8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

October 11, 2012
Date of Report (Date of earliest event reported)

ECHO AUTOMOTIVE, INC.
(Exact Name of Registrant as Specified in Charter)

Nevada	000-53681	98-0599680
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

15029 N. 74th Street, Scottsdale, AZ 85260
(Address of Principal Executive Offices)

(855) 324-7288
(Registrant’s telephone number, including area code)

69 Stanley Point Road, Devonport, Auckland, New Zealand 0624
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[   ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Cautionary Notice Regarding Forward-Looking Statements

This Current Report on Form 8-K (“Form 8-K”) and other reports filed by the Registrant from time to time with the Securities and Exchange Commission (collectively the “Filings”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Registrant’s management as well as estimates and assumptions made by the Registrant’s management. When used in the filings the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan” or the negative of these terms and similar expressions as they relate to the Registrant or the Registrant’s management identify forward-looking statements. Such statements reflect the current view of the Registrant with respect to future events and are subject to risks, uncertainties, assumptions and other factors (including the risks contained in the section of this report entitled “Risk Factors”) relating to the Registrant’s industry, the Registrant’s operations and results of operations and any businesses that may be acquired by the Registrant. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

Although the Registrant believes that the expectations reflected in the forward-looking statements are reasonable, the Registrant cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, the Registrant does not intend to update any of the forward-looking statements to conform these statements to actual results. The following discussion should be read in conjunction with the Registrant’s financial statements and pro forma financial statements and the related notes filed with this Form 8-K.

Unless otherwise indicated, in this Form 8-K, references to “we,” “our,” “us,” “ECAU,” the “Company” or the “Registrant” refer to Echo Automotive, Inc. (formerly Canterbury Resources, Inc.), a Nevada corporation and its wholly owned subsidiary Echo Automotive, LLC, an Arizona limited liability company.

Section 2 - Financial Information

Item 2.01.           Completion of Acquisition or Disposition of Assets.

On October 11, 2012 (the “Closing Date”), Echo Automotive, Inc. (formerly Canterbury Resources, Inc.), a Nevada corporation (the “Registrant,” “Company” or “ECAU”), closed a voluntary exchange transaction with Echo Automotive,™ LLC, an Arizona limited liability company (“Echo” or “Echo Automotive”) and DBPJ Stock Holding, LLC, an Arizona limited liability company and sole member of Echo (the “Echo Member”) pursuant to an Exchange Agreement dated September 21, 2012 (the “Exchange Agreement”) by and among the Company, Echo, and the Echo Member.

In accordance with the terms of Exchange Agreement, on the Closing Date, the Registrant issued 52,500,000 shares of its common stock to the Echo Member in exchange for 100% of the issued and outstanding units of Echo™ (the “Exchange Transaction”). As a result of the Exchange Transaction, the Echo Member acquired 70% of our issued and outstanding common stock, Echo™ became our sole wholly-owned subsidiary, and the Registrant acquired the business and operations of Echo™.

Echo™ is primarily engaged in developing a technology that it believes may reduce overall fuel expenses in commercial fleet vehicles by augmenting existing power trains with highly efficient electrical energy delivered by electric motors powered by Echo’s modular plug-in battery modules.

Prior to the Exchange Transaction, we were a public reporting “shell company,” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder (“Exchange Act”). Accordingly, pursuant to the requirements of Item 2.01(f) of Form 8-K, set forth below is the information that would be required if the Registrant were filing a general form for registration of securities on Form 10 under the Exchange Act, for the Registrant’s common stock, which is the only class of its securities subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act upon consummation of the Exchange Transaction.

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The following description of the terms and conditions of the Exchange Agreement and the transactions contemplated thereunder that are material to the Registrant does not purport to be complete and is qualified in its entirety by reference to the full text of the Exchange Agreement, a copy of which is filed as Exhibit 2.1 hereto and incorporated by reference into this Item 2.01.

Issuance of Common Stock. At the closing of the Exchange Transaction (“Closing”), the Registrant issued a total of 52,500,000 shares of its common stock to the Echo Member in exchange for 100% of the issued and outstanding units of Echo. Immediately prior to the Exchange Transaction, the Registrant had 22,500,000 shares of common stock issued and outstanding. Immediately after the Exchange Transaction, the Registrant had 75,000,000 shares of common stock issued and outstanding.

Change in Management. As a condition to closing the Exchange Agreement, effective on the Closing Date, Messrs. William D. Kennedy, Jason Plotke, Jim Holden and Daniel Clarke were appointed to the Registrant’s Board of Directors, Mr. Vincent Espiritu resigned from the Registrant’s Board of Directors and as an officer of the Registrant, and Mr. B. Gordon Brooke resigned as Vice President, Finance of the Registrant. On the Closing Date, Mr. Kennedy was appointed Chief Executive Officer, Mr. Plotke was appointed President, Mr. Rodney H. McKinley was appointed Chief Financial Officer and Secretary, and Mr. Patrick van den Bossche was appointed Chief Operating Officer of the Registrant.

The following persons consist of the Registrant’s new executive officers and directors subsequent to the closing of the Exchange Transaction:

Name	Age	Position
William D. Kennedy	39	Director, Chief Executive Officer
Jason Plotke	39	Director, President
Jim Holden	63	Director
Daniel Clarke	47	Director
Rodney H. McKinley	63	Chief Financial Officer, Secretary
Patrick van den Bossche	50	Chief Operating Officer

The Registrant previously filed and mailed the Information Statement required under Rule 14(f)-1 to its shareholders on or about June 19, 2012, and the ten-day period prior to the change in the majority of the Registrant’s directors as required under Rule 14(f)-1 expired on June 29, 2012. Additional information regarding the above-mentioned directors and/or executive officers is set forth below under the section titled “Management.”

From and after the Closing Date, our primary operations consist of the business and operations of Echo™. In the Exchange Transaction, or reverse acquisition, the Registrant is the accounting acquiree and Echo is the accounting acquirer. Accordingly, we are presenting the financial statements of Echo™ as set forth in Exhibits 99.1 and 99.2 and certain pro forma financial information as set forth in Exhibit 99.3 of this report. Further, we disclose information about the business, financial condition, and management of Echo in this Form 8-K.

DESCRIPTION OF BUSINESS

Except as otherwise indicated by context, references to “we,” “us” or “our” hereinafter in this Form 8-K are to the business of Echo, except that references to “our common stock,” “our shares of common stock” or “our capital stock” or similar terms shall refer to the common stock of the Registrant.

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Overview

Echo is developing a set of technologies that it believes will reduce overall fuel expenses in commercial fleet vehicles by augmenting existing powertrains with highly efficient electrical energy delivered by electric motors powered by Echo’s modular plug-in battery modules. Echo believes this technology should achieve an immediate return on investment for each individual vehicle in a fleet.

Background

Echo Automotive, Inc. (formerly Canterbury Resources, Inc). was organized under the laws of the State of Nevada on September 2, 2008. The Registrant’s initial business plan was to acquire and explore mineral properties. The Registrant has not generated any revenue from its business operations to date, and to date, the Registrant has been unable to raise additional funds to implement its operations. As a result, the Registrant consummated the Exchange Transaction with Echo.

Strategy

Echo Automotive™ develops technologies and products that allow the cost effective conversion of existing vehicles into highly fuel efficient hybrids and plug-in hybrids. Key to Echo’s strategy is the bolt-on nature of its solutions that introduce little, or in some cases, no additional points of failure, making its offerings very low risk compared to other solutions.

Echo Automotive™ is developing a modular platform called EchoDrive™. This platform allows Echo Automotive to develop technologies, such as battery modules, control systems, propulsion modules and vehicle interface systems that can then be deployed in different configurations on a broad range of vehicles. By leveraging the EchoDrive platform, solutions can be configured as hybrid, plug-in hybrid or even pseudo electric, where significant battery capacity is integrated into a vehicle to leverage as much electrical energy as possible.

We believe by developing these technologies as modules, Echo can efficiently modify, augment and reposition its offerings to fulfill a broad range of customer needs or quickly adapt to changes in the marketplace. In addition, the characteristics of each vehicle as well the mission of each customer is different, so the EchoDrive platform will allow for unparalleled configurability from motor placement to battery capacity. This flexibility, we believe, allows EchoDrive’s to be easily bolted on to or retrofit on an existing vehicle’s powertrain and assist it with inexpensive electrical energy to increase its fuel efficiency. This modular solution will likely allow Echo to deploy its solution on a broad range of vehicles quickly and with significantly reduced R&D expense.

By targeting the fleet market, Echo plans to benefit from the need to reduce overall operating costs by selling multiple kits to each customer. In addition, with the help of strategic financing partnerships, EchoDrive™ likely will pay for itself in a relatively reasonable time frame and provide a return on the investment of the installation of EchoDrive™ to the customer.

Echo™ will employ both direct as well as indirect sales channels, including distribution partnerships with service companies, fleet financing and other entities that currently serve the fleet market.

The Opportunity

Although there has been much promise and excitement surrounding next generation hybrids, alternative fuel and electric vehicles, to date there has been very little measurable commercial success. In the even more demanding world of commercial fleet vehicle electrification, there has yet to be any significant adoption due to the overwhelming capital expenditure required to realize a sustainable and profitable business that can scale large enough to provide cost effective electric vehicles. Management believes that widespread adoption of these new vehicles will probably take a decade or more as fleet operators are, by their nature, risk adverse and slow in their adoption of unproven vehicles. The current electric fleet vehicle industry is largely fragmented and has been relatively inept in its ability to profitably and reliably deliver vehicles, parts and know-how in any volume. With failures of two of the top leaders in fleet electrification within the first half of 2011 (Bright Automotive and Azure Dynamics), Echo believes fleet operators will remain skeptical for years to come. Until the cost of producing electric vehicles drops drastically, and the ‘real-world’ return on investment is far shorter than the vehicle’s expected lifetime, management believes that fleets will not adopt these vehicles in mass.

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The Solution

EchoDrive™ system is a solution for converting fleet vehicles into fuel-efficient plug-in hybrids. Today’s internal combustion engines are highly inefficient in that they still only use a small percentage of the energy received from fossil fuels consumed. Management believes that fleet operators can reduce their operating expenses with EchoDrive™, a simple, affordable and financeable solution. EchoDrive can be bolted onto new and existing vehicles cost-effectively to reduce a vehicle’s fuel consumption. The EchoDrive components include an electric motor, system controller and modular battery-packs that enable the ‘right-sizing’ of the battery to help shorten the return on investment and align to the customer’s needs and budget. With EchoDrive™ installed, these vehicles are then plugged in using any available power source from a standard 110 voltage outlet to any industry standard rapid charger via the integrated ‘J-Plug’, thereby increasing energy efficiency with grid power.

During operation of the vehicle, EchoDrive applies the stored energy via the electric motor to assist the power train when the internal combustion engine is most inefficient, significantly reducing the workload of the engine and the use of fossil fuels. Like hybrid vehicles, EchoDrive recaptures energy (electrons) for its battery packs when the vehicles utilize their brakes. Additionally, EchoDrive’s unique engineering allows for uninterrupted driving in the unlikely event of most system or component failures, making EchoDrive an attractive alternative for critical fleet operations.

Strategic Advantages of EchoDrive

Short Term Return on Investment

EchoDrive’s solution objective is to achieve a more competitive payback with less reliance on extensive government subsidies and by being a low cost provider relative to the gained efficiencies and fuel savings.

Low Risk to Fleet Operations

In the unlikely event of a component failure, the vehicle will simply revert to its pre conversion operating capabilities of full gasoline powered engine operation. This reduces the fear of unproven new technologies affecting operations and helps give the buyer a more predictable vehicle resale value.

Flexible Electric Energy System

We believe our scalable and modular electrical storage system allows fleets to deploy the right amount of expensive batteries for the need on each vehicle to shorten the return on investment and align to the customer needs and budget.

Flexible Solution Set

EchoDrive’s flexible strategy and design is designed for broad deployment. Complete retrofit kits and new vehicles require significant design and regulatory approval. EchoDrive can be fitted on most vehicles with simply engineered adapter plates and brackets. The Company’s strategy is to fit many types of fleet vehicles through its “simple” design and flexible component approach.

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Financing Options

Management believes EchoDrive’s projected quick return on investment (“ROI”), shared savings models, and pre-approved financing options allow companies to manage their cash flow for the capital expenditure while benefitting from the EchoDrive™ operational cost savings.

Scalable

By leveraging mostly off-the-shelf components from industry leading automotive suppliers, EchoDrive can scale without the same manufacturing risks that plague full retrofit providers and Original Equipment Manufacturers (“OEMs”).

Disadvantages of EchoDrive

While EchoDrive substantially reduces energy costs, it does not provide the same efficiency of a full electric vehicle or range-extending hybrid. In the case of an electric vehicle, efficiency ratings are significantly higher. Range-extending hybrid vehicles also offer significant efficiency results compared to EchoDrive. Furthermore, EchoDrive does not include start/stop capability, which is a feature that shuts the internal combustion engine off at idle conditions thereby further increasing efficiency where drive cycles have more frequent idle opportunities.

Recent Developments

Bright Automotive Facilities and Key Staff

Bright Automotive was established in 2008 as the offspring of the non-profit Rocky Mountain Institute to commercialize and develop the IDEA plug-in hybrid electric fleet vehicle. Bright Automotive ceased operations in March 2012 after failing to obtain a loan through the Advanced Technology Vehicles Manufacturing Loan Program. Echo successfully hired key members of the Bright Automotive team and acquired certain facilities and intellectual property in a bid to accelerate EchoDrive’s commercialization in Spring of 2012.

System Patent Filed

A System Patent (Dual Fuel Plug-in Hybrid) was filed by Clean Futures, which Echo has a binding licensing agreement with for its technology, in January 2012 (Provisional Patent #: 61587987).

Third Generation Demonstrators

Third Generation Demonstrators, which are demonstration vehicles with the technology and system installed, were recently completed to study efficiency gains in real-world tests and provide a working platform closer to the production version that Echo ultimately aims to deploy.

Revenues and Customers

Echo is in the research and development phase and therefore currently has no contracted customers. Echo’s sales plan intends to generate revenue through the following distribution channels:

• Pre–Sales Activities such as Fleet Evaluations
• EchoDrive Product Sales
• Installation & Support Services
• Echo Solutions™ Consulting Services
• Referral and commission revenue from such partners as financing partners.

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Echo™ will focus its initial sales efforts on the fleet market. Echo will aim to increase its conversion rate and enhance its margins by focusing on fleets that will benefit most from the EchoDrive technology.

Echo Solutions™ intends to provide services to automotive companies and component manufacturers and specialty equipment manufacturers and converters.

Technology

EchoDrive™ is a modular set of components that can be assembled in different configurations to support a broad range of client requirements. This approach will enable Echo to rapidly move its offerings into other product areas including hybrids and OEM fittings. Echo has developed its system and software to be component sourcing independent therefore allowing for flexible system revisions and changes where necessary. Echo is also employing a “self-learning” type programming style that will allow for the system to improve itself over time.

Intellectual Property

Echo Automotive™ has entered into a License Agreement with Clean Futures, LLC (“CleanFutures”) dated February 1, 2012 (the “License Agreement”). In accordance with the License Agreement, CleanFutures has agreed to provide Echo, within the original equipment, service parts and aftermarket passenger automobile, light truck, field, heavy truck industries and any other automotive sector (with the exception of the hummer market), an exclusive license, with the right to grant sublicenses, under CleanFutures’ patents and CleanFutures’ technology, to make, have made, use, sell or import any products using CleanFutures’ dual-fuel, plugin hybrid technology (Provisional Patent #61587987). The license period extends in perpetuity until the expiration of any patent rights held by CleanFutures. Echo shall pre pay certain royalties to CleanFutures in the aggregate amount of $150,000 over a scheduled timeframe, but in no event more than eight months after the completion of a financing by Echo of $3,000,000. As of October, 2012, Echo has paid $0 to CleanFutures. Echo has the right to convert the exclusive license into a non-exclusive perpetual license provided a lump sum of $250,000 is paid by Echo to CleanFutures with proper notice of this licensing change.

In addition, in accordance with the License Agreement, Echo has agreed to provide CleanFutures, within the hummer marker (this includes all vehicles that have been marketed under the brand Hummer of Humvee prior to the date of the License Agreement), an exclusive license to make, have made, use sell or import any products based on Echo’s patents, knowhow and other intellectual property. In consideration for such license, CleanFutures has agreed to pay a royalty to Echo in accordance with the terms and conditions of the License Agreement. As of October, 2012, CleanFutures has paid Echo $0 in royalty fees.

Further, Echo has entered into a License Agreement with Bright Automotive, Inc. (“Bright”) dated June 28, 2012 (the “Bright Agreement”). In accordance with the Bright Agreement, Bright has provided to Echo a royalty-free, perpetual, fully-paid up, worldwide, non-exclusive, non-transferable and non-sub-licensable limited license to use Bright’s Battery Management Software and CAD, and certain other intellectual property of Bright, as detailed in the Bright Agreement, to develop, modify and/or sell, offer for sale, market, distribute, import and export derivative works. In consideration of the granting of the license, Echo paid to Bright a onetime up-front license fee in the amount of $50,000.

Echo is developing additional intellectual property and is taking all necessary steps to protect its ability to do so. However, patents, even when licensed, approved and issued can still be challenged by third parties to its validity. There is the risk that there are competing patents or technologies existing at the time the patent was issued, prior or afterwards, that were overlooked when the patent was filed and/or issued. Patents can be challenged and lost based on previously existing prior art. There are also multiple rules and regulations one must follow when challenging a patent or making claims when prosecuting a patent. Patent law is complex and expensive. Although Echo feels secure with its patents and respective licenses, there always remains the possibility that challenges to the licenses or underlying patents may arise and make Echo’s patents invalid.

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Echo will continue to evaluate the business benefits in pursuing patents in the future. Echo has engaged with both its legal team and outside intellectual property process experts to create an internal workflow to capture, protect and file the appropriate documentation to best protect its intellectual property. However, third parties may, in an unauthorized manner, attempt to use, copy or otherwise obtain and market or distribute Echo’s intellectual property or technology or otherwise develop a product with the same functionality as Echo’s IP. Policing unauthorized use of intellectual property rights is difficult, and nearly impossible on a worldwide basis. Therefore, Echo cannot be certain that the steps its has taken or will take in the future will prevent misappropriation of its technology or intellectual property, particularly in foreign countries where Echo may do business, where the laws may not protect proprietary rights as fully as do the laws of the United States or where the enforcement of such laws is not common or effective.

Echo also has a number of trademarks it has filed which include, but is not limited to Echo Automotive™, EchoDrive™, and Echo Solutions™. The Company is also filing a number of patents as part of its component design.

Products and Distribution

Products in Development

Echo has developed an advanced plug-in hybrid electric vehicle (PHEV) technology, branded as EchoDrive™. EchoDrive™ is being targeted at commercial vehicle fleets in the United States and internationally.

Distribution

Echo is focused on direct sales via its in-house marketing team to reach large-scale U.S. fleet customers, while national and regional distribution partners will also be leveraged to access medium and small-sized fleets. Internationally, Echo will partner with leading distribution agents to deploy the EchoDrive™ product through a licensing strategy. No distribution agreements are currently in place.

Manufacturing

Echo intends to rely on third party suppliers for the manufacture of existing components and outsource proprietary product manufacturing to subcontractors. This approach allows for greater agility in responding to changing market demands, while effective communication and transfer of information between Echo’s suppliers will ensure products are drop shipped as per Echo’s requirements.

Echo will continuously monitor product demand to evaluate the optimal lot size. The optimal manufacturing lot size determines the cost effectiveness of the production process. The frequency and the volume of the production runs are then evaluated to enable just-in-time delivery from Echo’s partners, while a range of production and control methods will be utilized to implement this and Kanban philosophies across all aspects of the manufacturing process.

Management believes that the manufacturing process will allow Echo to synchronize its inventory management system with its supply chain operations to ensure better inventory maintenance, inventory record accuracy and inventory access speed.

Quality Control & Warranties

Echo’s staff includes employees, contractors and consultants who are six sigma certified and trained and will therefore include best business practices where it deems applicable as part of its quality assurance program intended to result in OEM grade processes and quality control. The Company will require third party providers to adhere to these practices and/or standards. All components and systems analysis work will encompass Design Failure Mode and Effects Analysis (DFMEA) work, which is in concert with OEM vehicle design and validation practices. Furthermore, each EchoDrive kit will be fully tested on in-house simulation equipment for effective operation of each component and system prior to shipment.

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Industry

The demand for advance powertrain vehicles is on the rise. With increasing energy costs the market continues to grow. The top 100 U.S. commercial fleets represent a significant opportunity for EchoDrive™. The industry is very fragmented, however, with small component technology randomly appearing in the market resulting in cohesive end-to-end providers being scarce and the commercialization of these products being at a premium. As material costs such as lithium ion (used in most battery storage systems) decrease, the adoption rate for such technologies will increase. The focus on advanced vehicle technology is growing and a variety of opportunities are emerging as a result.

Markets

The U.S. Market

According to the U.S. Department of Transportation, there are over 100 million light-to-medium duty trucks on the road in the U.S. today. Many of these vehicles are used in commercial or government fleets. Initially, Echo intends to focus on selling EchoDrive into the existing fleet market, which consists of roughly 25 to 30 million vehicles in use today and approximately 2 million new vehicles purchased annually. Echo is initially focused on the top 100 commercial fleets, which represent significant potential opportunity for EchoDrive.

Short ROI Drives International Adoption

Echo believes that the opportunity internationally for a rapid ROI can be significant due to the higher fuel prices relative to the United States. Management believes the potential return on investment picture in such markets could be compelling. International territory licensing will be key to servicing these markets to execute an international strategy.

Competition

Many companies today rely on commercial fleets to conduct business and with the ever-increasing energy costs, the demand for advance vehicle technology solutions has never been higher. With that demand, there are new companies bringing technologies to market; however, most are focused on achieving very high efficiency ratings, which creates a very capital-intensive enterprise resulting in an expensive end-product for the customer. In most cases these technologies require the removal of most of the original powertrain, which is replaced with technologies that often have not been time-tested, therefore adding inherent risk to fleet operations. Additionally many competitors rely on government subsidies to support their financial equations, leaving them at the mercy of often varying political mandates.

Providers, such as Alt-e, require a complete transformation of the original drivetrain including removal of the engine and transmission and replacing it with a completely new powertrain. Via Motors also removes the original components in favor of an all-new system. AMP Electric vehicles, which converts existing vehicles to full electric, offers conversions for very select models and again removes the entire drivetrain for purposes of adapting new technology in order to provide efficiency.

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Government & Industry Regulation

Echo conducts business within the confines of local, state and federal regulations, both in operations and for its products. Internationally, each unique market has specific requirements which are fully evaluated prior to solicitation.

All products must meet or exceed Federal Motor Vehicle Safety Standards (FMVSS) requirements, while Echo also abides (voluntarily) with Environmental Protection Agency (EPA) emission standards.

The Magnuson-Moss Warranty Act enables purchasers of vehicles to make modifications to a vehicle without affecting the vehicle’s manufacture warranty. In the event of a related failure, the burden of proof is on the manufacture to show the failure was due to the installation of said component(s).

While EchoDrive does not construct its products around government subsidies and tax incentives, there are many state and federal subsidies which EchoDrive products would be eligible for. For example, in Colorado, consumers can qualify for up to $6,000 in government rebates for plug-in hybrid electric vehicle (“PHEV”) conversions. There are a number of other states that offer a variety of incentives for such conversions. The Federal government also offers up to $7,500 in tax credits for similar PHEV conversions.

Employees

Echo has eight (8) full-time employees and three (3) part-time employees. All employees are required to execute non-disclosure agreements as part of their employment.

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RISK FACTORS

You should carefully consider the risks described below together with all of the other information included in this Form 8-K before making an investment decision with regard to our securities. The statements contained in or incorporated into this Form 8-K that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following events described in these risk factors actually occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Related to Our Business and Industry

We have incurred losses in prior periods and may incur losses in the future.

We cannot be assured that we can achieve or sustain profitability on a quarterly or annual basis in the future. Our operations are subject to the risks and competition inherent in the establishment of a business enterprise. There can be no assurance that future operations will be profitable. We may not achieve our business objectives and the failure to achieve such goals would have an adverse impact on us.

Our future is dependent upon our ability to obtain financing. If we do not obtain such financing, we may have to cease our activities and investors could lose their entire investment.

There is no assurance that we will operate profitably or generate positive cash flow in the future. We will require additional financing in order to proceed with the manufacture and distribution of our products, including our Echo Drive™ technology. We will also require additional financing to pay the fees and expenses necessary to become and operate as a public company. We will also need more funds if the costs of the development and operation of our existing technologies are greater than we have anticipated. We will also require additional financing to sustain our business operations if we are not successful in earning revenues. We may not be able to obtain financing on commercially reasonable terms or terms that are acceptable to us when it is required. Our future is dependent upon our ability to obtain financing. If we do not obtain such financing, our business could fail and investors could lose their entire investment.

Because we may never earn revenues from our operations, our business may fail and investors may lose all of their investment in our Company.

We have no history of revenues from operations. We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. Our company has a limited operating history. If our business plan is not successful and we are not able to operate profitably, then our stock may become worthless and investors may lose all of their investment in our company.

Prior to obtaining customers and distribution for our products, we anticipate that we will incur increased operating expenses without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from the sale of our products in the future, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide no assurance that we will generate any revenues or ever achieve profitability. If we are unsuccessful in addressing these risks, our business will fail and investors may lose all of their investment in our company.

Our limited operating history and recent change in business direction makes evaluating our business and future prospects difficult, and may increase the risk of your investment.

We have a very limited operating history on which investors can base an evaluation of our business, operating results and prospects. Of even greater significance is that fact that we have no operating history with respect to augmenting existing power trains with highly efficient electrical energy delivered by electric motors powered by our modular plug-in battery modules.

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While the basic technology has been verified, we only recently have begun the commercialization of the complete plug-in hybrid electric vehicle (PHEV) system in preparation for our initial conversion of a vehicle. This limits our ability to accurately forecast the cost of the conversions or to determine a precise date on which the commercial platform for vehicle conversions will be widely released.

We are currently evaluating, qualifying and selecting our suppliers for the hybrid conversion system. However, we may not be able to engage suppliers for the remaining components in a timely manner, at an acceptable price or in the necessary quantities. In addition, we may also need to do extensive testing to ensure that the conversions are in compliance with applicable National Highway Traffic Safety Administration (NHTSA) safety regulations and United States Environmental Protection Agency (EPA) regulations prior to full distribution to our licensees. Our plan to complete the initial commercialization of the hybrid conversion system is dependent upon the timely availability of funds, upon our finalizing the engineering, component procurement, build out and testing in a timely manner. Any significant delays would materially adversely affect our business, prospects, financial condition and operating results. Consequently, it is difficult to predict our future revenues and appropriately budget for our expenses, and we have limited insight into trends that may emerge and affect our business. In the event that actual results differ from our estimates or we adjust our estimates in future periods, our operating results and financial position could be materially affected. If the markets for hybrid electric conversions and/or electric motors and generators does not develop as we expect or develops more slowly than we expect, our business, prospects, financial condition and operating results will be harmed.

Decreases in the price of oil, gasoline and diesel fuel may influence the conversions to plug-in hybrid electric vehicles include, which may slow the growth of our business and negatively impact our financial results.

The market for plug-in hybrid electric vehicle conversions is relatively new, rapidly evolving, characterized by rapidly changing technologies, evolving government regulation, and changing consumer demands and behaviors. Prices for oil, gasoline and diesel fuel can be very volatile. Increases in the price of fuels will likely raise interest in plug-in hybrid conversions. Decreases in the price of fuels will likely reduce interest in conversions and reduced interest could slow the growth of our business.

Our growth depends in part on environmental regulations and programs mandating the use of vehicles that get better gas mileage and generate fewer emissions and any modification or repeal of these regulations may adversely impact our business.

Enabling commercial customers to meet environmental regulations and programs in the United States that promote or mandate the use of vehicles that get better gas mileage and generate fewer emissions is an integral part of our business plan. Industry participants with a vested interest in gasoline and diesel invest significant time and money in efforts to influence environmental regulations in ways that delay or repeal requirements for cleaner vehicle emissions. Furthermore, the economic recession may result in the delay, amendment or waiver of environmental regulations due to the perception that they impose increased costs on the transportation industry or the general public that cannot be absorbed in a shrinking economy. The delay, repeal or modification of federal or state regulations or programs that encourage the use of more efficient and/or cleaner vehicles could slow our growth and adversely affect our business.

Some aspects of our business will depend in part on the availability of federal, state and local rebates and tax credits for hybrid electric vehicles, and as such, a reduction in these incentives would increase the cost of conversions for our customers and could significantly reduce our revenue.

Hybrid conversions for the general public will depend in part on tax credits, rebates and similar federal, state and local government incentives that promote hybrid electric vehicles. We anticipate that fleet owners will be less reliant on incentives. As for other products we create, there should be no reliance at all. Nonetheless, any reduction, elimination or discriminatory application of federal, state and local government incentives and other economic subsidies or tax credits because of policy changes, the reduced need for such subsidies or incentives due to the perceived success of the hybrid conversions, fiscal tightening or other reasons may have a direct or indirect material adverse effect on our business, financial condition, and operating results.

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We may experience significant delays in the design and implementation of our technology into the motors of the companies with which we may have research and development agreements with, which could harm our business and prospects.

Any delay in the financing, design, and implementation of our technology into the motor of the companies with which we may have research and development agreements could materially damage our brand, business, prospects, financial condition and operating results. Motor manufacturers often experience delays in the design, manufacture and commercial release of new product lines.

If we are unable to adequately control the costs associated with operating our business, including our costs of sales and materials, our business, financial condition, operating results and prospects will suffer.

If we are unable to maintain a sufficiently low level of costs for designing, marketing, selling and distributing our conversion system relative to their selling prices, our operating results, gross margins, business and prospects could be materially and adversely impacted. We have made, and will be required to continue to make, significant investments for the design and sales of our system and technologies. There can be no assurances that our costs of producing and delivering our system and technologies will be less than the revenue we generate from sales, licenses and/or royalties or that we will achieve our expected gross margins.

We may be required to incur substantial marketing costs and expenses to promote our systems and technologies, even though our marketing expenses to date have been relatively limited. If we are unable to keep our operating costs aligned with the level of revenues we generate, our operating results, business and prospects will be harmed. Many of the factors that impact our operating costs are beyond our control. For example, the costs of our components could increase due to shortages as global demand for these products increases. Indeed, if the popularity of hybrid conversions exceeds current expectations without significant expansion in battery production capacity and advancements in battery technology, shortages could occur which would result in increased costs to us.

We will be dependent on our suppliers, some of which are single or limited source suppliers, and the inability of these suppliers to continue to deliver, or their refusal to deliver, necessary components at prices and volumes acceptable to us would have a material adverse effect on our business, prospects and operating results.

We are currently and continually evaluating, qualifying and selecting suppliers for our conversion system. We will source globally from a number of suppliers, some of whom may be single source suppliers for these components. While we obtain components from multiple sources whenever possible, it may not always be possible to avoid purchasing from a single source. To date, we have not qualified alternative sources for any of our single sourced components.

While we believe that we may be able to establish alternate supply relationships and can obtain or engineer replacements for our single source components, we may be unable to do so in the short term or at all at prices or costs that are favorable to us. In particular, while we believe that we will be able to secure alternate sources of supply for almost all of our single-sourced components in a relatively short time frame, qualifying alternate suppliers or developing our own replacements for certain highly customized components may be time consuming and costly.

The supply chain will expose us to potential sources of delivery failure or component shortages. If we experience significant increased demand, or need to replace our existing suppliers, there can be no assurance that additional supplies of component parts will be available when required on terms that are favorable to us, at all, or that any supplier would allocate sufficient supplies to us in order to meet our requirements or fill our orders in a timely manner. The loss of any single or limited source supplier or the disruption in the supply of components from these suppliers could lead to delays to our customers, which could hurt our relationships with our customers and also materially adversely affect our business, prospects and operating results.

Changes in our supply chain may result in increased cost and delay. A failure by our suppliers to provide the necessary components could prevent us from fulfilling customer orders in a timely fashion which could result in negative publicity, damage our brand and have a material adverse effect on our business, prospects, financial condition and operating results.

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The use of plug-in hybrid electric vehicles in vehicle components or electric motors may not become sufficiently accepted for us to expand our business.

To expand our conversion business, we must license new fleet, dealer and service center customers. We cannot guarantee that we will be able to develop these customers or that they will sign our license contracts. Whether we will be able to expand our customer base will depend on a number of factors, including the level of acceptance of plug-in hybrid electric vehicles by fleet owners and the general public. A failure to expand our customer base could have a material adverse effect on our business, prospects, financial condition and operating results.

If there are advances in other alternative vehicle fuels or technologies, or if there are improvements in gasoline or diesel engines, demand for hybrid electric conversions and/or our other products may decline and our business may suffer.

Technological advances in the production, delivery and use of alternative fuels that are, or are perceived to be, cleaner, more cost-effective than our traditional fuel/electric combination have the potential to slow adoption of plug-in hybrid electric vehicles. Hydrogen, compressed natural gas and other alternative fuels in experimental or developmental stages may eventually offer a cleaner, more cost-effective alternative to our gasoline or diesel and electric combination. Equally, any significant improvements in the fuel economy or efficiency of the internal combustion engine may slow conversions to plug-in hybrid vehicles and, consequently, would have a detrimental effect on our business and operations.

While we are not aware of any pending innovations in or introductions of new heat reduction or heat transfer technologies, that does not mean none are in the offing. We have no control of what our competitors are doing nor awareness of their plans until such information is released for general consumption. The introduction of any new technology that offers better or equivalent results at a lower price would have a detrimental effect on our business and operations.

Our research and commercialization efforts may not be sufficient to adapt to changes in electric vehicle technology.

As technologies change, we plan to upgrade or adapt our conversion system in order to continue to provide vehicles with the latest technology, in particular battery technology. However, our conversions may not compete effectively with alternative vehicles if we are not able to source and integrate the latest technology into our conversion system. For example, we do not manufacture battery cells and that makes us dependent upon other suppliers of battery cell technology for our battery packs.

Any failure to keep up with advances in electric or internal combustion vehicle technology would result in a decline in our competitive position which would materially and adversely affect our business, prospects, operating results and financial condition.

The cyclical nature of business cycles can adversely affect our business.

Our business is directly related to general economic conditions which can be cyclical. It also depends on other factors, such as corporate and consumer confidence and preferences. A significant increase in global sales of electric or hybrid vehicles could have a direct impact on our earnings and cash flows by lowering the need to convert existing vehicles to plug-in hybrids. Equally, a significant decrease in the global sales of electric motors and generators could have a direct impact on our earnings and cash flows. The realization of either situation would also have an adverse effect on our business, results of operations and financial condition.

A prolonged economic downturn or economic uncertainty could adversely affect our business and cause us to require additional sources of financing, which may not be available.

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Our sensitivity to economic cycles and any related fluctuation in the businesses of our fleet customers, electric motor manufacturers or income of the general public may have a material adverse effect on our financial condition, results of operations or cash flows. If global economic conditions deteriorate or economic uncertainty increases, our customers and potential customers may experience lowered incomes or deterioration of their businesses, which may result in the delay or cancellation of plans to convert their vehicles, reduced license sales or reduced royalties from sales by licensees. As a consequence, our cash flow could be adversely impacted.

Any changes in business credit availability or cost of borrowing could adversely affect our business.

Declines in the availability of business credit and increases in corporate borrowing costs could negatively impact the number of conversions performed and the number of electric motors manufactured. Substantial declines in the number of conversions by our customers could have a material adverse effect on our business, results of operations and financial condition. In addition, the disruption in the capital markets that began in 2008 has reduced the availability of debt financing to support the conversion of existing vehicles into plug-in hybrids. If our potential customers are unable to access credit to convert their vehicles, it would impair our ability to grow our business.

Our future business depends in large part on our ability to execute our plans to market and license our conversion system.

Failure to obtain reliable sources of component supply, that will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes required to successfully mass market our conversion system could negatively affect our Company’s revenues and business operations.

Even if we are successful in developing a high volume conversion platform and reliable sources of component supply, we do not know whether we will be able to do so in a manner that avoids significant delays and cost overruns, including factors beyond our control such as problems with suppliers and vendors, or shipping schedules that meet our customers’ conversion requirements. Any failure to develop such capabilities within our projected costs and timelines could have a material adverse effect on our business, prospects, operating results and financial condition.

We may incur material losses and costs as a result of warranty claims and product liability actions that may be brought against us.

We face an inherent business risk of exposure to product liability in the event that our hybrid conversions or other products fail to perform as expected and, in the case of product liability, failure of our products results in bodily injury and/or property damage. Our customers have expectations of proper performance and reliability of our hybrid conversions and any other products that we may supply. If flaws in the design of our products were to occur, we could experience a rate of failure in our hybrid conversions or other products that could result in significant charges for product re-work or replacement costs. Although we will engage in extensive quality programs and processes, these may not be sufficient to avoid conversion or product failures, which could cause us to:

• lose revenue;
• incur increased costs such as costs associated with customer support;
• experience delays, cancellations or rescheduling of conversions or orders for our products;
• experience increased product returns or discounts; or
• damage our reputation;

all of which could negatively affect our financial condition and results of operations. If any of our hybrid conversions or other products are or are alleged to be defective, we may be required to participate in a recall involving such conversions or products. A recall claim brought against us, or a product liability claim brought against us in excess of our available insurance, may have a material adverse effect on our business.

If we are unable to enforce our intellectual property rights or if our intellectual property rights become obsolete, our competitive position could be adversely impacted.

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We utilize a variety of intellectual property rights in our products. We view our portfolio of process and design technologies as one of our competitive strengths and we use it as part of our efforts to differentiate our product offerings. We may not be able to successfully preserve these intellectual property rights in the future and these rights could be invalidated, circumvented, challenged or infringed upon. In addition, the laws of some foreign countries in which our products may be sold do not protect intellectual property rights to the same extent as the laws of the United States. If we are unable to protect and maintain our intellectual property rights, or if there are any successful intellectual property challenges or infringement proceedings against us, our ability to differentiate our product offerings could diminish. In addition, if our intellectual property rights or work processes become obsolete, we may not be able to differentiate our product offerings and some of our competitors may be able to offer more attractive products to our customers. As a result, our business and financial performance could be materially and adversely affected.

Developments or assertions by us or against us relating to intellectual property rights could materially impact our business.

We expect to own or license significant intellectual property, including patents, and intend to be involved in numerous licensing arrangements. Our intellectual property should play an important role in maintaining our competitive position in a number of the markets we intend to serve. We will attempt to protect proprietary and intellectual property rights to our products and conversion system through available patent laws and licensing and distribution arrangements with reputable domestic and international companies. Despite these precautions, patent laws afford only limited practical protection in certain countries.

Litigation may also be necessary in the future to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others or to defend against claims of invalidity. Such litigation could result in substantial costs and the diversion of resources. As we create or adopt new technology, we will also face an inherent risk of exposure to the claims of others that we have allegedly violated their intellectual property rights.

We cannot assure that we will not experience any intellectual property claim losses in the future or that we will not incur significant costs to defend such claims nor can we assure that infringement or invalidity claims will not materially adversely affect our business, results of operations and financial condition. Regardless of the validity or the success of the assertion of these claims, we could incur significant costs and diversion of resources in enforcing our intellectual property rights or in defending against such claims, which could have a material adverse effect on our business, results of operations and financial condition.

Any such imposition of a liability that is not covered by insurance, is in excess of insurance coverage or is not covered by an indemnification could have a material adverse effect on our business, results of operations and financial condition.

Liability or alleged liability could harm our business by damaging our reputation, requiring us to incur expensive legal costs in defense, exposing us to awards of damages and costs and diverting management’s attention away from our business operations. Any such liability could severely impact our business operations and/or revenues. If any claims or actions are asserted against us, we may seek to settle such claim by obtaining a license from the plaintiff covering the disputed intellectual property rights. We cannot provide any assurances, however, that under such circumstances a license, or any other form of settlement, would be available on reasonable terms or at all.

We may incur material losses, additional costs or even interruption of business operations as a result of fines or sanctions brought by government regulators.

We will likely be subject to various U.S. federal, state and local, and non-U.S. environmental, transportation and safety laws and regulations, such as requirements for aftermarket fuel conversion certification by the Environmental Protection Agency or separate requirements for aftermarket fuel conversion certification by California and other states. We cannot assure you that we will be at all times in complete compliance with such laws, regulations and permits. If we violate or fail to comply with these laws, regulations or certifications, we could be fined or otherwise sanctioned by regulators.

We may face risks from doing business internationally.

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We may license, sell or distribute products outside the U.S., and derive revenues from these sources. Consequently, our revenues and results of operations will be vulnerable to currency fluctuations. We will report our revenues and results of operations in U.S. dollars, but a significant portion of our revenues could be earned outside of the U.S. We cannot accurately predict the impact of future exchange rate fluctuations on revenues and operating margins. Such fluctuations could have a material adverse effect on our business, results of operations and financial condition. Our business will also be subject to other risks inherent in the international marketplace, many of which are beyond our control. These risks include:

• laws and policies affecting trade, investment and taxes, including laws and policies relating to the repatriation of funds and withholding taxes, and changes in these laws;
• changes in local regulatory requirements, including restrictions on conversions;
• differing cultural tastes and attitudes;
• differing degrees of protection for intellectual property;
• financial instability;
• the instability of foreign economies and governments;
• war and acts of terrorism.

Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

Our long-term growth depends upon technological innovation and commercialization.

Our ability to deliver our long-term growth strategy depends in part on the commercialization of new technology. A central aspect of our growth strategy is to improve our products and services through innovation, to obtain technologically advanced products through internal research and development and/or acquisitions, to protect proprietary technology from unauthorized use and to expand the markets for new technology by leveraging our infrastructure. Our success will depend on our ability to commercialize the technology that we have acquired and demonstrate the enhanced value our technology brings to our customers’ operations. Our major technological advances include, but are not limited to, those related to the design of technology to reduce overall fuel expenses in commercial fleet vehicles by augmenting existing power trains with highly efficient electrical energy delivered by electric motors powered by our modular plug-in battery modules. We cannot be assured of the successful commercialization of, and above-average growth from, our new products and services, as well as legal protection of our intellectual property rights. Any failure in the commercialization of our technology could adversely affect our business and results of operations.

Risks Relating to our Securities and our Status as a Public Company

The relative lack of public company experience of our management team may put us at a competitive disadvantage.

Our management team lacks public company experience and is generally unfamiliar with the requirements of the United States securities laws and U.S. Generally Accepted Accounting Principles, which could impair our ability to comply with legal and regulatory requirements such as those imposed by Sarbanes-Oxley Act of 2002. The majority of the individuals who now constitute our senior management team have never had responsibility for managing a publicly traded company. Such responsibilities include complying with federal securities laws and making required disclosures on a timely basis. Our senior management may not be able to implement programs and policies in an effective and timely manner that adequately responds to such increased legal, regulatory compliance and reporting requirements. Our failure to comply with all applicable requirements could lead to the imposition of fines and penalties and distract our management from attending to the growth of our business.

Shares of our common stock that have not been registered under the Securities Act of 1933, as amended, regardless of whether such shares are restricted or unrestricted, are subject to resale restrictions imposed by Rule 144, including those set forth in Rule 144(i) which apply to a “shell company.” In addition, any shares of our common stock that are held by affiliates, including any received in a registered offering, will be subject to the resale restrictions of Rule 144(i).

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Pursuant to Rule 144 of the Securities Act of 1933, as amended (“Rule 144”), a “shell company” is defined as a company that has no or nominal operations; and, either no or nominal assets; assets consisting solely of cash and cash equivalents; or assets consisting of any amount of cash and cash equivalents and nominal other assets. As such, we may be deemed a “shell company” pursuant to Rule 144 prior to the Exchange, and as such, sales of our securities pursuant to Rule 144 are not able to be made until a period of at least twelve months has elapsed from the date on which our Current Report on Form 8-K is filed with the Commission reflecting our status as a non- “shell company.” Therefore, any restricted securities we sell in the future or issue to consultants or employees, in consideration for services rendered or for any other purpose will have no liquidity until and unless such securities are registered with the Commission and/or until a year after the date of the filing of our Current Report on Form 8-K and we have otherwise complied with the other requirements of Rule 144. As a result, it may be harder for us to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it will be harder for us to raise funding through the sale of debt or equity securities unless we agree to register such securities with the Commission, which could cause us to expend additional resources in the future. Our previous status as a “shell company” could prevent us from raising additional funds, engaging employees and consultants, and using our securities to pay for any acquisitions (although none are currently planned), which could cause the value of our securities, if any, to decline in value or become worthless. Lastly, any shares held by affiliates, including shares received in any registered offering, will be subject to the resale restrictions of Rule 144(i).

We will be required to incur significant costs and require significant management resources to evaluate our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act, and any failure to comply or any adverse result from such evaluation may have an adverse effect on our stock price.

As a smaller reporting company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, we are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”). Section 404 requires us to include an internal control report with the Annual Report on Form 10-K. This report must include management’s assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year. This report must also include disclosure of any material weaknesses in internal control over financial reporting that we have identified. Failure to comply, or any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on the trading price of our equity securities. Management believes that its internal controls and procedures are currently not effective to detect the inappropriate application of U.S. GAAP rules. Management realize there are deficiencies in the design or operation of our internal control that adversely affect our internal controls which management considers to be material weaknesses including those described below:

i)	As of December 31, 2011, the Company did not have a separate audit committee.
	Due to the significant number and magnitude of out-of-period adjustments identified during the year- end closing process, management has concluded that the controls over the period-end financial reporting process were not operating effectively. A material weakness in the period-end financial reporting process
ii)	could result in us not being able to meet our regulatory filing deadlines and, if not remediated, has the potential to cause a material misstatement or to miss a filing deadline in the future. Management override of existing controls is possible given the small size of the organization and lack of personnel.
iii)	There is no system in place to review and monitor internal control over financial reporting. The Company maintains an insufficient complement of personnel to carry out ongoing monitoring responsibilities and ensure effective internal control over financial reporting

Achieving continued compliance with Section 404 may require us to incur significant costs and expend significant time and management resources. We cannot assure you that we will be able to fully comply with Section 404 or that we and our independent registered public accounting firm would be able to conclude that our internal control over financial reporting is effective at fiscal year end. As a result, investors could lose confidence in our reported financial information, which could have an adverse effect on the trading price of our securities, as well as subject us to civil or criminal investigations and penalties. In addition, our independent registered public accounting firm may not agree with our management’s assessment or conclude that our internal control over financial reporting is operating effectively.

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If we lose our key management personnel, we may not be able to successfully manage our business or achieve our objectives, and such loss could adversely affect our business, future operations and financial condition.

Our future success depends in large part upon the leadership and performance of our executive management team and key consultants. If we lose the services of one or more of our executive officers or key consultants, or if one or more of them decides to join a competitor or otherwise compete directly or indirectly with us, we may not be able to successfully manage our business or achieve our business objectives. We do not have “Key-Man” life insurance policies on our key executives. If we lose the services of any of our key consultants, we may not be able to replace them with similarly qualified personnel, which could harm our business. The loss of our key executives or our inability to attract and retain additional highly skilled employees may adversely affect our business, future operations, and financial condition.

The elimination of monetary liability against our directors, officers and employees under Nevada law and the existence of indemnification rights to our directors, officers and employees may result in substantial expenditures by our company and may discourage lawsuits against our directors, officers and employees.

Our Articles of Incorporation contain a provision permitting us to eliminate the personal liability of our directors to our company and shareholders for damages for breach of fiduciary duty as a director or officer to the extent provided by Nevada law. The foregoing indemnification obligations could result in the Company incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup. These provisions and resultant costs may also discourage our company from bringing a lawsuit against directors and officers for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against our directors and officers even though such actions, if successful, might otherwise benefit our company and shareholders.

Our stock is categorized as a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations which may limit a shareholder’s ability to buy and sell our stock.

Our stock is categorized as a penny stock. The SEC has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than US$ 5.00 per share or an exercise price of less than US$ 5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

FINRA sales practice requirements may also limit a shareholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

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To date, we have not paid any cash dividends and no cash dividends will be paid in the foreseeable future.

We do not anticipate paying cash dividends on our common stock in the foreseeable future and we may not have sufficient funds legally available to pay dividends. Even if the funds are legally available for distribution, we may nevertheless decide not to pay any dividends. We presently intend to retain all earnings for our operations.

Our common stock is not listed on any stock exchange and there is no established market for shares of our common stock. Even if a market for our common stock develops, our common stock could be subject to wide fluctuations.

Our common stock is not listed on any stock exchange. Although our common stock is quoted on the OTCBB, there is no established public market for shares of our common stock, and no trades of our common stock have taken place on the OTCBB. Even if the shares of our common stock may in the future trade on the OTCBB, the liquidity and price of our common stock is expected to be more limited than if such securities were quoted or listed on a national exchange. No assurances can be given that an active public trading market for our common stock will develop or be sustained. If trading of our securities commences on the OTCBB, the trading volume we will develop may be limited by the fact that many major institutional investment funds, including mutual funds, as well as individual investors follow a policy of not investing in bulletin board stocks and certain major brokerage firms restrict their brokers from recommending bulletin board stocks because they are considered speculative, volatile and thinly traded. Lack of liquidity will limit the price at which stockholders may be able to sell our common stock.

Even if our common stock will in the future trade on the OTCBB, the price of such common stock could be subject to wide fluctuations, in response to quarterly variations in our operating results, announcements by us or others, developments affecting us, and other events or factors. In addition, the stock market has experienced extreme price and volume fluctuations in recent years. These fluctuations have had a substantial effect on the market prices for many companies, often unrelated to the operating performance of such companies, and may adversely affect the market prices of the securities. Such risks could have an adverse affect on the stock’s future liquidity.

If we issue additional shares in the future, it will result in the dilution of our existing shareholders.

Our articles of incorporation authorize the issuance of up to 650,000,000 shares of common stock with a par value of $0.001 per share. Our Board of Directors may choose to issue some or all of such shares to acquire one or more companies or properties and to fund our overhead and general operating requirements. The issuance of any such shares may reduce the book value per share and may contribute to a reduction in the market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our corporation.

We may not qualify to meet listing standards to list our stock on an exchange.

The SEC approved listing standards for companies using reverse acquisitions to list on an exchange may limit our ability to become listed on an exchange. We would be considered a reverse acquisition company (i.e., an operating company that becomes an Exchange Act reporting company by combining with a shell Exchange Act reporting company) that cannot apply to list on NYSE, NYSE Amex or Nasdaq until our stock has traded for at least one year on the U.S. OTC market, a regulated foreign exchange or another U.S. national securities market following the filing with the SEC or other regulatory authority of all required information about the merger, including audited financial statements. We would be required to maintain a minimum $4 share price ($2 or $3 for Amex) for at least thirty (30) of the sixty (60) trading days before our application and the exchange’s decision to list. We would be required to have timely filed all required reports with the SEC (or other regulatory authority), including at least one annual report with audited financials for a full fiscal year commencing after filing of the above information. Although there is an exception for a firm underwritten IPO with proceeds of at least $40 million, we do not anticipate being in a position to conduct an IPO in the foreseeable future. To the extent that we cannot qualify for a listing on an exchange, our ability to raise capital will be diminished.

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DESCRIPTION OF PROPERTY

The principal executive offices of the Company are located at: 15029 N. 74^th Street, Scottsdale, AZ 85260. The monthly rent for this property and related expenses is US$1,000 per month.

In addition, Echo has entered into two client leases with Flagship Enterprise Center, Inc., regarding two properties located in Anderson, Indiana. The first client lease, dated April 1, 2012, is for Echo’s use of certain office and laboratory space with a rent of $3,435 per month and a term of two years. The second client lease, dated June 1, 2012, is for Echo’s use of a dynamometer and control lab with a rent of $2,942 for the first six months, $5,849 per month thereafter, and a term of one year and ten months.

SUMMARY SELECTED FINANCIAL DATA

The following tables summarize selected financial data regarding the business of Echo and should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the pro forma financial statements of the Company and the related notes included with those financial statements. The summary financial information has been derived from the audited financial statements for Echo for the years ended December 31, 2011 and 2010.

Historical Financial Performance of Echo Automotive, LLC

The following represents the past financial performance for Echo as of and for the years ended December 31, 2011 and 2010.

		Year Ended December 31
		2011			2010
Income Statement Data
Revenues	$	69,100		$	48,204
Operating Expenses		361,739			86,804
Interest Expense		7,903			-
Net Loss	$	(300,542	)	$	(38,600	)

		As of December 31
		2011			2010
Balance Sheet Data
Cash and cash equivalents	$	101,359		$	1,069
Total Current Assets		106,359			1,069
Prototype Equipment		24,906			-
Total Assets		131,265			1,069
Total Current Liabilities		256,235			-
Total Liabilities		367,903			-
Members’ Equity (Deficit)	$	(236,638	)	$	1,069

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		Year Ended December 31
		2011			2010
Cash Flow Data
Net cash used in operating activities	$	(294,545	)	$	(42,751	)
Net cash used in investing activities		(28,000	)		-
Net cash provided by financing activities		422,835			41,900
Net change in cash and cash equivalents	$	100,290		$	(851	)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the results of operations and financial condition of Echo for the fiscal years ended December 31, 2011 and 2010, and three and six months ended June 30, 2012 and 2011, should be read in conjunction with the Summary Selected Financial Data and the financial statements of Echo, and the notes to those financial statements that are included elsewhere in this Form 8-K. Management’s discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as Echo’s plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this Form 8-K. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Overview

Nature of operations – Echo, formerly known as Controlled Carbon, LLC, was incorporated on November 25, 2009. Echo is an Arizona limited liability company in the development stage with several unique technologies and specific methods that allows commercial fleet vehicles to significantly reduce their overall fuel expenses. The business plan for Echo is based on providing the marketplace a business proposition for reducing the use of fossil fuels by augmenting power trains within existing commercial fleet vehicles with highly efficient electrical assist delivered through electric motors powered by Echo’s modular plug-in battery modules to achieve rapid real-world operating results including a rapid return on the investment (of the Echo conversion) for such amended vehicles.

Echo operations to date have been funded by advances, private “family and friends” capital contributions, and subsequent equity conversions by the majority stockholders. Echo’s working and growth capital is dependent on more significant future funding expected to be provided in part by equity investments from other accredited investors including institutional investors. There can be no assurance that any of these strategies will occur or be achieved on satisfactory terms.

For the year ended December 31, 2011, Echo had a net loss attributable to members of $300,542 as compared to a net loss of $38,600 for the year ended December 31, 2010. In 2011, Echo shifted from its previous business plan of marketing carbon credits and entered into a new business model of the development of technology that allows commercial vehicle fleets to significantly reduce their overall fuel expense as described within.

In May 2012, Echo signed a Letter of Intent (“LOI”) with Canterbury Resources, Inc. (“Canterbury”) in connection with a contemplated voluntary share exchange (the “Exchange”). In connection with the LOI, Echo received funding of $300,000 in exchange for promissory notes as of the closing date of the LOI as advances against the proceeds received by Echo from the sale of Company common stock at the closing of the Exchange of $2,000,000 (“Closing Investment”) in aggregate which will be amortized over quarterly payments to the Company. The parties have agreed to reconcile any issued advances as part of the amortized payments. These advances will provide Echo with working capital to continue its operations, continue its product development, and to purchase intellectual property and equipment to execute its business and strategic plan.

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Subsequent to the LOI and prior to closing of the Exchange, Echo received a further $603,000 of funding from Canterbury in exchange for promissory notes as advances against the proceeds to be received by Echo from the sale of Company common stock at the closing of the Exchange. Echo is obligated to repay the promissory notes as either part of reconciliation to the Closing Investment or as part of repayment plan. These advances provided Echo with working capital to continue its operations and it also included payment to third parties for services rendered specifically to the Exchange.

Management’s discussion and analysis of Echo’s financial condition and results of operations are based on Echo’s current business and operations. The Registrant’s previous results of operations are immaterial and will not be included in the discussion below. Key factors affecting Echo’s results of operations include revenues, cost of revenues, operating expenses and income and taxation.

Comparison of the Six Months Ended June 30, 2012 to the Six Months Ended June 30, 2011

Overview

During the first six months ended June 30, 2012, Echo has expanded its efforts to develop the unique technologies that allow commercial vehicles fleet vehicles to significantly reduce their overall fuel expenses. That includes, but is not limited to, hiring of new employees, renting facilities for its operations, purchasing assets, and incurring other costs to facilitate that development.

Revenues

Echo is in the research and development phase and currently has no customers. Revenues for the six months ended June 30, 2012 and 2011 are attributable to the sales of carbon credits and consulting they performed.

Operating Expenses

Total operating expenses during the six months ended June 30, 2012 were $655,145 compared to $149,426 for the same period in 2011. The increase of total operating expenses is related to the development of Echo’s technology and includes Echo purchase of intellectual property from Bright Automotive totaling $112,500 to further enhance Echo’s technology development and also the purchase of approximately $62,000 of prototype equipment, computers and shop equipment.

In addition, Echo had an increase of payroll in the six months ended June 30, 2012 compared to the six months ended June 30, 2011 due to the hiring of specialty development staff for the development of its technology and had the added expense burden of the leased facilities for the Echo development facility located in Anderson, Indiana.

Taxes

Echo is an Arizona Limited Liability Company, which is treated as a “pass-through entity” for income tax purposes. Accordingly, Echo has not recognized any effects of income taxes in the accompanying financial statements.

Comparison of the Year Ended December 31, 2011 to the Year Ended December 31, 2010

Revenues

Echo is in the research and development phase and currently has no customers. Revenues for the 2010 and 2011 are attributable to the sales of carbon credits and consulting they performed.

Operating Expenses

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Total operating expenses for the year ended December 31, 2011, increased $274,935, from $86,804 in 2010 to $361,739 in 2011, as shown in the table below:

		2011		2010
Marketing	$	16,884	$	49,236
Computer and Internet		76,881		1,256
Development Expenses		214,381		20,011
General and Administrative		53,593		16,301
	$	361,739	$	86,804

The primary reason for the increase in total operating expenses is the change in the focus of Echo from the marketing and sales of carbon credits to the development of the fuel saving technology.

Total Sales and Marketing expenses decreased $32,562, in 2011 as compared to 2010 due to the reduction in sales/marketing focus for the carbon credit business.

Total Computer and Internet expenses increased $75,925, primarily due to ramp up in the first half of 2011 in the carbon credit business and subsequent change in focus and development efforts for the fuel savings technology.

Total Development Expenses increased by $184,370, primarily due to the accelerated pace of development for the fuel saving technology.

General and Administrative expenses increased $37,292, primarily due to the accelerated pace of development for the fuel saving technology.

Taxes

Echo is an Arizona Limited Liability Company, which is treated as a “pass-through entity” for income tax purposes. Accordingly, Echo has not recognized any effects of income taxes in the accompanying financial statements.

Liquidity and Capital Resources

Sources and Uses of Funds

As of June 30, 2012, Echo had cash and equivalents on hand of $46,931. Echo’s cash on hand and working capital will not be sufficient to meet its anticipated cash requirements through 2012. To date, Echo’s working capital since its inception through June 30, 2012 has been through a combination of private investments, private loans, shareholder capital contributions, and advances through promissory notes.

Echo is pre-revenue and in the developmental stage and therefore does not internally generate adequate cash flows to support its existing operations. Moreover, the historical and existing capital structure is not adequate to fund Echo’s planned growth. We intend to finance our operations by issuing additional common stock, warrants and through bridge financing. There can be no assurance that we will be successful in procuring the financing we are seeking. Future cash flows are subject to a number of variables, including the level of production, economic conditions and maintaining cost controls. There can be no assurance that operations and other capital resources will provide cash in sufficient amounts to maintain planned or future levels of capital expenditures.

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In May 2012, Echo signed the LOI with the Company in connection with the Exchange. In connection with the LOI, Echo received funding of $300,000 in exchange for promissory notes as of the closing date of the LOI as advances against the proceeds to be received by Echo from the sale of Company common stock at the Closing of the Exchange. In accordance with the LOI, it is anticipated that an aggregate of $2,000,000 will be raised through the issuance of Company common stock. Subsequent to the signing of the LOI and prior to Closing, Echo received an additional $603,000 in exchange for promissory notes as advances against the proceeds to be received by Echo from the sale of Company common stock at the Closing of the Exchange. Echo is obligated to repay the promissory notes at the Closing of the Exchange. These advances provided Echo with working capital to continue its operations and to purchase intellectual property and equipment. Without the advances, Echo would have been unable to complete the Exchange and would have had difficulty continuing with its operations.

To meet future objectives, Echo will need to meet revenue targets and sell additional equity and debt securities, which could result in dilution to current shareholders. Echo may also seek additional loans where the incurrence of indebtedness would result in increased debt service obligations and could require Echo to agree to operating and financial covenants that would restrict Echo’s operations. Financing may not be available in amounts or on terms acceptable to Echo, if at all. Any failure by Echo to raise additional funds on terms favorable to Echo, or at all, could limit Echo’s ability to expand business operations and could harm Echo’s overall business prospects.

Echo’s current cash requirements are significant due to planned development and marketing of Echo’s current products, and generating losses is anticipated. In order to execute on Echo’s business strategy, Echo will require additional working capital commensurate with the operational needs of planned marketing, development and production efforts. Management anticipates that Echo will be able to raise sufficient amounts of working capital through debt or equity offerings as may be required to meet short-term obligations. However, changes in operating plans, increased expenses, acquisitions, or other events, may cause Echo to seek additional equity or debt financing in the future. Echo anticipates continued and additional marketing, development and production expenses. Accordingly, Echo expects to continue to use debt and equity financing to fund operations for the foreseeable future as Echo looks to expand its asset base and fund marketing, development and production of the EchoDrive product.

There are no assurances that Echo will be able to raise the required working capital on terms favorable, or that such working capital will be available on any terms when needed. Any failure to secure additional financing may force Echo to modify its business plan. In addition, Echo cannot be assured of profitability in the future.

Net cash provided by (used in) operating activities

Net cash used in operating activities for the year ended December 31, 2011 and 2010 was $294,595 and $42,751. Additionally, net cash used in operating activities for the six months ended June 30, 2012 and 2011 was $680,155 and $80,325.

Net cash used in investing activities

Net cash used in investing activities for the year ended December 31, 2011 and 2010 was $28,000 and $0. Additionally, net cash used in investing activities for the six month ended June 30, 2012 and 2011 was $174,273 and $0.

Net cash provided by financing activities

Net cash provided by financing activities was $422,835 for the year ended December 31, 2011, as compared to $41,900 for the year ended December 31, 2010. In both periods, the principal source of capital was the issuance of short-term, convertible promissory notes to individual investors.

For the six months ended June 30, 2012, net cash provided by financing activities was $800,000, as compared to $79,270 for six months ended June 30, 2011. In both periods, the principal source of capital was the issuance of short-term, convertible promissory notes to individual investors and the advances provided by Canterbury.

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Contractual Obligations and Off-Balance Sheet Arrangements

Contractual Obligations

The table below outlines Echo’s obligations subsequent to December 31, 2011.

Contractual obligations	Payments due by period			3–5 years	More than 5 years
	Total	Less than 1 year	1–3 years
Long-Term Debt Obligations	-	-	-	-	-
Capital Lease Obligations	-	-	-	-	-
Operating Lease Obligations       • Building Lease	$ 196,993	$ 54,416	$ 142,577	-	-
Purchase Obligations       • CleanFutures(1)	$ 1,030,000	$ 75,000	$ 505,000	$ 450,000	-
Other Long-Term Liabilities Reflected on the Registrant's Balance Sheet under GAAP	$ 110,000	-	$ 110,000	-	-
Total	$ 1,336,993	$ 129,416	$ 748,577	$ 450,000	-

(1) Royalty payments if Echo sells products using the CleanFutures technology in accordance with the License Agreement between the parties.

Building Lease – Subsequent to December 31, 2011, Echo entered into two lease agreements to occupy lab facilities at the Flagship Enterprise Center in Anderson, Indiana. The lease terms begin on April 1, 2012 and June 1, 2012, respectively. Both leases end on March 31, 2014.

CleanFutures License Agreement – Echo has entered into a License Agreement with CleanFutures dated February 1, 2012, which is predicated on certain conditions. No monies have been paid to CleanFutures and no monies are due to CleanFutures. Echo does not believe that future payments will be due unless Echo chooses to utilize the CleanFutures technology in its business development efforts.

Future minimum rental payments required under the leases are as follows:

Years Ending

December 31, 2012	$	54,416
December 31, 2013		113,896
December 31, 2014		28,681
Total	$	196,993

Echo has the option to renew the leases for five subsequent two year periods.

In addition, Echo advanced the landlord in Anderson, Indiana, $50,000 to cover the landlord’s costs for the purchase of certain building and improvements from the previous tenant. These funds are scheduled to be repaid to the Company at or shortly after Closing.

Off-Balance Sheet Arrangements

Echo has not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. Echo has not entered into any derivative contracts that are indexed to its shares and classified as shareholder’s equity or that are not reflected in its consolidated financial statements. Furthermore, Echo does not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Echo does not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to it or that engages in leasing, hedging or research and development services with it.

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Critical Accounting Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the consolidated financial statements and the accompanying notes. Accounting estimates and assumptions are those that management considers to be the most critical to an understanding of the consolidated financial statements because they inherently involve significant judgments and uncertainties. All of these estimates reflect management’s judgment about current economic and market conditions and their effects based on information available as of the date of these consolidated financial statements. If such conditions persist longer or deteriorate further than expected, it is reasonably possible that the judgments and estimates could change, which may result in future impairments of assets, among other effects. Significant estimates for Echo include the carrying value of intangible assets and the value of equity instruments, including convertible notes, stock options, warrants, and membership units issued in lieu of cash.

Recently Issued Accounting Pronouncements

There have been no new accounting rules or pronouncements introduced in 2011 that have had an effect of Echo’s financial conditions or results of operations.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership Prior To the Exchange Transaction

The Company has one class of its stock outstanding, its common stock. The following table sets forth certain information as of October 11, 2012 prior to the closing of the Exchange Transaction with respect to the beneficial ownership of our common stock (i) each director and officer, (ii) all of our directors and officers as a group, and (iii) each person known to us to own beneficially five percent (5%) or more of the outstanding shares of our common stock. As of October 11, 2012, there were 22,500,000 shares of common stock outstanding.

To our knowledge, except as indicated in the footnotes to this table or pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to the shares of common stock indicated.

Name and Address of		Percentage
Beneficial Owner(1)	Shares Beneficially Owned	Beneficially Owned
Directors and Executive Officers Vincent Espiritu, Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, President, Secretary, Treasurer and Director 69 Stanley Point Road, Devonport, Auckland, New Zealand 0624	-	-

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B. Gordon Brooke, Vice President of Finance 69 Stanley Point Road, Devonport, Auckland, New Zealand 0624	-	-
All Officers and Directors as a Group	-	-
5% Shareholders None.	-	-

____________________

(1) Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Pursuant to the rules of the SEC, shares of common stock which an individual or group has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be beneficially owned and outstanding for the purpose of computing the percentage ownership of any other person shown in the table.

Security Ownership After the Exchange Transaction

The following table sets forth certain information as of October 11, 2012, after giving effect to the Closing of the Exchange Transaction, with respect to the beneficial ownership of our common stock for (i) each director and officer, (ii) all of our directors and officers as a group, and (iii) each person known to us to own beneficially five percent (5%) or more of the outstanding shares of our common stock. As of October 11, 2012, after giving effect to the closing of the Exchange Transaction, there were 75,000,000 shares of common stock outstanding.

To our knowledge, except as indicated in the footnotes to this table or pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to the shares of common stock indicated.

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Name and Address of	Shares Beneficially	Percentage Beneficially
Beneficial Owner(1)	Owned	Owned
Directors and Executive Officers
William D. Kennedy, Director, Chief Executive Officer 15029 N. 74th Street, Scottsdale, AZ 85260	52,500,000 (2)	70.00%
Jason Plotke, Director, President 15029 N. 74th Street, Scottsdale, AZ 85260	52,500,000 (3)	70.00%
Jim Holden, Director 15029 N. 74th Street, Scottsdale, AZ 85260	-	-
Daniel Clarke, Director 15029 N. 74th Street, Scottsdale, AZ 85260	-	-
Rodney H. McKinley, Chief Financial Officer, Secretary 15029 N. 74th Street, Scottsdale, AZ 85260	-	-
Patrick van den Bossche, Chief Operating Officer 15029 N. 74th Street, Scottsdale, AZ 85260	-	-
All Officers and Directors as a Group	52,500,000	70.00%
5% Shareholders DBPJ Stock Holding, LLC 15029 N. 74th Street, Scottsdale, AZ 85260	52,500,000	70.00%

_________________

(1)	Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Pursuant to the rules of the SEC, shares of common stock which an individual or group has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be beneficially owned and outstanding for the purpose of computing the percentage ownership of any other person shown in the table.
(2)	52,500,000 shares of Company common stock are directly owned by DBPJ Stock Holding, LLC, an Arizona limited liability company. Mr. Kennedy is the Chief Financial Officer, Secretary and a member of the Board of Directors of DBPJ Stock Holding, LLC. In addition, The Dan Kennedy Family Trust U/A 12/20/95, of which Mr. Kennedy is a beneficiary, is a member of DBPJ Stock Holding, LLC. By virtue of such positions, Mr. Kennedy may be deemed to be the indirect beneficial owner of such shares. However, Mr. Kennedy disclaims that he is a beneficial owner of such shares, except to the extent of his pecuniary interest therein.
(3)	52,500,000 shares of Company common stock are directly owned by DBPJ Stock Holding, LLC, an Arizona limited liability company. Mr. Plotke is the Chief Executive Officer, Chairman and a member of the Board of Directors of DBPJ Stock Holding, LLC. In addition, The Jason Plotke Family Revocable Trust, of which Mr. Plotke is the trustee and a beneficiary, is a member of DBPJ Stock Holding, LLC. By virtue of such positions, Mr. Plotke may be deemed to be the indirect beneficial owner of such shares. However, Mr. Plotke disclaims that he is a beneficial owner of such shares, except to the extent of his pecuniary interest therein.

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DIRECTORS AND EXECUTIVE OFFICERS

Name	Age	Position	Since
William D. Kennedy	39	Director, Chief Executive Officer	2012
Jason Plotke	39	Director, President	2012
Jim Holden	63	Director	2012
Daniel Clarke	47	Director	2012
Rodney H. McKinley	63	Chief Financial Officer, Secretary	2012
Patrick van den Bossche	50	Chief Operating Officer	2012

William D. Kennedy, Director, Chief Executive Officer

Mr. Kennedy is currently the CEO of Echo. Mr. Kennedy has held this position since February 2009. Prior to working with Echo, Mr. Kennedy established RouteCloud in 2008. The first public preview of a solution powered by RouteCloud was demonstrated at www.Protector.com. From 1997 to 2008, Mr. Kennedy held various positions with Vcommerce, including CEO, President and Chief Technology Officer, a company offering end-to-end eCommerce solution for retailers, including Sony.com, Target.com, Overstock, and many others representing billions in transactions annually. Vcommerce was sold to Channel Intelligence in 2009. Mr. Kennedy has over 20 years of experience with entrepreneurial business, and in 2001, Mr. Kennedy formed a business incubator, where he has assisted companies in a wide range of industries with financing and growth objectives. In 1993, he co-founded SalesLogix , a widely used sales-force automation software . Mr. Kennedy founded Vcommerce in 1997, creating the outsourced commerce market space. Mr. Kennedy’s vision and execution led its platform development, market positioning and strategy. Mr. Kennedy studied Mathematics, Computer Graphics & Music Theory at Syracuse University from 1989 to 1991 The Company believes that Mr. Kennedy’s entrepreneurial business experience will be a valuable resource as the Company seeks to expand its business.

Jason Plotke, Director, President and Chairman

Mr. Plotke is currently the President and Chairman of Echo. Mr. Plotke has held this position since February 2009. Mr. Plotke is also the President of KPE, a niche performance and styling specialist for specific automotive vehicles, which he founded in April 2006. Mr. Plotke served as CEO and Cofounder of Innovative Automotive Group (IAG), an automotive accessory designer/distributor/e-tailer, from August 2006 to November 2008. As President and Cofounder of SMA, an accessory manufacturer and tier 1 supplier to General Motors, Mr. Plotke served from March 2002 - March 2006 where he assisted in raising capital and rapidly expanding the business, and was instrumental in securing the tier 1 supplier position with General Motors. Prior to SMA, in 1998, Mr. Plotke founded and operated MAC Motorsports, an accessory manufacturer/distributor for niche product segments. MAC Motorsports was acquired in 2002. Of special note, Mr. Plotke is the recipient of four General Motors Design Awards. Mr. Plotke studied at Arizona State University from 1993 – 1996 earning 90 credits toward a Mechanical Engineering degree. The Board believes that Mr. Plotke’s experience in the automotive industry will provide valuable insight to the Company’s business and operations.

Jim Holden, Director

Mr. Holden is currently the Chairman of Holden International, a global sales consulting and training firm. Mr. Holden founded Holden International in 1979, and throughout its almost 30-year history, Holden has grown to be a leader in the sales process improvement field. In 1990, he established Holden as one of the first companies to model sales effectiveness, an achievement that garnered the Ernst & Young Regional Entrepreneur of the Year award for the service industry. Mr. Holden began his sales career in 1974 with Teradyne, a Boston-based high-technology company. Prior to founding Holden, he was Vice President of Sales for Aegis, a third-party distribution company selling computer-based test systems into the manufacturing environment. Mr. Holden was a founder/director of the First National Bank of Roselle and has served as a director of two other area banks and several early development-stage companies. He is active in the community, having founded the Partnership to End Homelessness in Chicago, and is a supporter of many other charities, including cancer research. Mr. Holden earned a B.S.E.E. with high honors from Northeastern University in Boston in 1972 and is a member of the National Engineering Honor Society, Tau Beta Pi, and the National Interdisciplinary Honor Society, Phi Kappa Phi. Mr. Holden’s broad business and consulting experience is expected to provide our Board with helpful insight as to its growth potential and objectives.

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Daniel Clarke, Director

Mr. Clarke is currently the CEO of Living Naturally, a leading online marketing and procurement company in the natural products, specialty grocery and independent pharmacy sectors. He has held this position since March 2012. Mr. Clarke is currently a member of the Board of Directors of NewsComm, Inc., a customizable SmartTV interactive application that allows local newspapers and magazines to showcase their existing content right to the living rooms of cable and satellite TV subscribers, where he has served since May 2011. Mr. Clarke is also currently the Executive Chairman of Inilex where he has served since August 2007. Inilex is a leading provider of intelligent telemetry solutions. For over 20 years, Dan Clarke has been a strong force in the high-tech industry, building multi-million dollar companies and raising over $250 million from top-tier venture capital firms. Mr. Clarke was an EIR at AZ Digital Farm and Chief Marketing Officer of CopiaMobile. He also served as CEO of portfolio companies NewsComm, Falan Funding and Online Professor. Mr. Clarke was CEO of WinBuyer, a leading online advertising company serving large ecommerce retailers, from August 2007 to May 2010. Prior to WinBuyer, Mr. Clarke was CEO of Vcommerce (which was acquired by Channel Intelligence) from August 2003 to December 2007 where he increased sales momentum, visibility, and overall performance growing the company to over $1.5 billion in retail value per year. Prior to joining Vcommerce, Mr. Clarke served as President, CEO and director of Primarion (acquired by Infineon), a semiconductor company, which he founded in 1999. Mr. Clarke spent 7 years at Intel, where he held several key positions including business unit general manager and marketing director of the Video Components, Mobil Computing and Graphics divisions. Mr. Clarke also served as the vice-president of sales and marketing at Three-Five Systems Inc., a NYSE public liquid crystal display company. Mr. Clarke studied at the University of Central Florida earning credits toward a degree in electrical engineering. Mr. Clarke’s extensive business building experience will aid the Board in defining and supporting the Company’s growth initiatives.

Rodney H. McKinley, Chief Financial Officer, Secretary

Mr. McKinley has 40 years of financial management and operational experience working as a CFO, Director of Finance and Administration, President, and Controller for businesses ranging from closely held start-ups to Fortune 500 divisions. Mr. McKinley is currently the Managing Partner of CFO Partners LLC, a company engaged in personalized CFO and accounting services for a wide range of businesses. Mr. McKinley has held this position since August 2009. Prior to CFO Partners, Mr. McKinley served as CFO of Nautical Enterprises, Inc. from March 2006 to September 2009 where he managed all accounting and finance functions. Nautical Enterprises, Inc. is a privately held company considered one of the top 20 dealers in the United States. Mr. McKinley has worked in a variety of industries including new and used car dealerships, manufacturing, real estate development, professional practice (medical, chiropractic, dentists, and veterinarian), retail sales, restaurant, and numerous high tech manufacturing including startups. Mr. McKinley has served as Controller for such organizations as AutoNation from March 2005 to March 2006, United Auto Group from January 2001 to January 2003, and Director of Finance and Administration for International Cruise and Excursions, Inc. from April 2003 to March 2005. While in public accounting with PriceWaterhouseCoopers from January 1991 to January 1993, Mr. McKinley has done work with and for a number of large and midsized companies including Ford Motor Company and Masco Industries. Mr. McKinley is a CPA (currently inactive) and earned a Bachelor of Business Administration (BBA) degree in Accounting from the University of New Mexico in 1975. We believe that with Mr. McKinley’s extensive background in finance, financial services and accounting will be critical to the Company’s success.

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Patrick van den Bossche, Chief Operating Officer

Mr. van den Bossche is the former Chief Operating Officer (2005 to 2012), Managing Director, and a board member of Barrett-Jackson, a company providing products and services to classic and collector car owners, astute collectors and automotive enthusiasts around the world. His responsibilities included day-to-day company operations, company finances and strategic business development. He has more than 20 years of experience as a senior executive by managing fast growth, start-up and next-growth companies. Previously, Mr. van den Bossche served as CEO & President of SPI/Modtech Holdings from 1986 to 2003, where he led the company from sales of less than $2 million annual revenues to nearly $300 million with managed net profits. He has significant experience with acquisitions, mergers, corporate capitalization and public offerings. He is an occasional lecturer who has spoken at Penn State University and at various stock growth conferences. He is a long time member of the Young Presidents’ Organization (YPO), World Presidents’ Organization (WPO), CEO, Association of Corporate Growth (ACG) and the Arizona Dutch Business Club. Mr. van den Bossche obtained a degree from California State Polytechnic University, Pomona in 2005. The Board believes that Mr. van den Bossche’s extensive operational, finance, and business building experience strengthens the Company’s ability to execute its business model.

Terms of Office

The Company’s directors are appointed for a one-year term to hold office until the next annual general meeting of the Company’s shareholders or until removed from office in accordance with the Company’s bylaws and the provisions of the Nevada Revised Statutes. The Company’s directors hold office after the expiration of his or her term until his or her successor is elected and qualified, or until he or she resigns or is removed in accordance with the Company’s bylaws and the provisions of the Nevada Revised Statutes.

The Company’s officers are appointed by the Company’s Board and hold office until removed by the Board.

Involvement in Certain Legal Proceedings

No director, executive officer, significant employee or control person of the Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.

Committees of the Board

Our Board of Directors held no formal meetings during the fiscal year ended December 31, 2011. All proceedings of the Board of Directors were conducted by resolutions consented to in writing by the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Nevada Revised Statutes and the bylaws of our company, as valid and effective as if they had been passed at a meeting of the directors duly called and held. We do not presently have a policy regarding director attendance at meetings.

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We do not currently have standing audit, nominating or compensation committees, or committees performing similar functions. Due to the size of our board, our Board of Directors believes that it is not necessary to have standing audit, nominating or compensation committees at this time because the functions of such committees are adequately performed by our Board of Directors. We do not have an audit, nominating or compensation committee charter as we do not currently have such committees. We do not have a policy for electing members to the board. Neither our current nor proposed directors are independent directors as defined in the NASD listing standards.

After the change in the Board of Directors, it is anticipated that the Board of Directors will form separate compensation, nominating and audit committees, with the audit committee including an audit committee financial expert.

Audit Committee

Our Board of Directors has not established a separate audit committee within the meaning of Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Instead, the entire Board of Directors acts as the audit committee within the meaning of Section 3(a)(58)(B) of the Exchange Act and will continue to do so upon the appointment of the proposed directors until such time as a separate audit committee has been established.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors, executive officers, and shareholders holding more than 10% of our outstanding Common Stock to file with the SEC initial reports of ownership and reports of changes in beneficial ownership of our Common Stock. Executive officers, directors, and persons who own more than 10% of our Common Stock are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file.

Based solely upon a review of Forms 3, 4, and 5 delivered to us as filed with the SEC during our most recent fiscal year, none of our executive officers and directors, and persons who own more than 10% of our Common Stock failed to timely file the reports required pursuant to Section 16(a) of the Exchange Act, except that Mr. B. Gordon Brooke failed to timely file a Form 4, and Mr. Bruce Wetherall, a former officer and director of the Company, failed to file a Form 4.

Nominations to the Board of Directors

Our directors take a critical role in guiding our strategic direction and oversee the management of the Company. Board candidates are considered based upon various criteria, such as their broad-based business and professional skills and experiences, a global business and social perspective, concern for the long-term interests of the shareholders, diversity, and personal integrity and judgment.

In addition, directors must have time available to devote to Board activities and to enhance their knowledge in the growing business. Accordingly, we seek to attract and retain highly qualified directors who have sufficient time to attend to their substantial duties and responsibilities to the Company.

In carrying out its responsibilities, the Board will consider candidates suggested by shareholders. If a shareholder wishes to formally place a candidate’s name in nomination, however, he or she must do so in accordance with the provisions of the Company’s Bylaws. Suggestions for candidates to be evaluated by the proposed directors must be sent to the Board of Directors, c/o Echo Automotive, Inc. 15029 N. 74^th Street, Scottsdale, AZ 85260.

Board Leadership Structure and Role on Risk Oversight

William Kennedy currently serves as the Company’s principal executive officer and a director. The Company determined this leadership structure was appropriate for the Company due to our small size and limited operations and resources. The Board of Directors will continue to evaluate the Company’s leadership structure and modify as appropriate based on the size, resources and operations of the Company.

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Subsequent to the closing of the Exchange Transaction, it is anticipated that the Board of Directors will establish procedures to determine an appropriate role for the Board of Directors in the Company’s risk oversight function.

Compensation Committee Interlocks and Insider Participation

No interlocking relationship exists between our board of directors and the board of directors or compensation committee of any other company, nor has any interlocking relationship existed in the past.

Family Relationships

There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.

EXECUTIVE COMPENSATION

Board Compensation

We have no standard arrangement to compensate directors for their services in their capacity as directors. Directors are not paid for meetings attended. However, we intend to review and consider future proposals regarding board compensation. All travel and lodging expenses associated with corporate matters are reimbursed by us, if and when incurred.

Executive Compensation - Former Executive Officers

No former director, officer or employee received compensation during the Company’s last fiscal year.

Executive Compensation - New Executive Officers

The following summary compensation table indicates the cash and non-cash compensation earned from Echo during the fiscal years ended December 31, 2011 and 2010 by the executive officers of Echo and each of the other two highest paid executives or directors, if any, whose total compensation exceeded $100,000 during those periods.

Summary Compensation Table
Name and						Non-Equity
Principal				Stock	Option	Incentive Plan	All Other
Position	Year	Salary	Bonus	Awards	Awards	Compensation	Compensation	Total
Jason Plotke	2011	$46,000	-	-	-	-	-	$46,000
- President	2010	$31,000	-	-	-	-	-	$31,000
Dan Kennedy	2011	$49,000	-	-	-	-	-	$49,000
- CEO	2010	$49,000	-	-	-	-	-	$49,000

_______________

None of our executive officers or directors received, nor are there any arrangements to pay out, any bonus, stock awards, option awards, non-equity incentive plan compensation, or non-qualified deferred compensation.

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Potential Payments Upon Termination or Change-in-Control

SEC regulations state that we must disclose information regarding agreements, plans or arrangements that provide for payments or benefits to our executive officers in connection with any termination of employment or change in control of the Company. Please see the section entitled “Employment Agreements” below for a discussion of management compensation in the event of a termination of employment or change in control of the Company.

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Employment Agreements

Echo has entered into binding employment agreements with certain key employees to protect Echo regarding matters such as confidentiality and disruption to existing operations. The following are summaries of the Echo employment agreements.

William Daniel Kennedy

Echo has entered into an Executive Employment Agreement with William Daniel Kennedy, effective April 21, 2012 (the “Kennedy Agreement”), in connection with his service as Chief Executive Officer of Echo. In accordance with the Kennedy Agreement, Mr. Kennedy shall be entitled to a base salary of $220,000 per year payable in accordance with Echo’s customary payroll practice. The Kennedy Agreement shall continue in full force and effect until terminated by the parties as a result of (i) negotiation and replacement of the Kennedy Agreement by a new employment agreement; (ii) termination by Echo with or without cause (as defined in the Kennedy Agreement); (iii) or termination by Mr. Kennedy with or without good reason (as defined in the Kennedy Agreement).

In the event the Kennedy Agreement is terminated for cause by Echo, or without good reason and notice by Mr. Kennedy, Echo shall pay Mr. Kennedy the compensation to which he is entitled through the end of Mr. Kennedy’s employment, and any further payment obligations on the part of Echo shall cease. In the event the Kennedy Agreement is terminated without cause by Echo upon at least 30 days written notice, or by Mr. Kennedy upon good reason, Mr. Kennedy shall be entitled to certain severance benefits including (a) continuance of monthly base salary for a period commencing on the date of termination and continuing for twelve (12) months from such termination; and (b) continuance of any benefits, such as retirement plans, life insurance plans, health and dental plans, if applicable, for a period commencing on the date of termination and continuing for thirty (30) days from such termination.

Jason Plotke

Echo has entered into an Executive Employment Agreement with Jason Plotke, effective April 21, 2012 (the “Plotke Agreement”), in connection with his service as President of Echo. In accordance with the Plotke Agreement, Mr. Plotke shall be entitled to a base salary of $200,000 per year payable in accordance with Echo’s customary payroll practice. The Plotke Agreement shall continue in full force and effect until terminated by the parties as a result of (i) negotiation and replacement of the Plotke Agreement by a new employment agreement; (ii) termination by Echo with or without cause (as defined in the Plotke Agreement); (iii) or termination by Mr. Plotke with or without good reason (as defined in the Plotke Agreement).

In the event the Plotke Agreement is terminated for cause by Echo, or without good reason and notice by Mr. Plotke, Echo shall pay Mr. Plotke the compensation to which he is entitled through the end of Mr. Plotke’s employment, and any further payment obligations on the part of Echo shall cease. In the event the Plotke Agreement is terminated without cause by Echo upon at least 30 days written notice, or by Mr. Plotke upon good reason, Mr. Plotke shall be entitled to certain severance benefits including (a) continuance of monthly base salary for a period commencing on the date of termination and continuing for twelve (12) months from such termination; and (b) continuance of any benefits, such as retirement plans, life insurance plans, health and dental plans, if applicable, for a period commencing on the date of termination and continuing for thirty (30) days from such termination.

Additional Binding Agreements

Echo has a binding employment offer letter to each of its current employees, which includes Sean Stanley, Paul Bishop, Amy Dobrikova, Dave Crecelius, Jeff Ronning, Patrick van den Bossche and John Waters. The offer letters detail base and variable compensation and any stock options. Echo is obligated to the terms of these offer letters because they are binding agreements made by Echo.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AND DIRECTOR INDEPENDENCE

Certain Relationships and Transactions

There are no family relationships between any of our former directors or executive officers and new directors or new executive officers. None of the new directors and executive officers were directors or executive officers of the Company prior to the closing of the Exchange Transaction, nor did any hold any position with the Company prior to the closing of the Exchange Transaction, nor have been involved in any material proceeding adverse to the Company or any transactions with the Company or any of its directors, executive officers, affiliates or associates that are required to be disclosed pursuant to the rules and regulations of the SEC.

Review, Approval or Ratification of Transactions with Related Persons

Although we have adopted a Code of Ethics, we rely on our board to review related party transactions on an ongoing basis to prevent conflicts of interest. Our board reviews a transaction in light of the affiliations of the director, officer or employee and the affiliations of such person’s immediate family. Transactions are presented to our board for approval before they are entered into or, if this is not possible, for ratification after the transaction has occurred. If our board finds that a conflict of interest exists, then it will determine the appropriate remedial action, if any. Our board approves or ratifies a transaction if it determines that the transaction is consistent with the best interests of the Company.

Related Party Transactions

In accordance with the Exchange Transaction, the Echo Member received 52,500,000 shares of Company common stock, representing 70% of the issued and outstanding common stock of the Company. Jason Plotke is the Chief Executive Officer and Chairman of the Echo Member and William D. Kennedy is the Chief Financial Officer and Secretary of the Echo Member. Jason Plotke and William D. Kennedy, each of which is an incoming officer and director of the Company, is deemed an indirect beneficial owner of shares of common stock of the Company, respectively, through their beneficial ownership of membership interests in the Echo Member as well as their positions as officers of the Echo Member.

In addition, as noted above under “Employment Agreements,” Echo has employment contracts with certain employees. Echo also has a licensing agreement with RouteCloud which has related ownership to Mr. Kennedy. Further, Echo has a closed revolving line of credit with zero ($0) balance due with the BK Family Trust, a trust with related ownership to Mr. Kennedy.

In addition, Echo has entered into certain transactions in the normal course of business with entities under common ownership. Echo has recognized revenue for consulting related to these transactions of $0 and $0 for the six months ended June 30, 2012 and 2011, respectively and $47,100 for the period from inception (November 25, 2009) through June 30, 2012.

Further, Echo paid consulting fees to the owners of Echo that amounted to $182,167 and $43,475 for the six months ended June 30, 2012 and 2011 and $381,432 for the period from inception (November 25, 2009) through June 30, 2012.

Other than as set forth above, none of our current officers or directors have been involved in any material proceeding adverse to the Company or any transactions with the Company or any of its directors, executive officers, affiliates or associates that are required to be disclosed pursuant to the rules and regulations of the SEC.

Director Independence

During the year ended December 31, 2011, we did not have any independent directors on our board. We evaluate independence by the standards for director independence established by applicable laws, rules, and listing standards including, without limitation, the standards for independent directors established by The New York Stock Exchange, Inc., the NASDAQ National Market, and the Securities and Exchange Commission.

Subject to some exceptions, these standards generally provide that a director will not be independent if (a) the director is, or in the past three years has been, an employee of ours; (b) a member of the director’s immediate family is, or in the past three years has been, an executive officer of ours; (c) the director or a member of the director’s immediate family has received more than $120,000 per year in direct compensation from us other than for service as a director (or for a family member, as a non-executive employee); (d) the director or a member of the director’s immediate family is, or in the past three years has been, employed in a professional capacity by our independent public accountants, or has worked for such firm in any capacity on our audit; (e) the director or a member of the director’s immediate family is, or in the past three years has been, employed as an executive officer of a company where one of our executive officers serves on the compensation committee; or (f) the director or a member of the director’s immediate family is an executive officer of a company that makes payments to, or receives payments from, us in an amount which, in any twelve-month period during the past three years, exceeds the greater of $1,000,000 or two percent of that other company’s consolidated gross revenues.

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LEGAL PROCEEDINGS

None.

MARKET PRICE OF AND DIVIDENDS ON COMMON EQUITY
AND RELATED SHAREHOLDER MATTERS

Market Information

Our common stock is not listed on any stock exchange. Although our common stock is currently quoted on the OTCBB under the symbol “ECAU,” there is no established public market for shares of our common stock, and no trades of our common stock have taken place on the OTCBB. The shares were first listed on February 22, 2012, but there is no history of trading. Any quotations reflect interdealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

Holders

Prior to the Exchange Transaction, there were approximately 35 shareholders of record of our common stock based upon the shareholders’ listing provided by our transfer agent. Our transfer agent is Action Stock Transfer Corp. The transfer agent’s address is 2469 E. Fort Union Blvd, Ste 214, Salt Lake City, UT 84121 and its phone number is (801) 274-1088.

Dividends

We have never paid cash dividends on our common stock. We intend to keep future earnings, if any, to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. Our future payment of dividends will depend on our earnings, capital requirements, expansion plans, financial condition and other relevant factors that our board of directors may deem relevant. Our retained earnings deficit currently limits our ability to pay dividends.

Securities Authorized for Issuance Under Equity Compensation Plans

None.

RECENT SALES OF UNREGISTERED SECURITIES

Reference is made to Item 3.02 of this Form 8-K for a description of recent sales of unregistered securities, which is hereby incorporated by reference.

DESCRIPTION OF SECURITIES

The following information describes our capital stock and provisions of our articles of incorporation and our bylaws, all as in effect upon the Closing of the Exchange Transaction. This description is only a summary.

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You should also refer to our articles of incorporation and bylaws which have been incorporated by reference to this Form 8-K.

General

Our authorized capital stock consists of 650,000,000 shares of common stock at a par value of $0.001 per share, of which 22,500,000 shares were issued and outstanding immediately prior to the Closing of the Exchange Transaction.

Common Stock

The holders of Common Stock are entitled to one vote per share. They are not entitled to cumulative voting rights or preemptive rights. The holders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of legally available funds. However, the current policy of the Board of Directors is to retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders of Common Stock are entitled to share ratably in all assets that are legally available for distribution after payment in full of any preferential amounts. The holders of Common Stock have no subscription, redemption or conversion rights. The rights, preferences and privileges of holders of Common Stock are subject to, and may be adversely affected by, the rights of the holders of any series of preferred stock, which may be designated solely by action of the Board of Directors and issued in the future. All outstanding shares of common stock are duly authorized, validly issued, fully paid and non-assessable.

Outstanding Options, Warrants and Convertible Securities

We do not have any outstanding options, warrants or convertible securities, other than the warrants issued to Hartford Equity Inc. as discussed in Item 3.02 of this Form 8-K.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

Reference is made to Item 4.01 of this Form 8-K for a description of the changes in and disagreements with accountants, which is hereby incorporated by reference.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Reference is made to the financial statements and supplementary data included in Exhibits 99.1, 99.2 and 99.3, which are incorporated herein by reference.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Nevada Law

Section 78.7502 of the Nevada Revised Statutes (“NRS”) permits a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he:

(a) is not liable pursuant to Nevada Revised Statute 78.138, or

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(b) acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

In addition, Section 78.7502 permits a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys’ fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he:

(a)	is not liable pursuant to Nevada Revised Statute 78.138; or
(b)	acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation.

To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter, the corporation is required to indemnify him against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection with the defense.

Section 78.752 of the Nevada Revised Statutes allows a corporation to purchase and maintain insurance or make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee or agent, or arising out of his status as such, whether or not the corporation has the authority to indemnify him against such liability and expenses.

Other financial arrangements made by the corporation pursuant to Section 78.752 may include the following:

(a)	the creation of a trust fund;
(b)	the establishment of a program of self-insurance;
(c)	the securing of its obligation of indemnification by granting a security interest or other lien on any assets of the corporation; and
(d)	the establishment of a letter of credit, guaranty or surety

No financial arrangement made pursuant to Section 78.752 may provide protection for a person adjudged by a court of competent jurisdiction, after exhaustion of all appeals, to be liable for intentional misconduct, fraud or a knowing violation of law, except with respect to the advancement of expenses or indemnification ordered by a court.

Any discretionary indemnification pursuant to Section 78.7502, unless ordered by a court or advanced pursuant to an undertaking to repay the amount if it is determined by a court that the indemnified party is not entitled to be indemnified by the corporation, may be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination must be made:

(a) by the shareholders;

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(b)	by the board of directors by majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding;
(c)	if a majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding so orders, by independent legal counsel in a written opinion, or
(d)	if a quorum consisting of directors who were not parties to the action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion.

Charter Provisions and Other Arrangements of the Registrant

Articles of Incorporation

Pursuant to the provisions of Nevada Revised Statutes, the Registrant has adopted the following indemnification provisions in its Articles of Incorporation for its directors and officers:

No director or officer of the Registrant shall be personally liable to the Registrant or any of its stockholders for damages for breach of fiduciary duty as a director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer (i) for acts or omissions which involve intentional misconduct, fraud or knowing violation of law, or (ii) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of an Article by the stockholders of the Registrant shall be prospective only, and shall not adversely affect any limitation of the personal liability of a director or officer of the Registrant for acts or omissions prior to such repeal or modification.

Bylaws

Pursuant to the provisions of Nevada Revised Statutes, the Registrant has adopted the following indemnification provisions in its Bylaws for its directors and officers:

The Registrant shall indemnify its directors and officers to the fullest extent not prohibited by the Nevada Revised Statutes provided that the Registrant shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the Registrant, (iii) such indemnification is provided by the Registrant, in its sole discretion, pursuant to the powers vested in the Registrant under the Nevada Revised Statutes or (iv) such indemnification is required to be made in accordance with the Registrant’s Bylaws.

The Registrant shall have power to indemnify its employees and other agents as set forth in the Nevada Revised Statutes.

The Registrant shall advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer, of the Registrant, or is or was serving at the request of the Registrant as a director or executive officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or officer in connection with such proceeding upon receipt of an undertaking by or on behalf of such person to repay said mounts if it should be determined ultimately that such person is not entitled to be indemnified under the Bylaws or otherwise.

Notwithstanding the foregoing, no advance shall be made by the Registrant to an officer of the Registrant (except by reason of the fact that such officer is or was a director of the Registrant in which event the following shall not apply) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding, or (ii) if such quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Registrant.

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Without the necessity of entering into an express contract, all rights to indemnification and advances to directors and officers under the Bylaws shall be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the Registrant and the director or officer. Any right to indemnification or advances granted by the Bylaws to a director or officer shall be enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefor. The claimant in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting his claim. In connection with any claim for indemnification, the Registrant shall be entitled to raise as a defense to any such action that the claimant has not met the standard of conduct that make it permissible under the Nevada Revised Statutes for the Registrant to indemnify the claimant for the amount claimed. In connection with any claim by an officer of the Registrant (except in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such officer is or was a director of the Registrant) for advances, the Registrant shall be entitled to raise a defense as to any such action clear and convincing evidence that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed in the best interests of the Registrant, or with respect to any criminal action or proceeding that such person acted without reasonable cause to believe that his conduct was lawful. Neither the failure of the Registrant (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in the Nevada Revised Statutes, nor an actual determination by the Registrant (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct. In any suit brought by a director or officer to enforce a right to indemnification or to an advancement of expenses hereunder, the burden of proving that the director or officer is not entitled to be indemnified, or to such advancement of expenses, under the Bylaws or otherwise shall be on the Registrant.

The rights conferred on any person by the Bylaws shall not be exclusive of any other right which such person may have or hereafter acquire under any statute, provision of the Articles of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office. The Registrant is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the Nevada Revised Statutes.

The rights conferred on any person by the Bylaws shall continue as to a person who has ceased to be a director, officer, employee or other agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

To the fullest extent permitted by the Nevada Revised Statutes, the Registrant, upon approval by the Board of Directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to the Bylaws.

In addition to the above, each of our directors has entered into an indemnification agreement with us. The indemnification agreement provides that we shall indemnify the director against expenses and liabilities in connection with any proceeding associated with the director being our director to the fullest extent permitted by applicable law, our Articles of Incorporation and Bylaws.

Section 3 - Securities and Trading Markets

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Item 3.02.           Unregistered Sales of Equity Securities.

As more fully described in Item 2.01 above, in connection with the Exchange Transaction, on the Closing Date, we issued a total of 52,500,000 shares of our common stock to the Echo Member in exchange for 100% of the issued and outstanding units of Echo. Reference is made to the disclosures set forth under Item 2.01 of this Form 8-K, which disclosures are incorporated herein by reference.

The issuance of the common stock to the Echo Member pursuant to the Exchange Agreement was exempt from registration in reliance upon Regulation D and/or Regulation S of the Securities Act as the investors are “accredited investors,” as such term is defined in Rule 501(a) under the Securities Act and in offshore transactions (as defined in Rule 902 under Regulation S of the Securities Act), such determination based upon representations made by such investors.

In addition, in May 2012, in connection with the LOI, Echo received funding from the Company of $300,000 in exchange for promissory notes as advances against the proceeds to be received from the sale of Company common stock at the Closing of the Exchange. Prior to Closing, Echo received an additional $328,000 from the Company in exchange for promissory notes as advances against the proceeds to be received from the sale of Company common stock at the Closing of the Exchange. Further, an additional $275,000 was advanced on the Closing Date.

To facilitate the aggregate advances of $903,000, as noted above, the Company issued 1,806,000 shares of its common stock to several accredited investors, at $0.50 per share (the “Shares”) and warrants to purchase 1,806,000 shares of common stock of the Company with an exercise price of $0.75 per share with a term of eighteen (18) months (the “Warrants”). The Shares and Warrants were issued in reliance upon Regulation S of the Securities Act to investors who are “accredited investors,” as such term is defined in Rule 501(a) under the Securities Act, or in offshore transactions (as defined in Rule 902 under Regulation S of the Securities Act), based upon representations made by such investors.

Section 4 - Matters Related to Accountants and Financial Statements

Item 4.01.           Changes in Registrant’s Certifying Accountant.

(a)           Dismissal of Independent Certifying Accountant

Effective October 11, 2012, Madsen & Associates CPA’s Inc. (“Madsen”) was dismissed as the Company’s independent registered public accounting firm. Madsen’s report for the fiscal years ended December 31, 2011 and 2010 were on the Company’s financial statements for the Company’s former operations prior to the reverse acquisition. On October 11, 2012, the Company completed a reverse acquisition with Echo Automotive, LLC, which became the operations of the Company and the accounting acquirer on a going forward basis.

The dismissal of Madsen as the independent registered public accounting firm was approved by the written consent by the Board of Directors.

The reports of Madsen regarding the Company’s financial statements for the fiscal years ended December 31, 2011 and 2010 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that the audit report of Madsen on the Company’s financial statements for fiscal years ended December 31, 2011 and 2010 contained an explanatory paragraph which noted that there was substantial doubt about the Company’s ability to continue as a going concern.

During the years ended December 31, 2011 and 2010, and during the period from December 31, 2011 to October 11, 2012, the date of dismissal, (i) there were no disagreements with Madsen on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Madsen would have caused it to make reference to such disagreement in its reports; and (ii) there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

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The Company has provided Madsen with a copy of the foregoing disclosures and requested that Madsen furnish the Company with a letter addressed to the SEC stating whether or not it agrees with the above statements. A copy of such letter is filed as Exhibit 16.1 to this Current Report on Form 8-K.

(b)           Engagement of Independent Certifying Accountant

Effective October 11, 2012, the Company’s Board of Directors engaged Mayer Hoffman McCann P.C. (“MHM”) as its independent registered public accounting firm to review the Company’s financial statements for the fiscal quarter ending September 30, 2012. MHM is the independent registered accounting firm for Echo, and its report on the financial statements of Echo at December 31, 2011 and 2010 and the period of inception (November 25, 2009) through December 31, 2011, are included in the this Current Report on Form 8-K.

During each of the Company’s two most recent fiscal years and through the interim periods preceding the engagement of MHM, the Company (a) has not engaged MHM as either the principal accountant to audit the Company’s financial statements, or as an independent accountant to audit a significant subsidiary of the Company and on whom the principal accountant is expected to express reliance in its report; and (b) has not consulted with MHM regarding (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and no written report or oral advice was provided to the Company by MHM concluding there was an important factor to be considered by the Company in reaching a decision as to an accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K or a reportable event, as that term is described in Item 304(a)(1)(v) of Regulation S-K.

Section 5 - Corporate Governance and Management

Item 5.01.           Changes in Control of Registrant.

As more fully described in Item 2.01 above, incorporated herein by reference, on October 11, 2012, we closed the Exchange Transaction. As a result of the Exchange Transaction, the Echo Member acquired 70% of our issued and outstanding common stock, Echo became our sole wholly-owned subsidiary, and the Registrant acquired the business and operations of Echo.

In connection with this change in control, and as explained more fully in Item 5.02 below, effective on the Closing Date, Mr. Espiritu and Mr. Brooke resigned as a director and officers of the Registrant. We appointed new officers and directors effective on the closing date of the Exchange Transaction. On June 19, 2012, we filed with the Securities and Exchange Commission and transmitted to holders of record of our securities the information required by Rule 14(f)-1 of the Securities Exchange Act of 1934.

Item 5.02.           Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The information contained in Item 2.01 above is incorporated by reference herein.

Resignation of Officers and Directors

As a condition to closing the Exchange Agreement, effective on the closing date of the Exchange Transaction, Mr. Vincent Espiritu resigned from the Registrant’s Board of Directors and as an officer of the Registrant and Mr. B. Gordon Brooke resigned as Vice President, Finance of the Registrant. The following persons consist of the Registrant’s new executive officers and directors subsequent to the closing of the Exchange Transaction:

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Appointment of Officers and Directors

Effective on the closing date of the Exchange Transaction, Messrs. William D. Kennedy, Jason Plotke, Jim Holden and Daniel Clarke were appointed to the Registrant’s Board of Directors. Further, on the Closing Date, Mr. Kennedy was appointed Chief Executive Officer, Mr. Plotke was appointed President, Mr. Rodney H. McKinley was appointed Chief Financial Officer and Secretary, and Mr. Patrick van den Bossche was appointed Chief Operating Officer of the Registrant.

Our officers and directors as of the Closing Date are as follows:

Name	Age	Position
William D. Kennedy	39	Director, Chief Executive Officer
Jason Plotke	39	Director, President
Jim Holden	63	Director
Daniel Clarke	47	Director
Rodney H. McKinley	63	Chief Financial Officer, Secretary
Patrick van den Bossche	50	Chief Operating Officer

Descriptions of our newly appointed directors and officers can be found in Item 2.01 above, in the section titled “Directors and Executive Officers.”

There are no family relationships among any of our officers or directors. None of the newly appointed directors has been named or, at the time of this Form 8-K, is expected to be named to any committee of the Board. As disclosed in this Form 8-K, certain of our newly appointed officers have entered into employment agreements with the Company. Other than the Exchange Transaction, there are no transactions, since the beginning of our last fiscal year, or any currently proposed transaction, in which the Company was or is to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of the average of the Company’s total assets at year-end for the last three completed fiscal years, and in which any of the newly appointed officers and directors had or will have a direct or indirect material interest. Other than the Exchange Transaction, there is no material plan, contract or arrangement (whether or not written) to which any of the newly appointed directors or officers is a party or in which any of the new directors and officers participates that is entered into or material amendment in connection with our appointment of the new directors and officers, or any grant or award to any new director or officer or modification thereto, under any such plan, contract or arrangement in connection with our appointment of the new directors and officers.

Item 5.06.           Change in Shell Company Status.

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Reference is made to the Exchange Transaction under the Exchange Agreement, as described in Item 2.01, which is incorporated herein by reference. From and after the closing of the transactions under the Exchange Agreement, our primary operations consist of the business and operations of Echo. Accordingly, we are disclosing information about Echo’s business, financial condition, and management in this Form 8-K.

Section 9 - Financial Statements and Exhibits

Item 9.01.           Financial Statements and Exhibits.

Reference is made to the Exchange Transaction under the Exchange Agreement, as described in Item 2.01, which is incorporated herein by reference. As a result of the closing of the voluntary exchange transaction, our primary operations consist of the business and operations of Echo. Accordingly, we are presenting the consolidated financial statements of Echo as of the three and six months ended June 30, 2012 and 2011, and for the years ended December 31, 2011 and 2010 after giving effect to the acquisition of Echo by the Registrant.

          (a)           Financial Statements of the Business Acquired

The audited consolidated financial statements of Echo for the years ended December 31, 2011 and 2010 and the period of inception (November 25, 2009) through December 31, 2011, and the unaudited consolidated financial statements of Echo for the three and six months ended June 30, 2012 and 2011, including the notes to such financial statements, are incorporated herein by reference to Exhibit 99.1 and 99.2 of this Form 8-K.

          (b)           Pro Forma Financial Information

The pro forma financial statements of the Registrant and Echo for the year ended December 31, 2011, and the pro forma financial statements of the Registrant and Echo for the six months ended June 30, 2012, including the notes to such financial statements, are incorporated by reference to Exhibit 99.3 of this Form 8-K.

          (c)           Shell Company Transactions

Reference is made to Items 9.01(a) and 9.01(b) above and the exhibits referred to therein, which are incorporated herein by reference.

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          (d)           Exhibits

Exhibit	Description
Number
2.1	Exchange Agreement, dated September 21, 2012 (incorporated by reference to the registrant’s Current Report on Form 8-K filed on September 27, 2012)
3.1(a)	Articles of Incorporation (incorporated by reference to the registrant’s Registration Statement on Form S-1 filed on March 20, 2009)
3.1(b)	Text of Amendment to Articles of Incorporation (incorporated by reference to the registrant’s Current Report on Form 8-K filed on September 27, 2012
3.2	Bylaws, as amended (incorporated by reference to the registrant’s Registration Statement on Form S-1 filed on March 20, 2009)
10.1	License Agreement by and between Clean Futures, LLC and Controlled Carbon, LLC dated February 1, 2012*
10.2	Form of Indemnification Agreement*
10.3	Client Lease by and between Flagship Enterprise Center, Inc. and Controlled Carbon LLC, dba Echo Automotive, dated April 1, 2012*
10.4	Client Lease by and between Flagship Enterprise Center, Inc. and Controlled Carbon LLC, dba Echo Automotive, dated June 1, 2012*
10.5	Letter of Intent by and between Canterbury Resources, Inc. and Controlled Carbon, LLC dba Echo Automotive, dated May 16, 2012 (incorporated by reference to the registrant’s Current Report on Form 8-K filed on May 22, 2012)
10.6	Promissory Note by and between Canterbury Resources, Inc. and Controlled Carbon, LLC dba Echo Automotive, dated May 16, 2012 (incorporated by reference to the registrant’s Current Report on Form 8-K filed on May 22, 2012)
10.7	Financing Agreement by and between Canterbury Resources, Inc. and Hartford Equity Inc., dated May 16, 2012 (incorporated by reference to the registrant’s Current Report on Form 8-K filed on May 22, 2012)
10.8	Letter of Intent by and between Controlled Carbon, LLC and Kellington Group Bhd., dated January 24, 2012*
10.9	Form of Warrant*
10.10	Executive Employment Agreement with William Daniel Kennedy dated April 21, 2012*
10.11	Executive Employment Agreement with Jason Plotke dated April 21, 2012*
10.12	License Agreement with Bright Automotive, Inc. dated June 28, 2012*
10.13	Promissory Note with William W. Kennedy dated July 13, 2012*
10.14	Promissory Note with Josh Lambert dated July 13, 2012*
16.1	Letter of Madsen & Associates CPA’s, Inc.*
21	List of Subsidiaries - Echo Automotive, LLC an Arizona limited liability company

47

99.1	Audited financial statements of Echo for the years ended December 31, 2011 and 2010, and the period of inception (November 25, 2009) through December 31, 2011*
99.2	Unaudited interim financial statements of Echo for the six months ended June 30, 2012 and 2011*
99.3	Proforma financial statements*

______________
*Filed Herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ECHO AUTOMOTIVE, INC.
a Nevada corporation

Dated: October 15, 2012	By:	/s/ William D. Kennedy
		William D. Kennedy
		Chief Executive Officer

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EX-10.1

LICENSE AGREEMENT

This agreement (“Agreement” is made on 2/1, 2012 (“Effective Date”), between Controlled Carbon, LLC (“ControlledCarbon”), with offices at 9909 N. 126^th Street, Scottsdale, Arizona 85259, and Clean Futures, LLC, (“CleanFutures”), having a principal place of business at 120 N. Main Street, Suite 9, El Dorado, Kansas, 67042 (hereinafter collectively referred to as the “Parties”).

              WHEREAS, CleanFutures represents that it has developed unique engine assist technology;

              WHEREAS, CleanFutures represents that it has developed and possesses valuable information and intellectual property pertaining to the intelligent application of energy of an electric motor to assist an internal combustion engine via a belt drive attached to the engine crank-shaft pulley;

              WHEREAS, CleanFutures represents that it has applied for, or is preparing to file and has been reasonably diligent with its processes and record keeping to allow for patent coverage of the system described above mentioned ‘engine assist’ and owns patent applications, patents and/or the capability, desire and intention to file and procure patents to protect the ‘engine assist’ technology described above, which are listed in Schedule 1 and corresponding patent applications and patents in other countries;

              WHEREAS, CleanFutures wishes to expand their business by offering solutions in the Hummer Market and wishes to license intellectual property, know-how, capabilities and proprietary components from ControlledCarbon to leverage the investments being made by ControlledCarbon including improvements made to CleanFutures Technology as well as application of additional technologies beyond the scope of CleanFutures Technology;

              WHEREAS, ControlledCarbon wishes to obtain from CleanFutures, and CleanFutures is willing to provide to ControlledCarbon, an exclusive, worldwide, unrestricted, perpetual license in accordance with and subject to the terms and conditions contained in this Agreement;

              WHEREAS, ControlledCarbon wishes to grant CleanFutures, an exclusive, worldwide, unrestricted, perpetual license of its technologies for the Hummer Market in accordance with and subject to the terms and conditions contained in this Agreement;

              WHEREAS, By way of a separate agreement, ControlledCarbon wishes to grant an option to CleanFutures to purchase common stock in ControlledCarbon, and CleanFutures is willing to agree to such an option;

              WHEREAS, All other agreements between the Parties will become null and void at the execution of this Agreement; and

              NOW THEREFORE, intending to be legally bound upon the terms, conditions and mutual covenants set forth in this Agreement, it is agreed as follows:

1.            DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below:

1.1          “CleanFutures Patents” shall mean:

(a) any patents or patent applications listed in Schedule 1, including any continuations, continuations-in-part, divisionals, reissues, re-examinations, extensions or additions thereof, and any improvements thereto,

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(b) any foreign patent applications and any patents corresponding to the United States patent applications and patents, and

(c) any other patent applications filed and any patents granted and any continuations and divisions of such applications and patents. Neither Party has any performance requirements nor obligations required to continue to develop new technology or patents.

1.2          “CleanFutures Technology” shall mean the components that incorporate proprietary and unique technology created, developed or acquired by CleanFutures that increase the performance and or economy of an engine through the addition of a battery, electric motor, motor control system, and belt harnessing method to the engine crank-shaft.

1.3          “CC Technology” shall mean the patents or patent applications, intellectual property, knowhow, algorithms, or other knowledge it has, develops or acquires to manufacture and produce its ‘EchoDrive’ product as defined below. For the avoidance of doubt, these technologies may include additional technologies, fitments, and strategies than have not been contemplated by the Parties, but are still to be considered CC Technology so long as it is designed to reduce fuel consumption on a vehicle.

1.4          “License Period” shall mean beginning on the Effective Date and continue in perpetuity until the last to expire of any patent rights within the CleanFutures Patents.

1.5          “Licensed Products” shall mean any and all components the manufacture, use, sale, offer for sale or import of which, in the absence of this Agreement, would infringe or contribute to the infringement of CleanFutures Patents, and that ControlledCarbon or its Affiliates have elected to integrate into their products, components or technology.

1.6          “Military Market" shall mean any and all tactical vehicles marketed to and sold to any of the branches of the military.

1.7          “Hummer Market" shall mean all vehicles that have been marketed under the brand Hummer or Humvee prior to the execution of this Agreement. For the avoidance of doubt, this includes the H1, H2 and H3 in any of their forms as well as any Hummer used for military purposes.

1.8          “CC Exclusive Licensed Field” shall mean the original equipment, service parts and aftermarket passenger automobile, light truck, fleet, heavy truck industries and any other automotive sector (with the exception of the Hummer Market).

1.9          “Non-exclusive Licensed Field" shall mean all fields of industry except the Hummer Market.

1.10        “EchoDrive” shall mean a ControlledCarbon product that is a collection of technologies, systems and components to generally increase performance and/or reduce overall operating costs of a vehicle.

1.11        “Affiliates” shall mean any corporation or other legal entity which controls, or is controlled by the respective Party. For purposes of this Agreement, ownership, directly or indirectly, of twenty-five percent (25%) or more equity interest of or by a Party shall mean an affiliate relationship exists between such entities.

1.12        “System Cost” shall be the actual cost, per unit sold, of the components and materials, any per-unit capitalized NRE (paid to a non-affiliated company or supplier), actual manufacture freight, actual assembly costs, actual QA costs, actual 3^rd party licensing or per unit warranty programs. For the avoidance of doubt, these costs will not include costs from any Affiliates, marketing expenses, general overhead, R&D, sales commissions or salaries. Any additional costs to be included in this definition must be agreed to by both Parties in writing.

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1.13        “Gross Margin” shall be calculated as actual selling price minus actual System Cost divided by the actual selling price. [Calculation Example. Selling Price ($15) – System Cost ($10) / Selling Price ($15) = Gross Margin of (33%)]

2.            CONTROLLED CARBON LICENSE AND ADDITIONAL TERMS

2.1          CleanFutures hereby grants to ControlledCarbon, within the CC Exclusive Licensed Field, an exclusive license, with the right to grant sublicenses, under the CleanFutures Patents and CleanFutures Technology during the License Period to make, have made, use, sell, have sold, offer for sale and import Licensed Products and any other products that incorporate CleanFutures Technology throughout the world. For the avoidance of doubt, ControlledCarbon shall have the exclusive right under the CleanFutures Patents and CleanFutures Technology to grant sublicenses, to the extent of the CC Exclusive Licensed Field.

2.2          The exclusive license granted in clause 2.1 of this Agreement is not subject to any reserved license in CleanFutures to make, use, sell, offer for sale and import Licensed Products within the CC Exclusive License Field.

2.3          ControlledCarbon shall have the sole right to convert the exclusive license granted in clause 2.1 into a non-exclusive perpetual license in the CC Exclusive License Field under CleanFutures Patents and CleanFutures Technology for the balance of the License Period to make, use, sell, offer for sale and import Licensed Products throughout the world. This right to convert shall be effective forty eight (48) months after the Effective Date provided that CleanFutures receives notice at least three (3) months before such conversion date. Upon such conversion, for the balance of the License Period, ControlledCarbon shall pay CleanFutures a one-time lump sum of Two Hundred Fifty Thousand ($250,000.00) for the non-exclusive rights to CleanFutures Technologies.

2.4          CleanFutures will grant to ControlledCarbon, within the Non-exclusive Licensed Field, a non-exclusive license, with no right to grant sublicenses (except to ControlledCarbon Affiliates), under the CleanFutures Patents and CleanFutures Technology during the License Period to make, have made, use, sell, have sold, offer for sale and import Licensed Products throughout the world subject to the licensing fees in this agreement.

2.5          CleanFutures will execute any confirmation of this Agreement and any other documentation necessary to perfect or provide notice of ControlledCarbon’s rights under this Agreement in the United States Patent and Trademark Office as well as cooperate with any other reasonable requirements brought forth from similar international requirements.

2.6          CleanFutures shall deliver to ControlledCarbon the following deliverables within 30 days, if applicable: any and all manufacturing specifications, quality control plans, engineering design specifications, part prints, algorithms or datasets, formulations required for manufacture, related quality control data, all production test data, any tooling, jig and fixture blueprints, design manuals, and training manuals related to CleanFutures Technology within fifteen (15) days of the Effective Date. Johnathan Goodwin shall oversee the transfer of the deliverables as project manager. CleanFutures will reasonably update ControlledCarbon on a timely bases of any additions, updates or changes during the term of this Agreement.

2.7          CleanFutures will promptly inform ControlledCarbon of the grant of each patent licensed under this Agreement, and of the filing of each application for such a patent, and will promptly furnish copies of such patents to ControlledCarbon.

2.8          CleanFutures will promptly disclose, deliver and otherwise make fully available to ControlledCarbon in the form of duplicates of drawings, designs, data, reports, written specifications, instructions and consultations, or in such other suitable manner and form as may be convenient to the Parties, all CleanFutures Technology within ninety (90) days of the Effective Date of this Agreement, provided that this clause does not apply to any CleanFutures Technology which has been communicated to CleanFutures on terms which preclude CleanFutures from disclosing it to ControlledCarbon even under a confidentiality agreement.

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2.9          During the License Period, CleanFutures will continue to promptly disclose, deliver and otherwise make fully available to ControlledCarbon in the form of duplicates of drawings, designs, data, reports, written specifications, instructions and consultations, or in such other suitable manner and form as may be convenient to the Parties, all CleanFutures Technology now possessed or hereafter discovered or developed by CleanFutures or otherwise coming into CleanFutures’s possession that is requested by ControlledCarbon or that CleanFutures believes would be useful or helpful to ControlledCarbon in the manufacture, sale and importation of its products, provided that this clause does not apply to any CleanFutures Technology which is communicated to CleanFutures on terms which preclude CleanFutures from disclosing it to ControlledCarbon even under a confidentiality agreement. However, CleanFutures has no performance requirements nor obligations required to continue to develop new technology. ControlledCarbon will be responsible for any reasonable, pre-approved costs, if any, associated with this paragraph.

2.10        ControlledCarbon will execute a Warrant agreement where CleanFutures will have the right to purchase a number of common stock equal to five percent (5%) of the outstanding shares of ControlledCarbon calculated at the time of the execution of this Agreement and issued at the next round of funding or at the time of ControlledCarnom’s conversion from an LLC to an S Corp, whichever comes first. The warrant price will be set at $0.01 and will be in place for a period of 10 years. In addition, the Warrant agreement and stock, if converted will be subject to a voting rights agreement. ControlledCarbon will have the right to reduce the Warrant amount to four percent (4%) anytime in the first twenty four (24) months by making royalty prepayments totaling One Hundred Thousand Dollars ($100,000.00) or reduce the Warrant amount to three percent (3%) anytime in the first twenty four (24) months with royalty prepayments totaling Five Hundred Thousand Dollars ($500,000.00) .

2.11        CleanFutures will transfer the ownership of both the VW Beetle prototype and Goodwin trailer upon execution of this Agreement. CleanFutures will have the one-time right to repurchase the VW Beetle on the one-year anniversary of the Effective Date of this Agreement for the amount of One Dollar ($1.00) . All improvements or modifications made by either Party to the VW Beetle remain with the VW Beetle. ControlledCarbon will reimburse CleanFutures Seven Thousand Dollars ($7,000.00) for the Goodwin trailer, due within 30 days of the effective date of this agreement or within 48 hours of recipt of any reimbursement from ControlledCarbon’s insurance provider, whichever comes first.

2.12        If the above Warrants are converted by CleanFutures, CleanFutures will have the right to sell the common stock at any time after the initial funding of ControlledCarbon subject to the terms of the voting rights agreement. CleanFutures will have the right to sell up to Two Hundred Thousand Dollars ($200,000.00) of their stock holdings, or lesser some amount, (if the above mentioned warrants are converted by CleanFutures) to investors during the next round of funding of over Three Million Dollars ($3,000,000.00) at the value of such shares during that round.

2.13        ControlledCarbon and CleanFutures will negotiate in good faith to enter into a contractor agreement that will allow ControlledCarbon to leverage CleanFutures to help develop new products and demonstration vehicles.

2.14        ControlledCarbon shall have the right to grant sublicenses with respect to any rights conferred upon ControlledCarbon under clause 2.1, provided, however, that any such sublicense, and sublicensee shall be subject in all respects to the restrictions, exceptions and termination provisions contained in this Agreement.

2.15        ControlledCarbon shall be responsible to CleanFutures for all obligations of its sublicensees in the same fashion and to the full extent that ControlledCarbon is obligated to CleanFutures under this Agreement, including, but not limited to, the payment of royalties due with respect to sales made by sublicensees, which sales shall be treated as though they were sales by ControlledCarbon. Sublicensees may pay royalties and provide royalty accounting to ControlledCarbon but without prejudice to the ultimate responsibility of ControlledCarbon to CleanFutures under this Agreement. A breach by a sublicensee of ControlledCarbon will be treated as a breach by ControlledCarbon, and CleanFutures may request ControlledCarbon terminate its sublicense agreement with the breaching Party with fifteen (15) days written notice. In the event ControlledCarbon elects not to terminate its sublicense agreement with the Party in breach, and CleanFutures is required to bring suit against the ControlledCarbon Affiliate or sublicensee of ControlledCarbon for breach of this Agreement, ControlledCarbon will pay all reasonable attorney fees and court costs incurred by CleanFutures in connection therewith.

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2.16        ControlledCarbon shall notify CleanFutures upon the commencement of negotiations with a bona fide sublicensee and of the on-going negotiation with said sublicensee with respect to granting a sub-license under this Agreement. The reports shall contain any written or oral offer from sublicensees and is accepted by ControlledCarbon regarding the licensed technology. CleanFutures will have fifteen (15) days to respond in writing regarding any term that it considers to be a breach of this Agreement.

2.17        ControlledCarbon shall pay, at their own expense, the costs of parts and materials used by ControlledCarbon in creating the Licensed Products, CleanFutures Technology, and related technologies.

3.            CONTROLLEDCARBON LICENSE FEE & ROYALTIES

3.1          ControlledCarbon shall pre-pay royalties to CleanFutures in the amount of One Hundred Fifty Thousand Dollars (U.S. $150,000.00) according to the following payment schedule; (i) Ten Thousand Dollars (U.S. $10,000.00) at the signing of this Agreement; (ii) Twenty-Five Thousand Dollars (U.S. $25,000.00) within thirty (30) days of the Effective Date of this Agreement; (iii) Forty Thousand Dollars (U.S. $40,000.00) within One-Hundred-Twenty (120) days of the Effective Date of this Agreement; (iv) Seventy Five Thousand Dollars (U.S. $75,000.00) at the time that ControlledCarbon completes a round of funding of no less than Three Million Dollars (U.S. $3,000,000.00) and in no event more than eight (8) months from the completion of the bridge financing . ControlledCarbon will pay CleanFutures the amount of Ten Thousand Dollars ($10,000.00) per month for a period of eighteen (18) months as additional pre-paid royalties beginning with the month following the completion of bridge financing.

3.2          To retain its exclusive license to the CC Exclusive Licensed Field, ControlledCarbon shall pay to CleanFutures royalties as stated in clause 3.4 for the license in clause 2.1 during the License Period, but in no event shall royalties for a one (1) year period starting at the beginning of general availability of the product or substantial commercial sales by ControlledCarbon of products incorporating CleanFutures Technology, be less than the following minimum royalties (such minimum royalties to be pre-paid and any unearned pre-paid royalties for any year will carry over to the subsequent year’s pre-paid royalties due):

-      Year 1 – U.S $100,000.00
-      Year 2 – U.S $150,000.00
-      Year 3 – U.S $200,000.00
-      Year 4 and beyond – U.S $250,000.00

3.3          At ControlledCarbon’s option, ControlledCarbon may pay CleanFutures a one-time prepayment of licensing fees in the amount of One Million Dollars (U.S $1,000,000.00) . In the event that ControlledCarbon elects to make such a payment, ControlledCarbon’s financial obligation to make the minimum yearly royalty payments in section 3.2 and the yearly exclusive license fees in section 3.1 will terminate effective the date such prepayment is made.

3.4          For every Licensed Product sold by ControlledCarbon that includes CleanFutures Technology or the system defined as CleanFutures Technology, ControlledCarbon will pay CleanFutures a royalty calculated with the schedule below for every system sold. All royalty payments made by ControlledCarbon will be based on the actual selling price as billed and as cash collected by ControlledCarbon. No royalties will be due on returned product, services, consulting, NRE, warranty programs, accessories, packaging, system or component housings, adapters or plugs, infrastructure sales, software, licensing fees, 3rd party add-ons, financing programs or any related offering that supports the sale of CleanFutures Technology or integrates with CleanFutures Technology, but contains no CleanFutures Technology. Forty eight (48) months from the Effective Date of this Agreement, and on each anniversary of the Effective Date going forward, ControlledCarbon will, at its sole option, have the right to (a) continue its exclusive license agreement with continued royalty payments as defined below; or (b) convert its exclusive license to a non-exclusive license at no cost to ControlledCarbon and reduce its royalty rate to one percent (1%) for all sales that infringe on any Pending Patent within the CleanFutures Patents and (2%) for all sales that would infringe on any issued Patent within the CleanFutures Patent; or (c) modify its products or evidence that its products do not infringe on any issued CleanFutures Patents covering CleanFutures Technology and will owe no royalties going forward to CleanFutures. At anytime after the first forty eight (48) months, it becomes reasonably clear that meaningful patent protection will be unlikely, or CleanFutures is advised by legal counsel that an overall system patent protecting CleanFutures Technology as used in EchoDrive is unlikely to be granted then no royalties will be due CleanFutures going forward. In no event will this reduction occur within the first forty-eight (48) months after the Effective Date of this Agreement.

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System Component	Royalty Rate	Maximum Percentage of Component Gross Margin	Estimated Min. Gross Margin to Receive Full Royalty
Electric Motor Controller	5.0%	15%	33.3%
Electric Motor	5.0%	15%	33.3%
Cables, Brackets & Belt	5.0%	15%	33.3%
Li-Ion Batteries Cells	2.0%	5%	33.3%

Royalties to be paid will be calculated by; (i) multiplying the actual sales price by the Royalty Rate above then; (ii) multiplying the Gross Margin by the Maximum Percentage of Gross Margin above then; (iii) selecting whichever amount is lower will be used to calculate the royalty to be paid.

3.5          Any system delivered by ControlledCarbon that is based on CleanFutures Technology, ControlledCarbon will include a sticker or side badge with mutually agreed upon branding. ControlledCarbon will have no obligation to ensure that the sticker is applied to any vehicle.

3.6          ControlledCarbon shall pay no royalty to CleanFutures for any Licensed Products sold to CleanFutures at wholesale price or for any other product offerings that does not integrate CleanFutures Technology. This Agreement in no way obligates ControlledCarbon to integrate any technology, patent or invention into ControlledCarbon’s products, components or technology. For the avoidance of doubt, any CleanFutures Technology that ControlledCarbon elects not to integrate into it’s components or products, CleanFutures will have the right to license such technology to another party.

3.7          Within thirty (30) days after the end of each quarter beginning with the Effective Date of this Agreement and with the beginning of commercial sales of products or components integrating CleanFutures Technology, ControlledCarbon shall furnish CleanFutures with written statements showing ControlledCarbon’s sales of components containing CleanFutures Technology during the preceding quarter, any deductions taken, and the computation of royalties, and shall pay the royalties due under this clause 3. A similar statement shall be rendered and payment made within thirty (30) days after and as of the date of termination of this Agreement covering the period from the end of that covered by the preceding statement to the date of termination. ControlledCarbon shall keep for two (2) years after the date of submission of each statement, true and accurate records, files and books of account containing all the data reasonably required for the full computation and verification of ControlledCarbon’s sales of components with which it paid royalties and deductions taken. ControlledCarbon agrees to permit CleanFutures to examine these records to the extent necessary to verify the reports no more than once a year. The examination by CleanFutures shall be conducted by an auditor appointed by CleanFutures and paid for by CleanFutures.

3.8          The remittance of all monies payable pursuant to this Agreement shall be made in United States Dollars.

4.            CLEANFUTURES LICENSE AND ADDITIONAL TERMS

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4.1          ControlledCarbon hereby grants to CleanFutures, limited solely to the Hummer Market, an exclusive license, during the term of this Agreement the right to make, have made, use, sell, have sold, offer for sale and import products based upon ControlledCarbon’s patents, knowhow and other intellectual property. For the avoidance of doubt, CleanFutures will have no right to grant sublicenses to any ControlledCarbon technology.

4.2          The exclusive license granted in clause 4.1 of this Agreement limits the use of this intellectual property and know-how exclusively in the Hummer Market and non-exclusively in the Military Market and may be not be used in any other field or market including CC Exclusive License Field.

4.3          ControlledCarbon will execute any confirmation of this Agreement and any other documentation necessary to perfect or provide notice of CleanFutures’s rights under this Agreement in the United States Patent and Trademark Office as well as cooperate with any other reasonable requirements brought forth from similar international requirements.

4.4          ControlledCarbon will promptly inform CleanFutures of the grant of each ControlledCarbon patent licensed under this Agreement, and of the filing of each application for such a patent, and will promptly furnish copies of such patents to CleanFutures.

4.5          During the License Period, both Parties will work together in good faith to identify which patents, know-how and capabilities CleanFutures may benefit from in the Hummer Market and will work together to disclose, deliver and otherwise make fully available to CleanFutures in the form of duplicates of drawings, designs, data, reports, written specifications, instructions and consultations, or in such other suitable manner and form as may be convenient to the Parties, all CC Technology now possessed or hereafter discovered or developed by ControlledCarbon or otherwise coming into ControlledCarbon’s possession that is requested by CleanFutures in the manufacture, sale and importation of its products, provided that this clause does not apply to any ControlledCarbon Technology which is communicated to ControlledCarbon on terms which preclude ControlledCarbon from disclosing it to CleanFutures even under a confidentiality agreement. However, ControlledCarbon has no performance requirements nor obligations required to continue to develop new technology. CleanFutures will be responsible for any reasonable, pre-approved costs, if any, associated with this paragraph.

4.6          CleanFutures shall pay, at their own expense, the costs of parts and materials used by CleanFutures in creating the products based on CC Technologies.

5.            CLEANFUTURES LICENSE FEE & ROYALTIES

5.1          For every product sold by CleanFutures that includes CC Technology, CleanFutures will pay ControlledCarbon a royalty calculated with the schedule below for every system sold. All royalty payments made by CleanFutures will be based on the actual selling price as billed and as cash collected by CleanFutures. No royalties will be due on returned product, services, consulting, NRE, warranty programs, accessories, packaging, system or component housings, adapters or plugs, infrastructure sales, software, licensing fees, 3rd party add-ons, financing programs or any related offering that supports the sale of the product or integrates with the product, but contains no CC Technology. Forty eight (48) months from the Effective Date of this Agreement, and on each anniversary of the Effective Date going forward, CleanFutures will, at its sole option, have the right to (a) continue its exclusive license agreement with continued royalty payments as defined below; or (b) convert its exclusive license to a non-exclusive license at no cost to CleanFutures and reduce its royalty rate to one percent (1%) for all sales that would infringe on any pending ControlledCarbon patent and (2%) for all sales that would infringe on any issued ControlledCarbon patent; or (c) modify its products or evidence that its products do not infringe on any ControlledCarbon patents covering CC Technology and will owe no royalties going forward to ControlledCarbon. At anytime after the first forty eight (48) months, it becomes reasonably clear that meaningful patent protection will be unlikely, or ControlledCarbon is advised by legal counsel that patents protecting CC Technology is unlikely to be granted then no royalties will be due to ControlledCarbon going forward. In no event will this reduction occur within the first forty eight (48) months after the execution of this Agreement.

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System Component	Royalty Rate	Maximum Percentage of component Gross Margin	Est. Min. Gross Margin to Receive Full Royalty
Motor Controller	5.0%	15%	33.3%
Electric Motor	5.0%	15%	33.3%
Cables, Brackets & Belt	5.0%	15%	33.3%
L-Ion Batteries	2.0%	5%	33.3%

In addition, ControlledCarbon may be providing intellectual property to CleanFutures not contemplated in the above chart. In the event that CleanFutures chooses to integrate any CC Technology not addressed above, both Parties will work together in good faith to find an appropriate licensing percentage. In no case will that licensing fee exceed Twenty-Five (25%) of the Gross Margin of the product where such intellectual property is being used or integrated and ControlledCarbon will give CleanFutures most favored nation pricing for such licensing for like volumes and terms.

Royalties to be paid will be calculated by; (i) multiplying the actual sales price by the Royalty Rate above then; (ii) multiplying the Gross Margin by the Maximum Percentage of Gross Margin above then; (iii) selecting whichever amount is lower will be used to calculate the royalty to be paid.

5.2          Within thirty (30) days after the end of each quarter beginning with the Effective Date of this Agreement and with the beginning of commercial sales of products or components integrating CC Technology, CleanFutures shall furnish ControlledCarbon with written statements showing CleanFutures’s sales of components containing CC Technology during the preceding quarter, any deductions taken, and the computation of royalties, and shall pay the royalties due under this clause 5. A similar statement shall be rendered and payment made within thirty (30) days after and as of the date of termination of this Agreement covering the period from the end of that covered by the preceding statement to the date of termination. CleanFutures shall keep for two (2) years after the date of submission of each statement, true and accurate records, files and books of account containing all the data reasonably required for the full computation and verification of CleanFutures’s sales of components with which it paid royalties and deductions taken. CleanFutures agrees to permit ControlledCarbon to examine these records to the extent necessary to verify the reports no more than once a year. The examination by ControlledCarbon shall be conducted by an auditor appointed by ControlledCarbon and paid for by ControlledCarbon.

6.            ASSIGNABILITY

6.1          The licenses granted under this Agreement shall be binding upon any successor of either Party in ownership or control of the patents and technology. ControlledCarbon may assign this Agreement to any successor or other party at its option subject to the written approval of CleanFutures, the approval of which shall not be unreasonably withheld and will only be withheld if such a assignment will, or is likely to, materially breach this Agreement. An acquisition of ControlledCarbon or substantially all of the assets of ControlledCarbon by another entity will not require CleanFutures approval. ControlledCarbon will have a thirty (30) day right of first refusal to match with reasonably similar terms and purchase CleanFutures if they receive a bona fide offer from a party capable of completing such a transaction.

7.            PRODUCT MARKING

7.1          Each Party shall place in a conspicuous location on any product or component containing CleanFutures Technology or CC Technology a distinguishing mark agreeable to both Parties and the number or numbers of any patents applicable thereto.

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7.2          The marking of product in clause 7.1 shall not be required if the product performance is compromised thereby, the marking cannot reasonably be placed on any product due to the product size, increase in production cost, or in all instances where either Parties customers request in writing that any products do not include any markings.

7.3          Each Party shall notify the other in writing when any components are not marked pursuant to clause 7.2.

8.            PUBLICITY

8.1          Except as required in clause 7.1, neither Party shall use the others trade names or trademarks without written consent.

8.2          CleanFutures will not issue any press release or communicate externally or publicly its relationship with ControlledCarbon or disclose any information regaring CleanFutures Technologies without prior review and written approval from ControlledCarbon, which will not be unreasonably witheld. However, parameters on use of EchoDrive or CleanFutures Technology may be modified by separate written agreement.

8.3          CleanFutures shall not use any ControlledCarbon or EchoDrive trademarks, trade names or service marks without the prior written consent of ControlledCarbon.

9.            CONFIDENTIALITY

9.1          All of the terms of this Agreement, including the existence of the Agreement, are confidential, and CleanFutures shall not disclose any such terms and conditions to anyone else without first obtaining the prior written consent from ControlledCarbon, provided that either party may disclose the terms and conditions of this Agreement in response to the legal requirement of a governmental agency or a court of competent jurisdiction if such disclosure is first submitted to the other Party.

9.2          Both Parties will protect confidential materials received from the other under this Agreement and containing CleanFutures Technology or CC Technology against disclosure to others with the same degree of care each Party protects its own materials of a similar nature and will endeavor to instruct their own employees most likely to have access to such materials that such materials are to be so protected. Both Parties acknowledges that each Party often discloses its own materials for its own commercial purposes to customers, vendors and consultants, and accordingly will not assert any claim with respect to disclosure or use of any materials, or any CC Technology or CleanFutures Technology, disclosed to the other Party. The foregoing expresses ControlledCarbon’s entire obligation with respect to CleanFutures Technology, and supersedes any obligation that might otherwise be implied by or inferred from any legends placed on materials containing CleanFutures Technology.

9.3          Both parties will protect materials received from the other under this Agreement against disclosure to others with the same degree of care each Party protects its own materials of a similar nature and will endeavor to instruct the other Parties employees most likely to have access to such materials that such materials are to be so protected. The foregoing expresses the entire obligation of the Parties with respect to such materials, and supersedes any obligation that might otherwise be implied by or inferred from any legends placed on materials.

10.          INFRINGEMENT BY THIRD PARTIES

10.1        Each Party shall notify the other Party in writing of any suspected infringement(s) of their patents and shall inform the other Party of any evidence of such infringement(s).

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10.2        ControlledCarbon shall have the first right to institute suit for infringement(s) of the CC Technology and in the CC Exclusive License Field. CleanFutures agrees to join as a party plaintiff in any such lawsuit initiated by ControlledCarbon, if requested by ControlledCarbon or required by law, with all costs, attorney fees, and expenses to be paid by ControlledCarbon. However, if ControlledCarbon does not institute suit for infringement(s) within ninety (90) days of receipt of written notice from CleanFutures of CleanFutures’s desire to bring suit for infringement in its own name and on its own behalf, then CleanFutures may at its own expense, select legal counsel and bring suit or take any other appropriate action.

10.3        CleanFutures shall have the sole right to institute suit for infringement(s) in the Non Exclusive Licensed Field in regards to CleanFutures Technology.

10.4        Neither Party may settle with an infringer without the prior approval of the other Party if such settlement would affect any rights of the other Party under the CleanFutures Patents and CleanFutures Technology.

11.          WARRANTY

11.1        CleanFutures warrants it has the right to convey the licenses granted by this Agreement.

11.2        CleanFutures warrants that, as of the Effective Date of this Agreement, it has received no claim from a third party charging infringement of a patent or other intellectual property of any third party from the use of any CleanFutures Patents, CleanFutures Technology, or any activity of CleanFutures.

11.3        CleanFutures warrants that it has obtained an agreement with Johnathan Goodwin where he has assigned his intellectual property and other assignments necessary to allow CleanFutures to perform under this Agreement, and to permit ControlledCarbon to use the CleanFutures Patents and CleanFutures Technology as contemplated under this Agreement.

11.4        CleanFutures agrees to defend at its expense and hold harmless ControlledCarbon from all loss or damage by reason of any and all actions or proceedings charging infringement, whether rightfully or wrongfully brought, of any patent by reason of manufacture, use, sale, offer for sale, or import of any Licensed Product, or other product or component by ControlledCarbon incorporating the CleanFutures Patents, and/or CleanFutures Technology as contemplated under this Agreement. ControlledCarbon agrees to notify CleanFutures in writing of all such actions or proceedings and, at the expense of CleanFutures, to assist CleanFutures in the defense of the action or proceeding. If the manufacture, use, offer for sale, sale or import of such CleanFutures Technology is enjoined as a result of such action or proceeding, CleanFutures will indemnify ControlledCarbon for any and all losses or damages sustained by reason of obeying such injunction.

11.5        If a claim or claims of any patent licensed hereunder or Clean Futures Patent shall be held invalid, unenforceable, or cancelled by a court or administrative agency from whose decision no appeal is taken or no appeal or other proceeding for review can be taken (hereinafter a “final judgment”), or such patent must be modified to materially reduce the scope and protection provided by such patent and/or application, then such claim or claims shall, subsequent to the date of the final judgment, or date of patent modification, be treated as invalid, unenforceable, or cancelled and no royalties shall be due under clauses 3 or 5 of this Agreement for sales thereafter of products covered solely by such claims. For the avoidance of doubt, this section does not release either Party from their obligation to pay royalties under this Agreement.

11.6        If a claim or claims of any patent licensed hereunder shall be held noninfringed by a third party’s products in a final judgment of a court or administrative agency, then subsequent to the date of the final judgment, either Party shall have no obligation to pay royalties hereunder to the other Party on related products manufactured, used, sold, offered for sale or imported by the Party not holding the patent at issue which do not infringe such patent.

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11.7        CleanFutures warrants that, as of the Effective Date of this Agreement, it has received no claim from a third party alleging ownership or misappropriation of any CleanFutures Patent and/or CleanFutures Technology.

11.8        CleanFutures warrants that, as of the Effective Date of this Agreement, and within the CC Exclusive Licensed Field, it and its licensees have not granted any rights under CleanFutures Technology and/or CleanFutures Patents. In addition, CleanFutures warrants that, as of the Effective Date of this Agreement, CleanFutures is under no obligation with any third party prohibiting the disclosure of CleanFutures Technology to ControlledCarbon.

11.9        CleanFutures agrees that with respect to any patent which may later issue, it will not assert against ControlledCarbon, or its vendees, any claims for infringement based on the manufacture, use, sale, offer for sale or import of any apparatus made or sold by ControlledCarbon under the license granted in this Agreement and upon which royalty has been paid in accordance with the provisions of clause 3.

11.10      Both Parties warrant that, during the License Period all patents will not be allowed to lapse.

12.          LIABILITY

12.1        At all times during the term of this Agreement and thereafter, each Party shall indemnify, defend and hold the other harmless against all claims and expenses, including legal expenses and reasonable attorney’s fees, arising out of the death of or injury to any person or persons or out of damage to personal property resulting from production, assembly, advertisement, sale or use of the other Party’s technology.

12.2        Indemnifications under clause 12.1 shall not apply to any claims or expenses due to: (i) the gross negligence of the other Party; or (ii) the intentional wrongdoing or intentional misconduct which caused material harm to the other Party.

12.3        Each Party shall obtain and carry in full force and effect reasonable commercial, general liability insurance which shall protect ControlledCarbon and CleanFutures with respect to events covered by the clause above. Such insurance shall be written by a reputable insurance company authorized to do business in the State of Kansas and Arizona, and shall list the other Party as an additional named insured.

12.4        Each Party shall at all times comply, through insurance or self-insurance, with all statutory workers’ compensation and employers’ liability requirements covering any and all employees with respect to activities performed under this Agreement.

13.          TERM

13.1        This Agreement shall continue in force for the License Period unless terminated by either Party under clause 13.2.

13.2        If either Party shall at any time default in the payment of any monies due in accordance with this Agreement or in fulfilling any of the other obligations or conditions hereof, prior to terminating this Agreement, the other Party shall give written notice of such default specifying the reasons thereof. If such default is not cured by the noticed Party within six (6) months of such notice, the other Party shall then have the right in its own discretion to terminate this Agreement by giving written notice of termination. This Agreement shall terminate on the thirtieth (30^th) day after the notice of termination is given. The noticed Party shall have the right to cure any such default up to termination.

13.3        If either Party: (i) makes a general assignment for the benefit of creditors or becomes insolvent; (ii) files an insolvency petition in bankruptcy or the approximate equivalent under local law; (iii) petitions for or acquiesces in the appointment of any receiver, trustee or similar officer to liquidate or conserve its business or any substantial part of its assets or the approximate equivalent under local law; (iv) commences under the laws of any jurisdiction any proceeding involving its insolvency, bankruptcy, reorganization, adjustment of debt, dissolution, liquidation, or any other similar proceeding for the release of financially distressed debtors; or (v) becomes a party to any proceeding or action of the type described above in (iii) or (iv) and such proceeding or action remains undismissed or unstayed for a period of more than sixty (60) days, then the other Party may by written notice terminate the exclusive license with immediate effect.

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14.          LICENSED PRODUCT QUALITY

14.1        Both Parties will work together to create corporate quality standards, as reasonably established and modified from time-to-time, shall be used as a minimum acceptable level of quality for all components delivered to the other Party.

15.          NOTICES

15.1        All notices given under this Agreement shall be in writing and shall be deemed to have been properly given when delivered personally or sent by prepaid registered or certified mail, and electronic transmission, and all payments and statements shall be sent by first class mail, postage prepaid, to the following addresses:

Controlled Carbon, LLC, 9909 N. 126^th Street, Scottsdale, Arizona, 85259

Clean Futures, LLC, 120 N. Main Street, Suite 9, El Dorado, Kansas, 67042

The date of service shall be deemed to be the date on which such notice, payment, or statement was personally delivered, posted, and sent by telex or electronic transmission. Either Party may give written notice of a change of address and, after notice of such change has been received, any notice, payment, or statement thereafter shall be given to such Party as above provided at such changed address.

16.          COVENANT

16.1        CleanFutures, for the License Period, agrees to refrain from disclosing any CleanFutures Technology to any company, partnership or other entity which is engaged in the manufacture, use or sale of products in the CC Exclusive Licensed Field.

17.          CONSTRUCTION

17.1        This Agreement will be governed by and construed in accordance with the laws of the state of Arizona, without regard to its law of conflicts. The headings of the clauses in this Agreement are intended solely for convenience of reference and shall not be considered in construing this Agreement.

18.          EXTRANEOUS WRITINGS

18.1        This Agreement constitutes the entire understanding between the Parties with respect to the subject matter hereof; all prior agreements, drafts, representations, statements, negotiations, and undertakings are superseded hereby. No amendment to this Agreement shall be effective unless it is in writing and signed by duly authorized representatives of both Parties.

19.          ARBITRATION

19.1        Both Parties shall use their best efforts to resolve by mutual agreement any disputes, controversies, or differences which may arise from, under, out of, or in connection with this Agreement. If such disputes, controversies, or differences cannot be settled between the parties within sixty (60) days of the first written notice relative thereto, it shall be resolved by arbitration before three arbitrators acting under the Expedited Arbitration Rules in accordance with the most recent Rules of the American Arbitration Association. Such arbitration shall be held in Arizona and the award rendered in the arbitration shall be final and binding upon both parties.

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20.          PATENT PROSECUTION AND EXPENSES

20.1        Subject to the following paragraphs of this clause, each Party or their designated representative will prosecute applications corresponding to their respective patents and maintain foreign patents issuing thereon. Each Party shall retain the sole right to elect counsel for prosecution of the their patents. Such applications will be filed in all countries deemed necessary to protect the patents, prior to 1-year form the filing date to protect the United States priority date.

20.2        Each Party agrees to bear the costs of filing, prosecution, and maintaining their respective patents in those countries covered in clause 20.1.

21.          INDEPENDENT CONTRACTOR

21.1        This Agreement does not constitute either Party as the partner, joint venturer, employee, agent, or legal representative of the other Party for any purpose whatsoever. Neither Party has granted any right or authority to assume or create any obligation or responsibility, express or implied, on behalf of or in the name of the other Party, or to bind the other Party in any manner. At all times, each Party, in fulfilling its obligations pursuant to this Agreement, shall be acting as an independent contractor.

22.          WAIVER

22.1        Waiver by ControlledCarbon or CleanFutures of any single default or breach or succession of defaults or breaches by the other shall not deprive ControlledCarbon or CleanFutures of any right to terminate this Agreement arising out of any subsequent default or breach.

23.          APPLICABLE LAWS

23.1        Each Party acknowledges that they have certain duties and obligations under Federal laws, including Export Administration Regulations of the United States Department of Commerce, anti-trust laws of the United States, and the Environmental Protection Agency. Each Party will be solely responsible for any breach of such Federal laws by that Party, its Affiliates or sublicensees and will defend and hold the other Party harmless in the event of a suit or action involving the other Party occasioned by any such breach.

IN WITNESS THEREOF, the parties have made this Agreement the day and year written above.

ControlledCarbon, LLC	CleanFutures, LLC By:
/s/_______________________________	By: /s/_________________________________
Name:_____________________________	Name:_________________________________
Title:____________________________	Title:________________________________
Date:_____________________________	Date:_________________________________

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EX-10.2

INDEMNIFICATION AGREEMENT

          This Indemnification Agreement (this “Agreement”), dated as of September ___, 2012, is made by and between Canterbury Resources, Inc., a Nevada corporation (the “Company”), and the undersigned, who is either a director or an officer of the Company (the “Indemnitee”), with this Agreement to be deemed effective as of the date that the Indemnitee first became a director or an officer of the Company.

RECITALS

          A.      The Company is aware that competent and experienced persons are reluctant to serve as directors or officers of corporations unless they are protected by comprehensive liability insurance and indemnification, due to the exposure to litigation costs and risks resulting from their service to such corporations, and due to the fact that the exposure frequently bears no reasonable relationship to the compensation of such directors and officers;

          B.      The Board of Directors of the Company (the “Board”) has concluded that, to retain and attract talented and experienced individuals to serve as officers or directors of the Company, it is necessary for the Company contractually to indemnify certain of such persons and to assume for itself maximum liability for expenses and damages in connection with claims against such persons in connection with their service to the Company;

          C.      Section 7502 of Chapter 78 of the Nevada General Corporation Law, under which the Company is organized (“Section 7502”), empowers the Company to indemnify by agreement its present and former officers and directors and persons who serve, at the request of the Company, as directors or officers of other corporations, partnerships, joint ventures, trusts, or other enterprises and expressly provides that the indemnification provided by Section 7502 is not exclusive; and

          D.      The Company desires and has requested the Indemnitee to serve or continue to serve as a director or an officer of the Company free from undue concern for claims for damages arising out of or related to such services to the Company.

          NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

          1.           Definitions

                                        1.1      Agent. For the purposes of this Agreement, “agent” of the Company means any person who is or was a director or an officer of the Company or a subsidiary of the Company; or is or was serving at the request of the Company or a subsidiary of the Company as a director or an officer of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise or an affiliate of the Company. The term “enterprise” includes any employee benefit plan of the Company, its subsidiaries, affiliates, and predecessor corporations.

                                        1.2      Company. For purposes of this Agreement, the “Company” includes, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence had continued, would have had power and authority to indemnify its directors or officers so that any person who is or was a director or an officer of such constituent corporation, or is or was serving at the request of such constituent corporation as a director or an officer of another corporation, partnership, joint venture, trust, or other enterprise, shall stand in the same position under this Agreement with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.

                                        1.3      Expenses. For the purposes of this Agreement, “expenses” includes all direct and indirect costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and related disbursements and other out-of-pocket costs) actually and reasonably incurred by the Indemnitee in connection with the investigation, defense, or appeal of a proceeding or establishing or enforcing a right to indemnification or advancement of expenses under this Agreement, Section 7502 or otherwise; provided, however, that expenses shall not include any judgments, fines, ERISA excise taxes or penalties, or amounts paid in settlement of a proceeding.

                                        1.4      Fines. For purposes of this Agreement, references to “fines” includes any excise taxes assessed on a person with respect to any employee benefit plan.

                                        1.5      Liabilities. For purposes of this Agreement, “liabilities” means judgments, fines, ERISA execute taxes or penalties, and amounts paid in settlement in connection with a proceeding.

                                        1.6      Other Enterprises. For purposes of this Agreement, “other enterprises” includes employee benefit plans.

                                        1.7      Proceeding. For the purposes of this Agreement, “proceeding” means any threatened, pending, or completed action, suit, or other proceeding, whether civil, criminal, administrative, or investigative.

                                        1.8      Subsidiary. For purposes of this Agreement, “subsidiary” means any corporation of which more than 50% of the outstanding voting securities is owned directly or indirectly by the Company, by the Company and one or more of its subsidiaries, or by one or more of the Company’s subsidiaries.

                                        1.9      Serving at the Request of the Company. For purposes of this Agreement, “serving at the request of the Company” includes any service as a director or an officer of the Company that imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

          2.      Agreement to Serve. The Indemnitee agrees to serve and/or continue to serve as an agent of the Company, at the will of the Company (or under separate agreement, if such agreement exists), in the capacity the Indemnitee currently serves as an agent of the Company, faithfully and to the best of his ability, so long as he is duly appointed or elected and qualified in accordance with the applicable provisions of the charter documents of the Company or any subsidiary of the Company; provided, however, that the Indemnitee may at any time and for any reason resign from such position (subject to any contractual obligation that the Indemnitee may have assumed apart from this Agreement), and the Company and any subsidiary shall have no obligation under this Agreement to continue the Indemnitee in any such position.

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          3.      Directors’ and Officers’ Insurance. The Company shall, to the extent that the Board determines it to be economically reasonable, maintain a policy of directors’ and officers’ liability insurance (“D&O Insurance”), on such terms and conditions as may be approved by the Board.

          4.      Mandatory Indemnification. Subject to Section 9 below, the Company shall indemnify the Indemnitee:

                                        4.1      Third-Party Actions. If the Indemnitee is a person who was or is a party or is threatened to be made a party to any proceeding (except an action by or in the right of the Company) by reason of the fact that the Indemnitee is or was an agent of the Company, or by reason of anything done or not done by the Indemnitee in any such capacity, against any and all expenses and liabilities of any type whatsoever incurred by the Indemnitee in connection with such proceeding if (a) the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company and, with respect to any criminal action or proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful, or (b) the Indemnitee, if a director or an officer of the Company, did not act or fail to act in a manner that constituted a breach of the Indemnitee’s fiduciary duties as a director or an officer or such Indemnitee’s breach of those duties did not involve intentional misconduct, fraud, or a knowing violation of law; and

                                        4.2      Derivative Actions. If the Indemnitee is a person who was or is a party or is threatened to be made a party to any proceeding by or in the right of the Company to procure a judgment in its favor by reason of the fact that the Indemnitee is or was an agent of the Company, or by reason of anything done or not done by the Indemnitee in any such capacity, against any and all expenses and liabilities incurred by the Indemnitee in connection with such proceeding if (a) the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company, or (b) the Indemnitee, if a director or an officer of the Company, did not act or fail to act in a manner that constituted a breach of the Indemnitee’s fiduciary duties as a director or an officer or such Indemnitee breach of those duties involved intentional misconduct, fraud, or a knowing violation of law; except that no indemnification under this subsection shall be made in respect of any claim, issue, or matter as to which the Indemnitee shall have been adjudged by a court of competent jurisdiction, after the exhaustion of all appeals therefrom, to be liable to the Company or for amounts paid in settlement to the Company, unless and only to the extent that the court in which such proceeding was brought or another court of competent jurisdiction determines upon application that, in view of all the circumstances of the case, the Indemnitee is fairly and reasonable entitled to indemnity for such expenses as the court deems proper; and

                                        4.3      Exception for Amounts Covered by Insurance. Notwithstanding the foregoing, the Company shall not be obligated to indemnify the Indemnitee for expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) to the extent such have been paid to the Indemnitee by D&O Insurance.

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          5.      Partial Indemnification and Contribution.

                                        5.1      Partial Indemnification. If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any expenses or liabilities of any type whatsoever incurred by the Indemnitee in connection with a proceeding but is not entitled, however, to indemnification for all of the total amount thereof, then the Company shall nevertheless indemnify the Indemnitee for such total amount except as to the portion thereof to which the Indemnitee is not entitled to indemnification.

                                        5.2      Contribution. If the Indemnitee is not entitled to the indemnification provided in Section 4 for any reason other than the statutory limitations set forth in the Nevada General Corporation Law, then in respect of proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such proceeding), the Company shall contribute to the amount of expenses and liabilities paid or payable by the Indemnitee in such proportion as is appropriate to reflect (a) the relative benefits received by the Company on the one hand and the Indemnitee on the other hand from the transaction from which such proceeding arose and (b) the relative fault of the Company on the one hand and of the Indemnitee on the other hand in connection with the events that resulted in such expenses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of the Indemnitee on the other hand shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent the circumstances resulting in such expenses, judgments, fines, or settlement amounts. The Company agrees that it would not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata allocation or any other method of allocation which does not take account of the foregoing equitable considerations.

          6.      Mandatory Advancement of Expenses.

                                        6.1      Advancement. Subject to Section 9 below, the Company shall pay as incurred and in advance of the final disposition of a civil or criminal proceeding all expenses incurred by the Indemnitee in connection with defending any such proceeding to which the Indemnitee is a party or is threatened to be made a party by reason of the fact that the Indemnitee is or was an agent of the Company or by reason of anything done or not done by the Indemnitee in any such capacity. The Indemnitee hereby undertakes to promptly repay such amounts advanced only if, and to the extent that, it shall ultimately by determined that the Indemnitee is not entitled to be indemnified by the Company under the provisions of this Agreement, the Articles of Incorporation or Bylaws of the Company, the Nevada General Corporation Law, or otherwise. The advances to be made hereunder shall be paid by the Company to the Indemnitee within thirty (30) days following delivery of a written request therefor by the Indemnitee to the Company.

                                        6.2      Exception. Notwithstanding the foregoing provisions of this Section 6, the Company shall not be obligated to advance any expenses to the Indemnitee arising from a lawsuit filed directly by the Company against the Indemnitee if an absolute majority of the members of the Board reasonably determines in good faith, within thirty (30) days of the Indemnitee’s request to be advanced expenses, that the facts known to them at the time such determination is made demonstrate clearly and convincingly that the Indemnitee acted in bad faith. If such a determination is made, the Indemnitee may have such decision reviewed in the manner set forth in Section 8.5 hereof, with all references therein to “indemnification” being deemed to refer to “advancement of expenses,” and the burden of proof shall be on the Company to demonstrate clearly and convincingly that, based on the facts known at the time, the Indemnitee acted in bad faith. The Company may not avail itself of this Section 6.2 as to a given lawsuit if, at any time after the occurrence of the activities or omissions that are the primary focus of the lawsuit, the Company has undergone a change in control. For this purpose, a “change in control” shall mean a given person of group of affiliated persons or groups increasing their beneficial ownership interest in the Company by at least twenty (20) percentage points without advance Board approval.

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          7.      Notice and Other Indemnification Procedures.

                                        7.1      Notification. Promptly after receipt by the Indemnitee of notice of the commencement of or the threat of commencement of any proceeding, the Indemnitee shall, if the Indemnitee believes that indemnification with respect thereto may be sought from the Company under this Agreement, notify the Company of the commencement or threat of commencement thereof.

                                        7.2      Insurance. If, at the time of the receipt of a notice of the commencement of a proceeding pursuant to Section 7.1 hereof, the Company has D&O Insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such D&O Insurance policies.

                                        7.3      Defense. In the event the Company shall be obligated to advance the expenses for any proceeding against the Indemnitee, the Company, if appropriate, shall be entitled to assume the defense of such proceeding, with counsel approved by the Indemnitee (which approval shall not be unreasonably withheld), upon the delivery to the Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by the Indemnitee and the retention of such counsel by the Company, the Company will not be liable to the Indemnitee under this Agreement for any fees of counsel subsequently incurred by the Indemnitee with respect to the same proceeding, provided that (a) the Indemnitee shall have the right to employ the Indemnitee’s own counsel in any such proceeding at the Indemnitee’s expense; (b) the Indemnitee shall have the right to employ the Indemnitee’s own counsel in connection with any such proceeding, at the expense of the Company, if such counsel serves in a review, observer, advice, and counseling capacity and does not otherwise materially control or participate in the defense of such proceeding; and (c) if (i) the employment of counsel by the Indemnitee has been previously authorized by the Company, (ii) the Indemnitee shall have reasonably concluded that there may be conflict of interest between the Company and the Indemnitee in the conduct of any such defense, or (iii) the Company shall not, in fact, have employed counsel to assume the defense of such proceeding, then the fees and expenses of the Indemnitee’s counsel shall be at the expense of the Company.

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          8.      Determination of Right to Indemnification.

                                        8.1      Success on Merits. To the extent the Indemnitee has been successful on the merits or otherwise in defense of any proceeding referred to in Section 4.1 or 4.2 of this Agreement or in the defense of any claim, issue, or matter described therein, the Company shall indemnify the Indemnitee against expenses actually and reasonably incurred by the Indemnitee in connection with the investigation, defense, or appeal of such proceeding, or such claim, issue, or matter, as the case may be.

                                        8.2      Proof by Company. In the event that Section 8.1 is inapplicable, or does not apply to the entire proceeding, the Company shall nonetheless indemnify the Indemnitee unless the Company shall prove by clear and convincing evidence to a forum listed in Section 8.4 below that the Indemnitee has not met the applicable standard of conduct required to entitle the Indemnitee to such indemnification.

                                        8.3      Termination of Proceeding. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere its equivalent, does not, of itself, create a presumption that a person (a) did not act in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Company, (b) with respect to any criminal action or proceeding, that the person had reasonable cause to believe that the person’s conduct was unlawful, or (c) the person’s act or failure to act constituted a breach of the person’s fiduciary duties as a director or an officer or the person’s breach of those duties involved intentional misconduct, fraud, or a knowing violation of law.

                                        8.4      Applicable Forums. The Indemnitee shall be entitled to select the forum in which the validity of the Company’s claim under Section 8.2 hereof that the Indemnitee is not entitled to indemnification will be heard from among the following, except that the Indemnitee can select a forum consisting of the stockholders of the Company only with the approval of the Company and, if the Indemnitee is a director or an officer at the time of such determination, the determination shall be made in accordance with (a), (b), (c) or (d) below at the election of the Company:

                                                  (a)      A majority vote of the directors who are not parties to the proceeding for which indemnification is being sought even though less than a quorum;

                                                  (b)      By a committee of directors who are not parties to the proceeding for which indemnification is being sought designated by a majority vote of such directors, even though less than a quorum;

                                                  (c)      If there are no directors who are not parties to the proceeding for which indemnification is sought, or if such directors so direct, by independent legal counsel in a written opinion;

                                                  (d)      The stockholders of the Company;

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                                                  (e)      A panel of three arbitrators, one of whom is selected by the Company, another of whom is selected by the Indemnitee and the last of whom is selected by the first two arbitrators so selected; or

                                                  (f)      A court having jurisdiction of subject matter and the parties.

                                        8.5      Submission. As soon as practicable, and in no event later than thirty (30) days after the forum has been selected pursuant to Section 8.4 above, the Company shall, at its own expense, submit to the selected forum its claim that the Indemnitee is not entitled to indemnification, and the Company shall act in the utmost good faith to assure the Indemnitee a complete opportunity to defend against such claim.

                                        8.6      Appeals. If the forum selected in accordance with Section 8.4 hereof is not a court, then after the final decision of such forum is rendered, the Company or the Indemnitee shall have the right to apply to a court of Nevada, the court in which the proceeding giving rise to the Indemnitee’s claim for indemnification is or was pending, or any other court of competent jurisdiction, for the purpose of appealing the decision of such forum, provided that such right is executed within sixty (60) days after the final decision of such forum is rendered. If the forum selected in accordance with Section 8.4 hereof is a court, then the rights of the Company or the Indemnitee to appeal any decision of such court shall be governed by the applicable laws and rules governing appeals of the decision of such court.

                                        8.7      Expenses for Interpretation. Notwithstanding any other provision in this Agreement to the contrary, the Company shall indemnify the Indemnitee against all expenses incurred by the Indemnitee in connection with any hearing or proceeding under this Section 8 involving the Indemnitee and against all expenses incurred by the Indemnitee in connection with any other proceeding between the Company and the Indemnitee involving the interpretation or enforcement of the rights of the Indemnitee under this Agreement unless a court of competent jurisdiction finds that each of the material claims and/or defenses of the Indemnitee in any such proceeding was frivolous or not made in good faith.

          9.      Exceptions. Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement in the following circumstances:

                                        9.1      Claims Initiated by Indemnitee. To indemnify or advance expenses to the Indemnitee with respect to proceedings or claims initiated or brought voluntarily by the Indemnitee and not by way of defense, except with respect to proceedings specifically authorized by the Board or brought to establish or enforce a right to indemnification and/or advancement of expenses arising under this Agreement, the charter documents of the Company or any subsidiary, or any statute or law or otherwise, but such indemnification or advancement of expenses may be provided by the Company in specific cases if the Board finds it to be appropriate; or

                                        9.2      Unauthorized Settlements. To indemnify the Indemnitee hereunder for any amounts paid in settlement of a proceeding unless the Company consents in advance in writing to such settlement, which consent shall not be unreasonably withheld; or

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                                        9.3      Securities Law Actions. To indemnify the Indemnitee on account of any suit in which judgment is rendered against the Indemnitee for an accounting of profits made from the purchase or sale by the Indemnitee of securities of the company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state, or local statutory law; or

                                        9.4      Unlawful Indemnification. To indemnify the Indemnitee if a final decision by a court having jurisdiction in the mater shall determine that such indemnification is not lawful. In this respect, the Company and the Indemnitee have been advised that the Securities and Exchange Commission takes the position that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication.

          10.      Non-Exclusivity. The provisions for indemnification and advancement of expenses set forth in this Agreement shall not be deemed exclusive of any other rights that the Indemnitee may have under any provision of law, the Company’s Certificate of Incorporation or Bylaws, the vote of the Company’s stockholders or disinterested directors, other agreements, or otherwise, both as to action in the Indemnitee’s official capacity and to action in another capacity while occupying the Indemnitee’s position as an agent of the Company, and the Indemnitee’s rights hereunder shall continue after the Indemnitee has ceased acting as an agent of the Company and shall inure to the benefit of the heirs, executors, and administrators of the Indemnitee.

          11.      General Provisions.

                                        11.1      Interpretation of Agreement. It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification and advancement of expenses to the Indemnitee to the fullest extent now or hereafter permitted by law, except as expressly limited herein.

                                        11.2      Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal, or unenforceable for any reason whatsoever, then: (a) the validity, legality, and enforceability of the remaining provisions of this Agreement (including, without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal, or unenforceable that are not themselves invalid, illegal, or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal, or unenforceable, that are not themselves invalid, illegal, or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal, or unenforceable and to give effect to Section 11.1 hereof.

                                        11.3      Modification and Waiver. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.

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                                        11.4      Subrogation. In the event of full payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all documents required and shall do all acts that may be necessary or desirable to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

                                        11.5      Counterparts. This Agreement may be executed in one or more counterparts, which shall together constitute one agreement.

                                        11.6      Successors and Assigns. The terms of this Agreement shall bind, and shall inure to the benefit of, the successors and assigns of the parties hereto. The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or an officer and shall inure to the benefit of the heirs, executors, and administrators of such a person.

                                        11.7      Notice. All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed duly given if (a) delivered by hand and receipted for by the party addressee, or (b) mailed by certified or registered mail, with postage prepaid, on the third business day after the mailing date. Addresses for notice to either party are as shown on the signature page of this Agreement or as subsequently modified by written notice.

                                        11.8      Governing Law. This Agreement shall be governed exclusively by and construed according to the laws of the state of Nevada, as applied to contracts between Nevada residents entered into and to be performed entirely within Nevada .

                                        11.9      Consent to Jurisdiction. The Company and the Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the state of Nevada for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement.

                                        11.10      Attorneys’ Fees. In the event Indemnitee is required to bring any action to enforce rights under this Agreement (including, without limitation, the expenses of any proceeding described in Section 4), the Indemnitee shall be entitled to all reasonable fees and expenses in bringing and pursuing such action, unless a court of competent jurisdiction finds each of the material claims of the Indemnitee in any such action was frivolous and not made in good faith.

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          IN WITNESS WHEREOF, the parties hereto have entered into this Indemnification Agreement effective as of the date first written above.

CANTERBURY RESOURCES, INC.	INDEMNITEE:
By: _________________________________________________
Name: _______________________________________________
	(Print Name)
Title: ________________________________________________
________________________________________________

[Signature Page to Indemnification Agreement]

EX-10.3

CLIENT LEASE

_____________________

          THIS LEASE is made and entered into this 4/1/2012, by and between FLAGSHIP ENTERPRISE CENTER, INC., an Indiana not-for-profit corporation (hereinafter called “Landlord”), and CONTROLLEDCARBON LLC, DBA ECHO AUTOMOTIVE (hereinafter called “Tenant”).

Witnesseth That:

Article I.
Leased Premises.

          Section 1.01. Lease and Description of Premises. Landlord, for and in consideration of the rent, covenants, agreements and conditions stated herein, does hereby lease to Tenant and Tenant does hereby lease from Landlord the following described premises (hereinafter referred to as the “Leased Premises”) situated at the east end of the Flagship Enterprise Center Building located at 2701 Enterprise Drive, Anderson, Indiana 46013 (hereinafter referred to as “Building”) and including all that certain space of the Flagship Lab Addition Building which contains Three Thousand Four Hundred (3,400) square feet, as shown in Exhibit “A.” Because of the special nature of Landlord’s building, Landlord has the option, in its sole discretion, to require Tenant to move to comparable space in the Building during the term of this Lease. In the event that Landlord decides to require Tenant to move, the following additional terms shall apply:

(A)	Tenant shall have at least 90 days notice of such move;
(B)	All costs, including Tenants moving expenses, associated with the relocation shall be borne by Landlord.

          Section 1.02. Additional Consideration to Tenant/Use of Equipment and Shared Services. As additional consideration of Tenant’s payment of rent as herein below provided, Landlord shall provide Tenant with the following equipment and/or services:

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(a)	Central Office Services. Landlord shall provide reception services in the main Flagship Enterprise Center lobby, access to common areas, including scheduled access to conference rooms; access to shared restrooms, fitness room and kitchen facilities; a centralized mail area, including a mailbox for Tenant; access to centralized copying and faxing facilities and equipment; Landlord’s standard centralized computer systems and services, including internet access; and security and janitorial services. Tenant is responsible for the cost of any additional office services required by Tenant. One CAT6 internet data jack for both voice and internet is included at no additional cost to the tenant. Additional data jacks can be accessed for a fee of $40.00 each. In the event that Tenant desires to replace or upgrade Landlord’s standard computer systems or services, Tenant must obtain Landlord’s prior written approval. Tenant shall pay all costs and fees incurred in connection with any replacement or upgrade of Landlord’s standard computer systems or services.
(b)	Telephone Infrastructure Services. The Landlord will assist in arranging Tenant with local calling area telephone service, telecommunication lines and telephone and computer network jacks. Tenant is responsible for the cost of these lines and any other expenses associated with its telephone service and equipment, including but not limited to charges associated with the installation of additional telephone lines, additional bandwidth requirements, long distance charges, and all other expenses. In the event that Tenant desires to replace or upgrade telephone equipment or service, Tenant must obtain Landlord’s prior written approval. Tenant shall pay all costs and fees incurred in connection with such replacement or upgrade. Landlord shall provide Tenant with monthly invoices reflecting any such additional telephone systems and services charges and Tenant shall pay Landlord for such charges within fifteen (15) days of receipt of each invoice.
(c)	Parking. Landlord shall provide Tenant with access to parking facilities, which shall be subject to availability and Landlord’s parking facilities policies. Handicapped parking is made available for those tenant/visitors with a handicap parking pass only, all others may be towed or ticketed.

          Section 1.03. Examination and Inspection of Leased Premises / Renovation Expenses. Tenant acknowledges that it has had the opportunity to examine and inspect and has examined and inspected the Leased Premises. Tenant accepts the Leased Premises in their current “as is” condition, subject to the responsibility of the Landlord to effect repairs and maintenance as below provided.

          As per the negotiations heretofore completed between the parties, Landlord, prior to the inception of this Lease, has renovated and improved the Leased Premises. As to such renovations and improvements, Landlord has paid or will pay the total cost of such renovations and improvements.

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Article II.
Lease Term.

          Section 2.01. Initial Lease Term. Unless sooner terminated under the provisions hereof, the term of this Lease shall be for a period of two (2) years (the “Initial Term”), commencing on the 1^st day of April, 2012 (hereinafter referred to as the “Commencement Date”) and ending on the 31^st day of March, 2014.

          Section 2.02. Lease Renewal. This Lease may be renewed for a subsequent term of two (2) years (each a “Renewal Term”) with option for four (4) additional renewal terms if two (2) years each, on such terms as are acceptable to Tenant and to Landlord. The term of this Lease, including the Initial Term and any Renewal Term(s), is referred to in this Lease as the “Term.”

          Section 2.03. Provisions for Negotiation of Renewal. The parties shall commence negotiations for a Renewal Term no sooner than ninety (90) days before the expiration of the existing Term and such negotiations shall be completed no later than thirty (30) days before the expiration of the existing Term.

          Section 2.04. Holding Over. In the event Tenant remains in possession of the Leased Premises after the expiration of the Initial Term and/or expiration of agreed upon renewal terms, without the execution of a lease extension agreement or exercise of a renewal option, Tenant shall be deemed to be occupying the Leased Premises as a tenant from month to month and all terms of the Lease shall continue unabated, excepting for the length of term as herein specified. Such month to month tenancy may at any time be terminated by either party upon thirty (30) days written notice given to the other party.

Article III.
Rental Payments.

          Section 3.01. Rent. Based upon negotiations between the parties, Tenant shall pay, as rent, to Landlord, a sum equal to that as set forth in Exhibit “B.” Such Rent shall be increased 3% from each successive annual anniversary date of the lease as shown in Exhibit “B.”

          Section 3.02. Rent During Renewal Terms. The rental payments for any Renewal Term shall be in the monetary sum mutually agreed to by the parties prior to the commencement of the Renewal Term.

          Section 3.03. Obligation of Tenant to Relocate in Madison County, IN. Tenant agrees that, following termination or expiration of this Lease for any reason (other than any termination by Landlord during the Initial Term without cause), Tenant shall maintain its principal place of business and operations in the State of Indiana for a period of time at least equal to the length of time that Tenant leases space within the Flagship Enterprise Center (the “Term"). If, after termination or expiration of this Lease, Tenant relocates its principal place of business and operations outside of Madison County, Indiana prior to expiration of the Term, then Tenant shall pay to Landlord an amount equal to the difference between (i) the fair market rent for leasing Tenant Space during Tenant's tenancy at the Flagship Enterprise Center and (ii) the total amount of rent paid by Tenant to Landlord during such tenancy. The "fair market rent" shall be the stipulated fair market rental as set forth in Exhibit “B”. The exception to this clause shall occur with a change in the ownership of a majority of a tenant’s stock; if a majority interest is acquired by another entity, and that entity requires the relocation of the company outside of Madison County, Indiana, then this clause shall not apply to the tenant.

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          Section 3.04. Landlord’s Payment of Utilities. Landlord shall pay all usage and other monthly charges for all utility services rendered or furnished to or based upon or in connection with the Leased Premises, including, but not limited to, electricity, gas, water/sewage, or other utility or service. Provided, however, should Tenant’s use of the Leased Premises cause an unreasonable or unexpected use of any utility or utility service, Landlord reserves the right, upon notice to Tenant, to charge such excessive utility use and the charges therefore to Tenant. The use of the dynamometer located in the leased premises constitutes an “extensive utility use,” and as such utility costs for this specific piece of equipment would be the responsibility of the Tenant.

          Section 3.05. Payment of Taxes on Real Estate and Personal Property. Landlord covenants and agrees to assume and pay all real estate taxes, if any, incurred and/or assessed against the real estate and improvements located on the Leased Premises. Tenant covenants and agrees to assume and pay all personal property taxes incurred and/or assessed against the personal property owned by Tenant located on the Leased Premises.

          Section 3.06. Past Due Payments. In the event any rental payment or other payment owing from Tenant to Landlord pursuant to this Lease shall become overdue for a period in excess of ten (10) days, a late charge in the amount of five percent (5%) of such overdue payment shall be paid by Tenant to Landlord, which late charge shall be payable upon demand. Said late charge shall be in addition to and not in lieu of any other remedy Landlord may have and any fee, charge, payment and advancements landlord may be entitled to hereunder or by law. In the event any rental payment or other payment owing from Tenant to Landlord pursuant to this Lease shall become overdue for a period in excess of twenty-five (25) days, such unpaid amounts shall bear interest from the due date thereof to the date of payment at the rate of one and one-half percent (1½%) per month.

          Section 3.07. Place of Payments. All payments required to be paid, and all statements required to be rendered by Tenant to Landlord shall be delivered to Landlord at its address set forth in Section 15.01 hereof or to such other address as Landlord specifies to tenant in accordance with such Section.

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Article IV.
Use and Occupancy.

          Section 4.01. Use of Leased Premises. The Leased Premises in the office area shall be used solely as office or laboratory research space. The Leased Premises in the manufacturing area shall be used as manufacturing, research or lab space. Landlord may relocate Tenant to comparable space within the Building at Landlord's sole discretion. Tenant will have full access to and use of Tenant Space, and the right to use and access all common areas within the Building on an “as available” basis, subject to the Flagship Enterprise Center’s Building Rules and Regulations, as amended or modified from time to time, which are incorporated by reference into this Lease. Tenant hereby acknowledges receipt of the current Building Rules and Regulations. Landlord shall provide to Tenant written notice of any amendments or modifications to the Building Rules and Regulations, which shall be effective with respect to Tenant after such notice has been given. Tenant will not have access to any other areas within the Building, including but not limited to the space of other tenants and Landlord’s executive offices.

          Section 4.02. Prohibition Against Waste and Unlawful Uses. Tenant shall not commit or allow any waste or damage to be committed on any portion of the Leased Premises. Tenant shall not occupy or use or permit any portion of the Leased Premises to be occupied or used for any business or purpose which is unlawful, disreputable or deemed to be hazardous, or permit anything to be done which would in any way significantly increase the cost of insurance coverage on the Leased Premises or its contents.

          Section 4.03. Prohibition Against Use or Storage of Hazardous Materials. Tenant shall not maintain, store or use any other hazardous materials upon the Leased Premises without Landlord’s written consent. Hazardous materials shall mean any hazardous, toxic or radioactive substance, matter, material or waste which is or becomes regulated by any federal, state or local law, ordinance, order, rule, regulations, code or other governmental restriction or requirement and includes, without limitation, asbestos, petroleum products and the terms hazardous substance and hazardous waste as defined in CERCLA and RCRA, as each may be amended. If any hazardous materials are necessary for the carrying on of tenant’s business operations, notice of existence of such materials must be given to Landlord, and Tenant shall retain such licenses as may be required to handle, transport and dispose of such materials in accordance with local, state and federal rules, regulations and laws.

          Section 4.04. Environmental Responsibility. Tenant must supply Landlord Material Safety Data Sheets for all chemicals used by Tenant, excepting ordinary office chemicals used in laser printers and copiers, and other ordinary and widely used business machines. Nevertheless, Tenant shall dispose of any and all such items in an appropriate and responsible manner. Tenant must comply with the OSHA and EPA requirements. Noise levels created by Tenant’s machinery must not exceed a limit of 85 decibels or such noise level required by the applicable zoning ordinance, whichever is lower. Tenant shall defend and hold Landlord harmless from all fines, penalties and costs relating to any violation or noncompliance with such laws and regulations.

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          Section 4.05. Prohibition Against Excessive Floor Loads. Tenant shall not overload the floors of the Tenant Space beyond their designed weight-bearing capacity. Landlord reserves the right to direct the positioning of all heavy equipment, furniture and fixtures that Tenant desires to place in the Tenant Space so as to distribute weight properly. Landlord may require the removal of any equipment, furniture or fixtures that exceeds appropriate weight limits for the Tenant Space.

          Section 4.06. Condition, Alterations and Additions. Tenant’s acceptance of the Leased Premises on the Commencement Date shall be as is, where is and without warranty of any kind as to zoning, condition, fitness for Tenant’s business purpose or otherwise. Tenant assumes sole responsibility for examining the Leased Premises prior to the Commencement Date to assure itself of the Leased Premises’ compliance with this Lease and Tenant’s business purpose. Tenant shall make no leasehold improvements, alterations or additions to any part of the Leased Premises without the prior written consent of Landlord. All such improvements, alterations and additions, excepting only unattached and movable trade fixtures, shall be the sole property of Landlord.

          Section 4.07. Signage. All signage, whether installed inside the structure on the Leased Premises or on the exterior thereof, shall be subject to the written approval of Landlord.

Article V.
Maintenance and Repairs.

          Section 5.01. Maintenance by Landlord. Landlord, at Landlord’s expense, shall keep the foundation, walls and other structural parts, including the roof, of the building in reasonable order, condition and repair; provided, however, Landlord shall not be responsible for making any repairs or replacements occasioned by any act or negligence of Tenant, its employees, contractors, agents, invitees, licensees or concessionaires. Landlord shall also keep, maintain, replace and repair the Leased Premises and every part thereof in good order, condition and repair, including, but not limited to, interior and exterior electrical, mechanical and utility equipment and systems; fixtures; and interior walls, floors and ceilings.

          Section 5.02. Payment of Cleaning & Janitorial Service Expenses. Tenant shall assume and pay all expenses for routine/customary cleaning and janitorial services to keep the Leased Premises in a clean and orderly condition. Should Tenant fail in this responsibility, Landlord reserves the right, but shall not be obligated, to cause the Leased Premises to be cleaned and charges therefore would be assessed to Tenant. Landlord shall assume and pay all expenses for routine/customary cleaning and janitorial services to keep the Common Areas within the Building in a clean and orderly condition. Tenants are responsible for picking up after themselves in the kitchen area.

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          Section 5.03. Landlord’s Provision of Snow Removal and Lawn Care. As additional consideration for Tenant’s payment of Monthly Rental Payments, Landlord, during the Initial Term and any Renewal Term, shall provide snow removal for Tenant’s parking and walkways and shall further provide lawn care and landscaping services to the area surrounding the Leased Premises.

          Section 5.04. Notice. Tenant shall give Landlord prompt written notice of the need for any maintenance, replacement or repairs which Landlord is obligated to make under foregoing Section 5.01 and of any material damage to the Leased Premises or any part thereof.

          Section 5.05. Access to Leased Premises. Landlord and its agents may retain a pass key to the Leased Premises and shall have the right to enter the Leased Premises at any and all times to service and inspect the Leased Premises. During the period beginning sixty (60) days prior to the expiration of the Initial Term or any Renewal Term (unless Landlord has already agreed to extend the Term of this Lease), Landlord’s staff may enter the Leased Premises to show the Leased Premises to prospective tenants. Tenant shall have the right of access to its leased area on a 24 hour a day, 7 day a week basis.

Article VI.
Insurance and Indemnification.

          Section 6.01. Public Liability Insurance: Tenant. Tenant, at Tenant’s expense, shall maintain in full force and effect throughout the Lease Term a policy of general public liability insurance naming Landlord as an additional insured and covering any and all claims for injuries to or death of persons and damage to property occurring in or upon the Leased Premises, in an amount not less than One Million Dollars ($1,000,000.00) for injury to or death of any one person; Two Million Dollars ($2,000,000.00) for injury to or death of more than one person in the same accident or occurrence; and Five Hundred Thousand Dollars ($500,000.00) for damaged property arising out of any one accident or occurrence.

          Section 6.02. Insurance on Tenant’s Property. All of Tenant’s fixtures, equipment, merchandise or other personal property shall be kept at Tenant’s sole risk and expense, and Tenant, at Tenant’s expense, shall maintain in full force and effect throughout the Lease Term fire and extended coverage insurance on its fixtures, equipment, merchandise and other personal property in or upon the Leased Premises for its full insurable value on a replacement cost basis, if obtainable, and if not obtainable, for the full amount of the estimated cash value for such property.

          Section 6.03. Insurance on Leased Premises. Landlord shall maintain in full force and effect throughout the Lease Term broad form fire and extended coverage insurance on the Leased Premises and Landlord’s fixtures, equipment and personal property, in, on or about the Leased Premises, for their full insurable value on a replacement cost basis, if obtainable, and if not obtainable, for the full amount of its actual cash value.

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          Section 6.04. Waiver of Subrogation. Each of the parties hereto hereby waives and releases any and all rights of recovery which it might have against the other for any loss or damage, whether or not caused by any alleged negligence of the other party, its agents, licensees or invitees, to the extent that such loss or damage is or would be covered by any insurance required to be maintained under this Lease. Each policy of insurance required under this Lease shall contain an endorsement to such effect, so long as such endorsement is available. Should either Landlord or Tenant be unable to procure such an endorsement, the other party shall be relieved of carrying insurance with such an endorsement and the foregoing provisions for waiver of right of recovery against the other (right of subrogation) shall be of no further force or effect.

          Section 6.05. Tenant’s Indemnification. Unless caused or contributed to by the gross negligence or willful misconduct of Landlord, its agents or employees, Tenant assumes all risks and responsibilities for accidents, injuries or damages to person or property and agrees to indemnify and hold Landlord harmless from any and all claims, liabilities, losses, costs and expenses (including attorneys’ fees) arising from or in connection with its, use or control of the Leased Premises and any improvements thereon during the Lease Term or Tenant’s breach of any term, covenant, condition or agreement to be observed by Tenant under this Lease. Tenant shall be liable to Landlord for any damages caused by gross negligence or willful misconduct to the Leased Premises and for gross negligence or willful misconduct done by Tenant or any person coming on the Leased Premises by the license or invitation of Tenant, express or implied (except Landlord, its agents or employees).

          Section 6.06. Tenant’s Waiver of Claims. Landlord shall not be liable for, and Tenant waives all claims against Landlord for, any injuries, damages (including, but not limited to, consequential damages) or losses of or to person, property or otherwise, sustained by Tenant and not covered by insurance, unless resulting from Landlord’s gross negligence or willful misconduct. All property of Tenant kept or stored in, upon or about the Leased Premises shall be so kept or stored at the sole risk of Tenant; and Tenant shall hold Landlord harmless from any claims, costs or expenses, including attorneys’ fees, arising out of damage thereto, unless such claim arises out of grossly negligent or willful misconduct on the part of Landlord, its agents and employees.

          Section 6.07. Certificates of Insurance. For each type of insurance which Landlord or Tenant are required to maintain under this Lease, each shall furnish the other an endorsed copy of such insurance policy showing that each such type of insurance is in full force and effect and not cancelable without thirty (30) days prior written notice to the other party.

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Article VII.
Eminent Domain.

          Section 7.01. Legal Effect. If the whole or any part of the Leased Premises is taken for public or quasi-public use by a governmental or other authority having the power of eminent domain, or shall be conveyed to any such authority in lieu of such taking, and if such taking or conveyance shall cause the remaining part of the Leased Premises to be untenantable and inadequate for Tenant’s Business, then Landlord or Tenant may, at their option, terminate this Lease as of the date Tenant is required to surrender possession of the Leased Premises by giving the other party notice of such termination. If a part of the Leased Premises shall be taken or conveyed, but the remaining part is tenantable and adequate for Tenant’s Business (as reasonably determined by Tenant, and with notice of such determination given to Landlord within fifteen (15) days of any such taking), then this Lease shall be terminated as to the part taken or conveyed as of the date Tenant surrenders possession thereof; Landlord shall make such repairs, alterations and improvements as may be necessary to render the part not taken or conveyed tenantable; and the rent shall be reduced in proportion to the part of the Leased Premises so taken or conveyed.

          Section 7.02. Payment of Award. All compensation awarded for such taking or conveyance shall be the sole property of Landlord, without any deduction therefrom for any present or future estate of Tenant, and Tenant hereby assigns to Landlord all its right, title and interest in and to any such award; provided, however, Tenant shall have the right to recover from such taking authority, but not from Landlord, such compensation as may be awarded to Tenant on account of moving and relocation expenses and depreciation to and removal of Tenant’s property.

Article VIII.
Destruction and Damage.

          Section 8.01. Damage by Casualty. In the event of a fire or other casualty in the Leased Premises, Tenant shall give prompt notice thereof to Landlord. If the Leased Premises shall be partially destroyed by fire or other casualty so as to render the Leased Premises partially or wholly untenantable, the Rent shall be abated on the basis of leasable square footage remaining and occupied thereafter, until such time as the Leased Premises are made fully fit for use by Tenant; provided, however, that if gross negligence or willful misconduct of Tenant, or its agents or employees shall have contributed to such fire or other casualty, the Rental shall not be abated during the period of restoration of the Leased Premises.

          Section 8.02. Restoration; Partial or Total Destruction of Building. In the event the Building shall be partially or totally destroyed by fire or other casualty, the same shall be repaired as soon as is reasonably possible, at the expense of Landlord, unless Landlord shall elect to terminate this Lease as hereinafter provided. If damage to the Leased Premises is to such extent that the cost of restoration, as estimated by Landlord will exceed fifty percent (50%) of the replacement value of the Leased Premises (including the building standard improvements) or thirty percent (30%) of the replacement value of the Building (exclusive of the foundation) in its condition just prior to the occurrence of the damage, Landlord may, no later than the sixtieth (60^th) day following such damage, give Tenant notice that it elects to terminate this Lease. If such notice shall be given:

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(a)	This Lease shall terminate on the twentieth (20th ) day following the giving of said notice;
(b)	Tenant shall surrender possession of the Leased Premises on or before such termination date; and
(c)	The rental provided hereunder shall be apportioned as of the date of such termination and any Rental paid for any period beyond said date shall be refunded to Tenant.

Unless Landlord so elects to terminate this Lease, Landlord shall proceed with the restoration of the Leased Premises and/or the Building as soon as reasonably possible. If the damage to the Building as the result of any casualty is such that the Leased Premises cannot be used by Tenant for Tenant’s Business for a period of three (3) or more months, as estimated by Landlord, either Landlord or Tenant may cancel and terminate this Lease by giving notice of such termination to the other party within thirty (30) days after the date of such casualty. In such event of termination, all Rental shall be apportioned as of the date of such termination and any Rental paid for any period beyond said date shall be refunded to Tenant. In no event, however, shall Tenant have the right to cancel or terminate this Lease if the gross misconduct or willful neglect of Tenant, or its agents, employees or invitees shall have contributed to the cause of such casualty.

Article IX.
Events of Default and Remedies.

          Section 9.01. Events of Default. The occurrence of any one (1) or more of the following events shall be deemed to be an “Event of Default”:

(a)	The failure of Tenant to pay any installment of rent within thirty (30) days after its due date;
(b)	The failure of Tenant to perform any other of its covenants under this Lease or to comply with the Building Rules and Regulations within thirty (30) days after written notice or demand therefore is served upon Tenant by Landlord;
(c)	The making by Tenants of an assignment for the benefit of creditors;

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(d)	The levying of a writ of execution or attachment on or against the Leased Premises or Tenant’s interest therein as the property of Tenant, and the same not being released or discharged within sixty (60) days thereafter;
(e)	The institution of proceedings in a court of competent jurisdiction for the reorganization, liquidation, voluntary or involuntary dissolution of Tenant, or for its adjudication as a bankrupt or insolvent, or for the appointment of a receiver of the property of Tenant, and said proceedings are not dismissed within sixty (60) days after the institution of said proceedings; or
(f)	A mechanic’s lien or similar lien upon the Leased Premises or the building is asserted of record in connection with work allegedly done in or about the Leased Premises at the request or instance of Tenant, and the same is not removed by Tenant, or adequate security for the satisfaction thereof deposited with Landlord, within forty-five (45) days from the date any such lien was filed in the office of the Recorder of Madison County, Indiana.

          Section 9.02 Remedies. Upon the occurrence of an Event of Default, Landlord shall have the option to:

(a)	Re-enter the Leased Premises with or without process of law, using such means as may be necessary to remove all persons and property therefrom; and/or
(b)	Exercise any other right or remedy available to Landlord at law or in equity in addition to or as an alternative to any of the other rights and remedies of Landlord herein specified upon the occasion of any such Event of Default.

In the event that subsequent to an Event of Default, Landlord should relet the Leased Premises or a portion thereof during the balance of the Term of this Lease, the proceeds of such reletting, after deduction of all reasonable costs incurred by Landlord in connection with repossession and reletting of the Leased Premises (including without limitation, all legal fees, leasing commissions, remodeling costs and similar expenses) shall be applied to satisfaction of Tenant’s obligations hereunder. Landlord shall have the right to file suit to recover any sums which have fallen due under this Lease from time to time on one (1) or more occasions without being obligated to wait until the expiration of the Term of this Lease. Alternatively, in the event Landlord should elect to terminate this Lease, Landlord shall be entitled to recover forthwith as damages from Tenant a sum of money equal to: (i) the cost of recovering possession of the Leased Premises, (ii) the unpaid Rent owed at the time of such termination; (iii) the balance of the Rent for the remainder of the term; and (iv) any other sum of money or damages owed by Tenant to Landlord, less the fair market rental value of the Leased Premises for the remainder of the term of this Lease.

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Article X.
Subordination.

          Section 10.01. Subordination. Upon request by Landlord, this Lease shall become subordinate to the lien of a mortgage given by Landlord, if such mortgage provides that Tenant’s rights under this Lease and possession of the Leased Premises shall not be disturbed as long as it performs its duties hereunder. Tenant shall enter into any confirming subordination and non-disturbance agreement such mortgagee may reasonably require.

Article XI.
Assignment and Subletting.

          Section 11.01. Assignment and Subletting. Tenant shall not assign or encumber this Lease or any interest herein, or sublet the Leased Premises or any part thereof, or permit the use of the Leased Premises or any part thereof by any party other than Tenant, without the prior written consent of Landlord.

Article XII.
Covenant of Quiet Enjoyment.

          Section 12.01. Covenant of Quiet Enjoyment. Landlord covenants and warrants that it has all necessary right, title and interest in the Leased Premises to enter into this Lease and grant tenant the rights herein. Landlord agrees that if Tenant performs all the covenants and agreements herein provided to be performed by Tenant, Tenant shall, at all times during the Lease Term, have the peaceable and quiet enjoyment of possession of the Leased Premises without any manner of hindrance from Landlord or any persons claiming under Landlord subject to the terms of any mortgage to which this Lease is subordinate or subordinated to.

Article XIII.
Termination of Lease and Surrender of Leased Premises.

          Section 13.01. Termination. This Lease shall Terminate upon any one (1) of the following occurrences:

(a)	Upon expiration of ten (10) days following written notice by Landlord to Tenant, if Tenant continues to be in default in the performance of obligations of this Lease required to be performed by Tenant;
(b)	Upon expiration of the Initial Term or any Renewal Term where no extension of the Initial Term or Renewal Term has been negotiated;

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(c)	Upon expiration of thirty (30) days following written notice by one party to the other during any holdover period;
(d)	Upon expiration of thirty (30) days following written demand by Landlord to Tenant, if Tenant continues to be more than Five Hundred Dollars ($500.00) in arrears in the payment of monies due and owing Landlord’s list of recommended Preferred Providers as listed in the Flagship Enterprise Center Building Rules and Regulations as amended from time to time, for services rendered to Tenant.
(e)	Upon expiration of thirty (30) days following written notice of Landlord’s Board of Director’s written findings that Tenant, despite written notice and provision of a ninety (90) day period to cure, continues by its conduct to:

(i.)	depart in a material and significant manner from its business intentions, as originally submitted to Landlord at commencement of the Initial Term;
(ii.)	fail to exercise due diligence in the execution of its business plan and/or pursuit of its business objectives;
(iii.)	be absent from the Building for protracted periods without appropriate excuse or justification;
(iv.)	violate the terms and provisions of the Articles of Incorporation of the Flagship Enterprise Center, Inc.

          Section 13.02. Surrender. At the termination or expiration of this Lease, Tenant shall deliver the Tenant Space in good order and repair, ordinary wear and tear excepted. Tenant shall not be required to surrender any of Tenant's trade fixtures, equipment or personal property, unless permanently affixed to the Tenant Space, provided that any trade fixtures, equipment or personal property of Tenant not removed within forty-eight (48) hours following the termination or expiration of this Lease shall be deemed abandoned and shall become the sole and exclusive property of the Landlord. Tenant shall repair any damage to the Tenant Space caused by removal of any trade fixtures, equipment, or personal property of Tenant. In no event will Tenant have the right to hold over past the termination of this Lease. Tenant acknowledges that time is of the essence and that it is of critical importance for Landlord to have possession of the Tenant Space upon the termination or expiration of this Lease. In the event Tenant does not vacate the Tenant Space as required in this Lease, Landlord shall be entitled to any and all remedies at law or in equity, including, without limitation, the right to change locks on the building, remove all trade fixtures, equipment or personal property from the Tenant Space and/or to demolish all improvements in the Tenant Space, all which shall be without any liability or claim against Landlord, which are hereby waived by Tenant.

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Article XIV.
Enforcement Expenses.

          Section 14.01. Enforcement Expenses. In the event that either party hereto shall be successful in enforcing against the other any remedy, legal or equitable, for a breach of any of the provisions of this lease, there shall be included in the judgment or any decree the reasonable expenses and attorney fees of the successful party against the unsuccessful party.

Article XV.
Notices.

          Section 15.01. Notices. All notices and demands which may or are required to be given by either party to the other hereunder shall be in writing and shall be deemed to have been fully given two (2) days after being deposited with the United States Postal Service, or its successor, as certified or registered mail, postage prepaid, and addressed as follows:

To Tenant:	ControlledCarbon, LLC
	DBA Echo Automotive
	12157 E. Collembine Dr.
	Scottsdale, AZ 85259
	Attention: CEO
To Landlord:	Flagship Enterprise Center, Inc.
	2701 Enterprise Drive
	Anderson, Indiana 46013
	Attention: President / CEO

or to such other address as either party may designate from time to time for itself by notice similarly given. Any notice to be given may also be given by personal delivery of the written notice to the person in charge of the business operations at the Leased Premises at the time of such notice, and shall be deemed effective as of the date such personal delivery is made.

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Article XVI.
Compliance With Economic Development Administration (“EDA”)
Civil Rights and Nonrelocation Regulations.

          Section 16.01. Compliance. Inasmuch as Landlord has received benefits and grants from EDA, Tenant agrees that it shall comply with EDA civil rights requirements, which, in general, prohibit unlawful discrimination practices in the work place. Also, Tenant agrees that it shall comply with EDA nonrelocation regulations, which, in general, prohibit use of EDA financial assistance to assist employers from transferring jobs from one commuting area to another.

Article XVII.
General Provisions.

          Section 17.01. Relationship of the Parties. Nothing herein contained shall be deemed or construed by the parties hereto, nor by any third party, as creating a relationship of principal and agent, partnership or joint venture between the parties hereof, it being understood and agreed that nothing herein, no any acts of the parties hereto, shall be deemed to create any relationship between the parties hereto other than the relationship of Landlord and Tenant.

          Section 17.02. Provision for Non-Waiver. No delay or omission of the right to exercise any power by either party shall impair any such right or power, or shall be construed as a waiver of any default or as an acquiescence thereon. One or more waivers of any covenant, term or condition of this Lease by either party shall not be construed by the other party as a waiver of subsequent breach of the same covenant, term or condition. Consent or approval by either party to or of any act by the other party of a nature requiring consent or approval shall not be deemed to waive or render unnecessary consent to or approval of any subsequent similar act.

          Section 17.03. Recording Memorandum of Lease. Either party hereto, upon written request of the other, shall join in the execution of a Memorandum of Lease in proper form for recording or filing in the office of the Recorder of Madison County, Indiana, which Memorandum shall set forth the existence of terms of this Lease, with subordination of the leasehold interest to any mortgage by the Landlord and such other terms as the parties may mutually agree upon.

          Section 17.04. Law of Indiana Governs. The laws of the State of Indiana shall govern the validity, performance and enforcement of this Lease. The invalidity or unenforceability of any provision of this Lease shall not affect or impair any other provision.

          Section 17.05. Complete Agreement. Headings of the several articles of sections contained herein are for convenience only and do not define, limit, or construe the contents of such articles and sections. All negotiations, considerations, representations and understandings between the parties are incorporated herein and may be modified or altered only by memorandum in writing signed by the parties hereto.

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          Section 17.06. Agreement Binding on Successor and Assigns. The covenants, agreements and obligations herein contained shall extend to, bind and inure to the benefit not only of the parties hereto, but their respective personal representatives, heirs, successors and assigns.

          Section 17.07. Tenant’s Compliance with Rules and Regulations. Tenant agrees to conduct its business and operations so as to comply with the Rules and Regulations adopted by the Landlord.

IN WITNESS WHEREOF, the said parties have hereunto set their hands this _________, day of ___________, 2012.

CONTROLLEDCARBON, LLC	FLAGSHIP ENTERPRISE CENTER
DBA ECHO AUTOMOTIVE	Landlord
Tenant
BY:_________________________________________________	BY:_________________________________________________
William D. Kennedy, CEO	Charles Staley, President/CEO

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EXHIBIT “A”

FIRST FLOOR DIAGRAM – Lab Addition (Suite 122)

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EXHIBIT “B”

RENT SCHEDULE

Rent Calculation

          Effective April 1, 2012, Tenant will rent the space known as the Flagship Lab Addition. The monthly rent for this space is set at Three Thousand, Four Hundred and Thirty-Five Dollars and Zero Cents ($3,435.00) for the first year, being the product of the rent per square foot ($12.00), multiplied by square footage (3,400), divided by 12 (months); to which is added the monthly fob access fee of Thirty-Five Dollars and Zero Cents ($35.00) .

          Rent for subsequent annual Terms will incorporate a 3% increase of the base rental fee (excluding the fob access fee), which will become effective upon each year’s anniversary date of April 1^st.

TIME PERIOD	MONTHLY RENT
4/01/2012 to 3/31/2013	$3,400.00 + $35 (fob access fee) = $3,435.00
4/01/2013 to 3/31/2014	$3,502.00 + $35 = $3,537.00
2 Year Renewal Option:
4/01/2014 to 3/31/2015	$3,607.06 + $35 = $3,642.06
4/01/2015 to 3/31/2015	$3,715.27 + $35 = $3,750.27

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EX-10.4

CLIENT LEASE

___________________

          THIS LEASE is made and entered into this 6/1/2012, by and between FLAGSHIP ENTERPRISE CENTER, INC., an Indiana not-for-profit corporation (hereinafter called “Landlord”), and CONTROLLEDCARBON, LLC DBA ECHO AUTOMOTIVE (hereinafter called “Tenant”).

Witnesseth That:

Article I.
Leased Premises.

          Section 1.01. Lease and Description of Premises. Landlord, for and in consideration of the rent, covenants, agreements and conditions stated herein, does hereby lease to Tenant and Tenant does hereby lease from Landlord the following described premises (hereinafter referred to as the “Leased Premises”) situated in the Flagship Enterprise Center Building located at 2701 Enterprise Drive, Anderson, Indiana 46013 (hereinafter referred to as “Building”) and including all that certain space, which is on the First floor of the Flagship Enterprise Center Building which is designated as Labs 1 through 4 (4,900 square feet), and including the Dynamometer and Control Lab (914 square feet), making a total of 5,814 square feet of space as shown in Exhibit “A.” Because of the special nature of Landlord’s building, Landlord has the option, in its sole discretion, to require Tenant to move to comparable space in the Building during the term of this Lease. In the event that Landlord decides to require Tenant to move, the following additional terms shall apply:

(A)	Tenant shall have at least 90 days notice of such move;
(B)	All costs, including Tenants moving expenses, associated with the relocation shall be borne by Landlord.

          Section 1.02. Additional Consideration to Tenant/Use of Equipment and Shared Services. As additional consideration of Tenant’s payment of rent as herein below provided, Landlord shall provide Tenant with the following equipment and/or services:

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(a)	Central Office Services. Landlord shall provide reception services, access to common areas, including scheduled access to conference rooms; access to shared restrooms, exercise room and kitchen facilities; a centralized mail area, including a mailbox for Tenant; access to centralized copying and faxing facilities and equipment; Landlord’s standard centralized computer systems and services, including internet access; and security and janitorial services. Tenant is responsible for the cost of any additional office services required by Tenant. One CAT6 internet data jack for both voice and internet is included at no additional cost to the tenant. Additional data jacks can be accessed for a fee of $40.00 each. In the event that Tenant desires to replace or upgrade Landlord’s standard computer systems or services, Tenant must obtain Landlord’s prior written approval. Tenant shall pay all costs and fees incurred in connection with any replacement or upgrade of Landlord’s standard computer systems or services.
(b)	Telephone Infrastructure Services. The Landlord will assist in arranging Tenant with local calling area telephone service, telecommunication lines and telephone and computer network jacks. Tenant is responsible for the cost of these lines and any other expenses associated with its telephone service and equipment, including but not limited to charges associated with the installation of additional telephone lines, additional bandwidth requirements, long distance charges, and all other expenses. In the event that Tenant desires to replace or upgrade telephone equipment or service, Tenant must obtain Landlord’s prior written approval. Tenant shall pay all costs and fees incurred in connection with such replacement or upgrade. Landlord shall provide Tenant with monthly invoices reflecting any such additional telephone systems and services charges and Tenant shall pay Landlord for such charges within fifteen (15) days of receipt of each invoice.
(c)	Parking. Landlord shall provide Tenant with access to parking facilities, which shall be subject to availability and Landlord’s parking facilities policies. Handicapped parking is made available for those tenant/visitors with a handicap parking pass only, all others may be towed or ticketed.

          Section 1.03. Examination and Inspection of Leased Premises/Renovation Expenses. Tenant acknowledges that it has had the opportunity to examine and inspect and has examined and inspected the Leased Premises. Tenant accepts the Leased Premises in their current “as is” condition, subject to the responsibility of the Landlord to effect repairs and maintenance as below provided.

          As per the negotiations heretofore completed between the parties, Landlord, prior to the inception of this Lease, has renovated and improved the Leased Premises. As to such renovations and improvements, Landlord has paid or will pay the total cost of such renovations and improvements.

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Article II.
Lease Term.

          Section 2.01. Initial Lease Term. Unless sooner terminated under the provisions hereof, the term of this Lease shall be for a period of one (1) year and (10) ten months (the “Initial Term”), running concurrently with the April 1, 2012 lease of the Flagship Lab Addition, and commencing on the 1^st day of June, 2012 (hereinafter referred to as the “Commencement Date”) and ending on the 31^st day of March, 2014.

          Section 2.02. Lease Renewal. This Lease may be renewed for a subsequent term of two (2) years (each a “Renewal Term”) with option for four (4) additional renewal terms of two (2) years each, on such terms as are acceptable to Tenant and to Landlord. The term of this Lease, including the Initial Term and any Renewal Term(s), is referred to in this Lease as the “Term.”

          Section 2.03. Provisions for Negotiation of Renewal. The parties shall commence negotiations for a Renewal Term no sooner than ninety (90) days before the expiration of the existing Term and such negotiations shall be completed no later than thirty (30) days before the expiration of the existing Term.

          Section 2.04. Holding Over. In the event Tenant remains in possession of the Leased Premises after the expiration of the Initial Term and/or expiration of agreed upon renewal terms, without the execution of a lease extension agreement or exercise of a renewal option, Tenant shall be deemed to be occupying the Leased Premises as a tenant from month to month and all terms of the Lease shall continue unabated, excepting for the length of term as herein specified. Such month to month tenancy may at any time be terminated by either party upon thirty (30) days written notice given to the other party.

Article III.
Rental Payments.

          Section 3.01. Rent. Based upon negotiations between the parties, Tenant shall pay, as rent, to Landlord, a sum equal to that as set forth in Exhibit “B.” Such Rent shall be increased 3% upon each successive annual anniversary date of the lease as shown in Exhibit “B.”

          Section 3.02. Rent During Renewal Terms. The rental payments for any Renewal Term shall be in the monetary sum mutually agreed to by the parties prior to the commencement of the Renewal Term.

          Section 3.03. Obligation of Tenant to Relocate in Madison County, IN. Tenant agrees that, following termination or expiration of this Lease for any reason (other than any termination by Landlord during the Initial Term without cause), Tenant shall maintain its principal place of business and operations in the State of Indiana for a period of time at least equal to the length of time that Tenant leases space within the Flagship Enterprise Center (the “Term"). If, after termination or expiration of this Lease, Tenant relocates its principal place of business and operations outside of Madison County, Indiana prior to expiration of the Term, then Tenant shall pay to Landlord an amount equal to the difference between (i) the fair market rent for leasing Tenant Space during Tenant's tenancy at the Flagship Enterprise Center and (ii) the total amount of rent paid by Tenant to Landlord during such tenancy. The "fair market rent" shall be the stipulated fair market rental as set forth in Exhibit “B”. The exception to this clause shall occur with a change in the ownership of a majority of a tenant’s stock; if a majority interest is acquired by another entity, and that entity requires the relocation of the company outside of Madison County, Indiana, then this clause shall not apply to the tenant.

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          Section 3.04. Landlord’s Payment of Utilities. Landlord shall pay all usage and other monthly charges for all utility services rendered or furnished to or based upon or in connection with the Leased Premises, including, but not limited to, electricity, gas, water/sewage, or other utility or service. Provided, however, should Tenant’s use of the Leased Premises cause an unreasonable or unexpected use of any utility or utility service, Landlord reserves the right, upon notice to Tenant, to charge such excessive utility use and the charges therefore to Tenant. The use of the dynamometer and cycler located in the leased premises constitutes an extensive use, and utility costs for these specific pieces of equipment would be the responsibility of the Tenant.

          Section 3.05. Payment of Taxes on Real Estate and Personal Property. Landlord covenants and agrees to assume and pay all real estate taxes, if any, incurred and/or assessed against the real estate and improvements located on the Leased Premises. Tenant covenants and agrees to assume and pay all personal property taxes incurred and/or assessed against the personal property owned by Tenant located on the Leased Premises.

          Section 3.06. Past Due Payments. In the event any rental payment or other payment owing from Tenant to Landlord pursuant to this Lease shall become overdue for a period in excess of ten (10) days, a late charge in the amount of five percent (5%) of such overdue payment shall be paid by Tenant to Landlord, which late charge shall be payable upon demand. Said late charge shall be in addition to and not in lieu of any other remedy Landlord may have and any fee, charge, payment and advancements landlord may be entitled to hereunder or by law. In the event any rental payment or other payment owing from Tenant to Landlord pursuant to this Lease shall become overdue for a period in excess of twenty-five (25) days, such unpaid amounts shall bear interest from the due date thereof to the date of payment at the rate of one and one-half percent (1½%) per month.

          Section 3.07. Place of Payments. All payments required to be paid, and all statements required to be rendered by Tenant to Landlord shall be delivered to Landlord at its address set forth in Section 15.01 hereof or to such other address as Landlord specifies to tenant in accordance with such Section.

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Article IV.
Use and Occupancy.

          Section 4.01. Use of Leased Premises. The Leased Premises in the office area shall be used solely as office or laboratory research space. The Leased Premises in the manufacturing area shall be used as manufacturing, research or lab space. Landlord may relocate Tenant to comparable space within the Building at Landlord's sole discretion. Tenant will have full access to and use of Tenant Space, and the right to use and access all common areas within the Building on an “as available” basis, subject to the Flagship Enterprise Center’s Building Rules and Regulations, as amended or modified from time to time, which are incorporated by reference into this Lease. Tenant hereby acknowledges receipt of the current Building Rules and Regulations. Landlord shall provide to Tenant written notice of any amendments or modifications to the Building Rules and Regulations, which shall be effective with respect to Tenant after such notice has been given. Tenant will not have access to any other areas within the Building, including but not limited to the space of other tenants and Landlord’s executive offices.

          Section 4.02. Prohibition Against Waste and Unlawful Uses. Tenant shall not commit or allow any waste or damage to be committed on any portion of the Leased Premises. Tenant shall not occupy or use or permit any portion of the Leased Premises to be occupied or used for any business or purpose which is unlawful, disreputable or deemed to be hazardous, or permit anything to be done which would in any way significantly increase the cost of insurance coverage on the Leased Premises or its contents.

          Section 4.03. Prohibition Against Use or Storage of Hazardous Materials. Tenant shall not maintain, store or use any other hazardous materials upon the Leased Premises without Landlord’s written consent. Hazardous materials shall mean any hazardous, toxic or radioactive substance, matter, material or waste which is or becomes regulated by any federal, state or local law, ordinance, order, rule, regulations, code or other governmental restriction or requirement and includes, without limitation, asbestos, petroleum products and the terms hazardous substance and hazardous waste as defined in CERCLA and RCRA, as each may be amended. If any hazardous materials are necessary for the carrying on of tenant’s business operations, notice of existence of such materials must be given to Landlord, and Tenant shall retain such licenses as may be required to handle, transport and dispose of such materials in accordance with local, state and federal rules, regulations and laws.

          Section 4.04. Environmental Responsibility. Tenant must supply Landlord Material Safety Data Sheets for all chemicals used by Tenant, excepting ordinary office chemicals used in laser printers and copiers, and other ordinary and widely used business machines. Nevertheless, Tenant shall dispose of any and all such items in an appropriate and responsible manner. Tenant must comply with the OSHA and EPA requirements. Noise levels created by Tenant’s machinery must not exceed a limit of 85 decibels or such noise level required by the applicable zoning ordinance, whichever is lower. Tenant shall defend and hold Landlord harmless from all fines, penalties and costs relating to any violation or noncompliance with such laws and regulations.

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          Section 4.05. Prohibition Against Excessive Floor Loads. Tenant shall not overload the floors of the Tenant Space beyond their designed weight-bearing capacity. Landlord reserves the right to direct the positioning of all heavy equipment, furniture and fixtures that Tenant desires to place in the Tenant Space so as to distribute weight properly. Landlord may require the removal of any equipment, furniture or fixtures that exceeds appropriate weight limits for the Tenant Space.

          Section 4.06. Condition, Alterations and Additions. Tenant’s acceptance of the Leased Premises on the Commencement Date shall be as is, where is and without warranty of any kind as to zoning, condition, fitness for Tenant’s business purpose or otherwise. Tenant assumes sole responsibility for examining the Leased Premises prior to the Commencement Date to assure itself of the Leased Premises’ compliance with this Lease and Tenant’s business purpose. Tenant shall make no leasehold improvements, alterations or additions to any part of the Leased Premises without the prior written consent of Landlord. All such improvements, alterations and additions, excepting only unattached and movable trade fixtures, shall be the sole property of Landlord.

          Section 4.07. Signage. All signage, whether installed inside the structure on the Leased Premises or on the exterior thereof, shall be subject to the written approval of Landlord.

Article V.
Maintenance and Repairs.

          Section 5.01. Maintenance by Landlord. Landlord, at Landlord’s expense, shall keep the foundation, walls and other structural parts, including the roof, of the building in reasonable order, condition and repair; provided, however, Landlord shall not be responsible for making any repairs or replacements occasioned by any act or negligence of Tenant, its employees, contractors, agents, invitees, licensees or concessionaires. Landlord shall also keep, maintain, replace and repair the Leased Premises and every part thereof in good order, condition and repair, including, but not limited to, interior and exterior electrical, mechanical and utility equipment and systems; fixtures; and interior walls, floors and ceilings.

          Section 5.02. Payment of Cleaning & Janitorial Service Expenses. Tenant shall assume and pay all expenses for routine/customary cleaning and janitorial services to keep the Leased Premises in a clean and orderly condition. Should Tenant fail in this responsibility, Landlord reserves the right, but shall not be obligated, to cause the Leased Premises to be cleaned and charges therefore would be assessed to Tenant. Landlord shall assume and pay all expenses for routine/customary cleaning and janitorial services to keep the Common Areas within the Building in a clean and orderly condition. Tenants are responsible for picking up after themselves in the kitchen area.

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          Section 5.03. Landlord’s Provision of Snow Removal and Lawn Care. As additional consideration for Tenant’s payment of Monthly Rental Payments, Landlord, during the Initial Term and any Renewal Term, shall provide snow removal for Tenant’s parking and walkways and shall further provide lawn care and landscaping services to the area surrounding the Leased Premises.

          Section 5.04. Notice. Tenant shall give Landlord prompt written notice of the need for any maintenance, replacement or repairs which Landlord is obligated to make under foregoing Section 5.01 and of any material damage to the Leased Premises or any part thereof.

          Section 5.05. Access to Leased Premises. Landlord and its agents may retain a pass key to the Leased Premises and shall have the right to enter the Leased Premises at any and all times to service and inspect the Leased Premises. During the period beginning sixty (60) days prior to the expiration of the Initial Term or any Renewal Term (unless Landlord has already agreed to extend the Term of this Lease), Landlord’s staff may enter the Leased Premises to show the Leased Premises to prospective tenants. Tenant shall have the right of access to its leased area on a 24 hour a day, 7 day a week basis.

Article VI.
Insurance and Indemnification.

          Section 6.01. Public Liability Insurance:Tenant. Tenant, at Tenant’s expense, shall maintain in full force and effect throughout the Lease Term a policy of general public liability insurance naming Landlord as an additional insured and covering any and all claims for injuries to or death of persons and damage to property occurring in or upon the Leased Premises, in an amount not less than One Million Dollars ($1,000,000.00) for injury to or death of any one person; Two Million Dollars ($2,000,000.00) for injury to or death of more than one person in the same accident or occurrence; and Five Hundred Thousand Dollars ($500,000.00) for damaged property arising out of any one accident or occurrence.

          Section 6.02. Insurance on Tenant’s Property. Tenant’s fixtures, equipment, merchandise or other personal property shall be kept at Tenant’s sole risk and expense, and Tenant, at Tenant’s expense, shall maintain in full force and effect throughout the Lease Term fire and extended coverage insurance on its fixtures, equipment, merchandise and other personal property in or upon the Leased Premises for its full insurable value on a replacement cost basis, if obtainable, and if not obtainable, for the full amount of the estimated cash value for such property.

          Section 6.03. Insurance on Leased Premises. Landlord shall maintain in full force and effect throughout the Lease Term broad form fire and extended coverage insurance on the Leased Premises and Landlord’s fixtures, equipment and personal property, in, on or about the Leased Premises, for their full insurable value on a replacement cost basis, if obtainable, and if not obtainable, for the full amount of its actual cash value.

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          Section 6.04. Waiver of Subrogation. Each of the parties hereto hereby waives and releases any and all rights of recovery which it might have against the other for any loss or damage, whether or not caused by any alleged negligence of the other party, its agents, licensees or invitees, to the extent that such loss or damage is or would be covered by any insurance required to be maintained under this Lease. Each policy of insurance required under this Lease shall contain an endorsement to such effect, so long as such endorsement is available. Should either Landlord or Tenant be unable to procure such an endorsement, the other party shall be relieved of carrying insurance with such an endorsement and the foregoing provisions for waiver of right of recovery against the other (right of subrogation) shall be of no further force or effect.

          Section 6.05. Tenant’s Indemnification. Unless caused or contributed to by the gross negligence or willful misconduct of Landlord, its agents or employees, Tenant assumes all risks and responsibilities for accidents, injuries or damages to person or property and agrees to indemnify and hold Landlord harmless from any and all claims, liabilities, losses, costs and expenses (including attorneys’ fees) arising from or in connection with its, use or control of the Leased Premises and any improvements thereon during the Lease Term or Tenant’s breach of any term, covenant, condition or agreement to be observed by Tenant under this Lease. Tenant shall be liable to Landlord for any damages caused by gross negligence or willful misconduct to the Leased Premises and for gross negligence or willful misconduct done by Tenant or any person coming on the Leased Premises by the license or invitation of Tenant, express or implied (except Landlord, its agents or employees).

          Section 6.06. Tenant’s Waiver of Claims. Landlord shall not be liable for, and Tenant waives all claims against Landlord for, any injuries, damages (including, but not limited to, consequential damages) or losses of or to person, property or otherwise, sustained by Tenant and not covered by insurance, unless resulting from Landlord’s gross negligence or willful misconduct. All property of Tenant kept or stored in, upon or about the Leased Premises shall be so kept or stored at the sole risk of Tenant; and Tenant shall hold Landlord harmless from any claims, costs or expenses, including attorneys’ fees, arising out of damage thereto, unless such claim arises out of grossly negligent or willful misconduct on the part of Landlord, its agents and employees.

          Section 6.07. Certificates of Insurance. For each type of insurance which Landlord or Tenant are required to maintain under this Lease, each shall furnish the other an endorsed copy of such insurance policy showing that each such type of insurance is in full force and effect and not cancelable without thirty (30) days prior written notice to the other party.

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Article VII.
Eminent Domain.

          Section 7.01. Legal Effect. If the whole or any part of the Leased Premises is taken for public or quasi-public use by a governmental or other authority having the power of eminent domain, or shall be conveyed to any such authority in lieu of such taking, and if such taking or conveyance shall cause the remaining part of the Leased Premises to be untenantable and inadequate for Tenant’s Business, then Landlord or Tenant may, at their option, terminate this Lease as of the date Tenant is required to surrender possession of the Leased Premises by giving the other party notice of such termination. If a part of the Leased Premises shall be taken or conveyed, but the remaining part is tenantable and adequate for Tenant’s Business (as reasonably determined by Tenant, and with notice of such determination given to Landlord within fifteen (15) days of any such taking), then this Lease shall be terminated as to the part taken or conveyed as of the date Tenant surrenders possession thereof; Landlord shall make such repairs, alterations and improvements as may be necessary to render the part not taken or conveyed tenantable; and the rent shall be reduced in proportion to the part of the Leased Premises so taken or conveyed.

          Section 7.02. Payment of Award. All compensation awarded for such taking or conveyance shall be the sole property of Landlord, without any deduction therefrom for any present or future estate of Tenant, and Tenant hereby assigns to Landlord all its right, title and interest in and to any such award; provided, however, Tenant shall have the right to recover from such taking authority, but not from Landlord, such compensation as may be awarded to Tenant on account of moving and relocation expenses and depreciation to and removal of Tenant’s property.

Article VIII.
Destruction and Damage.

          Section 8.01. Damage by Casualty. In the event of a fire or other casualty in the Leased Premises, Tenant shall give prompt notice thereof to Landlord. If the Leased Premises shall be partially destroyed by fire or other casualty so as to render the Leased Premises partially or wholly untenantable, the Rent shall be abated on the basis of leasable square footage remaining and occupied thereafter, until such time as the Leased Premises are made fully fit for use by Tenant; provided, however, that if gross negligence or willful misconduct of Tenant, or its agents or employees shall have contributed to such fire or other casualty, the Rental shall not be abated during the period of restoration of the Leased Premises.

          Section 8.02. Restoration; Partial or Total Destruction of Building. In the event the Building shall be partially or totally destroyed by fire or other casualty, the same shall be repaired as soon as is reasonably possible, at the expense of Landlord, unless Landlord shall elect to terminate this Lease as hereinafter provided. If damage to the Leased Premises is to such extent that the cost of restoration, as estimated by Landlord will exceed fifty percent (50%) of the replacement value of the Leased Premises (including the building standard improvements) or thirty percent (30%) of the replacement value of the Building (exclusive of the foundation) in its condition just prior to the occurrence of the damage, Landlord may, no later than the sixtieth (60^th) day following such damage, give Tenant notice that it elects to terminate this Lease. If such notice shall be given:

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(a)	This Lease shall terminate on the twentieth (20th ) day following the giving of said notice;
(b)	Tenant shall surrender possession of the Leased Premises on or before such termination date; and
(c)	The rental provided hereunder shall be apportioned as of the date of such termination and any Rental paid for any period beyond said date shall be refunded to Tenant.

Unless Landlord so elects to terminate this Lease, Landlord shall proceed with the restoration of the Leased Premises and/or the Building as soon as reasonably possible. If the damage to the Building as the result of any casualty is such that the Leased Premises cannot be used by Tenant for Tenant’s Business for a period of three (3) or more months, as estimated by Landlord, either Landlord or Tenant may cancel and terminate this Lease by giving notice of such termination to the other party within thirty (30) days after the date of such casualty. In such event of termination, all Rental shall be apportioned as of the date of such termination and any Rental paid for any period beyond said date shall be refunded to Tenant. In no event, however, shall Tenant have the right to cancel or terminate this Lease if the gross misconduct or willful neglect of Tenant, or its agents, employees or invitees shall have contributed to the cause of such casualty.

Article IX.
Events of Default and Remedies.

          Section 9.01. Events of Default. The occurrence of any one (1) or more of the following events shall be deemed to be an “Event of Default”:

(a)	The failure of Tenant to pay any installment of rent within thirty (30) days after its due date;
(b)	The failure of Tenant to perform any other of its covenants under this Lease or to comply with the Building Rules and Regulations within thirty (30) days after written notice or demand therefore is served upon Tenant by Landlord;
(c)	The making by Tenants of an assignment for the benefit of creditors;

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(d)	The levying of a writ of execution or attachment on or against the Leased Premises or Tenant’s interest therein as the property of Tenant, and the same not being released or discharged within sixty (60) days thereafter;
(e)	The institution of proceedings in a court of competent jurisdiction for the reorganization, liquidation, voluntary or involuntary dissolution of Tenant, or for its adjudication as a bankrupt or insolvent, or for the appointment of a receiver of the property of Tenant, and said proceedings are not dismissed within sixty (60) days after the institution of said proceedings; or
(f)	A mechanic’s lien or similar lien upon the Leased Premises or the building is asserted of record in connection with work allegedly done in or about the Leased Premises at the request or instance of Tenant, and the same is not removed by Tenant, or adequate security for the satisfaction thereof deposited with Landlord, within forty-five (45) days from the date any such lien was filed in the office of the Recorder of Madison County, Indiana.

          Section 9.02 Remedies. Upon the occurrence of an Event of Default, Landlord shall have the option to:

(a)	Re-enter the Leased Premises with or without process of law, using such means as may be necessary to remove all persons and property therefrom; and/or
(b)	Exercise any other right or remedy available to Landlord at law or in equity in addition to or as an alternative to any of the other rights and remedies of Landlord herein specified upon the occasion of any such Event of Default.

In the event that subsequent to an Event of Default, Landlord should relet the Leased Premises or a portion thereof during the balance of the Term of this Lease, the proceeds of such reletting, after deduction of all reasonable costs incurred by Landlord in connection with repossession and reletting of the Leased Premises (including without limitation, all legal fees, leasing commissions, remodeling costs and similar expenses) shall be applied to satisfaction of Tenant’s obligations hereunder. Landlord shall have the right to file suit to recover any sums which have fallen due under this Lease from time to time on one (1) or more occasions without being obligated to wait until the expiration of the Term of this Lease. Alternatively, in the event Landlord should elect to terminate this Lease, Landlord shall be entitled to recover forthwith as damages from Tenant a sum of money equal to: (i) the cost of recovering possession of the Leased Premises, (ii) the unpaid Rent owed at the time of such termination; (iii) the balance of the Rent for the remainder of the term; and (iv) any other sum of money or damages owed by Tenant to Landlord, less the fair market rental value of the Leased Premises for the remainder of the term of this Lease.

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Article X.
Subordination.

          Section 10.01. Subordination. Upon request by Landlord, this Lease shall become subordinate to the lien of a mortgage given by Landlord, if such mortgage provides that Tenant’s rights under this Lease and possession of the Leased Premises shall not be disturbed as long as it performs its duties hereunder. Tenant shall enter into any confirming subordination and non-disturbance agreement such mortgagee may reasonably require.

Article XI.
Assignment and Subletting.

          Section 11.01. Assignment and Subletting. Tenant shall not assign or encumber this Lease or any interest herein, or sublet the Leased Premises or any part thereof, or permit the use of the Leased Premises or any part thereof by any party other than Tenant, without the prior written consent of Landlord.

Article XII.
Covenant of Quiet Enjoyment.

          Section 12.01. Covenant of Quiet Enjoyment. Landlord covenants and warrants that it has all necessary right, title and interest in the Leased Premises to enter into this Lease and grant tenant the rights herein. Landlord agrees that if Tenant performs all the covenants and agreements herein provided to be performed by Tenant, Tenant shall, at all times during the Lease Term, have the peaceable and quiet enjoyment of possession of the Leased Premises without any manner of hindrance from Landlord or any persons claiming under Landlord subject to the terms of any mortgage to which this Lease is subordinate or subordinated to.

Article XIII.
Termination of Lease and Surrender of Leased Premises.

          Section 13.01. Termination. This Lease shall Terminate upon any one (1) of the following occurrences:

(a)	Upon expiration of ten (10) days following written notice by Landlord to Tenant, if Tenant continues to be in default in the performance of obligations of this Lease required to be performed by Tenant;
(b)	Upon expiration of the Initial Term or any Renewal Term where no extension of the Initial Term or Renewal Term has been negotiated;

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(c)	Upon expiration of thirty (30) days following written notice by one party to the other during any holdover period;
(d)	Upon expiration of thirty (30) days following written demand by Landlord to Tenant, if Tenant continues to be more than Five Hundred Dollars ($500.00) in arrears in the payment of monies due and owing Landlord’s list of recommended Preferred Providers as listed in the Flagship Enterprise Center Building Rules and Regulations as amended from time to time, for services rendered to Tenant.
(e)	Upon expiration of thirty (30) days following written notice of Landlord’s Board of Director’s written findings that Tenant, despite written notice and provision of a ninety (90) day period to cure, continues by its conduct to:

(i.)	depart in a material and significant manner from its business intentions, as originally submitted to Landlord at commencement of the Initial Term;
(ii.)	fail to exercise due diligence in the execution of its business plan and/or pursuit of its business objectives;
(iii.)	be absent from the Building for protracted periods without appropriate excuse or justification;
(iv.)	violate the terms and provisions of the Articles of Incorporation of the Flagship Enterprise Center, Inc.

          Section 13.02. Surrender. At the termination or expiration of this Lease, Tenant shall deliver the Tenant Space in good order and repair, ordinary wear and tear excepted. Tenant shall not be required to surrender any of Tenant's trade fixtures, equipment or personal property, unless permanently affixed to the Tenant Space, provided that any trade fixtures, equipment or personal property of Tenant not removed within forty-eight (48) hours following the termination or expiration of this Lease shall be deemed abandoned and shall become the sole and exclusive property of the Landlord. Tenant shall repair any damage to the Tenant Space caused by removal of any trade fixtures, equipment, or personal property of Tenant. In no event will Tenant have the right to hold over past the termination of this Lease. Tenant acknowledges that time is of the essence and that it is of critical importance for Landlord to have possession of the Tenant Space upon the termination or expiration of this Lease. In the event Tenant does not vacate the Tenant Space as required in this Lease, Landlord shall be entitled to any and all remedies at law or in equity, including, without limitation, the right to change locks on the building, remove all trade fixtures, equipment or personal property from the Tenant Space and/or to demolish all improvements in the Tenant Space, all which shall be without any liability or claim against Landlord, which are hereby waived by Tenant.

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Article XIV.
Enforcement Expenses.

          Section 14.01. Enforcement Expenses. In the event that either party hereto shall be successful in enforcing against the other any remedy, legal or equitable, for a breach of any of the provisions of this lease, there shall be included in the judgment or any decree the reasonable expenses and attorney fees of the successful party against the unsuccessful party.

Article XV.
Notices.

          Section 15.01. Notices. All notices and demands which may or are required to be given by either party to the other hereunder shall be in writing and shall be deemed to have been fully given two (2) days after being deposited with the United States Postal Service, or its successor, as certified or registered mail, postage prepaid, and addressed as follows:

To Tenant:	ControlledCarbon, LLC
	DBA Echo Automotive
	12157 E. Collembine Dr.
	Scottsdale, AZ 85259
	Attention: CEO
To Landlord:	Flagship Enterprise Center, Inc.
	2701 Enterprise Drive
	Anderson, Indiana 46013
	Attention: President / CEO

or to such other address as either party may designate from time to time for itself by notice similarly given. Any notice to be given may also be given by personal delivery of the written notice to the person in charge of the business operations at the Leased Premises at the time of such notice, and shall be deemed effective as of the date such personal delivery is made.

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Article XVI.
Compliance With Economic Development Administration (“EDA”)
Civil Rights and Nonrelocation Regulations.

          Section 16.01. Compliance. Inasmuch as Landlord has received benefits and grants from EDA, Tenant agrees that it shall comply with EDA civil rights requirements, which, in general, prohibit unlawful discrimination practices in the work place. Also, Tenant agrees that it shall comply with EDA nonrelocation regulations, which, in general, prohibit use of EDA financial assistance to assist employers from transferring jobs from one commuting area to another.

Article XVII.
General Provisions.

          Section 17.01. Relationship of the Parties. Nothing herein contained shall be deemed or construed by the parties hereto, nor by any third party, as creating a relationship of principal and agent, partnership or joint venture between the parties hereof, it being understood and agreed that nothing herein, no any acts of the parties hereto, shall be deemed to create any relationship between the parties hereto other than the relationship of Landlord and Tenant.

          Section 17.02. Provision for Non-Waiver. No delay or omission of the right to exercise any power by either party shall impair any such right or power, or shall be construed as a waiver of any default or as an acquiescence thereon. One or more waivers of any covenant, term or condition of this Lease by either party shall not be construed by the other party as a waiver of subsequent breach of the same covenant, term or condition. Consent or approval by either party to or of any act by the other party of a nature requiring consent or approval shall not be deemed to waive or render unnecessary consent to or approval of any subsequent similar act.

          Section 17.03. Recording Memorandum of Lease. Either party hereto, upon written request of the other, shall join in the execution of a Memorandum of Lease in proper form for recording or filing in the office of the Recorder of Madison County, Indiana, which Memorandum shall set forth the existence of terms of this Lease, with subordination of the leasehold interest to any mortgage by the Landlord and such other terms as the parties may mutually agree upon.

          Section 17.04. Law of Indiana Governs. The laws of the State of Indiana shall govern the validity, performance and enforcement of this Lease. The invalidity or unenforceability of any provision of this Lease shall not affect or impair any other provision.

          Section 17.05. Complete Agreement. Headings of the several articles of sections contained herein are for convenience only and do not define, limit, or construe the contents of such articles and sections. All negotiations, considerations, representations and understandings between the parties are incorporated herein and may be modified or altered only by memorandum in writing signed by the parties hereto.

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          Section 17.06. Agreement Binding on Successor and Assigns. The covenants, agreements and obligations herein contained shall extend to, bind and inure to the benefit not only of the parties hereto, but their respective personal representatives, heirs, successors and assigns.

          Section 17.07. Tenant’s Compliance with Rules and Regulations. Tenant agrees to conduct its business and operations so as to comply with the Rules and Regulations adopted by the Landlord.

          IN WITNESS WHEREOF, the said parties have hereunto set their hands this _________, day of ___________, 2012.

CONTROLLEDCARBON, LLC	FLAGSHIP ENTERPRISE CENTER
Tenant	Landlord
BY:_______________________________________________	BY::_______________________________________________
William D. Kennedy, CEO	Charles E. Staley, President/CEO

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EXHIBIT “A”

FIRST FLOOR DIAGRAM – Labs 1, 2, 3, and 4

 

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EXHIBIT “B”

RENT SCHEDULE

Rent Calculation

          Effective June 1, 2012, Tenant will lease the space known as the *Labs 1 through 4, located within the Flagship Enterprise Center facility. This space includes four labs and houses a full chassis dynamometer and control room, totaling 5814 square feet. The rental rate for said space is set at Six Dollars and Zero Cents ($6.00) per square foot for the first six months of the Term; after which rent will be ramped up to Twelve Dollars and Zero Cents ($12.00) per square foot.

          The monthly rent for this space is the product of the square footage times the rent per square foot, divided by 12 months; to which is added a base fee of $35 for the use of a fob security system allowing Tenant access into Leased quarters.

          Rent for subsequent annual Terms will incorporate a 3% increase of the base rental fee (excluding the fob access fee), which will become effective upon each year’s anniversary date of April 1^st.

TIME PERIOD	MONTHLY RENT
Initial Term (first 6 months):
6/01/12 to 11/30/12      ($6.00/sq ft)	$2,907.00 + $35 = $2,942.00
Initial Term (4 months after
12/01/12 to 3/31/13      ($12.00/sq ft)	$5,814.00 + $35 = $5,849.00
Initial Year 2:
4/01/2013 to 3/31/2014	$5988.42 + $35 = $6,023.42
2 Year Renewal Option:
4/01/2014 to 3/31/2015	$6,168.07 + $35 = $6,203.07
4/01/2015 to 3/31/2016	$6,353.11 + $35 = $6,388.11

*The Flagship Enterprise Center reserves the right to nullify a HOLD placed on leasable space if a viable offer is received for immediate lease.

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EX-10.8

24 January 2012

Letter of Intent

This letters serves as a Letter of Intent between ControlledCarbon, LLC (“CC”) and Kellington Group Bhd. (“KE”) with regards to the Echo Drive product for the purpose of conducting a controlled pilot program of the product within the territory of Taiwan during the Calendar year of 2012.

It is intended that a formal binding agreement will be drafted out lining the terms of such arrangement no later than February 15^th, 2012.

It is intended that CC will supply and assist in the install of Echo Drive Pilot kits and KE will provide a letter-of-credit in the amount of $1.5 million USD for delivery and performance of these kits. A schedule and additional criteria of the draws will be outlined in this binding agreement. This letter serves as formal engagement for both parties for the purpose of finalizing vehicle pilo tprogram.

In addition, until the date of February15^th, 2012, or later if extended by both parties in writing, CC will not engage with any other party regarding distribution rights for Echo Drive in Taiwan or Malaysia.

Offering Party	Accepting Party
ControlledCarbon,LLC	Kellington Engineering
Name:	Name:
/s/____________________________________	/s/_____________________________________
Title:	Title:
____________________________________	____________________________________
Date:	Date:
_____________________	_____________________
Signature:	Signature:
____________________________________	____________________________________

EX-10.9

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM AND THE ISSUER OF THESE SECURITIES HAS BEEN PROVIDED WITH AN OPINION OF LEGAL COUNSEL TO THE HOLDER IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES TO THE EFFECT THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION UNDER SUCH LAWS.

Date of Issuance: _________, 2012	Number of Shares________________
Warrant No. ____	(subject to adjustment)

CANTERBURY RESOURCES, INC.

A NEVADA CORPORATION

Warrant

          Canterbury Resources, Inc., a Nevada corporation (the “Company”), for value received, hereby certifies that _______________________ (the “Initial Holder”), or its registered assigns (the Initial Holder or such registered assigns shall be referred to as the “Registered Holder”), is entitled, subject to the terms set forth below, to purchase from the Company at any time on or after the Exercise Date and on or before the Expiration Date, up to ___________ shares (the “Warrant Shares”) of the Company’s common stock, $0.001 par value per share (“Common Stock”), at a purchase price of $0.75 per share (the “Purchase Price”). The number of shares of Warrant Shares and the Purchase Price may be adjusted from time to time pursuant to the provisions of this Warrant. As used herein, “Exercise Date” means any date after the date hereof and prior to the Expiration Date on which the Registered Holder elects by written notice to the Company to exercise this Warrant.

          This Warrant is issued pursuant to that Securities Purchase Agreement, dated as of _______, 2012, by and among the Company and the Initial Holder.

          1.      Exercise.

                    (a)      Manner of Exercise. This Warrant may be exercised by the Registered Holder, in whole or in part, by surrendering this Warrant, with the purchase/exercise form appended hereto as Exhibit A duly executed by such Registered Holder or by such Registered Holder’s duly authorized attorney, at the principal office of the Company, or at such other office or agency as the Company may designate in writing, accompanied by payment in full of the Purchase Price payable in respect of the number of shares of Warrant Shares purchased upon such exercise. The Purchase Price may be paid by cash, check, or wire transfer.

                    (b)      Effective Time of Exercise. Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in Section 1(a) above. At such time, the person or persons in whose name or names any certificates for Warrant Shares shall be issuable upon such exercise as provided in Section 1(c) below shall be deemed to have become the holder or holders of record of the Warrant Shares represented by such certificates.

                    (c)      Delivery to Holder. As soon as practicable after the exercise of this Warrant, in whole or in part, and in any event within ten (10) days thereafter, the Company at its expense will cause to be issued in the name of, and delivered to, the Registered Holder, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct:

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                              (i)      a certificate or certificates for the number of shares of Warrant Shares to which such Registered Holder shall be entitled, and

                              (ii)      in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Shares equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant minus the number of such shares purchased by the Registered Holder upon such exercise as provided in Section 1(a) above.

          2.      Adjustments.

                    (a)      Stock Splits and Dividends. If outstanding shares of the Company’s Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, then the Purchase Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If outstanding shares of Common Stock shall be combined into a smaller number of shares, then the Purchase Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. When any adjustment is required to be made in the Purchase Price, the number of shares of Warrant Shares purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Purchase Price in effect immediately prior to such adjustment, by (ii) the Purchase Price in effect immediately after such adjustment.

                    (b)      Reclassification, Etc. In case of any reclassification or change of the outstanding securities of the Company or of any reorganization of the Company (or any other corporation the stock or securities of which are at the time receivable upon the exercise of this Warrant) or any similar corporate reorganization on or after the date hereof, then and in each such case the Registered Holder, upon the exercise hereof at any time after the consummation of such reclassification, change, reorganization, merger or conveyance, shall be entitled to receive, in lieu of the stock or other securities and property receivable upon the exercise hereof prior to such consummation, the stock or other securities or property to which such holder would have been entitled upon such consummation if such holder had exercised this Warrant immediately prior thereto, all subject to further adjustment as provided in this Section 2; and in each such case, the terms of this Section 2 shall be applicable to the shares of stock or other securities properly receivable upon the exercise of this Warrant after such consummation.

                    (c)      Adjustment Certificate. When any adjustment is required to be made in the Warrant Shares or the Purchase Price pursuant to this Section 2, the Company shall promptly mail to the Registered Holder a certificate setting forth (i) a brief statement of the facts requiring such adjustment, (ii) the Purchase Price after such adjustment and (iii) the kind and amount of stock or other securities or property into which this Warrant shall be exercisable after such adjustment.

          3.      Transfers.

                    (a)      Unregistered Security. This Warrant and the Warrant Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be sold, pledged, distributed, offered for sale, transferred or otherwise disposed of in the absence of (i) an effective registration statement under the Act as to this Warrant or such Warrant Shares and registration or qualification of this Warrant or such Warrant Shares under any applicable U.S. federal or state securities law then in effect, or (ii) an opinion of counsel, reasonably satisfactory to the Company, that such registration or qualification is not required. Each certificate or other instrument for Warrant Shares issued upon the exercise of this Warrant shall bear a legend substantially to the foregoing effect.

                    (b)      Transferability. Subject to the provisions of Section 3(a) hereof, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of the Warrant with a properly executed assignment (in the form of Exhibit B hereto) at the principal office of the Company.

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                    (c)      Warrant Register. The Company will maintain a register containing the names and addresses of the Registered Holders of this Warrant. Until any transfer of this Warrant is made in the warrant register, the Company may treat the Registered Holder as the absolute owner hereof for all purposes; provided, however, that if this Warrant is properly assigned in blank, the Company may (but shall not be required to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. Any Registered Holder may change such Registered Holder’s address as shown on the warrant register by written notice to the Company requesting such change.

          4.      No Impairment. The Company will not, by amendment of its charter or through reorganization, consolidation, merger, dissolution, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will (subject to Section 11 below) at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Registered Holder against impairment.

          5.      Termination. This Warrant (and the right to purchase securities upon exercise hereof) shall terminate eighteen (18) months from the date of issuance of this Warrant (the “Expiration Date”).

          6.      Notices of Certain Transactions. In the event:

                    (a)      the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time deliverable upon the exercise of this Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or

                    (b)      of any capital reorganization of the Company, any reclassification of the capital stock of the Company, or any consolidation or merger of the Company with or into another corporation, or

                    (c)      of the voluntary or involuntary dissolution, liquidation or winding-up of the Company,

then, and in each such case, the Company will mail or cause to be mailed to the Registered Holder a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reclassification, reorganization, consolidation, merger, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Warrant Shares shall be entitled to exchange their shares of Warrant Shares (or such other stock or securities) for securities or other property deliverable upon such reclassification, reorganization, consolidation, merger, dissolution, liquidation or winding-up. Such notice shall be mailed at least ten (10) days prior to the record date or effective date for the event specified in such notice.

          7.      Reservation of Stock. The Company will at all times reserve and keep available out of its authorized but unissued stock, solely for the issuance and delivery upon the exercise of this Warrant and other similar Warrants, such number of its duly authorized shares of Common Stock as from time to time shall be issuable upon the exercise of this Warrant and other similar Warrants. All of the shares of Common Stock issuable upon exercise of this Warrant and other similar Warrants, when issued and delivered in accordance with the terms hereof and thereof, will be duly authorized, validly issued, fully paid and non-assessable, subject to no lien or other encumbrance other than restrictions on transfer arising under applicable securities laws and restrictions imposed by Section 3 hereof.

          8.      Exchange of Warrants. Upon the surrender by the Registered Holder of any Warrant or Warrants, properly endorsed, to the Company at the principal office of the Company, the Company will, subject to the provisions of Section 3 hereof, issue and deliver to or upon the order of such Holder, at the Company’s expense, a new Warrant or Warrants of like tenor, in the name of such Registered Holder or as such Registered Holder (upon payment by such Registered Holder of any applicable transfer taxes) may direct, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant or Warrants so surrendered.

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          9.      Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.

          10.      Notices. Any notice required or permitted by this Warrant shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or forty-eight (48) hours after being deposited in the regular mail as certified or registered mail (airmail if sent internationally) with postage prepaid, addressed (a) if to the Registered Holder, to the address of the Registered Holder most recently furnished in writing to the Company and (b) if to the Company, to the address set forth below or subsequently modified by written notice to the Registered Holder.

          11.      No Rights as Stockholder. Until the exercise of this Warrant, the Registered Holder shall not have or exercise any rights by virtue hereof as a stockholder of the Company.

          12.      Representations of Registered Holder. By acceptance of this Warrant, the Registered Holder hereby represents and acknowledges to the Company that:

                    (a)      this Warrant and the Warrant Shares are “restricted securities” as such term is used in the rules and regulations under the Securities Act and that such securities have not been and will not be registered under the Securities Act or any state securities law, and that such securities must be held indefinitely unless registration is effected or transfer can be made pursuant to appropriate exemptions;

                    (b)      the Registered Holder has read, and fully understands, the terms of this Warrant set forth on its face and the attachments hereto, including the restrictions on transfer contained herein;

                    (c)      the Registered Holder is purchasing for investment for its own account and not with a view to or for sale in connection with any distribution of this Warrant and the Warrant Shares and it has no intention of selling such securities in a public distribution in violation of the federal securities laws or any applicable state securities laws; provided that nothing contained herein will prevent the Registered Holder from transferring such securities in compliance with the terms of this Warrant and the applicable federal and state securities laws; and

                    (d)      the Company may affix one or more legends, including a legend in substantially the following form (in addition to any other legend(s), if any, required by applicable state corporate and/or securities laws) to certificates representing Warrant Shares:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM AND THE ISSUER OF THESE SECURITIES HAS BEEN PROVIDED WITH AN OPINION OF LEGAL COUNSEL TO THE HOLDER IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES TO THE EFFECT THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION UNDER SUCH LAWS.”

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          13.      No Fractional Shares. No fractional shares will be issued in connection with any exercise hereunder. In lieu of any fractional shares which would otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the fair market value of one such share on the date of exercise, as determined in good faith by the Company’s Board of Directors.

          14.      Amendment or Waiver. Any term of this Warrant may be amended or waived upon written consent of the Company and the Registered Holder.

          15.      Headings. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

          16.      Governing Law. This Warrant shall be governed, construed and interpreted in accordance with the laws of the State of Nevada, without giving effect to principles of conflicts of law.

[Remainder of Page Intentionally Left Blank]

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          IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed and delivered by its authorized officer as of the date first above written.

CANTERBURY RESOURCES, INC., a Nevada corporation

Signed: ____________________________________________

By: _______________________________________________

Title: ______________________________________________

Address:           69 Stanley Point Road

                            Devonport, Auckland

                            New Zealand 0624

Phone No.:          (69) 9 445-6338

[SIGNATURE PAGE TO CANTERBURY RESOURCES, INC. WARRANT]

EXHIBIT A

PURCHASE/EXERCISE FORM

To:      CANTERBURY RESOURCES, INC. Dated:_________________

          The undersigned, pursuant to the provisions set forth in the attached Warrant No. ___ hereby irrevocably elects to purchase _____shares of the Common Stock covered by such Warrant and herewith makes payment of $_________, representing the full purchase price for such shares at the price per share provided for in such Warrant.

          The undersigned acknowledges that it has reviewed the representations and warranties contained in Section 12 of the Warrant and by its signature below hereby makes such representations and warranties to the Company as of the date hereof.

          The undersigned further acknowledges that it has reviewed that certain Securities Purchase Agreement, dated as of ________, 2012, among the Company and certain holders of the Company’s securities (as amended from time to time) and agrees to be bound by such provisions.

Signature: _______________________________________________

Name (print): _____________________________________________

Title (if applic.) ___________________________________________

Company (if applic.): _______________________________________

EXHIBIT B

ASSIGNMENT FORM

          FOR VALUE RECEIVED, _________________________________________ hereby sells, assigns and transfers all of the rights of the undersigned under the attached Warrant with respect to the number of shares of Common Stock covered thereby set forth below, to:

Name of Assignee Address/Fax Number No. of Shares

Dated: ______________________________________________	Signature: ______________________________________________
	______________________________________________
	Witness:   ______________________________________________

EX-10.10

EXECUTIVE EMLOYMENT AGREEMENT

          THIS EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made this 21st day of April 2012, by and between William Daniel Kennedy ("Executive") and Echo Automotive, LLC, a Delaware corporation ("Company"), effective April 21st, 2012 ("Effective Date").

RECITALS

          Company wishes to retain the services of Executive pursuant to this Executive Employment Agreement, the terms and provisions of which are set forth below.

          NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED AS FOLLOWS:

                    1.      POSITION AND DUTIES.

          During the Term (as defined in Section 5) Executive will continue to be employed by Company as its President and shall perform those duties as determined by the Board of Directors of Company ("Board") in accordance with the policies, practices and bylaws of Company.

          Executive shall serve Company faithfully, loyally, honestly and to the best of Executive's ability. Executive will devote Executive's best efforts and substantially all of the Executive's business time, except as disclosed by Executive for board or consulting obligations which do not interfere with the performance of Executive's duties, to the performance of Executive's duties for, and in the business and affairs of Company.

          Subject to Section 7, the Board reserves the right, in its sole discretion, to change or modify Executive's position, title, and duties during the Term of this Agreement.

                    2.      COMPENSATION.

          Commencing on the Effective Date and during the first 12 months of this Agreement, Executive's base salary will be Two Hundred Twenty and 00/100 Dollars ($220,000), payable in accordance with Company 's customary payroll practice. Executive's base salary will be reviewed annually by the Board in accordance with Company's compensation review policies and practices. For the avoidance of doubt, this compensation obligation will be above all other debt of the company.

                    3.      INCENTIVE COMPENSATION.

          Executive shall be eligible to participate in any and all performance-based incentive compensation program that the Board has established or may in the future establish for Executive, as well as any performance-based incentive compensation program established from time to time for other members of Company's senior management.

                    5.      TERM AND TERMINATION.

          This Agreement will continue in full force and effect until terminated by the parties. This Agreement may be terminated in any of the following ways: (a) it may be negotiated and replaced by a written agreement signed by both parties(b) Company may elect to terminate this Agreement with or without "Cause," as defined below or (c) Executive may elect to terminate this Agreement with or without "Good Reason," as defined below.

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                    6.      TERMINATION BY COMPANY.

                              (a)      Termination For Cause. Company may terminate this Agreement and Executive's employment for Cause at any time upon written notice. Company's termination of Executive's employment with Company shall be for "Cause" if, in the reasonable judgment of the Board of Directors: (i) Executive engages in any act or omission which is in bad faith and to the material detriment of Company (ii) Executive exhibits, unfitness for service, habitual neglect, or gross incompetence to the material detriment of Company(iii) Executive is convicted of a felony or any crime or offense involving moral turpitude to the material detriment of Company(iv) or Executive refuses or fails to act on any reasonable, lawful or material directive or order from the Board of Directors.

          If this Agreement and Executive's employment are terminated by Company for Cause, Company shall pay Executive the compensation to which he is entitled pursuant to Sections 2 hereof through the end of Executive's employment and thereafter Company's obligations hereunder shall terminate.

                              (b)      Termination Without Cause. Company also may terminate this Agreement and Executive's employment at any time without Cause by giving at least 30 days prior written notice to Executive. In the event this Agreement and Executive's employment are terminated by Company without Cause, Executive shall be entitled to receive Severance Benefits pursuant to Section 9.

                    7.      TERMINATION BY EXECUTIVE.

          Executive may terminate this Agreement and his employment with or without "Good Reason" in accordance with the provisions of this Section 7.

                              (a)      Termination For Good Reason. Executive may terminate this Agreement and Executive's employment for "Good Reason" by giving written notice to Company within 90 days, or such longer period as may be agreed to in writing by Company, of Executive's knowledge or receipt of notice of the occurrence of an event constituting "Good Reason," as described below.

          Executive shall have "Good Reason" to terminate this Agreement and Executive's employment upon the occurrence of any of the following events: (i) a material reduction in salary or benefits outlined in this agreement, (ii) a material reduction in responsibilities, or (iii) a requirement to relocate necessitating an increase of greater than 25 miles in Executive's one-way commute, or (iv) Company is significantly delinquent in its financial obligations to Executive and such is not cured with 30 days notice.

          If Executive terminates this Agreement and his employment for Good Reason, Executive shall be entitled to receive Severance Benefits pursuant to Section 9.

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                              (b)      Termination Without Good Reason. Executive also may terminate this Agreement and Executive's employment without Good Reason at any time by giving 30 days notice to Company. If Executive terminates this Agreement and Executive's employment without Good Reason, Company shall pay Executive the compensation to which he is entitled pursuant to Sections 2 and 3 hereof through the end of Executive's employment, including such notice, and thereafter Company's obligations hereunder shall terminate.

                    8.      DEATH OR DISABILITY.

          This Agreement will terminate automatically on Executive's death. Any salary or other amounts due to Executive for services rendered prior to Executive's death shall be paid to Executive's surviving spouse, or if Executive does not leave a surviving spouse, to Executive's estate. No other benefits shall be payable to Executive's estate or heirs pursuant to this Agreement, but amounts may be payable pursuant to any life insurance or other benefit plans maintained in whole or in part by Company for the benefit of Executive, his estate or heirs.

          If the Executive becomes "Disabled," Executive's employment hereunder and Company's obligation to pay Executive's salary shall continue for a period of 18 months from the date of such Disability, at which time Executive's employment hereunder shall automatically cease and terminate. Executive shall be considered ''Disabled" or to be suffering from a "Disability" for purposes of this Section 8 if, in the reasonable, good faith judgment of a licensed physician, Executive is unable for a period of90 consecutive business days to perform the essential functions of Executive position required under this Agreement, with or without reasonable accommodations, because of a physical or mental impairment.

                    9.      SEVERANCE BENEFITS.

          If this Agreement and Executive's employment are terminated without Cause pursuant to Section 6(b) hereof or if Executive elects to terminate this Agreement for Good Reason pursuant to Section 7(a) hereof: (i) Executive shall continue to receive payment of his base salary under Sections 2 and 3 hereof paid in accordance with Company's standard payroll procedures during the period commencing on the date of such termination and continuing until twelve (12) months from such termination(ii) Executive's benefits as described in Section 11 shall continue during the period commencing on the date of such termination and continuing until thirty (30) days from such termination on the same terms and conditions in effect prior to Executive's termination.

          If Company terminates the Agreement and Executive's employment for Cause, or if Executive voluntarily terminates this Agreement and Executive's employment without Good Reason prior to the end of the Term, no Severance Benefits shall be paid to Executive. No Severance Benefits are payable in the event of Executive's death or disability while in the active employ of Company.

                    10.      BENEFITS.

          Executive will be entitled to participate in all employee benefit plans, including, but not limited to, retirement plans, life insurance plans and health and dental plans available to other Company employees, subject to restrictions (including waiting periods) specified in the applicable Plan.

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          Executive is entitled to twenty (20) days of paid vacation per calendar year, with such vacation to be scheduled and taken in accordance with Company's standard vacation policies.

                    12.      CONFIDENTIALLY ANON-DISCLOSURE.

          During the course of Executive's employment, Executive has and will become exposed to a substantial amount of confidential and proprietary information, including, but not limited to financial information, annual report, audited and unaudited financial reports, strategic plans, business plans, marketing strategies, new business strategies, personnel and compensation information, and other such reports, documents or information. In the event Executive's employment is terminated by either party for any, reason, Executive will return to Company and Executive will not take, any copies of such documents, computer print-outs, computer tapes, floppy disks, CD-ROMS, etc., in any form, format or manner whatsoever, nor will Executive disclose the same in whole or in part to any person or entity, in any manner either directly or indirectly. Excluded from this Agreement is information that is already disclosed to third parties and is in the public domain or that Company consents to be disclosed, with such consent to be in writing. The provisions of this Section 11 shall survive the termination of this Agreement.

                    13.      COVENANTS.

                              (a)      Interests to be Protected. The parties acknowledge that during the Term, Executive will perform essential duties for Company, its employees and stockholders, and for customers of Company. Therefore, Executive will be given an opportunity to meet, work with and develop close working relationships with Company's customers on a first-hand basis and will gain valuable insight as to the customers' operations, personnel and need for services. In addition, Executive will be to, have access to, and be required to work with, a considerable amount of Company 's confidential and proprietary information, including but not limited to information concerning Company's methods of operation, financial information, strategic planning, operational budgets and strategies, payroll data, management systems programs, computer systems, marketing plans and strategies, merger and acquisition strategies and customer lists.

          The parties also expressly recognize and acknowledge that the personnel of Company have been trained by, and are valuable to Company, and that if Company must hire new personnel or retrain existing personnel to fill vacancies Company will incur substantial expense in recruiting and training such personnel. The parties expressly recognize that should Executive compete with Company in any manner whatsoever, it would seriously impair the goodwill and diminish the value of Company's business.

          The parties acknowledge that this covenant has an extended duration however, they agree that this covenant is reasonable and that it is necessary for the protection of Company, its stockholders and employees.

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          For these and other reasons, and the fact that there are many other employment opportunities available to Executive if Executive should terminate, the parties are in full and complete agreement that the following restrictive covenants (which together are referred to as the "Covenants") are fair and reasonable and are freely, voluntarily and knowingly entered into. Further, each party has been given the opportunity to consult with independent legal counsel before entering into this Agreement.

                              (b)      Devotion to Employment. During the term of employment, Executive shall not at any time or place or to any extent whatsoever, either directly or indirectly, without the express written consent of Company, engage in any outside activity competitive with or adverse to Company 's business, practice or affairs, whether alone or as partner, officer, director, employee, stockholder of any corporation or as a trustee, fiduciary, consultant or other representative. This is not intended to prohibit Executive from engaging in nonprofessional activities such as personal investments or conducting private business affairs which may include other boards of directors' activity, as long as they do not conflict with Company. Participation to a reasonable extent in civic, social or community activities is encouraged.

                              (c)      Non-Solicitation of Customer or Suppliers. During the term of Executive's employment with Company and for a period of 12 months after the expiration or termination of employment with Company, regardless of who initiates the termination, Executive shall not, directly or indirectly, for Executive, or on behalf of, or in conjunction with, any other person(s), Company, partnership, corporation, or governmental entity, in any manner whatsoever, call upon, contact, encourage, handle or solicit, or cause others to solicit, any person or other entity that is, or was within the 12-month period immediately prior to the date of Executive's termination, an actual or intended customer or supplier of Company or any of its subsidiaries or affiliates, for the purpose of soliciting, selling or purchasing from such customer or supplier the same, similar, or related services or products that are provided by, or purchased by, Company or any of its subsidiaries or affiliates. If Executive violates Executive's obligations under this Section 13(c), then the time periods hereunder

                              (d)      Non-Solicitation of Employees. During the term of Executive's employment with Company and for a period of 12 months after the termination of employment with Company, regardless of who initiates the termination, Executive shall not, directly or indirectly, for Executive, or on behalf of, or in conjunction with, any other person(s), Company, partnership, corporation, or governmental entity, in any manner whatsoever, seek to him, and/or hire any person who, on the date hereof, or on the date of Executive's termination, is an employee of Company or any of its subsidiaries or affiliates for employment or as an independent contractor with any person or entity (other than Company or any of its subsidiaries or affiliates), unless first authorized in writing by Company, which authorization may be withheld in the sole and absolute discretion of Company. If Executive violates Executive's obligations under this Section 13(d), then the time periods hereunder shall be extended by the period of time equal to that period beginning when the activities constituting such violation commenced and ending when the activities constituting such violation terminated.

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                              (e)      Competing Business. During the term of Executive's employment and for a period of 12 months after the termination of employment with Company, regardless of who initiates the termination, Executive shall not, directly or indirectly, (including, without limitation, as a partner, director, officer or employee of, or lender or consultant to, any other personal entity, or stockholder (other than as the holder of less than five percent (5%) of the stock of a corporation the securities of which are traded on a national securities exchange or in the over-the-counter market), for Executive, or on behalf of, or in conjunction with, any other person(s), Company, partnership, corporation, or governmental entity, in any manner whatsoever, or in any other capacity, within, into or from the Restricted Territory (as defined below) engage or cause others to engage in the same or similar business as Company and its subsidiaries, or any aspect thereof, unless first authorized in writing by Company, which authorization may be withheld in the sole and absolute discretion of Company. For purposes of this Section 13(e), the term "Restricted Territory" shall mean any geographical service area where Company or any of its subsidiaries and affiliates is engaged in business, sells products or performs services or was considering engaging in business at any time, prior to the termination or at the time of termination, which such territory shall include any markets from which existi ng or intended Company customers operate, including, without limitation, the United States, Canada, the United Kingdom, the Republic of China (Taiwan), the People's Republic of China, South Korea, Singapore and Malaysia. If Executive violates Executive's obligations under this Section 13(e), then the time periods hereunder shall be extended by the period of time equal to that period beginning when the activities constituting such violation commenced and ending when the activities constituting such violation terminated.

                              (f)      Notification and Disclosure. Executive will promptly and fully disclose to Company in writing, whether or not requested by Company, any and all ideas, improvements, discoveries, inventions, trademarks, proprietary information, know-how, processes, or other developments or improvements (collectively, the "Inventions''), whether or not Executive believes them to be patentable, that directly relate to the business of Company now or hereafter engaged in,that Executive conceives or first actually reduces to a plan, practice, or device, either individually or jointly with others, during the term of Executive's employment with Company, or within the period ending six months after the termination thereof, and that relate to the business of Company now or hereafter engaged in, resulting from or arising out of Executive's use of Company's equipment, supplies, facilities, or trade secret information that result from any work performed by Executive in his capacity as an Executive of Company, whether conceived or developed during Company's business hours or otherwise. Executive will keep current, accurate, and complete records of all Inventions, which records will belong to Company and at all times be kept and stored on Company's premises.

                              (g)      Ownership and Patenting of Inventions. The Inventions will be the sole and exclusive property of Company. During the term of Executive's employment by Company and at any time thereafter, Executive, at any time upon the requests of Company, will execute and deliver an assignment or assignments of any and all applications, plans, devices, and other uses relating to the Inventions that Company deems necessary or convenient to apply for, obtain, or maintain patents of the United States, and any other foreign countries, for the Inventions and to assign and convey to Company or its nominee the sole and exclusive right, title, and interest in and to the Inventions. Executive will provide any and all aid and assistance deemed necessary by Company to protect Company's interest in the Inventions with respect to any disputes arising out of any unauthorized use or infringement of the Inventions or any patents issued in relation thereto.

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                              (h)      Judicial Amendment. If the scope of any provision of this Section 13 is found by a court of competent jurisdiction to be too broad to permit enforcement to its full extent, then such provision shall be enforced to the maximum extent permitted by law. The parties agree that the scope of any provision of this Agreement may be modified by a judge in any proceeding to enforce this Agreement, so that such provision can be enforced to the maximum extent permitted by law. If any provision of this Agreement is found to be invalid or unenforceable for any reason, it shall not affect the validity of the remaining provisions of this Agreement.

                              (i)      Injunctive Relief Damages and Forfeiture. Due to the nature of Executive's position with Company, and with full realization that a violation of this Agreement will cause immediate and irreparable injury and damage, which is not readily measurable, and to protect Company 's interests, Executive understands and agrees that in addition to instituting legal proceedings to recover damages resulting from a breach of this Agreement, Company may seek to enforce this Agreement with an action for injunctive relief to cease or prevent any actual or threatened violation of this Agreement on the part of Executive.

                              (j)      Survival. The provisions of this Section 13, shall survive the termination of this Agreement.

                    14.      AMENDMENTS.

          This Agreement and the Ancillary Agreements constitute the entire agreement between the parties as to the subject matter hereof Accordingly, there are no side agreements or verbal agreements other than those that are stated in this document or in the Ancillary Agreements. Any amendment, modification or change in said Agreements must be done so in writing and signed by both parties.

                    15.      SEVERABILITY.

          In the event a court or arbitrator declares that any provision of this Agreement is invalid or unenforceable, it shall not affect or invalidate any of the remaining provisions. Further, the court shall have the authority to re-write that portion of the Agreement it deems unenforceable, to make it enforceable.

                    16.      GOVERNINGLAW.

          The interpretation, performance and enforcement of this Agreement shall be governed by the internal laws of the State of Arizona.

                    17.      INDEMNITY.

                              (a)      General. Company shall, to the fullest extent authorized, as amended, indemnify and hold harmless Executive in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative against expenses, liabilities and losses (including attorneys' fees, judgments, fines, excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by Executive in connection therewith.

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                              (b)      Expenses. This right to indemnification includes the right to be paid by Company the expenses (including attorneys' fees) incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if applicable law requires, an advancement of expenses incurred by Executive shall be made only upon delivery to Executive of an undertaking, by or on behalf of Executive, to repay all amounts so advanced if it is ultimately determined by fmal judicial decision from which there is no further right to appeal that Executive is not entitled to be indemnified for such expenses. The rights to indemnification and to the advancement of expenses shall be contract rights and such rights shall continue as to Executive after his termination of employment and shall inure to the benefit of the Indemnities' heirs, executors and administrators.

                              (c)      Claims for Indemnification or Expenses. If a claim under either (a) or (b) above is not paid in full by Company within 60 days after Company receives a written claim, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, Executive may at any time thereafter bring suit against Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, Executive shall be entitled to be paid also the expense of prosecuting or defending such suit. In any suit brought by the Executive to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by Company to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that Executive is not entitled to be indemnified, or to such advancement of expenses, shall be on Company.

                    18.      DISPUTE RESOLUTION.

                              (a)      Mediation. Any and all disputes arising under, pertaining to or touching upon this Agreement, or the statutory rights or obligations of either party hereto, shall, if not settled by negotiation, be subject to non-binding mediation before an independent mediator selected by the parties pursuant to Section below writing and served upon the other. Any demand for mediation shall be made in writing party to the dispute, by certified mail, return receipt requested, at the business address of or at the last known residence address of Executive respectively. The demand shall set forth with reasonable specificity the basis of the dispute and the relief sought. The mediation learning will occur at a time and place convenient to the parties in Maricopa County, Arizona, within thirty (30) days of the date of selection or appointment of the mediator and shall be governed by the National Rules for the Resolution of Employment Disputes of the American Arbitration Association ("AAA").

                              (b)      Arbitration. In the event that the dispute is not settled through mediation, the parties shall then proceed to binding arbitration before a single independent arbitrator selected pursuant to Section 18(D). The mediator shall not serve as arbitrator. ALL DISPUTES INVOLVING ALLEGED UNLAWFUL EMPLOYMENT DISCRIMINATION TERMINATION BY ALLEGED BREACH OF CONTRACT OR POLICY, OR ALLEGED EMPLOYMENT TORT COMMITTED BY COMPANY OR A REPRESENTATIVE OF COMPANY INCLUDING CLAIMS OF VIOLATIONS OF FEDERAL OR STATE DISCRIMINATION STATUTES OR PUBLIC POLICY, SHALL BE RESOLVED PURSUANT TO TIDS POLICY AND THERE SHALL BE NO RECOURSE TO COURT, WITH OR WITHOUT A JURY TRIAL. The arbitration hearing shall occur at a time and place convenient to the parties in Maricopa County, Arizona, within thirty (30) days of selection or appointment of the arbitrator. If Company has adopted a policy that is applicable to arbitrations with executives, the arbitration shall be conducted in accordance with said policy to the extent that the policy is consistent with this Agreement and the Federal Arbitration Act, 9 U.S.C. §§ 1-16. If no such policy has been adopted, the arbitration shall be governed by the National Rules for the Resolution of Employment Disputes of the AAA. The arbitrator shall issue written findings of fact and conclusions of law, and an award, within fifteen (15) days of the date of the hearing unless the parties otherwise agree.

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                              (c)      Damages. In cases of breach of contract or policy, damages shall be limited to contract damages. In cases of intentional discrimination claims prohibited by statute, the arbitrator may direct payment consistent with 42 U.S.C. § 1981(a) and the Civil Rights Act of 1991. In cases of employment tort, the arbitrator may award punitive damages if proved by clear and convincing evidence. Any award of punitive damages shall not exceed two times any compensatory award and in any event, shall not exceed Two Hundred Thousand Dollars ($200,000). The arbitrator may award fees to the prevailing party and assess costs of the arbitration to the non-prevailing party. Issues of procedure, arbitrability, or confirmation of award shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16, except that court review of the arbitrator's award shall be that of an appellate court reviewing a decision of a trial judge sitting without a jury.

                              (d)      Selection of Mediators or Arbitrators. The parties shall select the mediator or arbitrator form a panel list made available by the AAA. If the parties are unable to agree to a mediator or arbitrator within 10 days of receipt of a demand for mediation or arbitration, the mediator or arbitrator will be chosen by alternatively striking from a list of five mediators or arbitrators obtained by Company from ALA. Executive shall have the first strike.

                              (e)      Non-Arbitration Provisions. Disputes arising under Sections 12 and 13 shall not be subject to this Section 18.

                    19.      COUNTERPARTS.

          This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

*   *   *

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          IN WITNESS WHEREOF, Company and Executive have executed this Agreement effective on the date set forth above.

COMPANY, INC.

By: /s/_________________________________________

Name: _________________________________________

Its: ___________________________________________

"EXECUTIVE"

/s/____________________________________________

William D Kennedy                                                         Date

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EX-10.11

EXECUTIVE EMPLOYMENT AGREEMENT

          THIS EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made this 21st day of April 2012, by and between Jason Plotke ("Executive") and Echo Automotive, LLC, a Delaware corporation ("Company"), effective April 21^st, 2012 ("Effective Date").

RECITALS

          Company wishes to retain the services of Executive pursuant to this Executive Employment Agreement, the terms and provisions of which are set forth below.

          NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED AS FOLLOWS:

               1.      POSITION AND DUTIES.

          During the Term (as defined in Section 5) Executive will continue to be employed by Company as its President and shall perform those duties as determined by the Board of Directors of Company ("Board") in accordance with the policies, practices and bylaws of Company.

          Executive shall serve Company faithfully, loyally, honestly and to the best of Executive's ability. Executive will devote Executive's best efforts and substantially all of the Executive's business time, except as disclosed by Executive for board or consulting obligations which do not interfere with the performance of Executive's duties, to the performance of Executive's duties for, and in the business and affairs of Company.

          Subject to Section 7, the Board reserves the right, in its sole discretion, to change or modify Executive's position, title, and duties during the Term of this Agreement.

                    2.      COMPENSATION.

          Commencing on the Effective Date and during the first 12 months of this Agreement, Executive's base salary will be Two Hundred and 001100 Dollars ($200,000), payable in accordance with Company's customary payroll practice. Executive's base salary will be reviewed annually by the Board in accordance with Company's compensation review policies and practices. For the avoidance of doubt, this compensation obligation will be above all other debt of the company.

                    3.      INCENTIVE COMPENSATION.

          Executive shall be eligible to participate in any and all performance-based incentive compensation program that the Board has established or may in the future establish for Executive, as well as any performance-based incentive compensation program established from time to time for other members of Company's senior management.

                    5.      TERM AND TERMINATION.

          This Agreement will continue in full force and effect until terminated by the parties. This Agreement may be terminated in any of the following ways: (a) it may be negotiated and replaced by a written agreement signed by both parties(b) Company may elect to terminate this Agreement with or without "Cause," as defined below; or (c) Executive may elect to terminate this Agreement with or without "Good Reason," as defined below.

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                    6.      TERMINATION BY COMPANY.

                              (a)      Termination For Cause. Company may terminate this Agreement and Executive's employment for Cause at any time upon written notice. Company's termination of Executive's employment with Company shall be for "Cause" if, in the reasonable judgment of the Board of Directors: (i) Executive engages in any act or omission which is in bad faith and to the material detriment of Company(ii) Executive exhibits, unfitness for service, habitual neglect, or gross incompetence to the material detriment of Company(iii) Executive is convicted of a felony or any crime or offense involving moral turpitude to the material detriment of Company(iv) or Executive refuses or fails to act on any reasonable, lawful or material directive or order from the Board of Directors.

          If this Agreement and Executive's employment are terminated by Company for Cause, Company shall pay Executive the compensation to which he is entitled pursuant to Sections 2 hereof through the end of Executive's employment and thereafter Company 's obligations hereunder shall terminate.

                              (b)      Termination Without Cause. Company also may terminate this Agreement and Executive's employment at any time without Cause by giving at least 30 days prior written notice to Executive. In the event this Agreement and Executive's employment are terminated by Company without Cause, Executive shall be entitled to receive Severance Benefits pursuant to Section 9.

                    7.      TERMINATION BY EXECUTIVE.

          Executive may terminate this Agreement and his employment with or without "Good Reason" in accordance with the provisions of this Section 7.

                              (a)      Termination For Good Reason. Executive may terminate this Agreement and Executive's employment for "Good Reason" by giving written notice to Company within 90 days, or such longer period as may be agreed to in writing by Company, of Executive's knowledge or receipt of notice of the occurrence of an event constituting "Good Reason," as described below.

          Executive shall have "Good Reason" to terminate this Agreement and Executive's employment upon the occurrence of any of the following events: (i) a material reduction in salary or benefits outlined in this agreement, (ii) a material reduction in responsibilities, or (iii) a requirement to relocate necessitating an increase of greater than 25 miles in Executive's one-way commute, or (iv) Company is significantly delinquent in its financial obligations to Executive and such is not cured with 30 days notice.

          If Executive terminates this Agreement and his employment for Good Reason, Executive shall be entitled to receive Severance Benefits pursuant to Section 9.

                              (b)      Termination Without Good Reason. Executive also may terminate this Agreement and Executive's employment without Good Reason at any time by giving 30 days notice to Company. If Executive terminates this Agreement and Executive's employment without Good Reason, Company shall pay Executive the compensation to which he is entitled pursuant to Sections 2 and 3 hereof through the end of Executive's employment, including such notice, and thereafter Company's obligations hereunder shall terminate.

                    8.      DEATH OR DISABILITY.

          This Agreement will terminate automatically on Executive's death. Any salary or other amounts due to Executive for services rendered prior to Executive's death shall be paid to Executive's surviving spouse, or if Executive does not leave a surviving spouse, to Executive's estate. No other benefits shall be payable to Executive's estate or heirs pursuant to this Agreement, but amounts may be payable pursuant to any life insurance or other benefit plans maintained in whole or in part by Company for the benefit of Executive, his estate or heirs.

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          If the Executive becomes ''Disabled," Executive's employment hereunder and Company's obligation to pay Executive's salary shall continue for a period of 18 months from the date of such Disability, at which time Executive' s employment hereunder shall automatically cease and terminate. Executive shall be considered "Disabled" or to be suffering from a ''Disability" for purposes of this Section 8 if, in the reasonable, good faith judgment of a licensed physician, Executive is unable for a period of90 consecutive business days to perform the essential functions of Executive position required under this Agreement, with or without reasonable accommodations, because of a physical or mental impairment.

                    9.      SEVERANCE BENEFITS.

          If this Agreement and Executive's employment are terminated without Cause pursuant to Section 6(b) hereof or if Executive elects to terminate this Agreement for Good Reason pursuant to Section 7(a) hereof: (i) Executive shall continue to receive payment of his base salary under Sections 2 and 3 hereof paid in accordance with Company's standard payroll procedures during the period commencing on the date of such termination and continuing until twelve (12) months from such termination(ii) Executive's benefits as described in Section 11 shall continue during the period commencing on the date of such termination and continuing until thirty (30) days from such termination on the same terms and conditions in effect prior to Executive's termination.

          If Company terminates the Agreement and Executive's employment for Cause, or if Executive voluntarily terminates this Agreement and Executive's employment without Good Reason prior to the end of the Term, no Severance Benefits shall be paid to Executive. No Severance Benefits are payable in the event of Executive's death or disability while in the active employ of Company.

                    10.      BENEFITS.

          Executive will be entitled to participate in all employee benefit plans, including, but not limited to, retirement plans, life insurance plans and health and dental plans available to other Company employees, subject to restrictions (including waiting periods) specified in the applicable Plan.

          Executive is entitled to twenty (20) days of paid vacation per calendar year, with such vacation to be scheduled and taken in accordance with Company's standard vacation policies.

                    12.      CONFIDENTIALLY AND NON-DISCLOSURE.

          During the course of Executive's employment, Executive has and will become exposed to a substantial amount of confidential and proprietary information, including, but not limited to financial information, annual report, audited and unaudited financial reports, strategic plans, business plans, marketing strategies, new business strategies, personnel and compensation information, and other such reports, documents or information. In the event Executive's employment is terminated by either party for any, reason, Executive will return to Company and Executive will not take, any copies of such documents, computer print-outs, computer tapes, floppy disks, CD-ROMS, etc., in any form, format or manner whatsoever, nor will Executive disclose the same in whole or in part to any person or entity, in any manner either directly or indirectly. Excluded from this Agreement is information that is already disclosed to third parties and is in the public domain or that Company consents to be disclosed, with such consent to be in writing. The provisions of this Section 11 shall survive the termination of this Agreement.

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                    13.      COVENANTS.

                              (a)      Interests to be Protected. The parties acknowledge that during the Term, Executive will perform essential duties for Company, its employees and stockholders, and for customers of Company. Therefore, Executive will be given an opportunity to meet, work with and develop close working relationships with Company's customers on a first-hand basis and will gain valuable insight as to the customers' operations, personnel and need for services. In addition, Executive will be to, have access to, and be required to work with, a considerable amount of Company's confidential and proprietary information, including but not limited to information concerning Company's methods of operation, financial information, strategic planning, operational budgets and strategies, payroll data, management systems programs, computer systems, marketing plans and strategies, merger and acquisition strategies and customer lists.

          The parties also expressly recognize and acknowledge that the personnel of Company have been trained by, and are valuable to Company, and that if Company must hire new personnel or retrain existing personnel to fill vacancies Company will incur substantial expense in recruiting and training such personnel. The parties expressly recognize that should Executive compete with Company in any manner whatsoever, it would seriously impair the goodwill and diminish the value of Company 's business.

          The parties acknowledge that this covenant has an extended duration; however, they agree that this covenant is reasonable and that it is necessary for the protection of Company, its stockholders and employees.

          For these and other reasons, and the fact that there are many other employment opportunities available to Executive if Executive should terminate, the parties are in full and complete agreement that the following restrictive covenants (which together are referred to as the "Covenants") are fair and reasonable and are freely, voluntarily and knowingly entered into. Further, each party has been given the opportunity to consult with independent legal counsel before entering into this Agreement.

                              (b)      Devotion to Employment. During the term of employment, Executive shall not at any time or place or to any extent whatsoever, either directly or indirectly, without the express written consent of Company, engage in any outside activity competitive with or adverse to Company's business, practice or affairs, whether alone or as partner, officer, director, employee, stockholder of any corporation or as a trustee, fiduciary, consultant or other representative. This is not intended to prohibit Executive from engaging in nonprofessional activities such as personal investments or conducting private business affairs which may include other boards of directors' activity, as long as they do not conflict with Company. Participation to a reasonable extent in civic, social or community activities is encouraged.

                              (c)      Non-Solicitation of Customer or Suppliers. During the term of Executive's employment with Company and for a period of 12 months after the expiration or termination of employment with Company, regardless of who initiates the termination, Executive shall not, directly or indirectly, for Executive, or on behalf of, or in conjunction with, any other person(s), Company, partnership, corporation, or governmental entity, in any manner whatsoever, call upon, contact, encourage, handle or solicit, or cause others to solicit, any person or other entity that is, or was within the 12-month period immediately prior to the date of Executive's termination, an actual or intended customer or supplier of Company or any of its subsidiaries or affiliates, for the purpose of soliciting, selling or purchasing from such customer or supplier the same, similar, or related services or products that are provided by, or purchased by, Company or any of its subsidiaries or affiliates. If Executive violates Executive's obligations under this Section 13(c), then the time periods hereunder shall be extended by the period of time equal to that period beginning when the activities constituting such violation commenced and ending when the activities constituting such violation terminated.

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                              (d)      Non-Solicitation of Employees. During the term of Executive's employment with Company and for a period of 12 months after the termination of employment with Company, regardless of who initiates the termination, Executive shall not, directly or indirectly, for Executive, or on behalf of, or in conjunction with, any other person(s), Company, partnership, corporation, or governmental entity, in any manner whatsoever, seek to him, and/or hire any person who, on the date hereof, or on the date of Executive's termination, is an employee of Company or any of its subsidiaries or affiliates for employment or as an independent contractor with any person or entity (other than Company or any of its subsidiaries or affiliates), unless first authorized in writing by Company, which authorization may be withheld in the sole and absolute discretion of Company. If Executive violates Executive's obligations under this Section 13(d), then the time periods hereunder shall be extended by the period of time equal to that period beginning when the activities constituting such violation commenced and ending when the activities constituting such violation terminated.

                              (e)      Competing Business. During the term of Executive's employment and for a period of 12 months after the termination of employment with Company, regardless of who initiates the termination, Executive shall not, directly or indirectly, (including, without limitation, as a partner, director, officer or employee of, or lender or consultant to, any other personal entity, or stockholder (other than as the holder of less than five percent (5%) of the stock of a corporation the securities of which are traded on a national securities exchange or in the over-the-counter market), for Executive, or on behalf of, or in conjunction with, any other person(s), Company, partnership, corporation, or governmental entity, in any manner whatsoever, or in any other capacity, within, into or from the Restricted Territory (as defined below) engage or cause others to engage in the same or similar business as Company and its subsidiaries, or any aspect thereof, unless first authorized in writing by Company, which authorization may be withheld in the sole and absolute discretion of Company. For purposes of this Section 13(e), the term "Restricted Territory" shall mean any geographical service area where Company or any of its subsidiaries and affiliates is engaged in business, sells products or performs services or was considering engaging in business at any time, prior to the termination or at the time of termination, which such territory shall include any markets from which existing or intended Company customers operate, including, without limitation, the United States, Canada, the United Kingdom, the Republic of China (Taiwan), the People's Republic of China, South Korea, Singapore and Malaysia. If Executive violates Executive's obligations under this Section 13(e), then the time periods hereunder shall be extended by the period of time equal to that period beginning when the activities constituting such violation commenced and ending when the activities constituting such violation terminated.

                              (f)      Notification and Disclosure. Executive will promptly and fully disclose to Company in writing, whether or not requested by Company, any and all ideas, improvements, discoveries, inventions, trademarks, proprietary information, know-how, processes, or other developments or improvements (collectively, the "Inventions"), whether or not Executive believes them to be patentable, that directly relate to the business of Company now or hereafter engaged in, that Executive conceives or first actually reduces to a plan, practice, or device, either individually or jointly with others, during the term of Executive's employment with Company, or within the period ending six months after the termination thereof, and that relate to the business of Company now or hereafter engaged in, resulting from or arising out of Executive's use of Company's equipment, supplies, facilities, or trade secret information that result from any work performed by Executive in his capacity as an Executive of Company, whether conceived or developed during Company's business hours or otherwise. Executive will keep current, accurate, and complete records of all Inventions, which records will belong to Company and at all times be kept and stored on Company's premises.

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                               (g)      Ownership and Patenting of Inventions. The Inventions will be the sole and exclusive property of Company. During the term of Executive's employment by Company and at any time thereafter, Executive, at any time upon the requests of Company, will execute and deliver an assignment or assignments of any and all applications, plans, devices, and other uses relating to the Inventions that Company deems necessary or convenient to apply for, obtain, or maintain patents of the United States, and any other foreign countries, for the Inventions and to assign and convey to Company or its nominee the sole and exclusive right, title, and interest in and to the Inventions. Executive will provide any and all aid and assistance deemed necessary by Company to protect Company's interest in the Inventions with respect to any disputes arising out of any unauthorized use or infringement of the Inventions or any patents issued in relation thereto.

                              (h)      Judicial Amendment. If the scope of any provision of this Section 13 is found by a court of competent jurisdiction to be too broad to permit enforcement to its full extent, then such provision shall be enforced to the maximum extent permitted by law. The parties agree that the scope of any provision of this Agreement may be modified by a judge in any proceeding to enforce this Agreement, so that such provision can be enforced to the maximum extent permitted by law. If any provision of this Agreement is found to be invalid or unenforceable for any reason, it shall not affect the validity of the remaining provisions of this Agreement.

                              (i)      Injunctive Relief Damages and Forfeiture. Due to the nature of Executive's position with Company, and with full realization that a violation of this Agreement will cause immediate and irreparable injury and damage, which is not readily measurable, and to protect Company's interests, Executive understands and agrees that in addition to instituting legal proceedings to recover damages resulting from a breach of this Agreement, Company may seek to enforce this Agreement with an action for injunctive relief to cease or prevent any actual or threatened violation of this Agreement on the part of Executive.

                              (j)      Survival. The provisions of this Section 13, shall survive the termination of this Agreement.

                    14.      AMENDMENTS.

          This Agreement and the Ancillary Agreements constitute the entire agreement between the parties as to the subject matter hereof. Accordingly, there are no side agreements or verbal agreements other than those that are stated in this document or in the Ancillary Agreements. Any amendment, modification or change in said Agreements must be done so in writing and signed by both parties.

                    15.      SEVERABILITY.

          In the event a court or arbitrator declares that any provision of this Agreement is invalid or unenforceable, it shall not affect or invalidate any of the remaining provisions. Further, the court shall have the authority to re-write that portion of the Agreement it deems unenforceable, to make it enforceable.

                    16.      GOVERNING LAW.

          The interpretation, performance and enforcement of this Agreement shall be governed by the internal laws of the State of Arizona.

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                    17.      INDEMNITY.

                              (a)      General. Company shall, to the fullest extent authorized, as amended, indemnify and hold harmless Executive in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative against expenses, liabilities and losses (including attorneys' fees, judgments, fines, excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by Executive in connection therewith.

                              (b)      Expenses. This right to indemnification includes the right to be paid by Company the expenses (including attorneys' fees) incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if applicable law requires, an advancement of expenses incurred by Executive shall be made only upon delivery to Executive of an undertaking, by or on behalf of Executive, to repay all amounts so advanced if it is ultimately determined by final judicial decision from which there is no further right to appeal that Executive is not entitled to be indemnified for such expenses. The rights to indemnification and to the advancement of expenses shall be contract rights and such rights shall continue as to Executive after his termination of employment and shall inure to the benefit of the Indemnities' heirs, executors and administrators.

                              (c)      Claims for Indemnification or Expenses. If a claim under either (a) or (b) above is not paid in full by Company within 60 days after Company receives a written claim, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, Executive may at any time thereafter bring suit against Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, Executive shall be entitled to be paid also the expense of prosecuting or defending such suit. In any suit brought by the Executive to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by Company to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that Executive is not entitled to be indemnified, or to such advancement of expenses, shall be on Company.

                    18.      DISPUTE RESOLUTION.

                              (a)      Mediation. Any and all disputes arising under, pertaining to or touching upon this Agreement, or the statutory rights or obligations of either party hereto, shall, if not settled by negotiation, be subject to non-binding mediation before an independent mediator selected by the parties pursuant to Section below writing and served upon the other. Any demand for mediation shall be made in writing party to the dispute, by certified mail, return receipt requested, at the business address of or at the last known residence address of Executive respectively. The demand shall set forth with reasonable specificity the basis of the dispute and the relief sought. The mediation learning will occur at a time and place convenient to the parties in Maricopa County, Arizona, within thirty (30) days of the date of selection or appointment of the mediator and shall be governed by the National Rules for the Resolution of Employment Disputes of the American Arbitration Association ("AAA").

                              (b)      Arbitration. In the event that the dispute is not settled through mediation, the parties shall then proceed to binding arbitration before a single independent arbitrator selected pursuant to Section 18(D). The mediator shall not serve as arbitrator. ALL DISPUTES INVOLVING ALLEGED UNLAWFUL EMPLOYMENT DISCRIMINATION TERMINATION BY ALLEGED BREACH OF CONTRACT OR POLICY, OR ALLEGED EMPLOYMENT TORT COMMITTED BY COMPANY OR A REPRESENTATIVE OF COMPANY INCLUDING CLAIMS OF VIOLATIONS OF FEDERAL OR STATE DISCRIMINATION STATUTES OR PUBLIC POLICY, SHALL BE RESOLVED PURSUANT TO TIDS POLICY AND THERE SHALL BE NO RECOURSE TO COURT, WITH OR WITHOUT A JURY TRIAL. The arbitration hearing shall occur at a time and place convenient to the parties in Maricopa County, Arizona, within thirty (30) days of selection or appointment of the arbitrator. If Company has adopted a policy that i s applicable to arbitrations with executives, the arbitration shall be conducted in accordance with said policy to the extent that the policy is consistent with this Agreement and the Federal Arbitration Act, 9 U.S.C. §§ 1-16. If no such policy has been adopted, the arbitration shall be governed by the National Rules for the Resolution of Employment Disputes of the AAA. The arbitrator shall issue written findings of fact and conclusions of law, and an award, within fifteen (15) days of the date of the hearing unless the parties otherwise agree.

10-27-03 Company Confidential Information

                              (c)      Damages. In cases of breach of contract or policy, damages shall be limited to contract damages. In cases of intentional discrimination claims prohibited by statute, the arbitrator may direct payment consistent with 42 U.S.C. § 1981 (a) and the Civil Rights Act of 1991. In cases of employment tort, the arbitrator may award punitive damages if proved by clear and convincing evidence. Any award of punitive damages shall not exceed two times any compensatory award and in any event, shall not exceed Two Hundred Thousand Dollars ($200,000). The arbitrator may award fees to the prevailing party and assess costs of the arbitration to the non-prevailing party. Issues of procedure, arbitrability, or confirmation of award sha11 be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16, except that court review of the arbitrator's award shall be that of an appellate court reviewing a decision of a trial judge sitting without a jury.

                              (d)      Selection of Mediators or Arbitrators. The parties shall select the mediator or arbitrator form a panel list made available by the AAA. If the parties are unable to agree to a mediator or arbitrator within 10 days of receipt of a demand for mediation or arbitration, the mediator or arbitrator will be chosen by alternatively striking from a list of five mediators or arbitrators obtained by Company from ALA. Executive shall have the first strike.

                              (e)      Non-Arbitration Provisions. Disputes arising under Sections 12 and 13 shall not be subject to this Section 18.

                    19.      COUNTERPARTS.

          This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

*   *   *

10-27-03 Company Confidential Information

          IN WITNESS WHEREOF, Company and Executive have executed this Agreement effective on the date set forth above.

COMPANY, INC.

By: /s/_______________________________________

Name: _______________________________________

Its: _________________________________________

"EXECUTIVE"

/s/ __________________________________________

Jason Plotke                                                        Date

10-27-03 Company Confidential Information

EX-10.12

LICENSE AGREEMENT

This LICENSE AGREEMENT ("Agreement") is made and entered into this 28 day of June, 2012, by and between BrightAutomotive, Inc. of 2701 Enterprise Drive, Suite 122, Anderson, Indiana 46013 ("Bright") and ControlledCarbon, LLC d/b/a Echo Automotive ("Licensee") (collectively "Parties") pursuant to the terms and conditions herein.

1.           Grant of License. Pursuant to the terms of this Agreement, Bright hereby grants to Licensee a royalty-free, perpetual, fully-paid up, worldwide, non-exclusive, non-transferable and non-sub-licensable limited license to use the Battery Management Software and CAD of Exhibit A( l) ("Software") and intellectual property of Exhibit A(2) ("Bright Intellectual Property") to develop, modify and/or sell, offer for sale, market, distribute, import and export derivative works. In the event of a sale of substantially all of the Licensee's Assets or Merger, the license may be conferred to the purchasing or new entity. In consideration for the granting of this license, Licensee hereby agrees to pay to Bright a one-time up-front license fee in the amount of Amount of $50,000. Bright acknowledges they have received such consideration in full.

2.           Ownership of Derivative Works. Bright shall retain all right, title and interest, including all intellectual property rights, in and to the Software, including the Bright Intellectual Property. The Licensee shall own, without restriction, all derivative works of Bright Intellectual Property and Software.

3.           Intellectual Property Rights and Copyrights. All intellectual property rights in and to the Software shall remain the exclusive property of Bright. The Licensee shall have no right in or to the Software except as expressly set forth in this Agreement. Intellectual property includes, but is not limited to, patents, inventions, invention disclosures, trademarks, trade secrets, know-how, software programs, proprietary data and databases, copyrights and all other similar items of intellectual property, whether registered or unregistered, including any rights created thereof. All rights not expressly granted hereunder by Bright are reserved for Bright.

4.           Confidentiality. Licensee shall treat all proprietary material or information belonging to Bright or to any third party to which Bright owes a duty to maintain confidentiality as confidential, including, without limitation, all business information, computer software and computer technology that is not in the public domain, whether patentable or not, which is acquired by or on behalf of Licensee from time to time under this Agreement ("Confidential Information"). All Confidential Information shall be used solely to enable Licensee to use the Software in accordance with this Agreement.

5.           Indemnification, Warranty and Liability. Neither Party will be liable to the other Party for any special, consequential, exemplary or incidental damages (including lost or anticipated revenues or profits relating to the same, or cost of procurement of substitute products, services), arising from any claim relating to this Agreement or the subject matter hereof. The Software is provided "as is" and Bright makes no warranties, whether express or implied regarding or relating to the Software, including but not limited to warranties of merchantability, title, quiet enjoyment, accuracy of data, system integration, course of performance or fitness for a particular purpose with respect to the Software and any resultant product. Bright does not warrant that the Software provided under this Agreement will operate uninterrupted or that it will be free from defects. In the event there are any damages awarded through a court order or other process, the total amount of damages will not exceed $50,000 plus enforcement costs; provided that no party is restricted from obtaining injunctive relief to prevent violation of this agreement or enforcement of other rights.

6.           General Terms. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Indiana AND THE PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY OF ANY DISPUTE RELATED TO THIS AGREEMENT. Licensee may not assign any right, license or obligation under this Agreement to any third party without the Bright's consent. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter contained herein and supersedes all prior or simultaneous, representations, discussions, negotiations, and agreements, and industry customs or trade practices. If any provision of the terms of this Agreement is found by a court of competent jurisdiction or arbitral award to be unlawful, invalid or unenforceable, that provision will be amended to achieve as nearly as possible the same economic effect as the original provisions and the remainder of this Agreement will remain in full force.

IN WITNESS WHEREOF, the Parties have executed this Agreement.

/s/ ______________________________________________	/s/ ______________________________________________
Bright Automotive, Inc.	Dan Kennedy
2701 Enterprise Drive, Suite	CEO
122	2701 Enterprise Drive, Suite 122
Anderson, Indiana 46013	Anderson, Indiana 4601
Fax
Direct

EX-10.13

THIS NOTE AND THE INDEBTEDNESS REPRESENTED HEREBY ARE FOR THE PURPOSE OF A BRIDGE LOAN BY AND BETWEEN THE LENDER AND THE COPMANY AND IS SUBJECT TO ALL ARTICLES OF THE COMPANY’S OPERATING AGREEMENT.

PROMISSORY NOTE

$50,000 July 13^th, 2012

Borrower:	Echo Automotive, LLC of 9909 N 126th St, Scottsdale Arizona 85259 (individually and collectively the "Borrower")
Lender:	William W Kennedy (“Lender”)

This bridge loan being provided by Lender to Borrower as working capital. It is understood that both parties wish to replace this agreement with a more definitive purchase and/or funding agreement and both parties agree to work in good faith to negotiate the terms of a more definitive and comprehensive agreement. In the event that no definitive agreement is mutually agreed to and executed by both parties, for any reason whatsoever, this Promissory Note will remain in full force and effect.

FOR VALUE RECEIVED, The Borrower promises to pay to Lender at such address as may be provided in writing to the Borrower, the principal sum of fifty thousand ($50,000.00 ) USD, with interest accrued on the unpaid principal at the rate of 21 percent per annum, calculated monthly not in advance.

1.	Warrants. Within 120 days of the execution of this promissory note, Borrower will issue Lender warrants to purchase $50,000 of stock (100,000 shares) at no more than $0.01 per share. These warrants will expire 5 years after the issue date and may be subject to a standard voting agreement. In addition, Borrower will issue Lender Warrants to purchase 1 share of stock at the same as above terms for every $10 of outstanding debt at the end of each calendar month. For clarity, Borrower would issue Lender 5,000 Warrants on October 31st, 2012, if the unpaid balance was equal to $50,000.
2.	Term: This Note will be repaid in full within 180 days from receipt of funds from Lender.
3.	Prepayment. At any time while not in default under this Note, the Borrower may pay the outstanding balance then owing under this Note to Lender without further bonus or penalty.
4.	Repayment of Loan. It is understood that this loan is a bridge loan to help Borrower with cash timing and to operate until it receives other moneys from its current investors. At the time those monies are received by Borrower from its investors, Borrower will repay this loan within 180 business days.
5.	Default. If the Borrower defaults in payment as required under this Note and within thirty (30) days of written notice of such breach, the Security, if any is defined in this note, will be immediately provided to Lender and Lender is granted all rights of repossession as a secured party. For the avoidance of doubt, Borrower will have the right too liquidate such items to satisfy any amounts due under this agreement. Any and all proceeds beyond such amount or additional security obtained by Lender under this agreement will be promptly returned to Borrower. In addition, Borrower will have first right of refusal to purchase any property obtained from Borrower and the right to match any bona-fide offer.

6.	Legal Fees. All reasonable costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by Lender in enforcing this Note as a result of any default by the Borrower, will be added to the principal then outstanding and will immediately be paid by the Borrower.
7.	Successors. This Note will enure to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns of the Borrower and Lender. The Borrower waives presentment for payment, notice of non-payment, protest and notice of protest.
8.	Ranking. The indebtedness evidenced by the Note shall be senior in priority to all Indebtedness of the Borrower (including trade payables) and all indebtedness of the Borrower shall be senior in terms of priority and payment with the Note.
9.	Conflicting Agreements. In the event of any inconsistencies between the terms of this Note and any other document related to the loan evidenced by the Note, the terms of this Note shall prevail.
10.	Severability. If any provision of this Note is held to be invalid, illegal or unenforceable in any respect or to any extent under applicable law, such provision shall nevertheless remain valid, legal and enforceable in all other respects and to such extent as may be permissible.
11.	Governing Law. This Note shall be governed by and construed under the laws of the State of Arizona.
12.	Interest Savings Clause. If any interest payment due hereunder is determined to be in excess of the then legal maximum rate, then that portion of each interest payment representing an amount in excess of the then legal maximum rate shall instead be deemed a payment of principal and applied against the principal of the obligations evidenced by this Note.
13.	Waiver. The Borrower and Lender hereby expressly waive presentment, demand for payment, dishonor, notice of dishonor, protest, notice of protest, and any other formality.

IN WITNESS WHEREOF Echo Automotive, LLC has duly affixed its signature by a duly authorized officer and individual under seal on this 13^th day July, 2012.

SIGNED, SEALED, AND DELIVERED
this 13th day of July, 2012.
	Echo Automotive, LLC
	per________________________________________: (SEAL)

EX-10.14

THIS NOTE AND THE INDEBTEDNESS REPRESENTED HEREBY ARE FOR THE PURPOSE OF A BRIDGE LOAN BY AND BETWEEN THE LENDER AND THE COPMANY AND IS SUBJECT TO ALL ARTICLES OF THE COMPANY’S OPERATING AGREEMENT.

PROMISSORY NOTE

$65,000 July 13^th, 2012

Borrower:	Echo Automotive, LLC of 9909 N 126th St, Scottsdale Arizona 85259 (individually and collectively the "Borrower")
Lender:	Josh Lambert (“Lender”)

This bridge loan being provided by Lender to Borrower to help with general operational expenses of the business. It is understood that both parties wish to replace this agreement with a more definitive purchase and/or funding agreement and both parties agree to work in good faith to negotiate the terms of a more definitive and comprehensive agreement. In the event that no definitive agreement is mutually agreed to and executed by both parties, for any reason whatsoever, this Promissory Note will remain in full force and effect.

FOR VALUE RECEIVED, The Borrower promises to pay to Lender at such address as may be provided in writing to the Borrower, the principal sum of sixty five thousand ($65,000.00 ) USD, with interest accrued on the unpaid principal at the rate of 21 percent per annum, calculated monthly not in advance.

1.	Warrants. Within 120 days of the execution of this promissory note, Borrower will issue Lender warrants to purchase $65,000 of stock (130,000 shares) at no more than $0.01 per share. These warrants will expire 5 years after the issue date and may be subject to a standard voting agreement. In addition, Borrower will issue Lender Warrants to purchase 1 share of stock at the same as above terms for every $10 of outstanding debt at the end of each calendar month. For clarity, Borrower would issue Lender 5,000 Warrants on October 31st, 2012, if the unpaid balance was equal to $50,000.
2.	Term: This Note will be repaid in full within 180 days from receipt of funds from Lender.
3.	Prepayment. At any time while not in default under this Note, the Borrower may pay the outstanding balance then owing under this Note to Lender without further bonus or penalty.
4.	Repayment of Loan. It is understood that this loan is a bridge loan to help Borrower with cash timing and to operate until it receives other moneys from its current investors. At the time those monies are received by Borrower from its investors, Borrower will repay this loan within 180 business days.
5.	Default. If the Borrower defaults in payment as required under this Note and within thirty (30) days of written notice of such breach, the Security, if any is defined in this note, will be immediately provided to Lender and Lender is granted all rights of repossession as a secured party. For the avoidance of doubt, Borrower will have the right too liquidate such items to satisfy any amounts due under this agreement. Any and all proceeds beyond such amount or additional security obtained by Lender under this agreement will be promptly returned to Borrower. In addition, Borrower will have first right of refusal to purchase any property obtained from Borrower and the right to match any bona-fide offer.

6.	Legal Fees. All reasonable costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by Lender in enforcing this Note as a result of any default by the Borrower, will be added to the principal then outstanding and will immediately be paid by the Borrower.
7.	Successors. This Note will enure to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns of the Borrower and Lender. The Borrower waives presentment for payment, notice of non-payment, protest and notice of protest.
8.	Ranking. The indebtedness evidenced by the Note shall be senior in priority to all Indebtedness of the Borrower (including trade payables) and all indebtedness of the Borrower shall be senior in terms of priority and payment with the Note.
9.	Conflicting Agreements. In the event of any inconsistencies between the terms of this Note and any other document related to the loan evidenced by the Note, the terms of this Note shall prevail.
10.	Severability. If any provision of this Note is held to be invalid, illegal or unenforceable in any respect or to any extent under applicable law, such provision shall nevertheless remain valid, legal and enforceable in all other respects and to such extent as may be permissible.
11.	Governing Law. This Note shall be governed by and construed under the laws of the State of Arizona.
12.	Interest Savings Clause. If any interest payment due hereunder is determined to be in excess of the then legal maximum rate, then that portion of each interest payment representing an amount in excess of the then legal maximum rate shall instead be deemed a payment of principal and applied against the principal of the obligations evidenced by this Note.
13.	Waiver. The Borrower and Lender hereby expressly waive presentment, demand for payment, dishonor, notice of dishonor, protest, notice of protest, and any other formality.

IN WITNESS WHEREOF Echo Automotive, LLC has duly affixed its signature by a duly authorized officer and individual under seal on this 13^th day July, 2012.

SIGNED, SEALED, AND DELIVERED
this 13th day of July, 2012.
	Echo Automotive, LLC
	per: __________________________________(SEAL)

EX-16.1

EX-99.1

CONTROLLEDCARBON, LLC
(A Development Stage Company)

FINANCIAL STATEMENTS

Years Ended December 31, 2011 and 2010 and the
Period from Inception (November 25, 2009)
Through December 31, 2011

CONTROLLEDCARBON, LLC
(A Development Stage Company)

FINANCIAL STATEMENTS

Years Ended December 31, 2011 and 2010 and the
Period from Inception (November 25, 2009)
Through December 31, 2011

CONTENTS

	Pages
INDEPENDENT AUDITORS' REPORT	1
FINANCIAL STATEMENTS
Balance Sheets	2
Statements of Operations	3
Statements of Members’ Equity (Deficit)	4
Statements of Cash Flows	5
Notes to Financial Statements	6 - 11

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Controlled Carbon, LLC (a development stage company)

We have audited the accompanying balance sheets of ControlledCarbon, LLC (a development stage company) as of December 31, 2011 and 2010, and the related statements of operations, members’ equity (deficit) and cash flows for the years then ended and the period from inception (November 25, 2009) through December 31, 2011. These financial statements are the responsibility of ControlledCarbon, LLC’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ControlledCarbon, LLC (a development stage company) as of December 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended and from inception (November 25, 2009) through December 31, 2011, in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s operating losses since inception raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.

/s/ Mayer Hoffman McCann P.C.

Phoenix, Arizona
October 9, 2012

-1-

CONTROLLEDCARBON, LLC
(A Development Stage Company)

BALANCE SHEETS

December 31, 2011 and 2010

A S S E T S
		2011			2010
CURRENT ASSETS
Cash and cash equivalents	$	101,359		$	1,069
Prepaid expenses		5,000			-
TOTAL CURRENT ASSETS		106,359			1,069
PROTOTYPE EQUIPMENT		24,906			-
TOTAL ASSETS	$	131,265		$	1,069
L I A B I L I T I E S  A N D  M E M B E R S'  E Q U I T Y  (D E F I C I T)
CURRENT LIABILITIES
Accrued interest	$	6,235		$	-
Current maturities of long-term debt		250,000			-
TOTAL CURRENT LIABILITIES		256,235			-
ACCRUED INTEREST, net of current maturities		1,668			-
LONG-TERM DEBT, net of current maturities		110,000			-
TOTAL LIABILITIES		367,903			-
MEMBERS' EQUITY (DEFICIT)		(236,638	)		1,069
TOTAL LIABILITIES AND MEMBERS' EQUITY (DEFICIT)	$	131,265		$	1,069

See Notes to the Financial Statements

2

CONTROLLEDCARBON, LLC
(A Development Stage Company)

STATEMENTS OF OPERATIONS

Years ended December 31, 2011 and 2010 and the
Period from Inception (November 25, 2009) Through December 31, 2011

								Period from
								Inception
								(November 25,
								2009)
								Through
								December 31,
		2011			2010			2011
REVENUES
Miscellaneous	$	69,100		$	48,204		$	124,256
OPERATING EXPENSES		361,739			86,804			461,050
INTEREST EXPENSE		7,903			-			7,903
NET LOSS	$	(300,542	)	$	(38,600	)	$	(344,697	)

See Notes to the Financial Statements

3

CONTROLLEDCARBON, LLC
(A Development Stage Company)

STATEMENTS OF MEMBERS' EQUITY (DEFICIT)

Years ended December 31, 2011 and 2010 and the
Period from Inception (November 25, 2009) Through December 31, 2009

Balance, November 25, 2009	$	-
Net loss		(5,555	)
Contributions		3,324
Balance, December 31, 2009		(2,231	)
Net loss		(38,600	)
Contributions		44,900
Distributions		(3,000	)
Balance, December 31, 2010		1,069
Net loss		(300,542	)
Contributions		62,835
Balance, December 31, 2011	$	(236,638	)

See Notes to the Financial Statements

4

CONTROLLEDCARBON, LLC
(A Development Stage Company)

STATEMENTS OF CASH FLOWS

Years ended December 31, 2011 and 2010 and the
Period from Inception (November 25, 2009) Through December 31, 2011

								Period from
								Inception
								(November 25,
								2009)
								Through
								December 31,
		2011			2010			2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(300,542	)	$	(38,600	)	$	(344,697	)
Adjustments to reconcile net loss to net cash       used in operating activities:
Depreciation and amortization expense		3,094			-			3,094
Changes in assets and liabilities:
Prepaid expenses		(5,000	)		-			(5,000	)
Accounts payable		-			(4,151	)		-
Accrued interest		7,903			-			7,903
Net cash used in operating activities		(294,545	)		(42,751	)		(338,700	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of prototype equipment		(28,000	)		-			(28,000	)
Net cash used in investing activities		(28,000	)		-			(28,000	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from debt		360,000			-			360,000
Member contributions		62,835			44,900			111,059
Member distributions		-			(3,000	)		(3,000	)
Net cash provided by financing activities		422,835			41,900			468,059
NET CHANGE IN CASH AND CASH EQUIVALENTS		100,290			(851	)		101,359
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		1,069			1,920			-
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	101,359		$	1,069		$	101,359

See Notes to the Financial Statements

5

NOTE 1: BACKGROUND AND BASIS OF PRESENTATION

Background

ControlledCarbon, LLC (the “Company”) was incorporated on November 25, 2009. The Company is an Arizona Limited Liability Company in the development stage with several unique technologies that allow companies that operate or utilize commercial, fleet vehicles to significantly reduce their overall fuel expenses. The Company augments existing power trains with highly efficient electrical energy delivered by electric motors powered by the Company’s modular plug-in battery modules to achieve a rapid real-world ROI for each individual vehicle in a fleet. The mission of the Company is focused on the proposition of reducing the use of fossil fuels.

The Company’s operations have previously been funded by advances and subsequent equity conversions by the majority stockholders. Future funding is expected to be provided in part by equity investments from other accredited investors. There can be no assurance that any of these strategies will be achieved on terms attractive to us.

Basis of Presentation

The financial statements of the Company have been prepared using generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) of America that are applicable to a going concern which contemplates that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business.

The Company is a development stage company and during the years ended December 31, 2011 and 2010 and the period from inception (November 25, 2009) through December 31, 2009, significant losses have been incurred. The Company has experienced negative cash flows from operations since the inception of the Company. These circumstances result in substantial doubt as to the ability of the Company to continue as a going concern. The Company will need to obtain additional funding in the future in order to finance its business strategy, operations and growth through the issuance of equity, debt or collaboration. The failure to obtain this additional funding would be detrimental to the Company. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

Limited liability partnership

The Company is a limited liability partnership. This type of organization provides that the partner is not personally liable for any acts, debts, or liabilities beyond the partners’ capital contributions.

Management’s use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

Cash and cash equivalents include funds on hand and short-term investments with original maturities of three months or less. Cash deposits are insured in limited amounts by the Federal Deposit Insurance Corporation (FDIC).

Revenue recognition

Revenue is recognized when the four criteria for revenue recognition are met: (1) persuasive evidence of an arrangement exists; (2) shipment or delivery has occurred; (3) the price is fixed or determinable and (4) collectability is reasonably assured. The Company has not recognized any revenue associated with its mission as stated above in the nature of operations footnote. Miscellaneous revenue relates to consulting projects and is recorded based on the four criteria for revenue recognition.

6

Advertising expense

The Company expenses advertising costs as incurred. Advertising expense charged to operating expenses was $16,835 and $43,553 for the years ended December 31, 2011 and 2010, respectively and $60,388 for the period from inception (November 25, 2009) through December 31, 2011.

Prototype equipment

Prototype equipment is stated at cost. Maintenance and repair expenditures are expensed as incurred. Typically, amounts greater than $1,000 are capitalized. Depreciation and amortization is computed by the straight-line method using an estimated useful life of 3 years. Depreciation expense charged to operating expenses was $3,094 and $0 for the years ended December 31, 2011 and 2010, respectively and $3,094 for the period from inception (November 25, 2009) through December 31, 2011. Accumulated depreciation was $3,094 and $0 at December 31, 2011 and 2010, respectively.

Long-lived assets

The Company accounts for long-lived assets in accordance with the provisions of FASB ASC 360, Property, Plant and Equipment. FASB ASC 360 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. The Company did not recognize any impairment charges during the years ended December 31, 2011 and 2010 and the period from inception (November 25, 2009) through December 31, 2011.

Income taxes

The Company is a Limited Liability Partnership which is treated as a “pass-through entity” for income tax purposes. Accordingly, the Company has not recognized any effects of income taxes in the accompanying financial statements.

The Company has adopted FASB ASC 740-10, Accounting for Uncertainty in Income Taxes. This requires a more likely-then not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in the Company’s tax return. Management believes the tax positions taken on the Company’s income tax returns are appropriate. To the extent that the Company management’s assessment of such tax positions changes, the change will be reflected on tax returns in the period in which the determination is made. At December 31, 2011 and 2010, the Company did not have any unrecognized tax benefits. The Company will be subject to U.S. Federal and state and local income tax examinations by tax authorities for all tax years since inception on November 25, 2009.

NOTE 3: RECENTLY ISSUED ACCOUNTING PRONCOUNCEMENTS

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820) (“ASU 2011-04”). This ASU updates certain requirements for measuring fair value and disclosure regarding fair value measurement. This ASU is effective for reporting periods beginning after December 15, 2011. Early adoption is not permitted. The Company’s adoption of ASU 2011-04 on January 1, 2012, is not expected to have an impact on the financial statements.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 requires companies to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The provisions of ASU 2011-05 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company’s adoption of ASU 2009-13 on January 1, 2012, is not expected to have an impact on the financial statements.

NOTE 4: COMMITMENTS AND CONTINGENCIES

Litigation

7

The Company may from time to time be involved in legal proceedings arising from the normal course of business. There are no pending or threatened legal proceedings as of December 31, 2011.

NOTE 5: LONG-TERM DEBT

Redeemable convertible notes

On November 10 and 11, 2011, the Company issued two separate notes with a $200,000 aggregate principal amount and interest rates of 12% per annum (the "12% Notes"). Interest payments are required on a quarterly basis and shall accrue at the election of the lender with written notice to the borrower. The notes were amended in June 2012 such that the quarterly interest payments are not required until maturity. The 12% Notes mature on December 31, 2012. If by the maturity date, the Company has not completed a qualified financing (see the definition of a qualified financing in the following paragraph) or has failed to repay all outstanding indebtedness, the term of the 12% Notes shall automatically be extended for a subsequent 12 month period, unless the holder provides thirty days notice to the Company prior to the end of the then current term to convert to units of ownership at the conversion price. Management believes there is more than a remote chance that a qualified financing will occur prior to December 31, 2012. Thus, management has classified this debt as current. If the term is renewed or extended for any reason, all other provisions of the 12% Notes shall remain in force and effect. Accrued interest at December 31, 2011 totaled $3,367 for the 12% Notes.

The 12% Notes are convertible at the discount rate of 25% of the price paid by new investors in a qualified financing, such price paid by new investors being defined as the par value of the unit of ownership at that time. A qualified financing shall be defined as a sale of units of ownership of the Company with an aggregate sales price of at least $1,000,000 including conversion of these 12% Notes and any other note purchase agreements.

Line of credit

On October 1, 2011 the Company entered into a revolving line of credit agreement and promissory note for a $100,000 original principal amount and an interest rate of 6.0% per annum (the “LOC”). The lender is immediate family of one of the members of the Company and is considered a related party. Interest was required to be paid quarterly beginning January 1, 2012 through the maturity date of September 30, 2013. The LOC was amended in June of 2012 such that the quarterly interest payments are not required and interest is due September 30, 2013. The lender may advance additional amounts in excess of the original principal amount under the same terms and conditions as the original principal amount.

Upon execution and delivery of the LOC, as additional consideration, the lender received, at no cost or expense to the lender, a twelve and one-half percent (12.50%) member interest in the Company. In addition, the lender also has the unconditional right, but not the obligation, at any time after the loan amount has been fully drawn down by the Company, to convert the existing loan indebtedness into an additional twelve and one-half (12.50%) member interest in the Company. As of December 31, 2011, $110,000 was outstanding under the LOC. Accrued interest at December 31, 2011 totaled $1,668 for the LOC.

Notes payable

On March 30, 2011, the Company entered in to a promissory note for $50,000 with an interest rate of 7.0% per annum. Interest was to accrue and be paid with the original principal amount 180 days from the date of the promissory note. The parties modified the maturity date to December 31, 2012, all other terms and conditions remaining the same, with an amendment on June 21, 2012. Accrued interest at December 31, 2011 totaled $2,868 for this promissory note.

Interest expense incurred on all debt was $7,903 and $0 for the years ended December 31, 2011 and 2010, respectively and $0 for the period from inception (November 25, 2009) through December 31, 2011.

NOTE 6: MEMBER’S EQUITY

Pursuant to the terms of the Operating Agreement dated November 25, 2009, membership interest was divided among the founding members. In October 2011, the Operating Agreement was amended to include additional members. The members contributed $62,835 and $44,900 for the years ended December 31, 2011 and 2010, respectively and $111,059 for the period from inception (November 25, 2009) through December 31, 2011. The only distributions occurred during the year ended December 31, 2010 for $3,000.

8

NOTE 7: RELATED PARTY TRANSACTIONS

The Company has entered into certain transactions in the normal course of business with entities under common ownership. The Company has recognized revenue for consulting related to these transactions of $0 and $47,100 for the years ended December 31, 2011 and 2010, respectively and $47,100 for the period from inception (November 25, 2009) through December 31, 2011.

The Company paid consulting fees to the owners of the Company that amounted to $183,265 and $11,000 for the years ended December 31, 2011 and 2010 and $199,265 for the period from inception (November 25, 2009) through December 31, 2011.

NOTE 8: SEGMENT REPORTING

The Company has one business segment in one geographical area.

NOTE 9: SUBSEQUENT EVENTS

Building lease

Subsequent to December 31, 2011, the Company entered into two lease agreements to occupy lab facilities. The lease terms began on April 1, 2012 and June 1, 2012, respectively. Both leases end on March 31, 2014.

Future minimum rental payments required under the leases are as follows:

          Years Ending

December 31, 2012	$	54,416
December 31, 2013		113,896
December 31, 2014		28,681
Total	$	196,993

The Company has the option to renew the leases for five subsequent two year periods.

License agreement

On February 1, 2012, the Company entered into a license agreement with CleanFutures (CF), for use of their intellectual property. For every product sold, a royalty of two to five percent will be paid to CF, depending on the system component sold. Both parties have the option to reduce the royalty payments after 48 months and annually thereafter by converting their exclusive license agreement to a non-exclusive license agreement.

The Company shall pay no less than the following minimum royalties (such minimum royalties to be prepaid and any unearned prepaid royalties for any year will carry over to the subsequent year’s prepaid royalties due): $100,000 for year one, $150,000 for year two, $200,000 for year three, and $250,000 for years four and beyond.

Additionally, the Company is required to make royalty prepayments according to the following schedule: $10,000 upon execution, $25,000 within 30 days, $40,000 within 120 days, and $75,000 at the time that the Company completes a round of funding of no less than $3,000,000 and in no more than eight months after the completion of the bridge financing. The Company will pay CF $10,000 per month for 18 months as additional prepaid royalties beginning the month following the completion of bridge financing. At the Company’s option, the Company may make a one-time payment of $1,000,000 and the yearly exclusive license fees will terminate effective the date such prepayment is made.

Associated with this agreement the Company issued warrants to CF for the right to purchase common stock equal to five percent (5%) of the outstanding share of the Company, calculated at the time of execution and issued at the next round of funding or at the time of the Company’s conversion from an LLC to an S Corp, whichever comes first. The warrant exercise price is $0.01 and has a term of 10 years. The Company has the right to reduce the warrant amount to four percent (4%) by making royalty prepayments of $100,000 or to reduce the warrant amount to three percent (3%) by making royalty prepayments of $500,000, anytime within the first 24 months.

9

Articles of amendment

On June 26, 2012, the Company changed its name to Echo Automotive LLC through an amendment of the articles of organization filed with the Arizona Corporation Commission.

Debt

From March 31, 2012 to August 31, 2012 the Company entered into debt agreements which were to help the Company with timing of cash payments for its operations until money is received from other investors. The following is a detail of the debt agreements entered into between March 31, 2012 and August 31, 2012:

Date	Amount		Interest	Due Date
3/31/2012	100,000	(1)	7%	3/31/2013
4/11/2012	100,000	(1)	12%	4/11/2013
5/30/2012	12,000	(2)	21%	2/28/2013
5/30/2012	60,000	(1)	18%	5/30/2013
7/13/2012	65,000	(3)	21%	1/9/2013
7/27/2012	150,000	(1)	7%	10/25/2012
8/31/2012	11,000	(2)	12%	2/27/2013
Total	498,000

(1)	This note contains a conversion feature which enables either the Company or the lender to convert a portion or the entire note into shares of the Company. The conversion feature was not exercised by either party prior to the close of the Exchange Agreement (see further discussion of exchange agreement below).
(2)	This note contains a warrant feature which requires the Company to issue warrants to purchase stock at no more than $0.01 per share within a certain number of days of the execution of the debt agreement. The warrants would have an expiration date of 5 years. No warrants were issued prior to the close of the Exchange Agreement (see further discussion of exchange agreement below).
(3)	This note contains a warrant feature which requires the Company to issue warrants to purchase stock at no more than $0.01 per share within a certain number of days of the execution of the debt agreement. The warrants will have an expiration date of 5 years. No warrants were issued prior to the close of the Exchange Agreement (see further discussion of exchange agreement below).

On September 10, 2012, the LOC was converted into additional member interest of the Company in accordance with the line of credit agreement.

Exchange agreement

On September 21, 2012, the Company and DBPJ Stock Holding, LLC, sole member of the Company (the “Company Member”) completed an exchange agreement (the “Exchange Agreement”) with Echo Automotive, Inc. (formerly Canterbury Resources, Inc.). At the closing of the Exchange Agreement, the Company Member received a total of 52,500,000 shares of common stock of Echo Automotive, Inc. in exchange for 100% of the issued and outstanding units of the Company. In accordance with the terms of the Exchange Agreement, the shares received by the Company Member represent 70% of the issued and outstanding common stock of Echo Automotive, Inc.

The Company is in the process of transferring to the Company Member certain debt agreements that the Company entered into in 2011 and 2012 in accordance with the terms of the Exchange Agreement, with the Company Member assuming and bearing the obligations of the notes transferred and all of their related terms and obligations.

Pursuant to the Exchange Agreement, the Company received advances of $903,000 from Echo Automotive, Inc. from May 2012 to September 2012. Subsequent to the close of the Exchange Agreement, the advances will eliminate in consolidation in future reporting periods.

10

Employment Agreements

On April 21, 2012 the Company entered into an executive employment agreement with William Daniel Kennedy (the “Kennedy Agreement”), in connection with his service as Chief Executive Officer of the Company. In accordance with the Kennedy Agreement, Mr. Kennedy shall be entitled to a base salary of $220,000 per year.

On April 21, 2012 the Company entered into an executive employment agreement with Jason Plotke (the “Plotke Agreement”), in connection with his service as President of Echo. In accordance with the Plotke Agreement, Mr. Plotke shall be entitled to a base salary of $200,000 per year.

11

EX-99.2

ECHO AUTOMOTIVE, LLC
(A Development Stage Company)

FINANCIAL STATEMENTS

As of June 30, 2012 and December 31, 2011 and for the
Six months ended June 30, 2012 and 2011 and for the
Period from inception (November 25, 2009)
Through June 30, 2012

ECHO AUTOMOTIVE, LLC
(A Development Stage Company)

FINANCIAL STATEMENTS

As of June 30, 2012 and December 31, 2011 and for the
Six months ended June 30, 2012 and 2011 and for the
Period from inception (November 25, 2009)
Through June 30, 2012

CONTENTS

	Pages
FINANCIAL STATEMENTS
Balance Sheets	1
Statements of Operations	2
Statements of Cash Flows	4
Notes to Financial Statements	5 - 9

ECHO AUTOMOTIVE, LLC
(A Development Stage Company)

BALANCE SHEETS

June 30, 2012 (unaudited)
and December 31, 2011

A S S E T S
		June 30,			December 31,
		2012			2011
CURRENT ASSETS
Cash and cash equivalents	$	46,931		$	101,359
Accounts receivable		6,100			-
Prepaid expenses		50,000			5,000
TOTAL CURRENT ASSETS		103,031			106,359
PROTOTYPE EQUIPMENT, NET		139,189			24,906
INTANGIBLES, NET		50,000			-
TOTAL ASSETS	$	292,220		$	131,265
L I A B I L I T I E S  A N D  M E M B E R S'  E Q U I T Y  (D E F I C I T)
CURRENT LIABILITIES
Accrued expenses	$	10,000		$	-
Accrued interest		22,684			6,235
Current maturities of long-term debt		1,050,000			250,000
TOTAL CURRENT LIABILITIES		1,082,684			256,235
ACCRUED INTEREST, net of current maturities		7,697			1,668
LONG-TERM DEBT, net of current maturities		110,000			110,000
TOTAL LIABILITIES		1,200,381			367,903
MEMBERS' EQUITY (DEFICIT)		(908,161	)		(236,638	)
TOTAL LIABILITIES AND MEMBERS' EQUITY (DEFICIT)	$	292,220		$	131,265

See accompanying notes to unaudited consolidated financial statements.

-1-

ECHO AUTOMOTIVE, LLC
(A Development Stage Company)

STATEMENTS OF OPERATIONS (unaudited)

Six months ended June 30, 2012 and 2011 and the
Period from Inception (November 25, 2009) Through June 30, 2012

								Period from
								Inception
								(November 25,
		Six Months Ended June 30,						2009) Through
		2012			2011			June 30, 2012
REVENUES
Miscellaneous	$	6,100		$	69,100		$	130,356
OPERATING EXPENSES		655,145			149,426			1,116,195
INTEREST EXPENSE		22,478			1,069			30,381
NET LOSS	$	(671,523	)	$	(81,395	)	$	(1,016,220	)

See accompanying notes to unaudited consolidated financial statements.

-2-

ECHO AUTOMOTIVE, LLC
(A Development Stage Company)

STATEMENTS OF CASH FLOWS (unaudited)

Six months ended June 30, 2012 and 2011 and the
Period from Inception (November 25, 2009) Through June 30, 2012

					Period from
					Inception
					(November 25,
	Six Months Ended June 30,				2009) Through
	2012		2011		June 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	(671,523	)	(81,395	)	(1,016,220	)
Adjustments to reconcile net loss to net cash        used in operating activities:
Depreciation and amortization expense	9,990		-		13,084
Changes in assets and liabilities:
Prepaid expenses	(45,000	)	-		(50,000	)
Accounts receivable	(6,100	)	-		(6,100	)
Accrued interest	22,478		-		10,000
Accrued expenses	10,000		1,069		30,381
Net cash used in operating activities	(680,155	)	(80,326	)	(1,018,855	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of prototype equipment	(124,273	)	-		(152,273	)
Purchase of intangibles	(50,000	)	-		(50,000	)
Net cash used in investing activities	(174,273	)	-		(202,273	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from debt	800,000		50,000		1,160,000
Member contributions	-		29,270		111,059
Member distributions	-		-		(3,000	)
Net cash provided by financing activities	800,000		79,270		1,268,059
NET CHANGE IN CASH AND CASH EQUIVALENTS	(54,428	)	(1,056	)	46,931
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	101,359		1,069		-
CASH AND CASH EQUIVALENTS, END OF PERIOD	46,931		13		46,931

See accompanying notes to unaudited consolidated financial statements.

-3-

NOTE 1: BACKGROUND AND BASIS OF PRESENTATION

Background

ECHO AUTOMOTIVE, LLC (the “Company”) was incorporated on November 25, 2009. The Company is an Arizona Limited Liability Company in the development stage with several unique technologies that allow companies that operate or utilize commercial, fleet vehicles to significantly reduce their overall fuel expenses. The Company augments existing power trains with highly efficient electrical energy delivered by electric motors powered by the Company’s modular plug-in battery modules to achieve a rapid real-world ROI for each individual vehicle in a fleet. The mission of the Company is focused on the proposition of reducing the use of fossil fuels.

The Company’s operations have previously been funded by advances and subsequent equity conversions by the majority stockholders. Future funding is expected to be provided in part by equity investments from other accredited investors. There can be no assurance that any of these strategies will be achieved on terms attractive to us.

Articles of amendment

On June 26, 2012, the Company changed its name to Echo Automotive LLC through an amendment of the articles of organization filed with the Arizona Corporation Commission.

Basis of Presentation

The financial statements of the Company have been prepared using generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) of America that are applicable to a going concern which contemplates that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business.

The Company is a development stage company and during the six months ended June 30, 2012 and 2011 and the period from inception (November 25, 2009) through June 30, 2012, significant losses have been incurred. The Company has experienced negative cash flows from operations since the inception of the Company. These circumstances result in substantial doubt as to the ability of the Company to continue as a going concern. The Company will need to obtain additional funding in the future in order to finance its business strategy, operations and growth through the issuance of equity, debt or collaboration. The failure to obtain this additional funding would be detrimental to the Company. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.

Exchange Agreement

On September 21, 2012, the Company and DBPJ Stock Holding, LLC, sole member of the Company (the “Company Member”) completed an exchange agreement (the “Exchange Agreement”) with Echo Automotive, Inc. (formerly Canterbury Resources, Inc.). At the closing of the Exchange Agreement, the Company Member received a total of 52,500,000 shares of common stock of Echo Automotive, Inc. in exchange for 100% of the issued and outstanding units of the Company. In accordance with the terms of the Exchange Agreement, the shares received by the Company Member represent 70% of the issued and outstanding common stock of Echo Automotive, Inc.

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

Limited liability partnership

The Company is a limited liability partnership. This type of organization provides that the partner is not personally liable for any acts, debts, or liabilities beyond the partners’ capital contributions.

Management’s use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

-4-

Cash and cash equivalents

Cash and cash equivalents include funds on hand and short-term investments with original maturities of three months or less. Cash deposits are insured in limited amounts by the Federal Deposit Insurance Corporation (FDIC).

Allowance for Doubtful Accounts

In the normal course of business, the Company provides unsecured credit terms to its customers. Accordingly, the Company maintains an allowance for doubtful accounts for possible losses on uncollectible accounts receivable. The Company routinely analyzes accounts receivable and considers history, customer creditworthiness, facts and circumstances specific to outstanding balances, current economic trends, and payment term changes when evaluating adequacy of the allowance for doubtful accounts. For uncollectible accounts receivable, the Company records a loss against the allowance for doubtful accounts only after exhaustive efforts have been made to collect and with management’s approval.

Revenue recognition

Revenue is recognized when the four criteria for revenue recognition are met: (1) persuasive evidence of an arrangement exists; (2) shipment or delivery has occurred; (3) the price is fixed or determinable and (4) collectability is reasonably assured. The Company has not recognized any revenue associated with its mission as stated above in the nature of operations footnote. Miscellaneous revenue relates to consulting projects and is recorded based on the four criteria for revenue recognition.

Advertising expense

The Company expenses advertising costs as incurred. Advertising expense charged to operating expenses was $1,963 and $7,736 for the six months ended June 30, 2012 and 2011, respectively and $62,355 for the period from inception (November 25, 2009) through June 30, 2012.

Prototype equipment

Prototype equipment is stated at cost. Maintenance and repair expenditures are expensed as incurred. Typically, amounts greater than $1,000 are capitalized. Depreciation and amortization is computed by the straight-line method using an estimated useful life of 3 years. Depreciation expense charged to operating expenses was $9,990 and $0 for the six months ended June 30, 2012 and 2011, respectively and $13,084 for the period from inception (November 25, 2009) through June 30, 2012. Accumulated depreciation was $13,084 at June 30, 2012.

Long-lived assets

The Company accounts for long-lived assets in accordance with the provisions of FASB ASC 360, Property, Plant and Equipment. FASB ASC 360 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. The Company did not recognize any impairment charges during the six months ended June 30, 2012.

Intangibles

Finite-lived intangible assets include intellectual property rights and are amortized on a straight-line basis over their estimated useful lives, with useful lives of 10 years. We continually evaluate the reasonableness of the useful lives of these assets. Finite-lived intangibles are tested for recoverability whenever events or changes in circumstances indicate the carrying amounts may not be recoverable. An impairment loss, if any, would be measured as the excess of the carrying value over the fair value determined by discounted future cash flows.

Income taxes

The Company is a Limited Liability Partnership which is treated as a “pass-through entity” for income tax purposes. Accordingly, the Company has not recognized any effects of income taxes in the accompanying financial statements.

-5-

The Company has adopted FASB ASC 740-10, Accounting for Uncertainty in Income Taxes. This requires a more likely-then not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in the Company’s tax return. Management believes the tax positions taken on the Company’s income tax returns are appropriate. To the extent that the Company management’s assessment of such tax positions changes, the change will be reflected on tax returns in the period in which the determination is made. At June 30, 2012 the Company did not have any unrecognized tax benefits. The Company will be subject to U.S. Federal and state and local income tax examinations by tax authorities for all tax years since inception on November 25, 2009.

NOTE 3: RECENTLY ISSUED ACCOUNTING PRONCOUNCEMENTS

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820) (“ASU 2011-04”). This ASU updates certain requirements for measuring fair value and disclosure regarding fair value measurement. This ASU is effective for reporting periods beginning after December 15, 2011. Early adoption is not permitted. The Company’s adoption of ASU 2011-04 on January 1, 2012, did not have an impact on the financial statements.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 requires companies to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The provisions of ASU 2011-05 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company’s adoption of ASU 2009-13 on January 1, 2012, did not have an impact on the financial statements.

NOTE 4: COMMITMENTS AND CONTINGENCIES

Litigation

The Company may from time to time be involved in legal proceedings arising from the normal course of business. There are no pending or threatened legal proceedings as of June 30, 2012.

Building lease

The Company entered into two lease agreements to occupy lab facilities. The lease terms began on April 1, 2012 and June 1, 2012, respectively. Both leases end on March 31, 2014.

Future minimum rental payments required under the leases are as follows:

          Years Ending

December 31, 2012	$	54,416
December 31, 2013		113,896
December 31, 2014		28,681
Total	$	196,993

The Company has the option to renew the leases for five subsequent two year periods. Rent expense amounted to $13,247 and $0 for the six months ended June 30, 2012 and 2011, respectively and $13,247 for the period from inception (November 25, 2009) through June 30, 2012.

License agreement

On February 1, 2012, the Company entered into a license agreement with CleanFutures (CF), for use of their intellectual property. For every product sold, a royalty of two to five percent will be paid to CF, depending on the system component sold. Both parties have the option to reduce the royalty payments after 48 months and annually thereafter by converting their exclusive license agreement to a non-exclusive license agreement.

The Company shall pay no less than the following minimum royalties (such minimum royalties to be prepaid and any unearned prepaid royalties for any year will carry over to the subsequent year’s prepaid royalties due): $100,000 for year one, $150,000 for year two, $200,000 for year three, and $250,000 for years four and beyond.

-6-

Additionally, the Company is required to make royalty prepayments according to the following schedule: $10,000 upon execution, $25,000 within 30 days, $40,000 within 120 days, and $75,000 at the time that the Company completes a round of funding of no less than $3,000,000 and in no more than eight months after the completion of the bridge financing. The Company will pay CF $10,000 per month for 18 months as additional prepaid royalties beginning the month following the completion of bridge financing. At the Company’s option, the Company may make a one-time payment of $1,000,000 and the yearly exclusive license fees will terminate effective the date such prepayment is made.

Associated with this agreement the Company issued warrants to CF for the right to purchase common stock equal to five percent (5%) of the outstanding shares of the Company, calculated at the time of execution and issued at the next round of funding or at the time of the Company’s conversion from an LLC to an S Corp, whichever comes first. The warrant exercise price is $0.01 and has a term of 10 years. The Company has the right to reduce the warrant amount to four percent (4%) by making royalty prepayments of $100,000 or to reduce the warrant amount to three percent (3%) by making royalty prepayments of $500,000, anytime within the first 24 months.

There was no royalty expense from inception (November 25, 2009) through June 30, 2012. Prepaid royalty expense was $0 at June 30, 2012.

On June 28, 2012, the Company entered into a license agreement with Bright Automotive, Inc. (“Bright”) which provides Echo a royalty-free, perpetual, fully-paid up, worldwide, non-exclusive, non-transferable and non-sub-licensable limited license to use Bright’s Battery Management Software and CAD, and certain other intellectual property of t to develop, modify and/or sell, offer for sale, market, distribute, import and export derivative works. In consideration of the granting of the license, the Company paid to Bright a one-time up-front license fee in the amount of $50,000 which has been capitalized and depreciated over its estimated useful life.

Employment Agreements

On April 21, 2012 the Company entered into an executive employment agreement with William Daniel Kennedy (the “Kennedy Agreement”), in connection with his service as Chief Executive Officer of the Company. In accordance with the Kennedy Agreement, Mr. Kennedy shall be entitled to a base salary of $220,000 per year.

On April 21, 2012 the Company entered into an executive employment agreement with Jason Plotke (the “Plotke Agreement”), in connection with his service as President of Echo. In accordance with the Plotke Agreement, Mr. Plotke shall be entitled to a base salary of $200,000 per year.

NOTE 5: LONG-TERM DEBT

Redeemable convertible notes

On November 10 and 11, 2011, the Company issued two separate notes with a $200,000 aggregate principal amount and interest rates of 12% per annum (the "12% Notes"). Interest payments are required on a quarterly basis and shall accrue at the election of the lender with written notice to the borrower. The notes were amended in June 2012 such that the quarterly interest payments are not required until maturity. The 12% Notes mature on December 31, 2012. If by the maturity date, the Company has not completed a qualified financing (see the definition of a qualified financing in the following paragraph) or has failed to repay all outstanding indebtedness, the term of the 12% Notes shall automatically be extended for a subsequent 12 month period, unless the holder provides thirty days’ notice to the Company prior to the end of the then current term to convert to units of ownership at the conversion price. Management believes there is more than a remote chance that a qualified financing will occur prior to December 31, 2012. Thus, management has classified this debt as current. If the term is renewed or extended for any reason, all other provisions of the 12% Notes shall remain in force and effect. Accrued interest at June 30, 2012 totaled $15,367 for the 12% Notes.

The 12% Notes are convertible at the discount rate of 25% of the price paid by new investors in a qualified financing, such price paid by new investors being defined as the par value of the unit of ownership at that time. A qualified financing shall be defined as a sale of units of ownership of the Company with an aggregate sales price of at least $1,000,000 including conversion of these 12% Notes and any other note purchase agreements.

The 12% Notes are in the process of being transferred to the Company Member in accordance with the terms of the Exchange Agreement, with the Company Member assuming and bearing the obligations of the transferred 12% Notes and all of its related terms and obligations. No conversion of any of the 12% Notes has occurred.

-7-

Line of credit

On October 1, 2011 the Company entered into a revolving line of credit agreement and promissory note for a $100,000 original principal amount and an interest rate of 6.0% per annum (the “LOC”). The lender is immediate family of one of the members of the Company and is considered a related party. Interest was required to be paid quarterly beginning January 1, 2012 through the maturity date of September 30, 2013. The LOC was amended in June of 2012 such that the quarterly interest payments are not required and interest is due September 30, 2013. The lender may advance additional amounts in excess of the original principal amount under the same terms and conditions as the original principal amount.

Upon execution and delivery of the LOC, as additional consideration, the lender received, at no cost or expense to the lender, a twelve and one-half percent (12.50%) member interest in the Company. In addition, the lender also has the unconditional right, but not the obligation, at any time after the loan amount has been fully drawn down by the Company, to convert the existing loan indebtedness into an additional twelve and one-half (12.50%) member interest in the Company. As of June 30, 2012, $110,000 was outstanding under the LOC. Accrued interest at June 30, 2012 totaled $4,968 for the LOC.

On September 10, 2012, the LOC was converted into additional member interest of the Company in accordance with the line of credit agreement.

Notes payable

On March 30, 2011, the Company entered in to a promissory note for $50,000 with an interest rate of 7.0% per annum. Interest was to accrue and be paid with the original principal amount 180 days from the date of the promissory note. The parties modified the maturity date to December 31, 2012, all other terms and conditions remaining the same, with an amendment on June 21, 2012. Accrued interest at June 30, 2012 totaled $4,618 for this promissory note.

Other Debt Agreements

From March 31, 2012 to August 31, 2012 the Company entered into debt agreements which were to help the Company with timing of cash payments for its operations until money is received from other investors.

          The following is a detail of the debt agreements entered into between March 31, 2012 and June 30, 2012:

Date	Amount		Interest	Due Date
3/31/2012	100,000	(1)	7%	3/31/2013
4/11/2012	100,000	(1)	12%	4/11/2013
5/30/2012	12,000	(2)	21%	2/28/2013
5/30/2012	60,000	(1)	18%	5/30/2013
Total	272,000

          The following is a detail of the debt agreements entered into subsequent to June 30, 2012:

Date	Amount		Interest	Due Date
7/13/2012	65,000	(3)	21%	1/9/2013
7/27/2012	150,000	(1)	7%	10/25/2012
8/31/2012	11,000	(2)	12%	2/27/2013
Total	226,000

(1)	This note contains a conversion feature which enables either the Company or the lender to convert a portion or the entire note into shares of the Company. The conversion feature was not exercised by either party prior to the close of the Exchange Agreement (see further discussion of exchange agreement below).
(2)	This note contains a warrant feature which requires the Company to issue warrants to purchase stock at no more than $0.01 per share within a certain number of days of the execution of the debt agreement. The warrants would have an expiration date of 5 years. No warrants were issued prior to the close of the Exchange Agreement (see further discussion of exchange agreement below).

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(3) This note contains a warrant feature which requires the Company to issue warrants to purchase stock at no more than $0.01 per share within a certain number of days of the execution of the debt agreement. The warrants will have an expiration date of 5 years. No warrants were issued prior to the close of the Exchange Agreement (see further discussion of exchange agreement below).

The Company is in the process of transferring to the Company Member certain debt agreements that the Company entered into in 2012 in accordance with the terms of the Exchange Agreement, with the Company Member assuming and bearing the obligations of the notes transferred and all of their related terms and obligations.

Interest expense incurred on all debt was $22,478 and $1,069 for the six months ended June 30, 2012 and 2011, respectively and $30,381 for the period from inception (November 25, 2009) through June 30, 2012.

Advances

Pursuant to the Exchange Agreement, the Company received advances of $903,000 from Echo Automotive, Inc. from May 2012 to September 2012. As of June 30, 2012 the Company received $528,000 in advances from Echo Automotive, Inc. which are reflected as non-current debt on our balance sheet. Subsequent to the close of the Exchange Agreement, the advances will eliminate in consolidation in future reporting periods.

NOTE 6: MEMBER’S EQUITY

Pursuant to the terms of the Operating Agreement dated November 25, 2009, membership interest was divided among the founding members. In October 2011, the Operating Agreement was amended to include additional members. The members contributed $0 and $29,270 for the six months ended June 30, 2012 and 2011, respectively and $108,059 for the period from inception (November 25, 2009) through June 30, 2012. The only distributions occurred during the year ended December 31, 2010 for $3,000.

NOTE 7: RELATED PARTY TRANSACTIONS

The Company has entered into certain transactions in the normal course of business with entities under common ownership. The Company has recognized revenue for consulting related to these transactions of $0 and $0 for the six months ended June 30, 2012 and 2011, respectively and $47,100 for the period from inception (November 25, 2009) through June 30, 2012.

The Company paid consulting fees to the owners of the Company that amounted to $182,167 and $43,475 for the six months ended June 30, 2012 and 2011 and $381,432 for the period from inception (November 25, 2009) through June 30, 2012.

NOTE 8: SEGMENT REPORTING

The Company has one business segment in one geographical area.

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EX-99.3

     UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS

     The following unaudited condensed pro forma balance sheet as of June 30, 2012 was prepared as if the merger was effective as of such date. The unaudited condensed pro forma statement of operations for the six months ended June 30, 2012 was prepared as if the merger was effective on June 30, 2012. The consolidated balance sheet as of June 30, 2010 and the statement of operations for the six months then ended of Echo Automotive, LLC (“Echo”) was used for pro forma purposes.

     The unaudited condensed pro forma financial statements should be read in conjunction with the notes included herein for Canterbury Resources, Inc. (“Canterbury,” the “Company,” “we,” “us” or “our”) and the unaudited financial statements of Echo. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the future financial position or future results of operations of the combined enterprise after the merger of Echo with Canterbury, or of the financial position or results of operations of the combined enterprise that would have actually occurred had the merger been effected as of the dates described above. The merger will be accounted for as a reverse acquisition wherein Echo will be treated as the acquirer for accounting purposes since it will control the combined enterprise.

Condensed Pro Forma Balance Sheet as of June 30, 2012 (Unaudited)

Echo Automotive, Inc.
(A Development Stage Company)
Pro Forma Combined Balance Sheet

		Accounting Acquirer			Legal Survivor
											Echo
		Echo Automotive			Canterbury						Automotive,
		LLC			Resources, Inc.						Inc.
		June 30, 2012			June 30, 2012			Pro Forma			June 30, 2012
ASSETS		(Unaudited)			(Unaudited)			Adjustments			(Unaudited)
Current Assets
Cash and cash equivalents	$	46,931			-			-		$	46,931
Accounts receivable		6,100			-			-			6,100
Prepaid expenses		50,000			-			-			50,000
Promissory note receivable		-			530,013			(530,013	) (b)		-
Total Current Assets		103,031			530,013			(530,013	)		103,031
Prototype equipment, net		139,189			-			-			139,189
Intangible, net		50,000			-			-			50,000
Total Assets	$	292,220		$	530,013		$	(530,013	)	$	292,220
LIABILITIES AND MEMBERS DEFICIT
Current Liabilities
Accounts payable	$	10,000		$	29,820		$	(29,820	) (c)	$	10,000
Accrued interest		22,684			-			(22,684	) (d)		-
Advances from related parties		-			91,762			(91,762	) (c)		-
Current portion of debt		1,050,000			-			(1,050,000	) (d)		-
Total Current Liabilities		1,082,684			121,582			(1,194,266	)		10,000
Accrued Interest, net of current maturities		7,697			-			(7,697	) (d)		-
Long-Term Debt, net of current maturities		110,000			-			55,000	(d)		165,000
Total Liabilities		1,200,381			121,582			(1,146,963	)		175,000
Stockholders Deficit
Common stock		-			11,500			738,500	(a)		750,000
Common stock to be issued		-			528,000			(528,000	) (a)		-
Additional paid in capital					36,250			(210,500	) (a)
								(530,013	) (b)
		-						29,820	(c)
								91,762	(c)
								995,000	(d)
								(167,319	) (e)		245,000
Deficit accumulated during pre-exploration/development stage		(908,161	)		(167,319	)		30,381	(d)		(877,780	)
		-			-			167,319	(e)		-
Total stockholder equity		(908,161	)		408,431			616,950			117,220
Total Liabilities and Members Deficit	$	292,220		$	530,013		$	(530,013	)	$	292,220

(a)	To record the issuance of 75,000,000 shares of $01 par value common stock and the remainder to Additional Paid in Capital
(b)	To record capitalization of the notes receivable and interest due to Canterbury from Echo Automotive, Inc. as Additional Paid in Capital
(c)	To record the pro forma adjustments for all related party liabilites trasnferred to the stockholder of Canterbury in the merger.
(d)	To record the proforma adjustment for notes payable and accrued interest transfared to the single member in the merger.
(e)	To record the proforma adjustment to eliminate the accumulated deficit of the Legal Survivor (Accounting Acquiree) in the merger.

Condensed Pro Forma Statements of Operations for the six months ended June 30, 2012 (Unaudited)

Echo Automotive, Inc.
(A Development Stage Company)
Pro Forma Combined Statement of Operations
For the Six Months Ended

		Accounting Acquirer			Legal Survivor
					Canterbury Resources,
		Echo Automotive LLC			Inc.						Echo Automotive, Inc.
		June 30, 2012			June 30, 2012			Pro Forma			June 30, 2012
		(Unaudited)			(Unaudited)			Adjustments			(Unaudited)
Revenues
Miscellaneous	$	6,100		$	2,014		$	(2,014	) (b)	$	6,100
General and administrative		655,145			3,582			-			658,727
Professional fees		-			38,759			-			38,759
Interest Expense		22,478			-			(22,478	) (a)		-
Total expenses		677,623			42,341			(22,478	)		697,486
Net Loss	$	(671,523	)	$	(40,327	)	$	20,464		$	(691,386	)

(a)	To record proforma adjustment of interest expense related to notes payable converted to equity.
(b)	To record proforma adjustment for interest income related to notes receivable converted to equity.

NOTES TO THE CONDENSED PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)

     As a result of the merger, Echo became Canterbury’s wholly-owned subsidiary and the security holders of Echo received an aggregate of 52,500,000 shares of common stock. As a result of the merger and the issuance of stock to the security holders of Echo, the former security holders of Echo held approximately 70% of Canterbury’s outstanding common stock immediately after the merger. Accounting principles generally accepted in the United States generally require that a company whose security holders retain the majority voting interest in the combined business be treated as the acquirer for financial reporting purposes. The acquisition will be accounted for as a reverse acquisition whereby Echo was deemed to be the “accounting acquirer.”

(a) To record the issuance of 75,000,000 shares of $01 par value common stock and the remainder to Additional Paid in Capital
(b) To record capitalization of the notes receivable and interest due to Canterbury from Echo Automotive, Inc. as Additional Paid in Capital
(c) To record the pro forma adjustments for all related party liabilities transferred to the stockholder of Canterbury in the merger.
(d) To record the proforma adjustment for notes payable and accrued interest transferred to the single member in the merger.
(e) To record the proforma adjustment to eliminate the accumulated deficit of the Legal Survivor (Accounting Acquiree) in the merger.
(f) To record proforma adjustment of interest expense related to notes payable converted to equity.
(g) To record proforma adjustment for interest income related to notes receivable converted to equity.

Unaudited Condensed Pro Forma Statement of Operations

     The following unaudited condensed pro forma statement of operations for the year ended December 31, 2011 was prepared as if the merger was effective as of December 31, 2011. The statement of operations for the year ended December 31, 2011 of Echo Automotive, LLC (“Echo”) was used for pro forma purposes, as that is Echo’s year-end.

     The unaudited condensed pro forma financial statements should be read in conjunction with the audited consolidated historical financial statements and notes thereto included herein for Canterbury Resources, Inc. (“Canterbury,” the “Company,” “we,” “us” or “our”) and the audited financial statements of Echo. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the future results of operations of the combined enterprise after the merger of Echo with Canterbury, or of the results of operations of the combined enterprise that would have actually occurred had the merger been effected as of the dates described above. The merger will be accounted for as a reverse acquisition wherein Echo will be treated as the acquirer for accounting purposes since it will control the combined enterprise.

Condensed Pro Forma Statements of Operations for the year ended December 31, 2011 (Unaudited)

Echo Automotive, Inc.
(A Development Stage Company)
Pro Forma Combined Statement of Operations
For the Year Ended

		Accounting Acquirer			Legal Survivor
					Canterbury Resources,
		Echo Automotive LLC			Inc.						Echo Automotive, Inc.
		December 31, 2011			December 31, 2011			Pro Forma			December 31, 2011
		(Unaudited)			(Unaudited)			Adjustments			(Unaudited)
Revenues
Miscellaneous	$	69,100		$	-		$	-		$	69,100
General and administrative		361,739			19,400			-			381,139
Exploration		-			13,951			-			13,951
Interest Expense		7,903			-			(7,697	) (a)		206
Total expenses		369,642			33,351			(7,697	)		395,296
Net Loss	$	(300,542	)	$	(33,351	)	$	7,697		$	(326,196	)

(a) To record proforma adjustment of interest expense related to notes payable converted to equity.