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<br />Bk Vol pg
<br />05020201 OPR 2726 528
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<br />the interest or lien within a reasonable time; and sixth, the balance, if any, remaining after the full and
<br />final payment and performance of the Obligation, to Grantor.
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<br />3.7 In the event a foreclosure hereunder should be commenced by Trustee in accordance with
<br />the power of sale granted in this instrument, Holder may at any time before the conclusion thereof direct
<br />Trustee to abandon the sale, and may then institute suit for collection of the Note, and for the foreclosure
<br />of the Liens hereof. If Holder should institute a suit for collection of the Note, and for a foreclosure of the
<br />Liens hereof, it may at any time before the entry of a final judgment in such suit dismiss the same, and
<br />require Trustee to sell the Mortgaged Property, or any part thereof, in accordance with the provisions of
<br />this instrument.
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<br />SECTION 4. ASSIGNMENT OF LEASES AND RENTAL.
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<br />4.1 As used in this instrument: (a) "Lease" means any lease, sublease, or other agreement
<br />under the terms of which any person or entity other than Grantor has or acquires any right to occupy or
<br />use any part of the Mortgaged Property, or interest therein; (b) "Lessee" means the lessee, sublessee,
<br />tenant, or other person or entity having the right to occupy or use a part of the Mortgaged Property under
<br />a Lease; and (c) "Rental" means the rents, royalties, and other consideration payable to Grantor by the
<br />Lessee under the terms of a Lease.
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<br />4.2 Grantor hereby assigns to Holder all present and future Leases and all Rental payable
<br />under each Lease now or at any time hereafter existing, such assignment being upon the following terms:
<br />(a) Until receipt from Holder of notice of the occurrence of an Event of Default, each Lessee may pay
<br />Rental directly to Grantor, but Grantor covenants to hold all Rental so paid in trust for the use and benefit
<br />of Holder; (b) upon receipt from Holder of notice that an Event of Default exists, each Lessee is hereby
<br />authorized and directed to pay directly to Holder all Rental thereafter accruing, and the receipt of Holder
<br />shall be a release of such Lessee to the extent of all amounts so paid; (c) Rental so received by Holder
<br />shall be applied by Holder, first, to the expenses, if any, of collection and then in accordance with Section
<br />3; (d) without impairing its Rights hereunder, Holder may at its option, at any time and from time to time,
<br />release to Grantor Rental so received by Holder, or any part thereof; (e) Holder shall not be liable for its
<br />failure to collect, or its failure to exercise diligence in the collection of, Rental, but shall be accountable
<br />only for Rental that it shall actually receive; (f) this assignment shall terminate upon the release of this
<br />instrument, but no Lessee shall be required to take notice oftermination until a copy of such release shall
<br />have been delivered to such Lessee. As between Holder and Grantor, and any person or entity claiming
<br />through or under Grantor other than a Lessee who has not received notice of an Event of Default pursuant
<br />to clause (b) above, the assignment contained in this Section 4 is intended to be absolute, unconditional,
<br />and presently effective, and the provisions of clauses (a) and (b) above are intended solely for the benefit
<br />of each Lessee and shall never inure to the benefIt of Grantor or any person or entity claiming through or
<br />under Grantor, other than a Lessee who has not received such notice. It shall never be necessary for
<br />Holder to institute legal proceedings of any kind whatsoever to enforce the provisions of this Section 4.
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<br />4.3 Nothing in this Section 4 shall ever be construed as subordinating this instrument to any
<br />Lease; provided that any proceedings by Holder to foreclose this instrument, or any action by way of its
<br />entry into possession after the occurrence of an Event of Default, shall not operate to terminate any Lease
<br />which has been approved in writing by Holder, and Holder will not cause any Lessee under any such
<br />approved Lease to be disturbed in his possession and enjoyment of the leased premises so long as such
<br />Lessee shall continue fully and promptly to perform all the terms, covenants, and provisions of his Lease.
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<br />4.4 Grantor covenants to: (a) Upon demand by Holder, assign to Holder, by separate
<br />instrument in form and substance reasonably satisfactory to Holder, any or all Leases, or the Rental
<br />payable thereunder, including, without limitation, any Lease which is now in existence or which may be
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<br />CITY OF SAN MARcos-JQH DEED OF TRUST
<br />779100.6
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