exv10w27



 











EXHIBIT 10.27





[NOTE: CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN MARKED TO INDICATE THAT
CONFIDENTIAL INFORMATION HAS BEEN OMITTED. CONFIDENTIALITY HAS BEEN REQUESTED FOR
THIS CONFIDENTIAL INFORMATION. THE CONFIDENTIAL PORTIONS HAVE BEEN PROVIDED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION



VOLCANO-GOODMAN




EXCLUSIVE DISTRIBUTION AGREEMENT



This Agreement, dated as of September 27, 2004, is made and entered into by and between:



Goodman Company, Ltd., a company incorporated under the laws of Japan (“Distributor”), and VOLCANO
Therapeutics, Inc., a company incorporated under the laws of the United States (“VOLCANO”).




	 	 	 
	WHEREAS

	 	VOLCANO has developed certain products for interventional cardiology and radiology applications;
	 
	 	 
	WHEREAS

	 	Distributor sells devices for medical use and has considerable experience in the marketing, sale and servicing of such
devices and systems for such applications;
	 
	 	 
	WHEREAS

	 	VOLCANO desires Distributor to distribute the VOLCANO Products, and Distributor desires to distribute the VOLCANO
Products, in accordance with and subject to the terms, conditions and provisions set forth in this Agreement; and
	 
	 	 
	WHEREAS

	 	Distributor shall enter into a sub-distribution agreement (the “Goodman-Fukuda Sub-Distribution Agreement”) with Fukuda
Denshi Co., Ltd., a company incorporated under the laws of Japan (“Fukuda”), as a condition to the continuation of this
Agreement.






THE PARTIES HEREBY AGREE AS FOLLOWS





	1	 	DEFINITIONS




In this Agreement the following terms and expressions shall have the meaning set out below.




	 	 	 	 	 
	 

	 	Contract Year
	 	Shall mean any given twelve (12) month period ending on the anniversary of
the Effective Date of this Agreement.
	 
	 	 	 	 
	 

	 	Distributor
	 	Shall mean Goodman Company, Ltd., having its registered address at: 108
Fujigaoka, Meito-Ku, Nagoya, 465 Japan.
	 
	 	 	 	 
	 

	 	Effective Date
	 	Shall mean the date Distributor and/or VOLCANO receive Japanese regulatory
approval for the mechanical rotational Intravascular Ultrasound (IVUS)
catheters described in Exhibit A.
	 
	 	 	 	 
	 

	 	Field
	 	Shall mean the field of use for VOLCANO Products in interventional cardiology






 









 






	 	 	 	 	 
	 

	 	 	 	(applications within the heart).
	 
	 	 	 	 
	 

	 	Order
	 	Shall mean an order for VOLCANO Products submitted by Distributor and
accepted by VOLCANO under Section 4.
	 
	 	 	 	 
	 

	 	Price Schedule
	 	Shall mean the schedule of prices for the VOLCANO Products as agreed upon by
the parties from time to time. The current Price Schedule is set forth in
Exhibit A hereto.
	 
	 	 	 	 
	 

	 	Territory
	 	Shall mean the country of Japan.
	 
	 	 	 	 
	 

	 	VOLCANO
	 	Shall mean VOLCANO Therapeutics Inc., a Delaware corporation, having its
address at: 2870 Kilgore Road, Rancho Cordova, CA 95670, USA and its
affiliates.
	 
	 	 	 	 
	 

	 	VOLCANO Improvements
	 	Shall mean any improvements, modifications, developments or additions to the
VOLCANO Products, whether developed by VOLCANO or Distributor.
	 
	 	 	 	 
	 

	 	VOLCANO Product(s)
	 	Shall mean those products which are listed in Exhibit A and for which a
separate price is set forth in the Price Schedule. VOLCANO Products may be
changed, abandoned or added by VOLCANO, at its sole discretion, provided
that VOLCANO gives one hundred eighty (180) days prior written notice to
Distributor.







	2	 	DISTRIBUTORSHIP
	 
	2.1	 	VOLCANO hereby appoints Distributor, and Distributor hereby accepts appointment, as VOLCANO’s
exclusive distributor of the VOLCANO Products in the Field throughout the Territory, with the
right to import, market, sell, and distribute the VOLCANO Products for use in the Field
throughout the Territory in accordance with the terms and conditions of this Agreement.
Distributor agrees to use commercially reasonable efforts to successfully market the VOLCANO
Products throughout the Territory for use in the Field on a continuing basis throughout the
term.
	 
	2.2	 	Distributor may not, without prior written consent from VOLCANO, which consent may be
withheld in VOLCANO’s sole discretion, appoint third parties (a “Subdistributor”) to act for
Distributor in selling and distributing the VOLCANO Products in the Territory for use in the
Field under this Agreement. If VOLCANO provides written consent to a Subdistributor as
provided for in this Section 2.2, Distributor shall enter into an agreement with
Subdistributor in a form approved in writing by VOLCANO. For the avoidance of any doubt, the
term Subdistributor does not apply to local dealers normally used by Distributor in the
Territory.
	 
	2.3	 	Distributor shall not have any right to actively, and shall not actively, import, market,
sell, distribute or use, or authorize any third party to import, market, sell, distribute or
use, any of the VOLCANO Products outside of the Territory or for any use outside of the Field.
	 
	3	 	MINIMUM PURCHASE VOLUMES
	 
	3.1	 	Distributor shall place orders with VOLCANO for delivery in each Contract Year a quantity of
the VOLCANO Products greater or equal in volume to the minimum volumes for such Contract Year
as the parties shall agree and set forth in Exhibit B. As soon as reasonably possible
after the date hereof, but in no case later than [November 15, 2004], at such time as the
parties finalize Exhibit B, it shall be attached to and incorporated as part of this
Agreement.
	 
	3.2	 	Should Distributor not place orders with VOLCANO for a quantity of the VOLCANO Products at
least to the extent set forth in Exhibit B, VOLCANO may terminate the Agreement
pursuant to Section 11.1(i).




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	4	 	ORDERING AND DELIVERY
	 
	4.1	 	All orders for the VOLCANO Products submitted by Distributor shall be initiated by written
purchase order sent to VOLCANO; provided, however, that an order may initially be placed
orally or by facsimile if a confirmational written purchase order is received by VOLCANO
within seven (7) days after said oral or facsimile order. Distributor shall submit orders to
VOLCANO at least ninety (90) days prior to the first day of the requested month of delivery.
Each of Distributor’s orders shall specify: (a)the quantity of each VOLCANO Product ordered;
(b) the applicable purchase prices; (c) shipping instructions (e.g., requested carrier,
shipping date, shipping destination and insurance); and, (d) if requested by VOLCANO, a letter
of credit. Each of Distributor’s orders shall be subject to VOLCANO’s acceptance not to be
unreasonably withheld. Upon receipt of any order from Distributor, VOLCANO shall promptly
notify Distributor of its acceptance or rejection of the order and, if rejected, the reasons
for the rejection. VOLCANO shall have no liability to Distributor with respect to orders that
are not accepted. Any order submitted by Distributor and accepted by VOLCANO shall be binding
upon the parties and may not be modified, rescinded or cancelled by either party without the
agreement of the other party.
	 
	4.2	 	Within the first ten (10) days of every quarter, Distributor shall provide VOLCANO with a
twelve (12) month non-binding rolling forecast of its orders for the VOLCANO Products to be
shipped by VOLCANO in each of the months covered by the forecast, on a template formatted and
provided by VOLCANO.
	 
	4.3	 	VOLCANO shall use commercially reasonable efforts to deliver the VOLCANO Products in
accordance with the applicable Orders. Distributor shall pay directly, or reimburse VOLCANO
for, all shipping charges, premiums for insurance, inspection fees, customs, duties, export
and import fees, assessments and other costs incurred to comply with Distributor’s shipping
instructions and otherwise transport the VOLCANO Products as specified in the applicable
Order.
	 
	4.4	 	The VOLCANO Products delivered pursuant to the terms of this Agreement shall be suitably
packed for air freight shipment in VOLCANO’s standard shipping cartons, marked for shipment at
Distributor’s address set forth above or any other address in the Territory as Distributor
indicates and delivered to Distributor or its carrier agent F.O.B. VOLCANO’s manufacturing
plant, at which time title to such VOLCANO Product and risk of loss shall pass to Distributor.
Distributor shall select the carrier.
	 
	4.5	 	VOLCANO shall be responsible for all packaging and labeling of the VOLCANO Products purchased
under this Agreement. Distributor shall not modify, alter or add to, or authorize any third
party to modify, alter or add to, any labeling of any VOLCANO Product without the prior
written consent ofVOLCANO.
	 
	5	 	PRICING AND PAYMENT
	 
	5.1	 	The purchase price for each VOLCANO Product purchased by Distributor under this Agreement
shall be determined in accordance with the Price Schedule in effect on the date of the
applicable Order. Unless otherwise specified in the Price Schedule, all prices are specified
in US dollars.
	 
	5.2	 	Unless otherwise specified, the prices and other amounts specified in the Price Schedule, any
Order or otherwise in or pursuant to this Agreement, do not include any sales, use or similar
taxes. Distributor shall pay directly, or reimburse VOLCANO for such taxes or shall provide
VOLCANO with an exemption certificate satisfactory to VOLCANO.
	 
	5.3	 	VOLCANO shall issue invoices for any VOLCANO Product purchased by Distributor, reimbursable
costs, taxes and other amounts due to VOLCANO under this Agreement. Distributor shall pay
each of VOLCANO’s invoices within sixty (60) days after receipt. Distributor shall make such
payments in US Dollars by wire transfer to an account designated by VOLCANOor such other means
of payment as may be agreed upon by the parties. Any amount not paid when due shall bear
interest at the prime rate of interest quoted on the day the payment is late by The Wall
Street Journal or the highest rate allowed by applicable




Page 3 of 13









 












	 	 	usury law, whichever is less, determined on a daily basis and compounded on the last day of
each calendar month, from the date due until the date paid.
	 
	5.4	 	The prices for the VOLCANO Products may be revised from time to time through consultation
between VOLCANO and Distributor, taking into account the then prevailing government
reimbursement, as well as, market prices of similar products. Such revisions shall apply to
all orders received after the effective date of the price revision. Price revisions shall not
affect unfulfilled purchase orders accepted by VOLCANO prior to the effective date of the
price revision.
	 
	6	 	MARKETING, SALES, SERVICES AND APPROVALS
	 
	6.1	 	Distributor shall consult and cooperate with VOLCANO in connection with the marketing, sale
and distribution of the VOLCANO Products under this Agreement. Without limiting the
generality of the foregoing, Distributor shall prepare and submit to VOLCANO, at least ninety
(90) days prior to the commencement of each Contract Year, a
written plan for the marketing,
sale and distribution of the VOLCANO Products under this Agreement in the Territory during
such Contract Year. Distributor’s plan shall include, without limitation: (a) a description
of the promotional, advertising and other marketing activities planned by Distributor within
the Territory during the applicable Contract Year; (b)a budget and schedule for such
activities; (c) Distributor’s best estimate of anticipated sales of the VOLCANO Products
within the Territory during the applicable Contract Year; and (d) a description of any
training or other support to be provided by Distributor during the applicable Contract Year,
which shall be subject to VOLCANO’s approval not to be unreasonably withheld or delayed.
Distributor shall use commercially reasonable effort to comply with the plan for each Contract
Year.
	 
	6.2	 	Distributor shall supply all sales and marketing material in the Field throughout the
Territory at its sole expense, all such material to be approved by VOLCANO (such approval not
to be unreasonable withheld). VOLCANO shall supply Distributor, as reasonably requested from
time to time, information required in order to prepare sales and marketing materials.
	 
	6.3	 	Distributor shall, at its own expense, use commercially
reasonable efforts to promote the sale
of the VOLCANO Products in the Field throughout the Territory. Such promotion shall include,
but not be limited to, preparing promotional materials in languages appropriate for the
Territory, participating in appropriate trade shows to the extent Distributor thinks fit, and
directly soliciting orders from customers for the VOLCANO Products.
	 
	6.4	 	VOLCANO shall, at Distributor’s request, provide training for Distributor’s personnel in the
use, operation, maintenance, repair, servicing and other support of the VOLCANO Products in
the Territory. Distributor shall pay directly or reimburse VOLCANO for all of its costs
reasonably incurred within the Territory in relation to such training (including, without
limitation, travel costs in the Territory only).
	 
	6.5	 	VOLCANO shall, at Distributor’s request, provide maintenance, repair and servicing in the
Territory to support customers of the VOLCANO Products sold or otherwise distributed by
Distributor or its Subdistributors. Distributor shall reimburse VOLCANO for all of its costs
reasonably incurred in relation to such maintenance, repair and servicing (including, but not
limited to an hourly rate of $175.00 per hour, travel costs, expenses and spare parts costs).
	 
	6.6	 	Distributor shall, at its own expense, pay all import and export licenses and permits, pay
customs charges and duty fees, and take all other actions required to accomplish the export
and import of the VOLCANO Products purchased by Distributor. Distributor understands that
VOLCANO is subject to regulation by agencies of the U.S. government, including the U.S.
Department of Commerce, which prohibit export or diversion of certain technical products to
certain countries. Distributor agrees to comply with all export laws and restrictions and
regulations of the Department of Commerce or other United States or foreign agency or
authority. Distributor shall not import, export or reexport, or authorize the import, export
or reexport of, any VOLCANO Product, technical data or other items in violation of any such
requirement.




Page 4 of 13









 












	6.7	 	Distributor agrees that it will undertake to manage, at Distributor’s expense, all scientific
trials, whether to humans or animals, required to obtain approval from all Japanese regulatory
authorities to market the VOLCANO Products. Upon the request of VOLCANO, Distributor shall
submit for and maintain the Ministry of Health and Welfare (“MOHW”) approval for VOLCANO
Products. Distributor agrees that in the event of termination of this Agreement, Distributor
shall assist VOLCANO in the transfer of the approvals to parties specified by VOLCANO. VOLCANO
shall assist Distributor in obtaining regulatory approvals and registration of the VOLCANO
Products in the Territory by providing Distributor with (i) materials in VOLCANO’s possession
necessary to obtain MOHW approvals and marketing approvals, licenses, and permits; (ii)
certificates of analysis, export and compliance; and (iii) such other information as
Distributor shall reasonably request from time to time.
	 
	6.8	 	During the term of this Agreement and for a period of three (3) years after the end of the
term, Distributor shall keep and maintain records of all sales and other distributions of
VOLCANO Products made by Distributor sufficient to effectively, efficiently and economically
implement any recall of any VOLCANO Product. Upon VOLCANO’s request, Distributor shall make
such records available to VOLCANO and otherwise cooperate as reasonably required to
effectively, efficiently and economically implement any recall.
	 
	6.9	 	Distributor undertakes to use commercially reasonable efforts to achieve the highest possible
market penetration of all the VOLCANO Products in the Field throughout the Territory under
this Agreement. Distributor will keep VOLCANO informed about its activity and market
developments and about its customers on a regular basis. Such updates may include the
following:






	 	(i)	 	marketing efforts made within the Territory and the efforts to be made;
	 
	 	(ii)	 	competition situation and potential changes to be foreseen;
	 
	 	(iii)	 	particulars about orders taken, offers made and product traceability, and including
end user prices;
	 
	 	(iv)	 	opinions from customers and others with respect to the price and quality of the
products;
	 
	 	(v)	 	particulars about means and costs of transportation of the products and potential
changes to be foreseen; and
	 
	 	(vi)	 	other activities and changes, occurred or foreseen, in the Distributor’s financial
situation, ownership and management that could affect the status of this Agreement.






	7	 	INTELLECTUAL PROPERTY RIGHTS
	 
	7.1.1	 	VOLCANO hereby grants to Distributor a non-exclusive license to use the VOLCANO Trademarks
(defined herein below) for the purpose of identifying and marketing the VOLCANO Products in
the Field throughout the Territory. Any use of the VOLCANO Trademarks will be in accordance
with such instructions as VOLCANO may give Distributor from time to time.
	 
	7.1.2	 	During the term of this Agreement, Distributor shall have the right to indicate to the
public that it is an authorized distributor of the VOLCANO Products and to advertise (within
the Territory) such VOLCANO Product under the trademarks, marks and trade names that VOLCANO
may adopt from time to time (“VOLCANO Trademarks”). Nothing herein shall grant to Distributor
any right, title or interest in the VOLCANO Trademarks. At no time during or after the term of
this Agreement shall Distributor challenge or assist others to challenge the VOLCANO
Trademarks or the registration thereof or attempt to register any trademarks, marks or trade
name confusingly similar to those of VOLCANO.
	 
	7.2	 	As between the parties, VOLCANO shall be the owner of, and hereby reserves, any and all
patent, trade secret, trademark and other intellectual property rights with respect to VOLCANO
Products (including,




Page 5 of 13









 












	 	 	without limitation, any and all VOLCANO Improvements). Distributor shall properly identify
and accurately describe all VOLCANO Products as products of VOLCANO. Distributor shall not
alter, remove, deface or obscure any notice of any patent, trade secret, trademark or other
proprietary right on any VOLCANO Product and shall not add to any VOLCANO Product any other
trademark or notice of any other intellectual property right without the prior written
consent of VOLCANO.
	 
	7.3	 	VOLCANO reserves any and all rights that it may have in any of its names, logos and other
trademarks that are included in the branding of VOLCANO Products or otherwise used in
connection with the marketing, sale or distribution of VOLCANO Products under this Agreement.
	 
	7.4	 	Distributor shall immediately notify VOLCANO of any infringement, misuse, misappropriation or
violation of any patent, trade secret, trademark or other intellectual property right of a
VOLCANO Product that comes to Distributor’s attention. In the event of any such infringement,
misuse, misappropriation or violation relating to the activities of Distributor or any third
party acquiring any VOLCANO Product directly or indirectly from Distributor, Distributor shall
take all steps reasonably necessary to terminate any such infringement, misuse,
misappropriation or violation but excluding any right or obligation to initiate any legal
proceedings. VOLCANO shall have exclusive control over the commencement, prosecution and
settlement of any legal proceeding to enforce, recover damages on account of or obtain other
relief with respect to any infringement, misuse, misappropriation or violation of any patent,
trade secret, trademark or other intellectual property rights of VOLCANO. In connection with
any such legal proceeding in the Territory, Distributor shall provide such assistance related
to such proceeding as VOLCANO may reasonably request (including, without limitation, enforcing
any judgment, settlement or order made in connection with such proceeding); provided that
VOLCANO shall reimburse the expenses reasonably incurred by Distributor to provide such
assistance in accordance with VOLCANO’s request for the same. Distributor shall not have any
right to commence, prosecute or settle any legal proceeding to enforce, recover damages or
obtain other relief on account of any infringement, misuse, misappropriation or violation of
any patent, trade secret, trademark or other intellectual property right of VOLCANO as it
pertains to the VOLCANO Products.
	 
	7.5	 	Except as otherwise specifically set forth in this Section 7, this Agreement shall not be
interpreted or construed to transfer, assign, license or grant any right to or under any
patent, trade secret, trademark or other intellectual property right of either party.
	 
	8	 	INSPECTIONS, RETURNS, REPRESENTATION, WARRANTIES AND REMEDIES
	 
	8.1	 	In the event of any shortage, damageprior to delivery or discrepancy in or to a shipment of
the VOLCANO Products or in the event that any VOLCANO Product fails to comply with the
warranty set forth in Section 8.4 below, Distributor shall without unreasonable delay report
the same to VOLCANO and shall furnish such written evidence or other documentation as VOLCANO
reasonably may deem appropriate and which is in the possession of Distributor. Distributor
may return any such VOLCANO Product that is damaged prior to delivery or is subject to
discrepancy or fails to comply with the warranty set forth in Section 8.4 below to VOLCANO at
VOLCANO’s expense, and, at Distributor’s request, VOLCANO shall deliver promptly replacement
VOLCANO Products in accordance with the delivery procedures established herein.
	 
	8.2	 	VOLCANO represents and warrants to Distributor that the manufacture, use, sale, offer for
sale or import of VOLCANO Products in accordance with this Agreement shall notinfringe any
then currently issued patents, trade secrets, trademarks or other intellectual property rights
of any third party. The warranty set forth in this Section 8 shall not apply to any use of
any VOLCANO Product not in accordance with the applicable manuals, instructions and other
documentation provided by VOLCANO, where use of a VOLCANO Product in accordance with such
manuals, instructions and other documentation would have avoided the infringement.




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	8.3	 	VOLCANO warrants to Distributor that any VOLCANO Product sold to Distributor under this
Agreement shall, when delivered to Distributor, meet the then effective and agreed upon
specifications and shall be free from defects in design, materials and workmanship.
	 
	8.4	 	VOLCANO hereby extends and agrees to extend to any original purchaser of a VOLCANO Product
from Distributor a warranty against defects in design, material or workmanship. VOLCANO shall
be responsible for the repair and/or replacement of the VOLCANO Products that prove to be
defective. The warranty set forth in this Section 8 shall in respect of each VOLCANO Product
delivered hereunder expire upon the earlier of (a) one (1) year after the sale by Distributor
to the original purchaser; (b) the sterilization expiration date for the applicable VOLCANO
Product, provided that such date not be a date less than one (1) year after the date of
shipment; or (c) the completion of the first use of the applicable VOLCANO Product. If
compulsory law in the jurisdiction within the Territory requires warranties which are more
favorable to the purchaser than stated in the foregoing sentence, Distributor shall notify
VOLCANO hereof in writing. Should VOLCANO not accept to extend the warranty in accordance
with compulsory requirements in the jurisdiction, VOLCANO shall without undue delay inform
Distributor hereof in writing, in which case the parties shall as soon as reasonably possible
thereafter negotiate in good faith a solution acceptable to both parties.
	 
	8.5	 	VOLCANO’S REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION 8 ARE EXCLUSIVE AND IN
LIEU OF ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED (INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS). THE REMEDIES SET FORTH IN THIS SECTION 8
ARE EXCLUSIVE AND IN LIEU OF ANY AND ALL OTHER REMEDIES FOR ANY BREACH OF VOLCANO’S
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION 8.
	 
	8.6	 	VOLCANO’S LIABILITY ARISING OUT OF THIS AGREEMENT AND/OR SALE OF THE VOLCANO PRODUCT SHALL BE
LIMITED TO THE AMOUNT PAID BY DISTRIBUTOR FOR THE VOLCANO PRODUCTS. IN NO EVENT SHALL VOLCANO
BE LIABLE TO DISTRIBUTOR OR ANY OTHER ENTITY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR
INDIRECT DAMAGES, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY.
	 
	9	 	INDEMNITY AND INSURANCE
	 
	9.1	 	VOLCANO shall indemnify, defend and hold harmless Distributor from and against and in respect
of any and all demands, claims, actions or causes of action, assessments, losses, damages,
liabilities, interest, penalties, costs and expenses (including without limitation, reasonable
legal fees and disbursements) resulting from, arising out of, imposed upon or incurred by
Distributor by reason of (i)any breach of any representation or warranty of VOLCANO set forth
in paragraph 8.2, 8.3 or 8.4 of this Agreement; (ii) total or partial recalls of VOLCANO
Products; or (iii) any bodily injury caused by any alleged defects in materials, workmanship,
product performance, or design of the VOLCANO Products. VOLCANO shall maintain product
liability insurance for a period of three (3) years after termination of this Agreement in
such amounts as is advisable pursuant to ordinary good business practice for a similar company
in a similar type of business, and shall provide Distributor with evidence of this coverage
upon written request.
	 
	9.2	 	Distributor shall indemnify, defend and hold harmless VOLCANO from and against and in respect
of any and all demands, claims, actions or causes of action, assessments, losses, damages,
liabilities, interest, penalties, costs and expenses (including without limitation, reasonable
legal fees and disbursements) resulting from, arising out of, imposed upon or incurred by
Distributor by reason of (i)any breach of Distributor’s obligations under this Agreement; (ii)
product claims, representations or warranties, whether written or oral, made or alleged to be
made, by Distributor in its advertising, publicity, promotion or sale of any VOLCANO Product
where such product claims, representations or warranties were not provided by or approved by
VOLCANO; (iii) any infringement, misuse, misappropriation or violation of any intellectual
property right of any third party by any trademark of Distributor; or (iv) negligent handling
by Distributor of VOLCANO Products. Distributor shall maintain product liability insurance in
such amounts as is




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	 	 	advisable pursuant to
ordinary good business
practice for a similar
company in a similar type of
business, and shall provide
VOLCANO with evidence of this
coverage upon written
request.
	 
	10	 	TERM
	 
	10.1	 	Unless otherwise terminated in accordance with Section 11 hereof, this Agreement shall have
an initial term of five (5) years from the Effective Date.
	 
	10.2	 	At the end of the term, this Agreement shall terminate automatically without notice unless
prior to that time the term of the Agreement is extended by mutual written consent of the
parties.
	 
	11	 	EARLY TERMINATION
	 
	11.1	 	Not withstanding anything to the contrary in Article 10, this Agreement shall be subject to
early termination:
	 
	(i)	 	by VOLCANO after thirty (30) days from written notice if Distributor fails to meet the
minimum purchase volumes as provided for in Exhibit B;
	 
	(ii)	 	by VOLCANO if Distributor does not use its best efforts to gain Japanese regulatory approval
in a timely manner of the rotational IVUS catheters included in Exhibit A. The
parties expect that such approval will occur between January 1, 2006 and June 30, 2006;
	 
	(iii)	 	by VOLCANO if the parties have not agreed to the minimum purchase volumes and
finalizedExhibit B by [November 15, 2004];
	 
	(iv)	 	by VOLCANO if the Distributor is not able to enter into a sub-distribution agreement with
Fukuda by December 31, 2004 per Article 19;
	 
	(iv)	 	by either party immediately upon written notice if the other party fails to fulfill its
obligations under this Agreement and such failure is not remedied within thirty (30) days from
having received a request for such remedial action from the non-defaulting party; or
	 
	(v)	 	by either party immediately upon written notice if the other party should become insolvent or
start negotiations about composition for the benefit of its creditors, if a petition for
bankruptcy should be filed by or against the other party and is, in the latter, not dismissed
within sixty (60) days or if the other party makes an assignment of all or a material part of
its assets for the benefit of its creditors, other than an assignment given as security in
connection with a loan or other borrowing on marketable terms by such party.
	 
	11.2	 	In the event of a change in control of fifty (50%) percent or more of the outstanding stock
or assets of Distributor, VOLCANO (or its successor-in-interest) may, at its option, terminate
this Agreement.
	 
	11.3	 	In the event that there is a change of control, through an acquisition and/or majority
purchase of VOLCANO assets, VOLCANO may terminate this Agreement upontwenty-four (24) months
advance written notice, given such notice is not given until after the Effective Date.
	 
	12	 	EFFECTS OF TERMINATION




Upon expiration or termination of the Agreement, the following shall apply:





	12.1	 	Unless otherwise agreed upon by the parties, each party shall fulfill its obligations under
any and all Orders entered into by the parties during the term in accordance with Section 4;
provided, however, that, in the




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	 	 	event of any termination pursuant to Section 11.1(iv) or (v), the terminating party may, at
its option, cancel any outstanding Orders by giving the other party written notice of such
cancellation.
	 
	12.2	 	The parties’ respective rights and obligations with respect to any breach of this Agreement
during the term shall survive.
	 
	12.3	 	The parties’ respective rights and obligations under Sections 7, 8, 9, 12, 13, 14, 15, 16 and
17 shall survive.
	 
	12.4	 	Except as otherwise specifically provided for in Section 12, neither party shall have any
liability (e.g., for any claim of damages, loss of revenue, profit or compensation, for
anticipated sales or for any costs, expenses, investments or other commitments made in
reliance upon or otherwise in connection with this Agreement) to the other on account of any
expiration or termination of the term. Without limiting the generality of the foregoing,
neither party shall have any right, either express or implied by applicable law or otherwise,
to renewal of this Agreement or to any damages or compensation for any such termination.
	 
	13	 	NON-COMPETITION
	 
	 	 	Beginning on February 1, 2005 and for a period of two (2) months
following the termination of this Agreement, Distributor shall not,
without the prior written consent of VOLCANO, directly or indirectly
(e.g., through any of its affiliates), develop, market, sell,
distribute or support any product that competes with VOLCANO Products
in the Field throughout the Territory provided that this prohibition
does not extend to any of Distributor’s and/or its affiliates’
products (present or future) utilizing OCT technology.
	 
	14	 	FORCE MAJEURE
	 
	14.1	 	“Force Majeure” shall mean any event or condition, not existing on the date of signature of
this Agreement, not reasonable foreseeable as of such date and without control of either
party, which prevents, in whole or in material part, the performance by one of the parties of
its obligations hereunder, such as an act of God, act of government, war or related actions,
civil insurrection, riot, sabotage, general strike, general lockout, epidemic, fire, flood
windstorm and similar events.
	 
	14.2	 	Upon giving notice to the other party, a party affected by an event of Force Majeure shall be
released without any liability on its part from the performance of its obligations under this
Agreement, except for the obligation to pay any amounts due and owing hereunder, but only to
the extent and only for the period that its performance of such obligations is prevented by
the event of Force Majeure.
	 
	14.3	 	During the period that the performance by one of the parties of its obligations under this
Agreement has been suspended by reason of an event of Force Majeure, the other may likewise
suspend the performance of all or part its obligations hereunder to the extent that such
suspension is commercially reasonable.
	 
	15	 	MISCELLANEOUS
	 
	15.1	 	Confidentiality
	 
	15.1.1	 	During the term of this Agreement and for a period of five (5) years thereafter, each party
undertakes not to disclose to any third party any Confidential Information (as defined below)
that the party receives from the other party and shall not be used for any other purpose than
is required in order to fulfill its obligations under this Agreement.
	 
	15.1.2	 	For the purpose of this Agreement, Confidential Information shall include any and all
technical, financial, business or other information disclosed by one party to the other
verbally, in writing or in any other way, including without limitation documents, data or
information related to products, technologies, know-how and trade secrets, provided that
Confidential Information shall not include:




Page 9 of 13









 












	(i)	 	information which the receiving party can show was lawfully in its possession at the time of
disclosure;
	 
	(ii)	 	information which at the time of disclosure is in the public domain or which is published
after disclosure or otherwise becomes part of the public domain through no fault of the
receiving party; or
	 
	(iii)	 	information which the receiving party can show was received by it from a third party who did
not acquire the information, directly or indirectly, from the disclosing party under an
obligation of confidence.
	 
	15.1.3	 	Distributor shall ensure that any Subdistributor undertakes an equal confidentiality
undertaking. VOLCANO shall ensure that Fukuda agrees to an equal confidentiality undertaking
with regards to Distributor.
	 
	15.2	 	Relationship Between Parties
	 
	 	 	This Agreement does not make either party the employee, agent or
legal representative of the other for any purpose whatsoever. Neither
party is granted any right or authority to assume or create any
obligation or responsibility, expressed or implied, on behalf of or
in the name of the other party. In fulfilling its obligations
pursuant to this Agreement, each party shall be acting as an
independent contractor.
	 
	15.3	 	Headings
	 
	 	 	The titles and headings to Sections herein are inserted for the
convenience of reference only and are not intended to be a part of or
affect the meaning or interpretation of this Agreement.
	 
	15.4	 	Notice
	 
	15.4.1	 	All notices or other communications to a party hereto required or permitted hereunder shall
be deemed to be given if in writing and delivered personally or sent by facsimile (with
confirmation of transmission) or certified mail (return receipt requested) to such party at
the addresses listed in Section 1 of this Agreement (or at such other addresses as shall be
specified by like notice).
	 
	15.4.2	 	All notices shall be deemed to be given on the day when actually delivered as provided above
(if delivered personally or by facsimile) or on the day shown on the return receipt (if
delivered by mail) or on the second day following delivery to a reputable courier.
	 
	16	 	GOVERNING LAW
	 
	 	 	This Agreement shall be construed and governed in accordance with the
laws of the state of California, United States of America, without
regard to its rules relating to choice of law. The provisions of the
U.N. Convention on Contracts for the International Sale of Goods shall
not apply.
	 
	17	 	JURISDICTION
	 
	 	 	Any dispute, controversy or claim arising out of or in connection with
this Agreement, or the breach, termination or invalidity of thereof,
shall be finally settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.

	 
	 	 	
The arbitral tribunal shall be composed of three (3) arbitrators. The
place of arbitration shall be in San Francisco, California, and the
language to be used in the arbitral proceedings shall be English.
	 
	18	 	ASSIGNMENT
	 
	 	 	This Agreement, including all terms and conditions hereof which survive any termination or
expiration of this Agreement, shall be binding upon and inure to the benefit of the parties
hereto and their permitted




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	 	 	successors and assign. Distributor may not assign any of its rights and obligations
hereunder without prior written consent of VOLCANO.
	 
	19	 	FUKUDA SUB-DISTRIBUTION AGREEMENT
	 
	 	 	Distributor shall use its best efforts to enter into a sub-distribution agreement for the
distribution of VOLCANO Products, in a form approved by VOLCANO, with Fukuda as soon as
reasonably possible after the date hereof, but in no case later than December 31, 2004.
	 
	20	 	ATTORNEYS FEES
	 
	 	 	In the event that an action or proceeding is brought as a result of any dispute between the
parties hereto concerning any provision of this Agreement or the rights and duties of any
party in relation thereto, the prevailing party in such action or proceeding shall be
entitled to recover from the losing party its reasonable attorneys fees and costs in
addition to any other relief which may be granted.
	 
	21	 	COUNTERPARTS
	 
	 	 	This Agreement may be executed in several counterparts, each of which shall be deemed an
original, and such counterparts shall together constitute but one and the same agreement,
binding upon all the parties hereto, not withstanding that all the parties are not
signatories to the original of the same counterpart.
	 
	22	 	ENTIRE AGREEMENT
	 
	 	 	This Agreement, and exhibits attached hereto, constitutes the entire
agreement, and supersedes any and all prior agreements, with respect
to the appointment of Distributor as VOLCANO’s distributor and the
purchase and sale of the VOLCANO Products. No amendment, modification
or waiver of any of the provisions of this Agreement shall be valid
unless set forth in a written instrument signed by the party to be
bound thereby.
	 
	23	 	NO IMPLIED WAIVER
	 
	 	 	No waiver of any of the provisions of this Agreement shall be deemed, or shall constitute, a
waiver of any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the party
making the waiver.






 






IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date
first above written by their respective duly authorized representatives.




	 	 	 	 	 	 	 
	VOLCANO Therapeutics, Inc.	 	Goodman Company, Ltd.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Scott Huennekens	 	By:	 	/s/ Akira Yamamoto 
	 	 	 	 	 	 	 
	President and CEO 	 	President 
	 	 	 







Page 11 of 13









 













EXHIBIT A

TO VOLCANO-GOODMAN

EXCLUSIVE DISTRIBUTION AGREEMENT

EFFECTIVE November 1, 2005

Description of VOLCANO Products and Pricing




	 	 	 
	Distributor Name:

	 	Goodman Company, Ltd.
	Distributor Territory:

	 	Japan






	 	 	 	 	 	 	 
	 	 	CATALOG	 	TRANSFER PRICE	 
	PRODUCT	 	NUMBER	 	(EACH)	 
	Rotational IVUS Products:
	 	 	 	 	 	 
	Meridian PC Based Console with
	 	TBD	 	 	 	 
	Rotational Patient Interface (PIM) and
VH IVUS Hardware and Software:
	 	 	 	 	 	 
	Units 1-15 in calendar year
	 	 	 	[CONFIDENTIAL]USD
	Units 16-24 in calendar year
	 	 	 	[CONFIDENTIAL]USD
	Units 25+ in calendar year
	 	 	 	[CONFIDENTIAL]USD
	VH IVUS Software
	 	8044140015	 	[CONFIDENTIAL]USD
	VH IVUS Software Support and
	 	 	 	$[CONFIDENTIAL]
	Maintenance Agreement
	 	805698001	 	per Unit annually
	 
	 	 	 	 	 	 
	Revolution Rotational IVUS Catheter
	 	TBD	 	[CONFIDENTIAL]USD
	SpinVision Rotational Pullback System
	 	TBD	 	TBD
	Other Accessories for Rotational System
	 	TBD	 	TBD
	IVG3 Rotational Upgrade Kit
	 	TBD	 	TBD
	IVG3 Rotational VH IVUS Upgrade Kit
	 	TBD	 	TBD







	 	•	 	Travel costs associated with installation are not included in product cost.
	 
	 	•	 	All prices are quoted “each” and in US Dollars





	 	 	 
	 /s/ ILLEGIBLE 1/5/06	 	/s/ ILLEGIBLE 2/7/06
	 

	 	 
	Distributor Authorized Signature and Date

	 	VOLCANO Authorized Signature and Date
	Volcano
Corporation

	 	CONFIDENTAL






Page 12 of 13









 








EXHIBIT B

TO

EXCLUSIVE DISTRIBUTION AGREEMENT

`




As of [                     ]




Minimum Purchase Volumes





Page 13 of 13









 




(VOLCANO THERAPEUTICS LOGO)




October 18, 2004




Goodman Company, Ltd.




Attn: Aaron Nepper




108 Fujigaoka, Meito-Ku




Nagoya, 465 Japan




Dear Aaron:




This letter amendment (the “Amendment”) amends that
certain Exclusive Distribution Agreement (the “Distribution
Agreement”), dated as of September 27, 2004, by and
between Goodman Company, Ltd., and Volcano Therapeutics, Inc.
Except as set forth in this Amendment, the terms and conditions
of the Distribution Agreement, and Exhibit A thereto,
remain in full force and effect.




This Amendment confirms the understanding that the parties agree
that Section 3.1 of the Distribution Agreement be deleted
and substituted in its entirety by the following:






		
	 	
    3.1 Distributor shall place orders with VOLCANO for delivery
    in each Contract Year a quantity of the VOLCANO Products greater
    or equal in volume to the minimum volumes for such Contract Year
    as the parties shall agree and set forth in
    Exhibit B. As soon as reasonably possible after the
    date hereof, but in no case later than September 30, 2005,
    the parties agree to finalize Exhibit B and, at such
    time as Exhibit B is finalized,
    Exhibit B shall be attached to and incorporated as
    part of this Agreement.




If you are in agreement with the terms and conditions of this
Amendment, please sign where indicated below and return this
letter to the undersigned.




Sincerely,




VOLCANO THERAPEUTICS, INC.




By:     /s/ Scott
Huennekens






Name: Scott Huennekens




Title:   President & CEO



2






 



ACCEPTED:




This 22 day of October, 2004.



GOODMAN COMPANY, LTD.




By:     /s/ Akira Yamamoto




Name: Akira Yamamoto




Title:   President



3