Document:

QuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.26  

         

  

 
 

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, 

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. 

        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 

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] 

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

	Dated: December 27, 2005
	 	 	 	By: /s/ S. LEWIS MEYER, PH.D.
 S. Lewis Meyer, Ph.D.

President and Chief Executive Officer

Lipid Sciences, Inc.
	

Dated: December 28, 2005
	
 	

 	
 	

/s/ MARC BELLOTTI
 Marc Bellotti

 
 

EXHIBIT A
  
    CONSULTING AGREEMENT    
    

QuickLinks

SEPARATION AGREEMENT AND RELEASE

EXHIBIT A CONSULTING AGREEMENTQuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.20  

 
 
FIRST AMENDMENT TO

PARTICIPATION AGREEMENT

(Undivided Interest in the Conemaugh Facility)  

        THIS FIRST AMENDMENT TO PARTICIPATION AGREEMENT dated as of November 15, 2001 (this "Amendment"), among (i) RELIANT ENERGY MID-ATLANTIC
POWER HOLDINGS, LLC (formerly known as Sithe Pennsylvania Holdings, LLC), a Delaware limited liability company, as Facility Lessee, (ii) CONEMAUGH LESSOR GENCO LLC, a Delaware limited liability
company, as Owner Lessor, (iii) WILMINGTON TRUST COMPANY, a banking corporation organized and existing under the laws of the State of Delaware, not in its individual capacity, except as
expressly provided herein and in the Participation Agreement referred to below, but solely as manager under the LLC Agreement, (iv) WILMINGTON TRUST COMPANY, a banking corporation organized and
existing under the laws of the State of Delaware in its individual capacity, (v) PSEGR CONEMAUGH GENERATION, LLC, a Delaware limited liability company, as Owner Participant, (vi) BANKERS
TRUST COMPANY, a banking corporation organized and existing under the laws of the State of New York, not in its individual capacity, except as expressly provided herein and in the Participation
Agreement referred to below, but solely as trustee under the Lease Indenture, and (vii) BANKERS TRUST COMPANY, a banking corporation organized and existing under the laws of the State of New
York, not in its individual capacity, except as expressly provided herein and in the Participation Agreement referred to below, but solely as trustee under the Pass Through Trust Agreement. 

        WHEREAS,
the Facility Lessee, the Owner Lessor, the Lessor Manager, Wilmington Trust Company, the Owner Participant, the Lease Indenture Trustee and the Pass Through Trustee have entered
into that certain Participation Agreement dated as of August 24, 2000 (together with any and all amendments and modifications thereof, the "Participation
Agreement"); capitalized terms used herein and not otherwise defined have the same meaning as in the Participation Agreement; and 

        WHEREAS,
the parties to the Participation Agreement desire to amend the terms thereof as provided for herein; 

        NOW,
THEREFORE, in consideration of the premises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows: 

        Section 1.    Amendments to the Participation Agreement.    

        (a)   Section 7.6
of the Participation Agreement is hereby amended by deleting it in its entirety and inserting in lieu thereof 

        Section 7.6.    Limitation on Indebtedness and Actions.    Prior to the Debt Covenant Termination Date, each of
the Lessor Manager and the Owner Lessor covenants that it will not (a) incur any indebtedness unless (i) such indebtedness is subordinated to the Lessor Notes according to the terms as
set forth in Exhibit M attached hereto (the "Owner Lessor Subordinated Debt") and (ii) at the time of the incurrence thereof and after
giving effect thereto and the application of any proceeds (x) no Significant Lease Default or Lease Indenture Event of Default has occurred and is continuing and (y) the ratio of the
principal of the Indebtedness of the Owner Lessor (other than the Notes) to the Owner Lessor Net Worth is less than or equal to 4.88 to 1, nor (b) enter into any business or activity except as
required or expressly permitted or contemplated by any Operative Document (other than the LLC Agreement or the Tax Indemnity Agreement)." 

        (b)   Appendix A to the Participation Agreement is hereby amended by inserting the following definitions in their proper
alphabetical place: 

        "Owner Lessor Net Worth" means the aggregate purchase price set forth on Schedule 2 of the Participation Agreement minus the
principal amount of the Notes outstanding from time to time. 

        "Owner Lessor Subordinated Debt" shall have the meaning specified in Section 7.6 of the Participation Agreement. 

        (c)   The
Participation Agreement is hereby further amended by attaching thereto a new Exhibit M which shall be in the
form of Exhibit M attached hereto. 

        Section 2.    Conditions to Effectiveness.    This Amendment shall become effective as of the date (the
"Effective Date") 

        (a)   an
officer of each of the parties hereto shall have executed and delivered a counterpart hereof; and 

        (b)   that
the Facility Lessee has executed and delivered to each of the parties hereto a certificate stating that each of the following shall have occurred: 

        (i)    receipt
by the Lease Indenture Trustee of evidence that all necessary consents to this Amendment have been obtained; 

        (ii)   receipt
by the Lease Indenture Trustee of an opinion of counsel pursuant to Section 8.3 of the Lease Indenture that the Lease Indenture Trustee's execution of
this Amendment is permitted; and 

        (iii)  each
of the Rating Agencies shall have confirmed that the issuance of the Owner Lessor Subordinated Debt described above will not result in the ratings of the
Certificates to be lower than its original ratings of the Certificates. 

        Section 3.    Ratification of Related Documents.    The Participation Agreement, as amended hereby, and each of
the other Operative Documents is hereby ratified and confirmed to be in full force and effect. 

        Section 4.    Limitations.    The modifications set forth herein are limited precisely as written, and shall
not be deemed to (a) be a consent to, or waiver or modification of, any other term or condition of the Participation Agreement or any of the other Operative Documents, or (b) prejudice
any right or rights which any Transaction Party may now have or may have in the future under or in connection with the Participation Agreement or any of the other Operative Documents. In the event of
a conflict between this Amendment and any of the foregoing documents, the terms of this Amendment shall be controlling. 

        Section 5.    Choice of Law.    This Amendment and the rights and obligations of the parties hereunder shall be
construed in accordance with and be governed by the laws of the State of New York without giving effect to the conflicts of laws provisions thereof except New York General Obligations Law
Section 5-1401. 

        Section 6.    Descriptive Headings.    The descriptive headings of the several Sections of this Amendment are
inserted for convenience only and shall not be deemed to affect the meaning or construction of any of the provisions hereof. 

        Section 7.    Entire Agreement.    This Amendment, the Operative Documents and the documents referred to herein
represent the entire understanding of the parties hereto regarding the subject matter hereof and
supersede all prior and contemporaneous oral and written agreements of the parties hereto with respect to the subject matter hereof. There are no unwritten oral agreements between the parties. 

        Section 8.    Counterparts.    This Amendment may be executed in any number of counterparts and by parties
hereto on separate counterparts, each counterpart, when so executed and delivered, shall constitute an original instrument, and all such counterparts shall constitute but one and the same instrument. 

        IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized. 

	 	 	RELIANT ENERGY MID-ATLANTIC POWER HOLDINGS, LLC

as Facility Lessee
	

 	
 	

By:	

/s/  JAMES E. HAMMELMAN      
 James E. Hammelman

Vice President—Finance
	

 	
 	

CONEMAUGH LESSOR GENCO LLC

as Owner Lessor
	

 	
 	

By:	

WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Lessor Manager under the LLC Agreement
	

 	
 	

 	

By:	

/s/  MONICA M. HENRY      

	 	 	 	Name:	Monica M. Henry
	 	 	 	Title:	Senior Financial Services Officer
	

 	
 	

PSEGR CONEMAUGH GENERATION, LLC
	

 	
 	

By:	

/s/  CHRISTOPHER P. KELLEHER      

	 	 	Name:	Christopher P. Kelleher
	 	 	Title:	Vice President
	

 	
 	

BANKERS TRUST COMPANY, not in its individual capacity, except to the extent provided herein, but as Lease Indenture Trustee under the Lease Indenture
	

 	
 	

By:	

/s/  RICHARD L. BUCKWALTER      

	 	 	Name:	Richard L. Buckwalter
	 	 	Title:	Vice President
	

 	
 	

BANKERS TRUST COMPANY, not in its individual capacity, except to the extent provided herein, but as Pass Through Trustee under the Pass Through Trust Agreement
	

 	
 	

By:	

/s/  RICHARD L. BUCKWALTER      

	 	 	Name:	Richard L. Buckwalter
	 	 	Title:	Vice President
	

 	
 	

WILMINGTON TRUST COMPANY, in its individual capacity
	

 	
 	

By:	

/s/  MONICA M. HENRY      

	 	 	Name:	Monica M. Henry
	 	 	Title:	Senior Financial Services Officer

QuickLinks

Exhibit 10.20 FIRST AMENDMENT TO PARTICIPATION AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}]]