EMPLOYMENT AGREEMENT


     This  Employment  Agreement  (this  "Agreement")  is  entered  into  as  of
September  18,  1998,  by and between  INSIGNIA/ESG  HOLDINGS,  INC., a Delaware
corporation  with an office at 200 Park  Avenue,  New York,  New York 10166 (the
"Company"),  and ADAM B. GILBERT,  an individual  residing at 60 Cowdin  Circle,
Chappaqua, New York 10514 (the "Executive").

     WHEREAS,  it is  contemplated  that the Company will be "spun-off" from its
parent company, Insignia Financial Group, Inc. ("Insignia"), sometime during the
third  calendar  quarter of 1998 (the actual  date such  spin-off  occurs  being
referred to herein as the "Spin-Off Date"); and

     WHEREAS,  the  Company  desires  to assure  itself of the  services  of the
Executive  from and after the  Spin-Off  Date for the  period  provided  in this
Agreement,  and the  Executive  is willing to serve in the employ of the Company
for such period upon the terms and conditions provided in this Agreement;

     NOW,  THEREFORE,  in  consideration  of the  premises  and  other  good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties hereto agree as follows:

     Section 1.  Employment.  The Company hereby agrees to employ the Executive,
and the Executive  hereby accepts such  employment,  in each case upon the terms
and  conditions set forth herein,  for a period  commencing on the Spin-Off Date
(the  "Commencement  Date") and ending on  December  31,  2001 (the  "Expiration
Date"),  subject to earlier  termination as set forth herein (such period, as it
may be so terminated, being referred to herein as the "Employment Period").

         Section 2.        Duties and Services.

     (a) Offices.  During the Employment  Period,  the Executive  shall serve as
Executive Vice  President-Legal,  Secretary and General  Counsel of the Company,
with principal  responsibility for the Company's legal affairs. In addition,  at
the request of the  Company,  the  Executive  shall  serve as an officer  and/or
director of one or more  subsidiaries of the Company.  In the performance of his
duties hereunder,  the Executive shall report to and shall be responsible to the
Chief Executive Officer and the Board of Directors of the Company. The Executive
agrees to his  employment  as  described in this Section 2, and agrees to devote
substantially  all of his  working  time and efforts to the  performance  of his
duties hereunder. The Executive shall be available to travel as the needs of the
business of the Company reasonably require.

     (b)  Location of Office.  During the  Employment  Period,  the  Executive's
office shall be located at 200 Park Avenue, New York, New York, or at such other
location  in New York,  New York as the  Company  may  reasonably  request.  The
Company shall provide the Executive  with an  appropriate  office,  an executive
secretary reasonably  acceptable to him and other reasonable support appropriate
to his duties hereunder.

     (c) Primary  Responsibilities.  During the Employment Period, the Executive
shall (i) have such appropriate and lawful  responsibilities  assigned to him by
the Chief  Executive  Officer and/or the Board of Directors of the Company,  and
(ii) comply with all lawful written policies and procedures of the Company.

     (d) Other  Activities.  The Executive may (i) devote reasonable time to the
management of his personal  financial affairs and (ii) to the extent that he may
do so without unduly interfering with his duties at the Company,  participate on
boards of directors  of other  enterprises  which do not directly or  indirectly
compete with the Company;  provided,  however,  that (x) the Executive shall not
join the board of directors of any public  company  without first  obtaining the
approval of the Chief  Executive  Officer of the  Company and (y) the  Executive
shall give prompt  notice of his election or  appointment  to any other board of
directors,  whether  of a  private  for-profit  company  or  any  not-for-profit
company, to the Chief Executive Officer of the Company. The Executive may retain
any compensation paid to him for such service.

     Section 3.  Compensation.  Except as  otherwise  provided  herein,  as full
compensation  for the  Executive's  services under this  Agreement,  the Company
shall  pay,  grant,  issue or give,  as the case may be,  to the  Executive  the
following compensation and benefits:

     (a) Base  Salary.  Subject to the  provisions  of Section 6, an annual base
salary  ("Base  Salary") at the rate of $360,000  per annum,  payable in cash in
accordance  with the  customary  executive  payroll  policy of the Company as in
effect  from  time to time;  provided,  however,  that the  Base  Salary  may be
increased by action of the Board of Directors of the Company or the Compensation
Committee thereof (the "Compensation Committee").

     (b) Annual Bonus. An annual  discretionary bonus ("Bonus"),  the amount, if
any, of which shall be  determined  by the Board of  Directors of the Company or
the  Compensation  Committee,  and which  shall be paid to the  Executive,  with
respect to any given fiscal year of the  Company,  before the  expiration  of 74
days after the end of such fiscal year.

     (c) Fringe Benefit Programs.  In addition to the other benefits provided to
the  Executive  hereunder  and  to  the  extent  he  satisfies  the  eligibility
requirements thereof and to the extent permitted by law, participation in fringe
benefit  programs  made  available  generally  to  employees  and/or  to  senior
executives of the Company, including without limitation pension, profit sharing,
stock purchase,  savings, bonus, disability,  life insurance,  health insurance,
hospitalization,  dental,  deferred  compensation  and other plans and  policies
authorized on the date hereof or in the future.

     (d)  Expense   Reimbursement.   Reimbursement  of  the  Executive  for  all
out-of-pocket  expenses  reasonably  incurred  by him  in  connection  with  the
performance  of  his  duties  hereunder,   including   without   limitation  (i)
professional  activities and membership  fees and dues relating to  professional
organizations  of which the  Executive  currently  is a member or is directed in
writing to be a member by the Board of  Directors,  Chief  Executive  Officer or
President of the Company, (ii) expenses required for licensing of the Executive,
and (iii) business-related cellular phone expenses, all upon the presentation of
appropriate   documentation   therefor  in  accordance  with  the  then  regular
procedures of the Company.  (e) Vacations,  etc.  Twenty (20) paid vacation days
per year on a non-cumulative basis; and leaves-of-absence in accordance with the
regular  procedures of the Company  governing  senior officers in existence from
time to time.

     Section 4. Extraordinary Event.

     (a) Defined. As used herein, "Extraordinary Event" shall mean the cessation
of Andrew L. Farkas to serve as either the Chairman of the Board of Directors of
the Company or an  executive  officer of the  Company  for any reason  effective
simultaneously with or within one year following a merger, consolidation,  asset
sale or other similar  transaction  involving the Company or a subsidiary of the
Company which requires approval by the stockholders of the Company.

     (b)  Extraordinary   Event  Bonus.  Within  ten  business  days  after  the
occurrence of an Extraordinary  Event, the Company shall,  regardless of whether
the  Executive  elects to convert this  Agreement  into a  consulting  agreement
pursuant to Section  4(c),  pay to the Executive an amount in cash equal to 100%
of the Base Salary  then in effect.  In  addition,  if the  Executive  elects to
convert this  Agreement  into a consulting  agreement  pursuant to Section 4(c),
then:  (i) within ten business days after the effective  date of such  election,
the Company shall pay to the Executive an amount in cash equal to the product of
(x) the number of days that have elapsed from and including the first day of the
fiscal year in which such  Extraordinary  Event occurred,  multiplied by (y) the
amount of Bonus paid to the Executive by the Company (or bonus paid by Insignia,
if  applicable) in respect of the fiscal year  immediately  preceding the fiscal
year in which such Extraordinary Event occurred,  multiplied by (z) 0.00274; and
(ii) upon the effective  date of such  election,  all stock  options,  shares of
restricted stock and other awards granted under or otherwise subject to the 1998
Stock  Incentive Plan of the Company (the "Company Stock Plan") then held by the
Executive will fully,  immediately and automatically  vest and be exercisable as
and to the extent permitted by the Company Stock Plan.

     (c) Conversion to Consulting Agreement. During the 120-day period following
the occurrence of an Extraordinary Event, the Executive shall have the right, in
his sole  discretion,  to elect in  writing  to convert  this  Agreement  into a
consulting agreement,  whereupon: (i) the Executive will cease to be an employee
of the Company and shall resign all officer and other positions with the Company
and its  subsidiaries;  (ii)  the  Executive  shall  be  required,  through  the
Expiration  Date,  to  consult  with  respect  to the  assets,  liabilities  and
transactions   of  the  Company  as  they   existed   immediately   before  such
Extraordinary  Transaction,  such  consultation  to be at the  reasonable  times
convenient to the Executive on no less than five business  days' notice,  but in
no event for more than five days or portions of a day in any calendar month, the
parties  recognizing that the Executive during the consulting period likely will
have significant other business interests; and (iii) the terms of this Agreement
(including all rights hereunder of the Executive as to salary,  bonus,  payments
and benefits) shall continue unabridged through the Expiration Date, except that
(1) Section 2 hereof will be superseded by this Section 4(c) and (2)  references
herein to the  "employment" of the Executive shall be deemed to be references to
the consultancy by the Executive.

     Section 5. Representations and Warranties of the Executive and the Company;
Key Person Insurance.

     (a) The Executive represents and warrants to the Company as follows:

     (i) He is under no contractual or other  restriction or obligation which is
inconsistent with the execution of this Agreement, the performance of his duties
hereunder, or the other rights of the Company hereunder; and

     (ii) He is under no physical  or mental  disability  that would  hinder his
performance of duties under this Agreement.

     (b) The Company represents and warrants to the Executive that the execution
and  delivery of this  Agreement  by the  Company has been duly  approved by the
Board of Directors of the Company or the Compensation Committee.

     (c) The Executive  agrees to cooperate with the Company,  upon request,  in
connection  with the obtaining by the Company of a key person  insurance  policy
upon  the  life  of  Executive.  The  Executive  is not  aware  of any  fact  or
circumstance which would preclude the Company from obtaining such insurance, and
the  Executive  has not  heretofore  been  declined by an  insurance  company or
provider for life insurance.

     Section 6. Non-Competition and Non-Solicitation; Confidentiality.

     (a) Non-Competition and Non-Solicitation.

     (i) In  view  of the  unique  and  valuable  services  it is  expected  the
Executive  will  render to the  Company  and its  Subsidiaries  (as  hereinafter
defined),  the Executive's  knowledge of the customers,  trade secrets and other
proprietary  information  relating  to the  business  of  the  Company  and  its
customers and suppliers,  and similar  knowledge  regarding  Subsidiaries of the
Company it is expected the Executive  will obtain,  the  Executive  agrees that,
through and  including the  Expiration  Date plus any  additional  period during
which the  Executive is employed by the Company,  he will not compete with or be
engaged in the same business as, or "Participate  In" (as  hereinafter  defined)
any other business or organization which competes with or is engaged in the same
business as the Company or any of its Subsidiaries,  with respect to any product
or service sold or activity  engaged in by the Company or any  Subsidiary of the
Company in any  geographical  area in which,  at the time of such  expiration or
cessation,  such  product or service  is sold or  activity  is engaged in by the
Company or any Subsidiary of the Company; provided, however, that the provisions
of this Section  6(a)(i) shall not be interpreted to preclude the Executive,  at
any time and from time to time, from (1) Participating In any other organization
if approved by the Board of  Directors  of the  Company,  or (2) owning not more
than five percent (5%) of the outstanding  capital stock of any  publicly-traded
entity.  The terms  "Participate  In" and  "Participating  In" mean "directly or
indirectly, for his own benefit or for, with or through any other person, own or
owning, manage or managing, operate or operating,  control or controlling,  loan
money to or lending money to, or participate in or participating in, as the case
may be, the ownership,  management,  operation or control of, or be connected or
being connected, as the case may be, as a director,  officer, employee, partner,
consultant,   agent,  independent  contractor  or  otherwise,  or  acquiesce  or
acquiescing,  as the  case  may  be,  in  the  use of his  name  in."  The  term
"Subsidiary" means "any entity actually directly or indirectly controlled by the
Company or of which the Company  directly or indirectly  owns (in the aggregate)
in excess of 20% of the outstanding voting or economic interests."

     (ii) In recognition  of the close personal  contact the Executive will have
with  the  Company's  and  its   Subsidiaries'   trade   secrets,   confidential
information,  records and business  relationships,  and the position of trust in
which the Company will hold the  Executive,  the Executive  covenants and agrees
that for so long as the  Executive is employed by the Company,  and for a period
lasting  for two (2)  years  following  the  later  of the  date  on  which  the
Executive's  employment with the Company ceases for any reason or the Expiration
Date,  the Executive  will not,  either for himself or as an officer,  director,
employee,  agent,  representative,   independent  contractor  or  in  any  other
relationship to any person, partnership, corporation or other entity (other than
the Company and its Subsidiaries),  (A) directly or indirectly interfere with or
disturb, or seek to interfere with or disturb, any contractual relation in favor
of the  Company  or  any  of  its  Subsidiaries  or  (B)  solicit,  directly  or
indirectly,  including by assisting others, business from any customer or client
of the  Company  of any of its  Subsidiaries  with  whom the  Executive  has had
Material  Contact  (as  defined  below)  during  the twelve  (12)  month  period
preceding the date of cessation of the  Executive's  employment with the Company
for the purpose of providing  goods or services to such customer or client.  For
purposes of this Agreement,  the Executive shall be deemed to have had "Material
Contact" with a customer or client of the Company or a Subsidiary  (x) with whom
the  Executive  actually  dealt,  or (y)  whose  dealings  with the  Company  or
Subsidiary  were handled,  coordinated  or supervised by the  Executive,  or (z)
about whom the  Executive  obtained  confidential  information  in the  ordinary
course of business  through the Executive's  association with the Company or the
Subsidiary.

     (iii) The  Executive  covenants  and agrees  that,  for a period of two (2)
years  following  the  later of the  Commencement  Date or the date on which the
Executive's  employment with the Company ceases, the Executive will not solicit,
employ,  engage or in any manner encourage any employee,  broker or sales person
of the  Company  or of  any of its  Subsidiaries  (other  than  the  Executive's
personal  secretary),  to leave his or her  employ for the employ of a person or
entity which  directly or indirectly  competes with the Company or of any of its
Subsidiaries  unless and until he or she (A) has been  terminated by the Company
or a Subsidiary other than for cause or (B) has not been employed by the Company
or any of its Subsidiaries for a period of two (2) years.

     (iv) The Executive  acknowledges that the foregoing provisions are intended
to protect the Company's and its  Subsidiaries  business and customer  contacts,
and not to prevent the Executive  from pursuing a livelihood in the general area
of his  previous  training,  and that  such  provisions  should  be  interpreted
accordingly.

     (b)  Confidentiality.  The Executive covenants and agrees that he shall not
publish,  disclose or make accessible by him to any other person,  either during
or after the cessation of his  employment,  or use except during his  employment
with the  Company in the  business  and for the  benefit of the  Company and its
Subsidiaries,  any confidential information which the Executive may now possess,
may obtain during or after his employment  with Company,  or may create prior to
the end of his  employment  with the  Company  relating  to the  business of the
Company or any of its  Subsidiaries  or of any  customer  or  supplier of any of
them. In the event that the Executive  becomes legally compelled to disclose any
of the  confidential  information,  the Executive  will provide the Company with
prompt written  notice so that the Company may seek a protective  order or other
appropriate  remedy and/or waive in writing  compliance  with the  provisions of
this Section 6(b), and in the event that such  protective  order or other remedy
is not  obtained,  or should the Company  waive in writing  compliance  with the
provisions of this Section 6(b), the Executive will furnish only that portion of
the confidential information which is so legally required. Upon demand therefor,
the  Executive  shall  return  all  tangible   evidence  of  such   confidential
information  to the Chief  Executive  Officer of the Company  (or his  designee)
prior to or at the cessation of his employment.

     (c) Interpretation and Enforcement.  The Executive  acknowledges and agrees
that a breach  of the  provisions  of this  Section 6 could  not  adequately  be
compensated by money damages, and, therefore,  the Company shall be entitled, in
addition  to any  other  right and  remedy  available  to it,  to an  injunction
restraining such breach, and the Company shall not be required to post a bond in
any proceeding brought for such purpose.  The Executive further acknowledges and
agrees that the  provisions of this Section 6 are  necessary  and  reasonable to
protect the Company and its Subsidiaries in the conduct of their businesses.  If
any  restriction  contained  in this  Section 6 shall be  deemed to be  invalid,
illegal or unenforceable by reason of the extent, duration or geographical scope
thereof or otherwise,  then the court making such  determination  shall have the
right to reduce such extent,  duration,  geographical  scope or other  provision
hereof,  and in its reduced form such  restriction or other provision shall then
be  enforceable  in the manner  contemplated  hereby.  Nothing  herein  shall be
construed as prohibiting the Company from pursuing any other remedies, at law or
in equity, for any such breach or threatened breach.

     Section 7. Termination.

     (a) Definitions.

     (i) Death  Termination  Event. As used herein,  "Death  Termination  Event"
shall mean the death of the Executive.

     (ii) Disability Termination Event. As used herein,  "Disability Termination
Event" shall mean a  circumstance  where the Executive is physically or mentally
incapacitated  or disabled or  otherwise  unable to fully  discharge  his duties
hereunder as a result of a single or related  series of illnesses or  conditions
for a period of 100 consecutive days.

     (iii) Estate. As used herein, the term "Estate" shall mean (A) in the event
that the last will and  testament of the  Executive has not been probated at the
time of  determination,  the estate of the Executive,  and (B) in the event that
the last will and  testament of the  Executive  has been probated at the time of
determination,  the legatees or the Executor who are entitled under such will to
the assets or payments at issue.

     (iv)  Termination  For Cause.  As used herein,  the term  "Termination  For
Cause"  shall  mean  (A)  the  termination  by the  Company  of the  Executive's
employment  hereunder upon a good faith  determination by a majority vote of the
members of the Board of Directors of the Company  (after notice to the Executive
and an opportunity for the Executive and/or his  representative to appear before
the Board of Directors of the Company)  that  termination  of this  Agreement is
necessary  by reason of (1) the  conviction  of the  Executive of a felony under
state or federal law, or the  commission  by the  Executive an act of employment
discrimination  or sexual  harassment under state or federal law, or the failure
by the  Executive  to observe  any policy of the  Company set forth in a written
policy  manual or  handbook,  as amended  from time to time,  (2) the  continued
breach by the  Executive  of any  provision  of this  Agreement  for a period of
thirty (30) days after  written  notice of such breach is given to the Executive
by the Company,  including gross  negligence in the performance by the Executive
of his duties or responsibilities hereunder, (3) the failure by the Executive to
comply  with any  lawful  directive  of the  Board  of  Directors  or the  Chief
Executive  Officer of the Company,  which  failure  continues  for ten (10) days
after written notice thereof is given to the Executive, (4) a material violation
of any provision of Section 5 of this Agreement by the Executive, (5) the taking
by  the  Executive  of  any  action  on  behalf  of  the  Company  or any of its
Subsidiaries  without  the  possession  by  the  Executive  of  the  appropriate
authority to take such action  (other than as a result of innocent  error),  (6)
the taking by the  Executive  of any action  that the  Executive  knows to be in
conflict  of  interest  with the  Company or any of its  Subsidiaries  given the
Executive's  position  with  the  Company  and  its  Subsidiaries,  or  (7)  the
usurpation by the Executive of an opportunity  that the Executive  knows to be a
corporate  opportunity  of the  Company or any of its  Subsidiaries;  or (B) the
voluntary cessation of employment by the Executive prior to the Expiration Date.

     (v) Termination Without Cause. As used herein,  "Termination Without Cause"
shall  mean  any  termination  of the  Executive's  employment  by  the  Company
hereunder other than as a result of a Termination For Cause, a Death Termination
Event or a Disability Termination Event.

     (b) Death Termination  Event.  Subject to the provisions of Section 9, this
Agreement  shall  terminate   automatically  upon  the  occurrence  of  a  Death
Termination Event,  whereupon (i) the Company will continue to pay to the Estate
the Base Salary,  as then in effect,  through the Expiration  Date, and (ii) all
stock  options,  shares of  restricted  stock and other awards  granted under or
otherwise  subject to the  Company  Stock Plan then held by the  Executive  will
fully,  immediately  and  automatically  vest and be  exercisable  as and to the
extent permitted by the Company Stock Plan. In addition, if (i) an Extraordinary
Event  occurs  within one year after the  occurrence  of such Death  Termination
Event  and  (ii)  a  definitive  agreement  relating  to  the  specific  merger,
consolidation,  asset sale or other  similar  transaction  (or relating  another
substantially  similar  transaction) which gave rise to such Extraordinary Event
had been executed and delivered by all parties  thereto and was in effect at the
time such Death  Termination  Event occurred,  then the Company shall pay to the
Estate,  within ten business  days after the  occurrence  of such  Extraordinary
Event, all amounts (without  duplication) to which the Executive would have been
entitled  pursuant to Section 4(b)  assuming the Executive had made the election
to convert this  Agreement to a  consulting  agreement  pursuant to Section 4(c)
immediately after the occurrence of such Extraordinary Event.

     (c) Disability  Termination Event.  Subject to the provisions of Section 9,
this Agreement shall terminate automatically upon the occurrence of a Disability
Termination  Event,  whereupon  (i)  the  Company  will  continue  to pay to the
Executive the Base Salary,  as then in effect,  through the Expiration Date, and
(ii) all stock  options,  shares of  restricted  stock and other awards  granted
under or otherwise  subject to the Company Stock Plan then held by the Executive
will fully,  immediately and automatically vest and be exercisable as and to the
extent permitted by the Company Stock Plan. In addition, if (i) an Extraordinary
Event occurs within one year after the occurrence of such Disability Termination
Event  and  (ii)  a  definitive  agreement  relating  to  the  specific  merger,
consolidation,  asset sale or other  similar  transaction  (or relating  another
substantially  similar  transaction) which gave rise to such Extraordinary Event
had been executed and delivered by all parties  thereto and was in effect at the
time such Disability  Termination Event occurred,  then the Company shall pay to
the   Executive,   within  ten  business  days  after  the  occurrence  of  such
Extraordinary  Event, all amounts  (without  duplication) to which the Executive
would have been  entitled  pursuant to Section 4(b)  assuming the  Executive had
made the election to convert this Agreement to a consulting  agreement  pursuant
to Section 4(c) immediately after the occurrence of such Extraordinary Event.

     (d) Termination For Cause.

     (i) The Executive  acknowledges  and agrees that the Company shall have the
absolute  right to terminate the Executive for any of the reasons  enumerated in
Section 6(a)(iii)(A).

     (ii) Subject to the provisions of Section 9, this Agreement shall terminate
automatically upon the occurrence of a Termination For Cause,  whereupon (A) the
Executive  shall not be entitled to receive any  additional  payments  hereunder
other than the Base Salary,  as then in effect,  to and  including the date that
such Termination For Cause occurs,  and (B) the Company shall be entitled to any
and all remedies and damages available to it.

     (e) Termination Without Cause. Subject to the provisions of Section 9, this
Agreement  shall  terminate  automatically  upon the occurrence of a Termination
Without  Cause,  whereupon (i) the Company  shall:  (1) continue to pay the Base
Salary,  as then in effect,  to the Executive until the Expiration  Date, in the
same manner and at the same times as such Base Salary would have  otherwise been
payable to the Executive had this Agreement not been  terminated;  (2) within 90
days of the occurrence of such  Termination  Without Cause, pay to the Executive
an amount in cash equal to two times the  amount of Bonus paid to the  Executive
in respect of the fiscal year of the Company  immediately  preceding the year in
which such Termination Without Cause occurs; and (3) continue to provide health,
life and,  to the extent  permissible  under the  applicable  plans,  disability
insurance  benefits to the Executive until the Expiration  Date,  which benefits
shall not at any time be less  favorable  than those which the  Executive  would
have  received  had he  continued  to be  employed  by the  Company at such time
pursuant to this  Agreement;  provided,  however,  that if the Executive  should
subsequently  obtain  employment  from any source which  provides such insurance
benefits to Executive at no  out-of-pocket  cost to him, then the benefits to be
provided to the Executive under this clause (3) shall be  appropriately  reduced
for so long as such subsequent  employment continues and the Executive continues
to receive  such  benefits  from such  subsequent  employer;  and (ii) all stock
options,  shares of restricted stock and other awards granted under or otherwise
subject  to the  Company  Stock  Plan then  held by the  Executive  will  fully,
immediately  and  automatically  vest and be  exercisable  as and to the  extent
permitted by the Company Stock Plan. In addition,  if (i) an Extraordinary Event
occurs within one year after the  occurrence of such  Termination  Without Cause
and (ii) a definitive agreement relating to the specific merger,  consolidation,
asset sale or other  similar  transaction  (or  relating  another  substantially
similar  transaction)  which  gave  rise to such  Extraordinary  Event  had been
executed and delivered by all parties thereto and was in effect at the time such
Termination  Without Cause, then the Company shall pay to the Executive,  within
ten business days after the occurrence of such Extraordinary  Event, all amounts
(without  duplication) to which the Executive would have been entitled  pursuant
to Section  4(b)  assuming the  Executive  had made the election to convert this
Agreement to a consulting  agreement  pursuant to Section 4(c) immediately after
the occurrence of such Extraordinary Event.

     Section 8.  Withholding.  The Company  shall be  entitled to withhold  from
amounts  payable to the Executive  hereunder  such amounts as may be required by
applicable law to be so withheld.

     Section 9.  Survival.  Notwithstanding  anything in this  Agreement  to the
contrary,  the provisions of Sections 3 through 18 (inclusive) of this Agreement
shall survive any  termination of this Agreement or cessation of the Executive's
employment  hereunder  through the later of (i) the Expiration  Date or (ii) the
applicable period stated therein.

     Section 10. Entire  Agreement;  Modification;  Waiver.  This Agreement sets
forth the entire understanding of the parties hereto with respect to the subject
matter  hereof and  supersedes  all  existing  agreements  between  the  parties
concerning  such  subject  matter.  This  Agreement  may  be  modified  (or  the
application of any provision  hereof waived) only by a written  instrument  duly
executed by the party charged therewith.

     Section  11.  Notices.  Any  notice  or  other  communication  required  or
permitted  to be given  hereunder  shall be in  writing  and  shall be mailed by
certified  mail,  return  receipt  requested,  or  otherwise  delivered  against
receipt,  to the party to whom it is to be given,  at the  address of such party
set forth in the preamble to this  Agreement  (or to such other  address as such
party shall have furnished in writing in accordance  with the provisions of this
Section 11). Any notice or other  communication given by certified mail shall be
deemed given at the time of certification thereof,  except for a notice changing
a party's address which shall be deemed given at the time of receipt thereof.

     Section 12. Waiver. Any waiver by either party of a breach of any provision
of this  Agreement  shall not  operate  as a waiver of any other  breach of such
provision or of any breach of any other provision of this Agreement. The failure
of a party to insist upon strict  adherence to any term of this Agreement on one
or more occasions  shall not be considered a waiver or deprive that party of the
right  thereafter to insist upon strict adherence to that provision or any other
provision  of this  Agreement.  Any waiver  must be in writing and signed by the
party charged therewith.

     Section 13. Binding Effect.  The Executive's  rights and obligations  under
this  Agreement are not  transferable  by  assignment or otherwise,  such rights
shall  not  be  subject  to  commutation,  encumbrance  or  the  claims  of  the
Executive's creditors,  and any attempt to do any of the foregoing shall be void
and of no effect.  The  provisions of this  Agreement  shall be binding upon and
inure  to  the   benefit   of  the   Executive   and  his  heirs  and   personal
representatives,  and  shall be  binding  upon and inure to the  benefit  of the
Company and its successors.

     Section  14.  Headings.  The  headings  in this  Agreement  are  solely for
convenience of reference,  and shall be given no effect in the  construction  or
interpretation of this Agreement.

     Section  15.  Governing  Law.  This  Agreement  shall  be  governed  by and
construed in accordance with the internal laws of the State of New York, without
reference to any otherwise applicable conflict of law provisions.

     Section 16. Construction and  Interpretation.  Should any provision of this
Agreement  require  judicial  interpretation,  the parties hereto agree that the
court interpreting or construing the same shall not apply a presumption that the
terms hereof shall be more strictly construed against one party by reason of the
rule of construction  that a document is to be more strictly  construed  against
the party which  itself,  or through  its agent,  prepared  the same,  and it is
expressly  agreed and  acknowledged  that the  Executive,  the Company and their
respective  attorneys and  representatives  have participated in the preparation
hereof.  No provision of this  Agreement  shall be  interpreted  in favor of, or
against,  any party  hereto by reason of the  extent to which  such party or its
counsel  participated in the drafting hereof or by reason of the extent to which
any such provision is inconsistent with any prior draft hereof.

     Section 17. Waiver of Trial by Jury. TO THE EXTENT  PERMITTED BY APPLICABLE
LAW, EACH OF THE PARTIES TO THIS  AGREEMENT  HEREBY WAIVES ANY AND ALL RIGHTS IT
MAY HAVE TO A JURY  TRIAL OF ANY CLAIM OR CAUSE OF ACTION  BASED UPON OR ARISING
OUT OF THIS  AGREEMENT  OR ANY  DEALING  BETWEEN OR AMONG THEM  RELATING  TO THE
SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIPS  HEREIN ESTABLISHED.  THE
SCOPE OF THIS WAIVER IS INTENDED TO ENCOMPASS  ANY AND ALL DISPUTES  THAT MAY BE
FILED IN ANY COURT  AND THAT  RELATE TO THE  SUBJECT  MATTER OF THIS  AGREEMENT,
INCLUDING  WITHOUT  LIMITATION  CONTRACT  CLAIMS,  TORT  CLAIMS,  BREACH OF DUTY
CLAIMS,  AND ALL OTHER  COMMON  LAW AND  STATUTORY  CLAIMS.  EACH  PARTY  HERETO
ACKNOWLEDGES  THAT  THIS  WAIVER IS A  MATERIAL  INDUCEMENT  TO ENTER  INTO THIS
AGREEMENT,  AND THAT EACH  PARTY  WILL  CONTINUE  TO RELY ON THIS  WAIVER IN THE
RELATED  FUTURE  DEALINGS  BETWEEN  THE  PARTIES.   EACH  PARTY  HERETO  FURTHER
REPRESENTS  AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY  AND  VOLUNTARILY  WAIVES ITS JURY TRIAL RIGHTS  FOLLOWING
SUCH CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE,  MEANING THAT
IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING.  IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO THE TRIAL BY THE COURT.

     Section 18. Available Remedies.  The Executive acknowledges and agrees that
the  Executive's  employment  hereunder was granted by the Company  primarily in
reliance upon the covenants,  agreements,  duties, obligations and assurances of
the  Executive  contained  herein,  and in the  event  of a  breach  of any such
covenant, agreement, duty, obligation or assurance of the Executive, including a
voluntary  cessation  by  Executive  of his  employment  hereunder  prior to the
Expiration  Date,  (i)  the  Company  and  its  Subsidiaries,   including  their
respective businesses and properties,  would suffer irreparable damage for which
money damages alone would not adequately  compensate  the Company,  and (ii) the
Company  shall be  entitled,  in  addition  to any other  remedies  and  damages
available  to it,  to  obtain  injunctive  relief  in the  form  of a  temporary
injunction, permanent injunction, restraining order or other comparable remedies
in order to prevent or cease the violation of such  covenant,  agreement,  duty,
obligation or assurance.

     Section 19.  Counterparts.  This Agreement may be executed in counterparts,
each of which  shall be  deemed an  original,  but all of which  together  shall
constitute one and the same instrument.

     IN WITNESS WHEREOF,  each party hereto,  intending to be legally bound, has
duly executed this Agreement as of the date first written above.

                    INSIGNIA/ESG HOLDINGS, INC.

 
                    By:   /s/Andrew L. Farkas
                                   ----------
                            Andrew L. Farkas
                            Chief Executive Officer



                    EXECUTIVE


                                         
                    Adam B. Gilbert