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Exhibit 10.40
 
 
FIRST AMENDMENT TO TECHNOLOGY TRANSFER AGREEMENT
 
This First Amendment to Technology Transfer Agreement (this “Amendment”) is
entered into as of January 28, 2009 by and among Micrus Endovascular
Corporation, a Delaware corporation (“Buyer”) and Vascular FX, LLC, a Delaware
limited liability company (“Seller”).
 
WHEREAS, on July 28, 2005, Buyer and Seller entered into a Technology Transfer
Agreement pursuant to which Buyer purchased from Seller all of the right, title,
and interest in and to certain intellectual property assets (the “Technology
Transfer Agreement”); and
 
WHEREAS, Buyer and Seller wish to amend the Technology Transfer Agreement to
modify the earn-out provisions and eliminate the claw-back provisions thereof;
 
NOW THEREFORE, in consideration of these premises and the representations,
warranties and agreements set forth in this Amendment, Buyer, and Seller agree
as follows:
 
AMENDMENT
 
1. Buyer and Seller agree that the Technology Transfer Agreement shall be
amended as follows:
 
(a)           Clause (c) of Section 2.4 is deleted and replaced with the
following:
 
“Earn-out.  Buyer will pay an earn-out based on the aggregate Net Selling Price
of Deflectable Catheter Products whether such sale is made by Buyer or its
affiliates or by any third party directly or indirectly authorized by Buyer to
sell Deflectable Catheter Products, which Net Selling Price will be calculated
based on sales of Deflectable Catheter Products to non-affiliated third
parties.  Buyer will pay (the “Earn-Out Payment”) Seller or its assigns an
amount equal to 25% of the Net Selling Price of Deflectable Catheter Product(s)
sold by Buyer during the Earn-Out Period subject to the Mandatory Minimum
provisions below. The Earn-out Period for Deflectable Catheter Products is six
(6) years beginning at the Start Date.  The Start Date is November 1, 2007, and
the Finish Date shall be October 31, 20013.
 
Notwithstanding the foregoing, the parties agree that the aggregate Earn-Out
payment payable by Buyer to Seller with respect to all Deflectable Catheter
Products shall be not less than $250,000 per year (the “Mandatory Minimum”).  No
payments shall be made with respect to sales of Deflectable Catheter Products
that occur after the Finish Date.
 
Buyer shall calculate and pay the Earn-Out Payment on a quarterly basis, with
each payment made within sixty (60) days following the close of the applicable
quarter.  Payment shall be made by wire transfer of US dollar denominated funds
to a bank account designated by Seller or its designees or, if Seller or its
designees fails to give Buyer written wire instructions, by delivery of a check
payable in immediately available funds to the order of Seller or its designees.
 
In connection with the foregoing, Buyer agrees to maintain adequate
documentation and accounting records for demonstration of compliance with
Earn-Out Payments and to make such records available to Seller on Seller’s
reasonable request.  Buyer shall, upon written request of Seller, make such
records available for audit to an independent certified public accounting firm
chosen and compensated by Seller (provided that if such audit finds that there
has been an under-calculation of the Earn-Out Payment in excess of 5% (but in
any event greater than $5,000), then such fees shall instead be paid by
Buyer).  Seller may request such audit no more frequently than once per calendar
year; provided however, that if any substantial accounting irregularities or
discrepancies are found, then Seller may request additional audits relating to
the year during which the irregularities or discrepancies occurred.”  
 
(b)           Section 6 (License Back to Seller) is deleted and shall be of no
effect.
 
2.      Expenses; Notices.  Each party shall bear its own expenses incurred in
connection with the preparation and execution of this Amendment.  Each party
acknowledges for purposes of 8.3 of the Technology Agreement that the parties’
respective addresses are currently those set forth on the signature page to this
Amendment.
 
3.      No Other Modifications.  Except as expressly set forth in this
Amendment, the Technology Transfer Agreement has not been modified or amended.
 

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The parties have signed below to indicate their acceptance of the terms of this
First Amendment to Technology Transfer Agreement.
 
BUYER                                                                           SELLER
 
Micrus Endovascular
Corporation                                                                                     Vascular
FX, LLC
 

 
By:  _____________________________                                                   By: 
____________________________
Robert Stern, Executive Vice
President                                                                           Mark
Fontenot, Managing Member

821 Fox
Lane                                                                                       
2275 E. Bayshore Rd
San Jose, CA
95131                                                                                   
Suite 105
       Palo Alto, CA  94303
 
 

 
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