On September 9, 2008, KAL Energy, Inc., a Delaware corporation (the "Company"), entered into an Engagement Letter Agreement (the "Engagement Agreement") with Grayling Global, a public relations service provider ("Grayling"). Under the Engagement Agreement, Grayling will provide to the Company investor and media relations services and a one time crisis communication program (the "Services"). In consideration for the Services, the Company will pay Grayling a fixed fee of ten thousand dollars ($10,000) per month, a one time fee for the crisis communication program of eighteen thousand dollars ($18,000) and additional bonus compensation in an amount to be determined by the Company and Grayling upon Grayling's achievement of certain performance milestones to be agreed upon by the Company and Grayling. In addition, the Company will reimburse Grayling for reasonable out-of-pocket expenses including, but not limited to, travel and office expenses.

The initial term of the Engagement Agreement commenced on August 29, 2008 and will continue in effect for a period of one year. Upon expiration of the initial term, the term of the Engagement Agreement will automatically renew for additional one year periods unless terminated in accordance with the Engagement Agreement. Either the Company or Grayling may terminate the Engagement Agreement for any reason upon ninety (90) days prior written notice, provided, that such termination may not occur for a period six (6) months following the commencement of the initial term. In addition, either the Company or Grayling may terminate the Engagement Agreement immediately upon notice to the other party for failure of the other party to timely cure a breach of any material provision of the Engagement Agreement or upon bankruptcy or insolvency of the other party.

The foregoing description of the Engagement Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Engagement Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

See the disclosure under Item 5.02 of this Current Report on Form 8-K, which is incorporated herein by reference.

(e) On September 9, 2008, the Company entered into a Compensation Agreement (the "Compensation Agreement") with William Bloking, the Company's President and Chairman of the board of directors, pursuant to which the Company will compensate Mr. Bloking for his services to the Company at the rate of $300,000 per year, effective as of June 1, 2008 and continuing until such time as the Company appoints a Chief Executive Officer. Effective upon the Company's appointment of a Chief Executive Officer, Mr. Bloking's compensation will be reduced to $84,000 per year, his prior rate of compensation.

The foregoing description of the Compensation Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Compensation Agreement, a copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.

(d) Exhibits.

Exhibit
Number   Description
10.1     Engagement Letter Agreement, dated as of
         September 9, 2008, by and between KAL Energy,
         Inc. and Grayling Global.
10.2     Compensation Agreement, dated as of September
         9, 2008, by and between KAL Energy, Inc. and
         William Bloking.†

† Indicates management contract or compensatory plan or arrangement