EMPLOYEE PROMISSORY NOTE
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MAY 6, 2002
1. In consideration of the agreement of Insignia Financial Group, Inc.
("Insignia"), a Delaware corporation with its principal office located at
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, to lend Xxxxxxx X. Xxxxx
("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/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
