Document:

exv10w26

 

Exhibit
10.26

[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]

November 9, 1994

Mr. Akira Yamamoto

Goodman Company, Ltd.

108 Fujigaoka, Meito-ku

Nagoya-shi 465

Japan

Dear Mr. Yamamoto:

This is to confirm the understanding and agreement that Goodman Company, Ltd. and Kaneko
Enterprises, Inc. (collectively, “Distributor”) and Cardiometrics, Inc. (“Manufacturer”) have
reached regarding that certain International Distributor Agreement (“Prior Agreement”) dated as of
September 17, 1991 between Distributor and Manufacturer. Capitalized terms not otherwise defined in
this letter shall be defined as in the Prior Agreement.

	 	1.	 	Distributor and Manufacturer shall enter into a new 5-year International
Distributor Agreement (“New Agreement”) in the form enclosed with this letter, with
the fixed term of the New Agreement ending on September 17, 1999. Except as provided
below, the New Agreement shall supersede the Prior Agreement.
	 
	 	2.	 	Distributor and Manufacturer agree that Distributor has obtained government
approvals for the Products in the name of Distributor, rather than in the name of
Manufacturer, contrary to the provisions of Section 8(h) of the Prior Agreement.
Distributor and Manufacturer agree that these government approvals may remain in the
name of the Distributor; provided, that Distributor agrees that upon the earlier to
occur of: (a) the giving of notice of termination of the New Agreement pursuant to
Section 8 thereof, or (b) the termination of the New Agreement, it shall take all
necessary actions to transfer these government approvals to the name of the
Manufacturer as promptly as possible, but in any event within ninety (90) days of the
giving of notice or thirty (30) days after termination of the New Agreement, whichever
period ends the soonest. After the transfer of these government approvals has been
made and upon delivery to Manufacturer of Distributor’s customer list for the
Products, Manufacturer shall (i) reimburse Distributor for its reasonable expenses
incurred in effecting such transfers and obtaining official reimbursement from the
Ministry of Health in Japan and certain government approvals, in an amount not to
exceed (U.S.) $250,000, and (ii) pay to Distributor all amounts then due to
Distributor pursuant to Sections 8(c) and 8(e) of the New Agreement.

Cardiometrics Inc., 645 Clyde Avenue, Mountain View, CA 94043

Telephone: 415961.6993 Ÿ Fax 115
961-8753 Ÿ Customer Service: 500
531-FLOW (3569)

 

 

November 9, 1994

Page Two

 

To confirm the foregoing, please sign and return to me the enclosed copy of this letter.

Sincerely,

Cardiometrics, Inc.

	 	 	 	 	 
	By:

	 	/s/ Menahem Nassi
	 	 
	 

	 	 	 	 
	 

	 	Menahem Nassi	 	 
	 

	 	President and Chief Executive Officer	 	 

 

ACKNOWLEDGED AND CONFIRMED:

Goodman
Company, Ltd.

	 	 	 	 	 
	By:

	 	/s/ Akira Yamamoto
	 	 
	 

	 	 	 	 
	Name:

	 	Akira Yamamoto	 	 
	 

	 	 	 	 
	Title:

	 	President	 	 
	 

	 	 	 	 

Kaneko
Enterprises, Inc.

	 	 	 	 	 
	By:

	 	/s/ Masahiko Kaneko
	 	 
	 

	 	 	 	 
	Name:

	 	Masahiko Kaneko	 	 
	 

	 	 	 	 
	Title:

	 	President	 	 
	 

	 	 	 	 

 

 

INTERNATIONAL DISTRIBUTOR AGREEMENT

This
International Distributor Agreement (“Agreement ”) is entered into in Mountain View,
California, as of September 17, 1994 between Cardiometrics, Inc., a California Corporation
with principle offices at 645 Clyde Avenue, California, U.S.A. ( “Manufacturer” ), and GOODMAN
CO., LTD., and KANEKO ENTERPRISES, INC. companies with offices located at Goodman Co., Ltd.,
108 Fujigaoka, Meito-Ku,
 Nagoya, 465 Japan; and Kaneko Enterprises,
Inc. 16241-D Gothard Avenue, Huntington Beach, CA 92647 (
“Distributor”).

In consideration of the mutual promises contained herein, the parties agree as follows:

1. DEFINITIONS

     a) “Products” shall mean those products listed in Exhibit A attached hereto. Products may be
changed, abandoned or added by Manufacturer, at its sole discretion,
provided that Manufacturer gives thirty (30) days’ prior written notice to
distributor. Manufacturer shall be under no obligation to continue the production of any Product,
except as provided herein.

     b) “Territory” shall mean that geographic area identified in Exhibit B attached hereto.

2. APPOINTMENT AND AUTHORITY OF DISTRIBUTOR

     a) Appointment. Subject to the terms and conditions set forth herein, Manufacturer
hereby appoints Distributor as Manufacturer’s sole and exclusive importer and Distributor for the
Cardiometrics stand alone FloMap and Cardiometrics FloWire products as specified in Exhibit A, in
the Territory, and Distributor hereby accepts such appointment.
Manufacturer reserves the right to
appoint value added resellers, original equipment manufacturers
(OEM) and the like (“ Third Party Resellers”) to sell
Products other than disposable guidewire
Products, (“Hardware Products”) in the territory. Manufacturer shall pay no compensation for
Distributor for sales of hardware products by Third Party Resellers in the territory as noted in
2(a) .

     b)
Territorial Responsibility.  Distributor shall pursue aggressive sales
policies and procedures to realize the maximum sales potential for the Products in the Territory.

     c)
Conflict of Interest. Distributor warrants to Manufacturer that it does not
currently represent or promote any

 1

 

 

lines or products that compete with the Products. During the term of this Agreement,
Distributor shall not, without Manufacturer’s prior written consent, represent, promote or
otherwise try to sell within the Territory any lines or products that, in Manufacturer’s
judgement, compete with the Products covered by this Agreement. Immediately prior to the execution
of this Agreement, Distributor shall provide Manufacturer with a list of the companies and
products that it currently represents and shall notify Manufacturer in writing of any new
companies and products at such time as its promotion of those new companies and products
commences.

     d) Independent Contractors. The relationship of Manufacturer and distributor established
by this Agreement is that of independent contractors, and nothing contained in this Agreement
shall be construed to (i) give either party the power to direct and control the day-to-day
activities of the other, (ii) constitute the parties as partners, joint venturers, co-owners or
otherwise as participants in a joint or common undertaking, or (iii) allow Distributor to create
or assume any obligation on behalf of Manufacturer for any purpose whatsoever. All financial
obligations associated with Distributor’s business are the sole responsibility of distributor. All
sales and other agreements between Distributor and its customers are Distributor’s exclusive
responsibility and shall have no effect on Distributor’s obligations under this Agreement.
Distributor shall be solely responsible for, and shall indemnify and hold Manufacturer free and
harmless from any and all claims, damages or lawsuits (including Manufacturer’s attorneys fees)
arising out of the acts or omission of Distributor, its employees or its agents.

3.
TERMS OF PURCHASE OF PRODUCTS BY DISTRIBUTOR

     a) Terms and Conditions. All purchases of Products by Distributor from Manufacturer
during the term of this Agreement shall be subject to the terms and conditions of this
Agreement.

     b) Prices. All prices are F.O.B. (as defined in Section 2319 of the California Uniform
Commercial Code) Manufacturer’s plant currently located at the address listed for
Manufacturer at the beginning of this Agreement. The purchase price to Distributor for each
of the Products (“Purchase Price”) shall be as set forth in Exhibit A attached hereto. The
difference between Distributor’s Purchase Price and Distributor’s selling price to its
customers shall be Distributor’s sole remuneration for sale of the products and for all other
obligations of Distributor under this Agreement. Manufacturer has the right at any time to
revise the prices in Exhibit A with thirty (30) days’ advance written notice to Distributor.
Such revisions shall apply to all orders received after the effective date of revision. Price
increases shall not affect unfulfilled purchase orders accepted by Manufacturer prior to the
effective date of the price increase. Price decreases shall

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apply to pending purchase orders
accepted by Manufacturer prior to the effective date of the decrease but not yet shipped.

     c) Taxes. Distributor’s Purchase Price does not include any federal, state or local
taxes that may be applicable to the Products. When Manufacturer has the legal obligation to
collect such taxes, the appropriate amount shall be added to
Distributor’s invoice and paid by Distributor unless Distributor provides
Manufacturer with a valid tax exemption certificate authorized by the appropriate taxing
authority.

     d) Order and Acceptance. All orders for Products submitted by Distributor shall be
initiated by written purchase orders sent to Manufacturer and requesting a delivery date
during the term of this Agreement; provided, however, that an order may initially be placed
orally or by telex order. To facilitate Manufacturer’s production scheduling, Distributor
shall submit purchase orders to Manufacturer at least ninety (90) days prior to the first day
of the requested month of delivery. No order shall be binding upon Manufacturing until
accepted by Manufacturer in writing, and Manufacturer shall have no liability to Distributor
with respect to purchase orders that are accepted. Manufacturer shall use commercially
reasonable efforts to notify Distributor of the acceptance or rejection of an order and of
the assigned delivery date for accepted orders within thirty (30) days after receipt of the
purchase order.

No partial shipment of an order shall constitute the acceptance or the entire order, absent the
written acceptance of such entire order. Manufacturer shall use commercially reasonable efforts to
deliver Products at the times specified either in its quotation or in its written acceptance of
Distributor’s purchase orders.

     e) Terms of Purchase Orders. Distributor’s purchase orders submitted to Manufacturer
from time to time with respect to Products to be purchased hereunder shall be governed by the
terms of this Agreement, and nothing contained in any such purchase order shall in any way
modify such terms of purchase or add any additional terms or conditions.

     f) Demo Unit. To assure adequate sales support, Distributor agrees, upon the effective
date of this Agreement, to Purchase the Products shown in Exhibit C attached hereto. The
special purchase price set forth in Exhibit C is for the Products to be used by the
Distributor solely as demonstration units. The Products purchased by Distributor as
demonstration units may be sold to end users by the Distributors twelve (12) months after the
delivery date, provided Distributor replace them by purchasing an additional unit of the
same Product at the current Purchase Price.

     g)
Change Order. Distributor may utilize written change orders without penalty for
orders that have not yet been accepted by manufacturer. For orders that have been accepted by

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manufacturer but have not yet been shipped (excluding the initial order under Subsection 3(f)
above). Distributor may utilize written change orders subject to the following conditions.

      i) Distributor may delay delivery of any
accepted order, provided that the rescheduled delivery
date occurs during the term of this Agreement and provided further that Distributor shall pay a
rescheduling fee equal to ten percent (10%) of the Purchase Price (net of freight, taxes and other
charges) of the rescheduled Products if Distributor’s change order is received by manufacturer less
than ninety (90) days before the assigned delivery date.

Unless Manufacturer otherwise agrees, no change order shall be effective unless accompanied by the
rescheduling fee if any, required by the Subsection 3(g)(i).

      ii) Distributor may cancel any order that has been accepted by Manufacturer, provided that if the
written change order is received by Manufacturer less than ninety (90) days before the assigned
delivery date or if the written change order cancels an order that has been previously rescheduled
under Subsection 3(g)(i) above, then Distributor shall pay a cancellation charge equal to
fifteen percent (15%) of the net Purchase Price of the canceled Products. Not withstanding the
above, no order is cancelable fourteen (14) days before scheduled ship date.

      h)
Payment. Full payment of Distributor’s Purchase price for the Products and spare parts
(including any freight, taxes or other applicable costs initially paid by Manufacturer but to be
borne by Distributor) shall be made by Distributor to Manufacturer in U.S. dollars and shall be due
within sixty (60) days from the date of shipment of such Products to Distributor and shall be made
by wire transfer, check or other instrument approved by Manufacturer. Wire transfer shall be made
according to the terms of this agreement to:

	 	 	 
	 

	 	SILICON VALLEY BANK
	 

	 	3000 Lakeside Drive
	 

	 	Santa Clara. CA 95054
	 

	 	Attn: Jane Braun
	 

	 	(408) 654–5664
	 

	 	Account #: 02711508–70/-75

If Manufacturer hereafter determines that it no longer desires to extend credit to Distributor
it shall give written notice to Distributor and thereafter payment shall be effected by means of an
irrevocable letter of credit drawn on a California bank approved by Manufacturer; the letter of
credit shall be upon terms acceptable to Manufacturer, shall allow for partial shipments, and shall
be in an amount equal to Distributor’s Purchase Price for the Products Plus all applicable taxes,
shipping charges, and other charges to be borne by Distributor. All exchange, interest, banking,
collection, and other charges shall be at Distributor’s expense.

4

 

Any
invoiced amount not paid when due shall be subject to a service charge of one and one-half
percent (1.5%) per month or the maximum rate allowed by law, whichever is less. Distributor shall
pay all of Manufacturer’s costs and expenses (including reasonable attorney’s fees) to enforce and
preserve Manufacturer’s rights under this Subsection 3(h).

     i)
Shipping. All Products delivered pursuant to the terms of this agreement shall be packed for
air freight shipment in Manufacturer’s standard shipping cartons, marked for shipment at
Distributor’s address set forth above, and delivered to
Distributor or its carrier agent F.O.B.
Manufacturer’s manufacturing plant, at which time (subject to
Subsection 3(1) below) title to such
Products and risk of loss shall pass to Distributor. Unless otherwise instructed in writing by
Distributor, Manufacturer shall select the carrier. All freight, insurance, and other shipping
expenses, shall be paid by Distributor. Distributor shall also bear all applicable taxes, duties
and similar charges that may be assessed against the products after delivery to the carrier at
Manufacturer’s plant.

     j)
Rejection or Products. Distributor shall inspect all Products promptly upon receipt
thereof and may reject any Product that fails in any material way to meet the specifications sat
forth in Manufacturer’s current brochure for that Product. Any Product not properly rejected within
thirty (30) days after receipt of that Product by Distributor
(“Rejection Period”) shall be deemed
accepted. To reject a Product, Distributor shall, within the Rejection Period, notify Manufacturer
in writing or by FAX of its rejection and request Return Goods
Authorization (“RGA”) number.
Manufacturer shall use commercially reasonable efforts to provide the RGA number in writing or by
FAX to Distributor within fifteen (15) days after receipt of the
request. Within ten (10) days
after receipt of RGA number, Distributor shall return to manufacturer the rejected Product, freight
prepaid, in its original shipping carton with that RGA number displayed on the outside of the
carton. Provided that Manufacturer has complied with its obligations in
this Subsection 3(j), Manufacturer reserves the right to refuse to accept any rejected Products
that do not bear an RGA number on the outside of the carton. As promptly as possible but no later
that thirty (30) working days after receipt by Manufacturer of
properly rejected Products,
Manufacturer shall, at its option and expense, either repair or replace the Products. Manufacturer
shall pay the shipping charges back to Distributor for properly
rejected Products; otherwise,
Distributor shall be responsible for the shipping charges.

     k) Return of Products after Rejection Period. After the Rejection Period. distributor may
not return a product to manufacturer for any reason without Manufacturer’s prior written consent .
For any Product for which Manufacturer gives such consent.
Manufacturer shall charge Distributor a
restocking fee

5

 

equal to fifteen percent (15%) of Distributor’s Purchase price for that Product and in such
case shall credit the balance of the Purchase Price to Distributor’s account. Distributor shall be
responsible for all shipping charges.

     1)
Reservation of Title. Transfer of title for each Product and in such
case shall credit the balance of the Purchase Price to Distributor’s account.
Distributor shall be responsible for all shipping charges.

4.
TRAINING, INSTALLATION, AND SERVICE

     a)
Services by Distributor. Distributor shall have the responsibility to install the
Products, test the installed Products, service and repair the Products, and train the customers
with respect to the Products sold. The services shall be performed only by specially and properly
trained personnel of Distributor and shall be prompt and of the highest quality. Distributor shall
maintain a properly equipped service department as required sufficient to meet the needs of the
Territory, as well as a complete and adequate supply of spare parts to properly service Products
used in the Territory (in accordance with Subsection 6(e) below).

     b) Training by Manufacturer. Manufacturer shall provide sales, service, and repair
training to Distributor’s personnel at periodic intervals, with the frequency and content of the
training to be determined by Manufacturer. When possible, such training shall be given at
Distributor’s facilities, but it may be necessary to provide combined training at a geographically
central location near but not in the Territory. In either case, Manufacturer and Distributor shall
each pay their own costs for travel, food, and lodging during the
training period. In addition to sales and service training, Manufacturer shall cooperate with
Distributor in establishing efficient service procedures and policies.

5. WARRANTY TO DISTRIBUTOR

     a)
Standard Limited Warranty. Manufacturer provides a 1 year warranty on capital
equipment only to distributor for the Products, including the limitations set forth in Subsection
5(b) and 5(c) below. This warranty is contingent upon proper use of a Product in the application
for which it was intended and does not cover Products that were modified without Manufacturer’s
approval or that were subjected by the customer to unusual physical or electrical stress.

     b) No Other Warranty. EXCEPT FOR THE EXPRESS WARRANTY SET FORTH ABOVE, MANUFACTURER
GRANTS NO OTHER WARRANTIES, EXPRESS OR IMPLIED, BY STATUTE OR
OTHERWISE, REGARDING THE PRODUCTS, THEIR

6

 

FITNESS FOR ANY PURPOSE, THEIR QUALITY, THEIR MERCHANTABILITY, NON-INFRINGEMENT OR OTHERWISE.

     c)
Limitations of Liability. MANUFACTURER’S LIABILITY UNDER THE WARRANTY SHALL BE
LIMITED TO A REFUND OF THE CUSTOMER’S PURCHASE PRICE. IN NO EVENT SHALL MANUFACTURER BE LIABLE FOR
THE COST OF PROCUREMENT OF SUBSTITUTE GOODS BY THE CUSTOMER OR FOR ANY SPECIAL CONSEQUENTIAL OR
INCIDENTAL DAMAGES FOR BREACH OF WARRANTY.

6. ADDITIONAL OBLIGATIONS OF DISTRIBUTOR

     a) Annual Purchase Commitment. Attached hereto in Exhibit D is the annual purchase
commitment and required delivery dates with the number of Products to be Purchased by Distributor
from Manufacturer (“Annual Purchase Commitment”). Annually
for 1995 – 1999, Distributor and
Manufacturer shall mutually agree in writing on the Annual Purchase Commitment for the immediately
following calendar year. Throughout the term of this Agreement, if Distributor fails to purchase
(80%) of its Annual Purchase Commitment during any given year, then Manufacturer may terminate this
Agreement by mailing written notice of termination to Distributor, in which case this Agreement
shall terminate immediately. Products returned to Manufacturer under the provisions of Subsection
3(k) above shall not count towards the fulfillment of Distributor’s relevant Annual
Purchase Commitment. Prior to the close of each year, Manufacturer
shall work with Distributor to establish a forecast of annual
purchase commitment for the subsequent year. If the parties are unable to agree on an Annual
Purchase Commitment within sixty (60) days prior to the anniversary date of this Agreement, then an
extrapolation of market growth data based on Manufacturer’s worldwide growth rate will be used to
calculate projected increases for upcoming period.

     b) Forecasts. within the first five days of every month, Distributor shall provide
Manufacturer with a 90 day rolling forecast, attached hereto as Exhibit D, showing prospective
orders by Product model and intended submittal date.

     c)
Promotion of the Products. Distributor agrees to use its best efforts, at its own
expense, to vigorously promote the sale of the Products within the Territory and to develop a
market for the Products and to enhance the Company’s image in the marketplace as a provider of
quality medical devices. Distributor’s obligations shall include, but not be limited to, preparing
promotional materials in appropriate languages for the Territory, advertising the Products in trade
publications within the Territory, participating in appropriate trade shows, and directly soliciting orders from customers
for the Products. At the beginning of this Agreement and the beginning of each calendar year
Distributor and Manufacturer shall mutually agree in writing on the sales promotion

7

 

activities and performance criteria to be met by Distributor for that calendar year. Distributor
shall provide Company with an annual analysis of the market including total market. Such
information shall be provided to enable Manufacturer to assist Distributor in fully developing the
market demand for the Manufacturer’s Products and in developing appropriate marketing and business
plans for the mutual advantage of Distributor and Manufacturer.

     d) Representations. Distributor shall not make any false or misleading
representations to customers or others regarding manufacturer or the Products. Distributor shall
not make any representations, warranties or guarantees with respect
to the specifications, features
or capabilities of the Products that are not consistent with manufacturer’s documentation
accompanying the Products or Manufacturer’s literature
describing the Products, including the
limited warranty and disclaimers.

     e)
Inventory. Distributor shall, at its own expense, maintain a sufficient inventory
of the Products and of spare parts to fulfill its commitments under this Agreement.

     f) Finances and Personnel. Distributor shall maintain a net worth and working capital
sufficient, in Manufacturer’s reasonable judgement, to allow Distributor to perform fully and
faithfully its obligations under this Agreement. Distributor shall devote sufficient financial
resources and technically qualified sales and service engineers to the Products to fulfill its
responsibilities under this Agreement. Distributor additionally agrees to maintain qualified sales
and clinical personnel for the purpose of promoting and servicing the
Products and agrees to provide adequate training to physicians and laboratory
personnel to assist them in the proper use of the Product.

     g)
Customer and Sales Reporting. Distributor shall, at its own expense and consistent
with the sales policies of Manufacturer:

          i) Place the Products in Distributor’s catalogues as soon as possible and feature the Products
in any applicable trade show that it attends;

          ii) Provide adequate contact with existing and potential customers within the Territory on a
regular basis, consistent with good business practice;

          iii) Assist Manufacturer in assessing customer requirements for the Products, including
modifications and improvements thereto, in terms of quality, design, functional capability, and
other features;

          iv)
Submit market research information, as reasonably

8

 

requested
by Manufacturer, regarding competition and changes in the market within the
Territory; and

          v) Provide Manufacturer with the clinical data gathered during the investigational
stage for government approval.

     h) Import and Export Requirements. Distributor shall, at its own expense, pay all
import and export license and permits, pay customs charges and duty fees, and take all other
actions required to accomplish the export and import of the Products purchased by Distributor.
Distributor understands that Manufacturer 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, and not to export, or allow the export or reexport of any Proprietary
Information or Product or any direct product thereof in violation of any such restrictions, laws or
regulations or to Afghanistan, the People’s Republic of China or any Group Q, S, W, Y or Z country
specified in the then current Supplement No. 1 to section 770 of the U.S. Export Administration
Regulations (or any successor supplement or regulations); Manufacturer shall obtain any necessary
licenses and/or exemptions with respect to the export from the U.S. of all material or items
deliverable by Manufacturer.

     i) Limitation on Distributor’s Right to the Product. Distributor shall have no access
to or rights in the source codes of any software included in the Products. Distributor shall have
no right to copy, modify or remanufacture any Product or part thereof and will comply with
Manufacturer’s standard Confidentiality Agreement attached hereto as Exhibit E. The term sell or
sale does not apply to the software components of the Products, such software is licensed pursuant
to Manufacturer’s standard end-user agreement.

7. ADDITIONAL OBLIGATIONS OF MANUFACTURER

     a)
Materials. Manufacturer shall promptly provide Distributor with existing marketing
and technical information concerning the Products as well as reasonable quantities of brochures,
instructional material, advertising literature, reasonable sample allotment, and other Product data,
with all such material printed in the English language.

     b)
Responses to Inquiries. Manufacturer shall promptly respond to all inquiries from
Distributor concerning matters pertaining to this Agreement.

     c)
Testing. Manufacturer shall test all Products before

9

 

shipment to Distributor.

     d) Delivery Time. Manufacturer shall minimize delivery time as much as possible and
use commercially reasonable efforts to fulfill delivery obligations as committed in acceptances.

     e) Territorial Inquiries. Manufacturer shall submit to Distributor any inquiry
originating from the Territory rather than answering the inquiry directly.

     f) Quotations to Exporters. Manufacturer shall refrain from giving quotations to
exporters for products to the shipped to the Territory.

     g) New Developments. Manufacturer shall inform Distributor of new product developments
relating to the products.

8. TERM AND TERMINATION

     a) Term. This Agreement shall be effective from the date hereof and shall continue in
force for a fixed term of five (5) years unless terminated earlier under the provisions of
this Section 8. At the end of the fixed 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.

     b)
Terminator with Cause. If either party defaults in the performance of any provision
of this Agreement, then the non-defaulting party may give written notice to the defaulting party
that if the default is not cured within thirty (30) days the Agreement will be terminated. If the
non-defaulting party gives such notice and the default is not cured during the thirty-day period,
then the Agreement shall automatically terminate at the end of that period.

     c)
Termination without Cause. Manufacturer may terminate this Agreement upon ninety
(90) days written notice to Distributor provided (1) upon Distributor’s request Manufacturer will
repurchase all products owned by Distributor and all demonstration
units and sales literature at Manufacturer’s cost, (2)
Manufacturer pays to Distributor a
commission of five percent (5%) of the sales price of all Products sold in the Territory by anyone
for a period of six (6) months after the date of termination and (3) Manufacturer complies with its
other obligations under Sections 8.

     d) Termination
for Insolvency. This Agreement shall terminate, without notice, (i) upon
the institution by or against Distributor of insolvency, receivership or bankruptcy proceedings or any
other proceedings for the settlement of Distributor’s debts. (ii) upon Distributor’s making an
assignment for the benefit of

10

 

creditors,
or (iii) upon Distributor’s dissolution or ceasing to do business.

     e)
Fulfillment of Orders upon Termination. Upon termination of this Agreement for other
than Distributor’s breach, Manufacturer shall continue to fulfill, subject to the terms of Section
3 above, all orders accepted in writing by Manufacturer prior to the date of termination.

     f)
Return of Materials. All trademarks, trade names, patents, copyrights, designs,
drawings, formulas or other data, photographs, samples, literature, and sales aids of every kind
shall remain the property of Manufacturer. Within thirty (30) days after the termination of this
Agreement, Distributor shall prepare all such items in its possession for shipment, as Manufacturer
may direct at Manufacturer’s expense. Distributor shall not make, use, dispose of or retain any
copies of any confidential items or information which may have been intrusted to it. Effective
upon the termination of this Agreement, Distributor shall cease to
use all trademarks, marks, and
trade names of Manufacturer.

     g) Limitation on Liability. In the event of termination by either party in accordance with any of
the provisions of this Agreement, neither party shall be liable to the other, because of such
termination, for compensation, reimbursement or damages on account of the loss of prospective
profits or anticipated sales or on account of expenditures,
inventory, investments, leases or
commitments in connection with the business or goodwill of Manufacturer of Distributor. Termination
shall not, however, relieve either party of obligations incurred prior to the termination.

     h) Government Approvals. All government approvals or registration will be obtained under
the Manufacturer’s name by the Distributor and all costs involved will be borne by Distributor.
Upon termination of this Agreement for any reason, Distributor, shall take all necessary steps to
transfer any government approvals for each Product to Manufacturer or Manufacturer’s nominee (or if
such transfer is not permitted to cooperate in the cancellation of Distributor’s government
approvals and the reissuance thereof to Manufacturer or Manufacturer’s nominee). Distributor shall
promptly return to Manufacturer all data and information relating to such products and make no
further use thereof. Additionally, Distributor represents and warrants that neither this Agreement
(or any term hereof) nor the performance of or exercise of rights under this Agreement, is
restricted by, contrary to, in conflict with, ineffective under, requires registration or approval
or tax withholding under, or affects Manufacturer’s proprietary rights (or the duration thereof)
under, or will require any compulsory licensing under, any law or regulation of any organization,
country, group of countries or political or governmental entity located within or including all or
a portion of the Territory.

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     i)
Survival of Certain Terms. The provisions of Sections 3(h), 3(L), 5, 6(h), 8, 9,
10, 11, 12, and 13 shall survive the termination of this Agreement for any reason. All other rights
and obligations of the parties shall cease upon termination of this Agreement.

9.
LIMITATION ON LIABILITY

     MANUFACTURER
SHALL NOT BE RESPONSIBLE OR LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS
AGREEMENT OR THE AGREEMENT OF WHICH IT IS A PART OR ANY ATTACHMENT, PRODUCT ORDER, SCHEDULE OR
TERMS AND CONDITIONS RELATED THERETO UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER
THEORY:

     a) FOR LOSS, COST OF PROCUREMENT OF SUBSTITUTE GOODS, SERVICES OR TECHNOLOGY,

     b) FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES INCLUDING, BUT NOT LIMITED TO LOSS OF
REVENUES AND LOSS OF PROFITS; OR

     c) FOR ANY MATTER BEYOND ITS REASONABLE CONTROL.

10.
PROPERTY RIGHTS AND CONFIDENTIALITY

     a) Property Rights. Distributor agrees that Manufacturer owns all right, title, and
interest in the product lines that include without limitation the Products and in all of
Manufacturer’s patents, trademarks, trade names, inventions, copyrights, know-how, and trade
secrets relating to the design, manufacture, operation or service of
the Products. The use by
Distributor or any of these property rights is authorized only for
the purposes herein set forth,
and upon termination of this Agreement for any reason such authorization shall cease.

     b)
Sales Conveys no Right to Manufacturer or Copy. The Products are offered for sale
and are sold by Manufacturer subject in every case to the condition that such sale does not convey
any license, expressly or by implication, to manufacture, duplicate or otherwise copy or reproduce
any of the Products. Distributor shall take appropriate steps with its customers, as manufacturer
may request to inform them of and assure compliance with the restrictions contained in this
Subsection 10(b).

     c) Confidentiality. Distributor acknowledges that by reason of its relationship to certain
information and materials concerning Manufacturer’s business, plans, customers, technology, and
products that are confidential and of substantial value to
Manufacturer, which value would be
impaired if such information were disclosed to third parties. Distributor agrees that it will not
use in any way

12

 

for its own account or the account or the account of any third
party, nor disclose to any third party, any such confidential information revealed to it by Manufacturer. Distributor shall take every
reasonable precaution to protect the confidentiality of such information.
Upon request by Distributor, Manufacturer shall advise whether or not it
considers any particular information or materials to be confidential
Distributor shall not publish any technical description of the Products
beyond the description published by Manufacturer (except to translate the
description into appropriate languages for the Territory). In the event
of termination of this Agreement, there shall be no use or disclosure by
Distributor of any confidential information of Manufacturer, and
Distributor shall not manufacture or have manufactured any devices,
components or assemblies utilizing any of Manufacturer’s confidential
information.

	11.	 	TRADEMARKS AND TRADE NAMES

     a) Use. During the term of this Agreement, Distributor
shall have the right to indicate to the public that it is an authorized
distributor of Manufacturer’s Products and to advertise (within the
Territory) such Products under the trademarks, marks, and trade names
that manufacturer may adopt from time to time (“Manufacturer’s
Trademarks”). Any and all use of the Manufacturer’s Trademarks shall
inure to Manufacturer’s sole benefit. Distributor shall not alter or
remove any manufacturer’s Trademark applied to the Products at the
factory. Except as set forth in this Section 11, nothing contained in
this Agreement shall grant to Distributor any right, title or interest in
manufacturer’s Trademarks. At no time during or after the term of this
Agreement shall distributor challenge or assist others to challenge
Manufacturer’s Trademarks, marks or trade names confusingly similar to
those of Manufacturer.

     b) Approval of Representations. All representations of
Manufacturer’s Trademarks that Distributor intends to use shall first be
submitted to Manufacturer for approval (which shall not be unreasonably
withheld) of design, color, and other details or shall be exact copies
of those used by Manufacturer. If any Manufacturer’s Trademarks are to
be used in conjunction with another trademark on or in relation to the
Products, than Manufacturer’s mark shall be presented equally legibly,
equally prominently, and of greater size than the other but nevertheless
separated from the other so that each appears to be a mark in its own
right, distinct from the other mark.

	12.	 	PATENT, COPYRIGHT, AND TRADEMARK INDEMNITY

     a) Indemnification. Distributor agrees that Manufacturer
has the right to defend, or at its option to settle, and
Manufacturer agrees, at its own expense, to defend or at its option to
settle,

13

 

any claim, suit or proceeding brought against Distributor or its
customer on the issue of infringement of any United States patent,
copyright or trademark by the Products sold hereunder or the use thereof,
subject to the limitations hereinafter set forth. Manufacturer shall have
sole control of any such action or settlement negotiations, and
Manufacturer agrees to pay, subject to the limitations hereinafter set
forth, any final judgement entered against Distributor or its customer on
such issue in any such suit or proceeding defended by Manufacturer.
Distributor agrees that Manufacturer at its sole option shall be relieved
of the foregoing obligations unless Distributor or its customer notifies
Manufacturer promptly in writing of such claim, suit or proceeding and
give Manufacturer authority to proceed as contemplated herein, and, at
Manufacturer’s expense, gives Manufacturer proper and full information
and assistance to settle and/or defend any such claim, suit or
proceeding. If the Products, or any part thereof, are, or in the opinion
of Manufacturer may become, the subject of any claim, suit or proceeding
for infringement of any United States patent, copyright or trademark, or
if its adjudicatively determined that the Products, or any part thereof,
infringe any United States patent, copyright or trademark, or if the
sales or use of the Products, or any part thereof, is, as a result,
enjoined, then Manufacturer may, at its option and expense either: (1)
procure for Distributor and its customers the right under such patent,
copyright or trademark to sell or use, as appropriate, the Products or
such part thereof; or (ii) replace the Products, or part thereof, with
other suitable Products or parts; or (iii) suitably modify the Products,
or part thereof; or (iv) if the use of the Products, or part thereof, and
refund the aggregate payments paid therefore by Distributor, less a
reasonable sum for use and damage. Manufacturer shall not be liable for
any costs or expense incurred without its prior written authorization.

     b) Limitation. Notwithstanding the provisions of Subsection
12(a) above, Manufacturer assumes no liability for (i) infringements
covering completed equipment or any assembly, circuit, combination, method or process in which any of the Products may be used but not
covering the Products when used alone; (ii) trademark infringements
involving any marking or branding not applied by Manufacturer or
involving any marking or branding applied at the request of Distributor;
or (iii) infringements involving the modification or servicing of the
Products, or any part thereof, unless such modification or servicing was
done by Manufacturer.

     c) Entire Liability. The foregoing provisions of this Section 12
state the entire liability and obligations of Manufacturer and the
exclusive remedy of Distributor and its customers, with respect to any
alleged infringement of patents, copyrights, trademarks or other
intellectual property rights by the Products or any part thereof.

14

 

13. GENERAL PROVISIONS

     a) Governing Law and Jurisdiction. This Agreement shall be governed
by and construed under the laws of the State of California and United States
without regard to conflicts of laws provisions thereof and without
regard to the United Nations Convention on Contracts for the International
Sale of Goods. Unless otherwise elected by Manufacturer in writing for a particular
instance (which Manufacturer may do at its option), the sole jurisdiction and venue
for actions related to the subjected matter hereof shall be the California state and
U.S. federal courts having within their jurisdiction the location of Manufacturer’s
principal place of business. Both parties consent to the jurisdiction of such courts
and agree that process may be served in the manner provided herein for giving
of notices or otherwise as allowed by California state or U.S. federal law. In any
action or proceeding to enforce rights under this Agreement, the prevailing party
shall be entitled to recover costs and attorneys’ fees. Distributor hereby expressly
consents to (i) the personal jurisdiction of the federal and state courts within
California, (ii) service of process being affected upon it by registered mail sent
to the address set forth at the beginning of this Agreement, and (iii) the
uncontested enforcement of a final judgement from such court in any other
jurisdiction wherein Distributor or any of its assets are present.

     b) Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter herein and merges
all prior discussions between them. No modification of or Agreement, shall be
effective unless in writing signed by the party to be charged.

     c) Notices. Any notice required or permitted by this Agreement
shall be in writing and shall be sent by prepaid registered or certified mail,
return receipt requested, addressed to the other party at the address shown at the
beginning of this Agreement or at such other address for which such party gives
notice hereunder. Such notice shall be deemed to have been given three (3) days
after deposit in the mail.

     d)
Force Majeure. Non-performance of either party shall be excused (except for payment of monies and confidentiality) to the extent that performance is
rendered impossible by strike, fire, flood, governmental acts or orders or
restrictions failure of suppliers, or any other reason where failure to perform is
beyond the
reasonable control of and is not caused by the negligence of the non-performing party.

     e)
Nonassignability and Binding Effect. A mutually agreed
consideration for Manufacturer’s entering into this Agreement is the reputation,
business standing, and goodwill already honored and enjoyed by Distributor under
its present ownership, and accordingly, Distributor agrees that its rights and
obligations

15

 

under this Agreement may not be transferred or assigned directly or indirectly without the prior
written consent of Manufacturer. Subject to the foregoing sentence, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their successors and assigns.

     f) Legal Expenses. The prevailing party in any legal action brought
by one party against the other arising out of this Agreement shall be entitled, in
addition to any other rights and remedies it may have, to reimbursement for its
expenses, including court costs and reasonable attorney’s fees.

     g) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which together
shall constitute one instrument.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	     GOODMAN CO., LTD.	 	 
	 	 	 	 	 	 	 
	 	 	 	 	                    DISTRIBUTOR	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	     KANEKO ENTERPRISES, INC.	 	 
	 	 	 	 	 	 	 
	 	 	 	 	                    DISTRIBUTOR	 	 
	 
	 	 	 	 	 	 	 	 
	CARDIOMETRICS, INC.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BY:

	 	/s/ Menahem Nassi
	 	BY:
	 	/s/ Akira Yamamoto	 	 
	 

	 	 

   Menahem Nassi
	 	 	 	 

  Akira Yamamoto
	 	 
	 
	 	 	 	 	 	 	 	 
	TITLE:

	 	     President and CEO

	 	TITLE:
	 	     President
	 	 
	 

	 	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	BY:

	 	/s/ Michael J. Sorna
	 	BY:
	 	/s/ Masahiko Kaneko	 	 
	 

	 	 

Michael J. Sorna
	 	 	 	 

Masahiko Kaneko
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	     Vice President ,	 	 	 	 	 	 
	TITLE:

	 	   Int’l
Sales & Operations

	 	TITLE:
	 	     President
	 	 
	 

	 	 

	 	 	 	 

	 	 

16

 

EXHIBIT
A

TO

EXCLUSIVE DISTRIBUTION AGREEMENT

As of September 2, 2004

Description of VOLCANO Products and Pricing

	 	 	 	 	 
	Distributor Name:
	 	Goodman Company, Ltd.
	Distributor Territory:
	 	Japan

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	CATALOG	 	 	 		 	 
	 	PRODUCT	 	 	NUMBER	 	 	 	LIST PRICE (EACH)	 	 
	 	Functional Measurement Products:
	 	 	 	 	 	 	 	 	 	 	 
	 	WaveMap
	 	 	 	6000	 	 	 	[CONFIDENTIAL]USD	 
	 	SmartMap
	 	 	 	6500	 	 	 	[CONFIDENTIAL]USD	 
	 	SmartWire
	 	 	640X, 640XJ	 	 	[CONFIDENTIAL]USD	 
	 	WaveWire
	 	 	140X, 140XJ	 	 	[CONFIDENTIAL]USD	 
	 	FloWires
	 	 	840X, 840XJ	 	 	[CONFIDENTIAL]USD	 
	 	PC III Upgrade (SmartCable Upgrade)
	 	 	 	8200	 	 	 	[CONFIDENTIAL]USD	 
	 	ComboMap
	 	 	 	2500	 	 	 	[CONFIDENTIAL]USD	 
	 	* Any travel costs associated with installation are not included in product cost.
	 	 	 	 	 	 	 	 	 	 	 
	 

			
	n	 	All prices are quoted “each’’ and in US Dollars
	 
	n	 	Volcano Therapeutics’ Terms are FOB Origin, net thirty (30) days.

	 	 	 	 	 
	 
	 	 
	Distributor Authorized Signature and Date
	 	VOLCANO Authorized Signature and Date

17

 

EXHIBIT A (Cont’d)

For all new and additional Products for which Cardiometrics is the
sole owner, Goodman Co., Ltd. and Kaneko Enterprises, Inc. will be
given right of first refusal to represent new product in territory defined in Exhibit B.

	 	 	 	 	 	 	 
	 	 	 	 	     GOODMAN CO., LTD.
	 	 	 	 	 
	 	 	 	 	                    DISTRIBUTOR
	 
	 	 	 	 	 	 
	 	 	 	 	     KANEKO ENTERPRISES, INC.
	 	 	 	 	 
	 	 	 	 	                    DISTRIBUTOR
	CARDIOMETRICS, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	BY:

	 	/s/ Menahem Nassi	 	BY:	 	/s/ Akira Yamamoto
	 

	 	 
	 	 	 	 
	 

	 	     Menahem Nassi
	 	 	 	     Akira Yamamoto
	 
	 	 	 	 	 	 
	TITLE: President and CEO	 	TITLE: President
	 
	 	 

	BY:

	 	Michael J. Sorna	 	BY:	 	/s/ Masahiko Kaneko
	 

	 	 
	 	 	 	 
	 

	 	      Michael J. Sorna
	 	 	 	     Masahiko Kaneko
	 
	 	 	 	 	 	 
	 

	 	           Vice President,	 	 	 	 
	TITLE: Int’l Sales
& Operations	 	TITLE: President
	 
	 	 

18

 

EXHIBIT B

TERRITORY

Distributor’s Territory shall be all portions of the following:

JAPAN

	 	 	 	 	 	 	 
	 	 	 	 	     GOODMAN CO., LTD.
	 	 	 	 	 
	 	 	 	 	                    DISTRIBUTOR
	 
	 	 	 	 	 	 
	 	 	 	 	     KANEKO ENTERPRISES, INC.
	 	 	 	 	 
	 	 	 	 	                    DISTRIBUTOR
	CARDIOMETRICS, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	BY:

	 	/s/ Menahem Nassi	 	BY:	 	/s/ Akira Yamamoto
	 

	 	 
	 	 	 	 
	 

	 	     Menahem Nassi
	 	 	 	    Akira Yamamoto
	 
	 	 	 	 	 	 
	TITLE:
President and CEO
	 	TITLE:
President

	 
	 	 	 	 	 	 
	BY:

	 	/s/ Michael J. Sorna	 	BY:	 	/s/ Masahiko Kaneko
	 

	 	 
	 	 	 	 
	 

	 	     Michael J. Sorna
	 	 	 	     Masahiko Kaneko
	 
	 	 	 	 	 	 
	 

	 	           Vice President,	 	 	 	 
	TITLE:
Int’l Sales & Operations
	 	TITLE:
President

19exv10w27

 

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).

Page 2 of 13

 

	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.

Page 6 of 13

 

	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

Page 7 of 13

 

	 	 	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

Page 8 of 13

 

	 	 	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

Page 10 of 13

 

	 	 	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

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