Document:

EX-10.2

EXHIBIT 10.2

NEW CENTURY FINANCIAL CORPORATION

EXECUTIVE INCENTIVE PLAN

PLAN OBJECTIVE:

The New Century Financial Corporation Executive Incentive Plan (the “Plan”) is designed to maximize
assets available for distribution to creditors by providing incentives to certain executives of New
Century Financial Corporation (the “Company”) maximize the consideration received by the Company
upon the consummation of the sale of the (i) Company’s servicing assets and servicing platform
pursuant to that certain agreement Asset Purchase Agreement with Carrington Capital Management, LLC
and its affiliate, dated April 2, 2007, or the overbid process contemplated therein (the “Servicing
Assets Sale”) (ii) certain mortgage loans originated by the Company, as well as residual interests
in certain securitization trusts owned by the Company pursuant to that certain Asset Purchase
Agreement with Greenwich Capital Financial Products, Inc., dated April 2, 2007, or the overbid
process contemplated therein (the “Mortgage Assets Sale”), (iii) the Company’s wholesale, retail
and other asset classes (other than assets included in the Servicing Assets Sale, the Mortgage
Assets Sale and RPML Sale (as defined below)) (the “WRO Assets Sale”) and (iv) the Company’s REIT
portfolio and miscellaneous loans (other than assets included in the Servicing Assets Sale, the
Mortgage Assets Sale and the WRO Assets Sale) (the “RPML Sale”).

ELIGIBLE EMPLOYEES:

The Plan covers the employees of the Company and its subsidiaries listed on Exhibit A
hereto (the “Plan Participants”).

All payments under the Plan shall be in lieu of any other performance bonus or retention
compensation under any other plan, program, agreement, applicable law or policy otherwise
applicable to the Plan Participants by the Company or any of its subsidiaries (collectively, the
“Debtors”). As a condition precedent of any obligation of the Company to make any payment to a
Plan Participant under the Plan, the Plan Participant shall, upon or within thirty (30) days of the
date that such payment is made to the Plan Participant or such Plan Participant otherwise becomes
entitled to such payment, be required to fully execute and return to the Company a general release
and waiver of claims, excluding those claims specifically excepted from the release and waiver as
described therein, in substantially the form attached hereto as Exhibit B. The Company
shall have no obligation to make any payment under the Plan and shall not make any payment to any
Plan Participant that does not satisfy such release requirement or who otherwise revokes such
release within any revocation period afforded by applicable law.

PLAN POOLS:

The amounts contributed (each a “Contribution”) by the Company, if any, to finance payments under
the Plan (the “Plan Pools”) shall be based on the liquidation prices received for sales (the
“Sales”) of the Company’s various assets and shall be calculated as follows:

Servicing Assets Sale

The Contribution, if any, upon the consummation of the Servicing Assets Sale (the “Servicing Assets
Sale Contribution”) will be calculated based on the extent to which the ratio of (i) the net
liquidation price to (ii) the principal amount of loans held by securitization trusts and third
party whole loan purchasers for which the Company has mortgage service rights (such ratio, “BPS”)
equals or exceeds 50.0. There will be no Servicing Asset Sale Contribution if BPS is less than
50.0. If BPS is equal to 50.0, the Servicing Assets Sale Contribution will be $1,164,405. If BPS
is greater than 50.0, the Servicing Assets Sale Contribution will be increased proportionately e.g.
if BPS is 57.5 (115% of 50.0), the Servicing Assets Sale Contribution will be $1,339,065 (115% of
$1,164,605).

Mortgage Assets Sale

The Contribution, if any, upon the consummation of the Mortgage Assets Sale (the “Mortgage Assets
Sale Contribution”) will be based on the extent to which the liquidation price (the “Mortgage
Assets Sale Price”) equals or exceeds $47,000,000. There will be no Mortgage Asset Sale
Contribution if the Mortgage Assets Sale Price is less than $47,000,000. If the Mortgage Asset
Sale Price is equal to $47,000,000, the Mortgage Asset Sale Contribution will be $419,820. If the
Mortgage Asset Sale Price is greater than $47,000,000, the Mortgage Assets Sale Contribution will
be equal to $419,820 plus 2% of the amount by which the Mortgage Asset Sale Price exceeds
$47,000,000 e.g. if the Mortgage Assets Sale Price is $54,500,000, the Mortgage Assets Sale
Contribution will be $569,820 ($419,820 + (($54,500,000 – $47,000,000) X 2%)).

WRO Assets Sale 

The Contribution, if any, upon the consummation of the WRO Assets Sale (the “WRO Assets Sale
Contribution”) will be based on the extent to which the liquidation price (the “WRO Assets Sale
Price”) equals or exceeds the WRO Assets Sale target price set forth on Exhibit C (the
“Target Price”). There will be no Mortgage Asset Sale Contribution if the WRO Assets Sale Price is
less than the Target Price. If the WRO Asset Sale Price is equal to the Target Price, the WRO
Asset Sale Contribution will be $1,584,225. If the WRO Asset Sale Price is greater than the Target
Price, the WRO Assets Sale Contribution will be equal to $1,584,225 plus 2% of the amount by which
the WRO Asset Sale Price exceeds the Target Price e.g. if the Mortgage Assets Sale Price is $X,
which exceeds the Target Price, the WRO Assets Sale Contribution will be calculated as follows: WRO
Asset Sale Contribution = ($1,584,225 + (($X – Target Price) X 2%)).

RPML Sale

The Contribution upon the consummation of the RPML Sale to the extent that the Company manages to
sell such assets (the “RPML Sale Contribution”) will be equal to 0.5% of the liquidation price (the
“RPML Sale Price”) e.g. if the RPML Sale Price is equal to $63,250,000, the RPML Sale Contribution
will be $316,250 ($63,250,000 X 0.5%).

PLAN PAYMENTS:

Plan Participants shall receive the share of the Plan Pools set forth in Exhibit A;
provided however that a Plan Participant will not be eligible to receive a share of a Plan Pool
upon the consummation of the corresponding sale if such Plan Participant is offered comparable
employment by the purchaser in such sale. Awards will be paid within 50 days following the
consummation of each respective Sale.

TERMINATION OF EMPLOYMENT:

Awards under the Plan are offered as discretionary incentive amounts. If a Plan Participant
voluntarily terminates employment or is involuntarily terminated for any reason before the date
that any Sale described above in the Section titled “Plan Pools” is consummated, the Plan
Participant will not receive any payment under the Plan for the consummation of such Sale.
Additionally, if there is any ongoing investigation by the Audit Committee (the “Audit Committee”)
of the Company’s Board of Directors (the “Board”) into the actions or omissions of a Plan
Participant at the time such Plan Participant becomes entitled to any payment under the Plan, which
could result in the Company having the right to terminate such Plan Participant “for cause”, the
Company will be entitled to delay such payment (without any interest accruing thereon) until the
matter is determined by the Audit Committee. If the Company would have the right to terminate such
Plan Participant “for cause” based on the findings of the Audit Committee, then the Company will
not be obligated to make and will not make any payments (even if such Plan Participant’s employment
had terminated for other reasons) to such Plan Participant under the Plan.

For purposes of the Plan, the term “for cause” means, either before or after the adoption of the
Plan:

	 	•	 	Commission of a crime against the Company or its affiliates, customers or employees,
whether prosecuted or not;

	 	•	 	a finding by the Audit Committee that the Plan Participant engaged in willful
misconduct, or was grossly negligent, in the performance of his or her duties;

	 	•	 	Conviction of (or pleading guilty or nolo contendere to, or entering a similar plea
to) any other crime or violation of law, statute or regulation that creates an
inability to perform job duties;

	 	•	 	Failure or inability to perform job duties due to intoxication by drugs or alcohol
during working hours;

	 	•	 	A material and direct conflict of interest, not specifically waived in advance by
the Company;

	 	•	 	Unauthorized use or disclosure of confidential information that belongs to the
Company or its affiliates, customers or employees;

	 	•	 	Habitual neglect of duties or repeated absences from work;

	 	•	 	Refusal to follow the instructions of a supervisor or the Board (or a committee
thereof); or

	 	•	 	Other material misconduct including, but not limited to: falsification of Company
records; theft; sexual harassment; or possession of firearms, controlled substances or
illegal drugs on Company premises or while performing Company business.

FURTHER ACTIONS:

As a condition to each Plan Participants participation in the Plan, such Plan Participant shall
agree to take such further actions as are reasonably requested by the Company, including such
actions as the Company may request subsequent to the termination of such Plan Participant’s
employment with the Company or its subsidiaries, as the case may be, to assist the Company and its
subsidiaries in the conduct of the bankruptcy cases filed under chapter 11 of the United
States Bankruptcy Code to which they are currently parties.

CHANGE OF ADDRESS:

The Plan Participants shall be responsible for notifying the Company of any change of address
before payment is made by mail notification to [Name].

NO PROMISE OF CONTINUED EMPLOYMENT, FULL-TIME ATTENTION, AND GOOD STANDING:

The Plan and any Plan Participant’s selection as a participant in the Plan does not, and is in no
manner intended to constitute, a promise of employment for any period of time or to change a Plan
Participant’s status, if applicable, as an at will employee subject to termination of employment by
his or her employer at any time for any reason.

TAXES:

All payments will be subject to standard withholding and deductions. Neither the Company nor any
of its subsidiaries, officers or agents makes or has made any representation about the tax
consequences of any payments or benefits offered by the Company to any Plan Participant to the
Plan.

SEVERABILITY:

If any provision of the Plan is determined to be invalid or unenforceable, in whole or in part,
this determination will not affect any other provision of the Plan and the provision in question
shall be modified so as to be rendered enforceable in a manner consistent with the intent of the
parties insofar as possible. Any waiver of or breach of any of the terms of the Plan shall not
operate or be construed as a waiver of any other breach of such terms or conditions or of any other
terms and conditions, nor shall any failure to enforce any provision hereof operate or be construed
as a waiver of such provision or of any other provision.

CHOICE OF LAW AND VENUE:

The Plan will be governed by the laws of the State of California, notwithstanding that State’s
conflict of law provisions. The Company and each of the Plan Participants shall irrevocably and
unconditionally consent to the exclusive jurisdiction of the United States Bankruptcy Court for the
District of Delaware (the “Bankruptcy Court”). The Company and each of the Plan Participants shall
irrevocably and unconditionally waive any objection to the laying of venue of any action, suit, or
proceeding arising out of or related to the Plan in the Bankruptcy Court and shall further
irrevocably and unconditionally waive and agree not to plead or claim that any such action, suit or
proceeding brought in the Bankruptcy Court has been brought in an inconvenient forum.

ENTIRE AGREEMENT AND AMENDMENT:

This document constitutes the complete, final and exclusive embodiment of the terms and conditions
of the Plan and may only be modified in writing signed by an authorized officer of the Company.
Any agreement between any Plan Participant and the Company or any of its subsidiaries with regard
to the Plan and its subject matter is superseded in its entirety by this document.

No Assignment:

The rights of a Plan Participant or any other person to any payment or other benefits under the
Plan may not be assigned, transferred, pledged, or encumbered except by will or the laws of decent
or distribution.exv10w1

 

Exhibit 10.1

Employment Agreement

This employment agreement (“Agreement”) is effective as of April 10, 2007 (“Effective Date”),
by and between Kreido Biofuels, Inc., a Nevada corporation located at 1140 Avenida Acaso,
Camarillo, California 93012 and Kreido’s wholly-owned subsidiary, Kreido Laboratories, Inc.
(collectively “Kreido” or the “Company”) and Alan McGrevy, an individual (“Executive”).

Recitals

Whereas employee is currently employed as Company’s Vice President of Engineering and Company
and Executive now wish to memorialize the terms and conditions of Executive’s employment;

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

Terms and Conditions

			
	1	 	Executive’s Duties; Title; Location. As of the Effective Date, Executive is
employed as Kreido’s Vice President of Engineering under the terms and conditions below.
Executive will report to the Company’s CEO. Executive’s duties include, without limitation,
oversight of the Company’s engineering activities and machine shop activities and managing
such other matters that are reasonably within the scope of Executive’s expertise. In
addition, Executive shall participate in the management of Kreido as part of Kreido’s senior
executive team. Executive shall dedicate his full-time efforts to Kreido’s business and shall
work at Kreido’s Camarillo, California, office or such other location as Kreido deems
appropriate; provided, however, that Executive shall not be required routinely to provide
services outside of a reasonable commuting distance from the current Camarillo office except
when traveling on Kreido business.

			
	2	 	Term, Termination and Renewal.

2.1 Term and Termination. The Term of this Agreement shall commence on April 10, 2007. The
Term shall continue for two (2) years (“Initial Term”) unless it is terminated earlier as provided
herein below or renewed by the mutual agreement of the parties pursuant to this Section 2.

2.2 Renewal. Provided that by ninety (90) days before the end of the Initial Term the
Agreement has not been terminated as provided herein below, the parties shall inform each other of
their interest or lack of interest in renewing the Agreement. In the event that both parties wish
to renew the Agreement, they will enter into good faith negotiations to achieve that result prior
to the end of the Initial Term. If the Agreement is renewed for one or more additional terms (each
such additional term a “Renewal Term”), then ninety (90) days prior to the end of each such Renewal
Term, the parties will enter into good faith negotiations over whether to further renew the
Agreement.

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

 

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	4	 	Compensation.

	 	4.1	 	Cash Compensation.

4.1.1 Base Salary. Executive shall receive a base salary of $190,000 in accordance with
Kreido’s regular payroll practices.

4.1.2 Bonus. So long as Executive is employed hereunder, Executive shall be entitled to
participate in a performance-based executive bonus plan (“Bonus Plan”) that shall be
promulgated by the Compensation Committee of the Company’s board of directors each
fiscal year. The Bonus Plan will set forth three levels of target performance goals
“TPGs” which, if achieved, will entitled the Executive to a bonus of either 20%, 35% or
50% of the Executive’s Base Salary. The TPGs will consist of a combination of goals for
the Executive’s individual performance and the Company’s overall performance in a ratio
of 75% Company performance and 25% individual Executive performance. Bonuses paid under
the Bonus Plan, if any, will be paid annually within 60 days after the end of the fiscal
year.

4.1.3 2006 Bonus. Upon the execution of this Agreement by both parties, Executive shall
receive a 2006 Bonus payment of $50,000 less all applicable payroll taxes (“2006
Bonus”).

4.1.4 Stock Options. Upon the execution of this Agreement, Executive shall be entitled
to participate in the Kreido Biofuels 2006 Equity Incentive Plan (“Plan”). Executive’s
participation in the Plan shall be governed by the terms and conditions set forth in the
applicable Plan documents. Capitalized words not defined in this Agreement but used in
this Section shall have the meanings ascribed to them in the Plan.

	 	4.1.4	 	(a) Grant of Options. On April 9, 2007, the Company
granted Executive an option to purchase 580,000 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 Option is $1.20, the closing bid price per share of
Company common stock on April 9, 2007. 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: (A) 145,000 options shall vest upon signing
of this Employment Agreement (“Signing Grant”) and remain exercisable for a
period of ten years from the date of grant; and (B) 435,000 options shall
vest in eight equal installments of 54,375 options per calendar quarter
beginning with the quarter that ends on June 30, 2007 (“Quarterly Grant(s)”).
Each such Quarterly Grant shall remain exercisable for a period of ten years
from the date of grant, subject to vesting and Section 4.1.4(e).
	 
	 	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.

 

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	 	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 Sections 7.1.1 (A), (B) or (C), (1) all
unvested Quarterly Grants shall expire immediately effective the date of
termination, and (2) all vested Quarterly Grants shall expire thirty days
following the date of such termination unless and to the extent that within
said 30-day period Executive shall exercise any or all such vested Quarterly
Grants and pay the full exercise price of such shares as provided for in
4.1.4(f).

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

(iii) If the Executive’s employment terminates on account of death or
Disability, as defined below, all unvested Quarterly Grants shall immediately
expire effective the date of death or termination of employment and all
vested Quarterly Grants to the extent unexercised, shall expire one year
after the date of death or Disability.

(iv) If the Executive’s employment is terminated (A) in connection with a
Change of Control as defined below, (B) by the Company without Cause, or (C)
by the Executive for Good Reason, one-half of all unvested Quarterly Grants
shall immediately vest and become exercisable effective the date of
termination of employment, and, to the extent unexercised, shall expire five
years from the date of termination of employment, but in no event beyond ten
years from the date of grant.

	 	4.1.4	 	(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.

 

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4.1.5 Retention Bonus. If Executive successfully completes the three requirements set
forth in this Section 4.1.5, then at the end of the Term Executive will receive either
$150,000.00 in cash (less all routine payroll taxes) or Kreido securities with a fair
market value of
$150,000.00 on the date the securities are issued (“Retention Bonus”). The decision
whether the Retention Bonus will be paid in cash or in Kreido securities will be made
solely in Kreido’s discretion. The three requirements are: (1) Executive must
successfully complete two full years of employment at Kreido following the execution of
this Agreement; (2) Executive must participate meaningfully and cooperate materially in
training his successor to head Kreido’s Engineering department and lead Kreido’s future
engineering and research efforts; and (3) Executive must oversee the successful
achievement of certain commercially reasonable performance specifications for the 10G
SST System as commercially deployed during its first year of service, which
specifications will be set forth by the Company, (collectively “Retention Bonus
Requirements”). Unless all three Retention Bonus Requirements are completed to the
reasonable satisfaction of the Company, no portion of the Retention Bonus shall be owed
to Executive.

	 	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”). Business Expenses (including travel costs) in excess of
$1,000.00 individually or $3,500.00 in the aggregate shall be approved in advanced
except in case of emergency. Executive shall provide Kreido with documentation for
all Business Expenses at the time reimbursement is requested. In the event it is
necessary for Executive to travel on Kreido’s behalf, Executive shall be entitled
to fly and have travel accommodations on the same level as Kreido’s other most
senior management Executives.
	 
	 	4.2.3	 	Discretionary Time Off. During his employment hereunder, Executive
shall be entitled to accrue Paid Time Off (“PTO”) in accordance with Kreido’s
regular PTO policy for all employees, but in any case not less than 20 days per
calendar year.

			
	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 CEO or Chairperson of Kreido any
and all actual, potential, or apparent conflicts of interest, should they later arise. In
addition, Executive further represents and warrants to Kreido that for so long as he is
employed by the Company, he shall inform the Company of each and every business opportunity
presented to the Executive that arises that could be reasonably feasible for the Company to
undertake, and that he will not, directly or indirectly, exploit any such opportunity for
his own account or the account of any third party.

 

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	 	5.2	 	Covenant Not to Use or Disclose Confidential Information.

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

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

	 	5.4.1	 	Kreido Materials. Executive agrees that all information encompassed
in all executive compensation plans, Executive benefit plans, business plans,
advertising plans and marketing materials and other Confidential Information
concerning Kreido, its Executives and shareholders, customer lists, costs, pricing
information, documents, reports, plans, proposals or other items made or created by
Executive or that come into Executive’s possession during the Term are the property
of Kreido and shall not be used by Executive in any way after the Term. Executive
shall not deliver, reproduce or in any way allow such documents, or things to be
delivered to be used by any third party without specific written direction or
consent of a duly authorized representative of Kreido.

 

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

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

	 	7.1	 	Termination for Cause.

	 	7.1.1	 	Definition of Cause. The term “Cause” for purposes of this Agreement
means all of the following, any one of which will constitute a material breach of
this Agreement unless cured pursuant to Section 7.1.2 (“Material Breach”): (A) Any
willful act by Executive that causes the Company materially to violate any
applicable law; (B) Executive’s commission of any material act of dishonesty in
connection with his employment; (C) Executive’s conviction of or plea of nolo
contendere to any felony or any offense involving moral turpitude ; (D) Executive’s
being intoxicated by alcohol or his use of or being under the influence of illegal
drugs during working time; provided, however, that Executive’s mere use of alcohol
in connection with his business entertainment duties shall not be construed as
intoxication; (E) Executive’s breach of his fiduciary duties to the Company; (F)
Executive’s unjustifiable failure to comply with the reasonable and legal
directives of the Company that are communicated to him in writing; (G) Executive’s
unjustifiable failure to disclose to Kreido any and all actual, potential,
or apparent conflicts of interest that may later arise; (H) The willful or gross
failure of Executive substantially to perform the duties of his employment
hereunder; and (I) A breach by Executive of any material provision of this
Agreement.

 

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	 	7.1.2	 	The foregoing notwithstanding, if a Material Breach is susceptible of
being cured, Kreido shall provide Executive with written notice of such Curable
Breach within five business days after Kreido first learns of the Curable Breach.
Executive will then have fifteen business days in which to cure the breach. Should
Executive fail to cure a Curable Breach to Kreido’s reasonable satisfaction by the
end of the 15-business day cure period, Kreido may terminate his employment
immediately upon written notice to Executive. If a Material Breach is not
susceptible of being cured, Kreido may terminate Executive’s employment immediately
upon written notice to Executive.
	 
	 	7.1.3	 	Entitlements Upon a Termination for Cause. In the event of the
termination of the Executive’s employment hereunder due to a termination by the
Company for Cause, 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 as
of the date of such termination; and (ii) earned Executive benefits, if any, as to
which Executive may be entitled hereunder or under Executive benefit plans,
programs and arrangements of Kreido.

	 	7.2	 	Termination Without Cause. Kreido may terminate Executive’s employment
hereunder without Cause at any time by providing Executive written notice of such
termination. If Executive’s employment is terminated without Cause, the termination
shall take effect on the effective date of written notice (pursuant to Section 11.11)
of such termination to Executive. In the event of the termination of Executive’s
employment hereunder due to a termination by Kreido without Cause (other than due to
Executive’s death), Executive shall be entitled to: (i) a lump sum cash payment,
payable immediately upon the termination of Executive’s employment, equal to the sum of
any accrued but unpaid base salary as of the date of such termination; (ii) earned
Executive benefits, if any, as to which Executive may be entitled hereunder or under
Executive benefit plans, programs and arrangements of Kreido through the date of his
termination; and (iii) severance pay on the date of the Termination without Cause equal
to the following amounts: (A) If Executive’s employment is terminated less than 10
full years after he becomes employed hereunder, Executive shall be entitled to
severance pay in the amount of nine (9) months’ pay; (B) If Executive is employed
hereunder by Kreido for 10 years or more, Executive shall be entitled to severance pay
in the amount of twelve (12) months’ pay. Severance pay under this Section 7.2 shall
include Executive’s salary (at its then current rate), earned bonus, and expense
reimbursement, if applicable). For purposes of this Section 7.2, Executive’s prior
employment by Kreido Labs, Inc. shall be added to his employment by Kreido Biofuels,
Inc. for the purpose of calculating the length of his employment hereunder. For the
purpose of this Section 7.2 only, Earned Bonus shall have the following meaning: If
any other Kreido Senior Executive is awarded a bonus under the Bonus Plan for the year
during which Executive’s employment is terminated without cause, Earned Bonus shall
mean a bonus of no less than $10,000.00. If no other Kreido Senior Executive is
awarded a bonus under the Bonus Plan for the year during which
Executive’s employment is terminated without cause, no Earned Bonus shall be owed to
Executive.

 

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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, he shall have the same entitlements as provided in Section 7.1.3 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)	 	the removal of Executive from the position specified in Section 1 without
Cause;
	 
	 	(ii)	 	a material diminution in Executive’s salary, duties or title;
	 
	 	(iii)	 	the assignment to Executive of duties which are materially
inconsistent with his position or which materially impair his ability to
perform his duties;
	 
	 	(iv)	 	any termination of the Executive’s employment by the
Company, other than a termination for Cause, within 12 months after a Change
of Control. For purposes of this Agreement, “Change of Control” means the
occurrence of, or the Company’s Board votes to approve: (A) any
consolidation or merger of the Company pursuant to which the stockholders of
the Company immediately before the transaction do not retain immediately
after the transaction, in substantially the same proportions as their
ownership of shares of the Company’s voting stock immediately before the
transaction, direct or indirect beneficial ownership of more than 50% of the
total combined voting power of the outstanding voting securities of the
surviving business entity; (B) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company other than any sale, lease,
exchange or other transfer to any company where the Company owns, directly or
indirectly, 100% of the outstanding voting securities of such company after
any such transfer; (C) the direct or indirect sale or exchange in a single or
series of related transactions by the stockholders of the Company of more
than 50% of the voting stock of the Company.
	 
	 	(v)	 	the foregoing notwithstanding, i, ii, and iii above will
not constitute Good Reason unless Executive first notifies Kreido in writing
describing the event(s) that constitutes Good Reason (Executive’s Notice of
Good Reason ) and unless Kreido thereafter fails to cure such event(s) within
fifteen business days after Executive delivers Executive’s Notice of Good
Reason to Kreido (“Kreido’s Cure Period”). It will be incumbent upon
Executive to
deliver Executive’s Notice of Good Reason to Kreido within fifteen
business days after making a good faith determination that an event
constituting Good Reason has occurred.

 

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

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

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

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

	11.	 	General Terms and Conditions.

	 	11.1	 	Waiver. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any prior or subsequent
breach; provided, however, that either party to this Agreement may waive any
obligation owed to such party, if such waiver is in writing signed by an authorized
signer.

 

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	 	11.2	 	Integration; Modification. This Agreement constitutes the entire understanding
and agreement between Kreido and Executive regarding its subject-matter and supersedes
all prior negotiations and agreements between them with respect to its subject-matter
whether oral or written. This Agreement may not be modified except by a writing signed
by Executive and a duly authorized officer of Kreido.
	 
	 	11.3	 	Enforceability; Severability. If any provision of this Agreement shall be
deemed invalid or unenforceable in whole or in part, such provision shall be deemed to
be modified or restricted to the extent and in the manner necessary to render the same
valid and enforceable, or shall be deemed excised from this Agreement, as the case may
require, and this Agreement shall be construed and enforced to the maximum extent
permitted by law as if such provision had been originally incorporated herein as so
modified or restricted, or as if such provision had not been originally incorporated
herein, as the case may be.
	 
	 	11.4	 	Binding Effect. All the terms and conditions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
	 
	 	11.5	 	Interest and Costs; Attorneys’ Fees. In the event of any legal proceeding,
litigation or alternative dispute resolution process (including arbitration and
mediation as specified in Section 10) between the Parties respecting or arising out of
this Agreement, the substantially prevailing party shall be entitled to recover its
reasonable attorneys’ fees and other costs in connection therewith, including, without
limitation, any attorneys’ fees incurred after a judgment has been entered by an
arbitrator or court of competent jurisdiction; provided, however, that if a party files
any legal proceeding, litigation or demand for arbitration other than for equitable
relief without first making a request for mediation pursuant to Section 10.3.2, that
party shall not be entitled to Attorney’s Fees and other costs regardless whether such
party would have been entitled to those Attorney’s Fees and costs hereunder or by
operation of law.
	 
	 	11.6	 	Descriptive Headings. The paragraph and section headings in this Agreement are
for convenience only and shall not control or affect the meaning or construction of any
provision of this Agreement.
	 
	 	11.7	 	Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, and all such counterparts together shall
constitute but one agreement.
	 
	 	11.8	 	Third-Party Beneficiaries. No person shall be a third-party beneficiary of
this Agreement and no person other than the parties hereto and their permitted
successors and assigns shall receive any of the benefits of this Agreement.
	 
	 	11.9	 	Applicable Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without regard to
conflicts of laws principles.

 

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	 	11.10	 	Arms Length Agreement. This Agreement has been negotiated at arms length
between persons knowledgeable in the matters dealt with herein. Accordingly, any rule
of law or any statute, legal decision, or common law principle of similar effect that
would require interpretation of any ambiguity in this Agreement against the party that
drafted it is of no application and is hereby expressly waived. The provisions of this
Agreement shall be interpreted in a reasonable manner to effect the intentions of the
Parties hereto.
	 
	 	11.11	 	Notices. All notices, statements and other documents that any party is
required or desires to give to the other party hereunder shall be given in writing and
shall be served in person, by express mail, by certified mail, by overnight delivery or
by facsimile at the respective addresses of the parties as set forth below, or at such
other addresses as may be designated in writing by such party in accordance with the
terms of this Section 11.11.

	 	 	 	 	 
	 

	 	If to Kreido:
	 	Kreido Biofuels, Inc.
	 

	 	 	 	1140 Avenida Acaso,
	 

	 	 	 	Camarillo, California 93012
	 

	 	 	 	Attention: Joel Balbien, Ph.D., CEO
	 

	 	 	 	Telephone: (805) 389-3499
	 

	 	 	 	Fax: (805) 384-0989
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Susan Keenberg, Esq.
	 

	 	 	 	1217 Acacia Avenue
	 

	 	 	 	Torrance, California 90501
	 

	 	 	 	Telephone: (310) 783-0999
	 

	 	 	 	Fax: (310) 783-0111
	 
	 	 	 	 
	 

	 	If to Executive:
	 	Alan McGrevy
	 

	 	 	 	INFORMATION ON FILE

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 10th
day of April, 2007.

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

	 	 	 	 	 	 	 
	Kreido Biofuels, Inc.	 	 	 	Executive
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	Joel Balbien, Ph.D. Chief Executive Officer
	 	 	 	Alan McGrevy

 

 12 of 12

 

EXHIBIT A

MUTUAL AGREEMENT

TO

ARBITRATE CLAIMS

This Agreement is between Kreido Biofuels, Inc. (“Company”) and Philip Lichtenberger (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.

1. 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.

2. 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.

3. 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 provide
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.

 

-1-

 

4. 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 Ventura County or 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.

5. 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 the opposing party (which, with respect to the Company, means the Company’s CEO or
CFO or one other person under such party’s control, and any expert witness(es) designated by the
opposing party. 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.

 

-2-

 

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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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.

11. 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.

12. 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.

 

-3-

 

IMPORTANT

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

	 	 	 	 	 	 	 
	 

	 	Kreido Biofuels, Inc.
	 	 	 	Employee
	 
	 	 	 	 	 	 
	Signature:

	 	 	 	Signature:	 	 
	 
	 	 	 	 	 	 
	Print Name:

	 	Joel Balbien, Ph.D.
	 	Print Name:
	 	Philip Lichtenberger
	 
	 	 	 	 	 	 
	Print Title:

	 	CEO
	 	Date:	 	 
	 
	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 

 

-4-

 

EXHIBIT B

April 10, 2007

Tompkins Capital Group 488 Madison

Avenue, New York, New York 10022

Attention: Mr. Mark N. Tompkins

Mr. Tompkins:

Reference is made to that certain Term Sheet (the “Term Sheet”), dated September 1, 2006, as
amended on October 25, 2006 relating to a proposed business combination between Kreido Biofuels,
Inc. (f/k/a Gemwood Productions, Inc.), a Nevada corporation (the “Company”) and Kreido
Laboratories, a California corporation (“Kreido”), and a related private placement financing (the
“Transactions”). In connection with the Transactions, the Company, Kreido, and Kreido Acquisition
Corp., a California corporation, entered into that certain Agreement and Plan of Merger and
Reorganization (the “Merger Agreement”), dated as of January 12, 2007, pursuant to which Kreido
stockholders received common stock, par value $0.001 per share, of the Company (the “Common Stock”)
in consideration for shares of Kreido held by them at the effective time of the merger. In
consideration of the Company and Kreido entering into the Transactions, and for Tompkins Capital
Group to facilitate the Transactions and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned hereby agrees as follows:

1. The undersigned hereby covenants and agrees, except as provided herein, not to (1) offer, sell,
contract to sell or otherwise dispose of and (2) transfer title to (a “Prohibited Sale”) any of the
shares (the “Acquired Shares”) of Common Stock acquired by the undersigned pursuant to or in
connection with the Merger Agreement (including as a result of shares owned as a Kreido
shareholder), during the period commencing on the “Closing Date” (as that term is defined in the
Term Sheet) and ending on the 12-month anniversary of the Closing Date (the “Lockup Period”),
without the prior written consent of the Company and Tompkins Capital Group (which consent shall
not be unreasonably withheld). Notwithstanding the foregoing, the undersigned shall be permitted
from time to time during the Lockup Period, without the prior written consent of the Company or
Tompkins Capital Group, as applicable, (i) to acquire shares of Common Stock pursuant to the
undersigned’s participation in the Company’s stock option plan, or (ii) to transfer all or any part
of the Acquired Shares to any family member, for estate planning purposes or to an affiliate
thereof (as such term is defined in Rule 405 under the Securities Act of 1933, as amended),
provided that such transferee agrees with the Company and Tompkins Capital Group to be bound
hereby, and in any transaction in which holders of the Common Stock of the Company participate or
have the opportunity to participate pro rata, including, without limitation, a merger,
consolidation or binding share exchange involving the Company, a disposition of the Common Stock in
connection with the exercise of any rights, warrants or other securities distributed to the
Company’s stockholders, or a tender or exchange offer for the Common Stock, and no transaction
contemplated by the foregoing clauses (i) or (ii) shall be deemed a Prohibited Sale for purposes of
this Letter Agreement. All shares of Common Stock and related warrants purchased by the undersigned
pursuant to or in connection with the private placement financing
shall not be subject to this Letter Agreement.

 

 

 

2. This Letter Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles.

3. This Letter Agreement will become a binding agreement among the undersigned as of the Closing
Date. This Letter Agreement (and the agreements reflected herein) may be terminated by the mutual
agreement of the Company, Tompkins Capital Group and the undersigned, and if not sooner terminated,
will terminate upon the expiration date of the Lockup Period. This Letter Agreement may be duly
executed by facsimile and in any number of counterparts, each of which shall be deemed an original,
and all of which together shall be deemed to constitute one and the same instrument. Signature
pages from separate identical counterparts may be combined with the same effect as if the parties
signing such signature page had signed the same counterpart. This Letter Agreement may be modified
or waived only by a separate writing signed by each of the parties hereto expressly so modifying or
waiving such agreement.

Very truly yours,

Print Name:                                         

Address:                                         

Number of shares of Common Stock owned:

Certificate Numbers:

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