Document:

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                                                                   EXHIBIT 10.24

                                    AGREEMENT

            THIS AGREEMENT, dated as of October 15, 2002 (the "Agreement"), by
and between Lipid Sciences, Inc., a Delaware corporation (the "Company"), and
Phillip C. Radlick, Ph.D. ("Dr. Radlick").

            WHEREAS, the Company and Dr. Radlick have agreed to Dr. Radlick's
resignation effective as of the Resignation Date (as hereinafter defined); and

            WHEREAS, the Company believes that it is in the best interest of the
shareholders to have Dr. Radlick perform services for the Company as a
consultant following his resignation, and Dr. Radlick has agreed to serve in
such capacity; and

            WHEREAS, the parties intend that this Agreement shall set forth the
terms of their agreement with respect to the foregoing and that this Agreement
shall supercede all prior agreements between the Company and Dr. Radlick,
excluding that certain agreement dated as of June 1, 2000 entitled the Employee
Confidential Information and Inventions Agreement (the "Confidentiality
Agreement") and that certain agreement dated as of November 29, 2001 entitled
Indemnification Agreement (the "Indemnification Agreement").

            NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth in this Agreement, the parties hereto hereby agree as
follows:

            1. Resignation. (a) Effective as of the date of this Agreement (the
"Resignation Date"), Dr. Radlick hereby resigns from his position as President
and Chief Executive Officer of the Company, as a member of the Board of
Directors of the Company (the "Board") and from each and every other position as
an employee, officer or director of the Company, its subsidiaries or affiliated
companies.

            (b) On the Resignation Date, or if the Resignation Date is not a
business day, on the business day immediately following the Resignation Date,
the Company shall pay to Dr. Radlick an amount equal to $22,295.25, less
applicable deductions and withholdings, representing 185.5 hours of vacation
that Dr. Radlick has accrued but not used as of the Resignation Date.

            2. Advising Arrangement. Commencing on the Resignation Date and
ending on February 28, 2003, or such earlier date as contemplated in Section 5
below (the "Advising Period"), Dr. Radlick shall serve as an advisor, shall make
himself available to assist and cooperate with the Company, its subsidiaries and
affiliates, in connection with any matters relating to the business or affairs
of the Company, its subsidiaries and affiliates, and any pending or future
governmental or regulatory investigation, civil or administrative proceeding,
litigation or arbitration related to the business of the Company, its
subsidiaries and affiliates or to Dr. Radlick's services as an officer, director
or employee of the Company, its subsidiaries and affiliates. Dr. Radlick shall
in good faith provide such assistance and cooperation at such time and place and
in such manner as may be requested in good faith from time to time by the Board
or a designee thereof; provided, however, that the Company shall use its best
efforts to accommodate Dr. Radlick's professional obligations when requesting
the assistance and

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cooperation contemplated by this Section 2. During the Advising Period, Dr.
Radlick shall not engage or take part in any activity that is in conflict with
any obligations under this Agreement and the Confidentiality Agreement.
Notwithstanding anything to the contrary in this Section 2, this Agreement shall
not preclude Dr. Radlick from performing services for any other entity that is
not in conflict with the Confidentiality Agreement.

            3. Independent Contractor. Dr. Radlick acknowledges that during the
Advising Period he will be acting as an independent contractor, that he is
solely responsible for his actions or inactions, and that nothing in this
Agreement shall be construed to create an employment relationship between the
Company and Dr. Radlick. During the Advising Period, Dr. Radlick shall not have
the authority to enter into contracts or agreements on behalf of the Company or
to otherwise create obligations of the Company to third parties. Dr. Radlick
shall be responsible for and shall maintain adequate records of expenses he
shall incur in the course of performing services during the Advising Period and
shall be solely responsible for and shall file on a timely basis tax returns and
payments and payments required to be filed with or made to any federal or state
or local tax authority with respect to his performance of services during the
Advising Period. No federal, state or local income tax of any kind shall be
withheld or paid by the Company with respect to any amount paid to Dr. Radlick
during the Advising Period. Dr. Radlick agrees that he shall be responsible for
payment of all applicable state and federal income and employment taxes,
including workers' compensation, disability benefits and unemployment insurance.
The Company shall issue Dr. Radlick forms 1099 with respect to payments of the
Advising Fees.

            4. Payments and Benefits. In consideration of the foregoing, and Dr.
Radlick's execution and delivery of a Release Agreement in the form set forth as
Exhibit A hereto (the "Release") on the Resignation Date and Dr. Radlick's
execution and delivery of a general release on the last day of the Advising
Period (the "Second Release"), the Company shall provide Dr. Radlick with the
following payments and benefits:

            (a) Severance Payment. Upon the expiration of the Revocation Period
(as defined in the Release), the Company shall pay Dr. Radlick by check a lump
sum severance payment equal to $125,000, less applicable deductions and
withholdings.

            (b) Advising Fee. Commencing on the first day after the expiration
of the Revocation Period (as defined in the Release) continuing through the last
day of the Advising Period, the Company shall pay Dr. Radlick an amount equal to
$125,000, in equal installments, which shall be payable by check twice monthly
on the fifteenth day and the last day of each month during the Advising Period;
provided, however, that payment of the last installment of Advising Fees shall
be subject to Dr. Radlick's execution and delivery of the Second Release.

            (c) COBRA Costs. In the event Dr. Radlick elects to receive COBRA
continuation coverage for medical and dental benefits (the "COBRA Coverage")
following the Resignation Date, the Company shall pay the cost of the COBRA
Coverage during the Advising Period for Dr. Radlick and the number of dependants
with respect to which Dr. Radlick was receiving benefits under the Company's
medical and dental plans as of the Resignation Date. The parties acknowledge
that Dr. Radlick's previous health care insurer provider, Lifeguard, has
recently become insolvent and the healthcare insurer is now Aetna Insurance
Company

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            (d) Term Life Insurance. The Company shall reimburse Dr. Radlick for
the cost of the premium for term life insurance on the life of Dr. Radlick with
his wife as named beneficiary for a one-year period immediately following his
current life insurance policy that is due to expire on or about November 2002
(the "Current Policy"), in an amount that in no event shall exceed the amount
the Company paid on behalf of Dr. Radlick for a one-year period with respect to
the Current Policy.

            (e) Expense Advances. During the Advising Period, upon request by
Dr. Radlick, the Company shall advance all expenses that the Company requests
Dr. Radlick to incur in the course of providing services as a Consultant.

            5. Early Termination of Advising Period. Any other provision of this
Agreement to the contrary notwithstanding, in the event that the Board in good
faith finds that (i) Dr. Radlick breached in any material respect the terms and
conditions of this Agreement or the terms of the Release, (ii) in the course of
the performance of his duties with the Company prior to the Resignation Date,
Dr. Radlick committed gross negligence, committed an intentional act of fraud,
embezzlement, theft, or other material dishonest act or engaged in willful
misconduct with respect to the Company, or (iii) in the course of the
performance of his duties to the Company during the Advising Period, Dr. Radlick
committed gross negligence, committed an intentional act of fraud, embezzlement,
theft or a material dishonest act or engages in willful misconduct with respect
to the Company, the Advising Period shall be immediately terminated, Dr.
Radlick's status as a consultant of the Company shall be immediately terminated
and Dr. Radlick shall not be entitled to any further payments hereunder.

            6. No Other Payments or Benefits. Except as otherwise expressly
provided in this Agreement or as required by applicable law, Dr. Radlick
acknowledges and agrees that he is not entitled to any payment, compensation or
benefits (whether statutorily or otherwise) from the Company in connection with
this Agreement or with his termination of his employment with the Company and
that, except as expressly set forth herein, he is not entitled to any severance
or similar benefits under any agreement, plan, program, policy or arrangement,
whether formal or informal, written or unwritten, of the Company.

            7. Non-Disparagement. Dr. Radlick shall not, nor shall he cause
another person to, directly or indirectly, make any statement that disparages or
is derogatory of the Company or its subsidiaries and affiliates and any of their
respective directors or officers in any communications with any person. The
Company shall not, nor shall it cause another person to, directly or indirectly,
make any statement that disparages or is derogatory of Dr. Radlick in any
communications with any person.

            8. Severability. Each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. If any of the
provisions contained in this Agreement shall be determined by a court of
competent jurisdiction or an arbitration to be excessively broad as to duration,
activity, geographic application or subject matter, such

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provision shall be construed, by limiting or reducing it to the extent legally
permitted, so as to make such provision enforceable to the extent compatible
with then-applicable law.

            9. Cooperation. Dr. Radlick agrees that, during the twelve-month
period immediately following the last day of the Advising Period, he shall in
good faith make himself available to assist and cooperate with the Company, its
subsidiaries and affiliates, in connection with any pending or future
governmental or regulatory investigation, civil or administrative proceeding,
litigation or arbitration related to the business of the Company, its
subsidiaries and affiliates or to Dr. Radlick's services as an officer, director
or employee of the Company, its subsidiaries and affiliates. Dr. Radlick shall
provide such assistance and cooperation at such time and place and in such
manner as may be requested in good faith from time to time, provided that the
Company shall use its best efforts to accommodate Dr. Radlick's professional
obligations when scheduling appearances contemplated by this Section 9. The
Company shall pay Dr. Radlick a per diem fee based on the higher of his
then-current annual salary or his annual salary in effect on the Resignation
Date in the event compliance with this Section 9 requires Dr. Radlick to spend a
substantial amount of time and the Company shall advance all expenses that the
Company requests Dr. Radlick to incur in connection with complying with this
Section 9.

            10. Notices. For the purpose of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing and
shall be sent by messenger, overnight courier, certified or registered mail,
postage prepaid and return receipt requested, by first-class mail, postage
prepaid (when mailed first class to the address set forth below), or by
facsimile transmission to the parties at their respective addresses and fax
numbers set forth below or to such other address or fax number as to which
notice is given.

      If to the Company:         Lipid Sciences, Inc.
                                 7068 Koll Center Parkway, Suite 401
                                 Pleasanton, CA 94566
                                 Facsimile: (925) 249-4040
                                 Attn: Barry Michaels

                                 With a copy to:

                                 Shearman & Sterling
                                 1080 Marsh Road
                                 Menlo Park, CA 94025-1022
                                 Facsimile: (650) 838-3699
                                 Attn: James B. Bucher, Esq.

      If to Dr. Radlick:         Phillip C. Radlick, Ph.D.
                                 1022 McCauley Road
                                 Danville, CA 94526
                                 Facsimile: (925) 820-9623

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            Notices, demands and other communications shall be deemed given on
delivery thereof, or in the case of delivery by first-class mail, notice shall
be effective five days after deposit in a U.S. Postal Service office or mailbox.

            11. Restrictive Covenants. (a) No Interference. During the Advising
Period and for one year thereafter, Dr. Radlick shall not, either himself or
through any agent, whether for his own account or for the account of any other
individual, partnership, firm, corporation or other business organization,
intentionally solicit, endeavor to entice away from the Company, its
subsidiaries and affiliates, or otherwise interfere with the relationship of the
Company, its subsidiaries and affiliates with, any individual who is employed by
or otherwise engaged to perform services for the Company, its subsidiaries and
affiliates as of the last day of the Advising Period.

            (b) Secrecy. Dr. Radlick recognizes that the services that he has
performed for the Company and that are to be performed by him hereunder are
special, unique and extraordinary in that, by reason of his employment with the
Company, he may acquire confidential information and trade secrets concerning
the operation of the Company, the use or disclosure of which could cause the
Company substantial losses and damages that could not be readily calculated and
for which no remedy at law would be adequate. Accordingly, Dr. Radlick covenants
and agrees with the Company that he will not at any time, except in performance
of his obligations hereunder or with the prior written consent of the Company,
directly or indirectly disclose to any person any secret or confidential
information that he may learn or has learned by reason of his association with
the Company. The term "confidential information" means any information not
previously disclosed or otherwise available to the public or to the trade with
respect to the products, facilities and methods, trade secrets and other
intellectual property, systems, procedures, manuals, confidential reports,
product price lists, customer lists, financial information, business plans,
prospects or opportunities of the Company, its subsidiaries and affiliates.

            12. Entire Agreement. This Agreement, the Release, the Second
Release, the Indemnification Agreement and the Confidentiality Agreement
represent the entire agreement of the parties concerning the subject matter of
this Agreement and shall supersede any and all previous contracts, arrangements
or understandings with respect to such subject matter between the Company and
Dr. Radlick.

            13. Amendment. This Agreement may be amended at any time by mutual
written agreement of the parties hereto.

            14. Governing Law. The provisions of this Agreement shall be
construed in accordance with, and governed by, the laws of the State of
California, without regard to principles of conflict of laws.

            15. 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 will constitute one and the same instrument.

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            16. Acknowledgement. Dr. Radlick has executed this Agreement and the
Release having had the benefit of independent legal advice.

            17. Attorneys' Fees. In the event that any action is instituted by
any party hereto under this Agreement to enforce or interpret any of the terms
hereof, the prevailing party shall be entitled to be paid all reasonable costs
and expenses, including reasonable attorneys' fees, incurred by the prevailing
party with respect to such action.

            18. Indemnification. The parties hereto acknowledge that Dr. Radlick
will be deemed an agent of the Company for purposes of the Indemnification
Agreement to the extent Dr. Radlick is engaged in activities at the request of
the Company during the Advising Period and during the period he is providing
services to the Company pursuant to Section 9 hereof .

            IN WITNESS WHEREOF, the Company and Dr. Radlick, intending to be
legally bound have executed this Agreement on the day and year first above
written.

                                        LIPID SCIENCES, INC.

                                        By: /s/ Barry Michaels
                                           -------------------------------------
                                           Name:  Barry Michaels
                                           Title: Chief Financial Officer

                                        PHILLIP C. RADLICK, Ph.D.

                                            /s/ Phillip C. Radlick
                                        ----------------------------------------

                                       6
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                                    EXHIBIT A

                                RELEASE AGREEMENT

            THIS RELEASE AGREEMENT (the "Release") is made as of this October
15, 2002, by and between Phillip C. Radlick, Ph.D. (the "Employee"), and Lipid
Sciences, Inc. (the "Company"). In consideration of the mutual agreements set
forth below, the Employee and the Company hereby agree as follows:

            1. RELEASE OF CLAIMS AGAINST THE COMPANY: For good and valuable
consideration, including the payments and benefits set forth in the Agreement,
dated October 15, 2002 (the "Agreement"), of which this Release forms a part,
which includes special enhancements to which the Employee would not otherwise be
entitled under current company policies, plans, and guidelines, the Employee
hereby knowingly, voluntarily, and willingly releases, discharges, and covenants
not to sue the Company and its direct and indirect parents, subsidiaries,
affiliates and related companies, past and present, as well as each of its and
their directors, officers, employees, agents of the foregoing, representatives,
advisers, including, members of the Scientific Advisory Board and Viral Advisory
Board of the Company, attorneys, trustees, insurers, assigns, successors, and
agents, past and present (collectively hereinafter referred to as the "Released
Parties"), from and with respect to any and all actions, claims, or lawsuits,
whether known or unknown, suspected or unsuspected, in law or in equity, which
the Employee, and his heirs, executors, administrators, successors, assigns,
dependents, descendants, and attorneys ever had, now have, or hereafter can,
shall or may have against the Released Parties, arising out of or in any way
relating to the Employee's employment by the Company and its subsidiaries and
affiliates, his separation from that employment, including, without limitation,
the following:

      a.    any and all claims arising out of contract (whether oral or written,
            express or implied), statute (including, without limitation, the
            Unfair Dismissals Act 1977-1993, the Redundancy Payments Act
            1967-1991, the Minimum Notice and Terms of Employment Acts,
            1973-1991, the Organization of Working Time Act 1997, and the
            Employment Equality Act 1998), common law or otherwise;

      b.    any and all claims arising under the Employee Retirement Income
            Security Act of 1974, the Civil Rights Acts of 1866 and 1867, Title
            VII of the Civil Rights Act of 1964, as amended, the Civil Rights
            and Women's Equity Act of 1991, Sections 1981 through 1988 of Title
            42 of the United States Code, as amended, the Occupational Safety
            and Health Act of 1970, the Consolidated Omnibus Budget
            Reconciliation Act of 1985, the Family and Medical Leave Act of
            1993, the Worker Adjustment and Retraining Notification Act of 1988,
            the Vocational Rehabilitation Act of 1973, the Equal Pay Act of
            1963, the Americans with Disabilities Act, the Fair Labor Standards
            Act and the National Labor Relations Act, as amended, the California
            Fair Employment and Housing Act, the California Unruh Civil Rights
            Act, the California Equal Pay Law, any other federal or state
            anti-discrimination law or any local or municipal ordinance relating
            to discrimination in employment or human rights and under the common
            law; or

<PAGE>

      c.    any and all claims for salary, bonus, severance pay, pension,
            vacation pay, life insurance, health or medical insurance, or any
            other fringe benefits, other than the payments and benefits provided
            for in or in accordance with the Agreement.

The Employee acknowledges that he may hereafter discover claims or facts in
addition to or different from those which he now knows or believes to exist with
respect to the subject matter of this Release and which, if known or suspected
at the time of executing this Release, may have materially affected this Release
or his decision to enter into it. Nevertheless, the Employee hereby waives any
right, claim, or cause of action that might arise as a result of such different
or additional claims or facts and Employee hereby expressly waives any and all
rights and benefits conferred upon Employee by the provisions of Section 1542 of
the Civil Code of the State of California, which provides as follows:

      "A general release does not extend to claims which the creditor does not
      know or suspect to exist in his favor at the time of executing the
      release, which if known by him must have materially affected his
      settlement with the debtor."

            2. ADEA RELEASE: In recognition of the consideration provided in the
Agreement, the Employee hereby releases and discharges the Released Parties from
any and all claims, actions and causes of action that he may have against the
Released Parties arising under the U.S. Age Discrimination in Employment Act of
1967, as amended, and the applicable rules and regulations promulgated
thereunder ("ADEA"). The Employee acknowledges that he understands that ADEA is
a federal statute that prohibits discrimination on the basis of age in
employment, benefits and benefit plans.

            By signing this Release, the Employee hereby acknowledges and
confirms the following:

                  (a)   He is providing the release and discharge set forth in
                        this Section 2 in exchange for consideration in addition
                        to anything of value to which he is already entitled.

                  (b)   He was hereby advised by the Company in writing to
                        consult with an attorney of his choice prior to signing
                        this Release and to have such attorney explain to his
                        the terms of this Release including, without limitation,
                        the terms relating to his release of claims arising
                        under ADEA.

                  (c)   He has read this Release carefully and completely and
                        understands each of the terms thereof.

                  (d)   He is aware that he has twenty-one days in which to
                        consider the terms of this Release, which the Employee
                        has knowingly and voluntarily waived by accepting the
                        terms of the offer as described herein. For a period of
                        seven days following his acceptance hereof, the Employee
                        has the right to revoke the release contained in this
                        Section 2 (the "Revocation Period") commencing
                        immediately following the date he signs and delivers
                        this Release

                                      A-2
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                        to the Company. The Revocation Period shall expire at
                        5:00 p.m. E.S.T. on the last day of the Revocation
                        Period; provided, however, that if such seventh day is
                        not a business day, the Revocation Period shall extend
                        to 5:00 p.m. on the next succeeding business day. No
                        such revocation by shall be effective unless it is in
                        writing and signed by the Employee and received by the
                        Company prior to the expiration of the Revocation
                        Period. The Employee further understands that this right
                        to revoke the release contained in this Section 2
                        relates only to this section and does not act as a
                        revocation of any other term of the Agreement and the
                        Release.

            3. CONTINUING OBLIGATIONS: This Release shall not supersede any
continuing obligations the Employee has under the terms of the Agreement or the
Employee Information and Inventions Agreement dated as of June 1, 2000 between
the Company and Dr. Radlick. Both of the parties agree that nothing in this
Release shall in any way be construed to affect either party's rights under any
applicable indemnification agreement or insurance policy and nothing contained
herein shall be interpreted in an applicable manner so as to violate any
provision of such agreement or policy.

            4. CHOICE OF LAW: This Release and the rights and obligations of the
parties hereunder shall be governed by and construed and enforced in accordance
with the laws of the State of California, without regard to principles of
conflict of laws.

            IN WITNESS WHEREOF, the Company and the Employee, intending to be
legally bound, have executed this Release on the day and year first above
written.

                                        LIPID SCIENCES, INC.

                                        By: /s/ Barry Michaels
                                           -------------------------------------
                                           Name:  Barry Michaels
                                           Title: Chief Financial Officer

                                        PHILLIP C. RADLICK, Ph.D.

                                            /s/ Phillip C. Radlick
                                        ----------------------------------------

                                      A-3
<PAGE>

                                    EXHIBIT B

                                RELEASE AGREEMENT

            THIS RELEASE AGREEMENT (the "Release") is made as of this October
15, 2003, by and between Phillip C. Radlick, Ph.D. ("Dr. Radlick"), and Lipid
Sciences, Inc. (the "Company"). In consideration of the mutual agreements set
forth below, Dr. Radlick and the Company hereby agree as follows:

            1. RELEASE OF CLAIMS AGAINST THE COMPANY: For good and valuable
consideration, including the payments and benefits set forth in the Agreement,
dated October 15, 2002 (the "Agreement"), of which this Release forms a part,
which includes special enhancements to which Dr. Radlick would not otherwise be
entitled under current company policies, plans, and guidelines, Dr. Radlick
hereby knowingly, voluntarily, and willingly releases, discharges, and covenants
not to sue the Company and its direct and indirect parents, subsidiaries,
affiliates and related companies, past and present, as well as each of its and
their directors, officers, employees, agents of the foregoing, representatives,
advisers, including, members of the Scientific Advisory Board and Viral Advisory
Board of the Company, attorneys, trustees, insurers, assigns, successors, and
agents, past and present (collectively hereinafter referred to as the "Released
Parties"), from and with respect to any and all actions, claims, or lawsuits,
whether known or unknown, suspected or unsuspected, in law or in equity, which
Dr. Radlick, and his heirs, executors, administrators, successors, assigns,
dependents, descendants, and attorneys ever had, now have, or hereafter can,
shall or may have against the Released Parties

            2. WAIVER. Dr. Radlick acknowledges that he may hereafter discover
claims or facts in addition to or different from those which he now knows or
believes to exist with respect to the subject matter of this Release and which,
if known or suspected at the time of executing this Release, may have materially
affected this Release or his decision to enter into it. Nevertheless, Dr.
Radlick hereby waives any right, claim, or cause of action that might arise as a
result of such different or additional claims or facts and Dr. Radlick hereby
expressly waives any and all rights and benefits conferred upon Dr. Radlick by
the provisions of Section 1542 of the Civil Code of the State of California,
which provides as follows:

      "A general release does not extend to claims which the creditor does not
      know or suspect to exist in his favor at the time of executing the
      release, which if known by him must have materially affected his
      settlement with the debtor."

            3. CONTINUING OBLIGATIONS: This Release shall not supersede any
continuing obligations Dr. Radlick has under the terms of the Agreement, Dr.
Radlick Confidential Information and Inventions Agreement dated as of June 1,
2000 between the Company and Dr. Radlick or the Release Agreement dated as of
October 15, 2002 between the Company and Dr. Radlick. Both of the parties agree
that nothing in this Release shall in any way be construed to affect either
party's rights under any applicable indemnification agreement or insurance
policy and nothing contained herein shall be interpreted in an applicable manner
so as to violate any provision of such agreement or policy.

<PAGE>

            4. CHOICE OF LAW: This Release and the rights and obligations of the
parties hereunder shall be governed by and construed and enforced in accordance
with the laws of the State of California, without regard to principles of
conflict of laws.

            IN WITNESS WHEREOF, the Company and Dr. Radlick, intending to be
legally bound, have executed this Release on the day and year first above
written.

                                        LIPID SCIENCES, INC.

                                        By: /s/ Barry Michaels
                                           -------------------------------------
                                           Name:  Barry Michaels
                                           Title: Chief Financial Officer

                                        PHILLIP C. RADLICK, Ph.D.

                                            /s/ Phillip C. Radlick
                                        ----------------------------------------

                                      B-2<PAGE>

                                                                   EXHIBIT 10.25

                                  CONFIDENTIAL
                    SEPARATION AGREEMENT AND GENERAL RELEASE

            This Confidential Separation Agreement and General Release (this
"Agreement") between Lipid Sciences, Inc., a Delaware corporation (the
"Company"), and Barry D. Michaels (the "Employee") dated as of January 28, 2003
sets forth the understanding and agreement between the Company and the Employee
regarding the terms and conditions of the Employee's separation of employment
with the Company. THE EMPLOYEE IS HEREBY ADVISED TO CONSULT WITH AN ATTORNEY
BEFORE SIGNING THIS AGREEMENT. In consideration of the mutual promises and
commitments made in this Agreement, and intending to be legally bound, the
Company on the one hand, and the Employee on the other hand, agree to the terms
set forth in this Agreement.

            1. Termination of Service. Effective as of the date of this
Agreement (the "Termination Date"), pursuant to Section 4 of the Employment
Agreement dated March 4, 2002 between the Company and the Employee (the
"Employment Agreement"), the Employment Agreement is hereby terminated and the
Employee's employment and positions, including his position as Chief Financial
Officer, and other relationships of any kind and in any capacity with the
Company, its parent, subsidiaries and related corporations, and their
predecessors and successors (the "Related Organizations") are hereby terminated.
The Employee agrees and acknowledges that as of the Termination Date the
Employee's employment relationship with the Company and any of its Related
Organizations has ended, and that neither the Company nor any of its Related
Organizations has any obligation to hire, rehire or employ the Employee.

            2. Accrued Amounts. On the Termination Date the Company shall pay to
the Employee a gross amount equal to $23,093.42, representing 72 hours of
accrued but unpaid salary and 141.5 hours of accrued but unused paid time off,
both of the foregoing as of the Termination Date, less applicable payroll
withholding deductions for taxes (including federal, FICA, Medicare, state,
local and unemployment compensation).

            3. Severance Payments and Benefits.

                  (a) The Company shall continue to pay to the Employee his
salary, at the rate in effect as of the Termination Date, for a period of
thirteen (13) months commencing on the date that next follows the expiration of
the Revocation Period (as defined below) (the "Severance Period") in accordance
with the payroll practices of the Company then in effect (the "Severance
Payments"). From the gross amount of the Severance Payments, the Company will
determine and withhold payroll deductions for taxes (federal, FICA, Medicare,
state, local and unemployment compensation).

                  (b) Commencing on the date that next follows the expiration of
the Revocation Period the Employee shall be entitled to continue participation
in the Company's employee benefit plans and programs at the Company's cost, at
the level the Employee participated in the plans and programs as of the
Termination Date for a period that shall end on the earlier of the last day of
the Severance Period and the day that the Employee is entitled to comparable
employee benefits in the aggregate under plans or programs of a subsequent
employer.

<PAGE>

                  (c) The Employee shall have the right to exercise until April
2, 2011 the option that the Company granted to the Employee pursuant to the
Incentive Stock Option Agreement dated April 2, 2001 (the "Option") with respect
to 142,910 shares, which the parties hereto acknowledge is the number of shares
that will have vested and be exercisable as of thirty (30) days following the
Termination Date (termination of service date for purposes of the Option). The
parties hereto acknowledge and agree that the remaining shares subject to the
Option that are not vested as of the Termination Date shall be forfeited as of
such date.

                  (d) The first Severance Payment shall include an amount
representing paid time off that would have accrued during the thirty (30)-day
period following the Termination Date (amount equal to 13 hours of paid time
off).

                  (e) The Employee acknowledges and agrees that the Company's
obligations under Section 3 arise under this Agreement, are in consideration for
the Employee's signing of this Agreement, and constitute consideration to which
the Employee is not otherwise entitled.

            4. General Release.

                  (a) When used in this Agreement, the term "Released Parties"
means the Company, any and all of its past and present, direct or indirect
parents, subsidiaries and affiliated corporations, companies, partnerships,
joint ventures, compensation plans, benefit plans and other entities, and its
past and present directors, trustees, advisers, including, members of the
Scientific Advisory Board and Viral Advisory Board of the Company, officers,
managers, partners, supervisors, employees, attorneys, members, agents and
consultants, and their predecessors, successors and assigns, and all persons or
entities acting by, with, through, under or in concert with any of them.

                  (b) When used in this Agreement, the word "Claims" means: (i)
each and every claim, complaint, cause of action, grievance, demand, allegation,
or accusation, whether known or unknown, whether suspected or unsuspected, and
whether fixed, vested or contingent, and (ii) each and every promise, assurance,
contract, representation, obligation, guarantee, warranty, liability, right and
commitment of any kind, whether known or unknown, whether suspected or
unsuspected, and whether fixed, vested or contingent, and (iii) all forms of
relief, including, but not limited to, all costs, expenses, losses, damages,
debts, attorneys' fees, litigation costs and expenses and experts' fees, whether
known or unknown, whether suspected or unsuspected, and whether fixed, vested or
contingent.

                  (c) By signing this Agreement, the Employee expressly waives
all rights (to the extent the Employee has any rights) afforded by any statute
in any jurisdiction that limits the effect of a release with respect to unknown
Claims. The foregoing does not mean or imply that the Employee has, or would
have, any rights under any such statute in the absence of this waiver. The
Employee understands the significance of the Employee's release of unknown
Claims. Without limiting the scope of the foregoing, the Employee also agrees,
understands and recognizes that, by executing this Agreement, the Employee
hereby expressly waives any and all rights and benefits conferred upon the
Employee by the provisions of Section 1542 of the Civil Code of the State of
California, which provides as follows:

                                       2
<PAGE>

            "A general release does not extend to claims which the creditor does
            not know or suspect to exist in his favor at the time of executing
            the release, which if known by him must have materially affected his
            settlement with the debtor."

            THIS MEANS THAT (EXCEPT AS EXPRESSLY PROVIDED HEREIN) BY SIGNING
THIS AGREEMENT, THE EMPLOYEE WILL HAVE WAIVED ANY RIGHT THE EMPLOYEE MAY HAVE
HAD TO INITIATE ANY LEGAL ACTION OR MAKE ANY CLAIM AGAINST THE RELEASED PARTIES
BASED ON ANY ACTS OR OMISSIONS OF THE RELEASED PARTIES UP TO THE DATE OF SIGNING
OF THE AGREEMENT.

                  (d) In consideration of the promises of the Company set forth
in this Agreement, and intending to be legally bound, the Employee hereby
irrevocably releases and forever discharges all Released Parties of and from any
and all Claims that the Employee (on behalf of either the Employee or any other
person or persons) ever had or now has against any and all of the Released
Parties, or which the Employee (or the Employee's heirs, executors,
administrators or assigns or any of them) hereafter can, shall or may have
against any and all of the Released Parties, for or by reason of any cause,
matter, thing, omission, occurrence or event whatsoever from the date of the
Employee's birth to the date the Employee has signed this Agreement. The
Employee acknowledges and agrees that the Claims released under this Agreement
include, but are not limited to, (i) any and all Claims based on any law,
statute, or constitution or based on contract or in tort or on common law,
including, but not limited to, all Claims based on or arising under Title VII of
the Civil Rights Act of 1964, the Rehabilitation Act of 1973, the Americans With
Disability Act of 1990, the Civil Rights Act of 1866, the Civil Rights Act of
1991, the Employee Retirement Income Security Act of 1974, the Family Medical
Leave Act of 1993, the California Fair Employment and Housing Act, the
California Workers' Compensation Act, the California Unruh and Ralph Civil
Rights Laws, the California Alcohol and Drug Rehabilitation Law, as each of the
foregoing is amended from time to time, and (ii) any and all Claims under any
grievance of complaint procedure of any kind, and (iii) any and all Claims based
on or arising out of or related to the Employee's recruitment by, employment
with, the termination of the Employee's employment with, the Employee's
performance of any services in any capacity for, or any business transaction
with, each or any of the Released Parties, and (iv) any and all Claims in
connection with, or arising from, any lawsuit or proceeding brought by any
person or entity other than the Employee (including, but not limited to, Claims
brought by any administrative agency, department or commission).

            5. ADEA Release. In consideration of the promises of the Company set
forth in this Agreement, the Employee hereby releases and discharges the
Released Parties from any and all Claims that the Employee may have against the
Released Parties arising under the U.S. Age Discrimination in Employment Act of
1967, as amended, and the applicable rules and regulations promulgated
thereunder ("ADEA"). The Employee acknowledges that the Employee understands
that the ADEA is a federal statute that prohibits discrimination on the basis of
age in employment, benefits and benefit plans. The Employee also understands
that, by signing this Agreement, the Employee is waiving all Claims against any
and all of the Released Parties released by this Agreement.

                                       3
<PAGE>

            By signing this Release, the Employee hereby acknowledges and
confirms the following:

                  (a)   The Employee is providing the release and discharge set
                        forth in this Agreement in exchange for consideration in
                        addition to anything of value to which the Employee is
                        already entitled.

                  (b)   The Employee was hereby advised by the Company in
                        writing to consult with an attorney of the Employee's
                        choice prior to signing this Agreement and to have such
                        attorney explain to the Employee the terms of this
                        Agreement including, without limitation, the terms
                        relating to his release of claims arising under the
                        ADEA.

                  (c)   The Employee has read this Agreement carefully and
                        completely and understands each of the terms thereof.

                  (d)   The Employee is aware that he has twenty-one (21) days
                        in which to consider the terms of the release contained
                        in this Agreement. To the extent the Employee has
                        executed this Agreement within less than twenty-one (21)
                        days after its delivery to the Employee, the Employee
                        hereby acknowledges that the Employee's decision to
                        execute this Agreement prior to the expiration of such
                        twenty-one (21)-day period was entirely voluntary. For a
                        period of seven days following the Employee's execution
                        and delivery of this Agreement, the Employee has the
                        right to revoke the release contained in this Agreement
                        (the "Revocation Period") commencing immediately
                        following the date the Employee signs and delivers this
                        Agreement to the Company. The Revocation Period shall
                        expire at 5:00 p.m. California time on the last day of
                        the Revocation Period; provided, however, that if such
                        seventh day is not a business day, the Revocation Period
                        shall extend to 5:00 p.m. on the next succeeding
                        business day. No such revocation by the Employee shall
                        be effective unless it is in writing and signed by the
                        Employee and received by the Company prior to the
                        expiration of the Revocation Period.

                  (e)   As set forth in section 7(f)(1)(C) of the ADEA, as added
                        by the Older Workers Benefit Protection Act of 1990, the
                        Employee understands that the Employee is not waiving
                        any rights or Claims provided under ADEA that may arise
                        after this Agreement is executed by the Employee.

            6. Confidential Information. As used in this Agreement, the term
"Affiliated Companies" means the Company's clients, subcontractors and other
companies or individuals with which the Company carries on business or joint
enterprises. As used in this Agreement, the term "Confidential Information"
means any and all information disclosed, acquired or known to the Employee as a
result of employment with the Company or any of the Affiliated Companies,

                                       4
<PAGE>

including, without limitation, any information gathered or developed by the
Employee and relating to the business of the Company or any of the Affiliated
Companies. Confidential Information includes, without limitation, all documents
pertaining to the business of the Company or any of the Affiliated Companies,
including trade secrets, technical and financial information, data, designs,
systems drawings, proposals, client lists, client records, economic and
financial analysis, financial data, customer contracts, notes, memoranda, books,
correspondence, manuals, reports or research, whether developed by the Company
or any of the Affiliated Companies or developed by the Employee acting alone or
jointly with the Company or any of the Affiliated Companies, any product
development and ideas, apparatus as well as all other information, written,
oral, graphic or computerized relating to the business of the Company or any of
the Affiliated Companies, provided that such information was not publicly
disclosed by the Company or any of the Affiliated Companies or known to the
Employee before employment with the Company. The Employee represents and
warrants that the Employee shall at all times, including following the
termination of the Employee's employment with the Company, keep secret and
retain in strictest confidence all Confidential Information, and except as the
Employee may be authorized by the Company or Affiliated Companies in writing,
the Employee agrees not to publish or disclose to any person or entity, or use
in any manner, such Confidential Information. The Employee's obligations under
this Section 6 supplement, and do not limit or replace, any other obligations
that the Employee may have including, but not limited to, obligations under
statute, common law or contract.

            7. Return of Property to Company. The Employee represents and
warrants that the Employee has returned to the Company all written, descriptive
or tangible matter containing Confidential Information, including all copies
thereof, which was developed or compiled by the Employee or made available to
the Employee in the course of employment with the Company, including without
limitation, drawings, blueprints, tapes, disks, codes, descriptions or other
papers, documents or materials that contain any such Confidential Information.
Furthermore, the Employee represents and warrants that the Employee has returned
all Company property including, without limitation, all computer (hardware and
software) and business equipment, drawings, designs, specifications, tapes,
disks, codes, notes, memoranda or data made available or furnished to the
Employee by, or obtained by the Employee from, the Company or any of the
Affiliated Companies, and any copies thereof, whether or not they contain
Confidential Information.

            8. Full Satisfaction.

                  (a) The Employee acknowledges and agrees that, upon
satisfaction by the Company of its obligations under Section 3 of this Agreement
and except as forth in Section 8(b), the Employee has received all compensation
and other payments to which the Employee is or may be entitled by reason of the
Employee's employment or termination of employment with the Company and/or any
of its Related Organizations.

                  (b) Notwithstanding anything in this Agreement to the
contrary, the parties are not waiving or changing any rights, claims,
conditions, requirements, or defenses in connection with the following matters:
(i) the Employee's 401(k) account and; (ii) the reimbursement to the Employee of
reasonable and necessary business expenses incurred by the Employee on or before
the Termination Date, on behalf of the Company, and reported and

                                       5
<PAGE>

properly documented on expense reports, in accordance with and subject to the
requirements of the Company's expense reimbursement practices.

            (c) The Employee warrants and agrees that no promise, other than the
promises in this Agreement, has been made to the Employee. The Employee warrants
and agrees that by signing this Agreement the Employee is not relying upon any
statement or representation made by or on behalf of the Released Parties and
each or any of them concerning the merits or value of any Claims or concerning
any other thing or matter. The Employee warrants and agrees that the Employee is
relying solely upon the Employee's own judgment and that before signing this
Agreement the Employee has read it.

            9. No Disclosure of Agreement. The Employee agrees to keep the terms
of this Agreement confidential. The Employee shall not disclose or publicize the
terms of this Agreement and the amount paid or agreed to be paid pursuant to
this Agreement to any person or entity, except to the Employee's spouse,
attorney, accountant, financial advisor and/or to a government agency for the
purpose of payment or collection of taxes or application for unemployment
compensation benefits. The parties hereto acknowledge that this provision shall
not in any way prevent either party from making truthful statements that are
required by applicable law or government regulations or required in connection
with legal or judicial proceedings.

            10. Non-Disparagement. The Employee covenants and agrees that the
Employee shall not make any statement, written or oral, in disparagement of the
Company or any of its officers, shareholders, directors, employees, agents, or
associates (including, but not limited to, negative references to each or any of
the Company's products, services, or corporate policies) to the general public
and/or the Company's employees, potential employees, customers, suppliers,
potential suppliers, business partners, and/or potential business partners. The
Company shall not make any statement, written or oral, in disparagement of the
Employee to the general public or employers or prospective employers, or
business partners or prospective business partners, of the Employee. The parties
hereto acknowledge that this provision shall not in any way prevent either party
from making truthful statements that are required by applicable law or
government regulations or required in connection with legal or judicial
proceedings.

            11. No Admission. The 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, or
any wrongdoing or liability by each or any of the Released Parties; moreover,
any such liability or wrongdoing is denied by the Released Parties and each or
any of them. 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
Released Parties in any judicial, administrative or other proceeding now pending
or hereafter instituted by any person or entity.

            12. Enforcement; Severability. All provisions and portions of this
Agreement are severable. If any provision or portion of this Agreement or the
application of any provision or portion of this Agreement to any person, to any
circumstance, or to any Claims, are determined to be invalid, void, voidable or
unenforceable to any extent for any reason, (a) the application of such
provision or portion of this Agreement to any other person, to any other

                                       6
<PAGE>

circumstance, or to any other Claims shall be unaffected thereby, and the
remaining provisions and portions of this Agreement also shall be unaffected
thereby; (b) all other provisions and portions of this Agreement shall remain in
full force and shall continue to be enforceable to the fullest and greatest
extent permitted by law; and (c) any provision or part of the Agreement found by
any Court with jurisdiction to be invalid, void, voidable or unenforceable, may
be construed or changed by the Court to the extent reasonably necessary to make
the provision or part (as construed or changed), valid, enforceable and binding.
The Employee acknowledges that a breach of any of the covenants contained in
Sections 6, 7, 9 and 10 will result in material irreparable injury to the
Company or any Related Organization for which there is no adequate remedy at
law, that it will not be possible to measure damages for such injuries precisely
and that, in the event of such a breach, the Employee agrees to promptly forfeit
and return to the Company the entire consideration provided to the Employee
under this Agreement and the Company shall be entitled to obtain a temporary
restraining order and/or a preliminary or permanent injunction without bond or
other security, restraining the Employee from engaging in activities prohibited
by the applicable Sections or such other relief as may be required to
specifically enforce any of the covenants in the applicable Section. The
Employee agrees to and hereby submits to in personam jurisdiction before each
and every relevant court as determined by the Company for that purpose.

            13. Cooperation. The Employee agrees that, during the twelve-month
period immediately following the Termination Date, he shall in good faith make
himself available on a limited basis to assist, and cooperate with, the Company
or any Related Organization, in connection with any matters relating to the
business or affairs of the Company, its subsidiaries and affiliates, and any
future governmental or regulatory investigation, civil or administrative
proceeding, litigation or arbitration related to the business of the Company or
any Related Organization or to the Employee's services as an officer, director
or employee of the Company or any Related Organization. The Employee shall
provide such assistance and cooperation at such time and place and in such
manner as may be reasonably required by the Company from time to time. The
Company shall promptly reimburse the Employee for reasonable expenses incurred
by the Employee in connection with providing services contemplated under this
Section 13 upon submission by the Employee of receipts documenting the expenses.

            14. Governing Law. This Agreement is made and entered into by the
Company in the State of California. The Agreement shall in all respects be
governed by and interpreted under and in accordance with the laws of the State
of California. The breach of any promise in this Agreement by any party shall
not invalidate the Agreement or the release and shall not be a defense to the
enforcement of the Agreement against any party.

            15. Final Agreement. This Agreement and the Indemnification
Agreement dated November 29, 2001 between the Company and the Employee (the
"Indemnification Agreement") constitute a complete and final agreement between
the parties and supersede and replace all prior or contemporaneous agreements,
negotiations, or discussions relating to the subject matter of this Agreement,
including, without limitation, the Employment Agreement. This Agreement shall
not be modified or changed except by written instrument executed by all parties.

                                       7
<PAGE>

            16. No Attorney Fees or Expenses. The Employee acknowledges and
agrees that the Company is not obligated to pay any of the Employee's attorneys'
fees, costs or expenses relating to this Agreement and that the release set
forth in this Agreement releases all Claims for attorneys' fees, costs and
expenses including, but not limited to experts' fees and all litigation costs
and expenses. The parties hereto acknowledge that nothing in this Section 16
shall impair the Employee's rights under the Indemnification Agreement.

            17. Photocopies; Counterparts. All executed copies of this Agreement
and photocopies thereof shall have the same force and effect and shall be as
legally binding and enforceable as the original. This Agreement may be executed
in counterparts, each of which shall constitute a single instrument.

            18. Acceptance of Agreement. The Employee may accept this Agreement
by executing it and returning it to: Ms. Sandy Gardiner - Chief Accounting
Officer, Lipid Sciences, Inc., 7068 Koll Center Parkway, Suite 401, Pleasanton,
California 94566. The offer of this Agreement will be accepted by the Employee
upon actual receipt by the Company of the executed Agreement.

            19. Successors. This Agreement shall inure to the benefit of the
Company and its predecessors, successors and assigns, and to the benefit of the
Employee and the Employee's heirs, administrators and executors.

            20. This Agreement is being signed by the Employee and for the
Company with the intent to be legally bound.

Dated: January 28, 2003                       /s/ Barry Michaels
                                        ----------------------------------------
                                            Barry Michaels

Dated: January 28, 2003                 LIPID SCIENCES, INC.

                                        BY:   /s/ Sandra Gardiner
                                            ------------------------------------
                                            Sandra Gardiner
                                            Chief Accounting Officer

                                       8

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