EXHIBIT
        10.4

      


      SPLIT-OFF
        AGREEMENT

      


      SPLIT-OFF
        AGREEMENT,
        dated
        as of this 12th day of January, 2007 (this “Agreement”), by and among Kreido
        Biofuels, Inc. (f/k/a Gemwood Productions, Inc.), a Nevada corporation
        (“Seller”), Victor
        Manuel Savceda
        (“Buyer”), Gemwood Leaseco, Inc., a Nevada corporation (“Leaseco”), and Kreido
        Laboratories, a California corporation (“Kreido”).

       

      RECITALS:

      


      WHEREAS, Seller
        is
        the owner of all of the issued and outstanding capital stock of Leaseco.
        Leaseco
        is a newly-formed wholly-owned subsidiary of Seller which was organized to
        acquire, and has so acquired, the business assets and liabilities previously
        held by Seller. Seller has no other businesses or operations;

      


      WHEREAS,
        prior
        to the execution of this Agreement, Seller, Kreido, and a newly-formed
        wholly-owned California subsidiary of Seller, Kreido Acquisition Corp.
        (“Acquisition Corp.”), have entered into an Agreement and Plan of Merger and
        Reorganization (the “Merger Agreement”) pursuant to which Acquisition Corp.
        merged with and into Kreido with Kreido being the surviving entity (the
“Merger”), and the equity holders of Kreido received shares of common stock in
        Seller in exchange for their equity interests in Kreido;

      


      WHEREAS,
        the
        execution and delivery of this Agreement was required by Kreido as a condition
        subsequent to its execution of the Merger Agreement. The consummation of
        the
        purchase and sale transaction contemplated by this Agreement was also a
        condition subsequent to the completion of the Merger pursuant to the Merger
        Agreement. Seller has represented to Kreido in the Merger Agreement that
        the
        purchase and sale transaction contemplated by this Agreement would be
        consummated as soon as practicable following the consummation of the Merger,
        and
        Kreido relied on such representation in entering into the Merger
        Agreement;

      


      WHEREAS,
        Buyer
        desires to purchase the Shares (as defined in Section
        1.1)
        from
        Seller, and to assume, as between Seller and Buyer, all responsibilities
        for any
        debts, obligations and liabilities of Leaseco, on the terms and subject to
        the
        conditions specified in this Agreement; and

      


      WHEREAS,
        Seller
        desires to sell and transfer the Shares to the Buyer, on the terms and subject
        to the conditions specified in this Agreement.

      


      NOW,
        THEREFORE,
        in
        consideration of the premises and the covenants, promises, and agreements
        herein
        set forth and for other good and valuable consideration, the receipt and
        sufficiency of which are hereby acknowledged, the parties hereto, intending
        legally to be bound, agree as follows.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      I. PURCHASE
        AND SALE OF STOCK.

       

      1.1 Purchased
        Shares.
        Subject
        to the terms and conditions provided below, Seller shall sell and transfer
        to
        Buyer and Buyer shall purchase from Seller, on the Closing Date (as defined
        in
Section
        1.3),
        all
        the issued and outstanding shares of capital stock of Leaseco (the
“Shares”).

       

      1.2 Purchase
        Price.
        The
        purchase price for the Shares shall be the transfer and delivery by Buyer
        to
        Seller of 19,444,444 shares of common stock of Seller that Buyer owns (the
        “Purchase Price Shares”), deliverable as provided in Section
        2.2.

       

      1.3 Closing.
        The
        closing of the transactions contemplated in this Agreement (the “Closing”) shall
        take place as soon as practicable following the execution of this Agreement.
        The
        date on which the Closing occurs shall be referred to herein as the Closing
        Date
        (the “Closing Date”).

       

      II. CLOSING.

       

      2.1 Transfer
        of Shares.
        At the
        Closing, Seller shall deliver to Buyer certificates representing the Shares,
        duly endorsed to Buyer or as directed by Buyer, which delivery shall vest
        Buyer
        with good and marketable title to all of the issued and outstanding shares
        of
        capital stock of Leaseco, free and clear of all liens and
        encumbrances.

       

      2.2 Payment
        of Purchase Price.
        At the
        Closing, Buyer shall deliver to Seller a certificate or certificates
        representing the Purchase Price Shares duly endorsed to Seller, which delivery
        shall vest Seller with good and marketable title to the Purchase Price Shares,
        free and clear of all liens and encumbrances.

       

      2.3 Transfer
        of Records.
        On or
        before the Closing, Seller shall arrange for transfer to Leaseco all existing
        corporate books and records in Seller’s possession relating to Leaseco and its
        business, including but not limited to all agreements, litigation files,
        real
        estate files, personnel files and filings with governmental agencies;
provided,
        however,
        when
        any such documents relate to both Seller and Leaseco, only copies of such
        documents need be furnished. On or before the Closing, Buyer and Leaseco
        shall
        transfer to Seller all existing corporate books and records in the possession
        of
        Buyer or Leaseco relating to Seller, including but not limited to all corporate
        minute books, stock ledgers, certificates and corporate seals of Seller and
        all
        agreements, litigation files, real property files, personnel files and filings
        with governmental agencies; provided,
        however,
        when
        any such documents relate to both Seller and Leaseco or its business, only
        copies of such documents need be furnished.

       

      III. BUYER’S
        REPRESENTATIONS AND WARRANTIES.
        Buyer
        represents and warrants to Seller and Kreido that:

       

      3.1 Capacity
        and Enforceability.
        Buyer
        has the legal capacity to execute and deliver this Agreement and the documents
        to be executed and delivered by Buyer at the Closing pursuant to the
        transactions contemplated hereby. This Agreement and all such documents
        constitute valid and binding agreements of Buyer, enforceable in accordance
        with
        their terms.

       

      
        
          
          

        

        
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      3.2 Compliance.
        Neither
        the execution and delivery of this Agreement nor the consummation of the
        transactions contemplated hereby by Buyer will result in the breach of any
        term
        or provision of, or constitute a default under, or violate any agreement,
        indenture, instrument, order, law or regulation to which Buyer is a party
        or by
        which Buyer is bound.

       

      3.3 Purchase
        for Investment.
        Buyer
        is financially able to bear the economic risks of acquiring an interest in
        Leaseco and the other transactions contemplated hereby, and has no need for
        liquidity in this investment. Buyer has such knowledge and experience in
        financial and business matters in general and with respect to businesses
        of a
        nature similar to the business of Leaseco so as to be capable of evaluating
        the
        merits and risks of, and making an informed business decision with regard
        to,
        the acquisition of the Shares. Buyer is acquiring the Shares solely for his
        own
        account and not with a view to or for resale in connection with any distribution
        or public offering thereof, within the meaning of any applicable securities
        laws
        and regulations, unless such distribution or offering is registered under
        the
        Securities Act of 1933, as amended (the “Securities Act”), or an exemption from
        such registration is available. Buyer has (i) received all the information
        he has deemed necessary to make an informed investment decision with respect
        to
        the acquisition of the Shares; (ii) had an opportunity to make such
        investigation as he has desired pertaining to Leaseco and the acquisition
        of an
        interest therein and to verify the information which is, and has been, made
        available to him; and (iii) had the opportunity to ask questions of Seller
        concerning Leaseco. Buyer acknowledges that Buyer is an officer and director
        of
        Seller and Leaseco and, as such, has actual knowledge of the business,
        operations and financial affairs of Leaseco. Buyer has received no public
        solicitation or advertisement with respect to the offer or sale of the Shares.
        Buyer realizes that the Shares are “restricted securities” as that term is
        defined in Rule 144 promulgated by the Securities and Exchange Commission
        under
        the Securities Act, the resale of the Shares is restricted by federal and
        state
        securities laws and, accordingly, the Shares must be held indefinitely unless
        their resale is subsequently registered under the Securities Act or an exemption
        from such registration is available for their resale. Buyer understands that
        any
        resale of the Shares by him must be registered under the Securities Act (and
        any
        applicable state securities law) or be effected in circumstances that, in
        the
        opinion of counsel for Leaseco at the time, create an exemption or otherwise
        do
        not require registration under the Securities Act (or applicable state
        securities laws). Buyer acknowledges and consents that certificates now or
        hereafter issued for the Shares will bear a legend substantially as
        follows:

       

      THE
        SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
        SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER
        ANY APPLICABLE STATE SECURITIES LAWS (THE “STATE ACTS”), HAVE BEEN ACQUIRED FOR
        INVESTMENT AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
        EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
        QUALIFICATION UNDER THE STATE ACTS OR EXEMPTIONS FROM SUCH REGISTRATION OR
        QUALIFICATION REQUIREMENTS (INCLUDING, IN THE CASE OF THE SECURITIES ACT,
        THE
        EXEMPTIONS AFFORDED BY SECTION 4(1) OF THE SECURITIES ACT AND RULE 144
        THEREUNDER). AS A PRECONDITION TO ANY SUCH TRANSFER, THE ISSUER OF THESE
        SECURITIES SHALL BE FURNISHED WITH AN OPINION OF COUNSEL OPINING AS TO THE
        AVAILABILITY OF EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION AND/OR
        SUCH
        OTHER EVIDENCE AS MAY BE SATISFACTORY THERETO THAT ANY SUCH TRANSFER WILL
        NOT
        VIOLATE THE SECURITIES LAWS.

       

      
        
          
          

        

        
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      Buyer
        understands that the Shares are being sold to him pursuant to the exemption
        from
        registration contained in Section 4(1) of the Securities Act and that the
        Seller
        is relying upon the representations made herein as one of the bases for claiming
        the Section 4(1) exemption. 

       

      3.4 Liabilities.
        Following the Closing, Seller will have no liability for any debts, liabilities
        or obligations of Leaseco or its business or activities, and there are no
        outstanding guaranties, performance or payment bonds, letters of credit or
        other
        contingent contractual obligations that have been undertaken by Seller directly
        or indirectly in relation to Leaseco or its business and that may survive
        the
        Closing. 

       

      3.5 Title
        to Purchase Price Shares.
        Buyer
        is the sole record and beneficial owner of the Purchase Price Shares. At
        Closing, Buyer will have good and marketable title to the Purchase Price
        Shares,
        which Purchase Price Shares are, and at the Closing will be, free and clear
        of
        all options, warrants, pledges, claims, liens, and encumbrances and any
        restrictions or limitations prohibiting or restricting transfer to Seller,
        except for restrictions on transfer as contemplated by applicable securities
        laws. 

       

      IV. SELLER’S
        AND LEASECO’S REPRESENTATIONS AND WARRANTIES.
        Seller
        and Leaseco, jointly and severally, represent and warrant to Buyer
        that:

       

      4.1 Organization
        and Good Standing.
        Seller
        is a corporation duly incorporated, validly existing, and in good standing
        under
        the laws of the State of Nevada. Leaseco is a corporation duly incorporated,
        validly existing and in good standing under the laws of the State of
        Nevada.

       

      4.2 Authority
        and Enforceability.
        The
        execution and delivery of this Agreement and the documents to be executed
        and
        delivered at the Closing pursuant to the transactions contemplated hereby,
        and
        performance in accordance with the terms hereof and thereof, have been duly
        authorized by Seller and all such documents constitute the valid and binding
        agreements of Seller enforceable in accordance with their terms.

       

      4.3 Title
        to Shares.
        Seller
        is the sole record and beneficial owner of the Shares. At Closing, Seller
        will
        have good and marketable title to the Shares, which Shares are, and at the
        Closing will be, free and clear of all options, warrants, pledges, claims,
        liens
        and encumbrances, and any restrictions or limitations prohibiting or restricting
        transfer to Buyer, except for restrictions on transfer as contemplated by
        Section
        3.3
        above.
        The Shares constitute all of the issued and outstanding shares of capital
        stock
        of Leaseco.

       

      4.4 WARN
        Act.
        Leaseco
        does not have a sufficient number of employees to make it subject to the
        Worker
        Adjustment and Retraining Notification Act (“WARN Act”).

       

      
        
          
          

        

        
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      4.5 Representations
        in Merger Agreement.
        Leaseco
        represents and warrants that all of the representations and warranties by
        Seller, insofar as they relate to Leaseco, contained in the Merger Agreement
        are
        true and correct.

       

      V. OBLIGATIONS
        OF BUYER PENDING CLOSING.
        Buyer
        covenants and agrees that between the date hereof and the Closing:

       

      5.1 Not
        Impair Performance.
        Buyer
        shall not take any intentional action that would cause the conditions upon
        the
        obligations of the parties hereto to effect the transactions contemplated
        hereby
        not to be fulfilled, including, without limitation, taking or causing to
        be
        taken any action that would cause the representations and warranties made
        by any
        party herein not to be true, correct and accurate as of the Closing, or in
        any
        way impairing the ability of Seller to satisfy its obligations as provided
        in
Article
        VI.

       

      5.2 Assist
        Performance.
        Buyer
        shall exercise its reasonable best efforts to cause to be fulfilled those
        conditions precedent to Seller’s obligations to consummate the transactions
        contemplated hereby which are dependent upon actions of Buyer and to make
        and/or
        obtain any necessary filings and consents in order to consummate the sale
        transaction contemplated by this Agreement.

       

      VI. OBLIGATIONS
        OF SELLER PENDING CLOSING.
        Seller
        covenants and agrees that between the date hereof and the Closing:

       

      6.1 
        Business as Usual.
        Leaseco
        shall operate and Seller shall cause Leaseco to operate in accordance with
        past
        practices and shall use best efforts to preserve its goodwill and the goodwill
        of its employees, customers and others having business dealings with Leaseco.
        Without limiting the generality of the foregoing, from the date of this
        Agreement until the Closing Date, Leaseco shall (a) make all normal and
        customary repairs to its equipment, assets and facilities, (b) keep in
        force all insurance, (c) preserve in full force and effect all material
        franchises, licenses, contracts and real property interests and comply in
        all
        material respects with all laws and regulations, (d) collect all accounts
        receivable and pay all trade creditors in the ordinary course of business
        at
        intervals historically experienced, and (e) preserve and maintain Leaseco’s
        assets in their current operating condition and repair, ordinary wear and
        tear
        excepted. Leaseco shall not (i) amend, terminate or surrender any material
        franchise, license, contract or real property interest, or (ii) sell or
        dispose of any of its assets except in the ordinary course of business. Neither
        Leaseco nor Buyer shall take or omit to take any action that results in Seller
        incurring any liability or obligation prior to or in connection with the
        Closing.

       

      6.2 Not
        Impair Performance.
        Seller
        shall not take any intentional action that would cause the conditions upon
        the
        obligations of the parties hereto to effect the transactions contemplated
        hereby
        not to be fulfilled, including, without limitation, taking or causing to
        be
        taken any action which would cause the representations and warranties made
        by
        any party herein not to be materially true, correct and accurate as of the
        Closing, or in any way impairing the ability of Buyer to satisfy his obligations
        as provided in Article
        V.

       

      
        
          
          

        

        
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      6.3 Assist
        Performance.
        Seller
        shall exercise its reasonable best efforts to cause to be fulfilled those
        conditions precedent to Buyer’s obligations to consummate the transactions
        contemplated hereby which are dependent upon the actions of Seller and to
        work
        with Buyer to make and/or obtain any necessary filings and consents. Seller
        shall cause Leaseco to comply with its obligations under this
        Agreement.

       

      VII. SELLER’S
        AND LEASECO’S CONDITIONS PRECEDENT TO CLOSING.
        The
        obligations of Seller and Leaseco to close the transactions contemplated
        by this
        Agreement are subject to the satisfaction at or prior to the Closing of each
        of
        the following conditions precedent (any or all of which may be waived by
        Seller
        and Kreido in writing):

       

      7.1 Representations
        and Warranties; Performance.
        All
        representations and warranties of Buyer contained in this Agreement shall
        have
        been true and correct, in all material respects, when made and shall be true
        and
        correct, in all material respects, at and as of the Closing, with the same
        effect as though such representations and warranties were made at and as
        of the
        Closing. Buyer shall have performed and complied with all covenants and
        agreements and satisfied all conditions, in all material respects, required
        by
        this Agreement to be performed or complied with or satisfied by Buyer at
        or
        prior to the Closing.

       

      7.2 Additional
        Documents.
        Buyer
        shall deliver or cause to be delivered such additional documents as may be
        necessary in connection with the consummation of the transactions contemplated
        by this Agreement and the performance of their obligations
        hereunder.

       

      7.3 Release
        by Leaseco.
        At the
        Closing, Leaseco shall execute and deliver to Seller and Kreido a general
        release which in substance and effect releases Seller and Kreido from any
        and
        all liabilities and obligations that Seller and Kreido may owe to Leaseco
        in any
        capacity and from any and all claims that Leaseco may have against Seller,
        Kreido, or their respective managers, members, officers, directors,
        stockholders, employees and agents (other than those arising pursuant to
        this
        Agreement or any document delivered in connection with this
        Agreement).

       

      VIII. BUYER’S
        CONDITIONS PRECEDENT TO CLOSING.
        The
        obligation of Buyer to close the transactions contemplated by this Agreement
        is
        subject to the satisfaction at or prior to the Closing of the following
        condition precedent (which may be waived by Buyer in writing):

       

      8.1 Representations
        and Warranties; Performance.
        All
        representations and warranties of Seller and Leaseco contained in this Agreement
        shall have been true and correct, in all material respects, when made and
        shall
        be true and correct, in all material respects, at and as of the Closing with
        the
        same effect as though such representations and warranties were made at and
        as of
        the Closing. Seller and Leaseco shall have performed and complied with all
        covenants and agreements and satisfied all conditions, in all material respects,
        required by this Agreement to be performed or complied with or satisfied
        by them
        at or prior to the Closing.

       

      
        
          
          

        

        
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      IX. OTHER
        AGREEMENTS.

       

      9.1 Expenses.
        Each
        party hereto shall bear its expenses separately incurred in connection with
        this
        Agreement and with the performance of its obligations hereunder.

       

      9.2 Confidentiality.
        The
        parties hereto shall not make any public announcements concerning this
        transaction other than in accordance with mutual agreement reached prior
        to any
        such announcement(s) and other than as may be required by applicable law
        or
        judicial process. If for any reason the transactions contemplated hereby
        are not
        consummated, then Buyer shall return any information received by Buyer from
        Seller or Leaseco, and Buyer shall cause all confidential information obtained
        by Buyer concerning Leaseco and its business to be treated as such.

       

      9.3 Brokers’
        Fees.
        No
        party to this Agreement has employed the services of a broker and each agrees
        to
        indemnify the other against all claims of any third parties for fees and
        commissions of any brokers claiming a fee or commission related to the
        transactions contemplated hereby.

       

      9.4 Access
        to Information Post-Closing; Cooperation.
        

       

      (a) Following
        the Closing, Buyer and Leaseco shall afford to Seller and its authorized
        accountants, counsel, and other designated representatives reasonable access
        (and including using reasonable efforts to give access to persons or firms
        possessing information) and duplicating rights during normal business hours
        to
        allow records, books, contracts, instruments, computer data and other data
        and
        information (collectively, “Information”) within the possession or control of
        Buyer or Leaseco insofar as such access is reasonably required by Seller.
        Information may be requested under this Section
        9.4(a)
        for,
        without limitation, audit, accounting, claims, litigation and tax purposes,
        as
        well as for purposes of fulfilling disclosure and reporting obligations and
        performing this Agreement and the transactions contemplated hereby. No files,
        books or records of Leaseco existing at the Closing Date shall be destroyed
        by
        Buyer or Leaseco after Closing but prior to the expiration of any period
        during
        which such files, books or records are required to be maintained and preserved
        by applicable law without giving the Seller at least 30 days’ prior written
        notice, during which time Seller shall have the right to examine and to remove
        any such files, books and records prior to their destruction.

       

      (b) Following
        the Closing, Seller shall afford to Leaseco and its authorized accountants,
        counsel and other designated representatives reasonable access (including
        using
        reasonable efforts to give access to persons or firms possessing information)
        and duplicating rights during normal business hours to Information within
        Seller’s possession or control relating to the business of Leaseco. Information
        may be requested under this Section
        9.4(b)
        for,
        without limitation, audit, accounting, claims, litigation and tax purposes
        as
        well as for purposes of fulfilling disclosure and reporting obligations and
        for
        performing this Agreement and the transactions contemplated hereby. No files,
        books or records of Leaseco existing at the Closing Date shall be destroyed
        by
        Seller after Closing but prior to the expiration of any period during which
        such
        files, books or records are required to be maintained and preserved by
        applicable law without giving the Buyer at least 30 days’ prior written notice,
        during which time Buyer shall have the right to examine and to remove any
        such
        files, books and records prior to their destruction.

       

      
        
          
          

        

        
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      (c) At
        all
        times following the Closing, Seller, Buyer and Leaseco shall use reasonable
        efforts to make available to the other party on written request, the current
        and
        former officers, directors, employees and agents of Seller or Leaseco for
        any of
        the purposes set forth in Section
        9.4(a) or (b)
        above or
        as witnesses to the extent that such persons may reasonably be required in
        connection with any legal, administrative or other proceedings in which Seller
        or Leaseco may from time to be involved.

       

      (d) The
        party
        to whom any Information or witnesses are provided under this Section
        9.4
        shall
        reimburse the provider thereof for all out-of-pocket expenses actually and
        reasonably incurred in providing such Information or witnesses.

       

      (e) Seller,
        Buyer, Leaseco and their respective employees and agents shall each hold
        in
        strict confidence all Information concerning the other party in their possession
        or furnished by the other or the other’s representative pursuant to this
        Agreement with the same degree of care as such party utilizes as to such
        party’s
        own confidential information (except to the extent that such Information
        is
        (i) in the public domain through no fault of such party or (ii) later
        lawfully acquired from any other source by such party), and each party shall
        not
        release or disclose such Information to any other person, except such party’s
        auditors, attorneys, financial advisors, bankers, other consultants and advisors
        or persons with whom such party has a valid obligation to disclose such
        Information, unless compelled to disclose such Information by judicial or
        administrative process or, as advised by its counsel, by other requirements
        of
        law.

       

      (f) Seller,
        Buyer and Leaseco shall each use their best efforts to forward promptly to
        the
        other party all notices, claims, correspondence and other materials which
        are
        received and determined to pertain to the other party.

       

      9.5 Guarantees,
        Surety Bonds and Letter of Credit Obligations.
        In the
        event that Seller is obligated for any debts, obligations or liabilities
        of
        Leaseco by virtue of any outstanding guarantee, performance or surety bond
        or
        letter of credit provided or arranged by Seller on or prior to the Closing
        Date,
        Buyer and Leaseco shall use best efforts to cause to be issued replacements
        of
        such bonds, letters of credit and guarantees and to obtain any amendments,
        novations, releases and approvals necessary to release and discharge fully
        Seller from any liability thereunder following the Closing. Buyer and Leaseco,
        jointly and severally, shall be responsible for, and shall indemnify, hold
        harmless and defend Seller from and against, any costs or losses incurred
        by
        Seller arising from such bonds, letters of credits and guarantees and any
        liabilities arising therefrom and shall reimburse Seller for any payments
        that
        Seller may be required to pay pursuant to enforcement of its obligations
        relating to such bonds, letters of credit and guarantees.

       

      9.6 Filings
        and Consents.
        Buyer,
        at its risk, shall determine what, if any, filings and consents must be made
        and/or obtained prior to Closing to consummate the purchase and sale of the
        Shares. Buyer shall indemnify the Seller Indemnified Parties (as defined
        in
Section
        11.1
        below)
        against any Losses (as defined in Section
        11.1
        below)
        incurred by any Seller Indemnified Parties by virtue of the failure to make
        and/or obtain any such filings or consents. Recognizing that the failure
        to make
        and/or obtain any filings or consents may cause Seller to incur Losses or
        otherwise adversely affect Seller, Buyer and Leaseco confirm that the provisions
        of this Section
        9.6
        will not
        limit Seller’s right to treat such failure as the failure of a condition
        precedent to Seller’s obligation to close pursuant to Article
        VII
        above.

       

      
        
          
          

        

        
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      9.7 Insurance.
        Buyer
        acknowledges that on the Closing Date, effective as of the Closing, all
        insurance coverage and bonds provided by Seller for Leaseco, and all
        certificates of insurance evidencing that Leaseco maintains any required
        insurance by virtue of insurance provided by Seller, will terminate with
        respect
        to any insured damages resulting from matters occurring subsequent to Closing.
        

       

      9.8 Agreements
        Regarding Taxes.
        

       

      (a)
        Tax
        Sharing Agreements.
        Any tax
        sharing agreement between Seller and Leaseco is terminated as of the Closing
        Date and will have no further effect for any taxable year (whether the current
        year, a future year, or a past year).

       

      (b)
        Returns
        for Periods Through the Closing Date.
        Seller
        will include the income and loss of Leaseco (including any deferred income
        triggered into income by Reg. §1.1502-13 and any excess loss accounts taken into
        income under Reg. §1.1502-19) on Seller’s consolidated federal income tax
        returns for all periods through the Closing Date and pay any federal income
        taxes attributable to such income. Seller and Leaseco agree to allocate income,
        gain, loss, deductions and credits between the period up to Closing (the
        “Pre-Closing Period”) and the period after Closing (the “Post-Closing Period”)
        based on a closing of the books of Leaseco and both Seller and Leaseco agree
        not
        to make an election under Reg. §1.1502-76(b)(2)(ii) to ratably allocate the
        year’s items of income, gain, loss, deduction and credit. Seller, Leaseco and
        Buyer agree to report all transactions not in the ordinary course of business
        occurring on the Closing Date after Buyer’s purchase of the Shares on Leaseco’s
        tax returns to the extent permitted by Reg. §1.1502-76(b)(1)(ii)(B). Buyer
        agrees to indemnify Seller for any additional tax owed by Seller (including
        tax
        owned by Seller due to this indemnification payment) resulting from any
        transaction engaged in by Leaseco during the Pre-Closing Period or on the
        Closing Date after Buyer’s purchase of the Shares. Leaseco will furnish tax
        information to Seller for inclusion in Seller’s consolidated federal income tax
        return for the period which includes the Closing Date in accordance with
        Leaseco’s past custom and practice.

       

      (c)
        Audits.
        Seller
        will allow Leaseco and its counsel to participate at Leaseco’s expense in any
        audits of Seller’s consolidated federal income tax returns to the extent that
        such audit raises issues that relate to and increase the tax liability of
        Leaseco. Seller shall have the absolute right, in its sole discretion, to
        engage
        professionals and direct the representation of Seller in connection with
        any
        such audit and the resolution thereof, without receiving the consent of Buyer
        or
        Leaseco or any other party acting on behalf of Buyer or Leaseco, provided
        that
        Seller will not settle any such audit in a manner which would materially
        adversely affect Leaseco after the Closing Date unless such settlement would
        be
        reasonable in the case of a person that owned Leaseco both before and after
        the
        Closing Date. In the event that after Closing any tax authority informs the
        Buyer or Leaseco of any notice of proposed audit, claim, assessment, or other
        dispute concerning an amount of taxes which pertain to the Seller, or to
        Leaseco
        during the period prior to Closing, Buyer or Leaseco must promptly notify
        the
        Seller of the same within 15 calendar days of the date of the notice from
        the
        tax authority. In the event Buyer or Leaseco does not notify the Seller within
        such 15 day period, Buyer and Leaseco, jointly and severally, will indemnify
        the
        Seller for any incremental interest, penalty or other assessments resulting
        from
        the delay in giving notice. To the extent of any conflict or inconsistency,
        the
        provisions of this Section 9.8 shall control over the provisions of
Section 11.2 below.

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

       

      (d)
        Cooperation
        on Tax Matters.
        Buyer,
        Seller and Leaseco shall cooperate fully, as and to the extent reasonably
        requested by the other party, in connection with the filing of tax returns
        pursuant to this Section and any audit, litigation or other proceeding with
        respect to taxes. Such cooperation shall include the retention and (upon
        the
        other party’s request) the provision of records and information which are
        reasonably relevant to any such audit, litigation or other proceeding and
        making
        employees available on a mutually convenient basis to provide additional
        information and explanation of any material provided hereunder. Leaseco shall
        (i) retain all books and records with respect to tax matters pertinent to
        Leaseco relating to any taxable period beginning before the Closing Date
        until
        the expiration of the statute of limitations (and, to the extent notified
        by
        Seller, any extensions thereof) of the respective taxable periods, and to
        abide
        by all record retention agreements entered into with any taxing authority,
        and
        (ii) give Seller reasonable written notice prior to transferring,
        destroying or discarding any such books and records and, if the Seller so
        requests, Buyer agrees to cause Leaseco to allow Seller to take possession
        of
        such books and records.

       

      9.9 ERISA.
        Effective as of the Closing Date, Leaseco shall terminate its participation
        in,
        and withdraw from, all employee benefit plans sponsored by Seller, and Seller
        and Buyer shall cooperate fully in such termination and withdrawal. Without
        limitation, Leaseco shall be solely responsible for (i) all liabilities
        under those employee benefit plans notwithstanding any status as an employee
        benefit plan sponsored by Seller, and (ii) all liabilities for the payment
        of vacation pay, severance benefits, and similar obligations, including,
        without
        limitation, amounts which are accrued but unpaid as of the Closing Date with
        respect thereto. Buyer and Leaseco acknowledge that Leaseco is solely
        responsible for providing continuing health coverage, as required under the
        Consolidated Omnibus Reconciliation Act of 1985, as amended (“COBRA”), to each
        person, if any, participating in an employee benefit plan subject to COBRA
        with
        respect to such employee benefit plan as of the Closing Date, including,
        without
        limitation, any person whose employment with Leaseco is terminated after
        the
        Closing Date.

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

       

      X. TERMINATION.
        This
        Agreement may be terminated at, or at any time prior to, the Closing by mutual
        written consent of Seller, Buyer and Kreido.

       

      If
        this
        Agreement is terminated as provided herein, it shall become wholly void and
        of
        no further force and effect and there shall be no further liability or
        obligation on the part of any party except to pay such expenses as are required
        of such party.

       

      XI. INDEMNIFICATION.

       

      11.1 Indemnification
        by Buyer.
        Buyer
        covenants and agrees to indemnify, defend, protect and hold harmless Seller,
        and
        its officers, directors, employees, stockholders, agents, representatives
        and
        affiliates (collectively, together with Seller, the “Seller Indemnified
        Parties”) at all times from and after the date of this Agreement from and
        against all losses, liabilities, damages, claims, actions, suits, proceedings,
        demands, assessments, adjustments, costs and expenses (including specifically,
        but without limitation, reasonable attorneys’ fees and expenses of
        investigation), whether or not involving a third party claim and regardless
        of
        any negligence of any Seller Indemnified Party (collectively, “Losses”),
        incurred by any Seller Indemnified Party as a result of or arising from
        (i) any breach of the representations and warranties of Buyer set forth
        herein or in certificates delivered in connection herewith, (ii) any breach
        or nonfulfillment of any covenant or agreement (including any other agreement
        of
        Buyer to indemnify Seller set forth in this Agreement) on the part of Buyer
        under this Agreement, (iii) any debt, liability or obligation of Leaseco,
        (iv) the conduct and operations of the business of Leaseco whether before
        or after Closing, (v) claims asserted against Leaseco whether before or
        after Closing, or (vi) any federal or state income tax payable by Seller
        and attributable to the transaction contemplated by this Agreement.

       

      11.2 Third
        Party Claims.

       

      (a) Defense.
        If any
        claim or liability (a “Third-Party Claim”) should be asserted against any of the
        Seller Indemnified Parties (the “Indemnitee”) by a third party after the Closing
        for which Buyer has an indemnification obligation under the terms of
Section
        11.1,
        then
        the Indemnitee shall notify Buyer and Leaseco (the “Indemnitor”) within 20 days
        after the Third-Party Claim is asserted by a third party (said notification
        being referred to as a “Claim Notice”) and give the Indemnitor a reasonable
        opportunity to take part in any examination of the books and records of the
        Indemnitee relating to such Third-Party Claim and to assume the defense of
        such
        Third-Party Claim and in connection therewith and to conduct any proceedings
        or
        negotiations relating thereto and necessary or appropriate to defend the
        Indemnitee and/or settle the Claim. The expenses (including reasonable
        attorneys’ fees) of all negotiations, proceedings, contests, lawsuits or
        settlements with respect to any Third-Party Claim shall be borne by the
        Indemnitor. If the Indemnitor agrees to assume the defense of any Third-Party
        Claim in writing within 20 days after the Claim Notice of such Third-Party
        Claim
        has been delivered, through counsel reasonably satisfactory to Indemnitee,
        then
        the Indemnitor shall be entitled to control the conduct of such defense,
        and any
        decision to settle such Third-Party Claim, and shall be responsible for any
        expenses of the Indemnitee in connection with the defense of such Third-Party
        Claim so long as the Indemnitor continues such defense until the final
        resolution of such Third-Party Claim. The Indemnitor shall be responsible
        for
        paying all settlements made or judgments entered with respect to any Third-Party
        Claim the defense of which has been assumed by the Indemnitor. Except as
        provided on subsection (b) below, both the Indemnitor and the Indemnitee
        must
        approve any settlement of a Third-Party Claim. A failure by the Indemnitee
        to
        timely give the Claim Notice shall not excuse Indemnitor from any
        indemnification liability except only to the extent that the Indemnitor is
        materially and adversely prejudiced by such failure.

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

       

      (b) Failure
        to Defend.
        If the
        Indemnitor shall not agree to assume the defense of any Third-Party Claim
        in
        writing within 20 days after the Claim Notice of such Third-Party Claim has
        been
        delivered, or shall fail to continue such defense until the final resolution
        of
        such Third-Party Claim, then the Indemnitee may defend against such Third-Party
        Claim in such manner as it may deem appropriate and the Indemnitee may settle
        such Third-Party Claim on such terms as it may deem appropriate. The Indemnitor
        shall promptly reimburse the Indemnitee for the amount of all settlement
        payments and expenses, legal and otherwise, incurred by the Indemnitee in
        connection with the defense or settlement of such Third-Party Claim. If no
        settlement of such Third-Party Claim is made, then the Indemnitor shall satisfy
        any judgment rendered with respect to such Third-Party Claim before the
        Indemnitee is required to do so, and pay all expenses, legal or otherwise,
        incurred by the Indemnitee in the defense against such Third-Party
        Claim.

       

      11.3 Non-Third-Party
        Claims.
        Upon
        discovery of any claim for which Buyer has an indemnification obligation
        under
        the terms of this Section
        11.3
        which
        does not involve a claim by a third party against the Indemnitee, the Indemnitee
        shall give prompt notice to Buyer of such claim and, in any case, shall give
        Buyer such notice within 30 days of such discovery. A failure by Indemnitee
        to
        timely give the foregoing notice to Buyer shall not excuse Buyer from any
        indemnification liability except to the extent that Buyer is materially and
        adversely prejudiced by such failure.

       

      11.4 Survival.
        Except
        as otherwise provided in this Section
        11.4,
        all
        representations and warranties made by Buyer, Leaseco and Seller in connection
        with this Agreement shall survive the Closing. Anything in this Agreement
        to the
        contrary notwithstanding, the liability of all Indemnitors under this
Article
        XI
        shall
        terminate on the third (3rd)
        anniversary of the Closing Date, except with respect to (a) liability for
        any item as to which, prior to the third (3rd)
        anniversary of the Closing Date, any Indemnitee shall have asserted a Claim
        in
        writing, which Claim shall identify its basis with reasonable specificity,
        in
        which case the liability for such Claim shall continue until it shall have
        been
        finally settled, decided or adjudicated, (b) liability of any party for
        Losses for which such party has an indemnification obligation, incurred as
        a
        result of such party’s breach of any covenant or agreement to be performed by
        such party after the Closing, (c) liability of Buyer for Losses incurred by
        a Seller Indemnified Party due to breaches of their representations and
        warranties in Article
        III
        of this
        Agreement, and (d) liability of Buyer for Losses arising out of Third-Party
        Claims for which Buyer has an indemnification obligation, which liability
        shall
        survive until the statute of limitation applicable to any third party’s right to
        assert a Third-Party Claim bars assertion of such claim.

       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

       

      XII. MISCELLANEOUS.

       

      12.1 Notices.
        All
        notices and communications required or permitted hereunder shall be in writing
        and deemed given when received by means of the United States mail, addressed
        to
        the party to be notified, postage prepaid and registered or certified with
        return receipt requested, or personal delivery, or overnight courier, as
        follows:

       

      (a) If
        to
        Seller, addressed to:

       

      Kreido
        Biofuels, Inc.

      1140
        Avenida Acaso

      Camarrillo,
        CA 93012

      Attn:
        Joel A. Balbien, Chief Executive Officer

      Facsimile:
        (805) 384-0989

      


      With
        a
        copy to (which shall not constitute notice hereunder):

       

      McGuireWoods
        LLP

      1345
        Avenue of the Americas

      New
        York,
        NY 10105

      Attn:
        Louis W. Zehil, Esq.

      Facsimile:
        (212) 548-2175

      


      Additional
        copy to (which shall not constitute notice hereunder):

       

      DLA
        Piper
        LLP

      203
        North
        LaSalle Street, Suite 1900

      Chicago,
        Illinois 60601

      Attn:
        John H. Heuberger, Esq.

      Facsimile:
        (312) 236-7516

      


      (b) If
        to
        Buyer or Leaseco, addressed to:

       

      Victor
        Manuel Savceda

      C
        Alta
        Mar 157 Fracc Baja Del Mar

      Playas
        de
        Rosarito BC 22710 Mexico

      


      With
        a
        copy to (which shall not constitute notice hereunder):

       

      Gottbetter
        & Partners, LLP

      488
        Madison Avenue, 12th
        Floor

      New
        York,
        New York 10022

      Attn:
        Adam S. Gottbetter, Esq.

      Facsimile:
        (212) 400-6901

       

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

      

      


      (c) If
        to
        Kreido, addressed to:

       

      Kreido
        Laboratories

      1140
        Avenida Acaso

      Camarrillo,
        CA 93012

      Attn:
        Joel A. Balbien, Chief Executive Officer

      Facsimile:
        (805) 384-0989

      
With
        a
        copy to (which shall not constitute notice hereunder):

       

      McGuireWoods
        LLP

      1345
        Avenue of the Americas

      New
        York,
        NY 10105

      Attn:
        Louis W. Zehil, Esq.

      Facsimile:
        (212) 548-2175

      


      Additional
        copy to (which shall not constitute notice hereunder):

       

      DLA
        Piper
        LLP

      203
        North
        LaSalle Street, Suite 1900

      Chicago,
        Illinois 60601

      Attn:
        John H. Heuberger, Esq.

      (312)
        236-7516

      


      or
        to
        such other address as any party hereto shall specify pursuant to this
Section
        12.1
        from
        time to time.

       

      12.2 Exercise
        of Rights and Remedies.
        Except
        as otherwise provided herein, no delay of or omission in the exercise of
        any
        right, power or remedy accruing to any party as a result of any breach or
        default by any other party under this Agreement shall impair any such right,
        power or remedy, nor shall it be construed as a waiver of or acquiescence
        in any
        such breach or default, or of any similar breach or default occurring later;
        nor
        shall any waiver of any single breach or default be deemed a waiver of any
        other
        breach or default occurring before or after that waiver.

       

      12.3 Time.
        Time is
        of the essence with respect to this Agreement.

       

      12.4 Reformation
        and Severability.
        In case
        any provision of this Agreement shall be invalid, illegal or unenforceable,
        it
        shall, to the extent possible, be modified in such manner as to be valid,
        legal
        and enforceable but so as to most nearly retain the intent of the parties,
        and
        if such modification is not possible, such provision shall be severed from
        this
        Agreement, and in either case the validity, legality and enforceability of
        the
        remaining provisions of this Agreement shall not in any way be affected or
        impaired thereby.

       

      12.5 Further
        Acts.
        Seller,
        Buyer and Leaseco shall execute any and all documents and perform such other
        acts which may be reasonably necessary to effectuate the purposes of this
        Agreement.

       

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

       

      12.6 Entire
        Agreement; Amendments.
        This
        Agreement contains the entire understanding of the parties relating to the
        subject matter contained herein. This Agreement cannot be amended or changed
        except through a written instrument signed by all of the parties hereto,
        including Kreido. No provisions of this Agreement or any rights hereunder
        may be
        waived by any party without the prior written consent of Kreido.

       

      12.7 Assignment.
        No
        party may assign his or its rights or obligations hereunder, in whole or
        in
        part, without the prior written consent of the other parties.

       

      12.8 Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of New York, without giving effect to principles of conflicts or choice
        of
        laws thereof.

       

      12.9 Counterparts.
        This
        Agreement may be executed in one or more counterparts, with the same effect
        as
        if all parties had signed the same document. Each such counterpart shall
        be an
        original, but all such counterparts taken together shall constitute a single
        agreement. In the event that any signature is delivered by facsimile
        transmission, such signature shall create a valid and binding obligation
        of the
        party executing (or on whose behalf such signature is executed) the same
        with
        the same force and effect as if such facsimile signature page was an original
        thereof.

       

      12.10 Section
        Headings and Gender.
        The
        Section headings used herein are inserted for reference purposes only and
        shall
        not in any way affect the meaning or interpretation of this Agreement. All
        personal pronouns used in this Agreement shall include the other genders,
        whether used in the masculine, feminine or neuter, and the singular shall
        include the plural, and vice
        versa,
        whenever and as often as may be appropriate.

       

      12.11 Specific
        Performance; Remedies.
        Each of
        Seller, Buyer and Leaseco acknowledges and agrees that Kreido would be damaged
        irreparably if any provision of this Agreement is not performed in accordance
        with its specific terms or is otherwise breached. Accordingly, each of Seller,
        Buyer and Leaseco agrees that Kreido will be entitled to seek an injunction
        or
        injunctions to prevent breaches of the provisions of this Agreement and to
        enforce specifically this Agreement and its terms and provisions in any action
        instituted in any court of the United States or any state thereof having
        jurisdiction over the parties and the matter, subject to Section
        12.8,
        in
        addition to any other remedy to which they may be entitled, at law or in
        equity.
        Except as expressly provided herein, the rights, obligations and remedies
        created by this Agreement are cumulative and in addition to any other rights,
        obligations or remedies otherwise available at law or in equity, and nothing
        herein will be considered an election of remedies.
        

       

      12.12 Submission
        to Jurisdiction; Process Agent; No Jury Trial.

       

      (a) Each
        party to the Agreement hereby submits to the jurisdiction of any state or
        federal court sitting in the State of New York, in any action arising out
        of or
        relating to this Agreement and agrees that all claims in respect of the action
        may be heard and determined in any such court. Each party to the Agreement
        also
        agrees not to bring any action arising out of or relating to this Agreement
        in
        any other court. Each party to the Agreement agrees that a final judgment
        in any
        action so brought will be conclusive and may be enforced by action on the
        judgment or in any other manner provided at law or in equity. Each party
        to the
        Agreement waives any defense of inconvenient forum to the maintenance of
        any
        action so brought and waives any bond, surety, or other security that might
        be
        required of any other Party with respect thereto.

       

      
        
          
          

        

        
          -15-

          
            

          

        

        
          
          

        

      

       

      (b) EACH
        PARTY TO THE AGREEMENT HEREBY AGREES TO WAIVE HIS OR HER RIGHTS TO JURY TRIAL
        OF
        ANY DISPUTE BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER AGREEMENTS
        RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT OR ANY DEALINGS AMONG THEM
        RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. The scope of this waiver
        is
        intended to be all encompassing of any and all actions that may be filed
        in any
        court and that relate to the subject matter of the transactions, including,
        contract claims, tort claims, breach of duty claims, and all other common
        law
        and statutory claims. Each party to the Agreement hereby acknowledges that
        this
        waiver is a material inducement to enter into a business relationship and
        that
        they will continue to rely on the waiver in their related future dealings.
        Each
        party to the Agreement further represents and warrants that it has reviewed
        this
        waiver with its legal counsel, and that each knowingly and voluntarily waives
        its jury trial rights following consultation with legal counsel. NOTWITHSTANDING
        ANYTHING TO THE CONTRARY HEREIN, THIS WAIVER IS IRREVOCABLE, MEANING THAT
        IT MAY
        NOT BE MODIFIED ORALLY OR IN WRITING, AND THE WAIVER WILL APPLY TO ANY
        AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO
        ANY
        OTHER DOCUMENTS OR AGREEMENTS RELATING HERETO. In the event of commencement
        of
        any action, this Agreement may be filed as a written consent to trial by
        a
        court.

       

      12.13 Construction.
        The
        parties hereto have participated jointly in the negotiation and drafting
        of this
        Agreement. If an ambiguity or question of intent or interpretation arises,
        this
        Agreement will be construed as if drafted jointly by the parties hereto and
        no
        presumption or burden of proof will arise favoring or disfavoring any party
        because of the authorship of any provision of this Agreement. Any reference
        to
        any federal, state, local, or foreign law will be deemed also to refer to
        law as
        amended and all rules and regulations promulgated thereunder, unless the
        context
        requires otherwise. The words “include,” “includes,” and “including” will be
        deemed to be followed by “without limitation.” The words “this Agreement,”
“herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to
        this Agreement as a whole and not to any particular subdivision unless expressly
        so limited. The parties hereto intend that each representation, warranty,
        and
        covenant contained herein will have independent significance. If any party
        hereto has breached any representation, warranty, or covenant contained herein
        in any respect, the fact that there exists another representation, warranty
        or
        covenant relating to the same subject matter (regardless of the relative
        levels
        of specificity) which that party has not breached will not detract from or
        mitigate the fact that such party is in breach of the first representation,
        warranty, or covenant.

       

      [Signature
        page follows this page]

       

      
        
          
          

        

        
          -16-

          
            

          

        

        
          
          

        

      


      IN
        WITNESS WHEREOF,
        the
        parties hereto have hereunto set their hands as of the day and year first
        above
        written.

      
        	 	 	 
	 	
                KREIDO
                  BIOFUELS, INC.

              
	 
 	 
 	 
 
	
              	By:  	/s/ Stephen B. Jackson 
	 	
                
Name: Stephen
                B. Jackson
	 	Title:  President


      

       

      
        	 	 	 
	 	GEMWOOD LEASECO,
                INC.
	 
 	 
 	 
 
	
              	By:  	/s/ Stephen B. Jackson 
	 	
                
Name: Stephen
                B. Jackson
	 	Title  President


      

       

      
        	 	 	 
	 	BUYER
	 
 	 
 	 
 
	 	By:  	/s/
                Victor Manuel Savceda 
	 	
                
Victor
                Manuel Savceda


      

       

      
        	 	 	 
	 	KREIDO
                LABORATORIES
	 
 	 
 	 
 
	
              	By:  	/s/ Joel A. Balbien
	 	
                
Name: Joel
                A. Balbien
	 	Title:  Chief
                Executive Officer




      
        
          
          

        

        
          -17-