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Exhibit 10.5

2001 PERFORMANCE EQUITY PLAN NONQUALIFIED STOCK OPTION AGREEMENT
(Non-Employees)

        THIS AGREEMENT made and entered into as of the [    ]th day of
[                        ] 200[    ] (the "Grant Date"), by Lipid
Sciences, Inc., a Delaware corporation (the "Company"), and
[                        ] (the "Participant") whose signature is set forth on
the signature page hereof.

RECITALS

        WHEREAS, the Company has adopted the Lipid Sciences, Inc. 2001
Performance Equity Plan (the "Plan"), which provides for the grant of options to
non-employee members of the Board of Directors of the Company (the "Board") and
consultants of the Company.

        WHEREAS, the Participant is a non-employee member of the Board or
consultant of the Company and is in a position to contribute materially to the
continued growth and development and the future financial success of the
Company; and

        WHEREAS, the Company wishes to grant to the Participant an option to
purchase common stock of the Company (the "Common Stock") on the terms and
conditions specified herein to provide a means for the Participant to
participate in the future growth of the Company and to increase the
Participant's incentive and personal interest in the continued success and
growth of the Company.

AGREEMENT

        NOW, THEREFORE, the parties agree as follows (any capitalized terms used
herein but not defined herein will have the respective meanings given in the
Plan):

        1.     Option.

        (a)   Grant.    Subject to the terms and conditions of this Agreement
and the Plan, the Company hereby grants to the Participant a Non-Qualified Stock
Option (the "Option") to purchase all or any part of the shares of Common Stock
subject to the Option, as set forth on the signature page hereof, at the
exercise price (the "Exercise Price") set forth on the signature page hereof.

        (b)   Term.    The term of the Option shall expire at 11:59 p.m. on the
date immediately preceding the [tenth/fifth] anniversary of the Grant Date.

        (c)   Vesting.    This Option shall vest over [            ] years at
the rate of [            ] per [            ] of the total [            ]
shares, such that the Option shall be fully vested on
[                        ].

        (d)   [Change of Control.    Notwithstanding the vesting schedule set
forth in Subsection 1(c), effective upon a Change of Control (defined below),
the Option shall become immediately exercisable, and the Participant shall fully
vest in the right to exercise the Option, with respect to 100% of the shares
subject to the Option. For purposes of this Subsection 1(d), a "Change of
Control" means:

        (i)    the acquisition by any individual, entity or group of "beneficial
ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange Act
of 1934) of 30% or more of

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the then outstanding voting securities of the Corporation entitled to vote
generally in the election of directors or of equity securities having a value
equal to 30% or more of the total value of all equity securities of the
Corporation, provided, however, that the following acquisitions of shares or
other securities shall not constitute a Change of Control: (A) any acquisition
directly from the Corporation of newly issued equity securities, (B) any
acquisition by the Corporation or (C) any acquisition by an employee benefit
plan (or related trust) sponsored or maintained by the Corporation or any of its
Affiliates (as defined in Regulation D under the Securities Act of 1933);

        (ii)   individuals who as of the effective date of the relevant option
agreement constitute the Corporation's Board (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Corporation's Board, except
that any director whose election or nomination for election was approved by the
vote of at least a majority of directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding for this purpose any individual whose initial assumption of
office occurs as the result of either an actual or threatened election contest
or other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Corporation's Board;

        (iii)  there occurs a reorganization, merger, consolidation, share
exchange or other corporate transaction involving the Corporation or an
Affiliate (a "Transaction"), in each case with respect to which the persons who
have beneficial ownership, directly or indirectly, of all of the combined voting
power of the Corporation immediately prior to such Transaction do not,
immediately after the Transaction, have beneficial ownership, directly or
indirectly, of more than 50% of the combined voting power of the Corporation or
other corporation resulting from such Transaction;

        (iv)  assets having a value of more than 50% of the value of all of the
Corporation's assets, taken as a whole, are sold, liquidated or distributed in
one or more transactions;

        (v)   the liquidation or dissolution of the Corporation; or

        (vi)  the occurrence of any other transaction or event that the
Committee specifies, either before or after the occurrence of such transaction
or event, constitutes a "Change of Control".]

        2.     Exercise.    No Option shall be exercisable prior to the date it
is vested or after the expiration date. The Participant may, subject to the
limitations of this Agreement, exercise all or any portion of the Option that
has vested pursuant to Section 1 hereof by providing written notice of exercise
to the Company specifying the number of shares with respect to which the Option
is being exercised and accompanied by payment of the Exercise Price for such
shares. The Exercise Price shall be paid in cash, by certified check or
cashier's check payable to the Company, or by the surrender of a whole number of
shares (free of all adverse claims and duly endorsed in blank by the Participant
or accompanied by stock powers duly endorsed in blank) having a Fair Market
Value on the date of exercise equal to the Exercise Price, or by the surrender
through a broker assisted cashless exercise program of the unexercised, vested
portion of the Option as to which the Spread (as hereinafter defined) is equal
to the Exercise Price, or any combination of the foregoing. "Spread" means the
Fair Market Value on the date of exercise of the underlying shares less the
Exercise Price. In order to exercise the Option, the Participant shall also
submit a completed exercise agreement on a form approved by the Company. No
portion of the Option shall be exercisable after it has expired pursuant to
Section 1 hereof.

        3.     Withholding.    The Company may deduct and withhold from any cash
payable to the Participant such amount as may be required for the purpose of
satisfying the Company's obligation to withhold federal, state or local taxes in
connection with any exercise of this Option. The Participant

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may elect to satisfy such withholding obligation, in whole or in part, (a) by
causing the Company to withhold shares otherwise issuable pursuant to the
exercise of the Option or (b) by delivering to the Company shares already owned
by the Participant. The shares so delivered or withheld shall be a whole number,
have a Fair Market Value that shall not exceed the amount determined by the
applicable minimum statutory withholding rates as of the date that the amount of
tax to be withheld is to be determined, shall be free of all adverse claims, and
shall be duly endorsed in blank by the Participant or accompanied by stock
powers duly endorsed in blank.

        4.     Non-transferability.    The Participant shall have no rights to
sell, assign, transfer, pledge, assign or otherwise alienate this Option, except
by will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the rules thereunder, and
any such attempted sale, assignment, transfer, pledge or other conveyance shall
be null and void. The Option shall be exercisable during the Participant's
lifetime only by the Participant (or his or her legal representative).

        5.     Legality of Issuance.    Anything in this Agreement or otherwise
to the contrary notwithstanding, no shares shall be issued upon the exercise of
this Option unless and until the Company has determined that:

        (a)   The Company and the Participant have taken all actions required to
register the shares under the Securities Act or to perfect an exemption from the
registration requirements thereof;

        (b)   All applicable listing requirements of any stock exchange or other
securities market on which the Common Stock is listed has been satisfied; and

        (c)   Any other applicable provision of state or federal law has been
satisfied.

        6.     Adjustments upon Changes in Capitalization.    The number, kind
and class of shares of Common Stock subject to this Option and the Exercise
Price shall be equitably adjusted, substituted or converted in the event of a
stock split, stock dividend, recapitalization, reorganization, merger,
consolidation, extraordinary dividend, split-off, spin-off, combination,
exchange of shares or other similar corporate event affecting the Common Stock,
in any case, in order to preserve the benefits or potential benefits intended to
be made available to the Participant hereunder. The foregoing adjustments shall
be made by the Committee, the determination of which as to whether and which
adjustments shall be made, and the extent thereof, shall be final, binding and
conclusive on all parties affected thereby.

        7.     Beneficiary.    The person whose name appears on the signature
page hereof after the caption "Beneficiary" or any successor designated by the
Participant in accordance herewith (the person who is the Participant's
Beneficiary at the time of his or her death is referred to as the "Beneficiary")
shall be entitled to exercise the Option, to the extent it is exercisable, after
the death of the Participant. The Participant may from time to time revoke or
change his or her Beneficiary designation without the consent of any prior
Beneficiary by filing a new designation with the Board of Directors. The last
such designation received by the Board shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective unless
received by the Board prior to the Participant's death, and in no event shall
any designation be effective as of a date prior to such receipt. If no
Beneficiary designation is in effect at the time of the Participant's death, or
if no designated Beneficiary survives the Participant or if such designation
conflicts with law, the Participant's estate shall be entitled to exercise the
Option, to the extent it is exercisable after the death of the Participant. If
the Board is in doubt as to the right of any person to exercise the Option, the
Company may refuse to recognize such exercise, without liability for any
interest or dividends on the underlying shares, until the Board determines the
person entitled to exercise the Option, or the Company may apply to any court of
appropriate jurisdiction and such application shall be a complete discharge of
the liability of the Company therefore.

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        8.     Limited Interest.

        (a)   The grant of this Option shall not be construed as giving the
Participant any interest other than as provided in this Agreement.

        (b)   The Participant shall have no rights as a stockholder as a result
of the grant of the Option, until the Option is exercised, the Exercise Price is
paid, and the shares issued thereunder.

        (c)   The grant of this Option shall not confer on the Participant any
right to continue as an employee, nor interfere in any way with the right of the
Company to terminate the Participant's employment or other service relationship
with the Company at any time.

        (d)   The grant of the Option shall not affect in any way the right or
power of the Company to make or authorize any or all adjustments,
recapitalizations, reorganizations, or other changes in the Company's capital
structure or its business, or any merger, consolidation or business combination
of the Company, or any issuance or modification of any term, condition, or
covenant of any bond, debenture, debt, preferred stock or other instrument ahead
of or affecting the shares or the rights of the holders thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business or any other Company act or proceeding, whether
of a similar character or otherwise.

        9.     Incorporation by Reference.    The terms of the Plan to the
extent not stated herein are expressly incorporated herein by reference and in
the event of any conflict between this Agreement and the Plan, the Plan shall
govern.

        10.   Entire Agreement.    This Agreement and the Plan constitute the
entire contract between the parties hereto with regard to the subject matter
hereof. They supersede all other agreements, representations or understandings
(whether oral or written and whether express or implied) that relate to the
subject hereof.

        11.   Notices.    Any notice required by the terms of this Agreement
shall be given in writing and shall be deemed effective upon personal delivery
or upon deposit with the United States Postal Service, by registered or
certified mail, with postage and fees prepaid. Notice shall be addressed to the
Company at its principal executive office and to the Participant at the address
that he or she most recently provided to the Company.

        12.   Governing Law.    This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without regard
to the choice of law provisions thereof.

        13.   Amendment.    This Agreement shall not be amended, modified,
terminated or otherwise altered except by the written consent of the parties
thereto.

        14.   Counterparts.    This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

        15.   Successors and Assigns.    Except to the extent otherwise provided
in Section 4 hereof, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Company and its successors and assigns and the
Participant, the Participant's assigns and the legal representatives, heirs and
legatees of the Participant's estate.

        IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer and its corporate seal hereunto affixed,
and the Participant has hereunto affixed his or her hand, all on the day and
year set forth below.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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    LIPID SCIENCES, INC.
Date:             
 
By:
 
         

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S. Lewis Meyer Ph.D.
President/CEO
("Company")
Date:             
 
 
 
         

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[Participant Name]
("Participant")

 
 
  No. of Shares: [            ]   Grant Date: [            ]
Exercise Price Per Share: $[            ]
 
Initial Exercise Date: [            ]
Beneficiary: [            ]
 
Option Expiration Date: [            ]
Beneficiary Tax Identification No.:
 
Address of Beneficiary:
[                              ]
 
[                              
 
 
                              ]

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