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October 30, 2001

Dear Shareholders:

You probably are unaware of my request to Susan Kim, the co-op's president, to appear at the meeting held last Wednesday night which I was told related to the garage lawsuit and would be attended by the co-op's counsel. My request, by e-mail, was not responded to. You are probably also unaware of my five requests to Susan Kim (with copies of the last two requests sent to Jim Kafadar), to inspect and copy the board's minutes during the preceding two years and to obtain a shareholder list (with current addresses) dated October 9, 11, 14, 17, and 19, 2001. Not one response was received to any of these five e-mails which sought to exercise statutory rights granted to all shareholders.

I planned, if permitted, to offer another proposal to terminate the lawsuit for the consideration of the shareholders which proposal could then be discussed with the co-op's counsel. My proposal would have been made not because of any lack of confidence in the ultimate resolution of the matter in court but rather, as an "enlightened sponsor" concerned about the well being of the co-op in which the sponsor has a substantial investment.

I fear, regardless of the result in the court proceeding, the existing and extreme rancor among shareholders will continue and increase, destroying the friendly and convivial atmosphere that not so long ago existed in the building. In addition, I am concerned about the co-op's financial situation which, notwithstanding a lack of full knowledge, appears precarious. I am also concerned by the absence of full and accurate disclosure of information to shareholders.

I think most of us know the Act under which the lawsuit exists provides for the recovery of plaintiffs legal fees from the defendant. From what I understand, the sponsor's legal bills (about $270,000) and the co-op's cash on hand are about equal. To avoid the possibility that the co-op would be placed in financial jeopardy or that shareholders would suffer additional assessments, I propose to waive the recovery of the sponsor's legal fees, subject to certain conditions described below.

To: Shareholders
October 30, 2001
Page Two

The terms of settlement, if acceptable to the co-op and its counsel, would be as follows:

     1.     The sponsor would waive its right to recover attorney's fees,

     2.     The judgment holding the lease termination invalid and enjoining interference would remain in full force and effect.

     3.     The co-op would waive its right to appeal the judgment thus finalizing the dispute.      

     4.     A certified resolution would be provided confirming that the co-op's board of directors has approved the transaction and that at least two-thirds of the shareholders (other than the sponsor), by numbers of units and shares, have approved the transaction. (The sponsor, in its sole discretion, may elect to waive all or any part of this condition.)

     5.     The co-op shall irrevocably withdraw its notice of termination of the garage portion of the master lease with prejudice.

     6.     The sponsor and co-op shall exchange general releases (covering themselves, successors and assigns and their respective present, past and future officers, directors, partners, representatives, employees, and attorneys) with stated exceptions based only upon future obligations under specified written agreements between the parties (proprietary leases, by-laws and the like).

     7.     Either party may obtain specific performance and damages in the event of a breach by the other of its obligation under the stipulation, together with costs of enforcement, including attorneys' fees.

     8.     The action shall be discontinued with respect to the attorneys' fee claim and without costs to any party.

     9.     Written consent to the transaction by the co-op's board to be delivered to the sponsor no later than November 15, 2001,

     10.     Upon approval of the terms by the co-op's board, the co-op and the sponsor shall have 30 days to obtain the following approvals:

To: Shareholders
October 30, 2001
Page Three

     11.     Stay of 30 days of all proceedings to enforce the payment of legal fees.

Shareholders should feel free to contact me to discuss terms or to ask questions about the settlement of the sponsor's positions with regard to the action.

Shareholders should feel free to contact me to discuss terms or to ask questions about the settlement of the sponsor's positions with regard to the action.

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