XXXXXX CORP.
XXXXXXXXX AVE, NEW YORK XXXX

POLICY FOR SUBLEASING

1. Definitions. The following terms shall have the meanings respectively ascribed to them:
(a) Applicant refers to a person who proposes to sublease an apartment in the building owned by the Corporation from a Shareholder.
(b) Board means the board of directors of the Corporation.
(c) Corporation means XXXXXX Avenue Corp.
(d) Effective Date means June 26, 2003.
(e) Proprietary Lease refers to the proprietary lease between the Corporation and the Shareholders.
(f) Shareholder refers to a Shareholder of the Corporation.
2. Coverage of this Policy and Requirement for Board Approval. No sublease shall take effect or be valid without compliance with the sublet policy set forth herein, nor shall any sublease be valid until approved in writing by the Board as provided in the Proprietary Lease. This sublet policy shall become effective on the Effective Date with respect to subleases entered into on or after the Effective Date. This sublet policy shall not apply to any sublease duly approved by the Board which commenced prior to the Effective Date, but it shall be effective with respect to: (i) any extended or renewal term thereof commencing on or after the Effective Date; and (ii) any sublease which commenced prior to the Effective Date and which was not been duly approved by the Board prior to the Effective Date. The term “Subletting” shall include the occupancy of an apartment by any person not authorized to occupy the apartment by the provisions of the Proprietary Lease, whether or not any rent is paid by such occupant.
3. General Criteria For Subletting. The following provisions shall apply to all apartments other than those owned by holders of unsold shares:
(a) No more than thirteen percent (13%) of apartments owned by Shareholders, excluding apartment(s) owned by a holder of unsold shares, may be sublet at any given time (“sublet quota”).
(b) No Shareholder shall be permitted to sublet the whole or any part of his/her apartment until he/she shall have owned his/her shares in the Corporation for a period of not less than two (2) years prior to the commencement date of the sublease term. This requirement may be waived by the Board, provided such waiver is in writing.
(c) Except for apartment(s) owned by a holder of unsold shares, no apartment may be sublet for a period or periods exceeding two (2) years out of any five (5) year period. This limitation may be waived by the Board, provided such waiver is in writing.
(d) No Shareholder may sublet more than one apartment during any given one year period.
(e) Upon receipt of a completed sublease application, the Shareholder's request will be placed on a list and reviewed by the Board. Generally, Board consideration of sublet applications will be on a first-come-first-serve basis, subject to the sublet quota. If more than one Shareholder seeks approval to sublet his or her apartment, the Board may, in its discretion, give preference to a Shareholder who has historically sublet his/her apartment less frequently than others, but nothing in this Sublet Policy is intended to diminish or restrict the Board’s discretion with regard to the granting or withholding of consent, for any reason or no reason, or to impose such conditions as the Board deems appropriate in connection with the granting of any consent.
(f) No sublease application shall be considered by the Board in the event that the Shareholder is then in default of his/her Proprietary Lease, including without limitation breach of the house rules, failure to pay any maintenance fees, assessments, garage parking fees, repair fees, or any other outstanding fee or charge due.
(g) The term of each sublease shall not exceed one (1) year, unless extended with written approval by the Board. In addition, each sublease agreement must begin on the first day of a calendar month.
(h) Any proposed sublease must specifically state that it is subject to all of the terms and conditions of the Proprietary Lease and that it is subordinate to the Proprietary Lease. A breach of the house rules by a subtenant shall also be deemed a breach of the Shareholder’s Proprietary Lease.
(i) Each Shareholder subletting an apartment shall maintain a comprehensive homeowners type policy with an A rated insurance company, including (i) coverage of at least 80% of replacement value of the interior portions of the premises for which the Shareholder is responsible to maintain and repair under his/her Proprietary Lease, including the Shareholder’s improvements, fixtures, wall coverings, floor coverings, the finished surfaces of all floors, and all other of Shareholder’s improvements and installations, (ii) personal property contents insurance to cover contents contained within the apartment, (iii) other provisions that the Board may require, and (iv) liability insurance in an initial amount of not less than $100,000 (the "minimum amount"), provided that in their sole discretion, the Directors may, by resolution, increase the minimum amount of such liability insurance from time to time.