55 MASPETH AVENUE

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F MANAGERS REAL ESTATE TAXES 88 INCOME TAX DEDUCTIONS TO UNIT OWNERS AND 93 TAX STATUS OF THE CONDOMINIUM OPINION OF COUNSEL 94 WORKING CAPITAL FUND 100 RESERVE FUND 101 IDENTITY OF PARTIES 103 REPORTS TO UNIT OWNERS 105 DOCUM ENTS ON FILE 105 GENERAL 105 SPONSOR'S STATEMENT OF SPECIFICATIONS 106

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HIGHER. Please see “Real Estate Taxes” Section of the Plan. 24. While Sponsor is in control of the Board of Managers of the Condominium, the reserve fund or working capital fund may not be used to reduce the projected Common Charges in the Plan. Please see “Working Capital Fund” and “Reserve Fund” Sections of the Plan. 25. The Purchase Agreement contains a provision that Purchaser waives the right to trial by jury in any litigation arising out of, or connected with, or relating to the Purchase Agreement or the relationship created by the Purchase Agreement or the Plan. Please see Section 34 of the Purchase Agreement in Part II of the Plan. 26. Pursuant to the By -Laws of the Condominium, any matter arising out of the Condominium Documents, except for an action to foreclose a lien for unpaid common charges by the Board of Managers, shall be submitted for resolution by a panel of three (3) arbitrators in a proceeding held in the City of New York, which arbitrato

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i. the Condominium will not have a right of first refusal; ii. the Condominium will not have a commercial space; iii. the Condominium will have a reserve fund equal to 10% of budgeted income; iv. the Condominium will have a master insurance policy covering 100% of replacement cost of the Building, not including the foundation or land; v. the Condominium will have a general liability policy insuring all common elements and public ways. The project currently does not have FHA loan certification. Sponsor will disclose by an amendment if the project receives FHA loan certification. 12. Purchasers should note that in the current real estate market, banks and other lenders are imposing various restrictions on purchase financing. Such restrictions include requiring that a certain percentage of units in a building or group of buildings be sold before a lender will consider making a loan. Thus, it may be possible for a purchaser to experience difficulty obtaining a loan

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.00 Service contracts and supplies (6) $4,200.00 Insurance (7) $5,200.00 Management fee (8) $0.00 Legal fees and audit fees (9) $1,900.00 Yearly reserve fund (10) $2,468.00 TOTAL $24,675.00 Note: All figures are rounded to the nearest dollar. IF THE ACTUAL OR PROJECTED DATE OF COMMENCEMENT OF CONDOMINIUM OPERATIONS IS DELAYED MORE THAN SIX (6) MONTHS FROM THE BUDGET YEAR PROJECTED IN THE PLAN, THE PLAN WILL BE AMENDED TO INCLUDE A REVISED BUDGET DISCLOSING AMENDED PROJECTIONS. IF SUCH AMENDED PROJECTIONS EXCEED THE ORIGINAL PROJECTIONS BY 25% OR MORE, ALL PURCHASERS WILL HAVE A RIGHT TO RESCIND THEIR PURCHASE AGREEMENTS WITHIN TWENTY (20) DAYS AFTER THE DATE OF PRESENTATION, WHETHER OR NOT SPONSOR OFFERS TO GUARANTEE THE PREVIOUS BUDGET PROJECTION. SPONSOR WILL RETURN ANY DEPOSIT OR DOWNPAYMENT TO PURCHASERS WITHIN TEN (10) DAYS AFTER RECEIPT OF WRITTEN NOTICE OF RESCISSION. IN ADDITION, ALL PURCHASERS WILL HAVE A RIGHT TO RESCIND THEIR PURCHASE AGREEMENTS IF

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10. Yearly Reserve Fund. The Condominium will have a reserve fund for capital expenditures only. It will be equal to 10% of the projected annual budget of the Condominium . The yearly reserve fund will be sufficient to pay for major capital repairs or replacement items likely to be needed within the first five years of operation following the first closing under the Plan. Please see “Reserve Fund” Section of the Plan. 34

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i. the Condominium will not have a right of first refusal; ii. the Condominium will not have a commercial space; iii. the Condominium will have a reserve fund equal to 10% of budgeted income; iv. the Condominium will have a master insurance policy covering 100% of replacement cost of the Building, not including the foundation or land; v. the Condominium will have a general liability policy insuring all common elements and public ways. The project currently does not have FHA loan certification. Sponsor will disclose by an amendment if the project receives FHA loan certification. 52

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viii. Reimbursement fee. Purchaser will pay the fee of $1,500.00 to Sponsor as partial reimbursement for the cost of preparing the Plan. ix. Working capital fund con tribution. Purchaser will be required to deposit the sum equal to two (2) months’ Common Charges then applicable to each Unit being purchased with the Board of Managers for the initial contribution to the working capital fund. The above closing costs ar e cumulative to the extent applicable to an individual Unit. 2. Mortgage Tax Credit Section 339- ee(2) of the Real Property Law of the State of New York provides as follows: “In the event the proceeds of a construction mortgage were applied to construction of a unit of condominium submitted to the provisions of this article, or in the event that a Unit submitted to the provisions of this act was subject to a blanket mortgage, and a mortgage tax was duly paid on such construction or blanket mortgage in accordance with article eleven of the tax

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k State transfer tax $4,372.00 "Mansion" transfer tax $10,926.00 Document preparation fee $2,500.00 Reimbursement fee $1,500.00 Working capital fund contribution $680.00 Total: $59,208.00 4. Closing Adjustments At the closing of title to each Unit, the following adjustments shall be made as of the midnight of the day preceding the closing date with respect to the Unit: (a) real estate taxes and assessments, if any, on the basis of the period for which assessed; (b) Common Charges and assessments for the month in which title closes; and (c) if Purchaser is allowed to occupy the Unit prior to the closing, accrued occupancy fees and any other charges pursuant to a pre-closing possession agreement, if any, covering the Unit. In the event that the Units have not been separately assessed for real estate tax purposes prior to the closing of title to the first Unit, Sponsor will place in escrow in the name of the Board of Managers an am

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isbursements of the Insurance Trustee, if any. The Common Expenses will also include such amounts as the Board of Managers may deem proper for a reserve fund for capital expenditures. The Common Expenses may also include such amounts as may be required for the purchase by the Board of Managers or its designee, corporate or otherwise on behalf of all Unit Owners, of any Unit, which is to be sold at a foreclosure or other judicial sale, together with such amounts as may be necessary to maintain such Units. The Board of Managers will also, where necessary, impose an assessment or additional Common Charge in order to meet any unanticipated Common Expense. The Board of Managers will advise all Unit Owners, promptly, in writing, of the amount of Common Charges payable by each of them, respectively, as determined by the Board of 79

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WORKING CAPITAL FUND The Condominium will have a fund for working capital, (hereinafter called the “Working Capital Fund”). It is currently equal to $4,112.50 for the first year of the condominium operation. The Working Capital Fund will be used only for payment by the Board of Managers of expenses authorized by the Declaration and the By -Laws of the Condominium, and for payment by the Board of Managers of any net adjustments for prepaid expenses owed to Sponsor at the closing of title to the first Unit. At the time of the closing of title to the Units from Sponsor or Sponsor -designee to a bona fide Purchaser, Purchaser will pay into the Working Capital Fund the sum equal to two (2) months’ Common Charges then applicable to each Unit being purchased. While Sponsor is in control of the Board of Managers, the Working Capital Fund will not be used to reduce the Common Charges. The Working Capital Fund will be available for the Condominium after the closing of

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RESERVE FUND The Condominium will have a fund as a reserve for capital expenditures, (hereinafter called the “Reserve Fund”). The Reserve Fund will be used only for capital expenditures. The Condominium’s By - Laws contain a provision authorizing the establishment of the Reserve Fund. Please see Article II, Section 2 of the By-Laws. When established, the Reserve Fund will not have any funds. During the first year a nd subsequent years of Condominium operations, the Unit Owners, with their common charges, will make contributions to the Reserve Fund, the amount of which will be equal to 10% of the projected annual budget of the Condominium . The Reserve Fund will be sufficient to pay for capital expenditures likely to be needed within the first five years of operation following the first closing under the Plan. While Sponsor is in control of the Board of Managers, the Reserve Fund will not be used to reduce the Common Charges. Should monies be required by

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ee hundred thirty -nine-aa of this article.” NEITHER TH E DEPARTMENT OF LAW NOR ANY OTHER GOVERNMENT AGENCY HAS PASSED UPON THE ADEQUACY OF THE RESERVE FUND. 102

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he safety of the Building or the safety of its occupants. Sponsor may not exercise veto power over expenses in Schedule B. (r) establishing the reserve fund, which will be used only for capital expenditures. The amount of the reserve fund will be equal to 10% of the projected annual budget of the Condominium, including the reserve amount. Section 3. Managing Agent and Manager. The Board of Managers may employ for the Condominium a managing agent and/or a manager, at a compensation established by the Board of Managers, to perform such duties and services as the Board of Managers shall authorize. The Board of Managers may delegate to the managing agent or manager, all of the powers granted to the Board of Managers by these By -Laws other than the powers set forth in subdivisions (b), (e), (f), (g), (h), (i), (j), (k), (n), (o) and (p) of Section 2 of this Article II. Section 4. First Board of Managers. The first Board of Managers shall consist of persons desi

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h amounts as the Board of Managers may deem proper for the operation and maintenance of the Property, including, w ithout limitation, an amount for working capital of the Condominium for a general operating reserve, and for a 12 219

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reserve fund for capital expenditures only, to make up any deficit in the Common Expenses for any prior year. The Common Expenses may also include such amounts as may be required for the purchase by the Board of Managers or its designee, corporate or otherwise on behalf of all Unit Owners, of any Unit, which is to be sold at a foreclosure or other judicial sale, together with such amounts as may be necessary to maintain such Units. The Board of Managers shall also, where necessary, impose an assessment or additional Common Charge in order to meet any unanticipated Common Expense. The Board of Managers shall advise all Unit Owners, promptly, in writing, of the amount of Common Charges payable by each of them, respectively, as determined by the Board of Managers, as aforesaid, and shall furnish copies of each budget on which such charges are based, to all Unit Owners and to their mortgagees, if so required. Sponsor or Sponsor -designee shall be responsible for the Co

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anagers. Acquisition of Units by the Board of Managers or its designee, corporate or otherwise, on behalf of all Unit Owners, may be made from the working capital and Common Charges in the possession of the Board of Managers, o r, if such funds are insufficient, the Board of Managers may levy an assessment against each Unit Owner, other than the offering Unit Owner, in proportion to his or her ownership in the Common Elements, as a Common Charge, which assessment shall be enforceable in the same manner as provided in Section 6 and 7 of Article VI, or, the Board of Managers, in its discretion, may borrow money to finance the acquisition of such Unit, provided, however, that no financing may be secured by an encumbrance or hypothecation of any property other than the Unit, together with the Appurtenant Interests, so to be acquired or leased by the Board of Managers. Section 4. Gifts and Devises, etc. Each Unit Owner has the right to convey or transfer his or her Unit b

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4. Sponsor will pay all Common Charges, special assessments and real estate taxes with respect to Unsold Units. Sponsor represents that Sponsor has the financial resources to meet its obligations with respect to Unsold Units. Sponsor will fund its financial obligations to the Condominium from its own existing capital. No bond or other security has been posted to secure Sponsor’s obligations under the Plan. 5. Sponsor shall have no obligation or liability to repair or restore the Uni t damaged by fire or other casualty that occurs before closing of a Purchaser’s Unit. If Sponsor elects to repair or restore the Unit (which election will be in its sole discretion and made within sixty (60) days of the damage to the Unit), the Purchase A greement will continue in full force and effect, Purchaser will not have the right to reject title or receive a credit against, or abatement in, the purchase price, and Sponsor will be entitled to a reasonable period of time within which

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an Chase Bank, N.A, loc ated at 633 3rd Avenue, New York, NY 10017. There is currently $4,351.06 in the operating account. 6. Sponsor opened the reserve fund account under the name of “55 Maspeth Avenue Condominium” with JPMorgan Chase Bank, N.A , located at 633 3rd Avenue, New York, NY 10017. There is currently $731.42 in the reserve fund. 7. Below is a list of all the Unsold Units held by Sponsor: Unit No. % of Common Interest Monthly Common Charges Monthly Real Estate Taxes 1F 14.60 $373.21 $588.28 TOTAL 14.60 $373.21 $588.28 1