AMENDMENT NO. 3 TO EXCHANGE AND EASEMENT AGREEMENT
THIS AMENDMENT NO. 3 TO EXCHANGE AND EASEMENT AGREEMENT (this “Amendment”) is entered into as of February 21, 2023, by and among THE CITY OF REDONDO BEACH, a California chartered municipal corporation (“City”), SOUTH BAY CENTER SPE, LLC, a Delaware limited liability company (“South Bay Center”), and SOUTH BAY ASSOCIATES SPE, LLC, a Delaware limited liability company (“South Bay Associates”).
RECITALS:
WHEREAS, South Bay Center, South Bay Associates and City entered into that certain Exchange and Easement Agreement dated as of June 1, 2013, as amended by (i) that certain Amendment to Exchange and Easement agreement among South Bay Center, South Bay Associates and City dated as of May 15, 2018; and (ii) that certain Omnibus Amendment to Ground Lease and Exchange and Easement Agreement dated as of March 16, 2021 (as amended by both of the foregoing amendments, the “Exchange Agreement”).
WHEREAS, South Bay Center, South Bay Associates and City desire to amend the Exchange Agreement to, among other things, change certain closing conditions by providing for the close of escrow (defined in the Exchange Agreement as the “Step Two Close of Escrow”) for the land exchange to occur sooner, in order to facilitate Developer’s final tract map recordation and further other mutual objectives of City and Developer.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties do hereby agree:
1. Defined Terms. All initially capitalized terms used herein but not herein defined shall have the meaning ascribed to such terms under the Exchange Agreement.
2. Amended Provisions.
(a) Step Two Closing Date. The definition of the term “Step Two Closing Date” in Section 1.2 is hereby deleted and replaced with the following sentence: “Step Two Closing Date” means the date which is two business days following Escrow Agent’s receipt of written confirmation (i) from Developer that all conditions to closing in Section 6.2 have been satisfied or waived; and (ii) from City that all conditions to closing in Section 6.3 have been satisfied or waived. The Parties shall use reasonable good faith efforts to (a) satisfy the closing conditions and provide the foregoing confirmations to Escrow Agent on or before March 15, 2023; and (b) achieve the Step Two Close of Escrow on or before March 31, 2023. (b) Waiver of Future Transit Center Completion as a Closing Condition. In view of the fact that the Future Transit Center construction is now complete, Developer hereby waives condition 6.2(c), which stated: “The City shall have delivered notice to the Developer that the Future Transit Center has been constructed on the FC Kingsdale Parcel.” 2 (c) Changes to City Demolition and Restoration Obligations. Developer hereby waives condition 6.2(d) as a condition precedent to the Step Two Close of Escrow; provided, however, that City shall remain obligated to perform the “City’s Post-Closing Work” as defined below in this paragraph. The City shall perform City’s Post-Closing Work at City’s sole cost and expense as soon as possible following the Step Two Close of Escrow using reasonable good faith efforts. The City’s Post-Closing Work shall consist of demolition of portions of the Existing Transit Center and installation of a new curb, gutter, interim sidewalk and irrigated interim landscaping as indicated on Exhibit “1” to this Amendment. (d) Transfer of Bus Operations. The Parties acknowledge and agree that City has transferred transit center operations over to the Future Transit Center prior to the date of this Amendment and will no longer utilize the City Galleria Parcel for transit operations. (e) Amendment to Section 10.1(c). The first sentence of the second paragraph of Section 10.1(c) is hereby amended as indicated by the following redlining:
“Notwithstanding the foregoing, City, at its sole cost and expense, and including all costs of demolition and construction, whether or not anticipated or budgeted, shall perform the City’s Post-Closing Work construct a parking lot on the City Galleria Parcel in compliance with all applicable laws and with good workmanship and materials.” All other references in Section
10.1(c) to City construction of a parking lot on the City Galleria shall be deemed to refer instead to the City’s Post-Closing Work.
(f) Construction Easements Over and Adjacent to the City Galleria Parcel.
Paragraph 14.1(d) is hereby amended as indicated by the redlining below:
14.1(d) Developer and South Bay Center hereby grant
grants to City temporary access during the period of demolition and construction in, to over under and across such portions of the property owned by the Developer or South Bay Center that are on or adjacent to the City Galleria Parcel Existing Transit Center as necessary for: (i) the City's installation and maintenance of street lights and any required construction and maintenance of the adjacent interim landscaped area and walkway including, without limitation the right to remove, repair, or relocate water electrical, telephone, power, and other utility lines, and the right of entry and exit over and through Developer's or South Bay Center’s adjacent property as needed for demolition and installation of street lights, all of which shall expire and be of no further force or effect upon and after the Step Two Closing Date July 1, 2023 except as otherwise provided*; and (ii) the City’s Post-Closing Work. In exercising its rights under the temporary access rights described herein, the City shall use its commercially reasonable efforts to not materially interfere with access to or the business operations of the Galleria Shopping Center. City shall provide notice to Developer’s property manager at least ten (10) calendar days prior to the date City intends to enter the adjacent property. City shall indemnify Developer and South Bay Center for any losses incurred by Developer or South Bay Center as a result of City's exercise of the rights granted hereunder, and shall require City’s contractors for this work to name South Bay Center as an additional insured on any insurance coverage the contractor is required to maintain for the City, provided that this additional insured requirement does not result in additional cost to the 3 City. maintain insurance and require any agents to maintain insurance in an amount a reasonable person performing work of the type to be performed would carry. *The utility easement and maintenance agreement for the 20-foot strip allows City access to maintain the street light system for the duration of the agreement. (g) Addresses for Notices. Addresses for notices in Section 16.5 are hereby changed to the following:
If to City: City of Redondo Beach
415 Diamond Street
Redondo Beach, CA 90277
with copy to Lender: KW South Bay Galleria, LLC
c/o Kennedy Wilson
151 S. El Camino Drive
Beverly Hills, CA 90212
If to Developer or South Bay Center:
South Bay Associates SPE, LLC
1815 Hawthorne Blvd., Suite 201
Redondo Beach, CA 90278
Attention: Stuart Miller
with copy to Lender: [See above]
If to Escrow Agent: Stewart Title Guaranty Company
Attn: Jeanine Weld, Commercial Processor
525 North Brand Boulevard
Glendale CA 91203
Reference: Escrow #12110400 - Title #450459
with copy to Lender: [See above]
(h) City Galleria Parcel Deed. Prior to the Step Two Closing, the Parties shall revise and re-execute Exhibit “E” (City Galleria Parcel Deed) to replace Developer with South Bay Center as the grantee.
(i) Utility Easement and Maintenance Agreement and Exhibits. Exhibit “1” attached to this Amendment is hereby substituted for and shall for all purposes replace: i) Exhibit “P” to the Exchange Agreement; and ii) Exhibits “C” and “D” of the Utility Easement and Maintenance Agreement and Subordination (“UEMAS”, also known as Exhibit “U” to the Exchange Agreement). The first sentence of Section 2 of the UEMAS is hereby deleted and replaced with the following two sentences: “No later than 120 days following the recordation of this Agreement, City at its cost shall demolish portions of the prior transit center improvements 4 on the Developer’s Access Area and adjacent City property and install a new curb, gutter, interim sidewalk and irrigated interim landscaping as indicated on Exhibit “C” hereto (collectively, the “City’s Post-Closing Work”). As soon as practicable following completion of the City’s Post-Closing Work, but in no event later than 12 months after completion of the City’s Post-Closing Work, Developer at its cost shall install a permanent meandering walkway, parkways, irrigation and landscaping in the Developer’s Access Area as indicated on Exhibit “C”.
(j) Other Conforming & Corrective Amendments. The Parties shall reasonably cooperate in executing conforming and corrective amendments to the Exchange Agreement exhibits and other closing documents related to the Step Two Close of Escrow, including but not limited to: (i) preparing one or more alternate versions of Exhibit “1” and other exhibits that are more legible and suitable for recordation; and (ii) updating the closing documents with updated references to the Parties’ current addresses and the identity and address of the current Lender as set forth in paragraph 2(g) above.
3. Full Force and Effect/Conflicting Provisions. Except as expressly modified by this Amendment, the terms of the Exchange Agreement shall remain in full force and effect. In the event of a conflict between the terms of the Exchange Agreement and the terms of this Amendment, the terms of this Amendment shall control.
[Remainder of Page Left Intentionally Blank.]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above set forth.
CITY OF REDONDO BEACH, SOUTH BAY CENTER SPE, LLC,
a California chartered municipal corporation a Delaware limited liability company By: ______________________________ By: ______________________________ Name: William C. Brand______________ Name: ____________________________ Title: Mayor________________________ Title: _____________________________ Attest: SOUTH BAY ASSOCIATES SPE, LLC, a
Delaware limited liability company
By: ______________________________
______________________________ Name: ____________________________ Eleanor Manzano, City Clerk Title: _____________________________ Approved:
______________________________
Diane Strickfaden, Risk Manager
Approved as to Form:
______________________________
Michael W. Webb, City Attorney
EXHIBIT “1”
CITY & DEVELOPER RESPONSIBILITIES FOR DEMO AND IMPROVEMENT Scope Division Legend
City scope of work
Owner scope of work
paint black and board up
all glass on the inside
remove wall
mounted sign boards
remove hanging circle
signs above, typ
perform a final cleaning of interior spaces
and turn keys over to SBG operations
perform a final cleaning of interior spaces
and turn keys over to SBG operations
Scope Division Legend
City scope of work
Scope Division Legend
City scope of work
Owner scope of work
City to install temporary sidewalk,
landscaping, and irrigation until new
sidewalk is constructed by owner.
City to install temporary sidewalk,
landscaping, and irrigation until new
sidewalk is constructed by owner.
Scope Division Legend
City scope of work
Owner scope of work