In connection with the sale of the assets to Island Fund, CB Richard Ellis has agreed to increase the total consideration per share of Insignia common stock in the previously announced CB Richard Ellis/Insignia merger from $11 per share to $11.156 per share, provided that the sale is completed immediately prior to the Insignia merger and certain conditions are satisfied.

Both the Island Fund transaction and previously announced merger of Insignia and CB Richard Ellis are expected to close in July. The merger is subject to approval by Insignia's shareholders; Insignia expects to announce the date of its shareholder meeting and distribute related proxy materials in June.

The sale of the investment assets to Island Fund is expressly conditioned on the subsequent closing of the merger. Assuming the sale of the real estate investment assets is completed, Island Fund will pay Insignia a cash purchase price of approximately $44.0 million, and will assume approximately $7.8 million of employment-related contractual obligations. The cash purchase price is subject to adjustment under certain circumstances, including in connection with cash distributions and cash investments with respect to the assets made after December 31, 2002. However, adjustments to the cash purchase price pursuant to the agreement with Island Fund will not affect the proposed increase in the merger consideration.