Exhibit 10.1
DISTRIBUTOR TERMINATION
AGREEMENT
This Termination Agreement (“
Termination Agreement ”) is made effective as of
July 8, 2009 (the “ Effective Date ”), by
and between Volcano Corporation, a Delaware company (“
Volcano ”), Volcano Japan Co., Ltd, a company
incorporated under the laws of Japan (“ Volcano Japan
”), and Goodman Company, Ltd., a company incorporated under
the laws of Japan (“ Goodman ”). Notwithstanding
anything in this Termination Agreement to the contrary,
“Goodman”, as used in this Termination Agreement does
not refer to any direct or indirect parent, subsidiary, or
affiliate (including any holder of at least 5% of the voting stock
of Goodman) of Goodman Company, Ltd., except to the extent any such
party is involved in the distribution of Volcano’s IVUS or FM
products.
RECITALS
A. Volcano, Volcano Japan and
Goodman have had a distribution relationship (the “
Distribution Relationship ”) where Goodman distributes
certain of Volcano’s Intravascular Ultrasound (“
IVUS ”) and Functional Measurement (“ FM
”) consoles and other products in Japan on a purchase order
by purchase order basis and the parties now desire to memorialize
the termination of the Distribution Relationship pursuant to this
Termination Agreement.
B. Volcano, Volcano Japan and
Goodman are parties to (i) those certain Software Support and
Maintenance Agreements executed on various dates (collectively, the
“ Software Agreements ”), (ii) the
Shurigyo Itaku Keiyakusho dated June 1, 2006 (the
“ Service Consignment Agreement ”),
(iii) those certain Quality Assurance Agreements executed on
various dates (collectively, the “ Quality Agreements
”), (iv) those certain Equipment Loan Agreements
executed on various dates (collectively, the “ Equipment
Loan Agreements ”), (v) those certain Equipment
Rental Agreements executed on various dates (collectively, the
“ Equipment Rental Agreements ”), and
(vi) an oral agreement concerning the payment of certain
expenses associated with a clinical trial relating to the detection
and characterization of coronary atherosclerosis through the use of
certain products of Volcano (hereinafter such clinical trial
referred to as the “ Toyohashi Special Trial ”,
and such oral agreement referred to as the “ Special Trial
Agreement ”).
AGREEMENT
In consideration of the mutual
covenants and representations herein set forth, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties, Volcano, Volcano Japan and
Goodman hereby agree as follows:
1. Confirmation of
Termination . The Distribution Relationship, the Software
Agreements, the Service Consignment Agreement, the Quality
Agreements, the Equipment Loan Agreements, the Equipment Rental
Agreements, and the Special Trial Agreement are terminated in their
entirety effective as of August 31, 2009 (the “
Termination Date ”), and the Distribution
Relationship, the Software Agreements, the Service Consignment
Agreement, the Quality Agreements, the Equipment Loan Agreements,
the Equipment Rental Agreements, and the Special Trial Agreement
shall be of no further force or effect. Upon such termination,
(a) all rights granted by Volcano to Goodman with respect to
the IVUS and FM hardware, software and disposable products
manufactured by Volcano and distributed or leased by Goodman in
Japan (the “ Products ”), if any, shall
terminate and shall revert to Volcano without any further action
required on the part of either party, (b) Goodman shall,
subject to Section 3.4.3 below, transfer, convey and deliver
to Volcano Japan all the rights of Goodman (i) to distribute,
sell or market Products or service or maintain any consoles
Products (each a
“ Console ” and together, the
“ Consoles ”) installed at customer sites,
whether the Console is owned by the customer or by Goodman and
whether the Console is repurchased by Volcano Japan hereunder, and
(ii) with respect to the Products, under all contracts,
agreements, commitments and sales and purchase orders concluded or
placed with customers, but excluding the rights to assert and
collect any payments or remedies to pursue such payments from the
customers in relation to the Products distributed by Goodman (other
than any such Products that are or should be set forth on
Exhibits A or B and any disposables on consignment
with customers) or services conducted by Goodman prior to the
earlier of the Termination Date and the Transition Date (as defined
in Section 3.4.2 below), as more fully set forth in
Section 3.4 herein, and (c) Goodman shall, subject to
Section 3.4.3 below, (i) cease all sales and marketing
activities, terminate all subdistribution agreements, cease all
servicing activities with respect to the Products and (ii) not
distribute Products, accept purchase orders or ship any Products to
customers.
2. Fees and Payment
.
2.1 Termination Payment . In
addition to the other terms set forth herein, and in consideration
of the rights and obligations set forth herein, including the
transfer and sale of the rights and assets in relation to Products
by Goodman to Volcano Japan hereunder, Volcano Japan shall pay
Goodman 350 million Japanese Yen (the “ Termination
Payment ”), plus 5% consumption tax, as
follows:
2.1.1 on July 15, 2009, Volcano
Japan shall deliver a non-refundable amount of 100 million
Japanese Yen, plus 5% consumption tax, by wire transfer to an
account which shall have been designated by Goodman prior to the
date of such payment (the “ Goodman Account
”);
2.1.2 promptly following the
transfer and delivery of the Goodman Consoles in Possession and the
Rental Consoles in Possession to Volcano Japan (except (a) the
Retained Consoles, as defined in Section 3.1.2 and
(b) the Consoles that Volcano Japan instructs Goodman to
destroy) pursuant to Sections 3.1.1 and 3.1.2 (and in any event
within 5 business days of such transfer and delivery), Volcano
Japan shall deliver a non-refundable amount of 50 million
Japanese Yen, plus 5% consumption tax, by wire transfer to the
Goodman Account; provided, however, if Goodman is not
obligated to ship any Consoles to Volcano Japan, then Volcano Japan
may postpone the payment of the 50 million Japanese Yen until
the Termination Date except that if Volcano Japan instructed
Goodman to destroy all Goodman Consoles in Possession and Rental
Consoles in Possession (except for the Retained Consoles), then the
payment shall not be postponed; and
2.1.3 on the Termination Date,
subject to the offset described in Section 2.2 below, on the
condition of the delivery and effectiveness of the final assignment
and transfer to Volcano Japan of the Consoles (including the
Retained Consoles but excluding the Consoles that Volcano Japan
instructed Goodman to destroy) in accordance with the terms of this
Termination Agreement, Volcano Japan shall deliver a non-refundable
amount of 200 million Japanese Yen, plus 5% consumption tax,
by wire transfer to the Goodman Account.
2.2 Offset . Volcano Japan
may offset any payments due to Goodman under this Termination
Agreement by any amounts owed to Volcano or Volcano Japan by
Goodman which amount is specified under any valid purchase order
for which a Product has been delivered or which amount is specified
under any other agreement among the parties, regardless of the due
date of such amounts. Volcano Japan shall notify Goodman of all
offsets made against payments due to Goodman under this Termination
Agreement.
2.3 Taxes . Except as
otherwise specified herein, (a) all amounts payable hereunder
shall include all applicable sales, use, consumption and other
taxes and (b) each party will be responsible for payment of
all taxes, fees, duties and charges, and any related
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penalties and interest that may be imposed by
the tax authorities on each party, arising from the payment of any
amounts hereunder. Notwithstanding the foregoing, Goodman shall be
responsible for the payment of all taxes relating to payments made
by Volcano Japan to Goodman pursuant to Section 5.3.1. Goodman
acknowledges and agrees that it will timely remit any consumption
tax due hereunder to the applicable taxing authority. Volcano
assumes no responsibility for late payments or the nonpayment of
such consumption tax by Goodman.
3. Termination Arrangements
.
3.1 Consoles Owned or Leased by
Goodman .
3.1.1 Goodman currently owns the FM
and IVUS imaging consoles set forth on Exhibit A hereto,
which exhibit sets forth the number of each such console and,
concurrently herewith, Goodman has delivered a list to Volcano
certifying the model number and location of each such console.
Certain of such consoles are in Goodman’s possession at the
locations set forth on the certified list provided by Goodman (the
“ Goodman Consoles in Possession ”) and certain
of such consoles are located at hospitals as set forth on such
certified list (the “ Goodman Consoles at Third
Parties ” and, together with the Goodman Consoles in
Possession, the “ Goodman Consoles ”). On or
before July 15, 2009, Goodman shall transfer, convey and
deliver all rights, title and interest in all of the Goodman
Consoles in Possession, free and clear of all liens and
encumbrances, to Volcano Japan, and Goodman shall ship the Goodman
Consoles in Possession to Volcano Japan at an address or addresses
specified by Volcano or Volcano Japan (except (a) Goodman may
retain possession until the Termination Date of certain of the
Goodman Consoles with the prior consent of Volcano Japan, which
Consoles are specifically identified on Exhibit A hereto,
which may be amended from time to time with the written consent of
the parties hereto (the “ Goodman Retained Consoles
”) and Goodman shall transfer possession of the Goodman
Retained Consoles and ship the Retained Consoles to Volcano Japan
on the Termination Date and (b) Goodman Consoles which have
been transferred to a third party in accordance with the provisions
of Section 3.1.3 below shall remain with such third party or
be delivered to Volcano Japan as instructed by Volcano Japan);
provided, however, Goodman shall give Volcano Japan notice
of any such Consoles which are not functional and shall not ship
any Goodman Consoles in Possession without Volcano Japan’s
prior approval. If Volcano Japan does not approve of shipping of
any Goodman Consoles in Possession within ten (10) calendar
days after the Goodman’s notice to Volcano Japan of any
consoles that are not functional, then Volcano Japan shall be
deemed to have approved the destruction of such consoles and
Goodman shall promptly destroy such consoles. Volcano Japan shall
be responsible for all shipping and insurance charges related to
the return of the Goodman Consoles in Possession and all charges
relating to the destruction of any such consoles approved by
Volcano Japan. All Goodman Consoles in Possession shall be
delivered to Volcano Japan on an “as-is” basis. On the
Termination Date, Goodman shall transfer, convey and deliver all
rights, title and interest in all of the Goodman Consoles at Third
Parties, free and clear of all liens and encumbrances, to Volcano
Japan. Goodman shall be under no obligation to deliver the Goodman
Consoles at Third Parties to Volcano or Volcano Japan and, except
as may be arranged by Volcano following the Termination Date, the
Goodman Consoles at Third Parties shall remain at their respective
locations.
3.1.2 Goodman currently leases from
Volcano the FM and IVUS imaging consoles set forth on Exhibit
B hereto, which exhibit sets forth the number of each such
console and, concurrently herewith, Goodman has delivered a list to
Volcano certifying the model number and location of each such
console. Certain of such consoles are in Goodman’s possession
at the locations
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set forth on the certified list provided by
Goodman (the “ Rental Consoles in Possession ”)
and certain of such consoles are located at hospitals as set forth
on such certified list (the “ Rental Consoles at Third
Parties ” and, together with the Rental Consoles in
Possession, the “ Rental Consoles ”). On or
before July 15, 2009, Goodman shall ship the Rental Consoles
in Possession to Volcano Japan at an address or addresses specified
by Volcano or Volcano Japan (except (a) Goodman may retain
possession until the Termination Date of certain of the Rental
Consoles with the prior consent of Volcano Japan, which Consoles
are specifically identified on Exhibit B hereto, which may
be amended from time to time with the written consent of the
parties hereto (the “ Rental Retained Consoles
”, and together with the Goodman Retained Consoles, the
“ Retained Consoles ”) and Goodman shall
transfer possession of the Rental Retained Consoles and ship the
Rental Retained Consoles to Volcano Japan on the Termination Date
and (b) Rental Consoles which have been transferred to a third
party in accordance with the provisions of Section 3.1.3 below
shall remain with such third party or be delivered to Volcano Japan
as instructed by Volcano Japan); provided, however, Goodman
shall give Volcano Japan notice of any such consoles which are not
functional and shall not ship any Rental Consoles in Possession
without Volcano Japan’s prior approval. If Volcano Japan does
not approve of shipping of any Rental Consoles in Possession within
ten (10) calendar days after the Goodman notice to Volcano
Japan of any consoles that are not functional, then Volcano Japan
shall be deemed to have approved the destruction of such consoles
and Goodman shall promptly destroy such consoles. Volcano Japan
shall be responsible for all shipping and insurance charges related
to the return of the Rental Consoles in Possession and all charges
relating to the destruction of any such consoles approved by
Volcano Japan. All Rental Consoles in Possession shall be delivered
to Volcano Japan on an “as-is” basis. Goodman shall be
under no obligation to deliver the Rental Consoles at Third Parties
to Volcano or Volcano Japan and, except as may be arranged by
Volcano following the Termination Date, the Rental Consoles at
Third Parties shall remain at their respective
locations.
3.1.3 Following the execution of
this Termination Agreement, Goodman shall promptly notify in
writing to Volcano Japan upon moving or letting any end user move
any of the Goodman Consoles or the Rental Consoles, (a) until
the date of delivery to Volcano Japan for the Goodman Consoles in
Possession and the Rental Consoles in Possession, and
(b) until the Termination Date for the Goodman Consoles at
Third Parties and the Rental Consoles at Third Parties. Following
June 30, 2009, but prior to the Termination Date (the “
Inspection Period ”), Goodman shall cooperate to
provide Volcano with access to the Goodman Consoles at Third
Parties and the Rental Consoles at Third Parties so Volcano may, in
its sole discretion, inventory and inspect such consoles. Goodman
shall take such further actions, including the execution and
delivery of any documents evidencing the transfer of Goodman
Consoles at Third Parties to Volcano Japan, that Volcano or Volcano
Japan may reasonably request.
3.2 Return of Disposables .
On the Termination Date, Volcano Japan will repurchase from Goodman
all disposable Products owned by Goodman, including IVUS
disposables placed by Goodman on consignment with customers, (which
Products, to qualify for repurchase hereunder, shall be of a
quality suitable for sale in the ordinary course of business and,
in the case of the FM disposables, have an expiration date that is
no earlier than February 28, 2010 (“Salable”),
except that the Revolution IVUS catheters in Goodman’s
possession purchased from Volcano during the last 12 months from
the Effective Date (the “ Revolution Catheters
”) shall qualify for repurchase regardless of whether the
expiration date has passed, and shall be unopened and unused and
returned to Volcano Japan in their original packaging) (the “
Disposables ”). The repurchase price for the
Disposables shall be the same as the price(s) billed by Volcano and
paid by Goodman at the time of Goodman’s purchase of such
Disposables. The repurchase price shall be paid within five
(5) business days following confirmation by Volcano that such
qualifying Disposables are Salable (with the
4
exception of the Revolution Catheters which
shall qualify for repurchase regardless of whether the expiration
date has passed) and are unopened and unused and returned in their
original packaging, which confirmation shall be made no later than
five (5) business days after receipt of such Disposables by
Volcano Japan. Goodman shall return all Disposables to Volcano
Japan at its warehouse in Japan by the Termination Date (except for
IVUS disposables placed by Goodman on consignment with customers
which may remain with such customers). Volcano Japan shall be
responsible for all shipping and insurance charges related to the
return of the Disposables and all charges relating to the
destruction of any such disposable Products that shall be destroyed
in accordance with the following sentence. Goodman shall destroy
all disposable Products that it controls (including disposables
held by customers on consignment) that are not eligible for
repurchase because they are not Salable or are not in original
packaging and shall deliver reasonable evidence of such destruction
to Volcano by the Termination Date.
3.3 Sales Materials . On the
Termination Date, Goodman shall transfer, convey and deliver to
Volcano Japan at its warehouse in Japan all sales and promotional
literature and other sales-related materials relating to the
Products (the “ Sales Materials ”) except for
those Sales Materials which Volcano Japan requests Goodman in
writing to delete or destroy. Volcano Japan shall be responsible
for all shipping and insurance charges related to the transfer,
conveyance and delivery of the Sales Materials to Volcano Japan.
All references to Products on any websites or advertisements
controlled by Goodman shall be removed by the Termination Date, and
Goodman shall not place any print, media, internet or other
advertisement of Products that is scheduled to run after the
Termination Date.
3.4 Assignment of Customer
Contracts and Assumption of Customer Service and Support
Obligations .
3.4.1 Concurrently herewith, Goodman
is delivering to Volcano a complete and correct list of all written
contracts, agreements, licenses, leases and similar arrangements
currently in effect relating to the Products (the “
Customer Contracts ”) with all customers who have
purchased or are purchasing on a consignment basis any Products
from Goodman. Goodman has delivered to Volcano a true, complete and
correct copy of each such Customer Contract, except for such
Customer Contracts that relate to both the Products and the
products of manufacturers other than Volcano (the “
Bifurcated Contracts ”). Goodman represents that all
Bifurcated Contracts, if they are terminated subject to
Section 3.4.3, can be terminated without penalty and without
any obligation of Volcano to supply any Products under such
Bifurcated Contracts. Goodman shall not enter into any new
contracts in relation to Products after the date of this
Termination Agreement. Subject to Section 3.4.3 below, on or
before the Termination Date, Goodman shall assign to Volcano Japan
all of Goodman’s rights under the Customer Contracts (except
for the rights relating to the products of manufacturers other than
Volcano under any Bifurcated Contract and except for the rights to
any payments and remedies to pursue such payments in relation to
the Products distributed by Goodman (other than any such Products
that are or should be set forth on Exhibits A or B
and any disposables on consignment with customers) or services
conducted by Goodman prior to the earlier of the Termination Date
and the Transition Date) and shall take such further actions,
including the execution and delivery of any documents evidencing
assignment of such rights to Volcano Japan, that Volcano or Volcano
Japan may reasonably request.
3.4.2 In the event that any end user
claims in signed written form that the disposable Products
distributed by Goodman have failed in the field, prior to the date
of this Termination Agreement (which are set forth on a certified
list delivered by Goodman to Volcano concurrently herewith) or
after the date of this Termination Agreement, Volcano Japan will
not replace any disposable Products but will credit Goodman against
outstanding invoices for the original purchase price of any
disposable Products
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received by it that would have otherwise been
replaced by Volcano Japan. If there are no more outstanding
invoices to Goodman that can be credited against, Volcano Japan
shall pay the original purchase price of any disposable Products
that would have otherwise been replaced by Volcano Japan within
fourteen (14) business days from the date of notification from
Goodman to Volcano Japan of the end user claim. Until the
Termination Date or, if earlier, the transfer of a Customer
Contract, subject to Section 3.4.3 below (such date of
transfer of a Customer Contract hereinafter referred to as the
“Transition Date”), Goodman shall continue to perform
all services relating to the Products customarily performed by it
pursuant to the Customer Contracts, including supplying disposable
Products to customers with installed consoles (the “
Service Obligations ”). Thereafter, Volcano Japan,
either directly or through a third party, will assume
Goodman’s Service Obligations set forth in the Customer
Contracts and any additional obligations as may be agreed to by the
parties hereto in writing after the date hereof; provided,
however, that Volcano Japan shall have the right, within two
weeks following Goodman’s delivery of a Customer Contract to
Volcano Japan, to determine, in its sole discretion, that Volcano
Japan shall not assume the Service Obligations under such Customer
Contract and any assignment and assumption of such Customer
Contract shall be void ab initio. The parties agree that if a
Customer Contract is not assumed by Volcano Japan, Goodman shall
not be responsible for Volcano or Volcano Japan’s loss of
such customer. Goodman shall not assume any additional Service
Obligations except for those customarily entered into by Goodman in
the ordinary course of business and shall not enter into any new
equipment rental agreements in relation to Products with customers
from and after the date of this Termination Agreement. To the
extent any third party makes a claim against Volcano with respect
to any obligations of Goodman under this Termination Agreement or
the Customer Contracts which should have been performed by Goodman
prior to the Transition Date or the Termination Date, whichever
comes earlier for the respective customer, Goodman agrees to
indemnify, defend and hold Volcano and Volcano Japan harmless from
any such claims and any damages, losses, liabilities or expenses
(including reasonably attorneys’ fees) associated therewith.
To the extent that any third party makes a claim against Goodman
with respect to any of the obligations of Volcano or Volcano Japan
under this Termination Agreement, Volcano and
