LICENSE AGREEMENT

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

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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 sta