Canterbury Resources, Inc.: Exhibit 10.1 - Filed by newsfilecorp.com





BINDING LETTER OF INTENT

     This Binding Letter of Intent
(this “LOI”) is entered into by and between CANTERBURY RESOURCES,
INC., a Nevada corporation (the “Company”), and CONTROLLED CARBON,
LLC DBA ECHO AUTOMOTIVE, an Arizona limited liability company
(“Echo”).

BACKGROUND AND PURPOSE

     A. The Company is a fully
reporting publicly traded company with the ticker symbol “CTBX” on the United
States over-the-counter (OTCQB) securities market.

     B. The Company wishes to acquire
Echo through a reverse acquisition and believes Echo to have a valuable product
and intellectual property rights related to a cost-reduction technology
(EchoDrive) for converting fleet vehicles into highly fuel-efficient plug-in
hybrids.

     C. The Company and Echo wish to
enter into a voluntary share exchange (the “Exchange”) transaction
whereby the Company would acquire all of the issued and outstanding units of
Echo in exchange for the issuance to the members of Echo of approximately
52,500,000 shares of common stock of the Company.

     D. The parties wish to enter into
this LOI which states that the closing of the Exchange will occur upon
completion of the conditions as set forth herein and in a formal, definitive
agreement.

AGREEMENT

     NOW, THEREFORE, in
consideration of the mutual agreements and representations contained herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:

     1. This LOI constitutes a binding
agreement with regard to the various matters set forth herein and shall become
effective on execution of this LOI. The Company understands that time is of the
essence with respect to an advance in the amount of $300,000 and hereby agrees
to provide such an advance of $300,000, in immediately available funds, within 3
business days of the execution of this LOI. Such advance will be subject to the
terms and conditions of a promissory note in the form of Exhibit A (the
“LOI Advance”). The general use of these funds are as follows: (a)
$100,000 to be used for general working capital and business activities; (b)
$50,000 loan to Flagship Enterprise Center to purchase assets to be used by
Echo; (c) $112,500 to purchase battery pack IP and other assets from Bright
Automotive; (d) $15,000 to purchase engine dyne; (e) $20,000 to purchase e250
van (used); and (f) $2,500 for working capital.

     2. The Company and Echo agree
that they will enter into a mutually agreed upon definitive agreement containing
substantially the same terms and provisions as set forth in Paragraphs 3-15 of
this LOI within thirty (30) days from the date of execution of this LOI (the
“Definitive Agreement”). 




     3. Upon the satisfaction of the
conditions set forth herein and in the Definitive Agreement, the Company will
acquire all of the issued and outstanding units of Echo in exchange for the
issuance to the members of Echo of 52,500,000 shares of common stock of the
Company. At the Closing, Echo shall become wholly-owned by the Company and the
note evidencing the LOI Advance or Additional Advances (defined below) shall be
cancelled in connection with the Exchange. 

     4. The closing of the Exchange
(the “Closing”) shall occur on or before thirty (30) days from the
date on which Echo completes the audit of its financial statements as required
to be filed by the Company upon the Closing in accordance with the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and approval
by its members and note holders of the Definitive Agreement and the transactions
contemplated thereunder and hereunder. Immediately prior to the Closing, the
Company will have 22,500,000 shares of common stock, on a fully diluted basis,
issued and outstanding. At the Closing, after giving effect to the Exchange, the
capitalization of the Company will be as set forth on Exhibit B. 

     5. After the Closing, the Company
will be managed by Echo’s current management and board of managers. The existing
board of directors and officers of the Company will resign effective as of the
Closing and be replaced by officers and directors to be designated by Echo. For
the avoidance of doubt, these board of directors will include William D.
Kennedy, Jason Plotke, Jim Holden, Eric Crown and Dan Clarke and the officers
will include William D Kennedy, CEO and Jason Plotke, President as well as any
other officers and directors designated by Echo. 

     6. Upon execution of this LOI,
the Company will enter into an agreement (the “Financing
Agreement”) with Hartford Equity Inc. (“Hartford”) under
which Hartford or its associates will commit to providing financing of not less
than $2 million within twelve (12) months of the Closing as follows (the
“Financing”):

	
  Concurrently with execution of this LOI, Hartford will purchase $300,000 of
  common stock of the Company pursuant to the Financing Agreement. This amount
  will be used to fund the LOI Advance referenced in Paragraph 1 above. 

  
	
  At the Closing, an amount equal to $200,000 at a price of $0.50 per share
  of common stock, to the Company. 

  
	
  No less than 750,000 shares of common stock of the Company at a price of
  $0.50 per share shall be purchased by the investor on the first day of each
  quarter after the Closing until the entire $2 million is invested in the
  Company no later than twelve (12) months from the Closing. Quarters shall be
  based on the calendar year starting in January of each year with January 1,
  April 1, July 1, Oct 1 being the first day of Quarter 1, Quarter 2, Quarter 3,
  and Quarter 4 respectively. For the purpose of clarity, if the transaction
  closes prior to June 30, 2012, the Investor shall purchase no less than
  750,000 shares of common stock on July 1, 2012. 



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	The Financing Agreement includes the form of securities purchase agreement
  and warrant for each tranche of equity funding and shall require the investors
  providing such financing to provide all information regarding such investor as
  may be required for the Company to comply with all applicable securities or
  other laws relating to the private placement of securities. Under the terms of
  the Financing, for each dollar invested, the investor making such investment
  will be issued two (2) shares of common stock of the Company and a warrant to
  purchase two (2) shares of common stock of the Company with an exercise price
  of $0.75 per share with a term of eighteen (18) months. The Financing
  Agreement shall not be amended or terminated on or prior to the Closing
  without the written consent of Echo. 


     7. The Company, at its sole
discretion, may advance additional funds (“Additional Advances”)
to Echo or on behalf of Echo prior to Closing. Any such Additional Advances
shall be offset against the $500,000 received by Echo at Closing.

     8. The Company shall have no more
than 79,000,000 shares of common stock issued and outstanding after completion
of the full $2,000,000 Financing, excluding any shares of common stock issuable
under outstanding warrants and options. In the event the Company fails to meet
the terms of the Financing Agreement, unless waived by the parties hereto, the
Company and Echo will mutually agree to take all necessary actions to rescind
the Exchange in the most cost-effective and expeditious manner. 

     9. At the Closing, the Company
will have no more than $1,000 in actual or contingent liabilities outstanding
and no undisclosed liabilities, commitments or other obligations of any kind
other than the Company’s obligations to Echo pursuant to this LOI and the
Definitive Agreement and the Company’s obligation to investors pursuant to the
Financing document attached as Exhibit C.

     10. All legal, accounting or
other fees and expenses related to the Closing shall be paid for by the Company
prior to the Closing shall be in addition to the Advance and the Closing
Consideration amounts, and shall be offset against the aggregate Financing
amount and credited against the final financing tranche to be funded. 

     11. Echo represents that the
board of directors of Echo has approved this LOI and the transactions
contemplated hereunder.

     12. The parties intend for the
post-Closing and post-Financing capitalization table of the Company to be
substantially as attached hereto as Exhibit B. Any update to Exhibit B
between now and the execution of the definitive agreement will have no
effect on total number of shares (52,500,000) issued by Company to Echo.

     13. The Company shall advance any
audit fees necessary to obtain an audit and comply with the filing requirements
of the Exchange Act. Any advances by the Company under this Paragraph 13 for
audit fees prior to the Closing shall be in addition to the Advance and the
Closing Consideration amounts, and shall be offset against the aggregate
Financing amount and credited against the final financing tranche to be
funded.

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     14. In the Definitive Agreement,
Echo will grant to the Company a non-exclusive license (conditioned on Closing)
to use the name “Echo Automotive” or any variation thereof not currently used by
Echo and, upon the Closing, the Company may undertake to change its name to
“Echo Automotive, Inc.” or a mutually agreed upon name not used by Echo. Echo
further agrees to provide consents, as may be required by the Company to make
filings for the use of such name; provided, however, that in no
event shall Echo be precluded from continuing to use any names currently used by
Echo. Prior to the Closing, neither the Company nor its representatives shall
make any representations regarding the business or affairs of Echo without the
prior written consent of Echo.

     15. The Definitive Agreement
shall contain customary representation and warranties, covenants and
indemnification provisions as shall be mutually agreed upon by Echo and the
Company.

     16. In consideration of the time
and effort the Company will incur to pursue this transaction, Echo agrees that,
from the date of execution of this LOI (or, if sooner, until such time as this
LOI is terminated) until the Closing, neither Echo nor any person or entity
acting on its behalf will in any way directly or indirectly (i) solicit,
initiate, encourage or facilitate any offer to directly or indirectly purchase
Echo or any of its material assets or equity, (ii) enter into any discussions,
negotiations or agreements with any person or entity which provide for such
purchase, or (iii) provide to any persons other than its members or the Company
or its representatives any information or data related to such purchase or
afford access to the properties, books or records of Echo to any such persons.
If Echo, or its representatives receive any inquiry or proposal offering to
purchase Echo or any part of its assets or equity, Echo will promptly notify the
Company. The Company acknowledges that Echo has advised the Company that the
amount of the LOI Advance is insufficient to fund Echo’s operating costs pending
the Closing and Echo will not be in breach of this paragraph or agreement so
long as any action taken that might breach this paragraph is done so to raise
additional bridge funding for the Company. No party hereto will make any
disclosure or public announcements of the proposed transactions, the LOI or the
terms thereof without the prior consent of the other party, which shall not be
unreasonably withheld, or except, and only to the extent, as required by the
applicable rules and regulations of the Securities and Exchange Commission. The
Company agrees to provide to Echo such current information regarding the Company
as Echo may reasonably request to include in any disclosure statement to be
provided to Echo members and note holders in connection with soliciting the vote
of Echo members and note holders for approval of the Plan of Reorganization and
the transactions contemplated thereby.

     17. Prior to the Closing, the
Company and its representatives shall maintain the confidentiality of all
confidential information that is provided to the Company by Echo or its
representatives except to the extent such disclosure is required by law. Each
party agrees and acknowledges that such party and its directors, officers,
employees, agents and representatives will disclose business information and
information about the proposed transaction in the course of securing financings
for the Company and Echo and that the parties and their representatives may be
required to disclose that information under the continuous disclosure
requirements of the Exchange Act; provided, however, that prior to
the Closing, the disclosure of any non-public confidential information of Echo
may be made by the Company only with prior approval of Echo and subject to obtaining an appropriate confidentiality
agreement from the proposed recipient of such information.

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     18. This LOI shall be construed
in accordance with, and governed by, the laws of the State of Nevada, and each
party separately and unconditionally subjects to the jurisdiction of any court
of competent authority in the State of Nevada, and the rules and regulations
thereof, for all purposes related to this agreement and/or their respective
performance hereunder.

     19. The parties shall prepare,
execute and file any and all documents necessary to comply with all applicable
federal and state securities laws, rules and regulations in any jurisdiction
where they are required to do so.

     20. If any term or provision
hereof shall be held illegal or invalid, this LOI shall be construed and
enforced as if such illegal or invalid term or provision had not been contained
herein.

     21. This LOI may be executed in
counterparts, by original or facsimile signature, with the same effect as if the
signatures to each such counterpart were upon a single instrument; and each
counterpart shall be enforceable against the party actually executing such
counterpart. All counterparts shall be deemed an original copy.

     22. The delay or failure of a
party to enforce at any time any provision of this LOI shall in no way be
considered a waiver of any such provision, or any other provision of this LOI.
No waiver of, delay or failure to enforce any provision of this LOI shall in any
way be considered a continuing waiver or be construed as a subsequent waiver of
any such provision, or any other provision of this LOI.

     23. This LOI may be terminated
prior to entering into the Definitive Agreement (i) by mutual written agreement
of the parties, (ii) by either party if the Definitive Agreement has not been
entered into by May 31, 2012 through no fault of terminating party, or (iii) by
either party in the event of a material breach of this LOI by the other party,
including failure by the Company to promptly fund the LOI Advance after
execution of this LOI.

[SIGNATURE PAGE FOLLOWS]

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DATED EFFECTIVE: May 16, 2012

	 	CANTERBURY
      RESOURCES, INC. 
	 	  	 
	 	  	 
	 	  	 
	 	By: 	 
	 	Name: 	 
	 	Title: 	 
	 	  	 
	 	  	 
	 	  	 
	 	CONTROLLED CARBON,
      LLC 
	 	DBA ECHO
      AUTOMOTIVE 
	 	  	 
	 	  	 
	 	  	 
	 	By: 	 
	 	Name: 	 
	 	Title: 	 


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EXHIBIT A	
	 
	
FORM OF PROMISSORY NOTE	
	 
	
(Attached)	















	
EXHIBIT B	
	 
	
CAPITALIZATION TABLE	















	
EXHIBIT C	
	 
	
FORM OF FINANCING AGREEMENT	
	 
	
(Attached)