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Exhibit 10.26

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SEPARATION AGREEMENT AND RELEASE

        This Separation Agreement and Release (the "Agreement") is made by and
between Marc Bellotti ("Employee") and Lipid Sciences, Inc. (the "Company" and,
with Employee, the "Parties").

        WHEREAS, Employee's employment with the Company is to be terminated by
resignation effective as of December 31, 2005 (the "Termination Date"); and

        WHEREAS, the Parties, and each of them, wish to resolve any and all
disputes, claims, complaints, grievances, charges, actions, petitions, and
demands that Employee may have against the Company, including, without
limitation, any and all claims arising out of, or in any way related to,
Employee's employment with the Company or termination thereof;

        NOW, THEREFORE, in consideration of the promises made herein, the
Parties hereby agree as follows:

        1.     Consideration.    Employee's stock option granted on July 2, 2001
covering 155,902 shares of Company common stock as a result of the merger of the
Company with NZ Corporation (the "2001 Option") is hereby amended so that the
2001 Option may be exercised until December 31, 2006, after which the 2001
Option shall expire, and Employee's stock option granted on March 14, 2003
covering 160,000 shares of Company common stock (the "2003 Option") is hereby
amended so that, as of the Effective Date, the 2003 Option is fully exercisable
as to all of the shares, including shares as to which the 2003 Option would not
otherwise be exercisable. In addition, Employee will be offered the opportunity
to serve as a consultant to the Company pursuant to an agreement in
substantially the form attached hereto as Exhibit A.

        2.     Confidential Information.    Employee will continue to maintain
the confidentiality of all confidential and proprietary information of the
Company and will continue to comply with the Employee Confidential Information
and Inventions Agreement executed as of July 2, 2001 (the "Confidential
Information Agreement"). Employee will return all of the Company's property and
confidential and proprietary information in his possession to the Company no
later than the Effective Date.

        3.     Payment of Salary.    Employee acknowledges and represents that
the Company has paid all salary, wages, bonuses, accrued vacation, commissions,
and any and all other compensation and benefits due to Employee as of the
Effective Date.

        4.     Release of Claims.    Employee agrees that the consideration set
forth in Section 1 above represents settlement in full of all outstanding
obligations owed to Employee by the Company and its officers, directors, agents,
employees, and shareholders. Employee, on his own behalf and on behalf of his
heirs, family members, executors, agents, and assigns, hereby fully and forever
releases the Company and its officers, directors, agents, employees,
shareholders, predecessor and successor corporations, and assigns from, and
agrees not to sue concerning, any claim, duty, obligation, or cause of action
relating to any matters of any kind, whether presently known or unknown,
suspected or unsuspected, that Employee may possess arising from any omissions,
acts or facts that have occurred up until and including the Effective Date of
this Agreement including, without limitation:

        (a)   any and all claims relating to or arising from Employee's
employment relationship with the Company and the termination of that
relationship,

        (b)   any and all claims relating to, or arising from, Employee's right
to purchase, or actual purchase of, shares of stock of the Company, including,
without limitation, any claims for fraud,

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misrepresentation, breach of fiduciary duty, breach of duty under applicable
state corporate law, and securities fraud under any state or federal law,

        (c)   any and all claims under the law of any jurisdiction including,
but not limited to, wrongful discharge of employment, constructive discharge
from employment, termination in violation of public policy, discrimination,
breach of contract (both expressed and implied), breach of a covenant of good
faith and fair dealing (both expressed and implied), promissory estoppel,
negligent or intentional infliction of emotional distress, negligent or
intentional misrepresentation, negligent or intentional interference with
contract or prospective economic advantage, unfair business practices,
defamation, slander, libel, negligence, personal injury, assault, battery,
invasion of privacy, false imprisonment, and conversion,

        (d)   any and all claims for violation of any federal, state, or
municipal statute, including, without limitation, Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor
Standards Act, the Employee Retirement Income Security Act of 1974, the Worker
Adjustment and Retraining Notification Act, the Older Workers Benefits
Protection Act, and the California Fair Employment and Housing Act,

        (e)   any and all claims for violation of the federal, or any state,
constitution,

        (f)    any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination, and

        (g)   any and all claims for attorneys' fees and costs.

        The Company and Employee agree that the release set forth in this
section will be and remain in effect in all respects as a complete general
release as to the matters released. This release does not extend to any
obligations incurred under this Agreement.

        5.     Acknowledgement of Waiver of Claims Under ADEA.    Employee
acknowledges that he is waiving and releasing any rights he may have under the
Age Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and
release is knowing and voluntary. Employee and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
the ADEA after the Effective Date of this Agreement. Employee acknowledges that
the consideration given for this waiver and release is in addition to anything
of value to which the Employee already was entitled. Employee further
acknowledges that he has been advised by this writing that

        (a)   he should consult with an attorney prior to executing this
Agreement,

        (b)   he has up to 21 days within which to consider this Agreement,

        (c)   he has seven days following his execution of this Agreement to
revoke this Agreement,

        (d)   this Agreement shall not be effective until the revocation period
has expired, and

        (e)   nothing in this Agreement precludes Employee from challenging or
seeking a determination in good faith of the validity of this waiver under the
ADEA, nor does it impose any condition precedent, penalties, or costs for doing
so, unless specifically authorized by federal law.

        6.     Unknown Claims.    The Parties represent that they are not aware
of any claim by either of them other than the claims that are released by this
Agreement. Employee acknowledges that he has been advised by legal counsel and
is familiar with the provisions of California Civil Code Section 1542, which
provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

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        Employee, being aware of California Civil Code Section 1542, agrees to
expressly waive any rights he may have thereunder, as well as under any other
statute or common law principles of similar effect.

        7.     No Pending or Future Lawsuits.    Employee represents that he has
no lawsuits, claims, or actions pending in his name, or on behalf of any other
person or entity, against the Company or any other person or entity referred to
herein. Employee also represents that he does not intend to bring any claims on
his own behalf, or on behalf of any other person or entity, against the Company
or any other person or entity referred to herein.

        8.     Application for Employment.    Employee understands and agrees
that, as a condition of this Agreement, he is not entitled to any employment
with the Company, its subsidiaries, or any successor, and he hereby waives any
right, or alleged right, of employment or reemployment with the Company, its
subsidiaries, or any successor.

        9.     No Cooperation.    Employee agrees that he will not act in any
manner that might damage the business of the Company. Employee agrees that he
will not counsel or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third party against the Company or any officer, director,
employee, agent, shareholder, or attorney of the Company, unless under a
subpoena or other court order to do so. Notwithstanding the foregoing, Employee
shall be permitted to respond truthfully to questions posed in connection with a
governmental investigation.

        10.   Non-Disparagement.    Employee agrees to refrain from any
defamation, libel, or slander of the Company, its directors, officers, and
employees. The Company agrees to instruct its officers and directors to refrain
from any defamation, libel, or slander of Employee.

        11.   Non-Solicitation.    Employee agrees that for a period of twelve
months immediately following the Effective Date, Employee shall not either
directly or indirectly solicit, induce, recruit, or encourage any of the
Company's employees or consultants to leave their employment or consultancy, or
take away such employees or consultants, or attempt to solicit, induce, recruit,
encourage, take away, or hire employees or consultants of the Company, either
for himself or on behalf of any other person or entity.

        12.   No Admission of Liability.    Employee acknowledges and agrees
that neither the offer of this Agreement, nor the acceptance of this Agreement,
nor the Agreement itself is an admission, or shall be construed to be an
admission, of any wrongdoing or liability by each or any of the Company, its
officers, directors, employees, agents, or shareholders. Neither the offer of
this Agreement, nor any of its terms, shall be admissible as evidence of any
liability or wrongdoing by each or any of the persons listed in the preceding
sentence in any judicial, administrative, or other proceeding now pending or
hereafter instituted by any person or entity.

        13.   No Knowledge of Wrongdoing.    Employee represents that he has no
knowledge of any wrongdoing involving improper or false claims against a federal
or state governmental agency, or any other wrongdoing that involves Employee or
other present or former Company employees.

        14.   Tax Consequences.    The Company makes no representations or
warranties with respect to the tax consequences of the consideration set forth
in Section 1. Employee agrees and understands that he is responsible for the
payment, if any, of local, state, and federal taxes on the consideration
provided hereunder and any penalties or assessment thereon. Employee further
agrees to indemnify and hold the Company harmless from any claims, demands,
deficiencies, penalties, assessments, executions, judgments, or recoveries by
any governmental agency against the Company for any amounts claimed due on
account of Employee's failure to pay local, state, or federal taxes or damages
sustained by the Company by reason of any such claim, including reasonable
attorneys' fees.

        15.   Arbitration.    The Parties hereby agree that any and all disputes
arising out of, or relating to, the terms of this Agreement, their
interpretation, and any of the matters herein released shall be subject to
binding arbitration in Alameda County, California before the American
Arbitration Association under its National Rules for the Resolution of
Employment Disputes. The Parties agree that the prevailing party in any
arbitration shall be entitled to injunctive relief in any court of

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competent jurisdiction to enforce the arbitration award. The Parties hereby
agree to waive their right to have any dispute between them resolved in a court
of law by a judge or jury. This section will not prevent either Party from
seeking injunctive relief, or any other provisional remedy, from any court
having jurisdiction over the Parties and the subject matter of the dispute
relating to this Agreement and the agreements incorporated herein by reference.

        16.   No Representations.    Each Party represents that it has had the
opportunity to consult with an attorney and has carefully read and understands
the scope and effect of the provisions of this Agreement. Neither Party has
relied upon any representations or statements made by the other Party that are
not specifically set forth in this Agreement.

        17.   Severability.    In the event that any provision hereof becomes or
is declared by a court of competent jurisdiction to be illegal, unenforceable,
or void, this Agreement shall continue in full force and effect without said
provision so long as the remaining provisions remain intelligible and continue
to reflect the original intent of the Parties.

        18.   Entire Agreement.    This Agreement, the Confidential Information
Agreement, and the agreements evidencing the grant of the 2001 Option and the
2003 Option, as amended by this Agreement, (the "Surviving Agreements")
represent the entire agreement and understanding between the Parties concerning
the subject matter of this Agreement and Employee's relationship with the
Company. This Agreement supersedes and replaces any and all prior agreements and
understandings between the Parties concerning the subject matter of this
Agreement and Employee's relationship with the Company with the exception of the
Surviving Agreements.

        19.   Amendment.    Any modification or amendment of this Agreement, or
additional obligation assumed by either Party in connection with this Agreement,
will be effective only if placed in writing and signed by both Parties or by
authorized representatives of each Party.

        20.   Governing Law.    This Agreement shall be deemed to have been
executed and delivered within the State of California, and it shall be
construed, interpreted, governed, and enforced in accordance with the laws of
the State of California applicable to contracts to be performed entirely
therein. Both Parties consent to personal and exclusive jurisdiction and venue
in the state and federal courts of the State of California.

        21.   Effective Date.    This Agreement is effective after it has been
signed by both Parties and after eight days have passed since Employee has
signed this Agreement (the "Effective Date"), unless revoked by Employee within
seven days after his execution. To the extent Employee executes this Agreement
before the expiration of the 21-day period set forth in Section 5, Employee
acknowledges that he has voluntarily waived the remaining portion of such 21-day
period.

        22.   Voluntary Execution.    This Agreement is executed voluntarily and
without any duress or undue influence on the part or on behalf of the Parties,
with the full intent of releasing all claims. The Parties acknowledge that

        (a)   They have read this Agreement,

        (b)   They have been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of their own choice or that they
have voluntarily declined to seek such counsel,

        (c)   They understand the terms and consequences of this Agreement and
of the releases it contains, and

        (d)   They are fully aware of the legal and binding effect of this
Agreement.

[SIGNATURE PAGE FOLLOWS]

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        IN WITNESS WHEREOF, the Parties have executed this Agreement on the
respective dates set forth below.

Dated: December 27, 2005

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      By: /s/ S. LEWIS MEYER, PH.D.

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S. Lewis Meyer, Ph.D.
President and Chief Executive Officer
Lipid Sciences, Inc.
Dated: December 28, 2005

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/s/ MARC BELLOTTI

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Marc Bellotti

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EXHIBIT A

CONSULTING AGREEMENT

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SEPARATION AGREEMENT AND RELEASE
EXHIBIT A CONSULTING AGREEMENT