Exhibit 10.1

PATENT AND TECHNOLOGY LICENSE AGREEMENT

This AGREEMENT (“ AGREEMENT ”) is made on this 15th day of April, 2004 (“ EFFECTIVE DATE ”), by and between Vista Medical Technologies, Inc., a Delaware corporation, having a principal place of business located at 2101 Faraday Avenue, Carlsbad, CA 92008 (“ LICENSOR ”), and Viking Systems, Inc., a Nevada corporation, having a principal place of business located at 7514 Girard Ave., Suite 1509, La Jolla, CA  92037 (“ LICENSEE ”).

RECITALS

A.                                    WHEREAS, pursuant to that certain Asset Purchase Agreement by and between LICENSOR and LICENSEE dated December 22 (the “Asset Purchase Agreement”), LICENSEE is acquiring from the LICENSOR, and LICENSOR is selling to LICENSEE, certain assets (“ ASSETS ”) of the LICENSOR’s medical device and technology business (“ BUSINESS ”); and

B.                                      WHEREAS, LICENSOR owns certain intellectual property rights necessary to make use of such ASSETS, commercialize LICENSED PRODUCTS and operate the BUSINESS; and

C.                                      WHEREAS, LICENSEE desires to license certain intellectual property rights necessary to make use of such ASSETS, commercialize LICENSED PRODUCTS and operate the BUSINESS and LICENSOR is willing to grant such an exclusive license to LICENSEE.

NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, the parties agree as follows:

I.

DEFINITIONS

All definitions below or elsewhere in this AGREEMENT apply to both their singular and plural forms, as the context may require.  “Herein , ” “hereunder , ” and “hereof” and other similar expressions refer to this AGREEMENT.  “ Section ” refers to sections in this AGREEMENT.  “Including” means “including without limitation.”  “Days” means “calendar days,” unless otherwise stated.

1.1 “AFFILIATE” means any business entity more than fifty percent (50%) owned by LICENSEE, any business entity which owns more than fifty percent (50%) of LICENSEE, or any business entity that is more than fifty percent (50%) owned by a business entity that owns more than fifty percent (50%) of LICENSEE.

1.2 “ CONFIDENTIAL INFORMATION ” means the proprietary or confidential information of a party (each, a “ DISCLOSER ”) which is disclosed to the other party (each, a “ RECIPIENT ”) before or after the EFFECTIVE DATE and (i) is identified as “confidential” by DISCLOSER in writing prior to disclosure and (ii) relates to products, plans, designs, costs, prices, finances, marketing plans, business opportunities, personnel, research, development, know-how, trade secrets, inventions, blueprints, techniques, chemical or biological materials, drugs, devices, specimens, apparatus, processes, algorithms, software programs, schematics,

designs, contracts, customer lists, procedures, formulae, patent applications and other information relating to DISCLOSER’s business, services, processes or technology.  CONFIDENTIAL INFORMATION shall not include information that RECIPIENT proves:  (i) was known by RECIPIENT, or was publicly available, prior to disclosure by DISCLOSER to RECIPIENT; (ii) became publicly available after disclosure by DISCLOSER to RECIPIENT through no act of RECIPIENT; (iii) is hereafter rightfully furnished to RECIPIENT by a third party without confidentiality restriction; or (iv) is disclosed with the prior written consent of DISCLOSER or as expressly authorized under this AGREEMENT.

1.3 “GROSS REVENUES ” means royalties, up-front payments, marketing, distribution, franchise, option, license, or documentation fees, bonus and milestone payments, equity securities or any other payment or value received by License from the sale, licensing, sublicensing, renting, leasing or other commercialization of Licensed Products, less sales/and/or use taxes actually paid, import and/or export duties actually paid, outbound transportation prepaid or allowed, and amounts allowed or credited due to returns.

1.4 “ IMPROVEMENTS ” means any and all derivative works, modifications, improvements, enhancements, translations, abridgements, additional developments or the like to the existing LICENSED TECHNOLOGY made by LICENSEE, LICENSEE’s AFFILIATES and/or LICENSEE’s sublicensees after the EFFECTIVE DATE.

1.5 “ INTELLECTUAL PROPERTY ” or “ INTELLECTUAL PROPERTY RIGHTS ” collectively means any and all patents (including reissues, divisions, continuations and extensions thereof), patent registrations, patent applications, data rights, utility models, business processes, trademarks, trade secrets, know how, trade names, registered or unregistered designs, mask works, copyrights, moral rights and any other form of proprietary protection afforded by law to intellectual property, or any applications therefor, which arises or is enforceable under the laws of the United States, any other jurisdiction or any bi-lateral or multi-lateral treaty regime.

1.6 “KNOW-HOW” means any and all information, processes, procedures, documents and materials relating to the design, development and manufacture of LICENSED PRODUCTS known to LICENSOR as of the EFFECTIVE DATE.

1.7 “LICENSED PRODUCTS” means any product incorporating or arising out of LICENSED TECHNOLOGY, including the OEM PRODUCTS and the VISTA PRODUCTS.

1.8 “LICENSED PATENTS” means all of the patent applications and patents listed on Schedule 3.10(a) of the Company Disclosure Schedule (as defined in the Asset Purchase Agreement), and any patents issued therefrom, together with all pending and issued foreign counterparts of such applications, and all pending and issued renewals, continuations, continuations-in-part, divisions, patents of addition, reexaminations and/or reissues of such applications or foreign counterparts.

1.9 “LICENSED TECHNICAL INFORMATION” means LICENSOR’s rights in any technical information, KNOW-HOW, processes, procedures, compositions, devices, methods, formulae, protocols, techniques, software, designs, drawings or data which are not claimed in

LICENSED PATENTS but that are necessary or useful for practicing LICENSED PATENTS.

1.10    “LICENSED TECHNOLOGY” means inventions or discoveries covered by LICENSED PATENTS and/or LICENSED TECHNICAL INFORMATION as more fully defined in Exhibit A .  LICENSED TECHNOLOGY includes any IMPROVEMENTS developed by LICENSEE or its AFFILIATES subsequent to the EFFECTIVE DATE as set forth in Section 4.2.

1.11    “ LIMITED ROYALTY PERIOD ” has the meaning set forth in Section 3.1(b).

1.12    “LIMITED ROYALTY PERIOD GROSS REVENUES” means Gross Revenues from Licensee’s Sale of Vista Products less the gross revenues earned by LICENSOR from its Sale of Vista Products during 2003.

1.13    “OEM PRODUCTS ” meansthe Aesculap product line, the Wolf product line and the OEM Camera product line as further defined in Exhibit B , and any improvements, derivatives, modifications or enhancements thereto.

1.14    “SALE” OR “SOLD ” means the transfer, licensing, renting, leasing, disposition or other commercialization of Licensed Products for value.

1.15    “ TERM ” has the meaning set forth in Section 10.1.

1.16    “ VISTA PRODUCTS ” means the Endosite System product line and the Three Chip Endosite System product line as further defined in Exhibit B , and any improvements, derivatives, modifications or enhancements thereto.

II.

LICENSE; TECHNOLOGY TRANSFER

2.1 Subject to the terms and conditions of this Agreement, LICENSOR hereby grants to LICENSEE, a worldwide, exclusive (even as to LICENSOR) license, with the right to sublicense, under LICENSED TECHNOLOGY, and all INTELLECTUAL PROPERTY RIGHTS therein (i) to make, have made, use, import, reproduce, offer to sell and/or sell LICENSED PRODUCTS; and (ii) to modify and create IMPROVEMENTS.

2.2 Sublicenses.  LICENSEE may grant sublicenses under LICENSED TECHNOLOGY consistent with the terms of Section 2.1 and this AGREEMENT.  Notwithstanding anything else herein and for avoidance of doubt, LICENSEE shall have no right to commercialize the LICENSED TECHNOLOGY except as incorporated into LICENSED PRODUCTS.

2.3 Technology Transfer .  No later than thirty (30) days following the EFFECTIVE DATE, LICENSOR shall deliver to LICENSEE all LICENSED TECHNOLOGY.

III.

CONSIDERATION, PAYMENTS AND REPORTS

3.1 Royalties .  In consideration of rights granted by LICENSOR to LICENSEE under this AGREEMENT, LICENSEE agrees to pay LICENSOR the following:

(a) A five percent (5%) royalty on Gross Revenues for all OEM PRODUCTS Sold by LICENSEE, its AFFILIATES or its sublicensees;

(b) For the first (1st) two (2) twelve (12) month periods after the EFFECTIVE DATE (“ LIMITED ROYALTY PERIOD ”), a ten percent (10%) royalty on the Limited Royalty Period Gross Revenues for all VISTA PRODUCTS Sold by LICENSEE, its AFFILIATES or its sublicensees; and

(c) After the LIMITED ROYALTY PERIOD, a ten percent (10%) royalty on Gross Revenues for all VISTA PRODUCTS Sold licensed, leased, rented or otherwise commercialized by LICENSEE, its AFFILIATES or its sublicensees.

3.2 Minimum Royalties .  Notwithstanding Section 3.1, the minimum royalty payment by LICENSEE to LICENSOR for the Licensed Products shall be as follows:

(a) One Hundred and Fifty Thousand U.S. Dollars ($150,000) for the first (1st) twelve (12) month period after the EFFECTIVE DATE to be paid no later than thirty (30) days after the first (1st) anniversary of the EFFECTIVE DATE;

(b) Three Hundred Thousand U.S. Dollars ($300,000) for the second twelve (12) month period starting on the first (1st) anniversary of the EFFECTIVE DATE to be paid no later than thirty (30) days after the second (2nd) anniversary of the EFFECTIVE DATE;

(c) Three Hundred Thousand U.S. Dollars ($300,000) for the third twelve (12) month period starting on second (2nd) anniversary of the EFFECTIVE DATE to be paid no later than thirty (30) days after the third (3rd) anniversary of the EFFECTIVE DATE;

(d) Three Hundred Thousand U.S. Dollars ($300,000) for the fourth twelve (12) month period starting on the third (3rd) anniversary of the EFFECTIVE DATE to be paid no later than thirty (30) days after the fourth (4th) anniversary of the EFFECTIVE DATE; and

(e) Three Hundred and Seventy-Five Thousand U.S. Dollars ($375,000) for the fifth twelve (12) month period starting on the fourth (4th) anniversary of the EFFECTIVE DATE to be paid no later than thirty (30) days after the fifth (5th) anniversary of the EFFECTIVE DATE.

3.3 Termination of License .  If LICENSEE does not pay LICENSOR the minimum royalty for each twelve month period as set forth in Section 3.2, and such failure continues for thirty (30) days after LICENSOR notifies LICENSEE thereof in writing,  the licenses granted

under Section 2 shall terminate immediately and all rights and interests granted therein shall revert back to LICENSOR.  The parties shall take any and all necessary actions and execute all documents necessary to ensure that the intent of this Section is enforced.

3.4 Royalty Obligation and Conditional Transfer of LICENSED TECHNOLOGY .   The royalties agreed to hereunder shall be paid until the earlier of the date on which LICENSEE has paid LICENSOR an aggregate of Four Million Five Hundred Thousand U.S. Dollars ($4,500,000) or the fifth anniversary of Effective Date. (“ TOTAL ROYALTY ”).  If LICENSEE pays LICENSOR the TOTAL ROYALTY, LICENSOR shall assign and transfer to LICENSEE all of LICENSOR’s rights, title and interests in and to the LICENSED TECHNOLOGY.  The parties shall take any and all necessary actions and execute all documents necessary to ensure the intent of this Section is enforced.

3.5 Payment Terms .  The royalties due hereunder shall be paid on a semi annual basis (“Payment Period”) commencing six (6) months from the Effective Date. Within thirty (30) days after the end of each Payment Period, LICENSEE:

(i) shall pay all royalties set forth in this Section 3 accrued and payable for such period, and

(ii) furnish LICENSOR with a royalty report along with a written statement certified by an officer of LICENSEE (a) stating that the royalty report is true and accurate, and (b) specifying the total royalties payable to LICENSOR for such period and providing the basis for the calculation of such royalties.

All payments due to LICENSOR shall be made solely in U.S. Dollars in immediately available funds, via wire transfer to such account as is designated by LICENSOR in writing to LICENSEE.  Late payments shall accrue interest from the date due until the date paid at a rate of one percent (1%) per month, or the maximum rate allowed under applicable law, whichever is less.  LICENSEE shall make no offset for any amounts due to LICENSOR regardless of the justification for such intended offset.

3.6 Right of Audit.  During the TERM and for three (3) years after the expiration and termination of this AGREEMENT for any reason (the “ AUDIT PERIOD ”), LICENSEE shall keep complete, true and accurate records containing all invoices and other data related to the computation and verification of the royalties to be paid under Section 3 and any other amounts to be paid to LICENSOR, and (b) the basis of information provided in the royalty report or any statements provided by LICENSEE to LICENSOR pursuant to this AGREEMENT.  During the AUDIT PERIOD LICENSEE shall permit LICENSOR or its designees or agents, at LICENSOR’s expense and upon ten (10) days prior written notice, to inspect and make copies of such records for the sole purpose of verifying the accuracy of the royalties and other payments made by LICENSEE under this AGREEMENT.  LICENSEE shall itself, and shall cause its accountants to, diligently cooperate with the audit.  If any audit reveals any underpayment by LICENSEE, LICENSEE shall within ten (10) days after such audit remit to LICENSOR all amounts due, with interest thereon at the rate of one percent (1%) per month compounded (or the highest rate permitted by applicable law, whichever is lower), calculated from the date such amounts were due.  If any underpayment is more than five percent (5%) of the total payments

due for the period audited, LICENSEE shall remit to LICENSOR in full all costs for such audits and the subsequent audit, including any fees of a certified public accountant.

3.7 Taxes.  In addition to any other amounts due under this AGREEMENT, LICENSEE agrees to pay, indemnify and hold LICENSOR harmless from any TAXES imposed by any governmental authority with respect to LICENSEE’s use of the LICENSED TECHNOLOGY.  “ TAXES ” herein means any tax, fee or cost not based on LICENSOR’s net income, including any sales, use, excise, import or export, value added, withholding or similar tax, or any duty or fee and any penalties or interest associated with any of the foregoing.  LICENSEE’s obligation to pay TAXES shall survive any expiration or termination of this AGREEMENT.  Notwithstanding the foregoing, if LICENSEE is required by U.S. or other law to withhold any amount from sums payable to LICENSOR hereunder, LICENSEE shall deduct and pay any withholding taxes to the appropriate U.S. or other tax authorities, respectively, and shall provide LICENSOR with a tax receipt evidencing such payment.

IV.

PATENTS AND INVENTIONS

4.1 Ownership.  Except for the licenses granted herein and as set forth in Section 3, LICENSOR shall retain all of its rights, title and interests, which it may have, in the underlying INTELLECTUAL PROPERTY RIGHTS of the LICENSED TECHNOLOGY and any IMPROVEMENTS.

4.2 LICENSEE IMPROVEMENTS.  In the event that LICENSEE develops IMPROVEMENTS subsequent to the EFFECTIVE DATE, LICENSEE shall have all rights to such IMPROVEMENTS under the terms of the exclusive license granted to LICENSEE in Section 2.1.

4.3 Patent Prosecution.  LICENSEE shall have the responsibility for preparing, filing, prosecuting and maintaining the LICENSED PATENTS and conducting any interferences, reexaminations or requesting reissues or patent term extensions with respect to the LICENSED PATENTS in the United States, and the right to prepare, file, prosecute and maintain the LICENSED PATENTS and conduct any interferences, reexaminations or request reissues or patent term extensions with respect to the LICENSED PATENTS, or to take such similar actions to protect the LICENSED PATENTS in any other country.  During the TERM LICENSEE shall prosecute and/or maintain, as appropriate, the LICENSED PATENTS in at least the countries in which LICENSOR has already begun prosecution and/or maintenance (“ PROSECUTION COUNTRIES ”), a list of which shall be provided by LICENSOR upon request.  LICENSEE shall keep LICENSOR fully informed as to the status of such patent matters, including without limitation by providing LICENSOR with the opportunity to review and comment on any documents which will be filed in any patent office and by providing LICENSOR copies of any documents received by LICENSEE from such patent offices including notices of all interferences, reexaminations, oppositions or requests for patent term extensions.  In the event that LICENSEE declines or fails to prepare, file, prosecute or maintain any LICENSED PATENTS in any PROSECUTION COUNTRY, LICENSEE shall promptly, and in no event later than ninety (90) days prior to any filing deadline, provide written notice to LICENSOR and

LICENSOR shall then have the right to assume such responsibilities at its own expense using counsel of its choice.  In addition, LICENSEE shall promptly notify LICENSOR of any decision to abandon a patent or application covered by the LICENSED PATENTS in any country, in which case, LICENSOR shall have the option, at its expense and with counsel of its choice, of continuing to prosecute any such