<PAGE>


                        AMENDMENT TO EMPLOYMENT AGREEMENT

     This AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment"), effective as of
March 14, 2002, by and between Insignia Financial Group, Inc., a Delaware
corporation (the "Company"), and FRANK M. GARRISON (the "Executive").

     WHEREAS, the Executive is presently employed by the Company pursuant to an
Employment Agreement between the Company and the Executive, entered into on
August 1, 2000 (the "Agreement"); and

     WHEREAS, the Executive and the Company desire to amend the Agreement as
hereinafter set forth.

     NOW, THEREFORE, for good and valuable consideration, the Executive and the
Company agree as follows:

     1. DEFINED TERMS. All capitalized terms used but not otherwise defined
herein shall have the meanings ascribed thereto in the Agreement.

     2. AMENDMENT TO SECTION 1 OF THE AGREEMENT. Section 1 of the Agreement is
amended as follows:

         (a) "2002" is replaced with "2005", thereby defining the Expiration
Date as December 31, 2005, subject to earlier termination as set forth in the
Agreement, and requiring the referenced notice, if any, to be given at least six
(6) months prior to December 31, 2005; and

         (b) as of January 1, 2003, the "Effective Date" shall be defined as
"January 1, 2003". Accordingly, all benefits, consideration, restrictions and/or
obligations with a duration measured from the Effective Date shall thereafter be
measured from January 1, 2003.

     3. OPTIONS. The Company hereby affirms its conditional grant to the
Executive of an option pursuant to the Insignia Financial Group, Inc. 1998 Stock
Incentive Plan to purchase One Hundred Thousand (100,000) shares of the Class A
Common Stock, par value $.01 per share, of Insignia Financial Group, Inc.
However, this grant will only be effective subject to, and upon the Executive's
execution of, a Stock Option Agreement in the form annexed hereto as Exhibit A.

     4. RETENTION BONUS. The Executive shall be paid a retention bonus in the
amount of $500,000, to be paid in a manner and at a time (in one or more
installments) as shall be mutually agreed by the Executive and the Company.

     5. AFFIRMATION. Except as amended hereby, the Agreement shall remain in
full force and effect.

     6. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

<PAGE>

     7. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without reference to the
conflict of law provisions thereof.

     IN WITNESS WHEREOF the parties have executed this Amendment below as of the
day first above written.

                                    INSIGNIA FINANCIAL GROUP, INC.

                                    By: /s/ Adam B. Gilbert
                                        ---------------------------------------

                                    Name: Adam B. Gilbert
                                         --------------------------------------

                                    Title: Executive Vice President
                                          -------------------------------------

                                    /s/ Frank M. Garrison
                                    -------------------------------------------
                                                FRANK M. GARRISON



                                       2
<PAGE>

                                    AGREEMENT

     AGREEMENT (the "Agreement"), effective as of March 14, 2002, by and among
INSIGNIA FINANCIAL GROUP, INC., a Delaware corporation (the "Company"), and
FRANK M. GARRISON ("Garrison").

     WHEREAS, Garrison is presently employed by the Company pursuant to an
Employment Agreement between the Company and Garrison, entered into on August 1,
2000 (the "Garrison Employment Agreement");

     WHEREAS, the Company desires to extend the term of the Garrison Employment
Agreement pursuant to a written amendment to be mutually agreed upon by the
respective parties hereto (the "Amendment"); and

     WHEREAS, in consideration of, and as an inducement to, Garrison entering
into the Amendment with the Company, the Company has agreed to grant to Garrison
a contingent retention bonus in accordance with the terms and conditions set
forth in this Agreement.

     NOW, THEREFORE, for good and valuable consideration, Garrison and the
Company agree as follows:

     8. DEFINED TERMS. All capitalized terms used but not otherwise defined
herein shall have the meanings ascribed thereto in the Garrison Employment
Agreement.

     9. BONUS.

         The Company agrees to pay to Garrison a contingent bonus of $500,000,
payable in installments from, and to the extent of, any Net Promote Proceeds (as
defined below) within a reasonable time after such Net Promote Proceeds are
received by the Company from time to time.

     10. NET PROMOTE PROCEEDS.

         For purposes of this Agreement, the term "Net Promote Proceeds" shall
mean 33.5% of the aggregate proceeds, actually received by the Company, if any,
from its promote participations in the Insignia Opportunity Partners and/or
Insignia Opportunity Partners II (collectively, the "Opportunity Partnerships")
until Garrison has received his full $500,000 bonus, subject to Section 4
hereof. For the avoidance of doubt, the parties hereto acknowledge and agree
that the bonus to be paid to Garrison in accordance with this Agreement is
contingent upon the Company actually receiving promote proceeds from the
Opportunity Partnerships, and then only in accordance with the percentage set
forth in this section 3. The Net Promote Proceeds shall not include any return
the Company earns on any actual investment by the Company in the Opportunity
Partnerships nor any fees received by the Company in respect of acquisition or
asset management services.

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<PAGE>

     11. BONUS TERMINATION.

         Notwithstanding anything to the contrary contained herein, no payments
shall be paid to Garrison following the date his employment with the Company (or
his engagement as a consultant with Company, as provided in Section 2(d) of the
Garrison Employment Agreement) is terminated as a result of (i) a voluntary
termination (other than a termination upon the occurrence of an Extraordinary
Transaction, Influence Change Event or an Extraordinary Stock Event); or (ii) a
Termination for Cause (as those terms are defined in the Garrison Employment
Agreement).

     12. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without reference to the
conflict of law provisions thereof.

         IN WITNESS WHEREOF the parties have executed this Agreement below as of
the day first above written.

                                         INSIGNIA FINANCIAL GROUP, INC.

                                         By: /s/ Adam B. Gilbert
                                             -----------------------------------

                                         Name: Adam B. Gilbert
                                              ----------------------------------

                                         Title: Executive Vice President
                                               ---------------------------------

                                         /s/ Frank M. Garrison
                                         ---------------------------------------
                                                   FRANK M. GARRISON










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