Document:

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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<PAGE>

                                 PROMISSORY NOTE
                                 ---------------

$1,500,000.00                                                      March 2, 2002

     FOR VALUE RECEIVED, the undersigned, Andrew Lawrence Farkas, an individual
with an office at 200 Park Avenue, New York, New York 10166 ("Obligor"), hereby
unconditionally promises to pay to the order of Insignia Financial Group, Inc.,
a Delaware corporation ("IFG"), at the offices of IFG located at 200 Park
Avenue, New York, New York 10166 (or at such other place as IFG may designate in
writing to Obligor), the principal sum of ONE MILLION FIVE HUNDRED THOUSAND AND
00/100 DOLLARS (U.S. $1,500,000.00), in lawful money of the United States of
America.

     1. Interest Rate; Principal Payment.

         (a) Interest shall accrue and be payable on the outstanding unpaid
principal balance of this Promissory Note at the Applicable Rate (as defined
herein); provided that in no event shall the amount of interest due or payable
under this Promissory Note exceed the maximum rate of interest allowed by
applicable law. The "Applicable Rate" for any period shall be a rate of interest
(expressed on an annual basis) equal to Cost of Funds (as defined herein). For
purposes of this Promissory Note, "Cost of Funds" as of any date shall mean a
rate of interest equal to the applicable rate of interest as of such date
provided under that certain Credit Agreement dated as of May 4, 2001, by and
among IFG, First Union National Bank, Lehman Commercial Paper, Inc., Bank of
America, N.A. and the Lenders referred to therein, as the same shall be amended
from time to time. In the absence of an Applicable Rate, interest shall accrue
at the Prime Lending Rate as announced from time to time by The Chase Manhattan
Bank. Obligor agrees that such interest payments may be deducted automatically
by IFG from each quarterly "Advance" payment required to be made by IFG to
Obligor pursuant to Section 4(f) of that certain Employment Agreement, entered
into on May 18, 2000, between IFG and Obligor, as amended (the "Employment
Agreement").

         (b) Unless sooner paid in full or as otherwise provided herein, the
entire unpaid principal balance of this Promissory Note, together with all
accrued and unpaid interest on this Promissory Note, shall be due and payable on
March 5, 2005 (the "Maturity Date"). Obligor acknowledges that IFG has no
obligation to extend the Maturity Date and that IFG has no obligation to
refinance the loan evidenced by this Promissory Note. Notwithstanding any other
provisions of this Promissory Note, in no event shall Obligor be personally
liable for payment of principal or interest other than as a provided in Sections
1(a) and/or 3 of this Promissory Note.

     2. Prepayments.

         The principal amount of this Promissory Note may be prepaid, without
premium or penalty, at the option of Obligor at any time and from time to time
prior to the Maturity Date, in whole or in part.

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     3. Right to Offset.

         The Obligor is a participant in the Insignia Financial Group, Inc.
401(k) Restoration Plan, as amended (the "Restoration Plan"), which entitles the
Obligor to receive certain payments from time to time in accordance with the
distribution terms and conditions of the Restoration Plan (the "Permitted
Distributions"). The Obligor hereby irrevocably agrees that upon the occurrence
and continuation of an Event of Default (as defined below), any benefit that
becomes payable to the Obligor under the Restoration Plan on account of a
Permitted Distribution shall be paid not to the Obligor but rather directly to
IFG for purposes of a partial or full repayment, as the case may be, of this
Promissory Note. For the avoidance of doubt, Permitted Distributions shall not
include any amounts constituting the "Wife's Equitable Interest" (as defined and
referred to in the Restoration Plan), which Obligor holds as nominee for his
ex-wife, Pamela S. Farkas.

         In addition, Obligor agrees that he will not (i) request or be
permitted to receive a Permitted Distribution until all outstanding principal
and interest under this Promissory Note have been paid in full, and (ii) create,
incur, assume or suffer to exist, any security interest, lien or any other
encumbrance upon his interest in the Restoration Plan and/or any Permitted
Distributions.

     4. Forgiveness of Debt.

         In the event that the Obligor's employment with IFG is terminated as a
result of a an Extraordinary Transaction, an Influence Change Event, an
Extraordinary Stock Event or a Disability Termination Event (each as defined in
the Employment Agreement), before the Maturity Date, the repayment of fifty
percent (50%) of the then outstanding principal amount of this Promissory Note,
and all then accrued interest thereon, shall be forgiven on the one year
anniversary of such termination event, and the remaining fifty percent (50%) of
the then outstanding principal amount of this Promissory Note, and all then
accrued interest thereon shall be forgiven on the second year anniversary of
such termination event, provided that on each such dates Obligor is not in
breach of Sections 6(a)(1) and 6(a)(2) of the Employment Agreement. In the event
that the Obligor's employment with IFG is terminated as a result of a Death
Termination Event (as defined in the Employment Agreement) before the Maturity
Date, the repayment of the then outstanding principal amount of this Promissory
Note, and all then accrued interest thereon, shall be forgiven upon the
occurrence of such Death Termination Event.

     5. Events of Default.

         The occurrence of any of the following events shall constitute an
"Event of Default" hereunder:

         (a) The failure of Obligor to pay any principal on this Promissory Note
within ten (10) days of its due date (whether at maturity, upon acceleration or
otherwise); or

         (b) The breach by Obligor of any representation, warranty or agreement
contained in this Promissory Note; or

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         (c) Obligor's employment with IFG is terminated as a result of a
voluntary termination by Obligor (other than a termination by Obligor due to an
Extraordinary Transaction, an Influence Change Event, an Extraordinary Stock
Event, a Death Termination Event, and a Disability Termination Event (each as
defined in the Employment Agreement)) or Obligor's Termination for Cause (as
defined in the Employment Agreement); or

         (d) Obligor makes an assignment for the benefit of creditors, commences
(as the debtor) a case in bankruptcy, or commences (as the debtor) any
proceeding under any other insolvency law; or

         (e) A case in bankruptcy or any proceeding under any other insolvency
law is commenced against (as the debtor) and a court having jurisdiction in the
premises enters a decree or order for relief against Obligor as the debtor in
such case or proceeding, and such case or proceeding is continued for thirty
(30) days, or Obligor consents to or admits the material allegations against
Obligor in any such case or proceeding; or

         (f) A trustee, receiver or agent (however named) is appointed or
authorized to take charge of all or a substantial part of the property of
Obligor for the purpose of enforcing a lien against such property or for the
purpose of general administration of such property for the benefit of creditors.

         Upon the occurrence of an Event of Default, (i) if such event is an
Event of Default specified in clauses (b), (c), (d), (e) or (f) above,
automatically all amounts owing under this Promissory Note shall immediately
become due and payable, and (ii) if such event is an Event of Default specified
in clause (a) above, IFG may, upon ten (10) days written notice of default to
the Obligor, declare all amounts owing under this Promissory Note to be due and
payable forthwith, whereupon the same shall immediately become due and payable
at the end of such 10 day notice period. Upon and after an Event of Default, IFG
shall have all of the rights and remedies provided in this Promissory Note and,
in addition, all of the rights and remedies available under all other applicable
laws, all of which rights and remedies shall be cumulative and non-exclusive,
except as otherwise provided by law.

     6. Costs of Collection.

         Obligor agrees to pay or reimburse IFG on demand for all reasonable
costs, expenses and charges (including reasonable attorneys' fees and expenses
incurred) in connection with the enforcement of any provision of this Promissory
Note, or the collection of this Promissory Note.

     7. Miscellaneous.

         (a) No Waiver of Remedies. No failure or delay on the part of Obligor
or IFG in the exercise of any power or right in this Promissory Note shall
operate as a waiver thereof, and no exercise or waiver of any single power or
right, or the partial exercise thereof, shall affect the rights of Obligor or
IFG, as the case may be, with respect to any and all other rights and powers.

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         (b) Certain Waivers. Obligor waives presentment and demand for payment,
notice of dishonor, protest and notice of protest of this Promissory Note.

         (c) Notices. Any notice, demand or other communication required or
which may be given hereunder shall be in writing and shall be delivered
personally or by a recognized overnight courier for next business day delivery
or sent by registered or certified mail, postage prepaid (and shall be deemed
given when so delivered personally, or the next business day after delivered to
such overnight courier or if mailed, five days after the date of mailing) at the
address set forth above or to such other address as may be hereafter specified
by written notice by the parties to each other.

         (d) Successors and Assigns. This Promissory Note shall inure to the
benefit of and be binding upon the Obligor, IFG or any holder of this Promissory
Note and their respective heirs, successors and assigns.

         (e) Headings and Captions. Any headings or captions preceding the text
of the separate paragraphs hereof are intended solely for convenience of
reference and shall not constitute a part of this Promissory Note, nor shall
they affect its meaning, construction or effect.

         (f) No Set-Off. The obligations of Obligor under this Promissory Note
are absolute and unconditional and shall not be subject to any setoff or
counterclaim.

         (g) GOVERNING LAW. THIS PROMISSORY NOTE SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK WITHOUT REFERENCE TO ITS PRINCIPLES OF CONFLICT OF LAWS.

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         IN WITNESS WHEREOF, the undersigned has executed this Promissory Note
as of the date set forth above.

                                             Obligor:
                                             --------

                                               /s/ Andrew Lawrence Farkas
                                             --------------------------------
                                                    Andrew Lawrence Farkas

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