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Section 3.9 Assumption. The Promissory Note shall not be assumable by successors and assigns of the Developer without the prior written consent of the City, which consent shall be granted or denied in the City's sole discretion, subject to the terms of Section 6.5 when applicable. Section 3.10 Non -Recourse. (a) Following recordation of the Deed of Trust, and except as provided below, the Developer shall not have any direct or indirect personal liability for payment of the principal of, or interest on, the Loan or the performance of the covenants of the Developer under the Deed of Trust. The sole recourse of the City with respect to the principal of, or interest on, the Promissory Note and defaults by the Developer in the performance of its covenants under the Deed of Trust shall be to the property described in the Deed of Trust; provided, however, that nothing contained in the foregoing limitation of liability shall: (1) limit or impair the enforcement against all such security for the Promissory Note of all the rights and remedies of the City thereunder; or (2) be deemed in any way to impair the right of the City to assert the unpaid principal amount of the Promissory Note as demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto. (b) The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on the Promissory Note and the performance of the Developer's obligations under the Deed of Trust, except as hereafter set forth; nothing contained herein is intended to relieve the Developer of its waiver of liability in Section 3.6 and the Developer's indemnification obligations under this Agreement, or liability for: (1) fraud or willful misrepresentation; (2) the failure to pay taxes, assessments or other charges which may create liens on the Developer's interest in the Property that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (3) the fair market value of any personal property or fixtures removed or disposed of by the Developer other than in accordance with the Deed of Trust; and (4) the misappropriation of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Development. Section 3.11 Assignment of Collateral Documents. (a) The Developer will grant to the City, pursuant to the Assignment Agreement, a valid, second priority (or such lower priority if approved by the City in writing), continuing security interest in all of the Developer's right, title, and interest presently existing and after-acquired or arising Collateral Documents in order to secure prompt, full and complete payment of any and all of Developer's obligations to the City under this Agreement and in order to secure prompt, full and complete performance by Developer of each of its covenants and duties under this Agreement and the Affordability Covenant. For purposes hereof, the Collateral Documents subject to the Assignment Agreement shall expressly exclude any document that, pursuant to applicable law, the Developer does not have the right to pledge and assign as contemplated by this Agreement. The City shall not have any obligation under any Collateral Documents assigned pursuant to the Assignment Agreement until it expressly agrees in writing REV: 06-17-2020 PR 1199\09\2727850.8 ATTY/AGR.2020.100/353 Main Street Apartments LP (Page 30 of 143)