Section 9. Mortgaging Common Area: The Lochmere Association shall have the power to borrow money for the purpose of improving the Common Area and facilities and pursuant thereto to mortgage the Common Area, or any portion thereof, provided, however, that the execution of such mortgage shall require the same approval of the membership which is required for special assessments for capital improvements as set forth in Article VI, Section 5 of this Declaration. The rights of such mortgage in said Common Area properties shall not be subordinate to the rights of the members.

Section 10. Common Area Dedication or Transfer: The Lochmere Association shall have the right to dedicate or transfer all or any part of the Common Area to any public agency, authority, or utility for such purposes and subject to such conditions as may be agreed to by the Members. No such dedication or transfer shall be effective unless an instrument signed by Members entitled to cast two thirds (213) of the votes of the membership has been recorded, agreeing to such dedication or transfer, and unless written notice of the proposed action is sent to every Member and not less than thirty (30) days in advance.

ARTICLE III

LAND USE

Section 1. Restrictions: Each Dwelling Unit or Site and the facilities on the Common Area shall be subject to both the restrictions herein, and those set forth in the Bylaws.

Section 2. Designated Residential Property Restrictions: All property designated for residential use shall be used, improved and devoted exclusively to residential use.

Section 3. Common Area Restriction: All Common Area recreational facilities and amenities shall be used, improved and devoted exclusively to recreational purposes for the benefit of the Owners.

Section 4. Common Area Offensive Use: No immoral, improper, offensive or unlawful use shall be made of Lochmere, any Dwelling ordinances, and regulations of all governmental agencies having jurisdiction thereof shall be observed.

Section 5. Common Area Construction or Alteration: No person shall undertake, cause, or allow any alteration or construction in or upon any portion of the Common Area except at the direction of and with the express written consent of the Lochmere Association.

Section 6. Nuisance or Annoying Activity: No obnoxious or offensive activity shall be carried on, in or upon Lochmere, nor shall anything be done which may be or may become a nuisance or annoyance to any resident within Lochmere. In addition, no Owner of a Dwelling Unit or Site shall store or keep a trail bike, motorcycle, motorized tri-wheel bike, tractor, truck or other such motorized riding vehicle on the premises except one pick‑up truck and one or more operational automobiles without specific written approval by the Lochmere Association. In granting such approval, the Lochmere Association may attach specific conditions which shall be binding on the Owner and occupants of the Dwelling Unit or Site.

Section 7. Parking and Antennas: The Lochmere Association may regulate the parking of boats, campers, trailers, and the placing of tents and other such items on the Common Area (including the provision of special facilities for which a reasonable charge may be made). No automobiles, trucks, tractors, boats, campers, or trailers shall be regularly parked within the right‑of‑way of any street in or adjacent to Lochmere. The Lochmere Association may regulate or prohibit the erection of antennas on Dwelling Units.

ARTICLE IV

ARCHITECTURAL CONTROL

Section 1. Architectural Committee: An Architectural Committee consisting of three (3) persons shall be appointed at or prior to the sale and transfer of title to the first Site by the Declarant. At such time as the Class B membership expires, the Architectural Committee shall be appointed by the Board of Directors of Lochmere Association. J.P. Goodson Enterprises, Inc. shall be entitled to control the selection of one of this three (3) person architectural committee and that person so selected shall have the right to control the vote of such committee on all decisions of the architectural committee relating to the property within Lochmere and owned now by J.P. Goodson Enterprises, lnc. This right and power shall continue until January,1999 or until J.P. Goodson Enterprises, Inc. has sold seventy-five percent (75%) of all properties in its name and shown on the general plan of development of Lochmere.

Section 2. Plan or Design Approval: No site preparation or initial construction, erection, or installation of any improvements, including but not limited to, Dwelling Units, outbuildings, fences, walls, signs, antennas, clotheslines, and other structures, excavation, or changes in grade shall be undertaken upon any Site unless the plans and specifications therefore, showing the nature, kind, shape, height, materials, and location of the proposed improvements shall have been submitted to the Architectural Committee and expressly approved in writing. No subsequent alteration or modification of any existing improvements or construction, erection or installation of additional improvements may be undertaken or allowed to remain on any of the Sites without the review and express written approval of the Architectural Committee.

Section 3. Effect of failure to Approve or Disapprove: In the event that the Architectural Committee fails to approve or disapprove the design of any proposed Improvements within thirty (30) days after plans and specifications therefore have been submitted and received, approval will not be required, and the requirements of this Article will be deemed to have been fully satisfied; provided, that* the plans and specifications required to be submitted shall not be deemed to have been received by the Architectural Committee if they contain erroneous data or fail to present adequate information upon which the Architectural Committee can arrive at a decision.

Section 4. Right of Inspection: The Architectural Committee shall have the right, at Its election, to enter upon any of the Sites in Lochmere during preparation, construction, erection, or installation of any improvements to determine that such work Is being performed in conformity with the approved plans and specifications.

Section 5. Exterior Maintenance: The exterior maintenance of Dwelling Units, Sites, and improvements constructed thereon shall be the duty of the Owners of such Dwelling Units or Sites (except where specifically provided otherwise) and shall not normally be interfered with by Lochmere Association or any person. If, however, in the opinion of Lochmere Association any Owner shall fail to maintain any Dwelling Unit-or Site in a manner which is reasonable neat and orderly or shall fail to keep improvements constructed thereon in a state of repair so as not to be unsightly, Lochmere Association at its discretion, and following ten (10) days written notice to the Owner, may enter upon and make or cause to be made repairs to such improvement and perform such maintenance on the Dwelling Unit or Site such as, but not limited to, the removal of trash, cutting of grass, pruning of shrubbery, and seeding for erosion control. Lochmere Association, or its agents, shall have an easement for the purpose of accomplishing the foregoing. The costs Incurred by the Lochmere Association in rendering all such services plus a service charge of twenty percent (20%) of such costs, shall be added to and become a part of such other assessments to which such Dwelling Unit or Site is subject.

ARTICLE V MEMBERSHIP AND VOTING RIGHTS

Section 1. Members: The Declarant, for so long as it shall be an Owner, and every person or entity who is an Owner of a fee or undivided fee interest in any Dwelling Unit or Site which is subject by covenants of record to assessments by Lochmere Association, including contract sellers shall be a member of Lochmere Association. The foregoing does not include persons or entities who hold an interest merely as security for the performance of an obligation. Ownership of such Dwelling Unit or Site shall be the sole qualification for membership, and no Owner shall have more than one membership, except as expressly provided hereinafter, Membership shall be appurtenant to and may not be separated from ownership of any Dwelling Unit or Site which is subject to assessment by Lochmere Association. The Board of Directors may make reasonable rules relating to the proof of ownership of a Dwelling Unit or Site in Lochmere.

Section 2. Member Classes and Voting Rights: The Lochmere Association shall have two (2) classes of voting Members:

Class A. Class A Members shall be all those Owners with the exception of the Declarant. Class A Members shall be entitled to one (1) vote for each Dwelling Unit or Site in which they hold the required ownership interest when more than one person or entity holds such interest in any Dwelling Unit or Site all such persons shall be Members. The vote for such Dwelling Unit or Site shall be exercised as they among themselves determine, but in no event shall more than one (1) vote be cast with respect to any Dwelling Unit or Site and no fractional vote may be cast with respect to any Dwelling Unit or Site.

Class B. The Class B Members shall be the Declarant. The Class B Member shall be entitled to seven (7)votes for each Dwelling Unit or Site in which it holds the required ownership interest, provided that the Class B membership shall cease and be converted to Class A membership on the happening of either of the following events, whichever occurs first:

(a) The total votes outstanding in the Class A membership equal the total votes outstanding in the Class B membership; provided, that the Class B membership shall be reinstated with all rights, privileges, responsibilities and voting power if, after conversion of the Class 8 membership to Class A membership, as provided hereunder, additional lands are annexed to the properties without the assent of the Members on account of the development of such additional lands by the Declarant, all within the times and as provided In Article Vill, Section 2; or (b) January 1, 1999.

Section 3. Voting Rights Suspension: The right of any Class A member to vote may be suspended by the­ Board of Directors of the Lochmere Association for just cause pursuant to its rules and regulations and according to the provisions of Article 11, Section 7.

Section 4. Right of Declarant to Representation on Board of Directors of the Association: Notwithstanding anything contained herein to the contrary, until January 1, 1999, or until MACGREGOR DEVELOPMENT (MACGREGOR) shall have conveyed seventy‑five percent (75%) of the properties shown on the general plan of Lochmere heretofore submitted to the Town of Cary, North Carolina, and submitted to VA and HUD, whichever first occurs, MACGREGOR (or its express assignee of the right granted in this Section) shall have the right to designate and select a two‑thirds (2/3) majority of the Board of Directors of the Lochmere Association. Whenever MACGREGOR shall be entitled to designate and select any person or persons to serve on any Board of Directors, the manner in which such person or persons shall be designated shall be as provided in the Articles of Incorporation and/or Bylaws of the Association. MACGREGOR shall have the right to remove any person or persons selected‑by it to act and serve on said Board of Directors and to replace such person or persons with another person or other persons to act and serve in the place of any Director or Directors so removed. Any Director designated and selected by MACGREGOR need not be an Owner. Any representative of MACGREGOR serving on the Board of Directors of the Association shall not be required to disqualify himself from any vote upon any contract or matter between MACGREGOR and the Association where MACGREGOR may have a pecuniary or other interest. Similarly, MACGREGOR, as a member of the Association, shall not be required to disqualify itself upon any vote upon or entrance into any contract or matter between MACGREGOR and the Association where MACGREGOR may have a pecuniary or other interest.