International Distributor Agreement

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.

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.

ACKNOWLEDGED AND CONFIRMED:

Goodman Company, Ltd.

Kaneko Enterprises, Inc.

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

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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

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

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:

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.

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

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 addit