(a) Consent to Supplemental Lien. Notwithstanding any provisions of this Instrument or the Loan Documents to the contrary, and subject to the provisions of this subsection, it is understood and agreed that Borrower may encumber the Mortgaged Property with a lien subordinate at all times to the lien of this Instrument, to secure an indebtedness of Borrower to Lender and its successors and assigns (
the "Supplemental Lender") in the original principal amount of _____________________ (the "
Supplemental Lien").
(b) Default Under Supplemental Lien. An Event of Default under the note evidencing the Supplemental Lien (the "
Supplemental Note"), the security instrument securing the Supplemental Lien (the "
Supplemental Instrument") or any other documents relating to the Supplemental Lien ("
Supplemental Loan Documents"), shall constitute an Event of Default under the terms of this Instrument, and shall entitle Lender to invoke any and all remedies permitted to Lender by applicable law, the Note, this Instrument or any of the other Loan Documents.
(c) No Merger.
(i) If Lender obtains title to the Mortgaged Property (by virtue of a foreclosure sale, a deed in lieu of foreclosure or otherwise) and Lender is also or subsequently becomes the holder of the Supplemental Note and Supplemental Instrument, Lender’s title interest and lien interest shall not automatically merge so as to effect an extinguishment of the Supplemental Instrument by operation of the doctrine of merger.
(ii) If Supplemental Lender obtains title to the Mortgaged Property (by virtue of a foreclosure sale, a deed in lieu of foreclosure or otherwise) and Supplemental Lender is also the holder of the Note and Instrument, Supplemental Lender's title interest and lien interest shall not automatically merge so as to effect an extinguishment of the Instrument by operation of the doctrine of merger.
(iii) Borrower acknowledges and agrees that no course of conduct by Borrower, Lender or Supplemental Lender subsequent to the date of this Instrument shall be used to demonstrate any intent contrary to the express intent stated in this subsection. The parties agree that Supplemental Lender is a third party beneficiary of the provisions of this subsection and that no amendments, modifications, waivers or other limitations of this subsection shall be effective without the prior written agreement of Supplemental Lender.