Document:

exhibit10-8.htm

 

 

Exhibit 10.8

 

RATE CAP AGREEMENT (BMA)

 

THIS RATE CAP AGREEMENT (this “Agreement”) is dated as of August 25, 2010 between ROYAL BANK OF CANADA (the “Seller”) and ATAX TEBS I, LLC (the “Buyer”), whereby the parties agree as follows:

 

Section 1. Definitions and Incorporated Terms.  For purposes of this Agreement, the terms set forth below in the Cap Transaction Profile or in Exhibit A shall have the meanings there indicated and capitalized terms that are used and not otherwise defined herein shall have the meanings given to them (as completed herein, where applicable) in the 2000 ISDA Definitions as published by the International Swaps and Derivatives Association, Inc. and the 1992 ISDA U.S. Municipal Counterparty Definitions as published by the International Swaps and Derivatives Association, Inc. (to the extent any term is defined in the 1992 ISDA U.S. Municipal Counterparty Definitions such definition shall apply instead of any definition of the same term in the 2000 ISDA Definitions). In addition, the provisions in the booklet of 1992 ISDA U.S. Municipal Counterparty Definitions are incorporated by reference herein and shall apply hereto except as otherwise expressly provided herein.

 

Cap Transaction Profile

 

	
Notional Amount:

	
USD $ 31,936,666.67 amortizing as per attached Exhibit A

 

Trade Date:                                                                           August 25, 2010

 

Effective Date:                                                                      September 2, 2010

 

Termination Date:                                                                September 15, 2017

 

Fixed Amount:

 

        Fixed Rate Payer:                                                  Buyer

 

        Buyer’s Payment Date:                                        September 2, 2010

 

        Fixed Amount:                                                       USD $928,000

 

Floating Amounts:

 

Floating Rate Payer:                                             Seller

 

Cap Rate:                                                               3.00% per annum

 

	
  

	
Payment Dates:

	
Fifteenth calendar day of each month, commencing on October 15, 2010, and ending on the Termination Date, subject to adjustment in accordance with the Following Business Day Convention.

 

	
  

	
Period End Dates:

	
Fifteenth calendar day of each month, not subject to adjustment.

 

	
  

	
Floating Rate Option:

	
USD-BMA Municipal Swap Index

 

	
  

	
Count Fraction:

	
Actual/Actual

 

	
  

	
Reset Dates:

	
Effective Date and thereafter Weekly on Thursday.

 

	
  

	
Weighted Average Method:

	
Applicable

 

	
Business Days:

	
A day other than (a) a Saturday or a Sunday, (b) any day on which banking institutions located in the city of New York, New York are authorized or required by law to close, (c) a day on which the New York Stock Exchange is closed or (d) any day on which Freddie Mac is closed.

 

	
Rounding Convention:

	
The simple arithmetic mean of rates expressed as a percentage rounded to five decimal places.

 

	
Calculation Agent:

	
The Seller

 

Additional Defined Terms

 

“Credit Support Document” means the Guaranty of the Credit Support Provider, if any, and the Credit Support Annex, each as identified in Exhibit A hereto.

 

“Credit Support Provider” means the Person (if any) identified as such in Part 3 of Exhibit A.

 

“Damages” means an amount determined as provided in Section 11(b).

 

“Early Termination Date” has the meaning given to that term in Section 10(b).

 

“Local Business Day” in relation to a party means a day on which commercial banks in the city indicated in that party’s address for notices hereunder are open for business.

 

“Market Quotation” means an amount determined as provided in Section 12.

 

“Person” means an individual, an estate, a trust, a corporation, a partnership, a limited liability company, or any other organization or entity, whether governmental or private.

 

“Reference Market-maker” has the meaning given to that term in Section 12(a).

 

“Taxes,” with respect to payments hereunder by the Seller, means any present or future taxes, levies, imposts, duties or charges of any nature whatsoever that are collectible by withholding except for any such tax, levy, impost, duty or charge that would not have been imposed but for the existence of a connection between the Buyer and the jurisdiction where the Tax is imposed.

 

“Termination Event” has the meaning given to that term in Section 9.

 

Section 2. Payments.  On the Payment Date for the Buyer, it shall pay the Fixed Amount and, on each Payment Date for the Seller, it shall pay the Floating Amount for the Calculation Period ending on that Payment Date.  The Seller’s obligation to make any payment hereunder shall be subject to the condition precedent that the Buyer have paid the Fixed Amount.  If the Buyer fails to pay the Fixed Amount to the Seller as and when due hereunder and does not remedy the failure on or before the third Local Business Day after notice from the Seller, the Seller may, by notice to the Buyer given not later than the fifth Local Business Day after the end of the Buyer’s cure period, declare this Agreement to be terminated, whereupon neither party shall have any further obligation hereunder, except for the Buyer’s obligation to pay interest pursuant to Section 4.  Notwithstanding the foregoing, the Buyer shall, upon failure to pay the Fixed Amount, remain liable to the Seller to pay the value of this Agreement, calculated, on the date Seller declares this Agreement terminated, on the basis of Market Quotation, which, for purposes of this Section 2 only, shall be determined pursuant to Section 12, substituting the word “Seller” in each instance when the word “Buyer” is utilized in such section and the quotation referred to in Section 12(b) shall be the amount in Dollars that a Reference Market-Maker would charge as a Fixed Amount on such date of declaration of termination.  The value of this Agreement, if any, shall be the original Fixed Amount less the amount of the Market Quotation determined in the manner described in the previous sentence.  If the difference is a negative number, the value of this Agreement shall be zero.

 

Section 3. Making of Payments.  All payments hereunder shall be made to the account of the intended payee specified in Exhibit A, or to such other account in New York City as that party may have last specified by notice to the party required to make the payment.  All such payments shall be made in funds settled through the New York Clearing House Interbank Payments System or such other same-day funds as are customary at the time for the settlement in New York City of banking transactions denominated in Dollars.

 

Section 4. Interest on Overdue Amounts.  If any amount due hereunder is not paid when due, interest shall accrue on that amount to the extent permitted by applicable law at a rate per annum equal for each day that amount remains unpaid to the sum of 1% and the rate per annum equal to the cost (without proof or evidence of any actual cost) to the intended payee (as certified by it) if it were to fund or of funding the relevant amount for that day.

 

Section 5. Supervening Illegality.  If it becomes unlawful for either party to make any payment to be made by it hereunder, as a result of the adoption of, or any change in, or change in the interpretation of, any law, regulation or treaty, that party shall give notice to that effect to the other party and shall use reasonable efforts (a) to assign or transfer its rights and obligations under this Agreement, subject to Section 14, to another of its branches, offices or affiliates, or to any leading participant in the interest rate cap market, that may make those payments lawfully and without withholding for or on account of Taxes or (b) to agree with that other party to modify this Agreement or change the method of payment hereunder so that the payment will not be unlawful.  If an assignment or agreement is not made as provided herein on or before the tenth Business Day after that notice becomes effective, either party may give notice of termination as provided in Section 10.

 

Section 6. Taxes.

 

(a) For the purpose of this Agreement, each of the Buyer and Seller hereby represent, respectively, that it is a “United States person” for purposes of the United States Internal Revenue Code of 1986, as amended.  Except as otherwise required by law, each payment hereunder shall be made without withholding for or on account of Taxes.  If a party is required to make any withholding from any payment under this Agreement for or on account of Taxes, it shall:

 

(i) make that withholding;

 

(ii) make timely payment of the amount withheld to the appropriate governmental authority;

 

(iii) forthwith pay the other party such additional amount as may be necessary to ensure that the net amount actually received by it free and clear of Taxes (including any Taxes on the additional amount) is equal to the amount that it would have received had no Taxes been withheld; and

 

(iv) on or before the thirtieth day after payment, send the payee the original or a certified copy of an official tax receipt evidencing that payment; provided, however, that if the representation and warranty made by a party in Section 7(c) proves not to have been true when made or, if repeated on each Payment Date, would not then be true, or if a party fails to perform or observe any of its covenants set forth in Section 7 or Section 8, the other party shall be under no obligation to pay any additional amount hereunder to the extent that the withholding would not have been required if the representation and warranty had been true when made, or would have been true if so repeated, or if the failure had not occurred.

 

(b) If a party would be required to make any withholding for or on account of Taxes and pay any additional amount as provided in Section 6(a) with respect to any payment to be made by it in accordance with Section 2, it shall give notice to that effect to the other party and shall use reasonable efforts

 

(i) to assign or transfer its rights and obligations under this Agreement, subject to Section 14, to another of its branches, offices or affiliates, or to any leading participant in the interest rate cap market, that may make the payments to be made by it hereunder lawfully and without withholding for or on account of Taxes; or

 

(ii) to agree with that other party to modify this Agreement or change the method of payment hereunder so that those payments will not be subject to the withholding.  If an assignment or agreement is not made as provided herein on or before the tenth day after that notice becomes effective, the party that would be required to make the withholding may give notice of termination as provided in Section 10.

 

Section 7. Representations and Warranties.

 

(a) Each of the parties makes the representations and warranties set forth below to the other as of the date hereof:

 

(i) It is duly organized and validly existing and has the corporate, partnership or other power as a company and the authority to execute and deliver this Agreement and to perform its obligations hereunder;

 

(ii) It has taken all necessary action to authorize its execution and delivery of this Agreement and the performance of its obligations hereunder;

 

(iii) All governmental authorizations and actions necessary in connection with its execution and delivery of this Agreement and the performance of its obligations hereunder have been obtained or performed and remain valid and in full force and effect; and

 

(iv) This Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of this Agreement, subject to all applicable bankruptcy, insolvency, moratorium and similar laws affecting creditors’ rights generally;

 

(b) The Seller makes the following additional representations and warranties to the Buyer:

 

(i) No event or condition that constitutes (or that with the giving of notice or the lapse of time or both would constitute) a Termination Event with respect to it has occurred and is continuing or will occur by reason of its entering into or performing its obligations under this Agreement;

 

(ii) There are no actions, proceedings or claims pending or, to its knowledge, threatened, the adverse determination of which might have a materially adverse effect on its ability to perform its obligations under, or affect the validity or enforceability against it of, this Agreement; and

 

(iii) Each of the documents delivered by the Seller hereunder is, as of the date stated in such document, true, accurate and complete in every material respect or, in the case of financial statements, fairly presents the condition of the Person indicated therein.

 

(c) In addition, if an Exhibit B on Tax Representations and Covenants is made a part of this Agreement, each of the Buyer and the Seller makes the representations and warranties set forth therein to the other and covenants as set forth therein with the other with respect to certain matters relating to Taxes.

 

Section 8. Documents.  At or before the time of execution of this Agreement by the Buyer, the Seller shall deliver to the Buyer evidence of the truth and accuracy of the Seller’s representations in subsections (ii) and (iii) of Section 7(a) as well as evidence of the authority, incumbency and specimen signature of each Person authorized to execute and deliver this Agreement or any other document to be delivered by the Seller under this Agreement on behalf of the Seller.  In addition, the Seller shall deliver to the Buyer at the times specified in Part 2 of Exhibit A, each of the documents there specified.

 

Section 9. Termination Events.  For purposes of this Agreement, “Termination Event” means each of the events and circumstances listed below:

 

(a) The Seller fails to pay any amount payable by it hereunder as and when that amount becomes payable and does not remedy that failure on or before the third Local Business Day after notice from the Buyer of the failure;

 

(b) Any representation or warranty made by the Seller in this Agreement, other than in Section 7(c), or made by any Credit Support Provider in any Credit Support Document (or document related thereto) delivered hereunder proves to have been incorrect, incomplete or misleading in any material respect at the time it was made, or the Seller fails to deliver any document it is required to deliver as provided in Part 2 of Exhibit A and does not remedy that failure on or before the thirtieth day after notice from the Buyer of the failure or, in the case of failure to deliver a Credit Support Document, does not remedy that failure immediately;

 

(c) The Seller or any Credit Support Provider becomes the subject of any action or proceeding for relief under any bankruptcy or insolvency law or any law affecting creditors’ rights that is similar to a bankruptcy or insolvency law or law relating to the composition of debts or seeks or becomes subject to the appointment of a receiver, custodian or similar official for it or any of its property or fails or is unable to pay its debts generally as they fall due;

 

(d) The Seller or any Credit Support Provider fails to pay any amount payable by it to the Buyer under any other agreement or under any instrument of the Seller or any Credit Support Provider held by the Buyer and does not remedy that failure during any applicable cure period;

 

(e) (i) There occurs a default, an event of default or another similar condition or event (however described) in respect of the Seller or any Credit Support Provider for the Seller under one or more agreements or instruments relating to Specified Indebtedness in an aggregate amount of not less than the Threshold Amount and as a result such Specified Indebtedness has been or may be declared due and payable before it would otherwise have been due and payable or (ii) there occurs a default by the Seller or any such Credit Support Provider in making one or more payments on the due date thereof in an aggregate amount of not less than the Threshold Amount under any such agreements or instruments or under any Specified Transaction (after giving effect to any applicable notice requirement or grace period) or (iii) the combined amounts of Specified Indebtedness covered by clauses (i) and (ii) at least equal the Threshold Amount.

 

For this purpose, “Specified Indebtedness,” with respect to any Person, means all obligations of that Person (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money; “Specified Transaction” means any rate swap, currency swap, cross-currency swap, commodity-price swap, equity, equity-index, debt-linked or debt-index-linked swap, rate cap, floor or collar, forward rate agreement, forward or spot foreign exchange transaction, interest rate, currency or commodity-price option, any cash-settled option on a security or index or group of securities, any combination of any of the foregoing and any similar transaction; and “Threshold Amount” means U.S. $10,000,000 (or the equivalent in any other currency or currencies);

 

(f) Any Credit Support Provider fails to comply with or perform any agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document to which it is a party if the failure is not remedied during any applicable cure period; or any Credit Support Document expires or terminates or fails or ceases to be in full force and effect (in either case, other than in accordance with its terms) prior to the satisfaction of all obligations of the Seller under this Agreement; or any Credit Support Provider or any Person purporting to act on its behalf disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, any Credit Support Document to which it is a party;

 

(g) The Seller or any Credit Support Provider consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity, and the creditworthiness of the resulting, surviving or transferee entity is materially weaker than that of the Seller or such Credit Support Provider (as the case may be) as determined by the Buyer or Freddie Mac immediately prior to such action; or

 

(h) If at any time the unsecured, unsubordinated long term obligations of the Seller are rated below A+ by S&P (or such rating is suspended or withdrawn) or below A1 by Moody’s (or such rating is suspended or withdrawn), and within five Business Days of the issuance of such a rating, either (a) Seller fails to post collateral to Buyer pursuant to the Credit Support Annex delivered concurrently herewith sufficient to secure Seller’s obligation hereunder or (b) either Buyer or Seller, each using its good faith efforts, fails to find a party acceptable to the other party hereto and to Freddie Mac, which acceptance shall not be unreasonably withheld, to which all of Seller’s interests and obligations under this Agreement shall be assigned at no cost to Buyer, and following which Seller shall be released from all obligations hereunder. In the event that S&P or Moody's ceases to provide rating services generally, or ceases to provide rating services specifically in regard to long-term unsecured, unsubordinated debt, the parties hereto, and Freddie Mac so long as the Buyer’s rights under this Agreement are collaterally assigned to Freddie Mac, shall mutually agree upon one or more alternate rating agencies and shall designate the rating level issued by such alternate rating agency or agencies for the purpose of this provision.

 

Section 10. Early Termination.

 

(a) At any time while a Termination Event is continuing, the Buyer may, with the prior written consent of Freddie Mac, or Freddie Mac may, in its absolute discretion, give notice of termination in accordance with this Section.  If a party gives notice of supervening illegality, either party may give notice of termination in accordance with this Section in the circumstances described in Section 5.  If a party is required to pay any additional amount pursuant to Section 6, it may give notice of termination in accordance with this Section in the circumstances described in Section 6.

 

(b) Any notice of termination hereunder

 

(i) shall state the grounds for termination;

 

(ii) shall specify a date that is not before, nor more than 10 days after, the date the notice of early termination is given on which the payments required by Section 11 shall be made as provided therein (the “Early Termination Date”); and

 

(iii) shall declare the obligations of the Seller to make the payments required by Section 2 that are scheduled to be made after the Early Termination Date to be terminated as of that date, and those obligations shall so terminate and be replaced by the parties’ obligations to make the payments specified in Section 11.

 

Section 11. Payments Upon Early Termination.

 

(a) If notice of termination is given pursuant to Section 10, the Seller shall pay the Buyer its Damages.

 

(b) The Buyer’s Damages in the event of early termination shall be the Market Quotation, if it can be determined.  If it cannot be determined, the Buyer’s Damages shall be an amount in Dollars equal to the sum of the losses (including loss of bargain) that it may incur as a result of the early termination or as a result of the event that served as the ground for early termination.

 

(c) Payments to be made in accordance with this Section shall be made on the Early Termination Date.  If the Buyer is entitled to be paid any amount in respect of its Damages in accordance with this Section, it shall submit to the Seller a statement in reasonable detail of those Damages.

 

Section 12. Market Quotation.

 

(a) For the purpose of determining the Market Quotation, the Buyer shall select, with the consent of Freddie Mac, four leading participants in the interest rate cap market (each a “Reference Market-maker”), in its sole discretion and in good faith, with a view to minimizing the Market Quotation (to the extent required by law); provided, however, that in doing so the Buyer shall be entitled to select market participants that are of the highest credit standing and that otherwise satisfy all the criteria that the Buyer applies generally at the time in deciding whether to enter into an interest rate protection transaction.

 

(b) The Buyer shall request from each of the Reference Market-makers it has selected a quotation of the amount in Dollars which that Reference Market-maker would charge on the Early Termination Date as a flat amount for entering into an agreement, effective on the Early Termination Date, pursuant to which it would be obligated to make all the payments scheduled to be made by the Seller under Section 2 of this Agreement after the Early Termination Date.

 

(c) The Market Quotation shall be the arithmetic mean (rounded up, if necessary, to the nearest cent) of the amounts described in Section 12(b) that are quoted to the Buyer by the Reference Market-makers it has selected or, if only one Reference Market-maker will quote such a fee, the Market Quotation Value shall be the amount quoted by that Reference Market-maker.

 

Section 13. Costs and Expenses.

 

(a) Each of the parties shall pay, or reimburse the other on demand for, all stamp, registration, documentation or similar taxes or duties, and any penalties or interest that may be due with respect thereto, that may be imposed by any jurisdiction in respect of its execution or delivery of this Agreement.  If any such tax or duty is imposed by any jurisdiction as the result of the conduct or status of both parties, each party shall pay one half of the amount of the tax or duty.

 

(b) The Seller shall pay, or reimburse the Buyer on demand for, all reasonable costs and expenses incurred by the Buyer in connection with enforcement of its rights under this Agreement or as a consequence of a Termination Event, including, without limitation, fees and expenses of legal counsel.

 

Section 14. Nonassignment. Neither party shall assign or otherwise transfer its rights or obligations hereunder or any interest herein to any other Person or any of its other branches or offices without the prior written consent of the other party to this Agreement and Freddie Mac, unless the assignment or transfer by the Seller is pursuant to Section 5 or Section 6 and provided that:

 

(a) the Seller gives the Buyer 10 Business Days’ prior written notice of the assignment or transfer;

 

(b) the assignee or transferee meets the criteria set forth in Section 5(a) or Section 6(b), as the case may be;

 

(c) the credit policies of the Buyer or Freddie Mac at the time would permit the Buyer to purchase an interest rate cap from the assignee or transferee without credit support;

 

(d) a Termination Event does not occur as a result of such transfer;

 

(e) on or prior to the effective date of the transfer, this Agreement (including, without limitation, any Tax covenants (if any) in Exhibit B to this Agreement) and all other related documents shall have been amended to reflect the transfer in a manner reasonably satisfactory to Buyer; and

 

(f) on or prior to the effective date of the transfer, Seller shall have agreed in writing to indemnify and hold harmless Buyer in a manner reasonably satisfactory to Buyer from and against any adverse tax consequences and any related fees, expenses and other losses resulting from the transfer, subject to the following conditions:  (i) notwithstanding Seller’s duty to indemnify Buyer, Buyer shall at all times retain sole control and decision-making authority with regard to any tax issues affecting Buyer or related litigation arising from or in connection with said transfer; and (ii) such indemnification shall be made as such expenses are incurred by Buyer and at such time as Buyer is required to pay any such tax liability, provided that Seller shall not be required to make such indemnification until five Business Days after it has received written notice from Buyer of expenses or liabilities for which Buyer seeks reimbursement.

 

Any purported transfer in violation of this Section shall be void.  The parties are acting for purposes of this Agreement through their respective branches or offices specified in Exhibit A.

 

The Seller shall not withhold its consent to an assignment or transfer proposed by the Buyer, or by any subsequent assignee or transferee of the Buyer, if the Seller would be entitled to make the payments it is required to make pursuant to Section 2 to the proposed assignee or transferee lawfully and without withholding for or on account of Taxes and the proposed assignee or transferee assumes the obligations of the Buyer under the Tax covenants (if any) of the Buyer in Exhibit B to this Agreement to the satisfaction of the Seller.  Notwithstanding the provisions of this Section 14 to the contrary, the Seller consents to the assignment of the Buyer’s interest herein ultimately to Freddie Mac.  Accordingly, all payments hereunder shall be made in accordance with Section 3 hereof and to the account of  Freddie Mac as specified in Exhibit A hereto.  The Seller agrees that Freddie Mac may exercise the rights of the Buyer hereunder from time to time, and Buyer agrees that the Seller may rely conclusively on the written instructions of Freddie Mac to Seller made pursuant to this Agreement.

 

Section 15. Waivers: Rights Not Exclusive.  No failure or delay by a party in exercising any right hereunder shall operate as a waiver of, or impair, any such right.  No single or partial exercise of any such right shall preclude any other or further exercise thereof or the exercise of any other right.  No waiver of any such right shall be effective unless given in writing.  No waiver of any such right shall be deemed a waiver of any other right hereunder.  The right to terminate provided for herein is in addition to, and not exclusive of, any other rights, powers, privileges or remedies provided by law.

 

Section 16. Interpretation.  The section headings in this Agreement are for convenience of reference only and shall not affect the meaning or construction of any provision hereof.

 

Section 17. Notices.  All notices in connection with this Agreement shall be given by telex or cable or by notice in writing hand-delivered or sent by facsimile transmission or by airmail, postage prepaid.  All such notices shall be sent to the telex or telecopier number or address (as the case may be) specified for the intended recipient in Exhibit A (or to such other number or address as that recipient may have last specified by notice to the other party).  All such notices shall be effective upon receipt, and confirmation by answerback of any notice sent by telex as provided herein shall be sufficient evidence of receipt thereof, and telephone confirmation of receipt of any facsimile transmission in accordance with Exhibit A shall be sufficient evidence of receipt thereof.

 

Section 18. Amendments.  This Agreement may be amended only by an instrument in writing executed by the parties hereto.

 

Section 19. Survival.  The obligations of the parties under Section 6, Section 11 and Section 13 shall survive payment of the obligations of the parties under Section 2 and Section 4 and the termination of their other obligations hereunder.

 

Section 20. Jurisdiction; Governing Law.

 

(a)           Any action or proceeding relating in any way to this Agreement may be brought and enforced in the courts of the State of New York or of the United States for the Southern District of New York, and each of the parties irrevocably submits to the nonexclusive jurisdiction of each such court in connection with any such action or proceeding.

 

(b)           This Agreement shall be governed by, and construed in accordance with, the law of the State of New York without reference to its choice of law doctrine.

 

Section 21. Independence of this Agreement. It is the parties’ intention that no other agreements or arrangements between them or any of their affiliates affect the transaction provided for herein except as expressly provided herein.  Therefore, except as expressly provided herein, the Seller’s obligation to make payments to the Buyer hereunder shall not be subject to early termination or to any condition precedent, no such payment obligation shall be netted against any payment due from the Buyer or any third party under any other agreement or instrument, and neither the Seller nor any third party shall have any right to set off any such payment due from the Seller to the Buyer or withhold any such payment, in whole or in part, pending payment of any amount payable by the Buyer or any third party to the Seller or any third party.  In addition, the terms set forth in this provision may not be modified except in a written amendment to this Agreement executed by both parties hereto that (i) is expressly identified in capital letters as modifying this provision (identified by its title) and (ii) deals only with such modification.

 

Section 22. Waiver of Jury Trial. Each of the Buyer and the Seller, respectively, hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to this Agreement or any Credit Support Document.  Each of the Buyer and the Seller (i) certifies that no representative, agent or attorney of the other party or any Credit Support Provider has represented, expressly or otherwise, that such other party would not, in the event of such suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into this Agreement and provide for any Credit Support Document, as applicable, by, among other things, the mutual waivers and certifications in this Section.

 

Section 23. Setoff.  The obligation to pay amounts due hereunder shall be absolute and unconditional and shall not be subject to diminution by set-off, recoupment, counterclaim, abatement or otherwise.

 

Section 24. Counterparts: Integration of Terms.  This Agreement may be executed in counterparts, and the counterparts taken together shall be deemed to constitute one and the same agreement.  This Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all oral statements and prior writings with respect thereto.

 

Section 25. Contractual Currency.  The provision on Contractual Currency set forth in Part 4 of Exhibit A will apply if the Seller or any Credit Support Provider for the Seller is not organized in the U.S. or is acting through any office outside the U.S.

 

  

  

  

IN WITNESS WHEREOF the parties have caused this Agreement to be duly executed and delivered as of the day and year first written above.

 

ROYAL BANK OF CANADA

 

By      /s/ Irene Klausmann                                                                      

Name    Irene Klausmann                                                                      

Title      Authorized Signatory                                                                      

 

ATAX TEBS I, LLC, a Delaware limited liability company

 

	
  

	
By: AMERICA FIRST TAX EXEMPT INVESTORS, L.P., a Delaware limited partnership

Its:  Member

 

	
  

	
By: AMERICA FIRST CAPITAL ASSOCIATES LIMITED PARTNERSHIP TWO, a Delaware limited partnership

        Its:  General Partner

	
  

	
By:   THE BURLINGTON CAPITAL GROUP LLC, a Delaware limited liability company

            Its:    General Partner

            By:     /s/ Michael J. Draper                  

                     Michael J. Draper

                     Chief Financial Officer

 [Signature Page to ATAX TEBS I, LLL  Rate Cap Agreement]

  

  

  

EXHIBIT A

 

 

NOTICE ADDRESSES AND OTHER MATTERS

 

Part 1:                                Addresses for Notices and Accounts for Payments:

 

The Seller:

 

	
Address:

	
ROYAL BANK OF CANADA

2nd Floor

Royal Bank Plaza

200 Bay Street

Toronto, Ontario  M5J 2W7

Attention:  Managing Director, Global Middle Office

Facsimile:  (416) 842-4839

	
Payments to Seller:

	
Bank Name:  JPMorgan Chase Bank, New York

ABA#: 021000021

Account Name: Royal Bank of Canada, Toronto

Account Number: 001-1-153004

Beneficiary Swift No.: ROYCCAT3IMM

The Buyer:

 

	
Address:

	
ATAX TEBS I, LLC

1004 Farnam Street, Suite 400

Omaha, NE  68102

Attention:  Chad L. Daffer, Fund Manager

Telephone:  402-930-3085

Facsimile:  402-930-3047

copies to Freddie Mac:

 

	
Address:

	
Federal Home Loan Mortgage Corporation

8100 Jones Branch Drive

McLean, Virginia 22102

Attention: Multifamily Management and Information Control

Facsimile:  (703) 714-3273

Telephone:  (703) 903-2000

 

                       and

 

	  	
Federal Home Loan Mortgage Corporation

8200 Jones Branch Drive

McLean, Virginia 22102

Attention:  Associate General Counsel – Multifamily (Legal Division)

Facsimile:  (703) 903-2885

Telephone:  (703) 903-2000

 

                       and

 

	  	
Federal Home Loan Mortgage Corporation

8100 Jones Branch Drive

McLean, Virginia 22102

Attention: Multifamily Servicing

Facsimile:  (703) 714-3003

Telephone:  (703) 903-2000

 

Payments to Buyer (pursuant to Section 3, payments are to be made as will be specified):

 

Bank Name:                                                         FRB New York

 

Bank ACCT Name:                                            FHLMC Investor PI

 

ABA #:                                                                  021039513

 

Bank ACCT #:                                                     380530

 

Reference:                                                            MFTEBS

 

ATTN:                                                                   MFRRO – Loan Accounting 714-4177

 

Part 2:                                Documents to be delivered by the Seller to the Buyer contemporaneously with this Rate Cap Agreement:

 

	
(a)

	
Credit Support Document to be delivered by the Seller:  Credit Support Annex on standard ISDA form with paragraph 13 in the form attached as Exhibit C hereto

 

	
(b)

	
[RESERVED]

 

	
(c)

	
[RESERVED]

 

	
(d)

	
[RESERVED]

 

Part 3:                                Credit Support Provider for the Seller:  NONE

 

Part 4:                                Each reference in this Agreement to Dollars (the “Contractual Currency”) is of the essence.  The obligation of each party in respect of any amount due under this Agreement in the Contractual Currency is, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the Contractual Currency that the intended payee may, in accordance with normal banking procedures, purchase with the sum paid in that other currency (after any premium and costs of exchange) on the Business Day in New York City immediately following the day on which that payee receives the payment.  If the amount in the Contractual Currency that may be so purchased for any reason falls short of the amount originally due, the party owing that amount shall pay such additional amount, in the Contractual Currency, as is necessary to compensate for the shortfall.  Any obligation of that party not discharged by that payment shall, to the fullest extent permitted by applicable law, be due as a separate and independent obligation and, until discharged as provided herein, shall continue in full force and effect.

 

  

  

  

EXHIBIT B

 

TAX REPRESENTATIONS AND COVENANTS

 

A.           Tax Representations and Covenants

 

Representations of each of the Seller and the Buyer

 

It is not required by any applicable law, as modified by the practice of any relevant governmental authority, to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 4 to be made by it to the other party) under this Agreement.  In making this representation, it may rely on (i) the accuracy of any representation made by the other party below in this Exhibit and (ii) the satisfaction of the covenant of that other party contained below in this Exhibit and the accuracy and effectiveness of any document provided by that other party pursuant to any such covenant.

 

B.           Payee Tax Representations

 

Of the Seller:

 

Seller is a federally chartered bank organized under the laws of Canada.

 

Of the Buyer:

 

Buyer is a United States person for purposes of the United States Internal Revenue Code of 1986, as amended, and is not acting as an agent or intermediary for a foreign Person.

 

C.           Covenants

 

Of Each Party:

 

If a party is required at any time to execute any form or document in order for payments to it hereunder to qualify for exemption from withholding for or on account of Taxes or to qualify for such withholding at a reduced rate, that party shall, as soon as practicable after request from the other party, execute the required form or document and deliver it to that other party.

 

Of the Seller:

 

W-8BEN

 

Of the Buyer:

 

W-9

 

 Freddie Mac Form:  Revision January 23, 2006

4832-6767-5904.4

  

  

  

EXHIBIT C

 

 

FORM OF PARAGRAPH 13 OF CREDIT SUPPORT ANNEX

 

Paragraph 13.  Elections and Variables

 

	
(a)

	
Security Interest for “Obligations.”  The term “Obligations” as used in the Annex includes the following additional obligations:  Not Applicable.

 

	
(b)

	
Credit Support Obligations.

 

	
  

	
(i)

	
Delivery Amount, Return Amount and Credit Support Amount.

 

	
  

	
(A)

	
“Delivery Amount” has the meaning specified in Paragraph 3(a), unless otherwise specified here:  None Specified

 

	
  

	
(B)

	
“Return Amount” has the meaning specified in Paragraph 3(b), unless otherwise specified here:  None Specified

 

	
  

	
(C)

	
“Credit Support Amount” means, for any Valuation Date (i) the Secured Party’s Exposure for that Valuation Date plus (ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any, minus (iii) the Pledgor’s Threshold; provided, however, that (x) in the case where the sum of the Independent Amounts applicable to the Pledgor exceeds zero, the Credit Support Amount will not be less than the sum of all Independent Amounts applicable to the Pledgor and (y) in all other cases, the Credit Support Amount will be deemed to be zero whenever the calculation of Credit Support Amount yields an amount less than zero.

 

	
  

	
(ii)

	
Eligible Collateral.  Debt obligations of the Federal Home Loan Mortgage Corporation shall not qualify as “Eligible Collateral”.  The following items will qualify as “Eligible Collateral”:

 

	  	
Remaining Maturity

	  
	
 

 

 

ICAD Code

	
 

 

One (1) year or under

	
More than one (1) year up to and including five (5) years

	
More than five (5) years up to and including ten (10) years

	
 

 

More than ten (10) years

	
 

US-CASH

	
 

100%

	
 

N/A

	
 

N/A

	
 

N/A

	
US-TBILL

	
99%

	
N/A

	
N/A

	
N/A

	
US-TNOTE

	
99%

	
98%

	
95%

	
N/A

	
US-TBOND

	
99%

	
98%

	
95%

	
95%

	
  

	 

 

	
  

	
(iii)

	
Other Eligible Support.  There shall be no “Other Eligible Support” for either Party A or Party B.

 

	
  

	
(iv)

	
Thresholds.

 

	
  

	
(A)

	
“Independent Amount” for Pledgor means, with respect to each Transaction, zero.

 

	
  

	
(B)

	
“Threshold” for the Pledgor means the amounts determined on the basis of the lower of the Long Term Debt Ratings set forth in the following table, provided, however, that if (i) the Pledgor has no Long Term Debt Rating, or (ii) an Event of Default has occurred and is continuing with respect to the Pledgor, the Threshold shall be USD$0.

 

	
Long Term Debt Rating

(the higher of S&P/Moody’s)

	
Threshold

	  	  
	
A+/A1 or above

	
Infinity

	
A/A2

	
$1,000,000

	
At or below A-/A3

	
$0

As used herein:

 

“Long Term Debt Rating” means with respect to the Pledgor, the public or private rating assigned by S&P or Moody’s, to the extent the Pledgor is rated by such organization, to the long term, unsecured and unsubordinated indebtedness of such party, or, if applicable, the Credit Support Provider.  If a party has been assigned a private rating by S&P or Moody’s, such party is responsible to advise such private rating and any changes to such private rating to the other party and to provide any relevant credit reports to the other party.

 

“S&P” means Standard & Poor’s Ratings Group.

 

“Moody’s” means Moody’s Investors Service.

 

	
  

	
(C)

	
“Minimum Transfer Amount” means, with respect to Pledgor, USD$10,000; provided, that if an Event of Default has occurred and is continuing with respect to Pledgor, the Minimum Transfer Amount with respect to Pledgor shall be zero.

 

	
  

	
(D)

	
Rounding.  The Delivery Amount and the Return Amount will be rounded up or down respectively to the nearest integral multiple of USD$1,000.

 

	
(c)

	
Valuation and Timing.

 

	
  

	
(i)

	
“Valuation Agent” means the Secured Party.

 

	
  

	
(ii)

	
“Valuation Date” means each Local Business Day.

 

	
  

	
(iii)

	
“Valuation Time” means the closing of business in the city of the Valuation Agent on the Local Business Day preceding the Valuation Date or the date of calculation, as applicable, provided that the calculations of Value and Exposure will be made as of approximately the same time on the same date.

 

	
  

	
(iv)

	
“Notification Time” means by 10:00 a.m., New York time, on a Local Business Day.

 

	
(d)

	
Conditions Precedent and Secured Party’s Rights and Remedies.  Each of the following Termination Events will be a “Specified Condition” for the Pledgor if the Pledgor is an Affected Party with respect for such Termination Event:

 

Credit Event Upon Merger                                                                                [X]

 

Additional Termination Events (if any)                                                           [X]

 

	
(e)

	
Substitution.

 

	
  

	
(i)

	
“Substitution Date” has the meaning specified in Paragraph 4(d)(ii) unless otherwise specified here:  None

 

	
  

	
(ii)

	
Consent.  The Pledgor does not need to obtain the Secured Party’s consent for any substitution pursuant to Paragraph 4(d).

 

	
(f)

	
Dispute Resolution.

 

	
  

	
(i)

	
“Resolution Time” means 1:00 p.m., New York Time, on the fifth Local Business Day following the date on which notice of a dispute is given under Paragraph 5.

 

	
  

	
(ii)

	
Value.  For the purpose of Paragraph 5(i)(C) and 5(ii), the Value of Eligible Collateral other than Cash will be calculated as follows:

 

the sum of (i) (x) the arithmetic mean of the closing bid prices quoted on the relevant date of three nationally recognized principal market makers (which may include an affiliate of Party A) for such security chosen by the Valuation Agent or (y) if no quotations are available from such principal market makers on the relevant date, the arithmetic mean of the closing bid prices on the next preceding date, multiplied by the appropriate Valuation Percentage set forth in subsection (b) of this Paragraph 13, plus (ii) the accrued interest on such security (except to the extent Transferred to a party pursuant to any applicable provision of this Agreement or included in the applicable price referred to in (i) of this clause) as of such date.

 

	
  

	
(iii)

	
Alternative.  Not Applicable.

 

	
(g)

	
Holding and Using Posted Collateral.

 

	
  

	
(i)

	
Eligibility to Hold Posted Collateral; Custodians.  Secured Party will be entitled to hold Posted Collateral only through its Custodian pursuant to Paragraph 6(b), provided that the following conditions applicable to it are satisfied:

 

(1)           The Secured Party:  The Secured Party is not a Defaulting Party; and

 

(2)           The Custodian:  The Custodian is Freddie Mac or a bank or trust company designated by the Secured Party and having total assets of at least USD $10,000,000,000.  The Custodian shall be designated by Freddie Mac if this Agreement is collaterally assigned to Freddie Mac.

 

Initially the Custodian shall be The Bank of New York Mellon Trust Company, N.A.

 

	
  

	
(ii)

	
Use of Posted Collateral.  The provision of Paragraph 6(c) will not apply.

 

	
(h)

	
Distributions and Interest Amount.

 

	
  

	
(i)

	
Interest Rate.  The Interest Rate will be the rate per annum equal to the overnight Federal Funds Rate for each day cash is held by the Secured Party as reported in Federal Reserve Publication H.15-519.

 

	
  

	
(ii)

	
Transfer of Interest Amount.  The Transfer of the Interest Amount will be made on the last Local Business Day of each calendar month and on any Local Business Day that Posted Collateral in the form of Cash is Transferred to the Pledgor pursuant to Paragraph 3(b).

 

	
  

	
(iii)

	
Alternative to Interest Amount.  Not Applicable.

 

	
(i)

	
Additional Representation(s).  Not Applicable.

 

	
(j)

	
“Other Eligible Support and Other Posted Support.”

 

	
  

	
(i)

	
“Value” with respect to Other Eligible Support and Other Posted Support means:  Not Applicable.

 

	
  

	
(ii)

	
“Transfer” with respect to Other Eligible Support and Other Posted Support means:  Not Applicable.

 

	
(k)

	
Demands and Notices.  All demands, specifications and notices made by one party to this Annex will be made pursuant to the Notices Section of this Agreement, unless otherwise specified here:

 

Party A:                                To be provided

Party B:                                To be provided

 

	
(l)

	
Address for Transfers.  Not Applicable.

 

	
(m)

	
Other Provisions.

 

	
  

	
(i)

	
Agreement as to Single Secured Party and Pledgor.  Party A and Party B agree that, notwithstanding anything to the contrary in the recital to this Annex, Paragraph 1(b) or Paragraph 2 or the definitions in Paragraph 12, (a) the term “Secured Party” as used in this Annex means only Party B, (b) the term “Pledgor” as used in this Annex means only Party A, (c) only Party A makes the pledge and grant in Paragraph 2, the acknowledgement in the final sentence of Paragraph 8(a) and the representations in Paragraph 9 and (d) only Party A will be required to make Transfers of Eligible Credit Support hereunder.

 

	
  

	
(ii)

	
FIRREA.  Party A, if an FDIC-insured depository institution, represents that (i) this Annex has been executed and delivered by a duly appointed or elected and authorized officer of Party A of the level of vice president or higher and (ii) Party A has taken all necessary action to authorize the execution, delivery and performance of this Annex.

 

	
  

	
(iii)

	
Posted Collateral.  The definition of Posted Collateral shall also include any and all accounts in which Cash Collateral is held.

 

	
  

	
(iv)

	
Additions to Paragraph 3.  The following subparagraph (c) is hereby added to Paragraph 3 of this Annex:

 

No Offset.  On any Valuation Date, if (i) each party is required to make a Transfer under Paragraph 3(a) and (ii) each party is required to make a Transfer under Paragraph 3(b), then the amounts of those obligations will not offset each other.

	
  

	
(v)

	
Fees of Custodian and Valuation Agent.  Notwithstanding any other provision contained in this Annex, Pledgor shall pay all fees and charges of the Custodian related to the holding and maintenance of the Posted Collateral.

 

	
  

	
(vi)

	
Exposure.  The definition of the term “Exposure” contained in Paragraph 12 of this Annex is deleted in its entirety and the following language is substituted therefor:  “Exposure” means for any Valuation Date or other date for which Exposure is calculated and, subject to Paragraph 5 in the case of a dispute, the amount, if any that would be payable to Party B pursuant to Section 11 of this Agreement as if this Agreement were being terminated as of the relevant Valuation Time.

 

	
  

	
(vii)

	
Agreement.  Any reference herein to the “Agreement”, “Master Agreement” or “Schedule” shall be deemed to refer to the Rate Cap Agreement between Party A and Party B dated as of even date herewith.

	
  

	
(viii)

	
Freddie Mac Shall Act on Behalf of the Secured Party. Party A and Party B acknowledge and agree that, so long as the Cap Agreement is collaterally assigned to Freddie Mac, Freddie Mac  shall act as Valuation Agent hereunder on behalf of Party B and shall act as the Secured Party for purposes of making demands for and holding collateral and receiving demands for any Return Amount.Greenlite Ventures Inc.: Exhibit 10.6 - Filed by newsfilecorp.com

CARBON OFFSET MARKETING AGREEMENT

This Carbon Offset Marketing Agreement (the “Agreement”) is
dated for reference the 14th day of August, 2010 (the “Effective
Date”).

BETWEEN:

	 	UNITED NATURE INC., a Panama
      corporation having its head office 	 
	 	at Calle Alberto Navarro, Edif Raphin, piso 3,
      El Cangrejo, Panama, 	 
	 	PO Box 0823-05980 Republic of Panama 	 
	 	  	 
	 	(the “Company”) 	 

OF THE FIRST PART

AND:

	 	GREENLITE VENTURES INC., a Nevada
      corporation having its head 	 
	 	office at 810 Peace Portal Drive, Suite 201,
      Blaine, WA 	 
	 	  	 
	 	(the “Distributor”) 	 

OF THE SECOND PART

WHEREAS:

A. The Company is engaged in the business of reforestation of
previously deforested land in the Republic of Panama and owns and manages teak
plantations that produce Carbon Offsets by sequestration of CO2; and

B. The Distributor wishes to acquire the exclusive rights to
market and distribute the Carbon Offsets generated by the teak plantations owned
or managed by the Company on the terms and conditions contained herein.

NOW THEREFORE THIS AGREEMENT WITNESSES that in
consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:

	1. 	DEFINITIONS 
	  	
       

	(a) 	
      “Aggregator” means any entity that collects, combines,
      completes the administrative work and brokers the Carbon Offsets.
  

	  	
       

	(b) 	
      “Annex I/B County” means Countries listed in Annex I of
      the UN Framework Convention on Climate Change (UNFCCC) are developed
      countries expected to take the lead in responding to climate change and
      Annex I/B countries are all but two of the Annex I countries that are also
      listed in Annex B of the Kyoto Protocol and have agreed to a target for
      their greenhouse gas emissions. 

	  	
       

	(c) 	
      “Cap and Trade” means a system for controlling emissions
      of environmental pollutants, whereby overall emissions are capped, but
      actors covered can allocate emissions rights by trading. 

	  	
       

	(d) 	
      “Carbon Offset” means a unit of GHG emissions reduction
      equal to one ton carbon dioxide equivalent (CO2e) in one part of the world
      that offsets an equivalent amount of GHG emissions in another part of the
      world. 

	  	
       

	(e) 	
      “Carbon Offset Market” means a type of commodity market
      in which certified or verified Carbon Offsets are sold to emitters of
      greenhouse gases by projects that are generating emissions reductions.
    

	  	
       

	(f) 	
      “Carbon Offset Plan” means the Distributor’s plan to sign
      up plantations in Panama to sell Carbon Offsets.

-2-

	(g) 	
      “Carbon Offset Project” means a project that reduces the
      rate of global GHG accumulation by generating additional emissions
      reductions or increasing the rate of removal of greenhouse gases from the
      atmosphere. More specifically, Carbon Offsets generated by Land Use, Land
      Use Change and Forestry.

	 	 
	(h) 	
      “Carbon Sinks” means locations that absorb and store
      carbon dioxide.

	 	 
	(i) 	
      “Certified Emissions Reduction (CER)” means climate
      credits (or carbon credits) issued by the Clean Development Mechanism
      (CDM) Executive Board for emission reductions achieved by CDM projects and
      verified by a DOE under the rules of the Kyoto Protocol. CERs can be used
      by Annex 1 countries in order to comply with their emission limitation
      targets or by operators of installations covered by the European Union
      Emission Trading Scheme (EU ETS) in order to comply with their obligations
      to surrender EU Allowances, CERs or Emission Reduction Units (ERUs) for
      the CO2 emissions of their installations. CERs can be held by governmental
      and private entities on electronic accounts.

	 	 
	(j) 	
      “Clean Development Mechanism (CDM),” means a
      project-based flexible mechanism whereby Annex I/B countries can purchase
      carbon credits from projects in non-Annex I/B countries, if the project
      developers can demonstrate that the projects will generate additional
      emissions reductions and contribute to clean and sustainable development
      in the host countries.

	 	 
	(k) 	
      “CDM Executive Board (EB)” means International authority
      which supervises the registration of CDM projects and CDM-related
      procedures.

	 	 
	(l) 	
      “Company Carbon Offsets” means Carbon Offsets generated
      by the Company Plantations.

	 	 
	(m) 	
      “Company Plantations” means the Teak Plantations in
      Panama owned by the Company which at date of this Agreement cover
      approximately _____hectares as more particularly set out in Schedule A
      attached hereto.

	 	 
	(n) 	
      “Designated Operational Entity (DOE)” means a private
      firm with experience in audit, monitoring, evaluation and verification
      that has been accredited by the CDM Executive Board (EB) as a competent
      project evaluator which is qualified to prepare validation and
      verification reports for CDM projects.

	 	 
	(o) 	
      “Emissions Reduction” means either the absolute reduction
      in the level of future human-induced GHG emissions below the level of
      emissions in a selected period in the past, or a reduction in the level of
      future GHG emissions below the level of emissions that would result from a
      continuation of current trends.

	 	 
	(p) 	
      “Greenhouse Gases (GHG)” means gases that form a thick
      blanket in the earth's upper atmosphere and absorb radiation emitted by
      the earth’s surface and by clouds (infrared radiation), trapping part of
      the absorbed energy, which, in turn, warms the planetary
surface.

	 	 
	(q) 	
      “Land Use, Land Use Change and Forestry (LULUCF)” means
      activities that can mitigate climate change by sequestering carbon and
      creating Carbon Sinks.

	 	 
	(r) 	
      “Managed Plantations” means the plantations managed by
      the Company in Panama which as of the date of this Agreement cover
      approximately _____hectares as more particularly set out in Schedule B
      attached hereto.

	 	 
	(s) 	
      “Managed Plantation Carbon Offsets” means the Carbon
      Offsets generated by the Managed Plantations.”

	 	 
	(t) 	
      “Non-Annex I/B Country” means Countries not listed in
      Annex I to the UNFCCC not in Annex B of the Kyoto Protocol, generally
      developing countries.

	 	 
	(u) 	
      "Securities Act" means the United States Securities Act
      of 1933, as amended.

	 	 
	(v) 	
      “Sequestration” means natural process whereby carbon
      dioxide is removed from the atmosphere by new growth vegetation and stored
      (sequestered) in above- and below-ground biomass and soil
  biota.

-3-

	(w) 	
      “Teak” means a type of tropical hardwood tree.

	 	 
	(x) 	
      “Transaction Costs” means costs involved in preparing
      Carbon Offsets for market sale.

	 	 
	(y) 	
      “Verified Emission Reduction (VER)” means one ton of GHG
      emission reductions expressed in carbon dioxide equivalent units
      reduced—hence CO2 emission reductions, or VERs. VERs are usually traded in
      increments of tons. VERs are verified by a verifier that is certified by a
      Carbon Offset standard, exchange or both.

	 	 
	(z) 	
      “Voluntary Offset Market” means a commodity market for
      trading credits certified Carbon Offsets (CER), verified Carbon Offsets
      (VER) or any other credit type generated by Carbon Offset
  projects.

2.         
GRANT OF DISTRIBUTION RIGHTS

2.1.       The Company hereby
grants to the Distributor the exclusive rights to market and sell all Company
Offsets;

2.2.       The Company agrees to
use its best efforts to have the Owners of the Managed Plantations grant
distribution rights for the Managed Plantation Offsets to the Distributor.

2.3.       The Distributor will
have the Company Carbon Offsets and Managed Plantation Carbon Offsets certified
or verified, to the extent necessary to sell the Company Carbon Offsets and
Managed Plantation Carbon Offsets, by such certifier or verifier the Distributor
may choose;

2.4.       The Distributor may
subject the Carbon Offsets to multiple certifications or verifications to
conform with changing industry standards or to change to different platforms
that exchange Carbon Offsets;

2.5.       The Carbon Offsets
will be created by Land Use, Land Use Change and Forestry (LULUCF);

2.6.       The Distributor will
retain exclusive distribution rights to any Carbon Offsets created either
directly or indirectly by Company Plantations;

2.7.       The Company agrees
assist in any verification or certification process initiated by the Distributor
and comply with any tests to:

	 	i. 	
      register the Carbon Offset Project;

	 	 	 
	 	ii. 	
      register the Distributor as the Carbon Offset Project’s
      Aggregator; and

	 	 	 
	 	iii. 	
      verify/certify Company Carbon
Offsets.

2.8.       If for any reason the
Carbon Offset production exceeds the threshold which allows for an Aggregator,
the Company agrees to enter into an agency or partnership agreement that will
permit the sharing of proceeds on the terms set out in Section 3 below from the
sale of Carbon Offsets.

3.      
   OFFSET PRICES AND PAYMENT

3.1.       The Distributor will
set the price of Company Carbon Offsets and Managed Plantation Carbon Offsets
for private sales on the Internet;

3.2.       The price of Project
Carbon traded on the Chicago Climate Exchange or through another VER exchange
will be determined by the market price of VERs;

3.3.       The price of Company
Carbon Offsets and Managed Plantation Carbon Offsets traded through the CDM will
be determined by the market value of CERs;

-4-

3.4.       Proceeds from the
sales of Company Carbon Offsets and Managed Plantation Carbon Offsets will be
split 50/50 after deduction of Transaction Costs incurred by the Distributor to
have the Company Carbon Offsets and Managed Plantation Carbon Offsets certified
by a credible certified verifier;

3.5.       For each of the
Distributor’s fiscal quarters occurring wholly or partly during the term of this
Agreement, the Distributor shall within sixty (60) days after the end of each
such fiscal quarter, deliver to the Company its share of the proceeds from the
sales of Carbon Offsets generated in accordance with Sections 3.4 and 6.2.

3.6.       Proceeds will only be
disbursed after all Transaction Costs are deducted;

3.7.       The proceeds from the
sale of Carbon Offsets may be subject to different Transaction Costs depending
on the means used by the Distributor to facilitate the sales of Carbon
Offsets.

4.         
ISSUANCE OF SHARES

4.1.       Upon execution of this
Agreement Distributor shall issue 3,000,000 shares of the Distributor’s common
stock (the “Shares”) to the Company. The Shares will be released to the Company
on the following basis:

	 	i. 	
      500,000 Shares on execution of this Agreement;

	 	 	 
	 	ii. 	
      500,000 Shares upon the first anniversary of the
      Effective Date;

	 	 	 
	 	iii. 	
      500,000 Shares upon the second anniversary of the
      Effective Date;

	 	 	 
	 	iv. 	
      500,000 Shares upon the third anniversary of the
      Effective Date;

	 	 	 
	 	v. 	
      500,000 Shares upon the fourth anniversary of the
      Effective Date; and

	 	 	 
	 	vi. 	
      500,000 Shares upon the fifth anniversary of the
      Effective Date.

4.2.       The Company is not a
“U.S. Person” as defined by Regulation S of the Securities Act and is not
acquiring the Distributor’s Shares for the account or benefit of such a U.S.
Person.

4.3.       The Company represents
and warrants to the Distributor that it is acquiring the Shares for investment
purposes only, with no present intention of dividing its interest with others or
reselling or otherwise disposing of any or all of the Shares.

4.4.       The Company was not in
the United States at the time the offer to acquire the Shares was received. 

4.5.       The Company
acknowledges that the Shares are “restricted securities” within the meaning of
the Securities Act and will be issued to the Company in accordance with
Regulation S of the Securities Act. Any certificates representing the Shares
will be endorsed with a legend in accordance with Regulation S of the Securities
Act substantially as follows:

	
      “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
      NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"),
      AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE
      REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S
      PROMULGATED UNDER THE ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR
      SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH
      THE PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE
      REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
      FROM REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS INVOLVING THE
      SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
      ACT”. 

-5-

5.          
RECRUITMENT 

5.1.        The Company will
assist the Distributor in signing up plantations within the Republic of Panama
not owned or managed by them (the “Other Plantations). In such a case the
Distributor and the Company will share net proceeds on the same basis as
proceeds from the sale of Carbon Offsets from the Managed Plantations;

6.         
MARKETING OF CARBON OFFSETS

6.1.        The Distributor
shall have exclusive, unfettered discretion to market and sell the Company’s
Carbon Offsets in a manner in which the Distributor sees most practical for both
the Company and the Distributor;

6.2.        The Distributor
has the right to market and sell such Carbon Offsets via any of the
following:

	 	i. 	
      direct sales to consumers through the Internet;

	 	 	 
	 	ii. 	
      private sales to producers of GHGs.

	 	 	 
	 	iii. 	
      sales facilitated through a Voluntary Offset
    Market;

	 	 	 
	 	iv. 	
      sales facilitated through the Clean Development
      Mechanism; or

	 	 	 
	 	v. 	
      such other Carbon Offset trading mechanisms as the
      Distributor deems appropriate.

6.3.        To the extent
that the Distributor shall obtain marketing rights to Carbon Offsets from
Managed Plantations and Other Plantations the Distributor shall in its sole
discretion determine the order in which the Company Carbon Offsets, Managed
Plantation Carbon Offsets and such other Carbon Offsets shall be sold having
regard to such factors as the date on which it contracted to market the Carbon
Offsets, the timing of verification or certification and the timing of any FSC
certifications for such Plantations and the requirements of the proposed
marketing channel for the Carbon Offsets;

6.4.        The Distributor
may in it’s discretion hire a sub-distributor to assist in facilitating the
exchange of the Company’s Carbon Offsets either online or through an organized
exchange;

7.         
ADDITIONAL COVENANTS OF THE DISTRIBUTOR

7.1.        The Distributor
makes no warranty as to the market value of the Carbon Offsets created by the
Company;

7.2.        The Distributor
in no way guarantees that:

	 	i. 	
      the project is eligible for any registration as a
      producer of Carbon Offsets;

	 	 	 
	 	ii. 	
      that any revenues will result from the sale of Carbon
      Offsets; and

	 	 	 
	 	iii. 	
      that the Distributor will be eligible to act as an
      Aggregator, or an Agent of the Company for selling Carbon Offsets on a
      Registered Exchange.

7.3.        The Distributor
will throughout the term of this Agreement establish and maintain suitable sales
systems to sell the Carbon Offsets; and comply with all applicable laws and
regulations regarding the sale of Carbon Offsets, including all international
trade laws.

8.          
ADDITIONAL COVENANTS OF THE COMPANY

8.1.        The Company will
be responsible to obtain and maintain its FSC certification;

8.2.        The Company will
during the term of this Agreement:

-6-

	 	i. 	
      provide the Distributor with such information as the
      Distributor reasonably requests in order to assist the Distributor in the
      preparation of sales promotional material and shall provide the
      Distributor with its promotional materials in order to facilitate
      advertising of the Carbon Offsets;

	 	 	 
	 	ii. 	
      provide assistance to any and all persons required to
      enter the Company’s plantations to inspect for certification and
      verification purposes; and

	 	 	 
	 	iii. 	
      permit the Distributor to hold itself out as the
      authorized distributor of the Company Carbon
Offsets.

9.         
TERM AND TERMINATION

9.1.        The term of this
Agreement (the “Term”) commences on the Effective Date of this Agreement and
will continue for ten (10) years renewable at the option of the Distributor for
an additional ten (10) years at the end of the first ten (10) year term in
accordance with the provisions of this Agreement. In the event that the Term
continues until twenty (20) years from the Effective Date, the term of this
Agreement may only be extended by a written agreement between the Company and
the Distributor for the subsequent term.

9.2.        If the
Distributor is unable to produce cumulative proceeds to the Company of $100,000
USD by the fifth anniversary or the Effective Date, the Company may grant
non-exclusive distribution rights to other Carbon Offset Marketers for the
remainder of the Term.

9.3.        If the Company
grants non-exclusive distribution rights to other carbon offset marketers
pursuant to Section 9.2 of this agreement, the Company must return 50% of all
securities issued under Section 4.1 to the Distributor.

9.4.        The Company
shall not in any circumstances intentionally breach this Agreement. If it is
found that the Company intentionally breached this contract in order to grant
similar rights to a third party, the Distributor shall be entitled to 50% of all
revenues (less Transaction Costs) from the sale of Carbon Offsets generated by
the Company until June 30, 2030.

9.5.        Each of the
Distributor and the Company shall have the right to terminate this Agreement
upon the occurrence of any of the following events, such termination to be
effective immediately upon the receipt of or deemed receipt by the other party
of notice to that effect and the expiry of any applicable period for remedy of
the default:

	 	i. 	
      if a party is in default of any of the provisions, terms
      or conditions herein contained and shall fail to remedy such default
      within sixty (60) days of written notice thereof from the other party,
      provided that if the default is the non-payment of any monetary amount,
      the defaulting party will have a period of thirty (30) days from receipt
      of notice in which to remedy the default;

	 	 	 
	 	ii. 	
      the other party becomes bankrupt or insolvent, makes an
      assignment for the benefit of it’s creditors or attempts to avail itself
      of any applicable statute relating to insolvent debtors;

	 	 	 
	 	iii. 	
      if the other party winds-up, dissolves, liquidates or
      takes steps to do so or otherwise ceases to function as a going concern or
      is prevented from reasonably performing its duties hereunder; or

	 	 	 
	 	iv. 	
      if a receiver or other custodian (interim or permanent)
      of any of the assets of the other party is appointed by private instrument
      or by court order or if any execution or other similar process of any
      court becomes enforceable against the other party or it’s assets or if
      distress is made against the other party’s assets or any part
    thereof.

	9.6.       
      Upon termination of this Agreement for any reason whatsoever, the
      following shall apply:
	 	 	 
		i. 	
      those rights and obligations of each of the Company and
      the Distributor which are expressly stated to survive termination of the
      Agreement will survive termination and will continue in full force and
      effect;

-7-

	 	ii. 	
      all rights and privileges granted by the Company to the
      Distributor pursuant to this Agreement, including rights to market,
      distribute, and sell Company Carbon Offsets, will immediately terminate
      and be relinquished by the Distributor, and thereafter the Distributor
      shall take no action that would make it appear to the public that the
      Distributor is still supplying Carbon Offsets from the Company;

	 	 	 
	 	iii. 	
      the Distributor shall return to the Company all
      advertising, informational, or technical information given to the
      Distributor by the Company;

	 	 	 
	 	iv. 	
      the Distributor shall refrain from holding itself out as
      an authorized distributor of the Company’s Carbon Offsets;

	 	 	 
	 	v. 	
      the Distributor will retain in confidence all information
      regarding the business and products of the Company and the Carbon offsets;
      and

	 	 	 
	 	vi. 	
      all sub-distributorship agreements entered into by the
      Distributor will terminate.

The provisions of Section 9.4 shall survive the termination of
this Agreement.

10.         
RECORDS AND AUDIT

10.1.        The Distributor
shall keep and maintain during the currency of this Agreement, such full and
accurate records (including books of account) as are necessary to determine the
amounts payable hereunder 

10.2.        The Distributor
shall permit a member of the American Institute of Public Accountants designated
by the Company during normal business hours and upon reasonable notice to have
full access to such records, to audit them, and to make copies of the solely for
the purpose of verifying the accuracy thereof. The Company shall bear all costs
of such examination unless such examination reveals material misstatement or
mispayment for the amount owing by the Distributor to the Company of 5% or more,
in which event the Distributor shall bear all costs of such examination, and
Distributor agrees to promptly reimburse the Company for such costs;

If any such inspection reveals a shortfall in the proceeds
payable to the Company, hereunder then the Distributor shall forthwith pay the
full amount of such shortfall, to the Company; and

10.3.        For each of the
Distributor’s fiscal quarters occurring wholly or partly during the term of this
Agreement, the Distributor shall within sixty (60) days after the end of each
such fiscal year, deliver to the Company an accounting of the proceeds of the
sale of Company Carbon Offsets under this Agreement and a copy of the
Distributor’s financial statements for such fiscal quarter.

11.         
ASSIGNMENT

11.1.        Except as
permitted by Section 6 of this Agreement, the rights granted by this Agreement
may not be sold, assigned, sub-licensed or otherwise transferred by the
Distributor without the prior written consent of the Company, which consent
shall not be unreasonably withheld.

12.         
CONFIDENTIALITY

12.1.        Where used in
this Agreement, "Confidential Information" means all knowledge, information,
techniques, methods, processes, know how, business projections, and intellectual
property (whether or not reduced to writing; whether or not subject to
proprietary protection at law; and whether or not the information is already in
the public domain) in any way concerning or relating to the Carbon Offset
Project which in any way and at any time or times has been or may be
communicated to, acquired by, or learned of by the Company in the course of or
as a direct or indirect result of the Company’s access to information concerning
the Carbon Offset Project or the Carbon Offset Plan provided by the Distributor.
The Company specifically acknowledges and agrees in this Agreement,
"Confidential Information" includes information, which may be in the public
domain in some form but shall be considered confidential herein due to its
method of presentation as part and parcel of a system developed by the Company
utilizing the Carbon Offset Project and the Carbon Offset Plans;

-8-

12.2.        The Company
acknowledges that the success, profitability and competitive position of the
Distributor requires that strict confidentiality be maintained at all times with
respect to all Confidential Information, and that any breach of such
confidentiality is capable of causing substantial damage to the Distributor.
Accordingly, the Company covenants and agrees with the Company that:

	 	i. 	
      the Company shall at all times hereafter keep all
      Confidential Information in the strictest confidence;

	 	 	 	 
	 	ii. 	
      the Company shall hold all Confidential Information in
      trust for the Distributor; and

	 	 	 	 
	 	iii. 	
      the Company shall not at any time hereafter directly,
      indirectly or in any other manner:

	 	 	 	 
	 		a. 	
      publish or in any way participate or assist in the
      publishing of any Confidential Information;

	 	 	 	 
	 		b. 	
      utilize any Confidential Information, except only as may
      be required for and in the course of any provision of consulting services
      to the Distributor; or

	 	 	 	 
	 		c. 	
      disclose or assist in the disclosure of any Confidential
      Information to any person, firm, corporation or other entity
      whatsoever.

The provisions of this Section 12.2 shall not apply to any
Confidential Information which the Distributor expressly permits the disclosure
of, provided that the disclosure is made in compliance with any conditions
imposed in connection with the permission of such disclosure.

13.         
MISCELLANEOUS PROVISIONS

13.1.        Entire
Agreement. This Agreement constitutes the entire agreement between the parties
with respect to all matters herein contained, and its execution has not been
induced by, nor do any of the parties hereto rely upon or regard as material,
any representations or writings whatsoever not incorporated herein and made a
part hereof. This Agreement shall not be amended, altered or qualified except by
an instrument in writing, signed by all parties hereto and any amendments,
alterations or qualifications hereof shall not be binding upon or affect the
rights of any party who has not given its consent in writing.

13.2.        Interpretation.
The division of this Agreement into articles and sections is for convenience and
reference only and shall not affect the interpretation of construction of the
Agreement.

13.3.        Severability.
In the event that any of the covenants herein shall be held unenforceable or
declared invalid for any reason whatsoever, such unenforceability or invalidity
shall not affect the enforceability or validity of any remaining provisions of
the Agreement and such unenforceable or invalid portion shall be severable from
the remainder of this Agreement.

13.4.        Force Majeure.
In the event of an inability or failure of the Company to produce Carbon Offsets
herein by reason of any fire, explosion, war, riot, strike, walk-out, labor
controversy, flood, shortage of water, power, labor transportation facilities or
necessary materials or supplies, default or power failure of carriers, breakdown
in or the loss production or anticipated production from plant or equipment, act
of God or public enemy, any law, act or order of any court, board, government or
other authority of competent jurisdiction, or any other direct cause (whether or
not of the same character as the foregoing) beyond the reasonable control of the
company, then the Company shall not be liable to the Distributor and will ne be
deemed to be in default during the period and to the extent of such inability or
failure.

13.5.        Notices. All
notices, requests, demands, or communications made pursuant to the terms hereof
or required or permitted to be given by one party to another shall be given in
writing by personal delivery or by registered mail, postage prepaid, addressed
to such other party or delivered to such other party as follows:

-9-

	to the Company at: 	UNITED NATURE INC. 
	  	Calle Alberto Navarro, 
	  	Edif Raphin, piso 3 
	  	El Cangrejo, Panama 
	  	PO Box 0823-05980 
	  	Republic of Panama 
	  	Email: robert@unitednature.com 
	  	Fax: 
	  	  
	  	  
	to the Distributor at: 	GREENLITE VENTURES INC. 
	  	810 Peace Portal Drive, 
	  	Suite 201, Blaine, WA 98230 
	  	Email: howardthomson@hotmail.com 
	  	Fax: 360-230-2302 

or to such other address as may be given by any of them to the
other from time to time and such notices, requests, demands or other
communications shall be deemed to have been received when delivered, or, if
mailed, ten (10) business days following the date of mailing thereof, provided
that if any such notice, request, demand or other communication shall have been
mailed in regular mail service shall be interrupted by strikes or other
irregularities, such notices, requests, demands, or other communications shall
be deemed to have been received ten (10) business days after the day following
the resumption of normal mail service.

13.6.        Time of the
Essence. Time shall not be of the essence. 

13.7.        Further
Assurances. The parties agree to sign such other instruments, cause such
meetings to be held, resolutions passed and by-laws enacted, exercise the vote
and influence, do and perform and cause to be done and performed, such further
and other acts and things as may be necessary or desirable in order to give full
effect to this Agreement.

13.8.        Successors and
Assigns. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.

13.9.        Non-Waiver. No
waiver by any party of any breach by any other party of any of its covenants,
obligations and agreements hereunder shall be a waiver of any subsequent breach
of any other covenant, obligation or agreement, nor shall any forbearance to
seek a remedy for any breach be a waiver of any rights and remedies with respect
to such or any subsequent breach.

13.10.       Governing Law.
This contract will be governed by and construed in accordance with the laws of
the State of Nevada, and the laws of the United States of America applicable
therein any court of competent jurisdiction in the United States of America
shall have jurisdiction to adjudicate any matter arising out of this
Agreement.

13.11.       This Agreement
may be executed in one or more counterparts, each of which so executed shall
constitute an original and all of which together shall constitute one and the
same agreement.

-10-

IN WITNESS WHEREOF the parties hereto have executed this
Agreement and as of the date first above written.

UNITED NATURE INC. by its authorized signatory

/s/ Robert
Kroesen                                 

Signature of Authorized Signatory

Robert
Kroesen                                      

Name of Authorized Signatory

Managing
Director                               

Position of Authorized Signatory

GREENLITE VENTURES INC. by its authorized signatory

/s/ Howard
Thomson                          

Signature of Authorized Signatory

Howard
Thomson                               

Name of Authorized Signatory

President                                             

Position of Authorized Signatory

SCHEDULE A
To the Carbon Offset Marketing Agreement between
United Nature Inc. and Greenlite Ventures Inc. dated the 14th day of August,
2010

COMPANY PLANTATIONS

SCHEDULE B
To the Carbon Offset Marketing Agreement between
United Nature Inc. and Greenlite Ventures Inc. dated the 14th day of August,
2010

MANAGED PLANTATIONS

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