Exhibit 10.1
Employment Agreement
     This employment agreement (“Agreement”) is effective as of March 19, 2007
(“Effective Date”), by and between Kreido Biofuels, Inc., a Nevada corporation
located at 1140 Avenida Acaso, Camarillo, California 93012 and Kreido’s
wholly-owned subsidiary, Kreido Laboratories, Inc. (collectively “Kreido” or the
“Company”) and John M. Philpott, C.P.A., an individual (“Executive”).
Recitals
     Whereas Kreido wishes to employee Executive as its Vice President and Chief
Accounting Officer and Executive wishes to be so employed;
     Now, therefore, in consideration of the foregoing and good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the
parties agree as follows:
Terms and Conditions

1   Executive’s Duties;Title; Location. As of the Effective Date, Executive is
employed as Kreido’s Vice President and Chief Accounting Officer under the terms
and conditions below. Executive will report to the Company’s CEO. Executive’s
duties include, without limitation, managing the Company’s budgeting, financial
reporting, SEC filings, internal financial controls, Sarbanes Oxley compliance,
developing all related systems and infrastructure to support the accounting
function within the Company, and such other matters that are reasonable within
the scope of Executive’s expertise. Executive shall dedicate his full-time
efforts to Kreido’s business and shall work at Kreido’s Camarillo, California,
office or such other location as Kreido deems appropriate; provided, however,
that Executive shall not be required routinely to provide services outside of a
reasonable commuting distance from the current Camarillo office except when
traveling on Kreido business.

2   Term and Termination. The Term of this Agreement shall commence on March 19,
2007. The Term shall continue for one (1) year unless it is terminated earlier
as provided below in Sections 6, 7 and 8.

3   Hours. The Executive’s normal days and hours of work shall coincide with the
Company’s regular business hours. The nature of the Executive’s duties requires
flexibility in the days and hours that the Executive must work, and is likely to
require the Executive to work on other and additional days and hours.

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4   Compensation.       Cash Compensation.

4.1.1 Base Salary. Executive shall receive a base salary of $185,000 in
accordance with Kreido’s regular payroll practices.
4.1.2 Bonus. So long as Executive is employed hereunder, Executive shall be
entitled to participate in a performance-based executive bonus plan (“Bonus
Plan”) that shall be promulgated by the Compensation Committee of the Company’s
board of directors each fiscal year. The Bonus Plan will set forth three levels
of target performance goals “TPGs” which, if achieved, will entitled the
Executive to a bonus of either 20%, 35% or 50% of the Executive’s Base Salary.
The TPGs will consist of a combination of goals for the Executive’s individual
performance and the Company’s overall performance in a ratio of 75% Company
performance and 25% individual Executive performance. Bonuses paid under the
Bonus Plan, if any, will be paid annually within 60 days after the end of the
fiscal year.
4.1.3. Stock Options. Upon the execution of this Agreement, Executive shall be
entitled to participate in the Kreido Biofuels 2006 Equity Incentive Plan
(“Plan”). Executive’s participation in the Plan shall be governed by the terms
and conditions set forth in the applicable Plan documents. Capitalized words not
defined in this Agreement but used in this Section shall have the meanings
ascribed to them in the Plan.

  4.1.3   (a) Grant of Options. On the Effective Date, the Company will grant
Executive an option to purchase 150,000 shares of the Company’s common voting
stock under the Plan (the “Options”). Subsequently, the Executive shall be
eligible for such additional grants of options and other permissible grants
(collectively “Awards”) under the Plan as the Compensation Committee of the
board of directors of the Company shall determine in its absolute discretion.  
  4.1.3   (b) Option Exercise Price; Term. The per share exercise price of the
Option shall be the closing bid price per share of Company common stock on the
date of grant. The Term of the Option shall be ten years from the date of grant.
    4.1.3   (c) Vesting and Exercise. The Options shall vest and be exercisable
as follows: 150,000 options shall vest in eight equal installments of 18,750
options per calendar quarter beginning with the quarter that ends on June 30,
2007 (“Quarterly Grant(s)”). Each such Quarterly Grant shall remain exercisable
for a period of ten years from the date of grant, subject to vesting and
Section 4.1.3(e).     4.1.3   (d) Lock-Up Agreement. The Executive shall enter
into a Lock-Up Agreement with the Company in the form attached hereto as
Exhibit B. During any period that Executive is precluded by the Lock-Up
Agreement from exercising the Option granted to Executive in Section 4.1.3(a),
then the exercise period in Section 4.1.3(b) will be extended by the amount of
time during which Executive could not exercise the Option, but in no event
beyond ten years from the date of grant.

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  4.1.3   (e) Termination of Service; Accelerated Vesting.         (i) If the
Executive’s employment is terminated by the Company for Cause as such term is
defined below in Sections 7.1.1 (A), (B) or (C), (1) all unvested Quarterly
Grants shall expire immediately effective the date of termination, and (2) all
vested Quarterly Grants shall expire thirty days following the date of such
termination unless and to the extent that within said 30-day period Executive
shall exercise any or all such vested Quarterly Grants and pay the full exercise
price of such shares as provided for in 4.1.3(f).         (ii) If the
Executive’s employment is terminated voluntarily by the Executive without Good
Reason as such term is defined below, all unvested Quarterly Grants shall
immediately expire effective the date of termination of employment. Vested
Quarterly Grants, to the extent unexercised, shall expire on the later of five
years after the date of grant or the expiration of the contractual Lock-Up
Agreement.         (iii) If the Executive’s employment terminates on account of
death or Disability, as defined below, all unvested Quarterly Grants shall
immediately expire effective the date of death or termination of employment and
all vested Quarterly Grants to the extent unexercised, shall expire one year
after the date of death or Disability.         (iv) If the Executive’s
employment is terminated (A) in connection with a Change of Control as defined
below, (B) by the Company without Cause, or (C) by the Executive for Good
Reason, one-half of all unvested Quarterly Grants shall immediately vest and
become exercisable effective the date of termination of employment, and, to the
extent unexercised, shall expire five years from the date of termination of
employment, but in no event beyond ten years from the date of grant.        
4.1.3(f) Payment. The full consideration for shares purchased by the Executive
upon exercise of the Option shall be paid: (a) by delivery of a certified check
payable to the order of the Company; (b) by delivery and attestation of Mature
Shares (valued at their Fair Market Value on the date of delivery) or (c) by
delivery of a properly executed exercise notice with irrevocable instructions to
a broker to deliver to the Company the amount necessary to pay the exercise
price from the sale of proceeds of a loan from the broker with respect to the
sale of such award or a broker loan secured by Mature Shares.

  4.2   Additional Benefits.

  4.2.1   Welfare Benefit Plans. Executive shall at all times be entitled to
participate in all benefit, 401(k) and other ERISA-qualified plans made
available to senior management executives of Kreido under the same terms offered
to other senior management executives, including without limitation, health
benefit coverage for Executive’s spouse and dependant children, if any.

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  4.2.2   Expense Reimbursement. Kreido shall reimburse Executive for all
ordinary and necessary expenses reasonably incurred by Executive on Kreido’s
behalf (“Business Expenses”). Business Expenses (including travel costs) in
excess of $500.00 individually or $2,500.00 in the aggregate shall be approved
in advance except in case of emergency. Executive shall provide Kreido with
documentation for all Business Expenses at the time reimbursement is requested.
In the event it is necessary for Executive to travel on Kreido’s behalf,
Executive shall be entitled to fly and have travel accommodations on the same
level as Kreido’s other most senior management Executives.     4.2.3  
Discretionary Time Off. During his employment hereunder, Executive shall be
entitled to accrue Paid Time Off (“PTO”) in accordance with Kreido’s regular PTO
policy for all employees, but in any case not less than 10 days per calendar
year. Executive shall be entitled to additional PTO of no more than two days per
month to attend classes and study in the Executive MBA Program at the Graduate
School of Management at UCLA. Executive shall provide the Company with a report
each month of those days on which he was absent from work to attend and/or
prepare for class.     4.2.4   Reimbursement of Tuition. Company shall reimburse
Executive 25% of the cost of his tuition at the Executive MBA Program at the
Graduate School of Management at UCLA in which he is currently enrolled so long
as he is employed hereunder provided that he passes the coursework (“Tuition
Reimbursements”). The foregoing notwithstanding, in the event that prior to
March 20, 2008, Executive voluntarily terminates his employment without Good
Reason as defined in Section 8.1 of this Agreement, or the Company terminates
Executive’s employment before that date with Cause as defined in Section 7.1,
then all Tuition Reimbursements shall be deemed to have been payroll advances to
Executive (“Payroll Advances”). All such payroll advances shall be recoupable
against any accrued payroll and/or accrued but unused Paid Time Off due to
Executive at the time of the termination of his employment. If any balance
remains thereafter on such Payroll Advances, Executive agrees to remit the
balance to the Company within 10 days after the termination of his employment.

5   Proprietary Covenants of Executive.

  5.1   No Conflicts Of Interest. Executive acknowledges that she/he is bound to
use good judgment, to adhere to the highest ethical standards, and to avoid
situations that create an actual, potential, or apparent conflict of interest.
Executive warrants and represents to Kreido that she/he is currently unaware of
any actual, potential, or apparent conflicts of interest. She/he also agrees to
immediately disclose to the CEO or Chairperson of Kreido any and all actual,
potential, or apparent conflicts of interest, should they later arise. In
addition, Executive further represents and warrants to Kreido that for so long
as he is employed by the Company, he shall inform the Company of each and every
business opportunity presented to the Executive that arises that could be
feasible for the Company to undertake, and that he will not, directly or
indirectly, exploit any such opportunity for his own account or the account of
any third party.

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  5.2   Covenant Not to Use or Disclose Confidential Information.

  5.2.1   Definition of Confidential Information. For purposes of this
Agreement, the term Confidential Information means all and any confidential
information and/or trade secrets of Kreido, including without limitation,
scientific discoveries, recipes, formulations, information encompassed in all
advertising and marketing plans, customer lists, costs, pricing information,
information concerning software and all concepts or ideas, in or reasonably
related to the business of Kreido. Confidential Information shall not include
any Kreido information that has been voluntarily disclosed to the public by
Kreido, independently developed and disclosed by others, or otherwise enters the
public domain through lawful means.     5.2.2   Non-disclosure of Confidential
Information. Executive expressly acknowledges that in the performance of his
duties and responsibilities with the Company prior to the execution of this
Agreement, he has been exposed to the trade secrets, recipes, formulations,
business and/or financial secrets and confidential and proprietary information
of the Company, its affiliates and/or its clients, business partners or
customers (“Confidential Information”) and that he will continue to be exposed
to the Confidential Information after the execution of this Agreement. During
his employment and after the termination of his employment, Executive shall
regard and preserve as confidential all Confidential Information pertaining to
Kreido and its affiliates that have been or may be obtained by Executive in any
way by reason of Executive’s employment by Kreido. Executive shall not, without
the prior and specific written consent of Kreido, or unless ordered to do so by
court order or subpoena (i) use, publicize, release or disclose to others,
either during or after the period of employment, Confidential Information or
(ii) take, retain or copy any Kreido executive compensation plans, Executive
benefit plans, business plans, customer lists, costs, pricing information,
documents, reports, information encompassed in advertising and marketing plans,
or other concepts or ideas, in or reasonably related to the business of Kreido.
Executive agrees to notify Kreido’s CEO within two (2) business days of receipt
of any court order or subpoena to his or any individual which calls for
information deemed Confidential under this Agreement and to give Kreido
reasonable opportunity to contest the subpoena.

  5.3   Covenant Not to Interfere With Kreido’s Business Relationships. During
his employment and for a period of three (3) years after the termination of his
employment, executive shall not, whether for Executive’s own account or for the
account of a third-party, solicit or endeavor to entice any Executive, client,
customer or vendor of Kreido to end any business and/or contractual relationship
with Kreido.

  5.4   Ownership and Use of Materials.

  5.4.1   Kreido Materials. Executive agrees that all information encompassed in
all executive compensation plans, Executive benefit plans, business plans,
advertising plans and marketing materials and other Confidential Information
concerning Kreido, its Executives and shareholders, customer lists, costs,
pricing information, documents, reports, plans, proposals or other items made or
created by Executive or that come into Executive’s possession during the Term
are the property of Kreido and shall not be used by Executive in any way after
the Term. Executive

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      shall not deliver, reproduce or in any way allow such documents, or things
to be delivered to be used by any third party without specific written direction
or consent of a duly authorized representative of Kreido.

  5.4.2   Delivery of Materials. Upon termination of this Agreement, Executive
shall promptly deliver to Kreido all of its executive compensation plans,
Executive benefit plans, business plans, advertising plans and marketing
materials and other Confidential Information concerning Kreido, its Executives
and shareholders, customer lists, costs, pricing information, documents,
reports, plans, proposals or other items made or created by Executive during the
period of employment.

6.   Termination Due to Death or Disability. If Executive dies during the
employment, Executive’s employment shall automatically cease and terminate as of
the date of Executive’s death. In the event of Executive’s disability for a
period of 120 consecutive days during any 365-day period, Company shall
thereafter have the right, upon written notice to Executive, to terminate this
Agreement, in which case the date of termination shall be the date of such
written notice to Executive. As used herein, “disability” means a physical
and/or mental disability of Executive that prevents Executive from substantially
performing the essential functions of his position even with reasonable
accommodation (“Disability”). In the event of the termination of Executive’s
employment due to his death or Disability, Executive’s estate and/or Executive
shall be entitled to receive: (i) a lump sum cash payment, payable within ten
(10) business days after the date of death equal to the sum of any accrued but
unpaid salary and bonus as of the date of death; and (ii) earned Executive
benefits, perquisites and reimbursements described in Section 4 inclusive, if
any, as to which Executive may be entitled hereunder or under Executive benefit
plans, programs and arrangements of Kreido through the date of death. In the
event of the termination of Executive’s employment due to Disability, Executive
shall not be entitled to any severance pay.

7. Termination by Kreido.

  7.1   Termination for Cause.

  7.1.1   Definition of Cause. The term “Cause” for purposes of this Agreement
means all of the following, any one of which will constitute a material breach
of this Agreement unless cured pursuant to Section 7.1.2 (“Material Breach”):
(A) Any willful act by Executive that causes the Company materially to violate
any applicable law; (B) Executive’s commission of any material act of dishonesty
in connection with his employment; (C) Executive’s conviction of or plea of nolo
contendere to any felony or any offense involving moral turpitude ;
(D) Executive’s being intoxicated by alcohol or his use of or being under the
influence of illegal drugs during working time; (E) Executive’s breach of his
fiduciary duties to the Company; (F) Executive’s unjustifiable failure to comply
with the reasonable and legal directives of the Company that are communicated to
him in writing; (G) Executive’s unjustifiable failure to disclose to Kreido any
and all actual, potential, or apparent conflicts of interest that may later
arise; (H) The willful or gross failure of Executive substantially to perform
the duties of his employment hereunder; and (I) A breach by Executive of any
material provision of this Agreement.

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  7.1.2   The foregoing notwithstanding, if a Material Breach is susceptible of
being cured, Kreido shall provide Executive with written notice of such Curable
Breach within five business days after Kreido first learns of the Curable
Breach. Executive will then have fifteen business days in which to cure the
breach. Should Executive fail to cure a Curable Breach to Kreido’s reasonable
satisfaction by the end of the 15-business day cure period, Kreido may terminate
his employment immediately upon written notice to Executive. If a Material
Breach is not susceptible of being cured, Kreido may terminate Executive’s
employment immediately upon written notice to Executive.

  7.1.3   Entitlements Upon a Termination for Cause. In the event of the
termination of the Executive’s employment hereunder due to a termination by the
Company for Cause, then Executive shall be entitled to receive: (i) a lump sum
cash payment, payable immediately upon the termination of Executive’s
employment, equal to the sum of any accrued but unpaid base salary as of the
date of such termination; and (ii) earned Executive benefits, if any, as to
which Executive may be entitled hereunder or under Executive benefit plans,
programs and arrangements of Kreido.

  7.2   Termination Without Cause. Kreido may terminate Executive’s employment
hereunder without Cause at any time by providing Executive written notice of
such termination. If Executive’s employment is terminated without Cause, the
termination shall take effect on the effective date of written notice (pursuant
to Section 11.11) of such termination to Executive. In the event of the
termination of Executive’s employment hereunder due to a termination by Kreido
without Cause (other than due to Executive’s death), Executive shall be entitled
to: (i) a lump sum cash payment, payable immediately upon the termination of
Executive’s employment, equal to the sum of any accrued but unpaid base salary
as of the date of such termination; (ii) earned Executive benefits, if any, as
to which Executive may be entitled hereunder or under Executive benefit plans,
programs and arrangements of Kreido through the date of his termination; and
(iii) severance pay on the date of the Termination without Cause equal to the
following amounts: (A) If Executive’s employment is terminated on or before
April 1, 2008, six (6) months’ pay; (B) If Executive’s employment is terminated
after April 1, 2008, but less than 5 full years after he becomes employed
hereunder, Executive shall be entitled to severance pay in the amount of nine
(9) months’ pay; (C) If Executive is employed hereunder by Kreido for 5 years or
more, Executive shall be entitled to severance pay in the amount of twelve
(12) months’ pay. Severance pay under this Section 7.2 shall include Executive’s
salary (at its then current rate), earned bonus, and expense reimbursement, if
applicable).

8.   Termination by Executive.

  8.1   Termination Without Good Reason. Executive shall have the right to
terminate Executive’s employment hereunder at any time without Good Reason (as
defined below) upon written notice of such termination to Kreido. A voluntary
termination by Executive in accordance with this Section 8.1 shall not be deemed
a breach of this Agreement. Upon any voluntary termination of employment by
Executive pursuant to this Section 8.1, she/he shall have the same entitlements
as provided in Section 7.1.3 in the case of a termination by Kreido for Cause.

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  8.2   Termination With Good Reason. The following events constitute grounds
for Executive to terminate his employment for good reason (“Good Reason”):

  (i)   the removal of Executive from the position specified in Section 1
without Cause;     (ii)   a material diminution in Executive’s salary, duties or
title;     (iii)   the assignment to Executive of duties which are materially
inconsistent with his position or which materially impair his ability to perform
his duties;     (iv)   any termination of the Executive’s employment by the
Company, other than a termination for Cause, within 12 months after a Change of
Control. For purposes of this Agreement, “Change of Control” means the
occurrence of, or the Company’s Board votes to approve: (A) any consolidation or
merger of the Company pursuant to which the stockholders of the Company
immediately before the transaction do not retain immediately after the
transaction, in substantially the same proportions as their ownership of shares
of the Company’s voting stock immediately before the transaction, direct or
indirect beneficial ownership of more than 50% of the total combined voting
power of the outstanding voting securities of the surviving business entity;
(B) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all, or substantially all, of the assets of the
Company other than any sale, lease, exchange or other transfer to any company
where the Company owns, directly or indirectly, 100% of the outstanding voting
securities of such company after any such transfer; (C) the direct or indirect
sale or exchange in a single or series of related transactions by the
stockholders of the Company of more than 50% of the voting stock of the Company.
    (v)   the foregoing notwithstanding, i, ii, and iii above will not
constitute Good Reason unless Executive first notifies Kreido in writing
describing the event(s) that constitutes Good Reason (Executive’s Notice of Good
Reason ) and unless Kreido thereafter fails to cure such event(s) within fifteen
business days after Executive delivers Executive’s Notice of Good Reason to
Kreido (“Kreido’s Cure Period”). It will be incumbent upon Executive to deliver
Executive’s Notice of Good Reason to Kreido within five business days after
making a good faith determination that an event constituting Good Reason has
occurred.

  8.2.1   Entitlements Upon a Termination for Good Reason. Upon Executive’s
termination of his full-time employment for Good Reason in accordance with
Section 8.2 hereof, Executive shall have the same entitlements as provided under
Section 7.2 for a termination by Kreido without Cause.

9.   Right to Assign. This Agreement shall be assignable only by Kreido.

10.   Miscellaneous Terms.

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  10.1   Post-Termination Defense of Claims. In the event that Executive and/or
Kreido are named as defendants in any legal proceeding arising from the
operation of Kreido’s business, Kreido shall defend, indemnify and hold
Executive harmless to the full extent required by law. Kreido shall provide
Executive with defense counsel of Kreido’s choosing, but who is also reasonably
acceptable to Executive. In the event Executive’s interests in the proceeding
are adverse to Kreido’s interests, Kreido shall provide Executive with the
reasonable costs and fees of an attorney of Executive’s choosing.     10.2  
Alternative Dispute Resolution; Mediation Before Arbitration.

  10.2.1   Arbitrable Disputes. To the fullest extent allowed by law, any
controversy, claim, or dispute between Executive and Kreido (and/or any of its
directors, shareholders, officers, Executives, representatives or agents)
relating to or arising out of his employment or the termination of that
employment (“Arbitrable Dispute”) will be submitted to final and binding
arbitration in Los Angeles County, California. Executive agrees to execute the
Mutual Agreement to Arbitrate attached hereto as Exhibit “A” and incorporated
herein by reference.     10.2.2   Mediation Before Arbitration. The foregoing
provisions regarding Arbitration notwithstanding, before any Arbitrable Dispute
is submitted to arbitration, the Parties agree to mediate such dispute in good
faith with a professional mediator who is also a licensed attorney experienced
in the area of employment law. If the parties cannot agree on the choice of a
mediator, each party shall select a mediator, the two of whom will then select a
third mediator who alone will conduct the mediation. In the event one party
makes a demand on the other for mediation to which such party fails to respond
for a period of thirty days, the party demanding mediation may then submit the
dispute directly to Arbitration pursuant to the Mutual Agreement to Arbitrate.

11.   General Terms and Conditions.

  11.1   Waiver. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any prior or
subsequent breach; provided, however, that either party to this Agreement may
waive any obligation owed to such party, if such waiver is in writing signed by
an authorized signer.     11.2   Integration; Modification. This Agreement
constitutes the entire understanding and agreement between Kreido and Executive
regarding its subject-matter and supersedes all prior negotiations and
agreements between them with respect to its subject-matter whether oral or
written. This Agreement may not be modified except by a writing signed by
Executive and a duly authorized officer of Kreido.     11.3   Enforceability;
Severability. If any provision of this Agreement shall be deemed invalid or
unenforceable in whole or in part, such provision shall be deemed to be modified
or restricted to the extent and in the manner necessary to render the same

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      valid and enforceable, or shall be deemed excised from this Agreement, as
the case may require, and this Agreement shall be construed and enforced to the
maximum extent permitted by law as if such provision had been originally
incorporated herein as so modified or restricted, or as if such provision had
not been originally incorporated herein, as the case may be.

  11.4   Binding Effect. All the terms and conditions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.     11.5   Interest and Costs; Attorneys’ Fees. In the
event of any legal proceeding, litigation or alternative dispute resolution
process (including arbitration and mediation as specified in Section 10) between
the Parties respecting or arising out of this Agreement, the substantially
prevailing party shall be entitled to recover its reasonable attorneys’ fees and
other costs in connection therewith, including, without limitation, any
attorneys’ fees incurred after a judgment has been entered by an arbitrator or
court of competent jurisdiction; provided, however, that if a party files any
legal proceeding, litigation or demand for arbitration other than for equitable
relief without first making a request for mediation pursuant to Section 10.3.2,
that party shall not be entitled to Attorney’s Fees and other costs regardless
whether such party would have been entitled to those Attorney’s Fees and costs
hereunder or by operation of law.     11.6   Descriptive Headings. The paragraph
and section headings in this Agreement are for convenience only and shall not
control or affect the meaning or construction of any provision of this
Agreement.     11.7   Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute but one agreement.     11.8   Third-Party
Beneficiaries. No person shall be a third-party beneficiary of this Agreement
and no person other than the parties hereto and their permitted successors and
assigns shall receive any of the benefits of this Agreement.     11.9  
Applicable Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without regard
to conflicts of laws principles.     11.10   Arms Length Agreement. This
Agreement has been negotiated at arms length between persons knowledgeable in
the matters dealt with herein. Accordingly, any rule of law or any statute,
legal decision, or common law principle of similar effect that would require
interpretation of any ambiguity in this Agreement against the party that drafted
it is of no application and is hereby expressly waived. The provisions of this
Agreement shall be interpreted in a reasonable manner to effect the intentions
of the Parties hereto.     11.11   Notices. All notices, statements and other
documents that any party is required or desires to give to the other party
hereunder shall be given in writing and shall be served in person, by express
mail, by certified mail, by overnight delivery or by

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      facsimile at the respective addresses of the parties as set forth below,
or at such other addresses as may be designated in writing by such party in
accordance with the terms of this Section 11.11.

             
 
  If to Kreido:   Kreido Biofuels, Inc.
1140 Avenida Acaso,
Camarillo, California 93012
Attention: Joel Balbien, Ph.D., CEO
Telephone: (805) 389-3499
Fax: (805) 384-0989    
 
           
 
  With a copy to:   Susan Keenberg, Esq.
1217 Acacia Avenue
Torrance, California 90501
Telephone: (310) 789-0999
Fax: (310) 789-0111    
 
           
 
  If to Executive:   John M. Philpott, C.P.A.
1560 Menta Lane
Camarillo, CA 93010    
 
                Delivery shall be deemed conclusively made (I) at the time of
service, if personally served, (ii) when deposited in the United States mail,
properly addressed and postage prepaid, if delivered by express mail or
certified mail, (iii) upon deposit with the private overnight deliverer, if
served by overnight delivery, and (iv) at the time of electronic facsimile
transmission (as confirmed in writing), provided a copy is mailed within
twenty-four (24) hours after such transmission.

In Witness Whereof, Kreido and Executive have executed this Agreement this 19th
day of March, 2007.
This Agreement is subject to an arbitration agreement, which is attached hereto
and incorporated herein by reference.

              Kreido Biofuels, Inc.       Executive
 
           
By:
       /s/ Joel Balbien       /s/ John M.Philpott
 
           
 
  Joel Balbien, Ph.D.
Chief Executive Officer       John M. Philpott, C.P.A.

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EXHIBIT B
March 19, 2007
Tompkins Capital Group 488 Madison
Avenue, New York, New York 10022
Attention: Mr. Mark N. Tompkins
Mr. Tompkins:
     Reference is made to that certain Term Sheet (the “Term Sheet”), dated
September 1, 2006, as amended on October 25, 2006 relating to a proposed
business combination between Kreido Biofuels, Inc. (f/k/a Gemwood Productions,
Inc.), a Nevada corporation (the “Company”) and Kreido Laboratories, a
California corporation (“Kreido”), and a related private placement financing
(the “Transactions”). In connection with the Transactions, the Company, Kreido,
and Kreido Acquisition Corp., a California corporation, entered into that
certain Agreement and Plan of Merger and Reorganization (the “Merger
Agreement”), dated as of January 12, 2007, pursuant to which Kreido stockholders
received common stock, par value $0.001 per share, of the Company (the “Common
Stock”) in consideration for shares of Kreido held by them at the effective time
of the merger. In consideration of the Company and Kreido entering into the
Transactions, and for Tompkins Capital Group to facilitate the Transactions and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned hereby agrees as follows:
1. The undersigned hereby covenants and agrees, except as provided herein, not
to (1) offer, sell, contract to sell or otherwise dispose of and (2) transfer
title to (a “Prohibited Sale”) any of the shares (the “Acquired Shares”) of
Common Stock acquired by the undersigned pursuant to or in connection with the
Merger Agreement (including as a result of shares owned as a Kreido
shareholder), during the period commencing on the “Closing Date” (as that term
is defined in the Term Sheet) and ending on the 12-month anniversary of the
Closing Date (the “Lockup Period”), without the prior written consent of the
Company and Tompkins Capital Group (which consent shall not be unreasonably
withheld). Notwithstanding the foregoing, the undersigned shall be permitted
from time to time during the Lockup Period, without the prior written consent of
the Company or Tompkins Capital Group, as applicable, (i) to acquire shares of
Common Stock pursuant to the undersigned’s participation in the Company’s stock
option plan, or (ii) to transfer all or any part of the Acquired Shares to any
family member, for estate planning purposes or to an affiliate thereof (as such
term is defined in Rule 405 under the Securities Act of 1933, as amended),
provided that such transferee agrees with the Company and Tompkins Capital Group
to be bound hereby, and in any transaction in which holders of the Common Stock
of the Company participate or have the opportunity to participate pro rata,
including, without limitation, a merger, consolidation or binding share exchange
involving the Company, a disposition of the Common Stock in connection with the
exercise of any rights, warrants or other securities distributed to the
Company’s stockholders, or a tender or exchange offer for the Common Stock, and
no transaction contemplated by the foregoing clauses (i) or (ii) shall be deemed
a Prohibited Sale for purposes of this Letter Agreement. All shares of Common
Stock and related warrants purchased by the undersigned pursuant to or in
connection with the private placement financing

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shall not be subject to this Letter Agreement.
2. This Letter Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to its conflict of laws
principles.
3. This Letter Agreement will become a binding agreement among the undersigned
as of the Closing Date. This Letter Agreement (and the agreements reflected
herein) may be terminated by the mutual agreement of the Company, Tompkins
Capital Group and the undersigned, and if not sooner terminated, will terminate
upon the expiration date of the Lockup Period. This Letter Agreement may be duly
executed by facsimile and in any number of counterparts, each of which shall be
deemed an original, and all of which together shall be deemed to constitute one
and the same instrument. Signature pages from separate identical counterparts
may be combined with the same effect as if the parties signing such signature
page had signed the same counterpart. This Letter Agreement may be modified or
waived only by a separate writing signed by each of the parties hereto expressly
so modifying or waiving such agreement.

                                  Very truly yours,    
 
                   
 
          Print Name:        
 
                   
Address:
                                      Number of shares of Common Stock owned:  
      Certificate Numbers:              
 
                   

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