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Exhibit 10.14
CLINICAL SUPPLY AGREEMENT
This
Agreement, dated as of October 5, 2005, is made and entered into
by
and between: Light Sciences Oncology, Inc., a Washington
corporation ("LSO");
and Light Sciences Corporation, a Washington corporation
("Buyer").
RECITALS
A.
Light Sciences Corporation ("LSC") entered into agreements with
certain
third parties under which such third parties have manufactured and
supplied to
LSC talaporfin sodium (referred to as LS11) in bulk or finished
dosage form.
B.
LSC has assigned to LSO its rights under such manufacturing and
supply
agreements and has transferred to LSO approximately 3,500 vials of
LS11 in
finished dosage form, and approximately 2.5 kg of bulk LS11.
C.
Buyer has the valid right and license to use, make, have made,
sell,
offer to sell, import and otherwise dispose of LS11.
D.
Buyer wishes to acquire from LSO, and LSO wishes to supply to
Buyer,
LS11 in finished dosage form manufactured or to be manufactured
under third
party agreements for use in clinical studies under the terms and
conditions of
this Agreement.
AGREEMENT
NOW
THEREFORE, in consideration of the promises and agreements set
forth
herein, the parties agree as follows:
SECTION 1. DEFINITIONS
Whenever used in this Agreement with initial letters capitalized,
the
following terms will have the following specified meanings:
"BAXTER AGREEMENT" means the Drug Product Development and Clinical
Supply
Agreement between LSC and Baxter Pharmaceutical Solutions LLC
("Baxter"), dated
July 9, 2004, as amended from time to time.
"BULK DRUG" means talaporfin sodium manufactured and supplied by
Johnson
Matthey in bulk form under the Johnson Matthey Agreement or by
another Third
Party Manufacturer.
"CLINICAL STUDIES" means animal, preclinical or human clinical
studies of
LS11 by Buyer before marketing approval of LS11 by the regulatory
authority of
the jurisdiction where the study is conducted.
"CONFIDENTIAL INFORMATION" means any confidential or
proprietary
information of the disclosing party, whether of a scientific,
business or other
nature (including, but not limited to, trade secrets, know how and
information
relating to the products, research, studies, technology,
inventions, suppliers,
contracts, manufacturing methods, investigators, personnel,
business plans,
finances or
CLINICAL SUPPLY AGREEMENT
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scientific, regulatory, legal or other affairs of such party);
provided, that the same is marked or otherwise identified as
confidential or
proprietary information prior to, upon or promptly after receipt by
the
receiving party. However, Confidential Information does not include
any
information that: (a) was known by the receiving party prior to
communication by
the disclosing party; (b) is a matter of public knowledge at the
time of such
disclosure by the disclosing party; (c) becomes a matter of public
knowledge,
without fault on the part of the receiving party, subsequent to
disclosure by
the disclosing party to the receiving party; or (d) has been
disclosed to the
receiving party from a third party lawfully having possession of
such
Confidential Information without an obligation of confidentiality
to the
disclosing party. Subparagraph (a) will not apply to Confidential
Information
assigned or transferred to LSO by LSC on or before the date of this
Agreement.
"DRUG PRODUCT" means an investigational pharmaceutical product
containing
the Bulk Drug as the active pharmaceutical ingredient manufactured
and supplied
in finished dosage form by Baxter under the Baxter Agreement or by
another Third
Party Manufacturer.
"FIELD" has the meaning set forth in the Recitals.
"JOHNSON MATTHEY AGREEMENT" means the Research and Manufacturing
Agreement
between LSC and Johnson Matthey Pharmaceutical Materials, Inc.
d/b/a Pharm-Eco
("Johnson Matthey"), dated May 7, 2004, as amended from time to
time.
"TERM" has the meaning set forth in Section 5.1.
"THIRD PARTY MANUFACTURER" means Baxter, Johnson Matthey or any
other third
party LSO engages to supply raw material for LS11 or to manufacture
and supply
LS11 in bulk or finished dosage form, or any successor to such
entity's rights,
obligations or interests under the applicable Third Party Supply
Agreement.
"THIRD PARTY SUPPLY AGREEMENTS" means the Baxter Agreement, the
Johnson
Matthey Agreement and any other agreements under which LSO engages
a Third Party
Manufacturer to supply raw material for LS11 or to manufacture and
supply LS11
in bulk or finished dosage form.
SECTION 2. CLINICAL SUPPLY OF DRUG PRODUCT
2.1
OBLIGATION OF LSO TO
SUPPLY
LSO
will use commercially reasonable efforts to supply to Buyer
such
quantities of Drug Product as Buyer may order from LSO during the
Term; provided
such quantities do not exceed the quantities set forth in Buyer's
most recent
forecast under Section 3.2 and can be supplied from LSO's then
available
inventory of Drug Product or by a Third Party Manufacturer under a
Third Party
Supply Agreement. Buyer acknowledges that LSO will supply itself
and third
parties with Drug Product from its existing inventory, and that LSO
is not
obligated to maintain its existing inventory of Bulk Drug or Drug
Product, or
reserve inventory for Buyer, or enter into additional manufacturing
and supply
agreements. In the event of a shortage of available Drug Product,
LSO will
allocate the available Drug Product. Upon reasonable request, LSO
will furnish
to Buyer a current inventory of Drug Product being manufactured for
LSO and in
LSO's possession or control.
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2.2
SUBMISSION OF ORDERS
TO THIRD PARTY MANUFACTURERS
If
the quantity of Drug Product ordered by Buyer under Section 2.1
exceeds
LSO's then available inventory, LSO will notify Buyer, and, upon
Buyer's
request, LSO will submit a firm order for Drug Product with a Third
Party
Manufacturer, and, if necessary, will also submit firm orders with
other Third
Party Manufacturers for quantities of raw material and Bulk Drug
needed to
manufacture the requested Drug Product. Any orders submitted to a
Third Party
Manufacturer are subject to acceptance by the Third Party
Manufacturer and the
terms and conditions of the applicable Third Party Supply
Agreement, including,
without limitation, minimum quantities. Further, if the Third Party
Manufacturer
requires an advance payment before accepting the order or milestone
or other
progress payments, Buyer will pay to LSO the full amount of the
advance payment
before LSO submits the order to the Third Party Manufacturer and
any milestone
or other progress payments as they become due to the applicable
Third Party
Manufacturer. If the Third Party Manufacturers capable of supplying
the
requested raw material, Bulk Drug or Drug Product, as the case may
be, reject
LSO's order or are not able to supply the requested materials on
terms
acceptable to LSO and Buyer, then LSO will have no further
obligations with
respect to the supply of Drug Product that exceeds LSO's then
available
inventory.
2.3
USE OF DRUG PRODUCT
FOR CLINICAL STUDIES
Buyer will purchase, and LSO will supply to Buyer, Drug Product
under this
Agreement solely for use in Clinical Studies in the Field. Buyer
will not use
Drug Product acquired under this Agreement other than to conduct
Clinical
Studies in the Field, and Buyer will comply with all restrictions
on use and
other requirements set forth in the applicable Third Party
Manufacturer
Agreements.
2.4
ALTERNATE SOURCE OF
SUPPLY
Promptly after the date of this Agreement, or three (3) years
before the
projected date of Buyer's first commercial sale of LS11 drug
product, whichever
occurs last, Buyer will undertake commercially reasonable efforts
to identify,
qualify and enter into agreements with one or more third parties
for the
manufacture and supply of LS11 drug product. LSO will reasonably
cooperate with
Buyer to establish such alternate sources of supply and transition
supply of
drug product from LSO to such third parties, including, without
limitation,
furnishing available technical assistance and documentation. Buyer
will pay LSO
its then current FTE rates for such assistance and reimburse LSO
all reasonable
travel and other out-of-pocket expenses incurred in connection
therewith.
2.5
PROCESS
IMPROVEMENTS
Subject to LSO's obligations to third parties and provided LSO
has
sufficient rights, LSO will grant to Buyer a non-transferable,
non-exclusive
license to use any improvements to the Drug Product manufacturing
process
developed or made by or for LSO during the Term for the sole
purpose of
manufacturing talaporfin sodium drug product. The license granted
under this
Section 2.5 includes the right to sublicense under a written
sublicense
agreement reasonably acceptable to LSO for the sole purpose of
having talaporfin
sodium manufactured by a third party for Buyer.
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SECTION 3. TERMS AND CONDITIONS OF SALE
3.1
ORDERS
Buyer will complete, sign and submit to LSO a written order
specifying the
quantity of Drug Product that Buyer wishes to purchase, the desired
dose per
vial, desired delivery date and any specific requested shipping
instructions.
Buyer will order Drug Product in the minimum quantities specified
in EXHIBIT A.
All orders will be subject to acceptance by LSO and consistent with
the terms of
this Agreement and the applicable Third Party Supply
Agreements.
3.2
FORECASTS
Promptly after signing this Agreement and thereafter on the first
business
day of each calendar quarter during the Term, Buyer will provide
LSO with a
three (3) month rolling forecast of Buyer's reasonable estimate of
the
quantities of Drug Product that Buyer will need and order in each
quarter
covered by the forecast. Such estimates are estimates only and not
binding on
Buyer or LSO.
3.3
FIRM ORDERS
The
quantities set forth in an order submitted by Buyer and accepted by
LSO
will be binding on Buyer, and Buyer will be obligated to purchase
from LSO the
quantity of Drug Product set forth in the accepted order. Buyer may
not cancel
any such order or reduce the quantities or delay shipment of any
Drug Product
thereunder. Without limiting any other remedies, Buyer will
reimburse LSO for
all cancellation and other charges incurred as a result of Buyer's
breach of
this Section 3.3.
3.4
DELIVERY
LSO
will deliver all Drug Product to Buyer FOB at LSO's facility or
LSO's
inventory or storage location. Title to and risk of loss for the
Drug Product
will pass to Buyer when the Drug Product has been tendered to the
carrier
selected by Buyer at the place of delivery. Buyer will procure, at
its own cost,
insurance covering damage or loss of the Drug Product during
shipment from the
place of delivery to Buyer's shipping destination. Buyer is
responsible for all
transportation costs incurred in shipping the Drug Product from the
delivery
location to the shipping destination. Buyer will be responsible for
any claims
against the carrier arising from or relating to shipment.
3.5
INSPECTION AND
ACCEPTANCE
Buyer will inspect and test samples of the Drug Product promptly
after
receipt of the Drug Product to determine whether the Drug Product
conforms to
the applicable Third Party Manufacturers' warranties. If the Drug
Product fails
to conform to any applicable Third Party Manufacturer's warranty,
then Buyer
will notify LSO within thirty (30) days after receipt of the Drug
Product. In
such event, LSO will notify the applicable Third Party Manufacturer
and use
commercially reasonable efforts to exercise any remedies available
under the
applicable Third Party Supply Agreement at Buyer's expense. If LSO
and the
applicable Third Party Manufacturer determine in good faith that
the Drug
Product conforms to the Third Party Manufacturer's warranty, then
Buyer will be
deemed to have accepted the Drug Product unless the Drug Product
fails to
conform to the Third Party Manufacturer's warranty as a direct
result of LSO's
gross negligence or intentional misconduct in handling or storing
the Drug
Product or related Bulk Drug or raw material,
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in which case, Buyer's sole remedy will be to exercise its rights
under Section
7.1. If Buyer fails to notify LSO of any nonconformance within
thirty (30) days
after receipt of the Drug Product, then Buyer will be deemed to
have accepted
the Drug Product. Upon LSO's request, Buyer will return any
nonconforming Drug
Product to LSO or the applicable Third Party Manufacturer or
destroy such Drug
Product in accordance with LSO's instructions.
3.6
CONFLICTING TERMS
In
the event of any conflict or inconsistency between this Agreement
and
any order, the provisions of this Agreement will govern and
control. LSO will
not be bound by any term, condition or other provision that is
different from or
in addition to the provisions of this Agreement (whether or not it
would
materially alter this Agreement) that is proffered by Buyer in any
receipt,
acceptance, confirmation, correspondence or otherwise, unless LSO
specifically
agrees to such provision in writing.
SECTION 4. COMPENSATION
4.1
FEES
4.1.1 EXISTING DRUG PRODUCT
As
full consideration for Drug Product supplied to Buyer from
LSO's
inventory of Drug Product existing as of the date of this
Agreement, Buyer will
pay LSO a reasonable handling fee. Such handling fee will include
compensation
for costs incurred by LSO to store, transport, insure, maintain
records related
to and otherwise handle such Drug Product.
4.1.2 NEW DRUG PRODUCT
The
purchase price for Drug Product supplied to Buyer under this
Agreement
pursuant to orders submitted to Third Party Manufacturers after the
date of this
Agreement will be equal to the total cost incurred by LSO to have
such Drug
Product developed, manufactured and delivered to LSO and to
inspect, test,
insure and store such Drug Product and associated raw material and
Bulk Drug.
Such cost will include, without limitation, (i) fees, charges,
expenses, taxes
and other amounts paid to the Third Party Manufacturers for the
development,
capacity reservation, manufacture, testing, packaging and delivery
of the Drug
Product, Bulk Drug and raw material and related validation and
quality control
lots; and (ii) reasonable overhead charges of LSO (including,
without
limitation, fully loaded personnel costs) associated with any of
the foregoing
(including, without limitation, related record keeping and
regulatory
compliance), as determined by LSO in accordance with LSO's
accounting standards
consistently applied. Any advance or progress payments made by
Buyer pursuant to
Section 2.2 or required under Section 4.5 will be deducted from the
amounts
payable under this Section 4.1.
4.2
INVOICE; PAYMENT
LSO
will issue invoices to Buyer for the amounts payable under Section
4.1
within thirty (30) days after delivery of the Drug Product. Buyer
will pay the
amount set forth in each invoice within thirty (30) days after
receipt of such
invoice. All payments made under this Agreement will be made in
United States
currency. Any amounts not paid by Buyer under this Agreement when
due
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will bear interest from the date due until paid in full at the rate
of the
lesser of (a) 1.5% per month compounded monthly, and (b) the
highest rate
permitted by applicable usury law.
4.3
TAXES
The
amounts payable under this Agreement do not include any taxes,
duties
and other similar fees assessed by any government authority
("Taxes"). If and to
the extent that any Taxes are due in connection with the supply of
the Drug
Product to Buyer under this Agreement (other than Taxes based on
LSO's net
income or gross receipts), Buyer will pay such Taxes. If LSO is
obligated by
applicable law or regulation to collect and remit any
