Robert N. Fass, being duly sworn, deposes and says:

     1.     I am a member of the firm of Friedman Krauss & Zlotolow, attorneys for Defendant, 350 Bleecker Street Apartment Corporation (the "Cooperative"). I submit this affidavit in opposition to the application of Plaintiff, Bleecker Charles Company, (the "Sponsor") for an award of legal fees and other expenses pursuant to the Condominium And Cooperative Conversion and Abuse Relief Act. (the "Abuse Relief Act.") 15 U.S.C. § 3611(d). I am personally familiar with the facts set forth herein.

     2.     Sponsor's application seeks to recover attorney's fees and disbursements in the total amount of $338,097.43 on a matter that was resolved on an agreed statement of facts, without discovery or trial, on a single motion for summary judgement. As is shown in the accompanying affidavit of defendant's expert, Allen H. Brill, Esq. (the "Brill Aff.), the amount sought is unreasonable and excessive given the limited nature of the project and the narrow issues of law involved in the case.

     3.     The excessive nature of the Sponsor's legal fees request is well illustrated by comparing the fees incurred by the Sponsor with the fees incurred by the Cooperative for parallel work in this matter. Attached as Exhibit A hereto are true and correct copies of the bills rendered by my firm for such work beginning from June, 2000 when work was begun in anticipation of litigation, through November, 2001 when the decision in this matter was rendered.

     4.     As Exhibit A shows, the majority of the work was performed by Walter D. Goldsmith and by Robert N. Fass, who are both partners in Friedman Krauss & Zlotolow. A small amount of additional work was done by Douglas P. Heller, also a partner in the firm. No time was billed by associates or paralegals. This firm's staffing of the case contrasts sharply with that of the Sponsor's counsel, which used eight lawyers and several paralegals.

     5.     Mr. Goldsmith spent 119.70 hours on the case, I spent 182.25 hours on the case, and Mr. Heller spent 2.80 hours on the case for a total of 303.75 hours. Mr. Goldsmith's billing rate ranged from $275.00 per hour at the beginning of the work to $350.00 at the end. My billing rate began at $325.00 per hour and ended at $350.00 per hour. Mr. Heller's billing rate was $350.00 per hour for all work.

     6.     All three attorneys on the case have substantial real estate experience, including experience with cases involving the Abuse Relief Act.

     7.     Mr. Goldsmith has practiced in the cooperative and condominium areas for almost 30 years. He is the author of the Practice Commentaries to the Martin Act (Article 23-A of the New York General Business Law) and the Practice Commentaries to the Condominium Act (Article 9-B of the Real Property Law), both of which appear in McKinney's Consolidated Laws of New York, annotated, the official compilation of New York law. The Practice Commentaries to the Martin Act include extensive coverage of the Abuse Relief Act and related cases. He is the co-author of the volume entitled "Cooperatives and Condominiums," in the New York Real Estate Practice Guide published by Matthew Bender. Formerly, he was a Special Deputy Attorney General in the office of the Attorney General, Bureau of Real Estate Financing, which regulates offerings of real estate securities, such as cooperatives and condominiums. Subsequently, Mr. Goldsmith was a partner in the New York City law firm of Phillips, Nizer, Benjamin, Krim & Ballon.

     8.     I have practiced as a litigator for almost 25 years. I have extensive experience in real estate litigation, including litigation relating to cooperatives and condominiums and the Abuse Relief Act. I also have experience in other areas of commercial litigation in both the state and federal courts. I assist Mr. Goldsmith in the preparation of the above described Practice Commentaries, including the portion relating to the Abuse relief Act. Before joining Friedman Krauss & Zlotolow, I was a partner in the firm of Burstein & Fass and was previously associated with Phillips, Nizer, Benjamin, Krim & Ballon, and Carter Ledyard & Milburn.

     9.     Mr. Heller has 30 years of real estate experience in the areas of cooperatives and condominiums, lending and restructuring. His clients have included developers, sponsors, tenant associations, cooperative and condominium boards and institutional and private lenders in connection with transactions involving cooperatives and condominiums. Prior to becoming a member of the firm, he was a Senior Attorney with the Attorney General's office State of New York, Bureau of Real Estate Financing, and later was with the New York City law firm of Robinson, Silverman, Pearce Aronson & Berman LLP. He has been a member of and chaired a number of committees of the New York State Bar Association in a variety of areas relating to cooperative and condominium law and has written and lectured extensively in the field.

     10.     The total amount billed by the highly qualified attorneys for the Cooperative assigned to this matter was $106,789.45. This amount is less than one third of the $338,097.43 that the Sponsor's attorneys seek to recover for substantially the same work. As shown in the Brill Aff. both the hours expended and the hourly rate charged by Sponsor's counsel were excessive. The high hourly rates could only be justified, if at all, by a showing that Sponsor's attorneys, because of their avowed experience, were able to work more efficiently than lawyers having a lower billing rate. The time spent by each of the firms on this matter, however, shows that this is not the case.

     11.     The excessive time spent by Plaintiff's counsel is further illustrated by comparative analysis of the time spent by each firm on similar projects.

     12.     The Sponsor's counsel billed $46,654.87 for time spent on settlement negotiations. (See Exhibit B to the Affidavit of Allen H. Brill, Esq. (the "Brill Aff.")) The Cooperative's counsel billed only $4,117.50 for similar work. (See Exhibit A hereto, time entries for 9/10/00, 9/22/00, 10/2/00, 10/11/00, 3/23/01, 6/11/01, 6/14/01, 6/15/01 and 11/8/01). The billing by the Cooperative's counsel was modest because there were never any serious settlement discussions. One written proposal was made by Sponsor, which was rejected almost immediately as being far too low. Principals of the parties then met once for approximately one hour.. at which time a counter-proposal having a much higher value was made by the Cooperative. This offer was quickly rejected by the Sponsor.

     13.     The only remaining discussions occurred by telephone between counsel, after this Court had rendered its decision. That discussion involved only the question of what type of proposal, if any, would be entertained by the Sponsor. No proposal by the Cooperative followed. Simply put, the Sponsor's counsel was entirely unjustified in spending massive amounts of time analyzing the value and tax consequences of a settlement which could never come to pass. It was clear from the beginning that the parties were in fundamental disagreement regarding the value of any settlement. The parties were not even in the same ballpark, and the time spent by Sponsor's counsel was wasted.

     14.     A similar contrast exists between the billings for preparation of the Sponsor's summary judgment motion and those spent in preparation of the Cooperative's cross-motion. The Sponsor's counsel billed $50,968.75 for preparation of its summary judgment motion. (Brill Aff., Exhibit B.) The Cooperative's counsel spent $25,865.00 for its cross-motion. (See Exhibit A hereto, time entries for 4/18/01, 4/19/01, 4/20/01, 4/22/01, 4/24/01, 5/3/01, 5/4/01, 5/7/01, 5/14/01, 5/15/01, 5/16/01, 5/17/01, 5/18,01, 6/1/01, 6/6/01/ and 6/26/01.)

     15.     The Sponsor's counsel billed $110,971.25 for work done in opposition to the Cooperative's cross motion and for additional factual submissions in response to the Cooperative's reply papers. (Brill Aff., Exhibit B.) This amount is particularly striking in that it exceeds the sum billed by the Cooperative's counsel for this entire matter.

     16.     The Cooperative's counsel billed $35,650.00 for equivalent work on the reply. (See ExhibitAhereto, time entries for 6/25/01, 6/26/01, 6/27/01, 6/28/01, 7/3/01, 7/4/01, 7/5/01, 7/6/01, 7/9/01, 7/11/01 and 7/23/01.)

     17.     In sum, for summary judgment papers of similar length and complexity, and addressed to identical issues, the Sponsor incurred legal fees nearly three times greater than those charged by the Cooperative's counsel.

     18.     The massive amount billed by Sponsor's counsel in this matter is even more disquieting, given that only one previously undecided issue was presented by this case - that relating to the number of cooperative units that should be counted for purposes of triggering the two year termination window under the Abuse Relief Act. As shown in the accompanying Memorandum of Law, established precedent existed on all other issues, leaving the parties to argue only on the application of the law to the facts. In this regard, the majority of the facts were stipulated to, sharply reducing the legal work necessary in this matter. Under these circumstances the $300,000 plus in fees sought by Sponsor are beyond comprehension.

     19.     Not only does Sponsor request excessive legal fees, but it seeks to increase the crushing burden on the Cooperative by exempting itself from payment of any portion of the fees. Sponsor argues that this exemption is justified, because to hold otherwise would run contrary to the intent of the legal fees provision of the Abuse Relief Act.

     20.     Sponsor's argument, however, ignores that it wears two hats. Not only is the Sponsor a lessee of commercial space, but, independently, Sponsor is a shareholder of the Defendant by reason of its ownership of residential units. The Sponsor's status as a shareholder constitutes an entirely different legal relationship with the Cooperative than does Sponsor's status as a lessee of commercial space. To argue that Sponsor's right, as lessee, to recover legal fees vitiates its obligations as a shareholder is contrary to the prrovisions of the Cooperative documents and applicable law.

     21.     The Sponsor's rights and obligations as a shareholder, of the same class as the other owners in the Cooperative, are established by the Cooperative Proprietary Lease, By-laws and the Offering Plan. Those documents provide that, as a shareholder, the Sponsor must pay his pro rata share of the corporate expenses on the same basis as any other shareholder. (See Proprietary Lease at paragraph I (a), and Offering Plan at p. 56, copies attached hereto as Exhibits B and C.) Under the Cooperative's By-laws, the Board of Directors has thepowerto set the budget and fix the amount of rent to be paid by the unit owners under their Proprietary Leases. (By-laws, Article 2, section 6, copy attached as Exhibit D.)

     22.     Similarly, well established principles of corporate common law prohibit discrimination among shareholders of the same class with regard to their financial rights an obligations. This principle has been codified in New York in Section 501(c) of the Busines Corporation Law. As more fully described in the Memorandum of Law, that statute provides tha each share of corporate stock will be equal to every other share of corporate stock of the same class. The application of this law prohibits the imposition of financial assessments not made on an equa basis. (See accompanying Memorandum of Law at pp. 9-10.)

     23.     It is also the rule under New York law that a sponsor must pay its share of cooperative's legal expenses arising from litigations between the cooperative and the sponsor, eve where the sponsor has prevailed. (See Memorandum of Law at p. 10.)

     24.     It is well established that the Abuse Relief Act does not extend to terminate or destroy rights, contractual or otherwise, except as expressly allowed. In that regard, the Act is limited to the termination of specified contracts between a cooperative or condominium and a sponsor regarding property serving that cooperative or condominium. Therefore, the Abuse Relief Act may not be extended to destroy the Sponsor's obligations as a cooperative shareholder. (See Memorandum of Law at p. 10.)

     25.     Finally, the Abuse Relief Act is a consumer protection statute. It is intended to protect cooperative and condominium owners from abuses arising from self sealing contracts with sponsors. Although the law allows a prevailing lessee or other contract holder to recover legal fees, there is no policy inherent in the Act that would justify the destruction of separate and independent legal relationships between the parties.

/s/Kristina Giacinto
Notary Public

KRISTINA GIACINTO
Notary Public, State of New York
No. 01GI6030233
Qualified in Kings County
Commission Expires Sept 7, 2005.

This exhibit contains 28 pages of legal bills from Friedman, Krauss & Zlotolow.
To see the contents of this exhibit, please contact any board member for a copy.

This exhibit contains a section from the Proprietary Lease of the co-op.

 
     SUMMARY OF PRINCIPAL TERMS OF PROPRIETARY LEASE

     The proprietary lease is for a term ending on December 
31, 2075, but may be extended by the vote of the holders 
of a majority of the Apartment Corporation's issued and 
outstanding shares. As a lessee, every shareholder of the 
Apartment Corporation will be obligated to pay the main-
tenance charges for his apartment as fixed by the Board of 
Directors based upon the Board's determination as to the 
Apartment Corporation's cash requirements.

Each shareholder will also have the following rights
and obligations under his proprietary lease:

     1.   He may, if not in default under the proprietary 
lease, cancel his lease and surrender his shares and posses-
sion of the apartment to the Apartment Corporation (without 
receiving any compensation), effective on any September 30 
after the third anniversary of the consummation of this 
Plan, on at least six (6) months' prior notice to the 
Apartment Corporation. If he elects to cancel, he will have 
no liability for payment of maintenance charges after 
the effective date of the cancellation, but will remain liable 
for any indebtedness owing prior to such effective date.
Reference should be made to paragraph 35 for other prerequi-
sites to be met to cancel the lease. This provision (gener-
ally known as the "escape clause") may be availed of by any 
shareholder, including the holders of Unsold Shares. 
However, a holder of Unsold Shares may not so cancel unless
(i) the owners of a majority of all outstanding shares 
(other than the Unsold Shares) have elected to cancel their 
proprietary leases or (ii) the Unsold Shares constitute 15% 
or less of the outstanding shares, at least five (5) years 
have elapsed since the Apartment Corporation became the
owner of the property and, on the effective date of can-
cellation, the holder of Unsold Shares pays to the Apartment 
Corporation a sum equal to the product of the then current 
maintenance charge for the apartment or apartments being 
surrendered multiplied by 24.

     2.  The shares may not be sold or the proprietary lease 
assigned, nor the apartment sublet, without first obtaining 
the consent of the Board of Directors or (if the Board shall 
have failed or refused to give its consent) or the written 
consent or vote of shareholders owning at least 65% of the 
Apartment Corporation's outstanding shares. Such consent 
may be arbitrarily refused, provided such refusal is not 
based upon race, color, creed or other ground proscribed by 
law. An assignment may not be effected without complying 
with additional requirements of the proprietary lease (see 
paragraph 16 thereof); and with respect to a subletting, the 
Board or shareholders may impose such conditions as they

This exhibit contains a section from the By-Laws of the co-op.

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