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













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



 2
 









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



 3
 









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



 4
 









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,



 5
 









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



 6
 









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



 7
 









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



 8
 









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



 10
 









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



 11















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



 12
 









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



 13
 









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

  



 



 16
 









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

  	
   

  



 



 17
 









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

  



 



 18
 









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%.



 19