Document:

AMENDED
      AND RESTATED SUBSCRIPTION AGREEMENT

    

    This
      AMENDED AND RESTATED SUBSCRIPTION AGREEMENT (this “Agreement”)
      is
      made and entered into effective as of June 27, 2008 (the “Effective
      Date”),
      by
      and between KAL Energy, Inc., a Delaware corporation (the “Company”),
      and
      the subscribers listed on Exhibit
      A
      attached
      hereto (each, a “Subscriber”
and
      collectively, the “Subscribers”).

    

    RECITALS

    

    A. The
      Company and the Subscribers are parties to those certain Subscription
      Agreements, each dated as of June 10, 2007 (the “Original
      Agreements”),
      pursuant to which the Company issued and sold to the Subscribers an aggregate
      of
      937,500 shares of its common stock at a purchase price of $0.80 per share,
      resulting in gross proceeds to the Company of approximately $750,000. Pursuant
      to the Original Agreements, the Company agreed to issue to the Subscribers
      warrants to purchase an aggregate of 937,500 shares of its common stock at
      an
      exercise price of $1.428 per share
      (each, a
“June
      2007 Warrant”).
      The
      transaction described in this Recital A shall be referred to herein as the
      “June
      2007 Financing.”

     

    B. Subsequent
      to the closing of the June 2007 Financing, a dispute arose between the Company
      and the Subscribers as a result of administrative non-conformance relating
      to
      the Original Agreements (the “Dispute”).

    

    C. Following
      negotiations with the Subscribers, the Company agreed to resolve the Dispute
      by
      (i) reducing the purchase price for the shares of the Company’s common stock
      issued in the June 2007 Financing from $0.80 per share to $0.15 per share,
      which
      price represents the purchase price for shares of the Company’s common stock
      issued to certain investors in a private placement offering between March and
      June 2008 (the “New
      Purchase Price”),
      and
      (ii) increasing the aggregate number of shares issued to the Subscribers from
      937,500 shares to 5,000,000 shares. In addition, the Company and the Subscribers
      agreed to cancel and terminate the Warrants.

    

    D. The
      Company and the Subscribers desire that this Agreement shall amend, restate
      and
      supersede the Original Agreements, and acknowledge that the Original Agreements
      shall be terminated concurrent with the execution of this Agreement, and the
      Company and the Subscribers agree that the Subscribers shall acquire such number
      of shares of the Company’s common stock (the “Shares”)
      as are
      set forth opposite each Subscriber’s name on Exhibit
      A
      attached
      hereto at the New Purchase Price, on the terms and subject to the conditions
      set
      forth herein (the “Subscription”).

    

    AGREEMENT

    

    NOW,
      THEREFORE, in consideration of the mutual covenants hereinafter set forth,
      and
      for other good and valuable consideration, the receipt and sufficiency of which
      are hereby acknowledged, the parties hereto hereby agree as
      follows:

    

    1. Subscription.

    

    (a) Subject
      to the terms and conditions hereof, the Subscribers hereby tender this
      Subscription to purchase that certain number of Shares set forth opposite each
      Subscriber’s name on Exhibit
      A
      attached
      hereto at the New Purchase Price contemporaneous with the delivery of an
      executed copy of this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    (b) The
      Company acknowledges and agrees that each Subscriber previously tendered payment
      of the total aggregate purchase price for his, her or its Shares, in the amount
      set forth opposite each Subscriber’s name on Exhibit
      A
      attached
      hereto, to the Company. The Subscription is irrevocable and shall be made by
      delivery of this Agreement to the Company.

    

    2. Acceptance
      of Agreement.
      The
      Company proposes to issue up to 5,000,000 shares of its common stock to the
      Subscribers for an aggregate maximum purchase price of $750,000. The Company
      shall have the right to accept or reject this Subscription, in whole or in
      part,
      in its sole and absolute discretion. In addition, the Company shall have the
      right to reject this Subscription Agreement if it believes for any reason that
      any Subscriber is not a “non-U.S. person” within the meaning of Regulation S
      (“Regulation
      S”)
      promulgated by the Securities Act of 1933, as amended (the “Securities
      Act”).
      This
      Agreement shall be deemed to be accepted by the Company only when the Company
      executes the Agreement in the space provided. Upon execution of this Agreement
      by the Company, the Company will forward a fully executed copy of same to each
      Subscriber’s address as set forth on the signature page hereof.

    

    3. Cancellation
      of June 2007 Warrants.
      Each
      Subscriber hereby agrees and acknowledges that by virtue of this Agreement,
      as
      of the Effective Date, each June 2007 Warrant shall be cancelled and terminated,
      and such Subscriber shall have no further rights thereunder. Each Subscriber
      acknowledges and agrees that the Company did not issue such Subscriber a June
      2007 Warrant and that such Subscriber does not hold, and has not held, a June
      2007 Warrant. Each Subscriber, on behalf of himself, herself or itself, and
      on
      behalf of all spouses, heirs, predecessors, successors, assigns, representatives
      or agents of such Subscriber (including, without limitation, any trust of which
      such Subscriber is the trustee or which is for the benefit of such Subscriber
      or
      a member of his, her or its family), to the fullest extent permitted by law,
      hereby acknowledges that the consideration received by such Subscriber hereunder
      is in full satisfaction of any and all rights such Subscriber may have with
      respect the June 2007 Warrants and any other rights to purchase the Company’s
      capital stock as to which such Subscriber has any right, title or interest.
      Each
      Subscriber will, upon request, execute and deliver any additional documents
      reasonably requested by the Company as may be necessary or desirable to
      consummate the transactions contemplated by this Section 3.

    

    4. Release
      of Claims; Waiver.

    

    (a) Release
      of Claims.
      Except
      for the rights, duties, and obligations created by this Agreement, each
      Subscriber does hereby and forever fully and finally waive, release and
      discharge the Company, together with its representatives, administrators,
      agents, stockholders, directors, officers, employees, successors, assigns and
      all persons acting through, under, or in concert with them (hereinafter
      collectively referred to as the “Releasees”),
      from
      and against (i) any obligations the Company would otherwise have with respect
      to
      the Original Agreements and the June 2007 Warrants and (ii) any and all claims,
      demands, liabilities, obligations, promises, agreements, controversies, losses,
      rights, damages, expenses, attorneys fees, costs, and causes of action
      (hereinafter collectively referred to as “Claims”),
      whether known or unknown, suspected or unsuspected, and whether now existing
      or
      hereafter arising, and in any manner related to any act, omission, matter or
      event connected with or relating to the June 2007 Financing, the Original
      Agreements, the June 2007 Warrants or any other contract, agreement, or
      transaction entered into, contemplated by or relating to the June 2007
      Financing, the Original Agreements and the June 2007 Warrants. Each Subscriber
      acknowledges that the Releasees are intended third party beneficiaries of his,
      her or its release of Claims and other obligations hereunder, and shall be
      entitled to enforce the provisions of this Agreement related to such release
      and
      obligations as though a party hereto.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (b) Waiver
      of Civil Code Section 1542.
      As part
      of the foregoing release, each Subscriber hereby waives the protection afforded
      to creditors under Section 1542 of the California Civil Code, and any
      substantially similar provisions under the laws of the United States, any state
      of the United States or any foreign state. Section 1542 provides: 

    

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

    

    Each
      Subscriber hereby acknowledges that the waiver of the protection provided by
      Section 1542 and any substantially similar provisions under the laws of the
      United States, any state of the United States or any foreign state is a material
      inducement for the Company to enter into this Agreement and that each Subscriber
      intends to waive all protection provided by Section 1542 and its
      equivalents.

    

    5. Closing:
      Conditions to Closing.

    

    (a) Time
      and Place of Closing.
      Subject
      to Section 5(b) below, the closing of the sale and purchase of the Shares shall
      take place in the offices of the Company on such date and at such time as shall
      be selected by the Company (the “Closing”).

    

    (b) Subscribers’
      Conditions to Closing.
      Each
      Subscriber’s obligations hereunder are subject to the fulfillment, prior to or
      at the Closing, of each of the following conditions:

    

    (i) Performance
      of the Company.
      The
      Company shall have performed and complied with all agreements and conditions
      required by this Agreement to be performed or complied with by it prior to
      or at
      the Closing.

    

    (c) Company’s
      Conditions to Closing.
      The
      Company’s obligations hereunder are subject to acceptance by the Company of the
      Subscription, and to the fulfillment, prior to or at the Closing, of each of
      the
      following conditions:

    

    (i) Representations
      and Warranties.
      The
      representations and warranties of each Subscriber contained in this Agreement
      shall be true and correct at the Closing.

    

    (ii) Proceedings
      and Documents.
      The
      Company and Stradling Yocca Carlson & Rauth, its counsel, shall have
      received all such counterpart originals or certified or other copies of such
      documents as the Company may reasonably request.

    

    (iii) Contribution.
      The
      Company acknowledges prior receipt from each Subscriber of his, her or its
      aggregate purchase price for the Shares.

    

    6. Representation
      as to Investor Status.
      In
      order for the Company to offer and sell the Shares in compliance with Regulation
      S of the Securities Act the information set forth on the signature page hereto
      must be obtained regarding each Subscriber’s investor status. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7. Other
      Representations and Warranties of the Subscribers.
      Each
      Subscriber hereby represents and warrants to the Company, severally and not
      jointly, as follows:

    

    (a) The
      Subscriber acknowledges and agrees that the offer and sales of the Shares have
      not been registered under the Securities Act and the Shares may not be offered
      or sold in the United States or to a “U.S. Person” as defined in Exhibit
      B
      attached
      hereto (“U.S.
      Person”)
      for at
      least a one (1) year period commencing on the date of the purchase (the
“Restricted
      Period”)
      except
      pursuant to a registration statement which has been declared effective under
      Section 5 of the Securities Act unless an exemption from the registration
      requirements of the Securities Act is available. The Subscriber acknowledges
      and
      agrees that the certificates evidencing the Shares will contain a legend setting
      forth the foregoing restriction.

    

    (b) The
      Subscriber acknowledges and agrees that any offer or sale in the United States
      or to a U.S. Person after expiration of the Restricted Period will be made
      in
      accordance with the requirements of the Securities Act. In that regard, any
      such
      offer or sale will be registered under the Securities Act or will be made
      pursuant to an exemption from such registration requirements. The Subscriber
      hereby confirms that it is acquiring the Shares for investment purposes and
      not
      with a view to the distribution of the Shares.

    

    (c) The
      Shares are being acquired for the Subscriber’s own account for investment, with
      no present intention of distributing or selling any portion thereof within
      the
      meaning of the Securities Act, and will not be transferred by the Subscriber
      in
      violation of the Securities Act or the then applicable rules or regulations
      thereunder. No one other than the Subscriber has any interest in or any right
      to
      acquire the Shares. The Subscriber understands and acknowledges that the Company
      will have no obligation to recognize the ownership, beneficial or otherwise,
      of
      such Shares by anyone but the Subscriber.

    

    (d) The
      Subscriber’s financial condition is such that the Subscriber is able to bear the
      risk of holding the Shares for an indefinite period of time and the risk of
      loss
      of the Subscriber’s entire investment in the Company.

    

    (e) The
      Subscriber has had the opportunity to review the Company’s Annual Report on
      Form 10-KSB for the fiscal year ended May 31, 2007 (the “10-K”),
      and
      the other filings made by the Company with the United States Securities and
      Exchange Commission (the “SEC”)
      from
      time-to-time including, without limitation, the risk factors included in the
      10-K (the “SEC
      Filings”).

    

    (f) The
      Company has made available all additional information which the Subscriber
      has
      requested in connection with the Company and its representatives, and the
      Subscriber has been afforded an opportunity to make further inquiries of the
      Company and its representatives and the opportunity to obtain any additional
      information (to the extent the Company has such information or could acquire
      it
      without unreasonable effort or expense) necessary to verify the accuracy of
      information contained in the SEC Filings.

    

    (g) No
      representations or warranties have been made to the Subscriber by the Company,
      or any representative of the Company. The Subscriber expressly acknowledges
      that
      it has made its own investigation regarding the Company and is not relying
      on
      any other information regarding the Company other than as may be set forth
      in
      the SEC Filings and such information as may have been provided to the Subscriber
      in writing to verify the accuracy of information contained in the SEC Filings
      pursuant to Section 7(f) above.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (h) The
      Subscriber has investigated the acquisition of the Shares to the extent the
      Subscriber deemed necessary or desirable and the Company has provided the
      Subscriber with any assistance the Subscriber has requested in connection
      therewith.

    

    (i) The
      Subscriber has such knowledge and experience in financial and business matters
      that the Subscriber is capable of evaluating the merits and risks of an
      investment in the Shares and of making an informed investment decision with
      respect thereto.

    

    (j) The
      Subscriber agrees that the Company may refuse to register any transfer of the
      Shares not made in accordance with the provisions of Regulation S, pursuant
      to
      registration under the Securities Act and qualification under the securities
      laws of all applicable states, or pursuant to an exemption from such
      registration or qualification requirements.

    

    (k) The
      Subscriber acknowledges that the Subscriber is purchasing the Shares without
      being furnished any offering literature or prospectus other than the SEC Filings
      and this Agreement.

    

    (l) The
      Subscriber is not, and, to the Subscriber’s knowledge after making due inquiry,
      no person who owns a controlling interest in or otherwise controls the
      Subscriber is, (i) listed on the Specially Designated Nationals and Blocked
      Persons List maintained by the Office of Foreign Assets Control (“OFAC”),
      United States Department of the Treasury, and/or on any other similar list
      (collectively, the “Lists”)
      maintained by OFAC pursuant to any authorizing statute, Executive Order or
      regulation of the United States; or (ii) a person (a “Designated
      Person”)
      either
      (A) included within the term ‘designated national’ as defined in the United
      States Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (B) designated
      under Sections 1(a), 1(b), 1(c) or 1(d) of Executive Order No. 13224, 66 Fed.
      Reg. 49079 (published September 25, 2001) or similarly designated under any
      related enabling legislation or any other similar Executive Orders of the United
      States.

    

    (m) The
      Subscriber requires, and has taken reasonable measures to ensure compliance
      with
      the requirement, that no person who owns any other direct interest in the
      Subscriber is or shall be listed on any of the Lists or is or shall become
      a
      Designated Person.

    

    (n) The
      Subscriber has taken such measures as are required by the laws of the United
      States to assure that funds invested by the Subscriber in the Company are
      derived from legal sources.

    

    (o) Neither
      the Subscriber nor, to the actual knowledge of the Subscriber after making
      due
      inquiry, any holder of a direct or indirect interest in the Subscriber (i)
      is
      under investigation by any United States governmental authority for, or has
      been
      charged with, or convicted of, money laundering, drug trafficking,
      terrorist-related activities or other money laundering predicate crimes, or
      any
      violation of any United States bank secrecy laws, (ii) has been assessed civil
      penalties under any United States anti-money laundering laws, or (iii) has
      had
      any of its funds seized or forfeited in an action under any United States
      anti-money laundering laws.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (p) The
      Subscriber has taken such measures as are required by applicable law to ensure
      that the Subscriber is in material compliance with all current and future United
      States anti-money laundering laws and all current and future United States
      laws,
      regulations and government guidance for the prevention of terrorism, terrorist
      financing and drug trafficking.

    

    (q) The
      Subscriber has full power and authority to make the representations referred
      to
      herein, to purchase the Shares and to execute and deliver this
      Agreement.

    

    (r) The
      Subscriber acknowledges and is aware of the following:

    

    (i) The
      investment in the Shares is speculative and involves a high degree of risk
      of
      loss of the entire investment in the Company.

    

    (ii) Certificates
      representing the Shares will carry substantially the following legend condition
      (in addition to any legends required under applicable state securities
      laws):

    

    “THE
      OFFER AND SALE OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE “1933 ACT”) AND
      SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED EXCEPT
      PURSUANT TO (i) THE PROVISIONS OF REGULATION S, PROMULGATED UNDER THE 1933
      ACT,
      (ii) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT COVERING THE OFFER,
      SALE OR OTHER TRANSFER OF SUCH SECURITIES OR (iii) AN OPINION OF COUNSEL,
      REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER,
      ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
      DELIVERY REQUIREMENTS OF THE 1933 ACT.”

    

    (iii) There
      are
      substantial restrictions on the transferability of the Shares; the Subscriber
      may not be able to take advantage of the provisions of Rule 144 adopted by
      the United States Securities and Exchange Commission under the Securities Act
      with respect to the resale of the Shares and accordingly may have to hold the
      Shares indefinitely, and it may not be possible for the Subscriber to liquidate
      the investment in the Company.

    

    (iv) No
      state
      or federal agency has made any finding or determination as to the fairness
      of
      the terms of the sale of the Shares or any recommendation or endorsement
      thereof.

    

    (v) It
      never
      has been represented, guaranteed or warranted to the Subscriber by the Company,
      its agents or employees or any other person, expressly or impliedly, any of
      the
      following:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (A) The
      approximate or exact length of time that the Subscriber will be required to
      remain as owner of the Shares; or

    

    (B) The
      profit or return, if any, to be realized by making an investment in the
      Company.

    

    (s) The
      Subscriber understands that the foregoing representations and warranties are
      to
      be relied upon by the Company as a basis for exemption of the sale of the Shares
      under the Securities Act, under the securities laws of all applicable states
      and
      for other purposes.

    

    The
      foregoing representations and warranties are true and accurate as of the date
      hereof and shall survive such date. If
      in
      any respect such representations and warranties shall not be true and accurate
      prior to the acceptance of the Subscription by the Company, the Subscriber
      shall
      give notice of such fact to the Company by facsimile with written confirmation
      of receipt, specifying which representations and warranties are not true and
      accurate and the reasons therefor.

    

    8. Registration
      Rights.

    

    (a) Registration
      on Form SB-2.

    

    (i) Within
      sixty (60) days from the date of the Closing, the Company shall use its best
      efforts to ensure that a registration statement on Form S-1 (the “Form
      S-1”)
      is
      filed with the SEC and that each Subscriber’s Shares are included in such
      Registration Statement; provided, however, that the Company shall not be
      obligated to effect any such registration, qualification or compliance, pursuant
      to this paragraph 6(a): (A) if the Form S-1 is not available for such
      offering by the Subscribers; or (B) if the Company shall furnish to the
      Subscribers a certificate signed by the President of the Company stating that
      in
      the good faith judgment of the Board of Directors of the Company, it would
      be
      seriously detrimental to the Company and its stockholders for such registration
      under Form S-1 to be effected at such time, in which event the Company shall
      have the right to defer the filing of the Form S-1 or proportionally reduce
      the
      number of Shares included in such filing.

    

    (ii) Subject
      to the foregoing, the Company shall use its best efforts to ensure that a
      registration statement covering the Shares is filed as soon as practicable
      after
      receipt of the request or requests of the Subscriber. If the Form S-1 is not
      available for such offering by the Subscribers, the Company shall use its best
      efforts to ensure that a registration statement on an available form of
      registration statement is filed within one hundred twenty (120) days from the
      date of the Closing. 

    

    (b) “Piggy
      Back” Registration.
      If at
      any time prior to the filing of the Form S-1 the Company shall determine to
      register under the Securities Act the offer and sale of any of its Shares (other
      than a registration relating solely to the sale of securities to participants
      in
      a Company employee benefits plan, a registration on any form which does not
      include substantially the same information as would be required to be included
      in a registration statement covering the sale of the Shares or a registration
      in
      which the offer and sale of the only Common Stock being registered is Common
      Stock issuable upon conversion of debt securities which are also being
      registered), it shall send to each Subscriber written notice of such
      determination and, if within fifteen (15) days after receipt of such notice,
      such Subscriber shall so request in writing, the Company shall use its best
      efforts to ensure that such registration statement includes all or any part
      of
      the Shares that such Subscriber requests to be registered. If the total amount
      of shares requested by any Subscriber to be included in such offering exceeds
      the amount of securities that the managing underwriter determines in its sole
      discretion is compatible with the success of the offering, then the Company
      shall be required to include in the offering only that number of such
      securities, including the Shares, which the managing underwriter determines
      in
      its sole discretion will not jeopardize the success of the offering (the
      securities so included to be (A) first, to the Company, and (B) among the
      Subscribers requesting to sell the Shares and to other Subscribers holding
      registration rights, pro rata among the selling stockholders according to the
      total amount of securities owned by each such stockholder); all of the Company’s
      selling stockholders, including the Subscribers, shall not be reduced below
      20%
      of the total number of securities to be provided in the registration. For
      purposes of the preceding parenthetical concerning apportionment, for any
      selling Subscriber which is a Subscriber of registrable Shares and which is
      a
      partnership or corporation, the partners, retired partners and shareholders
      of
      such holder, or the estates and family members of any such partners and retired
      partners and any trusts for the benefit of any of the foregoing persons shall
      be
      deemed to be a single “selling stockholder,” and any pro rata reduction with
      respect to such “selling stockholder” shall be based upon the aggregate amount
      of shares carrying registration rights owned by all entities and individuals
      included in such “selling stockholder,” as defined in this sentence. If any
      Subscriber disapproves of the terms of such underwriting, he, she or it may
      elect to withdraw therefrom by written notice to the Company and the
      underwriter.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) Expenses.
      In the
      case of a registration under this Section 8, the Company shall bear all
      reasonable costs and expenses of such registration, including, but not limited
      to, SEC filing fees, “blue sky” fees and expenses, and all OTC Bulletin Board,
      stock exchange listing and qualification fees; provided, however, that the
      Company shall nave no obligation to pay or otherwise bear (i) any portion
      of the underwriter’s commissions or discounts attributable to the Shares being
      offered and sold by the Subscribers, (ii) any stock transfer taxes,
      (iii) any fees of counsel for the selling Subscribers, or (iv) any of such
      expenses if the payment of such expenses by the Company is prohibited by the
      laws of a state in which such offering is qualified and only to the extent
      so
      prohibited; provided, however, that the Company shall not be required to pay
      for
      any expenses of any registration proceeding begun if the registration request
      is
      subsequently withdrawn at the request of the Subscribers initiating such
      registration (in which case, all Subscribers initiating such registration shall
      bear such expenses pro rata based upon the total number of Shares requested
      to
      be included therein by each such Subscriber).

    

    (d) Transfer
      of Registration Rights.
      The
      registration rights of the Subscribers under this Section 8 may be transferred
      to any transferee provided that the transferor shall provide the Company with
      prompt written notice of such transfer. Notwithstanding the foregoing, the
      registration rights of the Subscribers under this Agreement may not be
      transferred to an entity, or a person controlled by, under common control with
      or controlling such entity, which is a direct competitor of the
      Company.

    

    (e) Termination
      of Registration Rights.
      The
      obligations of the Company to register any Subscriber’s registrable Shares
      pursuant to this Section 8 shall terminate at such time as all Shares held
      by
      and issuable to such Subscriber (and its affiliates, partners, former partners,
      members and former members) may be sold pursuant to Rule 144, or pursuant to
      Regulation S, during any ninety (90) day period.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    9. Indemnification.
      Each
      Subscriber hereby acknowledges that such Subscriber understands the meaning
      and
      legal consequences of the representations and warranties made by such Subscriber
      herein, and that the Company is relying on such representations and warranties
      in making the determination to accept or reject this Subscription. Each
      Subscriber hereby agrees to indemnify and hold harmless the Company and each
      employee and agent thereof from and against any and all loss, damage or
      liability due to or arising out of a breach of any representation or warranty
      of
      the undersigned contained in this Agreement.

    

    10. Transferability.
      Each
      Subscriber agrees not to transfer or assign this Agreement, or any interest
      herein, unless in accordance with applicable federal and state securities
      laws.

    

    11. No
      Revocation.
      Each
      Subscriber agrees that this Agreement and any agreement of such Subscriber
      made
      hereunder is irrevocable, and that this Agreement shall survive the death or
      disability of the undersigned, except as provided below in
      Section 12.

    

    12. Termination
      of Agreement.
      If this
      Subscription is rejected by the Company, then and only then shall this Agreement
      be null and void and of no further force and effect, and no party shall have
      any
      rights against any other party hereunder, and the Company shall promptly return
      or cause to be returned to the undersigned this Agreement and any payment of
      the
      aggregate purchase price for such Subscriber’s Shares tendered
      hereunder.

    

    13. Notices.
      All
      notices or other communications given or made hereunder shall be in writing
      and
      shall be delivered or mailed by registered or certified mail, return receipt
      requested, postage prepaid, or delivered by facsimile with written confirmation
      of receipt to each Subscriber at such Subscriber’s address set forth below and
      to the Company at the address set forth on the cover hereof, or at such other
      place as the Company or any Subscriber may designate by written notice to the
      other party.

    

    14. Expenses.
      Each
      Subscriber will pay such Subscriber’s own expenses relating to this Agreement,
      the ancillary documents attached hereto and the purchase of the Shares.

    

    15. Amendments.
      Neither
      this Agreement nor any term hereof may be changed, waived, discharged or
      terminated orally but only with the written consent of each Subscriber and
      the
      Company.

    

    16. Counterparts;
      Facsimile.
      This
      Agreement may be executed in any number of counterparts and may be delivered
      by
      electronic mail, telecopy or facsimile, each of which shall be an original
      but
      all of which taken together shall constitute one Agreement.

    

    17. Governing
      Law.
      This
      Agreement shall in all respects be governed by and construed in accordance
      with
      the laws of the State of Delaware, without regard to its conflicts of law
      doctrine.

    

    18. Dispute
      Resolution.
      The
      parties (a) hereby irrevocably and unconditionally submit to the jurisdiction
      of
      the federal and state courts located within the geographic boundaries of the
      United States District Court for the District of Delaware for the purpose of
      any
      suit, action or other proceeding arising out of or based upon this Agreement,
      (b) agree not to commence any suit, action or other proceeding arising out
      of or
      based upon this Agreement except in the federal and state courts located within
      the geographic boundaries of the United States District Court for the District
      of Delaware, and (c) hereby waive, and agree not to assert, by way of motion,
      as
      a defense, or otherwise, in any such suit, action or proceeding, any claim
      that
      it is not subject personally to the jurisdiction of the above-named courts,
      that
      its property is exempt or immune from attachment or execution, that the suit,
      action or proceeding is brought in an inconvenient forum, that the venue of
      the
      suit, action or proceeding is improper or that this Agreement or the subject
      matter hereof may not be enforced in or by such court. The prevailing party
      shall be entitled to reasonable attorney’s fees, costs, and necessary
      disbursements in addition to any other relief to which such party may be
      entitled. Each of the parties to this Agreement consents to personal
      jurisdiction for any equitable action sought in the U.S. District Court for
      the
      District of Delaware or any court of the State of Delaware.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    19. Obligations
      of the Subscribers.
      Each
      Subscriber hereby acknowledges and agrees that the Subscription hereunder is
      irrevocable, that such Subscriber is not entitled to cancel, terminate or revoke
      this Agreement or any agreements of such Subscriber hereunder and that this
      Agreement and such other agreements shall survive the death or disability of
      such Subscriber and shall be binding upon and inure to the benefit of the
      parties and their respective heirs, executors, administrators, successors,
      legal
      representatives and permitted assigns. If any Subscriber is more than one
      person, the obligations of such persons hereunder shall be joint and several
      and
      the representations, warranties, covenants, agreements and acknowledgments
      of
      such Subscriber herein contained shall be deemed to be made by and be binding
      upon each such person and his or her respective heirs, executors,
      administrators, successors, legal representatives and permitted
      assigns.

    

    20. Severability.
      In case
      any provision of this Agreement shall be invalid, illegal or unenforceable,
      the
      validity, legality and enforceability of the remaining provisions of this
      Agreement shall not in any way be affected or impaired thereby.

    

    21. Headings.
      As used
      in this Agreement, section and subsection headings are for convenience of
      reference only and shall not be used to modify, interpret, limit, expand or
      construe the terms of this Agreement.

    

    22. Entire
      Agreement.
      This
      Agreement and the documents referred to herein constitute the entire agreement
      among the parties with respect to the subject matter hereof and thereof and
      supersede all prior agreements and undertakings, both written and oral, among
      the parties, or any of them, with respect to the subject matter hereof and
      thereof, and no party shall be liable or bound to any other party in any manner
      by any warranties, representations, covenants or agreements except as
      specifically set forth herein or therein.

    

    23. Amendment
      and Restatement of Original Agreements.
      The
      Original Agreements are hereby amended in their entirety and restated herein.
      Upon execution of this Agreement, all provisions of, rights granted in and
      covenants made in the Original Agreements are hereby waived, released and
      superseded in their entirety and shall have no further force or
      effect.

    

    [Remainder
      of Page Intentionally Left Blank; Signature Page Follows]

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties have executed this Amended and Restated
      Subscription Agreement this ____ day of June, 2008.

    

    
      	
              A.

            	
              Number
                of Shares for which Subscriber is subscribing:
                _______________.

            

    

    

    
      	B.	
              Subscription
                Amount (the number filled in A. multiplied by U.S.$0.15):
                U.S.$___________.

            

    

    

    Please
      initial each category applicable to you as
      an
      investor in the Company.

    

    ________ (a) Subscriber
      is not
      a “U.S.
      Person.” 

    

    ________ (b) At
      the
      time the offer to purchase the Shares was originated, Subscriber was
      outside
      the
      United States and is
      outside
      the
      United States as of the date of the Subscription and the delivery of this
      Agreement. 

    

    ________ (c) Subscriber
      is
      purchasing the Shares for its own account and not
      on
      behalf of any U.S. Person and has
      no
      present
      intention of reselling the Shares into the United States. Subscriber
has
      not
      pre-arranged a sale of the Shares to any U.S. Person. Subscriber will
      not
      use the
      Shares to cover short positions in the U.S. during the Restricted
      Period.

    

    ________ (d) Subscriber
      is not
      a
“broker-dealer” as defined in Section 3 of the Securities Exchange Act of
      1934.

    

    ________ (e) Subscriber
      is not
      an
      affiliate of a “broker-dealer.”

    

    TYPE
      OF
      OWNERSHIP (CHECK ONE)

     

    
      	
              INDIVIDUAL
                SUBSCRIBER(S)

            	 	
              ENTITY
                SUBSCRIBER

            
	 	 	 
	
              _____
                Individual Ownership

            	 	
              _____
                Corporation

              (Please
                affix corporate seal on signature page)

            
	 	 	 
	
              _____
                Joint Tenants with Right of Survivorship (both Tenants must
                sign)

            	 	
              _____
                Partnership

               

              _____
                Trust:

              Name
                of Trustee:
                ____________________________

            
	 	 	 
	
              _____
                Husband and Wife as Community Property (both Spouses must
                sign)

            	 	
              Name
                of Trust:
                ____________________________

               

            
	 
	
              _____
                Tenants-in-Common (all Tenants
                must sign)

            	 	
              Date
                of Trust Instrument:

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              _____
                A Married (Man) (Woman) as (His) (Her) Separate Property

            	 	
              Beneficiary(ies):___________________________

               

              _____
                Other (Explain):___________________________

               

              State
                of Formation

              of
                Entity:___________________________

            
	 	 	 
	
              (FOR
                INDIVIDUAL SUBSCRIBER(S))

            	 	
              (FOR
                ENTITY SUBSCRIBER)

            
	 	 	 
	   
	 	   

	
              Signature

            	 	
              Signature
                and Capacity

            
	 	 	 
	  
	 	   

	
              Signature

            	 	
              Signature
                and Capacity

            
	
            	 	 
	  
	 	   

	
              Name(s)
                Typed or Printed

            	 	
              Name(s)
                Typed or Printed

            
	 	 	 
	  
	 	     

	
              Social
                Security No.(s)

            	 	
              Tax
                Identification or Social Security Numbers

            
	 	 	 
	         
	 	       

	
              Residence
                Address

            	 	
              Address

            
	 	 	 
	      
	 	    

	
              City,
                State and Zip Code

            	 	
              City,
                State and Zip Code

            
	 	 	 
	 	 	 
	  
	 	  

	
              Mailing
                Address, if different

            	 	
              Mailing
                Address, if different

            
	  
	 	  

	
              City,
                State and Zip Code

            	 	
              City,
                State and Zip Code

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	ACCEPTED AS	 
	OF JUNE __, 2008:	 
	
            	 
	KAL ENERGY, INC.,
	a Delaware
              corporation
	
            	 
	  	 
	By:	 
	
              Its:

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

    

    SUBSCRIBERS

    
      	
               

              Name
                of Subscriber

            	 	
              No.
                Shares Purchased

            	 	
              Aggregate
                Purchase Price

            
	 	 	 	 	 
	
              Gabriel
                Law Khing Hong

            	 	 	 	 
	
              Yam
                Koi Cheng

            	 	 	 	 
	
              Blackmort
                Nominees Pty Ltd

            	 	 	 	 
	
              Total:

            	 	 	 	 

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

    

    “U.S.
      person” shall mean:

    

    a. any
      natural person resident in the United States;

    

    b. any
      partnership or corporation organized or incorporated under the laws of the
      United States;

    

    c. any
      estate of which any executor or administrator is a U.S. person;

    

    d. any
      trust
      of which the trustee is a U.S. person;

    

    e. any
      agency or branch of a foreign entity located in the United States;

    

    f. any
      non-discretionary account or similar account (other than an estate or trust)
      held by a dealer or other fiduciary organized, incorporated, or (if an
      individual) resident in the United States;

    

    g. any
      discretionary account or similar account (other than an estate or trust) held
      by
      a dealer or other fiduciary organized, incorporated, or (if an individual)
      resident in the United States; and

    

    h. any
      partnership or corporation if:

    

    i) organized
      or incorporated under the laws of any foreign jurisdiction; and

    

    ii) formed
      by
      a U.S. person principally for the purpose of investing in securities not
      registered under the Securities Act, unless it is organized or incorporated,
      and
      owned, by accredited investors (as defined in Rule 501(a) of the Securities
      Act) who are not natural persons, estates or trusts

    

    “U.S.
      person” shall not include:

    

    a. any
      discretionary account or similar account (other than an estate or trust) held
      for the benefit or account of a non-U.S. person by a dealer or other
      professional fiduciary organized, incorporated, or (if an individual) resident
      in the United States;

    

    b. any
      estate of which any professional fiduciary acting as executor or administrator
      is a U.S. person, if:

    

    i) an
      executor or administrator of the estate who is not a U.S. person has sole or
      shared investment discretion with respect to the assets of the estate;
      and

    

    ii) the
      estate is governed by foreign law;

    

    c. any
      trust
      of which any professional fiduciary acting as trustee is a U.S. person, if
      a
      trustee who is not a U.S. person has sole or shared investment discretion with
      respect to the trust assets, and no beneficiary of the trust (and no settlor
      if
      the trust is revocable) is a U.S. person;

    

    d. an
      employee benefit plan established and administered in accordance with the law
      of
      a country other than the United States and customary practices and documentation
      of such country;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    e. any
      agency or branch of a U.S. person located outside the United States,
      if:

    

    i) the
      agency or branch operates for valid business reasons; and

    

    ii) the
      agency or branch is engaged in the business of insurance or banking and is
      subject to substantive insurance or banking regulation, respectively, in the
      jurisdiction where located; and

    

    f. the
      International Monetary Fund, the International Bank for Reconstruction and
      Development, the Inter-American Development Bank, the Asian Development Bank,
      the African Development Bank, the United Nations, and their agencies, affiliates
      and pension plans, and any other similar international organizations, their
      agencies, affiliates and pension plans.Exhibit
      10.1

    DRILLING
      CONTRACT

     

    Made
      this
      24th
      day of
      June, 2008

     

     

    
      	Between	
              Silver
                Reserve Corp.
                a
                Delaware corporation

              1135
                Terminal Way, Suite 207 B

              Reno
                Nevada 89502

              Phone  
                775-322-4448

              Fax       775-322-4458

              (herein
                called “Silver Reserve”)

            
	 	 
	And	Christiansen
              Drilling, Inc.
              a
              Nevada corporation
              557
                Ely Avenue

              Ely
                Nevada 89301

              Phone  
                775-289-4525

              Fax       775-289-6053

              (herein
                called “Christiansen”)

            

    

     

    Whereas
      Christiansen
      provides drilling services to the exploration and mining industry;
      and

    

    Whereas
      Silver
      Reserve wishes to employ the services of Christiansen to carry out a substantial
      amount of drilling on it projects in Nevada;

    

    Now
      Therefore
      based on
      the terms and conditions set out herein the parties hereto agree as
      follows;

    

    Christiansen
      will provide its drilling services as directed by Silver Reserve on the
      following terms and conditions;

     

    
      	
            	1.	
              Reverse
                Circulation (RC) Drilling will be conducted @ an hourly rate of $500.00
                per hr. with a 3-man crew. Sampling will be taken as directed by
                the
                on-site Geologist.

            

    

    

    
      	
            	2.	
              Equipment
                Mobilization & Demobilization.

            

    

    

    
      	 a.	
               SD-40
                Reverse Circulation Rig @ $150.00 per
                hr.

            

    

    

    
      	b.	
               Water
                & support trucks mobilization, demobilization & rental will be
                charged at a rate of $150.00 per hour while in use
                only.

            

    

    

    
      	
            	3.	
              Grading
                & site preparation by a Caterpillar D7-G Tractor will be charged at
                the rate of $150.00 per hour.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	a.
              	
               Caterpillar
                tractor transportation to the project site & return will be charged at
                a rate of $150.00 per hour, which will include a “pilot”
                car.

            

    

    

    
      	
            	4.	
              Drilling
                materials such as cement, casing, bits, wiper rubbers, drilling liquids,
                and sealers will be billed to the Operator at Christiansen Drilling,
                Inc.
                Invoice cost plus 10%.

            

    

    

    
      	
            	5.	
              Hole
                Plugging(s) per Nevada State Regulation: Setting casing & cementing,
                if required, will be charged at a rate of $350.00 per hour plus
                materials.

            

    

    

    
      	
            	6.	
              Drilling
                crew, cat operator, & on-site supervisors, travel time to & from
                the project site will be charged @ the rate of .75 cents per mile/per
                man.

            

    

    

    
      	
            	7.	
              Per
                Diem for drilling crew, cat operator, & on-site supervisors will be
                charged at the rate of $40.00 per day/per man plus motel
                accommodations.

            

    

    

    
      	
            	8.	
              Operator
                agrees to reimburse Contractor at 50% of cost for drill steel, hammer
                & interchange in the event that they are damaged or cannot be
                recovered during the drilling operations. Operator agrees to reimburse
                Contractor at invoice cost less 15% if Operator requires Contractor
                to
                continue drilling should hole conditions jeopardize loss of drilling
                tools. The daily “Drill Log” must be signed by the Operator’s
                Representative.

            

    

    

    
      	
            	9.	
              Drill
                Rig standby with crew at the request of Operator will be charged
                at the
                rate of $250.00 per hour based on an 8-hour
                day.

            

    

     

    
      
        
          	
                	10.	
                  Drilling
                    operations will operate at least 8 hours per-day (10 days on
& 4-days
                    off) or a schedule that is agreeable to both
                    parties.

                

        

      

    

     

    Christiansen
      will invoice not more than twice monthly on the 1st
      and
      15th
      of each
      month and payments will be made on the 15th
      of a
      month for invoices received on the 1st
      of a
      month and on the 1st
      of the
      following month for invoices received on the 15th
      of the
      preceding month.

    

    Silver
      Reserve agrees to provide a $50,000.00 advance payment against work to be
      carried out which shall be credited against the final invoice or invoices of
      the
      drill program or programs. Said advance payment shall be made on execution
      of
      the Drilling Contract.

    

    All
      drilling and other work carried out by Christiansen shall be done in a workman
      like manner in compliance with regulation governing drilling or other work
      in
      the State of Nevada.

    

    Christiansen
      shall maintain liability and workman compensation coverage in the amounts set
      out in the certificate delivered to Silver Reserve at all times while working
      for Silver Reserve and undertakes to notify or cause its insurance company
      to
      notify Silver Reserve of any interruption or cancellation of the insurance
      coverage as presented.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    During
      the term of this Contract, and thereafter, Christiansen shall not, without
      the
      prior written consent of Silver Reserve, disclose to anyone any Confidential
      Information. "Confidential Information" for the purposes of this Contract shall
      include proprietary and confidential information such as, but not limited to,
      drilling results, assay reporting, tonnage calculations or production plans.
      Confidential Information shall not include any information that:

    

    A.   
      is disclosed by Silver Reserve without restriction;

    

    B.    becomes
      publicly available through no act of Christiansen

    

    C.   
      is
      rightfully received by Christiansen from a third party.

     

    
      This
        Contract constitutes the final understanding and agreement between the parties
        with respect to the subject matter hereof and supersedes all prior negotiations,
        understandings and agreements between the parties, whether written or oral.
        This
        Contract may be amended, supplemented or changed only by an agreement in
        writing
        signed by both of the parties.

      

      This
        Agreement may be executed in multiple counterparts, each of which shall
        be deemed an original, and all of which together shall constitute one and
        the same instrument. Execution and delivery of this Agreement by exchange
        of
        facsimile copies bearing facsimile signature of a party shall constitute
        a valid
        and binding execution and delivery of this Agreement by such party. Such
        facsimile copies shall constitute enforceable original documents.

       

    

    IN
      WITNESS WHEREOF the parties have executed this Agreement effective as of the
      date first written above.

     

     

    
      	Silver Reserve
              Corp.	Christiansen Drilling,
              Inc.
	 	 
	 	 
	By_______________________	By                                               
              
	 	 
	 	 
	
                                                         

            	                                         
              
	
              Title

            	
              Title

            

    

     

    

    
      
        
        

      

      
        3

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