Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.1

SEPARATION AGREEMENT AND GENERAL RELEASE

THIS SEPARATION AGREEMENT AND GENERAL RELEASE (hereinafter “Agreement”) is made

and entered into by and between Joel Balbien, Ph.D., an individual and resident of California (hereinafter

“Balbien”) and Kreido Biofuels, Inc., a Nevada corporation (hereinafter “Kreido” or the “Company”).

RECITALS

A. Balbien has been employed as a corporate officer of Kreido under that certain employment
agreement made, entered into and effective as of November 1, 2006 (the “Balbien Employment
Agreement”).

B. Pursuant to the provisions of Section 1 of the Balbien Employment Agreement, Balbien and
the Company mutually have elected not to renew the Balbien Employment Agreement effective July 26,
2007 (“Termination Date”).

C. The Parties mutually have agreed to waive the written 90-day notice of non-renewal that
each is otherwise entitled to under Section 1 of the Balbien Employment Agreement.

D. Pursuant to Section 10 of the Balbien Employment Agreement, on the Effective Date as
defined in Section 29 below, Balbien will have vested options to purchase 301,346 shares of Kreido
common stock at $1.35 per option (the “Options”).

E. Although no known disputes currently exist between Balbien and Kreido, Balbien and Kreido
wish permanently to resolve any and all disputes that could arise out of Balbien’s employment with
the Company and the cessation of that employment.

NOW, THEREFORE, in consideration of the execution of this Agreement and the mutual covenants
contained in the following paragraphs, and for other good and valuable consideration, Kreido and
Balbien agree as follows:

1. INCORPORATION OF RECITALS. The Recitals and identification of the parties to, and
beneficiaries of, this Agreement are incorporated by reference as though fully set forth herein.

2. NO ADMISSION OF LIABILITY. The parties agree that this Agreement, and the
performance of the acts required by it, 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 parents, subsidiaries, related entities, predecessors, successors,
officers, directors, shareholders, agents, employees and assigns.

3. CESSATION OF EMPLOYMENT. Balbien hereby acknowledges that he resigned from his
employment, all officer positions within Kreido and his position as a director on Kreido’s Board of
Directors effective July 26, 2007.

4. WAGES, EXPENSES AND VACATION TIME PAID. On or before July 31, 2007, Kreido will
pay Balbien all of his wages through July 31, 2007 and his accrued and unused Paid Time Off
including vacation time (PTO) through October 31, 2007. As of the Termination Date, Kreido has paid
Balbien for his out of pocket expenses, with the sole exception of Balbien’s cell phone invoice for
the month of July, 2007, for which Kreido will reimburse Balbien promptly after he forwards the
invoice to Kreido upon his receipt of it in August, 2007. Once Kreido makes these payments, and
other payments
referenced in this Agreement, Balbien acknowledges and agrees that he will not be owed any
wages, expenses or benefits by Kreido in connection with his employment.

 

 

 

5. CONSIDERATION TO BALBIEN.

(A) SEVERANCE. Kreido agrees that on the Effective Date, it will commence paying
severance to Balbien. The severance shall equal, in the aggregate, the gross sum of $150,000.00
(representing nine months’ base salary), less all applicable withholding taxes (“Severance
Payments”). Severance Payments shall be made as follows: (1) On the Effective Date, Kreido will
make a lump sum payment to Balbien of $50,000, less all applicable withholding taxes; (2)
Commencing on the Company’s first regular payroll date following the Effective Date, the Company
will begin making semi-monthly Severance Payments of $8,333.33 each, less all applicable
withholding taxes (“Semimonthly Severance Payments”), and will continue making such Semi-monthly
Severance Payments on the Company’s regular payroll dates until six Semi-monthly Severance Payments
have been made; (3) On November 1, 2007, the Company will make a lump sum payment to Balbien of
$50,000, less all applicable withholding taxes. Balbien agrees and acknowledges that the Severance
Payments are made by Kreido in consideration of the general release, the knowing waiver of
employment-related claims and all other covenants given by Balbien pursuant to this Agreement.

(B) BONUS. Pursuant to Section 6(b) of the Employment Agreement, Kreido agrees to
pay Balbien $49,000.00 upon the execution of this Agreement (the “Bonus”). The Bonus will be paid
as follows: (1) $37,500 on the Effective Date; and (2) $11,500 on November 1, 2007.

(C) REPURCHASE OF OPTIONS. On the Effective Date, Kreido will repurchase the Options
from Balbien for $1,000.00.

(D) REFERENCE LETTER. Kreido agrees to provide Balbien with a favorable reference
letter signed by the Chair of Kreido’s Board of Directors, which Balbien may use in his future
employment endeavors. A senior executive officer of Kreido will provide oral references consistent
with the letter to Balbien’s prospective employers upon provision of written authorization from
Balbien at the time such references are requested.

(E) CONTINUATION OF HEALTH BENEFITS. The Company’s group health and dental insurance
for Balbien and his dependents will continue through August 31, 2007. In addition, the Company
agrees to continue to reimburse Balbien pursuant to its Benelect program for the out-of-pocket
health and dental expenses incurred by Balbien and his dependents through August 31, 2007, upon
submission by Balbien of appropriate documentation supporting such out-of-expenditures. The Company
will promptly provide Balbien with written materials which describe his rights to continue his and
his dependents’ participation in Kreido’s group healthcare plans pursuant to the provisions of the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”) commencing September 1, 2007. If Balbien
timely elects to continue his and his dependents’ participation in such plans pursuant to the
provisions of COBRA, Kreido will issue checks to Balbien payable to the COBRA administrator to pay
the cost of Balbien’s COBRA premiums on behalf of Balbien and his participating dependents for each
of the months of September and October 2007 (the “Coverage”) upon the provision to Kreido by
Balbien of a copy of the invoice from the COBRA administrator documenting the premium that is due
for the Coverage. Continued participation after October 2007 shall be at Balbien’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.

6. COOPERATION PERIOD. Balbien agrees to make himself available on or before October
31, 2007 to a reasonable extent when requested by the Company, consistent with Balbien’s other
obligations, to assist and cooperate with the Company in connection with matters related to
the business and affairs of the Company.

 

 

 

7. NONSOLICITATION. For two years from the Termination Date (the “Restricted
Period”), Balbien shall not in any capacity, directly or indirectly, solicit or take any other
action which is intended to induce any Kreido employee to terminate his or her employment with the
Company. Nothing contained herein shall be construed to prevent Balbien from competing with Kreido.

8. PRIOR AGREEMENTS SUPERSEDED. With the exception of the Non-disclosure Agreement
signed by Balbien (“NDA”), the Kreido Biofuels, Inc. Indemnity Agreement dated May 3, 2007, the
2006 Equity Incentive Plan and the Kreido Biofuels, Inc. Lock-up Agreement (collectively the
“Surviving Agreements”), all prior agreements or understandings between the parties, including
without limitation the Balbien Employment Agreement, are superseded and are of no further force and
effect. The foregoing notwithstanding, the following sections of the Balbien Employment Agreement
are not superseded and do remain in full force and effect: Sections 13 and 14(b)(4). Balbien
understands and agrees that all of the terms of the NDA remain in force and he agrees to maintain
the confidentiality of non-public information concerning Kreido pursuant to that NDA and Section 13
of the Balbien Employment Agreement. In the event any provision of any of the Surviving Agreements
shall be deemed to conflict with this Agreement, this Agreement shall be deemed the controlling
document.

9. NONDISPARAGEMENT. The Parties agree that hereafter, they will not, either
directly or indirectly, make any defamatory, negative or denigrating comments of any type or nature
whatsoever about each other. Balbien additionally agrees that he will not, either directly or
indirectly, make any defamatory, negative or denigrating comments of any type or nature whatsoever
about Kreido’s employees, officers, agents, consultants, affiliates, investors or business partners
to anyone. 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
executive officers, board members and board advisors promptly of Kreido’s duty of nondisparagement
under this Section 9, and to direct each of them individually not to disparage Balbien to any other
individual or entity, including without limitation Balbien’s prospective employers.

10. GENERAL RELEASE. (a) Balbien for himself, his heirs, executors, administrators,
assigns and successors, fully and forever releases and discharges Kreido and each of its current,
former and future officers, directors, employees, agents, constituents, affiliates, parents,
subsidiaries, employee benefit plans and their fiduciaries, predecessors, successors, officers,
directors, agents, employees and successors and assigns (collectively, “Kreido Releasees”), with
respect to any and all claims, liabilities and causes of action, of every nature, kind and
description, in law, equity or otherwise, which have arisen, occurred or existed at any time prior
to the signing of this Agreement, including, without limitation, any and all claims, liabilities
and causes of action arising out of or relating to Balbien’s employment with Kreido and the
cessation of that employment.

(b) Kreido for itself, its affiliates, assigns and successors, fully and forever releases and
discharges Balbien and each of his heirs, executors, administrators, assigns and successors
(collectively, “Balbien Releasees”), with respect to any and all claims, liabilities and causes of
action, of every nature, kind and description, in law, equity or otherwise, which have arisen,
occurred or existed at any time prior to the signing of this Agreement, including, without
limitation, any and all claims, liabilities and causes of action arising out of or relating to
Balbien’s employment with Kreido under the Balbien Employment Agreement and the cessation of that
employment, as well as Balbien’s prior service as Interim CEO beginning in October 2005 and his
service as a director of Kreido and its predecessor entities.

 

 

 

11. KNOWING WAIVER OF EMPLOYMENT-RELATED CLAIMS. Balbien 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 had, now has, or in the future may have, to pursue
against any of the Kreido Releasees any and all remedies available to him under any
employment-related causes of action, including without limitation, claims of wrongful discharge,
breach of contract, breach of the covenant of good faith and fair dealing, fraud, violation of
public policy, defamation, discrimination, personal injury, physical injury, emotional distress,
claims for severance (except as provided for in this Agreement), claims for benefits or perquisites
of employment (including stock options), claims under Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act, the Americans With Disabilities Act, the Federal
Rehabilitation Act, the Family and Medical Leave Act, the California Fair Employment and Housing
Act, the California Family Rights Act, the Equal Pay Act of 1963, the provisions of the California
Labor 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, and (iii) for indemnification
of Balbien pursuant to the California Labor Code and other applicable provisions of California law.

12. WAIVER OF CIVIL CODE SECTION 1542. Each party expressly waives any and all
rights and benefits conferred upon it by Section 1542 of the Civil Code of the State of California,
which states as follows:

“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.”

Each party expressly agrees and understands that the Release given by it pursuant to this Agreement
applies to all unknown, unsuspected and unanticipated claims, liabilities and causes of action
which he may have against the other party, any of the Kreido Releasees or any of the Balbien
Releasees.

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

14. DISPUTE RESOLUTION: MEDIATION BEFORE ARBITRATION. (a) Arbitrable Disputes. To
the fullest extent allowed by law, any controversy, claim, or dispute between Balbien and Kreido
(and/or any of its directors, shareholders, officers, Executives, representatives or agents)
relating to or arising out of Balbien’s employment or this Agreement (“Arbitrable Dispute”) will be
submitted to final and binding arbitration in Los Angeles County, California pursuant to the Mutual
Agreement to Arbitrate Claims, which is attached hereto and incorporated herein by reference. (b)
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 Claims.

 

 

 

15. PROMISE TO REFRAIN FROM ASSISTING IN SUIT OR ADMINISTRATIVE ACTION. Each party
promises and agrees that it shall not advocate or incite the institution of, or assist or
participate in, any suit, complaint, charge or administrative proceeding by any other person
against the other party hereto, any of the Kreido Releasees or any of the Balbien Releasees, unless
compelled by legal process to do so.

16. PRESS RELEASES. Balbien understands that following the execution of this
Agreement, the Company shall issue one or more press releases concerning its and Balbien’s joint
decision not to renew the Balbien Employment Agreement (“Press Releases”). The parties shall
cooperate and use their best efforts to create Press Releases containing only content that is
mutually acceptable to them (“Acceptable Content”). Balbien shall not issue a Press Release
independent of the Company without the Company’s prior written consent. The parties shall endeavor
to restrict their comments to the Press Releases. If either party shall determine that a statement
in a Press Release may misstate a material fact or omit to state a material fact necessary to make
the statements made therein not misleading, he or it shall immediately notify the other party and
the parties shall work together to promptly issue a corrective statement, if necessary.

17. PROMISE TO MAINTAIN CONFIDENTIALITY OF KREIDO’S CONFIDENTIAL INFORMATION.
Balbien 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, customers, sales, prices, contracts, and the like. Balbien 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, its research and development, the identities of
Kreido’s customers, suppliers, Kreido’s sales, Kreido’s prices, the terms of any of Kreido’s
contracts with third parties, and the like (“Confidential Information”). Balbien 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 and the NDA.

18. RETURN OF KREIDO PROPERTY. Balbien represents and warrants that as of the
Termination Date, he has returned to Kreido all Confidential Information and other Company property
within his possession including, without limitation, Company computers, electronic data,
cellphones, Blackberrys and keys. The foregoing notwithstanding, the Company agrees that Balbien
may keep the Company laptop computer and cellphone that Balbien used during his employment by
Kreido.

19. INTEGRATED AGREEMENT. The parties acknowledge and agree that no promises or
representations were made to them which do not appear written herein and that this Agreement
contains the entire agreement of the parties on the subject matter thereof. The parties further
acknowledge and agree that parol evidence shall not be required nor allowed to interpret the intent
of the parties.

20. VOLUNTARY EXECUTION. The parties hereby acknowledge that they have read and
understand this Agreement and that they sign this Agreement voluntarily and without coercion.

21. WAIVER AMENDMENT AND MODIFICATION OF AGREEMENT. The parties agree that no
waiver, amendment or modification of any of the terms of this Agreement shall be effective unless
in writing and signed by all parties affected by the waiver, amendment or modification. No waiver
of any term, condition or default of any term of this Agreement shall be construed as a waiver of
any other term, condition or default.

 

 

 

22. REPRESENTATION BY COUNSEL. The parties acknowledge that they have had the
opportunity to be represented in negotiations for 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 any of the facts or matters upon which they now rely in making this
Agreement hereafter prove to be otherwise, this Agreement will nonetheless remain in full force and
effect.

23. CALIFORNIA LAW. The parties agree that this Agreement and its terms shall be
construed under California law.

24. DRAFTING. 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.

25. COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may be signed in
counterparts and said counterparts shall be treated as though signed as one document. Facsimile
signatures on this Agreement shall be treated as original signatures.

26. HEADINGS ARE NOT CONTROLLING. The headings used in this Agreement are for the
purpose of organization only and are not intended to inform, alter or control the terms of this
Agreement.

27. PERIOD TO CONSIDER TERMS OF AGREEMENT. Balbien acknowledges that this Agreement
was presented to him on July 26, 2007 and that he is entitled to have 21 days’ time in which to
consider the terms of this Agreement. Balbien acknowledges that he has had the opportunity to
obtain the advice and counsel from the legal representative of his choice and that he executes this
Agreement having had sufficient time within which to consider its terms. Balbien represents that if
he executes this Agreement before 21 days have elapsed, he does so voluntarily and waives any
remaining consideration period.

28. REVOCATION OF AGREEMENT. Balbien understands that after executing this
Agreement, he has the right to revoke it within seven (7) days after his execution of it. Balbien
understands that this Agreement will not become effective and enforceable unless the 7-day
revocation period passes and Balbien does not revoke the Agreement in writing. Balbien understands
that this Agreement may not be revoked after the 7- day revocation period has passed. Balbien
understands that any revocation of this Agreement must be made in writing and received by Kreido’s
attorney, Susan Keenberg at 1217 Acacia Avenue, Torrance, California 90501, Facsimile 310-783-0111
within the seven-day period.

29. EFFECTIVE DATE. This Agreement shall become effective and binding upon the
parties eight (8) days after Balbien’s execution thereof (“Effective Date”), so long as he has not
revoked it within the time period and in the manner specified in paragraph 28 above.

30. INTEREST AND COSTS; ATTORNEYS’ FEES. In the event of any legal proceeding,
litigation or alternative dispute resolution process (including arbitration as specified in Section
14) 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 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 without first making a request for mediation
pursuant to Section 14, 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.

31. 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 31.

	 	 	 	 	 	 	 
	If to Kreido:

	 	Kreido Biofuels, Inc.
	 	With a copy to:
	 	Susan Keenberg, Esq.
	 

	 	1140 Avenida Acaso,
	 	 	 	Law Office of Susan Keenberg
	 

	 	Camarillo, California 93012
	 	 	 	1217 Acacia Avenue
	 

	 	Attention: Betsy Wood Knapp, Chair
	 	 	 	Torrance, California 90501 
	 

	 	Fax: (805) 384-0989
	 	 	 	Fax: (310) 783-0111 
	 
	 	 	 	 	 	 
	If to Balbien:

	 	Joel Balbien
	 	With a copy to:
	 	Frank Melton, Esq.
	 

	 	INFORMATION ON FILE
	 	 	 	Rutter, Hobbs & Davidoff, Inc.
	 

	 	 	 	 	 	1900 Ave. of the Stars, #1700 
	 

	 	 	 	 	 	Los Angeles, CA 90067 
	 

	 	 	 	 	 	Fax: (310) 286-1728 

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.

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

Joel Balbien, Ph.D.
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Kreido Biofuels, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

Betsy Wood Knapp, Chair of the Board of Directors
	 	 

 

 

 

MUTUAL AGREEMENT

TO

ARBITRATE CLAIMS

This Agreement is between Kreido Biofuels, Inc. (“Company”) and Joel Balbien (referred to as
“I” or “me”) related to that certain Separation Agreement and General Release of even date herewith
(“Separation Agreement”). By entering into this Agreement, both the Company and I anticipate that
we will benefit by resolving any disputes that may arise related to my previous employment with the
Company or the Separation Agreement through binding arbitration.

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

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

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

Exclusive Remedy: All Claims must be resolved according to the procedures in this Agreement,
and not otherwise except for the provision for Mediation before Arbitration as provide in the
Separation Agreement and General Release between me and the Company of even date herewith (the
“Separation 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 Separation Agreement. Either the Company or I may bring an action in any court of
competent jurisdiction to compel arbitration under this Agreement. The parties understand
and agree that they are waiving any right to a jury trial by entering into this Agreement.

 

 

 

Arbitration: All Claims must be resolved through final and binding arbitration. The arbitrator
must be a neutral arbitrator chosen by the parties. Arbitration will take place at a location
determined by the arbitrator in 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.

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.

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

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

 

 

 

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

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

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

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

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

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

IMPORTANT

I agree that I have been given a reasonable opportunity to read this Agreement carefully, I have
read it, I understand it and I am signing it voluntarily. I have not been promised anything for
signing it that is not described in this Agreement and the Separation Agreement. The Company
encouraged me to discuss this Agreement with my legal advisor if I wished before signing it and I
have had it reviewed by legal counsel of my choosing.

 

 

 

	 	 	 	 	 	 	 
	Kreido Biofuels, Inc.	 	Employee	 	 
	 
	 	 	 	 	 	 
	Signature:

	 	 	 	Signature:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Print Name:

	 	Betsy Wood Knapp
	 	Print Name:
	 	Joel Balbien, Ph.D.
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Print Title:

	 	Chair of the Board
	 	Date:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:Filed by Bowne Pure Compliance

 

Exhibit 10.2

Employment Agreement

This employment agreement (“Agreement“) is effective as of July 26, 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 George A. “Ben” Binninger, an individual
(“Executive”).

Recitals

A. The Company is desirous of engaging Executive’s services on a part-time basis as interim
chief executive officer (“Interim CEO”) on the terms and conditions set forth in this Agreement;
and

B. Executive is desirous of accepting such part-time interim employment, title, and attendant
responsibilities on the terms and conditions set forth in this Agreement.

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 Interim CEO under the terms and conditions below.
Executive shall do and perform all services, acts, or things necessary or advisable to manage
and conduct the business of the Company which are normally associated with the position of
CEO. However, at all times during his employment, Executive shall be subject to the direction
and policies from time to time established by the Board of Directors (the “Board”).
	 
	2.	 	Term and Termination. It is the expectation of the parties that Executive’s tenure
as Interim CEO will be approximately 90 to 120 days. The foregoing notwithstanding, the
Company’s employment of Executive as Interim CEO shall commence on July 26, 2007 and shall
continue for an indefinite period of time to be determined at the sole discretion of the Board
(the “Interim Period”). The Parties understand and agree that upon two (2) days’ written
notice from the Board to the Executive of the conclusion of the Interim Period, Executive’s
employment by the Company shall terminate effective the last day of the Interim Period.
Notwithstanding anything contained herein to the contrary, the Parties agree Executive is an
at-will employee and either Party may terminate Executive’s employment under this Agreement at
any time, with or without cause upon two (2) days’ notice.
	 
	3.	 	Hours. Executive shall provide his services to Company on a half-time basis, which
the parties agree will be an average of 2.5 days per week, unless Executive, in his sole
discretion, determines additional time is necessary. Executive 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.
	 
	4.	 	Compensation.

4.1 Base Salary. Executive shall receive an annual base salary of $140,000.00 in
accordance with Kreido’s regular payroll practices. Such salary shall be prorated for
any partial year of employment on the basis of a 365-day fiscal year. Executive agrees
to waive all compensation to which Executive would otherwise be entitled as a director
of the Company
and for serving on committees and sub-committees of the Company’s board of directors
during the Interim Period, .

 

Page 1 of 13

 

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

	 	4.2 (a)	 	 Grant of Options. On the Effective Date, the
Company will grant Executive an option to purchase 125,000 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.
	 
	 	4.2 (b)	 	 Option Exercise Price; Term. The per share exercise
price of the Option shall be the closing bid price per share of Company common
stock on the date of grant. The Term of the Option shall be ten years from the
date of grant.
	 
	 	4.2 (c)	 	 Vesting and Exercise. The Options shall vest and
be exercisable as follows: (A) 50,000 options shall vest upon signing of this
Employment Agreement (“Signing Grant”); (B) 50,000 options shall vest in four
equal installments of 12,500 options at the conclusion of each month of
employment the Executive completes with the Company beginning with the month
of August, 2007 (“Monthly Installments”) up to a maximum of four Monthly
Installments; and (C) the remaining 25,000 options shall vest in two equal
installments of 12,500 options each on April 15, 2008 and October 15, 2008 if
the Executive is employed by the Company or is a member of the Company’s board
of directors on those dates. All vested options shall remain exercisable for
ten years from the date of the Grant.
	 
	 	4.2 (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 4.2(a),
then the exercise period in Section 4.2(b) will be extended by the amount of
time during which Executive could not exercise the Option, but in no event
beyond ten years from the date of grant.
	 
	 	4.2 (e)	 	 Payment. The full consideration for shares
purchased by the Executive upon exercise of the Option shall be paid: (a) by
delivery of a certified check payable to the order of the Company; (b) by
delivery and attestation of Mature Shares (valued at their Fair Market Value
on the date of delivery) or (c) by delivery of a properly executed exercise
notice with irrevocable instructions to a broker to deliver to the
Company the amount necessary to pay the exercise price from the sale of
proceeds of a loan from the broker with respect to the sale of such award or a
broker loan secured by Mature Shares.

4.3 Expense Reimbursement. Kreido shall reimburse Executive for all ordinary and
necessary expenses reasonably incurred by Executive on Kreido’s behalf (“Business
Expenses”). Executive shall provide Kreido with documentation for all Business Expenses
at the time reimbursement is requested. In the event it is necessary for Executive to
travel on

Kreido’s behalf, Executive shall be entitled to fly and have travel accommodations on
the same level as Kreido’s other most senior management Executives.

 

Page 2 of 13

 

4.4 Completion Payment. Executive shall be entitled to a completion payment in an amount
to be determined by the Board of Directors of the Company in its sole discretion, but
not to exceed $25,000, at the date Executive’s employment is terminated by the Company.

	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 Chairperson of
Kreido any and all actual, potential, or apparent conflicts of interest, should they
later arise. In addition, Executive covenants 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 reasonably could be feasible for the Company
to undertake in the areas of biofuels technology, supply, facilities, equipment,
production, sales, or services, and that he will not, directly or indirectly, exploit
any such opportunity for his own account or the account of any third party. Nothing
contained in this Section 5.1 shall be construed to prevent Executive from operating the
consulting business in which he now is engaged.

5.2 Covenant Not to Use or Disclose Confidential Information.

	 	5.2.1	 	Definition of Confidential Information. For purposes of this
Agreement, the term Confidential Information means all and any confidential
information and/or trade secrets of Kreido and its affiliates, 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 as well as business and
financial information of Kreido’s customers and business partners that has been
disclosed to Kreido on a confidential basis (“Confidential Information”).
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. During his employment
and after the termination of his employment, Executive shall regard and
preserve as confidential all Confidential Information that has been or may be
obtained by Executive in any way by reason of Executive’s employment by
Kreido. Without the prior and specific written consent of Kreido, or
unless ordered to do so by a court order or subpoena, Executive shall not (i)
use, publicize, release or disclose Confidential Information to others, either
during or after the period of employment, or (ii) take, retain or copy any
Kreido executive compensation plans, Executive benefit plans, business plans,
customer lists, costs, pricing information, documents, reports, information
encompassed in advertising and marketing plans, or other concepts or ideas, in
or reasonably related to the business of Kreido. Executive agrees to notify
Kreido’s Board of Directors within two (2) business days of receipt of any
court order or subpoena that calls for information deemed Confidential under

 

Page 3 of 13

 

this Agreement and to give Kreido reasonable opportunity to contest the
subpoena. The foregoing notwithstanding, nothing contained within this Section
5.2 shall be construed to prevent Executive from using or disclosing the
Confidential Information when it is necessary for Executive to do so in the
course of conducting his regular employment duties.

5.3 Covenant Not to Interfere With Kreido’s Business Relationships. During his employment
and for a period of one (1) year 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 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 or that come into Executive’s
possession during the Interim Period (“Kreido Materials”) are the property of
Kreido and shall not be used by Executive in any way after the time this
Agreement is terminated.
	 
	 	5.4.2	 	Delivery of Materials. Upon termination of this Agreement,
Executive shall promptly deliver to Kreido all “Kreido Materials”. The
foregoing notwithstanding, if Executive is still a member of the board of
directors of the Company at the end of the Interim Period, Executive may retain
those Kreido Materials he acquired in his capacity as a director of the Company
and not as the Company’s Interim CEO.

	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 21 consecutive days during any
30-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 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.
	 
	7.	 	Right to Assign. This Agreement shall be assignable only by Kreido.

 

Page 4 of 13

 

	8.	 	Miscellaneous Terms.

	 	8.1	 	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.
	 
	 	8.2	 	Alternative Dispute Resolution; Mediation Before Arbitration.

	 	8.2.1	 	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.
	 
	 	8.2.2	 	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.

	9.	 	General Terms and Conditions.

	 	9.1	 	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.
	 
	 	9.2	 	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.
	 
	 	9.3	 	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.

 

Page 5 of 13

 

	 	9.4	 	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.
	 
	 	9.5	 	Descriptive Headings. The paragraph and section headings in this Agreement are
for convenience only and shall not control or affect the meaning or construction of any
provision of this Agreement.
	 
	 	9.6	 	Counterparts and Facsimile Signatures. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute but one agreement. Facsimile signatures on this
Agreement shall be treated as original signatures.
	 
	 	9.7	 	Third-Party Beneficiaries. No person shall be a third-party beneficiary of this
Agreement and no person other than the parties hereto and their permitted successors
and assigns shall receive any of the benefits of this Agreement.
	 
	 	9.8	 	Applicable Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without regard to
conflicts of laws principles.
	 
	 	9.9	 	Arms Length Agreement. This Agreement has been negotiated at arms length
between persons knowledgeable in the matters dealt with herein. Accordingly, any rule
of law or any statute, legal decision, or common law principle of similar effect that
would require interpretation of any ambiguity in this Agreement against the party that
drafted it is of no application and is hereby expressly waived. The provisions of this
Agreement shall be interpreted in a reasonable manner to effect the intentions of the
Parties hereto.
	 
	 	9.10	 	Notices. All notices, statements and other documents that any party is
required or desires to give to the other party hereunder shall be given in writing and
shall be served in person, by express mail, by certified mail, by overnight delivery or
by facsimile at the respective addresses of the parties as set forth below, or at such
other addresses as may be designated in writing by such party in accordance with the
terms of this Section 9.10.

	 	 	 
	If to Kreido:

	 	Kreido Biofuels, Inc.
	 

	 	1140 Avenida Acaso, Camarillo, California 93012
	 

	 	Attention: Betsy Wood Knapp, Chair of the Board
	 

	 	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:

	 	George A. Ben Binninger
	 

	 	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.

 

Page 6 of 13

 

In Witness Whereof, Kreido and Executive have executed this Agreement this 27 day of July,
2007.

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

	 	 	 	 	 
	Kreido 

	 	Biofuels, Inc.
	 	Executive
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	Betsy Wood Knapp, Chair of the Board
	 	George A. Ben Binninger

 

Page 7 of 13

 

Exhibit A

MUTUAL AGREEMENT

TO ARBITRATE CLAIMS

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

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

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

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

Exclusive Remedy: All Claims must be resolved according to the procedures in this Agreement,
and not otherwise except for the provision for Mediation before Arbitration as 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.

 

Page 8 of 13

 

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.

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 one
deposition of a non-expert witness 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 documents in their
possession or control which they intend to introduce as exhibits at the hearing or on which they
rely to support their positions.

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

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

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

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

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

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

 

Page 9 of 13

 

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 and costs to the prevailing
party under any applicable statute to the same extent that attorneys’ fees and costs could be
awarded in standard civil litigation. No award of attorneys’ fees may be made, however, unless the
party otherwise entitled to an award of such fees: (1) requested to mediate the dispute pursuant to
paragraph 8.2.2 of the Employment Agreement executed by the parties.; or (2) acceded to a request
from the other party to mediate the dispute if such request was made pursuant to paragraph 8.2.2 of
the Employment Agreement executed by the parties.

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

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

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

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

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

 

Page 10 of 13

 

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:

	 	Betsy Wood Knapp
	 	Print Name:
	 	George A. Binninger
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Print Title:

	 	Chair
	 	Date:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

 

Page 11 of 13

 

Exhibit B

LOCK-UP AGREEMENT

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

RECITALS:

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

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

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

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

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

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

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

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

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

7. All notices, instructions or other communications required or permitted to be given
pursuant to this Agreement shall be given in writing and delivered by certified mail, return
receipt requested, overnight delivery or hand-delivered to all parties to this Agreement at the
principal office of the Company, Attention: President and CEO, in the case of notice to the
Company, or to the principal office

 

Page 12 of 13

 

of Officer or his or her residence address indicated in the employment records of the Company,
whichever the Company may elect, in the case of notice to Officer.. All notices shall be deemed to
be given on the same day if delivered by hand or on the following business day if sent by overnight
delivery or the second business day following the date of mailing.

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

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

	 	 	 	 	 
	DATE OF AGREEMENT:

	 	April 28, 2007
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	EXPIRATION DATE:

	 	January 12, 2008	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	OFFICER:
	 	 	 	 
	 

	 	 	 	 

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

	 	 	 	 	 	 	 
	KREIDO BIOFUELS, INC.	 	OFFICER:
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	Name: Betsy Wood Knapp	 	Signature	 	 
	Its: Chair	 	Name: George A. Binninger	 	 

 

Page 13 of 13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00126-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00126-of-00352.parquet"}]]