COLLATERAL ASSIGNMENT OF LESSEE’S INTEREST IN LEASE
City of San Clemente, a California Municipal Corporation having a mailing address at 910 Calle Negocio San Clemente, CA 92673, Attn: City Clerk and Beaches, Parks & Recreation Director (the “Lessor”) has leased to Salty Turf LLC, a Delaware limited liability company having a mailing address at 224 Avenida Del Mar, Suite C, San Clemente, CA 92672, Attn: Jeff Moore (the “Lessee”), certain premises known as 987 Avenida Vista Hermosa San Clemente, California 92672, more fully described in Exhibit A annexed hereto and made a part hereof (the “Premises”), under lease dated April 1, 2024 (the “Lease”).
American Business Bank having a mailing address at 400 S. Hope Street, Suite 300, Los Angeles, CA 90071, Attn:
SBA Department (the “Collateral Agent”) has made a loan to the Lessee in the original principal amount of $3,900,000.00, (the “Loan”). As additional security for the Loan, the Collateral Agent has required a collateral assignment of the interest of the Lessee in the Lease.
Collateral Assignment of Lease
1 . The Lessee hereby assigns, transfers and sets over unto the Collateral Agent, its successors and assigns, all interest of the Lessee under the Lease of the Premises and under any renewal, extension or modification of the Lease; provided, however, that so long as the Lessee shall not be in default of any of its obligations to the Collateral Agent under the Loan, the Lessee shall continue to enjoy all the rights and privileges of lessee under the Lease.
2. In the event of any default by the Lessee in the payment or performance of any of its obligations to the Collateral Agent under the Loan, beyond the expiration of any applicable grace or cure period, and in addition to any other rights the Collateral Agent may have at law or in equity, the Collateral Agent shall have the immediate right to enter upon the Premises and take possession thereof. The Collateral Agent shall further have the option, whether or not the Collateral Agent has exercised its right to take possession of the Premises, to make this assignment absolute, and thereby to become lessee under the Lease. Upon the exercise by the Collateral Agent of the option to make this assignment absolute, the Collateral Agent may thereafter, at its option, sell, assign or otherwise dispose of the lessee’s interest under the Lease, as collateral, in accordance with the provisions of Article 9 of the California Uniform Commercial Code and Delaware Uniform Commercial code (the “Code”), and shall, with respect thereto, have all rights and remedies of a secured party under the Code. Upon the exercise of this option to make this assignment absolute, the Lessee shall have no further interest in or claim to possession of the Premises, and shall have no further interest in the Lease. Neither the taking of possession of the Premises, nor the exercise of the option to make this assignment absolute shall relieve the Lessee of any of its obligations of performance or payment under the terms of the Lease.
3. In addition to the foregoing, the Collateral Agent may, whether or not it has exercised its right to take possession of the Premises, or its right to make this assignment absolute, in its sole and absolute discretion, and without notice to the Lessee, make payment of any defaulted obligation to the Lessor. Any amount so paid by the Collateral Agent shall constitute a demand obligation from the Lessee to the Collateral Agent. Nothing herein contained shall obligate the Collateral Agent to make such payment, nor shall the making of one or more such payments constitute an agreement on the Collateral Agent’s part to take any further or similar action.
4. The Lessee agrees that it will not alter, assign or transfer any interest in or modify the Lease or terminate the terms thereof or surrender its right of possession to the Premises without the prior written consent of the Collateral Agent.
The Lessee will fulfill or perform each and every condition and covenant of the Lease by the Lessee to be fulfilled or performed, give prompt notice to the Collateral Agent of any notice of default by the Lessee under the Lease received by the Lessee, together with a complete copy of any such notice, and, at the sole cost and expense of the Lessee, cure such default as required by the Lease. Any subsequent leases or agreements for use and occupancy of the Premises or any part thereof shall be and are hereby made subject to all the terms of this Collateral Assignment and the Lessee shall, upon request of the Collateral Agent, further assign and transfer the same to the Collateral Agent by assignment satisfactory to the Collateral Agent.
Attachment 3
5. The Lessee represents and warrants that the Lessee has not executed any prior assignment or pledge of any of its rights, nor are its rights encumbered, with respect to the Lease or the Premises.
6. This agreement shall be governed by the laws of the State of California, shall inure to the benefit of the Collateral Agent, its successors and assigns, and shall be binding upon the Lessee and its successors and assigns.
IN WITNESS WHEREOF, this agreement has been executed this ____ day of _______, 2025.
LESSOR/LANDLORD LESSEE/TENANT
City of San Clemente, a California Salty Turf LLC, a Delaware limited liability municipal corporation company
By: __________________________ By: __________________________ Andy Hall, City Manager Andrew Streett, Manager
By:____________________________
Jeff Moore, Manager
By:____________________________
Marcus Vanneman, Manager
EXHIBIT A
LEGAL DESCRIPTION OF PREMISES
That certain real property located in the City of San Clemente, County of Orange, State of California, described as follows:
All that certain real property situated in the County of Orange, State of California, described as follows: A portion of the Vista Hermosa Sports Park, located within the City of San Clemente, more particularly described as follows: Commencing at a point marked by the coordinates 33°27'37.4"N latitude and 117°36'25.4"W longitude, said point being the Point of Beginning; From the Point of Beginning, proceed in a southerly direction along the western boundary of Courtney's Sandcastle Playground, a distance of 190.40 feet; Then, turning and proceeding in a southeasterly direction, a distance of 98.20 feet; Then, turning and proceeding in a westerly direction, a distance of 130.20 feet; Then, turning and proceeding in a north western direction, a distance of 115.60 feet; Then, turning and proceeding in a westerly direction, a distance of 223.20 feet; Then, turning and proceeding in a northeasterly direction, a distance of 138.90 feet; Then, turning and proceeding in a easterly direction, a distance of 297.90 feet, to the Point of Beginning; Containing an area of
1.2 acres, more or less; Together with all appurtenances, easements, and rights belonging thereto
APN: 678-163-01
987 Avenida Vista Hermosa, San Clemente, California 92672