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                            EMPLOYEE PROMISSORY NOTE
                            ------------------------

                                   MAY 6, 2002

1.   In consideration of the agreement of Insignia Financial Group, Inc.
     ("Insignia"), a Delaware corporation with its principal office located at
     200 Park Avenue, New York, New York 10166, to lend Jeffrey P. Cohen
     ("Employee") the sum of $270,000 subject to the following provisions of
     this Note, Employee hereby agrees to repay to Insignia the outstanding
     balance of such amount on the earlier of (i) June 30, 2005 or (ii) 30 days
     following a termination of Employee's employment with Insignia for any
     reason.

2.   Interest on any amount borrowed hereunder shall accrue from the date of
     such borrowing at a rate equal to Insignia's blended actual cost of funds
     under its line of credit (to the full extent of all advances heretofore and
     hereafter made to Employee), and shall be payable by Employee to Insignia
     in cash on June 30 and December 31 of each year; provided, however, that,
     subject to the following provisions of this Note, until and including
     December 31, 2004 all interest accrued and payable hereunder may, at the
     option of Employee, be paid by adding on the due date thereof the amount
     thereof to the then outstanding principal balance of this Note instead of
     in cash. Insignia's good faith determination as to its blended cost of
     funds shall be determinative of the interest rate to be charged hereunder.

3.   Notwithstanding the foregoing, Employee agrees that: (i) from and after
     August 1, 2002, Insignia or its applicable affiliate may at its option
     withhold up to 50% of any distribution otherwise payable to Employee in
     respect Employee's ownership interest in Insignia Opportunity Directives,
     LLC ("IOD"), which amount withheld shall be applied as a payment first to
     interest and then to the then outstanding principal balance of this Note
     effective as of the date of such distribution.

4.   Employee may prepay any all or any portion of the amount due under this
     Note at any time without penalty. Any such prepayment shall be applied
     first to unpaid interest through the date of such prepayment, and then to
     the principal amount outstanding hereunder.

5.   Employee hereby waives demand, presentment and notice of dishonor. In the
     event that Employee fails to make timely repayment in full in accordance
     with the terms hereof, Employee agrees to reimburse Insignia for all of its
     costs of collection actually incurred (including Insignia's attorneys fees
     and disbursements); and, in the event of suit to collect such sums,
     Employee agrees to jurisdiction and venue in the state and federal courts
     situate in the State of New York, County of New York, and waives both trial
     by jury and the right to assert any offset or counterclaim in and to such
     collection suit. Any amount not timely repaid shall bear interest at an
     annual rate of two (2%) percentage points above the "Prime Rate" from the
     date such amount was due hereunder through the date of collection. (The
     "Prime Rate" shall be the prime rate quoted in the Money Rates Section of
     the Wall Street Journal on the first business day of each calendar quarter
     during which such amount remains outstanding.)

6.   Employee represents and agrees that: (a) Employee has read the foregoing
     agreement and understands both its terms and the financial and legal
     obligations it imposes upon Employee; (b) Employee is executing and
     delivering this promissory note to Insignia voluntarily, having been
     advised by Insignia to consult independent counsel of Employee's choice;
     (c) this promissory note expresses the entire agreement of Employee in
     respect of the subject matters covered hereinabove, with no representations
     having been made by Insignia (or by any other person) to Employee in
     connection herewith; (d) interpretation and enforcement of this promissory
     note, which is an instrument for the payment of money only, shall be
     governed by New York law; and (e) no alteration, cancellation, waiver, or
     release of Employee's obligations hereunder shall be valid unless embodied
     in a writing signed by a duly authorized officer of Insignia.


                                                 /s/ Jeffrey P. Cohen
                                                --------------------------------
                                                         Jeffrey P. Cohen