Document:

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                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT ("Agreement"), is made as of July 24, 2002, by
and between Insignia Douglas Elliman, LLC, a Delaware limited liability company
with an address at 575 Madison Avenue, New York, New York 10022 (the "Company"),
and GEOFFREY P. WHARTON, an individual with an address at 46 Old Roaring Brook
Road, Mount Kisco, New York 10549 ("Employee").

                                   BACKGROUND

     The Company desires to assure itself of the services of Employee for the
period provided in this Agreement, and Employee is willing to serve in the
employ of the Company for such period upon the terms and conditions provided in
this Agreement.

                             STATEMENT OF AGREEMENT

     In consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

     SECTION 1.  EMPLOYMENT.

     (a) The Company hereby agrees to employ Employee, and Employee hereby
accepts such employment, in each case upon the terms and conditions set forth
herein, for a three (3) year period commencing as of September 3, 2002 (the
"Commencement Date"), and ending on the day prior to the third anniversary of
the Commencement Date (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"). In the event the Company does not notify
Employee, on or before 30 days prior to the Expiration Date, that the Employment
Period shall terminate on the Expiration Date, then subsequent to the Expiration
Date, Employee's employment will continue on an "at will" basis, as defined
below, and will be subject to the terms of this Agreement, except to the extent
said terms are inconsistent with the Employee's "at will" status, in which case
said inconsistent terms of this Agreement will not apply. The "Expiration Date"
shall, in the event of said "at will" employment, be extended to, and be deemed
to be, the date on which said "at will" employment is terminated. For purposes
of this agreement, "at will" employment means that either the Company or the
Employee may terminate the employment relationship at any time, with or without
cause, and with or without notice.

     (b) Notwithstanding the foregoing, this Agreement shall not become
effective unless Employee fully complies with the following provisions:

         (i) Employee shall resign from his current employment as soon as
possible following execution of this Agreement, and in no event later than three
(3) days following execution of this Agreement. The date of such resignation
shall hereinafter be referred to as the "Resignation Date". Said resignation
shall be made public by Employee. In no event shall this Agreement become
effective while Employee is employed by his current employer.

         (ii) During the ten (10) day period immediately following the
Resignation Date,

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Employee shall be permitted to accept employment with any entity which is not a
direct competitor of the Company, its parent companies or affiliates; and, in
the event Employee accepts such permitted alternate employment, this Agreement
shall become void and neither Employee nor the Company shall have any
obligations to one another hereunder, except for Employee's duty to maintain the
confidentiality of any Confidential Information (as defined below).

         (iii) If Employee has not, during the ten (10) day period immediately
following the Resignation Date, provided the Chief Executive Officer of Insignia
Financial Group, Inc. ("IFG") with notice that Employee has accepted alternate
employment pursuant to (ii), above, then on the eleventh (11th) day following
the Resignation Date, this Agreement shall automatically become fully effective
and binding on the parties hereto. Notwithstanding any other provision of this
Agreement, such notice shall be deemed to have been given on the date it is
actually received by the Chief Executive Officer of IFG.

         (iv) If this Agreement becomes fully effective and binding pursuant to
(iii), above, then, beginning on the eleventh (11th) day following the
Resignation Date and continuing to the Commencement Date, Employee shall devote
no less than twenty (20) hours per week towards transitioning into the position
of Chief Executive Officer of the Company and shall be compensated during that
period at a rate equal to fifty percent (50%) of the Base Salary (as defined
below). Notwithstanding the foregoing, in the event Employee, in good faith,
determines that during the foregoing period his obligations to wind-up existing
matters for his current employer prevent him from devoting at least twenty hours
per week to the foregoing transition, then the Company and Employee will adjust
the foregoing twenty hour commitment so as to reasonably accommodate such
obligations. Any such adjustment to Employee's hour commitment will be
accompanied by a commensurate adjustment to Employee's salary during the subject
period.

         (v) No announcement of Employee's employment with the Company shall be
made by or on behalf of Employee, and the Company shall make any and all such
announcements.

     SECTION 2.  DUTIES AND SERVICES.

         (a)  OFFICES.  During the Employment Period, Employee shall serve as
the Chief Executive Officer of the Company. In the performance of his duties
hereunder, Employee shall report to and shall be responsible to the Chief
Executive Officer of IFG or his designee (the "Supervisory Officer"). Employee
shall participate in weekly Executive Management Committee meetings and monthly
Operations Review Meetings of IFG. Employee 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. Employee
shall be available to travel as the needs of the business of the Company
reasonably require. Notwithstanding the foregoing, nothing in this Section 2(a)
shall prevent the Employee from (i) managing the Employee's own personal and
family investments and affairs, (ii) performing services for any charitable,
religious or community organizations or (iii) cooperating with Employee's former
employer in connection with litigation arising from or relating to the World
Trade Center tragedy, including providing testimony at deposition, trial or
other judicial or arbitral forums, provided that such activities do not
materially interfere with the Employee's performance of his

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duties hereunder.

         (b)  LOCATION OF OFFICE.  During the Employment Period, Employee's
office shall be located at the Company's office in New York, New York or at such
other location as the Company and Employee shall mutually agree.

         (c)  PRIMARY RESPONSIBILITIES.  During the Employment Period, Employee
shall have such responsibilities as are assigned to him by the Supervisory
Officer and as are customarily attendant to his position. Employee shall comply
with all written policies and procedures of the Company which have been made
generally available to Employee.

     SECTION 3.  COMPENSATION AND RELATED MATTERS.  As full compensation for his
services hereunder, the Company shall pay, grant, issue or give, as the case may
be, to Employee the compensation and benefits specified on Exhibit A attached
hereto and made a part hereof.

     SECTION 4.  REPRESENTATIONS, WARRANTIES AND COVENANTS OF EMPLOYEE.
Employee represents and warrants to the Company as follows:

         (a) He is under no contractual, legal or other restriction or
obligation which is inconsistent with his entry into, or participation in,
negotiations with the Company regarding this Agreement; the execution of this
Agreement; the performance of his duties hereunder; or the other rights of the
Company hereunder;

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

         (c) He was duly licensed as a real estate broker/sales person and shall
take all actions necessary to renew said license promptly; he shall at all times
maintain such license(s) as required by law; and he shall comply with all
requirements of applicable brokerage license laws. If Employee is not duly
licensed as a real estate salesperson/broker at any time during the term of this
Agreement, or if that license(s) is suspended or revoked, or such
suspension/revocation proceedings are commenced, Employee will immediately
notify the Supervisory Officer of that fact, in writing; during such period
Employee will not engage in any activities in violation of applicable law; and
Employee will diligently take all actions necessary to obtain such license(s)
promptly.

     SECTION 5.  NON-SOLICITATION; CONFIDENTIALITY.

         (a)  NON-SOLICITATION.

              (1) In recognition of the close personal contact Employee has or
will have with the Company's, its parents' and its affiliates' trade secrets,
confidential information, records and business relationships, and the position
of trust in which the Company holds Employee, Employee further covenants and
agrees that while Employee is employed by the Company and for a period lasting
for two (2) years following the date on which Employee's employment with the
Company ceases for any reason, Employee will not, either for himself or an
officer, director, employee, agent, representative, independent contractor or in
any

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relationship to any person, partnership, corporation, or other entity (except
the Company or its parents or affiliates), solicit, directly or by assisting
others, business from any of the customers or clients of the Company, its
parents or its affiliates with which customers or clients Employee has had
material contact (as defined below) during the twelve (12) month period
preceding the date of cessation of Employee's employment with the Company, for
the purpose of providing goods or services to said customers and clients
otherwise provided by the Company, its parents or its affiliates. For purposes
of this Agreement, "material contact" exists between Employee and any customers
or clients (i) with whom Employee actually dealt; or (ii) whose dealings were
handled, coordinated or supervised by Employee; or (iii) about whom Employee
obtained confidential information in the ordinary course of business through
Employee's association with the Company.

             (2) Employee covenants and agrees that, for a period ending two (2)
years after the date on which Employee's employment with the Company ceases,
Employee will not solicit, employ, engage or in any manner encourage any current
or former employee, broker or sales person of the Company, or any of its
respective parents or affiliates to leave their employ for the employ of a
person or entity which directly or indirectly competes with the Company, or any
of its respective parents or affiliates. This restriction shall not preclude
Employee from soliciting any individual who has not been employed by the
Company, or any of its respective affiliates or parents, during the one (1) year
period immediately prior to said solicitation.

         Employee acknowledges that the foregoing provisions are intended to
protect the Company's and its parents' and affiliates' business and customer
contacts, not to prevent Employee from pursuing a livelihood in the general area
of his previous training, and they should be interpreted accordingly.

         (b)  CONFIDENTIALITY.  All "Confidential Information" (as defined
below) which Employee 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
or otherwise, relating to the business of the Company or any of its parents or
affiliates or of any customer or supplier of any of them shall not be published,
disclosed, or made accessible by him to any other person, either during or after
the cessation of his employment, or used by him except during his employment
with the Company in the business and for the benefit of the Company and its
parents and affiliates. In the event that Employee becomes legally compelled to
disclose any of the Confidential Information, Employee 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 5(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 5(b), Employee will furnish only that portion of the
Confidential Information which is so legally required. Employee shall return all
tangible evidence of such Confidential Information to the Company prior to or at
the cessation of his employment. For purposes of this Agreement "Confidential
Information" means information relating to the Company's business or operations,
its plans, strategies, prospects or objectives, its products, technology,
intellectual property, financial condition and results of operations, and its
personnel and compensation policies and procedures, any information provided to
the Company by third parties (including, but not limited to, customers of the
Company) on a confidential basis, and the terms of the Agreement.

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         (c)  INTERPRETATION.  Since a breach of the provisions of this
Section 5 may not adequately be compensated by money damages, the Company,
notwithstanding the provisions of Section 18, 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. Employee agrees that the provisions of this Section 5
are necessary and reasonable to protect the Company in the conduct of its
businesses. If any restriction contained in this Section 5 shall be deemed to be
invalid, illegal, or unenforceable by reason of the extent, duration, or
geographical scope thereof, or otherwise, then the arbitrator(s) or court making
such determination shall have the right to reduce such extent, duration,
geographical scope, or other provisions hereof, and in its reduced form such
restriction shall then be enforceable in the manner contemplated hereby. Nothing
herein shall be construed as prohibiting the Company, subject to the provisions
of Section 18, from pursuing any other remedies, at law or in equity, for such
breach or threatened breach.

     SECTION 6.  TERMINATION.

         (a)  DEFINITIONS.

             (i)  DEATH TERMINATION EVENT.  As used herein, "Death Termination
     Event" shall mean the death of the Employee.

             (ii)  DISABILITY TERMINATION EVENT.  As used herein, "Disability
     Termination Event" shall mean a circumstance where Employee is physically
     or mentally incapacitated or disabled such that Employee is unable perform
     the essential functions of his position, with or without reasonable
     accommodation, for a period of 185 consecutive days.

             (iii)  TERMINATION FOR CAUSE.  As used herein, the term
     "Termination For Cause" shall mean the termination by the Company of
     Employee's employment hereunder upon a good faith determination by the
     Supervisory Officer that termination of this Agreement is necessary by
     reason of (A) the conviction of Employee of a felony under state or federal
     law, or the commission by Employee an act of employment discrimination or
     sexual harassment under state or federal law as determined by a court of
     law, or the failure by Employee to comply with any material policy of the
     Company set forth in a written policy manual or handbook, as amended from
     time to time, (B) the continued breach by Employee of any of the provisions
     of this Agreement for a period of thirty (30) days after written notice of
     such breach is given to Employee by the Company, (C) the failure by
     Employee to comply with any lawful directive of the Supervisory Officer
     which shall continue for ten (10) days after written notice thereof is
     given to the Employee, (D) a violation of the provisions of Section 5 of
     this Agreement by the Employee, (E) the taking by Employee of any action on
     behalf of the Company or any of its affiliates or parents without the
     possession by Employee of the appropriate authority to take such action,
     (F) the taking by Employee of actions in conflict of interest with the
     Company or any of its parents or affiliates given Employee's position with
     the Company and its parents and affiliates, after failing to cure such
     conflict of interest upon five (5) days notice thereof (provided, however,
     that such cure period shall not apply if said conflicting action is not
     curable), (G) the usurpation by Employee of a corporate

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     opportunity of the Company or any of its parents or affiliates, (H) the
     failure by Employee to perform any of Employee's material duties or
     responsibilities hereunder, which failure continues for a period of thirty
     (30) days after written notice of such failure is given to Employee, except
     in the event of a failure to perform any material responsibility or duty
     which cannot be cured, said thirty (30) day notice and continuation period
     shall not be required, (I) the voluntary cessation of employment by
     Employee prior to the Expiration Date, or (J) any other act, omission,
     event or condition constituting cause for the discharge of an employee
     under applicable law.

             (iv)  IDE INCOME TERMINATION.  As used herein, an "IDE Income
     Termination" shall mean the termination by the Company of Employee's
     employment hereunder if IDE Income (as defined in Exhibit A) is (A) less
     than $6,960,000; or (B) is less than IDE Income for the preceding year by
     an amount which is greater than twenty percent (20%) of IDE Income for the
     preceding year. The foregoing $6,960,000 threshold shall apply to 2003 IDE
     Income, and for each year of the Employment Period thereafter that
     threshold shall be reviewed and may be modified (or remain unchanged) as
     determined on an annual basis by the Compensation Committee of the Board of
     Directors of IFG. In the event of a force majeure which materially and
     negatively impacts the business of the Company (such a force majeure
     hereinafter referred to as a "Force Majeure"), the Company shall not be
     entitled to effect an IDE Income Termination (x) in the calendar year
     during which the Force Majeure occurred or (y) in the event the Force
     Majeure occurs in the last quarter of a calendar year, in the calendar year
     during which the Force Majeure occurred or during the immediately following
     calendar year.

             (v)  TERMINATION WITHOUT CAUSE.  As used herein, "Termination
     Without Cause" shall mean any termination of Employee's employment by the
     Company hereunder that is not a Termination For Cause, a Death Termination
     Event, a Disability Termination Event or an IDE Income Termination.

         (b)  DEATH TERMINATION EVENT.  Upon the occurrence of a Death
Termination Event, this Agreement shall terminate automatically upon the date
that such Death Termination Event occurred (subject to the provisions of Section
8), whereupon Employee shall not be entitled to receive any payments hereunder
other than a pro-rata bonus for the year in which the termination occurs,
reimbursement for outstanding expenses and the lesser of (i) Base Salary, as
then in effect, to and including the end of the fiscal year in which the
termination occurs and (ii) Base Salary, as then in effect, for the remainder of
the Employment Period.

         (c)  DISABILITY TERMINATION EVENT.  Upon the occurrence of a Disability
Termination Event, this Agreement shall terminate automatically upon the date
that such Disability Termination Event occurred (subject to the provisions of
Section 8), whereupon Employee shall not be entitled to receive any payments
hereunder other than a pro-rata bonus for the year in which the termination
occurs, reimbursement for outstanding expenses and the lesser of (i) Base
Salary, as then in effect, to and including the end of the fiscal year in which
the termination occurs Employment Period and (ii) Base Salary, as then in
effect, for the remainder of the Employment Period. Nothing herein shall alter
Employee's rights under applicable short term and long term disability insurance
coverage.

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         (d)  TERMINATION FOR CAUSE.  Employee and the Company agree that the
Company shall have the right to effectuate a Termination For Cause in accordance
with the terms of this Agreement at any time. Upon the occurrence of a
Termination For Cause, this Agreement shall terminate upon the date that such
Termination For Cause occurs (subject to the provisions of Section 8), whereupon
(i) Employee 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 reimbursement for outstanding expenses and
(ii) the Company shall be entitled to any and all remedies and damages available
to it.

         (e)  IDE INCOME TERMINATION.  Employee and the Company agree that the
Company shall have the right to effectuate an IDE Income Termination in
accordance with the terms of this Agreement at any time. Upon the occurrence of
an IDE Income Termination, this Agreement shall terminate upon the date that
such IDE Income Termination occurs (subject to the provisions of Section 8),
whereupon Employee 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 reimbursement for outstanding
expenses.

         (f)  TERMINATION WITHOUT CAUSE.  Upon the occurrence of a Termination
Without Cause, this Agreement shall terminate upon the date that such
Termination Without Cause occurs (subject to the provisions of Section 8),
whereupon the Company shall, within ten (10) days of such termination pay to
Employee the greater of (i) $400,000 or (ii) the amount of Base Salary to which
Employee would be entitled if he had remained employed through to the end of the
Employment Period. Employee shall not be entitled to receive any additional
payments hereunder other than reimbursement for outstanding expenses.

     SECTION 7.  WITHHOLDING.  The Company shall be entitled to withhold from
amounts payable to Employee hereunder such amounts as may be required by
applicable law to be so withheld.

     SECTION 8.  INDEMNIFICATION.  The Company agrees to indemnify the Employee
(and his successors, legatees, estate, administrators, executors, and legal
representatives) to the fullest extent permitted by applicable law against all
costs, charges, and expenses whatsoever, including but not limited to reasonable
attorney fees, incurred or sustained by him or his successors, legatees, estate,
administrators, executors, and legal representatives in connection with any
action, suit, or proceeding to which any of such persons may be a party by
reason of the Employee being or having been a director or officer of the
Company. Employee shall be entitled to the protection of any insurance policies
the Company may elect to maintain generally for the benefit of its directors and
officers. Employee agrees to indemnify the Company to the fullest extent
permitted by applicable law against all costs, charges, and expenses whatsoever,
including but not limited to reasonable attorney fees, incurred or sustained by
the Company in connection with any breach by Employee of any representation made
by Employee in this Agreement.

     SECTION 9.  SURVIVAL.  Notwithstanding anything in this Agreement to the
contrary, Sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17 and 18 of
this Agreement shall survive any termination of this Agreement or cessation of
Employee's employment hereunder for the periods stated therein.

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     SECTION 10.  MODIFICATION.  This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.

     SECTION 11.  NOTICES.  Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be given
personally or by recognized overnight courier at the address of the Company,
attention: General Counsel, or Employee's place of employment, as applicable.
Notice to the Estate shall be sufficient if addressed to Employee's personal
representative after qualification.

     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 term or any
other term of this Agreement. Any waiver must be in writing.

     SECTION 13.  BINDING EFFECT.  Employee's rights and obligations under this
Agreement shall not be transferable by assignment or otherwise, such rights
shall not be subject to commutation, encumbrance or the claims of Employee's
creditors, and any attempt to do any of the foregoing shall be void. The
provisions of this Agreement shall be binding upon and inure to the benefit of
Employee 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.  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.

     SECTION 16.  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.

     SECTION 17.  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 that itself, or through its agent, prepared the same, and it is
expressly agreed and acknowledged that Employee, the Company and their
respective attorneys and representatives have participated in the preparation
hereof.

     SECTION 18.  DISPUTE RESOLUTION.  All disputes arising out of or relating
to this Agreement, the employment of Employee by the Company or the termination
of such

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employment shall be resolved in accordance with the procedures specified in this
Section 18, which shall be the sole and exclusive procedures for the resolution
of any such disputes.

         (a)  Direct Negotiation.  The parties shall attempt in good faith to
resolve all disputes arising out of or relating to this Agreement, the
employment of Employee by the Company or the termination of such employment
promptly by negotiation between Employee and an executive of IFG, such as the
President or General Counsel, who has authority to settle the controversy. Any
party may give the other party written notice of any dispute not resolved in the
normal course of business. Within 15 days after delivery of the notice (the
"Notice"), the receiving party shall submit to the other a written response. The
Notice and the response shall include a statement of each party's position and a
summary of arguments supporting that position. Within 30 days after delivery of
the disputing party's Notice, Employee and an executive of IFG shall meet at a
mutually acceptable time and place, and thereafter as often as they reasonably
deem necessary, to attempt to resolve the dispute. All reasonable requests for
information made by one party to the other will be honored.

         All negotiations pursuant to this clause are confidential and shall be
treated as compromise and settlement negotiations for purposes of applicable
rules of evidence.

         (b)  Mediation.  If the dispute has not been resolved by negotiation
within 45 days of the disputing party's Notice, or if the parties failed to meet
within 30 days of said Notice, the parties shall endeavor to settle the dispute
by mediation under the auspices of J-A-M-S/Endispute in New York, New York (or
such other location as may be mutually agreed upon).

         (c)  Arbitration Clause.  Any dispute arising out of or relating to
this Agreement, the employment of Employee by the Company, or the termination of
such employment which has not been resolved by a non-binding procedure as
provided herein within 90 days of the Notice shall be resolved by binding
arbitration in New York, New York (or such other location as may be mutually
agreed upon) in accordance with the arbitration rules of J-A-M-S/Endispute
applicable to employment arbitration (the "Rules") as then in effect. Other than
with respect to equitable relief, neither party shall be entitled to commence or
maintain any action in a court of law with respect to any matter in dispute or
relief required until such matter or request for relief shall have been
submitted to and decided by the chosen arbitrator and then only for the
enforcement of the award of such arbitrator. The decision of the arbitrator
shall be final and binding upon the parties and all persons claiming under and
through them. All fees and expenses of the arbitrator shall be borne by the
Company and/or Employee, as determined pursuant to the Rules.

         The applicable statute of limitations shall be tolled for a period of
120 days following the provision of the Notice of dispute pursuant to section
(a) of this Section. Such 120 day period may be extended only by written
agreement of the parties.

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     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above.

                                      INSIGNIA DOUGLAS ELLIMAN, LLC

                                      By: /s/ Adam B. Gilbert
                                         ---------------------------------------
                                         Name: Adam B. Gilbert
                                              ----------------------------------
                                         Title: Senior Vice President,
                                                Insignia Residential Group, Inc.
                                                Managing Member

                                          /s/ Geoffrey P. Wharton
                                      -----------------------------------------
                                                GEOFFREY P. WHARTON

     As to the Stock Option provision on Exhibit A to this Agreement, only:

                                           INSIGNIA FINANCIAL GROUP, INC.

                                      By: /s/ Adam B. Gilbert
                                         --------------------------------------
                                         Name: Adam B. Gilbert
                                              ---------------------------------
                                         Title: EVP
                                               --------------------------------

THIS AGREEMENT SHALL BECOME EFFECTIVE ONLY UPON APPROVAL OF THE COMPENSATION
COMMITTEE OF THE BOARD OF DIRECTORS OF INSIGNIA FINANCIAL GROUP, INC.

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                                    EXHIBIT A

BASE SALARY:  $800,000 per annum, which Base Salary shall be paid to Employee
in accordance with the customary payroll policy of the Company as in effect from
time to time.

ANNUAL BONUS FOR 2002:  A wholly discretionary amount, if any, determined by
the Compensation Committee of the Board of Directors of IFG, in its sole and
absolute discretion.

ANNUAL BONUS FOR 2003 AND THEREAFTER:  Employee shall receive an annual bonus
which is comprised of three (3) parts, as follows, and which shall be paid to
Employee before the expiration of ninety (90) days after the end of the fiscal
year to which the bonus relates (the bonus year shall be the same as the
Company's fiscal year):

     (a)  Threshold Bonus.  Subject to sub-section (c), below, an amount equal
to $200,000 multiplied by a fraction, the numerator of which is the Company's
Income Before Income Taxes, as reported in IFG's annual financial reports to
shareholders ("IDE Income") and the denominator of which is the Base Amount (as
defined below), provided that, in no event may the bonus amount due pursuant to
this sub-section exceed $200,000. The "Base Amount" shall be $8,160,000 for 2003
and for each year thereafter shall be determined on an annual basis by the
Compensation Committee of the Board of Directors of IFG after considering a
budget supplied by the Company.

     (b)  Excess Bonus.  Subject to sub-section (c), below, an amount equal to
ten percent (10%) of IDE Income in excess of the Base Amount up to IDE Income
equal to the Threshold Amount (as defined below) and fifteen percent (15%) of
IDE Income in excess of the Threshold Amount. The "Threshold Amount" shall be
$9,460,000 for 2003 and for each year thereafter shall be determined on an
annual basis by the Compensation Committee of the Board of Directors of IFG
after considering a budget supplied by the Company.

     (c)  Notwithstanding the foregoing, (i) in the event IDE Income does not
equal or exceed seventy-five (75%) percent of budgeted IDE Income for the bonus
year, except in the event of a Force Majeure, Employee shall not be entitled to
receive any bonus pursuant sub-sections (a) or (b), above (in the event of a
Force Majeure, the Compensation Committee of the Board of Directors of IFG, in
its discretion, shall determine an appropriate threshold to replace said
seventy-five percent threshold); and (ii) in no event shall Employee receive an
aggregate annual bonus pursuant to sub-sections (a) and (b), above, which
exceeds $700,000 for any bonus year.

     (d)  Discretionary Bonus.  A wholly discretionary amount, if any,
determined by the Compensation Committee of the Board of Directors of IFG, in
its sole and absolute discretion.

STOCK OPTION. A non-qualified option to purchase 150,000 shares of the Class A
Common Stock of IFG (the "Option"), which shall vest at the rate of twenty
percent (20%) per year at the end of each of the first five years of employment.
The strike price shall be the greater of (a) ten dollars ($10.00) and (b) fair
market value per share on the date of issuance. Notwithstanding the foregoing,
in the event of a Change in Control Event (as defined below) during the initial
three (3) year term of this Agreement, if (x) Employee thereafter remains an
employee of the Company pursuant to this Agreement through the end of said three
year term or (y) Employee's employment is thereafter (during said three year
term) terminated as a result of a Termination

<PAGE>

Without Cause, then as of either the last day of said three year term or the
effective date of the Termination Without Cause, as the case may be, all then
unvested portions of the Option shall become fully vested and exercisable. A
"Change in Control Event" shall occur if, at any time during the initial three
year term of this Agreement, Andrew L. Farkas ceases to be the Chairman and/or
Chief Executive Officer of the direct or indirect parent company of the Company
or of the Company itself. Notwithstanding any other provision of this Agreement,
in the event of a Death or Disability Termination Event or a Termination Without
Cause, the Option shall continue to vest as though Employee was still employed
by the Company through the end of the Employment Period.

Employee agrees and acknowledges that the grant of the Option pursuant to this
provision is subject to Employee's agreement to, and execution of, that certain
separate option agreement governing such grant. Such option agreement shall
accurately reflect, and be consistent with, the terms set forth above. Employee
acknowledges and agrees that, as between this Agreement and such option
agreement, the terms of such option agreement shall be controlling with regard
to the foregoing option grant.

PROMOTE INTERESTS:  Employee shall be eligible to receive promote interests
associated with development investments of the IFG co-investment/development
program as determined in the sole discretion of the Compensation Committee of
the Board of Directors of IFG. Notwithstanding any other provision of this
Agreement, in the event of a Death or Disability Termination Event or a
Termination Without Cause, all such promote interests received by Employee as of
such termination shall continue to vest as though Employee was still employed by
the Company through the end of the Employment Period, unless otherwise mandated
by the Compensation Committee of the Board of Directors of IFG.

FRINGE BENEFITS:  During the Employment Period, Employee shall be eligible to
participate in all then-operative employee benefit plans of the Company or its
affiliates which are applicable generally to the Company's or the parent
company's most senior executives ("Employee Benefit Plans"), subject to the
respective terms and conditions of such Employee Benefit Plans. Nothing
contained in this Agreement shall obligate the Company to adopt or implement any
Employee Benefit Plan, or prevent or limit the Company from making any blanket
amendments, changes, or modifications to the eligibility requirements or any
other provisions of, or terminating, any Employee Benefit Plan at any time
(whether during or after the Employment Period), and Employee's participation in
or entitlement under any such Employee Benefit Plan shall at all times be
subject in all respects thereto. The Company shall provide Employee a car and
driver for the first twelve (12) months of the Employment Period, provided that
(x) the amounts so paid will be deducted in the calculation of IDE Income and
(y) the salary of the driver and the specific car are approved, in advance, by
the Chief Executive Officer of IFG.

VACATION:  Paid vacation of twenty (20) days during each calendar year during
the Employment Period (pro-rated for partial years), to be taken at such time as
is consistent with the needs of the Company as reasonably determined by
Employee.

EXPENSE REIMBURSEMENT:  Reimbursement of Employee for all reasonable
out-of-pocket expenses and are incurred by Employee in connection with the
performance of his duties hereunder, including mileage for business travel,
professional activities and membership fees and

<PAGE>

dues relating to professional organizations of which Employee is directed to be
a member by the Supervisory Officer, expenses required for licensing of Employee
and business related cell phone expenses in accordance with the Company's
written policies and procedures, all upon the approval of the Supervisory
Officer or his designee and the presentation of appropriate documentation
therefor in accordance with the then regular procedures of the Company.<PAGE>

                         INSIGNIA FINANCIAL GROUP, INC.

                             STOCK OPTION AGREEMENT

     STOCK OPTION AGREEMENT, dated as of July 24, 2002 (this "Agreement"), by
and between Insignia Financial Group, Inc. (the "Company") and Geoffrey P.
Wharton (the "Executive").

                              Preliminary Statement

     The purpose of this Agreement is to evidence the grant of an option to
purchase common stock of the Company to the Executive, who is a key employee of
the Company. The general purpose of the grant is to promote the interests of the
Company and its stockholders by inducing the Executive's entering into an
employment agreement with the Company.

     The Board of Directors and the Compensation Committee of the Board of
Directors of the Company (the "Committee") have authorized the granting to the
Executive of a non-qualified option (the "Option") to purchase the number of
shares of the Company's common stock, par value $.01 per share (the "Common
Stock"), set forth below. The Committee shall have the authority to administer
and interpret the terms of this Agreement.

     Accordingly, the parties hereto agree as follows:

     1.  Grant of Option.  Subject in all respects to the terms and conditions
set forth herein, the Executive is hereby granted a non-qualified option to
purchase from the Company up to 150,000 shares of Common Stock at a price per
share of $10.00 (the "Exercise Price"). This Agreement shall be numbered and
registered on the books of the Company.

     2.  Exercise.  (a)  The Option shall become exercisable in five annual
installments of 30,000 shares each on the twenty-third day of July (the "Vesting
Date") in each year commencing July 23, 2003, and continuing through July 23,
2007, provided that no such installment shall vest unless the Executive
continues to be employed by the Company on the applicable Vesting Date.

         (b) There shall be no proportionate or partial vesting in the periods
prior to each Vesting Date. Notwithstanding the foregoing, if there is a Change
in Control Event (as defined below) during the first three years of this
Agreement (the "Three Year Period") and (x) the Executive thereafter remains an
employee of the Company pursuant to his employment agreement through the end of
the Three Year Period or (y) Executive's employment is thereafter (during the
Three Year Period) terminated as a result of a Termination Without Cause (as
defined in the Executive's employment agreement), all then unvested portions of
the Option shall become fully vested and exercisable. In the event of a Death
Termination Event, a Disability Termination Event or a Termination Without Cause
(each as defined in the Executive's employment agreement), the Option will
continue to vest as though the Executive were still employed by the Company. A
"Change in

<PAGE>

Control Event" shall occur if Andrew L. Farkas ceases to be the Chairman and/or
Chief Executive Officer of the direct or indirect parent of the Company or of
the Company itself.

         (c) The Executive may exercise the Option in whole or in part at any
time and from time to time prior to the expiration of the Option as provided
herein by serving written notice of such exercise on the Committee accompanied
by payment in full of the aggregate Exercise Price. The Company will not be
under obligation to deliver to the Executive any Common Stock unless and until
all legal matters in connection with the issuance and delivery of the Common
Stock have been approved by the Company's counsel. Payment of the aggregate
Exercise Price shall be made in a manner acceptable to the Committee, in its
sole discretion, and payment shall generally be made in cash or in shares of
Common Stock which the Executive has owned for at least six months (and for
which the Executive has good title free and clear of any liens and encumbrances)
based on the fair market value of the Common Stock on the payment date as
determined by the Committee (or any combination thereof) against delivery of the
shares of Common Stock.

         (d) The Company shall not be required to issue fractional shares of
Common Stock on the exercise of the Option. If any fractional share of Common
Stock would, except for this provision, be issuable upon the exercise of the
Option, the Company shall pay an amount in cash equal to the current fair market
value of such fractional share of Common Stock.

     3.  Option Term.  (a)Unless terminated earlier as provided below, the
Option shall expire five years and six months after the grant of the option.

         (b) In the event of the termination of the Executive's employment with
the Company because of the Executive's voluntary termination, the Option shall
remain exercisable until the earlier of (i) thirty (30) days from the date of
such termination or (ii) the expiration of the stated term of the Option.

         (c) In the event of the termination of the Executive's employment with
the Company because of the Executive's Termination For Cause (as defined in the
Executive's employment agreement) or in the event of the Executive's voluntary
termination within ninety (90) days after an event that would be grounds for a
Termination For Cause, the Executive's entire Option (whether or not vested)
shall be forfeited and canceled in its entirety upon such termination.

     4.  Reservation of Shares.  The Company shall at all times reserve a number
of authorized but unissued shares of Common Stock equal to the maximum number of
shares of Common Stock that may be subject to the Option.

     5.  Restriction on Transfer of Option.  The Option is not transferable
other than by will or under the applicable laws of descent and distribution.
During the lifetime of the Executive, the Option may be exercised only by the
Executive or the Executive's guardian or legal representative. In addition, the
Option shall not be assigned, negotiated, pledged or hypothecated in any way
(whether by operation of law or otherwise), and the Option shall not be subject
to execution, attachment or similar process. Upon any attempt to transfer,
assign, negotiate, pledge or hypothecate

                                       2
<PAGE>

the Option or in the event of any levy upon the Option by reason of any
execution, attachment or similar process contrary to the provisions hereof, the
Option shall immediately become null and void.

     6.  Rights as a Stockholder.  The Executive shall have no rights as a
stockholder with respect to any shares of Common Stock covered by the Option
until the Executive shall have become the holder of record of the shares of
Common Stock, and no adjustments shall be made for dividends in cash or other
property, distributions or other rights in respect of any such shares of Common
Stock.

     7.  No Obligation to Continue Employment.  This Agreement does not
guarantee that the Company will employ the Executive for any specific time
period, nor does it modify in any respect the Company's right to terminate or
modify the Executive's employment or compensation.

     8.  Effectiveness of the Agreement.  This Agreement is effective as of the
date first set forth above.

     9.  Governing Law.  This Agreement shall be governed by, and construed in
accordance with, the laws of the state of Delaware (regardless of the law that
might otherwise govern under applicable Delaware principles of conflict of
laws).

     10.  Notices.  Any notice or communication given hereunder shall be in
writing and shall be deemed to have been duly given when delivered in person, or
by United States mail, to the appropriate party at the address set forth below
(or such other address as the party shall from time to time specify):

         If to the Company, to:

              Insignia Financial Group, Inc.
              200 Park Avenue
              New York, New York 10166
              Attn:  General Counsel

          If to the Executive, to:

              the address indicated after his signature at the end of
              this Agreement.

                                       3
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.

                                       INSIGNIA FINANCIAL GROUP, INC.

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

                                       EXECUTIVE

                                       By: /s/ Geoffrey P. Wharton
                                          -----------------------------
                                       Name: Geoffrey P. Wharton

                                       4

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