AGREEMENT AND PLAN OF REORGANIZATION

AGREEMENT AND PLAN OF REORGANIZATION

This Agreement and Plan of Reorganization (the “Agreement”), dated as of the 29th day of December 2006, by and between KAL Energy, Inc., a Delaware corporation (“KAL”), and Thatcher Mining Pte. Ltd., a company incorporated in Singapore (“Thatcher”), with reference to the following:

A.

KAL is a Delaware corporation organized on February 21, 2001.  KAL has authorized capital stock of 100,000,000 shares of Common Stock, $0.0001 par value per share (“KAL Common Stock”).  Of such shares, 46,875,272 shares of KAL Common Stock are issued and outstanding.

B.

Thatcher is a privately held corporation organized under the laws of Singapore on June 8, 2006.  Thatcher is authorized to issue only one class of stock.  Thatcher has authorized capital stock of eight (8) ordinary shares, S$1.00 par value per share (“Thatcher Common Stock”).  Of such shares, eight (8) shares of Thatcher Common Stock are issued and outstanding.

C.

The respective Boards of Directors of KAL and Thatcher have deemed it advisable and in the best interests of KAL and Thatcher and their respective shareholders that, contingent upon approval by shareholders holding 100% of the outstanding stock of Thatcher, all currently outstanding shares of Thatcher be acquired by KAL, pursuant to the terms and conditions set forth in this Agreement

D.

KAL and Thatcher propose to enter into this Agreement which provides, among other things, that all of the outstanding shares of Thatcher Common Stock be acquired by KAL, in exchange for 32,000,000 shares of KAL Common Stock and such additional items as more fully described in the Agreement.

E.

The parties desire the transaction to qualify as a taxable stock purchase pursuant to the U.S. Internal Revenue Code.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE 1
THE ACQUISITION

1.01

At the Effective Time (as defined in Section 2.01), subject to the terms and conditions herein, all of the shares of Thatcher Common Stock issued and outstanding immediately prior to the Effective Time shall be acquired by KAL in exchange for 32,000,000 fully paid and nonassessable shares of KAL Common Stock (the exchange of all shares of Thatcher Common Stock for KAL Common Stock shall constitute the “Exchange”).  The KAL Common Stock shall be issued to the shareholders of Thatcher and/or their nominees in the amounts set forth on a list provided by Thatcher to KAL.  In addition, at the Effective Time, KAL shall pay the shareholders of Thatcher and/or their nominees the sum of US$10,000.

1.02

As of the Effective Time, each outstanding stock certificate that immediately prior to the Effective Time represents shares of Thatcher Common Stock shall be deemed for all purposes to evidence ownership and to represent the number of shares of KAL Common Stock for which such shares of Thatcher Common Stock have been exchanged pursuant to Section 1.01.  The record holder

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of each outstanding certificate representing shares of Thatcher Common Stock shall, after the Effective Time, be entitled to vote the KAL Common Stock for which such shares of Thatcher Common Stock have been exchanged on any matters on which the holders of the KAL Common Stock are entitled to vote.  After the Effective Time, the holders of certificates evidencing outstanding shares of Thatcher Common Stock immediately prior to the Effective Time shall deliver such certificates of Thatcher Common Stock, duly endorsed so as to make KAL the sole holder thereof, free and clear of all claims, and encumbrances and KAL shall deliver a transmittal letter to the transfer agent of KAL directing the issuance of the KAL Common Stock to the shareholders of Thatcher and/or their nominees.  Any shares of KAL Common Stock issued pursuant to this Agreement will not be transferable except (a) pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”), or (b) upon receipt by KAL of a written opinion of counsel for the holder reasonably satisfactory to KAL to the effect that the proposed transfer is exempt from the registration requirements of the Act, and relevant state securities laws.  Restrictive legends shall be placed on all certificates representing KAL Common Stock issued pursuant to this Agreement, and the shares of KAL Common Stock into which they may be converted, as set forth in Section 11.02.

In the event any certificate for Thatcher Common Stock has been lost, stolen or destroyed, KAL shall issue and pay in exchange for such lost, stolen or destroyed certificate, promptly following its receipt of an affidavit of that fact by the holder thereof, such shares of KAL Common Stock as may be required pursuant to this Agreement.

1.03

Following the Effective Time, there will be a total of 78,875,272 shares of KAL Common Stock issued and outstanding.  

1.04

Following the Effective Time, Thatcher will be a wholly owned subsidiary of KAL.

ARTICLE 2
THE CLOSING

2.01

Subject to the terms and conditions herein, the consummation of the transactions contemplated by this Agreement (the “Closing”) shall take place at Stradling Yocca Carlson & Rauth, 660 Newport Center Drive, Suite 1600, Newport Beach, California 92660 on or before January 23, 2007 (the “Closing Date”) or at such other place or date and time as may be agreed to in writing by the parties hereto at the earliest practicable time after satisfaction or waiver of the conditions hereof, but in no event later than eighteen (18) days after such conditions have been satisfied or waived (the “Effective Time” or “Effective Date”).

2.02

The following conditions are a part of this Agreement and must be completed on or as of the Closing Date, or such other date specified by the parties:

(a)

At the Closing, the Board of Directors of KAL shall appoint the following individuals as members of the Board of Directors:

Strato Malamus

Laith R. Reynolds

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Andrew Caminschi

(b)

Immediately following the appointment of the individuals listed in Section 2.02(a) above to the Board of Directors, the Board of Directors of KAL shall consist of Strato Malamas, Andrew Caminschi and Laith R. Reynolds as chairman.

(c)

Immediately prior to Closing, all of the current officers of KAL including Strato Malamas, its President, shall resign as officers of KAL.  After the Closing Date, the newly constituted Board of Directors of KAL consisting of the individuals appointed pursuant to Section 2.2(a) shall appoint Cameron J. Reynolds as President, and appoint such other officers as it deems is necessary and in the best interests of KAL.

(d)

Prior to Closing, KAL shall have obtained board and shareholder approval to the extent necessary to (i) consummate the share exchange contemplated by this Agreement, (ii) create an option pool of 12,000,000 shares of Common Stock, and (iii) complete, following Closing, in a manner which is reasonably acceptable to Thatcher, the sale, spin-off or other disposition of its pre-Closing operations, including all assets and liabilities.

(e)

Thatcher shall have obtained the written approval of all of its shareholders to the terms of this Agreement and to the completion of the share exchange transaction described herein.

(f)

Thatcher shall have delivered to KAL its financial statements for the period from inception (June 8, 2006) through September 30, 2006, which shall have been audited in substantial compliance with generally accepted accounting principles in the U.S. (“U.S. GAAP”), and which shall be capable of being audited in accordance with U.S. GAAP.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF KAL

KAL hereby represents and warrants to Thatcher as follows:

3.01

Organization, Standing and Power .  KAL is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted, and is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary.

3.02

Capital Structure .  As of the date of execution of this Agreement, the authorized capital stock of KAL consists of 100,000,000 shares of Common Stock with a par value of USD $0.0001 per share, of which 46,875,272 shares are currently issued and outstanding. The Exchange Shares to be issued pursuant to this Agreement shall be, when issued pursuant to the terms of the resolution of the Board of Directors of KAL approving such issuance, validly issued, fully paid and nonassessable and not subject to preemptive rights.  Except as otherwise specified herein, as of the date of execution of this Agreement, there are no other options, warrants, calls, agreements or other rights to purchase or otherwise acquire from KAL at any time, or upon the happening of any stated event, any shares of the capital stock of KAL whether or not presently issued or outstanding.

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3.03

Certificate of Incorporation, Bylaws, and Minute Books .  The copies of the Articles of Incorporation and of the Bylaws of KAL which have been delivered to THATCHER are true, correct and complete copies thereof.  The minute book of KAL, which has been made available for inspection, contains accurate minutes of all meetings and accurate consents in lieu of meetings of the Board of Directors (and any committee thereof) and of the shareholders of KAL since the date of incorporation and accurately reflects all transactions referred to in such minutes and consents in lieu of meetings.

3.04

Authority .  KAL has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors of KAL.  No other corporate or shareholder proceedings on the part of KAL are necessary to authorize the Exchange, or the other transactions contemplated hereby.

3.05

Conflict with Other Agreements; Approvals .  The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or the loss of a material benefit under, or the creation of a lien, pledge, security interest or other encumbrance on assets (any such conflict, violation, default, right of termination, cancellation or acceleration, loss or creation, a “violation”) pursuant to any provision of the Articles of Incorporation or Bylaws or any organizational document of KAL or, result in any violation of any loan or credit agreement, note, mortgage, indenture, lease, benefit plan or other agreement, obligation, instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to KAL which violation would have a material adverse effect on KAL taken as a whole.  No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign (a “Governmental Entity”) is required by or with respect to KAL in connection with the execution and delivery of this Agreement by KAL or the consummation by KAL of the transactions contemplated hereby.

3.06

Books and Records .  KAL has made and will make available for inspection by THATCHER upon reasonable request all the books of KAL relating to the business of KAL. Such books of KAL have been maintained in the ordinary course of business.  All documents furnished or caused to be furnished to THATCHER by KAL are true and correct copies, and there are no amendments or modifications thereto except as set forth in such documents.

3.07

Compliance with Laws .  KAL is and has been in compliance in all material respects with all laws, regulations, rules, orders, judgments, decrees and other requirements and policies imposed by any Governmental Entity applicable to it, its properties or the operation of its businesses.

3.08

SEC Filings .

KAL filed a Form 10-KSB on August 29, 2006 and filed Form 10-QSB on October 11, 2006.  As of the date hereof, KAL is current in its filing obligations.

3.09

Financial Statements .  Copies of KAL’s audited financial statements for the fiscal year ended May 31, 2006 have been delivered to THATCHER.

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3.10

Banks .  KAL will deliver to THATCHER a true and complete list (in all material respects), as of the date of this Agreement, showing (1) the name of each bank in which KAL has an account or safe deposit box, and (2) the names and addresses of all signatories.  

3.11

Litigation .  There is no suit, action or proceeding pending, or, to the knowledge of KAL, threatened against or affecting KAL which is reasonably likely to have a material adverse effect on KAL, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against KAL having, or which, insofar as reasonably can be foreseen, in the future could have, any such effect.

3.12

Employees .  KAL has no employees or consultant contracts and is not in the process of acquiring any employees or consultant contracts.

3.13

Liens, Leases and Contracts .  KAL has no liens, encumbrances, easements, security interests or similar interests in or on any of its assets.  KAL has no leases (whether of real or personal property) contracts, promissory notes, mortgages, licenses, franchises, or other written agreement to which KAL is a party which involves or can reasonably be expected to involve aggregate future payments or receipts by KAL (whether by the terms of such lease, contract, promissory note, license, franchise or other written agreement or as a result of a guarantee of the payment of or indemnity against the failure to pay same) except any of said instruments which terminate or are cancelable without penalty.

3.14

Absence of Undisclosed Liabilities .  KAL has no liabilities of any nature, whether fixed, absolute, contingent or accrued. As of the Effective Time, KAL shall have no assets or liabilities other than those resulting from the acquisition of Thatcher. Prior to the execution of this Agreement, KAL and THATCHER have entered into a Loan Agreement pursuant to which KAL has loaned THATCHER a total of $90,000. Simultaneously with the execution of this Agreement, KAL and THATCHER shall enter into an additional Loan Agreement pursuant to which KAL shall loan THATCHER an additional $100,000.   Prior to closing under the terms of this Agreement, the loans shall be due and payable in accordance with the terms of the applicable Loan Agreements.  Upon closing under the terms of this Agreement, the loans shall be cancelled and deemed to be paid in full.

3.15

Absence of Changes .  Since May 31, 2006 there has not been any material adverse change in the condition (financial or otherwise), assets, liabilities, earnings or business of KAL, except for changes resulting from completion of those transactions described in Section 2.02(e) and Section 5.01.

3.16

Tax Matters .  All taxes and other assessments and levies which KAL is required by law to withhold or to collect have been duly withheld and collected, and have been paid over to the proper government authorities or are held by KAL in separate bank accounts for such payment or are represented by depository receipts, and all such withholdings and collections and all other payments due in connection therewith (including, without limitation, employment taxes, both the employee’s and employer’s share) have been paid over to the government or placed in a separate and segregated bank account for such purpose.  There are no known deficiencies in income taxes for any periods and all returns, declarations, reports, estimates and statements required have been filed.  There are no liens or taxes upon any assets of KAL, except taxes not yet due.  Further, the representations and warranties as to absence of undisclosed liabilities contained in Section 3.14 includes any and all tax liabilities of whatsoever kind or nature (including, without limitation, all federal, state, local and foreign income, profit, franchise, sales, use and property taxes) due or to become due, incurred in

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respect of or measured by KAL income or business prior to the Effective Date.  Copies of KAL’s tax returns for years ending May 31, 2004, 2005, 2006 have been delivered to THATCHER.

3.17

Brokers and Finders .  KAL shall be solely responsible for payment to any broker or finder retained by KAL for any brokerage fees, commissions or finders’ fees in connection with the transactions contemplated herein.  

3.18

Subsidiaries .  KAL does not have any subsidiary, or own an ownership interest in any other corporation.

3.19

Valid Issuance of Securities .  The KAL Common Stock, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid and non assessable, and will be free of restrictions on transfer other than restrictions on transfer under this Agreement and under applicable state and federal securities laws.

3.20

Directors, Officers and Controlling Shareholders .  No director, officer or controlling shareholder of KAL has been subject to a criminal proceeding, bankruptcy, Securities and Exchange Commission or NASD censure in the last five years nor is any such individual under investigation for any of the above.

3.21

Accuracy of Information .  No representation or warranty by KAL contained in this Agreement and no statement contained in any certificate or other instrument delivered or to be delivered to Thatcher pursuant hereto or in connection with the transactions contemplated hereby (including without limitation all Schedules and exhibits hereto) contains or will contain any untrue statement of material fact or omits or will omit to state any material fact necessary in order to make the statements contained herein or therein not misleading.

3.22

Full Disclosure .  The representations and warranties of KAL contained in this Agreement (and in any schedule, exhibit, certificate or other instrument to be delivered under this Agreement) are true and correct in all material respects, and such representations and warranties do not omit any material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.  There is no fact of which KAL has knowledge that has not been disclosed to Thatcher pursuant to this Agreement, including the schedules hereto, all taken together as a whole, which has had or could reasonably be expected to have a material adverse effect on KAL or Thatcher or materially adversely affect the ability of KAL to consummate in a timely manner the transactions contemplated hereby.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THATCHER MINING PTE. LTD.

Thatcher hereby represents and warrants to KAL as follows:

4.01

Organization, Standing and Power .  THATCHER is a corporation duly organized, validly existing and in good standing under the laws of Singapore, has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted, and is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary.

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4.02

Capital Structure .  The authorized capital stock of THATCHER consists of eight (8) ordinary shares, with par value of S$1.00 per share, all of which are issued and outstanding.  All outstanding shares of THATCHER stock are validly issued, fully paid and nonassessable and not subject to preemptive rights or other restrictions on transfer.  All of the issued and outstanding shares of THATCHER were issued in compliance with all applicable securities laws.  Except as otherwise specified herein, there are no options, warrants, calls, agreements or other rights to purchase or otherwise acquire from THATCHER at any time, or upon the happening of any stated event, any shares of the capital stock of THATCHER.

4.03

Certificate of Incorporation, Bylaws and Minute Books .  The copies of the Articles of Incorporation and of the other corporate documents of THATCHER which have been delivered to KAL are true, correct and complete copies thereof.  The minute books of THATCHER which have been made available for inspection contain accurate minutes of all meetings and accurate consents in lieu of meetings of the Board of Directors (and any committee thereof) and of the shareholders of THATCHER since the date of incorporation and accurately reflect all transactions referred to in such minutes and consents in lieu of meetings.

4.04

Authority .  THATCHER has all requisite power to enter into this Agreement and, subject to approval of the proposed transaction by the holders of 100% of its issued and outstanding shares which are entitled to vote to approve the proposed transaction, has the requisite power and authority to consummate the transactions contemplated hereby.  Except as specified herein, no other corporate or shareholder proceedings on the part of THATCHER are necessary to authorize the Exchange and the other transactions contemplated hereby.

4.05

Conflict with Agreements; Approvals .  The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, conflict with, or result in any violation of any provision of the Certificate of Incorporation or Bylaws of THATCHER or of any loan or credit agreement, note, mortgage, indenture, lease, benefit plan or other agreement, obligation, instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to THATCHER or its properties or assets. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required by or with respect to THATCHER in connection with the execution and delivery of this Agreement by THATCHER, or the consummation by THATCHER of the transactions contemplated hereby.

4.06

Financial Statements .  THATCHER will deliver to KAL financial statements for the period from inception (June 8, 2006) through September 30, 2006, which shall have been audited in substantial compliance with U.S. GAAP, and which shall be capable of being audited in accordance with U.S. GAAP.

4.07

Books and Records .  THATCHER has made and will make available for inspection by KAL upon reasonable request all the books of account, relating to the business of THATCHER.  Such books of account of THATCHER have been maintained in the ordinary course of business.  All documents furnished or caused to be furnished to KAL by THATCHER are true and correct copies, and there are no amendments or modifications thereto except as set forth in such documents.

4.08

Banks .  THATCHER has delivered to KAL a true and complete list (in all material respects), as of the date of this Agreement, showing (1) the name of each bank in which KAL has an account or safe deposit box, and (2) the names and addresses of all signatories.  

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4.09

Compliance with Laws .  THATCHER is and has been in compliance in all material respects with all laws, regulations, rules, orders, judgments, decrees and other requirements and policies imposed by any Governmental Entity applicable to it, its properties or the operation of its businesses.

4.10

Liabilities and Obligations .  Except as otherwise provided herein, THATCHER has no material liabilities or obligations (absolute, accrued, contingent or otherwise) except (i) liabilities that are reflected and reserved against on the THATCHER’s financial statements that have not been paid or discharged since the date thereof and (ii) liabilities incurred since the date of such financial statements in the ordinary course of business consistent with past practice and in accordance with this Agreement. Prior to the execution of this Agreement, KAL and THATCHER have entered into a Loan Agreement pursuant to which KAL has loaned THATCHER a total of $90,000. Simultaneously with the execution of this Agreement, KAL and THATCHER shall enter into an additional Loan Agreement pursuant to which KAL shall loan THATCHER an additional $100,000.  Prior to closing under the terms of this Agreement, the loans shall be due and payable in accordance with the terms of the applicable Loan Agreements.  Upon closing under the terms of this Agreement, the loans shall be cancelled and deemed to be paid in full.

4.11

Litigation .  There is no suit, action or proceeding pending, or, to the knowledge of THATCHER threatened against or affecting THATCHER, which is reasonably likely to have a material adverse effect on THATCHER, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against THATCHER having, or which, insofar as reasonably can be foreseen, in the future could have, any such effect.

4.12

Taxes .  THATCHER has filed or will file within the time prescribed by law (including extension of time approved by the appropriate taxing authority) all tax returns and reports required to be filed with all jurisdictions where such filing is required by law; and THATCHER has paid, or made adequate provision for the payment of all taxes, interest, penalties, assessments or deficiencies due and payable on, and with respect to such periods. THATCHER knows of (i) no other tax r