Kreido Biofuels, Inc. 8-K (Events or Changes Between Quarterly Reports) 2009-02-23

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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): February 19, 2008 (February 18, 2008)
KREIDO BIOFUELS, INC.

(Exact name of registrant as specified in its charter)
Nevada 333-130606 20-3240178

(State or other Jurisdiction of (Commission File Number) (IRS Employer Identification No.)
Incorporation)
1070 Flynn Road

Camarillo, California 93012
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (805) 389-3499
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))
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Item 8.01 Other Events.
On February 18, 2009, Kreido Biofuels, Inc. (the “Company”) deposited in the mail to its stockholders of record Notice of an
Annual Meeting of Stockholders to be held on March 4, 2009 for the following purposes: (1) to consider and vote on a proposal
to approve the Asset Purchase Agreement dated as of January 28, 2009 among Four Rivers BioEnergy, Inc., a Nevada
corporation, The Four Rivers BioEnergy Company, Inc., a Kentucky corporation, Kreido Laboratories, a California corporation,
and Kreido Biofuels, Inc. and the transactions therein; (2) to elect four directors; (3) to consider and vote to adjourn the meeting,
if necessary, to solicit additional proxies if there are insufficient votes at the meeting to approve the Asset Purchase Agreement,
and (4) to transact such other business as may properly come before the meeting and any and all adjourned sessions thereof.
The Company is furnishing the information in this Current Report on Form 8-K and in Exhibits 99.1 and 99.2 to comply with
Regulation FD. Such information shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of
1934, as amended, (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be
incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act
whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the
extent expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits (furnished solely for purposes of Item 8.01 of this Form 8-K)
Exhibit
Number
99.1 Letter to Stockholders, Notice of Annual Meeting , Proxy Statement and form of Proxy dated February 18, 2009
99.2 Asset Purchase Agreement dated as of January 28, 2009 by and among Four Rivers BioEnergy, Inc., The Four
Rivers BioEnergy Company, Inc., Kreido Biofuels, Inc. and Kreido Laboratories
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: February 19, 2009 KREIDO BIOFUELS, INC.
By: /s/ G.A. Ben Binninger

Name: G.A. Ben Binninger
Its: Chief Executive Officer
EXHIBIT INDEX
Exhibit
Number Description
99.1 Letter to Stockholders, Notice of Annual Meeting , Proxy Statement and form of Proxy dated February 18, 2009
99.2 Asset Purchase Agreement dated as of January 28, 2009 by and among Four Rivers BioEnergy, Inc., The Four Rivers
BioEnergy Company, Inc., Kreido Biofuels, Inc. and Kreido Laboratories
Exhibit 99.1

1070 Flynn Road
Camarillo CA 93012
February 18, 2009
Dear Stockholder:
We cordially invite you to attend the annual meeting of stockholders of Kreido Biofuels, Inc. (“Kreido Biofuels”), to be held
at 1070 Flynn Road, Camarillo, CA 93012, at 10:00 a.m., Pacific Time, on March 4, 2009. Holders of record of Kreido Biofuels
common stock at the close of business on February 6, 2009, will be entitled to vote at the meeting or any adjournment of the
meeting.
At the meeting, we will ask you to approve an Asset Purchase Agreement, dated as of January 28, 2009, by and among
Kreido Biofuels, our subsidiary, Kreido Laboratories (“Kreido Labs” and together with Kreido Biofuels, “Kreido”), Four Rivers
BioEnergy Inc., a Nevada corporation (“Four Rivers BioEnergy”), and its subsidiary, The Four Rivers BioEnergy Company, Inc.,
(together with Four Rivers BioEnergy, “Four Rivers”). If the transaction is completed, Four Rivers will acquire our STT® reactors,
STT® technology, modular biodiesel production plant equipment and related assets in return for approximately $2.8 Million in
cash, 1,200,000 shares of Four Rivers BioEnergy common stock (including 300,000 shares in escrow solely to cover Kreido warrant
exercises), a warrant to purchase an additional 200,000 shares of Four Rivers BioEnergy common stock at $8.00 per share, and the
assumption of certain purchase orders (the “Asset Sale”). Four Rivers is a development stage company planning initially to
establish an integrated bioenergy and by-products production facility near Calvert City, Kentucky and through development and
acquisition build a network of logistically and technologically differentiated, profitable bioenergy plants across the United States
and potentially elsewhere.
Because Kreido will be continuing as a business enterprise after the closing of the Asset Sale we will also ask you to elect
four candidates to our board of directors. Our nominees are current directors Betsy Wood Knapp, G.A. Ben Binninger, David
Mandel and David Nazarian.
Details of the proposed Asset Sale and the background and the reasons for the Asset Sale, as well as information for you to
consider in voting on the election of directors are set forth in our proxy statement, which is available on our website
www.kreido.com and on the website for our stockholders meeting, www.transferonline.com/KRBF, which you are urged to read
carefully. Our board of directors has determined that each of the Asset Purchase Agreement and the Asset Sale is fair to, and in
the best interests of, Kreido Biofuels and our stockholders. Accordingly, our board of directors has approved the Asset Purchase
Agreement and declared its advisability, and recommends that you vote “FOR” approval of the Asset Purchase Agreement.
You may obtain more information about Kreido Biofuels and Four Rivers from documents filed with the Securities and
Exchange Commission. You may obtain more information about the Asset Sale and Four Rivers, including the 2008 Annual Report
on Form 10-K of Four Rivers, by visiting our website: www.kreido.com, or the website established for our stockholders meeting
www.transferonline.com/KRBF . We will be pleased to furnish copies of any materials on our website to you upon request made
to John Philpott, Chief Financial Officer of Kreido Biofuels. His telephone number is 805-389-3499 x232; and his email address is
jphilpott@keido.com.
Your vote is very important. The Asset Sale cannot be completed unless the Asset Purchase Agreement is approved by the
affirmative vote of the holders of a majority of the outstanding shares of Kreido Biofuels’ common stock. If you fail to vote on the
Asset Purchase Agreement, the effect will be the same as a vote against the Asset Purchase Agreement and Asset Sale.
You can vote by mail or on the Internet at www.transferonline.com/proxy, following the instructions on your proxy card.
Voting by proxy will not prevent you from voting your shares in person if you subsequently choose to attend the stockholders
meeting.
Whether or not you plan to attend, please return your signed proxy as soon as possible.
I personally support the Asset Sale and recommend that you vote to approve the Asset Purchase Agreement.
Sincerely,
G.A. Ben Binninger

Chief Executive Officer
Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved
the Asset Sale, passed upon the merits or fairness of the Asset Sale or passed upon the adequacy or accuracy of the disclosure
in the Proxy Statement or this document. Any representation to the contrary is a criminal offense.
The proxy statement is dated February 18, 2009 and is first being mailed or otherwise made available to stockholders on or
about February 18, 2009.
YOUR VOTE IS VERY IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE STOCKHOLDERS MEETING IN PERSON, WE STRONGLY
ENCOURAGE YOU TO READ THE PROXY STATEMENT CAREFULLY AND THEN SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD(S) IN THE ENCLOSED POSTAGE-PAID ENVELOPE OR USE THE ELECTRONIC VOTING
PROCEDURES BY FOLLOWING THE INSTRUCTIONS IN THE ACCOMPANYING PROXY CARD. IF YOU LATER DESIRE
TO REVOKE YOUR PROXY FOR ANY REASON, INCLUDING IF YOU INTEND TO ATTEND AND VOTE AT THE MEETING
IN PERSON, YOU MAY DO SO IN THE MANNER SET FORTH IN THE PROXY STATEMENT.
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1070 Flynn Road
Camarillo CA 93012
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MARCH 4, 2009
To Our Stockholders:
Notice is hereby given that an Annual Meeting of Stockholders of Kreido Biofuels, Inc., a Nevada corporation (also referred
to as “we” or “Kreido Biofuels”), will be held at 1070 Flynn Road, Camarillo, CA 93012, at 10:00 a.m., Pacific Time, on March 4,
2009 for the following purposes:
• To consider and vote on a proposal to approve the Asset Purchase Agreement, dated as of January 28, 2009,
among Four Rivers BioEnergy Inc., a Nevada corporation, The Four Rivers BioEnergy Company, Inc., a Kentucky
corporation, Kreido Laboratories, a California corporation, and Kreido Biofuels and the transactions therein.
• To elect four directors of Kreido Biofuels.
• To consider and vote to adjourn the meeting, if necessary, to solicit additional proxies if there are insufficient
votes at the meeting to approve the Asset Purchase Agreement.
• To transact such other business as may properly come before the meeting and any and all adjourned sessions
thereof.
Stockholders of record at the close of business on February 6, 2009 are entitled to notice of, and to vote at, the annual
meeting and any adjourned sessions thereof. A list of stockholders entitled to vote at the meeting will be open to examination by
stockholders at the meeting and during normal business hours from February 18, 2009 to the date of the meeting at 1070 Flynn
Road, Camarillo, CA 93012.
Your vote is important, regardless of the number of shares of Kreido Biofuels’ common stock you own. The approval of the
Asset Purchase Agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Kreido Biofuels’
common stock. Even if you plan to attend the meeting in person, we request that you complete, sign, date and return the enclosed
proxy or submit your proxy by the Internet before the meeting to ensure that your shares will be represented at the meeting. If you
fail to return your proxy card or fail to submit your proxy on the Internet, the effect will be that your shares will not be counted for
purposes of determining whether a quorum is present at the meeting and will have the same effect as a vote against the Asset
Purchase Agreement and against adjournment of the meeting, if necessary, to solicit additional proxies. If you are a stockholder of
record and do attend the meeting and wish to vote in person, you may withdraw your proxy and vote in person.
By order of the Board of Directors:
Philip Lichtenberger, Secretary
Camarillo, California
February 18, 2009
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TABLE OF CONTENTS
SUMMARY TERM SHEET 1
The Asset Sale 1

Stockholder Vote Required 1
Our Board of Directors Recommends You Vote “FOR” the Asset Purchase Agreement and thereby the Asset
Sale 1
Reasons for the Asset Sale 1
Certain of our Executive Officers Have Financial Interests in the Asset Sale that are Different From Your
Interests 2
You Will Not Have Dissenters’ or Appraisal Rights in connection with the Asset Sale 2
The Asset Purchase Agreement 2
The Asset Purchase Agreement May Be Terminated Under Some Circumstances; We may be obligated to pay
Four Rivers termination damages 2
The Stockholders Meeting 3
Help in Answering Questions 4
Information about the Companies 5
QUESTIONS AND ANSWERS ABOUT THE STOCKHOLDERS MEETING AND THE PROPOSED ASSET
SALE 6
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION 8
THE COMPANIES 9
THE STOCKHOLDERS MEETING 10
Date, Time, Place and Purpose of the Special Meeting 10

Record Date, Quorum and Voting Power 10
Required Vote 10
Voting by Directors and Executive Officers 11
Proxies; Revocation 11
Expenses of Proxy Solicitation 12
Adjournments 12
THE ASSET SALE 12
Background of the Asset Sale 12

Reasons for the Asset Sale 13
Recommendation of Kreido Biofuels’ Board of Directors 15
Consideration 15
Interests of Current and Former Kreido Biofuels’ Executive Officers in the Asset Sale 15
Accounting Treatment 16
Material U.S. Federal Income Tax Consequences 16
Regulatory Approvals 16
THE ASSET PURCHASE AGREEMENT 16
The Asset Sale 16
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Assets to be Sold 17
The Purchase Price 18
Representations and Warranties 18
Pre-Closing Covenants 20
Conditions to Completion of the Asset Sale 22
Indemnification 24
Termination; Payment of Termination Damages 24
Agreements Relating to Four Rivers Stock 25
ELECTION OF DIRECTORS (PROPOSAL NO. 2) 26
ADJOURNMENT OF THE STOCKHOLDERS MEETING (PROPOSAL NO. 3) 28
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 28
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 30
EXECUTIVE COMPENSATION 33
STOCKHOLDER PROPOSALS; OUTSIDE AUDITOR 41
HOUSEHOLDING OF PROXY STATEMENT 41
WHERE YOU CAN FIND ADDITIONAL INFORMATION 42
ADDITIONAL INFORMATION AVAILABLE ON OUR WEBSITE, THE STOCKHOLDER MEETING WEBSITE AND UPON
REQUEST:
• Asset Purchase Agreement
• Four Rivers Annual Report on Form 10-K for Fiscal Year ended October 31, 2008
• Kreido Biofuels Quarterly Reports on Form 10-Q for Fiscal Quarters ended March 31, 2008, June 30, 2008 and
September 30, 2008*
• Kreido Biofuels Annual Report on Form 10-K for Fiscal Year ended December 31, 2007*
* Available only on the Kreido Biofuels website and upon request
v
SUMMARY TERM SHEET
The following summary highlights the material terms of the proposed Asset Sale and other matters relating to our
stockholders meeting. More complete information appears elsewhere in this proxy statement. This summary is not a complete
statement of all information, facts or materials to be voted on at the Stockholders Meeting. You should read this proxy
statement, and the other available materials, including the Asset Purchase Agreement, in their entirety to fully understand the
proposal and its consequences to you.
The Asset Sale
Subject to the terms and conditions of the Asset Purchase Agreement, Four Rivers will acquire substantially all of our
assets, particularly our STT® technology, our STT® reactors and our modular biodiesel production plant equipment, in exchange
for approximately $2.8 Million in cash, 1,200,000 shares of Four Rivers BioEnergy common stock (including 300,000 shares in
escrow solely to cover Kreido Warrant exercises), a warrant to purchase an additional 200,000 shares of Four Rivers BioEnergy
common stock at $8.00 per share, and the assumption by Four Rivers of certain purchase orders and an equipment lease of Kreido.
Stockholder Vote Required
The affirmative vote of the holders of a majority of the shares of Kreido Biofuels’ common stock outstanding as of the close
of business on the record date and entitled to vote is required to approve the Asset Purchase Agreement. Approval of the
proposal to adjourn the meeting for the purpose of soliciting additional proxies requires the affirmative vote of the majority of the
shares present in person or represented by proxy at the stockholders meeting and entitled to vote at the meeting.
Our Board of Directors Recommends You Vote “FOR” the Asset Purchase Agreement and thereby the Asset Sale
Our board of directors has determined that each of the Asset Purchase Agreement and Asset Sale is fair to, and in the best
interests of, Kreido and Kreido Biofuels’ stockholders. Our board of directors recommends that our stockholders vote “FOR” the
adoption of the Asset Purchase Agreement and the Transaction.
Reasons for the Asset Sale
In the course of reaching its decision to approve the Asset Purchase Agreement, declare the advisability of the Asset
Purchase Agreement and recommend that our stockholders approve the Asset Purchase Agreement, our board of directors
considered a number of factors, including, among others, the following:
• The ongoing contraction of the equity and debt markets, particularly as they relate to development stage
companies such as Kreido;
• Our inability to raise the additional capital required to complete the development of our planned biodiesel plant;
• The deterioration of our cash resources required to carry on our business operations;
• The challenging current and prospective environment in which we operate, including national and global
economic conditions, the competitive environment in the biofuels industry, and the likely effect of those factors
on us;
• Advice from our financial consultant, Breakwater Investments, LLC;
1
• The opportunity that Four Rivers offers for utilizing the STT ® technology and related biodiesel plant assets as
well as Four Rivers’ available funds, plant site, management team and business strategies and objectives;
• Our desire to satisfy our financial obligations to our creditors and provide a continuing opportunity for our
stockholders, through our holding of Four Rivers BioEnergy stock and warrants, to realize future value from the
commercial application of our STT® technology and biodiesel plant assets; and
• The possibility that the Asset Sale may not be completed, which would divert significant resources and could
likely cause Kreido to pursue a liquidation under the protection of the bankruptcy court.
Certain of our Executive Officers Have Financial Interests in the Asset Sale that are Different From Your Interests
Philip Lichtenberger, our Chief Operating Officer, and Alan McGrevy, our former Vice President of Engineering may be
retained as consultants to Four Rivers. We have agreed to release Phil and Alan from their confidentiality and non-competition
obligations to Kreido so that they may become consultants for Four Rivers and apply their knowledge about our technology to
help Four Rivers in its commercialization efforts. As provided in their respective agreements with us, we will be paying severance
compensation to Phil and Alan, as well as other officers from the proceeds of the Asset Sale.
Our board of directors was aware of these interests and considered them, among other matters, when approving the Asset
Sale. Kreido Biofuels’ board consists of one director who is also an executive officer, and at the time of the approval of the Asset
Sale, five independent directors.
You Will Not Have Dissenters’ or Appraisal Rights in connection with the Asset Sale
Under the Nevada Revised Statutes (“NRS”), Kreido Biofuels’ stockholders are not entitled to dissenters’ or appraisal rights
with respect to the Asset Sale, and Kreido Biofuels will not independently provide its stockholders with any such rights.
The Asset Purchase Agreement
The Asset Purchase Agreement, dated as of January 28, 2009, contains our representations and warranties to Four Rivers,
covenants relating to the conduct of our business prior to consummation of the Asset Sale, consents and approvals required for
and conditions to the completion of the Asset Sale and our ability to consider other acquisition proposals. We encourage you to
read the Asset Purchase Agreement carefully and in its entirety.
The Asset Purchase Agreement May Be Terminated Under Some Circumstances; We may be obligated to pay Four Rivers
termination damages
We and Four Rivers may mutually agree in writing to terminate the Asset Purchase Agreement at any time without
completing the Asset Sale, even after our stockholders approve it. In such case, the parties will each receive fifty percent (50%) of
the $250,000 placed in escrow by Four Rivers.
Either party may also terminate the Asset Purchase Agreement if the Asset Sale shall not have occurred at or before
11:59 p.m. Chicago Time, on April 1, 2009, unless such party’s failure to fulfill any of its obligations under the Asset Purchase
Agreement has been the cause of, or resulted in, the failure of the closing to occur on or prior to such date. If the failure of the
closing to occur on or prior to such date is caused by the other party, the terminating party is entitled to the entire $250,000 placed
in escrow by Four Rivers.
2
In addition, if a party is not in breach of any of its material obligations under the Asset Purchase Agreement, such party may
terminate the Asset Purchase Agreement, before the effective time of the Asset Sale, upon a breach of any representation or
warranty or violation of covenant by the other party that is not remedied within ten (10) business days after notice of such breach
or violation. In such case, the terminating party is entitled to the entire $250,000 placed in escrow by Four Rivers.
In the event that (a) Kreido unilaterally terminates the Asset Purchase Agreement as described above and (b) within
360 days of such termination, sells any or all of the assets intended to be sold to Four Rivers to any other party or successor to
Kreido’s estate, then Kreido shall pay to Four Rivers the amount of $250,000 in cash in immediately available funds as liquidated
damages.
The Stockholders Meeting
Date, Time and Place. The annual meeting of Kreido Biofuels’ stockholders will begin at 10:00 a.m., Pacific Time, on March 4,
2009. The meeting will be held at 1070 Flynn Road, Camarillo, CA 93012.
At the stockholders meeting, Kreido Biofuels’ stockholders will be asked to approve the Asset Purchase Agreement, to elect
four directors of Kreido Biofuels, and to adjourn the meeting, if necessary or appropriate, to solicit additional proxies. We are
nominating current directors G.A. Ben Binninger, Betsy Wood Knapp, David Mandel and David Nazarian for re-election to the
Board.
We do not know of any other business or proposals to be considered at the stockholders meeting other than the items
described in this proxy statement. If any other business is properly brought before the meeting or any adjournments thereof, the
signed proxies received from you and our other stockholders give the proxies the authority to vote on the matter according to
their discretion.
Record Date, Voting Power. Stockholders who own Kreido Biofuels’ common stock as of the close of business on
February 6, 2009, the record date, will be entitled to vote at the stockholders meeting. On that date there were 52,720,992 shares of
our common stock outstanding and entitled to vote. Each share is entitled to one vote on each matter properly brought before the
meeting.
Voting. Kreido Biofuels is offering you three methods of voting:
• You may indicate your vote on the enclosed proxy card, sign and date the card and return the card in the enclosed
prepaid envelope;
• You may vote via the Internet by going to www.transferonline.com/proxy and following the instructions on the
enclosed proxy card; or
• You may attend the meeting and vote in person.
All shares entitled to vote and represented by a properly completed and executed proxy received before the meeting and not
revoked will be voted at the meeting as you instruct in such proxy. If you do not indicate how your shares should be voted on a
matter, the shares represented by your properly completed and executed proxy will be voted as our board of directors
recommends, which is “FOR” the approval of the Asset Purchase Agreement.
Revocation of Proxies. You can revoke your proxy at any time before it is voted by delivery of a properly completed and
executed, later-dated proxy card or Internet vote, or by voting in person by ballot at the stockholders meeting.
3
Vote Required. Approval of the Asset Purchase Agreement requires the affirmative vote of stockholders holding a majority
of the shares of Kreido Biofuels’ common stock outstanding at the close of business on the record date. Abstentions, votes
withheld and broker “non-votes” will have the effect of a vote “AGAINST” the Asset Purchase Agreement and the Asset Sale. A
broker “non-vote” occurs when you hold your shares in “street name” through a broker or other nominee and you do not give
your broker or nominee instructions on how to vote with respect to the adoption of the Asset Purchase Agreement. Brokers and
other nominees do not have discretionary authority to vote on the proposal to adopt the Asset Purchase Agreement, and will not
cast votes on that proposal without timely written instructions from the beneficial owners.
Election of directors will be by a plurality of the votes cast at the stockholders meeting.
Approval of the proposal to adjourn the special meeting for the purpose of soliciting additional proxies requires the
affirmative vote of the majority of the shares present in person or represented by proxy at the meeting and entitled to vote at the
meeting. Abstentions will have the effect of a vote “AGAINST” this proposal. Broker non-votes will have no effect on this
proposal because the underlying shares would not be considered present and entitled to vote (due to the lack of beneficial owner
instructions).
Shares Owned by Our Directors and Executive Officers. On the record date, Kreido Biofuels’ directors and executive officers
beneficially owned 21,408,626 shares of common stock, which represented approximately 40.6% of the shares of common stock
outstanding on that date. These numbers do not give effect to outstanding stock options, which are not entitled to vote at the
special meeting. As required by the Asset Purchase Agreement, each Executive Officer and Director of Kreido Biofuels and
certain of their affiliates and associates have executed and delivered irrevocable proxies that will be voted FOR the approval of the
Asset Purchase Agreement.
Solicitation of Proxies and Expenses. Kreido Biofuels is paying the costs of soliciting proxies. We have also made
arrangements with brokerage houses and other custodians, nominees and fiduciaries of shares to send proxy materials to Kreido
Biofuels’ stockholders of record as of February 6, 2009. We will, upon request, reimburse brokerage firms and others for their
reasonable expenses in forwarding solicitation material to the beneficial owners of stock as of the record date. Certain of our
officers and directors may solicit the submission of proxies authorizing the voting of shares in accordance with Kreido Biofuels’
board of directors’ recommendations, but no additional remuneration will be paid by us for the solicitation of proxies by our
officers and directors.
Adjournment of Meeting. We may adjourn the special meeting if necessary to ensure that any required supplement or
amendment to the proxy statement is provided to our stockholders or, if as of the time for which the stockholders meeting is
originally scheduled, there are insufficient shares of our common stock represented (either in person or by proxy) to constitute a
quorum necessary to conduct the business of the meeting or to obtain stockholder approval of the proposal to adopt the Asset
Purchase Agreement.
Help in Answering Questions
If you have questions about the stockholders meeting or the Asset Sale after reading this document, you may contact us:
• By mail addressed to:
Ben Binninger or John Philpott

Kreido Biofuels, Inc.
1070 Flynn Road
Camarillo, CA 93012
• By calling (805) 389-3499; or
• By visiting our Web site at www.kreido.com.
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Information about the Companies

1070 Flynn Road
Camarillo, CA 93012
Telephone: (805) 389-3499
Kreido Biofuels, Inc. developed the STT ® system, a proprietary process intensification technology that offers a complete
modular biodiesel production system. The STT® system is designed to improve production efficiency and flexibility while using
less equipment and infrastructure. Before suspending our active operations in July, 2008, we were developing a biodiesel
production plant for construction in Wilmington, North Carolina and planned to develop additional biodiesel production plants in
the U.S. and license our STT ® reactor technology internationally and in a select few cases to third-party biodiesel producers in
the U.S.
Four Rivers BioEnergy Inc.

1367 Shar-Cal Road
P.O. Box 1056
Calvert City, Kentucky 42029
Telephone: (270) 395-3687
As discussed more fully in its Annual Report on Form 10-K for fiscal year ended October 31, 2008, Four Rivers is a
development stage company with a business plan to build, through acquisition, expansion, improvement, consolidation and green
field development, as appropriate, a network of logistically and technologically differentiated, profitable bioenergy plants across
the United States and potentially elsewhere. The two principal elements of its strategy are:
• To build a state of the art, multi-product, integrated bioenergy facility on its approximately 437 acre site located on the
Tennessee River approximately 12 miles upriver of Paducah, near Calvert City, Marshall County, Kentucky. This is
expected to be completed in a number of phases, and is currently planned to include biodiesel, bio-ethanol and their co-
products together with renewable power generation and integration of these facilities with an infrastructure
development to facilitate optimum logistics capability.
• To selectively acquire existing bioenergy assets and to improve, expand and consolidate them into its planned network
of assets, applying new technologies and its operational know-how and expertise. The assets will be selected based
upon strict criteria to meet the strategic objectives of Four Rivers and to service the markets across the USA and
elsewhere.
Four Rivers is run by a dedicated team experienced in the construction, operation and trading risk management of biofuel and
petrochemical plants. Four Rivers plans to commercialize the STT ® technology for the production of bio-diesel and other by-
products. Four Rivers has advised us that it plans to relocate the acquired Kreido biodiesel production plant equipment to Calvert
City, Kentucky.
We have included a copy of the Four Rivers Annual Report on Form 10-K for fiscal year ended October 31, 2008 on our
website at www.Kreido.com, and on the website for our stockholders meeting at www.transferonline.com/KRBF. We encourage
stockholders to review that report for an understanding of Four Rivers’ business plan and strategy, financial condition, liquidity
and capital resources, future capital requirements, properties, management, and the risk factors relating to its business and stock.
More information about Four Rivers and its periodic reports can be accessed on the website of the Securities & Exchange
Commission at www.sec.gov and on the website of Four Rivers at www.Riv4ers.com.
We will provide any of our stockholders with a printed copy of Four Rivers’ Annual Report on Form 10-K for fiscal year
ended October 31, 2008 upon request to Kreido’s address above.
5
QUESTIONS AND ANSWERS ABOUT THE STOCKHOLDERS MEETING AND THE PROPOSED ASSET SALE
The following discussion addresses briefly some questions you may have regarding the stockholders meeting and the
proposed Asset Sale. These questions and answers do not, and are not intended to, address all questions that may be important
to you as a stockholder of Kreido Biofuels. Please refer to the more detailed information contained elsewhere in this proxy
statement and the annexes to this proxy statement.
Q: What is the purpose of the Stockholders Meeting?
A: At the meeting, stockholders will act upon the approval of the Asset Purchase Agreement and the election of directors.
Q: Who may vote?
A: Kreido Biofuels has one class of voting shares outstanding, common stock. Stockholders of record at the close of business
on the record date, February 6, 2009, are entitled to receive notice of the stockholders meeting and to vote the shares of
common stock that they held on the record date, at the meeting, or any postponement or adjournment of the meeting. As of
the close of business on the record date, 52,720,992 shares were issued and outstanding and entitled to vote.
Q: How many votes do I have?
A: Each share of Kreido Biofuels’ common stock that you own entitles you to one vote on each matter to be voted on at the
stockholders meeting.
Q: What vote is required?
A: A quorum of stockholders is necessary to hold a valid stockholders meeting. The presence in person or by proxy at the
meeting of holders of shares representing a majority of the votes of the common stock entitled to vote constitutes a quorum.
Abstentions and broker “non-votes” are counted as present for establishing a quorum. A broker “non-vote” occurs on an
item when a broker is not permitted to vote on that item absent instruction from the beneficial owner of the shares and no
instruction is given.
Approval of the Asset Purchase Agreement requires the approval of the holders of a majority of outstanding stock entitled
to vote.
Directors will be elected by a plurality of the shares voted in the election of directors.
Q: How do I vote my shares?
A: Whether or not you plan to attend the stockholders meeting, we urge you to vote. You may vote by mailing your signed
proxy card in the postage-paid envelope provided. You can vote on the Internet at www.transferonline.com/proxy, following
the instructions on your proxy card. Returning the proxy card by mail or voting on the Internet will not affect your right to
attend the meeting and change your vote, if desired.
If your shares are held in the name of a bank, broker or other holder of record, you will receive instructions from the holder of
record that you must follow in order for your shares to be voted. Voting instructions are included on your proxy card. If you
properly fill in your proxy card and send it to us in time to vote, one of the individuals named on your proxy card (your
“proxy”) will vote your shares as you have directed. If you sign the proxy card but do not make specific choices, your proxy
will follow the board of directors’ recommendations and vote your shares “FOR” the proposal to approve the Asset
Purchase Agreement.
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Q: May I revoke my proxy?
A: You may revoke your proxy at any time before it is exercised at the stockholders meeting by any one of the following three
ways:
• sending in another signed proxy card with a later date;
• notifying our Corporate Secretary in writing before the special meeting that you have revoked your proxy; or
• attending the meeting and voting in person. Please note that merely attending the meeting will NOT revoke your
proxy.
Q: Can I still vote in person if I have already granted my proxy?
A: All stockholders as of the record date, or their duly appointed proxies, may attend the stockholders meeting. If you intend to
vote in person, we will give you a ballot at the meeting. If your shares are held in the name of your broker, bank or other
nominee, you must bring a proxy issued in your name from your broker, bank or other nominee indicating that you were the
beneficial owner of the shares on the record date.
Q: What will happen if the Asset Sale is not approved?
A: If the Asset Sale is not approved, Kreido Biofuels’ board of directors, along with management, will reassess our options in
light of our decision to wind-down our business and could in all likelihood pursue an orderly liquidation of assets under the
protection of a bankruptcy court.
Q: Can I still sell my shares of Kreido Biofuels’ common stock?
A: Yes. We expect that Kreido Biofuels’ common stock will continue to be listed on the OTC Bulletin Board or “pink sheets”
prior to and upon consummation of the Asset Sale.
Q: Will any of the proceeds from the Asset Sale be distributed to me as a stockholder?
A: No. None of the proceeds from the Asset Sale will be distributed to the stockholders. We intend to use the net proceeds of
the Asset Sale to satisfy our liabilities to creditors.
Q: Will the shares of Four Rivers BioEnergy stock issued to Kreido Biofuels be distributed to the stockholders?
A: Kreido Biofuels has agreed to hold the Four Rivers BioEnergy stock issued to it for at least 360 days. At that time, our Board
of Directors will decide whether to sell or distribute the Four Rivers BioEnergy stock.
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Q: What are Kreido’s plans after the Asset Sale?
A: Our current intent is to identify a business other than investing, owning, trading and holding securities that we can engage
in within the year after closing of the Asset Sale.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
Certain statements contained in this proxy statement, including the completion and timing of the Asset Sale, any other
statements regarding Kreido Biofuels’ or Four Rivers’ future expectations, beliefs, goals or prospects, and any statements that are
not statements of historical facts, might be considered forward-looking statements. While these forward-looking statements
represent our management’s current judgment of future events, they are subject to risks and uncertainties that could cause actual
results to differ materially from those stated in the forward-looking statements. Important factors that could cause actual results or
events to differ materially from those indicated by such forward-looking statements include: (i) the parties’ ability to consummate
the transaction; (ii) the conditions to the completion of the transaction may not be satisfied, on the terms expected or on the
anticipated schedule; and (iii) the parties’ ability to meet expectations regarding the timing and completion of the transaction.
Kreido Biofuels assumes no obligation to update or revise any forward-looking statement in this proxy statement, and such
forward-looking statements speak only as of the date of this proxy statement.
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THE COMPANIES

1070 Flynn Road
Camarillo, CA 93012
Telephone: (805) 389-3499
Kreido Biofuels, Inc. developed the STT ® system, a proprietary process intensification technology that offers a complete
modular biodiesel production system. The STT® system is designed to improve production efficiency and flexibility while using
less equipment and infrastructure. Before suspending our active operations in July, 2008, we were developing a biodiesel
production plant for construction in Wilmington, North Carolina and planned to develop additional biodiesel production plants in
the U.S. and license our STT ® reactor technology internationally and in a select few cases to third-party biodiesel producers in
the U.S.
After closing the Asset Sale, our primary assets will be the shares of Four Rivers BioEnergy common stock and common
stock purchase warrant, which are to be held for a 360 days lock-up period. At the end of that period we will decide whether to sell
or distribute the Four Rivers BioEnergy stock. Our current intention is to identify a business other than investing, owning, trading
and holding securities that we can engage in within the year after closing the Asset Sale.

1637 Shar-Cal Road
P.O. Box 1056
Telephone: (270) 395-3687
As discussed more fully in its Annual Report on Form 10-K for fiscal year ended October 31, 2008, Four Rivers is a
development stage company with a business plan to build, through acquisition, expansion, improvement, consolidation and green
field development, as appropriate, a network of logistically and technologically differentiated, profitable bioenergy plants across
the United States and potentially elsewhere. The two principal elements of its strategy are:
• To build a state of the art, multi-product, integrated bioenergy facility on its approximately 437 acre site located on the
Tennessee River approximately 12 miles upriver of Paducah, near Calvert City, Marshall County, Kentucky. This is
expected to be completed in a number of phases, and is currently planned to include biodiesel, bio-ethanol and their co-
products together with renewable power generation and integration of these facilities with an infrastructure
development to facilitate optimum logistics capability.
• To selectively acquire existing bioenergy assets and to improve, expand and consolidate them into its planned network
of assets, applying new technologies and its operational know-how and expertise. The assets will be selected based
upon strict criteria to meet the strategic objectives of Four Rivers and to service the markets across the USA and
elsewhere.
Four Rivers is run by a dedicated team experienced in the construction, operation and trading risk management of biofuel and
petrochemical plants. Four Rivers plans to commercialize the STT ® technology for the production of bio-diesel and other by-
products. Four Rivers has advised us that it plans to relocate the acquired Kreido biodiesel production plant equipment to Calvert
City, Kentucky.
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We have included a copy of the Four Rivers Annual Report on Form 10-K for fiscal year ended October 31, 2008 on our
website at www.Kreido.com, and on the website for our stockholders meeting at www.transferonline.com/KRBF. We encourage
stockholders to review that report for an understanding of Four Rivers’ business plan and strategy, financial condition, liquidity
and capital resources, future capital requirements, properties, management, and the risk factors relating to its business and stock.
More information about Four Rivers and its periodic reports can be accessed on the website of the Securities & Exchange
Commission at www.sec.gov and on the website of Four Rivers at www.Riv4ers.com.
We will provide any of our stockholders with a printed copy of Four Rivers’ Annual Report on Form 10-K for fiscal year
ended October 31, 2008 upon request to Kreido’s address above.
THE STOCKHOLDERS MEETING
Date, Time, Place and Purpose of the Meeting
This proxy statement is being furnished to Kreido Biofuels’ stockholders as part of the solicitation of proxies by the board of
directors for use at the annual meeting to be held on March 4, 2009, starting at 10:00 a.m. Pacific Time, at 1070 Flynn Road,
Camarillo, CA 93012. The purpose of the meeting is for Kreido Biofuels’ stockholders to consider and vote upon proposals to
approve the Asset Purchase Agreement and the transactions therein, to elect four directors of Kreido Biofuels, and to adjourn the
meeting, if necessary or appropriate, to solicit additional proxies, and to transact such other business as may properly come
before the meeting and any and all adjourned sessions thereof. This proxy statement, the notice of the stockholders meeting and
the enclosed form of proxy are first being mailed to Kreido Biofuels’ stockholders on or about February 18, 2009.
Record Date, Quorum and Voting Power
The holders of record of Kreido Biofuels’ common stock at the close of business on February 6, 2009, the record date, are
entitled to receive notice of, and to vote at, the stockholders meeting. As of the record date, there were 52,720,992 shares of
Kreido Biofuels’ common stock issued and outstanding, all of which are entitled to be voted at the meeting.
Each outstanding share of Kreido Biofuels common stock on the record date entitles the holder to one vote on each matter
submitted to stockholders for a vote at the meeting.
The holders of a majority of the outstanding common stock on the record date, represented in person or by proxy, will
constitute a quorum for purposes of the stockholders meeting. A quorum is necessary to hold the meeting. Once a share is
represented at the meeting, it will be counted for the purpose of determining a quorum at the meeting and any adjournment of the
meeting. However, if a new record date is set for the adjourned stockholders meeting, then a new quorum will have to be
established.
Required Vote
For us to complete the Asset Sale, stockholders holding at least a majority of the shares of Kreido Biofuels’ common stock
outstanding at the close of business on the record date must vote “FOR” the approval of the Asset Purchase Agreement. If we
propose to adjourn the stockholders meeting, it will take the affirmative vote of the majority of the shares present in person or
represented by proxy at the meeting and entitled to vote at the meeting to take that action. In order for your shares of Kreido
Biofuels’ common stock to be included in the vote, if you are a stockholder of record, you must vote your shares by returning the
enclosed proxy, by voting over the Internet as indicated on the proxy card, or by voting in person at the stockholders meeting.
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If your shares are held in “street name” by your broker, you should instruct your broker how to vote your shares using the
instructions provided by your broker. If you have not received such voting instructions or require further information regarding
such voting instructions, contact your broker and it can give you directions on how to vote your shares. A broker “non-vote”
generally occurs when a broker, bank or other nominee holding shares on your behalf does not vote on a proposal because the
nominee has not received your voting instructions and lacks discretionary power to vote the shares. Broker non-votes and
abstentions will count for the purpose of determining whether a quorum is present.
Broker non-votes and abstentions will have the same effect as a vote against the adoption of the Asset Purchase
Agreement. Abstentions will have the effect of a vote against the proposal to adjourn the meeting to solicit additional proxies.
Broker non-votes will have no effect on the adjournment proposal.
Voting by Directors and Executive Officers
At the February 6, 2009 the record date, the directors and executive officers of Kreido Biofuels held and are entitled to vote,
in the aggregate, 21,408,626 shares of Kreido Biofuels’ common stock, representing approximately 40.6% of the outstanding
shares of Kreido Biofuels’ common stock. The directors and executive officers of Kreido Biofuels and certain of their affiliates and
associates, representing approximately 48.5% of the outstanding shares of Kreido Biofuels common stock, have granted their
irrevocable proxies to vote all of their shares of Kreido Biofuels’ common stock “FOR” the approval of the Asset Purchase
Agreement.
Proxies; Revocation
If you vote your shares of Kreido Biofuels’ common stock by signing a proxy, or by voting over the Internet as indicated on
the proxy card, your shares will be voted at the stockholders meeting in accordance with the instructions given. If no instructions
are indicated on your signed proxy card, your shares will be voted “FOR” the approval of the Asset Purchase Agreement, “FOR”
the election of management’s nominees for election as director, and for any proposal to adjourn the meeting, if necessary or
appropriate, to solicit additional proxies, and, if any other matters are properly brought before the meeting for a vote, the persons
appointed as proxies or their substitutes will have discretion to vote or act on the matter according to their best judgment and
applicable law unless the proxy indicates otherwise.
You may revoke your proxy at any time before the vote is taken at the stockholders meeting. To revoke your proxy, you must
advise Kreido Biofuels’ Corporate Secretary in writing of your revocation, deliver a new proxy or submit another vote over the
Internet, in each case dated after the date of the proxy you wish to revoke, or attend the meeting and vote your shares in person.
Attendance at the stockholding meeting will not by itself constitute revocation of a proxy.
If you have instructed your broker to vote your shares, the above-described options for revoking your proxy do not apply
and instead you must follow the directions provided by your broker to change these instructions.
Kreido Biofuels does not expect that any matter other than the proposals to approve the Asset Purchase Agreement and
elect four directors of Kreido Biofuels will be brought before the stockholders meeting. If, however, such a matter is properly
presented at the meeting or any adjournment of the meeting, the persons appointed as proxies will vote the shares in accordance
with the recommendations of Kreido Biofuels’ board of directors.
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Expenses of Proxy Solicitation
Kreido Biofuels will pay the cost of this proxy solicitation. In addition to soliciting proxies by mail, directors, officers and
employees of Kreido Biofuels may solicit proxies personally and by telephone, facsimile or other similar means. These persons will
not receive additional or special compensation for such solicitation services. Kreido Biofuels will, upon request, reimburse
brokers, banks and other nominees for their reasonable expenses in forwarding proxy materials to their customers who are
beneficial owners of the shares they hold of record.
Adjournments
Any adjournment may be made by an announcement at the stockholders meeting by the chair of the meeting. If persons
named as proxies by you are asked to vote for one or more adjournments of the meeting or for other matters incidental to the
conduct of the meeting, such persons will have the authority to vote in their discretion on such matters. However, if persons
named as proxies by you are asked to vote for one or more adjournments of the meeting to solicit additional proxies if there are
insufficient votes at the time of the meeting to approve the Asset Purchase Agreement, such persons will only have the authority
to vote on such matter as instructed by you or your proxy, or, if no instructions are provided on your signed proxy card, in favor
of such adjournment. Any adjournment of the stockholders meeting for the purpose of soliciting additional proxies will allow
Kreido Biofuels’ stockholders who have already sent in their proxies to revoke them at any time prior to their use in the manner
provided herein.
THE ASSET SALE
Background of the Asset Sale
Beginning in the third quarter of calendar year 2007, as planned, we sought to arrange additional financing to complete the
construction and fund start up operations of our proposed biodiesel production plant at the Port of Wilmington in North Carolina.
We engaged an investment banker to assist in this effort. At that time, the capital markets were becoming unstable and few
institutional investors expressed an interest in making an equity investment in us. We considered debt financing alternatives,
including combinations of private and bond financing by the Wilmington Port Authority. The instability in the capital markets
was continuing and gross margins in the alternative fuels industry further reduced interest in the infusion of capital in our
company. In the first quarter of calendar year 2008, we developed a plan to reduce our operations to extend the availability of our
cash resources while we continued to explore financing alternatives. We continued to pursue financing opportunities through
June, 2008 when it became clear that the capital markets were not conducive to the financing of biodiesel businesses. We
suspended our operations and began to pursue business combination opportunities with a view towards protecting our creditors
and stockholders. We engaged Breakwater Investments, LLC to assist us in identifying and evaluating business combination
opportunities. Four Rivers was among approximately eight candidates that our management and advisor identified, and under
confidentiality agreements we provided information regarding Kreido and its STT® technology to interested prospects. During
the same period, the U.S. capital markets continued to contract and we believe that the market instability adversely affected the
interest of certain prospective business combination candidates.
Four Rivers completed a reverse acquisition and PIPE financing in December, 2007. It had begun to develop a large site near
Calvert City, Kentucky as an integrated bioenergy facility. Four Rivers was identified to us as a possible business combination
candidate by the investment banker previously engaged by Kreido for its capital raise. Initial discussions were held with Four
Rivers in the second quarter of 2008, and a conditional Memorandum of Understanding was executed by Kreido Biofuels and Four
Rivers in October, 2008. Four Rivers conducted a due diligence investigation of Kreido and its technology and biodiesel plant
components over the course of six months beginning July, 2008. We continued to explore other business combination
alternatives, but the interest of other candidates was not at the same level as that of Four Rivers.
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The board of directors held seven meetings in the first two quarters of calendar year 2008 at which it considered our financial
condition and possible financing opportunities. Between June and December 2008, the board of directors held an additional seven
meetings at which it considered business combination opportunities with a primary focus on the Asset Sale to Four Rivers.
A draft Asset Purchase Agreement between Kreido and Four Rivers was initially presented to the Board of Directors in mid-
November, 2008. At that board meeting, executive officers of Four Rivers introduced themselves to the Kreido Biofuels’ board and
reviewed the history and business plan of Four Rivers. A revised Asset Purchase Agreement was presented to our Board of
Directors, which it considered and acted upon at a Special Meeting of the Board of Directors held on January 23, 2009. At that
meeting, the Board of Directors determined that the Asset Sale offered the best opportunity for Kreido to satisfy the claims of its
creditors and allow its stockholders to continue to benefit from the commercialization of the STT ® technology and Kreido
Biofuels plant assets. It also determined that the Asset Sale was in the best interest of Kreido Biofuels, approved the Asset
Purchase Agreement, and recommended that the Asset Purchase Agreement be presented to the stockholders for consideration
and approval and recommended that the stockholders approve the agreement and the transactions contemplated therein.
Reasons for the Asset Sale
In reaching its decision to approve the Asset Purchase Agreement, declare the advisability of the Asset Purchase
Agreement and recommend that Kreido Biofuels’ stockholders approve the Asset Purchase Agreement, the board of directors
consulted with management, as well as its legal and financial advisors, and considered a number of factors in its deliberations,
including the following factors which our board of directors viewed as generally supporting its decision to approve the Asset
Purchase Agreement, the Asset Sale, and recommend that Kreido Biofuels’ stockholders approve the Asset Purchase Agreement:
• The ongoing contraction of and instability in the equity and debt markets, particularly as they relate to
development stage and alternative energy companies, such as Kreido;
• Our inability to raise the additional capital required to complete the development of our planned biodiesel plant;
• The diminution of our cash resources required to carry on our business operations;
• The challenging current and prospective environment in which we operate, including national and global
economic conditions, the competitive environment in the biodiesel industry and the likely effect of those factors
on us;
• Advice from our financial consultant, Breakwater Investments, LLC;
• The opportunity that Four Rivers offers for utilizing the STT® technology and the related biodiesel plant assets as
well as Four Rivers’ available funds, plant site, management team and business strategies and objectives;
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• Our desire to satisfy our financial obligations to our creditors and provide a continuing opportunity for our
stockholders, through our holding of Four Rivers BioEnergy stock and warrants, to realize future value from the
commercial application of our STT® technology and biodiesel plant assets; and
• The possibility that the Asset Sale may not be completed, which would divert significant resources and could
likely cause Kreido to pursue a liquidation under the protection of the bankruptcy court.
Each of these factors favored the determination by our board of directors that the Asset Sale and the Asset Purchase
Agreement is fair to, and in the best interests of, Kreido Biofuels and its stockholders.
The board of directors also considered a variety of risks and other potentially countervailing factors relating to the Asset
Purchase Agreement and the transactions contemplated by it, including the Asset Sale. These factors included:
• The fact that certain of our current and former executive officers may have interests that are different from those of
Kreido Biofuels’ stockholders generally, as described in “The Asset Sale—Interests of Our Executive Officers in
the Sale” below;
• The possibility that we may be required to pay liquidated damages equal to $250,000 to Four Rivers in the event
we terminate the agreement and sell the assets to another party;
• The risks and contingencies related to the announcement of the pending Asset Sale, including the effects of the
announcement of the Asset Sale on our creditors;
• The transaction costs that would be incurred in connection with the Asset Sale;
• The risks associated with our holding Four Rivers BioEnergy stock and the Four Rivers BioEnergy warrant for an
extended period of time after the closing;
• The conditions to Four Rivers’ obligation to complete the Asset Sale and the right of Four Rivers to terminate the
Asset Purchase Agreement in certain circumstances; and
• That, under the terms of the Asset Purchase Agreement and until the closing date, we agreed that we would
conduct our business in the ordinary and usual course of business and that we would not take a number of
actions related to the conduct of our business without the prior consent of Four Rivers (which consent cannot be
unreasonably withheld, conditioned or delayed).
The foregoing discussion of the factors considered by the board of directors is not intended to be exhaustive, but rather
includes the material factors considered by the board of directors. In reaching its decision to approve the Asset Purchase
Agreement, declare the advisability of the Asset Purchase Agreement and recommend that our stockholders approve the Asset
Purchase Agreement, the board of directors as a whole did not specifically quantify or assign any relative weights to the factors
considered, and individual directors may have given different weights to different factors. The board of directors considered all
these factors as a whole, including discussions with, and questioning of, management and advisors, and overall considered these
factors to be favorable to, and to support, its determination.
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Recommendation of Kreido Biofuels’ Board of Directors
The board of directors has determined that each of the Asset Purchase Agreement and the Asset Sale is fair to, and in the
best interests of, Kreido Biofuels and our stockholders. Accordingly, the board of directors has unanimously approved the Asset
Purchase Agreement and declared its advisability, and recommends that you vote “FOR” approval of the Asset Purchase
Agreement.
Consideration
As consideration for the sale of the assets, Kreido will receive the following:
(a) the cancellation of indebtedness in the amount of $100,000 owed by Kreido to Four Rivers pursuant to a promissory note
issued to Four Rivers in exchange for a $100,000 loan made concurrently with the execution of the Asset Purchase Agreement.
The proceeds of the loan were used to pay down amounts owed to a creditor;
(b) additional cash in the approximate amount of $2,700,000, which will be used to pay Kreido creditors;
(c) 1,200,000 shares of Four Rivers BioEnergy common stock, of which 300,000 shares shall be deposited in escrow and
delivered to Kreido only upon delivery of notice of the exercise of warrants issued by Kreido on or about January 12, 2007 and
only to the extent required to meet its obligations under such warrants. On January 28, 2009, shares of common stock of Four
Rivers BioEnergy closed trading at $0.75 per share;
(d) a Common Stock Purchase Warrant representing the right to purchase up to 200,000 shares of Four Rivers BioEnergy
common stock at an exercise price of $8.00 per share and having an expiration date five years after closing the Asset Sale; and
(e) the assumption of various purchase orders previously placed by Kreido with equipment vendors.
Interests of Current and Former Kreido Biofuels’ Executive Officers in the Asset Sale
Philip Lichtenberger, Senior Vice President of Operations and Chief Operating Officer, and Alan McGrevy, former Vice
President of Engineering of Kreido are likely to be offered an opportunity to consult for Four Rivers. Under his Employment
Agreement with Kreido, Mr. Lichtenberger is entitled to receive approximately $200,000 in connection with the termination of his
employment due to a sale of all or substantially all of the assets of Kreido. Under a Separation Agreement dated November 11,
2008, Kreido has agreed to pay Mr. McGrevy the sum of $75,000 as a consequence of Kreido executing the Asset Sale. Both
Mr. Lichtenberger and Mr. McGrevy are subject to restrictive covenants that prohibit their competing with Kreido and using
Kreido confidential information, including Kreido’s intellectual property such as the STT® technology for purposes unrelated to
Kreido. Kreido will release Messrs. Lichtenberger and McGrevy from these restrictive covenants for the benefit of Four Rivers.
The Employment Agreements of G.A. Ben Binninger, Chief Executive Officer, and John Philpott, Chief Financial Officer, of
Kreido allow for severance payments that will be triggered by the Asset Sale. Kreido will become obligated to pay Mr. Binninger
approximately $100,000 and Mr. Philpott approximately $190,000 as a consequence of the Asset Sale. We expect to engage
Mr. Philpott under a consulting agreement to continue to assist us in selling our remaining physical assets, paying remaining
creditors and attending to the financial, accounting and public company reporting activities of Kreido Biofuels after the closing of
the Asset Sale.
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The board of directors was aware of these differing interests and considered them, among other matters, in evaluating and
negotiating the Asset Purchase Agreement and the Asset Sale and in recommending to the stockholders that they approve the
Accounting Treatment
We will record the Asset Sale in accordance with Generally Accepted Accounting Principles in the United States. We will
recognize expenses associated with the transaction as costs are incurred. The total transaction expenses expected to be incurred
are approximately $450,000 before taxes, including professional fees, financial advisor fees and estimated meeting costs.
Material U.S. Federal Income Tax Consequences.
The transaction will be a taxable transaction for us but not for our stockholders. We will realize gain or loss with respect to
each asset sold measured by the difference between the proceeds received by us on such sale and our tax basis in the assets
sold. For purposes of calculating the amount of our gain or loss, the proceeds received by us will include the cash received, the
amount of our liabilities that are assumed and any other consideration we receive for our assets. We do not expect that there will
be any federal income tax liability on the transaction because of our significant net operating loss and tax credit carryforwards.
Some California state income tax may be incurred if the suspension of net operating loss carryforwards for taxpayers with net
business income of $500,000 or more enacted in October 2008 are applied to the Asset Sale.
Regulatory Approvals
We are unaware of any material regulatory requirements or approvals required for the execution of the Asset Purchase
Agreement or completion of the Asset Sale.
THE ASSET PURCHASE AGREEMENT
Following is a summary of the principal provisions of the Asset Purchase Agreement. A copy of the Asset Purchase
Agreement may be viewed on our website www.kreido.com and on the website established for the stockholders meeting:
www.transferonline.com/KRBF. A copy of the Asset Purchase Agreement will be provided to interested stockholders upon
request to Kreido Biofuels.
The Asset Sale
The Asset Purchase Agreement provides that, upon the terms and subject to the conditions of the Asset Purchase
Agreement, Kreido shall sell all of its right, title and interest in and to specified assets in exchange for cash, Four Rivers common
stock, a warrant to purchase additional shares of Four Rivers common stock, and the assumption by Four Rivers of certain
purchase order place with vendors by Kreido.
The consummation of the Asset Sale is contemplated to occur on or before March 15, 2009. However, such effective time will
be no later than five business days after the satisfaction or waiver of the conditions to the completion of the Asset Sale described
in the Asset Purchase Agreement or such other time as Four Rivers and Kreido Biofuels mutually agree. See “Conditions to the
Completion of the Asset Sale” below.
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Assets to be Sold
The assets to be sold comprise the following:
(a) all of Kreido’s STT® reactors, Kreido’s modular biodiesel production plant, plant operating and mechanical systems, extra
parts and supplies, miscellaneous manufacturing tools and equipment, and a Toyota fork lift (collectively, the “Physical
Purchased Assets”);
(b) Kreido’s patents, patent applications, trademarks and service marks (other than the trade name and mark “Kreido”) and
other registered and unregistered intellectual property including engineering drawings;
(c) certain contracts related to the Physical Purchased Assets; and
(d) (i) all insurance proceeds and rights thereto derived from loss, damage or destruction of or to any of the assets after the
closing, and prior to the closing, to the extent not utilized prior to the closing to repair or replace the insured items; and (ii) any
rights which Kreido may have against any of our suppliers or vendors under express or implied warranties, to the extent
assignable, relating to the Physical Purchased Assets or any right to receive any reimbursement or indemnification in respect
thereof.
Kreido is not selling the following assets:
(a) our corporate minute book, stock records, warrant records, stock option grant records and corporate seal;
(b) all cash on hand;
(c) all of our rights relating to any insurance policy or insurance contract (except as described above) maintained by us to the
extent not accepted by and assigned to Four Rivers;
(d) our lease with Acaso Investments, LLC regarding the facility located at 1070 Flynn Road in Camarillo, California (the
“Premises”);
(e) all leasehold improvements, selected office and conference room furniture, fixtures and equipment, manufacturing
equipment (including, without limitation the overhead crane and overhead fans), office supplies, laptop and desk top computers
and servers, and telephone and telecommunications equipment and systems located at the Premises used by our Chief Executive
Officer, Chief Financial Officer and controller but excluding the AutoCad computer, printer, engineering data and AutoCad
software which shall be included in the Asset Sale;
(f) any feedstock inventory;
(g) any receivables of the Seller, as of the closing date;
(h) all books of account, records (including, without limitation, financial records, employment records, and SEC filing
records), files, telephone numbers, facsimile numbers, internet addresses, web pages, e-mail accounts, any similar data and
intellectual property, except to the extent directly associated with or included in the assets to be sold;
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(i) prepaid expenses and security deposits, except to the extent directly associated with or included in the assets to be sold;
and
(j) all rights, title and interest in and to claims made by Kreido in the matter known as United States Securities and Exchange
Commission v. Louis Zehil, et. al. 07 Civ 1439 (LAP).
In addition, Kreido will continue to own and attempt to sell to third parties various tanks, resins and other pieces of
equipment not acquired by Four Rivers.
The Purchase Price
As consideration for the sale of the assets, Kreido will receive the following:
(a) the cancellation of indebtedness in the amount of $100,000 owed by Kreido to Four Rivers pursuant to a promissory note
issued to Four Rivers in exchange for a $100,000 loan made concurrently with the execution of the Asset Purchase Agreement.
The proceeds of the loan were used to pay down amounts owed to a creditor;
(b) additional cash in the amount of $2,700,000, which will be used to pay Kreido creditors;
(c) 1,200,000 shares of Four Rivers BioEnergy common stock, of which 300,000 shares shall be deposited in escrow and
delivered to Kreido Biofuels only upon delivery of notice of the exercise of warrants issued by Kreido Biofuels on or about
January 12, 2007 and only to the extent required to meet its obligations under such warrants;
(d) a Common Stock Purchase Warrant representing the right to purchase up to 200,000 shares of Four Rivers BioEnergy
common stock at an exercise price of $8.00 per share and having an expiration date five years after closing the Asset Sale; and
(e) the assumption of various purchase orders and an equipment lease previously placed by Kreido with equipment vendors.
Representations and Warranties
The Asset Purchase Agreement contains representations and warranties made by each of the parties regarding aspects of
their relative businesses, financial condition and structure, as well as other facts pertinent to the Asset Sale.
The Asset Purchase Agreement includes representations and warranties of Kreido relating to:
• corporate organization, qualification and existence, and our subsidiaries;
• corporate power and authority to enter into the Asset Purchase Agreement and to consummate the Asset Sale
and the enforceability of the Asset Purchase Agreement;
• the lack of conflict with any organizational documents, agreements or rules;
• our title and ownership of the assets to be sold;
• certain material contracts that we are a party to;
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• consents, approvals, notices, permits, exemptions, waivers and authorizations required to be obtained;
• our compliance with laws with respect to the assets being sold;
• legal proceedings and claims;
• the absence of liabilities except those reflected in our Quarterly Report on Form 10-Q for fiscal period ended
September 30, 2008, or incurred since September 30, 2008;
• the absence of specified changes or events;
• tax return filings, payments and related matters;
• labor and employment matters;
• insurance;
• environmental matters and compliance with environmental laws;
• intellectual property;
• the absence of brokers’ fees payable in connection with the Asset Sale (other than to Breakwater Investment,
LLC);
• our ability to bear the financial risks of owning stock in Four Rivers and the warrants to purchase stock in Four
Rivers;
• no intention on the part of Kreido to exercise any control over Four Rivers through the ownership of its stock;
• filings and reports with the SEC and the preparation of our financial statements; and
• the accuracy of information given to Four Rivers.
The Asset Purchase Agreement also contains representations and warranties of Four Rivers relating to:
• corporate organization, qualification and existence;
• capitalization;
• corporate power and authority to enter into the Asset Purchase Agreement and to consummate the Asset Sale
and the enforceability of the Asset Purchase Agreement;
• compliance with laws and certain material contracts;
• title and ownership of tangible assets;
• intellectual property;
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• insurance;
• consents, approvals, notices, permits, exemptions, waivers and authorizations required to be obtained;
• issuance of the securities;
• filings and reports with the SEC and the preparation of financial statements;
• compliance with the applicable provisions of the Sarbanes-Oxley Act of 2002;
• legal proceedings and claims;
• the absence of liabilities except those reflected in reports publicly filed with the SEC or incurred since July 31,
2008;
• registration rights;
• solvency;
• the absence of specified changes or events;
• Foreign Corrupt Practices Act of 1977;
• tax filings, payments and related matters;
• the accuracy of information given to Kreido; and
• the absence of brokers’ fees payable in connection with the Asset Sale (other than to Calyon Securities USA,
LLC).
The representations and warranties of each of the parties to the Asset Purchase Agreement described above will expire one
year from the completion of the Asset Sale. The representations included in the Asset Purchase Agreement were made by each of
Kreido and Four Rivers to each other. The representations and warranties were made as of specific dates, are (along with the
conduct of business covenants also described) subject to important qualifications, limitations and exceptions agreed to by Kreido
and Four Rivers in connection with negotiating the terms of the Asset Purchase Agreement, and have been included in the Asset
Purchase Agreement for the purpose of allocating risk between Kreido and Four Rivers rather than to disclose matters of fact.
This description of the representations and warranties are included solely to provide stockholders with information regarding the
terms of the Asset Purchase Agreement, and not to provide any other factual information regarding Kreido or its business.
Pre-Closing Covenants
Under the Asset Purchase Agreement, we have agreed that, prior to the effective time of the Asset Sale (unless Four Rivers
otherwise provides written consent, which may not be unreasonably withheld, conditioned or delayed, and subject to certain
exceptions), we will carry on our business in the usual and ordinary course, consistent with past practice, and shall not take or
omit to take any action that would render any of our representations or warranties inaccurate as of the effective time or take or
omit to take any action that would reasonably likely to delay or impair the ability of the parties to consummate the Asset Sale.
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In addition, we have agreed, among other things and subject to certain exceptions, that we may not, without Four Rivers’
prior written consent, which may not be unreasonably withheld, conditioned or delayed:
(a) adopt any change in our certificate of incorporation, by-laws or other governing document;
(b) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other material reorganization;
(c) issue any shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights
of any kind to acquire, any shares of our capital stock;
(d) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any equity interest in or a portion of the
assets of, or by any other manner acquire any business or any person or division thereof;
(e) sell, lease, encumber (including by the grant of any option thereon) or otherwise dispose of any asset to be sold in the
Asset Sale;
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or
entity; (iii) make or cancel, or waive any rights with respect to, any loans, advances or capital contributions to, or investments in,
any other person or entity; or (v) mortgage or pledge any of our tangible or intangible assets or properties;
(g) enter into any license or other contract with respect to any asset to be sold in the Asset Sale;
(h) amend, modify or otherwise change the terms of any existing contract to accelerate the payments due to us thereunder;
(i) enter into any joint venture, partnership or other similar arrangement;
(j) enter into any contract that limits our ability, or would limit the ability of Four Rivers after the closing, to compete in or
conduct any line of business or compete with any person or entity in any geographic area or during any period;
(k) enter into any contract relating to the distribution, sale, supply, license, marketing, co-promotion, research, development
or manufacturing of any asset to be sold in the Asset Sale or any product licensed by us, or our intellectual property, other than
pursuant to any such contracts currently in place (that have been disclosed in writing to Four Rivers prior to the date of the Asset
Purchase Agreement) in accordance with their terms as of the date of the Asset Purchase Agreement;
(l) modify, amend or terminate any contract or liability to be assumed in the Asset Sale or waive, release or assign any
material rights or claims thereunder;
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(m) enter into any contract to the extent consummation of the transactions contemplated by the Asset Purchase Agreement
or compliance by us with the provisions of the Asset Purchase Agreement would reasonably be expected to conflict with, or
result in a violation or breach of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of, or
result in, termination, cancellation or acceleration of any obligation or to the loss of a benefit under, or result in the creation of any
encumbrance in or upon any of the assets to be purchased in the Asset Sale under, or give rise to any increased, additional,
accelerated, or guaranteed right or entitlements of any third party under, or result in any material alteration of, any provision of
such contract;
(n) change or modify our accounting principles except as required to comply with the SEC filing requirements; or
(o) agree or commit to do any of the foregoing.
Conditions to Completion of the Asset Sale
The obligation of Kreido to complete the Asset Sale is subject to the satisfaction or waiver of the following conditions:
• Each of the representations and warranties of Four Rivers contained in the Asset Purchase Agreement, or in any
certificate delivered pursuant thereto, being true and correct in all material respects on and as of the closing date;
• The approval or consent of Kreido Biofuels’ stockholders holding more than 50% of the total number of shares of
our common stock issued and outstanding and entitled to vote on the Asset Purchase Agreement;
• Four Rivers having duly performed or complied in all material respects with all of the covenants, acts and
obligations to be performed or complied with by it under the Asset Purchase Agreement;
• No order, decree or ruling of any governmental agency having been entered, and no action, suit or proceeding
before any court, arbitration panel or other tribunal having been instituted (or threatened if Kreido reasonably
believes that such threat will result in institution of an action, suit or proceeding) by any governmental agency or
third party, to restrain, prohibit, challenge or invalidate any of the transactions contemplated by the Asset
Purchase Agreement;
• Four Rivers having executed and delivered an assignment and assumption agreement respecting assumed
contracts and assumed liabilities;
• Four Rivers having delivered an officer’s certificate (a) certifying that the conditions have been fulfilled,
(b) certifying the resolutions authorizing the Asset Purchase Agreement and the transactions contemplated
therein, and (c) identifying the incumbent officers of Four Rivers;
• Four Rivers having paid (a) the cash portion of the purchase price less the amount required to be paid to
lienholders on the closing date in excess of the assumed liabilities, (b) the sum of $14,000 in payment of certain
foreign patent processing fees and costs paid by Kreido and (c) the amount required to be paid to lienholders on
the closing date; and
• Four Rivers BioEnergy having issued share certificates representing 900,000 shares of its common stock and the
common stock purchase warrant to Kreido Biofuels and share certificates representing 300,000 shares of Four
Rivers BioEnergy common stock to Four Rivers’ transfer agent to be held in escrow for issuance only upon
exercise of Kreido Biofuels’ warrants.
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The obligation of Four Rivers to complete the Asset Sale is subject to the satisfaction or waiver of the following conditions:
• Each of the representations and warranties of Kreido contained in the Asset Purchase Agreement, or in any
certificate delivered pursuant thereto, being true and correct in all material respects on and as of the closing date;
• The approval or consent of Kreido Biofuels’ stockholders holding more than 50% of the total number of shares of
its common stock issued and outstanding and entitled to vote on the Asset Purchase Agreement;
• Kreido having duly performed or complied in all material respects with all of the covenants, acts and obligations to
be performed or complied with by it under the Asset Purchase Agreement;
• Kreido having delivered to Four Rivers an executed bill of sale and assumption agreement and such other
instruments of transfer and consents as Four Rivers may reasonably request to effect the transfer of the assets,
including, but not limited to an assignment and assumption agreement and an assignment of any assignment of
inventions agreements made by Philip Lichtenberger, Alan McGrevy and Dr. Alexey Sheinkman in favor of Kreido;
• Kreido having tendered to Four Rivers possession of all of the assets required to be tendered under the Asset
Purchase Agreement, where is and as is;
• Delivery by Kreido of an officer’s certificate (a) certifying that the conditions have been fulfilled, (b) certifying the
resolutions authorizing the Asset Purchase Agreement and the transactions contemplated therein, (c) identifying
the incumbent officers of Kreido and (d) certifying that the Asset Purchase Agreement and the transactions
contemplated therein have been approved by the holders of more than 50% of Kreido Biofuels’ common stock;
• No order, decree or ruling of any governmental agency having been entered, and no action, suit or proceeding
before any court, arbitration panel or other tribunal having been instituted (or threatened if Four Rivers reasonably
believes that such threat will result in institution of an action, suit or proceeding) by any governmental agency or
third party, to restrain, prohibit, challenge or invalidate any of the transactions contemplated by the Asset
Purchase Agreement or which might adversely affect the right of Four Rivers to own the assets to be sold;
• Kreido having obtained and delivered to Four Rivers all of the third party consents required by Four Rivers,
including consents and/or assignments of assumed contracts and assumed liabilities, necessary to consummate
the transaction contemplated by the Asset Purchase Agreement;
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• Delivery by Kreido, as required pursuant to the Asset Purchase Agreement, of (a) UCC, state tax lien, and
bankruptcy search reports as of a date no more than five (5) business days before the closing date; (b) pay off
letters in form and substance reasonably satisfactory to Four Rivers and (c) a written instrument from a named
vendor;
• Philip Lichtenberger and Alan McGrevy having been released from their employment agreements with Kreido with
full rights to enter into consulting agreements with, or in the employ of, Four Rivers;
• Delivery by Kreido (a) to Four Rivers of copies of various financial statements and (b) to its outside independent
auditors a letter indicating that they are authorized to provide information relating to such financial statements to
representatives of Four Rivers, at the expense of Four Rivers, in connection with the preparation of financial
statements of Four Rivers;
• Delivery by Kreido to Four Rivers of a good standing certificate from the Secretary of State of the State of Nevada
and California, as applicable, certifying the good standing of Kreido; and
• Delivery of all other documents, agreements or certificates set forth in the Asset Purchase Agreement
The Asset Purchase Agreement permits each of Kreido and Four Rivers to waive conditions to its respective obligations to
complete the Asset Sale. Any waiver must be in writing and would be effective only as to the waiving party.
Indemnification
The Asset Purchase Agreement provides that the parties will indemnify each other for any losses and expenses incurred by,
among other things, breaches of representations, warranties and covenants made in the Asset Purchase Agreement.
Neither party is required, however, to indemnify the other for losses incurred until the total of all indemnifiable losses
exceeds $50,000, in which case, the indemnified parties will be entitled to indemnification to the full amount of the indemnifiable
losses incurred by them, provided that the total amount of indemnifiable losses that either party shall be obligated to pay to the
other party shall not exceed $1.0 million. All indemnity claims are to be satisfied by using shares of Four Rivers common stock
valued at $8.00 per share.
Within 30 days after closing, Four Rivers may submit a claim to Kreido regarding lost, stolen or damaged Physical Purchased
Assets and call upon Kreido to repay to Four Rivers, in cash, the agreed value of the lost, stolen or damaged assets up to
$300,000 net of any anticipated insurance proceeds.
Termination; Payment of Termination Damages
At the time of execution of the Asset Purchase Agreement, Four Rivers deposited $250,000 in escrow with Bank of New York
Mellon as earnest money for its performance of the agreement.
Kreido and Four Rivers may mutually agree in writing, at any time before the effective time of the Asset Sale, to terminate the
Asset Purchase Agreement. In such case, the parties will each get fifty percent (50%) of the $250,000 placed in escrow by Four
Rivers.
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Either party may also terminate the Asset Purchase Agreement if the Asset Sale shall not have occurred at or before
11:59 p.m. Chicago Time, on April 1, 2009, unless such party’s failure to fulfill any of its obligations under the Asset Purchase
Agreement has been the cause of, or resulted in, the failure of the closing to occur on or prior to such date. If the failure of the
closing to occur on or prior to such date is caused by the other party, the terminating party is entitled to the entire $250,000 placed
in escrow by Four Rivers.
In addition, if a party is not in breach of any of its material obligations under the Asset Purchase Agreement, such party may
terminate the Asset Purchase Agreement without the consent of the other, before the effective time of the Asset Sale, upon a
breach of any representation or warranty or violation of covenant by the other party that is not remedied within ten (10) business
days after notice of such breach or violation. In such case, the terminating party is entitled to the entire $250,000 placed in escrow
by Four Rivers.
In the event that (a) Kreido unilaterally terminates the agreement as described above and (b) within 360 days of such
termination, sells any or all of the assets intended to be sold to Four Rivers to any other party or successor to Kreido’s estate,
then Kreido shall pay to Four Rivers the amount of $250,000 in cash in immediately available funds.
Agreements Relating to Four Rivers Stock
A total of 900,000 shares of Four Rivers BioEnergy common stock are to be issued directly to Kreido Biofuels at the closing
of the Asset Sale. An additional 300,000 shares of Four Rivers BioEnergy common stock will be issued to Kreido Biofuels and
immediately placed in escrow with the Four Rivers BioEnergy transfer agent for release to Kreido Biofuels if, when, and to the
extent Kreido warrants are exercised. The 900,000 shares of Four Rivers BioEnergy common stock to be held by Kreido Biofuels
represent approximately 11.6% of the issued and outstanding voting stock of Four Rivers at February 10, 2009. So that Kreido
Biofuels may not be subject to limitations on resales of restricted securities imposed on affiliates of issuers under Securities and
Exchange Commission Rule 144, Kreido has agreed to take steps to avoid affiliate status. During the period commencing with the
execution and delivery of the Asset Purchase Agreement and ending on the 360th day following the closing date, neither Kreido,
nor any person (except Philip Lichtenberger and Alan McGrevy) who is then or at any time within three months before the
proposed date of purchase has been an officer or director of Kreido or any affiliate of such person, may (a) purchase or otherwise
acquire, directly or indirectly, any shares of Four Rivers BioEnergy common stock or derivative securities of Four Rivers
BioEnergy common stock, including puts, calls swaps and other similar instruments, other than upon exercise of Kreido warrants,
(b) take any action to nominate a person for election as a director of Four Rivers, accept any nomination for election or
appointment as a director of Four Rivers, or accept an appointment as an officer of Four Rivers, or (c) enter into any contract or
agreement with Four Rivers or any other person or entity that would have the effect of Kreido, directly or indirectly controlling,
being under common control with or being controlled by Kreido or having the power to influence or influencing the policies and
management of Four Rivers.
Under a voting agreement to be made at the closing of the Asset Sale, the President and Chief Financial Officer of Four
Rivers will be given an irrevocable proxy to vote all shares of Four Rivers BioEnergy common stock held in escrow by the transfer
agent at any meeting of the Four Rivers BioEnergy stockholders to establish a quorum and in such officer’s discretion or any
matter presented to the Four Rivers BioEnergy stockholders.
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If Four Rivers determines that Kreido is an affiliate of Four Rivers, upon request of Kreido Biofuels, Four Rivers will be
required to register the shares of Four Rivers BioEnergy common stock issued to Kreido Biofuels, the Four Rivers BioEnergy
warrant and the underlying warrant shares under the Securities Act of 1933, as amended, and to keep the registration statement
current until the Four Rivers BioEnergy securities are disposed of in accordance with the registration statement or may be sold
under Securities and Exchange Commission Rule 144(i) without regard to any volume limitation under the Rule. In addition, if Four
Rivers BioEnergy has agreed to offer to include the Four Rivers BioEnergy warrant and underlying warrant shares in any
registration statement that it files to register shares for sale on its account or for resale of shares issued to other Four Rivers
BioEnergy stockholders.
ELECTION OF DIRECTORS (PROPOSAL NO. 2)
Nominees
Our board of directors currently has six members. We will continue as a business entity after the Asset Sale but may not be
engaged in the biofuels business. Mesrrs. Murli Tolaney and Richard Redoglia were elected to our board of directors in 2007
because of their expertise in matters relating to our planned biodiesel production business which is being sold in the Asset Sale.
Thus, we intend to reduce our board to four directors. We have not elected directors since 2006. Thus, we are nominating only
four candidates for election as directors at the Stockholders Meeting.
Unless otherwise instructed, the proxy holders will vote the proxies received by them for the four nominees named below, all
of whom are presently directors of Kreido Biofuels. In the event that any nominee is unable or declines to serve as a director at
the time of the Stockholders Meeting, the proxies will be voted for any nominee who shall be designated by the current Board of
Directors to fill the vacancy. We are not aware of any nominee who will be unable or will decline to serve as a director. The term of
office for each person elected as a director will continue until the next Annual Meeting of Stockholders or until a successor has
been elected and qualified.
Our nominees for election as directors and certain information are set forth below. Information as to the stock ownership of
each director and all of our current directors and executive officers as a group is set forth below under the caption “Security
Ownership of Certain Beneficial Owners and Management.”
Date First Elected or

Name Age Position Appointed
G.A. Ben Binninger 60 Chief Executive Officer; Director January 12, 2007
Betsy Wood Knapp 66 Chairperson of the Board; Director January 12, 2007
David Mandel 42 Director October 31, 2007
David Nazarian 47 Director October 31, 2007
G.A. Ben Binninger, Chief Executive Officer, Director. G.A. Ben Binninger, age 60, has served as Chief Executive Officer of
Kreido Biofuels since July 27, 2007. Mr. Binninger has served as a director of our company since January 12, 2007. From 2003 to
2006, Mr. Binninger served as a consultant to Kreido Labs, relating to the development and evaluation of business opportunities.
Mr. Binninger has 30 years of experience in chemicals and fuels. Mr. Binninger has hands-on experience leading both large and
small technologically sophisticated global businesses with Atlantic Richfield (ARCO), Rio Tinto Borax, Exxon and Hercules. From
1995 to 2003, Mr. Binninger served as Senior Vice President of Rio Tinto Borax. Mr. Binninger has a B.E. degree in Chemical
Engineering from Manhattan College and an M.B.A. from Harvard University.
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Betsy Wood Knapp, Chairperson of the Board, Director. Betsy Wood Knapp, age 66, has served as Chair of the Board of Kreido
Laboratories and Kreido Biofuels since January 12, 2007. An early investor in the Kreido technology, she joined the current
company, Kreido Biofuels, on January 12, 2007 as Chair of the Board. Ms. Knapp serves as a member of the Compensation
Committee and Audit Committee of the Board of Directors of the Company. Ms. Knapp is an entrepreneur who has
owned/operated and invests in early stage growth companies for 39 years. In 1995, Ms. Knapp founded Los Angeles-based
BigPicture Investors, LLC to finance startups with patented enabling technologies. Ms. Knapp also serves as CEO of BigPicture
Investors LLC. She has also been a founder or CEO of several software and new media companies where she has held positions of
CEO, President and Director. At the UCLA Anderson Graduate School of Management, she is a founder of the Entrepreneur’s
Hall, serves on the Board of Visitors, is a repeat guest lecturer in the MBA program and established the Knapp Competition for
excellence in business planning and venture initiation. Ms. Knapp is also the Chair of the UCLA Foundation. Ms. Knapp is a
founding member of the Committee of 200, a highly selective international organization of women entrepreneurs and corporate
executives. She is also a member of WomenCorporateDirectors, a by-invitation organization of women directors of Fortune 500;
NASDAQ; and private companies. She received a B.A. in economics from Wellesley College where she also serves as a Trustee
(1996 — present).
David Mandel, Director. David Mandel, age 42, became a director of Kreido Biofuels on October 31, 2007. Mr. Mandel is an
established private venture capital investor, based in Los Angeles, California. Mr. Mandel has pursued venture capital activities
on behalf of his family since 1994. Mr. Mandel and his family were seed investors in Broadcom Corp., Innovent Systems (acquired
by Broadcom) and Access360 (acquired by IBM), among others. Prior to becoming active in venture capital, he served on the
research staff at the University of Toronto, Department of Biophysics, where he focused on molecular simulations. Mr. Mandel
served as Advisor to the Board prior to his appointment as a director of the company. Mr. Mandel received a B.A. in Mathematics
from the University of Pennsylvania.
David Nazarian, Director. David Nazarian, age 47, became director of Kreido on October 31, 2007. Mr. Nazarian, is the founding
member and principal of Smart Technology Ventures, the general partner of a series of capital funds including Smart Technology
Ventures III, L.P., which he organized in 2000. He has nearly 20 years of operation investment experience in the
telecommunications and aerospace industries. Prior to founding Smart Technology Ventures, Mr. Nazarian was a major investor in
Omninet, a company that provided two-way messaging services via satellite for mobile users, when it merged with Qualcomm in
1988. Mr. Nazarian serves on the boards of directors for Lucix Corporation and Allard Industries. Mr. Nazarian received a M.B.A.
from the University of Southern California.
Vote Required
The four nominees receiving the highest number of votes will be elected to the Board of Directors. Votes withheld from any
nominee will be counted for purposes of determining the presence or absence of a quorum for transaction of business at the
meeting but will have no other legal effect upon the election of directors under Nevada law.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF THE FOUR NOMINEES
NAMED ABOVE.
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ADJOURNMENT OF THE STOCKHOLDERS MEETING (PROPOSAL NO. 3)
Kreido Biofuels may ask its stockholders to vote on a proposal to adjourn the stockholders meeting, if necessary, to solicit
additional proxies if there are insufficient votes at the time of the meeting to approve the Asset Purchase Agreement. Kreido
Biofuels may adjourn the meeting for up to 45 days. Our board of directors recommends that you vote FOR the adjournment of
the meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the meeting to approve the
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 6, 2009, certain information with respect to shares beneficially owned by
(i) each person who is known by Kreido Biofuels to be the beneficial owner of more than five percent (5%) of Kreido Biofuels’
outstanding shares of Common Stock, (ii) each of our directors and executive officers, and (iv) all of our directors and executive
officers as a group.
Beneficial ownership has been determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended. Under this rule, certain shares may be deemed to be beneficially owned by more than one person (if, for example,
persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned
by a person if the person has the right to acquire shares (for example, upon exercise of an option or warrant) within 60 days after
February 6, 2009. In computing the percentage ownership of any person, the number of shares is deemed to include the number of
shares beneficially owned by such person (and only such person) by reason of such acquisition rights. As a result, the
percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person’s actual
voting power at any particular date.
To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the
persons named in the table have sole voting and investment power with respect to all shares of Common Stock shown as
beneficially owned by them.
Shares Beneficially Owned as

of February 6, 2009 (1)
Percent
Beneficial Owner* Number of Shares of Class
G.A. Ben Binninger (2) 6,109,346 11.2%
David Nazarian/Smart Technology Ventures and affiliates and associates (3) 15,350,756 27.8%
Wellington Management Company, LLP (4) 9,456,330 16.5%
David Fuchs (5) 4,234,646 8.0%
Betsy Wood Knapp (6) 462,646 **
David Mandel (7) 3,763,049 7.1%
Murli Tolaney (8) 27,500 **
Richard Redoglia (8) 27,500 **
Philip Lichtenberger (9) 1,148,419 2.1%
John Philpott (10) 500,000 **
All current directors and executive officers as a group (8 people) 23,814,401 43.2%
* Unless otherwise indicated below, these beneficial owners can be reached at Kreido Biofuels, Inc.,
1070 Flynn Road, Camarillo CA 93012.
** Less than 1% of the outstanding shares of Common Stock.
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(1) The number of shares of Common Stock deemed owned by each officer and director includes shares
issuable pursuant to stock options that may be exercised within 60 days after February 6, 2009. On
February 6, 2009, there were 52,720,992 shares of Common Stock outstanding.
(2) Includes 4,373,663 shares of Common Stock, 100,000 shares of restricted stock, 33,848 shares of
Common Stock underlying options awarded under the 1997 Plan, 226,835 shares of Common Stock
underlying warrants, and 1,375,000 shares of Common Stock underlying options awarded under the
2006 Plan, all of which are exercisable within 60 days of February 6, 2009.
(3) Includes shares held of record by Smart Technology Ventures Advisors, LLC and its affiliates, STV
SBIC, Smart Technology Ventures, II, LLC, Smart Technology Ventures, III, L.P. (together the “STV
Funds”), the David and Angela Nazarian Family Trust, and the Y & S Nazarian Revocable Trust.
Includes 11,731,852 shares of Common Stock (which number includes 740,741 shares of Common
Stock underlying warrants) beneficially owned by STV Funds, 3,148,150 shares of Common Stock
(which number includes 1,574,075 shares of Common Stock underlying warrants) beneficially owned
by the Y&S Nazarian Revocable Trust, and 426,665 shares of common stock (which number includes
213,604 shares of common stock underlying warrants) beneficially owned by the Younes Nazarian
2006 Annuity Trust, 19,089 shares held by the David and Angela Nazarian Family Trust and 25,000
shares of Common Stock underlying stock options awarded under the 2006 Plan exercisable within
60 days of February 6, 2009. Mr. Nazarian disclaims beneficial ownership of shares owned of record
and beneficially by the Y & S Nazarian Revocable Trust and Younes Nazarian 2006 Annuity Trust.
David Nazarian and Smart Technology Ventures and affiliates address is 1801 Century Park West,
5th Floor, Los Angeles, CA 90067.
(4) Based upon Schedule 13G/A2 filed with the Securities and Exchange Commission on February 17,
2008. The address of Wellington Management Company, LLP is 75 State Street, Boston MA 02109.
(5) Includes 2,655,775 shares of Common Stock (which number includes 95,645 shares of Common Stock
underlying warrants) beneficially owned by Mr. Fuchs and 1,578,871 shares of Common Stock
(which number includes 123,333 shares of Common Stock underlying warrants) beneficially owned
by Mr. Fuchs’ Trust.
(6) Includes 437,646 shares of Common Stock (which number includes 218,978 shares of Common Stock
underlying warrants) beneficially owned by Betsy Wood Knapp and held of record by the Knapp
Trust of which Cleon T. Knapp and Betsy Wood Knapp are the trustees. Also includes 25,000
shares of Common Stock underlying stock options awarded under the 2006 Plan exercisable within
60 days of February 6, 2009.
(7) Includes 3,738,049 shares of Common Stock (which number includes 220,092 shares of Common
Stock underlying warrants) beneficially owned by Mr. Mandel. Also, includes 25,000 shares of
Common Stock underlying stock options awarded under the 2006 Plan exercisable within 60 days of
February 6, 2009. Mr. Mandel can be reached through Moss Adams, 11766 Wilshire Blvd 9th floor,
Los Angeles, CA 90025.
(8) Includes 2,500 shares of Common Stock and 25,000 shares of Common Stock underlying options
awarded under the 2006 Equity Compensation Plan which are exercisable within 60 days of
February 6, 2009.
(9) Includes 296,002 shares of restricted stock, 270,781 shares of Common Stock underlying options
awarded under the 1997 Plan, 580,000 shares of Common Stock underlying options awarded under
the 2006 Plan and 1,636 shares of Common Stock underlying warrants, all of which are exercisable
within 60 days of February 6, 2009.
(10) Includes 25,000 shares of Common Stock, 75,000 shares of restricted stock and 400,000 shares of
Common Stock underlying options awarded under the 2006 Plan, all of which are exercisable within
60 days of February 6, 2009.
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DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The Directors and Executive Officers of the Company at February 6, 2009 are:
Date First Elected

Name Age Position or Appointed
G.A. Ben Binninger 60 Chief Executive Officer; Director January 12, 2007
John M. Philpott 48 Chief Financial Officer March 19, 2007
Philip Lichtenberger 52 Chief Operating Officer January 12, 2007
Betsy Wood Knapp 66 Chairperson of the Board; Director January 12, 2007
David Mandel 42 Director October 31, 2007
David Nazarian 47 Director October 31, 2007
Richard Redoglia 51 Director July 27, 2007
Murli Tolaney 67 Director July 27, 2007
Background and experience information about Mr. Binninger, Ms. Knapp, Mr. Mandel and Mr. Nazarian is presented above
under “Election of Directors.”
Philip Lichtenberger, Senior Vice President of Operations and Chief Operating Officer. Philip Lichtenberger, has served as
Executive Vice President and Chief Operating Officer of Kreido Labs since 1997 and joined Kreido Biofuels, Inc. as Senior Vice
President of Operations and interim Chief Financial Officer on January 12, 2007. He was appointed Chief Operating Officer of
Kreido Biofuels on July 27, 2007. Mr. Lichtenberger has 26 years of experience in technology and engineering in senior roles in
Fortune 500 companies. Mr. Lichtenberger’s operations background includes Group III-V semiconductors, optoelectronics,
microelectronics and networking equipment. His technical background includes energy systems design and RF Electronics.
Mr. Lichtenberger has B.A. degrees in Physics and Philosophy from Beloit College in Beloit, Wisconsin and is a member of Phi
Beta Kappa.
John M. Philpott, Vice President and Chief Financial Officer. John M. Philpott joined Kreido Biofuels on March 19, 2007 as Vice
President and Chief Accounting Officer. He was appointed Chief Financial Officer of Kreido Biofuels on July 27, 2007. From
September 2006 until joining Kreido, Mr. Philpott served as a Partner with Aegis Advisors, LLC, a private management company.
For more than 10 years before joining Aegis Advisors, LLC, Mr. Philpott held the position of CFO, Treasurer and Assistant
Secretary with Miravant Medical Technologies, Inc., a publicly held pharmaceutical research and development company engaged
in drug and laser light development. Mr. Philpott has B.S. degrees in Business Administration — Accounting and Business
Administration — Management Information Systems from California State University Northridge and an M.B.A from University of
California, Los Angeles.
Richard Redoglia, Director. Richard Redoglia, age 51, became a director of Kreido on July 27, 2007. Mr. Redoglia serves as a
member of the Compensation Committee and Audit Committee of the Board of Directors of the Company. Mr. Redoglia currently
serves as Executive Director of Global Energy Horizons, a strategic investment firm focused on businesses within the energy
industry. Prior to joining Global Energy Horizons in 2003, Mr. Redoglia served as Director Global Futures Group for ABN AMRO
Inc. from 2000 to 2002. During 15 year tenure with Merrill Lynch, Mr. Redoglia served in various positions of increasing
responsibility, including Director of the Energy Commodity Group. Mr. Redoglia received a B.A. in Economics from the University
of California, Santa Barbara with added emphasis on the foreign policy of the U.S. and the histories of the Middle East and Russia.
30
Murli Tolaney, Director. Murli Tolaney, age 67, became a director of Kreido on July 27, 2007 and was elected Chair of the
Compensation Committee of the Board of Directors on October 31, 2007. Mr. Tolaney also serves on the Audit Committee of the
Board of Directors of the company. Mr. Tolaney retired in 2008 as Chairman of Montgomery Watson Harza, a privately-owned
global environmental engineer, management, technology and construction company. Mr. Tolaney joined Montgomery Watson
Harza in 1973 as a Senior Engineer and in 1992, became its Chief Executive Officer, a position he held until 2001 when he assumed
the post of Chairman of this 130 office worldwide, 6,000 employee firm. Mr. Tolaney received a B.S. in Civil Engineering and M.S.
in Environmental Engineering from the University of Kansas and an A.M.P. from Harvard Business School.
Code of Ethics and Business Conduct
We have adopted a code of ethics that applies to all officers and employees of our company including our principal
executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions. If
we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or
grant any waivers, including implicit waivers, from a provision of our Code of Ethics to a covered person, we will disclose the
nature of the amendment or waiver, its effective date and to whom it applies by posting such information on our Internet website
at www.kreido.com.
Board Committees
The board has established an audit committee and a compensation committee. Other committees may be established by the
board from time to time. Following is a description of each of the committees and their composition.
Audit Committee
Our audit committee has consisted of three directors: Ms. Knapp (Chair), Mr. Redoglia and Mr. Tolaney. The Board has
determined that all members of the audit committee are (i) “independent” under NASDAQ independence standards, (ii) meet the
criteria for independence as set forth in the Securities Exchange Act of 1934, or Exchange Act, (iii) has not participated in the
preparation of our financial statements at any time during the past three years and (iv) is able to read and understand fundamental
financial statements. None of the audit committee members qualifies as an “audit committee expert” as defined by the SEC.
Our audit committee operates pursuant to a written charter adopted by our board, a copy of which is available on the
investor relations section corporate governance subsection of our website www.kreido.com. Among other things, the charter
calls upon the audit committee to:
• oversee our auditing, accounting and control functions, including having primary responsibility for our financial
reporting process;
• monitor the integrity of our financial statements to ensure the balance, transparency and integrity of published financial
information;
• monitor our outside auditors independence, qualifications and performance;
• monitor our compliance with legal and regulatory requirements; and
• monitor the effectiveness of our internal controls and risk management system.
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It is not the duty of the audit committee to determine that our financial statements are complete and accurate and are in
accordance with generally accepted accounting principles. Our management is responsible for preparing our financial statements,
and our independent registered public accounting firm is responsible for auditing those financial statements. Our audit committee
does, however, consult with management and our independent registered public accounting firm prior to the presentation of
financial statements to stockholders and, as appropriate, initiates inquiries into various aspects of our financial affairs. In addition,
the audit committee is responsible for retaining, evaluating and, if appropriate, recommending the termination of our independent
registered public accounting firm and approving professional services provided by them.
The audit committee met four times during 2008.
Compensation Committee
Our compensation committee consists of three members: Mr. Tolaney (Chair), Ms. Knapp and Mr. Redoglia. The board has
determined that all of the compensation committee members qualify as:
• independent” under NASDAQ independence standards;
• “non-employee directors” under Exchange Act Rule 16b-3; and
• “outside directors” under Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code.
Our compensation committee operates pursuant to a written charter adopted by our board, a copy of which is available on
the corporate governance section of our website at www.kreido.com. Among other things, the charter calls upon the
compensation committee to:
• determine our compensation policy and all forms of compensation for our officers and directors;
• review bonus and stock and incentive compensation arrangements for our other employees; and
• administer our stock option and equity incentive plans.
The compensation committee met two times during 2008.
Board Qualification and Selection Process
Our board does not have a nominating committee as the board has traditionally considered nominees for election as
directors. Our board reviews, evaluates and proposes prospective candidates for our board. Each member of our board should
possess the highest personal and professional ethics and integrity and is devoted to representing our best interests and the best
interests of our stockholders.
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Public Availability of Corporate Governance Documents
Our key corporate governance documents, including our Code of Ethics and Business Conduct and the charters of our audit
committee and compensation committee are:
• available on our corporate website at www.kreido.com;
• available in print to any stockholder who requests them from our corporate secretary; and
• certain of them are filed as exhibits to our securities filings with the SEC.
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning the compensation earned by our Chief Executive
Officer and each of our two other most highly compensated executive officers whose aggregate salary and bonus for the fiscal
year ended December 31, 2007 or 2008 was in excess of $100,000 (the “Named Executive Officers”).
Name and Principal Stock Option All Other

Position Year Salary Bonus Awards Awards Compensation Total
($) ($) ($)1 ($)2 ($) ($)
G.A. Ben Binninger3 2008 223,861 40,000 20,000 271,180 — 555,041
Chief Executive Officer & 2007 76,440 50,000 1,667 56,020 32,609 216,736
Director
Philip Lichtenberger4 2008 224,404 — 367 202,384 — 427,155

Chief Operating Officer 2007 252,487 97,500 3,019 277,775 — 630,781
John Philpott5 2008 191,828 55,664 7,500 95,778 — 350,770

Chief Financial Officer 2007 142,604 46,250 — 51,564 — 240,418
Joel A. Balbien6 2008 — — — — — —

Former Chief Executive 2007 189,615 212,750 — — 1,000 403,365
Officer
(1) We record the value of the restricted stock awards and stock awards based on the fair market value
of the stock as of the date of grant.
(2) We have recorded $768,000 and $1,069,855 as compensation expense in 2007 and 2008, respectively.
The fair value of the options issued during the year ended December 31, 2007 and 2008 was
estimated using the Black-Scholes option-pricing model with the following assumptions: risk free
interest rates between 2.75% and 4.81%, expected life of five (5) to six (6) years and expected
volatility of 92%. The expected stock price volatility assumption was based on the average volatility
of 92%. The expected stock price volatility assumption was based on the average volatility of similar
public companies for the period prior to our reverse merger. The expected term assumption used in
the option pricing model was based on the “safe harbor” approach under SEC Staff Accounting
Bulletin (SAB) No. 107, (SAB 107), where the “expected term = ((vesting term + original contractual
term) / 2).” The risk free interest rate assumption was based on the implied yield currently available
on U.S. Treasury zero coupon issues with remaining term equal to the expected term. A projected
dividend yield of 0% was used as the company has never issued dividends.
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(3) Mr. Binninger

became our Chief
Executive Officer
on July 27, 2007
and prior to that he
was Chief
Operating Officer of
our company from
January 12, 2007 to
March 15, 2007.
Mr. Binninger
served as a
consultant to
Kreido Laboratories
from 2003 to 2006.
Other
compensation
includes amounts
paid to
Mr. Binninger as a
consultant to our
company.
Mr. Binninger’s
bonus for calendar
year 2008 will be
paid following the
closing of the
Asset Sale.
(4) Mr. Lichtenberger
became an
executive officer of
our company on
January 12, 2007.
Mr. Lichtenberger
has served as
Executive Vice
President and Chief
Operating Officer of
Kreido Labs since
1997. The
Compensation
Committee awarded
and paid
Mr. Lichtenberger a
$50,000 signing
bonus and awarded
him a year-end
bonus equal to 25%
of his 2007 base
salary for calendar
year 2007, of which
$15,000 has been
paid. No bonus was
provided for 2008.
The unpaid balance
($32,500) of
Mr. Lichtenberger’s
2007 bonus will be
paid following the
closing of the
Asset Sale.
(5) Mr. Philpott
became Chief
Accounting Officer
of the Company in
April, 2007 and
Chief Financial
Officer of the
Company in
August, 2007. The
Compensation
Committee awarded
Mr. Philpott a year-
end bonus equal to
25% of his 2007
base salary for
calendar year 2007,
of which $15,000
has been paid.
Mr. Philpott’s
bonus for calendar
year 2008 and the
unpaid balance
($31,250) of his
2007 bonus will be
paid following the
closing of the
Asset Sale.
(6) Mr. Balbien joined
Kreido Labs as
Chief Executive
Officer in
November 2006 and
served as our Chief
Executive Officer
until July 27, 2007.
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Outstanding Equity Awards at Fiscal-Year End
The following table provides certain information with respect to our Named Executive Officers concerning the exercise of
options during 2008 and unexercised options held by them at the end of the year.
Option Awards Stock Awards

Equity
Equity Incentive
Incentive Plan
Market Plan Awards:
Value Awards: Market or
Equity of Number Payout
Incentive Shares of Value of
Plan or Unearned Unearned
Awards: Number Units Shares, Shares,
Number of Number of Number of of Shares of Units or Units or
Securities Securities Securities or Units Stock Other Other
Underlying Underlying Underlying of Stock That Rights Rights
Unexercised Unexercised Unexercised Option That Have That That Have
Options Options Unearned Exercise Option Have Not Not Have Not Not
Exercisable Unexercisable Options Price Expiration Vested Vested Vested Vested
Name (#) (#) (#) ($) Date (#) ($) (#) ($)
G.A. Ben
Binninger 33,848 — — 0.09 7/1/09 — — — —
100,000 — — 0.44 7/26/17 — — — —
25,000 — — 0.33 7/26/17 — — — —
1,250,000 — — 0.30 12/1/17 — — — —
Philip 270,781 — — 0.09 4/17/10 — — — —

Lichtenberger 308,125 — — 1.18 4/4/17 — — — —
271,875 54,375 0.33 4/4/17 — — — —
John Philpott 56,250 — — 1.20 3/19/17 75,0001 750 — —

93,750 18,750 — 0.33 3/19/17 — — — —
75,000 30,000 — 0.33 2/1/18 — — — —
175,000 50,000 — 0.15 4/30/18 — — — —
(1) These shares are subject to repurchase by the Company under Mr. Philpott’s employment agreement
until April 30, 2009 or earlier under the provision of his employment agreement.
Employment Agreements and Termination of Employment and Change in Control Arrangements
G.A. Ben Binninger
On December 10, 2007, we entered into an Employment Agreement with G. A. Ben Binninger, our Chief Executive Officer. The
term of the agreement is 18 months and the agreement provides that Mr. Binninger’s base salary will be $225,000 per year.
Mr. Binninger will be eligible to earn performance-based bonuses of $48,000, $84,000 or $120,000, depending on the achievement
of target performance goals for 2008 and 2009, as determined by the Compensation Committee of the Board of Directors.
Mr. Binninger will be paid a minimum bonus of $40,000 for calendar year 2008. The agreement also provided for an engagement
bonus of $25,000, upon the execution of the agreement.
35
Mr. Binninger was granted an option to purchase 1,250,000 shares of our common stock under the 2006 Plan at an exercise
price of $0.30 per share, the closing sales price of our common stock on December 10, 2007. Options to purchase 100,000 shares of
common stock vested upon execution of the agreement. The remainder of the options vested in eleven equal installments of
100,000 each month beginning January 2008 and ending with November 2008; with the final 50,000 options vesting on
December 10, 2008. Had Mr. Binninger’s employment been terminated by us for Cause, by Mr. Binninger without Good Reason or
on account of Mr. Binninger’s death or Disability (each capitalized term as defined in the agreement), any unvested options would
have expired immediately effective the date of termination or death. If Mr. Binninger’s employment is terminated following a
Change of Control (as defined in the agreement), by us without Cause or by Mr. Binninger for Good Reason, any unvested
options will immediately vest and become exercisable effective the date of termination of employment.
Mr. Binninger was also granted 100,000 shares of restricted common stock under the 2006 Plan, which is subject to
repurchase by the Company at the price of $0.01 per share should Mr. Binninger not be employed by us through the term of the
Agreement other than due to: (1) his death or Disability; (2) the termination of his employment by us without Cause; or (3) the
termination of his employment by Mr. Binninger for Good Reason.
Philip Lichtenberger
On April 4, 2007, we entered into an Employment Agreement with Philip Lichtenberger, our Senior Vice President of
Operations who was appointed Chief Operating Officer on July 27, 2007. The initial term of the agreement is two years, with ninety
days notice required for renewal. The agreement provides that Mr. Lichtenberger’s base salary will currently be $195,000 per year.
Mr. Lichtenberger will be eligible to earn performance based bonuses ranging from 20% to 50% of his base salary as determined
by the Compensation Committee of the Board of Directors. The agreement also provided for a bonus of $50,000 for his service to
our subsidiary, Kreido Laboratories, in 2006 and payment of any unused vacation pay. Mr. Lichtenberger has been notified that
his Employment Agreement will not be renewed.
Mr. Lichtenberger was granted an option to purchase 580,000 shares of our common stock under the 2006 Plan at an exercise
price of $1.18 per share on April 3, 2007. On February 1, 2008, the Company reduced the exercise price to $0.33 per share for those
option shares that had not yet vested as of that date, which were 271,875 shares. Upon execution of the agreement 145,000 shares
of common stock vested and the remainder of the options vest in eight equal installments of 54,375 each per calendar quarter
beginning with the calendar quarter ending on June 30, 2007. If we terminate Mr. Lichtenberger’s employment in connection with a
Change of Control or without Cause, or if Mr. Lichtenberger terminates his employment for Good Reason (each capitalized term as
defined in the agreement), one half of all unvested options will immediately vest and the option term will continue for five years
from the date of termination of employment. If we terminate Mr. Lichtenberger’s employment for Cause, all unvested options shall
immediately expire and vested but unexercised options will expire 30 days after the date of termination. If Mr. Lichtenberger
terminates his employment without Good Reason, all unvested options shall immediately expire and the term of vested but
unexercised options will expire five years after the date of grant. If Mr. Lichtenberger’s employment is terminated on account of
death or Disability (as defined in the agreement), all unvested options shall immediately expire and the term of vested but
unexercised options will expire one year after the date of termination. Mr. Lichtenberger has also entered into a Lock-Up
Agreement which contains limits as to when Mr. Lichtenberger may sell the shares underlying the options.
36
Should Mr. Lichtenberger’s employment be terminated by us for Cause or by Mr. Lichtenberger without Good Reason, he
shall receive a lump sum cash payment equal to the sum of any accrued but unpaid base salary as of the date of termination and
earned benefits under any of the our benefit plans. If Mr. Lichtenberger’s employment is terminated by us without Cause or by
Mr. Lichtenberger for Good Reason, he shall receive a lump sum cash payment equal to the sum of his accrued base salary, earned
bonus and severance pay for twelve months of base salary.
John Philpott
On April 30, 2008 we entered into a new Executive Employment Agreement with Mr. Philpott. The term of the agreement is
12 months and the agreement provides that Mr. Philpott’s base salary will be $195,000 per year. Mr. Philpott will be eligible to earn
performance-based bonuses of between $39,000 and $97,500 depending on the achievement of target performance goals for 2008
and 2009, as determined by the Compensation Committee of the Board of Directors. Mr. Philpott, will be paid a minimum bonus of
$39,000 for 2008. In continuation of our commitment to Mr. Philpott, we will reimburse to him $25,000 of tuition and expenses for
the MBA program that he completed in June 2008, which will be accumulated at $2,083 per month.
Mr. Philpott was granted an option to purchase 175,000 shares of our common stock under the 2006 Plan at an exercise price
of approximately $0.15 per share, the closing sales price of our common stock on April 30, 2008. Options to purchase 25,000 shares
of common stock vested upon execution of the agreement. The remainder of the options vest in 12 equal installments of 12,500
each month beginning May, 2008 and ending with April 2009. Should Mr. Philpott’s employment be terminated by us for Cause,
by Mr. Philpott without Good Reason or on account of Mr. Philpott’s death or Disability (each capitalized term as defined in the
agreement), all unvested options shall expire immediately effective the date of termination or death. If Mr. Philpott’s employment
is terminated following a Change of Control (as defined in the agreement) by us Without Cause or by Mr. Philpott for Good
Reason, all unvested options shall immediately vest and become exercisable effective the date of termination of employment.
Mr. Philpott was also granted 75,000 shares of restricted common stock under the 2006 Plan, which is subject to repurchase
by the Company at the price of $0.01 per share should Mr. Philpott not be employed by us through the term of the Agreement
other than due to: (1) his death or Disability; (2) the termination of his employment by us Without Cause; or (3) the termination of
his employment by Mr. Philpott for Good Reason.
Insurance and Indemnity
We have purchased and currently maintain directors and officers liability insurance in the amount of $1,000,000 covering our
officers and directors. The policy has a term of 12 months beginning January 12, 2009. Additionally, we purchased $5,000,000 of
directors and officers liability insurance covering Kreido for occurrences that happened prior to January 12, 2009 for a period of
3 years and purchased $5,000,000 of directors and officers liability insurance which covers the individual directors and officers for
occurrences that happened prior to January 12, 2009 for a period of 6 years. We have entered into Indemnity Agreements with
each of our officers and directors that assures those individuals with indemnification and defense cost reimbursement protection
to the fullest extent permitted by Nevada law. We believe that providing full indemnity protection is necessary to attract and
retain qualified executives and board members.
37
Director Compensation
Fees Non-Qualified
Earned Non-Equity Deferred
or Paid Stock Option Incentive Plan Compensation All Other
Name in Cash Awards Awards Compensation Earnings Compensation Total
($) ($) ($) ($) ($) ($) ($)
Betsy Wood Knapp 72,500 — 15,115 — — — 87,615
David Mandel 26,500 — 11,198 — — — 37,698
David Nazarian 26,000 — 11,198 — — — 37,198
Richard Redoglia 27,000 — 8,290 — — — 35,290
Murli Tolaney 28,500 — 8,290 — — — 36,790
Pursuant to our Outside Director Compensation Program adopted in 2007, our outside directors receive an (i) annual cash
retainer of $20,000, payable quarterly, for service on the board, (ii) $1,000 for each board meeting and $500 for each committee
meeting attended in person, and (iii) $500 for each board meeting and $250 committee meeting attended telephonically. Fees paid
to directors for attending meetings may not exceed $1,000 if multiple meetings are attended in person on a given day. We
reimburse all of our directors for the expenses they incur in connection with attending board and committee meetings. In addition,
each outside director is (x) granted 2,500 shares of our common stock upon his or her first election or appointment and
(y) receives annual option grants to purchase 25,000 shares of our common stock on October 15 of each calendar year beginning
October 15, 2007. The number of shares of common stock included in an annual option grant will be reduced by the number of
shares of common stock included in option grants to the applicable outside director, in any capacity, within the 12 months
preceding the October 15th grant date. Options granted to outside directors under the Outside Director Compensation Program
will vest in two equal installments of six months each, provided that the outside director is serving as a director of our company
on the vesting date. Options will be granted at the closing bid price on our common stock on the date of grant and will have terms
of 10 years from the date of grant. Outside director options will be granted from the shares reserved for issuance under our 2006
Equity Incentive Plan. The Chairperson of the Board of Directors receives an annual cash retainer of $60,000 payable quarterly.
In 2008 the Directors acted to defer receiving cash fees for attending board and committee meetings. At February 6, 2009,
Kreido was indebted to its directors as a group in that aggregate amount of $180,500 for 2008 board fees which amount will be
paid as soon as possible after the Asset Sale is closed.
38
Compensation Discussion and Analysis
Elements of our executive compensation program
Our executive compensation currently consists solely of base salary, performance bonuses and participation in benefits
programs such as medical benefits programs. We have also granted equity awards to our executive officers typically upon the
commencement of their employment with the company or the execution or extension of their employment agreements.
The initial cash compensation of our executive officers was determined through direct negotiations with the individual
officers. The total compensation for our executives that is reflected in the summary compensation table above consists principally
of their base salary, bonuses and equity compensation.
We determined the specific amounts of compensation to be paid to our executive officers based upon the following factors:
• The roles and responsibilities of our executives;
• The individual experience and skills of, and expected contributions from, our executives;
• The negotiations relating to the hiring of our executives; and
• The amounts of compensation being paid to our other executives.
Our Chief Executive Officer considers each of these factors, as well as any other factors he may determine are relevant at the
time, in his discretion, in determining the amount of cash and equity compensation to recommend to our Compensation Committee
in connection with the awarding of compensation to executive officers. As a matter of corporate policy, no hiring, firing or
compensation decisions relating to a corporate officer may be made and no equity or equity-linked compensation may be awarded
to any employee, without the prior approval of our Board of Directors or its compensation committee.
G. A. Ben Binninger accepted the position of interim Chief Executive Officer of Kreido on July 27, 2007 following the
resignation of Dr. Joel Balbien from that position and accepted the permanent position of Chief Executive Officer in December,
2007. Mr. Binninger’s annual salary was established through direct negotiations between he and the Compensation Committee
and was based upon the Compensation Committee’s determination of a reasonable annual salary plus a minimum annual bonus
and performance bonuses to be paid based on achievement of goals as determined by the Compensation Committee. So that
Mr. Binninger could be better aligned with the economic interests of our stockholders, we granted Mr. Binninger shares of
restricted stock and stock option that would vest over the term of his employment agreement. We believe that the 10 year term of
the option is typical of options awarded to Chief Executive Officers of other public companies comparable in stage of
development to Kreido. The vesting of the option was the result of negotiations between he and the Compensation Committee.
39
Annual cash compensation
Base Salary
We pay base salaries that are competitive with similar positions in the independent energy sector and that provide for
equitable compensation among executives of our company. Our Chief Executive Officer recommends initial base salaries, and our
Compensation Committee considers and approves base salaries based upon the elements of our compensation program outlined
above. Through calendar year 2008, base salaries of all employees, including executive offices, were reviewed annually or within
30 days of the scheduled expiration date of an executive officer’s employment agreement. Our Chief Executive Officer’s salary will
be reviewed by our Compensation Committee within 30 days of the expiration date of his employment agreement. We expect all
salary reviews to consist of detailed performance-based evaluations. We have adhered to the belief that a competitive base salary
is a necessary element of any compensation program designed to attract and retain talented and experienced executives.
Cash incentive bonuses
In 2008, we considered the award of cash bonuses to all employees, including our executive officers. We established target
bonuses for our executive officers, which took into account each executive officer’s annual salary. Actual payment of bonuses
will be subject to the approval of the Compensation Committee, in its discretion. Bonuses for calendar year 2007 to executive
officers other than Mr. Binninger, who was not qualified for a 2007 cash bonus, were paid in part in the first quarter of 2008 and
the balances were deferred pending the completion of a capital raise, which did not occur. The remaining balance of 2007 bonuses
and minimum contractually provided bonuses for 2008 to the three remaining officers of Kreido Biofuels will be paid following the
closing of the Asset Sale.
Equity incentive compensation
All of our executive officers were granted stock options under one or both of the Company’s incentive compensation plans.
Upon the renewal of his employment agreement, in 2008 we granted shares of restricted stock to our Chief Financial Officer. In
2008 we reset the exercise price of our unvested stock options held by our continuing employees, based upon discussion with the
Chief Executive Officer and with the unanimous approval of our Compensation Committee. Our goal was to retain our management
and administrative team through an intended capital raise. We believe that it is important the executive officers have an
opportunity to acquire equity positions in their employers commensurate to their positions in the employer.
Other compensation
General benefits
All of our executive officers are eligible for benefits offered to employees generally, including life, health and disability
insurance. These benefits are designed to provide an array of support to employees and their families and are provided to all
employees regardless of their individual performance levels.
40
Perquisites
We do not believe it is necessary for the attraction or retention of management talent to provide our executive officers with a
substantial amount of compensation in the form of perquisites. In 2007 and 2008 we did not provide any perquisites to our
executive officers.
Relocation and education expenses
We offered reimbursement of relocation expenses to our officers from time to time. We encouraged our executive officers to
continue their formal education and reimbursed our Chief Financial Officer for a portion of the cost of his M.B.A. degree.
Role of executives in executive compensation decisions
Executive officer salaries have been, and will be, subject to approval of the Board of Directors or our Compensation
Committee. In determining the compensation for our executive officers, our Compensation Committee will consider the results of
the annual reviews of our executive officers conducted by our Chief Executive Officer. Our Chairperson will also provide input to
the Board of Directors and the compensation committee based on discussions with the Chief Executive Officer and his review of
company performance.
STOCKHOLDER PROPOSALS; OUTSIDE AUDITOR
Although Kreido Biofuels is not subject to the Securities and Exchange Commission proxy rules, we are willing to consider
proper proposals from eligible stockholders. An eligible stockholder is a person who has held shares of Kreido Biofuels stock
having a market value of $2,000 or more or representing 1% or more of the outstanding shares for more than 12 months before
submission of the stockholder proposal and at the time of the meeting. To be considered as a proper stockholder proposal for our
next annual meeting of stockholders, the proposal must be made by an eligible stockholder in proper form no later than
October 21, 2009.
Our outside auditor for calendar year 2008 is Vasquez & Company LLP, Los Angeles, California. It served in the same
capacity for Kreido for calendar year 2007 and for Kreido Laboratories for calendar year 2006. The outside auditor is appointed by
the Audit Committee. The audit of our financial statements for calendar year 2008 is ongoing. We do not expect a representative
of Vasquez & Company LLP to attend or make a statement at our meeting, or be available to respond to appropriate questions.
Information regarding 2007 and 2008 audit, audit-related, tax and other fees will be provided to interested stockholders upon
request.
HOUSEHOLDING OF PROXY STATEMENT
The Securities and Exchange Commission has adopted rules that permit companies and intermediaries (such as brokers) to
satisfy delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same
address by delivering a single proxy statement and annual report addressed to those stockholders. This process, known as
“householding,” potentially means extra convenience for stockholders and cost savings for companies. This year, a number of
brokers with customers who are our stockholders will be “householding” our proxy materials unless contrary instructions have
been received from the customers. We will promptly deliver, upon oral or written request, a separate copy of this proxy statement
to any stockholder sharing an address to which only one copy was mailed. Requests for additional copies should be directed to
Investor Relations at Kreido Biofuels, Inc., 1070 Flynn Road, Camarillo CA 93012, or by telephone at (805) 389-3499.
41
Once a stockholder has received notice from his or her broker that the broker will be “householding” communications to the
stockholder’s address, “householding” will continue until the broker is notified otherwise or until the stockholder revokes his or
her consent. If, at any time, a stockholder no longer wishes to participate in “householding” and would prefer to receive separate
copies of this proxy statement, the stockholder should so notify his or her broker. Any stockholder who currently receives
multiple copies of a proxy statement and annual report at his or her address and would like to request “householding” of
communications should contact his or her broker or, if shares are registered in the stockholder’s name, our Investor Relations at
the address or telephone number provided above.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
Kreido Biofuels and Four Rivers file annual, quarterly and current reports and other information with the Securities and
Exchange Commission. You may read and copy any reports, proxy statements or other information that we and Four Rivers file
with the Securities and Exchange Commission at the following location of the Securities and Exchange Commission:
Public Reference Room

100 F Street, N.W.
Washington, D.C. 20549
Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the public reference rooms.
You may also obtain copies of this information by mail from the Public Reference Section of the Securities and Exchange
Commission, 100 F Street, N.W., Washington, D.C. 20549, at prescribed rates. Kreido Biofuels’ and Four Rivers’ public filings are
also available to the public from document retrieval services and the Internet website maintained by the Securities and Exchange
Commission at www.sec.gov.
Any person, including any beneficial owner, to whom this proxy statement is delivered may request copies of reports, proxy
statements or other information concerning us, without charge, by written or telephonic request (805) 389-3499, directed to us at
Kreido Biofuels, Inc., 1070 Flynn Road, Camarillo CA 93012, Attention: John Philpott. If you would like to request documents,
please do so by March 2, 2009 in order to receive them before the stockholders meeting.
No persons have been authorized to give any information or to make any representations other than those contained in this
proxy statement and, if given or made, such information or representations must not be relied upon as having been authorized by
us or any other person. This proxy statement is dated February 18, 2009. You should not assume that the information contained in
this proxy statement is accurate as of any date other than that date, and the mailing of this proxy statement to stockholders shall
not create any implication to the contrary.
42
PROXY KREIDO BIOFUELS, INC. PROXY
Annual Meeting of Stockholders, March 4, 2009

This Proxy is Solicited on Behalf of the Board of Directors of Kreido Biofuels, Inc.
A complete set of proxy materials relating to our annual meeting is available on the Internet. These materials, consisting
of the Notice of Annual Meeting, Proxy Statement, Proxy Card as well as the Asset Purchase Agreement and Four Rivers
BioEnergy, Inc. 2008 Annual Report on Form 10-K may be viewed at www.transferonline.com/KRBF.
The undersigned hereby acknowledges receipt of the Notice of the Annual Meeting of Stockholders to be held March 4,
2009 and access to the Proxy Statement, and appoints G.A. Ben Binninger and John Philpott, voting together or if only one is
present ,then each of them acting alone, the Proxy of the undersigned, with full power of substitution, to vote all shares of
Common Stock of Kreido Biofuels, Inc. (the “Company”) which the undersigned is entitled to vote, either on his or her own
behalf or on behalf of any entity or entities, at the Annual Meeting of Stockholders of the Company to be held on March 4, 2009
and at any adjournment(s) or postponement(s) thereof, with the same force and effect as the undersigned might or could do if
personally present thereat.
THE SHARES REPRESENTED HEREBY SHALL BE VOTED AS HEREIN SPECIFIED. IF NO SPECIFICATION IS MADE,
SUCH SHARES SHALL BE VOTED FOR PROPOSALS 1 THROUGH 3 BELOW.
VOTE BY INTERNET — www.transferonline.com/proxy

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Pacific Time the
day before the meeting date. Have your proxy card in hand when you access the web site and follow these instructions:
Your Proxy ID is: 214
Your Authorization Code is:
Instructions for voting electronically:
1. Go to www.transferonline.com/proxy
2. Enter your Proxy ID and Authorization Code
3. Press Continue
4. Make your selections
5. Press Vote Now
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope as soon as possible.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
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A vote FOR the following proposals is recommended by the Board of Directors:
1. To approve the Asset Purchase Agreement, dated as of January 28, 2009, among the Company, Kreido Laboratories, a
California corporation, and Four Rivers BioEnergy Inc., a Nevada corporation, and The Four Rivers BioEnergy Company,
Inc., a Kentucky corporation, and the transactions therein:
o FOR o AGAINST o ABSTAIN
2. To elect four directors of the Company to serve until the next Annual Meeting of Stockholders or until their successors are
duly elected and qualified:
o FOR ALL o WITHHOLD

NOMINEES* AUTHORITY FOR
ALL NOMINEES*
Nominees: G.A. Ben Binninger Betsy Wood Knapp David Mandel David Nazarian
*Instructions: To withhold authority to vote for any individual nominee, while voting for the others, line through or otherwise
strike out the name of the nominee(s) for whom authority is withheld.
3. To adjourn the meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the meeting to
approve the Asset Purchase Agreement:
o FOR o AGAINST o ABSTAIN
4. In accordance with the discretion of the proxy holders, to act upon all matters incident to the conduct of the meeting and
upon other matters as may properly come before the meeting.
This Proxy, when properly executed, will be voted as specified above. If no specification is made, this proxy will be voted FOR
approval of the Asset Purchase Agreement, FOR the election of the directors listed above, and FOR each of the other proposals.
Please print the name(s) appearing on each share certificate(s) over which you have voting authority:
Note: Please sign exactly as name appears hereon. When

(Print name(s) on certificate) shares are held by joint owners, both should sign.
When signing as attorney, executor, trustee or
guardian, please give full title as such. If a
corporation, please sign in full corporate name by
Please sign your name(s) (Authorized Signature(s)) authorized officer, giving full title. If a partnership,
please sign in partnership name by authorized
Date: person, giving full title.
This Proxy must be signed and dated to be valid.
44
Exhibit 99.2
EXECUTION VERSION
ASSET PURCHASE AGREEMENT
dated as of January 28, 2009
by and between
KREIDO BIOFUELS, INC.,

a Nevada corporation
(“Kreido”)
And
KREIDO LABORATORIES a California corporation

(“Kreido Laboratories,” and together with Kreido, “Seller”)
and
FOUR RIVERS BIOENERGY INC.,

a Nevada corporation
(“FRB”)
And
The Four Rivers BioEnergy Company Inc.,

A Kentucky corporation
(“FRB Sub” and together with FRB, “Buyer”)
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the “Agreement”) dated as of January 28, 2009 (the “Signing Date”), is made by
and between KREIDO BIOFUELS, INC., a Nevada corporation (“Kreido”), KREIDO LABORATORIES, a California corporation
that is a wholly owned subsidiary of Kreido (“Kreido Labs,” and together with Kreido, “Seller”), and FOUR RIVERS
BIOENERGY INC., a Nevada corporation (“FRB”) and The Four Rivers BioEnergy Company, Inc., a Kentucky corporation (“FRB
Sub” and together with FRB, the “Buyer”).
R E C I T A L S:
A. Seller is engaged in the business of developing bio-diesel production plants designed to use Seller’s STT® Reactor and
related Registered IP and Unregistered IP (the “Business”).
B. Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, assets associated with the Business, subject to
and upon the terms and conditions contained in this Agreement which Buyer intends to use to construct and operate one or more
bio-diesel production, chemical, pharmaceutical and related bio-energy plants.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale. Subject to the terms and conditions of this Agreement, Seller shall sell, transfer, convey and deliver
to Buyer, and Buyer shall purchase from Seller, all of Seller’s right, title and interest in and to the Purchased Assets (as defined in
Section 1.2), free and clear of all, claims, liens, mortgages, pledges, contractual restrictions, security interests and encumbrances
of any nature, kind or description whatsoever (collectively “Encumbrances”).
1.2 Purchased Assets. As used herein, the term “Purchased Assets” shall mean the properties, assets and rights of Seller
wherever, whether real, personal, or mixed, or tangible or intangible, listed on Schedule 1.2 (a) (“Physical Purchased Assets”), on
Schedule 1.2(b) (“Registered IP” and “Unregistered IP”) and on Schedule 1.2(c) (“Assumed Contracts”) other than the Excluded
Assets. The Purchased Assets shall also include: (i) all insurance proceeds and rights thereto derived from loss, damage or
destruction of or to any of the Physical Purchased Assets after the Closing, and prior to the Closing, to the extent not utilized
prior to the Closing to repair or replace the insured items; and (ii) any rights which Seller may have against any of its suppliers or
vendors under express or implied warranties, to the extent assignable, relating to the Physical Purchased Assets or any right to
receive any reimbursement or indemnification in respect thereof.
1.3 Excluded Assets. The Purchased Assets shall not include the following assets of Seller (collectively, the “Excluded
Assets”), which Seller shall specifically retain:
(a) Seller’s corporate minute book, stock records, warrant records, stock option grant records and corporate seal;
(b) all cash on hand;
(c) all of Seller’s rights relating to any insurance policy or insurance contract (except as and to the extent provided in
Section 1.2(ii) hereof) maintained by Seller to the extent not accepted by and assigned to Buyer;
(d) the Lease between Seller and Acaso Investments, LLC regarding the facility (“Building”) located at 1070 Flynn
Road in Camarillo, California (the “Building Lease”);
(e) all leasehold improvements, selected office and conference room furniture, fixtures and equipment, manufacturing
equipment (including, without limitation the overhead crane and overhead fans), office supplies, laptop and desk top computers
and servers, and telephone and telecommunications equipment and systems located at the Building used by the Chief Executive
Officer, Chief Financial Officer and controller of Kreido but excluding the AutoCad computer, printer, engineering data and
AutoCad software which shall be part of the Purchased Assets;
(f) any feedstock inventory;
(g) any receivables of the Seller, as of the Closing Date;
(h) all books of account, records (including, without limitation, financial records, employment records, and SEC filing
records), files, telephone numbers, facsimile numbers, internet addresses, web pages, e-mail accounts, any similar data and
intellectual property, except to the extent directly associated with or included in the Purchased Assets;
(i) prepaid expenses and security deposits, except to the extent directly associated with or included in the Purchased
Assets; and
(j) all rights, title and interest in and to claims made by Kreido in the matter known as United States Securities and
Exchange Commission v. Louis Zehil, et. al. 07 Civ 1439 (LAP).
1.4 Assumption of Certain Liabilities and Obligations. As partial consideration for Seller’s sale of the Purchased Assets to
Buyer and subject to the provisions of Section 1.5 below, Buyer hereby assumes the liabilities and obligations (the “Assumed
Liabilities”) and Encumbrances all as listed on Schedule 1.4 hereto and/or obligation arising as of the Closing date under the
Assumed Contracts (the “Assumed Contracts”).
2
1.5 No Assumption of Excluded Liabilities. Buyer does not assume or take or shall become subject to any claims, debts,
commitments, liabilities or obligations of Seller whatsoever whether arising prior to, on or after the Closing Date, which are not
expressly assumed pursuant to Section 1.4 and which shall remain the sole obligation of Seller. Without limiting the generality of
the foregoing, “Excluded Liabilities” includes, but not limited to: (a) all Taxes (defined in Section 3.10), including those arising in
connection with the purchase and sale of the Purchased Assets, (b) accounts payable, (c) accrued expenses, including
employment termination expenses, severance obligations and accrued vacation pay, (d) the Building Lease, (e) any liabilities
arising from environmental matters, (f) indemnification obligations, (g) any liabilities, fines or penalties for violations of laws,
(h) costs and expenses associated with the negotiation and consummation of the transactions contemplated herein, (i) claims
relating to the Excluded Assets, (j) loans payable, (k) indebtedness to employees (including benefit plans) and shareholders, and
(l) broker’s fees.
1.6 Closing. The consummation of the transactions contemplated in this Agreement (the “Closing”) shall take place at the
offices of Golenbock Eiseman Assor Bell & Peskoe LLP, 437 Madison Avenue, New York, New York 10022, at 10:00 a.m. EST on
February 27, 2009, or on March 15, 2009 if so requested by Seller in writing on or before February 25, 2009, or such earlier date and
at such other time as the parties mutually agree in writing (the “Closing Date”), but in no event shall Closing occur later than the
fifth business day after fulfillment or waiver of all the conditions set forth under Articles 6 and 7 hereof, unless otherwise agreed
to by the parties.
1.7 Discharge and Release of Encumbrances. No later than three (3) days prior to the Closing, Seller shall deliver to Buyer a
schedule (the “CFO Certificate”), duly certified by the Chief Financial Officer of the Seller setting forth all outstanding amounts
due to the holders of the Encumbrances (the “Lienholders”), and shall deliver to Buyer, in such detail as shall be reasonably
acceptable to Buyer, such relevant information available to Seller on which the calculations reflected in the CFO Certificate are
based together with wire information for each such Lienholder to whom payment is to be made at the Closing. In furtherance of
the foregoing, Seller agrees that Buyer shall, on behalf of the Seller, pay or cause to be paid from the cash portion of the Purchase
Price amounts required to be paid to the Lienholders on the Closing Date in excess of the Assumed Liabilities and in accordance
with the CFO Certificate and Schedule 7.9 hereof.
3
1.8 Physical Purchased Assets.
(a) Notwithstanding anything to the contrary in this Agreement, no later than five (5) Business Days after the date
hereof, Seller shall cause all vendors or other parties that are in possession of the Physical Purchased Assets to deliver to Seller,
for the benefit of Buyer, written communication substantially with the content of the form attached as Exhibit F-1 or other similar
evidence reasonably satisfactory to Buyer, provided, however, that “evidence reasonable satisfactory”: (i) with respect to the
Physical Purchased Assets located at Foothills Biodiesel in Lenoir, NC and the EPA Laboratories in Cincinnati, OH shall mean a
delivery by Kreido copy of a letter attached as Exhibit F-2 hereof and the absence of any reply that would negate any of the
statements of said letter; and (ii) with respect to the Physical Purchased Assets located at the Port of Wilmington, NC, a written
confirmation substantially similar to the form attached as Exhibit F-1, after due inspection to take place no later than the fifth
Business Day of the date hereof, to be delivered by a person jointly designated by Buyer and Seller.
(b) In the event that: (i) such party is unable to deliver such certificate since any Physical Purchased Asset has been
stolen, destroyed or substantially damaged; and (ii) any such Physical Purchased Asset is not covered by insurance or the right
to obtain insurance proceeds which may be assigned to Buyer, then Buyer shall not be under any obligation to purchase such
asset, and the portion of the Purchase Price referred to in Section 2.1(b) shall be reduced in a like amount. The value of such
Purchase Price reduction shall be determined jointly by Seller and Buyer in accordance with the principles set forth in Section 2.2
no later than three (3) business days prior to the Closing Date.
1.9 Post Closing Inspection and Refund Rights. The Buyer shall, for a period of thirty (30) calendar days following the
Closing Date have the opportunity to physically re-inspect the Physical Purchased Assets and in which to deliver to Seller an
instrument in writing setting forth any claims by Buyer that any of the Physical Purchased Assets has been stolen, destroyed or
materially damaged, specifically identifying therein such affected Physical Purchased Assets and the facts supporting Buyer’s
claims. Within seven (7) days of the delivery of such claims, Seller shall respond in writing to those of Buyer’s claims to which it
disputes, setting forth the reasons for such dispute. Within five (5) days thereafter, the Buyer and Seller shall meet (with the party
in possession or responsible for possession of the affected Physical Purchased Assets, if necessary) to resolve in good faith the
disputed claims and for Buyer and Seller to jointly determine in good faith the value of any such stolen, destroyed or materially
damaged Physical Purchased Asset (in accordance with the principles set forth in Section 2.2). Buyer and Seller shall also
determine whether any claims for insurance or warranty coverage may be made with respect to any stolen, destroyed or materially
damaged Physical Purchased Property that is the subject of Buyer’s claim, and Seller shall refund to Buyer an amount equal to the
agreed upon value of the stolen, destroyed or materially damaged Physical Purchased Assets net of the projected amount to be
recovered from insurance and warranty claims; provided , however, that in no event shall the amount of the refund from Seller to
Buyer exceed $300,000.00 in the aggregate. If any insurance or warranty claim shall be definitively rejected in its entirety (as
opposed to taking under reservation) by the insurer or warrantor within 60 days following the Closing, then subject to the
aggregate limit provided above, Seller shall refund to Buyer the projected amount of the insurance or warranty claim. If an
insurance or warranty claim made hereunder shall be definitively rejected in its entirety after said 60-day period, Seller shall
compensate Buyer the cash amount above, subject to the aggregate limit provided above pursuant to the indemnity rights of
Buyer under Article 8 of this Agreement. Except as otherwise specifically provided in this Section 1.9, this Section is in lieu of any
indemnification rights of Buyer under Article 8 of this Agreement with respect to any claims that any of the Physical Purchased
Assets were stolen, destroyed or materially damaged.
4
ARTICLE 2
CONSIDERATION AND PAYMENT TERMS
2.1 Purchase Price and Manner of Payment. The aggregate consideration to be paid to Seller by Buyer for the Purchased
Assets (the “Purchase Price”) shall be as follows:
(a) Concurrent with the execution and delivery of this Agreement, Buyer shall make a loan in an aggregate amount of
$100,000 to Seller against the delivery and execution by Seller of a promissory note (the “Note”) and a Security Agreement (the
“Security Agreement”), in the form attached hereto as Exhibit G the proceeds of which are solely to be used to pay such amounts
owed by Seller to Certified Technical Services, L.P. (“Certified”). Seller hereby authorizes Buyer to make such payment directly to
Certified. On the Closing Date, the Note shall be cancelled and surrendered to Buyer.
(b) Upon the notice of the Escrow Agent that the escrow account has been established, and Buyer and Seller shall
make reasonable commercial efforts to established the escrow account within three (3) days of the date hereof, Buyer shall
deposited into escrow at Bank of New York pursuant to the Escrow Agreement attached hereto as Exhibit A the sum of Two
Hundred Fifty Thousand Dollars ($250,000) (the “Escrow Deposit”). The Escrow Deposit shall be released in accordance with the
provisions of Section 9 hereof.
(c) On the Closing Date, Buyer shall pay to Seller, in immediately available funds by wire transfer to such account as
shall be designated in a written direction by Kreido to FRB (such directing to be provided no later than three (3) days prior to the
Closing Date) the sum of Two Million Dollars Four Hundred Forty Two Thousand Dollars ($2,442,000) less any of the amounts to
be paid directly by Buyer to Lienholders in accordance with Section 1.7 hereof.
(d) On the Closing Date, FRB shall issue to Kreido a total of One Million Two Hundred Thousand (1,200,000) shares of
FRB common stock, $0.001 par value per share (“Buyer Stock”), of which Three Hundred Thousand (300,000) shares shall be
deposited in escrow with Wall Street Transfer Agents, Inc., the transfer agent of FRB, pursuant to the Securities Escrow
Agreement in the form attached hereto as Exhibit I, for delivery to Kreido or its designee(s) solely upon delivery of notice of
exercise of warrants issued by Kreido on or about January 12, 2007 and only to the extent required to meet its obligations under
said warrants. (It being agreed and understood that any of the escrowed Buyer Stock not delivered to Kreido or its designee on or
before January 31, 2012, shall be returned to FRB) and cancelled and returned to the status of authorized and unissued capital
stock.
(e) On the Closing Date, FRB shall issue to Kreido a Warrant Agreement and Certificate representing the right to
purchase up to Two Hundred Thousand (200,000) shares of common stock of FRB at an exercise price of $8.00 per share and
having an expiration date five years after the Closing Date, substantially in the form attached hereto as Exhibit B (the “Buyer
Warrant”).
(f) On the Closing Date, Buyer shall accept and assume the Assumed Contracts and the Assumed Liabilities.
5
2.2 Valuation and Purchase Price Allocation. At the Closing, Buyer and Seller shall agree upon the value of the Purchase
Price based, in part upon the bid price of FRB common stock at the close of business on the day immediately preceding the
Closing Date traded in the OTCBB market. The FRB Warrant shall be valued using the Black Scholes method of valuation using
the same risk free interest rate and volatility factor most recently applied by FRB in valuing other warrants granted by in for
audited financial statement purposes. The Purchase Price shall be allocated among the Purchased Assets in the manner required
by Section 1060 of the Internal Revenue Code of 1986, as amended, as shown on an allocation schedule to be provided by Buyer
to Seller as soon as practicable after the Closing Date. After the Closing, the parties will make consistent use of the allocations set
forth in such allocation schedule for all purposes, including for purposes of any tax returns and any forms or reports required to
be filed pursuant to Section 1060 of the Internal Revenue Code of 1986, as amended (including Internal Revenue Service
Form 8594), or any comparable provision of state, local or foreign law. As soon as practicable after the Closing Date, Buyer will
prepare and deliver to Seller Internal Revenue Service Form 8594 to be filed with the Internal Revenue Service. Any subsequent
adjustment to the Purchase Price will be allocated in accordance with Section 1060 of said Code. Buyer and Seller agree that the
form of the transactions, the consideration provided for in this Agreement and the allocation of the Purchase Price are provided
above were arrived at on the basis of arm’s length negotiation between Buyer and Seller, and shall be respected by each of them
and their respective Affiliates for federal, state, local and other tax reporting purposes and that none of them will assert or
maintain a position inconsistent with the foregoing.
ARTICLE 3
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER
Seller represents, warrants and covenants to Buyer currently and as of the Closing Date as follows:
3.1 Organization and Standing.
(a) Kreido is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.
Kreido has full power and authority to conduct its business as it is presently being conducted and to own, lease and operate its
properties and assets and is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where
the ownership or operation of its properties or conduct of its business requires such qualification. A complete and correct copy of
its certificate of incorporation and bylaws as amended to date are filed as exhibits to periodic reports and registration statements
filed by Kreido with the SEC (“Kreido SEC Filings”). Such certificate of incorporation and bylaws are in full force and effect.
Kreido is qualified to do business as a foreign corporation is the State of California. None of the material operations of the
Business has been conducted through any direct or indirect subsidiary of Kreido or any direct or indirect shareholder or Affiliate
of Kreido other than Kreido Labs and Kreido Wilmington, LLC, a Delaware limited liability company.
6
(b) Kreido has two classes of equity securities authorized: Preferred stock of which zero shares are designated, issued
and outstanding; and common stock of which 52,720,992 shares are issued and outstanding. The Kreido Warrants represent the
right to purchase a total of 18,498,519 shares of Kreido common stock at an exercise price of $1.85 per share at any time on or
before January 12, 2012. There are issued and outstanding options to purchase 3,289,952 shares of Kreido common stock at
purchase prices ranging from $0.004 to $1.20 per share and other warrants to purchase 437,355 shares of Kreido common stock at
prices ranging from $0.09 to $0.89 per share. Except as set forth on Schedule 3.1, Kreido has no form of plan or any other
agreement for the issuance of any securities or payment of money, including any form of anti-takeover mechanism whether by
statute, certificate of incorporation, by-law or agreement, that is or may be triggered by its consideration or signing of this
Agreement.
(c) Kreido Labs is a corporation duly organized, validly existing and in good standing under the laws of the State of
California. Kreido Labs has full power and authority to conduct its business as it is presently being conducted and to own and
lease its properties and assets and conduct its Business and is qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the ownership or operation of its properties or conduct of its business requires such
qualification. A complete and correct copy of its certificate of incorporation and bylaws as amended to date has been delivered to
Buyer. Such certificate of incorporation and bylaws so delivered are in full force and effect. Kreido Labs is not qualified to do
business as a foreign corporation in any State. None of the material operations of the Business has been conducted through any
direct or indirect subsidiary of Kreido Labs.
(d) Kreido Labs has two classes of equity securities authorized: Preferred stock of which zero shares are currently
issued and outstanding, and common stock of which 100 shares are issued and outstanding and held of record and beneficially
by Kreido. Kreido Labs has no form of plan or any other agreement for the issuance of any securities or payment of money,
including any form of anti-takeover mechanism whether by statute, certificate of incorporation, by-law or agreement, that is or may
be triggered by its consideration or signing of this Agreement.
3.2 No Restrictions; Authorization; Binding Effect. Except as set forth in Schedule 3.2, Seller is not subject to any
restriction, agreement, law, rule, regulation, ordinance, code, writ, injunction, award, judgment or decree which would prohibit or
be violated by the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. Seller
has all necessary power and authority to consummate the transactions contemplated herein. Seller has all necessary corporate
power and authority and, subject to obtaining Kreido shareholder approval, has taken all corporate action necessary to execute
and deliver this Agreement and the instruments, documents and agreements to be executed and delivered pursuant hereto by
Seller (the “Seller Documents”) to consummate the transactions contemplated by this Agreement and to perform Seller’s
obligations under this Agreement. Other than obtaining approval of the Kreido shareholders, the execution, delivery and
performance by Seller of this Agreement and the other Seller Documents executed and delivered by Seller and the consummation
by Seller of the transactions contemplated hereby and thereby, have been duly and validly adopted and approved by the board of
directors of Seller. Upon receipt of the approval of the Agreement and the transactions contemplated herein by the holders of
more than 50% of Kreido common stock issued and outstanding and entitled to vote no other corporate proceedings on the part
of Seller shall be necessary to authorize the performance of this Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby and, at the Closing Date, this Agreement will have been duly authorized by all necessary
corporate and shareholder action on the part of Kreido, and this Agreement and each of the Seller Documents hereto will have
been duly executed and delivered by Seller and will constitute a legal, valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms.
7
3.3 Title to Purchased Assets. Set forth on Schedule 1.2(a), Schedule 1.2(b) and Schedule 1.2(c) is a true, correct and
complete list of the Purchased Assets and the location of the Physical Purchased Assets. Upon payment by Seller to certain
vendors (as listed on Schedule 3.3(a) hereto) in possession of certain of the Purchased Assets of release payments thereto, Seller
will have good and marketable title to all Purchased Assets. The release payments to vendors will not exceed the cash portion of
the Purchase Price. Except for the Encumbrances identified on Schedule 1.4, at the Closing Date, the Purchased Assets will be
transferred to FRB Sub upon payment therefor, free and clear of all Encumbrances. Except as modified by the provisions of
Section 1.8 and Section 1.9, the Physical Purchased Assets shall be transferred to FRB Sub AS IS and WHERE IS in their present
condition and without any warranty whatsoever as to the quality, fitness or condition thereof.
3.4 Contracts. Schedule 3.4 hereto is a true, correct and complete list of all written contracts, agreements, commitments or
arrangements (“Contract”) to which Seller, is a party that are material to the Business or/and by which any Purchased Assets are
bound:
(a) which contains covenants or other provisions concerning confidentiality or limiting Seller’s right to compete in any
line of business or with any person or in any area;
(b) which relates to any distribution, marketing or sale of any Purchased Assets or any product by Seller with any
individual or entity providing services to Seller;
(c) involving any remaining or unsatisfied obligation of Seller to purchase vehicles, equipment, leasehold
improvements, materials, supplies, or goods in the nature of inventory;
(d) between Seller and any director, officer, employee or principal shareholder of Seller, or any such person’s family, or
any corporation, partnership, trust or other entity in which such person has an interest as a shareholder, officer, director, member,
manager, trustee or partner;
(e) which contains any obligation to acquire or dispose of any property or asset, other than in the ordinary course of
business;
(f) which relates to the licensing or other acquisition of rights to any technology or intellectual property of a third party,
any new product or to the development of any new product;
(g) any contracts or commitments not made in the ordinary course of the business; and
(h) any leases.
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Except as set forth on Schedule 3.4 hereto, all Contracts are valid and binding obligations of Seller and to Seller’s knowledge the
other parties thereto, and are in full force and effect and, enforceable in accordance with their respective terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the enforcement of
creditors’ rights generally, now or hereafter in effect and subject to the application of equitable principles and the availability of
equitable remedies. Except as set forth in Schedule 3.4, neither Seller nor to Seller’s knowledge, any other party to any Contract is
in default in the payment of any obligation under, or in the performance of any material covenant or material obligation to be
performed by it pursuant to, any Contract. The execution and delivery of this Agreement and any documents to be delivered
pursuant hereto and Seller’s performance of their obligations under this Agreement and such other documents, will not conflict
with or breach any of the provisions of, or constitute a default (with or without notice or lapse of time, or both) under, or
accelerate any indebtedness as due under, or give rise to any other rights or obligation under, any Contract, agreement, mortgage,
indenture, lease, permit or other instrument relating to the Business to which Seller is a party or by which Seller is bound Except as
set forth in Schedule 3.4 hereto, there have been no oral or written modifications of, or amendments or waivers with respect to,
any of the terms of any of the Contracts. Seller shall indicate on Schedule 3.4 those Contracts that will be Assumed Contracts at
the Closing. Except as set forth on Schedule 3.4, each of the Assumed Contracts and Assumed Liabilities may be assigned by
Seller to Buyer without the approval or consent of the other party to such Assumed Contract or Assumed Liability.
3.5 Licenses and Permits. Schedule 3.5 hereto lists all governmental licenses and permits related to the Purchased Assets
held by Seller and indicates such licenses and permits that are included in the Purchased Assets. Except as indicated on
Schedule 3.5, Seller is the owner of such governmental licenses and permits included in the Purchased Assets. No proceeding is
pending or, to the knowledge of Seller, threatened, to revoke or limit any license or permit that is included in the Purchased
Assets.
3.6 Consents. Except for the approval by the Kreido stockholders as provided for in this Agreement and as set forth on
Schedule 3.6, Seller is not required to obtain any consents or other approvals from, or make any filing or other registration with,
any governmental agency or other person (including any lessor, vendor, supplier or lender) in order to consummate the
transactions contemplated hereby.
3.7 Compliance with Laws. Seller has complied in all material respects with all laws, rules, regulations, ordinances, codes,
judgments or orders applicable to the Business and Seller has not received any written notice alleging non-compliance or any
other investigation with respect thereto which remains uncured as of the date hereof nor, to Seller’s knowledge, any such action
is threatened, other than as described on Schedule 3.7.
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3.8 Litigation. Seller is not (a) subject to any outstanding injunction, judgment, order, decree or ruling relating directly or
indirectly to the Business, or (b) a party to or, to the knowledge of Seller, threatened to be made a party to, any action, suit,
proceeding, hearing, or investigation before any court, quasi-judicial agency, administrative agency or arbitrator, except as set
forth on Schedule 3.8.
3.9 Liabilities. Seller has no material liabilities except for liabilities reflected or reserved against on the balance sheet of Seller
included in its Quarterly Report on Form 10-Q for the fiscal period ended September 30, 2008 included in the Kreido SEC Reports
and current liabilities incurred in the ordinary course of business of Seller since September 30, 2008. Except as set forth on
Schedules 1.2 (c), 1.2(b), 1.4, 3.3(a) and Schedule 3.9, the Purchased Assets are not subject to or affected by any indebtedness or
liabilities, including any fines and/or penalties.
3.10 Taxes. Seller has filed with the appropriate authorities all returns (collectively, the “Tax Returns”) concerning income,
sales, payroll, or any other kind of taxes (“Taxes”) required to be filed through the Closing Date and such Tax Returns are correct
and complete in all material respects. Seller will timely file any Tax Returns for all Taxes required to be filed after the date hereof
which relate to the operation of the Business prior to the Closing Date. Seller has paid all Taxes shown to be due by such Tax
Returns. No claim for unpaid Taxes has, to Seller’s knowledge, become an Encumbrance of any kind against the property of the
Seller or is being asserted against Seller.
3.11 No Material Adverse Change. Except as disclosed on Schedule 3.11, since September 30, 2008 there has not been any:
(a) Material Adverse Change, as hereinafter defined, in the business, operations, prospects, assets, results of
operations or condition (financial or otherwise) of Seller, and no event has occurred or circumstances exist that would reasonably
likely to result in such a Material Adverse Change;
(b) To Seller’s knowledge after inquiry, any damage, destruction or other casualty loss with respect to any Physical
Purchased Asset, whether or not covered by insurance;
(c) any declaration, setting aside or payment of any distribution (whether equity or property) in respect of Seller’s
capital stock, or any repurchase, redemption or other reacquisition of any shares of capital stock or other securities of Seller;
(d) any change in Seller’s accounting principles, practices or methods;
(e) any transfer, sale, or encumbrance of any Purchased Asset;
(f) Receipt of any notice of default under any Assumed Contract or Assumed Liability or of any infringement by a third
party on any of the Registered IP or Unregistered IP.
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3.12 Employees.
(a) Schedule 3.12 is a true and complete list of all of Seller’s employees by name and position.
(b) Except as set forth on Schedule 3.12, Seller is not party to or bound by any written (i) collective bargaining
agreement, (ii) employment agreement that will not be terminated on the Closing Date, (iii) covenant not to compete for the benefit
of any employee or former employee, (iv) severance plan or program or other severance arrangement for its employees that will be
satisfied in full on the Closing Date. The execution, delivery and consummation of the transactions contemplated by this
Agreement will not result in any severance liability to any employee of Seller hired by the Buyer in accordance with this
Agreement. At or before the Closing, Seller will release Philip Lichtenberger and Alan McGrevy from their covenants not to
compete and other restrictive covenants to Seller to the extent necessary for such persons to provide services to Buyer, subject
to a release by such persons of any and all claims they may have against Seller and its affiliates.
(c) Seller is and has been in compliance in all material respects with all applicable laws and regulations respecting
employment, termination of employment, discrimination in employment, terms and conditions of employment, wages, hours, and
occupational safety and health and employment practices. Seller has not engaged, or to the knowledge of the Seller, alleged to
have engaged, in any unfair labor practice, unlawful employment practice or unlawful discriminatory practice in the conduct of its
business for which Buyer could become liable. There is no unfair labor practice charge or complaint against the Seller pending
before the National Labor Relations Board or any comparable state agency. The relations of the Seller with its employees are
satisfactory and Seller is not a party to or affected by or, to the knowledge of the Seller, threatened overtly with any dispute or
controversy with a union or with respect to unionization or collective bargaining.
(d) Seller has not made any written or, to the knowledge of the Seller, oral agreement with or promise to any employee,
officer or consultant regarding continued employment by Buyer after the Closing Date.
3.13 Insurance. Seller is covered by insurance in scope and amount customary and reasonable for the Business and as
required under applicable laws. All insurance policies are in full force and effect and all installments of outstanding premiums have
been paid as of the date hereof and as of the Closing Date.
3.14 Environmental. To Seller’s knowledge, (i) the operation of the Business has been in material compliance with all
applicable hazardous materials laws and (ii) Seller has received no written notice of, and to the knowledge of Seller, there are no
existing or threatened claims, demands, or actions instituted or pending in connection with the presence, release, discharge or
required remediation of hazardous materials by Seller, and (iii) Seller has not discharged or released any hazardous materials at the
Building in violation of any hazardous material laws. For purposes of this section, “hazardous material laws” means all federal,
state and local laws regulating the environmental condition of air, water or real property, pollution, contamination or clean-up, and
“hazardous materials” means substances as defined under hazardous material laws.
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3.15 Intellectual Property.
(a) For purposes of this Agreement, “Intellectual Property” shall mean all (i) patents, patent applications, provisional
patent applications, patent disclosures, discoveries and inventions filed with the United States Patent and Trademark Office
(whether or not patentable and whether or not reduced to practice) and any reissue, continuation, continuation-in-part, division,
revision, extension or reexamination thereof; (ii) trademarks, service marks, industrial designs and trade dress filed with the United
States Patent and Trademark Office, registered copyrights, copyright registrations, copyright applications; (iii) all confidential
information (including, without limitation, ideas, formulae, compositions, know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications, designs, plans and technical data, trade secrets,
(iv) supplier lists and related information), and computer software programs and applications, in both source and object form,
technical documentation of such software programs, statistical models, databases and data, and (v) any Inbound License
Agreement, but specifically excluding trade names and corporate names, internet domain names and websites, logos and
typographics. The Intellectual Property included in (i) and (ii) above is the Registered IP and the Intellectual Property included in
(iii), (iv) and (v) above is the Unregistered IP.
(b) Attached hereto on Schedule 1.2(c) is a complete and accurate list of all the Registered IP and Unregistered IP
owned by Seller including jointly owned with others. All fees, payments and filings due with respect to the Registered IP have
been duly made by or on behalf of Seller. Schedule 1.2(c) also contains a complete and accurate list of all licenses granted by
Seller to any third party that are in full force and effect (“Outbound License Agreement”) and all licenses granted by any third
party to Seller that are in full force and effect (“Inbound License Agreement”), in each case identifying the subject Intellectual
Property.
(c) License Agreements.
(i) Except as set forth on Schedule 3.15(c)(i) hereto, to Seller’s knowledge, no person has the right to use any
Registered IP without duly executing an Outbound License Agreement.
(ii) Except as set forth on Schedule 3.15(c)(ii) hereto, there is no outstanding or, to Seller’s knowledge, threatened
dispute or disagreement with respect to any Inbound License Agreement or any Outbound License Agreement. Except as set
forth in Schedule 3.15(c)(ii) hereto, Seller is not in material breach of, or has failed to perform any material obligation under, any of
the Inbound License Agreements and, to the best of Seller’s knowledge, no person that is a party to any Outbound License
Agreement is in breach of or has failed to perform thereunder.
(iii) Seller is not bound by any contract, including without limitation any Outbound License Agreement, granting
to any third party any purchase option, right of first refusal, consensual security interest, or exclusive right in any Registered IP.
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(d) Ownership; Sufficiency of Intellectual Property Assets . Except as set forth on Schedule 3.15(d), Seller owns, or
possesses adequate licenses, or other rights, to use and practice, free or clear of encumbrances, orders and arbitration awards,
and without obligation to make any payments of any kind to any person, all Registered IP and, to Seller’s knowledge, all
unregistered IP. All payments required to maintain any Registered IP have been made. Each person who, in any capacity
(including, without limitation, current and former consultants, independent contractors, officers, directors and employees) has had
access to the Intellectual Property from which such person could potentially misappropriate information or technology of any
material value, has entered into a written agreement suitable to vest sole and exclusive right, title and interest in and to all
inventions, creations, developments, and works developed by such person (including, without limitation, intellectual property
rights contained therein) in Seller. The Intellectual Property identified in Schedule 1.2(c) hereto, together with Seller’s unregistered
copyrights and rights under the licenses granted to Seller under the Inbound License Agreements, constitute all the Intellectual
Property rights used in the operation of the Business.
(e) Protection of Intellectual Property. Seller has taken all measures reasonable and appropriate, to maintain and protect
its Registered IP, and there has been no publication or public distribution by Seller of any of its Unregistered IP, including,
without limitation, any publication or distribution by Seller that could in any way affect the right of Seller to seek, assert or enforce
any trademark, copyright or patent protection.
(f) No Infringement. To Seller’s knowledge, none of the products or services used, manufactured, distributed, marketed,
sold, licensed by Outbound License Agreement or performed by Seller, nor any of the Intellectual Property used in the conduct of
the Business, infringe upon, violate or constitute the unauthorized use of any rights owned or controlled by any person.
(g) No Pending or Threatened Infringement Claims. There is no pending litigation and no notice or other claim has been
received by Seller (i) alleging that Seller has engaged in any activity or conduct that infringes upon, violates or constitutes the
unauthorized use of any of the intellectual property or proprietary rights of any person, or (ii) challenging the ownership, use,
validity or enforceability of any Intellectual Property or the Intellectual Property exclusively licensed by or to Seller. Seller has not
received any writing requesting, inquiring or demanding the licensing of any other person’s intellectual property or proprietary
rights or any payment with respect thereof.
(h) No Infringement by Third Parties. To Seller’s knowledge, no third party is misappropriating, any Registered IP or
Unregistered IP, or infringing or violating any Registered IP of Seller.
(i) Assignment, Change of Control of the Intellectual Property. The execution, delivery and performance by Seller of this
Agreement, and the consummation of the transactions contemplated hereby, will not result in the loss or impairment of, or give
rise to any right of any third party to terminate or alter, any of Seller’s rights in or to any Inbound License Agreement or
Outbound License Agreement, or require the consent of any governmental agency or person in respect of any Intellectual
Property.
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3.16 Brokers. Seller has not dealt with any broker, finder or other person entitled to any broker’s or finder’s fee, commission
or other similar compensation in connection with the transactions contemplated hereby other than Breakwater Investment, LLC,
who shall be compensated by Seller.
3.17 Financial Risks; Lock-up. Kreido acknowledges that it is able to bear the financial risks associated with FRB Stock and
Buyer Warrants and that it has had access to the periodic reports filed by FRB with the United States Securities and Exchange
Commission (the “SEC”) and has had reasonable access to the officers of FRB for purposes of conducting a due diligence
investigation of Buyer, and has had the opportunity to ask question or make other inquiries which were satisfactorily answered.
Kreido is capable of evaluating the risks and merits of an investment in the Buyer Stock and Buyer Warrants and is capable of
bearing the entire loss of its investment in such securities. Kreido will be acquiring the Buyer Stock and Buyer Warrants for its
own account and for investment and not with a view to distribution. Kreido understands that neither the FRB Stock nor the
Warrants have been registered under the Securities Act of 1933, as amended (the “Securities Act”) , and will be issued to Kreido
upon an exemption from such registration requirements and comparable registration requirements under applicable state securities
laws. Kreido further understands that the certificates evidencing the Stock and Buyer Warrants will bear restrictive legends as set
forth below, and that Kreido will not be permitted to distribute the Buyer Stock or Buyer Warrants, without either compliance with
the registration requirements of the Securities Act or the availability of an exemption from such registration requirements. Kreido
hereby covenants and agrees not to make a sale, transfer, distribution or any other disposition of any Buyer Stock or Buyer
Warrants or any other securities based upon the Buyer Stock or Buyer Warrants, including options, swaps, puts and calls, during
the 360-day period commencing with the Closing Date except that Seller may transfer shares of Buyer Stock to five (5) or fewer
creditors that are accredited investors (as that term is defined in Securities Act Rule 501) in order to satisfy certain outstanding
obligation to such creditors, subject to the delivery to Buyer of an opinion of counsel to Kreido that the shares may be transferred
without compliance with the registration requirements under Section 5 of the Securities Act of 1933, as amended, and such
creditors agree to continue to be bound by the lock-up provision applicable to Kreido in respect of the Buyer Stock.
3.18 No Affiliation; Limited Voting Rights.
(a) Seller has no intention to exercise any control over Buyer through the ownership of FRB Stock or otherwise. In
furtherance of the forgoing, Seller covenants and agrees that during the period commencing with the execution and delivery of
this Agreement and ending on the 360th day of the Closing Date, neither Seller nor any person (except Philip Lichtenberger and
Alan McGrevy) who is then or at any time within three (3) months before the proposed date of purchase has been an officer or
director of Seller or any Affiliate of such person will (a) purchase or otherwise acquire, directly or indirectly, any shares of FRB
common stock or derivative securities of FRB common stock, including puts, calls swaps and other similar instruments, other than
upon exercise of Kreido Warrants, (b) take any action to nominate a Person for election as a director of FRB, accept any
nomination for election or appointment as a director of FRB, or accept an appointment as an officer of FRB, or (c) enter into any
contract or agreement with FRB or any other Person that would have the effect of Seller, directly or indirectly controlling, being
under common control with or being controlled by FRB or having the power to influence or influencing the policies and
management of FRB.
(b) With respect to any shares of Buyer Stock held in escrow by the FRB transfer agent, Kreido agrees to grant to the
President and Chief Financial Officer of FRB an irrevocable proxy in the form attached hereto as Exhibit J to vote such shares at
any meeting of the FRB stockholders to establish a quorum and in such officer’s discretion or any matter presented to the FRB
stockholders.
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3.19 SEC Reports; Financial Statements. Kreido has filed all required Kreido SEC Reports since January 12, 2007. As of their
respective dates, such Kreido SEC Reports, as amended, complied as to form and substance in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none of the required
reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not
misleading. The financial statements of Kreido included in the Kreido SEC Reports have been prepared in accordance with GAAP,
(except as may be specified therein or in the notes thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP and subject to year-end adjustments, provided that all adjustments necessary to make the financial
statements accurate and complete in all material respects have been made), and fairly present in all material respects the financial
position of Kreido as of and for the dates thereof and the results of operations and cash flows for the periods then ended.
3.20 Full Disclosure. No representation or warranty made by Seller in this Agreement or in any Seller Documents contain or
will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading in the light they were made.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER
Buyer represents, warrants and covenants to Seller currently and as of the Closing Date as follows.
4.1 Organization and Standing.
(a) FRB is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.
FRB is duly registered or qualified to conduct its business and own its properties in each state or other jurisdiction in which such
qualification or registration is required except where the failure to be so qualified or in good standing would not have an FRB
Material Adverse Effect. FRB has full corporate power and authority to conduct its business as it is presently being conducted
and to own and lease its properties and assets.
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(b) FRB Sub is a corporation duly organized, validly existing and in good standing under the laws of the State of
Kentucky. FRB Sub is duly registered or qualified to conduct its business and own its properties in each state or other jurisdiction
in which such qualification or registration is required except where the failure to be so qualified or in good standing would not
have an FRB Material Adverse Effect. FRB Sub has full power and authority to conduct its business as it is presently being
conducted and to own and lease its properties and assets. FRB owns all (100%) of the issued and outstanding shares of capital
stock of FRB Sub. There are no outstanding warrants, options, subscriptions, calls, rights, agreements, convertible or other
exchangeable securities or other commitments or arrangements relating to the issuance, sale, purchase, return or redemption,
voting or transfer of any shares, whether issued or un-issued, of any capital stock, equity interest or other securities of FRB Sub.
None of FRB or FRB Sub or the Subsidiaries (as defined below) own any equity interests in any person, other than the
Subsidiaries.
(c) Except as set forth on Schedule 4.1, the Buyer has no form of plan or any other agreement for the issuance of any
securities or payment of money, including any form of anti-takeover mechanism whether by statute, certificate of incorporation,
by-law or agreement, that is or may be triggered by its consideration or signing of this Agreement.
(d) Schedule 4.1 sets forth, with respect to each direct or indirect subsidiary of FRB (each, a “Subsidiary” and
collectively, the “Subsidiaries”), its type of entity and the jurisdiction of its organization. Each Subsidiary is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and
authority to own, lease and operate its properties and to conduct its business. All of the outstanding shares of capital stock of
each of the Subsidiaries are duly authorized, validly issued, fully paid and non-assessable and owned by Buyer, FRB Subsidiary
or another Subsidiary, and, are free and clear of all Encumbrances and were not issued in violation of, nor subject to, any
preemptive, subscription or similar rights.
4.2 Capitalization. Schedule 4.2 sets forth the number of shares of common stock and type of all authorized, issued and
outstanding capital stock of FRB as the date hereof. FRB’s common stock (the “FRB Stock”) is presently quoted on the OTCBB
under the symbol FRBE.OB and is not subject to any notice of suspension or delisting. All of the issued and outstanding shares
of FRB Stock are duly authorized, validly issued, fully paid, nonassessable, except that for any FRB Stock issued prior to
December 4, 2007, such statement is expressly subject to FRB’s knowledge. Except: (i) as set forth in any report publicly filed with
the SEC on or after December 12, 2007 by FRB under the Exchange Act of 1934 (the “Exchange Act”), including pursuant to
Section 13(a) or 15(d) thereof, together with any materials publicly filed or furnished to the SEC by FRB under the Exchange Act,
whether or not any such reports were required (the “FRB SEC Reports”), and (ii) with respect to 625,000 warrants to be issued to
certain FRB employees (the “Employee Warrants”); there are no outstanding or authorized stock appreciation, phantom stock,
warrants, convertible securities, script, or similar rights, with respect to FRB and no Person has any right or first refusal,
preemptive right, right of participation, or any similar right to participate in the issuance of shares or warrants or to acquire equity
securities of FRB. All of the issued and outstanding shares of FRB Stock were issued in compliance with applicable federal and
state securities laws, except that for any FRB Common Stock issued prior to December 4, 2007, such statement is expressly subject
to FRB’s knowledge. FRB shall give written notice to Seller of the execution and delivery of any agreement or the adoption of any
plan to issue any shares of FRB Stock or any security convertible into FRB Stock after the Signing Date.
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4.3 No Restrictions; Authorizations; Binding Effect. Buyer is not subject to any restriction, agreement, law, rule, regulation,
ordinance, code, writ, injunction, award, judgment or decree which would prohibit or be violated by the execution and delivery
hereof or the consummation of the transactions contemplated hereby. Buyer has all necessary corporate and shareholder power
and authority and has taken all action necessary to execute and deliver this Agreement and the instruments, documents and
agreements to be executed and delivered pursuant hereto by Buyer, to consummate the transactions contemplated by this
Agreement and to perform Buyer’s obligations under this Agreement and the instruments, documents and agreements to be
executed and delivered pursuant hereto. This Agreement and each of the instruments, documents and agreements to be executed
and delivered by Buyer pursuant hereto has been duly executed and delivered by Buyer and constitutes a legal, valid and binding
obligation of Buyer enforceable against Buyer in accordance with its terms except as may be limited by applicable bankruptcy,
insolvency reorganization, moratorium, fraudulent transfer or similar laws of general applicability relating to or limiting creditors’
rights generally and subject to the availability of equitable remedies.
4.4 Compliance. Except as disclosed in the FRB SEC Reports, Buyer is not (i) in default under or in violation of (and no event
has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by Buyer), nor has
Buyer received notice of a claim that is in default under or that is in violation of, any material indenture, loan or credit agreement or
any other material agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not
such default or violation has been waived), (ii) in violation of any order of any court, arbitrator or governmental body, or (iii) is or
has been in violation of any statute, rule or regulation of any governmental authority, except for any violations or defaults that,
individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect.
4.5 Tangible Assets. Except as set forth in the FRB SEC Reports, Buyer has title in fee simple to all real property owned by it
that is material to its business and title in all personal property owned by it that is material to the business of Buyer, in each case
free and clear of all Encumbrances, except for Encumbrances that do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property by Buyer (wear and tear excepted). Any real
property and facilities held under lease by Buyer is held by it under valid leases of which Buyer is in compliance, except as would
not have an FRB Material Adverse Effect.
4.6 Patents and Trademarks. Other than the corporate name, Buyer does not own or have rights to use, any registered
patents, patent applications, registered trademarks, trademark applications, service marks, trade names, registered copyrights,
licenses and other similar rights. Buyer has (i) received no written notice that the Buyer is violating or infringing upon the
intellectual property rights of any person, or (ii) received a written invitation to license any intellectual property rights of any
person in order to avoid such a violation or infringement.
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4.7 Insurance. Buyer is covered by insurance in scope and amount to Buyer’s knowledge are customary and reasonable for
the businesses in which it is presently engaged. Schedule 4.7 sets forth a summary of all insurance maintained by Buyer.
4.8 Filings, Consents and Approvals. Buyer is not required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
person in connection with the execution, delivery and performance by the Buyer of this Agreement other than (i) filings with the
SEC under the Securities Act and the Exchange Act and (ii) filings with state “blue sky” or other securities regulatory authorities.
4.9 Issuance of the Securities. The FRB Stock to be issued on the Closing Date or issuable upon exercise of the FRB
Warrants has been duly authorized and, when issued and paid for in accordance with this Agreement or the FRB Warrants, will be
duly and validly issued, fully paid and non-assessable, free and clear of all Encumbrances. The FRB Warrants have been duly
authorized, executed and delivered by FRB and are valid and binding obligations of FRB, enforceable in accordance with their
terms, except as may be limited by applicable bankruptcy, insolvency reorganization, moratorium, fraudulent transfer or similar
laws of general applicability relating to or limiting creditors’ rights generally and subject to the availability of equitable remedies.
As of the Closing, FRB will have reserved from its duly authorized capital stock the maximum number of shares of common stock
issuable pursuant to this Agreement, the FRB Warrants.
4.10 SEC Reports; Financial Statements. As of their respective dates, all FRB SEC Reports complied as to form and
substance in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated
thereunder, and none of the required reports, when filed, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial statements of FRB included in the FRB SEC Reports have been
prepared in accordance with GAAP, (except as may be specified therein or in the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP and subject to year-end adjustments, provided that all adjustments
necessary to make the financial statements accurate and complete in all material respects have been made), and fairly present in all
material respects the financial position of FRB as of and for the dates thereof and the results of operations and cash flows for the
periods then ended. FRB was a “shell company” as that term is used in SEC Rule 144 and filed “Form 10” information on Form 8-
K Report, dated December 4, 2007 on December 11, 2007. Except for a Transition Report on Form10 for the period ended
October 31, 2007 (the “Transition Report”), FRB has filed all the FRB SEC Reports required to be filed with the SEC under the
Exchange Act, and for a period of not less than three years following the Closing Date or six (6) months after the release from
escrow of all shares of FRB Stock deposited with the FRB transfer agents, whichever is sooner, FRB shall file and otherwise made
available all information to be disclosed in a periodic report required to be filed with the SEC under the Exchange Act necessary to
enable any holder of FRB Stock or FRB Warrants to transfer such securities in reliance upon SEC Rule 144.
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4.11 Sarbanes-Oxley; Internal Accounting Controls. To the best of FRB’s knowledge and except for the Transition Report,
FRB is in compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it. FRB has established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for Buyer and designed such
disclosure controls and procedures to ensure that material information relating to FRB is made known to the certifying officers by
others within those entities, particularly during the period in which FRB’s most recently filed periodic report under the Exchange
Act, as the case may be, is being prepared. FRB presented in its most recent periodic report filed with the SEC, the conclusions of
the certifying officers about the effectiveness of the disclosure controls and procedures. FRB’s certifying officers have evaluated
the effectiveness of FRB’s controls and procedures as of October 31, 2007 (the “Evaluation Date”). Since the Evaluation Date,
there have been no changes in FRB’s internal control over financial reporting or disclosure controls or procedures or, to the
knowledge of FRB, in other factors that could significantly affect its internal controls or disclosure controls or procedures.
4.12 Litigation. Except as set forth in the FRB SEC Reports, Buyer is not (a) subject to any outstanding injunction, judgment,
order, decree or ruling, or (b) a party to or, to the knowledge of Buyer, threatened to be made a party to, any action, suit,
proceeding, hearing, audit or investigation before any court, quasi-judicial agency, administrative agency or arbitrator.
4.13 Liabilities. Buyer has no material liabilities (actual or contingent) except for liabilities reflected or reserved against on
the most recent balance sheet included in the FRB SEC Reports and current liabilities incurred in the ordinary course of business
of Buyer since July 31, 2008 and contractual and other liabilities incurred in the ordinary course of business which are not required
by GAAP to be reflected on a balance sheet, but which are described in the most recent FRB SEC Report.
4.14 Registration Rights. Other than as set forth on Schedule 4.14, no person has any right to cause FRB to effect the
registration under the Securities Act of any securities of FRB. In the event FRB shall, after the Closing Date, effect the registration
under the Securities Act of any securities of FRB for the account of another person (other than on SEC Forms S-4 and S-8), FRB
shall include the Buyer Stock in such registration statement and shall afford to Kreido the registration rights as held by the other
FRB shareholders included in such registration statement. At any time within 12 months of the date of the Closing, if FRB shall
determine that Kreido is an affiliate of FRB for purposes of SEC Rule 144, it shall so notify Kreido, and at Kreido’s request made
within such 12 month period FRB shall take all actions necessary to register under the Federal securities laws the Buyer Stock, the
Buyer Warrants and shares of common stock issuable upon exercise of the Buyer Warrants for resale under the Securities Act on
one occasion.
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Notwithstanding the foregoing, if the above Buyer Stock, Buyer Warrants and shares of common stock issuable upon
exercise of the Buyer Warrants (“together the “Registrable Securities”) are to be registered under a registration statement that is
being filed in connection with an underwritten offering on behalf of the FRB and the managing underwriter of such underwritten
offering for FRB shall advise FRB, in writing, that the number of Registrable Securities requested to be included in such
registration statement exceeds the number of securities which can be sold in an orderly manner in or proximate to such offering
within a price range acceptable to FRB, then FRB shall include in such registration: (i) first, all securities proposed by FRB to be
sold for its own account; (ii) second, Registrable Securities requested by the holders thereof to be included in such registration,
pro rata among such holders, that the managing underwriter agrees may be included in the registration statement for the
underwritten offering, and such Registrable Securities shall be included only if the holders thereof agree not to sell their
Registrable Securities for a period of up to 90 days as the managing underwriter reasonably requests; and (iii) third, securities of
any other selling security holders requested to be included in such registration statements, provided that all the Registrable
Securities have been included in the registration statement, unless such securities have equal registration rights with the
Registrable Securities, in which case to the extent the managing underwriter permits the inclusion of the Registrable Securities and
the securities of others, the included Registrable Securities and the other securities will be pro rated first as to the holders of the
similar registration rights and then pro rated within such group of holders or as they agree.
The obligation to register any of the Registrable Securities, in whole or in part, under this any of the provisions of this
Section 4.14, will cease when (i) the Registrable Securities have been effectively registered under the Securities Act and disposed
of in accordance with the registration statement covering them, or (ii) the Registrable Securities are or may be sold or transferred
without registration pursuant to Rule 144(i) under the Securities Act (or any similar provisions that are then in effect) without
regard to any volume limitations set forth in such rule.
4.15 Solvency. Buyer has no actual knowledge of any facts or circumstances which lead it to believe that it is not solvent or
that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year
from the Closing Date.
4.16 Material Changes. Except as set forth on Schedule 4.16, since July 31, 2008 (i) there has been no event, occurrence or
development that has had or could reasonably be expected to result in FRB Material Adverse Effect, (ii) Buyer has not incurred
any material liabilities (contingent or otherwise) other than trade payables accrued expenses incurred in the ordinary course of
business, (iii) Buyer has not altered its method of accounting or the identity of its auditors, (iv) Buyer has not declared or made
any dividend or distribution of cash or other property to its stockholders (v) Buyer has not issued any equity shares or options or
warrants (except for the Employee Warrants) to acquire equity shares, (vi) Buyer has not mortgaged, pledged or subjected to lien
any of its assets, tangible or intangible, (vii) Buyer has not sold, transferred or leased any of its assets except in the ordinary
course of business, (viii) Buyer has not cancelled or compromised any debt or claim, (ix) Buyer has not suffered any physical
damage, destruction or loss (whether or not covered by insurance) or, as of the date hereof, loss of a material contractual right, or
received written notice of a final non-appeallable ruling by a governmental agency adversely affecting the properties or business
of Buyer, (x) Buyer has not entered into any material transaction other than in the ordinary course of business except for this
Agreement, (xi) Buyer has not made or granted any wage or salary increase or entered into any written employment agreement
except as contemplated in this Agreement, (xii) Buyer has not suffered any material change in its business relationship with any of
its material contractual parties, property owners, distributors or suppliers except as otherwise disclosed to Kreido’s Chief
Executive Officer and Chief Financial Officer, (xiii) there are no renegotiations of, or attempt to renegotiate any terms or provision
of any material contract or (xiv) Buyer has not entered into any agreement, or otherwise obligated itself, to do any of the
foregoing.
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4.17 Foreign Corrupt Practices. None of Buyer’s executive officers or agents acting expressly on behalf of Buyer has
(i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to
foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or
to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made
by Buyer (or made by any person acting on its behalf of which Buyer is aware) which is in violation of law, or (iv) violated in any
material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.
4.18 Taxes. Buyer has filed with the appropriate authorities all Tax Returns concerning income, sales, payroll, or any other
kind of Taxes required to be filed through the Closing Date and will timely file any Tax Returns for all Taxes required to be filed
after the date hereof which relate to the operation of the Business prior to the Closing Date. Buyer has paid all Taxes shown to be
due by such Tax Returns.
4.19 Full Disclosure. No representation or warranty made by Buyer in this Agreement or in any Buyer closing document
contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading in the light they were made.
4.20 Brokers. Buyer has not dealt with any broker, finder or other person entitled to any broker’s or finder’s fee, commission
or other similar compensation in connection with the transaction contemplated hereby other than Calyon Securities USA, LLC
who shall be compensated by Buyer.
ARTICLE 5
PRE-CLOSING COVENANTS
5.1 Conduct of Business Pending Closing. From the date hereof to and including the Closing Date, Seller shall operate the
Business in compliance with all applicable laws and only in the usual and ordinary course, consistent with past practice, and shall
not, without the prior written consent of FRB, which consent shall not be unreasonably withheld, conditioned or delayed, take or
omit to take any action, the effect of which act or omission would render any of Seller’s representations or warranties set forth
herein inaccurate as of the Closing Date or take or omit to take any action that would reasonably likely to delay or impair the
ability of the parties to consummate the transactions contemplated herein. Without limiting the generality of the foregoing, except
with the prior written consent of FRB which consent shall not be unreasonably withheld, delayed or conditional, from the date
hereof until the Closing Date, Seller shall not:
(a) adopt any change in its certificate of incorporation, by-laws or other governing document;
(b) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other material reorganization of Seller;
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(c) issue, any shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or
rights of any kind to acquire, any shares of capital stock of Seller;
(d) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any equity interest in or a portion of
the assets of, or by any other manner acquire any business or any person or division thereof;
(e) sell, lease, encumber (including by the grant of any option thereon) or otherwise dispose of any Purchased Asset;
(f) (i) incur or assume any long-term or short-term debt or issue any debt securities, (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person;
(iii) make or cancel, or waive any rights with respect to, any loans, advances or capital contributions to, or investments in, any
other person; or (v) mortgage or pledge any of the tangible or intangible assets or properties of Seller;
(g) enter into any license or other Contract with respect to any Purchased Asset;
(h) amend, modify or otherwise change the terms of any existing Contract to accelerate the payments due to Seller
thereunder;
(i) enter into any joint venture, partnership or other similar arrangement;
(j) enter into any Contract that limits the ability of Seller, or would limit the ability of Buyer after the Closing, to compete
in or conduct any line of business or compete with any Person in any geographic area or during any period;
(k) enter into any Contract relating to the distribution, sale, supply, license, marketing, co-promotion, research,
development or manufacturing of Purchased Assets of Seller or products licensed by Seller, or the Intellectual Property of Seller,
other than pursuant to any such Contracts currently in place (that have been disclosed in writing to Buyer prior to the date
hereof) in accordance with their terms as of the date hereof;
(l) modify, amend or terminate any Assumed Contract or any Assumed Liability or waive, release or assign any material
rights or claims thereunder;
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(m) enter into any Contract to the extent consummation of the transactions contemplated by this Agreement or
compliance by Seller with the provisions of this Agreement would reasonably be expected to conflict with, or result in a violation
or breach of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of, or result in, termination,
cancellation or acceleration of any obligation or to the loss of a benefit under, or result in the creation of any Encumbrance in or
upon any of the Purchased Assets under, or give rise to any increased, additional, accelerated, or guaranteed right or entitlements
of any third party under, or result in any material alteration of, any provision of such Contract;
(n) change or modify its accounting principles except as required to comply with the SEC filing requirements; and
(o) agree or commit to do any of the foregoing.
5.2 Sale. On the Closing Date, Seller shall deliver to FRB Sub a bill of sale substantially in the form attached hereto as
Exhibit C transferring to FRB Sub all of Seller’s rights, title and interest in and to the Physical Purchased Assets listed on
Schedule 1.2(a), free and clear of all Encumbrances (other than with respect to Assumed Liabilities), and by form of assignments
attached hereto as Exhibit D all of Seller’s rights title and interest in and to the Registered IP and the Unregistered IP listed on
Schedule 1.2(b), free and clear of all Encumbrances, in each case as evidenced by UCC financing statement reports of the
Secretaries of State of Nevada and California and confirmation of review of the Patent and Trademark Office filings dated within
10 days of the Closing Date.
5.3 Access Pending Closing. Concurrently with the execution and delivery of this Agreement, Buyer shall deliver to Seller a
schedule of due diligence matters that remain to be completed on or before the Closing Date (“Open Items”) Seller shall diligently
attend to providing to Buyer the information needed to satisfy itself as to the Open Items. From the date hereof to and including
the Closing Date, Seller shall allow Buyer and its agents and representatives reasonable access to the Business facilities, books
and records, employees, suppliers, and vendors of the Business during normal business hours and on reasonable notice, for the
purpose of completing its investigation of the then Open Items; provided, however, that Buyer shall not conduct any meetings
with employees, suppliers or vendors including without limitation Certified Technical Services, L.P. (“Certified”) and R.C.
Costello & Assoc. Inc. (“Costello”) without giving Seller notice not less than three (3) calendar days in advance of such meeting
and offering Seller an opportunity to participate in such meeting. Upon request of Seller, Buyer shall confirm the status of Open
Items and its need for any information required to satisfy itself as to any such Open Items.
5.4 Officer and Director Proxies. Within ten (10) Business Days after the Signing Date, Kreido shall deliver to FRB copies of
irrevocable proxies substantially in the form attached hereto as Exhibit K that Kreido has obtained, signed by the officers,
directors, board observer(s), and associates and affiliates thereof appointing Kreido or its designee to vote the shares of Kreido
common stock held by them of record and beneficially in favor of this Agreement and the transactions described herein. The total
number of shares represented by the proxies shall be not less than 40% of the total number of shares of Kreido common stock
entitled to vote.
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5.5 Shareholders’ Meeting. Within 20 Business Days after the Signing Date, Seller shall issue notice to the Kreido
shareholders of a meeting of its shareholders to be held within 60 days after the Signing Date to consider and act upon, among
other things, approval of this Agreement and the transactions contemplated by this Agreement. Kreido shall include with the
notice of the shareholder’s meeting a proxy statement or information statement containing information that Kreido’s management
determines to be material for the Kreido shareholder’s consideration and action upon the transactions contemplated herein,
including such rights of appraisal as may be required under Nevada law. Buyer shall provide to Kreido such information
concerning Buyer, its business, its financial condition, its management and its prospects as Seller may reasonably request for
presentation to, and consideration by, the Kreido shareholders. Kreido shall promptly inform Buyer of the vote/action by Kreido’s
shareholders regarding the transactions contemplated herein. Buyer and Seller acknowledge that Seller’s obligation hereunder is
to seek shareholder approval as contemplated herein and that the transactions are expressly subject to the approval of this
Agreement and the transactions contemplated herein by the holders of more than 50% of the total number of shares of Kreido
common stock issued and outstanding and entitled to vote.
5.6 Insurance. Upon a written request of the Buyer, to be delivered to Seller at least two (2) Business Days prior to the
Closing Date, Seller shall continue to maintain the Seller’s property, casualty and general liability insurance policies in effect as of
the date hereof for a period not to exceed twelve (12) months after the Closing Date and Buyer shall pay Seller in advance the
premiums required to maintain such insurance. Buyer shall have the right at any time to request in writing that Seller cancel such
insurance policies at the end of the applicable insurance coverage period.
ARTICLE 6
CONDITIONS TO SELLER’S OBLIGATIONS TO CLOSE
6.1 Representations and Warranties. Each of the representations and warranties of Buyer contained herein, or in any
certificate delivered pursuant hereto, shall be true and correct in all material respects on and as of the Closing Date.
6.2 Shareholder Consent. Seller shall have received the approval or consent of the Kreido shareholders holding more than
50% of the total number of shares of Kreido common stock issued and outstanding and entitled to vote on the Agreement and the
transactions contemplated herein.
6.3 Performance. Buyer shall have duly performed or complied in all material respects with all of the covenants, acts and
obligations to be performed or complied with by it hereunder at or prior to the Closing.
6.4 No Restraint or Litigation. No order, decree or ruling of any governmental agency shall have been entered, and no
action, suit or proceeding before any court, arbitration panel or other tribunal shall have been instituted (or threatened if Seller
reasonably believes that such threat will result in institution of an action, suit or proceeding) by any governmental agency or third
party, to restrain, prohibit, challenge or invalidate any of the transactions contemplated by this Agreement.
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6.5 Assignment and Assumption. On the Closing Date, Buyer shall execute and deliver to the Seller an Assignment and
Assumption Agreement in the form attached hereto as Exhibit E.
6.6 Officer’s Certificate. Buyer shall deliver to Seller at the Closing an Officer’s Certificate (a) certifying that the conditions
in Sections 6.1, 6.3 and 6.4 have been fulfilled, (b) certifying the resolutions authorizing this Agreement and the transactions
contemplated herein, and (c) identifying the incumbent officers of Buyer. There shall be attached to the officer’s certificate a true
and correct copy of the Articles of Incorporation of FRB and FRB Subsidiary certified by the Secretary of State of Nevada and
Kentucky, as applicable and certificates of Good Standing of FRB and FRB Subsidiary issued by the Secretary of State of Nevada
and Kentucky, as applicable.
6.7 Payments. Buyer shall pay to Seller the cash portion of the Purchase Price less the amount required to be paid to
Lienholders on the Closing Date in excess of Assumed Liabilities, pay to Seller the sum of $14,000 in payment of certain foreign
patent processing fees and costs paid by Seller and shall pay to Lienholders the amount required to be paid thereto on the
Closing Date.
6.8 Share Certificates and Warrants. Buyer shall have issued to Kreido share certificates representing the Buyer Stock and
the Buyer Warrants, provided that 300,000 shares of the Buyer Stock shall be delivered to the FRB transfer agent to be held in
escrow thereby pursuant to escrow instructions respecting the delivery of any or all of such shares of Buyer Stock solely in
connection with the exercise of Kreido Warrants and the return of any remaining escrowed shares to FRB upon expiration of the
escrow instructions. Seller acknowledges and agrees that the certificates representing Buyer Stock, the Buyer Warrant and the
Common Stock underlying the Buyer Warrant may bear the following or similar legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND NO
SUCH SECURITIES MAY BE SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT.”
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ARTICLE 7
CONDITIONS TO BUYER’S OBLIGATIONS TO CLOSE
7.1 Representations and Warranties. Each of the representations and warranties of Seller contained herein, or in any Seller
Document, shall be true and correct in all material respects as of the date of this Agreement and shall be true and correct in all
material respects as of the Closing Date as though made as of the Closing Date.
7.2 Shareholder Consent. Seller shall have received the approval or consent of the Kreido shareholders holding more than
50% of the total number of shares of Kreido common stock issued and outstanding and entitled to vote on the Agreement and the
transactions contemplated herein.
7.3 Performance. Seller shall have duly performed or complied in all material respects with all of the covenants, acts and
obligations to be performed or complied with by them hereunder at or prior to the Closing. The transactions contemplated herein
shall have been authorized by all necessary actions on the part of Seller.
7.4 Assignment Documents. Seller shall have delivered to Buyer an executed bill of sale and Assumption Agreement and
such other instruments of transfer and consents as Buyer may reasonably request to affect the transfer of the Purchased Assets
in accordance herewith, including, but not limited to an Assignment and Assumption Agreement in the form attached hereto as
Exhibit E, and an assignment of any assignment of inventions agreements made by Philip Lichtenberger, Alan McGrevy,
Dr. Alexey Shenkman in favor of Seller.
7.5 Tender of Possession. Except as modified by the provisions of Section 1.8 and Section 1.9 hereof and Schedules 1.2(a)
and 1.2(b), Seller shall have tendered to Buyer possession of all of the Physical Purchased Assets, where is and as is.
7.6 Officer’s Certificate. Seller shall deliver to Buyer at the Closing an Officer’s Certificate (a) certifying that the conditions
in Sections 7.1, 7.2, 7.3 and 7.7 have been fulfilled, (b) certifying the resolutions of the Sellers authorizing this Agreement and the
transactions contemplated herein, and (c) identifying the incumbent officers of the Seller and (d) certifying that this Agreement
and the transactions contemplated herein have been approved by the holders of more than 50% of the Kreido common stock .
There shall be attached to the Officer’s Certificate and true and correct copy of the Articles of Incorporation of Kreido and Kreido
Labs certified by the Secretary of State of Nevada or California, as applicable, Certificates of Good Standing of Kreido and Kreido
Labs issued by the Secretaries of State of Nevada and California, as applicable, and copies of the authorizing resolutions certified
by the Secretary or Assistant Secretary of Kreido.
7.7 No Restraint or Litigation. No order, decree or ruling of any Governmental Authority shall have been entered, and no
action, suit or proceeding before any court, arbitration panel or other tribunal shall have been instituted (or overtly threatened if
the Buyer reasonably believes that such threat will result in institution of an action, suit or proceeding) by any Governmental
Authority or third party, to restrain, prohibit, challenge or invalidate any of the transactions contemplated by this Agreement or
which might adversely affect the right of the Buyer to own the Purchased Assets.
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7.8 Necessary Consents. Seller shall have obtained and delivered to Buyer all of the third party consents required by Buyer,
including consents and/or assignments of Assumed Contracts and Assumed Liabilities, necessary to consummate the transaction
contemplated by this Agreement.
7.9 Encumbrances. Seller shall have delivered to Buyer UCC, state tax lien, and bankruptcy search reports from the
Secretaries of State of Nevada and of California or search companies reasonably acceptable to Buyer and a Patent and Trademark
Office lien searches as of a date no more than five (5) Business Days before the Closing Date indicating that there are no
Encumbrances of record with respect to any Purchased Assets, other than those which will be discharged by the payment of
money at the Closing or those which are approved or accepted in writing by the Buyer. Seller shall deliver to Buyer: (i) pay off
letters in form and substance reasonably satisfactory to Buyer from any creditor or vendor of Seller holding an Encumbrance on
Purchased Assets which shall provide that all outstanding obligations or any outstanding indebtedness to any such creditor or
vendor shall be satisfied and discharged in full upon the payment by Buyer in accordance with Section 1.7 hereof of the amounts
set forth on Schedule 7.9 hereof; and (ii) a written instrument from Certified, a form of which is attached as Exhibit H hereto.
7.10 Employees. Phil Lichtenberger shall be, and Alan McGrevy shall have been, released from their employment agreements
with Seller with full rights to enter into the employ of Buyer.
7.11 Accounting. At the Closing, Kreido will provide to Buyer copies of detailed statement of operations and balance sheets
for each of the Sellers and copies of the consolidated statement of operations, statement of cash flows, statement of shareholders
equity and balance sheet for Kreido for the annual and quarterly accounting periods from January 1, 2007 to December 31, 2008,
an audited inception to December 31, 2007 statement of operations, and copies of the additional financial information listed on
Schedule 7.11. In addition, Kreido will provide to its outside independent auditors a letter indicating that they are authorized to
provide information relating to the above information to representatives of FRB, at the expense of FRB, in connection with the
preparation of financial statements of FRB which includes data relating to the Purchased Assets.
7.12 Good Standing. Seller shall have delivered to Buyer a good standing certificate from the Secretary of State of the State of
Nevada and California, as applicable, certifying the good standing of the Seller.
7.13 Other Deliverables. Seller shall have delivered to Buyer all other documents, agreements or certificates as set forth in
this Agreement.
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ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by Seller.
(a) Subject to the paragraphs 1.9 and 8.1(b) and Sections 8.3 and 8.4 hereof, Seller shall indemnify, defend and hold
harmless Buyer and its directors, officers, agents, representatives, successors and assigns (collectively, the “Buyer Indemnified
Parties”) against all costs, expenses, losses, damages, fines, and penalties (including, without limitation, reasonable attorneys’
fees) (collectively, “Damages”) incurred by the Buyer Indemnified Parties arising directly or indirectly from, with respect to or in
connection with:
(i) Any breach of any representation or warranty of Seller contained in this Agreement or any other Seller
Document;
(ii) the breach by Seller of any covenant or agreement contained in this Agreement or any other Seller
Document;
(iii) any claim, suit, action or cause of action or proceeding, whether instituted or commenced prior to or after the
Closing Date, which relates to any of the Excluded Liabilities whether before or after the Closing Date; or
(iv) any and all debts, liabilities and obligations of, and any and all violation of laws, rules, regulations, codes or
orders by Seller, direct or indirect, fixed, contingent, legal, statutory, contractual or otherwise, which exist at
or as of the Closing Date or which arise after the Closing Date but which are based upon or arise from any
act, transaction, circumstance, sale or providing of works, material, product or services, state of facts or other
condition which occurred or existed, on or before the Closing Date, whether or not then known, due or
payable except with respect to or under the Assumed Contracts and Assumed Liabilities.
(b) Notwithstanding anything in Section 8.1(a) to the contrary, Seller will not be obligated to make any indemnification
payment to any Buyer Indemnified Parties (an “Indemnification Payment”) unless and until the aggregate amount of Damages
exceeds the sum of $50,000, (in which case the Buyer Indemnified Persons shall be entitled to seek compensation for all such
Damages) and in no event shall the total amount of Indemnification Payments made by the Seller exceed an amount equal to One
Million Dollars ($1,000,000 (the “Cap”); provided that the Cap shall not apply to claims of fraud or intentional misrepresentation of
a material fact. All indemnification payments shall be made in shares of Buyer Stock with each share valued at $8.00 per Share.
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8.2 Indemnification by Buyer.
(a) Subject to the paragraph 8.2(b) and Sections 8.3 and 8.4 hereof, Buyer shall indemnify, defend and hold harmless
Seller and its shareholders, directors, officers, agents, representatives, successors and assigns (collectively, the “Seller
Indemnified Parties”) against all Damages, incurred by the Seller Indemnified Parties arising directly or indirectly from, with
respect to or in connection with:
(i) Any breach of any representation or warranty of Buyer contained in this Agreement or any Buyer closing
document; and
(ii) the breach by Buyer of any covenant or agreement contained in this Agreement or any Buyer closing
document.
(b) Notwithstanding anything in Section 8.2(a) to the contrary, Buyer will not be obligated to make any indemnification
payment to any Seller Indemnified Parties (a “Buyer Indemnification Payment”) unless and until the aggregate amount of
Damages exceeds the sum of $50,000 (in which case Seller Indemnified parties shall be entitled to seek compensation for all such
damages) and in no event shall the total amount of Indemnification Payments made by the Seller exceed an amount equal to the
Cap provided that such Cap shall not apply to claims of fraud or intentional misrepresentation of material fact. All indemnification
payments shall be made in shares of FRB Stock with each share valued at $8 per share.
8.3 Survival. All covenants and agreements of any party hereto shall survive the Closing. All representations and warranties
of any party hereto set forth herein shall survive the Closing for a period of one (1) year following the Closing Date, at which time
they shall be deemed terminated. Any claim which either party makes in good faith against the other party shall be made in writing
prior to the termination date provided for in this Section 8.3 and shall survive the termination date, and the party making such
claim shall have the right to pursue the same in accordance with the indemnification provisions provided for in this Agreement.
8.4 Procedures for Indemnification of Potential Damages.
(a) Within ten (10) business days after receipt by a potentially indemnified party hereunder of any actual or potential
Damages, such potentially indemnified party shall, give written notice to the Buyer or Seller, as the case may be (in either case the
“Indemnifying Party”). The failure to so notify the Indemnifying Party shall relieve it of liability that it may have to any
indemnified party with respect to such action only if and to the extent the failure to so notify has prejudiced the indemnifying
party. The Indemnifying Party shall be entitled to participate in all negotiations and discussions with the resolution of such
Damages and, to the extent that it may elect, to assume primary responsibility therefor or the defense thereof and after written
notice from the Indemnifying Party to such indemnified party of acceptance of primary responsibility or defense shall not be liable
for any reasonable and documented legal or other expenses subsequently incurred by such indemnified party in connection with
negotiations or the defense thereof, other than reasonable costs of investigation unless, in the written opinion of counsel to any
indemnified party (which counsel shall be reasonably acceptable to the Indemnifying Party), the interests of any indemnifying
party may conflict with the interests of the indemnified party.
29
(b) The indemnified party shall have the right to employ separate counsel in any and all such actions and to participate
in the defense thereof, but the fees and expenses of such counsel shall not be at the expense of the Indemnifying Party if the
Indemnifying Party has assumed primary responsibility therefor or the defense of such action with counsel reasonably
satisfactory to the indemnified party;
(c) If the Indemnifying Party elects to assume primary responsibility for or the defense of such action, no compromise
or settlement thereof may be affected by the indemnified party without the Indemnifying Party’s written consent (which shall not
be unreasonably withheld or delayed), provided however, that the Indemnifying Party is not required to consent to any settlement
unless Indemnifying Party receives as part of such settlement a legally binding and enforceable unconditional satisfaction and
release of all claimed liabilities or obligations in form and substance reasonably satisfactory to the Indemnified Party. If notice is
timely given to an indemnifying party and it does not, within twenty (20) days after the indemnified party’s notice is received, give
notice to the indemnified party of the Indemnifying Party’s election to assume primary responsibility therefor or the defense
thereof, the Indemnifying Party shall only be bound by any settlement of the claim for Damages effected by the indemnified party.
(i) such settlement does not require the indemnified party to admit of any wrongdoing or take or refrain from taking any action,
(ii) is limited to monetary damages; and (iii) the indemnified party receives as part of such settlement an unconditional release of
all claims pertaining thereto. Upon its request of any amount to be paid by an Indemnifying Party pursuant to this Section 8, the
indemnified party shall deliver to the Indemnifying Party such documents as it may reasonably request assigning to the
Indemnifying Party any and all rights the indemnified party may have against third parties with respect to the claims for which
indemnification is being received.
(d) Notwithstanding any provision of this Agreement to the contrary, Seller shall not be entitled to assume or direct the
defense or settlement of any Proceeding if the amount of any Damages with respect to such proceeding is reasonably expected to
exceed the Cap after taking into account all liabilities which the Seller have, has, have had or could reasonably be anticipated to
have by reason of this Article 8, whether in respect of such proceeding and/or the events or circumstances giving rise thereto
and/or in respect of all other claims and/or indemnification obligations. In such event, Buyer shall be entitled to control the
defense and settlement of any such proceeding, and, without limiting the provisions of Section 8 hereof, the Indemnifying Party
shall be liable for all Damages in connection thereunder.
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ARTICLE 9
TERMINATION
9.1 Termination. This Agreement may be terminated at any time prior to the Closing as follows:
(a) By mutual agreement of the parties;
(b) by Buyer if Buyer is then not in breach of any of its material obligations hereunder, upon a material breach of any
representation or warranty or violation of covenant by Seller that is not remedied within ten (10) Business Days after notice of
such breach or violation; and
(c) by Seller if Seller is not in breach with any of its material obligations hereunder, upon a breach of any representation
or warranty or violation of covenant by Buyer that is not remedied within ten (10) Business Days after notice of such breach or
violation;
(d) by either Buyer or Seller if Closing shall not have occurred at or before 11:59 p.m. Chicago Time, on April 1, 2009,
provided that the right to terminate the Agreement under this Section 9.1(d) shall not be available to any party whose failure to
fulfill any of its obligations under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or
prior to the aforesaid date.
9.2 Survival. In the event this Agreement is terminated pursuant to Section 9.1, (i) this Agreement shall become null and void
and of no further force and effect, subject to Section 9.5 and (ii) except or provided in Section 9.5, there shall be no liability on the
part of either Seller or Buyer or their respective officers, directors or affiliates.
9.3 Certain Effects of Termination. In the event of the termination of this Agreement by Seller or Buyer as provided in
Section 9.1, any party, if so requested by another party, will return promptly every document furnished to it by the other party in
connection with the transactions contemplated hereby, whether so obtained before or after the execution of this Agreement, and
any copies thereof (except for copies of documents publicly available) which may have been made, and will use reasonable efforts
to cause its representatives and any representatives of financial institutions and investors and others to whom such documents
were furnished promptly to return such documents and any copies thereof any of them may have made.
9.4 Remedies. Notwithstanding any termination right granted in Section 9.1, in the event of the non-fulfillment of any
condition to a party’s closing obligations, in the alternative, such party may elect to do one of the following:
(a) proceed to close, despite the non-fulfillment of any closing condition, it being understood that consummation of the
Closing shall not be deemed a waiver of a breach of any representation, warranty or covenant or of such party’s rights and
remedies with respect thereto;
(b) decline to close, terminate this Agreement, and thereafter seek damages to the extent permitted in Section 9.5; or
(c) seek specific performance. The Parties agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is
accordingly agreed that each Party shall be entitled to an injunction or injunctions to prevent breaches of this Agreement
(without any obligation of such Party to post any bond or other surety in connection therewith) and to enforce specifically the
terms and provisions of this Agreement in addition to any other remedy to which such Party may be entitled at law or in equity.
31
9.5 Right to Seek Damages.
(a) Neither Seller nor Buyer shall have any right whatsoever to assert a claim against the other party, and except as
otherwise provided herein, all rights and obligations of the parties hereunder shall terminate without any liability of any party to
any other party, unless the circumstances giving rise to such termination were caused by either: (a) the other party’s failure to
comply with any of its material obligations set forth herein, or (b) the other party’s material breach of a representation or warranty
contained in Section 3 or Section 4 hereof, in which event termination shall not be deemed or construed as limiting or denying any
legal or equitable right or remedy of the non breaching party. Notwithstanding anything in the forgoing to the contrary, in the
event of a termination of this Agreement by Seller under Section 9.1(c) or 9.1(d) (only if Buyer has failed to fulfill its obligations
hereunder or has been the cause or the result of the failure to consummate the transactions contemplated hereunder) without a
Closing, the Escrow Deposit shall be promptly disbursed to Seller. In the event of a termination of this Agreement by Buyer under
Section 9.1(b) or (d) (only if Seller has failed to fulfill its obligations hereunder or has been the cause or the result of the failure to
consummate the transactions contemplated hereunder) without a Closing, the Escrow Deposit shall be promptly disbursed to
Buyer. In the event of a termination of this Agreement by Buyer and Seller under Section 9.1(a), one-half (50%) of the Escrow
Deposit shall be promptly disbursed to Buyer and one-half (50%) of the Escrow Deposit shall be promptly disbursed to Seller.
(b) In the event of: (A) termination by Buyer in accordance with the provisions of Section 9.1(b) or 9.1(d), or if Seller
refuses to consummate the transactions contemplated herein despite the satisfaction of all conditions set forth in Section 7
hereof, and (B) within a period of 360 days after such termination, Seller sells any or all of the Purchased Assets to any other party
or successor to Kreido’s estate, then Kreido shall pay FRB the amount of $250,000 in cash in immediately available funds (“FRB
Damages”) upon the consummation of the transaction referred to in (B) above.
(c) The payment of the FRB Damages, or Escrow Deposit shall be liquidated damages and not as a penalty, and shall be
in lieu of any other right or remedy that a party may have hereunder. In no event shall any Person or party be entitled to such
recourse for damages against any officer or director of Buyer or Seller, any such recourse being hereby expressly waived. In
addition, Sections 9.3, 9.5(c), 9.5(d), 10.3, 10.5, 10.8 and 10.11 shall survive the termination of this Agreement.
(d) Buyer hereby agrees that in the event that this Agreement has been terminated by Seller in accordance with
Section 9.1(c) or (d) above due to Buyer embarking on a course of conduct designed to avoid the Closing, Buyer shall not be
entitled to acquire or contract to acquire any or all of the Purchased Assets for a period of 360 days following such termination
except upon the payment to Seller or Seller’s estate, successors or assigns of an amount not less than the Purchase Price plus the
amount of the Assumed Liabilities.
32
ARTICLE 10
MISCELLANEOUS
10.1 Transaction Expenses. Each party will bear all of its own expenses incurred in the negotiations and consummation of the
transactions contemplated hereby, including all legal, accounting and other advisors’ fees.
10.2 Notices.
(a) 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 delivered by a regular overnight delivery service or
by means of facsimile communication addressed as follows:
If to Buyer to: Four Rivers BioEnergy Inc.

14 South Molton Street
London W1K 5QP
Attention: Martin Thorp
Facsimile No.: +44 161 241 5365
And

1637 Shar-Cal Road
P.O. Box 1056
Attention: Stephen Padgett
Facsimile No.: (270) 395-0323
with a copy to: Golenbock Eiseman Assor Bell & Peskoe LLP
437 Madison Avenue
New York, New York 10022
Attention: Andrew Hudders, Esq.
Facsimile No.: (212) -754-0330
If to Seller to: Kreido Biofuels, Inc.

Kreido Laboratories
1070 Flynn Road
Camarillo, CA 93010
Attention: G.A. Ben Binninger and John Philpott
Facsimile No.: (805) 384-0989
33
with a copy to: DLA Piper LLP (US)

203 North LaSalle Street
Suite 1900
Chicago, IL 60601
Attention: John Heuberger
Facsimile No.: (312) 630-5322
(b) 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.
All such notices, requests, demands, waivers and other communications shall be deemed to have been received (w) if by
personal delivery on the day of such delivery, (x) if by next-day or overnight mail or delivery, on the business day following
delivery to the service and (y) 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.
10.3 Written Agreement to Govern. This Agreement (along with all documents and instruments to be delivered pursuant
hereto, including all Exhibits and Schedules) sets forth the entire understanding, and supersedes all prior and contemporaneous
discussions, negotiations, understandings and oral and written agreements, among the parties relating to the subject matter it
contains and merges all prior and contemporaneous discussions among them. No party shall be bound by any definition,
condition, representation, warranty, covenant or provision other than as expressly stated in this Agreement or in the other
documents referred to in this Agreement which form a part of this Agreement. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and together shall constitute one and the same agreement.
10.4 Further Assurances.
(a) The parties agree that before and after the Closing, they shall use all reasonable efforts to take, or cause to be taken
(i) all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement; (ii) to execute any documents, instruments or conveyances of any kind which may
be reasonably necessary or advisable to carry out any of the transactions contemplated hereunder and thereunder; and (iii) to
cooperate with each other in connection with the foregoing. Upon Buyer’s request and at Buyer’s cost and expense, Seller shall
deliver Buyer, before or after the Closing, copies of all Seller’s accounting records requested by Buyer and shall afford Buyer
access to Seller’s auditors.
(b) Each party agrees that throughout the term of this Agreement it will cooperate with and make available to the other
party, during normal business hours, all books and records, information and employees (without substantial disruption of
employment) retained and remaining in existence after the Closing which are necessary or useful in connection with any financial
statement audit, tax inquiry, audit, investigation or dispute, any litigation or investigation or any other matter requiring any such
books and records, information or employees for any reasonable business purpose and will take reasonable measures to cause its
representatives, including its accountants to do the same.
34
10.5 Severability. If any provision of this Agreement is judicially or administratively interpreted or construed as being
unenforceable, such provision shall be inoperative, and the remainder of this Agreement shall remain binding upon the parties. If
any provision of this Agreement is determined by a court of competent jurisdiction to be invalid as written by reason of its scope,
the parties intend that such provision be enforced to the maximum extent permitted under applicable laws.
10.6 Interpretation. The headings in this Agreement are inserted for convenience of reference only and are not a part of and
will not control or affect the meaning of this Agreement.
10.7 Waiver of Provisions. The terms, covenants, representations, warranties and conditions of this Agreement may be
waived only by a written instrument executed by the party waiving compliance. The failure of any party at any time to require
performance of any obligation under this Agreement and all other instruments and documents to be delivered pursuant hereto
shall in no manner affect the right at a later date to enforce the same. No waiver by any party of any condition, or any breach of
any provision, term, covenant, representation or warranty contained in this Agreement, whether by conduct or otherwise in any
one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or the breach
of any other provision, term, covenant, representation or warranty of this Agreement.
10.8 Law to Govern. The validity, construction and enforceability of this Agreement shall be governed in all respects by the
laws of the State of New York, without regard to its conflict of laws rules.
10.9 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, administrators successors and assigns; however, neither this Agreement nor the rights
or obligations of any party hereunder may be assigned except with the written consent of the other parties, which consent shall
not be unreasonably withheld except that this Agreement may be assigned by FRB Sub to any other wholly owned entity of FRB.
10.10 Material Adverse Change or Material Adverse Effect. The term “Material Adverse Effect” or “Material Adverse
Change” means a material adverse effect on the assets, business, condition (financial or otherwise) prospects or results of
operations of Seller or Buyer, as the case may be, taken as a whole, provided, that none of the following alone shall be deemed, in
and of itself, to constitute a Material Adverse Effect: or Material Adverse Change: (i) a change in the market price or trading
volume of the shares of FRB’s or Kreido’s Common Stock, or (ii) changes in general economic conditions or changes affecting the
industry in which the FRB or Seller operates generally.
10.11 Recovery of Fees and Expenses. In the event any party shall bring legal action to enforce its rights or the obligations of
the other party under this Agreement or to pursue its remedies at law or in equity, the parties agree that the successful party in
said legal proceedings shall be entitled to recover from the other party the reasonable costs and expenses, including attorneys’
fees and court costs, incurred in such legal action.
10.12 Business Day. The term “Business Day” means any day other than a Saturday, Sunday or any weekday on which the
national banks located in New York are officially closed for business in the State of New York.
(signature page follows)
35
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year first written above.
Seller:
KREIDO BIOFUELS, INC., a Nevada corporation
By: /s/ G. A. Ben Binninger

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

Name: G. A. Ben Binninger
Title: Chief Executive Officer
Buyer:
FOUR RIVERS BIOENERGY INC., a Nevada corporation
By: /s/ Gary Hudson

Name: Gary Hudson
Title: President & CEO
THE FOUR RIVERS BIOENERGY COMPANY, INC.

a Kentucky corporation
By: /s/ Gary Hudson

Name: Gary Hudson
Title: President & CEO
Exhibits and Schedules intentionally omitted

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Kreido Biofuels, Inc. 8-K (Events or Changes Between Quarterly Reports) 2009-02-23

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KREIDO BIOFUELS, INC.

Nevada 333-130606 20-3240178

1070 Flynn Road

Registrant’s telephone number, including area code: (805) 389-3499

Item 8.01 Other Events.

Item 9.01 Financial Statements and Exhibits.

Dated: February 19, 2009 KREIDO BIOFUELS, INC.

By: /s/ G.A. Ben Binninger

KREIDO BIOFUELS, INC.

February 18, 2009

G.A. Ben Binninger

YOUR VOTE IS VERY IMPORTANT

KREIDO BIOFUELS, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

• To elect four directors of Kreido Biofuels.

By order of the Board of Directors:

Philip Lichtenberger, Secretary

SUMMARY TERM SHEET 1

The Asset Sale 1

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION 8

THE STOCKHOLDERS MEETING 10

Date, Time, Place and Purpose of the Special Meeting 10

THE ASSET SALE 12

Background of the Asset Sale 12

THE ASSET PURCHASE AGREEMENT 16

The Asset Sale 16

ELECTION OF DIRECTORS (PROPOSAL NO. 2) 26

ADJOURNMENT OF THE STOCKHOLDERS MEETING (PROPOSAL NO. 3) 28

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 28

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 30

STOCKHOLDER PROPOSALS; OUTSIDE AUDITOR 41

HOUSEHOLDING OF PROXY STATEMENT 41

WHERE YOU CAN FIND ADDITIONAL INFORMATION 42

• Asset Purchase Agreement

SUMMARY TERM SHEET

The Asset Sale

Stockholder Vote Required

Reasons for the Asset Sale

• Advice from our financial consultant, Breakwater Investments, LLC;

The Asset Purchase Agreement

The Stockholders Meeting

Voting. Kreido Biofuels is offering you three methods of voting:

• You may attend the meeting and vote in person.

Help in Answering Questions

• By mail addressed to:

Ben Binninger or John Philpott

• By calling (805) 389-3499; or

• By visiting our Web site at www.kreido.com.

Information about the Companies

Kreido Biofuels, Inc.

Four Rivers BioEnergy Inc.

Q: What is the purpose of the Stockholders Meeting?

Q: Who may vote?

Q: How many votes do I have?

Q: What vote is required?

Q: How do I vote my shares?

Q: May I revoke my proxy?

• sending in another signed proxy card with a later date;

Q: Can I still vote in person if I have already granted my proxy?

Q: What will happen if the Asset Sale is not approved?

Q: Can I still sell my shares of Kreido Biofuels’ common stock?

Q: What are Kreido’s plans after the Asset Sale?

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION