Form 8-K

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Wez1PvHrZ4LzxiIQJ4oqXp6E02fd8DfyjBoYD/O4h2hs1CNhmg/NeOk9MG+bk34Z K7v95B6uGdiCo2LZpjDEPw== 0001362310-09-005841.txt : 20090424 0001362310-09-005841.hdr.sgml : 20090424 20090424172955 ACCESSION NUMBER: 0001362310-09-005841 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20090420 ITEM INFORMATION: Termination of a Material Definitive Agreement ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090424 DATE AS OF CHANGE: 20090424 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Kreido Biofuels, Inc. CENTRAL INDEX KEY: 0001342219 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 203240178 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-130606 FILM NUMBER: 09770674 BUSINESS ADDRESS: STREET 1: 1140 AVENIDA ACASO CITY: CAMARILLO STATE: CA ZIP: 93012 BUSINESS PHONE: 805-389-3499 MAIL ADDRESS: STREET 1: 1140 AVENIDA ACASO CITY: CAMARILLO STATE: CA ZIP: 93012 FORMER COMPANY: FORMER CONFORMED NAME: Gemwood Productions, Inc. DATE OF NAME CHANGE: 20051024 8-K 1 c84260e8vk.htm FORM 8-K Form 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 20, 2009

KREIDO BIOFUELS, INC.

(Exact name of registrant as specified in its charter)


Nevada	333-130606	20-3240178

(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)


1070 Flynn Road Camarillo, California		93012

(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (805) 987-8231

Not applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.02 Termination of Material Definitive Agreement.

On April 20, 2009, Kreido Biofuels, Inc. (the “Company”) effected a Separation Agreement and General Release dated as of April 15, 2009 with G.A. Ben Binninger, Chief Executive Officer of the Company, pursuant to which his Employment Agreement dated December 1, 2007 and his employment with the Company and its wholly owned subsidiaries were voluntarily terminated. Under the Separation Agreement, the Company paid Mr. Binninger $53,958 of a total $107,917 total severance pay as provided for in his Employment Agreement. The remaining $53,959 of severance pay will be paid when and as Company cash assets allow for such payment and in all events no later than March 5, 2010. Also by the Separation Agreement, Mr. Binninger and the Company released and discharged each other from all known and contingent liabilities and obligation. The Company retired stock options held by Mr. Binninger for nominal consideration. Mr. Binninger will continue to serve as a director of the Company.

The Company and Acaso Investments, LLC are entering into an Agreement Re: Termination of Lease pursuant to which the parties terminated the Company’s Lease dated June 22, 2007 respecting the entire premises at 1070 Flynn Road in Camarillo, California (the “Flynn Road Premises”) effective as of March 31, 2009. The Company will allow Acaso to apply the security deposit to satisfy its March rent obligation and to retain certain office furniture and equipment in consideration for a release of all future rental obligations. Asorco will buy other office equipment for $10,000.

John Philpott, the continuing officer of the Company, has arranged with Acaso to maintain an office at the Flynn Road Premises for himself and will use that office as the Company’s headquarters at no cost to the Company for the term of his Employment Agreement summarized in Item 5.02 below.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

As discussed under Item 1.02 above, as of April 15, 2009, the Company effected a Separation Agreement with G.A. Ben Binninger, Chief Executive Officer of the Company, pursuant to which his Employment Agreement dated December 1, 2007 and his employment with the Company and its wholly owned subsidiaries were terminated.

On April 23, 2009, the Company elected John Philpott, Chief Financial Officer of the Company, as the Chief Executive Officer of the Company. The Company and Mr. Philpott entered into an Employment Agreement dated April 23, 2009 that replaces the Employment Agreement between the Company and Mr. Philpott dated April 30, 2008 and which was scheduled to expire on April 30, 2009. Mr. Philpott will report to the Board of Directors of the Company. He will not be required to dedicate his full time or attention to the business of the Company. Rather, his primary responsibilities will be to attend to the sale of the remaining equipment and inventory owned by the Company, evaluating acquisition and merger opportunities, and attending to the Company’s periodic reporting requirements. Mr. Philpott will provide his own office space, which shall serve as the Company’s headquarters. The Company will pay Mr. Philpott a salary of $5,000 per month. Mr. Philpott will have the opportunity to earn a performance bonus of between $1,000 and $50,000 depending upon his achieving target performance goals to be established by the Board of Directors. The Employment Agreement is scheduled to terminate on May 31, 2010. As an inducement for Mr. Philpott accepting the Chief Executive Officer position and waiving his rights under his April 30, 2008 Employment Agreement, the Company will pay Mr. Philpott an inducement payment of $252,800, of which $126,400 is to be paid on or before April 30, 2009 and the balance will be paid in installments when and as the Company has cash resources available to make payments and in all events on or before March 5, 2010. The Company has also released its rights to repurchase 75,000 shares of Company common stock previously issued to Mr. Philpott.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits


Exhibit
Number

	99.1	Separation Agreement dated as of April 15, 2009 by and among Kreido Biofuels, Inc., Kreido Laboratories and G.A. Ben Binninger.

	99.2	Employment Agreement dated April 23, 2009 by and among Kreido Biofuels, Inc. Kreido Laboratories and John Philpott.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Information included in this Form 8-K may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that any projections included in these forward-looking statements will come to pass. The Company’s actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company undertakes no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Dated: April 24, 2009	KREIDO BIOFUELS, INC.
	By:	/s/ John Philpott
		Name:	John Philpott
		Its:	Chief Executive Officer

EX-99.1 2 c84260exv99w1.htm EXHIBIT 99.1 Exhibit 99.1

Exhibit 99.1

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (“Agreement” herein) is made and entered into as of this 15th day of April, 2009, by and between G.A. Ben Binninger (“BINNINGER”), 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. BINNINGER has been employed as an officer of Kreido and as an officer of Kreido Laboratories pursuant to a certain Employment Agreement dated as of December 1, 2007 (the “Employment Agreement”).

B. Because of a sale of substantially all of the assets of the Company, which constitutes a Change in Control of the Company, BINNINGER has elected to terminate his employment for Good Reason (as defined in the Employment Agreement) effective April 15, 2009.

C. Although there are no known disputes currently existing between BINNINGER and Company, the parties wish to permanently provide for and resolve any and all disputes that could arise out of BINNINGER’s employment with Company and the termination of BINNINGER’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. BINNINGER and the Company hereby agree that the employment of BINNINGER by Kreido, Kreido Laboratories, Kreido Wilmington, LLC and all other business entities affiliated with Kreido shall cease, without further notice or action on April 15, 2009. The termination of BINNINGER’s employment shall also terminate the Employment Agreement but shall not terminate or release BINNINGER from any obligation, covenant or liability under the Employment Agreement that expressly survives termination of the Employment Agreement, except as specifically provided herein. BINNINGER shall relinquish the title of Chief Executive Officer and President of Kreido and Kreido Laboratories on April 15, 2009 and he shall continue as a director of Kreido and Kreido Laboratories.

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. BINNINGER and Company hereby acknowledge that there exists no disagreements, disputes, misunderstandings or misinterpretations by and among them with regard to BINNINGER’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) BINNINGER’s employment with Company shall terminate at the close of business on April 15, 2009;

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

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

3. CONSIDERATION.

(a) Severance Pay. Kreido agrees to pay to BINNINGER, the gross sum of $107,917.00, less all applicable withholding and payable taxes and benefits, contributions or payments that are billed in arrears (“Severance Payment”). BINNINGER acknowledges that the Severance Payment is made by Kreido in consideration of the general release and other covenants set forth herein below, and in full satisfaction of all amounts of Severance pay, Earned Bonus and reimbursements, if applicable under Section 7.2 of the Employment Agreement, the knowing waiver of employment-related claims and all other covenants given by BINNINGER pursuant to this Agreement. The Severance Payment shall be paid in two or more installments, with the first installment in the amount of $53,958 being due and payable no later than April 30, 2009, and the balance in one or more additional installment when and as funds become available to Kreido but in all events on or before March 5, 2010. In addition, the Company will pay BINNINGER no later than April 30, 2009 his salary and accrued but unused paid time off through April 15, 2009, less all applicable withholding and payroll taxes and benefits, contributions or payments.

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


	Exercise				Option Shares
	Price per		Option Share		Vested as of
Grant Date	share		Quantity		April 15, 2009
July 1, 1999	$	0.09		33,848		33,848
July 26, 2007	$	0.44		100,000		100,000
July 29, 2007 repriced February 1, 2008	$	0.33		25,000		25,000
December 10, 2007		0.30		1,250,000		1,250,000

On the Effective Date, Kreido will repurchase all Options to purchase shares of Kreido common stock from BINNINGER for $1,250.00.

(c) Restricted Stock. Kreido hereby waives and releases any rights it may have to repurchase any or all of the Restricted Stock issued to BINNINGER under the Employment Agreement.

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

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(e) Continuation of Medical Insurance Benefits. The Company will be terminating its group medical insurance for employees and their dependents as of April 15, 2009. BINNINGER acknowledges and understands that he will have no 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”).

(f) Cooperation Period. BINNINGER agrees to make himself available by telephone from time to time between April 15, 2009 and July 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. BINNINGER, 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 Releasees”) 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 April 15, 2009. BINNINGER 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. BINNINGER 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 Releasees 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 BINNINGER 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: BINNINGER 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 after April 15, 2009.

(d) BINNINGER 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 BINNINGER. 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 BINNINGER 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 BINNINGER or omitted to be taken by BINNINGER 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 BINNINGER’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 BINNINGER’s employment by Company.

6. CALIFORNIA CODE WAIVER. BINNINGER 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, BINNINGER 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.

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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 Releasees unless compelled by legal process to do so.

9. COMPANY PROPERTY. BINNINGER 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. BINNINGER 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; provided however, that BINNINGER has purchased from Kreido a computer screen and three chairs and shall be entitled to purchases his personal laptop computer from Kreido and shall further be entitled to retain information prepared or provided to him in his capacity as a member of the Board of Directors.

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 BINNINGER to any other individual or entity.

11. SPECIFIC ACKNOWLEDGEMENTS.

(a) BINNINGER 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. BINNINGER 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. BINNINGER further understands that if he signs this Release, he will have seven (7) days thereafter in which to change his mind and revoke it. BINNINGER 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. BINNINGER understands and agrees that the release and waiver provisions are not effective or enforceable until the expiration of the seven (7) day revocation period.

(b) BINNINGER 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.

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(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) BINNINGER understands that following the execution of this Agreement, the Company shall issue one or more public announcements concerning the termination of BINNINGER’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 BINNINGER has not revoked it within the time period and in the manner specified in Section 12(a) above.

12. DISPUTE RESOLUTION.

(a) To the fullest extent allowed by law, any controversy, claim, or dispute between BINNINGER and the Company (and/or any of its directors, shareholders, officers, 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. BINNINGER agrees to execute the Mutual Agreement to Arbitrate attached hereto as Exhibit “A” and incorporated herein by reference.

(b) The foregoing provisions regarding Arbitration notwithstanding, before any Arbitrable Dispute is submitted to arbitration, the Parties agree to mediate such dispute in good faith with a professional mediator in Los Angeles County who is also a licensed attorney experienced in the area of employment law. If the parties cannot agree on the choice of a mediator, each party shall select a mediator, the two of whom will then select a third mediator who alone will conduct the mediation. In the event one party makes a demand on the other for mediation to which such party fails to respond for a period of thirty days, the party demanding mediation may then submit the dispute directly to Arbitration pursuant to the Mutual Agreement to Arbitrate.

(c) To the fullest extent allowed by law, every controversy, claim, or dispute between BINNINGER and Company (and/or its directors, shareholders, officers, representatives and agents) relating to or arising out of his employment or the termination of that employment (“Claim”) shall be asserted in writing, with a specific demand first to mediate and then, if still necessary, to arbitrate the Claim, by the party asserting such Claim (“Claimant”) and delivered to the non-asserting party no later than twelve months after the Claimant knows or should have known of the existence of the Claim or the Claim will be forever barred. The foregoing notwithstanding, any such Claim that has a statutory limitations period shorter than twelve months will be subject to the shorter statutory limitations period.

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13. MISCELLANEOUS.

(a) This instrument constitute the complete agreement between BINNINGER and Company regarding the termination of BINNINGER’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, are required to effect or complete the transaction contemplated herein.

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


	BINNINGER:
	/s/ G.A. Ben Binninger
	G.A. Ben Binninger
	Address on file

	KREIDO BIOFUELS, INC., a Nevada corporation
	By:	/s/ John Philpott
		Title: Chief Executive Officer

	KREIDO LABORATORIES, a California corporation
	By:	/s/ John Philpott
		Title: Chief Executve Officer

Common address:

1070 Flynn Road
Camarillo, California 93012
Attn: Chief Executive Officer

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EXHIBIT A

MUTUAL AGREEMENT
TO
ARBITRATE CLAIMS

This Agreement is between Kreido Biofuels, Inc. (“Company”) and G.A. Ben Binninger (referred to as “I” or “me”) is applicable to any disputes that may arise between the Company and me related to my Separation Agreement and General Release of even date herewith by and between the Company and me (the “Separation Agreement”). 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, to the extent not released by the Separation Agreement.

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

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

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

Arbitration Procedures; Discovery:

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

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

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

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

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

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

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

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

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

In Witness Whereof, Kreido and I have executed this Agreement this _____ day of April, 2009 (the “Execution Date”).


KREIDO BIOFUELS, INC.			BINNINGER:

By:	/s/ John Philpott		/s/ G.A. Ben Binninger
	Name:	John Philpott	G. A. Ben Binninger
	Title:	Chief Executive Officer

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EX-99.2 3 c84260exv99w2.htm EXHIBIT 99.2 Exhibit 99.2

Exhibit 99.2

Employment Agreement

This employment agreement (“Agreement”), executed as of April 23, 2009, by and between Kreido Biofuels, Inc., a Nevada corporation located at 1070 Flynn Avenue, Camarillo, California 93012 and Kreido’s wholly-owned subsidiary, Kreido Laboratories (collectively “Kreido” or the “Company”) and John M. Philpott, an individual (“Executive”).

Recitals

Whereas, Executive currently is employed as Company’s Chief Financial Officer under an Employment Agreement dated April 30, 2008 (the “2008 Agreement”);

Whereas, Executive, because of the sale of substantially all of the assets of the Company, is entitled to terminate his employment for Good Reason (as defined in the 2008 Agreement); and

Whereas, Kreido wishes to continue to employ Executive as its Chief Executive Officer and Chief Financial Officer on an ongoing basis and Executive, subject to the terms of this Agreement, is willing to be so employed.

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

Terms and Conditions

Waiver. Executive hereby waives his right to terminate his employment for Good Cause under the 2008 Agreement. This Agreement, from and after its Effective Date shall replace and supersede the 2008 Agreement. As used herein, the “Effective Date” shall mean April 15, 2009.

Executive’s Duties; Titles. From the date hereof to the Effective Date, Executive shall continue to be employed as the Chief Financial Officer of Kreido and Kreido Laboratories. Beginning on the Effective Date, Executive shall be employed as Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) of Kreido and Kreido Laboratories. Executive shall not be required to dedicate his full time or attention to Kreido. Rather, Executive shall dedicate such amount of his time and attention as shall be reasonably necessary for him to do and perform all services, acts and things necessary and advisable to manage and conduct the business of the Company including, without limitation, the marshalling and sale of its remaining assets, the settlement of its liabilities and obligations, the preparation and filing of all reports and statements to be filed by the Company under any applicable federal or state law, including the federal securities laws, and the identification and evaluation of new operating business opportunities. At all times during his employment, Executive shall report to and be subject to the direction and policies that are established from time to time by the Kreido’s Board of Directors (the “Board”).

Term and Termination. Except as specifically provided herein, the Term of this Agreement shall commence as of the date of execution of this Agreement. The Term shall continue through and including May 31, 2010 unless it is terminated earlier as provided herein below or extended by agreement of the parties. The expiration of this Agreement at the end of its Term shall not constitute a termination of the employment of Executive.

Location. Executive shall work from his own office in Camarillo, California. Executive shall not be required routinely to provide services outside of a reasonable commuting distance from Camarillo, California except when traveling on Kreido business and at the expense of Kreido.

Compensation.

5.1

Annual Compensation.

5.1.1

Base Salary. From the date hereof to the Effective Date, Executive shall receive a base salary equal to $16,250 per month. Commencing on the Effective Date, Executive shall receive a base salary of $5,000 per month based upon his dedication of approximately one full day per week to the business affairs of Kreido, payable monthly through Kreido’s regular payroll system.

5.1.2

Bonus. Executive shall be entitled to participate in a performance-based executive bonus plan (“Bonus Plan”), which shall be promulgated by the Compensation Committee of the Board. The Bonus Plan will set forth three levels of target performance goals “TPGs” for fiscal years 2009 and 2010 combined which, if achieved, will entitle the Executive to a bonus of between $1,000 and $50,000 depending upon the level of TPG achieved. The TPGs will consist of a combination of goals for the Executive’s individual performance and the Company’s overall performance in a ratio of 75% Company performance and 25% individual Executive performance. Bonuses paid under the Bonus Plan, if any, will be paid on or before June 30, 2010. The foregoing notwithstanding, so long as Executive’s employment under this Agreement is not terminated voluntarily by Executive without Good Reason (as defined below), Executive’s bonus shall be no less than $1,000. In the event Executive’s employment is terminated by the Company Without Cause or by Executive with Good Reason prior to the end of the applicable fiscal year, Executive shall be entitled to receive a pro rata portion of the bonus that would have been earned based on the TPG’s achieved prior to termination.

5.2

Inducement Payment. As an inducement to Executive continuing in the employment of the Company and waiving and releasing his rights under the 2008 Agreement, Kreido agrees to pay to Executive the gross sum of $252,875.00 less all applicable withholding and payable taxes and benefits, contributions or payments that are billed in arrears (the “Inducement Payment”). The Inducement Payment shall be paid in two or more installments, the first installment being in the gross amount equal to one-half of the Inducement Payment shall be paid no later than April 30, 2009. The balance of the Inducement Payment shall be paid when and as funds are available to the Company from the sale of remaining equipment but in all events the unpaid balance shall be due and payable on March 5, 2010. Executive acknowledges that the Company’s agreement to make the Inducement Payment is in consideration of the general release and other covenants set forth herein below, and such Inducement Payment is in full satisfaction of all amounts of Severance Pay, Earned Bonus and reimbursements, if applicable under Section 7.2 of the 2008 Agreement that would have been due and payable to Executive had Executive terminated his employment for Good Cause.

5.3

Restricted Stock. Kreido hereby waives and releases its rights to repurchase the 75,000 shares of Company common stock issued to Executive as Restricted Stock under the 2008 Agreement.

5.4

Expense Reimbursement. Kreido shall reimburse Executive for all ordinary and necessary expenses reasonably incurred by Executive on Kreido’s behalf (“Business Expenses”). Business Expenses (including travel costs) in excess of $500 individually or $2,500 in the aggregate shall be approved in advance in writing by a Board member, except in case of emergency.

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Proprietary Covenants of Executive.

6.1

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 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 could be reasonably feasible for the Company to undertake.

6.2

Covenant Not to Use or Disclose Confidential Information.

6.2.1

Definition of Confidential Information. For purposes of this Agreement, the term Confidential Information means all and any confidential information and/or trade secrets of Kreido, including without limitation, scientific discoveries, recipes, formulations, information encompassed in all advertising and marketing plans, customer lists, costs, pricing information, information concerning software and all concepts or ideas, in or reasonably related to the business of Kreido. Confidential Information shall not include any Kreido information that has been voluntarily disclosed to the public by Kreido, independently developed and disclosed by others, information about Kreido that Executive did not obtain by virtue of his employment or fiduciary relationship with the Company, or information which otherwise enters the public domain through lawful means.

6.2.2

Non-disclosure of Confidential Information. Executive expressly acknowledges that in the performance of his duties and responsibilities with the Company prior to the execution of this Agreement, he has been exposed to Confidential Information and that he will continue to be exposed to the Confidential Information after the execution of this Agreement. During his employment and for three years thereafter, Executive shall regard and preserve as confidential all Confidential Information pertaining to Kreido and its affiliates that have been or may be obtained by Executive in any way by reason of Executive’s employment by Kreido. Executive shall not, without the prior and specific written consent of Kreido, or unless ordered to do so by court order or subpoena (i) use, publicize, release or disclose to others, either during or after the period of employment, Confidential Information or (ii) take, retain or copy any Kreido executive compensation plans, Executive benefit plans, business plans, customer lists, costs, pricing information, documents, reports, information encompassed in advertising and marketing plans, or other concepts or ideas, in or reasonably related to the business of Kreido. Executive agrees to notify Kreido’s Board within two (2) business days of receipt of any court order or subpoena which calls for information deemed Confidential under this Agreement and to give Kreido reasonable opportunity to contest the subpoena. The foregoing notwithstanding, nothing contained in this Section 6.2.2 shall be construed to prevent Executive from using or disclosing Confidential Information when it is necessary for him to do so in the course of conducting his regular employment duties.

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Termination Due to Death or Disability. If Executive dies during the employment, Executive’s employment shall automatically cease and terminate as of the date of Executive’s death. In the event of Executive’s disability for a period of 120 consecutive days, 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” shall have the meaning provided in the Company’s disability insurance 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 the annual salary to the extent not previously paid and bonus as of the date of death; (ii) any unpaid Inducement Payment, and (iii) any reimbursements, if any, as to which Executive may be entitled hereunder. In the event of the termination of Executive’s employment due to Disability, Executive shall not be entitled to any severance pay.

Termination by Kreido.

8.1

Termination for Cause.

8.1.1

Definition of Cause. The term “Cause” for purposes of this Agreement means the following, which will constitute a material breach of this Agreement (“Material Breach”): Executive’s conviction of or plea of nolo contendere to any felony or any offense involving moral turpitude.

8.1.2

Entitlements Upon a Termination for Cause. In the event of the termination of the Executive’s employment hereunder due to a termination by the Company for Cause, on the date of termination Executive shall be entitled to receive: a lump sum cash payment, payable immediately upon the termination of Executive’s employment, equal to the sum of any accrued but unpaid base salary and bonus as of the date of such termination plus any unpaid Inducement Payment, and any properly incurred but unpaid expense reimbursements.

8.2

Termination Without Cause. Kreido may terminate Executive’s employment hereunder without Cause at any time by providing Executive written notice of such termination. If Executive’s employment is terminated without Cause, the termination shall take effect on the effective date of written notice of such termination to Executive (pursuant to Section 13.10).

8.2.1

Entitlements Upon a Termination Without Cause. In the event of the termination of Executive’s employment hereunder due to a termination by Kreido without Cause (other than due to Executive’s death), Executive shall be entitled to: a lump sum cash payment, payable immediately upon the termination of Executive’s employment, equal to the sum of the annual base salary to the extent not previously paid and bonus as of the date of such termination plus any unpaid Inducement Payment and any properly incurred but unpaid expense reimbursements.

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Termination by Executive.

9.1

Termination Without Good Reason. Executive shall have the right to terminate Executive’s employment hereunder at any time without Good Reason (as defined below) upon written notice of such termination to Kreido. A voluntary termination by Executive in accordance with this Section 9.1 shall not be deemed a breach of this Agreement.

9.2

Termination With Good Reason. The following events constitute grounds for Executive to terminate his employment for good reason (“Good Reason”):

	(i)		removal of Executive from either position specified in Section 1 without Cause of Executive’s consent;

	(ii)		material diminution in Executive’s annual salary after the Effective Date;

	(iii)		assignment to Executive of duties that are materially inconsistent with his position or that materially impair his ability to perform his duties;

	(iv)		the foregoing notwithstanding, ii, and iii above will not constitute Good Reason unless Executive first notifies Kreido in writing describing the event(s) that constitutes Good Reason (Executive’s Notice of Good Reason ) and unless Kreido thereafter fails to cure such event(s) within fifteen business days after Executive delivers Executive’s Notice of Good Reason to Kreido (“Kreido’s Cure Period”). It will be incumbent upon Executive to deliver Executive’s Notice of Good Reason to Kreido within fifteen business days after making a good faith determination that an event constituting Good Reason has occurred.

	9.2.2		Entitlements Upon a Termination for Good Reason. Upon Executive’s termination of his employment hereunder for Good Reason, Executive shall have the same entitlements as provided under Section 8.2.1 for a termination by Kreido Without Cause.

10.

Releases.

10.1

Executive and Company hereby acknowledges that there exist no disagreements, disputes, misunderstandings or misinterpretations by and among them respecting Executive’s employment as an officer and employee of the Company.

10.2

Release of Company. Executive, 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 Releasees”) 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 which have arisen, occurred or existed at any time prior to the date hereof. Executive 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.

10.2.1

Executive 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.

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10.3

Release of Executive. 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 Executive 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 Executive or omitted to be taken by Executive during his employment with Company, including, without limitation, breach of contract, or any federal, state or local laws relating in any way to Executive’s employment with Company prior to the date hereof. 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 Executive’s employment by Company.

10.4

California Code Waiver. Executive and Company hereby specifically waives 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:

Furthermore, Executive 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.

10.5

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 to the extent permitted by law.

11.		Right to Assign. This Agreement shall be assignable only by Kreido.

12.		Miscellaneous Terms.

12.1

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.

12.2

Alternative Dispute Resolution; Mediation Before Arbitration.

12.2.1

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 Ventura County, California. Executive agrees to execute the Mutual Agreement to Arbitrate attached hereto as Exhibit “A” and incorporated herein by reference.

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12.2.2

Mediation Before Arbitration. The foregoing provisions regarding Arbitration notwithstanding, before any Arbitrable Dispute is submitted to arbitration, the Parties agree to mediate such dispute in good faith with a professional mediator in Ventura County who is also a licensed attorney experienced in the area of employment law. If the parties cannot agree on the choice of a mediator, each party shall select a mediator, the two of whom will then select a third mediator who alone will conduct the mediation. In the event one party makes a demand on the other for mediation to which such party fails to respond for a period of thirty days, the party demanding mediation may then submit the dispute directly to Arbitration pursuant to the Mutual Agreement to Arbitrate.

12.3

Limitation of Claims. To the fullest extent allowed by law, every controversy, claim, or dispute between Executive and Kreido (and/or its directors, shareholders, officers, Executives, representatives and agents) relating to or arising out of his employment or the termination of that employment (“Claim”) shall be asserted in writing, with a specific demand first to mediate and then, if still necessary, to arbitrate the Claim, by the party asserting such Claim (“Claimant”) and delivered to the non-asserting party no later than twelve months after the Claimant knows or should have known of the existence of the Claim or the Claim will be forever barred. The foregoing notwithstanding, any such Claim that has a statutory limitations period shorter than twelve months will be subject to the shorter statutory limitations period.

12.4

Executive’s Fiduciary Duty to Company. No term contained herein is intended to, nor shall be construed to, limit or reduce Executive’s fiduciary duties to the Company.

13.

General Terms and Conditions.

13.1

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.

13.2

Integration; Modification. This Agreement constitutes the entire understanding and agreement between Kreido and Executive regarding its subject-matter and supersedes all prior negotiations and agreements between them with respect to its subject-matter whether oral or written. This Agreement may not be modified except by a writing signed by Executive and the Chairperson of Kreido.

13.3

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.

13.4

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.

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13.5

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.

13.6

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.

13.7

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.

13.8

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.

13.9

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.

13.10

Notices. All notices, statements and other documents that any party is required or desires to give to the other party hereunder shall be given in writing and shall be served in person, by express mail, by certified mail, by overnight delivery or by facsimile at the respective addresses of the parties as set forth below, or at such other addresses as may be designated in writing by such party in accordance with the terms of this Section 11.10.


		If to Kreido:		Kreido Biofuels, Inc. 1070 Flynn Avenue Camarillo, California 93012 Attention: Chair of the Board Fax: (805) 384-0989

		If to Executive:		John Philpott INFORMATION ON FILE

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

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IN WITNESS WHEREOF, Kreido and Executive have executed this Agreement this _____ day of March, 2009.

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


KREIDO BIOFUELS, INC., a Nevada corporation and KREIDO LABORATORIES, a California corporation		EXECUTIVE:

By:	/s/ Betsy Wood Knapp Betsy Wood Knapp, Chair of the Board	/s/ John M. Philpott John M. Philpott

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EXHIBIT A
MUTUAL AGREEMENT
TO
ARBITRATE CLAIMS

This Agreement is between Kreido Biofuels, Inc. (“Company”) and John Philpott (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.

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