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          KENNETH B. NEWMAN, being duly sworn, states:

     1.     I am the liquidating partner of Bleecker Charles Company ("the Sponsor"), a New York limited partnership and plaintiff in this action. I submit this affidavit in connection with the Sponsor's motion for summary judgment granting the Sponsor declaratory and injunctive relief and in opposition to the cross-motion of defendant 350 Bleecker Street Corporation ("the Co-op") for summary judgment. This affidavit is submitted to provide additional facts of which I have personal knowledge, and to place certain documents before this Court.

     2.     On October 21, 1987, a meeting of all shareholders was held to elect members of the Co-op's Board of Directors ("the Board"). At that meeting, I was elected to the Board as a designee of the Sponsor. I remained a member of the Board until November 9, 1999. A true and correct copy of the October 21, 1987 shareholder vote is annexed hereto as Exhibit A.

     3.     The Board meets on a regular basis and minutes were recorded and maintained. I am familiar with the Board minutes recorded from at least October 21, 1987 through November 9, 1999 and have never known the Board to formally approve any unit owner's request to combine two or more apartments and have them treated as one unit. If such a request had been submitted to the Board for approval, and if the Board had approved, it would have been duly noted in the Board's minutes. No such approval was ever made or recorded.

     4.     The Sponsor has granted purchase money financing to only one purchaser, one Anthony Prestipino, on December 16, 1992 in the principal amount of $40,000 bearing interest at 8.6% per annum. The loan was repaid on July 10, 1997. Since that date, the Sponsor has never had any security interest in, or other lien upon, any Proprietary Lease or related share certificates owned by any unit owner.

     5.     On or about June 1, 1999, the then constituted Board called a shareholders' meeting for the purpose of voting on a resolution terminating that portion of a lease between the Co-op and the Sponsor covering a public parking garage ("the Garage Lease") on June 24, 1999. Following receipt of this notice, on behalf of the Sponsor, I was able to present to the Co-op's shareholders, in writing prior to the meeting at which the vote was to be taken, the reasons that voting for termination of the Garage Lease was not proper and otherwise not in their best interests and thereby convince them to attend the meeting and to vote in person. Further presentations were made at the meeting held on June 24, 1999 from both the Sponsor and proponents of termination before the vote was taken. The vote was taken and the shareholders did not approve the termination resolution.

     6.     Sometime during June 2000, the Board called for another shareholders' vote at a meeting to be held on June 27, 2000 to pass a resolution terminating the Garage Lease (presumably a meeting to which I was not invited). The Sponsor did not receive notice of this meeting from the Co-op and learned of it only a few days before the scheduled meeting date. I attended the shareholders meeting but learned at that time that virtually all of the votes had already been submitted by proxy and that many shareholder therefore had decided not to attend the meeting. The chairwoman announced that the termination resolution had been approved by the owners of more than two-thirds of the units other than those held by the Sponsor, but I could not confirm that this in fact happened. Following the vote I, on behalf of the Sponsor, demanded that the Co-op provide me with access to the ballots and/or proxies submitted in this vote for inspection and copying. The Co-op has refused to produce or make available these ballots and/or proxies for inspection or copying by either the Sponsor or its counsel.

     7.     In the accompanying memorandum of law, the Sponsor asserts since the cooperative conversion the principal documents governing the Co-op, namely, the Sponsor's offering plan and amendments, as well as the Proprietary Leases and related share certificates issued to unit owners never changed the original 137 units in the building. The only affidavit submitted by the Co-op in support of the assertion that the number of units has changed was submitted by Marc Lilien. Despite the positions taken by Mr. Lilien in his affidavit, as late as August 1996 and well before Mr. Lilien became a leader of the group of unit owners seeking to terminate the Garage Lease, Mr. Lilien believed that, despite combinations of apartments that had occurred through that time, the building still had 137 units. He is quoting as so stating in an article about the building appearing under the title "Bleecker Street Brouhaha" in the August 1996 issue of Habitat, a leading publication of news about cooperatives in Manhattan. A true copy of that article is annexed as Exhibit B.

/s/ Kenneth B. Newman
Kenneth B. Newman

Sworn to me on this
21th day of June, 2001

/s/ Jason A. Zweig

JASON A. ZWEIG
Notary Public, State of New York
No. 02ZW6021785
Qualified in New York County
Commission Expires March 22, 2003

         ANNUAL MEETING OF SHAREHOLDERS
                       OF
       350 BLEECKER STREET APARTMENT CORP.
                OCTOBER 21, 1987

On October 21, 1987, at the Church of Our Lady of 
Pompeii, Father Demo Hall, located at 25 Carmine Street, New 
York, New York, a meeting of the shareholders of the 
corporation was had. A quorum was presented.  Annexed is a 
list of shareholders present.

The following business was conducted:

     1.     Report of the Board.  Ken Newman reported on 
building income and expenses, the current market value of 
apartments, proposed lobby and hallway renovations and other 
matters of general interest.

     2.    Election.   The following were candidates for 
election to the Board:

                       Linda Schloss
                       Linda Sheer
                       Robin Maya
                       Robin Morlock
                       Mark Lilien
                       Kenneth B. Newman
                       Fred Kohut
                       John Istel
                       Elizabeth Farrell

Michael Mendelson and Diana Mendelson were elected inspectors 
of elections. The inspectors of elections reported that the 
following were elected:

                       Linda Schloss
                       Robin Maya
                       Robin Morlock
                       Mark Lilien
                       Kenneth B. Newman
                       Fred Kohut
                       John Istel

     The meeting was adjourned.

                            /s/ Kenneth B. Newman
                            Kenneth B. Newman, President

Dated: October 22, 1987

Bleecker Street Brouhaha

[Picture with caption: "Newman on the roof of 350 Bleecker: subletting was out of control"]

It was 1993. Refinancing was the issue. Subletting was the problem. Mark Lilien, vice president of the board at 350 Bleecker Street, remembers it well. Out of 137 units, 40 were owned by nonresidents. Another 50 were sponsor-owned. And those numbers were causing trouble.

"We had a board member who had had difficulty selling her apartment," he recalls. "The prospective purchaser couldn't get a mortgage because banks don't want to lend to buildings with such a high level of subletting." Not only that, the board had become concerned about refinancing the building mortgage. "We knew that with our subletting as it was, we would have trouble getting a loan," he notes.

The reasons to forbid subletting were clear: brokers were telling the board that most lenders refused to grant or refinance co-op mortgages ,when more than 20 or 25 percent of a co-op building's apartments are rented out. Yet to the board, the reasons to permit it were just as clear: in a tough market, the co-op didn't want to make it tougher on the owners. With more apartments for sale than there were buyers, owners were worried the they could lose on their investment if they sold. Because of those concerns, Lilien's building had lightened up its subleasing policy in the late '80s and permitted more rentals.

Yet by 1993, things had gotten out of hand and 350 Bleecker Street had good reason to oppose subletting. Besides the refinancing issue, the high number of rentals was seen by many outsiders looking to buy as a sign of instability, making the building more hotel than home.

Nonetheless, the Bleecker Street property avoided a crisis by examining the options, talking with experts, and communicating with the tenants. One reason they succeeded. says Lilien, is because the tenants are an unusually harmonious group. Besides working together to plant a roof garden and build a basement exercise room, most of the shareholders have a warm relationship with Ken Newman, the man who previously owned and converted the building to cooperative status. Newman owns 50 apartments, but does not control the board. He is, however, board president. managing agent and occasional attorney.

"Ken is an unusually enlightened guy." Lilien says, "I'll give you an example. He holds the master lease on two stores and there are no restrictions. He could have easily had bars and restaurants. But he kept them unleased for two years, holding up for a business that would not sell food. Now we have a video store and a bookstore. They don't attract fire hazards, vermin, or noise. He knows that he would have done better financially with a restaurant in the short run but that it would have impaired salability in the building in the long run. He has enlightened self-interest. He's willing to forego short-term revenue for long-term sales.

Newman was made president, Lilien says, out of convenience, "since there are many papers that needs signing and no one has the time or ego to want to handle all that. He knows if he steals money he could lose his license as a lawyer. People trust him. Many tenants give their shares as proxy to Newman to vote. There am not many buildings that give proxies to a former convertor. The converter is usually seen as Hitler or Mussolini.

Newman was instrumental in giving the board advice. "The mortgage came due in November 1996," Newman recalls. "When we started talking about this three years ago, we knew that it would take about two years to actually bring down the number of sublets. We then figured out what the existing sublets were, how many there were to bring down to, and how much time we bad to do it in. Then we discussed policy."

The board held meetings with everyone in and out of the property to discuss what they thought the reasons why the co-op was considering a change, and then dealt openly with complaints and criticisms. Throughout the process, the directors continually stated that, sympathetic as they were to the plight of the non-resident owners, they had to act in the best interests of the building as a whole.

The subleasing program finally put in place allowed an owner to sublet for two years. After that, he had to wait another two years for an opportunity to sublet again. Newman also began selling his rent-stabilized units as they became vacant.

If your property is considering a subletting policy. Newman, Lilien, and others suggest a number of solutions. Among them:

Set terms. Some managers say longer-term leases promote stability, while others insist boards should still limit the length of a sublet. In either case, the board should retain the power to revoke a sublease annually.

Charge a fee. Since a cooperative is taking on extra wear and tear by allowing subletting, managers say it is fair to charge a fee. That can be a flat rate of several hundred dollars, a fee per year, or a fee based on the number of shares, like a flip tax.

If the same subtenant renews, you can waive the fee. That keeps it friendly and also encourages long-term sublets, which are good for building stability.

Require "hardship." Many say that a board can limit sublets by requiring proof of "hardship"; i.e., not that profits are low on reselling the apartment but that resale possibilities are non-existent.

Create a pecking order. Chaos can be avoided by setting firm criteria for who can sublet. Set limits on how many subtenants you have and then give priority to tenants who have been there the longest.

Encourage sales. Some buildings have relaxed pet policies, which can open up the resale market for many of the properties. Lilien says his building created a "simple handout, 8 1/2 by 11, that lists all the features of the building. If people walk by and ask bout apartments in the building, the doorman hands them this flier, which lists a real estate broker to call for more information."

Simplify the sublet procedures. Help your tenants by taking into account their needs, If your sublet procedures are too complicated - and lead to the rejection of acceptable subtenants - you can end up creating animosity in the cooperative. To counter that, some recommend a simple four- page application form that limits questions to financial data, job stability, character, anticipated use, prior history as a tenant, size of the family, and pets.

Simplify sale procedures. Timing is usually critical. Boards may not move as quickly as tenants like, but the directors should remember they are affecting people's lives. At 350 Bleecker Street, the co-op has tried to speed up sales interviews. "We put in rules where we would interview people before there was even a contract," Newman says.

"A lot of buildings require that you submit a contract, applications, and a commitment from the bank before they will consider a transfer. We waive all that. We give people advance indication of our willingness to consent. That certainly helped shareholders who were considering a sale." Agrees Lilien: We try to be human about it, not bureaucrats."

The Bleecker Street board also began a pair of projects that made it easier for tenants to sell. They worked out a deal with a broker who would take four percent commission rather than the six percent standard. "We have a two percent flip tax," says Lilien. "So it sellers use this broker, they in essence get free of the flip tax." And the co-op also entered into a deal with a bank that would provide financing for any of the units in the building, even the less desirable studios. "We did everything we could to help people sell their units and thereby reduce subletting," notes Newman.

Whether you are reducing or simply trying to control subleasing, remember: the final decision will have to be a balancing act between the requirements of the cooperative and the needs of the shareholder. Tough economic times call for tough personal choices, but above all else boards have to be sensitive. Observes Newman: "It is imperative to try to do everything to ease the pain. This is not an easy thing. -- Tom Soter

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