Document:

Exhibit 10.19

Exhibit 10.19

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (“Agreement” herein) is made and entered into as
of this 30th day of November, 2008, by and between Larry Sullivan, a resident of
Williamsburg, Virginia (“SULLIVAN”), and Kreido Biofuels, Inc., a Nevada corporation having its
principal place of business in the State of California (”Kreido”), and Kreido Laboratories, a
California corporation (together with Kreido, the “Company”).

A. SULLIVAN has been employed as an officer of Kreido and as an officer of Kreido Laboratories
pursuant to a certain Employment Agreement dated April 28, 2007 (the “Employment Agreement”).

B. The parties desire to terminate the employment of SULLIVAN by the Company effective on the
effective date set forth below.

C. SULLIVAN holds options (“Options”) to purchase shares of Kreido common stock the excise
price of which is significantly greater than the market value of Kreido common stock and the
parties desire to terminate said options.

D. Although there are no known disputes currently existing between SULLIVAN and Company, the
parties wish to permanently provide for and resolve any and all disputes that could arise out of
SULLIVAN’s employment with Company and the termination of SULLIVAN’s employment.

For and in consideration of the mutual covenants herein contained and for other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties do
hereby agree as follows:

1. TERMINATION OF EMPLOYMENT. SULLIVAN and the Company hereby agree that the
employment of SULLIVAN by the Company shall cease, without further notice or action on the
Termination Date. The termination of SULLIVAN’s employment shall also terminate the Employment
Agreement but shall not terminate or release SULLIVAN’s from any obligation, covenant or liability
under the Employment Agreement that expressly survives termination of the Employment Agreement,
except as specifically provided herein.

2. NO DISPUTES OR ADMISSIONS. The parties agree that this Agreement, and the
performance of the acts required hereunder do not constitute an admission of liability,
culpability, negligence or wrongdoing on the part of anyone, and will not be construed for any
purpose as an admission of liability, culpability, negligence or wrongdoing by any party and/or by
any party’s current, former or future predecessors, successors, officers, directors, shareholders,
agents, employees and assigns. SULLIVAN and Company hereby acknowledge that there exists no
disagreements, disputes, misunderstandings or misinterpretations by and among them with regard to
SULLIVAN’s employment or any act or omission as an officer or employee of Company and/or his
termination of such employment. In furtherance of the foregoing:

(a) SULLIVAN’s employment with Company shall terminate voluntarily effective as of the
Termination Date;

(b) No accrued but unpaid salary or other compensation is owed to SULLIVAN by Company.
No accrued but unpaid paid time off is due and payable to SULLIVAN;

 

 

 

(c) No reimbursable expenses are due and payable to SULLIVAN;

(d) As of the date of this Agreement, SULLIVAN has not suffered any on the job
injuries, family or medical leave claims, occupational diseases or wage or overtime claims
relating to SULLIVAN’s employment at the Company; and

3. CONSIDERATION.

(a) Severance Pay. Kreido agrees that on the Effective Date, it will pay, to
SULLIVAN, the gross sum indicated in the space below as the Severance Payment, less all
applicable withholding and payable taxes and benefits, contributions or payments that are
billed in arrears (“Severance Payment”). SULLIVAN acknowledges that the Severance Payment
is made by Kreido in consideration of the general release and other covenants set forth
herein below, the knowing waiver of employment-related claims and all other covenants given
by SULLIVAN pursuant to this Agreement. In addition, the Company will pay SULLIVAN on the
Effective Date his salary and accrued but unpaid paid time off pay through November 30,
2008, less all applicable withholding and payroll taxes and benefits, contributions or
payments.

(b) Repurchase Of Options. SULLIVAN has been granted the following stock
options:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Exercise	 	 	 	 	 	 	 
	 	 	Price per	 	 	Option Share	 	 	Option Shares Vested as of	 
	Grant Date	 	share	 	 	Quantity	 	 	Termination Date	 
	 
	April 28, 2007
	 	$	1.00	 	 	 	65,625	 	 	 	65,625	 
	April 28, 2007,
repriced February
1, 2008
	 	$	0.33	 	 	 	109,375	 	 	 	65,625	 

On the Effective Date, Kreido will repurchase all Options to purchase shares of Kreido
common stock from SULLIVAN for $175.00.

(c) Reference Letter. Kreido agrees to provide SULLIVAN with a reference
letter signed by the Chief Executive Officer of Kreido, which SULLIVAN may use in his future
employment endeavors.

(d) Continuation of Medical Insurance Benefits. The Company’s group medical
insurance for SULLIVAN and his dependents will continue through December 31, 2008. The
Company will promptly provide SULLIVAN with written materials which describe his rights to
continue his and his dependents’ participation in Kreido’s group provider medical plan
pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”)
commencing January 1, 2009. Kreido will pay on his behalf the medical insurance premium for
the month of December, 2008 (the “Coverage”). After December 31, 2008, SULLIVAN will have
to determine whether to enroll in the COBRA program in order to have continued participation
in medical coverage for he and his dependents which shall be at SULLIVAN’s expense. Nothing
herein shall limit the right of Kreido to change the provider and/or the terms of its group
healthcare plans for its employees at any time hereafter.

 

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(e) Cooperation Period. SULLIVAN agrees to make himself available from time to
time between the Effective Date and January 31, 2009 when reasonably requested by the
Company, to assist and cooperate with the Company with matters related to the business and
affairs of the Company.

4. RELEASE OF COMPANY.

(a) Release. SULLIVAN, for himself and for each of his affiliates, successors
and assigns, knowingly and voluntarily waives, and fully and forever releases and discharges
Company and each of its past, present and future officers, directors, agents, employees,
attorneys, independent contractors, and affiliates, and their respective successors and
assigns (collectively, the “Kreido Releases”) from any and all liabilities, charges, claims,
promises, demands, losses, rights, and actions, of any kind or nature, in law or in equity,
actual or contingent, known or unknown, related to or arising out of his employment with
Company or its termination which have arisen, occurred or existed at any time prior to the
Effective Date this Agreement. SULLIVAN understands and agrees that this release and waiver
applies to any and all forms of monetary or other relief which he might seek in connection
with his employment or its termination.

(b) Knowing Waiver Of Employment-Related Claims. SULLIVAN understands and
agrees that, with the exception of potential employment-related claims specifically
identified below, he is waiving any and all rights he may have or has, or in the future may
have, to pursue against any of the Kreido Releases any and all remedies available to him
under employment-related causes of action, including without limitation, claims of wrongful
discharge, breach of contract, breach of covenant of good faith and fair dealing, fraud,
misrepresentation, violation of public policy, defamation, discrimination, harassment,
personal injury, physical or emotional distress, interference with prospective economic
advantage, claims for severance (except as provided for in this Agreement), claims for
benefits or perquisites of exercise (including stock options). These include a release of
all claims under any federal, state or local laws or regulations including, but not limited
to, claims under: Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000e
et seq,; the Age Discrimination in the Employment Act, 29 U.S.C. §621
et. seq.; the Americans With Disabilities Act; the Federal Rehabilitation Act; the
Family and Medical Leave Act; Sarbanes-Oxley Act of 2002, 18 U.S.C. §1514A et.
seq,; Civil Rights Employment Statutes, 42 U.S.C. §§1891 through 1988; Employment
Retirement Income Security Act of 1974, 29 U.S.C. §1001 et. seq,; National
Labor Relations Act 29 U.S.C. §151 et. seq.; the Health Insurance
Portability and Accounting Act of 1996, Pub. Law 104-191; the Equal Pay Act of 1963; the
Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq.; the California Fair Employment
and Housing Act; the California Family Rights Act; California Labor Code §132a and §200
et. seq; any applicable California Industrial Welfare Commission Order or Division
of Labor Standards Enforcement Order or advisory ruling; California Civil Code § 1700 et
seq ;.the Moore Brown Roberti Family Rights Act, Cal. Gov’t. Code § 12945.1, et
seq.; California Civil Code §§ 1798.29 and 1798.82; California Labor Code § 432.7;
California Business & Prof. Code § 17200 et seq; California Labor Code § 1400,
et seq.; the California Constitution, Article I, § 1 and § 8; the California
Investigative Consumer Reporting Agencies Act, California Civil Code § 1786, et
seq.; and California Civil Code § 1798.81, as well as any other provisions of the
California Code and any other federal, state or local laws and regulations relating to
employment, conditions of employment (including wage and hour laws) and/or employment
discrimination. Claims not covered by the release provisions of this Agreement are
(i) claims for unemployment insurance benefits, (ii) claims under the California Workers’
Compensation Act with the exception of any claim under
California Labor Code 132(a) (discrimination in connection with filing a workers’
compensation claim), and (iii) for indemnification of SULLIVAN pursuant to the California
Labor Code and other applicable provisions of California law.

 

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(c) Age discrimination is specifically intended to be included as a Released
Action. SULLIVAN specifically intends that this Agreement shall include a complete
release of claims under the Age Discrimination in Employment Act of 1967 (ADEA; 29 U.S.C. §§
621 et seq.), as amended by the Older Workers’ Benefit Protection Act of 1990, except for
any allegation that a breach of this Act occurred following the Effective Date of this
Agreement.

(d) SULLIVAN represents and warrants that he has not assigned or transferred, or
attempted to assign or transfer, to any person or entity, any of the claims he is releasing
in this Agreement.

5. RELEASE OF SULLIVAN. The Company, on behalf of itself and its affiliates, and on
behalf of all past, present and future officers, directors and employees of Company, releases and
fully and forever discharges SULLIVAN and his successors and assigns from any and all liabilities,
claims, and actions of any kind or nature, actual or contingent, known or unknown, relating to or
arising out of any action taken by SULLIVAN or omitted to be taken by SULLIVAN during the term of
his employment with Company, including, without limitation, breach of contract, or any federal,
state or local laws relating in any way to SULLIVAN’s employment with Company. Company understands
and agrees that this release and waiver applies to any and all forms of monetary and other relief
which they might seek in connection with SULLIVAN’s employment by Company.

6. CALIFORNIA CODE WAIVER. SULLIVAN and Company hereby specifically waive the
provisions of Section 1542 of the California Civil Code (“Section 1542”) and any similar law of any
other state, territory or jurisdiction. Section 1542 provides:

A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the release,
which if known by him or her must have materially affected his or her settlement with
the debtor.

Furthermore, SULLIVAN and Company acknowledge that he or it is aware that he or it may
hereafter discover material facts in addition to or different from those that he or it now knows or
believes to be true with respect to the subject matter of this Agreement, but that it is his or its
intention to settle and release any and all claims, disputes, and differences referred to herein,
known or unknown, suspected or unsuspected, fully, finally and forever relating to the subject
matter of this Agreement. ACCORDINGLY, THE UNDERSIGNED EXPRESSLY WAIVES ANY AND ALL RIGHTS HE OR
IT MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 1542, OR ANY SIMILAR SUCH LAW IN ANY OTHER
JURISDICTION.

7. SEVERABILITY OF RELEASE PROVISIONS. Each party agrees that if any provision of the
releases given by this Agreement is found to be unenforceable, it will not affect the
enforceability of the remaining provisions and the court shall enforce all remaining provisions to
the extent permitted by law.

8. PROMISE TO REFRAIN FROM ASSISTING IN SUIT OR ADMINISTRATIVE ACTION. Neither party
has commenced a suit, arbitration, charge or administrative proceeding against the other party as
of the date hereof asserting any claim released in this Agreement. Each party agrees that he or it
shall not advocate or incite the institution of, or assist or participate in, any suit, complaint,
charge or administrative proceeding or arbitration by any other person against the other party
hereto or any of the Kreido Releases unless compelled by legal process to do so.

 

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9. COMPANY PROPERTY. SULLIVAN represents and warrants that he has not entered into
any agreements, instruments, leases, commitments or understandings, written or oral, that are
binding on Company or that transfer, encumber or improperly disclose intellectual property of the
Company. SULLIVAN represents and warrants that there are no computers, laptops, software programs,
cell telephones, blackberry communication systems, inventions, know-how or trade secrets manifested
in writing, business or performance plans or programs or other equipment or assets of Company that
are in his possession or control.

10. NON DISPARAGEMENT. Each party agrees not to make any statements, remarks or
comments to third parties, orally or in writing, that actually disparages or tends to disparage,
defame, adversely identify, denigrate, or create a negative image of the other party or the
affiliates, officers, directors employees or known agents of the other party. The covenants in
this Section 10 shall survive the execution of this Agreement for a period of three (3) years.
Each party understands and agrees that the breach of this provision constitutes a breach of this
entire Agreement for which the injured party may seek appropriate action at law or in equity.
Truthful testimony compelled by legal process or in the context of enforcing the terms of this
Agreement or other rights, powers, privileges, or claims not released by this Agreement shall not
be considered a violation of this provision by either party. Kreido agrees to inform its officers,
directors and board advisors promptly of Kreido’s duty of non-disparagement under this Section 10
and to direct each of them individually not to disparage SULLIVAN to any other individual or
entity.

11. PROMISE TO MAINTAIN CONFIDENTIALITY OF KREIDO’S CONFIDENTIAL INFORMATION.
SULLIVAN acknowledges that due to the position he has occupied and the responsibilities he has had
at Kreido, he has received confidential information concerning Kreido’s trade secrets, products,
research and development, sale prices, contracts, and SULLIVAN hereby promises and agrees that,
unless compelled by legal process, he will not disclose to others and will keep confidential all
information he has received while employed by Kreido concerning, without limitation, Kreido’s
products and procedures technology, trade secrets, research and development, the identities of
Kreido’s vendors suppliers, the terms of any contracts with third parties, and the like
(“Confidential Information”). SULLIVAN agrees that a violation by him of the foregoing obligation
to maintain the confidentiality of Kreido’s Confidential Information will constitute a material
breach of this Agreement.

12.
SPECIFIC ACKNOWLEDGEMENTS.

(a) SULLIVAN acknowledges that Company has advised him to consult with an attorney
about the terms of this Agreement and the release provided herein before signing it.
SULLIVAN further acknowledges that Company has given him a period of twenty one (21) days in
which to consider the terms and binding effect of the release and waiver herein, and to
decide whether he wishes to sign it. SULLIVAN further understands that if he signs this
Release, he will have seven (7) days thereafter in which to change his mind and revoke it.
SULLIVAN agrees that if he decides to revoke this Agreement within the seven (7) day
revocation period, he will inform the Company of his decision by written notice addressed to
the Company at 1070 Flynn Road, Camarillo, California, Attn: Chief Financial Officer and
delivered within such seven (7) day period. SULLIVAN understands and agrees that the
release and waiver provisions are not effective or enforceable until the expiration of the
seven (7) day revocation period.

 

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(b) SULLIVAN and Company state that they have carefully read this Agreement; that they
understand its final and binding effect; that the only promises made to each other to sign
this Agreement are those stated above; and that they are each signing this document
voluntarily.

(c) The parties hereby acknowledge that they have read and understand this Agreement
and they sign this Agreement voluntarily and without coercion.

(d) The parties acknowledge that they have had the opportunity to be represented in the
negotiations and the preparation of this Agreement by counsel of their own choosing, and
that they have entered into this Agreement voluntarily, without coercion, and based upon
their own judgment and not in reliance upon any representations or promises made by the
other party or parties or any attorneys, other than those contained within this Agreement.
The parties further agree that if the facts or matters upon which they now rely in making
this Agreement hereafter prove to be otherwise, this Agreement will remain in full force and
effect.

(e) SULLIVAN understands that following the execution of this Agreement, the Company
shall issue one or more public announcements concerning the termination of SULLIVAN’s
employment.

(f) This Agreement shall become effective and binding upon the parties eight (8) days
after full execution thereof (“Effective Date”), so long as SULLIVAN has not revoked it
within the time period and in the manner specified in Section 12(a) above.

13.
DISPUTE RESOLUTION.

(a) Any disputes arising under this Agreement shall be settled in Camarillo,
California, through mediation first, and failing successful resolution, binding arbitration
applying the rules and procedures of the American Arbitration Association.

(b) In the event of any legal proceeding, litigation or alternative dispute resolution
process (including arbitration as specified in this Section 13) between the Parties
respecting or arising out of this Agreement, the substantially prevailing party shall be
entitled to recover his or its reasonable attorneys’ fees and other costs in connection with
and 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 without first making
a request for mediation pursuant to Section 13(a), that party shall not be entitled to
attorneys’ fees and other costs regardless whether such party would have been entitled to
those attorneys’ fees and costs hereunder or by operation of law.

14. MISCELLANEOUS.

(a) This instrument constitute the complete agreement between SULLIVAN and Company
regarding the termination of SULLIVAN’s employment with Company, and all prior or
contemporaneous agreement are merged herein and superseded hereby. The headings used in
this Agreement are for the purpose of organization and are not intended to inform, alter or
control the terms of this Agreement.

(b) Each party agrees to execute and deliver promptly such further documents and
instruments as may, in the opinion of counsel of the other party, be required to effect or
complete the transaction contemplated herein.

 

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(c) This Agreement is made and entered into at Camarillo, California, which state’s
laws shall govern this Agreement.

(d) This Agreement may be executed in one or more counterparts, each of which shall be
deemed an original and all of which together will constitute one and the same instrument.

(e) The parties agree that this Agreement shall be construed without regard to the
drafter of the same and shall be construed as though each party to this Agreement
participated equally in the preparation and drafting of this Agreement.

(f) All notices, requests, demands and other communications required or permitted to be
given under this Agreement shall be deemed to have been given if in writing and delivered
personally or mailed first-class, postage prepaid, registered or certified mail, delivered
by a regular overnight delivery service addressed to the parties at the addresses set forth
below. All such notices, requests, demands, waivers and other communications shall be
deemed to have been received (w) if by personal delivery on the day after such delivery,
(x) if by certified or registered mail, on the third business day after the mailing thereof,
(y) if by next-day or overnight mail or delivery, on the day delivered, (z) if by facsimile,
on the next day following the day on which such telecopy was sent, provided that a copy is
also sent by certified or registered mail. Either party may designate, by notice in writing,
a new or additional address to which any notice, demand or communication may hereafter be so
given or sent.

 

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(g) The following terms shall have the following meanings in this Agreement:

	 	 	 	 	 
	Severance Payment:
	 	$	35,000	 

IN WITNESS WHEREOF, this Agreement is made and executed as of the day and year first above
written.

	 	 	 	 	 	 	 	 	 
	 

	 	SULLIVAN:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ LarrySullivan	 	 
	 	 	 	 	 
	 	 	(Signature)	 	 
	 
	 	 	Larry Sullivan	 	 
	 	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	KREIDO BIOFUELS, INC., a Nevada corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ G. A. Ben Binninger	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	KREIDO LABORATORIES, a California corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ G.A. Ben Binninger	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Common address:

1070 Flynn Road

Camarillo, California 93012

Attn: Chief Financial Officer
	 	 

 

8Exhibit 10.23

Exhibit 10.23

SECURITIES ESCROW AGREEMENT

SECURITIES ESCROW AGREEMENT, dated as of March 5, 2009 (this “Agreement”), by and
among FOUR RIVERS BIOENERGY INC., a company organized under the laws of Nevada (the
“Company”), KREIDO BIOFUELS, INC., a company organized under the laws of Nevada
(“Kreido”), and WALL STREET TRANSFER AGENTS, INC. (“Escrow Agent”).

WHEREAS, the Company has entered into an Asset Purchase Agreement, dated the date hereof (the
“Purchase Agreement”), with Kreido pursuant to which, among other matters, the Company has
agreed to purchase substantially all of the assets of Kreido and its wholly-owned subsidiary Kreido
Laboratories.

WHEREAS, prior to the date hereof, Kreido issued warrants to purchase up to 18,498,519 shares
of its common stock (“Kreido Shares”), at an exercise price of $1.85 per share, and
expiring on January 12, 2012 (each a “Kreido Warrant” and together the “Kreido
Warrants”).

WHEREAS, pursuant to the terms of the Purchase Agreement, the Company has issued 300,000
shares of its common stock, par value $0.001 per share (the “Warrant Shares”), to Kreido in
Kreido’s name, to be delivered by Kreido to the holders of the Kreido Warrants upon exercise
thereof.

WHEREAS, Kreido has agreed as a condition of the Purchase Agreement to deposit all of the
Warrant Shares (the “Escrow Shares” and together with any cash, others securities or
property paid or issued on the Escrow Shares, the “Escrow Securities”) in escrow as
hereinafter provided.

WHEREAS, the Company and Kreido desire that the Escrow Agent accept the Escrow Securities, in
escrow, to be held and disbursed as hereinafter provided.

THEREFORE, IT IS AGREED:

1. Appointment of Escrow Agent. The Company and Kreido hereby appoint the Escrow
Agent to act in accordance with and subject to the terms of this Agreement and the Escrow Agent
hereby accepts such appointment and agrees to act in accordance with and subject to such terms.

2. Term of Escrow Agreement. This Agreement shall terminate on the earlier of (i) the
exercise or cancellation of all of the Kreido Warrants or (ii) January 31, 2012 (the
“Termination Date”).

3. Deposit of Escrow Securities. On the date hereof, the Company shall deliver to the
Escrow Agent certificates representing the Escrow Shares, to be held and disbursed subject to the
terms and conditions of this Agreement.

4. Disbursement of the Escrow Securities. Upon the valid exercise of a Kreido
Warrant, in accordance with all of the terms and conditions thereof, Kreido shall provide the
Escrow Agent with prompt written notice of such exercise (the “Exercise Notice”), with a
copy to the Company, such notice to include, at the minimum, the name of the holder of the
exercised Kreido Warrant, the exercise date, the number of Kreido Shares to be issued under such
warrant, the equivalent number of Warrant Shares to be issued as determined by Kreido (which shall
be a whole number and not a fraction), the name and address of the registered holder of the Warrant
Shares, and the name and address of the party to whom the Escrow Shares shall be delivered to;
provided, that in no event shall the aggregate number of Warrant Shares exceed 300,000. Upon
receipt of the Exercise Notice, the Company shall have three business days to
notify the Escrow Agent and Kreido, in writing, of its objection (and the reason therefor) to
the release of the Escrow Securities, in which case, the Escrow Agent shall not release any Escrow
Securities until it receives joint written instructions from the Company and Kreido to do so.
Absent such objection, the Escrow Agent shall release that number of Escrow Securities equal to the
number of Warrant Shares set forth in the Exercise Notice to the applicable party set forth in the
Exercise Notice on the fourth business day following its receipt of the Exercise Notice.

 

 

 

5. Final Disbursement of Escrow Securities. Provided that all fees owing to the
Escrow Agent have been paid, the Escrow Agent shall promptly deliver to the Company any Escrow
Securities remaining in escrow on the Termination Date. In furtherance thereof and as a condition
to the Company entering into this Agreement, Kreido shall have delivered to the Company (i) a
Medallion guaranteed stock power executed in blank, (ii) certified resolutions of its Board of
Directors authorizing such transfer, and (iii) irrevocable instructions to transfer the remaining
shares to the Company for cancellation.

6. Legend. Each certificate for Warrant Shares issued under this Agreement shall bear
a legend as follows:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE LAW. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH
ALL APPLICABLE STATE SECURITIES LAWS.”

7. Rights in the Escrow Securities.

7.1 Voting Rights as a Shareholder. Kreido’s rights as a shareholder of the Company
with respect to the Escrow Securities, including, without limitation, the right to vote such
shares, shall be subject to and governed by the terms of that Voting Agreement and Proxy, of even
date herewith, by and between the Company and Kreido.

7.2 Dividends and Other Distributions in Respect of the Escrow Securities. All
dividends and other distributions payable in cash, securities or other property with respect to the
Escrow Shares shall be paid to Kreido and shall become part of the Escrow Securities.

7.3 Restrictions on Transfer. Except as permitted under the terms of this Agreement,
Kreido shall have no right whatsoever to transfer all or a portion of the Escrow Securities. During
the term of this Agreement, Kreido shall not pledge or grant a security interest in the Escrow
Securities or grant a security interest in its rights under this Agreement.

8. Concerning the Escrow Agent.

8.1 Good Faith Reliance. The Escrow Agent shall not be liable for any action taken or
omitted by it in good faith and in the exercise of its own best judgment, and may rely conclusively
and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of
counsel (including counsel chosen by the Escrow Agent), statement, instrument, report or other
paper or document (not only as to its due execution and the validity and effectiveness of its
provisions, but also as to the truth and acceptability of any information therein contained) which
is believed by the Escrow
Agent to be genuine and to be signed or presented by the proper person or persons. The Escrow
Agent shall not be bound by any notice or demand, or any waiver, modification, termination or
rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent signed by
the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless
it shall have given its prior written consent thereto.

 

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8.2 Indemnification. The Escrow Agent shall be indemnified and held harmless, jointly
and severally, by the Company and Kreido from and against any expenses, including reasonable
counsel fees and disbursements, or loss suffered by the Escrow Agent in connection with any action,
suit or other proceeding involving any claim which in any way, directly or indirectly, arises out
of or relates to this Agreement, the services of the Escrow Agent hereunder, or the Escrow
Securities held by it hereunder, other than expenses or losses arising from the gross negligence or
willful misconduct of the Escrow Agent. Promptly after the receipt by the Escrow Agent of notice
of any demand or claim or the commencement of any action, suit or proceeding, the Escrow Agent
shall notify the other parties hereto in writing. In the event of the receipt of such notice, the
Escrow Agent, in its sole discretion, may commence an action in the nature of interpleader in an
appropriate court to determine ownership or disposition of the Escrow Securities or it may deposit
the Escrow Securities with the clerk of any appropriate court or it may retain the Escrow
Securities pending receipt of a final, non-appealable order of a court having jurisdiction over all
of the parties hereto directing to whom and under what circumstances the Escrow Securities are to
be disbursed and delivered. The provisions of this Section 8.2 shall survive in the event the
Escrow Agent resigns or is discharged pursuant to Sections 8.5 or 8.6 below.

8.3 Compensation. The Escrow Agent shall be entitled to reasonable compensation from
the Company for all services rendered by it hereunder, as set forth on Exhibit A hereto. The Escrow
Agent shall also be entitled to reimbursement from the Company for all expenses paid or incurred by
it in the administration of its duties hereunder including, but not limited to, all reasonable
counsel, advisors’ and agents’ fees and disbursements and all taxes or other governmental charges.

8.4 Further Assurances. From time to time on and after the date hereof, the Company
and Kreido shall deliver or cause to be delivered to the Escrow Agent such further documents and
instruments and shall do or cause to be done such further acts as the Escrow Agent shall reasonably
request to carry out more effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to assure itself that it is protected in acting hereunder.

8.5 Resignation. The Escrow Agent may resign at any time and be discharged from its
duties as escrow agent hereunder by its giving the other parties hereto written notice and such
resignation shall become effective as hereinafter provided. Such resignation shall become
effective at such time that the Escrow Agent shall turn over to a successor escrow agent, appointed
by the Company, the Escrow Securities held hereunder. If no new escrow agent is so appointed
within the 60 day period following the giving of such notice of resignation, the Escrow Agent may
deposit the Escrow Securities with any court it reasonably deems appropriate. Upon resignation,
the Escrow Agent shall reimburse the Company pro-rata for any annual fees paid as set forth in
Exhibit A.

8.6 Discharge of Escrow Agent. The Escrow Agent shall be discharged from its duties
as escrow agent hereunder if so requested in writing at any time by the other parties hereto;
provided, however, that such resignation shall become effective only upon acceptance of appointment
by a successor escrow agent as provided in Section 8.5.

8.7 Liability. Notwithstanding anything herein to the contrary, the Escrow Agent
shall not be relieved from liability hereunder for its own gross negligence or its own willful
misconduct.

 

3

 

9. Miscellaneous.

9.1 Governing Law. This Agreement shall for all purposes be deemed to be made under
and shall be construed in accordance with the laws of the State of New York. Each of the parties
hereby agrees that any action, proceeding or claim against it arising out of or relating in any way
to this Agreement shall be brought and enforced in the courts of the State of New York or the
United States District Court for the Southern District of New York, and irrevocably submits to such
jurisdiction, which jurisdiction shall be exclusive. Each of the parties hereby waives any
objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any
such process or summons to be served upon each of the Company, Kreido and the Escrow Agent may be
served by transmitting a copy thereof by registered or certified mail, return receipt requested,
postage prepaid, addressed to it at the address set forth in Section 9.6 hereof. Such mailing shall
be deemed personal service and shall be legal and binding upon each of the Company, Kreido and the
Escrow Agent in any action, proceeding or claim.

9.2 No Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is not for the benefit of,
nor may any provision hereof be enforced by, any other person or entity.

9.3 Entire Agreement. This Agreement contains the entire agreement of the parties
hereto with respect to the subject matter hereof and, except as expressly provided herein, may not
be changed or modified except by an instrument in writing signed by the party to the charged.

9.4 Headings. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation thereof.

9.5 Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the respective parties hereto and their legal representative, successors and assigns.

9.6 Notices. Any notice or other communication required or which may be given
hereunder shall be in writing and either be delivered personally or by private national courier
service, or be mailed, certified or registered mail, return receipt requested, postage prepaid, and
shall be deemed given when so delivered personally or, if sent by private national courier service,
on the next business day after delivery to the courier, or, if mailed, two days after the date of
mailing, as follows:

If to the Company, to:

Four Rivers BioEnergy Inc.

P.O. Box 1056

Calvert City, Kentucky 42029

Fax No.: (270) 395-0323

Attn: Stephen Padgett

with a copy to:

Golenbock Eiseman Assor Bell & Peskoe LLP

437 Madison Avenue, 40th Floor

New York, New York 10022

Fax No.: (212) 754-0330

Attn: Andrew H. Hudders, Esq.

 

4

 

If to Kreido, to:

Kreido Biofuels, Inc.

1070 Flynn Road

Camarillo, California 93010

Fax No.: (805) 384-0989

Attn: G.A. Ben Binninger and John Philpott

with a copy to:

DLA Piper LLP (US)

203 North LaSalle Street, Suite 1900

Chicago, Illinois 60601

Fax No.: (312) 630-5322

Attn: John H. Heuberger, Esq.

and if to the Escrow Agent, to:

Wall Street Transfer Agents, Inc.

12492 Harris Road

Pitt Meadows, British Columbia

Canada V3Y 2J4

Fax No.: (     )      -     

Attn:                                         

The parties may change the persons and addresses to which the notices or other communications are
to be sent by giving written notice to any such change in the manner provided herein for giving
notice.

9.7 Counterparts. This Agreement may be executed in several counterparts each one of
which shall constitute an original and may be delivered by facsimile transmission and together
shall constitute one instrument.

[Signature page follows]

 

5

 

IN WITNESS WHEREOF, the execution of this Securities Escrow Agreement as of the date first
above written.

	 	 	 	 	 
	 	FOUR RIVERS BIOENERGY INC.

 	 
	 	By:  	/s/Gary Hudson
 	 
	 	 	Name:  	Gary Hudson 	 
	 	 	Title:  	President 	 
	 
	 	KREIDO BIOFUELS , INC.

 	 
	 	By:  	/s/ G. A. Ben Binninger
 	 
	 	 	Name:  	G. A. Ben Binninger 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	WALL STREET TRANSFER AGENTS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

[Signature page to Securities and Escrow Agreement]

 

 

 

EXHIBIT A

Escrow Agent Fees

$250 initial fee, to be paid at closing, for acting agent escrow fee.

An annual fee equal to one-quarter of one percent (0.25%) of the value of the remaining escrow
shares then held by the escrow agent based upon the average closing price of the Company’s common
stock, as reported by the OTC Bulletin Board, for the 10 trading days preceding the closing date
and each subsequent anniversary thereafter (the “determination date”). The annual fee will be
payable within 15 days of the determination date with the exception of the first annual fee which
shall be payable at closing. Notwithstanding the foregoing, in no event shall an annual fee exceed
$3,000 for any one year period, nor be less than $500 for any one year period (subject, however, to
pro-ration as described in paragraph 8.5).

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