EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) is made, entered into and effective as of November 1, 2006 (the “ Effective Date ”), between KREIDO LABORATORIES (the “ Company ”), and JOEL BALBIEN, Ph.D. , an individual (the “ Executive ”).

WHEREAS, the Company and the Executive wish to memorialize the terms and conditions of the Executive’s employment by the Company in the positions of President and Chief Executive Officer;

NOW, THEREFORE, in consideration of the covenants and promises contained herein, the Company and the Executive agree as follows:

1.   Employment Period . The Company offers to employ the Executive, and the Executive agrees to be employed by Company, on an "at will" basis, in accordance with the terms and subject to the conditions of this Agreement, commencing on the Effective Date and terminating on the first (1 ^st ) anniversary of the Effective Date (the “ Scheduled Termination Date ”), unless terminated in accordance with the provisions of Section 12 below, in which case the provisions of Section 12 shall control; provided , however , that unless either party provides the other party with written notice of his or its intention not to renew this Agreement at least 90 days prior to the expiration of the initial term or any renewal term of this Agreement (as the case may be), this Agreement shall automatically renew for additional one-year periods commencing on the day after such expiration date. The Executive affirms that no obligation exists between the Executive and any other entity which would prevent or impede the Executive’s immediate and full performance of every obligation of this Agreement. The Company may terminate this Agreement, anything to the contrary notwithstanding, without any further compensation due to the Executive in the event that the Company does not close a financing of at least TWENTY-FIVE MILLION DOLLARS ($25,000,000) prior to January 15, 2007.

2.   Position and Duties . During the term of the Executive’s employment hereunder, the Executive shall continue to serve in, and assume duties and responsibilities consistent with, the positions of President and Chief Executive Officer, unless and until otherwise instructed by the Company. The Executive agrees to devote to the Company substantially all of his working time, skill, energy and best business efforts during the term of his employment with the Company, and the Executive shall not engage in business activities outside the scope of his employment with the Company if such activities would detract from or interfere with his ability to fulfill his responsibilities and duties under this Agreement or require substantial amounts of his time or of his services, or which would constitute a conflict of interest by the Executive.

3.   No Conflicts . The Executive covenants and agrees that for so long as he is employed by the Company, he shall inform the Company of each and every future business opportunity presented to the Executive that arises within the scope of the Business of the Company (as defined below) and would be feasible for the Company, and that he will not, directly or indirectly, exploit any such opportunity for his own account.

4.   Hours of Work . The Executive’s normal days and hours of work shall coincide with the Company’s regular business hours. The nature of the Executive’s employment with the Company requires flexibility in the days and hours that the Executive must work, and may necessitate that the Executive work on other or additional days and hours.

5.   Location . The locus of the Executive’s employment with the Company shall be primarily at the Company’s office located in Camarillo, California.

6.   Compensation .

(a)   Base Salary . During the term of this Agreement, the Company shall pay, and the Executive agrees to accept, in consideration for the Executive’s services hereunder, an annual salary of TWO HUNDRED THOUSAND DOLLARS ($200,000) , less all applicable taxes and other appropriate deductions, payable in accordance with the Company's policy for salaried employees.

The Compensation Committee (as defined below) of the Board shall also review the Executive’s base salary annually and shall make a recommendation to the Board as to whether such base salary should be adjusted upward, which decision shall be within the Board’s sole discretion.

(b)   Annual Bonus . The Executive shall be entitled to an initial bonus of up to ONE HUNDRED AND FIFTY THOUSAND DOLLARS ($150,000) for the period from the Effective Date through December 31, 2007, the actual amount of the bonus shall be determined according to achievement of performance-related financial and operating targets established quarterly for the Company and the Executive by the Compensation Committee. The Compensation Committee will establish four (4) quarterly performance plans for the Employee. Each plan will contain financial and operating objectives (the " Quarterly Performance Targets "), the achievement of which will determine the amount of bonus paid during that quarter. The initial performance objective shall be the completion of an equity financing of the Company or its parent Company, which is expected to close concurrently with the proposed merger transaction (the “ Merger ”) referred to in Section 17 , for which a bonus of THIRTY SEVEN THOUSAND FIVE HUNDRED DOLLARS ($37,500) will be paid upon the closing date of the equity financing and the Merger. The remaining three (3) Quarterly Performance Targets will be set by the Compensation Committee of the board of directors of the Company or its parent Company (the “Compensation Committee”) not later than January 12, 2007. The remaining payments, if the Executive meets Quarterly Performance Targets, are scheduled for April 1, 2007, July 1, 2007 and November 1, 2007.   Quarterly Performance related financial and operational targets for Q4:2007 - Q3:2008 shall be adopted by the Compensation Committee promptly after the end of Q3:2007, but in no event later than October 12, 2007).

7.   Expenses . During the term of this Agreement, the Executive shall be entitled to payment or reimbursement of any reasonable expenses paid or incurred by him in connection with and related to the performance of his duties and responsibilities hereunder for the Company. All requests by the Executive for payment or reimbursement of such expenses shall be supported by appropriate invoices, vouchers, receipts or such other supporting documentation in such form and containing such information as the Company may from time to time require, evidencing that the Executive, in fact, incurred or paid said expenses.

8.   Vacation . During the term of this Agreement, the Executive shall be entitled to accrue, on a pro rata basis, twenty (20) vacation days, per year. The Executive shall be entitled to carry over any accrued, unused vacation days from year to year as provided by current Company policy.

9.   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 the Executive is precluded by the Lock-Up Agreement from exercising the Option granted to the Executive under Section 10 , then the exercise period in Section 10(d) will be extended by the amount of time during which the Executive could not exercise the Option.

10.   Stock Options . The Company hereby agrees to use commercially reasonable efforts to cause Kreido Biofuels, Inc., a Nevada corporation (the “ PubCo ”) to grant the Executive a non-qualified stock option under the PubCo's equity incentive plan on the terms and conditions hereinafter stated. When so granted, the following terms and conditions will be incorporated into a separate stock option agreement (the “ PubCo Stock Option Agreement ”), dated the date of the grant, between the Executive and the PubCo. In the event of any inconsistency between the PubCo Stock Option Agreement and this Agreement, the terms of the PubCo Stock Option Agreement shall prevail.

(a)   Grant of Option . On the effective date of the Merger, the Company will grant the Executive an option to purchase an aggregate of ONE MILLION TWO HUNDRED AND FIVE THOUSAND THREE HUNDRED AND EIGHTY FOUR (1,205,384) shares of the Company’s common voting stock (the “ Option ”) under the PubCo’s 2006 Stock Option Plan (the “ Stock Option Plan ”). In subsequent years the Executive shall be eligible for such grants of options and other permissible awards (collectively with such options, the “ Awards ”) under the Stock Option Plan as the Compensation Committee of the board of directors of PubCo shall determine.

(b)   Option Price; Term . The per share exercise price of the Option shall be ONE AND 35/100THS DOLLARS ($1.35) , which represents the anticipated fair market value per share of Company common voting stock on the closing date of the Merger. The term of the Option shall be ten (10) years from the date of grant.

(c)   Vesting and Exercise . The Option shall be vested and exercisable in eight (8) quarterly installments of ONE HUNDRED FIFTY THOUSAND SIX HUNDRED AND SEVENTY THREE (150,673) shares each.

(d)   Termination of Service; Accelerated Vesting .  

(i)   If the Executive’s employment is terminated for Cause, as such term is defined below, all Awards, whether or not vested, shall immediately expire effective the date of termination of employment.

(ii)   If the Executive’s employment is terminated voluntarily by the Executive without Good Reason, as such term is defined below, all unvested Awards shall immediately expire effective the date of termination of employment. Vested Awards, to the extent unexercised, shall expire on the later of ninety (90) days after the termination of employment and the expiration of the contractual lock-up agreement.

(iii)   If the Executive’s employment terminates on account of death or Disability, as defined below, all unvested Awards shall immediately expire effective the date of termination of employment. Vested Awards, to the extent unexercised, shall expire one (1) year after the termination of employment.

(iv)   If the Executive’s employment is terminated (A) in connection with a Change of Control, as defined below, (B) by the Company without Cause or (C) by the Executive for Good Reason, one-half (1/2) of all unvested Awards shall immediately vest up to a maximum of six (6) months, and become exercisable effective the date of termination of employment, and, to the extent unexercised, shall expire one (1) year from the date of termination of employment.

(e)   Payment . The full consideration for any shares purchased by the Executive upon exercise of the Option shall be paid in cash.

11.   Other Benefits .

(a)   During the term of this Agreement, the Executive shall be eligible to participate in incentive, savings, retirement (401(k)), and welfare benefit plans, including, without limitation, health, medical, dental, vision, life (including accidental death and dismemberment) and disability insurance plans (collectively, “ Benefit Plans ”), in substantially the same manner, including but not limited to responsibility for the cost thereof, and at substantially the same levels, as the Company makes such opportunities available to all of the Company’s managerial or salaried executive employees.

(b)   The Executive’s spouse and dependent minor children will be covered under the Benefit Plans providing health, medical, dental, and vision benefits, in substantially the same manner, including but not limited to responsibility for the cost thereof, and at substantially the same levels, as the Company makes such opportunities available to the spouses and dependent minor children to all of the Company’s managerial or salaried executive employees.

(c)   The Company shall purchase and maintain traditional directors and officers liability insurance coverage in the amount of at least ONE MILLION DOLLARS ($1,000,000) covering the Company’s officers and directors, including the Executive, as soon as practicable after the Effective Date, but in no event later than 30 days following the Effective Date, provided such coverage is available on commercially reasonable terms.

(d)   Until such time as the Executive becomes covered by Company medical coverage, the Company shall pay the cost of COBRA coverage provided by the Executive’s prior employer, to the same extent as such coverage was paid for by such prior employer.

12.   Termination of Employment .

(a)   Death . In the event that during the term of this Agreement the Executive dies, this Agreement and the Executive’s employment with the Company shall automatically terminate and the Company shall have no further obligations or liability to the Executive or his heirs, administrators or executors with respect to compensation and benefits accruing thereafter, except for the obligation to pay the Executor’s heirs, administrators or executors any earned but unpaid base salary, unpaid pro rata annual bonus and unused vacation days accrued through the date of death; provided , that nothing contained in this paragraph shall be deemed to excuse any breach by the Company of any provision of this Agreement. The Company shall deduct, from all payments made hereunder, all applicable taxes, including income tax, FICA and FUTA, and other appropriate deductions.

(c)   “ Cause. ”

(i)   At any time during the term of this Agreement, the Company may terminate this Agreement and the Executive’s employment hereunder for “Cause.” For purposes of this Agreement, “ Cause ” shall be defined as the occurrence of: (A) gross neglect, malfeasance or gross insubordination in performing the Executive’s duties under this Agreement; (B) the Executive’s conviction for a felony, excluding convictions associated with traffic violations; (C) an egregious act of dishonesty (including without limitation theft or embezzlement) or a malicious action by the Executive toward the Company’s customers or employees; or (D) a willful and material violation of any provision of Section 13 or Section 14 hereof.

(ii)   Upon termination of this Agreement for Cause, the Company shall have no further obligations or liability to the Executive or his heirs, administrators or executors with respect to compensation and benefits thereafter, except for the obligation to pay the Executive any earned but unpaid base salary, any earned but unpaid portion of Executive's annual bonus and unused vacation days accrued through the Executive’s last day of employment with the Company. The Company shall deduct, from all payments made hereunder, all applicable taxes, including income tax, FICA and FUTA, and other appropriate deductions. However, 12 (c)(ii) not withstanding, with respect to "Cause" as defined in 12 (c)(i)(D) of the Employment Agreement, the Company must provide notification in writing of the breach and the Employee shall have the right to cure the breach to the satisfaction of the Company within 30 days of the written notice.

(d)   Change of Control . For pu