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                                                                   Exhibit 10.25

                            MASTER SERVICES AGREEMENT

This Master Services Agreement ("AGREEMENT") is made effective as of February
27, 2004 (the "EFFECTIVE DATE") between Light Sciences Corporation, which has a
place of business at 34931 SE Douglas Street, Suite 200, Snoqualmie, WA 98065
(hereinafter "LSC"), and Ergomed Clinical Research, Ltd., which has a place of
business at 60 Cannon Street, London EC4N 6JP, England (hereinafter
"Contractor").

                                    RECITALS

A. LSC is in the business of developing, manufacturing and distributing
pharmaceutical products, medical devices and/or biotechnology products and is in
the process of entering a phase II clinical trial of its products in the United
States of America and the European Union.

B. Contractor is in the business of providing clinical trial management and
support services to biomedical companies.

C. LSC and Contractor desire to enter into this Agreement to provide the terms
and conditions on which LSC may engage Contractor from time to time to provide
services for individual studies or projects by executing Individual Project
Agreements (or "IPAs," as further defined below) specifying the details of
requested services and related specific terms and conditions.

Now therefore, in consideration of the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the parties hereto agree
as follows:

                                    AGREEMENT

SECTION 1. DEFINITIONS

     (a) "ALL APPLICABLE LAWS AND REGULATIONS" means all federal, state,
provincial, or local laws of the United States, United Kingdom and European
Union member states having authority over the conduct of clinical studies, or
the use or review of data obtained under this Agreement, or that govern the
activities of Contractor in providing Services under this Agreement. For studies
conducted under an investigational new drug application ("IND") in the United
States, applicable laws and regulations may include, but are not limited to, 21
CFR Pts. 312, 50, and 56, FDA's Electronic Records and Electronic Signatures
Rule (21 CFR Pt. 11), and the Health Insurance Portability and Accountability
Act of 1996 ("HIPAA") and its implementing regulations (45 CFR Pts. 160 and
164). For studies conducted in, or for use in an application for marketing
approval submitted to a European Union member state, applicable laws may
include, but are not limited to 65/65/EEC, 75/318/EEC, and 91/507/EEC, and the
European Union Personal Data Directive ("Directive 95/46/EC of the European
Parliament and of the Council of 24 October 1995 on the protection of
individuals with regard to the processing

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of personal data and on the free movement of such data"). All Applicable Laws
and Regulations also means all conditions of approval imposed by the reviewing
IRB/Ethics Committees, FDA, or other applicable authorities.

     (b) "CONFIDENTIAL INFORMATION" is defined in Section 6.

     (c) "CHANGE ORDER" is defined in Section 2.

     (d) "CONTRACT MANAGER" is defined in Section 2(d).

     (e) "DELIVERABLES" means any data, images, specifications, designs,
prototypes, products, software code, documentation, reports, memoranda, studies,
plans, exhibits, or other materials prepared or obtained by Contractor in the
course of performing the Services.

     (f) "EXISTING CONTRACTOR IP" is defined in Section 8(b).

     (g) "FDA" means the United States Food and Drug Administration.

     (h) "GOVERNMENTAL AUTHORITY" means the FDA or other foreign or domestic
judicial, governmental or regulatory bodies having jurisdiction over the conduct
of the clinical studies, or review of the data obtained from such studies, with
respect to which Contractor is providing Services.

     (i) "INDIVIDUAL PROJECT AGREEMENT" (or "IPA") means an agreement between
the parties with respect to a specific Project to be performed by Contractor for
LSC under this Agreement, as described in a document that the parties have
signed with reference to this Agreement. A general form of IPA to be used to
prepare future specific IPAs is set forth as Exhibit A hereof. The initial IPA
is attached as Exhibit A-1 and will be effective upon its signature by both
parties.

     (j) "PROJECT" means a collection of related Services to be carried out
under IPA's.

     (k) "SERVICES" is defined in Section 2(c).

     (l) "STANDARD RATE SCHEDULE" means that document attached to and made a
part of this Agreement as Exhibit B, setting forth the hourly rates at which LSC
will pay Contractor for Services unless otherwise specified in an IPA.

SECTION 2. PERFORMANCE OF SERVICES; IPAS.

     (a) Scope of Agreement. This Agreement provides the master terms and
conditions under which the parties may contract for multiple Projects by
entering into multiple IPAs. Contractor will provide Services to LSC by
performing Projects that require the training, skills and abilities of
Contractor as represented to LSC. Contractor

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will devote best efforts to performing Services under this Agreement and will be
available for consultation with LSC and its representatives by correspondence,
telephone and meetings at such times and places as LSC may reasonably select.

     (b) Individual Project Orders. The parties will separately negotiate and
agree on the details of each Project under this Agreement by completing and
signing IPAs, each of which shall be annexed to this Agreement by appendix and
incorporated herein by reference. Each IPA will set forth, as appropriate, the
scope of work, specific tasks and Deliverables, a schedule for their completion
and delivery (where applicable), and a budget and payment schedule. Each IPA
will be subject to all of the terms and conditions of this Agreement. To the
extent any terms or provisions of a IPA conflict with the terms and provisions
of this Agreement, the terms and provisions of this Agreement will control,
except to the extent that the applicable IPA expressly and specifically states
an intent to supersede the Agreement on a specific matter.

     (c) Nature of Services. The services covered by this Agreement may include
consulting and technical services related to clinical trials management
requested by LSC and agreed to by Contractor as set forth in any IPA
(collectively, the "SERVICES"). Contractor and LSC will cooperate, where
appropriate, in the completion of a Transfer of Obligations Form, as described
in 21 CFR Section 312.52 or its European counterpart in conjunction with the
relevant IPA, and LSC, or its designate, will file the Transfer of Obligations
Form as required by law or regulation.

     (d) Contract Manager for Each IPA. As part of each IPA, each party will
specify a contract manager who will be the primary contact for all Projects
under the IPA ("CONTRACT MANAGER"). The Contract Manager's name and contact
information (and the Contract Manager's substitute or a procedure for the
selection of a substitute) will be set forth in each IPA.

     (e) Changes to an IPA. The parties agree to discuss in good faith any
issues that may arise in performance of the Projects associated with each IPA,
including any issues regarding compliance with the schedule set forth in the
IPA. The parties may amend an IPA from time to time, subject to mutual written
agreement by duly authorized representatives of the parties (a "CHANGE ORDER").
Each Change Order will detail the requested changes to the applicable IPA, which
may include, but not be limited to, changes in responsibility, duty, budget,
time line or other matter. The Change Order will become effective upon its
execution. For any Change Order that affects the scope of the regulatory
obligations that have been transferred to Contractor, Contractor and LSC will
execute a corresponding amendment to the Transfer of Obligations Form.

     (f) Personnel/Rate Schedule Adjustments. Contractor will maintain on its
staff trained and experienced personnel that are available to perform Projects
as set forth in the IPAs. Contractor will use commercially reasonable efforts
to ensure that (1) Contractor personnel providing Services under this Agreement
are available for assignment by Contractor to work on additional Projects which
are similar to those for which they have provided Services previously; and (2)
Contractor personnel providing

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Services under this Agreement are not unnecessarily and inefficiently moved
between Projects during their performance. Contractor will consult with LSC when
establishing and changing key members of the project teams assigned under each
IPA. The parties will meet from time to time to discuss upcoming IPAs and the
anticipated personnel needs for resulting Projects.

     (g) Restriction on Subcontracting. Except for sub-contracting to or
engagement of other members of the Contractor's Group (for this purpose, any
entity which is either owned in majority by shareholders of Contractor or by
other Contractor's company in any country), Contractor will not subcontract or
otherwise permit third parties to perform any Services hereunder without LSC's
specific prior written consent. Any subcontractor authorized to perform Services
in connection with this Agreement will first sign subcontracting and
confidentiality agreements and take such other actions as LSC determines are
sufficient to protect LSC's intellectual property and confidentiality interests.
Contractor shall provide written notice to LSC prior to engagement of any member
of Contractor's Group to perform any Services hereunder.

     (h) Status Reports. For each individual Project, Contractor will provide to
LSC, in consideration of the fees set forth in the applicable IPA, a current and
accurate monthly status report, in a form reasonably acceptable to LSC,
detailing the status of each Project, including current budget tracking and
progress toward completing Project milestones in accordance with the schedule in
the applicable IPA. Contractor will also provide, at LSC's expense, such
additional status reports regarding work in progress as the LSC Contract Manager
may reasonably request from time to time.

SECTION 3. SERVICES EVALUATION; ERROR CORRECTIONS

     (a) Professional Quality Services. Contractor understands and agrees that
it is obligated at all times under this Agreement to provide LSC with
professional quality Services that conform to the IPAs. In addition, Contractor
will be responsible for initiating prompt and detailed communications with the
LSC Contract Manager regarding any errors discovered during the course of
performing Services. In the event that it is established by independent third
party that any such errors are caused by a failure of Contractor to provide
professional quality Services that conform to this Agreement, including the
applicable IPA(s), then LSC will be entitled (in addition to any other remedies
it may have under this Agreement, at law or in equity) to an appropriate credit
for Services affected by such error.

     (b) Evaluation and Acceptance or Error Correction Requirements. Contractor
will use best efforts to complete and deliver the Services and associated
Deliverables set forth in an IPA according to the applicable schedule and in
accordance with the terms and conditions of this Agreement, including the
applicable IPA. Upon receipt of the Services and/or any associated Deliverables,
LSC will review them for conformance with the terms and conditions of this
Agreement (including the applicable IPA), and LSC will, within thirty (30) days,
either accept such Services or Deliverables or notify Contractor of

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its reasons for rejection, which reasons may be based on one or more of the
following: the material non-conformance of any Services or associated
Deliverables with the IPA, or Services that are materially below the quality
Contractor is obligated to provide pursuant to this Agreement (including without
limitation because LSC identifies material errors in the results of such
Services or associated Deliverables). In the event LSC rejects any Services or
associated Deliverables, Contractor will re-perform the Services in relevant
part at no cost to LSC within thirty (30) days (or such shorter period as may be
agreed upon in the applicable IPA) and notify LSC when it is timely to re-review
the Services and associated Deliverables for potential acceptance in accordance
with this paragraph. Contractor will promptly raise with LSC any issues that
arise (or which Contractor reasonably foresees arising) regarding the quality or
performance of any Services and associated Deliverables, as well as any
deviation from the applicable schedule in the IPA for such Services. The parties
will use all reasonable efforts to promptly address any such issues that may
arise, including the establishment of an appropriate recovery plan to the extent
required.

SECTION 4 REGULATORY COMPLIANCE; INSPECTIONS.

     (a) Compliance. Contractor agrees to conduct all Services in compliance
with All Applicable Laws and Regulations, and with at least the standard of care
customary in the United States contract research organization industry.
Contractor certifies that it has not been debarred under the FDA regulations and
that it will not knowingly employ or subcontract with any person or entity that
has been so debarred to perform any Services under this Agreement. LSC will not
require Contractor to perform any assignments or tasks in a manner that would
violate any Applicable Laws or Regulations to the best of the knowledge of the
LSC Contract Manager. LSC further agrees that it will cooperate with Contractor
in taking any actions that Contractor reasonably believes are necessary to
comply with the regulatory obligations that LSC has transferred to Contractor
pursuant to a Transfer of Obligations Form.

     (b) Regulatory Response. Each party acknowledges that the other party may
respond independently to any regulatory correspondence or inquiry received from
a Governmental Authority in which such party is named. Contractor will, however:
(1) notify LSC within three business days of receiving notice of any inspection
or inquiry by a Governmental Authority related to any Services hereunder,
including, but not limited to, inspections of investigational sites or
laboratories; (2) forward to the LSC copies of any correspondence from any
Governmental Authority relating to any Services, including, but not limited to,
Form FD-483 notices and FDA warning letters, even if they do not specifically
mention LSC; and (3) obtain the written consent of LSC, which will not
unreasonably be withheld, before referring to LSC in any regulatory
correspondence. Contractor will give LSC the opportunity to have a
representative present during any Governmental Authority inspection or inquiry
related to any Services or Project. Each party, however, acknowledges that it
may not direct the manner in which the other party fulfills its obligations to
permit inspection by Governmental Authorities.

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     (c) Inspections. Each party agrees that, during an inspection by any
Governmental Authority concerning any Project of LSC with respect to which
Contractor is providing Services, it will not disclose any confidential or
proprietary information or materials of the other party that are not required to
be disclosed to such agency, except with the prior written consent of the other
party. Such information and materials include, but are not limited to, the
following: (1) financial data and pricing data (including, but not limited to,
the budget and payment sections of any IPA); (2) sales data (other than shipment
data); and (3) personnel data (other than required data, if any, as to
qualification of technical and professional persons performing functions subject
to regulatory requirements).

     (d) Audits. During the term of this Agreement, Contractor will permit LSC's
representatives, or its designate, to examine or audit Contractor's performance
of the Services and Contractor's facilities at which the Services are conducted
upon 8 (eight) working days advance written notice during regular business hours
to determine that the Services are being conducted in accordance with this
Agreement, including the applicable LPA(s), the facilities are adequate, and the
Services comply with All Applicable Laws and Regulations and to examine original
source documentation, databases and software with respect to such Services, and
any other essential study documentation (ICH E6) considered relevant and useful
by LSC to confirm compliance with All Applicable Laws and Regulations. If, after
such audit is conducted it is determined that Contractor has failed to meet its
material obligations under this Agreement or has failed to materially comply
with All Applicable Laws and Regulations, Contractor shall reimburse LSC for all
commercially reasonable audit costs, including, but not limited to, all travel
costs and professional fees incurred to conduct such audit(s).

     During the Term and for three (3) years thereafter, Contractor agrees to
keep and to cause Contractor and approved subcontractors ("CONTRACTOR ENTITIES")
to keep all usual and proper books and records relating to Contractor's
reimbursable expenses and Contractor fees as contemplated by this Agreement. To
verify Contractor's request for reimbursement under this Agreement, LSC may
designate, during the Term and for three (3) years thereafter an independent
certified public accountant to, (i) audit Contractor's books and records or the
books and records of Contractor Entities, and/or (ii) inspect Contractor's or
any of the foregoing entities' facilities and procedures to the extent they are
relevant to Contractor's request for reimbursement under this Agreement. Any
audit or inspection under this Section will be conducted upon 30 (thirty)
calendar days advance written notice, during regular business hours and in a
manner that does not unreasonably interfere with Contractor's or the applicable
entity's operations. Any audit shall be conducted by an independent certified
public accountant selected by LSC and approved by Contractor. Contractor agrees
to provide, and to cause Contractor Entities to provide, to independent
certified public accountant prompt and reasonable access to all relevant books,
records, procedures, and facilities. LSC shall keep and shall ensure that such
independent certified public accountant keeps any and all Contractor's
information, marked as confidential or confidential by nature, obtained during
such audit and inspection in strictest confidence for a period of 5 (five) years
from disclosure of such confidential information. In addition, if independent
certified public accountant reveals

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that Contractor or any of the Contractor Entities has reported expenses or fees
which have been reimbursed that are materially in excess over those documented
expenses or fees identified under such audit or inspection or otherwise
materially breached any provision of this Agreement, Contractor will pay the
cost of such audit or inspection, refund to LSC any reimbursed amounts over such
documented expenses and fees and pay interest on such refunded amounts at the
average rate of interest of two percent (2%) for each month between the date
payment should have been made in full and the date of such additional payment.
For purposes of this Section, "materially in excess" means those documented
Development costs as disclosed by an independent audit that are more than five
percent (5%) lower than Contractor has reported during the audited period. Any
report of an independent certified public accountant, if acceptable to
Contractor, prepared in accordance with this Section will be accepted by the
Parties, and Contractor will promptly refund the amount of any overpayment, plus
interest on the unpaid balance (at the maximum interest rate allowed by law)
except that if either Party has a good faith objection to an audit report
produced under this Agreement, it may notify the other Party in writing within
ten (10) business days of receiving such report, in which event the Parties will
submit the dispute (unless they are able to resolve it between them within
another ten (10) business days) to a confidential and expedited binding
arbitration to resolve such dispute under the AAA rules for commercial disputes,
notwithstanding anything to the contrary in this Agreement.

SECTION 5. DATA MANAGEMENT.

     (a) Delivery of Data. With respect to all Services that include an
obligation for Contractor to deliver databases or other data or electronic
records ("DATA DELIVERABLES") to LSC and/or its designees, and also with respect
to any software that Contractor delivers to LSC for use with such Data
Deliverables, Contractor will ensure that such Data Deliverables and associated
software: (1) have been and will be developed, validated, established and
maintained in full accordance with All Applicable Laws and Regulations,
including, but not limited to, FDA regulations (including 21 CFR Part 11),
requirements and guidance documents, and with the HIPAA regulations, if
applicable; (2) are not subject to any errors, anomalies or impairment in
connection with the use, calculation, representation or handling of any form of
date or numerical calculation; (3) are free of any software viruses, trojan
horses, or other malicious computer instructions or techniques that can disrupt,
damage, disable, or shut down a computer system or any component thereof,
including its security or user data ("VIRUSES"), and of any form of lock or
other access or use control which may impair LSC's full and unconditional use of
such Data Deliverables; and (4) are fully functional and can be used for their
foreseeable purposes without any requirement that LSC obtain any license or
acquire any rights from third parties for their use (except for licenses to
commercially available off-the-shelf software licenses normally required to
handle and use electronic records).

     (b) Data Transition Obligations. Unless otherwise agreed with LSC (e.g.,
pursuant to a different IPA), upon Contractor's termination of each Project,
Contractor will make knowledgeable employees available and will cooperate in
good faith with LSC

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or its designees to assist with the retrieval, formatting, storage and
transmission, in accordance with LSC's written instructions, of all Data
Deliverables then in the possession or control of Contractor, at the expense of
LSC. The parties will mutually agree in good faith on one or more formats in
which all such Data Deliverables will be stored and/or transmitted. The
provisions of this paragraph will apply regardless of whether Contractor has
completed a particular Project or whether the applicable IPA (or this Agreement)
is terminated by either Party before such completion. To the extent data
retrieval, formatting, storage or transmission costs are not already covered by
the IPA governing the applicable Project for which the Data Deliverables were
created or stored, Contractor will be entitled to charge no more than its
Standard Rates for any such tasks requested by LSC under this paragraph. In the
event that independent third person establishes that Contractor failed to
materially comply with the provisions under this Section or any other provision
of this Agreement, LSC may withhold payment then due under this Agreement or any
relevant IPA until Contractor materially complies.

     (c) Hardware Reliability; Backup of Data. Without limiting the application
of any other provision of this Agreement, Contractor agrees to maintain its
premises, all relevant equipment, hardware, and software in a condition
necessary to meet its obligations under this Agreement. Without limiting the
foregoing, Contractor will conform to commercially reasonable standards for data
processing, storage and retrieval operations in connection with the Services,
which include, but are not limited to: the use of an uninterrupted power supply,
humidity and temperature controls, standards for air cleanliness, back-up
procedures, and network security procedures. Contractor will also use
commercially reasonable disaster proofing methods and will create
recovery/redundant systems to ensure the restoration of Services in the event
any outage or failure.

SECTION 6. CONFIDENTIALITY AND NON-SOLICITATION.

     (a) All information, materials and data received by Contractor from LSC or
any clinical site during the term of this Agreement or created by Contractor in
connection with this Agreement (including any IPA), including without limitation
all specifications and physical materials provided by LSC or any clinical site
to Contractor, will be deemed to be LSC "Confidential Information" for purposes
of this Agreement. Such Confidential Information may include, without
limitation, patent applications, inventions, studies, research, technical
information, pre-clinical and clinical data, products, specifications,
fabrication methods, manufacturing methods and processes, designs, devices,
videotapes, prototypes, contracts, documents, supplier, marketing and customer
information, cost and other financial data, policies, prospects and future
plans. "Confidential Information" does not include information or material that:
(a) Contractor can demonstrate by written evidence was known to it prior to
receipt thereof in connection with this Agreement; (b) Contractor can
demonstrate by written evidence was disclosed to it in good faith by a third
party who was in lawful possession thereof and who had the right to make such
disclosure; (c) has become public knowledge, by publication or other public
disclosure, through no fault of Contractor; or (d) Contractor can demonstrate by
written evidence was independently developed by it without use of any
Confidential Information.

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     b. Confidentiality and Non-Use. For a period of five (5) years from the
actual disclosure of Confidential Information to it, Contractor shall (i) keep
in strict confidence and not disclose any Confidential Information to any person
or entity, with the exception of Contractor's employees who have a need to know
and are subject to binding written confidentiality agreements with Contractor,
without LSC's prior written consent, and (ii) not use Confidential Information
for any purpose whatsoever other than for LSC's benefit and consistent with
LSC's obligations to third parties. Contractor shall treat the Confidential
Information with at least the same degree of care and protection (but no less
than a commercially reasonable level of protection) with which it would treat
its own highly sensitive technology and materials.

     All LSC Confidential Information and all intellectual property rights
therein will remain the exclusive property of LSC, and there are no rights
granted or any understandings, agreements or representations between the parties
hereto, express or implied relating to the LSC Confidential Information.

     (c) The parties agree to treat the specific terms of this Agreement,
including any IPAs hereunder, as confidential information that neither of them
will disclose except to outside legal and financial advisors and LSC potential
investors under obligations of confidentiality.

     (d) None of the parties shall at any time during the term of this Agreement
or within 1 (one) year after termination of this Agreement solicit or entice
away or seek to entice away in any way whatsoever from the other party
respectively any person who is, during the validity of this Agreement or within
the period indicated above, employed or engaged on any other terms by any of the
parties respectively without prior written approval of the other party.

SECTION 7. COMPENSATION AND INDEPENDENT CONTRACTOR STATUS.

     (a) General. Contractor and LSC will determine as part of each IPA the
compensation for Services thereunder and treatment of related out-of-pocket
expenses that Contractor may incur. LSC will remit payment to Contractor for
compensation earned and will reimburse expenses incurred, which have been
pre-approved by LSC in writing, within thirty (30) days of its receipt of
detailed monthly invoices unless the applicable IPA expressly and specifically
states an intent to supercede this second sentence of Section 7(a). Except as
expressly set forth in this Agreement, including its IPAs, Contractor will not
be entitled to any other reimbursement or other benefit, monetary or otherwise,
from LSC or anyone else in consideration of the Services or its performance
under this Agreement.

     (b) If any portion of an invoice is disputed, then LSC shall pay the
undisputed amounts as set forth in the preceding sentence and the parties shall
use good faith efforts to reconcile the disputed amount as soon as practicable.
LSC shall pay Contractor

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interest in an amount equal to two percent (2%) per month of all undisputed
amounts owing hereunder and not paid within forty-five (45) days of receipt of
the invoice.

     (c) The parties agree that Contractor shall have, notwithstanding any other
rights that it might have, the right to suspend rendering the Services if any
amount invoiced by Contractor to LSC is outstanding and past due for more than
15 (fifteen) days from the due date.

     (d) No Authority to Contract for LSC. Contractor represents that Contractor
is an independent contractor engaged in the operation of Contractor's own
business, and understands that Contractor will not be considered an agent of, or
a partner or venturer with, LSC. Contractor will not enter into any contract,
assume any obligations or make any warranties or representations on LSC's
behalf, or represent that Contractor is an agent of, or a partner or venturer
with, LSC, except as specifically provided in any applicable IPA.

     (e) Independent Contractor Status. Contractor will have the sole discretion
in determining the manner in which it will carry out the Services. LSC will have
no right to control or direct the details or manner in which Contractor performs
the Services. If requested, Contractor will provide proof to LSC that Contractor
has obtained and maintained all necessary licenses, if any, and paid all
necessary fees necessary and consistent with Contractor's status as an
independent contractor.

     (e) No Participation in LSC Employee Plans and Benefits. Contractor and its
employees and agents are not entitled to participate in any LSC plans,
arrangements, or distributions for employees, including without limitation
retirement, stock option, profit sharing, bonus, medical and other insurance,
vacation and/or sick leave plans or arrangements. In addition, Contractor will
indemnify and hold LSC harmless from all taxes, penalties, assessments and other
payments, losses or obligations (including legal and other professional fees,
increased taxes, penalties, and interest) arising out of or related to any
challenge to Contractor's or its employees' or agents' status as an independent
contractor.

SECTION 8. OWNERSHIP OF WORK PRODUCT AND INTELLECTUAL PROPERTY RIGHTS.

     (a) Work Made For Hire. Subject to the terms of Section 8(b) regarding
Existing Contractor IP, to the extent Deliverables include material subject to
copyright protection, such materials have been specially commissioned by LSC for
use as a contribution to a collective work and they will be deemed "work made
for hire" as such term is defined under U.S. copyright law. To the extent any
Deliverables do not qualify as a "work made for hire" under applicable law, and
to the extent they include material subject to copyright, mask work, patent,
trademark, trade secret, or any other proprietary rights protection, Contractor
hereby irrevocably and exclusively assigns to LSC, its successors, and assigns,
all right, title, and interest in and to all such Deliverables. To the extent
any of Contractor's rights in the same, including without limitation any moral
rights, are not subject to assignment hereunder, Contractor hereby irrevocably
and

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unconditionally waives all enforcement of such rights. Subject to the licenses
set forth in Section 8(b), any prototypes, documents, magnetically or optically
encoded media, and other tangible materials created by Contractor as part of its
Services under this Agreement or applicable IPA will be owned by LSC. Contractor
will execute and deliver such instruments and take such other actions as may be
required to carry out the assignments and other arrangements contemplated by
this Section 8.

     (b) Inventions. Contractor will promptly report to LSC any invention or
potentially patentable subject matter resulting from the Services performed
under this Agreement. In consideration of the compensation described in Section
7 above, Contractor agrees that the Inventions shall be LSC' sole and exclusive
property. Contractor will provide sufficient detail in such report(s) to permit
LSC to assess patentability and determine inventorship for which invention(s)
Contractor is a sole or joint inventor. LSC will in its sole discretion and at
its own expense have the right to prepare, file, and prosecute one or more
patent applications and maintain, correct and extend the term as provided by law
for any patent that issues from such patent application, where such patent
application covers or claims the invention or patentable subject matter
identified pursuant to this Agreement.

     (c) Return of LSC Deliverables and Property. At the request of LSC, or at
the latest upon termination of this Agreement, Contractor will promptly deliver
to LSC, at the expense of LSC, all originals, reproductions, summaries, clinical
trial data and records and other materials in Contractor's possession or control
which contain any LSC Confidential Information, Deliverables or other property
of LSC in any form whatsoever. Contractor will also recover and deliver, at the
expense of LSC, all originals, reproductions, summaries, and other materials
which contain any LSC Confidential Information, Deliverables or other property
of LSC in any form whatsoever and which Contractor may have delivered to any
subcontractors it may have engaged on behalf of LSC as authorized pursuant to
this Agreement.

SECTION 9. REPRESENTATIONS AND COVENANTS; LIMITATIONS OF LIABILITY.

     (a) Contractor represents, warrants, and covenants that (1) Contractor is
free to enter into this Agreement, and has full legal power and authority to
enter into and perform under this Agreement; (2) Contractor's entry into and
performance under this Agreement (including all IPAs) does not and will not
violate any rights of or obligations of Contractor to any third party; (3)
Contractor will provide, pay for, and keep in good standing all licenses
pertaining to activities engaged in by Contractor and will comply with All
Applicable Laws and Regulations and all valid orders of Governmental Authorities
pertaining to such activities; (4) Contractor will not engage in any act that
could harm the good reputation or image of LSC or its services and products; and
(5) the Services and Deliverables do not and will not infringe upon, violate or
misappropriate any patent, copyright, trade secret, trademark, contract, or any
other publicity right, privacy right, or proprietary right of any third party.

                                       11

<PAGE>

     (b) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PARTIES MAKE NO
REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, WHETHER EXPRESS, IMPLIED
OR STATUTORY, WITH REGARD TO THE DATA OR MATERIALS EXCHANGED BY THEM OR THE
SERVICES TO BE PERFORMED UNDER THIS AGREEMENT OR THE APPLICABLE IPA, INCLUDING
WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE OR NONINFRINGEMENT.

     (c) EXCEPT WITH RESPECT TO OBLIGATIONS OF CONFIDENTIALITY REFERENCED IN
SECTION 6, INDEMNIFICATION OBLIGATIONS UNDER SECTION 10, OR CLAIMS OF
INTELLECTUAL PROPERTY INFRINGEMENT BY ONE PARTY AGAINST THE OTHER, THE PARTIES
AGREE THAT NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY INDIRECT,
INCIDENTAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY OR SPECIAL DAMAGES, ARISING OUT
OF OR RELATED TO THIS AGREEMENT INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS
OF BUSINESS PROFITS, BUSINESS INTERRUPTION, AND THE LIKE, EVEN IF SUCH PARTY IS
AWARE OF OR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

SECTION 10. INDEMNIFICATION.

LSC will indemnify, pay the defense costs of, and hold harmless Contractor and
its successors, officers, directors, employees and subcontractors from any and
all actions, causes of action, claims, demands, costs, losses, liabilities,
expenses and damages (including, without limitation, reasonable attorneys' fees)
(collectively, "Losses") arising out of or in connection with this Agreement,
except to the extent such Losses arise out of the negligence or willful
wrongdoing of Contractor or which, if true, would represent a breach by the
Contractor of its obligations or warranties under this Agreement, in which case
Contractor will indemnify, pay the defense costs of and hold harmless LSC and
its successors, officers, directors and employees from any such Losses. The
indemnifying party will reimburse the indemnified party promptly upon invoicing
for any payment made by indemnified party in respect of any liability or claim
to which any indemnity obligation under this contract relates. The indemnified
party will give prompt notice to indemnifying party of any claim to which this
paragraph relates.

SECTION 11. RESPONSIBILITY FOR TAXES. If taxes are required to be withheld on
payments made under this Agreement by any Governmental Authority, LSC may deduct
such taxes from the amount owed to Contractor and pay them to the appropriate
taxing authority. LSC will in turn secure and deliver to Contractor an official
receipt for any taxes withheld. LSC will use commercially reasonable efforts to
minimize such taxes to the extent permissible under applicable law.

SECTION 12. TERM AND TERMINATION. This Agreement will take effect on the
Effective Date and will continue until the earliest of (a) regular termination
of this Agreement by

                                       12
<PAGE>

any party upon sixty (60) days written notice; or (b) extraordinary termination
by a party for material breach of this Agreement or any applicable IPA by the
other party upon written notice, provided that the party terminating the
Agreement has first given the party in breach thirty (30) days written notice of
the material breach and the breach has not been cured within this notice period.
If LSC terminates this Agreement or any IPA under this Section 12(b) and such
material breach is determined by a final judgement of the competent court,
Contractor is obligated to reimburse LSC for all reasonable costs incurred,
including, but not limited to all reasonable costs which arise from Contractor's
breach and are associated with the transfer of obligations to a third party CRO.
If LSC terminates this Agreement without cause while one or more Projects are
ongoing under an IPA(s), Contractor will be entitled to any compensation for
Services agreed pursuant to each respective IPA performed in good faith in
accordance with the IPA(s) until the time of such termination. In the event of
expiration or termination of this Agreement, Contractor's obligations with
respect to LSC Confidential Information will survive for the duration of this
Agreement. In addition, Sections 1, 2(i), 4, 5 through 17 will survive any
expiration or termination of this Agreement.

     Any applicable IPA may be terminated by any of the parties in accordance
with the terms and conditions for termination of this Agreement from this
Section 12. Unless determined specifically by the party terminating the IPA,
termination of an IPA shall not affect the term of this Agreement.

SECTION 13. SEVERABILITY. If any provision of this Agreement or its application
is construed to be invalid or unenforceable, then all other provisions and their
application will not be affected and will be fully enforceable without regard to
the invalid or unenforceable provision. If any provision in this Agreement is
determined to be unenforceable in equity because of its scope, duration,
geographical area or other factor, then the court making that determination will
have the power to reduce or limit such scope, duration, area or other factor,
and such provision will be then enforceable in equity in its reduced or limited
form.

SECTION 14. NOTICES. All notices and requests in connection with this Agreement
will be deemed given as of the day they are received either by messenger,
delivery service, or in the United States of America mails, postage prepaid,
certified or registered, return receipt requested, and addressed as follows:

To CONTRACTOR:                          To LSC:
Ergomed Clinical Research, Ltd.         Light Sciences Corporation
c/o ERGOMED d.o.o.                      34931 SE Douglas Street, Suite 200
Gracanska cesta 12                      Snoqualmie, WA
10000 Zagreb, Croatia                   98065

                                        Attention: Legal Counsel
                                        Phone: (425)369-2844
                                        Fax: (425) 369-2845

                                       13

<PAGE>

SECTION 15. INSURANCE. As of the Effective Date, and throughout the term of this
Agreement, both parties will procure and maintain the following acceptable
insurance: (1) commercial general liability insurance policy with a reputable
insurer with policy limits of not less than the equivalent of One Million
Dollars ($1,000,000) each occurrence for bodily injury and the equivalent of One
Million Dollars ($1,000,000) each occurrence for damage to property, or,
alternatively, One Million Dollars ($1,000,000) combined single limit each
occurrence for bodily injury and property damage combined, and a maximum annual
aggregate insurance of not less than One Million Dollars ($1,000,000) for all
occurrences in one year, (2) professional liability/errors & omissions liability
insurance with policy limits of not less than One Million Dollars ($1,000,000)
each claim. All insurance policies maintained by the parties in order to comply
with this paragraph will include coverage for claims related to each party's
performance. Upon request, each party will provide written evidence to the other
of its compliance with the foregoing insurance requirements.

SECTION 16. GOVERNING LAW; JURISDICTION; ATTORNEYS FEES; ASSIGNMENT. This
Agreement will be construed and interpreted under and in accordance with the
laws of the State of Washington, United States of America without regard to its
conflict of laws provisions. All suits, claims or other causes of action arising
out of or relating to this Agreement will be brought in a state or federal court
sitting in King County, Washington, United States of America and each party
hereby consents to the exclusive jurisdiction and venue of such Washington
courts in that event. In any proceeding arising out of or in connection with the
terms of this Agreement, the prevailing party, in addition to any other remedies
that may be awarded, will be entitled to recover from the other party its
reasonable attorneys' fees and costs. This Agreement will be binding upon and
will benefit the subsidiaries, affiliates, assigns and successors of each party,
with the exception that, save as stipulated in Section 2 (g) herein, Contractor
may not assign this Agreement or its rights or obligations hereunder (whether by
merger, acquisition, operation of law, or otherwise) without LSC's prior written
permission, and any attempt by Contractor to do so will be void and will
constitute a material breach of this Agreement.

SECTION 17. COMPLETE AGREEMENT; AMENDMENTS; WAIVER. This Agreement, including
all IPAs and any Exhibits referenced in this Agreement, constitute the entire
agreement between the parties with respect to the subject matter hereof and
merges all prior discussions between them with respect to such subject matter.
This Agreement wholly cancels, terminates and supersedes any agreement or
agreements, formal or informal, oral or written heretofore entered into
pertaining to the subject matter, except that the Independent Contractor
Agreement, entered into between LSC and Ergomed D.O.O. on March 18, 2003, shall
continue to be valid and applicable to any work assignment signed on the basis
of such Independent Contractor Agreement prior to the date of this Agreement.
This Agreement will not be modified except by a written agreement dated
subsequent to the date of this Agreement and signed by an authorized
representative from LSC and from Contractor. None of the provisions of this
Agreement will be deemed to have been waived by any act or acquiescence on the
part of LSC, its agents, or employees, but only by an instrument in writing
signed by an authorized

                                       14

<PAGE>

officer of LSC. No waiver of any provision of this Agreement will constitute a
waiver of any other provision(s) or of the same provision on another occasion.

IN WITNESS WHEREOF, the parties have executed this Agreement.

CONTRACTOR                              LSC
ERGOMED CLINICAL RESEARCH, LTD.         LIGHT SCIENCES CORPORATION

By: /s/ Miroslav Relsanovic             By: /s/ Albert A. Luderer
    ---------------------------------       ------------------------------------
Name: Miroslav Relsanovic, M.D          Name: Albert A. Luderer, Ph.D.
Title: CEO                              Title: President and CEO
Date: 22/03/2004                        Date: 3/8/04

                                       15

<PAGE>

                                    (SAMPLE)

                                   EXHIBIT A

                                  FORM OF IPA

This IPA is entered into pursuant to that certain Master Services Agreement (the
"Agreement"), dated ____________, 2004 by and between Light Sciences Corporation
and ERGOMED Clinical Research Ltd ("COMPANY")

A.   Project Title:

B.   Project Description/Scope of Work:

C.   Timeline:

D.   Project Budget:

E.   Approved Expenses:

F.   Approved Subcontractors (delete if not applicable):

G.   Expected staffing level requirements:

H.   Key Members of project teams (delete if not applicable):

I.   Transfer of Obligations Form (delete if not applicable):

The term of this IPA will commence on the date of execution and will continue
until the Services described in this IPA are completed, unless this IPA is
terminated in accordance with the Agreement. Upon signature, this IPA is hereby
fully incorporated into the Agreement and all Services performed hereunder, and
Deliverables created in connection with them, are subject to all the terms and
conditions of the Agreement.

ACKNOWLEDGED AND AGREED TO:

ERGOMED CLINICAL RESEARCH, LTD.         LIGHT SCIENCES CORPORATION

-------------------------------------   ----------------------------------------
By (Sign)                               By (Sign)

-------------------------------------   ----------------------------------------
Name (Print)                            Name (Print)
Title                                   Title
      -------------------------------         ----------------------------------<PAGE>

                                                                   Exhibit 10.26

                          SECURITIES PURCHASE AGREEMENT

     This SECURITIES PURCHASE AGREEMENT (this "AGREEMENT") is made and entered
into as of January 1, 2005 ("EFFECTIVE DATE") by and among Light Sciences
Oncology, Inc., a Washington corporation "COMPANY"), and Craig M. Watjen, an
individual ("INVESTOR").

                                  INTRODUCTION:

A. Investor wishes to loan Company funds to finance operations related to the
research and development operations of Company by purchase of Convertible
Promissory Notes sold by Company under terms and conditions of this Agreement.

C. Under the terms of this Agreement, Company, in its discretion and at such
times during the term of this Agreement that it determines that funds are
necessary for the operation of Company, may require that Investor purchase
future Convertible Notes as provided herein.

D. Under the terms of this Agreement, Investor's obligation to purchase
Convertible Notes shall run from the date of this Agreement through the first to
occur of: (i) a Qualified Financing (as defined below); (ii) a Change of Control
Event (as defined below); (iii) December 31, 2005; or (iv) until effectively
terminated by one or both of the parties pursuant to the terms of the Agreement.

              NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

                                    ARTICLE I
                   PURCHASE OF CONVERTIBLE NOTES AND CLOSINGS

     1.1 AGREEMENT TO PURCHASE AND ISSUE CONVERTIBLE NOTES. Company agrees to
sell to Investor at each Closing (as defined in Section 1.4 below), and Investor
agrees to purchase from Company at each Closing, convertible promissory notes in
the form attached hereto as Exhibit 1.1a ("CONVERTIBLE NOTES") up to an
aggregate principal amount of _________________________ (the "MAXIMUM PRINCIPAL
AMOUNT"). Company shall sell and Investor shall purchase at each Closing
Convertible Notes in the principal amount as determined under Section 1.5 below.

     1.2 CLOSING. The purchase and sale of the Convertible Notes will take place
by exchange of original or facsimile signatures on the date or dates (each, a
"CLOSING") as determined pursuant to Section 1.3 below. At each Closing: (i)
Company will deliver to Investor a certificate signed by an officer of Company
confirming the sale of the Convertible Note, specifying the principal amount
thereof and the satisfaction of the conditions to the sale as stated herein; and
(ii) Investor will deliver to Company the principal amount specified in such
certificate (as determined pursuant to Section 1.6 below). Promptly following
each Closing, Company shall issue a Convertible Note for such principal amount
and at an interest rate equal to the prime rate as reported by the Wall Street
Journal on each respective closing plus one and one-half percent (1 1/2%).

<PAGE>

     1.3 PRINCIPAL AMOUNT OF CONVERTIBLE NOTES. Company, in its discretion, may
decide at any time during the Term (as defined in Section 1.4 below) to require
Investor to purchase Convertible Notes in an amount not to exceed the Maximum
Principal Amount less the aggregate principal amount of Convertible Notes
already purchased by Investor at previous Closings (not including the Principal
Amount). Company shall give either oral or written notice to Investor of its
intention to effect a Closing, which notice shall state the date that Closing is
to occur. If Investor elects to terminate this Agreement pursuant to Section
4.2(b) below, then during the Interim Period (as defined in Section 4.2(b)
below) Company shall only be able to require Investor to purchase Convertible
Notes for a principal amount reasonably consistent with previous monthly funding
requirements of Company; provided, however, that the amount that Company shall
be able to require Investor to fund during the Interim Period shall not exceed
the Maximum Principal Amount less the aggregate principal amount of Convertible
Notes already purchased by Investor at previous Closings (not including the
Principal Amount).

         1.4 TERM. Unless earlier terminated pursuant to Article IV hereof, the
term of this Agreement shall run from the date of this Agreement through the
first to occur of: (i) a Qualified Financing, (ii) a Change of Control Event (as
defined below), or (iii) December 31, 2005 (the "TERM"). For purposes of this
Agreement, a "QUALIFIED FINANCING" shall mean the closing of a private round of
financing of "Series A Preferred Stock" as defined below. The term "CHANGE OF
CONTROL EVENT" shall mean the closing of a merger of Company with or into
another entity in which the holders of voting securities of Company immediately
prior to such transaction will hold less than 50% of the voting securities of
the surviving entity or the sale of all or substantially all of the assets of
Company effected through a single transaction or a series of related
transactions. As used herein, the term "SERIES A PREFERRED STOCK" shall mean
that series of preferred stock of Company designated as Series A Preferred Stock
and having the rights and preferences set forth in Company's Articles of
Incorporation, as amended (or such other series of preferred securities issued
in Company's next round of equity financing).

                                   ARTICLE II
                   REPRESENTATIONS AND WARRANTIES OF INVESTOR

     Investor hereby represents and warrants to Company that:

     2.1 PURCHASE FOR INVESTOR'S OWN ACCOUNT. Investor is acquiring the
Convertible Notes (and the shares of Preferred Stock issuable upon the
conversion of the Convertible Notes (the "NOTE CONVERSION SHARES) for Investor's
own account, not as nominee or agent, for investment and not with a view to, or
for resale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act of 1933, as amended (the "SECURITIES
ACT"). By executing this Agreement, Investor further represents that Investor
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participation to any such person or to any
third person, with respect to the Convertible Notes (or the Note Conversion
Shares and the Common Shares issuable upon conversion of the Note Conversion
Shares).

     2.2 UNREGISTERED SECURITIES; LEGEND. Investor understands that (i) the
Convertible Notes (and the Note Conversion Shares and the Common Shares issuable
upon conversion of the Note Conversion Shares) have not been registered under
either the Securities Act or the

<PAGE>

securities laws of any state by reason of specific exemptions therefrom, (ii)
the Convertible Notes (and the Note Conversion Shares and Common Shares issuable
upon conversion of the Note Conversion Shares) must be held by Investor
indefinitely, and, therefore, Investor must bear the economic risk of such
investment indefinitely, unless a subsequent disposition thereof is registered
under the Securities Act and the securities laws of any applicable state or is
exempt from such registrations; (iii) the Convertible Notes and each certificate
representing the Note Conversion Shares and Common Shares issuable upon
conversion of the Note Conversion Shares will be endorsed with a legend
substantially as follows:

     "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
     LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
     TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
     PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT
     TO REGISTRATION OR EXEMPTION THEREFROM."

and (iv) Company will instruct any transfer agent not to register the transfer
of the Convertible Notes, the Note Conversion Shares and the Common Shares
issuable upon conversion of the Note Conversion Shares unless the conditions
specified in the foregoing legend are satisfied.

     2.3 COMPANY INFORMATION. Investor has been furnished with such materials
and has been given access to such information relating to Company as Investor or
Investor's qualified representative has requested and Investor has been afforded
the opportunity to ask questions regarding Company, the Convertible Notes, the
Note Conversion Shares, and the Common Shares issuable upon conversion of the
Note Conversion Shares, as Investor has found necessary to make an informed
investment decision. Investor has been solely responsible for its own due
diligence investigation of Company and its proposed business, for its own
analysis of the merits and risks of its investment made pursuant to this
Agreement and for its own analysis of the terms of its investment.

     2.4 ACCREDITED INVESTOR. Investor is an accredited investor within the
meaning of Regulation D under the Securities Act. Investor is in a financial
position to hold the Convertible Notes, the Note Conversion Shares and the
Common Shares issuable upon conversion of the Note Conversion Shares, and is
able to bear the economic risk and withstand a complete loss of Investor's
investment in the Convertible Notes. Investor recognizes that the investment in
the Convertible Notes involves a high degree of risk. Investor understands and
acknowledges that there can be no assurance that Company will be able to meet
its projected goals and that Company will need significant additional capital to
be successful, which capital may not be available readily.

     2.5 FINANCIAL SOPHISTICATION. Investor acknowledges hereby that he has been
advised to and has obtained, to the extent Investor deems necessary,
professional (including legal) advice with respect to the risks inherent in the
investment in the Convertible Notes, the condition of Company, and the
suitability of the investment in the Convertible Notes in light of

<PAGE>

Investor's condition and investment needs, and the terms and conditions of this
Agreement and documents relating to the investment in the Convertible Notes.
Investor, either alone or with the assistance of such professional advisors, is
a sophisticated investor, is able to fend for himself in the transaction
contemplated by this Agreement, and has such knowledge and experience in
financial and business matters that Investor is capable of evaluating the merits
and risks of the prospective investment in the Convertible Notes. Investor is an
investor in securities of companies in the development stage and acknowledges
that an investment in the Convertible Notes is a speculative risk.

     2.6 SUITABILITY. The investment in the Convertible Notes is suitable for
Investor based upon Investor's investment objectives and financial needs, and
Investor has adequate net worth and means for providing for its current
financial needs and contingencies and has no need for liquidity of the
investment with respect to the Convertible Notes.

     2.7 DOMICILE. For purposes of the application of state securities laws,
Investor represents that it is a bona fide resident of, and is domiciled in, the
state set forth in Investor's address on Investor's signature page hereto.

                                   ARTICLE III
                              CONDITIONS PRECEDENT

     3.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO CLOSE. The respective
obligation of each party to close the transactions contemplated by this
Agreement shall be subject to the satisfaction prior to each Closing of the
following conditions:

          3.1.1 GOVERNMENTAL APPROVALS. All governmental consents legally
required for the consummation of the transactions contemplated by this Agreement
shall have been filed, other than such governmental consents for which the
failure to obtain would have no material adverse effect on the consummation of
the transactions contemplated hereby or on Company.

          3.1.2 NO RESTRAINTS. No statute, rule, regulation, executive order,
decree or injunction shall have been enacted, entered, promulgated or enforced
by any United States court or governmental entity of competent jurisdiction
which enjoins or prohibits the consummation of the transactions herein
contemplated.

          3.2 CONDITION OF OBLIGATION OF INVESTOR. The obligation of Investor to
purchase the Convertible Notes at each Closing is subject to the condition
(unless waived by Investor) that the representations and warranties of Company
set forth in this Agreement shall be true and correct in all material respects
as of the date of this Agreement and as of the date of each Closing as though
made on and as of the date of each Closing.

          3.3 CONDITION OF OBLIGATION OF COMPANY. The obligation of Company to
effect the issuance of the Convertible Notes is subject to the condition (unless
waived by Company) that the representations and warranties of Investor set forth
in this Agreement shall be true and correct in all material respects as of the
date of this Agreement and as of the date of each Closing as though made on and
as of the date of each Closing.

<PAGE>

                                   ARTICLE IV
                                   TERMINATION

     4.1 MUTUAL AGREEMENT. This Agreement may be terminated at any time by the
written consent of Investor and Company.

     4.2 TERMINATION BY INVESTOR.

          (A) This Agreement may be terminated by Investor alone, by means of
written notice to Company, if there has been a material breach by Company of any
representation, warranty, covenant or agreement set forth in the Agreement,
which breach has not been cured within fifteen business days following receipt
by Company of written notice of such breach.

          (B) In the absence of any breach, this Agreement may also be
terminated by Investor alone, upon thirty (30) days following delivery of a
written notice to Company. For purposes of this Agreement, the period from the
date of the delivery of such notice and the expiration of the thirty (30) day
period following such delivery shall be defined as the "INTERIM PERIOD."

     4.3 TERMINATION BY COMPANY. This Agreement may be terminated by Company
alone, by means of written notice to Investor, if there has been a material
breach by Investor of any representation, warranty, covenant or agreement set
forth in the Agreement, which breach has not been cured within fifteen business
days following receipt by Investor of notice of such breach.

     4.4 EXPIRATION OF TERM. This Agreement shall terminate upon the expiration
of the Term.

                                    ARTICLE V
                                  MISCELLANEOUS

     5.1 ENTIRE AGREEMENT. This Agreement, including the exhibits and schedules
delivered pursuant to this Agreement between the parties contain all of the
terms and conditions agreed upon by the parties relating to the subject matter
of this Agreement and supersede all prior agreements, negotiations,
correspondence, undertakings, and communications of the parties, whether oral or
written, respecting that subject matter.

     5.2 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Washington as applied to agreements
entered into and entirely to be performed within that state. Venue of any action
arising out of this Agreement shall be had in King County, Washington and the
parties hereby consent to the jurisdiction thereof.

     5.3 HEADINGS. The headings contained in this Agreement are intended
principally for convenience and shall not, by themselves, determine the rights
of the parties to this Agreement.

     5.4 SEVERABILITY. If any provision of this Agreement is held to be
unenforceable for any reason, such provision and all other related provisions
shall be modified rather than voided,

<PAGE>

if possible, in order to achieve the intent of the parties to this Agreement to
the extent possible. In any event, all other unrelated provisions of this
Agreement shall be deemed valid and enforceable to the full extent.

     5.5 COUNTERPARTS. This Agreement and any certificates may be executed in
two or more partially or fully executed counterparts and by facsimile signatures
each of which shall be deemed an original and shall bind the signatory, but all
of which together shall constitute but one and the same instrument. The
execution and delivery of a signature page in the form annexed to this Agreement
by any party hereto who shall have been furnished the final form of this
Agreement shall constitute the execution and delivery of this Agreement by such
party.

     5.6 SUCCESSORS, ASSIGNS AND HEIRS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding on the respective
successors, assigns and heirs of the parties, by will, intestacy or otherwise.

     5.7 AMENDMENT. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.

     5.8 EXTENSION, WAIVER. At any time prior to the Closing, any party hereto
may, to the extent legally allowed: (i) extend the time for the performance of
any of the obligations or other acts of the other party hereto, (ii) waive any
inaccuracies in the representations and warranties made to such other party
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements, covenants or conditions for the benefit
of such other party contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.

              (the remainder of this page intentionally left blank)

<PAGE>

                                SIGNATURE PAGE -
                          SECURITIES PURCHASE AGREEMENT

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

                                        "COMPANY"

                                        LIGHT SCIENCES ONCOLOGY, INC.,
                                        a Washington corporation

                                        By
                                           -------------------------------------
                                           Llew Keltner, MD, Ph.D.
                                        Its President

                                        "INVESTOR"

                                        ----------------------------------------
                                        Craig M. Watjen

<PAGE>

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE THESE SECURITIES
ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.

                          LIGHT SCIENCES ONCOLOGY, INC.

                                CONVERTIBLE NOTE

Note No. ______                                                          [Date]

     LIGHT SCIENCES ONCOLOGY, INC., a Washington corporation (the "Company"),
for value received hereby promises to pay to CRAIG M. WATJEN, an individual, or
his registered assigns (the "Holder"), the sums of (i) $_______ (the "Principal
Amount") plus unpaid accrued interest hereon, as set forth below, all on
December 31, 2005 ("Maturity Date"). Payment for all amounts due hereunder shall
be made by mail to the registered address of the Holder, or, if requested in
writing by the Holder, by wire transfer in accordance with the Holder's
instructions. This Note is issued in connection with the transactions described
in that certain Securities Purchase Agreement, dated January 1, 2005, by and
among the Company and the Holder, as the same may be further amended, modified
or supplemented from time to time (the "Securities Purchase Agreement"). The
Holder is subject to certain restrictions, and is entitled to certain rights and
privileges, set forth in the Securities Purchase Agreement.

     The following is a statement of the rights of the Holder and the conditions
to which this Note is subject, and to which the Holder, by the acceptance of
this Note, agrees:

     1.   PRINCIPAL AND INTEREST.

     Unless this Note is sooner prepaid or converted pursuant to Section 3
hereof, the Principal Amount and interest on the Principal Amount shall be paid
in full on the Maturity Date. Commencing on the original issue date of this Note
(the "Original Issue Date"), until the earlier of (a) the payment in full of the
Principal Amount, Previously Accrued Interest and interest on the Principal
Amount, or (b) the conversion, pursuant to Section 3 hereof, of this Note,
including the entire Principal Amount and any and all accrued but unpaid
interest on the Principal Amount, the Company shall accrue and defer all
interest on this Note, computed on the basis of a 365-day year, from the date of
this Note, on the unpaid balance of the outstanding Principal Amount of this
Note, at the non-compounded rate of [] percent ([]%) per annum, and such
interest shall be payable upon the earlier of (a) or (b) of this sentence.

<PAGE>

     2.   EVENTS OF DEFAULT.

          (A) DEFINITION. An "Event of Default" with respect to this Note shall
mean the following:

               (i) Default for fifteen (15) business days in payment of the
Principal Amount, Previously Accrued Interest and interest on the Principal
Amount when due;

               (ii) Default in the performance or breach of any covenant or
warranty of the Company in respect to this Note that is not remedied, waived or
cured for a period of fifteen (15) days following knowledge by the Company of
such default;

               (iii) The institution by the Company of proceedings to be
adjudicated as bankrupt or insolvent, or the consent by it to institution of
bankruptcy or insolvency proceedings against it or the filing by it of a
petition or answer or consent seeking reorganization or release under the
federal Bankruptcy Act, or any other applicable federal or state law, or the
consent by it to the filing of any such petition or the appointment of a
receiver, liquidator, assignee, trustee or other similar official of the
Company, or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the taking of corporate action by
the Company in furtherance of any such action; and

               (iv) If, within sixty (60) days after the commencement of an
action against the Company (and service of process in connection therewith on
the Company) seeking any bankruptcy, insolvency, reorganization, liquidation,
dissolution, or similar relief under any present or future statute, law or
regulation, such action shall not have been resolved in favor of the Company or
all orders or proceedings thereunder affecting the operations or the business of
the Company stayed, or if the stay of any such order or proceeding shall
thereafter be set aside, or if, within sixty (60) days after the appointment
without the consent or acquiescence of the Company of any trustee, receiver or
liquidator of the Company, such appointment shall not have been vacated.

          (B) NOTICE OF EVENTS OF DEFAULT. The Company covenants that it will
give notice to the Holder of the occurrence of any Event of Default within five
(5) business days after the discovery of such an event by an officer of the
Company, specifying the nature thereof, the period of existence thereof and what
action it proposes to take with respect thereto.

          (C) RIGHT OF ACCELERATION. If an Event of Default shall occur and be
continuing, then the Holder may elect to accelerate payment of the Note. If any
payment due hereunder, including those due upon acceleration, is not paid within
fifteen (15) days after its due date, the entire balance of the Principal Amount
and any and all accrued interest on the Principal Amount shall bear interest
from the date of default until such payment (including all accrued interest on
the Principal Amount through the date of

<PAGE>

payment) is paid, at the per annum rate of interest equal to twelve percent
(12%); provided, however, that in no event shall such interest rate exceed the
maximum rate permitted by law.

     3. CONVERSION. The outstanding Principal Amount, the Previously Accrued
Interest and any and all accrued but unpaid interest on the Principal Amount
(the "Conversion Amounts") shall be convertible into capital stock of the
corporate successor to Company ("Oncology Corporation") or the Company (the
"Conversion Shares"), as follows:

          (A) MANDATORY CONVERSION UPON CLOSING OF A PREFERRED OFFERING. Upon
the closing (but in no event later than the Maturity Date) (the "Series A
Preferred Closing Date") of the offer and sale of a class of "Series A Preferred
Stock," as defined in Section 3(c)(i) below (a "Qualifying Offering"), the
Conversion Amounts shall be converted automatically, without any further act of
the Company, its shareholders or the Holder, into fully paid nonassessable
shares of "Series A Preferred Stock,", as defined in Section 3(c)(i) below, of
Light Sciences Oncology, Inc. pursuant to the terms and conditions of this
Section 3, at a conversion price equal to the per share purchase price paid by
investors in the Qualifying Offering (the "Series A Preferred Offering Price").

          (B) OPTIONAL CONVERSION INTO COMMON. In the event that the Company
fails to close a Qualifying Offering on or before the Maturity Date, the Holder
shall have the right at the Holder's option to convert the Conversion Amounts
into fully paid, nonassessable shares of Series A Preferred stock of the
Company, at a conversion price equal to $1.275 per share (the "Series A
Preferred Conversion Price").

          (C) CERTAIN DEFINITIONS.

          As used herein, the term "Series A Preferred Stock" shall mean that
series of preferred stock of the Oncology Corporation designated as Series A
Preferred Stock and having the rights and preferences set forth in the Oncology
Corporation's Articles of Incorporation, (or such other series of preferred
securities issued in Oncology Corporation's initial round of equity financing).

          (D) MECHANICS OF CONVERSION. Upon the Series A Preferred Closing Date,
the Conversion Amounts shall be converted automatically into Series A Preferred
Stock without any further action by the Holder and whether or not this Note is
surrendered to the Company; provided, however, that the neither the Company nor
Oncology Corporation shall be obligated to issue to the Holder a certificate
that evidences the Conversion Shares unless this Note is delivered to the
Company. The Holder may exercise the optional conversion rights specified in
Section 3(b) as to any part of this Note by surrendering this Note to the
Company, accompanied by written notice stating that the Holder elects to convert
all or a specified portion of the Conversion Amounts into common membership
units of the Company in accordance with Section 3(b). Conversion of this Note
shall be deemed to have been effected (the "Conversion

<PAGE>

Date") (i) with respect to Section 3(a), on the Series A Preferred Closing Date,
or (ii) the date when delivery of notice of an election to convert pursuant to
Section 3(b) is made. As promptly as practicable thereafter (and after surrender
of this Note to the Company), the Company, or Oncology Corporation, as successor
in interest under this Note, shall issue and deliver to the Holder a certificate
for the number of full Conversion Shares to which the Holder is entitled and a
check or cash with respect to any fractional interest in a Conversion Share as
provided in Section 3(e). The entity in whose name the certificate for
Conversion Shares is to be issued shall be deemed to have become a holder of
record of such shares on the Conversion Date. Upon conversion of only a portion
of the Conversion Amounts (in the case of optional conversion pursuant to
Section 3(b)), the Company shall issue and deliver to the Holder, at the expense
of the Company, a new Note covering the amounts of the unconverted portion of
this Note.

          (E) FRACTIONAL SHARES. No fractional Conversion Shares or scrip shall
be issued upon conversion of this Note. Instead of any fractional Conversion
Shares which would otherwise be issuable upon conversion of this Note, the
Company shall pay a cash adjustment in respect of such fractional interest in an
amount equal to that fractional interest of the Series A Preferred Offering
Price or the Common Membership Interest Conversion Price, as applicable.

          (F) ADJUSTMENT FOR STOCK DIVIDENDS, SPLITS, ETC. If at any time after
the date of issuance of this Note (the "Issue Date"), the number of Conversion
Shares outstanding is increased by a stock dividend or other distribution on
Conversion Shares payable in Conversion Shares or by a subdivision, split-up or
reclassification of outstanding Conversion Shares, then immediately after the
record date fixed for the determination of holders of Conversion Shares entitled
to receive such stock dividend or the effective date of such subdivision,
split-up or reclassification, as the case may be, the Series A Conversion Price
shall be reduced appropriately so that the Holder shall be entitled to receive
the number of Conversion Shares which it would have owned immediately following
such action had this Note been converted immediately prior thereto.

          (G) ADJUSTMENT FOR COMBINATION OF CONVERSION SHARES. If the number of
Conversion Shares at any time after the Issue Date is decreased by a combination
or reclassification of the outstanding Conversion Shares, then, immediately
after the effective date of such combination or reclassification, the Series A
Conversion Price and the Common Membership Interest Conversion Price, as
appropriate, shall be increased appropriately so that the Holder shall be
entitled to receive the number of Conversion Shares which it would have owned
immediately following such action had this Note been converted immediately prior
thereto.

          (H) ADJUSTMENT FOR CAPITAL REORGANIZATION OR RECLASSIFICATION. If the
Conversion Shares shall be changed into the same or different number of shares
of any class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
or stock dividend provided

<PAGE>

for in Sections 3(f) and (g)), then in each such event the Holder shall have the
right thereafter to convert this Note into the kind and amount of shares of
stock and other securities and property receivable upon such reorganization,
reclassification or other change by the Holder of the number of Conversion
Shares into which this Note might have been converted immediately prior to such
reorganization, reclassification or change, all subject to further adjustment as
provided herein.

          (I) ADJUSTMENT FOR MERGER OR CONSOLIDATION. If at any time or from
time to time there shall be an acquisition of the Company by another entity by
means of merger, consolidation or otherwise, resulting in the exchange of the
outstanding Conversion Shares for securities or consideration issued or caused
to be issued by the acquiring entity or any of its affiliates, then, as a part
of such acquisition, provision shall be made so that the Holder shall thereafter
be entitled to receive, upon conversion of this Note, the number of shares of
stock or other securities or property of the acquiring corporation resulting
from such acquisition to which the Holder would have been entitled if the Holder
had converted this Note pursuant to Section 3(b) immediately prior to such
acquisition. In any such case, appropriate adjustments shall be made in the
application of the provisions of this Section 3(i) with respect to the rights of
the Holder after such acquisition to the end that the provisions of this Section
3(i) shall be applicable after that event in as nearly equivalent a manner as
may be practicable.

          (J) NOTICE TO HOLDER. In the event the Company shall propose to take
any action of the type described in Sections 3(f), (g), (h) or (i), the Company
shall give notice to the Holder, which notice shall specify the record date, if
any, with respect to any such action and the approximate date on which such
action is to take place. In the case of any action which would require the
fixing of a record date, such notice shall be given at least ten (10) days prior
to the date so fixed, and in case of all other action, such notice shall be
given at least fifteen (15) days prior to the taking of such proposed action.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of any such action.

          (K) COSTS. The Company shall pay all documentary, stamp, transfer or
other transactional taxes attributable to the issuance or delivery of Conversion
Shares upon conversion of this Note; provided, however, that the Company shall
not be required to pay any taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificate for such shares in a
name other than that of the Holder.

     4. UNSECURED OBLIGATION. The payment of the Principal Amount, Previously
Accrued Interest and interest on the Principal Amount is a general, unsecured
obligation of the Company.

     5. ASSIGNMENT. Subject to the restrictions on transfer described in Section
7 below, the rights and obligations of the Company and the Holder shall be
binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties.

<PAGE>

     6. WAIVER AND AMENDMENT. Any provision of this Note may be amended, waived
or modified upon the written consent of the Company and Holder.

     7. TRANSFER OF THIS NOTE. The Holder understands that the Company will
instruct any transfer agent not to register the transfer of this Note (or the
Conversion Shares issued upon conversion of this Note) unless the conditions
specified in the legend above are satisfied.

     8. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given upon
personal delivery; upon confirmed transmission by telecopy or telex; or upon
deposit with the United States Post Office, by first-class mail, postage
prepaid, or otherwise delivered by hand or by messenger, addressed (i) if to the
Holder, at the Holder's address as set forth on the signature page hereto or at
such other address as the Holder shall have furnished to the Company in writing,
or (ii) if to the Company, one copy shall be sent to 34931 S.E. Douglas Street,
Suite 200, Snoqualmie, WA 98065 to the attention of the President, or at such
other address as the Company shall have furnished to the Holder.

     9. NO RIGHTS OF A SHAREHOLDER. Nothing contained in this Note shall be
construed as conferring upon the Holder or any other person the right to vote or
consent or to receive notice as a shareholder in respect of meetings of
shareholders for the election of directors of the Company or any other matters
or any rights whatsoever as a shareholder of the Company prior to the time that
this Note is converted into Conversion Shares pursuant to Section 3.

     10. PREPAYMENT. The Principal Amount, Previously Accrued Interest, and
accrued interest of the Principal Amount, may be prepaid by the Company at any
time, without premium or penalty, upon ten (10) days' prior written notice to
Holder.

     11. GOVERNING LAW; VENUE. This Note shall be governed by and construed in
accordance with the laws of the State of Washington, and venue for any action
taken in connection herewith or related hereto shall exclusively reside in King
County, Washington.

ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

<PAGE>

     This Note has been executed and delivered as of the date first above
written.

                                        LIGHT SCIENCES ONCOLOGY, INC.,
                                        a Washington

                                        By
                                           -------------------------------------
                                           Llew Keltner
                                        Its President

Accepted and agreed by Holder:

-------------------------------------
Craig M. Watjen

Address:
         ----------------------------

-------------------------------------
Telephone:
           --------------------------
Telefax:
         ----------------------------

<PAGE>

                    Schedule of Convertible Promissory Notes

<TABLE>
<CAPTION>
Note Number          Date          Principal Amount   Interest Rate
-----------   ------------------   ----------------   -------------
<S>           <C>                  <C>                <C>
1              January 13, 2005       $  821,000          6.75%
2             February 24, 2005       $  265,581          7.00%
3               March 17, 2005        $  544,000          7.00%
4                May 16, 2005         $  400,000          7.50%
5                June 6, 2005         $  250,000          7.50%
6               July 14, 2005         $1,100,000          7.75%
7              August 15, 2005        $  619,419          8.00%
8             September 19, 2005      $1,000,000          8.00%
9             September 23, 2005      $1,250,000          8.25%
</TABLE>

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