5455 North Federal Hwy. Suite M
Boca Raton, FL 33487
phone 561.996.9895
fax 561.995.4824

6/28/01

John J. Apartment
Management Company
PO Box 160306
Anytown, USA

Re: Typical Apartments
Water Conservation Savings Estimate

Dear John:

Per your request, Aqua-Tech, Inc. has completed an Estimated Savings Projection for Typical Apartments. Our report and proposal is the result of information obtained from our Water Audit and review of water bills provided. We are pleased to report our findings.

The annual tenant water and sewer costs for the property can be reduced by approximately $18,000 and have a payback in approximately 12.7 months (and with the cash program-approximately 11.5 months), WHICH INCREASES THE VALUE OF THE PROPERTY BY APPROXIMATELY $180,000, -and if you choose, with NO CAPITAL EXPENDITURE. Additionally there will be significant savings relative to energy, as you will now have less water to heat.

This proposal includes replacing (1) all showers with our Prismere showerheads, (2) all bath sinks aerators with our "waterfall" aerators, (3) kitchen sinks aerators with our "waterfall" aerators, (4) all toilet flappers with our Adjustable 5Year flapper, PLUS (5) leak repairs outside the walls relative to showers, tub diverters and faucets.

SUMMARY OF FINDINGS
1. Currently your residents are using 16,542,496 gallons of water per year, primarily within apartments in the sinks, showers and toilets. We base this figure on actual flow rates measured during our audit, and on actual sewer/water bills that were supplied us.

2. Current Flow Rates:
(a) Existing toilets average 4.8 gallons per flush. With our patented water saving toilet flappers, that would be reduced to 4.0 gallons, a savings of approximately .8 gallons a flush.
(b) Existing showerheads average 4.1 gallons of water flow per minute. With our Oyster shower head, that would be reduced to 2.5 gallons, a savings of 1.6 gallons per minute.
(c) Existing kitchen sinks average 2.3 gallons of water flow per minute. Our low flow bathroom sink aerator would reduce that to 2.0 gallons, a savings of approximately .3 gallons/minute.
(d) Existing bathroom sinks average 2.4 gallons of water flow per minute. Our low flow bathroom sink aerator would reduce that to 1.5 gallons, a savings of approximately .9 gallons/minute.

3. At the current published water/sewer utility rate of $3.54 per 1000 gallons for water and sewer, this represents an annual bill for resident's water/sewer of $58,560.44.

4. If the recommended flow control devices were installed throughout the property, water consumption would drop to about 11,505,600 gallons a year, realizing an annual savings of $17,830.61. The flow control devices are installed in existing plumbing, and carry a full 5-year warranty.

INSTALLATION RECOMMENDATIONS
Aqua-Tech, Inc. proposes to supply and install the following water savings devices in each unit at Typical Apartments .
(a) "Waterfall" low flow kitchen sink aerators (457)
(b) "Waterfall" low flow bathroom sink aerators (537)
(c) Prismere adjustable shower heads (537)
(d) Adjustable Toilet control devices (537)

SHARED SAVINGS
Under our shared savings plan, Aqua-Tech will pay for all materials and labor to install equipment at your property. We will then share the savings achieved by comparing last year's bill with the corresponding month this year under the plan you choose from the following two (2) alternatives.

*Note: The first two (2) months are billed per the estimated savings, as these normally involve partial installation months, and delayed water and sewer authority billings. These billings will be adjusted to reflect the actual savings commencing month three.

Total purchase price for the 457 apartments is $18,901 under option (1) shared savings plan, or $17,010 under option (2) cash program, plus applicable sales tax. Based upon Shared Savings projection, total payback will be achieved in approximately 12.7 months, and under the cash program, the payback is projected to be approximately 11.5 months.
UNDER OPTION (1) THIS AGREEMENT MAY BE PREPAID AT ANY TIME BY A PAYMENT OF 90% OF THE OUTSTANDING BALANCE.

CONCLUSION
Installation of the recommended flow control devices will save Typical Apartments about $17,830.61 per year, based upon your current water/sewer rates. Aqua-Tech crews will perform the installation in a fast and efficient manner - approximately 75 apartments per day. Additionally, we shall report any leaks and plumbing problems to property management as a FREE added service.

Repair service (included)
Aqua-Tech, upon authorization, shall repair all "outside of wall" leaks, and replace missing plumbing parts and equipment. The labor cost of said repairs is INCLUDED in the above proposal price. You may supply the parts, or we shall supply same and charge you at actual cost. Repair Parts, if any, supplied by us, shall be due and payable upon completion of installation.

Very truly yours,

Martin A. Berns
National Marketing Manager

Water Conservation Savings Estimate

Property Name: Typical Apartments Management Co.: Management Company Units 457 Occupancy 0.92 Residents 752 Kitchens 457 Bath Sinks 537 Toilets 537 Showers 537 Aqua-Tech Savings Program   Before After Savings Toilets 6,136,320 5,113,600 1,022,720 Showers 7,338,016 4,474,400 2,863,616 Kitchen Sinks 650,000 450,000 200,000 Bathroom Sinks 3,068,160 1,917,600 1,150,560           17,192,496 11,955,600 5,236,896

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