Document:

SUBSCRIPTION
      BOOKLET

     

    FOR
      THE
      PURCHASE OF 

     

    COMMON
      STOCK

     

    OF

     

    KAL
      ENERGY, INC.,

    a
      Delaware corporation

    

    

    (Non-U.S.
      Subscribers Only)

    

     

     

    PLEASE
      CAREFULLY REVIEW AND FOLLOW THE “INSTRUCTIONS

    TO
      SUBSCRIBERS” IMMEDIATELY FOLLOWING THIS COVER PAGE

     

    
 

    KAL
      ENERGY, INC.

    93-95
      Gloucester Place

    London,
      W1U 6JQ

    UNITED
      KINGDOM

    Telephone:
      +44 (0)20 7487 8426

    Fax:
      +44
      (0)20 7487 8402 

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    INSTRUCTIONS
      TO SUBSCRIBERS

     

    In
      order to confirm and complete your subscription to purchase shares of Common
      Stock of KAL Energy, Inc., a Delaware corporation (the “Company”), the following
      instructions need to be complied with:

    
      
        

        
          	
                  1

                	
                   

                  Complete
                    TWO (2) copies
                    of
                    the attached Subscription Agreement.

                   

                
	
                  2

                	
                   

                  All
                    placement particulars have already been completed for you based
                    on the
                    information you have previously supplied the Company. This includes
                    the
                    summary information on the top right hand corner of the front
                    page, and
                    all the subscribers’ details on the Signature Page (pg. 9).

                   

                
	
                  3

                	
                   

                  Ensure
                    you INITIAL ALL the relevant investorcategories
                    in section C of the Signature Page (pg. 9). You must be an investor
                    who
                    qualifies as a “non-U.S. persons” to be eligible to purchase Shares from
                    the Company pursuant to this Subscription Agreement.

                   

                
	
                  4

                	
                   

                  Ensure
                    all necessary SIGNATURES are recorded in section E of the Signature
                    Page
                    (pg. 9).

                   

                
	
                  5

                	
                   

                  FAX
                    OR E-MAILa
                    scanned copy of the
                    ENTIRE document
                    to:

                  +44
                    20 7487 8402 or info@kalenergyinc.com

                   

                
	
                  6

                	
                   

                  Send
                    BOTH
                    ORGINALS
                    to:

                   

                  KAL
                    ENERGY, INC.

                  Attn:
                    Jorge Nigaglioni

                  93-95
                    Gloucester Place

                  London,
                    W1U 6JQ

                  UNITED
                    KINGDOM

                  Tel:
                    +44 (0)20 7487 8426

                   

                

        

         

      

      Please
        note that incomplete documents will be returned to subscribers for
        completion.
        If you
        have any questions about completion of the documents, please contact Jorge
        Nigaglioni of KAL ENERGY, Inc. at +44 (0) 20 7487 8426. Should
        you need copies of the Company’s SEC Filings referred to in Section 5 of
        the attached
        Subscription Agreement, please contact Jorge Nigaglioni, the Chief Financial
        Officer of the Company, at +44 (0)20 7487 8426 and copies will be provided
        to
        you free of charge.

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
       

      
        	 	
                Name
                  of Investor:

              	 
	 	
                Contact
                  Person:

              	 
	 	
                Telephone
                  Number:

              	 
	 	
                Fax
                  Number:

              	 
	 	
                Purchase
                  Price:

              	 

      

      
 

    

    KAL
      ENERGY, INC.,

    a
      Delaware corporation

     

    SUBSCRIPTION
      AGREEMENT

     

    

      
        	
                TO:

              	
                KAL
                  ENERGY, INC.

              
	 	
                Attn:
                  Jorge Nigaglioni

              
	 	
                93-95
                  Gloucester Place

              
	 	
                London,
                  W1U 6JQ

              
	 	
                UNITED
                  KINGDOM

              

      

    

     

    The
      undersigned (“Subscriber”),
      on
      the terms and conditions herein set forth, tenders this subscription to
KAL
      Energy,
      Inc., a Delaware corporation (the “Company”),
      and
      hereby offers to purchase a specified number of shares of Common Stock of the
      Company (the “Shares”)
      as
      provided herein (the “Subscription”).

     

    1.  Subscription.

     

    (a)  Subject
      to the terms and conditions hereof, Subscriber hereby tenders this Subscription
      (herein so called) to purchase that certain number of Shares of the Company
      set
      forth opposite Subscriber’s name on the signature page hereto for a purchase
      price of US$0.15 per Share contemporaneous with the delivery of an executed
      copy
      of this Subscription Agreement (the “Subscription
      Agreement”)
      as
      required by the “Instructions to Subscribers” accompanying this Subscription
      Agreement.

     

    (b)  Subscriber
      hereby tenders payment of the total purchase price of the Shares (the
“Purchase
      Price”)
      to the
      Company. The Subscription is irrevocable and shall be made by delivery of this
      Subscription Agreement to the Company.

     

    (c)  Upon
      the
      prior approval of the Company’s Board of Directors, in its sole discretion, the
      Company shall pay a fee equal to 7.0% of the Purchase Price to the party who
      identified Subscriber, advised the Company of Subscriber, and, upon the
      Company’s request, introduced the Company to Subscriber.

     

    2.  Acceptance
      of Agreement.
      The
      Company proposes to issue up to 66,666,667 shares of its common stock to
      non-U.S. subscribers for an aggregate maximum purchase price of
      $10,000,000.00.  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 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
      Subscription Agreement shall be deemed to be accepted by the Company only when
      the Company executes the Subscription Agreement in the space provided. Upon
      execution of this Subscription Agreement by the Company, the Company will
      forward a fully executed copy of same to Subscriber’s address as set forth on
      the signature page hereof.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    3.  Closing:
      Conditions to Closing.

     

    (a)  Time
      and Place of Closing.
      Subject
      to Section 3(b) below, the closing of the sale and purchase of the Shares and
      the payment by Subscriber of the Purchase Price therefor 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)  Subscriber’s
      Conditions to Closing.
      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 the 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 shall have received from Subscriber the Purchase Price.

     

    4.  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 your investor status. 

     

    5.  Other
      Representations and Warranties of Subscriber.
      Subscriber hereby represents and warrants to the Company as
      follows:

     

    (a)  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
      A
      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. Subscriber acknowledges and
      agrees that the certificates evidencing the Shares will contain a legend setting
      forth the foregoing restriction.

     

    (b)  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. Subscriber hereby confirms that
      it is acquiring the Shares for investment purposes and not with a view to the
      distribution of the Shares.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    (c)  The
      Shares are being acquired for 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 Subscriber in
      violation of the Securities Act or the then applicable rules or regulations
      thereunder. No one other than Subscriber has any interest in or any right to
      acquire the Shares. Subscriber understands and acknowledges that the Company
      will have no obligation to recognize the ownership, beneficial or otherwise,
      of
      such Shares by anyone but Subscriber.

     

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

     

    (e)  Subscriber
      has had the opportunity to review the Company’s Annual Report on Form 10-K
      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 Subscriber has
      requested in connection with the Company and its representatives, and 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 Subscriber by the Company,
      or
      any representative of the Company. 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 Subscriber in writing
      to verify the accuracy of information contained in the SEC Filings pursuant
      to
      Section 5(f) above.

     

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

     

    (i)  Subscriber
      has such knowledge and experience in financial and business matters that
      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)  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)  Subscriber
      acknowledges that Subscriber is purchasing the Shares without being furnished
      any offering literature or prospectus other than the SEC Filings and this
      Subscription Agreement.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    (l)  Subscriber
      is not, and, to Subscriber’s knowledge after making due inquiry, no person who
      owns a controlling interest in or otherwise controls 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)  Subscriber
      requires, and has taken reasonable measures to ensure compliance with the
      requirement, that no person who owns any other direct interest in Subscriber
      is
      or shall be listed on any of the Lists or is or shall become a Designated
      Person.

     

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

     

    (o)  Neither
      Subscriber nor, to the actual knowledge of Subscriber after making due inquiry,
      any holder of a direct or indirect interest in 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)  Subscriber
      has taken such measures as are required by applicable law to ensure that
      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)  Subscriber
      has full power and authority to make the representations referred to herein,
      to
      purchase the Shares and to execute and deliver this Subscription
      Agreement.

     

    (r)  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.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

    (iii)  There
      are
      substantial restrictions on the transferability of the Shares; 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 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 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 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)  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, 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.

     

    6.  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 SB-2 (the “Form
      SB-2”)
      is
      filed with the SEC and that 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 SB-2 is not available for such
      offering by the Subscribers; or (B) if the Company shall furnish to
      Subscriber 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 SB-2 to be effected at such time, in which event the Company shall
      have the right to defer the filing of the Form SB-2 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 SB-2 is not
      available for such offering by Subscriber, the Company shall use its best
      efforts to ensure that a registration statement on Form S-1 or other available
      form of registration statement is filed within one hundred twenty (120) days
      from the date of the Closing. 

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

    (b)  “Piggy
      Back” Registration.
      If at
      any time prior to the filing of the Form SB-2 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 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
      Subscribers of the Shares requesting to sell the Shares and to other Subscribers
      of Common Stock holding registration rights, pro rata among the selling
      shareholders according to the total amount of securities owned by each such
      shareholder); all of the Company’s selling shareholders, including
      Subscriber(s), 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
      shareholder”, and any pro rata reduction with respect to such “selling
      shareholder” shall be based upon the aggregate amount of shares carrying
      registration rights owned by all entities and individuals included in such
      “selling shareholder,” as defined in this sentence. If any Subscriber
      disapproves of the terms of such underwriting, he 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 6, 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 of the Shares, (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 a Subscriber of Shares under this Section 6 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 a Subscriber under this Subscription
      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 without the written consent of the Company.

     

    (e)  Termination
      of Registration Rights.
      The
      obligations of the Company to register any Subscriber’s registrable Shares
      pursuant to this Section 6 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.

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

    7.  Indemnification.
      The
      undersigned acknowledges that the undersigned understands the meaning and legal
      consequences of the representations and warranties made by the undersigned
      herein, and that the Company is relying on such representations and warranties
      in making the determination to accept or reject this Subscription. The
      undersigned 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 Subscription Agreement.

     

    8.  Transferability.
      The
      undersigned agrees not to transfer or assign this Subscription Agreement, or
      any
      interest herein, unless in accordance with applicable federal and state
      securities laws.

     

    9.  No
      Revocation.
      The
      undersigned agrees that this Subscription Agreement and any agreement of the
      undersigned made hereunder is irrevocable, and that this Subscription Agreement
      shall survive the death or disability of the undersigned, except as provided
      below in Section 10.

     

    10.  Termination
      of Agreement.
      If this
      Subscription is rejected by the Company, then and only then shall this
      Subscription 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
      Subscription Agreement and the Purchase Price tendered hereunder.

     

    11.  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 the undersigned at the 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 the undersigned may designate by written notice to the other
      party.

     

    12.  Expenses.
      The
      undersigned will pay the undersigned’s own expenses relating to this
      Subscription Agreement, the ancillary documents attached hereto and the purchase
      of the Shares. 

     

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

     

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

     

    15.  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. 

     

    16.  Obligations
      of Subscriber.
      Subscriber hereby acknowledges and agrees that the Subscription hereunder is
      irrevocable, that Subscriber is not entitled to cancel, terminate or revoke
      this
      Subscription Agreement or any agreements of Subscriber hereunder and that this
      Subscription Agreement and such other agreements shall survive the death or
      disability of 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 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
      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.

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

     

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

     

    18.  Gender,
      Number and Headings.
      As used
      in this Subscription Agreement, the masculine gender will include the feminine
      and neuter, and vice versa, as the context so requires; and the singular number
      will include the plural, and vice versa, as the context so requires. As used
      in
      this Subscription 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 Subscription Agreement.

     

    19.  Entire
      Agreement.
      This
      Subscription 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.

     

    [Signature
      on following page.]

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

     

    Signature
      Page

     

    IN
      WITNESS WHEREOF, the parties have executed this Subscription Agreement this
      12th
      day of March, 2008.

     

    
      	
              A.
                Number of Shares for which Subscriber is subscribing: 

            	 
	
              
                B.
                  Subscription Price: ( (A) multiplied by U.S.$0.15)

              

            	 

    

    
      	
               C.
                Please INITIAL
                ALL
                categories applicable to you as an investor in the
                Company. 

            
	
              Initial

            	
              Category

            
	 	
              (a) Subscriber
                IS
                NOT a
                “U.S. Person.”

            
	 	
              (b) At
                the time the offer to purchase the Shares was originated, Subscriber
                WAS
                NOT inside
                the United States and IS NOT
                inside 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
                HAS
                NOT
                had
                within the past three years, any position, office, or other material
                relationship with the Company, or any of its predecessors or affiliates.
                If Subscriber has had such a relationship, please describe it
                below:

            
	 	
              (e) Subscriber
                IS
                NOT a
                “broker-dealer” as defined in Section 3 of the Securities Exchange Act of
                1934. If Subscriber IS
                a
                “broker-dealer,” Subscriber will be deemed an
                “underwriter” unless Subscriber obtained the
                Shares from the Company as compensation for investment banking
                services.
                Please describe below if Subscriber DID
                NOT
                receive the Shares as compensation for investment banking
                services:

            
	 	
              (f) Subscriber
                IS
                NOT
                an
                affiliate of a “broker-dealer.” If Subscriber IS
                an
                affiliate of a “broker-dealer,” Subscriber will be deemed an “underwriter”
                unless Subscriber purchased the Shares in the ordinary course of
                business
                and at the time of purchase had no agreements or understandings,
                directly
                or indirectly, with any party to distribute the Shares. Please describe
                below if Subscriber DID
                NOT
                purchase the Shares in the ordinary course of business, or at the
                time of
                purchase HAS
                any
                agreements or understandings, directly or indirectly, with any party
                to
                distribute the Shares:

               

            
	
              D.
                Type of Ownership

            
	
               ̈
                Individual Ownership

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

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

               ̈
                Tenants-in-Common (all
                Tenants must sign) 

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

               

            	
               ̈
                Corporation (Please
                affix corporate seal on signature section)

               ̈
                Partnership

               ̈
                Trust:

               ̈
                Other: 

            
	
              E.
                Signatures

            
	
              Subscriber
                Signatures

              (Note:
                For Entity Subscribers, please identify the natural persons with
                power to
                vote or to dispose of the securities)

               

               

               

              ________________________________________________

              Signature
                (and Capacity for Entity Subscribers)

               

               

               

              ________________________________________________

              Signature
                (and Capacity for Entity Subscribers)

            	
              Subscriber
                Addresses

              Address:

               

               

               

              Mailing
                Address (if different to above):

               

               

               

            
	
               

              ACCEPTED
                AS OF March 12, 2008:

              KAL
                ENERGY, INC., a Delaware corporation

               

               

              By:
                Jorge Nigaglioni

              Its:
                Chief Financial Officer

               

            

    

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    

    EXHIBIT
      A

     

    “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.

     

     

    
      
        
        

      

      
        10Unassociated Document

     

    

      Exhibit
        10.5

       Lease
        Contract of Factory Buildings

      Contract
        No.: 118

      November
        18, 2006

      Wuhan,
        China

      

        
          	
                  Lessor: 

                	
                  TPV
                    Technology (Wuhan) Limited 

                
	 	
                  (Hereinafter
                    referred to as Party A) 

                

        

      

      

      Business
        Certification No.: 

      Address:
        

      

        
          	
                  Lessee:
                    

                	
                  Wuhan Diguang
                    Electronics Co. Ltd.

                
	
                   

                	
                  (Hereinafter
                    referred to as Party B)

                

        

         

      

      Business
        Certificate No.: 

      

      Address:
        

      

      Party
        A
        and Party B agree that Party A leases part of factory buildings to Party
        B which
        is located at No. Te 8, Chunkou Community, Wuhan Economic and Technological
        Development Zone of China, for the production, marketing and repairing of
        components of LCD modules so that the mutual efforts will be made for promoting
        the LCD industry chain to realize the long development and good cooperation.
        After amicable consultation, both parties reached the agreement as follows:
        

      

      01)
        Leased Properties

      

      a)
        Leased
        Properties are located at No. Te 8, Chunkou Community, Wuhan Economic and
        Technology Development Zone of China (part of factory buildings of Party
        A)
        (hereinafter referred to the Leased Properties) and the actual building area
        is
        3,043M2.

      b)
        The
        site map and specific area of the Leased Properties is indicated in the exhibit
        including the equipment arrangement and decoration status. 

      

      02)
        Use of the Leased Properties

      

      a)
        The
        use of the Leased Properties is for the production, marketing and repairing
        of
        the components of LCD modules.

      b)
        Party
        B cannot change the use of the Leased Properties without the prior written
        approval of Party A. 

      

      03)
        Lease Term and Renewal 

      

      a)
        The
        lease term will be two years, from December 1 2006 to November 30 2008.

      b)
        Upon
        the expiry of this Contract, if Party B does not want to renew the lease,
        the
        written notice shall be given to Party A 60 days before the expiry.

      c)
        If
        Party B intends to renew the lease, Party A shall give the priority of renewal
        to Party B unless it is in Force Majeure. 

      

      04)
        Rent 

      

      The
        rent
        of the Leased Properties is RMB 37, 431.00 (with tax). 

      If
        the
        rental price in the market fluctuates up to more than 5% (inclusive), both
        parties have the right to request adjusting the rental price, on which a
        supplemental agreement will be signed by both Parties. 

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      05)
        Terms of Payment 

      

      a)
        The
        rent shall be paid by Party B to Party A in the form of a cheque for transfer,
        to be settled once a month. Party B shall pay the monthly lease expenses
        by the
        end of every month. 

      b)
        Party
        B shall pay one month of rent to Party A as lease deposit in the form of
        a
        cheque for transfer as well as paying for the rent for the current month
        and
        previous one. If Party B is in breach of the contract and causes any damage
        to
        Party A, Party A will deduct it out of the deposit. 

      

      06)
        Utilities and Other Expenses

      

      a)
        Party
        A provides Party B with the energy resources such as water, steam and gas
        power
        etc, for the use in production and working. In respect of the above use,
        Party A
        cannot put Party B to a priority level and both parties shall enjoy equal
        rights. 

      b)
        If
        Party B requests for the enlargement of power capacity, the expenses incurred
        therefrom will be taken by Party A from Party B as rent. 

      c)
        Party
        A will charge the above water, power and gas fees in accordance with the
        price
        specified by the State, and shall not add other charges. 

      d)
        Terms
        of payment is on monthly base or to be made pursuant to the method agreed
        by
        Party A and the Power Supply Company. Party A will provide the list of energy
        consumption, which will be confirmed within 3 days by Party B and the such
        shall
        be paid within 7 days by Party B after the invoices are provided from Party
        A.

      

      07)
        Delivery of the Leased Properties

      

      a)
        The
        delivery time of Leased Properties is before November 10 2006. Party A will
        deliver the Leased Properties to Party B in good conditions. When making
        the
        delivery, both parties will confirm by signature on the takeover slip specifying
        the infrastructure status, and photos can be attached. 

      b)
        When
        the contract expires, if Party A and Party B agree not to renew, Party B
        shall
        take away its properties and items of its own and recover the original form
        and
        return it to Party A within 30 days except for the internal facilities specified
        in this Contract and other agreements to be retained in the Leased
        Properties.

      c)
        The
        premises that are delivered by Party A shall obtain the fire-prevention approval
        issued from the local fire-prevention authorities. 

      

      08)
        Maintenance and Safety Management

      

      a)
        In the
        lease term, Party A shall be responsible for the daily maintenance and property
        management of the buildings and the original facilities. In the lease term,
        when
        finding that the factory buildings and ancillary facilities are damaged or
        in
        failure, Party B shall inform Party A timely for repairing. Party A shall
        undertake the repairing within 3 days of receiving such notice, otherwise
        Party
        B can do it instead, for which the expenses will be borne by Party A. Party
        B
        will be responsible for the repair of the modified part made by Party B.
        

      b)
        Party
        B shall be obliged to bear the losses and maintenance expenses caused due
        to the
        improper management of Party B. 

      c)
        In the
        lease term, as to the issues of fire protection, general duties, public security
        etc., Party B shall comply with the rules and regulations imposed by local
        authorities, take all the responsibilities and subject to the inspection
        and
        supervision of Party A.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      09)
        Renewal of the Lease and Assignment of the Leased Properties

      

      Upon
        the
        expiry of the lease, the Contract will terminate and so Party B shall return
        to
        Party A the Leased Properties. If Party B wants to renew, it shall notify
        Party
        A in writing 60 days in advance,. Unless any event in the Force Majeure clause
        happens, Party A shall give priority to Party B. In the lease term, if Party
        A
        assigns or leases part of or all the property rights of Leased Properties,
        Party
        A shall ensure that the transferee continues to perform the Contract. Under
        the
        same conditions, Party B will have the right of first refusal. 

      

      10)
        Restriction and Use of the Leased Properties

      

      	a)  	
              Party
                A warrants to have obtained the valid state land use right of the
                Leased
                Properties.

            

      	b)  	
              Party
                A lease the Leased Properties to Party B in its original form. Party
                B
                shall only change the Leased Properties or reshape the partition
                rooms for
                the purpose of decoration upon the written approval of Party A, and
                shall
                obtain the approval of relevant authorities with the assistance of
                Party
                A. Party B shall bear all the expenses incurred therefrom. When the
                lease
                term of the Contract expires and when the Leased Properties are returned,
                besides the parts to be purchased by Party A as agreed by both Parties,
                Party B shall take back the decoration without damaging the structure
                of
                Leased Properties. 

            

      	c)  	
              During
                the use of the Leased Properties, Party B shall abide by the regulations
                for the safety inspection and fire prevention equipment examination
                and
                repair declaration of public buildings.

            

      	d)  	
              Party
                B shall not sublease, lend or transfer all or part of the Leased
                Properties to others or for the use by others in any form. If the
                sublease
                is necessary, it shall get the written approval of Party A.
                

            

      	e)  	
              The
                use of the electric equipment and the hazardous and harmful substances
                by
                Party B shall comply with the relevant laws and regulations of the
                State.
                

            

      	f)  	
              Party
                B shall comply with Party A’s daily management and the waste water, gas
                and remnant, etc. shall be in compliance with the relevant environmental
                laws and regulations of state. 

            

      	g)  	
              Party
                B shall observe the rules for managing the Leased Properties, which
                constitutes one part of the Contract. For any inconsistency between
                their
                content and this Agreement, this Agreement shall prevail. The management
                methods will be discussed and come to agreement by both Parties
                separately. 

            

      	h)  	
              Party
                A will assist Party B in managing the lease area and Party A cannot
                enter
                the lease area unless it gets express permission .
                

            

      

      11)
        Termination of Contract

      Party
        B
        will be deemed as breach of the Contract if one of the following events
        occurs.

      Pursuant
        to the Article 13 of this Contract, Party A can recover the penalties and
        with a
        fifteen-day written notice, Party A could terminate this Contract and take
        back
        the Leased Properties. Any damage to Party A thus incurred shall be compensated
        by Party B.

       

      a)
        sublease, transfer or lend the Leased Properties to others without consent;
        change the use purpose of the Leased Properties without consent;

      b)perform
        illegal activities in the Leased Properties.

      c)
        Party
        B is in breach of the Contract.

      d)
        Other
        matters harmful to the legal rights of Party A. 

      

      Party
        A
        will be deemed as breach of the Contract if one of the following events
        occurs.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      Pursuant
        to the Article 13 of this Contract, Party B can recover the penalties and
        with a
        fifteen-day written notice, Party B could terminate this Contract. Any damage
        to
        Party B thus incurred shall be compensated by Party A. 

      a)
        fails
        to repair timely, which makes Party B can not use the Properties any more.
        

      b)
        Party
        A is in breach of the Contract.

      c)
        Other
        matters harmful to the legal rights of Party B. 

      

      12)
        Improvement of Leased Properties 

      

      For
        working convenience, Party B will carry out the improvement of the properties
        provided by Party A so as to build the dust free environment, which can not
        affect the normal production operation of Party A. The reconstruction plan
        will
        be provided by Party B and Party A shall be responsible for applying for
        the
        required examination and approval formalities. 

      

      13)
        Insurance 

      

      Party
        A
        shall be responsible for the insurance of the property in the Leased Properties
        that belongs to Party A, and Party B shall be responsible for the insurance
        ofthe added equipment and modified facility in Leased Properties that belong
        to
        Party B. 

      

      14)
        Liabilities of Breach

      

      a)
        In the
        lease term, both parties shall comply with the Contract. If one party breaches
        the Contract, such party shall compensate for the loss caused to the other
        party. 

      b)
        If the
        loss is caused to Party A by Party B, Party B will make the compensation
        for the
        damages and vice versa. 

      3)
        If a
        party breaches this Contract, the other party shall notify in writing such
        party
        to make the remedy within 15 days. If the remedy fails to be made in the
        above
        period, the other party shall give another notice of 15-day remedy period.
        If
        the remedy fails to be made again, the Contract can be terminated by the
        non-breaching party in writing. 

      

      15)
        Force Majeure (Stipulated by the Government)

      

      If
        the
        obligations or stipulations under this Contract fail or postpone to be fulfilled
        by both parties due to Force Majeure, both parties will not have the liability
        and shall do their best to minimize the damages to the other party.

      

      16)
        Damage of Leased Properties 

       

      a)
        If the
        Leased Properties is damaged in part or completely in which Party B bears
        no
        fault, Party B shall give the written notice to Party A and Party A shall
        repair
        immediately. 

      b)
        If the
        Leased Properties is damaged in part or completely due to the faults of Party
        B,
        Party B shall be liable for the repair. 

      c)
        If the
        damages are made to one party due to the faults of the other party, such
        party
        shall be responsible for recover to the original and bear the compensation
        accordingly.

      

      17)
        Use of Water, Power, Energy and Public Utilities 

      

      Party
        A
        shall provide the current drawings of Leased Properties when Party A delivers
        the factory buildings. 

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      18)
        Confidentiality 

       

      The
        parties and their employees shall keep confidential the information and trade
        secrets belonging to the other party known to or possessed through performing
        this Contract, and shall not disclose to any third party. This provision
        shall
        survive the expiry or termination of this Contract. If one party or its
        employees violates this provision, such party shall compensate the other
        party.

       

      19)
        Contract Exhibits

      

      The
        following document is deemed as the valid part of the contract, having the
        same
        legal force with the Contract. 

      a)
        The
        Sitemap of Leased Properties and Lease Area

      

      20)
        Miscellaneous

      

      	1.  	
              For
                any other matters not covered by this Contract, both Parties may
                sign
                supplementary agreement thorough negotiation. For any inconsistency
                between this Contract and the supplementary agreement, the supplementary
                agreement shall prevail. 

            

      	2.  	
              For
                any other matters not covered by this Contract and the supplementary
                agreement, the relevant PRC laws, regulations and policies shall
                be
                adopted. 

            

      	3.  	
              Failure
                of either Party A or Party B to fulfill any of the provision or right
                herein, shall not be deemed as the waiver of such provision or right.
                

            

      	4.  	
              This
                Contract constitutes the entire agreement between the parties, and
                any
                modification or revision to this Contract shall become effective
                only
                after the execution of the representative of both Parties. Upon the
                expiry
                of this Contract, if the parties do not have any intent to renew
                it, the
                Contract will terminate. 

            

      	5.  	
              Either
                Party A or Party B shall not transfer the rights and obligations
                to any
                third party without prior written approval of the other
                party.

            

      	6.  	
              In
                accordance with the regulations of the state and local governments,
                the
                stamp tax, the registration fee and other related taxes in connection
                with
                this Contract shall be borne by Party A, and Party A shall be responsible
                for the registration formalities. 

            

      

      21)
        Notice 

      

      All
        the
        notices, correspondences, documents, notices and requests, etc. between the
        parties shall be given in writing (through email, fax, letter). 

      

      22)
        Dispute Resolution

      

      Any
        dispute arising from the execution of, or in connection with the Contract
        will
        be settled through friendly negotiation between both parties. In case the
        agreement cannot be reached, any party may file the dispute with the local
        people’s court.

      

      23)
        Counterparts

       

      This
        Agreement is six pages and shall be executed in two copies. Each Party shall
        hold one and both copies have the same legal force.

      

      (Signature
        Page)

      Party
        A
        (stamp): TPV
        Technology (Wuhan) Limited 

      Authorized
        representative (signature):                 

      Located
        at: Wuhan Economy and Technology Zone, Hubei, P.R.China 

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      Party
        B
        (stamp): Wuhan Diguang Electronics Co. Ltd.

      Authorized
        representative (signature):                 

      Located
        at: Wuhan Economy and Technology Zone, Hubei, P.R.China

      Date:
        November 18, 2006 at Wuhan

      

      

      Exhibit:
        

      The
        Sitemap of Leased Properties and Lease Area

       

      
        
          
          

        

        
          6

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