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KENNETH B. NEWMAN, being duly sworn, deposes and says:

     1.     I am the liquidating partner of Bleecker Charles Company ("the Sponsor"), the plaintiff in this action. I submit this supplemental affidavit, with leave of court, in support of the Sponsor's motion for summary judgment and in opposition to the Co-op's cross-motion for surnrnary judgment. [1] This affidavit responds to the factual assertions made in the Reply Affidavits of Mark Lilien, sworn to on July 3, 2001 ("Lilien Reply Affidavit") and Robert N. Fass, sworn to on July 6, 2001 ("Fass Reply Affidavit") submitted on behalf of the Co-op to support the Co-op's latest attempt to establish a paper trail recording physical combinations of apartments at 350 Bleecker Street ("the building").

Dates of Completion of Physical Combinations

     2.     I have reviewed the minutes of meetings of the Board from 1989 through 1999. Mr. Lilien submits Board minutes, and Mr. Fass submits Building Department records, to show that the Co-op documents reflect the physical combination of apartments. There are some Board minutes reflecting contingent approval of some (and certainly far from all) physical combinations of contiguous apartments in the building. However, there are no minutes recording that (a) these contingencies were fulfilled, (b) the physical combinations, whether or not contingent approvals were granted, were actually completed, (c) the combinations, if and when completed, were in compliance with the Board's approved plans and contingencies, or (d) when the combinations were completed.

     3.     The contingent approvals granted by the Board for some combinations cannot be equated with the occurrence of actual combinations. This is because the combinations can be accomplished only after the Board has granted contingent approval. The completion of the physical combinations are usually preceded by several, time-consuming steps, including, among others, (a) the filing of an application for a building permit with the Department of Buildings of the City of New York ("Building Department"), (b) the signing of an alteration agreement by the apartment owner with the Co-op, (c) the apartment owner's hiring of one or more contractors, architects or engineers (d) the contractors' satisfaction of the bonding and other pre-work commencement requirements under the alteration agreement, and (e) the actual performance of the contractors' work. The Lilien Reply Affidavit shows that some combinations were not completed until several years after the Board granted contingent approval for those combinations. (See Lilien Reply Aff., ¶22, 25).

     4.     If a combination becomes a combination only when it is completed for the purposes of calculating when the window period opened under the Act, then the Lilien Reply Affidavit demonstrates that the Notice was untimely. Mr. Lilien's discussion of the combination of 3D, 3E and 3F (¶25) reveals that the combination was not complete until October 1998. Because there were no unit sales by the Sponsor between December 16, 1997 and November 5, 1998, the disqualification of this one asserted combination (because the combination is not a "combination" until completed) would mean that the window period opened on December 16, 1997, when by the Co-op's account the Sponsor would have owned 33 of 133 units or 24.81%, and closed on December 16, 1999, almost one year before the effective date of the Notice (October 18, 2000). (See Stipulation of Undisputed Facts, Ex. E.)

     5.     To show that physical combinations of apartments in the building are not reflected in the Co-op's documents, I annex, as Exhibit 1, a chart reflecting the sources of information relied upon in the Lilien and Fass Reply Affidavits (documentary and oral, from the Co-op's records and from the records of the Building Department). The chart identifies the dates on which the physical combinations of apartments were purportedly completed. For four of the seven combinations, the chart shows no Board minutes contingently approving the combinations or noting their completion (Units 3D, 3E and 3F; 6C, 6D and 6E; 6K and 6L; 6V and 6W). For three of the seven combinations, the minutes report only the Board's contingent approvals (Units 3G and 3H; 4A and 4B; SW and 5X ). For six of the seven combinations, the only documentation of the dates of completion offered by the Co-op are inconclusive notations on a Building Department record entitled Property Profile Overview ("Property Profile") (Units 3D, 3E and 3F; 3G and 3H; 4A and 4B; 5W and 5X; 6C, 6D and 6E; 6K and 6L). For two combinations neither the Co-op's records nor the Property Profile reflect the possible completion of the combinations (Units 5W and 5X; 6V and 6W ). For three of the seven combinations, the Co-op relies on changes in the Certificate of Occupancy which do not reflect a final date of completion. No Board minutes provide a date of completion for any of the combinations.

     6.     As Exhibit 1 demonstrates, the purported effective date of the Notice (October 18, 2000) falls wel1 after the Act's two-year window period closed under any of the Co-op's combination theories. First, if the completed combinations are evidenced merely by "actual" Board approval (Ex. I, column D, the total number of units remains at 137. On this basis, the Sponsor would have owned 25% or fewer of the total units as of October 16, 1997, by which time the Sponsor owned only 34 units, and the window period would have closed on October 16, 1999. Second, if the completed combinations are evidenced by "conditional" Board approvals (Ex. 1, Column II), there would have been 135 units on October 10, 1991 (with no subsequent reduction until January 20, 2001), thereby translating the 25% threshold under the Act into 33.75 Sponsor-owned units. On this basis, the window period would have opened on December 16, 1997, by which time the Sponsor owned 33 units, and would have closed on December 16, 1999. Third, a similar result occurs if the completed combinations are evidenced by changes in the numbers of apartments reflected in Certificate of Occupancy amendments (Ex. 1, Column III). On this basis, the total number of units would be reduced to 135 on March 26, 1996 (with no subsequent reduction until April 7, 2000), translating the 25% threshold into 33.75 units. On this basis, once again, the window period would have opened on December 16, 1997, by which time the Sponsor owned 33 units, and would have closed on December 16, 1999. Fourth, if completed combinations are evidenced by the notations in the Property Profile (Ex. 1, Column IV), the window period would have opened on October 16, 1997 and closed on October 16, 1999. On this basis, the total number of units was reduced to 136 on March 26, 1996 (with no subsequent reduction until September 11, 1998), translating the 25% limit into 34 total units. As previously noted, this occurred on October 16, 1997.

     7.     The determination of the time when a combination has been completed is not revealed by either the Co-op's or the Building Department's records. Thus, Column V of Exhibit 1, shows that the "evidence" upon which the Co-op relies is Mark Lilien's recollection. Mr. Lillien's recollection is not a cooperative document, as required by the Act.

     8.     The Building Department's records do not show the date upon which a combination may have been completed. The dates taken from the Property Profile (Fass Reply Affidavit, Ex. B), by Mr. Fass (Fass Reply Affidavit, ¶¶5-11) and by Mr. Lilien (Lilien Reply Affidavit, ¶11) appear under the heading "File Date," which is the date an apartment owner files his application with the department. This is not the date of final approval, and is often long before the date of completion of the proposed alteration. Some of the entries in the Property Profile refer to units that "will be combined," again providing no completed combination date. Two entries refer not to specific apartments, but only floors in the building (e.g., entries for 5th and 6th floors). Under the column "Job Status," some entries refer to "sign off," and some to "partial permit." Neither necessarily signifies a completed combination (they may, for example, indicate completion of only part of the combination such as plumbing or electrical work). Even Mr. Lilien describes these records as mere "permit applications" that are then "recorded on the Department's computer records." (Lilien Reply Affidavit, ¶11). Finally, these are government records, not cooperative documents, as required by the Act.

     9.     The amended Certificates of Occupancy cited by the Co-op for three apartment combinations also do not provide completion dates for the combinations. The only date provided is the date of issuance of the amended Certificate of Occupancy. (See, e.g, Fass Reply Affidavit, Ex. A). This date depends on the Building Department's administrative convenience, not on the actual completion date of the combination referred to. Moreover, as the Co-op concedes, Certificates of Occupancy need not be amended for every alteration. (Lilien Reply Affidavit, ¶10). Finally, this too is not a cooperative document, as required by the Act.

Authority to Change Unit Designations in Proprietary Leases and Related Shares

     10.     The Proprietary Leases and Related Share Certificates have not changed since the building was converted. Like the original Offering Plan (the correct source for the number of "units"), these documents establish the number of units in the building as 137. The Co-op has failed to provide any evidence (documentary or otherwise) that the Sponsor ever had any authority to alter the Proprietary Leases or Related Shares without the express consent of the owner. At no time has any apartment owner or the Board ever requested that I, acting in any capacity (whether as representative of the Sponsor, representative of the Co-op's managing agent or otherwise), amend any Proprietary Lease or Related Share certificate in this manner. Moreover, I was never asked for my opinion or advice regarding the Board's authority to demand any such changes, with or without the unit owner's consent.

     11.     Kenneth B. Newman Realty Corporation acted as managing agent for the Co-op from July 31, 1985 until January 31, 2001 under a written management agreement (annexed as Exhibit A to the Lilien Reply Affidavit), as amended from time to time ("the Management Agreement"). (The final amendment extending the term of the Management Agreement through January 31, 2001 is annexed as Exhibit 2.) As a principal of the managing agent, I managed the physical assets of the Co-op, collecting monthly maintenance charges, paying bills and performing other administrative functions. I also served as transfer agent at the Board's discretion. As transfer agent, I would issue new share certificates and provide the papers to effectuate transfers of Proprietary Leases. In effecting these transactions, my company acted with the authorization of the Board. I was never directed by the transferors, the transferees or their respective attorneys to issue new Proprietary Leases or share certificates to owners of apartments that had been (or were being) physically combined.

     12.     In cases where the Board had contingently approved combinations of apartments when I was president of the Co-op, on behalf of the Co-op, I entered into alteration agreements with the apartment owners. While I did not retain copies of any alteration agreements, the Co-op's standard form alteration agreement is posted on its web site (http://350bleecker.com) under the banner Policies. (A copy of the form alteration agreement posted on the Co-op's site is annexed as Exhibit 3.) This alteration agreement primarily concerns the obligations of the apartment owner to make the physical alterations required to effect a physical combination of apartments in compliance with applicable Department of Building's regulations and to do so without causing physical or financial damage to the Co-op or the building. It does not require that the owner agree to amend his or her Proprietary Leases or Related Shares to change the multiple unit designations to a single unit designation.

My Limited Role As Counsel for the Co-op

     13.     The Lilien Reply Affidavit misdescribes actions I took when serving on the Board. First, I often abstained from voting on the issue of whether to grant an owner's request to combine contiguous apartments. Second, I seldom prepared Board minutes. Minutes were usually prepared by the Board's elected corporate secretary. Moreover, before my term on the Board expired, I turned over all minutes in my possession to the Board. Some minutes were missing because past corporate secretaries ignored repeated requests to provide me with copies.

     14.     The Lilien Reply Affidavit misleadingly portrays the limited legal representation that I provided to the Co-op. I never served as the Co-op's general counsel. I did not act as its counsel in any ongoing fashion and did not give the Board legal advice. Rather, over the years the Co-op retained various attorneys to represent it on specific matters, as it did before and during the period of time (from October 1997 through October 1999) when the Sponsor asserts the window period was open. I served as counsel for the Co-op only upon its most recent mortgage refinancing in 1995. When occasions arose during my service on the Board for the discussion of legal issues, I would respond to questions from other Board members and state my thoughts on the subject or suggest that outside counsel be retained. In so doing, I spoke not as counsel, but rather as a Board member or as a representative of the managing agent (who happened to be a lawyer) expressing my personals views on matters affecting the Co-op.

The Sponsor Never Exercised Any Alleged Veto Power

     15.     The Sponsor never exercised any power it may have possessed to veto any capital expenditures, operating expenses, additional employees or services, establishing reserves or other endeavors.

The Holders of Unsold Shares

     16.     There is nothing in the cooperative documents that requires the Sponsor to perfect either the Lomanto's or the Iwanczuk's status as holders of unsold shares under either the By-laws or applicable New York regulations. The Sponsor provided written designations to the Lomantos and to Ms. Iwanczuk, before her marriage and transfer of her Proprietary Lease and Related Shares to her husband and herself, as co-tenants. Any additional legal steps necessary to perfect that status has always been the individual designee's responsibility. That the Lomantos and Iwanczuks were able to sublet their units without being subject to certain restrictions and fees is not dispositive of whether they are legally entitled to all the rights and privileges of holders of unsold shareholders under New York law. Their entitlements, or lack thereof, is determined by New York law.

The 1999 and 2000 Shareholder Meetings

     17.     Prior to the shareholders meeting on June 24, 1999 at which the first vote was held to terminate the Garage Lease under the Act, I sent the shareholders letters stating the Sponsor's reasons why they should not vote to terminate the Garage Lease. I expressed my belief that, even if the Garage Lease could be terminated under the Act, there was no net financial benefit for the Co-op's shareholders and there were serious risks for them, including the loss of tax write-offs and possible jeopardy to the Co-op's favorable mortgage financing. The Sponsor also informed the shareholders that it believed it would prevail in any future litigation to terminate the Garage Lease under the Act. In particular, I stated that the Sponsor would seek to utilize the Act's fee-shifting provision to pass along the Sponsor's legal expenses to the Co-op and to assert the legal position that the Co-op could not under the Act pass on those expenses to the Sponsor in its capacity as shareholder. The shareholders were entitled to have this information, which was not disclosed to them by the proponents of the termination resolution. At the meeting, the Sponsor's counsel informed the shareholders that the ability of the Sponsor to avoid being assessed for part of the litigation expense award was an open question under the Act.

     18.     At the shareholder meeting held on June 27, 2000 to terminate the Garage Lease under the Act, when the Sponsor's (and possible others') non-receipt of notice of the meeting was under open discussion, Mr. Lilien stated that, if necessary, he would sign an affidavit stating that he did in fact mail notices to these parties. I believed then (and now) that he was saying that, although he had not in fact mailed notices to the Sponsor (and possibly others), he would claim that he had, if necessary.

Admissions in the Co-op's Newsletters

     19.     The Co-op's current position that there is a common understanding that the building contained fewer than 137 units at the time of the 1999 and 2000 shareholder votes to terminate the Garage Lease is contradicted by its own newsletters (which were often drafted by Mark Lilien himself) announcing that the building contains 137 units. (True and correct copies of the newsletter reflecting that the building contained 137 units at the time of both the 1999 and 2000 shareholder votes are annexed hereto as Exhibit 4.) Similarly, the Co-op's current position that the votes were counted by unit owner and not by unit is contradicted by statements in the July 15, 2000 newsletter. (A true and correct copy of the newsletter, dated July 15, 2000, reflecting that the 2000 vote was counted by units and not owners is annexed hereto as Exhibit 5.)

Sworn to me on this
27th day of July, 2001

/s/ Glessie M. Agrinzoni
Notary Public

GLESSIE M AGRINZONI
Notary Public, State of New York
No 01AG4759429
Qualified in Kings County
Commission Expires Nov. 30, 2002

Alleged Dates of Combinations/Sources of Information Provided

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

     KATHLEEN IWANCZUK and ANATOLE IWANCZUK, both being duly sworn, state:

          1.     From November 1, 1967 until November 1, 1999, I, Kathleen Iwanczuk, was a full-time employee of Blumenthal & Lynne, a Professional Corporation. Neither I nor my husband, Anatole Iwanczuk, have ever been employed by plaintiff Bleecker Charles Company ("the Sponsor") or by Kenneth B. Newman, P.C.

          2.     On or about July 31, 1985, I, Kathleen Iwanczuk purchased, from the Sponsor, the Proprietary Lease issued by 350 Bleecker Street Apartment Corporation ("the Co-op") for Unit 6A located in the residential apartment building at 350 Bleecker Street in the City, County and State of New York, New York ("the Property") and related shares of stock in the Co-op. On or about June 16, 1987, I, Kathleen Iwanczuk transferred that interest to both my husband and me as tenants in common.

          3.     Neither Mr. Newman nor any other representative of the Sponsor has ever influenced or attempted to influence any position that we have proposed to take, or have taken, as the owners of Unit 6A.

          4.     We understand that the Co-op sent written notices to some shareholders of Co-op for the shareholders meeting held on June 27, 2000 to vote a resolution to terminate that portion of an Agreement of Lease between the Sponsor and the Co-op covering the public parking garage appurtenant to the Property. We did not receive this notice, despite the fact that we were eligible to vote at that meeting on that resolution.

Sworn to me on
this 26th of July, 2001

/s/ Carrie C. R. Koch
A Notary Public

CARRIE C. R. KOCH
Notary Public, State of New York
No. 01KO6037107
Qualified In New York County
Commission Expires Feb. 14, 2002

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