exv10w14



 










October 10, 2006




Mr. Tony Flag

First United Ethanol

2 West Broad Street

Camilla, GA 31730




Dear Tony:



This document serves as the service agreement between US Water Services and First United Ethanol
for the 100 MMgy ethanol plant to be located in Camilla, GA. Signing the service agreement shows
the customers intent to utilize US Water Services as the water treatment supplier. Signing the LOI
will allow US Water Service to commit to the necessary resources and equipment



If US Water Services satisfactorily performs the engineering services and analytical support work
required during the design build process as detailed in Appendix A with a value of over $78,000 if
purchased through an outside consulting engineering company,

US Water Services will expect to partner with First United Ethanol for long term water treatment
chemicals and services. Appendix B shows the standard water treatment services agreement we will
present when all the water and equipment information is known. If US Water Services does not
satisfactorily perform the services detailed in Appendix A, the customer has no obligation to
continue to utilize our services.



We would like a level of commitment from First United Ethanol to show that the intention to utilize
US Water Services at the water treatment company is a valid assumption. US Water Services is
committing to be competitive with other suppliers of similar services and equipment.




Printed Name




	 	 	 	 	 	 	 
	/s/ Anthony J. Flagg CEO
 


	 	 
	 	10/11/06
	 	 
	 	 	 
	Printed Name, Title, Date
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Kent K. Herbst

	 	 	 	10/10/06	 	 
	 	 	 
	Kent K. Herbst
	 	 	 	 	 	 
	Ethanol Team Leader — USWS
	 	 	 	 	 	 






 









 










Appendix A



The below services are essential to the design, construction and operation of a new ethanol
plant. These services can take up to 500 engineering hours to complete depending on the complexity
of the water and environmental discharge and capital equipment. The services shall be provided
throughout the scope of the project including but not limited to the detailed listing below. The
value of the services and products supplied as part of this agreement have a market value of
$78,000 if purchased separately from other engineering and environmental services companies. The
valuation of our services are based upon a labor rate of $150.00/engineering hour, plus materials,
equipment and other expenses. As part of this agreement US Water Services agrees to perform the
below services at no charge as part of an overall agreement to provide the chemicals and water
treatment equipment for construction and operation.




	 	 	 
	Project Feasibility and Conceptual Design Stage
	 	Value$6,500







	•	 	Work with site representatives to identify water source
	 
	•	 	Aid in sampling by sending water sampling kit and/or technical representative
	 
	•	 	Provide laboratory services and test water for contaminants
	 
	•	 	Provide detailed cost analysis of the water source impact on water treatment capital equipment
	 
	•	 	Provide cost analysis of capital water treatment costs versus operational costs to provide
best options
	 
	•	 	Evaluate “Return on Investment” options by computer modeling
	 
	•	 	Provide budget guidelines for chemicals, capital water treatment equipment and chemical
control and feed equipment
	 
	•	 	Work with permitting agencies to determine water source impact on discharge
	 
	•	 	Provide waste discharge profile to waste permitting agencies
	 
	•	 	Meet with and work with waste permitting agencies to help guide permit through the process





	 		
	Detailed Engineering Stage
	 	Value $10,500







	•	 	Design/review chemical feed systems to insure chemical compatibility, safety and control of system
	 
	•	 	Provide drawings of chemical feed system
	 
	•	 	Provide P&ID’s of capital water treatment equipment layout
	 
	•	 	Design operator testing program and make recommendations of test equipment needed
	 
	•	 	Meet with engineering design, installation and site personnel to coordinate all aspects of water
treatment
	 
	•	 	Review water balances for water reuse opportunities.
	 
	•	 	Provide optimum chemistries to reduce operating costs prolong equipment life and meet discharge
limitations.
	 
	•	 	Integrate the water treatment equipment with system operating system to provide monitoring and control
from central point





	 		
	Construction Stage
	 	Value $36,000







	•	 	Develop and provide Operation Manuals for equipment, chemicals and control equipment
	 
	•	 	Develop cleaning procedures to boiler and cooling system start up
	 
	•	 	Develop operator training program
	 
	•	 	Develop Legionella Risk Assessment to minimize liability of Legionnaire’s disease
	 
	•	 	Work with installers to optimize the equipment installation
	 
	•	 	Provide all necessary stainless steel chemical totes, level gauges and chemical manifolds
	 
	•	 	Provide on site guidance to contractor to ensure proper installation of water treatment equipment and
systems.





 









 










	 	 	 
	Commissioning and Startup Stage
	 	Value $25,000







	•	 	Start up capital water treatment equipment and document conformance to operating specifications
þ Systems covered: RO, RO CIP, Tower controller, Boiler controller, water works PC
	 
	•	 	Provide products and instructions to assure successful cleaning and pretreatment of equipment
	 
	•	 	Conduct Supervisor and Operator Training
	 
	•	 	Provide 14 days of on-site service by trained service engineer throughout start up period.
Time will start either the weekend before grind and continue for 14 days or it will begin the
day of grind and continue for 14 days.
	 
	•	 	Start up chemical feed systems
	 
	•	 	Test chemistries and control equipment to assure that specifications are meet.
	 
	•	 	Confirm and document discharge chemistries meet discharge permits





			
	 	 	 
	Operating Stage (Included in service agreement)
	 	Value $6,500







	•	 	Provide service technician a minimum of monthly or as agree upon with plant
	 
	•	 	Test water systems and equipment performance during service visits
	 
	•	 	Provide written evaluation of equipment operating conditions
	 
	•	 	Plant shut down support (boroscope)
	 
	•	 	Boiler inspections and visual documentation of equipment condition
	 
	•	 	If required, help with environmental permit paperwork
	 
	•	 	Measure benchmarks for operating equipment such as boilers, RO’s, softeners and cooling systems
	 
	•	 	Provide corrosion prevention data
	 
	•	 	Provide bacteria and Legionella prevention assessment
	 
	•	 	Inspect equipment and document physical condition
	 
	•	 	Provide “Return on Investment” recommendations
	 
	•	 	Provide emergency response to problems
	 
	•	 	Update Operations Manual
	 
	•	 	Provide continuous training program for operators
	 
	•	 	Make recommendations on capital water treatment equipment
	 
	•	 	Provide laboratory analysis of water systems as needed to assure program success
	 
	•	 	Provide all “Yeast Friendly”, non sodium based chemicals for boiler systems
	 
	•	 	Provide environmentally acceptable non oxidizing biocide chemicals for cooling system
	 
	•	 	Provide environmentally acceptable scale and corrosion inhibitor
	 
	•	 	Provide site specific scale and fouling operational chemical for reverse osmosis
	 
	•	 	Provide specialty cleaning chemicals for the boiler, tower and reverse osmosis system. (not
included on service agreement)
	 
	•	 	Provide all testing reagents and reagent dispensing equipment
	 
	•	 	Provide quarterly corrosion coupon studies.





 









 










APPENDIX B




U.S. Water Services Chemical & Services Agreement

XYZ Company




Term



U.S. Water Services agrees to provide the necessary water treatment chemicals (reverse
osmosis, cooling tower, and boilers) and service program for a period of three years from the
startup of the XYZ Company plant, which is expected to be operational January 1, 2010.




Investment



Beginning December 1, 2006, XYZ Company agrees to pay U.S. Water Services $XX,XXX per
month for specialty water treatment chemicals, testing reagents, engineering services,
environmental support services, and plant start up assistance. The payments will be made in monthly
installments according to invoices generated by U.S. Water Services, and this amount is based on
the nameplate production of 50 million gallons per year. State and local taxes will be added to
each invoice unless a tax exemption is on file with U.S. Water Services. This agreement will
automatically renew each year. Price increases may be taken on the anniversary date of the
contract provided that a 30-day notice of the increase is provided to the customer. All testing
reagents are listed in Schedule A-1 and the specialty water treatment chemicals covered under this
agreement are listed in Schedule B-1.




Initial Order



Not included under the Chemical and Services Agreement are one-time use chemicals and lab
equipment. These items are outlined in Schedule D-1. The amount of these items is estimated to be
$XX,XXX.




Not To Exceed Costs for Chemicals



U.S. Water Services agrees to limit the annual chemical cost for the products in Schedule A-1
and B-1 to a maximum of $XX,XXX, provided the chemicals are applied within the recommended limits
specified by U.S. Water Services. If annual production and water usage are above nameplate design
the customer may be billed at a rate of $XX,XXX / 1,000,000 gallons additional ethanol production.
Nameplate design and water efficiencies are outlined in Schedule C-1. Operational variances from
the design basis outlined in Schedule C-1 may result in additional charges. Charges will be
reconciled at the end of every quarter. All efficiencies are based on a quarterly average.




 









 





     



Termination



The customer or U.S. Water Services may terminate the chemical and service agreement with 30
days written notice. If the customer terminates the chemical and service agreement, outstanding
equipment balances owed, if any, and bundled discounts taken must be paid in full prior to
termination. In addition, all remaining opened chemical inventory that is part of this agreement,
(Schedule B-1) must be purchased prior to termination. U.S. Water owned equipment shall be
returned within 30 days of termination date. If U.S. Water Services terminates the chemical and
service agreement, the customer has the choice of continuing to pay equipment installments per the
installment schedule or may pay the outstanding amount in full.



The customer and U.S. Water Services agree that the results of any water treatment program depend
on the diligent application of the water treatment program and the proper operation of the
operating equipment. U.S. Water Services will not be responsible for any failure, caused in whole
or part, by the customer not implementing or following recommendations made by U.S. Water Services
personnel. Under no circumstances shall U.S. Water Services or the customer be liable to the other
for incidental or consequential damages.










	 	 	 	 	 
	Customer:

	 	/s/ Anthony J. Flagg
 

	 	 
	 
	 	 	 	 
	By:

	 	FUEL	 	 
	 

	 	 	 	 
	 

	 	(Signature)	 	 
	 
	 	 	 	 
	 

	 	Anthony J. Flagg	 	 
	 

	 	 	 	 
	 

	 	(Printed Name)	 	 
	 
	 	 	 	 
	Title:

	 	CEO 
	 	 
	 
	 	 	 	 
	Date:

	 	10/11/06 
	 	 






Tax Exempt:            Yes o            No þ






	 	 	 	 	 
	Supplier:

	 	U.S. Water Services
	 	 











	 	 	 	 	 
	By:

	 	/s/ Kent K. Herbst	 	 
	 

	 	 	 	 
	 

	 	(Signature)	 	 
	 
	 	 	 	 
	 

	 	Kent K. Herbst	 	 
	 

	 	 	 	 
	 

	 	(Printed Name)	 	 
	 
	 	 	 	 
	Title:

	 	Ethanol Team Leader 
	 	 
	 
	 	 	 	 
	Date:

	 	10/10/06 
	 	 






 









 










Schedule A-1




	 	 	 	 	 	 	 	 	 
	Test Kits Description	 	# of Units	 	Part No.
	SaniCheck AB

	 	 	3	 	 	854 AN

	Total Alkalinity

	 	 	1	 	 	 	226 A	 
	Total Alkalinity

	 	 	1	 	 	 	226 C	 
	N/50

	 	 	4	 	 	 	203 G	 
	Free Cl2 packets

	 	 	6	 	 	H21055-69

	TDS Soln 3000 umhos

	 	 	1	 	 	 	117/300F	 
	High Range Hardness Titrating Soln

	 	 	4	 	 	 	145 G	 
	Low Range Hardness Titrating Soln

	 	 	2	 	 	 	144 G	 
	Ca Hard. Buffer soln

	 	 	1	 	 	 	107 A	 
	Ca Hard. Buffer soln

	 	 	1	 	 	 	107 E	 
	Ca Indicator powder

	 	 	1	 	 	 	109 B	 
	Ca Indicator powder

	 	 	1	 	 	 	109 C	 
	BaCl solution 30%

	 	 	1	 	 	 	101A	 
	BaCl solution 30%

	 	 	1	 	 	 	101C	 
	Hard. Buffer Soln

	 	 	1	 	 	 	138 A	 
	Hard. Buffer Soln

	 	 	1	 	 	 	138 E	 
	Hard. Indicator Powder

	 	 	1	 	 	 	139 B	 
	Hard. Indicator Powder

	 	 	1	 	 	 	139 C	 
	4 Automatic 10 ml Burettes

	 	 	4	 	 	 	702	 
	P Indicator

	 	 	1	 	 	 	168 A	 
	P Indicator

	 	 	1	 	 	 	168 C	 
	Starch Acid/Sulfite Indicator Powder

	 	 	3	 	 	 	199 B	 
	Potassium Iodide Titrating Soln. N/80

	 	 	1	 	 	 	175 G	 
	Polymer Buffer

	 	 	1	 	 	 	511 C	 
	Polymer Buffer

	 	 	2	 	 	 	511 E	 
	Polymer Titrant

	 	 	1	 	 	 	512 C	 
	Polymer Titrant

	 	 	1	 	 	 	512 E	 
	Iron Powder Packets 10 ml

	 	 	3	 	 	H21057-69

	25 ml Sample Cells (round)

	 	 	6	 	 	H1730-06

	Powder Pour Spout

	 	 	3	 	 	 	799	 
	140 ml casserole

	 	 	1	 	 	 	738	 
	Eye Dropper 0.5 and 1.0 ml

	 	 	4	 	 	 	759	 
	Graduated Cylinder, Plastic 100 m

	 	 	1	 	 	 	778	 
	 
	 	 	 	 	 	 	 	 





Additional Services




	 	 	 	 	 	 	 	 	 
	Services Description	 	# of Units	 	Supplier	 	Start up
	Corrosion coupon

	 	 	16	 	 	USWS
	 	4*






 




*Corrosion coupons for start up include Copper, Carbon Steel, Stainless Steel and Scaling coupon.




 









 










Schedule B-1




	 	 	 	 	 
	System	 	Chemical	 	Use
	`
	 	 	 	 
	Boiler

	 	BWT-103-L Plus
	 	Oxygen Scavenger
	Boiler

	 	Boiler MP
	 	Scale/Corrosion Inhibitor
	Boiler

	 	RLT-35
	 	Condensate Treatment
	Boiler

	 	BWT-200B
	 	Alkalinity Adjustment
	Cooling Tower

	 	CWT-530
	 	Scale/Corrosion Inhibitor
	Cooling Tower

	 	Biotrol 509
	 	Non-Oxidizing Biocide
	Reverse Osmosis

	 	RO-503
	 	RO Antiscalant
	Reverse Osmosis

	 	BWT-104
	 	Chlorine Scavenger
	Reverse Osmosis

	 	ROC-20
	 	RO CIP Chemical
	Reverse Osmosis

	 	ROC-50 Plus
	 	CO CIP Chemical





Chemicals and equipment not specifically listed in Schedule B-1 above are excluded from this
agreement. These include:





	 	•	 	Sulfuric acid
	 
	 	•	 	Chlorine
	 
	 	•	 	Process chemicals




It is the responsibility of the plant to order totes of 12% Sodium Hypochlorite, 66o
Baume Sulfuric Acid, and a pallet of salt prior to start up.





 









 













Schedule C-1




 









 





			
	
	 	330 S. Cleveland St.

Cambridge, MN 55008

P: 763 689-3636

F: 763 689-3660






Schedule D-1




	 	 	 	 	 
	Part Number	 	Description	 	Use
	BoilOut

	 	BoilOut
	 	Chemical for Cleaning Boiler
	TowerClean 819

	 	TowerClean 819
	 	Chemical for Cleaning Condenser System
	DR-890

	 	Spectrometer
	 	Digital Testing of System Chemistries
	TDS EP-10

	 	Conductivity Meter
	 	Used to Determine Operating Levels
	717

	 	Auto 10 mL Burettes
	 	Testing Titration Methods
	60060

	 	Casserole
	 	Testing Titration Methods
	770

	 	Graduated Cylinders
	 	Testing Titration Methods
	759

	 	Eye Droppers
	 	Reagent Dosing
	Auto SDI

	 	Auto SDI
	 	Determine RO Feed SDI Level