Section 2. Encroachments and Declarant's Easement to Correct Drainage: All Dwelling Units or Sites and the Common Area shall be subject to easements for the encroachment of Initial improvements constructed an adjacent Sites by the Declarant to the extent that such initial improvements actually encroach, including, without limitation, such items as overhanging eaves, gutters, downspouts, exterior storage rooms, bay windows, steps and walls if this Declaration as a result of settling or shifting of any building or as a result of any permissible repair, construction, reconstruction, or alteration, there is hereby created and shall be and remain a valid easement for such encroachment for the maintenance of the same. For a period of twenty‑five (25) years from the date of conveyance of the first Site in a parcel, phase or section, the Declarant reserves a blanket easement and right on, over and under the ground within that parcel, phase or section to maintain and to correct drainage or surface water in order to maintain reasonably standards of health, safety and appearance. Such right expressly includes the right to cut any trees, bushes or shrubbery, make any gradings of the soil, or take any other similar action reasonable necessary. After such action has been completed, the Declarant shall restore the affected property to Its original condition to the extent practicable. Declarant shall give reasonable notice of intent to take such action to all affected Owners. These rights and reservations are assignable by the Declarant.

Section 3. Private Streets and Limited Common Areas: Private streets and Limited Common Areas may be created upon any Site to serve ft needs of multiple Dwelling Units thereon. Such private streets and Limited Common Areas shall be subject to an easement In favor of every Dwelling Unit to which they are adjacent or which they are designed to serve and shall be deemed appurtenant to each Dwelling Unit whereby the Owner of such Dwelling Unit shall be entitled to use them as a means of ingress, egress and regress, and such other uses as shall have been designated.

Section 4. Easement to Town of Cary: An easement is hereby established for municipal, state or public utilities serving the area, their agents and employees over all Common Area hereby or hereafter established for setting, removing and reading utility meters, maintaining and replacing utility or drainage connections, and acting with other purposes consistent with the public safety and welfare, including, without limitation, police and fire protection.

ARTICLE VIl

ANNEXATION OF ADDITIONAL PROPERTIES

Section 1. Annexation by Members: Except as provided in Section 2 of this Article, additional lands may be added and annexed to Lochmere only if two thirds (2/3) of each class of all the votes entitled to be cast, in the aggregate, by Members are cast in favor of annexation. In such event the holder of Class B voting rights shall be entitled only to one vote for each Dwelling Unit or Site owned. A meeting shall be duly called for this purpose, written notice of which shall be sent to all Members not less than thirty (30) days in advance of the meeting.

For the purpose of such meeting, the presence thereat of Members or authorizing proxies entitled to cast sixty percent (60%) of the votes, in the aggregate, of the Members, shall constitute a quorum. If the required quorum is not forthcoming at any meeting, another meeting may be called within sixty (60) days thereafter, subject to the notice requirement set forth above, and the required quorum of such subsequent meeting shall be one‑half eh) of the required quorum of the preceding meeting.

If a quorum is present and a majority of the votes are cast in favor of the annexation, but the majority is less than the two-thirds (2/3) majority of each class required for approval of the annexation, and it appears that the required two‑thirds (2/3) of each e:

class may be achieved if the Members not present or voting by proxy assent to the annexation, then and in that event, the Members not present or voting by proxy may assent to or dissent from the proposed annexation in writing within one hundred twenty (120) days following the date of the meeting at which he is entitled under Article V, Section 3 of this Declaration either In favor of or against the annexation. If the number of votes cast at the meeting in favor of the annexation, together with the votes deemed to have been cast by the Members assenting to the annexation, shall constitute the requisite two­thirds (2/3) majority of each class of all votes entitled to be cast, the annexation shall stand approved.

Section 2 Annexation by Declarant: The Declarant or either of them may annex additional lands to Lochmere In the following manner:

(a) If, within fifteen (15) years of the date of incorporation of Lochmere Association, the Declarant or either of them should develop additional lands within the boundaries shown on the general plan of Lochmere heretofore submitted to the Town of Cary, VA or HUD, such additional lands may be annexed to Lochmere without the assent of the Members,

(b) If, within fifteen (15) years of the date of incorporation of the Lochmere Association the Declarant or either of them should develop, from time to time, an additional tract or additional tracts of land, other than as set forth in Subsection (a) above, consisting of any property contiguous to the boundaries shown In the general plan of Lochmere heretofore submitted to the Town of Cary, VA or HUD, such additional lands may be annexed to Lochmere without the assent of the Members; provided, however, that such annexation shall be approved by the town of Cary if such approval is required by ordinances of the Town of Cary, and further provided that the annexation of such additional lands referred to in this Section shall not exceed five hundred (500) acres in size or two thousand (2,000) Dwelling Units, whichever is less.

(c) The Declarant or either of them may annex to Lochmere the additional land described in Subsection (a) and (b) of this Section 2 by recording in the Wake County Registry a Declaration of Annexation, duly executed by Declarant, describing the lands annexed and incorporating the provisions of this Declaration. The additional land may be deemed annexed to Lochmere on the date of recordation of the Declaration of Annexation, and no other action or consent shall be necessary except the Town of Cary approval, as provided in Sub‑Sections (a) and (b) of this Section and except as required by Section 4 of this Article.

(d) Subsequent to recordation of the Declaration of Annexation by such Declarant, the Declarant or either of them shall deliver to the Lochmere Association one or more deeds conveying any property that will be designated as Common Area within the lands annexed as such designated property Is developed. It is understood, however, that the Common Area facilities which have been planned for inclusion within the general plan of Lochmere referred to in this Section 2 are intended for the use of the occupants of an estimated 2,000 to 4,000 Dwelling Units and it is also estimated that the adequate maintenance of such amenities will require dues from 2,000 Members in order to avoid excessive charges to the Members. Notwithstanding any provision in this instrument to the contrary, if less than 3,000 Dwelling Units are constructed within the boundaries shown on the general plan of Lochmere referred to in Sub‑Section (1) of this Section 2, no additional amenities shall be required on account of the annexation of additional properties outside the boundaries shown on the general plan of Lochmere until the number of Dwelling Units within the outside said boundaries exceed 4,000 Dwelling Units.

ARTICLE IX

GENERAL PROVISIONS

Section 1. Enforcement: The Lochmere Association, or any Owner, shall have the right to enforce, by any proceeding at law or in equity, all restrictions, conditions, covenants, reservations, liens and charges now or hereafter imposed by the provisions of this Declaration. Failure by the Lochmere Association or by any Owner to enforce any covenant or restriction herein contained shall in no event be deemed a waiver of the right to do so thereafter.

Section 2. Rights of Lenders and Insurers of First Mortgages: Lenders and insurers of first mortgages shall have the following rights:

(a) In the event that any Member is In default in any obligation ‑hereunder which default remains uncured for a period of sixty (60) days, every lender who Is a mortgage as to the Dwelling Unit or Site of the defaulting Member and the insurer of any such first mortgage, shall be immediately notified of such default, provided that such lender and/or insurer shall have given written certified notice to the Lochmere Association that it is a mortgage or insurer as to the Dwelling Unit or site‑of such Member and shall have requested the notice of default as herein set forth.

(b) Every first mortgage and/or insurer of the first mortgage of the Dwelling Unit or Site of a Member of the Lochmere Association shall have the right, during regular business hours, to examine the books and records of Lochmere Association.

Section 3. Amendment by Owners: The covenants, conditions and restrictions of this Declaration shall run with and bind the land, and shall inure to the benefit of and be enforceable by Lochmere Association, or the Owner of any Dwelling Unit or Site subject to this Declaration, their respective legal representatives, heirs, successors and assigns, for a term of thirty (30) years from the date this Declaration Is recorded, after which time said covenants shall be automatically extended for successive periods of ten (10) years. The Covenants, Conditions and Restrictions of the Declaration may be amended during the first thirty (30) year period or thereafter by an instrument signed by the Owners of not less than ninety percent (90%) of the Dwelling Units or Sites, provided, however, that the Board of Directors of the Lochmere Association (with prior approval of VA or HUD) may amend this Declaration to correct any obvious error or inconsistency in drafting, typing or reproduction or amendment requested by VA, HUD or the Federal National Mortgage Association, without action or consent of the Owners, and such amendment shall be certified as an official act of the Board and recorded in the Wake County Registry.

Section 4. Amendment to Achieve Tax-Exempt Status: The Declarant, MacGregor Development Company, for so long as it shall retain control of the Board of Directors of Lochmere Association, and thereafter, the Board of Directors, may amend this Declaration as shall be necessary, in its opinion, with the consent and approval of VA or HUD, and without the consent of any Owner, in order to qualify the Lochmere Association or Lochmere, or any portion thereof, for tax‑exempt status. Such amendment shall become effective upon the date of its recordation in the Wake County Registry.

Section 5. Certification and Recordation of Amendment: Any instrument amending these covenants, conditions and restrictions, (other than an amendment by the Board to correct an error or inconsistency in drafting, typing, or reproduction) shall be delivered, following approval by the owners, to the Board of Directors. Thereupon, the Board of Directors shall, within thirty(30) days after delivery, do the following:

(a)   Reasonably assure itself that the amendment has been duly approved by the Owners as provided in Section 3 of this Article. (For this purpose, the Board may rely on its roster of Members and shall not be required to cause any title to be examined.)

(b) Attach to the amendment a certification as to its validity, which certification shall be executed by the Lochmere Association.

(c) Within the thirty (30) day period aforesaid, cause the amendment to be recorded in the Wake County Registry.