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Microvision signs License and Development Agreement with Ethicon Endo-Surgery, Inc.

BOTHELL, Wash.--(BUSINESS WIRE)--Jan. 3, 2005--Microvision Inc. (Nasdaq:MVIS - News), a leader in light scanning technologies, today announced that it has entered into a multi-phase, exclusive license and product development agreement with Ethicon Endo-Surgery, Inc., a subsidiary of Johnson & Johnson, whereby Microvision and Ethicon Endo-Surgery will collaborate to integrate Microvision's proprietary technology into certain medical products, and Ethicon Endo-Surgery will receive an option for an exclusive license to Microvision's technology for human medical applications, excluding Ophthalmology.

Under the terms of the Agreement, Microvision will receive up to $6.2 million dollars consisting of an upfront license fee and additional fees to develop and deliver prototypes. Ethicon Endo-Surgery may elect to extend the development program to develop a commercial product for an additional fee. The Agreement also contains terms under which Microvision may supply certain products to Ethicon Endo-Surgery. Further details of the agreement are not being disclosed at this time.

"We are very pleased to be working with one of the world's leading innovators of medical devices," said Rick Rutkowski, Microvision's CEO. "This contract and relationship represents a significant validation of the potential productization of our unique and proprietary technology for medical device applications. We have several OEM solution applications under development and we are pleased to be continuing our progress in this area."

Entry Material Agreement

Item 1.01. Entry into a Material Definitive Agreement.

On December 30, 2004, Microvision, Inc. ("Microvision") entered into a multi-phase exclusive product development and license agreement with Ethicon Endo-Surgery, Inc., a subsidiary of Johnson & Johnson ("Ethicon"), whereby Microvision and Ethicon will collaborate to integrate Microvision's proprietary visualization technology into certain medical products, and Ethicon will receive an option to exclusively license Microvision's technology for human medical applications with certain exclusions.

Subject to the terms of the agreement, Ethicon will pay Microvision $6.2 million over approximately seven months consisting of an upfront license fee and additional fees to develop and deliver prototype components for use in an initial medical product. Following an evaluation period for the prototype, Ethicon may elect to proceed to the next phase of a commercial product development for approximately $5.5 million in development fees. The agreement contemplates that there may be additional development programs for other medical products. Ethicon has the right to terminate the agreement prior to completion of the development program, which could result in a reduction of the $6.2 million.

During the commercial product development phase, Ethicon will have an option to receive an exclusive license to Microvision's visualization technology for human medical applications and for Microvision to become Ethicon's exclusive design partner and source of supply for visualization components using Microvision technology. Alternatively, under certain conditions, Ethicon may receive the right to manufacture components using Microvision's technology and pay Microvision a royalty on the sale of products incorporating those components.

If Ethicon opts for an exclusive license, then after a period of time, Ethicon will be obligated to pay Microvision an increasing annual license maintenance fee, against which Ethicon's future component purchases, royalty payments, and development fee payments would be credited.


At January 4, 2005 at 9:40 AM Anonymous said...

The 8K refers to "proprietary visualization technology." This probably means the camera, but I wonder if it could be broader than that. We have seen the demo of the endoscopic camera capability. However, the image needs to be displayed either on a monitor or through an eyepiece for the surgeon. It seems to me that MVIS can play a role at both ends of an endoscope. Could that explain the use of the term "visualization?"

At January 4, 2005 at 12:02 PM Ben said...

great question. i dunno the answer!


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