exv10w31



 







EXHIBIT 10.31



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




TERMINATION OF OPTION TO DISTRIBUTE AGREEMENT




     This Termination of Option to Distribute Agreement (this “Termination Agreement”) is made and
entered into as of January 27, 2006 (the “Effective Date”), by and between Volcano Corporation
(f/k/a Volcano Therapeutics, Inc.), a Delaware corporation (“Volcano”), and Medtronic Vascular,
Inc. (f/k/a Medtronic AVE, Inc.), a Delaware corporation (“Medtronic” and, together with Volcano,
the “Parties”).



     WHEREAS, in accordance with Section 4.2 of that certain Option to Distribute Agreement, dated
as of July 21, 2003, by and between the Parties and attached hereto as Exhibit A (the
“Option Agreement”), the Parties may elect to terminate the Option Agreement by mutual consent;



     WHEREAS, the Parties intend to terminate the Option Agreement in accordance with its terms,
provided, however, that in lieu of payment of the Termination Fee (as defined in
the Option Agreement), Volcano will transfer to Medtronic, without any additional payment owed by
Medtronic, ownership to [CONFIDENTIAL] s5TM tower grayscale ultrasound imaging system
consoles with the specifications outlined in Exhibit B, together with all standard and
customary ancillary materials (collectively, the “Consoles”); and, upon the transfer of the
Consoles, Volcano will enter into one or more standard and customary 1-year warranty agreements
(each, a “Warranty,” and the period during which any Warranty is in effect, the “Warranty Period”),
whereby Volcano will provide service on each such Console at no charge to Medtronic:



     NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is hereby
acknowledged, the Parties agree as follows:



     1. Termination of Option Agreement. Without any further action required on the part
of either Party except as specifically set forth herein, the Option Agreement shall terminate and
be of no further force or effect as of the Effective Date. Nothing herein shall change either
Party’s respective rights and obligations under either the License Agreement or the ROFN/ROFR
Agreement, each as defined in the Option Agreement.



     2. Obligation to Provide Consoles Free of Charge. Medtronic hereby waives its right
to receive the Termination Fee provided for in Section 4.2 of the Option Agreement. In exchange
for waiving payment of the Termination Fee, Medtronic shall be entitled to the following free of
charge, except as expressly provided in Section 2(d):



          (a) up to [CONFIDENTIAL] Consoles, as may be requested by Medtronic from time to time; with
title to pass to Medtronic or its designee as provided in Section 3;




          (b) concurrent with the delivery of each Console, the execution by Volcano of a 1-year
Warranty for each such Console running from the date of delivery to Medtronic (for each console,
the “Delivery Date”), in each case substantially in the form attached hereto as Exhibit C
and as provided in Section 4, below;




          (c) the option to purchase one or more of Volcano’s standard service packages (“basic,”
“full,” or “full plus,” see attached service plans and pricing guide set forth on




 









 







Exhibit D) for each such Console at a 50% discount for up to 36 months following the
Delivery Date for each such Console (the period of time from the Effective Date until the last to
expire service package purchased by Medtronic pursuant to this Agreement, hereinafter, the “Service
Period”); and




          (d) any software upgrades released by Volcano during the Warranty Period or, for the Consoles
for which a service plan shall have been purchased, during the Service Period, for any of its tower
grayscale ultrasound imaging systems, provided such system is then in use by Medtronic; for the
avoidance of doubt, (i) Volcano shall be under no obligation to provide any software upgrades
that do not relate to grayscale ultrasound imaging including, but not limited to, software related
to virtual histology, IVUS/Angio Co-Registration, or palpography, and (ii) Volcano shall be under
no obligation to provide any software upgrades after the Warranty Period for any Consoles for which
a service plan has not been purchased.




     3. Delivery Terms. Delivery of the Consoles shall be made by Volcano, delivered CIP
to Medtronic’s Santa Rosa, California facility (per Incoterms 2000), within thirty (30) days of a
written request of delivery made by Medtronic, in each case to the location identified in such
written notice by Medtronic and in the name of Medtronic USA, Inc or in the name of any other
Medtronic affiliate designated by Medtronic prior to delivery. Medtronic shall be responsible for
all shipping, installation, handling, and insurance costs, as well as any sales, use, value added
or similar taxes, customs, duties, or tariffs imposed by any governmental authority or agency
resulting from the transfer to Medtronic of any Consoles or any components thereof.



     4. Warranty. Notwithstanding anything to the contrary, including any inconsistent
provisions in any Warranty delivered in accordance herewith, Volcano represents and warrants to
Medtronic that:




     (a) all Consoles sold under this Termination Agreement will have been manufactured,
labeled and packaged in accordance with all applicable laws and regulations, including (as
applicable) FDA GMP requirements and, if applicable, ISO 9001 certifications, or successor
requirements, and all other applicable manufacturing requirements, as well as the
specifications commonly applied to Volcano’s s5 tower grayscale ultrasound imaging system
consoles as well as those set forth in Exhibit B (collectively, the
“Specifications”);




     (b) Volcano has or will have (through contracting with third parties) the facilities,
equipment, licenses, permits and personnel to manufacture and supply the Consoles in
accordance with the Specifications and in compliance with applicable laws and regulations;
and




     (c) each Console, at the time of delivery to Medtronic, shall: (i) meet the
Specifications and warranties set forth herein; (ii) be free from defects in materials and
workmanship; and (iii) not be adulterated or misbranded within the meaning of the U.S. Food,
Drug and Cosmetic Act and regulations thereunder or any similar law or regulation.



2









 






     (d) EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 4, VOLCANO MAKES NO REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AS TO THE PRODUCT, AND VOLCANO HEREBY EXPRESSLY DISCLAIMS ANY
AND ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.



     5. Successors and Assigns. This Termination Agreement shall be binding upon and inure
to the benefit of the Parties hereto and the successors or assigns of the Parties hereto; provided,
that (i) the rights and obligations of Volcano herein may not be assigned except to an affiliate of
Volcano or to any person who succeeds to substantially all of the assets and business of Volcano to
which this Termination Agreement relates.



     6. Complete Agreement. This Termination Agreement and the Warranties referred to
herein, and the exhibits hereto and thereto, constitute the entire agreement between the parties
hereto with respect to the subject matter hereof and supersede all prior agreements whether written
or oral relating hereto.



     7. Governing Law. This Termination Agreement shall be governed by and construed in
accordance with the laws of the State of California without reference to the choice of law
principles thereof. The Parties hereby irrevocably consent to the exclusive jurisdiction and venue
of any United States court or state court of competent jurisdiction located in San Francisco,
California and waive any objections either may have at any time to such jurisdiction and venue.
The parties agree to the personal jurisdiction of such courts and agree that service of process may
be made pursuant to notice sent in accordance with Exhibit E.



     8. Waiver, Discharge, Amendment, Etc. The failure of any Party hereto to enforce at
any time any of the provisions of this Termination Agreement shall not, absent an express written
waiver signed by the party making such waiver specifying the provision being waived, be construed
to be a waiver of any such provision, nor in any way affect the validity of this Termination
Agreement or any part thereof or the right of the Party thereafter to enforce each and every such
provision. No waiver of any breach of this Termination Agreement shall be held to be a waiver of
any other or subsequent breach. Any amendment to this Termination Agreement shall be in writing
and signed by the Parties hereto.



     9. Counterparts. This Termination Agreement may be executed in any number of
counterparts, with signature pages delivered by facsimile, each of which shall be deemed an
original as if delivered in person and all of which together shall constitute one instrument.



     10. Restriction on Re-Sale by Medtronic. Medtronic agrees not to sell any of the
Consoles referenced in Section 2(a) to any hospital or doctor prior to the first anniversary of the
Delivery Date for each such Console.



[signature page to follow]




3









 








     IN WITNESS WHEREOF, the undersigned has executed this Termination of Option to Distribute
Agreement as of January 27, 2006.



	 	 	 
	VOLCANO CORPORATION

	 	MEDTRONIC VASCULAR, INC.
	 
	 	 
	/s/ John Dahldorf

	 	/s/ Scott Ward
	 

	 	 
	By: John Dahldorf

	 	By: Scott Ward
	Its: CFO

	 	Its: President
	Date: 1-27-2006

	 	Date: January 27, 2006






4









 






Exhibit A




Option to Distribute Agreement




 









 





OPTION TO DISTRIBUTE AGREEMENT





     
THIS OPTION TO DISTRIBUTE AGREEMENT (this “Agreement”)
is made and entered into as of July 21, 2003 (the
“Effective Date”) between VOLCANO THERAPEUTICS, INC.
(as defined below, “Volcano”), a Delaware corporation,
and MEDTRONIC AVE, INC. (as defined below,
“Medtronic”), a Delaware corporation.






RECITALS





     
WHEREAS, Volcano has acquired substantially all of the assets
associated with the functional measurement business and IVUS
business of JOMED, Inc. and its affiliates (the “JOMED
Acquisition”);





     
WHEREAS, Volcano and Medtronic are simultaneously entering into
a License Agreement (the “License Agreement”),
a Supply Agreement and a Right of First Negotiation and First
Refusal Agreement (the “ROFN/ROFR Agreement”)
and a financing agreement pursuant to which Medtronic will
purchase Series B Preferred Stock of Volcano; and





     
WHEREAS, Volcano and Medtronic wish to enter into this Agreement
pursuant to which Volcano grants to Medtronic an option to
exclusively distribute certain products in Japan, as further set
forth herein.






AGREEMENTS





     
NOW THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained herein, and for
other valuable consideration, the receipt and adequacy of which
is hereby acknowledged, the parties mutually agree as follows:






ARTICLE 1






DEFINITIONS





     
1.1     Specific Definitions. As
used in this Agreement, the following terms shall have the
meanings set forth or as referenced below:





     
“Affiliate” of a specified person (natural or
juridical) means a person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is
under common control with, the person specified.
“Control” shall mean ownership of more than 50% of the
shares of stock entitled to vote for the election of directors
in the case of a corporation, and more than 50% of the voting
power in the case of a business entity other than a corporation.





     
“Agreement” means this Agreement and all
Exhibits and Schedules hereto.





     
“Fukuda Distribution Agreement” means the
distribution agreement between Volcano (including as successor
to JOMED Inc.) and Fukuda Denshi Co., Ltd.
(“Fukuda”), the rights to which Volcano will
acquire in the JOMED Acquisition.






1








 




        “Liquidity Event” means either of the following
events: (i) the consummation by Volcano of a firm
commitment underwritten public offering made pursuant to an
effective registration statement under the Securities Act of
1933, as amended, covering the offer and sale of Volcano common
stock; or (ii) the closing of a sale to a person that is
not an Affiliate of Volcano of all or substantially all of
Volcano’s assets, whether by merger, combination, sale of
assets, sale of shares, licensing or otherwise, provided that
Volcano has complied with all of its obligations under the
ROFN/ROFR Agreement.





        “Medtronic” means Medtronic, Inc. and its
Affiliates.





        “Products” means all products acquired by
Volcano in the JOMED Acquisition and any improvements thereon.
For the avoidance of doubt, “Products” does not
mean, or include, products developed utilizing or incorporating
(i) the Philips Technology (as that term is defined in the
License Agreement) and not covered by any Patent (as defined in
the License Agreement) or (ii) any other technology or
intellectual property of Volcano other than Patents, unless, in
either case, on the Effective Date or at any time during the
term of the Fukuda Distribution Agreement, and as of
Medtronic’s exercise of the Japanese Distribution Option,
Volcano determines to include such products as products to be
distributed under the Fukuda Distribution Agreement, in which
case “Products” shall include such products.





        “Volcano” means Volcano Therapeutics, Inc. and
its Affiliates.





        1.2 Other Terms. Other terms
may be defined elsewhere in the text of this Agreement and shall
have the meaning indicated throughout this Agreement.





        1.3 Definitional Provisions.






		
	 	     
    (a) The words “hereof,”
    “herein,” and “hereunder” and words of
    similar import, when used in this Agreement, shall refer to this
    Agreement as a whole and not to any particular provisions of
    this Agreement.
	 
	 	     
    (b) The terms defined in the
    singular shall have a comparable meaning when used in the
    plural, and vice versa.
	 
	 	     
    (c) References to an
    “Exhibit” or to a “Schedule” are, unless
    otherwise specified, to one of the Exhibits or Schedules
    attached to or referenced in this Agreement, and references to
    an “Article” or a “Section” are, unless
    otherwise specified, to one of the Articles or Sections of this
    Agreement.
	 
	 	     
    (d) The term “person”
    includes any individual, partnership, joint venture,
    corporation, trust, unincorporated organization or government or
    any department or agency thereof.





ARTICLE 2





OPTION TO DISTRIBUTE




2






 



     
2.1 General. Volcano hereby grants to Medtronic an
option (the “Japanese Distribution Option”) to
exclusively distribute in Japan Products commencing on the date
of termination of the Fukuda Distribution Agreement.



     
2.2 Exercise and Expiration of Option. Medtronic may
exercise the Japanese Distribution Option by notifying Volcano
in writing of such exercise on or before June 30, 2006 (the
“Option Expiration Date”); provided, however,
that Medtronic may not exercise the Japanese Distribution Option
prior to the earlier to occur of (i) June 30, 2005
and (ii) to the extent possible, one year prior to any
anticipated termination of the Fukuda Distribution Agreement,
or, if it is not possible to give advance notice of any such
termination, then upon the termination of the Fukuda
Distribution Agreement. Volcano shall promptly notify Medtronic
if Volcano becomes aware of any anticipated or actual
termination of the Fukuda Distribution Agreement before its
natural expiration date.



     
2.3 Definitive Distribution Agreement. Promptly upon
Medtronic’s exercise of the Japanese Distribution Option,
Volcano and Medtronic (or an Affiliate of Medtronic) shall enter
into a definitive distribution agreement (the “Medtronic
Distribution Agreement”) related to such Japanese
exclusive distribution right, the term of which shall be at
least five (5) years from the commencement of
Medtronic’s distribution rights thereunder, and the other
terms and conditions of which shall be substantially similar to
the terms and conditions of the Fukuda Distribution Agreement as
of the Effective Date, provided that the minimum sales volumes
for the first year of the Medtronic Distribution Agreement shall
be substantially similar to the minimum sales volumes in the
last full year prior to the termination of the Fukuda
Distribution Agreement (less the amount of Product that Fukuda
is able to sell after the termination of the Fukuda Distribution
Agreement); provided, however, that Volcano shall have
the right to terminate the Medtronic Distribution Agreement at
any time prior to December 31, 2006 in the event that,
prior to such date, (i) a Liquidity Event occurs, and
(ii) within three (3) business days following the
consummation of such Liquidity Event, Volcano pays to Medtronic,
in immediately available funds, $2,000,000 (the
“Termination Fee”); provided, however,
that in the event the Liquidity Event is the public offering of
Volcano’s common stock (pursuant to subparagraph (i)
of the definition of “Liquidity Event”), Volcano may
terminate the Medtronic Distribution Agreement effective
immediately prior to such consummation of the public offering
provided that Volcano pays Medtronic the Termination Fee as
provided above within 3 business days following the
consummation of said public offering.



     
2.4 Further Obligations of Volcano. Volcano agrees
that it will not renew or extend the Fukuda Distribution
Agreement and, until the expiration of the Japanese Distribution
Option or any Medtronic Distribution Agreement, will not enter
into any other agreements or arrangements to provide
distribution rights in Japan with respect to any Product.
Further, Volcano will exercise commercially reasonable efforts
to obtain Japanese regulatory approvals in the name of Medtronic
(or transfer the existing approvals to Medtronic) so as to
ensure that such regulatory approvals are in Medtronic’s
name at the commencement of any Medtronic Distribution Agreement.




ARTICLE 3




CERTAIN REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION



3






 




     
3.1 Representations and Warranties of Volcano. Volcano
represents and warrants to Medtronic that the execution and
delivery by Volcano of this Agreement and the performance by
Volcano of its obligations hereunder have been duly authorized
by all requisite corporate action and will not violate any
provision of law, any order of any court or other agency of
government, the Certificate of Incorporation or Bylaws of
Volcano, as amended, or any provision of any indenture,
agreement or other instrument to which Volcano or any of its
properties or assets is bound, or conflict with, result in a
breach of or constitute (with due notice or lapse of time or
both) a default under any such indenture, agreement or other
instrument, or result in the creation or imposition of any lien,
charge, restriction, claim or encumbrance of any nature
whatsoever upon any of the properties or assets of Volcano. This
Agreement has been duly executed and delivered by Volcano and
constitutes the legal, valid and binding obligation of Volcano,
enforceable in accordance with its terms, subject, as to the
enforcement of remedies, to the discretion of the courts in
awarding equitable relief and to applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws
affecting the rights of creditors generally.





     
3.2 Representations and Warranties of Medtronic.
Medtronic represents and warrants to Volcano that the execution
and delivery by Medtronic of this Agreement and the performance
by Medtronic of its obligations hereunder have been duly
authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other
agency of government, the Articles of Incorporation or Bylaws of
Medtronic, as amended, or any provision of any indenture,
agreement or other instrument to which Medtronic or any of its
properties or assets is bound, or conflict with, result in a
breach of or constitute (with due notice or lapse of time or
both) a default under any such indenture, agreement or other
instrument, or result in the creation or imposition of any lien,
charge, restriction, claim or encumbrance of any nature
whatsoever upon any of the properties or assets of Medtronic.
This Agreement has been duly executed and delivered by Medtronic
and constitutes the legal, valid and binding obligation of
Medtronic, enforceable in accordance with its terms, subject, as
to the enforcement of remedies, to the discretion of the courts
in awarding equitable relief and to applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws
affecting the rights of creditors generally.





     
3.3 Indemnification. Each party shall indemnify, defend
and hold harmless the other party and its subsidiaries, and
their respective officers, directors, employees, shareholders
and distributors from and against and in respect of any and all
demands, claims, actions or causes of action, assessments,
losses, damages, liabilities, interest and penalties, costs and
expenses (including, without limitation, reasonable legal fees
and disbursements incurred in connection therewith and in
seeking indemnification therefor, and any amounts or expenses
required to be paid or incurred in connection with any action,
suit, proceeding, claim, appeal, demand, assessment or judgment)
finally awarded, resulting from, arising out of, or imposed upon
or incurred by any person to be indemnified hereunder by reason
of a breach of a representation, warranty or agreement of such
party set forth in this Agreement.






ARTICLE 4






TERM AND TERMINATION






4








 




     
4.1 Term. This Agreement shall take effect as of the date
hereof and shall continue in force until the Option Expiration
Date (if Medtronic has not exercised the Japanese Distribution
Option) or until the parties have entered into the Medtronic
Distribution Agreement (if Medtronic has exercised the Japanese
Distribution Option) (the “Term”). Nothing contained
in this Agreement will be interpreted as requiring either party
to renew or extend this Agreement beyond the Term.





     
4.2 Termination. This Agreement may be terminated by
mutual consent of the parties. Further, Volcano shall have the
right to terminate this Agreement (and all rights and
obligations hereunder) at any time prior to December 31,
2006 in the event that, prior to such date, (i) a Liquidity
Event occurs, and (ii) within three (3) business days
following the consummation of such Liquidity Event, Volcano pays
to Medtronic, in immediately available funds, the Termination
Fee; provided, however, that in the event the Liquidity
Event is the public offering of Volcano’s common stock
(pursuant to subparagraph (i) of the definition of
“Liquidity Event”), Volcano may terminate this
Agreement immediately prior to such consummation of the public
offering provided that Volcano pays Medtronic the Termination
Fee as provided above within 3 business days following the
consummation of said public offering.






ARTICLE 5






MISCELLANEOUS





     
5.1 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
the successors or assigns of the parties hereto; provided, that
(i) the rights and obligations of Volcano herein may not be
assigned except to an Affiliate of Volcano or to any person who
succeeds to substantially all of the assets and business of
Volcano to which this Agreement relates, and (ii) the rights and
obligations of Medtronic herein may not be assigned except to an
Affiliate of Medtronic or to any person who succeeds to
substantially all of that portion of Medtronic’s business
to which this Agreement relates.





     
5.2 Complete Agreement. This Agreement and the agreements
referred to herein, and the Schedules and Exhibits hereto and
thereto, constitute the entire agreement between the parties
hereto with respect to the subject matter hereof and supersede
all prior agreements whether written or oral relating hereto.





     
5.3 Governing Law. The formation, legality, validity,
enforceability and interpretation of this Agreement shall be
governed by the laws of the State of California, without giving
effect to the principles of conflict of laws thereof. Solely for
the purposes of seeking interim injunctive relief, the parties
hereby irrevocably consent to the exclusive jurisdiction and
venue of any United States court or state court of competent
jurisdiction located in San Francisco, California and waive any
objections either may have at any time to such jurisdiction and
venue. The parties agree to the personal jurisdiction of such
courts and agree that service of process may be made pursuant to
notice sent in accordance with Section 5.5.





     
5.4 Waiver, Discharge, Amendment, Etc. The failure of any
party hereto to enforce at any time any of the provisions of
this Agreement shall not, absent an express written waiver
signed by the party making such waiver specifying the provision
being waived, be construed to






5








 





be a waiver of any such provision, nor in any affect the
validity of this Agreement or any part thereof or the right of
the party thereafter to enforce each and every such provision.
No waiver of any breach of this Agreement shall be held to be a
waiver of any other or subsequent breach. Any amendment to this
Agreement shall be in writing and signed by the parties hereto.




     
5.5 Notices. All notices or other communications to
a party required or permitted hereunder shall be in writing and
shall be delivered personally or by facsimile (receipt confirmed
electronically) to such party (or, in the case of an entity, to
an executive officer of such party) or shall be sent by a
reputable express delivery service or by certified mail, postage
prepaid with return receipt requested, addressed as follows:




     
if to Medtronic, to:







		
	 	
    Medtronic, Inc.
	 	
    710 Medtronic Parkway NE
	 	
    Minneapolis, MN 55432-5604




     
with separate copies thereof addressed to








			
	 	Attention: 	
    General Counsel
	 	 	
    Mail Stop LC400
	 	 	
    Telecopier No.: (763) 572-5459
	 
	 
	 	
    and







			
	 	Attention: 	
    Vice President and Chief Development Officer
	 	 	
    Mail Stop LC390
	 	 	
    Telecopier No.: (763) 505-2542
	 
	 
	 	
    and
	 
	 
	 	
    Medtronic AVE
	 	
    3576 Unocal Place
	 	
    Santa Rosa, CA 95403
	 	Attention: 	
    General Counsel
	 	 	
    Telecopier No.: (707) 541-3190




     
if to Volcano to:







			
	 	
    Volcano Therapeutics, Inc.
	 	
    2870 Kilgore Road,
	 	
    Rancho Cordova, California 95670
	 	
    Telecopier No.: (916) 638-7976




			
	 	Attn: 	
    Vincent J. Burgess, Vice President, Marketing and Business
    Development





Any party may change the above-specified recipient and/or
mailing address by notice to all other parties given in the
manner herein prescribed. All notices shall be deemed given on
the day




6






 




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 delivery service).



     
5.6 Expenses. Except as expressly provided herein,
Volcano and Medtronic shall each pay their own expenses incident
to this Agreement and the preparation for, and consummation of,
the transactions provided for herein.




     
5.7 Titles and Headings; Construction. The titles
and headings to the Articles and Sections herein are inserted
for the convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this
Agreement. This Agreement shall be construed without regard to
any presumption or other rule requiring construction hereof
against the party causing this Agreement to be drafted.




     
5.8 Severability. If any provision of this Agreement
is held invalid, illegal or unenforceable, such provision shall
be enforced to the maximum extent permissible and the remaining
provisions shall nonetheless be enforceable according to their
terms.




     
5.9 Relationship. 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 to create any obligation or
responsibility, express 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.




     
5.10 Benefit. Nothing in this Agreement, expressed
or implied, is intended to confer on any person other than the
parties hereto or their respective successors or assigns, any
rights, remedies, obligations or liabilities under or by reason
of this Agreement.




     
5.11 Survival. All of the representations,
warranties, and covenants made in this Agreement, and all terms
and provisions hereof intended to be observed and performed by
the parties after the termination hereof, shall survive such
termination and continue thereafter in full force and effect,
subject to applicable statutes of limitations.




     
5.12 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed as
original and all of which together shall constitute one
instrument.



     
5.13 Execution of Further Documents. Each party
agrees to execute and deliver without further consideration any
further documents, and to perform such other lawful acts, as the
other party may reasonably require to fully secure and/or
evidence the rights or interests granted herein.




     
5.14 Arbitration. Any dispute arising out of or
relating to this Agreement, including the formation,
interpretation or alleged breach hereof, shall be settled in
accordance with the Exhibit A attached hereto. The results
of such arbitration proceedings shall be binding upon the
parties hereto, and judgment may entered upon the arbitration
award in any court having jurisdiction thereof. Notwithstanding
the foregoing, either party may seek interim injunctive




7






 




relief (including, without limitation, as expressly provided in
Section 5.15 below) from any court of competent jurisdiction as
provided in Section 5.3.



     
5.15 Public Announcement. Neither party will
publicly disclose or divulge any provisions of this Agreement
nor the transactions contemplated hereby without the other
party’s written consent, except as may be required by
applicable law or stock exchange regulation, and except for
communications to such party’s employees or customers or
investors or prospective investors (subject to appropriate
confidentiality obligations); provided that, prior to disclosure
of any provision of this Agreement that either party considers
particularly sensitive or confidential to any governmental
agency or stock exchange, the parties shall cooperate to seek
confidential treatment or other applicable limitations on the
public availability of such information. In particular, prior to
such disclosure, each party shall use its best efforts to redact
the payment terms specified herein and each party shall provide
the other the opportunity to redact other information and seek
confidential treatment of any such disclosure. The parties
expressly agree that any Medtronic Distribution Agreement shall
include this Section 5.15, or a confidentiality provision
substantially similar to this Section 5.15. Medtronic
expressly acknowledges, solely for purposes of Volcano’s
ability to seek injunctive or equitable relief, that its failure
to comply with this Section 5.15 or disclosure of the
provisions of this Agreement or the transactions contemplated
hereby will have an immediate, irreparable and significant
detrimental effect to Volcano’s business and business
relationships and agreements in Japan. Medtronic therefore
agrees that in the event of such failure to comply with this
Section 5.15 or disclosure of the provisions of this
Agreement, or threatened breach of this Section 5.15, and
in addition to any remedies available at law, Volcano shall have
the right to seek injunctive relief, without bond, in connection
with such failure to comply, disclosure or threatened breach, or
such equitable relief as may be determined by a court of
competent jurisdiction, after taking into consideration all the
facts related to such failure to comply, disclosure, or
threatened breach.



     
5.16 Medtronic Guaranty. Medtronic, Inc. hereby
guaranties the performance by Medtronic AVE, Inc. of Medtronic
AVE, Inc.’s obligations under this Option to Distribute
Agreement.



8






 



     
IN WITNESS WHEREOF, each of the parties has caused this Option
to Distribute Agreement to be executed in the manner appropriate
to each, as of the date first above written.




	 	 	 	 	 
	
    VOLCANO THERAPEUTICS, INC.	 	
    MEDTRONIC AVE, INC.
	 
	
    By: 	
    /s/ S. Huennekens
    	 	
    By: 	
     
	 	 	 	 	 
	
    Its:	
    President & CEO	 	
    Its:	
     

	 	 	 	 	 
	 
	
    MEDTRONIC, INC.	 	 	 
	 
	
    By:
    	 	 	 	 	 
	 	 	 	 	 
	
    Its:
    	
     
	 	 	 	 





Attachments:




                    Exhibit A —
Alternative Dispute Resolution



9






 



     
IN WITNESS WHEREOF, each of the parties has caused this Option
to Distribute Agreement to be executed in the manner appropriate
to each, as of the date first above written.




	 	 	 	 	 
	
    VOLCANO THERAPEUTICS, INC.	 	
    MEDTRONIC AVE, INC.
	 
	
    By: 	
     	 	
    By: 	
    [ILLEGIBLE]
	 	 	 	 	 
	
    Its:	
     	 	
    Its:	
     

	 	 	 	 	 
	 





Attachments:




                    Exhibit A —
Alternative Dispute Resolution



9






 



     
IN WITNESS WHEREOF, each of the parties has caused this Option
to Distribute Agreement to be executed in the manner appropriate
to each, as of the date first above written.





	 	 	 	 	 	 	 
	
    VOLCANO THERAPEUTICS, INC.	 	
    MEDTRONIC, INC.
	 
	
    
    By:

    	 	 	 	
    By:	 	
    /s/ Arthur D. Collins, Jr.
    
	 	 	
     
	 	 	 	
     
     Arthur
    D. Collins, Jr.
     Chairman of the
    Board and

     Chief Executive Officer
	 
	
    
    Its:

    	 	 	 	
    Its:	 	
     
    
	 	 	 	 	 	 	 






Attachments:




          Exhibit A —
Alternative Dispute Resolution



9






 





EXHIBIT A






Alternative Dispute Resolution





     
1) Negotiations. If any dispute arises between Volcano
and Medtronic with respect to the Option to Distribute Agreement
(the “Agreement”), or any alleged breach thereof, any
party may, by written notice to the other party, have such
dispute referred to their respective designees listed below or
their successors for attempted resolution by good faith
negotiations within 30 days after such notice is received. Such
designees are as follows:







		
	 	
    For Volcano — the Vice President, Marketing and
    Business Development of Volcano or his/her designee
	 
	 	
    For Medtronic — the President of Medtronic AVE, Inc.




     
Any settlement reached by the parties under this Section 1
shall not be binding until reduced to writing and signed by the
above-specified designees of Medtronic and Volcano. When reduced
to writing, such settlement agreement shall supersede all other
agreements, written or oral, to the extent such agreements
specifically pertain to the matters so settled. If the designees
are unable to resolve such dispute within such 30-day period,
any party may invoke the provisions of Section 2 below.





     
2) Arbitration. All claims, disputes, controversies, and
other matters in question arising out of or relating to the
Agreements, including claims for Indemnifiable Losses and
disputes regarding the making of the Agreements, including
claims of fraud in the inducement, or to the alleged breach
hereof, shall be settled by negotiation between the parties as
described in Section 1 above or, if negotiation is
unsuccessful, by binding arbitration in accordance with
procedures set forth in Section 3 and 4 below.





     
3) Notice. Notice of demand for binding arbitration shall
be given in writing to the other party and shall be delivered
personally or by facsimile (receipt confirmed) to an executive
officer of such party or shall be sent by a reputable express
delivery service or by certified mail, postage prepaid with
return receipt requested, addressed as provided in the Agreement.





     
Any party may change the above-specified recipient and/or
mailing address by notice to the other party given in the manner
herein prescribed. All notices shall be deemed given on the day
when actually delivered as provided above (if delivered
personally or by facsimile (upon appropriate electronic
confirmation of successful transmission)) or on the day shown on
the return receipt (if delivered by mail or delivery service).
In no event may a notice of demand of any kind be filed more
than two years after the date the claim, dispute, controversy,
or other matter in question was asserted by one party against
another, and if such demand is not timely filed, the claim,
dispute, controversy, or other matter in question referenced in
the demand shall be deemed released, waived, barred, and
unenforceable for all time, and barred as if by statute of
limitations.






A-1








 




     
4) Binding Arbitration. Upon filing of a notice of
demand for binding arbitration by any party hereto, arbitration
shall be commenced and conducted as follows:







		
	 	     
    (a) Arbitrators. All claims, disputes,
    controversies, and other matters (collectively
    “matters”) in question shall be referred to and
    decided and settled by a standing panel of three independent
    arbitrators, one selected by each of Volcano and
    Medtronic’s representative and the third by the two
    arbitrators so selected; provided, if the amount in controversy
    (including reasonably anticipated future amounts or payments
    under the Agreement affected by such arbitrated matter) is under
    $300,000, a single arbitrator will be used. The third (or the
    single arbitrator, if applicable) shall be a former judge of one
    of the U.S. District Courts or one of the U.S. Court
    of Appeals or such other classes of persons as the parties may
    agree. Selection of arbitrators shall be made within
    30 days after the date of the first notice of demand given
    pursuant to Section 3 and within 30 days after any
    resignation, disability or other removal of such arbitrator.
    Following appointment, each arbitrator shall remain a member of
    the standing panel, subject to removal for just cause or
    resignation or disability; provided, however, an arbitrator can
    be removed by the party who appointed the arbitrator, or in the
    case of the third arbitrator, by either party for any reason at
    any time when no matter is in arbitration.
	 
	 	     
    (b) Cost of Arbitration. The cost of each
    arbitration proceeding, including without limitation the
    arbitrators’ compensation and expenses, hearing room
    charges, court reporter transcript charges etc., shall be borne
    by the party whom the arbitrators determine has not prevailed in
    such proceeding, or borne equally by the parties if the
    arbitrators determine that neither party has prevailed. The
    arbitrators shall also award the party that prevails
    substantially in its pre-hearing position its reasonable
    attorneys’ fees and costs incurred in connection with the
    arbitration. The arbitrators are specifically instructed to
    award attorneys’ fees for instances of abuse of the
    discovery process.
	 
	 	     
    (c) Location of Proceedings. An arbitration
    proceeding shall be held in San Francisco, California, unless
    the parties agree otherwise.
	 
	 	     
    (d) Pre-hearing Discovery. The parties shall have the
    right to conduct and enforce pre-hearing discovery in accordance
    with the then current Federal Rules of Civil Procedure, subject
    to these limitations: Document discovery and other discovery
    shall be under the control of and enforceable by the
    arbitrators. The arbitrators shall permit and facilitate such
    other discovery as they shall determine is appropriate under the
    circumstances, taking into account the needs of the parties and
    the desirability of making discovery expeditious and cost
    effective. The arbitrators shall decide discovery disputes. The
    arbitrators are empowered:






		
	 	     
    (i) to issue subpoenas to compel pre-hearing document or
    deposition discovery;
	 
	 	     
    (ii) to enforce the discovery rights and obligations of the
    parties; and



A-2






 







		
	 	     
    (iii) to otherwise control the scheduling and conduct of the
    proceedings.





     
Notwithstanding any contrary foregoing provisions, the
arbitrators shall have the power and authority to, and to the
fullest extent practicable shall, abbreviate arbitration
discovery in a manner that is fair to all parties in order to
expedite the arbitration proceeding and render a final decision
within six months after the pre-hearing conference.





     
(e) Pre-hearing Conference. Within 45 days after filing
of notice of demand for binding arbitration, the arbitrators
shall hold a pre-hearing conference to establish schedules for
completion of discovery, for exchange of exhibit and witness
lists, for arbitration briefs, for the hearing, and to decide
procedural matters and all other questions that may be presented.





     
(f) Hearing Procedures. The hearing shall be conducted to
preserve its privacy and to allow reasonable procedural due
process. Rules of evidence need not be strictly followed, and
the hearing shall be streamlined as follows:







		
	 	     
    (i) Documents shall be self-authenticating, subject to valid
    objection by the opposing party;
	 
	 	     
    (ii) Expert reports, witness biographies, depositions, and
    affidavits may be utilized, subject to the opponent’s right
    of a live cross-examination of the witness in person;
	 
	 	     
    (iii) Charts, graphs, and summaries shall be utilized to present
    voluminous data, provided (i) that the underlying data was made
    available to the opposing party 30 days prior to the hearing,
    and (ii) that the preparer of each chart, graph, or summary is
    available for explanation and live cross-examination in person;
	 
	 	     
    (iv) The hearing should be held on consecutive business days
    without interruption to the maximum extent practicable; and
	 
	 	     
    (v) The arbitrators shall establish all other procedural rules
    for the conduct of the arbitration in accordance with the rules
    of arbitration of the Center for Public Resources.




     
(g) Governing Law. This arbitration provision shall be
governed by, and all rights and obligations specifically
enforceable under and pursuant to, the rules of the Federal
Arbitration Act and the laws of the State of California shall be
applied, without reference to the choice of law principles
thereof, in resolving matters submitted to such arbitration.






A-3








 




     
(h) Consolidation. No arbitration shall include, by
consolidation, joinder, or in any other manner, any additional
person not a party to this Agreement (other than affiliates of
any such party, which affiliates may be included in the
arbitration), except by written consent of the parties hereto
containing a specific reference to this Agreement.





     
(i) Award. The arbitrators shall be required to render
their final decision within six months after the pre-hearing
conference. The arbitrators are empowered to render an award of
general compensatory damages and equitable relief (including,
without limitation, injunctive relief), but are not empowered to
award punitive or presumptive damages. The award rendered by the
arbitrators (1) shall be final; (2) shall not constitute a basis
for collateral estoppel as to any issue; and (3) shall not be
subject to vacation or modification, except in the event of
fraud or gross misconduct on the part of the arbitrators.





     
(j) Confidentiality. The parties hereto will maintain the
substance of any proceedings hereunder in confidence and make
disclosures to others only to the extent necessary to properly
conduct the proceedings.





     
(j) Entry of Judgment. The rulings of the arbitrators and
allocation of fees and expenses shall be binding,
non-reviewable, and non-appealable, and may be entered as a
final judgment in any court having jurisdiction hereunder.






A-4








 








Exhibit B




Console Specifications




          System:





	§	 	Dual 3.06 GHz Xeon processor
	 
	§	 	250GB IDE Hard Drive
	 
	§	 	2 GB SD RAM
	 
	§	 	16x DVD Drive
	 
	§	 	USB color printer on board
	 
	§	 	Boot up time less than 60 seconds, application imaging within 60
seconds from boot (total time <120 seconds)
	 
	§	 	19” LCD flat panel medical grade monitor
	 
	§	 	Allows for sudden power loss, data will be saved to hard drive
	 
	§	 	Data entry: keyboard, trackball, color coded interface
	 
	§	 	Multiple image screens ultrasound, flouro, stored and sagittal
views
	 
	§	 	Patient book-marking capabilities during acquisition and playback
	 
	§	 	Digital video loop storage: up to 10 video loops, each loop can hold
up to 2700 frames (30fps x 90 sec)
	 
	§	 	System supports up to 99 still frames from different video loops or
live feed
	 
	§	 	DICOM viewer automatically saved to each DVD burned
	 
	§	 	Installed with and validated for use with ChromaFlo software





          Input Power:





	§	 	100 to 240 VAC
	 
	§	 	50/60 Hz





          Dimensions:





	§	 	62“ X 24“ X 24“(H x W x D)





          Weight: 





	§	 	< 100 lbs




 









 











Exhibit C




Form of Warranty



LIMITED
WARRANTY


Subject to the conditions and limitations on liability stated herein, Volcano Corporation
(“VOLCANO”) warrants that the Volcano s5 (the “System”) as so delivered, shall materially
conform to Volcano’s then current specifications for the System, for a period of one year from the
date of delivery. ANY LIABILITY OF VOLCANO WITH RESPECT TO THE SYSTEM OR THE
PERFORMANCE THEREOF UNDER ANY WARRANTY, NEGLIGENCE, STRICT LIABILITY OR
OTHER THEORY WILL BE LIMITED EXCLUSIVELY TO SYSTEM REPAIR OR REPLACEMENT. EXCEPT FOR THE FOREGOING,
THE SYSTEM IS PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION, ANY WARRANTY OF FITNESS, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT.
FURTHER, VOLCANO DOES NOT WARRANT, GUARANTEE, OR MAKE ANY
REPRESENTATIONS REGARDING THE USE, OR THE RESULTS OF THE USE, OF THE
SYSTEM OR WRITTEN MATERIALS IN TERMS OF CORRECTNESS, ACCURACY,
RELIABILITY, OR OTHERWISE. Buyer understands that VOLCANO is not responsible for and
will have no liability for any items or any services provided by any persons other than VOLCANO.
VOLCANO shall have no liability for delays or failures beyond its reasonable control.
Additionally, this warranty does not apply if:



1. The System is operated in other than a manner prescribed by Volcano Corporation in
the Operator’s Manual, and/or supplements.



2. The System is operated in a manner that is not in conformance with purchase
specifications and specifications contained in the Operator’s Manual, and/or
supplements.


3. The System is not maintained in accordance with procedures in the Operator’s
Manual, and/or supplements.


4. The System is repaired, altered, or modified in any way by other than Volcano
Corporation authorized personnel, or without Volcano Corporation authorization.


Contact Volcano Corporation Field Service for instructions and issuance of a Return Material
Authorization if claims under this warranty become necessary and if the System or components of
the System are to be returned. The System or components will not be accepted for warranty
purposes unless the return has been authorized by Volcano Corporation.



System parts or components repaired or replaced under warranty bear the same warranty
expiration date as the original equipment. Consumable parts (data disks, batteries, among others)
are warranted only against defects in materials and workmanship. System parts purchased
outside the original warranty period are warranted for a period of 90 days, subject to all of the
restrictions contained in this Limited Warranty. Use of unauthorized replacement parts may void
the warranty. In all cases, Volcano Corporation will be the sole judge as to what constitutes
warrantable damage.




 









 








Exhibit D




Volcano Service Plans and Pricing Guide




 









 













IVUS MAINTENANCE AGREEMENT

BASIC PROTECTION




Dated: (Insert Date)







Volcano Corporation by its acceptance hereof, agrees to provide maintenance
services for the equipment listed below in accordance with the following terms on
the face and attachments.



	 	 	 
	Equipment Location:

	 	(HOSPITAL NAME)
	 

	 	(HOSPITAL ADDRESS)








Contact Name:

Telephone:

Fax:






IVUS Serial Number:

Patient Interface Module: 0500-






For service, please contact: (800) 228-4728
ext. 230
Fax: (916) 281-2669





Account Manager:

Phone Number: (800) 228-4728 ext.







ACCEPTED BY (HOSPITAL NAME):






 


Authorized Signature





 


Name





 


Title





 


Date





Page 1









 












IVUS Imaging System

BASIC PROTECTION




AMOUNT DUE — Nine thousand, seven hundred fifty dollars ($9,750.00) per year






MAINTENANCE AGREEMENT TERMS:



Maintenance Service



Volcano Corporation will provide maintenance service for the
equipment shown on the face hereof during normal working hours
(8:00 AM to 5:00 PM, Monday through Friday, except holidays). The
remedial service will consist of replacement of unserviceable or
defective components. Volcano Corporation will provide a 4-hour
telephone response time within business hours.



Replacement parts will be furnished on an exchange basis at Volcano
Corporation’s expense and will be new or reconditioned parts
equivalent to new. Replaced parts become the property of Volcano
Corporation. The Patient Interface Module (PIM) will be replaced at
no charge to customer provided the defective PIM is returned to
Volcano Corporation.



Service that Volcano Corporation furnishes at the customer’s
request in addition to those specified in the contract will be
charged to the customer and invoiced at Volcano Corporation’s
applicable rates.



Exclusions




Maintenance service does not include:




	1.	 	Preventative Maintenance Visit.
	 
	2.	 	Disposable items, including but not limited to catheters.
	 
	3.	 	Damage to the system due to negligence or misuse.
Additionally, such damage can void this warranty.
	 
	4.	 	Labor and material will be charged at Volcano
Corporation applicable rates for any of the following:






	 	a.	 	Malfunction or damage due to improper use
of equipment as outlined in the
Operators Manual.
	 
	 	b.	 	Malfunction or damage due to unauthorized
modification or repair of the system. Additionally, such repair or modification could compromise
the safety and reliability of the equipment and shall void the warranty.
	 
	 	c.	 	Malfunction or damage due to unauthorized equipment interfaces. Additionally, such repair or modification could compromise the safety and
reliability of the equipment and shall also void the warranty.




Page 2








 
















	 	d.	 	Any malfunction or damage due to accident, misuse, or neglect.





Customer agrees that Volcano Corporation may inspect the equipment
before the commencement date of this agreement. Any deficiencies
discovered which are not otherwise covered by the Volcano
Corporation’s sales warranty, will be corrected and billed to the
customer at Volcano Corporation’s applicable rates.



Charges



Volcano Corporation shall add to all charges any sales, excise, use
or other taxes or fees, now in effect or hereafter levied, which
Volcano Corporation may be required to pay or collect in connection
with this agreement.



All charges shall be due net thirty (30) days from date of invoice
unless otherwise specified on the invoice. Volcano Corporation may,
at Volcano Corporation’s option, immediately terminate this
agreement for payment delinquency in excess of sixty (60) days.



Access to Equipment




Volcano Corporation or Volcano Corporation’s authorized
representatives shall have full and free access to the equipment
to perform maintenance service. The Volcano Corporation Service
Representative will charge for time waiting for equipment
availability after a sixty (60) minute wait beyond the scheduled
time.



Equipment Coverage




This agreement is non-cancelable for one year or the term as stated
on the face hereof whichever is less, except: if either party fails
to perform its obligations and such failure continues after thirty
(30) days written notice, then the other party has the right to
terminate this agreement.



By written agreement of the parties, additional items of equipment
may be added to the coverage of this agreement. The location of the
equipment, type, mode, serial number, and commencement date of
maintenance service as well as any additional charges for
maintenance of additional item shall be specified on the face of
this agreement.



Warranty




Repairs made during the term of this agreement are warranted for
the period remaining on and under the conditions of this agreement
or for ninety (90) days, whichever is longer.



Miscellaneous




This agreement constitutes the entire agreement between the parties
and supersedes any previous agreement, understanding or order
between the parties. Should the terms and conditions of the Purchase
Order issued in connection with this agreement conflict with terms
contained herein, the terms of this agreement shall prevail. No
modifications or waiver of the terms of this agreement shall be
binding unless made in writing and signed by both parties.




Page 3









 









Volcano Corporation shall be excused from any delay or failure to provide
maintenance service under this agreement due to: fire, casualties or accidents, acts
of God, civil disorder, governmental acts or restrictions, or any other causes beyond
our reasonable control.



VOLCANO CORPORATION’S LIABILITY UNDER THIS AGREEMENT SHALL BE LIMITED TO PROVIDING
MAINTENANCE SERVICE. IN NO EVENT SHALL VOLCANO CORPORATION BE LIABLE FOR LOSS OF
ANTICIPATED PROFITS OR CONSEQUENTIAL OR SPECIAL DAMAGES.



This agreement and any amendment or modification is subject to Volcano Corporation
acceptance. Upon acceptance, Volcano Corporation shall return to the customer a
signed duplicate copy.



The laws of the State of California shall govern this agreement.



Page 4









 












IVUS
MAINTENANCE AGREEMENT

FULL PROTECTION





Dated: (Insert Date)








Volcano Corporation by its acceptance hereof, agrees to provide maintenance
services for the equipment listed below in accordance with the following terms on
the face and attachments.



	 	 	 
	Equipment Location:

	 	(HOSPITAL NAME)
	 

	 	(HOSPITAL ADDRESS)








Contact Name:

Telephone:

Fax:






IVUS Serial Number:

Patient Interface Module: 0500-






For
Service Contact: (800) 228-4728
ext. 230
Fax: (916) 861-0266





Account
Representative:

Telephone: (800) 228-4728 ext.







ACCEPTED BY (HOSPITAL NAME):






 


Print Name





 


Authorized Signature





 


Title





 


Date















 












IVUS Imaging System

FULL PROTECTION




AMOUNT DUE — Thirteen thousand, six hundred fifty dollars ($13,650.00) per year




MAINTENANCE AGREEMENT TERMS:



Maintenance Service



Volcano Corporation will provide maintenance service for the
equipment shown on the face hereof during normal working hours
(8:00 a.m. to 5:00 p.m., Monday through Friday, except holidays).
The remedial service will consist of the replacement of
unserviceable or defective components. Volcano Corporation will
provide 48-hour response time to repair the Systems. Volcano
Corporation will provide a 4-hour telephone response time within
business hours.



One preventative maintenance visit will be provided during the term
of this agreement. The preventative maintenance will be performed
approximately six months following initiation of this agreement.
The PM includes functional check of the entire unit in conjunction
with accessories, and a full diagnostic check.



Replacement parts will be furnished on an exchange basis at Volcano
Corporation’s expense and will be a new part or reconditioned part
equivalent to new. Replaced parts become the property of Volcano
Corporation. The Patient Interface Module (PIM) will be replaced at
no charge to customer provided the defective PIM is returned to
Volcano Corporation.



Customer will be entitled to send a representative to attend a
clinical training course at a pre-scheduled training site. Volcano
Corporation will waive tuition charges. All related travel and
lodging expenses is the customer’s responsibility.



Service that Volcano Corporation furnishes at the customer’s
request in addition to those specified in this contract will be
charged to the customer and invoiced at Volcano Corporation’s
applicable rates.



Exclusions




Maintenance service does not include:




	1.	 	Disposable items, including but not limited to catheters.
	 
	2.	 	Damage to the system due to negligence or misuse.
Additionally, such damage can void this warranty.





 









 













	3.	 	Labor and material will be charged at Volcano
Corporation applicable rates for any of the following:






	 	a.	 	Malfunction or damage due to improper use of equipment
as outlined in the Operators Manual.
	 
	 	b.	 	Malfunction or damage due to unauthorized
modification or repair of the system. Additionally, such repair or modification could
compromise the safety and reliability of the equipment and shall void
the warranty.
	 
	 	c.	 	Malfunction or damage due to
unauthorized equipment interfaces. Additionally, such repair or modification could
compromise the safety and reliability of the equipment and shall also void the
warranty.
	 
	 	d.	 	Any malfunction or damage due to accident, misuse, or neglect.





Customer agrees that Volcano Corporation may inspect the equipment
before the commencement date of this agreement. Any deficiencies
discovered which are not otherwise covered by Volcano Corporation’s
sales warranty, will be corrected and billed to the customer at
Volcano Corporation’s applicable rates.



Charges




Volcano Corporation shall add to all charges any sales, excise, use
or other taxes or fees, now in effect or hereafter levied, which
Volcano Corporation may be required to pay or collect in connection
with this agreement.



All charges shall be due net thirty (30) days from date of invoice
unless otherwise specified on the invoice. Volcano Corporation may,
at Volcano Corporation’s option, immediately terminate this
agreement for payment delinquency in excess of sixty (60) days.



Access to Equipment




Volcano Corporation or Volcano Corporation’s authorized
representatives shall have full and free access to the equipment to
perform maintenance service. The Volcano Corporation Service
Representative will charge for time waiting for equipment
availability after a sixty (60) minute wait beyond the scheduled
time.



Equipment Coverage




This agreement is non-cancelable for one year or the term as stated
on the face hereof whichever is less, except: if either party fails
to perform its obligations and such failure continues after thirty
(30) days written notice, then the other party has the right to
terminate this agreement.



By written agreement of the parties, additional items of equipment
may be added to the coverage of this agreement. The location of the
equipment, type, mode, serial number,



Page 9









 












commencement
date of maintenance service and any additional charges
for maintenance of additional item shall be specified on the face of this agreement.



Warranty




Repairs made during the term of this agreement are warranted for the period
remaining on and under the conditions of this agreement or for ninety (90) days,
whichever is longer.



Miscellaneous




This agreement constitutes the entire agreement between the parties and supersedes
any previous agreement, understanding or order between the parties. Should the terms
and conditions of the Purchase Order issued in connection with this agreement
conflict with terms contained herein, the terms of this agreement shall prevail. No
modifications or waiver of the terms of this agreement shall be binding unless made
in writing and signed by both parties.



Volcano Corporation shall be excused from any delay or failure to provide
maintenance service under this agreement due to: fire, casualties or accidents, acts
of God, civil disorder, governmental acts or restrictions, or any other causes
beyond our reasonable control.



VOLCANO CORPORATION’S LIABILITY UNDER THIS AGREEMENT SHALL BE LIMITED TO PROVIDING
MAINTENANCE SERVICE. IN NO EVENT SHALL VOLCANO CORPORATION BE LIABLE FOR LOSS OF
ANTICIPATED PROFITS OR CONSEQUENTIAL OR SPECIAL DAMAGES.



This agreement and any amendment or modification is subject to Volcano Corporation
acceptance. Upon acceptance, Volcano Corporation shall return to the customer a
signed duplicate copy.



The laws of the State of California shall govern this agreement.



 









 













IVUS MAINTENANCE AGREEMENT

FULL PROTECTION PLUS




Dated: (Insert Date)







Volcano Corporation by its acceptance hereof, agrees to provide maintenance
services for the equipment listed below in accordance with the following terms on
the face and attachments.



	 	 	 
	Equipment Location:

	 	(HOSPITAL NAME)
	 

	 	(HOSPITAL ADDRESS)








Contact Name:

Telephone:

Fax:






IVUS Serial Number:

Patient Interface Module: 0500-






For Service Contact: (800) 228-4728
ext. 230
Fax: (916) 861-0266





Account
Representative:

Telephone: (800) 228-4728 ext.







ACCEPTED
BY (HOSPITAL NAME):






 


Print Name





 


Authorized Signature





 


Title





 


Date





 









 










IVUS Imaging System

FULL PROTECTION PLUS




AMOUNT DUE — Seventeen thousand, five hundred fifty dollars ($17,550.00) per year




MAINTENANCE AGREEMENT TERMS:



Maintenance Service



Volcano Corporation will provide maintenance service for the equipment shown on the
face hereof during normal working hours (8:00 am to 5:00 PM, Monday through Friday,
except holidays). The remedial service will consist of the replacement of
unserviceable or defective components. Volcano Corporation will provide 24-hour
response time to repair IIVUS Systems. Volcano Corporation will provide a 4-hour
telephone response time within business hours.



One preventative maintenance visit will be provided during the term of this
agreement. The preventative maintenance will be performed approximately six months
following initiation of this agreement. The PM includes functional check of the
entire unit in conjunction with accessories, and a full diagnostic check.



Replacement parts will be furnished on an exchange basis at Volcano Corporation’s
expense and will be a new part or reconditioned part equivalent to new. Replaced
parts become the property of Volcano Corporation. The Patient Interface Module (PIM)
will be replaced as needed at no charge to customer provided the defective (PIM) is
returned to Volcano Corporation.



Customer will be entitled to send a representative to attend a clinical training
course at a pre-scheduled training site. Volcano Corporation will waive tuition
charges. All related travel and lodging expenses is the customer’s responsibility.



Service that Volcano Corporation furnishes at the customer’s request in addition to
those specified in this contract will be charged to the customer and invoiced at
Volcano Corporation’ applicable rates.



Exclusions




Maintenance service does not include:




	1.	 	Disposable items, including but not limited to catheters.
	 
	2.	 	Damage to the system due to negligence or misuse. Additionally,
such damage can void this warranty.
	 
	3.	 	Labor and material will be charged at Volcano
Corporation’ applicable rates for any of
the following:




Page 2









 











	 	a.	 	Malfunction or damage due to improper use of equipment as outlined in
the Operators Manual.
	 
	 	b.	 	Malfunction or damage due to unauthorized
modification or repair of the system.
Additionally, such repair or modification could compromise the safety
and reliability of the equipment and shall void the warranty.
	 
	 	c.	 	Malfunction or damage due to unauthorized equipment
interfaces. Additionally, such repair or modification could compromise the safety and reliability
of the equipment and shall also void the warranty.
	 
	 	d.	 	Any malfunction or damage due to accident, misuse, or neglect.





Customer
agrees that Volcano Corporation may inspect the equipment before the commencement date of this agreement. Any deficiencies discovered which are not
covered by Volcano Corporation’s sales warranty, will be corrected and billed to the
customer at Volcano Corporation’s applicable rates.



95%
Uptime Guarantee




Volcano Corporation guarantees the unit will be available for use 247 working days.
Percentage is based on 260 working days per year. If the system is non-operational
less than 95% of the time as calculated above, a 2% credit per day on the service
contract will be granted.



Charges




Volcano Corporation shall add to all charges any sales, excise, use or other taxes
or fees, now in effect or hereafter levied, which Volcano Corporation may be
required to pay or collect in connection with this agreement.



All charges shall be due net thirty days (30) from date of invoice unless otherwise
specified on the invoice. Overdue payments shall be charged interest at the rate of
one and one-half (11/2) percent per month or the maximum permitted by law whichever
is less. Volcano Corporation may, at Volcano Corporation’s option, immediately
terminate this agreement for payment delinquency in excess of sixty (60) days.



Access
to Equipment




Volcano Corporation or Volcano Corporation’s authorized representatives shall have
full and free access to the equipment to perform maintenance service. The Volcano
Corporation Service Representative will charge for time waiting for equipment
availability after a sixty (60) minute wait beyond the scheduled time.



Equipment
Coverage




This agreement is non-cancelable for one year or the term as stated on the face
hereof whichever is less, except: if either party fails to perform its obligations
and such failure continues after thirty (30) days written notice, then the other
party has the right to terminate this agreement.




Page 3








 










By written
agreement of the parties, additional items of equipment may be added
to the coverage of this agreement. The location of the equipment, type, mode, serial
number, commencement date of maintenance service and any additional charges for
maintenance of additional item shall be specified on the face of this agreement.



Warranty




Repairs made during the term of this agreement are warranted for the period
remaining on and under the conditions of this agreement or for ninety (90) days,
whichever is longer.



Miscellaneous




This agreement constitutes the entire agreement between the parties and supersedes
any previous agreement, understanding or order between the parties. Should the terms
and conditions of the Purchase Order issued in connection with this agreement
conflict with terms contained herein, the terms of this agreement shall prevail. No
modifications or waiver of the terms of this agreement shall be binding unless made
in writing and signed by both parties.



Volcano Corporation shall be excused from any delay or failure to provide
maintenance service under this agreement due to: fire, casualties or accidents, acts
of God, civil disorder, governmental acts or restrictions, or any other causes
beyond our reasonable control.



VOLCANO CORPORATION’S LIABILITY UNDER THIS AGREEMENT SHALL BE LIMITED TO PROVIDING
MAINTENANCE SERVICE. IN NO EVENT SHALL VOLCANO CORPORATION BE LIABLE FOR LOSS OF
ANTICIPATED PROFITS OR CONSEQUENTIAL OR SPECIAL DAMAGES.



This agreement and any amendment or modification is subject to Volcano Corporation’s
acceptance. Upon acceptance, Volcano Corporation shall return to the customer a
signed duplicate copy.



The laws of the State of California shall govern this agreement.



Page 4









 















Description of Features & Values




Preventive
Maintenance: Complete functional and diagnostic check of the unit and peripherals.
Preventive Maintenance performed six months after initiation of contract.



24 Hour
On-Site Response: Field Service will respond via telephone within four business hours and
will be on-site within one business day (with Full Protection Plus Service Contracts).



Clinical
Training Bonus: Customer will be entitled to tuition costs for one person at a
pre-scheduled clinical training course. Customer responsible for all related travel and lodging
expenses.



95% Up-time
Guarantee: Based on 40 hours per week x 52 weeks = 2080 hours x 95% = 1976 hours per
year.



Parts:
Replacement parts will be furnished on an exchange basis and will be new or reconditioned
equivalents to new.



PIM (Patient
Interface Module) Replacement (for IVUS): Replacement PIM’s will be furnished
on an exchange basis and will be new or reconditioned equivalent to new.



Field Service Facts





	•	 	Technical support telephone response time: Four business hours
	 
	•	 	Average on-site response time: 48 hours (two business days)
	 
	•	 	Repair Charges (for systems not under contract or warranty):




$250/hour for labor



Minimum eight hour charge



All repairs are warranted for 90 days.



Please call Field Service
for current parts prices.




Service Contracts are available on all product lines.




Service Schools are held three times a year.




	 	 	 
	VOLCANO Corp.
	 	VOLCANO Europe SA/NV
	2870 Kilgore Road
	 	Excelsiorlaan 41
	Rancho Cordova, CA 95670
	 	B-1930 Zaventern Belgium
	800.228.4728 • 916.638.8008
	 	+32.2.679.1076
	Fax 916.638.8812
	 	+32.2.679.1079 fax






			
	For further information about VOLCANO and its products, please visit www.volcanocorp.com
	 	105630-001/003



















 









 







VOLCANO’S Commitment to Service 



Maintaining the highest quality standards is a priority at Volcano. We have a variety of
service contracts to ensure your Volcano equipment continues to operate at an optimum level.
Service contracts offer you confidence that your system will be maintained to factory
specifications.




To ensure you get the most out of your Volcano system, we offer:





	 	•	 	24 Hour On-site Response

	 
	 	•	 	Preventive Maintenance
	 
	 	•	 	Clinical Training Bonus
	 
	 	•	 	Up-time Guarantee




If you are interested in purchasing a service contract please contact your local Volcano sales or
clinical representative.




 



 



Place Business Card Here







Service Contract Options




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Special Features	 	 	Full Protection Plus	 	 	Full Protection	 	 	Basic Protection
	 	 	 	 	 	 	 	 	 	 
	Parts

	 	 	ü
	 	 	ü
	 	 	ü

	 	 	 	 	 	 	 	 	 	 
	Labor and Travel

	 	 	ü
	 	 	ü
	 	 	ü

	 	 	 	 	 	 	 	 	 	 
	PIM Replacement (IVUS only)

	 	 	As needed
	 	 	As needed
	 	 	As needed

	 	 	 	 	 	 	 	 	 	 
	Preventive Maintenance

	 	 	One per year
	 	 	One per year
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	

Value Added Features
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	95% Up-time Guarantee

	 	 	ü
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	24 Hour On-Site Response

	 	 	ü
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	Clinical Training Bonus

	 	 	ü
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	Annual Cost
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	IVUS System WaveMap

	 	 	$	17,550	 	 	 	$	13,650	 	 	 	$	9,750	 
	Pressure System

	 	 	 	N/A	 	 	 	 	N/A	 	 	 	$	2,275	 
	ComboMap System

	 	 	 	N/A	 	 	 	 	N/A	 	 	 	$	4,550	 






To Contact Field Service




	 	 	 
	Operating hours:

	 	Monday — Friday: 7am —
5pm (anywhere in the USA)
	Telephone:

	 	916-861 -0230
	Fax:

	 	916-861-0266






VOLCANO Corp.

2870 Kilgore Road

Rancho Cordova, CA 95670

800.228.4728 • 916.638.8008

Fax 916.638.8812










 









 








Exhibit E




Notice Provision



All notices or other communications to a party required or permitted hereunder shall be in writing
and shall be delivered personally or by facsimile (receipt confirmed electronically) to such party
(or, in the case of an entity, to an executive officer of such party) or shall be sent by a
reputable express delivery service or by certified mail, postage prepaid with return receipt
requested, addressed as follows:




     if to Medtronic, to:


Medtronic, Inc.

710 Medtronic Parkway NE

Minneapolis, Minnesota 55432-5604

Attn: Vice President and Chief Development Officer

Telecopier No.: (763) 572-5459




     with separate copies thereof (which shall not constitute notice) addressed to:



	 	 	 	 	 
	 

	 	 	 	 
	 

	 	Attention:
	 	General Counsel
	 

	 	 	 	Mail Stop LC400
	 

	 	 	 	Telecopier No.: (763) 572-5459
	 
	 	 	 	 
	 

	 	and	 	 
	 
	 	 	 	 
	 

	 	Attention:
	 	Medtronic Vascular, Inc.
	 

	 	 	 	3576 Unocal Place
	 

	 	 	 	Santa Rosa, CA 95403
	 

	 	 	 	Attn: VP of Legal Affairs
	 

	 	 	 	Telecopier No.: (707) 566-1259






     if to Volcano to:


Volcano Corporation

2870 Kilgore Road

Rancho Cordova, California 95670

Telecopier No.: (916) 638-7976

Attn: Chief Financial Officer



Either Party may change the above-specified recipient and/or mailing address by notice to all other
Party given in the manner herein prescribed. All notices shall be deemed 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 delivery service).