Filed by Bowne Pure Compliance



 




Exhibit 10.1




Employment Agreement




This employment agreement (“Agreement”), executed on December 10, 2007 (“Execution Date”)
but effective as of December 1, 2007 (“Effective Date”), by and between Kreido Biofuels, Inc., a
Nevada corporation located at 1070 Flynn Avenue, Camarillo, California 93012 and Kreido’s
wholly-owned subsidiary, Kreido Laboratories (collectively “Kreido” or the “Company”) and George A.
Ben Binninger, an individual (“Executive”).



Recitals




Whereas Executive currently is employed as Company’s Interim Chief Executive Officer; and



Whereas Kreido now wishes to employ Executive as its Chief Executive Officer on an ongoing
basis and Executive wishes to be so employed;



Now, therefore, in consideration of good and valuable consideration, the sufficiency of which
is hereby acknowledged, the parties agree as follows:



Terms and Conditions





	1.	 	Executive’s Duties; Title; Location. As of the Effective Date, Executive
is employed as Kreido’s Chief Executive Officer (“CEO”) under the terms and conditions below.
Executive shall do and perform all services, acts and things necessary and advisable to manage
and conduct the business of the Company that are normally associated with the position of CEO.
At all times during his employment, Executive shall report to and be subject to the direction
and policies that are established from time to time by the Company’s Board of Directors (the
“Board”)
	 
	2.	 	TERM AND TERMINATION. Except as specifically provided herein, the Term of this
Agreement shall commence as of the Effective Date. The Term shall continue for eighteen months
unless it is terminated earlier as provided herein below.
	 
	3.	 	Efforts; Location. Executive shall work at Kreido’s Camarillo, California
office. Executive shall not be required routinely to provide services outside of a reasonable
commuting distance from the current Camarillo office except when traveling on Kreido business.
The nature of the Executive’s duties requires flexibility in the days and hours that the
Executive must work.
	 
	4.	 	Compensation.






	 	4.1	 	Cash Compensation.






	 	4.1.1	 	Base Salary. Executive shall receive an annual base salary of $225,000.00 in
accordance with Kreido’s regular payroll practices.




 


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	 	4.1.2	 	Bonus. Executive shall be entitled to participate in a performance-based executive
bonus plan (“Bonus Plan”), which shall be promulgated by the Compensation Committee of
the Company’s board of directors each fiscal year. The Bonus Plan will set forth three
levels of target performance goals “TPGs” for fiscal years 2008 and 2009 which, if
achieved, will entitle the Executive to a bonus of $48,000.00, $84,000.00 or $120,000.00
depending upon the level of TPG achieved. The TPGs will consist of a combination of
goals for the Executive’s individual performance and the Company’s overall performance
in a ratio of 75% Company performance and 25% individual Executive performance. Bonuses
paid under the Bonus Plan, if any, will be paid annually within 60 days after the end of
the fiscal year. The foregoing notwithstanding, so long as Executive’s employment under
this Agreement is not terminated voluntarily by Executive Without Good Reason prior to
December 31, 2008 pursuant to Section 8.1 of this Agreement, Executive’s bonus for
calendar year 2008 shall be no less than $40,000.00 and no more than $120,000.00 (“2008
Bonus”). In the event Executive’s employment is terminated by Company without Cause or
by Executive with Good Reason prior to the end of the fiscal year, Executive shall be
entitled to receive a pro rata portion of the 2008 Bonus. With regard to calendar year
2009, regardless whether Executive is employed by Company at the end of Fiscal Year
2009, Executive shall be entitled to a pro rata bonus for those months of 2009 during
which he is employed hereunder, under the same terms and conditions that apply to
Executive’s fiscal year 2008 Bonus.
	 
	 	4.1.3	 	Engagement Bonus. Upon the execution of this Agreement by both parties, Executive
shall receive a payment of $25,000.00 less all applicable payroll taxes (“Engagement
Bonus”).
	 
	 	4.1.4.	 	Stock Options. Executive shall be entitled to participate in the Kreido Biofuels
2006 Equity Incentive Plan (“Plan”). Executive’s participation in the Plan shall be
governed by the terms and conditions set forth in the applicable Plan documents to the
extent the Plan documents are not inconsistent with the terms of this Agreement except
to the extent required by law. Capitalized words not defined in this Agreement but used
in this Section shall have the meanings ascribed to them in the Plan.






	 	4.1.4	 	(a) Grant of Options. On the Execution Date, the Company
will grant Executive an option to purchase 1,250,000 shares of the Company’s
common voting stock under the Plan (the “Options”). Subsequently, the
Executive shall be eligible for such additional grants of options and other
permissible grants (collectively “Awards”) under the Plan as the Compensation
Committee of the board of directors of the Company shall determine in its
absolute discretion.
	 
	 	4.1.4	 	(b) Option Exercise Price; Term. The per share
exercise price of the Options shall be the final closing price per share of
Company common stock on the date of grant, that being the Execution Date.
The Term of the Option shall be ten years from the date of grant.
	 
	 	4.1.4	 	(c) Vesting and Exercise. The Options shall vest
and be exercisable as follows: 100,000 options shall vest on the Execution
Date; an additional 100,000 options shall vest on the first day of each of
the eleven months beginning with January, 2008 and ending with November,
2008; and on December 10, 2008, an additional 50,000 Options shall vest (each
a “Monthly Vesting”). Each such Monthly Vesting shall remain exercisable for
a period of ten years from the date of grant, subject to Section
4.1.4(e)(iv).




 


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	 	4.1.4	 	(d) Lock-Up Agreement. The Executive shall enter
into a Lock-Up Agreement with the Company in the form attached hereto as
Exhibit B. During any period
that Executive is precluded by the Lock-Up Agreement from exercising the
Option granted to Executive in Section 4.1.4(a), then the exercise period in
Section 4.1.4(b) will be extended by the amount of time during which
Executive could not exercise the Option, but in no event beyond ten years
from the date of grant.
	 
	 	4.1.4	 	(e) Termination of Service; Accelerated Vesting.






(i) If the Executive’s employment is terminated by the Company for Cause as
such term is defined below in Section 7.1.1, (1) all unvested Monthly
Vestings shall expire immediately effective the date of termination, and; (2)
all vested Monthly Vestings shall expire ten years following the date of the
grant.




(ii) If the Executive’s employment is terminated voluntarily by the Executive
without Good Reason as such term is defined below, all unvested Monthly
Vestings shall immediately expire effective the date of termination of
employment. Vested Monthly Vestings, to the extent unexercised, shall expire
on the later of ten years after the date of grant or the expiration of the
contractual Lock-Up Agreement.




(iii) If the Executive’s employment terminates on account of death or
Disability, as defined below, all unvested Monthly Vestings shall immediately
expire effective the date of death or termination of employment and all
vested Monthly Vestings to the extent unexercised, shall expire ten years
after the date of the grant unless otherwise limited by applicable federal or
state law.




(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, all unvested Monthly Vestings shall
immediately vest and become exercisable effective the date of termination of
employment, and, to the extent unexercised, shall expire ten years after the
date of grant.




	 	4.1.4	 	(f) Payment. The full consideration for shares
purchased by the Executive upon exercise of the Option shall be paid: (a) by
delivery of a certified check payable to the order of the Company; (b) by
delivery and attestation of Mature Shares (valued at their Fair Market Value
on the date of delivery) or (c) by delivery of a properly executed exercise
notice with irrevocable instructions to a broker to deliver to the Company
the amount necessary to pay the exercise price from the sale of proceeds of a
loan from the broker with respect to the sale of such award or a broker loan
secured by Mature Shares.






	 	4.1.5	 	Grant of Restricted Stock. On the Execution Date, the Company will issue
to Executive 100,000 shares of Company common stock under the 2006 Equity Incentive
Plan, which shall be Restricted Stock in that it shall be subject to repurchase by the
Company at the price of $0.01 per share if Executive shall not be in the employ
of the Company through the Term of the Agreement other than due to: (1) the death
or disability of Executive; (2) the termination of Executive’s employment by
the Company without Cause; or (3) the termination of Executive’s employment by Executive
for Good Reason. The certificate representing the Restricted Stock shall be held in the
custody of the Company or its designee for the account of the Executive pending delivery
to Executive upon the lapse of the restriction. The parties agree that the value of the Restricted
Stock while subject to restriction is $0.01 per share. The Restricted Stock shall be
subject to the restriction described herein and shall bear an appropriate legend with
respect to the restriction.




 


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	 	4.1.5	 	(a) Taxes. The Executive shall be liable
for any and all taxes, including withholding taxes, arising out of this
grant and the vesting of Restricted Stock hereunder. When the restriction
on the Restricted Stock lapses, Executive may elect to satisfy Company’s
withholding tax obligation by (1) remitting to Company the amount of
Company’s minimum withholding obligation; (2) having Company retain that
portion of the Restricted Stock having a fair market value equal to the
Company’s minimum withholding obligation; (3) having the Company retain
its minimum withholding obligation from payroll otherwise due and payable
to Executive at the time the Restriction lapses; or (4) a combination of
numbers 1 through 3. Executive shall notify Company of his election under
this Section as soon as practicably possible after the restriction on the
Restricted Stock has lapsed.






	 	4.2	 	Additional Benefits.






	 	4.2.1	 	Welfare Benefit Plans. Executive shall at all times be entitled to
participate in all benefit, 401(k) and other ERISA-qualified plans made available
to senior management executives of Kreido under the same terms offered to other
senior management executives, including without limitation, health benefit coverage
for Executive’s spouse and dependant children, if any.
	 
	 	4.2.2	 	Expense Reimbursement. Kreido shall reimburse Executive for all
ordinary and necessary expenses reasonably incurred by Executive on Kreido’s behalf
(“Business Expenses”). Executive shall provide Kreido with documentation for all
Business Expenses at the time reimbursement is requested. In the event it is
necessary for Executive to travel on Kreido’s behalf, Executive shall be entitled
to fly and have travel accommodations on the same level as Kreido’s other most
senior management Executives.
	 
	 	4.2.3	 	Discretionary Time Off. During his employment hereunder, Executive
shall be entitled to accrue Paid Time Off (“PTO”) in accordance with Kreido’s
regular PTO policy for all employees, or at the rate of fifteen days per calendar
year, whichever is greater. In addition, Executive may devote up to 4 work days
per calendar month to philanthropic, civic, charitable, personal, business or
religious activities, or to serving on the boards of directors or as a trustee of
other entities (“Discretionary Time Off”). Time off Executive takes prior to
December 6, 2007, if any, shall not count against Executive’s 2008 PTO accrual nor
his 2008 Discretionary Time Off accrual. The quantum of Executive’s Discretionary
Time Off shall not be limited or reduced by any other provision of this Agreement,
including, without limitation, Section 10.4.
	 
	 	 	 	Executive shall provide written notice to the Company of those companies, if any,
for which he now serves as a director or trustee, and Executive shall provide
written notice to the Company in advance of any additional board memberships
and/or trusteeships he proposes to take on that involve the area of biofuels technology,
supply, facilities, equipment, production, sales, and/or services.




 


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	5.	 	Proprietary Covenants of Executive.






	 	5.1	 	No Conflicts Of Interest. Executive acknowledges that he is bound to use good
judgment, to adhere to the highest ethical standards, and to avoid situations that create
an actual, potential, or apparent conflict of interest. Executive warrants and represents
to Kreido that he is currently unaware of any actual, potential, or apparent conflicts of
interest. He also agrees to immediately disclose to the Board of Directors of Kreido any
and all actual, potential, or apparent conflicts of interest, should they later arise. In
addition, Executive further represents and warrants to Kreido that for so long as he is
employed by the Company, he shall inform the Company of each and every business opportunity
presented to the Executive that arises that could be reasonably feasible for the Company to
undertake in the area of biofuels technology, supply, facilities, equipment, production,
sales, and/or services and that he will not, directly or indirectly, exploit any such
opportunity for his own account or the account of any third party without first obtaining
the Company’s written consent. Nothing contained in this Section 5.1 shall be construed to
prevent Executive from engaging in the consulting activities in which he is currently
engaged.
	 
	 	5.2	 	Covenant Not to Use or Disclose Confidential Information.






	 	5.2.1	 	Definition of Confidential Information. For purposes of this
Agreement, the term Confidential Information means all and any confidential
information and/or trade secrets of Kreido, including without limitation,
scientific discoveries, recipes, formulations, information encompassed in all
advertising and marketing plans, customer lists, costs, pricing information,
information concerning software and all concepts or ideas, in or reasonably related
to the business of Kreido. Confidential Information shall not include any Kreido
information that has been voluntarily disclosed to the public by Kreido,
independently developed and disclosed by others, information about Kreido that
Executive did not obtain by virtue of his employment or fiduciary relationship with
the Company, or information which otherwise enters the public domain through lawful
means.
	 
	 	5.2.2	 	Non-disclosure of Confidential Information. Executive expressly
acknowledges that in the performance of his duties and responsibilities with the
Company prior to the execution of this Agreement, he has been exposed to
Confidential Information and that he will continue to be exposed to the
Confidential Information after the execution of this Agreement. During his
employment and for three years thereafter, Executive shall regard and preserve as
confidential all Confidential Information pertaining to Kreido and its affiliates
that have been or may be obtained by Executive in any way by reason of Executive’s
employment by Kreido. Executive shall not, without the prior and specific written
consent of Kreido, or unless ordered to do so by court order or subpoena (i) use,
publicize, release or disclose to others, either during or after the period of
employment, Confidential Information or (ii) take, retain or copy any Kreido
executive compensation plans, Executive benefit plans, business plans, customer
lists, costs, pricing information, documents, reports, information encompassed in
advertising and marketing plans, or other concepts or ideas, in or
reasonably related to the business of Kreido. Executive agrees to notify
Kreido’s Board of Directors within two (2) business days of receipt of any court
order or subpoena which calls for information deemed Confidential under this
Agreement and to give Kreido reasonable opportunity to contest the subpoena. The
foregoing notwithstanding, nothing contained in this Section 5.2.2 shall be
construed to prevent Executive from using or disclosing Confidential Information
when it is necessary for him to do so in the course of conducting his regular
employment duties.




 


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	 	5.3	 	Covenant Not to Interfere With Kreido’s Business Relationships. During his
employment and for a period of 18 months after the termination of his employment,
executive shall not, whether for Executive’s own account or for the account of a
third-party, solicit or endeavor to entice any employee or vendor of Kreido to end any
business and/or contractual relationship with Kreido. In addition, Executive will not use
any of Company’s Confidential Information in order to induce any client or customer of
Kreido to end its relationship with the Company.
	 
	 	5.4	 	Ownership and Use of Materials.






	 	5.4.1	 	Kreido Materials. Executive agrees that all information encompassed
in all executive compensation plans, Executive benefit plans, business plans,
advertising plans and marketing materials and other Confidential Information
concerning Kreido, its Executives and shareholders, customer lists, costs, pricing
information, documents, reports, plans, proposals or other items made or created by
Executive or that come into Executive’s possession during the Term are the property
of Kreido and shall not be used by Executive in any way after the Agreement is
terminated.
	 
	 	5.4.2	 	Delivery of Materials. Upon termination of this Agreement, Executive
shall promptly deliver to Kreido or destroy all of its executive compensation
plans, Executive benefit plans, business plans, advertising plans and marketing
materials and other Confidential Information concerning Kreido, its Executives and
shareholders, customer lists, costs, pricing information, documents, reports,
plans, proposals or other items made or created by Executive during the period of
employment. The foregoing notwithstanding, if Executive is still a member of the
Board of Directors of the Company after his employment with the Company terminates,
Executive may retain the Confidential Information he acquired in his capacity as a
director of the Company and not as the Company’s Chief Executive Officer.






	6.	 	Termination Due to Death or Disability. If Executive dies during the employment,
Executive’s employment shall automatically cease and terminate as of the date of Executive’s
death. In the event of Executive’s disability for a period of 120 consecutive days during any
365-day period, Company shall thereafter have the right, upon written notice to Executive, to
terminate this Agreement, in which case the date of termination shall be the date of such
written notice to Executive. As used herein, “disability” means a physical and/or mental
disability of Executive that prevents Executive from substantially performing the essential
functions of his position even with reasonable accommodation (“Disability”). Company does not
currently offer disability insurance to its employees. In the event Company, in its sole
discretion, elects to offer such insurance coverage (“Disability Policy”) to its employees at
any time in the future, the definition of Disability as used
herein automatically shall be modified by the adoption of the definition of disability as used in
the Disability Policy.




 


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	 	 	In the event of the termination of Executive’s employment due to his death or Disability,
Executive’s estate and/or Executive shall be entitled to receive: (i) a lump sum cash payment,
payable within ten (10) business days after the date of death equal to the sum of any accrued but
unpaid salary and bonus as of the date of death; and (ii) earned Executive benefits, perquisites
and reimbursements described in Section 4 inclusive, if any, as to which Executive may be
entitled hereunder or under Executive benefit plans, programs and arrangements of Kreido through
the date of death. In the event of the termination of Executive’s employment due to Disability,
Executive shall not be entitled to any severance pay.
	 
	7.	 	Termination by Kreido.






	 	7.1	 	Termination for Cause.






	 	7.1.1	 	Definition of Cause. The term “Cause” for purposes of this Agreement means the
following, which will constitute a material breach of this Agreement (“Material
Breach”): Executive’s conviction of or plea of nolo contendere to any felony or any
offense involving moral turpitude.
	 
	 	7.1.2	 	Entitlements Upon a Termination for Cause. In the event of the termination of the
Executive’s employment hereunder due to a termination by the Company for Cause, on the
date of termination Executive shall be entitled to receive: (i) a lump sum cash
payment, payable immediately upon the termination of Executive’s employment, equal to
the sum of any accrued but unpaid base salary and bonus as of the date of such
termination; and (ii) earned Executive benefits, as described in Section 4 of this
Agreement, as to which Executive may be entitled hereunder or under Executive benefit
plans, programs and arrangements of Kreido.






	 	7.2	 	Termination Without Cause. Kreido may terminate Executive’s employment hereunder without
Cause at any time by providing Executive written notice of such termination. If Executive’s
employment is terminated without Cause, the termination shall take effect on the effective
date of written notice of such termination to Executive (pursuant to Section 11.10).






	 	7.2.1	 	Entitlements Upon a Termination Without Cause. In the event of the
termination of Executive’s employment hereunder due to a termination by Kreido
without Cause (other than due to Executive’s death), Executive shall be entitled to:
(i) a lump sum cash payment, payable immediately upon the termination of Executive’s
employment, equal to the sum of any accrued but unpaid base salary and bonus as of
the date of such termination; (ii) earned Executive benefits, as described in
Section 4 of this Agreement, as to which Executive may be entitled hereunder or
under Executive benefit plans, programs and arrangements of Kreido through the date
of his termination; and (iii) severance pay on the date of the Termination without
Cause equal to Executive’s then-current base salary for three months.




 


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	8.	 	Termination by Executive.






	 	8.1	 	Termination Without Good Reason. Executive shall have the right to terminate
Executive’s employment hereunder at any time without Good Reason (as defined below)
upon written notice of such termination to Kreido. A voluntary termination by
Executive in accordance with this Section 8.1 shall not be deemed a breach of this
Agreement. Upon any voluntary termination of employment by Executive pursuant to this
Section 8.1, Executive shall have the same entitlements as provided in Section 7.1.2
in the case of a termination by Kreido for Cause.
	 
	 	8.2	 	Termination With Good Reason. The following events constitute grounds for
Executive to terminate his employment for good reason (“Good Reason”):






	 	(i)	 	removal of Executive from the position specified in Section 1
without Cause;
	 
	 	(ii)	 	material diminution in Executive’s salary, duties or title;
	 
	 	(iii)	 	assignment to Executive of duties that are materially
inconsistent with his position or that materially impair his ability to perform
his duties;
	 
	 	(iv)	 	Change of Control. For purposes of this Agreement, “Change of
Control” means the occurrence of: (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; (D) any sale, lease, exchange or other transfer
of stock (in one transaction or a series of transactions) which results in a
single shareholder having more than 50% of the voting stock of the Company.
	 
	 	(v)	 	the foregoing notwithstanding, i, ii, and iii above will not
constitute Good Reason unless Executive first notifies Kreido in writing
describing the event(s) that constitutes Good Reason (Executive’s Notice of Good
Reason ) and unless Kreido thereafter fails to cure such event(s) within fifteen
business days after Executive delivers Executive’s Notice of Good Reason to
Kreido (“Kreido’s Cure Period”). It will be incumbent upon Executive to deliver
Executive’s Notice of Good Reason to Kreido within fifteen business days after
making a good faith determination that an event constituting Good Reason has
occurred.






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




 


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






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






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






	 	10.3	 	Limitation of Claims. To the fullest extent allowed by law, every controversy,
claim, or dispute between Executive and Kreido (and/or its directors, shareholders,
officers, Executives, representatives and agents) relating to or arising out of his
employment or the termination of that employment (“Claim”) shall be asserted in
writing, with a specific demand first to mediate and then, if still necessary, to
arbitrate the Claim, by the party asserting such Claim (“Claimant”) and delivered to
the non-asserting party no later than twelve months after the Claimant knows or should
have known of the existence of the Claim or the Claim will be forever barred. The
foregoing notwithstanding, any such Claim that has a statutory limitations period
shorter than twelve months will be subject to the shorter statutory limitations period.
	 
	 	10.4	 	Executive’s Fiduciary Duty to Company. No term contained herein is intended to
nor shall be construed to limit or reduce Executive’s fiduciary duties to the Company.




 


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	11.	 	General Terms and Conditions.






	 	11.1	 	Waiver. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any prior or subsequent
breach; provided, however, that either party to this Agreement may waive any obligation
owed to such party, if such waiver is in writing signed by an authorized signer.
	 
	 	11.2	 	Integration; Modification. This Agreement constitutes the entire understanding
and agreement between Kreido and Executive regarding its subject-matter and supersedes
all prior negotiations and agreements between them with respect to its subject-matter
whether oral or written. This Agreement may not be modified except by a writing signed
by Executive and the Chairperson of Kreido’s Board of Directors.
	 
	 	11.3	 	Enforceability; Severability. If any provision of this Agreement shall be
deemed invalid or unenforceable in whole or in part, such provision shall be deemed to
be modified or restricted to the extent and in the manner necessary to render the same
valid and enforceable, or shall be deemed excised from this Agreement, as the case may
require, and this Agreement shall be construed and enforced to the maximum extent
permitted by law as if such provision had been originally incorporated herein as so
modified or restricted, or as if such provision had not been originally incorporated
herein, as the case may be.
	 
	 	11.4	 	Binding Effect. All the terms and conditions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
	 
	 	11.5	 	Descriptive Headings. The paragraph and section headings in this Agreement are
for convenience only and shall not control or affect the meaning or construction of any
provision of this Agreement.
	 
	 	11.6	 	Counterparts and Facsimile Signatures. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute but one agreement. Facsimile signatures on this
Agreement shall be treated as original signatures.
	 
	 	11.7	 	Third-Party Beneficiaries. No person shall be a third-party beneficiary of
this Agreement and no person other than the parties hereto and their permitted
successors and assigns shall receive any of the benefits of this Agreement.
	 
	 	11.8	 	Applicable Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without regard to
conflicts of laws principles.




 


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	 	11.9	 	Arms Length Agreement. This Agreement has been negotiated at arms length
between persons knowledgeable in the matters dealt with herein. Accordingly, any rule
of law or any statute, legal decision, or common law principle of similar effect that
would require interpretation of any ambiguity in this Agreement against the party
that drafted it is of no application and is hereby expressly waived.
	 
	 	11.10	 	Notices. All notices, statements and other documents that any party is
required or desires to give to the other party hereunder shall be given in writing and
shall be served in person, by express mail, by certified mail, by overnight delivery or
by facsimile at the respective addresses of the parties as set forth below, or at such
other addresses as may be designated in writing by such party in accordance with the
terms of this Section 11.10.





	 	 	 	 	 
	 

	 	If to Kreido:
	 	Kreido Biofuels, Inc.

1070 Flynn Avenue

Camarillo, California 93012

Attention: Betsy Knapp, Chair of the Board

Fax: (805) 384-0989
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Susan Keenberg, Esq.

1217 Acacia Avenue

Torrance, California 90501

Fax: (310) 783-0111
	 
	 	 	 	 
	 

	 	If to Executive:
	 	George A. Binninger

INFORMATION ON FILE
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Janet I. Swerdlow, Esq.

Swerdlow Florence Sanchez Swerdlow & Wimmer

9401 Wilshire Boulevard, Suite 828

Beverly Hills, California 90212

Fax: (310) 273-8680







Delivery shall be deemed conclusively made (I) at the time of service, if personally
served, (ii) when deposited in the United States mail, properly addressed and
postage prepaid, if delivered by express mail or certified mail, (iii) upon deposit
with the private overnight deliverer, if served by overnight delivery, and (iv) at
the time of electronic facsimile transmission (as confirmed in writing), provided a
copy is mailed within twenty-four (24) hours after such transmission.


 


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In Witness Whereof, Kreido and Executive have executed this Agreement this
 _____ 

day of
December, 2007.



This Agreement is subject to an arbitration agreement, which is attached hereto and
incorporated herein by reference.



	 	 	 	 	 
	Kreido Biofuels, Inc., a Nevada Corporation

and Kreido Laboratories, a California Corporation	 	Executive
	 
	 	 	 	 
	By:

	 	 
	 	 
	 	 	 	 	 
	 

	 	Betsy Knapp, Chair of the Board
	 	George A. Binninger





 


12 of 12









 





EXHIBIT A

MUTUAL AGREEMENT

TO

ARBITRATE CLAIMS




This Agreement is between Kreido Biofuels, Inc. (“Company”) and George A. Binninger (referred
to as “I” or “me”). While I am employed by the Company or thereafter, disputes may arise between
the Company and me related to my employment. By entering into this Agreement, both the Company and
I anticipate that we will benefit by resolving these disputes through binding arbitration.



Arbitration is a fair and impartial procedure that in most cases is faster and less expensive
than civil litigation. References to “the Company” in this Agreement include Kreido Biofuels,
Inc., its parents, subsidiaries, shareholders, partners, directors, and all affiliates of Kreido
Biofuels, Inc., together with all benefit plans of Kreido Biofuels, Inc. and the sponsors,
fiduciaries and administrators of such benefit plans.



Claims Covered by This Agreement: Except as described in the next paragraph, this Agreement
applies to all disputes between the Company and me, all claims the Company may have against me, and
all claims I may have against the Company or its agents, arising out of my employment with the
Company or the termination of my employment (referred to as Claims). This Agreement will apply to
Claims asserted during my employment with the Company or after it has ended. Claims covered by
this Agreement include but are not limited to: claims for breach of express or implied contract or
covenant; claims for the commission of any intentional or negligent tort; claims for violation of
any federal, state or local law, ordinance, regulation or rule; claims for wages, benefits or other
compensation due; claims for wrongful termination, demotion or disciplinary action; and claims of
discrimination or harassment under the Fair Employment and Housing Act and Title VII of the Civil
Rights Act, as amended.



Claims Not Covered by This Agreement: This Agreement does not apply to the following claims:
Claims for worker’s compensation or unemployment compensation benefits; Claims or charges before
any administrative agency having jurisdiction of the Claim, if private dispute resolution
procedures cannot be compelled as to such Claim; or Claims for benefits under a benefit plan which
has a claim procedure inconsistent with this Agreement.



Exclusive Remedy: All Claims must be resolved according to the procedures in this Agreement,
and not otherwise except for the provision for Mediation before Arbitration as provided in the
Employment Agreement between me and the Company of even date herewith (the “Employment Agreement”).
Neither the Company nor I will file or prosecute any lawsuit or administrative action in any way
related to any Claim, except as expressly permitted by this Agreement and the Employment Agreement.
Either the Company or I may bring an action in any court of competent jurisdiction to compel
arbitration under this Agreement. The parties understand and agree that they are waiving any right
to a jury trial by entering into this Agreement.



Arbitration: All Claims must be resolved through final and binding arbitration. The
arbitrator must be a neutral arbitrator chosen by the parties. Arbitration will take place at a
location determined by the arbitrator in Los Angeles County, California. The arbitration will be
administered in compliance with (a) the Federal Arbitration Act, U.S. Code, Tit. 9, § 1 et seq.,
California Arbitration Act, or such other state or federal law as may be adopted, (b) the
procedures set forth below and, (c) to the extent not inconsistent with such procedures, the then
existing AAA California Employment Dispute Resolution Rules. Any dispute about the interpretation,
applicability, enforceability or validity of this Agreement, or whether any issue is subject to
arbitration under this Agreement, will be determined by the arbitrator.



Arbitration Agreement


 


Page 1









 





Arbitration Procedures; Discovery:



5.1 A deposition is a chance for each party to ask questions of a witness, and the witness
must answer the questions under oath, with a court reporter present. Each party may take the
deposition of whatever persons they elect to depose. Additional depositions may be ordered by the
arbitrator. At or before the final Arbitration Management Conference, each party will provide the
other with copies of all non-privileged documents in their possession or control which they intend
to introduce as exhibits at the hearing or on which they rely to support their positions.



5.2 Interrogatories, Requests to Produce, and Requests to Admit are written methods that the
parties may use to learn about the other party’s case. These discovery methods will be allowed in
the manner permitted under California Arbitration Act, Calif. Code of Civil Proc. § 1283.05.



5.3 The arbitrator may rule on pre-hearing disputes and hold such pre-hearing conferences by
telephone or in person as he or she may determine. Either party may make motions to dismiss, for
summary judgment and/or for summary adjudication of issues.



5.4 Either party may submit, or the arbitrator may order either or both parties to submit, a
brief before the arbitration hearing. Either party, at its own expense, may arrange for a court
reporter to provide a stenographic record of proceedings at the hearing. The arbitrator will apply
the substantive law and the law of remedies of the State of California or the United States, as
applicable to the Claims.



5.5 After the end of the arbitration hearing, either party may file a post-hearing brief
within a time set by the arbitrator.



5.6 The arbitrator shall issue a written award, which shall include a statement of the
essential findings and conclusions on which the award is based. The award will be final and
binding on the parties to the arbitration. The arbitrator’s award may be reviewed by a court of
competent jurisdiction.



Arbitration Costs: the Company will pay the costs of arbitration, including reasonable fees
imposed by the AAA and the arbitrator. I will be responsible for the costs of discovery initiated
by me or on my behalf, any depositions noticed by me or on my behalf, expert witnesses retained by
me or on my behalf and for any out-of-pocket expenses incurred by me or on my behalf.



Legal Representation: In any arbitration under this Agreement, both the Company and I may be
represented by legal counsel of our own choosing. Each of us will be responsible for the fees of
our own counsel, provided that an arbitrator may award attorneys’ fees to the prevailing party
under any applicable statute or written agreement to the same extent that attorneys’ fees could be
awarded in standard civil litigation. This provision for the award of attorneys’ fees is subject
to the provisions of the Employment Agreement requiring Mediation before Arbitration.



Integrated Agreement; Amendment: This Agreement contains the final and complete expression
and understanding between the Company and me with respect to the subjects covered hereby. This
Agreement cannot be amended or modified except in writing, signed by an authorized representative
of Kreido Biofuels, Inc. and by me.



Severability: If any provision of this Agreement is held invalid, in whole or part, such
invalidity will not affect the remainder of such provision or the remaining provisions of this
Agreement.



Arbitration Agreement



 


Page 2









 





Headings: The headings in this Agreement are inserted for convenience only and do not affect
the meaning or interpretation of this Agreement or any provision hereof.



Successors and Assigns: This Agreement will be binding upon, and inure to the benefit of, the
Company, me and our respective heirs, executors, administrators, representatives, successors and
assigns.



Governing Law: I acknowledge that the Company is engaged in interstate commerce and that this
Agreement is covered by the provisions of the Federal Arbitration Act. This Agreement is to be
construed, and the rights and obligations of the parties hereunder determined, in accordance with
the laws of the United States and the State of California.



IMPORTANT




I agree that I have been given a reasonable opportunity to read this Agreement carefully, I have
read it, understand it and I am signing it voluntarily. I have not been promised anything for
signing it that is not described in this Arbitration Agreement and the Employment Agreement. The
Company encourages me to discuss this Agreement with my legal advisor if I wish before signing it.



In Witness Whereof, Kreido and Executive have executed this Agreement this 20th
day of November, 2007.



	 	 	 	 	 
	Kreido Biofuels, Inc.	 	Executive
	 
	 	 	 	 
	By:

	 	 
	 	 
	 	 	 	 	 
	 

	 	Betsy Knapp, Chair of the Board
	 	George A. Binninger






Arbitration Agreement



 


Page 3









 





EXHIBIT B




LOCK-UP AGREEMENT




THIS LOCK-UP AGREEMENT (the “Agreement”) is made and entered into as of the date indicated
below, by and between the officer named in the space provided below (the “Officer”) and KREIDO
BIOFUELS, INC., a Nevada corporation (the “Company”).



RECITALS:




WHEREAS, the Officer in the future may be owner of shares of Common Stock of the Company
either pursuant to the exercise of stock purchase options or otherwise (such shares owned or to be
owned by the Officer, the “Shares”); and



WHEREAS, in order to facilitate certain transactions consummated by the Company the Officer
desire to enter into this Agreement and restrict the sale, assignment, transfer, conveyance,
hypothecation or alienation of the Shares, all on the terms set forth below.



NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants, contained
herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:



1. The Officer hereby agrees to not sell, assign, transfer, pledge, convey, hypothecate or
otherwise alienate any Shares at any time beginning the date of this Agreement indicated in the
space provided below and the expiration date of this Agreement indicated in the space provided
below except as otherwise permitted in this Agreement.



2. Notwithstanding anything contained in this Agreement, Officer may transfer Shares to his or
her spouse or lineal descendants or to trusts established solely for the benefit of Officer, his or
her spouse or lineal descendants, for estate planning purposes provided that the transferee (or the
legal representative of the transferee) executes an agreement to be bound by all of the terms of
this Agreement.



3. Notwithstanding anything to the contrary set forth herein, the Company may, at any time
and from time to time, waive in writing any of the conditions or restrictions contained herein.



4. In the event of a tender offer to purchase all or substantially all of the Company’s issued
and outstanding securities, or a merger, consolidation or other reorganization with or into an
unaffiliated entity, this Agreement shall terminate and the Shares restricted pursuant hereto shall
be released from such restrictions if the requisite number of the record and beneficial owners of
the Company’s securities then outstanding are voted in favor of such tender offer, merger,
consolidation or reorganization.



5. Except as otherwise provided in this Agreement, Officer shall be entitled to his or her
beneficial rights of ownership of the Shares, including the right to vote the Shares for any and
all purposes.



6. This Agreement may be executed in any number of counterparts with the same force and effect
as if all parties had executed the same document.



7. All notices, instructions or other communications required or permitted to be given
pursuant to this Agreement shall be given in writing and delivered by certified mail, return
receipt requested, overnight delivery or hand-delivered to all parties to this Agreement at the
principal office of the Company, Attention: CFO, in the case of notice to the
Company, or to the principal office of Officer or his or her residence address indicated in the
employment records of the Company, whichever the Company may elect, in the case of notice to
Officer. All notices shall be deemed to be given on the same day if delivered by hand or on the following business day if sent by overnight delivery or the
second business day following the date of mailing.


 


 









 





8. The execution and delivery of this Agreement, although a condition of employment of
Officer, shall not be interpreted as an employment agreement or a guaranty or assurance of
employment. This Agreement shall survive the expiration or termination of any employment agreement
between the Company and Officer and the termination of Officer as an employee of the Company.



9. This Agreement sets forth the entire understanding of the parties hereto with respect to
the subject matter hereof, and may not be amended except by a written instrument executed by the
parties hereto. This Agreement shall be governed by the laws of the State of California.



	 	 	 	 	 
	DATE OF AGREEMENT:

	 	December 10, 2007		 
	 	 	 	 	 
	 

	 	 	 	 
	EXPIRATION DATE:

	 	January 12, 2008	 	 
	 	 	 	 	 
	 
	 	 	 	 
	OFFICER:

	 	 	 	 
	 	 	 	 	 






IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement in
Camarillo, California.



	 	 	 	 	 
	KREIDO BIOFUELS, INC.	 	OFFICER:
	 
	 	 	 	 
	By:

	 	 
	 	 
	 	 	 	 
	Name:

	Betsy Wood Knapp
	 	Signature
	Its:

	Chair
	 	Name: George A. Binninger