MEMORANDUM OF UNDERSTANDING THIS MEMORANDUM OF UNDERSTANDING (hereinafter referred to as “Memorandum) is made on the day of , 2012 by and between Oakland University, a Michigan public institution of higher education (hereinafter referred to as “Oakland”) and Alternate Energy Solutions Development, LLC., a Michigan limited liability company (“AESD” and individually or collectively referred to as “Party” or “Parties”, as required by context) having the purpose of culminating in a definitive development agreement to install, own, and operate utility scale wind energy generation facility (hereinafter referred to as the “Project”) on property belonging to Oakland (the “Leased Land”) WHEREAS, this Memorandum sets forth the general business principles and terms agreed to between the Parties; where AESD will provide services for design and funding of the Project to economically serve the electric energy needs of Oakland AESD will create a Special Purpose Entity (“SPE”) with value-added funding from proponent benefactors (“Benefactor”) which will then exclusively contract with Oakland for sale of the output electric power from the Project at a rate below Oakland’s existing cost of utility power for a cost savings to Oakland WHEREAS, AESD desires to use its professional and business resources and capabilities, on a “best efforts” basis, to undertake and facilitate a development plan for the successful completion of the Project in accordance with the timeline below Execute the Memorandum Negotiations with third party benefactors, Oakland, and AESD, FFA permitting, final site assessment, & microwave communication study Negotiate and execute Development Agreement Begin engineering & environmental impact studies PPA approval by Board of Trustees Order wind turbine, complete engineering and studies Turbine online January 2012 1st Quarter 2012 March – April 2012 2nd - 3rd Quarters 2012 Sept 2012 BOT meeting following signed PPA December 2013 WHEREAS, AESD has cause to believe that a number of potential proponent benefactors for the Project would provide financial support and or sponsorship for the benefit of being associated with the sustainable value project WHEREAS, Section Obligations of AESD and Section Obligations of Oakland shall be binding; and furthermore, Section Execution of a Development Agreement and a Power Purchase Agreement shall become binding upon completion of the aforementioned obligations and the Parties reaching agreement with the Benefactor THEREFORE, the Parties hereby acknowledge and agree to the following for one another’s mutual benefit: Section Obligations of AESD AESD shall: a) investigate plausible options for SPE framework through: 1) discussion with its investment council and securities council the use of prudent legal framework for the SPE to afford the maximum safety, reasonable return on investment, and significant reduction in unit cost of energy for Oakland; and 2) investigate Project financial pro-forma to determine suitable investment to benefactor ratios in order to provide lowest unit cost of energy for Oakland, b) discuss with Oakland and understand guidelines which my be in place for working with proponent benefactors; Memorandum_ AESI_MOISD [12122008] c) hold discussions with proponent benefactors for the purpose of asserting individual dispositions and the exact level of sponsorship funding that would be extended to the Project and to facilitate the financial contribution of the Benefactor; d) execute the Primary Tasks enumerated within the critical-path timeline: 1) discussion of Project with Potential Financier and Benefactor 2) conduct radio-frequency and broadcast interference study 3) submit construction notification to FAA for obstruction determination 4) conduct geotechnical testing of tentative location for Project construction; 5) determine to the extent possible the availability of wind turbine generator, materials and balance of equipment; 6) determine to the extent possible the availability of sub-contractors and critical construction equipment; 7) identify and confirm all permitting requirements for the Project; and 8) conduct a preliminary, “desktop”, avian and bat assessment Section Obligations of Oakland Oakland shall: a) provide to AESD written guidelines for governing how AESD shall conduct preliminary discussions with potential proponent Benefactors and establishing reasonable funding parameters for the Benefactor as it would relate to the Project; b) provide AESD with suitable documentation establishing AESD’s right to hold nonbinding discussions with potential proponent benefactors and supporting that AESD has been selected by Oakland for the development of the Project; c) compensate AESD for the work involved with its execution of obligations herein under Section of this Memorandum in the amount of Thirty-Five Thousand Eight Hundred ($35,800) Dollars; d) work in good faith with AESI to negotiate and execute the Development Agreement and the Power Purchase Agreement under the terms of Section herein, provided AESD has completed its obligations under this Memorandum; e) work in good faith with AESI and the Benefactor(s) regarding the funding for the Project; Section Development Agreement and Power Purchase Agreement AESD and Oakland shall compose and shall enter into a project development agreement which shall model the intentions first described in the Oakland University Wind Project Response to Request for Proposals, submitted by AESD on March 18, 2011, where the Project terms are described as encompassing: a) Design Build Operate Own (DBOO) Project structure; b) a 20 year power purchase agreement; c) the cost of energy being reduced and estimated not to exceed $70.00 per MW-h ($0.07 per kW-h) with potential for a reduced escalation It is the intention of AESD to provide for the transfer of the Project’s assets to Oakland at the completion of the Power Purchase Agreement We believe that the transfer cost for the Project’s assets can be significantly reduced from those listed in the Mandatory Pricing Form Memorandum_ AESI_MOISD [12122008] Section Amendments to the Memorandum Amendments to this Memorandum shall be only be valid when mutually agreed to in writing by Oakland and AESD, and executed by formal written document(s) entitled “Amendment No to Oakland-AESI Memorandum of Understanding Dated , 2012” Section Term of Memorandum This Memorandum shall be in effect for a period of five (5) years from the date first written above, unless the Parties agree to an extension in writing The non-circumvention provisions of this Memorandum shall endure the termination of the Memorandum Section Exclusive Dealing and Non-Competition The Parties agree that they will deal exclusively with one another for the Term of this Memorandum for the purposes of utility scale wind project development Section Warranties AESD hereby warrants that it is a company in “Good Standing” with the State of Michigan AESD further warrants that the company, its parent, its officers and directors are not the subject of any pending legal action AESD further warrants that it has the facility to enter into this Memorandum AESD also warrants that it has all the necessary approvals and authority to enter into this Memorandum and perform the services contemplated hereunder Oakland hereby warrants that it is a publicly funded institution of higher education “Good Standing” within the State of Michigan, having the ability to enter into this Memorandum Section Governance This Memorandum shall be governed and interpreted in accordance with the Laws of the State of Michigan, with venue in Ingham County Section Severability Should any provision of this Memorandum be judged unenforceable or conflicting with the intent of this Memorandum, then the unenforceable or conflicting provision of the Memorandum shall be stricken from the document and this Memorandum shall be interpreted as though the stricken provision had never been a part of this Memorandum Section headings contained in the Memorandum are for purposes of reference and convenience only and shall not limit or otherwise affect in any way the meaning of this Memorandum Memorandum_ AESI_MOISD [12122008] Section 10 Acceptance If you are in agreement with the foregoing, please sign and return one copy of this letter to Alternate Energy Solutions, Inc., 23801 Gratiot Office Plaza, Second Floor, Eastpointe, Michigan 48021 You may accept by submitting faxed signatures to (586) 498-8858 However, we request that any faxed signatures be followed up with the delivery of original signatures This letter may be executed in one or more counterparts, each of which will be deemed to be an original of this letter and all of which when taken together, will be deemed to constitute one and the same letter Oakland University By: _ Date: _ Alternate Energy Solutions, Inc By: _ Date: _ John D Wolar, President Memorandum_ AESI_MOISD [12122008]