EXHIBIT
      10.5

    


    EMPLOYMENT
      AGREEMENT

    


    THIS
      EMPLOYMENT AGREEMENT (this “Agreement”)
      is
      made, entered into and effective as of November 1, 2006 (the “Effective
      Date”),
      between KREIDO
      LABORATORIES
      (the
“Company”),
      and
JOEL
      BALBIEN, Ph.D.,
      an
      individual (the “Executive”).

    


    WHEREAS,
      the Company and the Executive wish to memorialize the terms and conditions
      of
      the Executive’s employment by the Company in the positions of President and
      Chief Executive Officer; 

    


    NOW,
      THEREFORE, in consideration of the covenants and promises contained herein,
      the
      Company and the Executive agree as follows:

    


    1. Employment
      Period.
      The
      Company offers to employ the Executive, and the Executive agrees to be employed
      by Company, on an "at will" basis, in accordance with the terms and subject
      to
      the conditions of this Agreement, commencing on the Effective Date and
      terminating on the first (1st)
      anniversary of the Effective Date (the “Scheduled
      Termination Date”),
      unless terminated in accordance with the provisions of Section
      12
      below,
      in which case the provisions of Section
      12
      shall
      control; provided,
      however,
      that
      unless either party provides the other party with written notice of his or
      its
      intention not to renew this Agreement at least 90 days prior to the expiration
      of the initial term or any renewal term of this Agreement (as the case may
      be),
      this Agreement shall automatically renew for additional one-year periods
      commencing on the day after such expiration date. The Executive affirms that
      no
      obligation exists between the Executive and any other entity which would prevent
      or impede the Executive’s immediate and full performance of every obligation of
      this Agreement. The Company may terminate this Agreement, anything to the
      contrary notwithstanding, without any further compensation due to the Executive
      in the event that the Company does not close a financing of at least
TWENTY-FIVE
      MILLION DOLLARS ($25,000,000)
      prior to
      January 15, 2007.

    


    2. Position
      and Duties.
      During
      the term of the Executive’s employment hereunder, the Executive shall continue
      to serve in, and assume duties and responsibilities consistent with, the
      positions of President and Chief Executive Officer, unless and until otherwise
      instructed by the Company. The Executive agrees to devote to the Company
      substantially all of his working time, skill, energy and best business efforts
      during the term of his employment with the Company, and the Executive shall
      not
      engage in business activities outside the scope of his employment with the
      Company if such activities would detract from or interfere with his ability
      to
      fulfill his responsibilities and duties under this Agreement or require
      substantial amounts of his time or of his services, or which would constitute
      a
      conflict of interest by the Executive.

    


    3. No
      Conflicts.
      The
      Executive covenants and agrees that for so long as he is employed by the
      Company, he shall inform the Company of each and every future business
      opportunity presented to the Executive that arises within the scope of the
      Business of the Company (as defined below) and would be feasible for the
      Company, and that he will not, directly or indirectly, exploit any such
      opportunity for his own account. 

     

    
      
        
        

      

      
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    4. Hours
      of Work.
      The
      Executive’s normal days and hours of work shall coincide with the Company’s
      regular business hours. The nature of the Executive’s employment with the
      Company requires flexibility in the days and hours that the Executive must
      work,
      and may necessitate that the Executive work on other or additional days and
      hours. 

    


    5. Location.
      The
      locus
      of the Executive’s employment with the Company shall be primarily at the
      Company’s office located in Camarillo, California. 

    


    6. Compensation.
      

    


    (a) Base
      Salary.
      During
      the term of this Agreement, the Company shall pay, and the Executive agrees
      to
      accept, in consideration for the Executive’s services hereunder, an annual
      salary of TWO
      HUNDRED THOUSAND
      DOLLARS ($200,000),
      less
      all applicable taxes and other appropriate deductions, payable in accordance
      with the Company's policy for salaried employees.

    


    The
      Compensation Committee (as defined below)
      of the
      Board shall also review the Executive’s base salary annually and shall make a
      recommendation to the Board as to whether such base salary should be adjusted
      upward, which decision shall be within the Board’s sole discretion.

    


    (b) Annual
      Bonus.
      The
      Executive shall be entitled to an initial bonus of up to ONE
      HUNDRED AND FIFTY
      THOUSAND DOLLARS ($150,000)
      for the
      period from the Effective Date through December 31, 2007, the actual amount
      of
      the bonus shall be determined according to achievement of performance-related
      financial and operating targets established quarterly for the Company and the
      Executive by the Compensation Committee. The
      Compensation Committee will establish four (4) quarterly performance plans
      for
      the Employee. Each plan will contain financial and operating objectives (the
      "Quarterly
      Performance Targets"),
      the
      achievement of which will determine the amount of bonus paid during that
      quarter. The initial performance objective shall be the completion of an equity
      financing of the Company or its parent Company, which is expected to close
      concurrently with the proposed merger transaction (the “Merger”)
      referred to in Section 17, for which a bonus of THIRTY SEVEN THOUSAND
      FIVE HUNDRED DOLLARS ($37,500) will be paid upon the closing date of the equity
      financing and the Merger. The remaining three (3) Quarterly Performance Targets
      will be set by the Compensation Committee of the board of directors of the
      Company or its parent Company (the “Compensation Committee”) not later than
      January 12, 2007. The remaining payments, if the Executive meets Quarterly
      Performance Targets, are scheduled for April 1, 2007, July 1, 2007 and November
      1, 2007.  Quarterly
      Performance related financial and operational targets
      for
      Q4:2007 - Q3:2008 shall be adopted by the Compensation Committee promptly after
      the end of Q3:2007, but in no event later than October 12, 2007). 

     

    
      
        
        

      

      
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    7. Expenses.
      During
      the term of this Agreement, the Executive shall be entitled to payment or
      reimbursement of any reasonable expenses paid or incurred by him in connection
      with and related to the performance of his duties and responsibilities hereunder
      for the Company. All requests by the Executive for payment or
      reimbursement of such expenses shall be supported by appropriate invoices,
      vouchers, receipts or such other supporting documentation in such form and
      containing such information as the Company may from time to time require,
      evidencing that the Executive, in fact, incurred or paid said expenses.


    


    8. Vacation.
      During
      the term of this Agreement, the Executive shall be entitled to accrue, on a
      pro
      rata basis,
      twenty (20) vacation days, per year. The Executive shall be entitled to carry
      over any accrued, unused vacation days from year to year as provided by current
      Company policy.

    


    9. 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 the Executive is precluded by the Lock-Up Agreement from
      exercising the Option granted to the Executive under Section 10, then the
      exercise period in Section 10(d) will be extended by the amount of time
      during which the Executive could not exercise the Option.

    


    10. Stock
      Options.
      The
      Company hereby agrees to use commercially reasonable efforts to cause Kreido
      Biofuels, Inc., a Nevada corporation (the “PubCo”) to grant the Executive
a
      non-qualified stock option under the PubCo's equity incentive plan on the terms
      and conditions hereinafter stated. When so granted, the following terms and
      conditions will be incorporated into a separate stock option agreement (the
      “PubCo Stock Option Agreement”), dated the date of the grant, between the
      Executive and the PubCo. In the event of any inconsistency between the PubCo
      Stock Option Agreement and this Agreement, the terms of the PubCo Stock Option
      Agreement shall prevail.

    


    (a) Grant
      of Option.
      On the
      effective date of the Merger, the Company will grant
      the
      Executive an option to purchase an aggregate of ONE
      MILLION TWO HUNDRED AND FIVE THOUSAND THREE HUNDRED AND EIGHTY FOUR
      (1,205,384)
      shares
      of the
      Company’s common voting stock (the “Option”)
      under
      the PubCo’s 2006 Stock Option Plan (the “Stock
      Option Plan”).
      In
      subsequent years the Executive shall be eligible for such grants of options
      and
      other permissible awards (collectively with such options, the “Awards”)
      under
      the Stock Option Plan as the Compensation Committee of the board of directors
      of
      PubCo shall determine.

    


    (b) Option
      Price; Term.
      The
      per
      share
      exercise price of the Option shall be ONE
      AND 35/100THS DOLLARS ($1.35),
      which
      represents the anticipated fair market value per share of Company common voting
      stock on the closing date of the Merger. The term of the Option shall be ten
      (10) years from the date of grant.

     

    
      
        
        

      

      
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    (c) Vesting
      and Exercise.
      The
      Option shall be vested and exercisable in eight (8) quarterly installments
      of
      ONE HUNDRED
      FIFTY THOUSAND SIX HUNDRED AND SEVENTY THREE (150,673)
      shares
      each. 

    


    (d) Termination
      of Service; Accelerated Vesting. 

     

    (i) If
      the
      Executive’s employment is terminated for Cause, as such term is defined below,
      all Awards, whether or not vested, shall immediately expire effective the date
      of termination of employment. 

    


    (ii) If
      the
      Executive’s employment is terminated voluntarily by the Executive without Good
      Reason, as such term is defined below, all unvested Awards shall immediately
      expire effective the date of termination of employment. Vested Awards, to the
      extent unexercised, shall expire on the later of ninety (90) days after the
      termination of employment and 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 Awards shall immediately expire effective the date of
      termination of employment. Vested Awards, to the extent unexercised, shall
      expire one (1) year after the termination of employment.

    


    (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 (1/2) of all unvested Awards shall immediately vest up
      to
      a maximum of six (6) months, and become exercisable effective the date of
      termination of employment, and, to the extent unexercised, shall expire one
      (1)
      year from the date of termination of employment.

    


    (e) Payment.
      The full
      consideration for any shares purchased by the Executive upon exercise of the
      Option shall be paid in cash. 

    


    11. Other
      Benefits.
      

    


    (a) During
      the term of this Agreement, the Executive shall be eligible to participate
      in
      incentive, savings, retirement (401(k)), and welfare benefit plans, including,
      without limitation, health, medical, dental, vision, life (including accidental
      death and dismemberment) and disability insurance plans (collectively,
“Benefit
      Plans”),
      in
      substantially the same manner, including but not limited to responsibility
      for
      the cost thereof, and at substantially the same levels, as the Company makes
      such opportunities available to all of the Company’s managerial or salaried
      executive employees. 

    


    (b) The
      Executive’s spouse and dependent minor children will be covered under the
      Benefit Plans providing health, medical, dental, and vision benefits, in
      substantially the same manner, including but not limited to responsibility
      for
      the cost thereof, and at substantially the same levels, as the Company makes
      such opportunities available to the spouses and dependent minor children to
      all
      of the Company’s managerial or salaried executive employees. 

     

    
      
        
        

      

      
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    (c) The
      Company shall purchase and maintain traditional directors and officers liability
      insurance coverage in the amount of at least ONE
      MILLION DOLLARS ($1,000,000)
      covering
      the Company’s officers and directors, including the Executive, as soon as
      practicable after the Effective Date, but in no event later than 30 days
      following the Effective Date, provided such coverage is available on
      commercially reasonable terms.

    


    (d)
       Until
      such time as the Executive becomes covered by Company medical coverage, the
      Company shall pay the cost of COBRA coverage provided by the Executive’s prior
      employer, to the same extent as such coverage was paid for by such prior
      employer.

    


    12. Termination
      of Employment.

    


    (a) Death.
      In the
      event that during the term of this Agreement the Executive dies, this Agreement
      and the Executive’s employment with the Company shall automatically terminate
      and the Company shall have no further obligations or liability to the Executive
      or his heirs, administrators or executors with respect to compensation and
      benefits accruing thereafter, except for the obligation to pay the Executor’s
      heirs, administrators or executors any earned but unpaid base salary, unpaid
      pro
      rata
      annual
      bonus and unused vacation days accrued through the date of death; provided,
      that
      nothing contained in this paragraph shall be deemed to excuse any breach by
      the
      Company of any provision of this Agreement. The Company shall deduct, from
      all
      payments made hereunder, all applicable taxes, including income tax, FICA and
      FUTA, and other appropriate deductions.

    


    (b) “Disability.”
      In the
      event of the Executive's disability for a period of 120 consecutive days during
      any 365-day period, the Company shall thereafter have the right, upon written
      notice to the Executive, to terminate this Agreement, in which case the date
      of
      termination shall be the date of such written notice to the Executive. As used
      herein, "disability" shall mean a physical and/or mental disability of the
      Executive that prevents the Executive from substantially performing the
      essential functions of his position even with reasonable accommodation. In
      the
      event of termination under this Section, all the Executive's compensation and
      benefits shall cease as of the date of his termination, and the Executive will
      not be entitled to receive any Severance.

    


    (c) “Cause.”
      

    


    (i) At
      any
      time during the term of this Agreement, the Company may terminate this Agreement
      and the Executive’s employment hereunder for “Cause.” For purposes of this
      Agreement, “Cause”
shall
      be defined as the occurrence of: (A) gross neglect, malfeasance or gross
      insubordination in performing the Executive’s duties under this Agreement; (B)
      the Executive’s conviction for a felony, excluding convictions associated with
      traffic violations; (C) an egregious act of dishonesty (including without
      limitation theft or embezzlement) or a malicious action by the Executive toward
      the Company’s customers or employees; or (D) a willful and material violation of
      any provision of Section
      13
      or
Section
      14
      hereof.

     

    
      
        
        

      

      
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    (ii) Upon
      termination of this Agreement for Cause, the Company shall have no further
      obligations or liability to the Executive or his heirs, administrators or
      executors with respect to compensation and benefits thereafter, except for
      the
      obligation to pay the Executive any earned but unpaid base salary, any earned
      but unpaid portion of Executive's annual bonus and unused vacation days accrued
      through the Executive’s last day of employment with the Company. The Company
      shall deduct, from all payments made hereunder, all applicable taxes, including
      income tax, FICA and FUTA, and other appropriate deductions. However, 12 (c)(ii)
      not withstanding, with respect to "Cause" as defined in 12 (c)(i)(D) of the
      Employment Agreement, the Company must provide notification in writing of the
      breach and the Employee shall have the right to cure the breach to the
      satisfaction of the Company within 30 days of the written notice.

    


    (d) 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.

    


    (e) “Good
      Reason.”

     

    (i) At
      any
      time during the term of this Agreement, subject to the conditions set forth
      in
Section
      12(e)(ii)
      below,
      the Executive may terminate this Agreement and the Executive’s employment with
      the Company for “Good Reason.” For purposes of this Agreement, “Good
      Reason”
shall
      mean the occurrence of any of the following events: (A) the assignment, without
      the Executive’s consent, to the Executive of duties that are significantly
      different from, and that result in a substantial diminution of, the duties
      that
      he assumed on the Effective Date; (B) the assignment, without the Executive’s
      consent, to the Executive of a title that is different from and subordinate
      to
      the title specified in Section
      2
      above,
provided,
      however,
      that
      the retention of another executive as President and Chief Executive Officer
      shall not, in and of itself, entitle the Executive to claim a termination for
      Good reason hereunder; (C) any termination of the Executive’s employment by the
      Company, other than a termination for Cause, within 12 months after a Change
      of
      Control; (D) the assignment, without the Executive’s consent, to the Executive
      of duties that are significantly different from, and that result in a
      substantial diminution of, the duties that he assumed on the Effective Date
      within 12 months after a Change of Control; or (E) material breach by the
      Company of this Agreement. 

     

    
      
        
        

      

      
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    (ii) The
      Executive shall not be entitled to terminate his employment with the Company
      and
      this Agreement for Good Reason unless and until he shall have delivered written
      notice to the Company of his intention to terminate this Agreement and his
      employment with the Company for Good Reason, which notice specifies in
      reasonable detail the circumstances claimed to provide the basis for such
      termination for Good Reason, and the Company shall not have eliminated the
      circumstances constituting Good Reason within 30 days of its receipt from the
      Executive of such written notice. 

    


    (iii) In
      the
      event that the Executive terminates this Agreement and his employment with
      the
      Company for Good Reason, the Company shall pay or provide to the Executive
      (or,
      following his death, to the Executive’s heirs, administrators or executors): (A)
      any earned but unpaid base salary, any earned but unpaid portion of Executive's
      bonus, and previously granted and unused vacation days accrued through the
      Executive’s last day of employment with the Company; (B) as severance pay, the
      Executive’s full base salary for a period of six (6) months; and (C) continued
      coverage, at the Company’s expense, under all Benefits Plans in which the
      Executive was a participant immediately prior to his last date of employment
      with the Company, or, in the event that any such Benefit Plans do not permit
      coverage of the Executive following his last date of employment with the
      Company, under benefit plans that provide no less coverage than such Benefit
      Plans, through the Scheduled Termination Date. Except for severance which will
      be payable monthly, all payments due hereunder shall be made within 45 days
      after the date of termination of the Executive’s employment. The Company shall
      deduct, from all payments made hereunder, all applicable taxes, including income
      tax, FICA and FUTA, and other appropriate deductions.

     

    (iv) The
      Executive shall have no duty to mitigate his damages, except that continued
      benefits required to be provided under Section
      11(e)(iii)(D)
      shall be
      canceled or reduced to the extent of any comparable benefit coverage offered
      to
      the Executive during the period prior to the Scheduled Termination Date by
      a
      subsequent employer or other person or entity for which the Executive performs
      services, including but not limited to consulting services. 

    


    (f) Without
      “Cause.”

     

    (i) By
      the Executive.
      At any
      time during the term of this Agreement, the Executive shall be entitled to
      terminate this Agreement and the Executive’s employment with the Company other
      than for Good Reason by providing prior written notice of at least 90 days
      to
      the Company. Upon termination by the Executive of this Agreement and the
      Executive’s employment with the Company without Cause, the Company shall have no
      further obligations or liability to the Executive or his heirs, administrators
      or executors with respect to compensation and benefits thereafter, except for
      the obligation to pay the Executive any earned but unpaid base salary, and
      unused vacation days accrued through the Executive’s last day of employment with
      the Company. The Company shall deduct, from all payments made hereunder, all
      applicable taxes, including income tax, FICA and FUTA, and other appropriate
      deductions.

     

    
      
        
        

      

      
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    (ii) By
      The Company.
      At any
      time during the term of this Agreement, the Company shall be entitled to
      terminate this Agreement and the Executive’s employment with the Company without
      Cause by providing prior written notice of at least 90 days to the Executive.
      Upon termination by the Company of this Agreement and the Executive’s employment
      with the Company without Cause, the Company shall pay or provide to the
      Executive (or, following his death, to the Executive’s heirs, administrators or
      executors): (A) any earned but unpaid base salary, unpaid pro
      rata
      bonus
      previously granted and unused vacation days accrued through the Executive’s last
      day of employment with the Company; (B) as severance pay, the Executive’s full
      base salary for a period of six (6) months; and (C) continued coverage, at
      the
      Company’s expense, under all Benefits Plans in which the Executive was a
      participant immediately prior to his last date of employment with the Company,
      or, in the event that any such Benefit Plans do not permit coverage of the
      Executive following his last date of employment with the Company, under benefit
      plans that provide no less coverage than such Benefit Plans, through the
      Scheduled Termination Date. Except for severance which will be payable monthly,
      all payments due hereunder shall be made within 45 days after the date of
      termination of the Executive’s employment. The Company shall deduct, from all
      payments made hereunder, all applicable taxes, including income tax, FICA and
      FUTA, and other appropriate deductions. 

     

    13. Confidential
      Information.
      

    


    (a) The
      Executive expressly acknowledges that, in the performance of his duties and
      responsibilities with the Company, he has been exposed since prior to the
      Effective Date, and will be exposed, to the trade secrets, 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”).
      The
      term “Confidential Information” includes information or material that has actual
      or potential commercial value to the Company, its affiliates and/or its clients,
      business partners or customers and is not generally known to and is not readily
      ascertainable by proper means to persons outside the Company, its affiliates
      and/or its clients or customers.

    


    (b) Except
      as
      authorized in writing by the Board, during the performance of the Executive’s
      duties and responsibilities for the Company and until such time as any such
      Confidential Information becomes generally known to and readily ascertainable
      by
      proper means to persons outside the Company, its affiliates and/or its clients,
      business partners or customers, the Executive agrees to keep strictly
      confidential and not use for his personal benefit or the benefit to any other
      person or entity (other than the Company) the Confidential Information.
“Confidential Information” includes the following, whether or not expressed in a
      document or medium, regardless of the form in which it is communicated, and
      whether or not marked “trade secret” or “confidential” or any similar legend:
      (i) lists of and/or information concerning customers, prospective customers,
      suppliers, employees, consultants, co-venturers and/or joint venture candidates
      of the Company, its affiliates or its clients or customers; (ii) information
      submitted by customers, prospective customers, suppliers, employees, consultants
      and/or co-venturers of the Company, its affiliates and/or its clients or
      customers; (iii) non-public information proprietary to the Company, its
      affiliates and/or its clients or customers, including, without limitation,
      cost
      information, profits, sales information, prices, accounting, unpublished
      financial information, business plans or proposals, expansion plans (for current
      and proposed facilities), markets and marketing methods, advertising and
      marketing strategies, administrative procedures and manuals, the terms and
      conditions of the Company’s contracts and trademarks and patents under
      consideration, distribution channels, franchises, investors, sponsors and
      advertisers; (iv) proprietary technical information concerning products and
      services of the Company, its affiliates and/or its clients, business partners
      or
      customers, including, without limitation, product data and specifications,
      diagrams, flow charts, know how, processes, designs, formulae, inventions and
      product development; (v) lists of and/or information concerning applicants,
      candidates or other prospects for employment, independent contractor or
      consultant positions at or with any actual or prospective customer or client
      of
      Company and/or its affiliates, any and all confidential processes, inventions
      or
      methods of conducting business of the Company, its affiliates and/or its
      clients, business partners or customers; (vi) acquisition or merger targets;
      (vii) business plans or strategies, data, records, financial information or
      other trade secrets concerning the actual or contemplated business, strategic
      alliances, policies or operations of the Company or its affiliates; or (viii)
      any and all versions of proprietary computer software (including source and
      object code), hardware, firmware, code, discs, tapes, data listings and
      documentation of the Company; or (ix) any other confidential information
      disclosed to the Executive by, or which the Executive obligated under a duty
      of
      confidence from, the Company, its affiliates, and/or its clients, business
      partners or customers.

     

    
      
        
        

      

      
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    (c) The
      Executive affirms that he does not possess and will not rely upon the protected
      trade secrets or confidential or proprietary information of his prior
      employer(s) in providing services to the Company. 

    


    (d) In
      the
      event that the Executive’s employment with the Company terminates for any
      reason, the Executive shall deliver forthwith to the Company or destroy any
      and
      all originals and copies of Confidential Information.

    


    14. Non-Competition
      And Non-Solicitation.
      

     

    (a) The
      Executive agrees and acknowledges that the Confidential Information that the
      Executive has already received and will receive is valuable to the Company
      and
      that its protection and maintenance constitutes a legitimate business interest
      of the Company, to be protected by the non-competition restrictions set forth
      herein. The Executive agrees and acknowledges that the non-competition
      restrictions set forth herein are reasonable and necessary and do not impose
      undue hardship or burdens on the Executive. The Executive also acknowledges
      that
      the products and services developed or provided by the Company, its affiliates
      and/or its clients or customers are or are intended to be sold, provided,
      licensed and/or distributed to customers and clients in and throughout the
      United States and Europe (the “Geographic
      Boundary”)
      (to
      the extent the Company comes to own or operate any material asset in other
      areas
      during the term of the Executive’s employment, the definition of Geographic
      Boundary shall be automatically expanded to cover such other areas), and that
      the Geographic Boundary, scope of prohibited competition, and time duration
      set
      forth in the non-competition restrictions set forth below are reasonable and
      necessary to maintain the value of the Confidential Information of, and to
      protect the goodwill and other legitimate business interests of, the Company,
      its affiliates and/or its clients or customers. 

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    


    (b) The
      Executive hereby agrees and covenants that he shall not, without the prior
      written consent of the Company, directly or indirectly, in any capacity
      whatsoever, including, without limitation, as an employee, employer, consultant,
      principal, partner, shareholder, officer, director or any other individual
      or
      representative capacity (other than a holder of less than one percent (1%)
      of
      the outstanding voting shares of any publicly held company), or whether on
      the
      Executive’s own behalf or on behalf of any other person or entity or otherwise
      howsoever, (i) during the Executive’s employment with the Company and (ii) the
      period during which the Executive continues to receive his base salary pursuant
      to Section
      12(e)
      or
Section
      12(f)(ii)
      of this
      Agreement following the termination of this Agreement and of the Executive’s
      employment, in the Geographic Boundary:

    


    (i) Engage,
      own, manage, operate, control, be employed by, consult for, participate in,
      or
      be connected in any manner with the ownership, management, operation or control
      of any business in competition with the Business of the Company. The
“Business
      of the Company”
is
      defined as the development and production of biodiesel and other alternatives
      to
      petroleum-based fuels within the Geographic Boundary.

    


    (ii) Recruit,
      solicit or hire, or attempt to recruit, solicit or hire, any employee, or
      independent contractor of the Company to leave the employment (or independent
      contractor relationship) thereof, whether or not any such employee or
      independent contractor is party to an employment agreement. 

    


    (iii) Attempt
      in any manner to solicit or accept from any customer of the Company, with whom
      the Executive had significant contact during the term of the Agreement, business
      of the kind or competitive with the business done by the Company with such
      customer or to persuade or attempt to persuade any such customer to cease to
      do
      business or to reduce the amount of business which such customer has customarily
      done or is reasonably expected to do with the Company, or if any such customer
      elects to move its business to a person other than the Company, provide any
      services (of the kind or competitive with the Business of the Company) for
      such
      customer, or have any discussions regarding any such service with such customer,
      on behalf of such other person.

    


    (iv) Interfere
      with any relationship, contractual or otherwise, between the Company and any
      other party, including, without limitation, any supplier, co-venturer or joint
      venturer of the Company to discontinue or reduce its business with the Company
      or otherwise interfere in any way with the Business of the Company.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    


    15. Dispute
      Resolution.
      The
      Executive and the Company agree that any dispute or claim, whether based on
      contract, tort, discrimination, retaliation, or otherwise, relating to, arising
      from, or connected in any manner with this Agreement or with the Executive’s
      employment with Company shall be resolved exclusively through final and binding
      arbitration under the auspices of the American Arbitration Association
      (“AAA”).
      The
      arbitration shall be held in Los Angeles, California. The Company will be
      responsible for the cost of the arbitration and the arbitrator. The arbitration
      shall proceed in accordance with the National Rules for the Resolution of
      Employment Disputes of the AAA in effect at the time the claim or dispute arose,
      unless other rules are agreed upon by the parties. The arbitration shall be
      conducted by one arbitrator who is a member of the AAA, unless the parties
      mutually agree otherwise. The arbitrator shall have jurisdiction to determine
      any claim, including the arbitrability of any claim, submitted to them. The
      arbitrator may grant any relief authorized by law for any properly established
      claim. The interpretation and enforceability of this paragraph of this Agreement
      shall be governed and construed in accordance with the United States Federal
      Arbitration Act, 9. U.S.C. § 1, et
      seq.
      More
      specifically, the parties agree to submit to binding arbitration any claims
      for
      unpaid wages or benefits, or for alleged discrimination, harassment, or
      retaliation, arising under Title VII of the Civil Rights Act of 1964, the Equal
      Pay Act, the National Labor Relations Act, the Age Discrimination in Employment
      Act, the Americans With Disabilities Act, the Employee Retirement Income
      Security Act, the Civil Rights Act of 1991, the Family and Medical Leave Act,
      the Fair Labor Standards Act, Sections 1981 through 1988 of Title 42 of the
      United States Code, COBRA, the New York State Human Rights Law, the New York
      City Human Rights Law, and any other federal, state, or local law, regulation,
      or ordinance, and any common law claims, claims for breach of contract, or
      claims for declaratory relief. The Executive acknowledges that the purpose
      and
      effect of this paragraph is solely to elect private arbitration in lieu of
      any
      judicial proceeding he might otherwise have available to him in the event of
      an
      employment-related dispute between him and the Company. Therefore, the Executive
      hereby waives his right to have any such employment-related dispute heard by
      a
      court or jury, as the case may be, and agrees that his exclusive procedure
      to
      redress any employment-related claims will be arbitration.

    


    16. Notice.
      For
      purposes of this Agreement, notices and all other communications provided for
      in
      this Agreement or contemplated hereby shall be in writing and shall be deemed
      to
      have been duly given when personally delivered, delivered by a nationally
      recognized overnight delivery service or when mailed United States Certified
      or
      registered mail, return receipt requested, postage prepaid, and addressed as
      follows:

    


    If
      to the Company: 

    


    Kreido
      Laboratories

    1140
      Avenida Acaso

    Camarillo,
      California 93012

    Attn:
      Chairman of the Board

    Facsimile:
      (805) 384-0989

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    


    If
      to the Executive:

    


    Joel
      Balbien, Ph.D.

    4041
      Balcony Drive

    Calabasas,
      California 91302

    


    Any
      party
      may change the address to which communications hereunder are to be delivered
      by
      giving the other party notice in the manner herein set forth.

    


    17. Assignment
      and Assumption.
      This
      Agreement may be assigned to and assumed by the PubCo in connection with a
      proposed merger transaction involving the Company and a subsidiary of the Pubco.
      From and after such assignment and assumption, all references to the Company
      shall be references to the PubCo, and this Agreement shall have been effectively
      novated to become an agreement between the Executive and the PubCo.

    


    18. Miscellaneous.

    


    (a) All
      issues and disputes concerning, relating to or arising out of this Agreement
      and
      from the Executive’s employment by the Company, including, without limitation,
      the construction and interpretation of this Agreement, shall be governed by
      and
      construed in accordance with the internal laws of the State of California,
      without giving effect to that State’s principles of conflicts of
      law.

    


    (b) The
      Executive and the Company agree that any provision of this Agreement deemed
      unenforceable or invalid may be reformed to permit enforcement of the
      objectionable provision to the fullest permissible extent. Any provision of
      this
      Agreement deemed unenforceable after modification shall be deemed stricken
      from
      this Agreement, with the remainder of the Agreement being given its full force
      and effect.

    


    (c) The
      Company shall be entitled to equitable relief, including injunctive relief
      and
      specific performance as against the Executive, for the Executive’s threatened or
      actual breach of Section
      13
      or
Section
      14
      of this
      Agreement, as money damages for a breach thereof would be incapable of precise
      estimation, uncertain, and an insufficient remedy for an actual or threatened
      breach of Section
      13
      or
Section
      14
      of this
      Agreement. The Executive and the Company agree that any pursuit of equitable
      relief in respect of Section
      13
      or
Section
      14
      of this
      Agreement shall have no effect whatsoever regarding the continued viability
      and
      enforceability of Section
      15
      of this
      Agreement.

    


    (d) Any
      waiver or inaction by the Company for any breach of this Agreement shall not
      be
      deemed a waiver of any subsequent breach of this Agreement.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    


    (e) The
      Executive and the Company independently have made all inquiries regarding the
      qualifications and business affairs of the other which either party deems
      necessary. The Executive affirms that he fully understands this Agreement’s
      meaning and legally binding effect. Each party has participated fully and
      equally in the negotiation and drafting of this Agreement. Each party assumes
      the risk of any misrepresentation or mistaken understanding or belief relied
      upon by him or it in entering into this Agreement.

    


    (f) The
      Executive’s obligations under this Agreement are personal in nature and may not
      be assigned by the Executive to any other person or entity. 

    


    (g) This
      instrument constitutes the entire Agreement between the parties regarding its
      subject matter. When signed by all parties, this Agreement supersedes and
      nullifies all prior or contemporaneous conversations, negotiations, or
      agreements, oral and written, regarding the subject matter of this Agreement.
      In
      any future construction of this Agreement, this Agreement should be given its
      plain meaning. This Agreement may be amended only by a writing signed by the
      Company and the Executive.

    


    (h) This
      Agreement may be executed in counterparts, a counterpart transmitted via
      facsimile, and all executed counterparts, when taken together, shall constitute
      sufficient proof of the parties’ entry into this Agreement. The parties agree to
      execute any further or future documents which may be necessary to allow the
      full
      performance of this Agreement. This Agreement contains headings for ease of
      reference. The headings have no independent meaning.

    


    (i) THE
      EXECUTIVE STATES THAT HE HAS FREELY AND VOLUNTARILY ENTERED INTO THIS AGREEMENT
      AND THAT HE HAS READ AND UNDERSTOOD EACH AND EVERY PROVISION THEREOF. THIS
      AGREEMENT IS EFFECTIVE UPON THE EXECUTION OF THIS AGREEMENT BY BOTH
      PARTIES.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the Company and the Executive have executed this Employment
      Agreement as of the day and year first above written.

     

    
      	EXECUTIVE:	 	 	COMPANY:
	 	 	 	 
	 	 	 	KREIDO
              LABORATORIES
	 	 	 	 
	 	 	 	 
	/s/ Joel Balbien	 	 	By: /s/
              Philip Lichtenberger
	
              
JOEL
              BALBIEN, Ph.D.	 	 	
              
                
Name:
                Philip Lichtenberger

            
	
              
              

            	
               

            	 	
              Title:
                Executive Vice President


            




         

    
      
        
        

      

      
        -14-