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Item J BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY Meeting Date: June 19, 2002 Division: County Attorney AGENDA ITEM WORDING: Approval of Option Agreement for the Transfer of a Wastewater System with Duck Key Wastewater Cooperative, Hawk's Cay Investors and County, This Option Agreement grants the County the option (but does not require) transfer of the Hawk's Cay plant to the County or its assignee to maximize flexibility in providing central wastewater treatment to Conch Key and Duck Key, ITEM BACKGROUND: The expired Hawk's Cay DRI, as amended, allowed the County to acquire the Hawk's Cay wastewater treatment plant. A subsequent, and still in effect, County resolution concerning Hawk's Cay made provision for the Hawk's Cay wastewater treatment plant system to expand to serve Conch Key and Duck Key. PREVIOUS RELEVANT BOCC ACTION: See above, CONTRACT I AGREEMENT CHANGES: N/A STAFF RECOMMENDATIONS: Approval. TOTAL COST: BUDGETED: Yes 0 No 0 COST TO COUNTY: APPROVED BY: County Attorney _ OMB/Purchasing 0 Risk Management 0 DIVISION DIRECTOR APPROVAL~~ . J S T, END ICK DOCUMENTATION: Included 0 To Follow 0 Not Required 0 AGENDA ITEM # - ~-J OPTION AGREEMENT FOR THE TRANSFER OF A WASTEWATER SYSTEM THIS OPTION AGREEMENT for the transfer of a wastewater system Is entered Into by the Duck Key Wastewater Cooperative, Inc., a Florida not-for-profit corporation (DKWC); Hawk's Cay Investors, Ltd., a Florida limited partnership (HCI); and the Board of County Commissioners of Monroe County, Florida (BOCC); WHEREAS, the parties desire that HCI transfer the ownership of the wastewater transmission and treatment system (System) serving the Hawk's Cay Development of Regional Impact together with certain easements necessary for anticipated expansion of the system, WHEREAS, the BOCC has not yet secured all necessary financing for the BOCC's anticipated upgrade and expansion of the wastewater treatment facility and expansion of the service area and has not yet conducted the public hearing and prepared the report required by Sec, 125.3401, F.S., and so cannot yet enter into a binding contract to purchase the System and related easements. WHEREAS, in view of the above, HCI and DKWC desire to grant the BOCC an option within which to enter into a purchase agreement for the System and easements; now, therefore, IN CONSIDERATION of the mutual promises and covenants set forth below, the parties agree as follows: 1. The effective date of this option agreement is , 2002. 2, In consideration for $100,00 paid by the BOCC to HCI and DKWC, HCI and DKWC grant the BOCC an option, to be exercised only at the discretion of the BOCC and effective for 3 years, to enter into a contract with HCI and DKWC for the purchase of the System and easements, A copy of the purchase contract and its exhibits (the "purchase contract") are attached to this option agreement and are made a part of it. If this option is exercised by the BOCC, HCI and DKWC further agree to timely perform their obligations under the purchase contract. BOCC (or its assignee pursuant to Paragraph 4, below) may exercise this option by signing the purchase contract in duplicate and delivering the duplicate original to HCI prior to expiration of the option agreement. 3. This option agreement will expire 3 years from the effective date and thereafter be of no further force and effect. 4, This option may be assigned by the BOCC only to the Florida Keys Aqueduct Authority or another governmental entity or a public corporation financially and professionally capable of furnishing wastewater treatment services, This optIon agreement is otherwise not assignable. 5. This option agreement is for the benefit of the parties to it only and may not be construed to create any benefits on behalf of any third parties or any obligations or liabilities on the part of HCI, DKWC or the BOCC (or its assignee), and their officers, partners, shareholders and employees, to any third parties, 6, For the limited purpose of the System transfer reqUirement of the amended Hawk's Cay Resort Development of Regional Impact development order (specifically paragraph 7 of Monroe County Resolution No. 037-2002) only, this option agreement constitutes the HCI transfer of the System and constitutes HCI's compliance with the aforementioned development order. 7. This option agreement is governed by the laws of Florida. Venue for any litigation arising under this agreement must be in a court of competent jurisdiction in Monroe County, Florida. IN WITNESS WHEREOF, the parties hereto have set their hands and seals the dates set forth below. (SEAL) ATTEST: DANNY L. KOLHAGE, CLERK BOARD OF COUNlY COMMISSIONERS OF MONROE COUNlY, FLORIDA By Deputy Clerk By Mayor/Chairperson Date (SEAL) Attest: DUCK KEY WASTEWATER COOPERATIVE, INC. By Title Date By Title (SEAL) Attest: HAWK'S CAY INVESTORS, LTD. By Title Date By Title JdconDKWCS/02 ~~'" "'~U"/{I N./'~ DATE~-31-0 2 -. AGREEMENT FOR TRANSFER OF WASTEWATER SYSTEM THIS AGREEMENT, is made and entered into as of the _ day of , 200_, by DUCK KEY WASTEWATER COOPERATIVE, INC. a Florida corporation not for profit ("DKWC"); HAWK'S CAY INVESTORS, LTD., a Florida limited partnership ("HCI"); the BOARD OF COUNlY COMMISSIONERS OF MONROE COUNlY, FLORIDA ("BOCC"). RECITALS : A. HCI is the developer of the Hawk's Cay Resort Development of Regional Impact (the "DRI") pursuant to the Development Order for same issued by BOCC on September 5, 1986 as subsequently amended from time to time (the "DO"), B. DKWC is the operator of the wastewater transmission and treatment system (the "System") serving the DRI and neighboring properties, the primary facility for which is located on a portion of "Utility Island" within the DRI, and is being leased by HCI to DKWC. C. Because the BOCC lacks an easement for transmission of wastewater from anticipated service areas to the System, HCI and DKWC must grant to the BOCC an easement over their respective property. NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and suffiCiency of which is hereby acknowledged, the parties hereby agree: 1. Incorooration of Recitals, All of the foregoing recitals are true and correct and are incorporated herein by this reference. 2, Title Transfer. HCI shall convey title to the real property constituting a portion of Utility Island, as depicted In Exhibit F, to BOCC by executing and recording a Warranty Deed in the form attached hereto as Exhibit A. BOCC shall, prior to Transfer Date, a Title Insurance Commitment, establishing that the real property is free and clear of any lien or encumbrance; and should the title commitment reveal the existence of any title defect, HCI shall cause same to be removed prior to Transfer Date. HCI shall transfer title to all equipment, pipes, pumps, transmission lines, collection pipes, meters and other fixtures and tangible personal property {Including all books, records, logs, plans, drawings and warranties In its possession) constituting the System (excluding, however, the reuse water pumps and lines running outward from same) to BOCC by executing and delivering a Bill of Sale In the form attached hereto as Exhibit B, Simultaneously, HCI and DKWC shall execute and record a termination of DKWC's lease of the Facility from HCI in the form attached hereto as Exhibit C. 3, Date of Transfer, HCI shall transfer the System and the applicable Utility Island to BOCC in the manner provided for In Section 3, above, 90 days after the execution of this document by all signatories (the "Transfer Date") or at such later time as the parties may agree, HCI has agreed to allow the hook-up of a Conch and Walker Keys collection system free of charge, prior to the Transfer Date, 4. Future Develooment. BOCC agrees that wastewater connection via the System will be provided for herein to the following future development within the DRI, according to the EDU Schedule attached as Exhibit D: A. twenty-eight (28) detached resort rental units; B. eighteen (18) employee housing units; C. a twelve (12) room employee dormitory building with two bathrooms, each containing two (2) toilets; and D. 4,800 square feet of commercial space. BOCC also recognizes and agrees that the central lift station may be relocated in connection with such future development, at the expense of HCI, BOCC agrees to provide adequate nutrient reduction credits for this proposed development as well as the redevelopment of sites from which building unit rights are extinguished in the Middle Keys ROGO subarea from those nutrient reduction credits available for affordable housing in the Middle Keys ROGO subarea, qualifying credits made available to Monroe County from the hook-up of Conch and Walker Keys to the System, at a number not to exceed 32. 5. Real and Personal Prooerty Taxes. BOCC shall secure and deliver to HCI an acknowledgment or agreement from the Monroe County Tax Collector that HCI's real and personal property tax liability for the year in which transfer occurs shall be only for that period beginning January 1 of that year and ending on the Transfer Date. 6. Condition of Facilitv. BOCC acknowledges and agrees that the Florida Keys' statutory wastewater authority (FKAA) has performed such inspections, testing, records review and other investigations for Utility Island and the System and its operational history and, accordingly, agrees to accept Utility Island and the System and the System in their "AS IS, WHERE IS, WITH ALL FAULTS" conditions (including without limitation environmental matters) without any representations or warranties by HCI or DKWC whatsoever except for Warranties of Title and the Warranty Deed and the Bill of Sale and the forms attached hereto. BOCC disclaims any reliance on, or entitlement to, any warranty or representation by HCI as to condition of the real property and the System, and agrees that it will make no claim against HCI or DKWC arising from or related to the condition of the real property and the System. Without limiting the generality of the foregoing, HCI has not made and does not hereby make any express or implied representations or warranties whatsoever with respect to Utility Island or the System including, without limitation, any representation or warranty regarding: (i) the quality of construction, workmanship, merchantability or fitness for any particular purpose of any improvements located on Utility Island or with respect to the System; or (II) the revenues to be received from operation of the System or the expenses to be incurred with respect thereto. 7. Reuse Water. HCI and DKWC have, and in accordance with the DO, entered into a Reuse Water Agreement in the form attached hereto as Exhibit E, which Reuse Agreement shall continue in full force and effect after this transfer agreement takes effect, and the System is transferred. 8. Rate Structure. BOCC acknowledges that the System and Utility Island were acquired and constructed at considerable expense, but are being conveyed to BOCC without charge. Therefore, in consideration of the transfer and receipt of the System and Utility Island, BOCC agrees that, for so long as the existing System is being utilized to treat waste generated by the existing members of the DKWC, their successors and assigns, the rate charged for same shall include only the following components: A. Actual operating expenses for the System and Utility Island (excluding depreciation, and other similar non-cash expenses); and B. Reasonably projected capital assessments to provide for the repair and replacement of the System, including upgrading the existing System to SWT standards (excluding any costs associated with system expansion or with collection systems designed to serve other proposed service areas). HCI will be charged according to the EDU schedule set forth in Exhibit D. 9. In the event of the extension of the System to Conch Key and Walker Key, all property owners on those Keys connected to the System must be members of the DKWC until the System is taken over by the FKAA or another public agency with the authority to operate the System. 10, Condition Precedent, It is understood and agreed by the parties that this agreement will not take effect until, and that the performance of the obligations of HCI and DKWC hereunder are conditioned on, the final binding resolution (Including all appeals or further review proceedings of any type) in favor of HCI of all litigation challenging on any grounds the development of any of the 46 additional units at the Hawk's Cay DRI, authorized in Monroe County Resolution No, 037-2002, such resolution to be in a manner that allows the continued development of those units as so authorized, This condition precedent shall apply to any litigation that is pending at the time of the execution of this agreement by the last party, as well as any future litigation, If such litigation is Instituted after performance by HCI and DKWC hereunder has begun, then any further obligations by HCI and DKWC shall be suspended immediately until resolution of such litigation on the terms described above. This condition may be waived by written waiver executed by HCI and DKWC, 11, General Matters. A. This Agreement shall be interpreted and enforced In accordance with the laws of the State of Florida. B. This Agreement shall not be amended except by a written Instrument executed by the parties intended to be bound by such amendment. C. No person or entity shall be deemed to in any manner have any third party benefiCiary rights or other rights to the benefit or enforcement of this Agreement. D. reference. All of the Exhibits attached hereto are hereby incorporated into this Agreement by this E, This Agreement constitutes the entire agreement among the parties with respect to its subject matter and no written or verbal agreements in such regard shall be binding or enforceable unless expressly provided herein. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written. (SEAL) AlTEST: DANNY L. KOLHAGE, Clerk By BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA By Deputy Clerk Mayor/Chairperson DUCK KEY WASTE WATER COOPERATIVE, INC. By Its (CORPORATE SEAL) Attest: By Title President (CORPORATE SEAL) Attest: HAWK'S CAY INVESTORS, LTD. HAWK'S CAY MANAGEMENT, INC., By President HCDKtransfer EXHIBIT "A" GENERAL WARRANTY DEED PREPARED BY/RETURN TO: Charles W. Edgar, III, Esq. CHERRY & EDGAR, P.A. 4400 PGA Blvd., Suite 900 Palm Beach Gardens, Florida 33410 Property Control No(s): GENERAL WARRANTY DEED THIS INDENTURE is made this _ day of ,20_, between HAWK'S CAY INVESTORS, LTD., a Florida limited partnership whose address is Mile Marker 61, Duck Key, Marathon, Florida 33050, hereinafter referred to as "Grantor" and Monroe County, whose address is 1100 Kennedy Drive, Key West, Florida 33041-1239, hereinafter referred to as "Grantee." W ! T N E SSE T H: THAT GRANTOR, for and in consideration of the sum of TEN AND NO/100 ($10.00) DOLLARS and other good and valuable considerations, in hand paid by Grantee, the receipt whereof is hereby acknowledged, by these presents does grant, bargain, sell, alien, remise, release, convey and confirm unto Grantee, those certain lands situate, lying and being in the County of Monroe, State of Florida, described on Exhibit "A" attached hereto and made a part hereof (the "Property"). This is a conveyance of unencumbered real property for nominal consideradon per a requirement of Monroe County, Florida and, as such, only minimal documentary stamp taus are payable on this instrument. TOGETHER with all the tenements, hereditaments and appurtenances thereto belonging or in anywise appertaining, including, but not limited to, all riparian or littoral rights, and the reversion or reversions, remainder or remainders, rents, issues and profits thereof. AND TOGETHER WITH a perpetual but non-exclusive easement appurtenant to the Property over, under and through the property described on Exhibit "B" attached hereto and made a part hereof for pedestrian and vehicular access to the Property and the installation, use, operation, maintenance, repair and replacement of wastewater and other utility lines used in connection with the Property. RESERVING UNTO GRANTOR a perpetual but non-exclusive easement for the installation, use, maintenance, repair and replacement of reuse water pumps, transmission lines and related equipment over, under and through the portion of the Property described on Exhibit "C" attached hereto and made a part hereof. TO HAVE AND TO HOLD the above granted, bargained and described premises, with the appurtenances thereto, unto said Grantee to Grantee's own proper use, benefit and behoof forever, SUBJECT TO: 1. Covenants, restrictions and easements of record, if any, none of which are hereby reimposed; and 2. Zoning restrictions, prohibitions and other requirements imposed by a governmental authority. AND Grantor does hereby warrant the title to said land, and will defend same against the lawful claims of all persons. IN WITNESS WHEREOF, Grantor has hereunto set his hand and seal the day and year first above written. WITNESSES: HAWK'S CAY INVESTORS, LID., a Florida limited partnership By: Hawk's Cay Management, Inc., a Florida corporation, its general partner By: Print Name: Name: Title: Print Name: Corporate Seal; STATE OF FLORIDA COUNTY OF MONROE The foregoing instrument was acknowledged before me this _ day of , 20-, by , the of Hawk's Cay Management, Inc., a Florida corporation, the general partner of Hawk's Cay Investors, Ltd., a Florida limited partnership, on behalf of the corporation and partnership, who is personally known to me or who has produced as identification and did/did not take an oath. My Commission Expires: Notary Public State of Florida at Large Print Name:_ Tbis is a conveyance of unencumbered real property for nominal considention per a requirement of Monroe County, Florida and, as sucb, only minimal doeumentary stamp taus are payable on tbis instrument. EXHIBIT "B" BILL OF SALE HAWK'S CAY INVESTORS, LTD., a Florida limited partnership ("Transferor"), for and in consideration ofthe sum ofTen Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, does hereby grant, bargain, sell, set over and convey to Monroe County(''Transferee'') all of the fixtures and items of personal property (the "Property") located on the real property in Monroe County, Florida described on Exhibit "A" attached hereto and made a part hereof, which fixtures and items of personal property are more particularly described on Exhibit "B" attached hereto and made a part hereof. TO HAVE AND TO HOLD unto Transferee, its successors and assigns forever. EXCEPT AS PROVIDED BELOW as to matters of title, the Property is transferred hereby "AS IS, WHERE IS WITH ALL FAULTS". TRANSFEROR hereby warrants to Transferee that Transferor is the lawful owner of the Property shown on Exhibit "B" and that they are free and clear of all liens and encumbrances, that Transferor has good right to sell same and that Transferor will defend title thereto against the claims of all persons whomsoever. IN WITNESS WHEREOF, Transferor has executed and delivered this Bill of Sale as of the_day of ,20_. WITNESSES: HAWK'S CAY INVESTORS, LTD., a Florida limited partnership By: Hawk's Cay Management, Inc., a Florida corporation, its general partner By: Name: Print Name: Title: Tbis is a coDveyaDt:e of uDent:umbered real property for nominal t:onsideration per a requirement of Monroe County, Florida and, as sIKb, only minimal doeumentary stamp taxes are payable on tbis instrument. Print Name: Corporate Seat STATE OF FLORIDA COUNTY OF MONROE The foregoing instrument was acknowledged before me this _ day of , 20-, by , the of Hawk's Cay Management, Inc., a Florida corporation, the general partner of Hawk's Cay Investors, Ltd., a Florida limited partnership, on behalf of the corporation and partnership~ who is personally known to me or who has produced as identification and did/did not take an oath. My Commission Expires: Notary Public State of Florida at Large Print Name:_ WITNESSES: DUCK KEY WASTEWATER COOPERATIVE, INC., a Florida not-for-profit corporation By: Print Name: Name: Title: Print Name: Corporate Seat Tbis is a cODveyaace of uaeacumbered real property for Domaal c:oosideratioD per a requiremeDt of MODroe COUDly, Florida aDd, as sucb, ODIy miDlmal doc:umeDtary stamp taIes are lNIyable OD tbls iDstrumeDt.. STATE OF FLORIDA COUNTY OF MONROE The foregoing instrument was acknowledged before me this _ day of , 20-, by , the of Duck Key Wastewater, Inc., a Florida not- for-profit corporation, on behalf of the corporatio~ who is personally known to me or who has produced as identification and did/did not take an oath. My Commission Expires: Notary Public State of Florida at Large Print Name:_ EXHIBIT "C" TERMINATION OF LEASE THIS TERMINATION OF LEASE is made this _ day of , 20_ by HAWK'S CAY INVESTORS, LTD., a Florida limited partnership (the "Landlord") and DUCK KEY WASTEWATER COOPERATIVE, INC., a Florida not-for-profit corporation (the ''Tenanf'). RECITALS: Landlord and Tenant entered into that certain Lease of the property described on Exhibit "A" attached hereto and made a part hereof with a term beginning May 1, 1990 and expiring April 30, 2096, unless earlier terminated (the "Lease"). In order to provide public notice of the Lease, Landlord and Tenant executed and recorded that certain "Memorandum of Lease" in Official Records Book 1477, Page 161, of the Public Records of Monroe County, Florida (the "Memorandum"). The "Premises" described in and subject to the Lease and the Memorandum are simultaneously herewith being conveyed to the Monroe County which will continue its operation for the same purposes for which Landlord leased the Premises to Tenant. Accordingly, Landlord and Tenant now wish to terminate the Lease and the Memorandum. NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Landlord and Tenant hereby declare and agree that the Lease and the Memorandum are and shall be terminated and rendered null, void and of no further force or effect; provided, however, that the provisions of the Lease which are intended to have effect after its termination (including, without limitation, any indemnification to which Landlord is entitled) shall survive and continue to be effective after this termination. Tbis is a conveyance of unencumbered real property for nominal consideradon per a reqnirement of Monroe County, Florida and, as sncb, only minimal documentary stamp tues are payable on tbis instnment. IN WITNESS WHEREOF, Landlord and Tenant have executed this Termination of Lease as of the date and year first above written. WITNESSES: Landlord: HAWK'S CAY INVESTORS, L TD, a limited partnenhip By: Hawk's Cay Management, Inc., a Florida corporation, its general partner By: Print Name: Name: Title: Print Name: Corporate Seal~ STATE OF FLORIDA COUNTY OF MONROE The foregoing instrument was acknowledged before me this _ day of , 20_, by , the of Duck Key Wastewater Cooperative, Inc., a Florida not-for-profit corporation, the general partner of Hawk's Cay Investors, Ltd., a Florida limited partnership, who is personally known to me or who has produced as identification and did/did not take an oath. My Commission Expires: Notary Public State of Florida at Large Print Name:_ This is a c:oaveyaac:e of uaeac:umbered real property for aomiaal c:oasideratioa per a requiremeat of Moaroe Couaty, Florida aDd, as soc:b, oaly miDimal doc:umeDtary stamp tans are payable OD this iDstrumeDt. EXHIBIT "D" The EDUs charged to the properties of Indies and Utility Islands will not exceed the following: Indies Island and Utility Island Parcel DescriDtion Nuumber of Parcels or Total Units EDUs Villas - new 247 247 Villas - existing 22 22 Villas - future 28 28 Employee houses - Hawk's Cay Resort 20 20 Condominiums 24 24 Clubhouse - Hawk's Cay Resort 1 1 Hotel - Hawk's Cay Resort 178 115 Marina - 53 full service slips - Hawk's Cay 1 24 Resort Marina - 32 other slips 1 10 Utility Island Marina 1 9 Commercial Building - Hawk's Cay Resort 1 6 Laundry Facilities - 3 macho - Hawk's Cay 1 14 Resort Other Lots 5 6 Total Potential and Current EDUs 526 EXHIBIT IIEII DUCK KEY WASTEWATER COOPERATIVE REUSE WATER AGREEMENT THIS AGREEMENT is made and entered into as of the _ day of 2002 between DUCK KEY WASTEWATER COOPERATIVE, INC., a Florida corporation not-for-proflt (IIDKWC"), and HAWK'S CAY INVESTORS, LTD., a Florida limited partnership ("User"). WIT N E SSE T H: A. User intends to transfer the "Utility Island" wastewater transmission and treatment system (the "System") to DKWC. B. In consideration for such transfer, DKWC will provide User reuse water generated by the System. C. User desires to utilize such reuse water for irrigation of lands owned or controlled by User as set forth on Exhibit "A" by reference made a part hereof or lands owned or controlled by User's designee(s). D. DKWC is willing to deliver this reuse water for such irrigation. E. Accordingly, DKWC and User wish to enter into this Agreement providing for the delivery of reuse water to User's property and the property of any designee of User. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, DKWC and User do hereby agree as follows: 1. Term. The term of this Agreement shall commence on the date of the transfer of the System to DKWC and shall remain in effect for so long as User desires to make use of the reuse water. 2. Quantity and Quality. DKWC acknowledges that the current average volume of reuse water is 100,000 gallons per day, ("the reuse base"), and that the volume of reuse water is expected to increase once additional users are connected to the System. DKWC agrees to continue to supply User with the reuse base, subject to Section 6 hereof. DKWC does hereby agree that User shall have the exclusive right, without charge, to the reuse base generated by the System and to designate other users of same, also without charge, as long as the reuse water is used within the service area of the System. 3. Use of Reuse Water. User shall accept the reuse water delivered by DKWC and use it for the irrigation of lands described on Exhibit "A" and lands owned by its designees in any manner determined by User. 4. Point of Deliverv. The Point of Delivery of the reuse water from DKWC to User is shown on Exhibit "B" hereto, it being specifically recognized that the pumps and related equipment and installations for the transmission of the reuse water are located after the point of delivery and are therefore User's responsibility. 5. Easements and Pioina. Each party shall execute all easements, in form and substance reasonably acceptable to the other party, necessary for the operation and maintenance of reuse water lines to and beyond the Point of Delivery. User shall be responsible for all operation and maintenance costs and other expenses relating to pumps or additional piping required from the Point of Delivery to User's irrigation system. User shall be responsible for all costs associated with required sampling and analysis for its reuse water application site. DKWC shall be responsible for all operation and maintenance costs relating to the operation of the System as well as the reuse water and transmission system to the Point of Delivery. 6. Emeraencv Situations. DKWC shall not be held liable by User and User hereby agrees not to hold DKWC liable for failure to deliver reuse water if an event occurs preventing such delivery, provided that DKWC diligently pursues to completion all repairs, corrections, decontamination and other actions necessary to restore reuse water delivery. Such events shall include, but not be limited to: (a). A lack of reuse water due to loss or lack of flow to the treatment plant or due to process failure. (b) Equipment or material failure in reuse water delivery including storage, pumping and piping. (c) Acts of God, public enemy, war, national emergency, allocation or other governmental restrictions upon the use or availability of labor or materials, rationing, civil insurrection, riot, racial or civil rights disorder or demonstration, strike, embargo, flood, tidal wave, fire, explosion, bomb detonation, nuclear fallout, windstorm, hurricane, earthquake, or other casualty or disaster or catastrophe, unforeseeable failure or breakdown of pumping transmission or other facilities. 7. Desianees of User. User may designate another person or entity to receive and use reuse water generated by the System by written notice to DKWC. In such case, User's designee shall be fully bound by the terms and conditions of this Agreement. Other than as to a designee of User as aforesaid, this Agreement is solely for the benefit of the formal parties hereto and no right or cause of action shall accrue upon or by reason hereof, to or for the benefit of any third party not a formal party hereto. 8. Severabilitv. If any part of the Agreement is found invalid or unenforceable by any court, such invalidity or unenforceability shall not affect the other parts of this Agreement if the rights and obligations of the parties contained therein are not materially prejudiced and if the intentions of the parties can continue to be effected. 9. ADDlicable Law. This Agreement and the provisions contained herein shall be construed, controlled, and interpreted according to the laws of the State of Florida. Venue in any action shall lie in Monroe County, Florida. 10. Extent of Aareement. This Agreement constitutes the entire Agreement between the parties as to the use of reuse water made available by DKWC and has been entered into voluntarily and with independent advice and legal counsel and has been executed by the authorized representative of each party on the date written above. This Agreement shall not be valid or enforceable until it has been signed by both parties. Modifications to and waivers of the provisions herein shall be made in writing and signed by the parties hereto. This Agreement shall be binding on the parties hereto and their successors and assigns. 11. Attornevs' Fees and Costs. Should either party employ an attorney to enforce any of the provisions of this Agreement, or defend any action instituted by the other party, the prevailing party shall be entitled to be reimbursed by the other party for all reasonable costs, charges and expenses including attorneys' fees, expended or incurred in connection therewith including same on appeal. 12. Notices. All notices required pursuant to this Agreement shall be in writing, sent by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: DKWC: Duck Key Wastewater Cooperative P. O. Box 500209 Marathon, Florida 33050 Attention: John White User: Hawk's Cay Investors, Ltd. 1200 North Federal Highway Suite 200 Boca Raton, Florida 33432 Attention: Donald H. Johnson 13. Recordation. A copy of this Agreement shall be recorded in the public records of Monroe County, Florida. IN WITNESS WHEREOF, the parties hereto have set their hands and seals this_ day of , 2002. WITNESSES: DUCK KEY WASTEWATER COOPERATIVE, INC., a Florida corporation not-for -profit By: Print Name Print Title: Print Name STATE OF FLORIDA COUNTY OF MONROE The foregoing instrument was acknowledged before me this day of , 2002 by as of Duck Key Wastewater Cooperative, Inc., a Florida corporation not-for-profit, on behalf of the corporation, who _ is personally known to me or _ who produced a as identification. My Commission Expires: Notary Public, State of Florida Print Name WITNESSES: HAWK'S CAY INVESTORS, LTD., a Florida limited partnership By: Hawk's Cay Management, Inc., a Florida corporation, its general partner By: Print Name: Name: Title: Print Name: Corporate Seal~ STATE OF FLORIDA COUNTY OF MONROE The foregoing instrument was acknowledged before me this _ day of , 20-, by , the of Hawk's Cay Management, Inc., a Florida corporation, the general partner of Hawk's Cay Investors, Ltd., a Florida limited partnership, on behalf of the corporation and partnership, who is personally known to me or who has produced as identification and did/did not take an oath. My Commission Expires: Notary Public State of Florida at Large Print Name: EXHIBIT F LEGAL DESCRIPTION OF PROPERTY (AND DRAWING) OPTION AGREEMENT FOR THE TRANSFER Of A WASTEWATER SYSTEM THIS OPTION AGREEMENT for the transfer of a wastewater system is entered into by the Duck Key Wastewater Cooperative, Inc., a Florida not-for-profit corporation (DKWC); Hawk's Cay Investors, Ltd" a Florida limited partnership (HCI); and the Board of County Commissioners of Monroe County, Florida (SOCC); WHEREAS, pursuant to the Development Order ("D.O.") issued for the Hawk's Cay DRI, HCI agreed to transfer the ownership of the wastewater transmission and treatment system (System) serving the Hawk's Cay Development of Regional Impact together with certain easements necessary for anticipated expansion of the system. WHEREAS, the BOCC has not yet determined the most cost-effective method to proceed with upgrade and expansion of the wastewater treatment facility and expansion of the service area and has not yet conducted the pUblic hearing and prepared the report required by Sec, 125,3401, F,S., and so cannot yet enter into a binding contract to purchase the System and related easements. WHEREAS, in view of the above, HeI and DKWC desire to grant the BOCC an exclusive option within which to enter into a purChase agreement for the System and easements; now, therefore, IN CONSIDERATION of the mutual promises and covenants set forth below, the parties agree as follows: 1. The effective date of this option agreement is June 20, 2002. 2. In consideration of Her's obligation under the D.O., HCI and DKWC grants the BOCC an option, to be exercised only at the discretion of the BOCC and effective for 2 years, to enter Jnto a transfer agreement rthe Transfer Agreement") with HC! and DKWC for the purchase of the System and easements. The purchase price will be $10.00, and the other terms (including without limitation agreements with respect to reuse water, ED Us and :J:T 8/1 3~'ttd 9158~6~508'aI 3~IddO ^~~'tt ^~Nno~ 30~NOW'WO~d 5~'01 ~0-0~-Nnr rates) will be negotiated between the parties and included in the Transfer Agreement. soee (or its assignee pursuant to Paragraph 4, below) may exercise this option by so notifying HeI and DKWC, in writing prior to expiration of this option agreement, In order to assure fair and equitable allocation of System costs among all users, those other terms will be the subject of a public hearing at which input will be solicited from Duck Key, Conch Key, Walker Key and Indies Island property owners, The Transfer Agreement will become effective upon approval by each of the parties to this Agreement, HeI agrees to allow the hook-up of a Conch Key and Walker Keys collection system free of charge, at any time during the term of this Option Agreement. 3. If not exercised as provided in Paragraph 2, this option agreement will expire 2 years from the effective date and thereafter be of no further force and effect. 4. This option may be assigned by the SOCC only to the Florida Keys Aqueduct Authority or another govemmental entity or a public corporation financially and professionally capable of furnishing wastewater treatment services. This option agreement is otherwise not assignable, 5. This option agreement is for the benefit of the parties to It only and may not be construed to create any benefits on behalf of any third parties or any obligations or liabilities on the part of HCI, DKWC or the BOCC (or its assignee), and their officers, partners, shareholders and employees, to any third parties. 6. For the limited purpose of the System transfer requirement of the amended Hawk's Cay Resort Development of Regional Impact development order (specifically paragraph 7 of Monroe County Resolution No, 037-2002) only, this option agreement satisfies the HCrs obligation for transfer of the System and constitutes Hers compliance with the aforementioned development order. E:/C; 3~'a'd 9tSE:C;SC;S0E:'aI 3~IddO ^LL'a' ^LNnO~ 30~NOW'WO~d 9~'0t C;0-0C;-Nnc 7. This option agreement is governed by the Jaws of Florida. Venue for any litigation arising under this agreement must be in a court of competent jurisdiction in Monroe County, Florida, IN WITNESS WHEREOF, the parties hereto have set their hands and seals the dates set forth below. (SEAL) ArrEST: DANNY L. KOLHAGE, CLERK BOARD OF COUNTI' COMMISSIONERS OF MONROE COUNTY, flORIDA By Deputy Clerk By Mayor/Chairperson Date (SEAL) Attest : DUCK KEY WASTEWATER COOPERATIVE, INC. By Title Date By Title (SEAL) Attest: HAWK'S CAy INVESTORS, LTD. By Title Date By Title JdconOKWCS/02 8/8 3~'ttd SlS8~B~S08'aI 3~IddO ^~~'tt ^~NnO~ 30~NOW'WO~d S~'01 ~0-0~-Nnc