MEMORANDUM OF UNDERSTANDINGTHIS MEMORANDUM OF UNDERSTANDING hereinafter referred to as “Memorandum is made on the ____ day of ____________, 2012 by and between Oakland University, a Mich
Trang 1MEMORANDUM 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
2 Negotiations with third party benefactors, Oakland, and
AESD, FFA permitting, final site assessment, & microwave
3 Negotiate and execute Development Agreement March – April 2012
4 Begin engineering & environmental impact studies 2nd - 3rd Quarters 2012
5 PPA approval by Board of Trustees Sept 2012 BOT meeting
6 Order wind turbine, complete engineering and studies following signed PPA
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 1 Obligations of AESD and Section 2 Obligations of Oakland shall be binding; and furthermore, Section 3 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 1 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
Trang 2c) 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 2 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 non-binding 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 1 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 3 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 3 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
Trang 3Section 4 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 <as required>
to Oakland-AESI Memorandum of Understanding Dated , 2012”
Section 5 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 6 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 7 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 8 Governance
This Memorandum shall be governed and interpreted in accordance with the Laws of the State of Michigan, with venue in Ingham County
Section 9 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
Trang 4Section 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
Alternate Energy Solutions, Inc.
By: _ Date: _
Oakland University
John D Wolar, President By: _ Date: _