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                                                                   Exhibit 10.16


[LIPID SCIENCES LOGO]


                              EMPLOYMENT AGREEMENT


      THIS EMPLOYMENT AGREEMENT (the "Agreement"), which is effective as of July
18, 2001, is between Lipid Sciences, Inc., a Delaware corporation (the
"Company"), and Jan Johansson ("Executive"), who agree as follows. The Company
and Executive are hereinafter collectively referred to as the "Parties," and may
individually be referred to as a "Party."

                                    RECITALS

      A.    The Company desires assurance of the association and services of
Executive in order to retain Executive's experience, skills, abilities,
background and knowledge, and is willing to engage Executive's services on the
terms and conditions set forth in this Agreement; and

      B.    Executive desires to be in the employ of the Company and is willing
to accept this employment on the terms and conditions set forth in this
Agreement.

                                    AGREEMENT

      1.    EMPLOYMENT.

            1.1   The Company will employ Executive, and Executive hereby
accepts employment by the Company, upon the terms and conditions set forth in
this Agreement, effective as of first Date of Hire (to be negotiated upon mutual
consent subsequent to an initial visit to Australia, fully paid by the Company,
and final approval by the President/CEO) for the term of one year from the Date
of Hire. This agreement will automatically be renewed for the term of one year
unless either party gives notice to the other at least 60 days prior to the
expiration of the then current term of employment of such party's intention not
to renew.

            1.2   Executive will be the Vice President of Research. Executive
will report to the President/CEO.

            1.3   Executive will do and perform all services, acts or things
necessary or advisable to manage and conduct the Research of the Company,
provided, however, that at all times during his employment Executive will be
subject to the direction of the President/CEO. Executive's duties will include,
but not be limited to, participation in the creation and management of the
overall strategy of the Company's research plan, it's clinical application
platforms, the external research process with outside vendors, the Company's
training programs as well as the preparation of the annual budget for his
department, and assist in the Company areas of new business development and
regulatory affairs. The Company acknowledges the non-competition agreement
Executive entered into with Esperion. During the first year of this Agreement,
Executive shall not provide any services nor act with respect to
biopharmaceuticals,


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plasma-derived apolipoprotein A-1 or any recombinant variant(s) thereof, or
synthetic HDL (parental therapies). Executive shall not disclose any information
that is confidential to Esperion.

            1.4   Unless the Parties otherwise agree in writing, prior to
Executive's termination in accordance with this Agreement, Executive will
perform the services he is required to perform in accordance with the terms of
this Agreement, reporting to the Company's offices and the President/CEO.

      2.    LOYAL AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION.

            2.1   During his employment by the Company, Executive will devote
his full business employment, interest, abilities and productive time to the
proper and efficient performance of his duties under this Agreement. Executive
may not be employed by another company or receive compensation for employment
from any other sources.

            2.2   During his employment by the Company, Executive may not engage
in competition with the Company, either directly or indirectly, in any manner or
capacity, as adviser, principal, agent, partner, officer, director, employee,
member of any association or otherwise, in any phase of the business of
developing, manufacturing and marketing of products that are in the same field
of use or which otherwise directly compete with the products or proposed
products of the Company.

            3.    COMPENSATION OF EXECUTIVE.

            3.1   The Company will pay Executive a salary of two hundred
thousand dollars ($200,000.00) per year ("Base Salary"), payable in regular
periodic payments in accordance with Company policy. Such salary will be
prorated for any partial year of employment on the basis of a 365-day fiscal
year.

            3.2   Executive's compensation may be changed from time to time by
mutual agreement of Executive the CEO and Board of Directors.

            3.3   All of Executive's compensation is subject to customary
withholding taxes and any other employment taxes as are commonly required to be
collected or withheld by the Company.

            3.4   Executive will, in the discretion of the Board and in
accordance with Company policy, be entitled to participate in benefits under any
employee benefit plan or arrangement made available by the Company now or in the
future to its executives and key management employees.

            3.5   Executive's performance will be reviewed by the CEO on a
periodic basis (not less than once each fiscal year). The CEO with approval of
the Board may, in their sole discretion, award bonuses to Executive as will be
appropriate or desirable based on Executive's performance. Executive will be
reviewed within twelve months of commencing employment hereunder.


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            3.6   Executive will be granted options to purchase the Company's
common stock. The Company will grant Executive an option to purchase up to one
hundred thousand (100,000) shares of the Company's common stock. The exercise
price per share of these options (the "Options") will be equal to $7.15 per
share. Options will vest as to twelve thousand five hundred (12,500) shares
following the first six (6) continuous months of service with the Company and
the remainder over three and one half years at the rate of 1/42nd per month of
the total 100,000 shares.

            3.7   Executive is entitled to receive prompt reimbursement of all
reasonable expenses incurred by Executive in performing Company services,
including expenses related to travel, entertainment, parking, and business
meetings. These expenses will be accounted for in accordance with the policies
and procedures established by the Company.

      4.    TERMINATION: Either party may terminate this Agreement and
Executive's employment without cause, upon thirty (30) days written notice. Upon
termination, the Company will be released from any and all obligations under
this Agreement, except in the event the Executive's employment is involuntarily
terminated by the Company for other than "good cause," then Executive will
resign from all positions with the Company, and enter into a consulting
arrangement for four (4) months commencing immediately after the termination
date. In consideration for such consulting arrangement, Executive will continue
to be paid salary and benefits for four (4) months. However, if Executive
obtains new full time employment during such four (4) month period, any salary
paid pursuant to such arrangement will be offset from amounts due under this
Letter Agreement. Executive's obligations under Paragraph 5 of this Agreement
will continue beyond his termination of employment.

      5.    CONFIDENTIAL INFORMATION; NONSOLICITATION.

            5.1   Executive recognizes that his employment with the Company will
involve contact with information of substantial value to the Company, which is
not old and generally known in the trade, and which gives the Company an
advantage over its competitors who do not know or use it, including but not
limited to, techniques, designs, drawings, processes, inventions, developments,
equipment, prototypes, sales and customer information, and business and
financial information relating to the business, products, practices and
techniques of the Company (hereinafter referred to as "Confidential
Information"). Executive will at all times regard and preserve as confidential
such Confidential Information obtained by Executive from whatever source and
will not, either during his employment with the Company or thereafter, publish
or disclose any part of such Confidential Information in any manner at any time,
or use the same except on behalf of the Company, without the prior written
consent of the Company; provided, however, that Executive may disclose
Confidential Information in the best interest of the Company with properly
executed Company confidentiality or secrecy agreements with the third party. As
a condition of this Agreement, the Executive will sign and return a copy of the
Company's Proprietary Information and Inventions Agreement, attached as EXHIBIT
A.

            5.2   While employed by the Company and for one (1) year thereafter,
in order to protect the Company's confidential and proprietary information from
unauthorized use, Executive may not, either directly or through others, (i)
solicit or attempt to solicit any employee, consultant or independent contractor
of the Company to terminate his or her relationship with the


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Company in order to become an employee, consultant or independent contractor to
or for any other person or business entity; or (ii) solicit or attempt to
solicit the business of any customer, vendor or distributor of the Company
which, at the time of termination or one (1) year immediately prior thereto, was
listed on the Company's customer, vendor or distributor list.

      6.    SUCCESSORS. The Company will require any successor (whether direct
or indirect, by purchase, merger, or consolidation) to all or substantially all
of the business and/or assets of the Company, by agreement in form and substance
reasonably satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.

      7.    ASSIGNMENT AND BINDING EFFECT. This Agreement is binding on and
inures to the benefit of Executive and Executive's heirs, executors, personal
representatives, assigns, administrators and legal representatives. Because of
the unique and personal nature of Executive's duties under this Agreement,
neither this Agreement nor any rights or obligations under this Agreement are
assignable by Executive. This Agreement is binding on and inures to the benefit
of the Company and its successors, assigns and legal representatives.

      8.    NOTICES. All notices or demands of any kind required or permitted to
be given by the Company or Executive under this Agreement will be given in
writing and will be personally delivered (and receipted for) or mailed by
certified mail, return receipt requested, postage prepaid.

      9.    CHOICE OF LAW. This Agreement will be construed and interpreted in
accordance with the laws of the State of California, without regard to the
conflict of laws provision thereof.

      10.   INTEGRATION. This Agreement contains the complete, final and
exclusive agreement of the Parties relating to the subject matter of this
Agreement, and supersedes all prior oral and written employment agreements or
arrangements between the Parties.

      11.   AMENDMENT. This Agreement may not be amended or modified except by a
written agreement signed by Executive and the Company.

      12.   WAIVER. No term, covenant or condition of this Agreement or any
breach thereof will be deemed waived, except with the written consent of the
Party against whom the wavier in claimed, and any waiver or any such term,
covenant, condition or breach will not be deemed to be a waiver of any preceding
or succeeding breach of the same or any other term, covenant, condition or
breach.

      13.   SEVERABILITY. The finding by a court of competent jurisdiction of
the unenforceability, invalidity or illegality of any provision of this
Agreement will not render any other provision of this Agreement unenforceable,
invalid or illegal. Such court will have the authority to modify or replace the
invalid or unenforceable term or provision with a valid and enforceable term or
provision which most accurately represents the parties' intention with respect
to the invalid or unenforceable term or provision.


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      14.   INTERPRETATION; CONSTRUCTION. The headings set forth in this
Agreement are for convenience of reference only and will not be used in
interpreting this Agreement. Executive has been encouraged, and has consulted
with, his own independent counsel and tax advisors with respect to the terms of
this Agreement. The Parties acknowledge that each Party and its counsel has
reviewed and revised, or had an opportunity to review and revise, this
Agreement, and the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party will not be employed
in the interpretation of this Agreement.

      15.   REPRESENTATIONS AND WARRANTIES. Executive represents and warrants
that, to the best of Executive's knowledge, he is not restricted or prohibited,
contractually or otherwise, from entering into and performing each of the terms
and covenants contained in this Agreement, and that his execution and
performance of this Agreement will not violate or breach any other agreements
between Executive and any other person or entity.

      16.   COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which will be deemed an original, all of which together will contribute
one and the same instrument.

      17.   ARBITRATION. If any dispute arises regarding the application,
interpretation, or enforcement of this Agreement, including fraud in the
inducement, the dispute will be resolved by final and binding arbitration before
one arbitrator at the Judicial Arbitration and Mediation Service in Pleasanton,
California. The decision of the arbitrator will be final and may not be appealed
by either of the Parties.

      18.   ATTORNEYS' FEES AND COSTS. The prevailing party in any dispute
arising out of this Agreement, will be entitled to reimbursement by the losing
party of all of its or his attorneys' fees and costs including, but not limited
to, arbitrator's fees and expert's fees.

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


THE COMPANY:                        LIPID SCIENCES, INC.




                                    By:   /s/ Phil Radlick
                                       _________________________________
                                          Phil Radlick
                                          President/CEO





EXECUTIVE:                                /s/ Jan Johansson
                                       ____________________________________
                                          Jan Johansson



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