(i) that the apartment corporation will purchase the property and will sell shares to purchasers to raise funds;

(ii) each shareholder will enter into a proprietary lease;

(iii) any restrictions on using, transferring, leasing or mortgaging the units and shares;

(iv) control of the apartment corporation will be in the hands of the board of directors; disclose whether sponsor represents and provides in the bylaws, that a majority of the apartment corporation board must be owner-occupants of the building or members of an owner-occupant's household, who are unrelated to the sponsor or its principals, after the end of the sponsor control period. If sponsor does not make this representation, include the warning set forth in paragraph (c)(3) of this section and discuss as a special risk;

(v) each shareholder will have the right to vote for members of the board of directors;

(vi) each shareholder will be responsible for the payment of maintenance charges and assessments;

(vii) the apartment corporation, as the fee owner of the entire building, is assessed for the real estate taxes on the property and may be the mortgagor on a mortgage encumbering the entire property. As a result, sharesholders are co-dependent on each other and on the sponsor for payment of the mortgage and taxes, default on which will jeopardize each shareholder's equity in his/her shares and unit. Where the sponsor owns a substantial percentage of the units, a default in payment of maintenance by sponsor jeopardizes the equity interest of other sharesholders;

(i) unit identification;

(ii) number of rooms and baths or usable space in square feet;

(iii) share allocation;

(iv) cash purchase price;

(v) approximate amount of mortgage applicable to a block of shares (if applicable);

(vi) projected maintenance charges for the first year of operation at $__ per share (annual and monthly); and

(vii) projected annual income tax deduction at $__ per share for the first year of operation (if applicable).

(i) for the number of rooms and baths, state the method of calculating the number of rooms or area of each unit. If rooms or area are calculated in accordance with an industry standard, it is sufficient to refer to the industry standard employed;

(ii) for the number of rooms and baths, identify the rooms or area within each unit or model (e.g., line G:2 BR, LR, K. 1½ B, balcony);

(iii) for the share allocation, disclose the basis for calculating the share allocation;

(iv) for the cash purchase price, refer to the portion of the plan that discloses and explains any closing costs or adjustments that a purchaser may have to pay and project approximate amount due for closing costs;

(v) for cash purchase price, refer to the portion of the plan that discloses and explains any closing costs or adjustments that a purchaser may have to pay and project approximate amount due for closing costs;

(vi) for approximate amount of mortgage applicable to shares, explain that although shareholders will not be personally liable to pay the mortgage(s), the apartment corporation will be responsible and shareholders' maintenance charges include amounts to pay debt service;

(vii) for projected maintenance charges, disclose, that if the purchaser obtains financing, debt service will be an additional expense. Disclose that projected maintenance charges do not include certain costs for which the shareholder is responsible such as (where applicable) repairs to the interior of the unit, separately metered gas, electricity, hot water, heat and air conditioning. Disclose any built-in increases in future years resulting from a fixed amount increase in mortgage debt service and state the dollar per share impact;

(viii) for projected income tax deduction, explain that the projected tax deduction may vary in future years (where applicable) due to changes in the interest rate on the existing mortgage (if any) or on a refinanced mortgage, due to the allocation of constant debt service payments to interest and principal, due to the expiration of real estate tax benefits or due to changes in the assessed value, the tax rate or in the method of assessing real property which result in a change in real property taxes. State the percentage of the budget for the first year of operation represented by the deductible items.

(i) Commercial income. Describe any contracts or leases, other than proprietary leases, that will be binding on the apartment corporation and refer to the section of the plan on management agreements and other contractual arrangements.

(ii) Labor costs. State the number of full- and part-time staff projected for the cooperative and whether the staff will be union members.

(iii) Heating, cooling and hot water costs. State the type and quantity of energy estimated to be used during the year and the cost per gallon or other measure, inclusive of sales tax, for all energy costs for providing heat, air conditioning and hot water for the building. Explain any energy costs that are shared between the shareholders and the apartment corporation. The Department of Law may, from time to time, issue pricing guidelines to reflect minimum fuel and utility costs.

(iv) Utilities. State the basis for the projected cost-consumption and unit cost for utilities. Unit cost should be based on the current tariff plus a reasonably anticipated increase which should be set forth (e.g., estimates based on current tariffs plus 12 percent increase).

(v) Insurance. The budget for insurance must provide for fire and casualty insurance under an agreed amount replacement value policy or under a policy including an 80 percent coinsurance provision so that the insured shall not be a coinsurer. Discuss the adequacy of the insurance to replace the building in the event of total loss and/or to avoid being a coinsurer in the event of partial loss.

(vi) Real estate taxes. State the projected assessed valuation after completion of construction and the projected tax rate used to calculate the budget item. Include the present assessed valuation if the cooperative is an existing building being sold without rehabilitation or is undergoing minimum rehabilitation.

(vii) Tax exemption/tax abatement benefits. If the plan represents that the cooperative may or will receive tax benefits, the plan must state that the sponsor will use best efforts to obtain the benefits, and project the amount, commencement and duration of the benefits.

(viii) Management and service contracts. State the basis for projected management fees and service contracts. Conspicuously disclose in the footnotes and highlight as a special risk if the cost of the management contract or any other contract which will be binding on the apartment corporation exceeds or is substantially less than the prevailing cost for similar services.

(ix) State that the contingency fund (if any) is intended to provide for any unanticipated expenses or unanticipated increases in the projected expenses.

(x) Mortgage interest and amortization. Describe how the mortgage is payable during the budget year and the allocation of payments to interest and principal. Refer to the “Terms of Mortgages” section for further explanation of all mortgage terms.

(i) the apartment corporation will qualify at closing as a cooperative housing corporation under Internal Revenue Code section 216; and

(ii) tenant stockholders will be entitled to deduct for income tax purpose their proportionate share of the interest and real estate taxes paid by the apartment corporation. Highlight as a special risk if there are unusual features of the plan which may jeopardize the apartment corporation's qualification or the deductability of interest and taxes by tenant-stockholders who itemize deductions in the first year of cooperative operation or thereafter.

(i) This is an opinion, not a guarantee, that the apartment corporation will qualify as a cooperative corporation and that tenant-stockholders will be entitled to income tax deduction. This opinion is based solely on the facts and documents referred to above. No warranties are made that the tax laws upon which counsel base this opinion will not change. In no event will the sponsor, the sponsor's counsel, the apartment corporation, counsel to the apartment corporation, the selling agent or any other person be liable if the apartment corporation ceases to meet the requirements of section 216 of the Internal Revenue Code of 1986, as amended, or the New York State Tax Law, as amended, by reason of future changes in fact or applicable law, regulations, decisional law or Internal Revenue Service rulings.

(i) Mandatory escrow agreement. All deposits, down payments, or advances made by subscribers or purchasers prior to closing of each individual transaction shall be held pursuant to a written agreement entered into between the sponsor, the subscriber or purchaser, and the escrow agent. Said provisions may be included in a separate escrow agreement or in the subscription or purchase agreement, and are referred to in this paragraph as the “escrow agreement.” The plan must set forth the material terms of the escrow agreement. The sponsor shall specify the exhibit in Part II of the plan that contains the escrow agreement. If a separate escrow agreement is used, a copy of the full agreement must be contained as a separate exhibit to the plan in Part II. Disclose, without limitation, any indemnity by the sponsor in favor of the escrow agent, provision for discharge of the escrow agent’s obligations by the sponsor upon payment of the deposit and interest in accordance with these regulations, any right of the escrow agent to represent the sponsor in any lawsuit, any compensation by the sponsor to the depository bank, any provision for payments by the sponsor under an indemnity in favor of the escrow agent and whether the sponsor will compensate the escrow agent for acting as such. The plan and escrow agreement must include language conforming to subparagraphs (v)-(vii) of this paragraph. However, the failure to include such language in the plan or escrow agreement shall not excuse the sponsor and the escrow agent from compliance with said subparagraphs.

(ii) Payments. All funds received from subscribers or purchasers whether in the form of checks, drafts, money orders, wire transfers, or other instruments which identify the payor, shall be made payable to or endorsed by the subscriber or purchaser to the order of the attorney or law firm as escrow agent.

(iii) The escrow agent. The escrow agent must be an attorney or firm of attorneys to practice in the State of New York or an attorney admitted in a foreign jurisdiction who submits to the jurisdiction of the State of New York for any cause of action arising out of the escrow provisions set forth in the escrow agreement. The authorized signatories on the escrow account must be attorneys admitted to practice in the State of New York or admitted in a foreign jurisdiction who submit to the jurisdiction of the State of New York for any cause of action arising out of the escrow provisions set forth in the escrow agreement. Neither the escrow agent nor any authorized signatory on any account may be the sponsor, the selling agent, the managing agent, or a principal thereof. However, a law firm that has a member who is a principal may be the escrow agent provided that members of the firm who are signatories on any account are not themselves principals. Only an attorney or a member of a firm acting as escrow agent shall be a signatory on any account and only such attorney shall be authorized to release funds. The name, address and telephone number of the escrow agent and of each attorney who is a signatory must be stated in the plan.

(iv) The account(s). All deposits, down payments, or advances made by subscribers or purchasers prior to closing of each individual transaction, whether received before or after the date of consummation of the plan, must be placed within five business days after the escrow agreement is signed by all necessary parties in an attorney's segregated special escrow account or accounts in a bank or banks doing business in the State of New York which account(s) is/are insured by the Federal Deposit Insurance Corporation (“FDIC”). Sponsor shall state the applicable limits for federal deposit insurance, whether and to what extent the deposits, down payments, or advances are insured, and whether sponsor may utilize more than one segregated special escrow account for each deposit, down payment, or advance. Include as a special risk that deposits in excess of said limits will not be federally insured. An attorney shall open and maintain such account in his or her own name, or in the name of a firm of attorneys of which he or she is a member, or in the name of the attorney or firm of attorneys by whom he or she is employed, separate from such attorney's personal accounts or from any accounts in which assets belonging to the firm are deposited, and separate from any accounts maintained in the capacity of executor, guardian, trustee or receiver. A master escrow account with a sub-account for each subscriber or purchaser is acceptable. The name of any account, the bank, and the bank address must be stated in the plan. The word “escrow” must be included as part of the name of any account. Funds from any account may be released only by signature of the attorney who is named as escrow agent. Neither the sponsor nor any principal of the sponsor may be a signatory on any account. Funds must be placed in an interest-bearing account or accounts, with all interest credited to the subscriber or purchaser, unless either the subscriber or purchaser defaults and the plan is consummated, or the sponsor elects to place the funds in a separate Interest-On-Lawyer's-Account (“IOLA”) for each plan pursuant to Judiciary Law section 497. The plan shall indicate whether the interest rate to be earned will be the prevailing rate for such accounts. State the current prevailing rate and when interest will begin to accrue. No fees of any kind may be deducted from e account principal or any interest earned thereon. Sponsor shall bear any administrative cost for maintenance of any account.

(v) Notification to purchaser. Within 10 business days after the escrow agreement is signed by all necessary parties, the escrow agent shall notify the subscriber or purchaser that such funds have been deposited in the bank indicated in the plan, and shall provide any account number and the initial interest rate. If the subscriber or purchaser does not receive notice of such deposit within 15 business days after tender of the deposit, he or she may cancel the subscription or purchase and rescind within 90 days after tender of the deposit. Complaints concerning the failure to honor such cancellation requests may be referred to the New York State Department of Law, Real Estate Finance Bureau, 28 Liberty Street, New York, NY 10005. Rescission may not be afforded where proof satisfactory to the Attorney General is submitted establishing that the escrowed funds were timely deposited in accordance with these regulations and requisite notice was timely mailed to the subscriber or purchaser.

(vi) Escrow revisions. Before funds are transferred to any new escrow account, or if the escrow agent is replaced, the plan must be amended to provide the same full disclosure with respect to any new account, the escrow agent and the escrow agreement as was originally provided. A bond, letter of credit or other security may be substituted for any escrow account only after the Department of Law approves in writing the use of such alternate form of security, pursuant to the provisions of paragraph (l)(4) of this section.

(vii) Release of funds. The escrow agreement and the plan must set forth the requirements and procedures for the release of the escrowed funds. These shall include:

(viii) Disputes.

(ix) Exhibits to plan. Copies of the forms provided by the bank for opening any escrow account and the form of escrow agreement, if separate from the subscription or purchase agreement, must be included as Exhibit B-19 of the submission.

(x) Records on file. The escrow agent shall maintain all records concerning any escrow account for seven years after release of the funds. Upon the dissolution of any law firm which was the escrow agent, the former partners or members of the firm shall make appropriate arrangements for the maintenance of these records by one of them or by the successor firm and shall notify the Department of Law of such transfer.

(xi) Review and audit. The Department of Law may perform random reviews and audits of any records involving escrow accounts to determine compliance with statute and regulation.

(xii) Waiver void. Any provision of any contract or agreement, whether oral or in writing, by which a subscriber or purchaser purports to waive or indemnify any obligation of the escrow agent holding trust funds is absolutely void. The provisions of this section of the regulations shall prevail over any conflicting or inconsistent provision in the offering plan or in a subscription or purchase agreement.

(xiii) Trust obligation of sponsor. Nothing contained herein shall diminish or impair the sponsor's statutory obligation to each subscriber or purchaser pursuant to GBL section 352-h to hold in trust all deposits, advances or payments made in connection with the offer until consummation of the transaction with such subscriber or purchaser. Consummation of the plan does not relieve sponsor of its obligations pursuant to GBL section 352-h. Funds from any escrow account remain the property of the subscriber or purchaser until employed in connection with the consummation of the transaction. Such funds shall not be a part of the estate of the sponsor or the escrow agent upon any bankruptcy, incapacity or death.

(xiv) Transition. All funds required to be held pursuant to GBL sections 352-e (2-b) and 352-h on the effective date of this section shall be transferred into escrow accounts in compliance with this regulation within 60 days thereafter.

(i) Application for alternate security. Sponsor must submit an affidavit which contains full information as to the proposed usage of such funds, the sponsor's financing of construction or rehabilitation work, expected completion date, the terms and conditions of the proposed surety bonds or letter of credit, and required undertakings and covenants.

(ii) Documentation. The proposed form of surety bond or letter of credit, any underlying agreement or related agreement, and any undertaking or covenant required hereunder, shall be appended to the application and also filed as Exhibits to the plan in Exhibits Part B section 21.2(c)(3)(ii)(r)(B-19), or as exhibits to an amendment to the plan.

(iii) Change from escrow account. Where surety bonds are or a letter of credit is to be provided under an amendment to the plan calling for release of funds already deposited in escrow, the amendment shall provide for, and annex a form for, the written consent of each affected subscriber or purchaser and shall provide for continuation of escrow of funds of any subscriber or purchaser who does not execute and deliver such written consent to the sponsor.

(iv) Disclosure. If an application for alternate security is approved, the terms of such alternate security shall be disclosed in the plan or in an amendment to the plan promptly submitted.

(i) Deposits into escrow account. All down payments and deposits, received after the Attorney General's approval of the use of surety bonds as alternate security, shall be placed, within five business days after escrow agreement is signed by all necessary parties, in an attorney's segregated special escrow account or accounts, established pursuant to and in compliance with paragraph (3) of this subdivision. Such funds shall be released by the escrow agent to the sponsor upon receipt by the escrow agent of a copy of the surety bond issued to the subscriber or purchaser whose funds are being released.

(ii) Payments. All funds received from subscribers or purchasers whether in the form of checks, drafts, money orders, wire transfers, or other instruments which identify the payor, shall be made payable to or endorsed by the subscriber or purchaser to the order of the attorney or law firm as escrow agent.

(iii) Requirements to act as surety. The surety company must be licensed to write insurance in the State of New York by the New York State Department of Financial Services, whether or not the property which is the subject of the plan is located in the State of New York unless the law of the State where the property is located requires otherwise. If the property is located outside New York State and the sponsor claims that the law of such state conflicts and is controlling, the sponsor's application must specify the conflicting law. In order for the application for alternate security to be approved by the Attorney General, the applicant must show that the surety company with which the sponsor proposes to contract has a current rating for debt securities no lower than the third highest grade conferred by at least two of the national reporting services regularly evaluating insurance companies.

(iv) Agreement between sponsor and surety. The plan must fully disclose the material terms of the agreement between the insurance company as surety and the sponsor, including the premium to be paid by the sponsor, any agreement by which sponsor provides collateral to secure its obligations to the surety and any agreement by the sponsor indemnifying the surety. The agreement must provide that the surety will abide by directives in conformity with these regulations.

(v) Provisions of the bond. The surety bond must specify the name and address of the sponsor as principal; the name and address of the surety company to which claims for payment may be made; provision for the name and address of the subscriber or purchaser as obligee on the bond; provision for the amount of the down payment or deposit secured and the rate of interest, if any, to accrue on such funds; the term of the bond, and, if the bond is for a finite period, a guarantee by the surety that it will pay the amount secured to the subscriber-obligee prior to expiration of the bond or a guarantee by the sponsor that the bond will be renewed before expiration.

(vi) Term and continuation. Each surety bond and any accompanying agreement shall provide that it will continue in effect or that it will be renewed periodically until consummation and closing of the sale of the respective shares the down payment for which is secured by such surety bond or until the secured funds of a subscriber or purchaser have been returned in full, or until the funds secured by the surety bond have been placed in any escrow account pursuant to paragraph (7) of this subdivision or until there is an undisputed subscriber or purchaser default or a final, non-reviewable determination by the Attorney General or final, non-appealable order or judgment of a court that the subscriber or purchaser has defaulted and that the sponsor is entitled to the secured funds.

(vii) Delivery of the surety bond. The sponsor shall cause the surety to mail or personally deliver the surety bond to the subscriber-obligee before the funds are released to the sponsor from any escrow account. The sponsor, the escrow agent and the surety company shall each retain a copy of the surety bond.

(viii) Invoking the bond. The subscriber-obligee shall have the right to demand payment of the amount secured by the surety bond directly from the surety, without first requesting payment from the sponsor. The surety shall be obligated to pay the amount secured by the bond to the subscriber-obligee without the consent or despite the objection of the sponsor, upon the following events or circumstances:

(ix) Failure by subscriber-obligee or purchaser-obligee to produce a copy of the bond. A subscriber's or purchaser's inability to produce a copy of the surety bond shall not be a basis for the surety to reject the subscriber's or purchaser's claim. The surety shall retain a copy of the bond and shall pay the secured funds to the subscriber-obligee or purchaser-obligee without a copy of the bond as long as the subscriber or purchaser is able to provide proof of identity as the obligee on the bond.

(x) Disputes.

(i) Amount. The amount of the letter of credit shall be at least 125 percent of the aggregate of all subscription deposits or down payments or payments expected to be received from subscribers or purchasers, and not retained in escrow, during such period of time as the letter of credit will be needed, as estimated by the sponsor in the application to the Department of Law. The amount of the letter of credit may be reduced or increased as warranted by circumstances and pursuant to a filed amendment to the plan.

(ii) Irrevocability. The letter of credit must he irrevocable during the stated term and any renewal term.

(iii) Beneficiary. The beneficiary must be an attorney, or firm of attorneys, acting as or qualified under paragraph (3)(iii) of this subdivision to act as escrow agent under the plan, who shall act as a fiduciary for the benefit of subscribers and purchasers under the plan.

(iv) Authority to draw. The letter of credit must provide that the beneficiary shall have sole power to draw upon the letter of credit without the consent or despite the objection of the sponsor or of any provider of underlying credit, at such times or upon such events as are set forth in subparagraph (ix) of this paragraph.

(v) Issuer. The issuer must be a bank authorized to act as a commercial bank or savings institution under supervision of the New York State Department of Financial Services or a federally supervised banking institution located in the State of New York, unless the property is located in another state and the letter of credit is issued by a bank located within such state. In order for the application for alternate security to be approved by the Attorney General the applicant must show that the issuer bank has surplus funds and net worth of at least ten times the amount of the letter of credit, and must have a current rating with respect to its debt securities that is within “investment grade” by one of the generally accepted national reporting services regularly rating the debt securities of banking institutions and that the provisions of the letter of credit include the right of the beneficiary to draw down the letter of credit in conformity with these regulations.

(vi) Term and continuation. The letter of credit and related agreement and any accompanying undertaking shall provide that it will continue in effect or that it shall be periodically renewed until consummation and closings of sales of all shares referred to in the application for alternate security pursuant to subparagraph (4)(i) of this subdivision or until the covered funds of subscribers and purchasers have been returned to them in full.

(vii) Undertaking. If the letter of credit will expire prior to the latest date of closings of sales of all such shares, provision for renewal of the letter of credit without loss of irrevocability and without any change of terms shall be afforded by:

(viii) Operative provisions. Upon approval of a sponsor's application for use of a letter of credit as alternate security:

(ix) Right to draw upon letter of credit. The escrow agent as the beneficiary of the letter of credit, acting as a fiduciary for the benefit of subscribers and purchasers under the plan whose funds were released from escrow by reason of the grant of sponsor's application, shall have the duty and the right to draw upon and collect the proceeds of the letter of credit, 10 business days after notice to the sponsor and sponsor's failure or refusal to restore such funds to the escrow agent, without the consent or despite the objection of the sponsor or the provider of the credit, upon the following events or circumstances:

(x) Disputes.

(i) a defect in title which cannot be cured without litigation or cannot be cured for less than a stated amount;

(ii) substantial damage or destruction of the building by fire or other casualty which cannot be cured for less than a stated amount; or

(iii) the taking of any material portion of the property by condemnation or eminent domain.

(i) shareholders owning a majority of the apartment corporation's outstanding shares (other than unsold shares) shall have given notice of intent to cancel; or

(ii) all unsold shares constitute 15 percent or less of the apartment corporation's outstanding shares, at least five years have elapsed since the apartment corporation acquired title to the building and on the effective date of cancellation holders of unsold shares shall pay to the apartment corporation a sum equal to the product of the then current monthly rent (maintenance charges) payable under the proprietary lease multiplied by 24.

(i) the date and statutory authority under which the apartment corporation was incorporated and the number of shares authorized and issued;

(ii) the composition of the board of directors, eligibility requirements, elections, and removal of members;

(iii) the powers, duties and potential personal liability of the board of directors and officers;

(iv) the allocation of responsibility between shareholders and the board of directors for repairs, replacement and maintenance;

(v) repair or restoration after fire or other casualty and whether insurance proceeds are dedicated to repair restoration;

(vi) insurance provided by the apartment corporation;

(vii) reports to shareholders including notice of meetings and availability of books and records;

(viii) how to amend the apartment corporation's certificate of incorporation, bylaws and other relevant documents;

(ix) termination of apartment corporation;

(x) the right to accumulate reserves for capital replacements or otherwise and any restrictions imposed on such right;

(xi) the names of the officers and directors and their relationship, if any, to sponsor, sponsor's principals and sponsor's agents;

(xii) the extent to which sponsor will or may control the board of directors after closing and the consequences to purchasers of such reservation of control;

(xiii) disclose and explain the manner in which the apartment secures a lien on each block of shares to secure payments of maintenance charges and assessments and the consequences of such lien;

(xiv) rights and procedure of the apartment corporation upon the sale of shares including right to approve or impose a charge or fee on such approval of sale or lease. Disclose whether corporate documents impose greater fees or charges (however denominated on shareholders than on sponsor or holders of unsold shares). If the plan or bylaws grant sponsor or holders of unsold shares greater freedom in selling shares or leasing units, such fact must be specifically disclosed and explained;

(xv) state that a copy of the bylaws is set forth in part II of the plan;

(xvi) if any construction or rehabilitation to the interior of units is the responsibility of shareholders, state whether the shareholder's obligation to perform that work is an obligation under the proprietary lease, state whether and when the apartment corporation may enter the unit to complete the work and whether the apartment corporation may place a lien on shares for the cost of completing work.

(i) state the date of the agreement, purchase price of the property and how and when it is to be paid;

(ii) describe any leases, mortgages and other liens, encumbrances and title exceptions affecting the property. Title exceptions may include the state of facts shown on a stated survey, and any additional state of facts a subsequent accurate survey would show, provided that the title exceptions do not render title uninsurable if the building remains standing. Highlight as a special risk if any title exception impairs the mortgagability of the property;

(iii) state that the sponsor will procure title insurance, identify the title company, state the amount of the coverage, and whether the sponsor or the apartment corporation will pay for the insurance;

(iv) list the personal propety included in the conveyance;

(v) describe fully all estimated costs, fees, and charges to be paid or apportioned in connection with the closing and specify whether they will be paid by the apartment corporation or sponsor. Include fee and mortgage title insurance charges, state and local transfer taxes, mortgage recording taxes, recording fees for the deed and any mortgage, power of attorney and any other documents, apportionment of taxes, water and sewer charges, contributions to working capital fund or reserve fund, brokerage commissions, attorneys fees and all other closing costs or adjustments. For all items to be apportioned, set forth the basis for apportionment;

(vi) describe the type of deed. Highlight as a special risk if the deed is not a bargain and sale deed with covenants against grantors acts or with full warranties;

(vii) describe whether the sponsor is obligated to repair any damage from a casualty or other cause that occurs before the closing and the rights and obligations of purchasers of damaged units;

(viii) the plan and contract of sale or exchange must provide that any conflict between the plan and the contract will be resolved in favor of the plan;

(viii) the plan and contract of sale or exchange must provide that any conflict between the plan and the contract will be resolved in favor of the plan;

(ix) state those obligations under the offering plan to be performed subsequent to closing that survive delivery of the deed;

(x) sponsor must assign any manufacturer's warranties with respect to equipment and appliances installed in a unit to the purchaser of the shares for that unit and assign any warranties with respect to equipment and appliances installed in public areas to the apartment corporation; and

(xi) for a contract of exchange, disclose the approximate amount of the sponsor's tax basis and discuss the tax consequences of the exchange to the apartment corporation.

(i) the name and address of the managing agent;

(ii) the term of the management agreement;

(iii) all fees and other compensation for services;

(iv) the major duties and services to be performed by the managing agent;

(v) the obligation (if any) of the apartment corporation to reimburse the agent for expenses incurred or to indemnify the agent against liability for acts properly performed by it pursuant to the agreement; and

(vi) whether the management agreement is assignable by the agent and what restrictions are imposed or assignability.

(i) State the date and term of each lease, the identity of the lessee and sublessee(s), if any, and the rent and any additional rent payable thereunder, the present and permitted use for the space, the security deposited, and the space leased.

(ii) State whether the present and future rent payable by the lessee is sufficient to cover the expenses fairly attributable to the leased space.

(iii) Highlight as a special risk if (a) any lease has a term exceeding 10 years; (b) if the lease generates less income than the pro rata share of expenses attributable to the leased space now or in the future; or (c) if the ratio of income generated by the lease to the share of expenses fairly attributable to the leased space may decline in the future. Describe the potential burden to the apartment corporation of these risks, disclose the basis for projecting the share of expenses attributable to the leased space, and estimate the income and expenses for the lease term.

(iv) Explain the apartment corporation's rights and obligations under the lease with regard to making ordinary or structural repairs, rebuilding after a casualty, retaining insurance or condemnation proceeds, limiting use to those compatible with a first class residential building, barring offensive uses, and whether consent of the apartment corporation is required before the lessee can assign or sublet space or change the current use.

(v) If the offering plan is subject to the provisions of General Business Law section 352-ee, disclose whether units are offered subject to the rights of existing commercial tenants and whether existing tenants could impair the completion of any rehabilitation.

(i) substitute equipment or materials of lesser quality or design; or

(ii) change the size, location or value of any units, or of other improvements or public areas if such changes adversely affect public areas or adversely affect the value of any unit to which title has closed or for which a subscription agreement has been executed and is in effect unless all affected shareholders consent in writing to such change and all affected contract vendees are given the right to rescind and receive any deposit or downpayment.

(i) Sponsor is required to maintain all deposits and funds in any special escrow account required by General Business Law section 352-e(2)(b) unless the sponsor's engineer or architect certifies that a lesser amount will be reasonably necessary to complete the work needed to obtain a permanent certificate of occupancy, in which case the sum exceeding the amount so certified by the sponsor's engineer or architect may be released from any special escrow account. Alternatively, sponsor must deposit with an escrow agent an unconditional, irrevocable letter of credit or post a surety bond in the amount so certified.

(ii) Notwithstanding subparagraph (i) of this paragraph, if the offering plan is subject to the provisions of General Business Law section 352-ee, sponsor is required to maintain all deposits and funds in any special escrow account required by General Business Law section 352-e(2)(b) unless the sponsor's engineer or architect certifies that a lesser amount will be reasonably necessary to complete all alterations and improvements to the public areas of the property, in which case the sum exceeding the amount so certified by the sponsor's engineer or architect may be released from any special escrow account. Alternatively, sponsor must deposit with an escrow agent an unconditional, irrevocable letter of credit or post a surety bond in the amount so certified.