Document:

<PAGE>   1
                                                                   EXHIBIT 10.7

                              MDB CAPITAL GROUP LLC
                       401 Wilshire Boulevard - Suite 1020
                          Santa Monica California 90401

                                                     As of June 29, 2001

Mr. Phillip C. Radlick
Lipid Sciences, Inc.
7068 Koll Center Parkway
Suite 401
Pleasanton, California 94566

Dear Mr. Radlick:

         We are please to confirm the engagement by Lipid Sciences, Inc., a
Delaware company ("Company"), of MDB Capital Group LLC, a California limited
liability company ("MDB"), as its financial advisor.

         You have advised us that the Company is seeking a potential business
combination ("Transaction") with a public company ("Prospect"). As used herein,
the term "Transaction" shall mean any investment or purchase of any interest in
the Prospect by the Company, any merger or business combination involving the
Company and the Prospect or other transaction pursuant to which any assets,
securities or other interests of or relating to the Prospect are acquired by, or
are combined with, the Company.

         Scope of Engagement in Respect of Transactions

         In connection with our engagement as financial advisor in respect of
Transactions, MDB will assist the Company in locating suitable Prospects, will
assist the Company in the consummation of a Transaction, and will facilitate due
diligence review of the Prospect. In connection with due diligence assistance,
MDB may prepare reports and may make presentations to the board of directors of
the Company. At this time, the Company is in active negotiations with NZ
Corporation, an Arizona corporation ("NZ"), which was located and proposed to
the Company by MDB.

         Compensation and Expenses in Connection with Transaction

         In consideration of the services described in this letter in respect of
any Transaction, the Company shall pay to MDB an advisory fee determined in
accordance with Schedule A hereto.
<PAGE>   2
If a Transaction is not consummated for any reason, no amount in respect of fees
will be payable to MDB hereunder.

         In the event that during the term of this engagement, the Company
determines to pursue other strategic or financing transactions outside the
ordinary course of its business, MDB will be compensated for services to be
rendered in such circumstances as shall be mutually agreed upon by the parties
hereto.

         The Company will reimburse MDB for all out-of-pocket expenses incurred
in connection with its engagement hereunder, including travel expenses, and the
fees and disbursements of our counsel and of other advisors and/or consultants
retained by us with your consent as well as any additional usual and customary
expenses incurred in connection with due diligence activities we perform in
connection with a Transaction or potential Transaction. The Company will
reimburse MDB for any out-of-pocket expenses (including, but not limited to,
reasonable counsel fees) which MDB may incur in connection with the enforcement
of its rights hereunder.

         March Private Placement

         This letter will also serve to ratify the engagement by the Company of
MDB as its private placement agent in connection with a private placement of
shares of common stock in March 2001 in which the Company received proceeds of
$6,125,000 from three investors. In respect of the private placement, the
Company will pay to MDB as its fees and as reimbursement of its expenses, the
sum of $428,750.00, payable in shares of common stock of the Company at a
valuation of $7.00 per share, or 61,250 shares of common stock. The Company will
instruct its transfer agent to issue a certificate in the amount of 61,250
shares of common stock in the name of MDB Capital Group LLC or its designees,
which shares will bear a standard Securities Act of 1933 restrictive legend. By
way of a separate agreement, MDB and any designees who receive such shares will
agree not to transfer these shares for a period one year after any initial
public offering, reverse merger or similar transaction of any kind that results
in the common stock of the Company or its equivalent being publicly traded.

         Responsibility for Information Used by MDB

         The Company acknowledges and agrees that, in rendering its services
hereunder in respect of the Transaction and the private placement, MDB has been
and will be using and relying on information furnished by the Company and/or the
Prospect, as well as information available from public sources and other sources
deemed reliable by MDB, without independent verification thereof by MDB. In
addition, the Company shall provide to MDB such business and financial
information regarding the Company or, if in the Company's possession, the
Prospect, as MDB believes is necessary or appropriate in connection with any
proposed Transaction. MDB does not assume responsibility for the accuracy or
completeness of any such information or any other information regarding the
Company, the Prospect, or any proposed Transaction. The
<PAGE>   3
Company, however, shall remain solely responsible for the accuracy and
completeness of any and all such information.

         Confidentiality; Public Announcements.

         To the extent consistent with legal requirements, all information given
to MDB by the Company, unless publicly available or otherwise available to MDB
without restriction or breach of any confidentiality agreement, will be held by
MDB in confidence and will not be disclosed to anyone other than MDB's attorneys
and accountants without the Company's prior approval or used for any purpose
other than those referred to in this agreement. MDB shall take reasonable steps
to ensure that its employees, lawyers, accountants and other agents abide by the
confidentiality provisions described above.

         Unless otherwise required by law, prior to any press release or other
public disclosure relating to our services hereunder, the Company and MDB shall
confer and reach an agreement upon the contents of any such disclosure.

         Term

         The term of this agreement for activities in respect of a Transaction
will be for one year, provided that it may be terminated by either party upon
not less than sixty days written notice by one party to the other. There is no
term in respect of the private placement which services of MDB have been
completed. Notwithstanding any termination of this agreement, MDB will be due
the compensation and reimbursement of expenses provided in this agreement as to
the private placement, and as to a Transaction if the Company consummates a
Transaction at any time after termination with a Prospect that was identified by
MDB to the Company prior to termination.

         Other Provisions

         The Company recognizes that the principals and employees of MDB have an
interest in the Company through investments made directly and through investment
vehicles. In addition, a director of the Company, Mr. Christopher Marlett, is a
Member of MDB. The potential conflicts have been discussed and brought to the
attention of the board of directors and management of the Company in connection
with the engagement of MDB by the Company. Notwithstanding the
interrelationships between MDB and the Company, it is agreed that MDB is
providing services which are valuable to the Company and are separate from any
other obligations that the Members and employees of MDB may have to the Company.

         The validity and interpretation of this agreement shall be governed by
the laws of the State of California applicable to agreements made and to be
fully performed therein. The parties hereto irrevocably (a) submit to the
jurisdiction of any court of the State of California or a United States District
Court located in the State of California for the purpose of any suit, action or
other
<PAGE>   4
proceeding arising out of this agreement, (b) agree that all claims in respect
of any such suit, action or proceeding may be heard and determined in any such
court and (c) agree that service of process may be made upon any of them by
service of process upon any authorized agent in the State of California, by
registered or certified mail or by any other means then contemplated by the laws
of the State of California or the United States.

         The benefits of this agreement shall inure to the respective successors
and assigns of the parties thereto, and the obligations and liabilities assumed
in this agreement by the parties hereto shall be binding upon their respective
successors and assigns.

                                           Sincerely,

                                           MDB CAPITAL GROUP LLC

                                           By: /S/ Dyana Marlett
                                               Name: Dyana Marlett

Agreed and Accepted this
19th day of July, 2001 by

LIPID SCIENCES, INC.

By: /S/ Phillip C. Radlick
   Name:  Phillip C. Radlick
   Title: President
<PAGE>   5
                                   Schedule A
                                       To
                          Investment Banking Agreement
                                     Between
       MDB Capital Group LLC ("MDB") and Lipid Sciences, Inc. ("Company")

         If the Company consummates a Transaction, it will pay to MDB a fee
under the Investment Banking Agreement that is equal to five percent of each of
the following categories:

         (1)      "Net Incremental Cash." The Net Incremental Cash amount will
be paid in cash on the closing date of the Transaction on the basis of the cash
and cash equivalents as of the end of the month immediately preceding the
closing date of the Transaction and adjusted to the closing date of the
Transaction. The adjustment shall be made and paid to MDB within 45 days of the
closing date of the Transaction. If there is any deduction from the amount
previously paid to MDB, the amount will be deducted from any future payments due
MDB or reimbursed on the 24 month anniversary of the closing date of the
Transaction.

         (2)      "Residual Asset Cash." The Residual Asset Cash will be paid in
cash as soon as practicable after any transaction in which the Company realizes
Residual Asset Cash, but shall be paid within 30 days of the closing of any
transaction which results in Residual Asset Cash.

         (3)      "Residual Expected Cash." The Residual Expected Cash will be
paid in cash within 90 days after the 24 month anniversary of the closing of the
Transaction.

         (4)      "Residual Net Operating Cash." The Residual Net Operating Cash
will be paid in cash on or before the date that is either 45 days after a fiscal
quarter of the Company or 90 days after a fiscal year of the Company, which is
the first fiscal quarter or the year end after the 12 month and 24 month
anniversary of the closing of the Transaction.

Definitions

         Net Incremental Cash will be the cash and cash equivalents of the
Company (on a post-Transaction basis) immediately after the Transaction less
the cash and cash equivalents of the Company (on a pre-Transaction basis)
immediately before the Transaction, less all transaction costs and encumbrances
on the cash and cash equivalents.

         Residual Asset Cash will be the gross sales price of any asset which is
sold or otherwise transferred for value during the 24 month period after the
closing date of the Transaction, which asset was owned by a Prospect immediately
prior to the closing of the Transaction, less all direct costs of the sale of
the asset (including, but not limited to, direct marketing expenses such as
advertising, fees and commissions related to the sale, taxes, and appraisal
fees). Where the gross sales price is not paid in full at closing, in cash, the
gross sales price will be the stated sales price
<PAGE>   6
in the contract of sale.

         Residual Expected Cash is the value of all assets (other than cash and
cash equivalents, assets received in the sale of assets on which MDB was paid a
fee, and ordinary operating assets, such as prepaid expenses) owned by the
Company on the 24 month anniversary of the closing date of the Transaction,
which were assets of a Prospect immediately prior to the closing date of the
Transaction. The value of those assets will be determined by a qualified
independent appraiser mutually agreed upon by the Company and MDB using any
reasonable method of appraisal which will estimate the gross proceeds from an
outright sale for cash due in full at the closing that might be obtained by the
Company for the assets within six months after the 24 month anniversary of the
Transaction, less reasonable and customary estimated expenses and commissions
that generally would be paid by the Company to dispose of the assets, the
appraisal fees and expenses to determine such value, and all estimated federal,
state and local tax liabilities expected to be incurred as a result of the sale
of such assets. In addition, any asset encumbrance such as a loan will
accordingly reduce the estimated cash value of the respective asset..

         Residual Net Operating Cash is the cash income derived by the Company
during the 24 months after the closing date of the Transaction from assets of a
Prospect immediately prior to the closing date of the Transaction, less all
expenses incurred to derive the income. Net cash income will include income
derived from any lending activities, ownership or leasing of real estate,
realized value on any receivables, and investments in joint ventures. Expenses
will include all liabilities incurred to wind down the operations of the
Prospect during the 24 months following the close of the Transaction, including
but not limited to, costs of terminating employees and leases and other related
obligations of the Prospect.<PAGE>   1
                                                                  EXHIBIT 10.15

                              LIPID SCIENCES, INC.
                       NONQUALIFIED STOCK OPTION AGREEMENT

         THIS AGREEMENT made and entered into as of the 25th day of March, 2000
(the "Grant Date"), by Lipid Sciences, Inc., a Delaware corporation (the
"Company"), and Gary S. Roubin ("Participant").

                                    RECITALS

         WHEREAS, the Company believes it to be in the best interests of the
Company and its stockholders for such individuals to obtain or increase their
stock ownership interest in the Company in order that they will have a greater
incentive to work for and manage the Company's affairs.

         WHEREAS, the Participant is a non-employee member of the Board of
Directors of the Company (the "Board") or a consultant or advisor to the Company
and has been selected by the Board to receive an option.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the promises and of the covenants
and agreements herein set forth, the parties hereby mutually covenant and agree
as follows:

         1.       Option.

                  (a)      Grant. Subject to the terms and conditions of this
Agreement, the Company hereby grants to Participant a Non-Qualified Stock Option
(the "Option") to purchase all or any part of the Company's shares of common
stock (the "Shares") set forth on the signature page hereof, at 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 anniversary of the date of
grant of the Option.

                  (c)      Vesting. The Option shall vest as set forth in the
following table:

<TABLE>
<CAPTION>
       Number of Optioned Shares Vested                Vesting Date
       --------------------------------                ------------
<S>                                         <C>
                    33,334                              Immediately
                    33,333                  One Year Anniversary of grant date
                    33,333                   Second Anniversary of grant date
</TABLE>

         2.       Exercise. The Option may not be exercised prior to the date it
is vested or after the expiration date. 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
<PAGE>   2
price shall be paid in cash, by the surrender of a whole number of Shares (free
of all adverse claims and duly endorsed in blank by Participant or accompanied
by stock powers duly endorsed in blank) having a fair market value as determined
by the Board ("Fair Market Value") on the date of exercise equal to the exercise
price, or by the surrender 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. No portion of
the Option may be exercised after it has expired pursuant to Section 1 hereof.

         3.       Termination of Service.

                  (a)      Except as otherwise provided by the Board, if the
Participant ceases to provide services to the Company for any reason other than
death, disability or cause (as defined below), then the Participant may exercise
the Option, to the extent vested and exercisable as of the date of such
cessation of services, for a period of three (3) months after such date, but in
no event beyond the Expiration Date of the Option.

                  (b)      If the Participant ceases to provide services to the
Company by reason of death or disability as defined in Section 22(e)(3) of the
Code, then the Participant (or the Participant's beneficiary or estate in the
event of the Participant's death) may exercise the Option, to the extent vested
and exercisable as of the date of the Participant's death or disability, for a
period of twelve (12) months following the date of death or disability, but in
no event beyond the Expiration Date.

                  (c)      If the Participant ceases to provide services to the
Company for cause, the Option (whether or not vested) shall immediately
terminate upon such cessation of services. For this purpose, "cause" is defined
to mean a termination of services as a result of: (i) the failure of the
Participant to perform or observe any of the terms or provisions of any written
agreement between the Participant and the Company, or, if no written agreement
exists, the gross dereliction of the Participant's duties with respect to the
Company; (ii) the failure of the Participant to comply fully with the lawful
directives of the Board of the Company, or the officers or supervisory employees
to whom the Participant is reporting; (iii) dishonesty; (iv) misconduct; (v)
conviction of a crime involving moral turpitude; (vi) substance abuse; (vii)
misappropriation of funds; (viii) disloyalty or disparagement of the Company or
its management or employees; or (ix) other proper cause determined in good faith
by the Board.

         4.       Change of Control. In the event of a Change of Control, any
unvested portion of the Option shall vest in full. Change of Control means: (i)
the adoption of a plan of reorganization, merger, share exchange or
consolidation of the Company with one or more other corporations or other
entities as a result of which the holders of the Shares as a group would receive
less than fifty percent (50%) of the voting power of the capital stock or other
interests of the surviving or resulting corporation or entity (unless such plan
is subsequently abandoned); (ii) the adoption by the Company's shareholders of a
plan of liquidation or the approval of the dissolution of the Company (unless
such liquidation or dissolution is subsequently abandoned); (iii) the approval
by the Company's shareholders of an agreement providing for the sale of all or
substantially the assets of the Company unless such sale is subsequently
abandoned); or (iv) the

                                      -2-
<PAGE>   3
acquisition of more than thirty percent (30%) of the outstanding Shares by any
person within the meaning of Rule 13(d)(3) under the Securities Exchange Act of
1934 if such acquisition is not preceded by a prior expression of approval by
the Board; or (v) one-third or more of the Company's Board are not Continuing
Directors (a "Continuing Director" means any member of the Board who was a
member on May 19, 1999, and any Director who was recommended for election, or is
elected to fill a vacancy, as a director by a majority of the Continuing
Directors then on such Board).

         5.       Withholding. The Company may deduct and withhold from any cash
payable to 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 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 equal to such withholding obligation 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 Participant or accompanied by
stock powers duly endorsed in blank.

         6.       Non-transferability. Participant shall have no rights to sell,
assign, transfer, pledge, assign or otherwise alienate the Option under this
Agreement, 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
ERISA, 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).

         7.       Beneficiary. The person whose name appears on the signature
page hereof after the caption "Beneficiary" or any successor designated by
Participant in accordance herewith (the person who is 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 Participant. 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. 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 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 Participant's death, or if no designated Beneficiary survives
Participant or if such designation conflicts with law, Participant's estate
shall be entitled to exercise the Option, to the extent it is exercisable after
the death of Optionee. 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 therefor.

         8.       Securities Law Restrictions. Participant acknowledges that he
is acquiring the Option and the Shares purchasable pursuant to the Option for
investment purposes only and not

                                      -3-
<PAGE>   4
with a view to resale or other distribution thereof to the public in violation
of the Securities Act of 1933, as amended (the "Act"). Participant agrees and
acknowledges with respect to any Shares that have not been registered under the
Act, that (i) Participant will not sell or otherwise dispose of such Shares
except pursuant to an effective registration statement under the Act and any
applicable state securities laws, or in a transaction which in the opinion of
counsel for the Company, is exempt from such registration, and (ii) a legend
will be placed on the certificates for the Shares to such effect. As a further
condition to the issuance of the Shares, the Participant agrees for himself, and
his heirs, legatees and legal representatives, prior to such issuance to execute
and deliver to the Company such investment representations and warranties, and
to take such other actions, as counsel for the Company determines may be
necessary or appropriate for compliance with the Act and any applicable
securities laws.

         Participant has had the opportunity to ask questions of, and to receive
answers from, appropriate executive officers of the Company with respect to the
terms and conditions of this option and with respect to the business, affairs,
financial condition and results of operations of the Company. Participant has
had access to such financial and other information as is necessary in order for
Participant to make a fully informed decision as to investment in the Company,
and has had the opportunity to obtain any additional information necessary to
verify any of information to which Participant has had access. Participant
further represents and warrants that the Participant is an accredited investor
as that term is defined in Rule 501 of Regulation D under the Securities Act of
1933.

         Unless otherwise determined by the Board, the Participant agrees that
any certificate representing shares of Stock acquired upon exercise of the
Option shall bear the following legend:

                  The shares of Stock represented by this certificate are
                  restricted securities as that term is defined under Rule 144
                  promulgated under the Securities Act of 1933, as amended (the
                  "Act"). These shares may not be sold, transferred or disposed
                  of unless they are registered under the Act, or sold in a
                  transaction that is exempt from registration under the Act and
                  any applicable state securities laws.

         9.       Two-Year Market Stand-Off Agreement.

                  (a)      Each Participant may not, without the prior written
consent of the managing underwriter, during the period commencing on the date
that LSI's common stock begins trading on Nasdaq or any other securities
exchange or quotation system and ending on the date specified by LSI and the
managing underwriter (the period may not exceed two years) (i) lend, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of common stock or any securities convertible into or exercisable or
exchangeable for common stock (whether such shares or any such securities are
then owned by the Participant or are thereafter acquired), or (ii) enter into
any swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of

                                      -4-
<PAGE>   5
ownership of the common stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of common stock or such other
securities, in cash or otherwise. The underwriters in connection with LSI's
initial public offering are intended third party beneficiaries of this section
and will have the right, power and authority to enforce the provisions hereof as
though they were a party hereto.

                  (b)      In order to enforce the covenant in this section 9,
LSI may impose stop-transfer instructions with respect to the registrable
securities of each Participant (and the shares or securities of every other
person subject to the foregoing restriction) until the end of the relevant
period.

         10.      Limited Interest.

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

                  (b)      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 the Option shall not confer on
Participant any right to continue as an employee, nor interfere in any way with
the right of the Company to terminate the Participant 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.

         11.      Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.

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

         13.      Counterparts. This Non-Qualified Stock Option Agreement may be
executed in one or more counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the same instrument.

                                      -5-
<PAGE>   6
         IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officers and its corporate seal hereunto
affixed, and the Participant has hereunto affixed his hand the day and year
first above written.

                                        LIPID SCIENCES, INC.

                                        By:
                                           ------------------------------------
                                            Christopher A. Marlett, Chairman

                                                        ("Company")

                                        By:
                                            -----------------------------------
                                            Gary Roubin

                                                       ("Participant")

No. of Shares: 100,000                      Grant Date: May 25, 2000

Exercise Price Per Share: $3.50             Initial Exercise Date: May 25, 2001

                                            Option Expiration Date: May 25, 2010

Date of Agreement: March 25, 2000           Date of First Service: May 25, 2001

Beneficiary:                                Address of Beneficiary:
            ----------------------
                                            350 E. 79th Street, 23A
Beneficiary Tax Identification No.:         New York, NY 10021

                                      -6-

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