Exhibit 10.2

Portions of this agreement, marked by asterisks (***), have been omitted
pursuant to a request for confidential treatment.  The omitted information has
been filed separately with the Securities and Exchange Commission.

CLINICAL STUDY AGREEMENT
LIPID SCIENCES PROTOCOL LS-081

This agreement is made effective as of the 15th day of May, 2006 (“Effective
Date”), between MedStar Research Institute, with its principal offices located
at 6495 New Hampshire Avenue, Suite 201, Hyattsville, MD 20783, USA, Washington
Hospital Center located at 110 Irving St, NW, Washington, DC 20010 both
affiliates of Medstar Health hereinafter referred to as (“Medstar”) and Lipid
Sciences, Inc. (“Sponsor”), with its principal offices located at 7068 Koll
Center Parkway, Suite 401, Pleasanton, CA 94566.

Whereas, Sponsor desires for Medstar to assist it in conducting clinical
research pursuant to the LS-011 Study designated below (“Study”); and

Whereas, Medstar has the facilities and the personnel with the required skills,
experience and knowledge to undertake the Study;

Therefore, in consideration of the foregoing and the covenants contained herein,
the receipt and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:

1.             Scope of Work and Principal Investigator,

1.1           The Study shall be performed in accordance with the Protocol
entitled “A Randomized, Single-Blind, Placebo-Controlled Study to Evaluate the
Safety of the Lipid Sciences PDS-2 in Subjects with Prior Acute Coronary
Syndrome (LS-001)” (“Protocol”, Exhibit A) and this Clinical Study Agreement
(“Agreement”), copies of which have been provided to Medstar.. Any changes,
amendments or modifications to the Protocol or, the Agreement must be authorized
in writing by all parties. The Study will be conducted in full compliance with
this Agreement, and in accordance with the Protocol, any Agreement or Protocol
amendments, any conditions set forth by the reviewing Institutional Review
Board, Ethics Committee, or equivalent, and all applicable laws and regulations,
including but not limited to, the requirements of 21 C.F.R Part 312.

1.2           Medstar agrees to appoint Ron Waksman, M.D., as Principal
Investigator under this Agreement. In the event the Principal Investigator shall
be unable to complete this clinical Study and Medstar and Sponsor shall be
unable to mutually agree to a substitute investigator within a period of fifteen
(15) days, this Agreement shall be immediately terminated at the discretion of
Sponsor.

1.3           Medstar certifies that neither Principal Investigator, nor any of
Medstar’s officers, employees or affiliated companies providing services to
Sponsor under this Agreement, have been debarred, nor have they been engaged in
any acts which may result in debarment as specified by the Genetic Drug
Enforcement Act, codified at 21 U.S.C. 306.

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1.4           Medstar shall contract with Kristen Alcorn, MD, Medical Director
Transfusion Services, Washington Hospital Center, to oversee the plasma pheresis
portion of the delipidation procedures as outlined in the Protocol.

2.             Consideration.  Sponsor will provide Study Device, support by
Sponsor’s personnel, materials and supplies required to carry out the Study to
Medstar at no charge to Medstar. Medstar shall provide access to Medstar’s
facilities to Sponsor’s personnel as required to carry out the Study at no
charge to Sponsor. Sponsor will compensate Medstar per Exhibit B and B I
attached. Medstar shall invoice Sponsor on a monthly basis for any billable
activity incurred in the previous month no later than twenty (20) days following
the end of each calendar month to the attention of Sandra Gardiner at the
address, or facsimile number, indicated in Section 13.1.

3.             Term and Termination.

3.1           Term of Agreement. The term of this Agreement shall commence on
the Effective Date and, unless terminated sooner pursuant to the provisions of
Section 3.2, will expire upon completion of the Study.

3.2           Termination of Agreement. This Agreement may be terminated as
follows:

3.2.1        Sponsor may terminate this Agreement by providing at least thirty
(30) days prior written notice to Medstar thereof; or

3.2.2        If one of the parties believes that another party has breached a
material term of this Agreement, that party may provide written notice to the
breaching party, with a copy to all other parties, describing the alleged Breach
in reasonable detail and containing a reference to this section. If the
breaching party does not cure the breach within thirty (30) days after receiving
the notice of breach, the party who gave the notice may immediately terminate
this Agreement for cause by providing written notice to the other parties.

3.3           Survival.  Any provision of this Agreement that imposes or
contemplates continuing obligations on a party will survive the expiration or
termination of this Agreement, including but not limited to sections 2, 4, 5, 6,
7, 8, 9 and 12.3.

4.             Independent Contractor Status.  The relationships of Medstar and
Sponsor shall be solely that of independent contractors. Medstar and Sponsor
agree that neither Medstar nor Sponsor is an employee, employer, agent, partner
or joint venture of another party. Neither Medstar nor Sponsor shall have or
hold itself out as having the right or authority to assume or create any
obligations or responsibility, whether express or implied, an behalf of or in
the name of another party, except with the express written authority of that
party.

5.             Employees.  All employees of the Medstar or any other person or
organization appointed by Medstar in the performance of this Agreement shall be
considered employees of Medstar or such other person or organization, as the
case may be, and not employees of

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Sponsor.  Medstar shall be responsible for paying their employees any and all
wages and other compensation and for all employment taxes and other employment
related obligations arising in connection with those employees.

6.             Usage, and Ownership of Property.

6.1           Data and Research Results Produced Under the Study.  The data and
research results produced as a result of the Study are the sole property of
Sponsor.

6.2           Patents and Inventions.  Sponsor shall own all right, title and
interest in and to any and all inventions, discoveries, or innovations, whether
or not patentable, arising directly or indirectly in the performance of the
Protocol (collectively “Inventions”). Medstar shall promptly notify Sponsor in
writing of any Inventions, and at Sponsor’s request and expense, Medstar will
cause to be assigned to Sponsor all right, title, and interest in and to any
Inventions and shall provide reasonable assistance to obtain patents including
causing the execution of any invention assignment or other documents.

7.             Trademarks. Logos, Etc.  Neither party shall, without the prior
written consent of the other party in each instance, use in any manner
whatsoever, including, without limitations, in any advertisement, the name,
trademarks, logos, symbols, or other images of the other party or of any party
affiliated therewith.

8.             Confidentiality.

8.1           Confidential Information.  During the course of the performance of
this Agreement, it is anticipated that the parties will exchange Confidential
Information. “Confidential Information” means confidential or proprietary
information that is in tangible form and marked or designated in writing to
indicate its confidential or proprietary nature, or, if disclosed orally, is
confirmed as confidential in writing within thirty (30) days of such disclosure.
Each party receiving Confidential Information agrees to limit disclosure of the
furnishing party’s Confidential Information to personnel having a need to know
the information for the purposes of this Agreement, and not to disclose any such
Confidential Information to any third party unless such third party is under a
confidentiality agreement with the receiving party or unless such disclosure is
required by law. These obligations will continue for five (5) years after the
expiration or termination of this Agreement. For the avoidance of doubt, as
between the parties to this Agreement all patient medical records are Medstar’s
Confidential Information regardless of whether or how they are marked.

8.2           Information Not Deemed Confidential Information.  Confidential
Information received from the other party shall not be deemed Confidential
Information, and the receiving party will have no obligation with respect to
such Confidential Information if:

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8.2.1        the Confidential Information is part of the public domain as of the
Effective Date, or subsequently becomes part of the public domain through no
fault of the receiving party;

8.2.2        the receiving party can show that the Confidential Information was
rightfully in its possession without obligation of confidentiality, as evidenced
by written records or by the proof of actual use at the time of executing this
Agreement;

8.2.3        the Confidential Information is subsequently disclosed to the
receiving party without obligation of confidentiality by a third party not in
violation of any right of, or obligation to, the other party to this Agreement;

8.2.4        the Confidential Information is developed independently by any
recipients without reference to the Confidential Information; or

8.2.5        the receiving party is obligated to produce the Confidential
Information pursuant to an order of a court of competent jurisdiction or a
facially valid administrative, Congressional or other subpoena, provided that
the recipient is subject to the order of the subpoena.

8.3           Patient Confidentiality.  Patient information, including identity,
shall be treated confidentially by all parties in accordance with all applicable
federal, state, and local laws including, but not limited to, the Standards for
Individually Identifiable Health Information, 45 C.F.R. Parts 160 and 164 (the
“HIPAA Privacy Regulation”).

9.             Publication and Data.

9.1           Publication; Presentation and Use of Material.  Medstar has the
right to publish and make public presentations regarding the results of the
research, and other information from the Study or otherwise make results of the
research available to the public in furtherance of its charitable and
educational purposes in accordance with this Agreement. Publication will occur
as promptly as reasonably possible and not less than twenty-four (24) months
after the conclusion of the Study. If Medstar desires to present or publish
materials relating to the Study, Medstar will provide Sponsor with two (2)
copies of any such publications or presentation materials at least sixty (60)
calendar days prior to the submission of manuscripts. Sponsor will have sixty
(60) calendar days from the receipt of such materials to object in writing to
publication or presentation of any materials that Sponsor believes to contain
Confidential Information. If Medstar receives no response from Sponsor within
such sixty (60) day period, Medstar will be free to proceed with publication or
presentation of the data, results, or information from the Study. If the Sponsor
raises an objection that the materials disclose Confidential Information,
Medstar shall refrain from the disclosure of the Confidential Information
identified by Sponsor in the materials unless the parties agree on a mutually
acceptable format for publishing or presenting such Confidential

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Information. Sponsor agrees that it may only object to such publication or
dissemination by Medstar on the basis of potential disclosure of Sponsor’s
Confidential Information.

9.2           Publishing Rights.  Medstar retains all rights to the publications
and other copyrightable material that it produces pursuant to Paragraph 9.1.
Sponsor agrees that said copyrightable material is the sole property of Medstar
and hereby assigns and agrees to assign to Medstar, its successors, and assigns
any right, title and interest in and to said copyrightable material Sponsor may
have.

9.3           Continuing Copyright Requirement.  This Article shall survive
termination or expiration of this Agreement.

10.           Indemnification

10.1         Indemnification of Sponsor.  Medstar agrees to indemnify, defend
and hold harmless Sponsor, its directors, officers, employees, representatives
and agents from and against any and all third party claims, suits, losses,
damages, costs, fees and expenses (including reasonable attorney’s fees), and
other liabilities asserted by third parties arising out of or related to this
Agreement to the extent based upon: (i) any material misrepresentation contained
in or breach of any warranty made by Medstar under this Agreement or (ii) any
material breach, violations or nonperformance of any covenant, condition or
agreement in this Agreement by Medstar.

10.2         Indemnification of Medstar.  Sponsor shall, at its own expense,
indemnify, defend and hold harmless Medstar and their investigators, directors,
officers, employees, representatives, agents and affiliates, including without
limitation any employee conducting the Study, from and against any and all third
party claims, suits, losses, damages, costs, fines, fees and expenses (including
reasonable attorneys’ fees) arising out of or related to this Agreement (except
to the extent covered by this Section 10.2) including without limitation, for
injury to persons, damage to property, or non-compliance with applicable laws
and regulations whether litigated or not, arising from the negligent or wrongful
acts or omissions of Sponsor, its agents or employees in the design,
development, marketing, distribution, use or sale of any product or services
derived from or embodying the Study (including the Protocol) or which is
otherwise the subject of this Agreement. Sponsor shall also, at its own expense,
indemnify, defend and hold harmless Medstar and their investigators, directors,
officers, employees, representatives, agents and affiliates including any
employee conducting the Study from any and all third party claims, suits,
losses, damages, costs, fines, fees and expenses (including reasonable
attorney’s fees) arising out of the acts of the sponsor’s employees
participating in the Study at Medstar.

10.3         Sponsor will be responsible for reasonable patient medical care
costs that are a direct result of a patient’s participation in this Study but
are not covered by third party payors and are not the result of negligence,
failure to follow the Protocol or

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IRB requirements or applicable laws or regulations, or any reckless or willful
malfeasance by Medstar or its employees, agents, officers, or assignees.

10.4         Insurance Requirements. Sponsor shall, at its own expense, carry
and maintain professional and general liability insurance from a carrier
acceptable to Medstar in amounts consistent with industry standards and adequate
to protect the Medstar, and the Sponsor from any and all claims of any nature
for damage to property or for personal injury, including death, which may arise
from performance of this Agreement and from claims which may arise pursuant to
Section 10.2 above. Sponsor shall provide evidence of insurance to Medstar
promptly upon execution of this Agreement.

11.           Inspections.

11.1         Inspections by Sponsor.  Sponsor, its agents or representatives,
shall provide, during Medstar’s regular hours of business and after reasonable
prior notice to Medstar, reasonable scheduled access to Medstar’s facility to
perform quality assurance inspections at mutually convenient times. Medstar
shall cooperate with Sponsor’s inspectors and shall provide Sponsor with copies
of all documents reasonably required by Sponsor to properly perform such
inspections so long as Sponsor can assure patient confidentiality.

11.2         Inspections by Regulatory Authorities.  Medstar shall notify
Sponsor, as soon as reasonably practicable, of all inspections or anticipated
inspections of its facility conducted by any regulatory authority, including,
without limitation, the Food and Drug Administration, that in any way directly
relates to the Study. Medstar shall promptly provide copies of all reports,
emotions, violations, warnings, and notices of deficiency received by Medstar
with such inspections.

12.           Record Keeping and Reporting

12.1         Medstar shall report to Sponsor any Serious or Unexpected Adverse
Event, as those terms are defined at 21 C.F.R. 312.32(a), as required by the
Protocol, by using the appropriate Case Report Form within twenty-four (24)
hours after Medstar or Principal Investigator receives information about the
event. All other Adverse Events shall be timely reported to Sponsor as required
by Protocol.

12.2         Medstar shall maintain all records required to be maintained under
federal, state or local laws, including, but not limited to, case report forms,
informed consent forms, drug accountability records, source documents, data
correction forms, monitoring logs, correspondence, clinical supplies receipts,
dispensing and final disposition records, Medstar Review Board/Ethics Review
Committee correspondence and appropriate, and all other Study documents. Medstar
shall ensure that Principal Investigator signs a statement in each subject’s
case report form attesting to Principal Investigator’s review of the data, and
attesting that the data are an accurate accounting of the treatment, care, and
events surrounding the subject’s involvement in the Study.

 

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Sections of this agreement marked by asterisks (***) have been omitted pursuant
to a request for confidential treatment.  The omitted information has been filed
separately with the Securities and Exchange Commission.

12.3         Medstar shall retain records for the Study produced pursuant to the
Agreement for a minimum of five (5) years following completion of the Study. To
avoid any possible errors, Medstar agrees to obtain the approval of Sponsor
prior to the destruction of any Study-related records. If Sponsor wishes to
receive all Study records in lieu of their destruction, Medstar shall, at the
expense of the Sponsor, ship all Study records to Sponsor within (30) days of
Sponsor request. In the event of accidental loss or destruction of any Study
record, to promptly notify Sponsor. This provision shall survive the expiration
or termination of this Agreement.

13.           Miscellaneous.

13.1         Notices.  All notices, requests, demands, and other communications
required or permitted to be given hereunder shall be in writing, shall be deemed
to have been duly given when delivered in person, or when sent by telex, or
telecopy, or other facsimile transmission (with the receipt confirmed), or on
the third business day after posting thereof by registered or certified mail,
return receipt requested, prepaid and addressed as follows (or other such
address site the parties may designate by written notice in the manner
aforesaid):

In the case of Medstar:

In the case of Sponsor:

 

 

MedStar Research Institute
6495 New Hampshire Avenue,
Suite 201
Hyattsville, MD 20783

Lipid Sciences, Inc.
7068 Koll Center Parkway, Suite 401
Pleasanton, CA 94566
Attn: Lew Meyer

Attn:

***

Fax:  (925) 249-4040

Fax:

***

 

 

 

with a copy to:

with a copy to:

 

 

Cardiovascular Research Institute
110 Irving Street, NW, Suite 4B1
Washington, D.C. 20010
Attn: Ron Waksman, M.D.

Lipid Sciences, Inc.
7068 Koll Center Parkway, Suite 401
Pleasanton, CA 94566
Attn: Sandra Gardiner

Fax:

***

Fax:  (925) 249-4080

13.2         Governing Law. This Agreement shall be construed and enforced in
all respects in accordance with the laws of the District of Columbia, without
regard to any provision of District of Columbia law that would require or permit
the application of the substantive law of any other jurisdiction.

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13.3         Non-Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party, except in the case of an
acquisition of at least fifty one percent (51%) outstanding shares of either
party (“Acquisition”). In the case of an Acquisition, the party being acquired
may assign this Agreement without the prior written consent of the other party,
provided the party being acquired notifies the other party in writing.

13.4         Entire Agreement.  This Agreement sets forth the entire
understanding of the parties with respect to the subject matter of this
Agreement. This Agreement supersedes all prior representations, agreements, and
understanding among the parties with respect to such subject matter. In the
event of any conflict between the Protocol and the other provisions of this
Agreement, the other provisions of this Agreement shall govern.

The Exhibits referred to in and attached to this Agreement are made a part of it
as if fully included in the text.

13.5         Amendment.  No changes or amendments or alterations shall be
effective unless in writing and signed by both parties.

13.6         Waiver.  No waiver of any default in the performance of any of the
duties or obligations arising out of this Agreement shall be valid unless in
writing and signed by the waiving party. Waiver of any one default does not
waive any successive or other default. No course of dealing between the parties
shall operate as a waiver or preclude the exercise of any rights or remedies
under this Agreement. Failure on the part of either party to object to any act
or failure to act by or on the part of the other party, or declare the other
party in default, regardless of the extent of such default, shall not constitute
a waiver by the party of its rights hereunder.

13.7         Severability.  The provisions of this Agreement will be deemed
severable, and the enforceability of any one or more provisions will not affect
the enforceability of any other provisions. In addition, if any provision of
this Agreement, for any reason, is declared to be unenforceable, the parties
will substitute an enforceable provision that, to the maximum extent possible in
accordance with applicable law, preserves the original intentions and economic
positions of the parties.

13.8         Construction.  This Agreement shall be interpreted without any
regard to any presumption or rule requiring construction against the party
causing this Agreement to be drafted.

13.9         Counterparts.  This Agreement may be executed in one or more
counterparts, including facsimile counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same agreement.

13.10       Captions.  The captions contained in this Agreement are inserted
only as a matter of convenience and in no way define, limit, or extend the scope
or intent of this Agreement or any provision hereof.

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THIS SPACE INTENTIONALLY LEFT BLANK

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

MedStar Research Institute

Lipid Sciences, Inc.

 

 

 

By:

***

By:

  /s/ S. Lewis Meyer

 

 

 

 

 

Name:

***

Name:

S. Lewis Meyer

 

 

 

 

Title:

Sr. VP, Administration

Title:

President and CEO

 

 

 

 

Date:

May 24, 2006

Date:

May 16, 2006

 

 

 

 

 

 

Read and Understood

 

 

 

 

By:

/s/ Ron Waksman, MD

 

 

 

 

 

Name:

Ron Waksman, MD

 

 

 

 

Title:

Principal Investigator

 

 

 

 

Date:

May 22, 2006

 

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EXHIBIT A
PROTOCOL

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***  This Exhibit has been omitted pursuant to a request for confidential
treatment.  The omitted information has been filed separately with the
Securities and Exchange Commission.

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Portions of this agreement, marked by asterisks (***), have been omitted
pursuant to a request for confidential treatment.  The omitted information has
been filed separately with the Securities and Exchange Commission.

EXHIBIT B
BUDGET

1.     The anticipated budget worksheet is attached as Exhibit B1.

2.     Shipping:

Sponsor authorizes the use of Sponsor’s Federal Express Number for returning to
Sponsor and sites those materials, products, documentation, etc. as commonly
occurs during the conduct of a Study of this nature.

3.     Payment Information:

All payments shall be made by Sponsor in US Dollars to the following fund:

Fund Name:

MedStar Research Institute

Tax ID#:

***

Mailing Address:

P.O. Box 632010

 

Baltimore, MD 21263

Attention:

CFO

4.     Upon written agreement by both parties, additional items may be added to
the budget.

5.     MedStar shall invoice Sponsor on a monthly basis for any billable patient
related charges incurred in the previous month no later than twenty (20) days
following the end of each calendar month to the attention to Sandra Gardiner at
the address, or facsimile number, indicated in Section 13.1.  Reimbursement for
data management and project management shall be invoiced as follows:  50% at
completion of first patient enrolled and 50% at completion of last patient
enrolled.

6.     ***

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EXHIBIT B1
BUDGET WORKHEET

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***  This Exhibit has been omitted pursuant to a request for confidential
treatment.  The omitted information has been filed separately with the
Securities and Exchange Commission.

 

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