Exhibit 10.46

LICENSE AGREEMENT

This License Agreement (this “Agreement”) is made as of December 9, 1999 by and
between Biocoat, Incorporated (“Biocoat”), a Pennsylvania corporation with its
principal place of business at 455 Pennsylvania Ave., Fort Washington, PA 19034
and Micro Therapeutics, Inc. (“MTI”) a California corporation with its principal
place of business at:  2 Goodyear, Irvine, California 92618.

WHEREAS, Biocoat owns patent rights and is licensed under patent rights of
others with the right to sublicense, and possesses know-how and technical
information relating to lubricious hydrophilic coatings, for application to
medical devices, such as catheters and guidewires, and

WHEREAS, MTI desires to obtain a license from Biocoat under such patent rights
and to have access to Biocoat know-how and technical information to enable MTI
to apply such coatings, to be furnished by Biocoat, to certain products and
Biocoat is agreeable to granting such a license pursuant to the terms of this
Agreement,

NOW, THEREFORE, in consideration of the terms, conditions and covenants set
forth below, the parties hereby agree as follows:

1.0                                 Definitions.  For purposes of this
Agreement, the following definitions shall apply:

1.1                                 “Affiliate” means, with respect to any
party, its direct or indirect parent company, if any, and any company, firm or
other entity more than fifty percent (50%) of whose issued and

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voting capital or share participation is owned or controlled, directly or
indirectly, by such party or by its parent company, but only for so long as such
ownership or control shall continue.

1.2                                 “Product” means any of the products
described in Schedule A, which is attached to and made part of this Agreement. 
MTI reserves t he right to add and/or modify Schedule A for newly developed
products, subject to approval by Biocoat, which approval will not be withheld
unless the change conflicts with contractual obligations to a third party.

1.3                                 “Net Sales” means the net billings of MTI
and its Affiliates from sales of Licensed Products to unaffiliated (i.e., other
than Affiliate) third parties, after deducting normal and customary cash and
trade discounts, returns, allowances and commissions to agents, and any excise,
sales or use or other similar taxes.

1.4                                 “Field” means devices used in vascular
access procedures.

1.5                                 “Medical Device Company” means a company
which manufactures or markets “finished devices” as that term is defined in the
Current Good Manufacturing Practice regulation of the U.S. Food and Drug
Administration.

1.6                                 “Patents” means the patents and patent
application described in Schedule B, which is attached to and made a part of
this Agreement.

1.7                                 “Technology” means any process for applying
a coating of hyaluronan to medical devices utilizing any adhesive

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layer consisting of acrylic copolymers.

1.8                                 “Proprietary Information” means all
know-how, trade secrets, inventions, data, technology, and information, owned,
acquired, developed or controlled by, or licensed to, Biocoat relating to the
Patents or the Technology which is used or useful with respect to Licensed
Products, including the composition and processes for producing the acrylic
copolymers and hyaluronan solutions.

1.9                                 “Licensed Product” means any Product
indicated for use in the Field which is processed with a coating of hyaluronan
using the Patents or the Proprietary Information.

1.10                           “Territory” means all countries of the world.

2.0                                 Grant.

2.1                                 Subject to the terms of this Agreement,
Biocoat hereby grants to MTI non-exclusive licenses in the Territory under the
Patents and the Proprietary Information, to make, have made, use and sell
Licensed Products with respect to those Products identified in Schedule A.  The
foregoing non-exclusive license does not include the right to grant sublicenses.

2.2                                 Biocoat hereby retains the right to develop
coatings for, supply coatings to, and enter into coatings license and supply
agreements with third parties so long as such agreements do not conflict with
the rights of MTI pursuant to this Agreement.

2.3                                 Biocoat hereby grants to MTI a fully paid,
royalty-free license to use the trademark HYDAK in connection with the Licensed
Products made or sold pursuant to this Agreement. This

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trademark license shall be in effect only during the term of this Agreement. 
MTI agrees that Biocoat shall have full control over the manner in which MTI
uses this licensed mark, and shall permit representatives of Biocoat to make
inspections of the facilities of MTI during normal business hours and with
reasonable notice, to insure that the requirements of this license are
fulfilled.  All use of the licensed mark, by MTI, shall inure to the benefit of
Biocoat and MTI shall not acquire any ownership rights in the mark by reason of
such use.

2.4                                 MTI agrees to include relevant numbers of
the Patents in the labeling information supplied with Licensed Products.

2.5                                 Biocoat agrees to supply the proprietary
acrylic copolymers and hyaluronan solutions needed to produce the Licensed
Products, as set forth in Schedule C, which is attached to and make a part of
this Agreement.

In the event that Biocoat is not able to produce and deliver the acrylic
copolymers or hyaluronan solutions for a period of sixty (60) days or more, it
will promptly advise MTI of such fact and provide the formulas and process
description for producing the acrylic copolymers to MTI.

In order to ensure that the formulas and process description are delivered,
Biocoat will, within ninety (90) days of the date of this Agreement, deliver in
escrow the formulas and process description to William H. Eilberg, Esq., 420 Old
York Road, Jenkington, PA 19046, with instructions to deliver such to

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MTI in the event above stated, or in case Biocoat ceases to exist without there
being a rightful Assignee under Section 12.1 of this Agreement.

2.6                                 If Biocoat makes any developments or
improvements to the Technology, whether or not such are patented, Biocoat shall
notify MTI of the existence of such development or improvement, including
sufficient technical detail so that MTI can understand the significance of the
development or improvement, and will offer MTI an opportunity to license such
development or improvements on terms to be negotiated.  Notwithstanding the
preceding sentence, Biocoat shall have not obligations to notify MTI of
improvements or developments if such notification would violate an agreement
between Biocoat and a third party.  If MTI chooses not to license such
development or improvement, Biocoat shall have no further obligation to MTI with
respect to such development or improvement.

3.0                                 Payments.  In consideration of the licenses
and other rights granted to MTI herein and the disclosure to MTI of Proprietary
Information, MTI shall make payments to Biocoat as follows:

3.1                                 MTI hereby agrees to pay a license fee of
twenty-five thousand U.S. dollars, ($25,000), reduced by previously paid
development costs incurred by MTI of $6,966.76, for a net payment of $18,033.24
to Biocoat with the signing of this Agreement.

3.2                                 Except as modified by Sections 3.3 and 8.2,
for each three (3) months period ending on the last day of March,

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June, September or December after MTI executes this Agreement, MTI shall pay to
Biocoat, in U.S. dollars, a royalty amount calculated in accordance with the
rates set forth in Schedule D which is attached to and made a part of this
Agreement.  Quarterly royalty payments shall be made within forty five (45) days
after the end of such three (3) month period.

3.3                                 If, for any Licensed Product, in any
calendar year, the number of units of such Licensed Product sold to any and all
unaffiliated (i.e., other than an Affiliates) Medical Device Companies (“OEM”
sales or units) exceeds 10% of the total units sold of such Licensed Product,
MTI shall adjust the calculation of Net Sales for such Licensed Product by
applying the average per unit price for non-OEM sales (instead of the average
per unit price for OEM sales) to the OEM units sold.

If it is not possible to determine the average unit price for non-OEM sales, it
shall be assumed that the average unit price for non-OEM sales is two times the
average unit price for OEM sales.

3.4                                 Overdue payments to Biocoat shall accrue
interest, which MTI shall pay to Biocoat, at 3% above the prime rate posted by
Chase Manhattan Bank, New York, NY.

3.5                                 The payment of royalties as set forth in
this Article and in Schedule C is in addition to the purchase price of the
coating solutions as set forth in Schedule C.

4.0                                 Accounting and Audit.

4.1                                 The rate of exchange to be used in computing
the

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amount of the U.S. Dollar equivalent of the currency in which non-U.S. sales may
be expressed shall be the commercial exchange rate in effect in New York, New
York, on the date on which payment for such Net Sales is due.

4.2                                 Accompanying each quarterly royalty payment,
MTI will provide Biocoat with a statement which itemizes the amount of royalty
due, by Product.  MTI shall keep accurate records in sufficient detail to enable
the aforesaid payments to be determined.

4.3                                 At Biocoat’s request and expense, MTI shall
permit an independent certified public accountant to have access once in each
royalty year, during regular business hours and upon reasonable notice to MTI,
to such of the records of MTI as may be necessary to verify the accuracy of the
reports required under this Agreement.  If, in any royalty year a deficiency in
excess of five (5%) percent exists, MTI shall reimburse Biocoat for the
reasonable fee and expenses of such audit; MTI shall pay any such deficiency
with interest thereon as set forth in Article 3.3

5.0                                 Confidentiality.  Each party undertakes to
keep secret and confidential and not to disclose to any third party any
Proprietary Information disclosed to it by the other party or learned by it from
the other party in the course of implementing this Agreement except:

(a)                                  Information which at the time of disclosure
is in the public domain or publicly known or available;

(b)                                 Information which, after disclosure, becomes

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part of the public domain or publicly known or available by publication or
otherwise, except by breach of this Agreement by the receiving party;

(c)                                  Information which the receiver receives
from a third party; provided, however, that such information was not illegally
or improperly obtained by such third party from the other party; and

(d)                                 Information which the receiver derives
independently of such disclosure.

Not withstanding the above, it shall not be a breach of this Agreement for a
party to disclose the existence of this Agreement or the identity of the other
party.

6.0                                 Technical Assistance.  Following the
execution of this Agreement, Biocoat shall furnish personnel having knowledge of
the Proprietary Information to consult with MTI technical personnel concerning
the applications of the Technology to the Licensed Products, provided that MTI
shall (a) reimburse Biocoat for the reasonable travel and living expenses
incurred by such personnel for travel requested by MTI hereunder, and (b) pay
Biocoat a charge of $750 per person per day.  Biocoat may increase this per
person per day charge from time to time but the rate of such increase shall not
exceed increases in the Consumer Price Index.

7.0                                 Warranty.

7.1                                 Biocoat represents and warrants that it is
the owner of the trademark Hydak and all right, title and interest in and to the
Patents listed in the top section of Schedule B and has

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been licensed under the Biomatrix patents listed in the bottom section of
Schedule B and has the unrestricted power and authority to grant the licenses
and give access to the Proprietary Information as provided herein.  Biocoat
represents and warrants that as of the date of this Agreement it has no
knowledge of any pending or threatened litigation against Biocoat which might
impair the rights licensed hereunder, nor does it have knowledge of any dominant
patens or patent rights which might reasonably be infringed by MTI manufacture,
use and sale of the Licensed Products.

8.0                                 Term.

8.1                                 This Agreement, unless earlier terminated as
provided for in Section 8.4 hereof, terminates upon the later of:  (1) the
expiration of the last to expire of the Patents; or (2) fifteen (15) years after
the date of this Agreement.

8.2                                 After the expiration of the last to expire
of the Patents, this Agreement converts from a patent license to a license of
know-how at that point and the royalty amounts payable in accordance with
Section 3.2 shall be calculated in accordance with the rates as set forth in
Scheduled D to this Agreement.

8.3                                 The provisions of Sections 4.0, 5.0 and 10.0
shall survive the expiration or termination of this Agreement.

8.4                                 If either party hereto shall commit any
breach of any material provision of this Agreement, and shall not, within sixty
(60) days written notice of such breach by the other party, correct such breach,
then such other party shall have the right to terminate this Agreement upon a
further thirty (30) days notice to the breaching party.  The right of either
party to take such action shall not be affected in any way by its failure to
take any action with respect to any previous breach.

8.5                                 Upon any termination of this Agreement by
MTI under Section 8.4 hereof, all rights ranted herein to MTI shall terminate. 
Termination of this Agreement for any reason s hall be without prejudice to
Biocoat’s right to receive all payments accrued under Section 3.0 hereof prior
to the effective date of

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such termination and any other remedies which any party may otherwise have.

8.6                                 No party shall be liable for failure of or
delay in performing any obligation set forth in this Agreement, and no party
shall be deemed in breach of its obligations hereunder, if such failure or delay
is due to natural disasters or any causes reasonably beyond the control of such
party.

8.7                                 Termination of this Agreement under Section
8.4 hereof shall not relieve either party of obligations incurred prior to
termination.

9.0                                 Infringement.  If at any time during the
term of this Agreement either MTI or Biocoat (a “party”) shall become aware of
any third party’s infringement or threatened infringement in the Field of any
Patent claim or claims embracing a Licensed Product sold by MTI the following
provisions shall apply:

9.1                                 The party having such knowledge shall
forthwith give notice to the other party.  If there is disagreement between the
parties as to whether the act complained of is in fact an

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infringement of any patent claim or claims, the parties shall refer such issue
to a mutually acceptable independent patent counsel.  The opinion of such
counsel shall be final and binding on the parties and costs incurred in that
regard shall be shared fifty percent (50%) by MTI and fifty percent (50%) by
Biocoat.

9.2                                 If within ninety (90) days following receipt
of notice from MTI to Biocoat of any such infringement or ninety (90) days after
receipt of the opinion of independent patent counsel concluding existence of
such infringement, Biocoat fails to halt such infringement or to initiate
litigation to do so, MTI shall have the right to initiate such litigation in its
own name or in the name of Biocoat as it deems necessary or appropriate. 
Biocoat shall cooperate with MTI as is reasonably necessary in any such
litigation brought by MTI in its own name or in Biocoat’s name.  In addition,
Biocoat shall have the right to determine what proportion, if any, of the
expenses of such litigation it will bear by providing written notice thereof to
MTI within thirty (30) days of the date of receipt by Biocoat of notice that MTI
has initiated litigation (it is understood by the parties that the proportion of
expenses borne by Biocoat shall determine Biocoat’s s hare of monetary recover
as provided in Section 9.3 below).

9.3                                 In the event any monetary recovery in
connection with such litigation is obtained (regardless of whether MTI or
Biocoat brought such litigation ), such monetary recovery shall be applied in
the following priority:  first, to the reimbursement of Biocoat and MTI for
their out-of-pocket expenses (including

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reasonable attorneys fees) in connection with such litigation; second, the
balance to be shared by Biocoat and MTI in proportion to the amounts spent by
the parties in conducting the litigation as provided in Section 9.2 above.  If
the monetary recovery is less than the out-of-pocket expenses of Biocoat and
MTI, reimbursement of these expenses shall be on a pro-rata basis.  If the
monetary recover is less than the out-of-pocket expenses of Biocoat and MTI,
reimbursement of these expenses shall be in proportion to the amount spent by
the parties in conducting the litigation as provided herein.

10.0                           Indemnification.  MTI shall indemnify and hold
Biocoat (as well as its Directors and Officers) harmless from and against any
and all expenses (including any and all attorneys fees), claims, demands,
liabilities or money judgments for death or bodily injury incurred by or
rendered against Biocoat which arise out of or are related to the use,
manufacturing, sale or distribution of a Licensed Product by MTI.

11.0                           Insurance.  MTI shall provide Biocoat evidence of
product liability coverage naming Biocoat as an additional insured.

12.0                           General.

12.1                           Assignment.  Neither MTI nor Biocoat shall have
the right to assign (including by sale, merger or, otherwise by operation of
law) any or all of its rights and obligations under this Agreement without the
prior written consent of the other party, which consent shall not be
unreasonably withheld, except that consent shall not be required in the event of
a sale by

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either MTI or Biocoat of substantially all of its assets to another entity,
provided that such other entity undertakes to accept all terms and conditions
hereof and carry out all obligations hereunder.

This Agreement and all rights and obligations hereunder shall be binding upon
and shall inure to the benefit of the respective successors, assignees who
rightfully become an Assignee, under this Section.

12.2                           Entire Agreement.  This Agreement contains the
entire agreement between the parties hereto in respect of the subject matter
hereof.  This Agreement may not be released, discharged, abandoned, changed or
modified in any manner except by an instrument in writing signed by a duly
authorized officer of each of the parties hereto.

12.3                           Waiver and Severability.  The waiver by either of
the parties of any breach of any provision hereof by the other party shall not
be construed to be a waiver of any succeeding breach of such provision or to be
a waiver of the enforceability of the provision itself.

12.4                           Governing Law.  This Agreement shall be construed
and interpreted in accordance with the laws of the Commonwealth of Pennsylvania
whose courts shall, except as limited by the provisions of the binding
arbitration provisions of Section 12.5 below, have jurisdiction over the parties
hereto and all matters arising hereunder.

12.5                           Arbitration.  The parties agree that any disputes

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arising under this Agreement that cannot be resolved by the parties shall be
submitted to binding arbitration in Philadelphia, PA.  Both parties agree to be
bound, and to abide by the decision reached in such arbitration including the
entry of judgment upon the award of the arbitrator(s) in such arbitration.

12.6                           Invalidity.  If any of the provisions of this
Agreement is held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision of this Agreement.

12.7                           Notice.  Any notice required or to be given
hereunder shall be considered delivered when deposited, postage prepaid, in the
United States mail, certified or registered mail, or by telecopier, to the
address of the other party as specified below or as subsequently modified in
writing by the parties.

If to Biocoat:

455 Pennsylvania Ave.

Fort Washington, PA  19034

Attn: President

If to MTI:

2 Goodyear

Irvine, CA  92618

Attn:  V.P. of Operations

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
effective the day and year set forth

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below, under the MTI signature.

Micro Therapeutics, Inc.

 

Biocoat, Incorporated

By:

/s/William M. McLain

 

 

By:

/s/Djoerd Hoekstra

 

 

 

 

 

 

Djoerd Hoekstra

 

 

 

 

 

 

President

 

 

 

 

Date:

12/8/99

 

 

Date:

12/03/99

 

 

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SCHEDULE A

PRODUCTS

Model #

 

Name

 

Description

 

 

 

 

 

105-5080

 

REBAR-14

 

OTW MICROCATHETER .0165”

 

 

 

 

 

105-5082
105-5083

 

REBAR-18

 

OTW MICROCATHETER .021” OF VARIOUS LENGTHS

105-5084

 

 

 

 

 

 

 

 

 

105-5085
105-5086

 

REBAR-HF

 

OTW MICROCATHETER .027” OF VARIOIUS LENGTHS

 

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SCHEDULE B

Patents of Biocoat, Incorporated

U.S. Patents

 

Expiration Date

 

 

 

 

 

4,663,233

 

October 24, 2005

 

4,801,475

 

January 31, 2006

 

5,023,114

 

January 31, 2006

 

5,037,677

 

January 31, 2006

 

 

Foreign Patents

France

 

90 08988

 

France

 

85 12625

 

Great Britain

 

2,163,436

 

Israel

 

75729

 

Germany

 

3529758

 

 

Patents of Biomatrix, Inc.

U.S. Patents

 

Expiration Date

 

 

 

 

 

4,487,865

 

December 11, 2001

 

4,500,676

 

December 11, 2001

 

 

Foreign Patents

Canada

 

1,223,383

 

1,218,776

 

Australia

 

55,1704

 

551,728

 

Japan

 

1,481,361

 

None

 

Great Britain

 

2,151,247

 

2,151,246

 

France

 

84-17,955

 

84-17,954

 

Germany

 

3,434,123

 

3,434,042

 

Italy

 

1,178,587

 

1,178,5868

 

 

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SCHEDULE C

MTI shall purchase all proprietary acrylic copolymers and hyaluronan solutions
used to make Licensed Products from Biocoat.

MTI has no minimum purchase requirement of such polymers.

Biocoat will certify each batch of polymer supplied to MTI with regard to
conformance with agreed upon specifications.

The current (1999) cost for the Hydak G-23 acrylic copolymer equals $300 per
liter, plus shipping.  The current cost for the Hydak A-14 hyaluronan solution
depends on volume as follows:

At 4 liters/week or less

– cost is $500/liter

At 6 liters/week

– cost is $450/liter

At 8 liters/week or more

– cost is $400/liter

 

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SCHEDULE D

ROYALTY RATE SCHEDULE

1.               ROYALTY RATE – Patent License (until expiration of the last to
expire patents on January 31, 2006).

a.               For the first million U.S. dollars of Net Sales in a given
calendar year, the rate will be 5%.

b.              For Net Sales over one million U.S. dollars in a given calendar
year, the rate will be 3%.

2.               ROYALTY RATE – Know-How License

a.               For the first million U.S. dollars of Net Sales in a given
calendar year, the rate will be 2.5%.

b.              For Net Sales over one million U.S. dollars in a given calendar
year, the rate will be 1.5%.

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