20-08 STEINWAY STREET

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Loan mortgage will be satisfied or released, such that the lender will set a release price for Unit so that Sponsor c an pay-off such amount of the underlying mortgage with the sale of the Unit. In addition, before the closing of title to the first Unit, all liens and mortgages affecting the Condominium shall be paid and satisfied or the Unit being conveyed and its appurt enant Common Interest shall be released therefrom by partial release duly recorded. In order to obtain partial releases, the Lender will require that the Sponsor pay a release price on the sale of each Unit, until the loan is repaid in full. Such minimum release price shall be determined prior to the closing of a Unit and be based on the total outstanding loan at that time. This portion of the loan will not be added to the Purchase price, but rather Sponsor may use the proceeds from such sale to pay towards the underlying mortgage. Therefore, there will be no resulting costs from Sponsor’s Building Loan a

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Loan mortgage will be satisfied or released, such that the lender will set a release price for Unit so that Sponsor can pay -off such amount of the underlying mortgage with the sale of the Unit. In addition, before the closing of title to the first Unit, all l iens and mortgages affecting the Condominium shall be paid and satisfied or the Unit being conveyed and its appurtenant Common Interest shall be released therefrom by partial release duly recorded. In order to obtain partial releases, the Lender will require that the Sponsor pay a release price on the sale of each Unit, until the loan is repaid in full. Such

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t time. This portion of the loan will not be added to the Purchase price, but rather Sponsor may use the proceeds from such sale to pay towards the underlying mortgage. Therefore, there will be no resulting costs from Sponsor’s Building Loan added to Purchaser’s individual mortgage, and no delay to the closing of title to a Unit due to the underlying mortgage. Purchaser shall not be obligated to pay any adjournment fee as a result of a delay caused by any assignment/consolidation of Sponsor’s construction loan. The terms of the Construction Loan contemplate the project as a “for-sale” condominium project and lender has not placed any restrictions on the marketing, selling, or renting of units other than set forth hereinabove. Sponsor may declare the Plan effective by selling a minimum of fifteen (15%) percent (four (4)) of the Residential Units being offered for sale. At the time of conveyance of the first Unit, each mortgagee will either: (i) consent to the formati

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Loa n mortgage will be satisfied or released, such that the lender will set a release price for Unit so that Sponsor can pay-off such amount of the underlying mortgage with the sale of the Unit. In addition, before the closing of title to the first Unit, all l iens

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t time. This portion of the loan will not be added to the Purchase price, but rather Sponsor may use the proceeds from such sale to pay towards the underlying mortgage. Therefore, there will be no resulting costs from Sponsor’s Building Loan added to Purchaser’s individual mortgage, and no delay to the closing of title to a Unit due to the underlying mortgage. Purchaser shall not be obligated to pay any adjournment fee as a result of a delay caused by any assignment/consolidation of Sponsor’s construction loan. The terms of the Construction Loan contemplate the project as a “for- sale” condominium project and lender has not placed any restrictions on the marketing, selling, or renting of units other than set forth hereinabove. Sponsor may declare the Plan effective by selling a minimu m of fifteen (15%) percent (four (4)) of the Residential Units being offered for sale. At the time of conveyance of the first Unit, each mortgagee will either: (i) consent to the fo

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CONDOMINIUM……………………………………………113 XXI. OPINION OF COUNSEL ............................................................................ 114 XXII. RESERVE FUND ....................................................................................... 123 XXIII. WORKING CAPITAL FUND ....................................................................... 123 XXIV. MANAGEMENT AGREEMENT, CONTRACTS AND LEASES .................. 123 XXV. IDENTITY OF PARTIES ............................................................................. 125 XXVI. REPORTS TO RESIDENTIAL UNIT OWNERS ......................................... 127 XXVII. DOCUMENTS ON FILE ............................................................................ 128 XXVIII. GENERAL .................................................................................................. 128 XXIX. SPONSOR’S STATEMENT OF SPECIFICATIONS OR BUILDING CONDITION .........................................................

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ment upon transfer of control. See Section III in Part I and Schedule G in Part II of the Offering Plan. 47. No representation is made that Reserve Fund line item in the Budget will be adequate for future expenses including repairs or replacements of Common Elements during the first five (5) years of the Condominium. If additional funds are required over and above said funds, it may be necessary to increase the Common Charges payable by the Unit Owners, collect a Special Assessment from each Unit Owner or borrow money. See Schedule B and Section XXII of the Offering Plan. 48. The Sponsor anticipates that the real estate tax rate will vary in future years rather than remain constant. The estimates of projected real estate taxes in this Offering Plan have been prepared by the Sponsor and cannot be constru ed as an assurance of the final tax costs, but are merely estimates based upon information available to the Sponsor at this time. Purchaser will not have the r

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600 20,753 100.0000% $11,407.05 $18,441.04 $221,292.93 $29,477.34 * Two (2) Months Common Charges will be collected from each Purchaser at Closing as Working Capital Contribution. **The projected real estate taxes for the first year of operation contained herein are based on the post-completion assessment of the building. *** Balcony space is uninhabitable space and may not be legally used as bedoom/livingroom; to do so may result in a building code violtaion being issued for the building. 27

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Administrative and Miscellaneous Expense: $1,200.00 • Supplies Expense: $4,500.00 • Telephone: $360.00 • Bank Fees: $50.00 (12) RESERVE The reserve fund is to be used for replacement of the Common Elements, such as the roof, boilers, and other major interior or exterior Common Elements; and is expecte d to

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$697,231 x .01425 = $9,936 = amount due for NYCRPTT *Note, transfer taxes, closing costs and fees for more expensive Units will be higher. 6. Working capital of an amount equal to two (2) months Common Charges to be paid to the Condominium. While Sponsor is in control of the Board of Managers, the working capital fund will not be used to reduce the Common Charges of the Condominium. If any por tion of the working capital fund is used during this period to pay for items in the budget set forth, such amounts will be repaid to such fund out of Common Charges collected.

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t Recording Fee: $ 50 New York State Transfer Tax: $ 2,522 New York City Transfer Tax: $ 8,981 Mortgage Tax: $ 9,676 Condominium Working Capital: $ 942 Pro-Rata Insurance $ 391 Sponsor Attorney Fees for Preparation of Deed, Power of Attorney and other Closing Documents: $ 2,500 TOTAL $28,682 In addition, if a closing takes place, at the request of Purchaser, at any location other than the office of Sponsor ’s attorney, Purchaser shall pay to Sponsor ’s attorney a travel fee in the sum of $250. Furthermore, in the event the Sponsor’s Attorney is required to prepare the New York City “ACRIS” transfer documents Purchaser shall be required to pay Sponsor ’s attorney an additional fee of $250. In the event the title company prepares the ACRIS, Purchaser shall pay the applicable fee of the title company.

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During any such period of delay, Sponsor will timely pay all expenses of the Condominium, including, but not limited to, insurance premiums and any reserve fund payments. Such expenses shall not include individual Unit Owner expenses such as real estate taxes, utility charges, etc. Upon commencement of collection of Common Charges, there will not be an assessment for any item set forth in the approved budget for the Condominium. Sponsor shall remain obligated to update the budget for the Condominium. Regardless of the delay in collection of Common Charges, Sponsor shall remain obligated to update the budget for the Condominium as required by the Department of Law governing regulations. In the event Sponsor elects to delay the collection of Common Charges, Sponsor shall disclose such fact in the post -closing Amendment to the Offering Plan as a benefit to subsequent Purchase rs. Such Amendment shall also disclose the period of delay. Prior to commencing the collection of C

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l be taxed, however, on any excess of income over expenses from un related sources. Examples of unrelated sources income include interest earned on reserve funds, income from concessions and income from dues or fees received from persons other than the Residential Unit Owners. In the event the Condominium fails to qualify for and elect Section 528 taxation status in any year, it may, to the extent it has any income from unrelated sources or from accumulated revenues received by virtue of dues, fees and assessments received from Reside ntial Unit Owners not expended in any taxable year, be subject to Federal, New York State and New York City Income Taxation (see Rev. Ruling 74-99, 1974-1 C.B. 131). We have considered the relevant cases and rulings on the tax status of the Condominium in cluding Revenue Rulings 74 -17, 74 -99, 75-370 and 75 -371. These rulings, under certain circumstances, permit assessments for capital replacements and new or replacement equipment to be

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um should not realize any significant amount of taxable income, other than with respect to incidental investment income, such as interest earned on reserve funds deposited in bank accounts. We have examined the exceptions to title set forth in Section XIII of the Offering Plan, and we are of the opinion that none of such exceptions of title are contrary to the terms of the Purchase Agreement nor do, they interfere with the quiet use or enjoyment of the Purchaser’s Unit as set forth in the Offering Plan. We have examined the Declaration and By -Laws pertaining to the proposed Condominium. It is our opinion that the Declaration and By -Laws, when recorded, will validly create a Condominium in accordance with Article 9-B of the Real Property Law of the State of New York. In addition, we note that the percentage of Common Interest for each Residential Unit as contained in Schedule A has been determined based upon floor space, subject to the location of such space and

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123 XXII. RESERVE FUND The Condominium budget includes an annual Reserve Fund in the amount as reflected in Schedule B. Such sum will be deposited into a separate reserve fund account. Prospective Purchasers should refer to Schedule B for a more detailed explanation of the Reserve Fund. No representation is made that Reserve Fund line item will be adequate for future expenses including repairs or replacements of Common Elements during the first five (5) years of the Condominium. If additional funds are required over and above said funds, it may be necessary to increase the Common Charges payable by the Unit Owners, collect a Special Assessment from each Unit Owner or borrow money. During the period Sponsor is in control of the Board of Managers, the Reserve Fund line items will not be used to reduce the estimated Common Charges. Neither the Department of Law nor any other Governmental Agency has passed upon the adequacy of the Reserve Fund line item.

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; insurance; common utilities; lab or; common water and sewer charges; legal and accounting; services and supplies; management fees; contingencies; reserve fund and any other expenses that are Common Expenses of the Condominium. Section 4. Foreclosures of Liens for Unpaid Common Charges . The Board shall have the power to purchase any Unit at a foreclosure sale resulting from any action brought by the Board to foreclose a lien on the Unit because of unpaid Common Charges. In the event of such purchase, the Board shall have the power to hol d, lease, mortgage, vote, sell or otherwise deal with the Unit. A suit to recover a money judgment for unpaid Common Charges shall also be obtainable separately without waiving the lien on the Unit. In either event the Unit Owner shall be liable for all costs of suit, including reasonable attorneys’ fees. Section 5. Statement of Common Charges . Upon the written request of any Unit Owner or their mortgagee, the Board shall promp

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he Board of Managers may deem proper for the operation and maintenance of the General Common Elements including, without limitat ion, an amount for working capital of the Condominium, for a general operating reserve, for a reserve fund for replacements, and 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 or lease by the Board of Managers or its designee, corporate or otherwise, on behalf of all Unit Owners, of any Unit whose Owner has elected to sell or lease such Unit or of any Unit which is to be sold at a foreclosure or other judicial sale. The Board of Managers shall advise all Unit Owners promptly, in writing, of the amount of Common Charges and Expenses 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 Common Charges and expenses are based, to all Unit Owners pursua

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the Condominium. Such fidelity bonds shall name the Condominium as an obligee and shall not be less than the estimated maximum of funds, including reserve funds, in the custody of the Condominium or the management agent, as the case may be, at any given time during the term of each bond. In no event may the aggregate amount of such bonds be less than a sum equal to three (3) months aggregate assessments on all units plus reserve funds. The bonds shall contain waivers by the issuers of the bonds of all defenses based upon the exclusion of persons serving without compensation from the definition of "employees", or similar terms or expressions. The premiums on all bonds required herein, except those maintained by the management agent, shall be paid by the Condominium as a Common Expense. The bonds shall provide that they may not be cancelled or substantially modified (including cancellation for non - payment of premium) without at least ten ( 10) days' prior written notice to

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they will be unable to do so in the name of the Condominium. In addition, the funds utilized for such actions will either have to be obtained by a special assessment of all Unit Owners excluding the Sponsor or obtained through independent funds of the Unit Owners. In the event the Unit Owners are unsuccessful in an action against the Sponsor, Sponsor has the right to request that the court or administrative department hearing the action grant the Sponsor reimbursement of legal fees, which would be payable by the Unit Owners, excluding the Sponsor. Unit Owners also have the right to request reimbursement of legal fees if they prevail. Any provisions that give the Sponsor control over the enforcement of the Sponsor’s obligations are not lawful. In addition, if there are non-sponsor members of the Board of Managers, and there is a vote on whether to sue the Sponsor, the Sponsor’s Board representatives cannot lawfully vote on that issue. The members of the Board of Manager

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e collection of Common Charges at a subsequent date. Until title to a Unit has passed to a Purchaser, the Sponsor will pay such Common Charges and Special Assessments as are as sessed by the Board of Managers on Units, to which title has not passed. Once title has passed to a Purchaser, the Purchaser will be responsible for all costs, including all Common Charges associated with the Unit. As long as the Sponsor retains a majori ty of the Board of Managers, the Board of Managers may commence the collection of Common Charges upon the Closing of Title to the first Unit or at any subsequent date as in its sole discretion it may determine. Prior to the commencement of the collection of Common Charges, Sponsor shall be obligated to provide all the services disclosed in the first-year budget at its sole expense. See Article VI of Schedule I in Part II of the Plan. Sponsor and/or the Board of Managers shall have the right to waive Unit Owner obligations to pay Common Charge

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iod at least thirty (30) days prior to such expiration. Upon commencement of collection of Common Charges from all Unit Owners, there will not be a Special Assessment for any expense set forth in the approved budget for which Common Charges were not collected during the Waiver Period. The Board of Managers shall remain obligated to update the budget in accordance with the terms of the Plan. Purchasers should note that, during any Waiver Period (regardless whether the Sponsor Paid Waiver Period or the Unit Owners Paid Waiver Period), Unit Owners will remain responsible for (in addition to their proportionate share of Operating Costs, if applicable) all individual Unit expenses, including wi thout limitation (as applicable) real estate taxes on the Unit, mortgage payments under a loan obtained to finance the purchase of the Unit, the cost of electricity supplied to the Unit which will be separately metered and payable either directly to the utility company or to the Board of

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f additional funds are required over and above said funds, it may be necessary to increase the Common Charges payable by the Unit Owners, collect a Special Assessment from each Unit Owner or borrow money. See Schedule B and Section XXII of the Offering Plan. 48. The Sponsor anticipates that the real estate tax rate will vary in future years rather than remain constant. The estimates of projected real estate taxes in this Offering Plan have been prepared by the Sponsor and cannot be constru ed as an assurance of the final tax costs, but are merely estimates based upon information available to the Sponsor at this time. Purchaser will not have the right to rescind his or her Purchase Agreement, in the event the amount of the taxes differ from those projected. 49. 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

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note, the consequence of not having such additional insurance is that in the event of any uncovered claim or damage the Board may need to asse ss a special assessment to the unit owners to be able to pay for the claim and or damage.

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e closing date will survive delivery of the deed. 3. Until title to a Unit is passed to a Purchaser, the Sponsor will pay such Common Charges, special assessments and real estate taxes, as are assessed by the Board of Managers of the Condominium and the City of

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k on the Units to which title has not passed. Once title is passed to a Purchaser the Purchaser shall be solely responsible for all Common Charges, special assessments, real estate taxes and all other costs applicable to the Unit, as are assessed by the Board of Managers of the Condominium and the City of New York. No bond or other security has been posted to secure such obligations. Sponsor will fund its financial obligations to the Condominium from the income derived from the sale of the Units and Sponsor ’s assets. Sponsor currently has the res ources necessary to meet its obligations under the Offering Plan. 4. The Sponsor’s repair of any damage from a casualty or other cause that occurs before the closing of Purchaser’s Residential Unit. In the event a Unit is damaged by casualty or other caus e prior to the closing of Purchaser’s Home, through no fault of Purchaser, Sponsor shall repair the Unit to meet the specifications set forth in the architects and/or engin

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od at least thirt y (30) days prior to such expiration. Upon commencement of collection of Common Charges from all Unit Owners, there will not be a Special Assessment for any expense set forth in the approved budget for which Common Charges were not collected during the Waiver Period. The Board of Managers shall

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ential Unit; or (v) borrow money on behalf of the Condominium; or (vi) reduce the services or maintenance set forth in Schedule B; (vii) charge any special assessment for a non -budgeted item unless required by law, municipal agency, emergency or for the health and safety of the condominium; or (viii) increase the Common Charges of the Condominium more than ten (10%) from the prior year’s budget, unless documentation is provided to the Sponsor in the nature of a financial statement, bids from contractors or verified increases in utility rates evidencing the need for an increase greater than ten (10%) percent, or (ix) utilize condominium funds or assess the Sponsor for the purpose of commencing a lawsuit against the Sponsor or any of its principals. As noted above, the Sponsor has the right to retain control over certain expenditures and fiscal actions of the Board of Managers. Notwithstanding said fact, Sponsor may not exercise veto power over expenses described in Sch

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iod at least thirty (30) days prior to such expiration. Upon commencement of collection of Common Charges from all Unit Owners, there will not be a Special Assessment for any expense set forth in the approved budget for which Common Charges were not collected during the Waiver Period. The Board of Managers shall remain obligated to update the b udget in accordance with the terms of the Plan. Purchasers should note that, during any Waiver Period (regardless whether the Sponsor Paid Waiver Period or the Unit Owners Paid Waiver Period), Unit Owners will remain responsible for (in addition to their proportionate share of Operating Costs, if applicable) all individual Unit expenses, including without limitation (as applicable) real estate taxes on the Unit, mortgage payments under a loan obtained to finance the purchase of the Unit, the cost of electri city supplied to the Unit which will be separately metered and payable either directly to the utility company or to the Board of

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f additional funds are required over and above said funds, it may be necessary to increase the Common Charges payable by the Unit Owners, collect a Special Assessment from each Unit Owner or borrow money. During the period Sponsor is in control of the Board of Managers, the Reserve Fund line items will not be used to reduce the estimated Common Charges. Neither the Department of Law nor any other Governmental Agency has passed upon the adequacy of the Reserve Fund line item. XXIII. WORKING CAPITAL FUND At closing, the Sponsor will collect an amount equal to two (2) months Common Charges from each Purchaser to be paid to the Condomini um as initial working capital. While Sponsor is in control of the Board of Managers of the Condominium, the working capital funds will not be used to reduce the Common Charges. The working capital fund may be utilized to reimburse Sponsor for prepai d expenses of the Condominium. The only budgetary item that might require a substan

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nd maintained a cash deposit account to be known as the “Operating Account,” into which shall be deposited the operating portion of all monthly and special assessments as fixed and determined for all Units. Disbursements from said account shall be for the general need of the operation including, but not limited to, wages, repairs, betterments, maintenance and other operating expenses of the Common Elements and for the purchase, lease, sale or other expenses resulting from the purchase or lease of Units. Section 8. Other Accounts. The Board shall maintain any other accounts it shall deem necessary to carry out its purpose. Section 9. Determination of Common Expenses and Fixing of Common Charges. The Board of Managers shall from time to time, and at least annually, prepare a budget for the operation of the General Common Elements and Common Expenses of the Condominium, determine the amount of the Common Charges payable by the Unit Owners to meet the Common Expens

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600 20,753 100.0000% $11,407.05 $18,441.04 $221,292.93 $29,477.34 * Two (2) Months Common Charges will be collected from each Purchaser at Closing as Working Capital Contribution. **The projected real estate taxes for the first year of operation contained herein are based on the post-completion assessment of the building. *** Balcony space is uninhabitable space and may not be legally used as bedoom/livingroom; to do so may result in a building code violtaion being issued for the building. 27