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.









 



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 









 



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:









 



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 









 



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 









 



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.


 















 


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.









 



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.









 



THIS
SPACE INTENTIONALLY LEFT BLANK









 



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

  	
   

  
						










 



EXHIBIT A

PROTOCOL






***  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.









 



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.     ***









 



EXHIBIT B1

BUDGET WORKHEET






***  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.