FUKUDA-GOODMAN NON-EXCLUSIVE SUB-DISTRIBUTION AGREEMENT

The Japanese Distribution Agreement, dated August 31, 1998, by and between Supplier and EndoSonics Corporation, a Delaware corporation (“EndoSonics”) (the “Distribution Agreement”) granted distribution rights related to certain medical device products to Supplier from EndoSonics;

Jomed, Inc., a Delaware corporation (formerly EndoSonics) assigned the Distribution Agreement to Volcano Therapeutics, Inc., a Delaware corporation;

Distributor is in the business of distributing and selling medical device products throughout the Territory;

Pursuant to the terms and conditions of this Agreement, Supplier now wishes to grant to Distributor the non-exclusive right to distribute and sell the Products in the Field throughout the Territory; and

Distributor desires that Supplier appoint Distributor as Supplier’s distributor in the Field throughout the Territory, with respect to the distribution and sale of the Products.

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DEFINITIONS

Best Efforts

Shall mean every necessary and prudent effort of a party applied in a prompt, commercially reasonable manner, to the maximum extent reasonably allowed by such party’s available financial resources, taking into account all of such party’s business commitments for such financial resources.

Distributor

Shall mean Goodman Company, Ltd., having its principal office at 108 Fujigaoka, Meito-Ku, Nagoya, 465-0032 Japan.

Field

Shall mean the field of use for the Products, limited to interventional cardiology physicians, accounts and departments and not include endovascular or peripheral specific physicians, accounts or departments. For the avoidance of any doubt, the Distributor may sell the Products to interventional cardiology physicians, accounts and departments performing endovascular or peripheral procedures.

Order

Shall mean an order for Products submitted by Distributor and accepted by Supplier under Section 3.

Price Schedule

Shall mean the schedule of prices for the Products as set forth in Exhibit A hereto. Such price schedule will automatically adjust to the prices currently contained in the Distribution Agreement and any subsequent changes.

Product(s)

Shall mean any product listed on Exhibit A hereto and for which a separate price is set forth in the Price Schedule. The current Products and pricing are described in Exhibit A. Such Products will automatically adjust to the products contained in the Distribution Agreement and any subsequent changes.

Product Improvements

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

Supplier

Shall mean Fukuda Denshi Co., Ltd., having its principal office at 3-39-4 Hongo, Bunkyo-ku, Tokyo 113-8483, Japan.

Territory

Fukuda Territory shall mean Fukuda accounts, J&J accounts and Gray Zone accounts listed in Exhibit B. Goodman Territory shall mean the Goodman accounts and Gray Zone accounts listed in Exhibit B.

VOLCANO

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

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DISTRIBUTORSHIP

2.1

Supplier hereby appoints Distributor, and Distributor hereby accepts appointment, as Supplier’s distributor of the Products in the Field throughout the Territory, with the right to distribute and sell the Products for use in the Field throughout the Territory in accordance with the terms and conditions of this Agreement. The right granted Distributor to distribute and sell Products for use in the Field throughout the Territory is expressly made subject to the terms of this Agreement.

2.2

Distributor may not appoint third parties (a “Subdistributor”) to act for Distributor in selling and distributing the Products in the Field throughout the Territory under this Agreement. 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 Products outside of the Territory or for any use outside of the Field.

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ORDERING AND DELIVERY

3.1

All orders for the Products submitted by Distributor shall be initiated by written purchase order sent to Supplier; provided, however, that an order may initially be placed orally or by facsimile if a confirmational written purchase order is received by Supplier and VOLCANO within seven (7) days after said oral or facsimile order. Distributor shall submit orders to Supplier and 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 Product ordered; (b) the applicable purchase prices; and, (c) shipping instructions (e.g., requested carrier, shipping date, shipping destination and insurance). Each of Distributor’s orders shall be subject to acceptance by Supplier, not to be unreasonably withheld. At the time Distributor provides a written purchase order to Supplier, Distributor shall also send a copy of such purchase order to VOLCANO. Upon receipt of any order from Distributor, Supplier shall promptly notify Distributor and VOLCANO of its acceptance or rejection of the order and, if rejected, the reasons for the rejection. Supplier shall have no liability to Distributor with respect to orders that are not accepted. Any order submitted by Distributor and accepted by Supplier shall be binding upon the parties and may not be modified, rescinded or cancelled by any party without the agreement by both Supplier and Distributor.

3.2

By the first day of every quarter, Distributor shall provide Supplier and VOLCANO with a four quarter rolling forecast (“Forecast”) showing prospective orders by product model and intended purchase order submittal date. The quantities forecasted for the first quarter of each Forecast shall be binding on Distributor and deemed supported by a non-cancelable order.

3.3

Supplier shall use commercially reasonable efforts to deliver the Products in accordance with the applicable Orders. Upon shipment of an Order by Supplier to Distributor, Supplier shall promptly notify Distributor that the Order has been shipped. Distributor shall pay to Supplier the purchase price, all shipping charges, premiums for insurance, inspection fees, duties, assessments and other costs incurred to comply with Distributor’s shipping instructions and otherwise transport the Products as specified in the applicable Order. Distributor shall pay to Supplier all import, taxes, shipping and other specific costs, if any, associated with importing and delivering the Products from VOLCANO in the United States to the Distributor. Supplier shall provide a detailed breakdown of each charge for each shipment of Products to Distributor.

3.4

The Products delivered pursuant to the terms of this Agreement shall be suitably packed for shipment in Supplier’s standard shipping cartons, marked for shipment to Distributor’s address set forth above or any other address in Japan as Distributor indicates. Title and risks of loss or damage to the Products shall pass from Supplier to Distributor upon delivery to the carrier selected by Distributor.

3.5

Supplier shall be responsible for all packaging and labeling of the 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 Product without the prior written consent of Supplier.

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PRICING AND PAYMENT

4.1

The purchase price for each 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. All payments for products under this Agreement shall be paid in US Dollars per the prices in Exhibit A. All payments for expense reimbursement under this Agreement will be paid in Japanese yen.

4.2

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 such taxes to Supplier.

4.3

Supplier shall issue invoices at the time Supplier ships the Order to Distributor for any Product purchased by Distributor, reimbursable costs, taxes and other amounts due to Supplier under this Agreement. Distributor shall pay each of Supplier’s invoices within sixty (60) days of the date of the invoice. Distributor shall make such payments in Japanese Yen by wire transfer to an account designated by Supplier or such other means of payment as may be agreed upon between Supplier and Distributor. Any late payment charge shall incur interest at a rate of 14.5% per year.

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MARKETING AND SALES

5.1

Distributor shall consult and cooperate with Supplier and VOLCANO in connection with the marketing, sale and distribution of the Products under this Agreement.

5.2

Distributor shall at its sole expense, use its Best Efforts to promote the sale of the Products in the Field within the Territory. Such promotion shall include, but not be limited to, preparing promotional materials in languages appropriate for the Territory, as approved by VOLCANO, participating in appropriate trade shows to the extent Distributor thinks fit, and directly soliciting orders from customers for the Products in the Field within the Territory.

5.3

Distributor shall devote sufficient financial resources, technically qualified sales personnel, and service personnel to the Products to fulfill its responsibilities under this Agreement.

5.4

Distributor shall, at its own expense:

(i)

place the Products in Distributor’s catalogues as soon as possible and feature the Products in any applicable trade show that it attends to the extent Distributor thinks fit;

(ii)

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

(iii)

assist Supplier and VOLCANO 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 to VOLCANO, as reasonably requested by VOLCANO, regarding competition, changes in the market within the Territory, and customer complaints; and

(v)

provide VOLCANO with a report, by product type, of all sales of Products for each quarter no later than thirty (30) days following the end of such quarter.

5.5

Distributor shall comply with all applicable laws and regulations relating to the marketing, sale and distribution of the Products under this Agreement. Distributor shall not import, export or reexport, or authorize the import, export or reexport of, any Product, technical data or other items in violation of any such requirement.

5.6

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 Products made by Distributor sufficient to effectively, efficiently and economically implement any recall of any Product. Upon Supplier’s or VOLCANO’S request, Distributor shall make such records available to Supplier or VOLCANO, as the case may be, and otherwise cooperate as reasonably required to effectively, efficiently and economically implement any recall.

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INTELLECTUAL PROPERTY RIGHTS

6.1.1

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 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.

6.1.2

During the term of this Agreement, Distributor shall have the right to indicate to the public that it is an authorized distributor of the Products and to advertise (within the Territory) such 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.

6.2

VOLCANO shall be the owner of, and hereby reserves, any and all patent, trade secret, trademark and other intellectual property rights with respect to Products (including, without limitation, any and all Product Improvements). Distributor shall properly identify and accurately describe all 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 Product.

6.3

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 Products or otherwise used in connection with the marketing, sale or distribution of Products under this Agreement.

6.4

Distributor shall immediately notify Supplier and VOLCANO of any infringement, misuse, misappropriation or violation of any patent, trade secret, trademark or other intellectual property right of a 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 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. As between the Distributor, VOLCANO and Supplier, 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. As between the Distributor and VOLCANO, 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, as the case may be, may reasonably request (including, without limitation, enforcing any judgment, settlement or order made in connection with such proceeding); provided that VOLCANO, as the case may be, shall reimburse the expenses reasonably incurred by Distributor to provide such assistance in accordance with VOLCANO’S, as the case may be, 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.

6.5

Except as otherwise specifically set forth in this Section 6, 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 any party.

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INSPECTIONS, RETURNS, REPRESENTATION, WARRANTIES AND REMEDIES

7.1

Distributor shall inspect all Products, except those Products which are sterilized and sealed, promptly upon receipt thereof and may reject any Product that fails to meet the specifications set forth in VOLCANO’S current product specifications for that Product. Any Product not properly rejected within sixty (60) days of receipt of that Product at Distributor’s facility (the “Rejection Period”) shall be deemed accepted. To reject a Product, Distributor shall, within the Rejection Period, notify Supplier and VOLCANO in writing by facsimile of its rejection and request a Return Material Authorization (“RMA”) number. Supplier shall provide the RMA number in writing by facsimile to Distributor within ten (10) days of receipt of the request. Within ten (10) days of receipt of the RMA number, Distributor shall return to Supplier the rejected Product in its original shipping carton with the number displayed on the outside of the carton. Immediately upon receipt by Supplier of properly received Products, Supplier shall forward the replacement request to VOLCANO. As soon as possible after Supplier receives the replacement Products from Volcano, Supplier shall, at its expense, ship such replacement Products to Distributor on a prepaid shipping basis. Volcano shall reimburse the Supplier for shipping costs related to sending replacement Products to the Distributor.

7.2

VOLCANO warrants to Distributor that any 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. VOLCANO warrants to Distributor that the use, sale, offer for sale or import of Products in accordance with this Agreement shall not infringe on patents, trade secrets, trademarks or other intellectual property rights of any third party.

7.3

VOLCANO hereby extends and agrees to extend to any original purchaser of a Product from Distributor a warranty against defects in design, material or workmanship. Volcano shall be responsible for the repair and/or replacement of the Products that prove to be defective. The warranty set forth in this Section 7 shall in respect of each Product delivered hereunder expire fifteen (15) months from the date of shipment to Distributor unless it is a sterilized Product. For sterilized Product the warranty shall be until the expiration of the shelf life for the sterilized Product.. If Supplier tests and inspects these returned Products and determines that such Products perform according to VOLCANO’s written specifications, no credit will be given to Distributor. If upon such test and inspections, such returned Products do not perform to VOLCANO’s written specifications, these Products will be replaced at no cost to Distributor except in the case that Supplier proves that such defect was caused after shipment by Supplier to Distributor.

7.4

SUPPLIER’S AND VOLCANO’S REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION 7 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 7 ARE EXCLUSIVE AND IN LIEU OF ANY AND ALL OTHER REMEDIES FOR ANY BREACH OF SUPPLIER’S OR VOLCANO’S REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION 7.

7.5

SUPPLIER’S AND VOLCANO’S LIABILITY ARISING OUT OF THIS AGREEMENT AND/OR SALE OF THE PRODUCT SHALL BE LIMITED TO THE AMOUNT PAID BY DISTRIBUTOR FOR THE PRODUCTS. IN NO EVENT SHALL SUPPLIER OR VOLCANO BE LIABLE TO DISTRIBUTOR OR ANY OTHER ENTITY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY. NOTHING IN THIS SECTION 7 SHALL LIMIT THE SUPPLIER’S INDEMNIFICATION OBLIGATION WITH RESPECT TO DAMAGE CLAIMS FOR PERSONAL INJURY AND/OR DEATH CAUSED BY A DEFECT IN THE VOLCANO PRODUCTS.

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