STAPLES NEIGHBORHOOD PARK FUNDING-IMPROVEMENT

D. On October 17, 2006, County and Hendrick Automotive Group, a New York general partnership ( "Hendrick ") entered into that certain "Agreement for Purchase and Sale of Real Property and Escrow Instructions," as subsequently amended, whereby County agrees to sell Lot 1 to Hendrick, and Hendrick agrees to purchase Lot 1 from County. Lot 1 is sometimes referred to as the "Hendrick Parcel" E. County presently owns Lot 2 (sometimes referred to as the "Commercial Parcel"). [Note: Change this Recital if Lot 2 is to be sold to a third party as of the Effective Date]. F. In connection with the proposed developments on Staples Ranch Property, it is contemplated that County will dedicate and convey Lot 3 to City. Lot 3 is sometimes referred to as the Community Park. G. On , 2010, County, City, CLC and Hendrick entered into that certain agreement titled "Funding and Improvement Agreement (Staples Ranch Neighborhood Park/Detention Basin)" [the "Funding and Improvement Agreement "]. The provisions of the Funding and Improvement Agreement are incorporated into this Declaration. H. It is the intent of the parties to the Funding and Improvement Agreement that some of the provisions of the Funding and Improvement Agreement be binding on the successors and assigns of the parties to the Funding and Improvement Agreement, and become covenants that run with the land and bind the Lots that comprise the Staples Ranch Property pursuant to this Declaration as more particularly provided in this Declaration. ARTICLE 1 DEFINITIONS In addition to defined words and phrases in other parts of this Declaration and in the Funding and Improvement Agreement (which defined words and phrases are incorporated into this Declaration), the following defined words and phrases have the meanings set forth in this Article. i) Default Interest Rate. The term "Default Interest Rate" shall mean five percent (5 %) per annum in excess of the "Prime Rate." The "Prime Rate" shall be the reference rate, or equivalent rate, announced as such from time to time by Bank of America or its successor. ii) Late Charge. The term "Late Charge" is an amount equal to five percent (5 %) of the sum or amount to which the Late Charge applies as provided in this Declaration. iii) Laws. The word "Laws" refers to present and future laws, statutes, ordinances, and regulations of all governmental authorities having jurisdiction over Staples Ranch Property. iv) Mortgage. The term "Mortgage" shall mean any deed of trust, mortgage, and/or other security instrument, creating a lien on a Lot. A -1 -2 000299.0044\ 10 9 3 3 3 7.6