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                          REGISTRATION RIGHTS AGREEMENT

                                  by and among

                         INSIGNIA FINANCIAL GROUP, INC.

                                       and

                      The INITIAL STOCKHOLDERS Specified on
                           the Signature Pages Hereof

                            Dated as of June 18, 2002


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                  REGISTRATION RIGHTS AGREEMENT (this or the "Agreement") dated
as of June 18, 2002, by and among Insignia Financial Group, Inc., a Delaware
corporation (the "Company"), and the Initial Stockholders specified on the
signature pages of this Agreement (the "Initial Stockholders").

                              W I T N E S S E T H :

                  WHEREAS, the Company and the Initial Stockholders have entered
into a Stock Subscription and Exchange Agreement, dated as of June 7, 2002 (such
Stock Subscription and Exchange Agreement, as amended or otherwise modified from
time to time, the "Stock Subscription and Exchange Agreement"), pursuant to
which the Stockholders have agreed (a) to purchase Series B Convertible
Preferred Stock from the Company in the aggregate stated amount of $12.5 million
and (b) to exchange their shares of Existing Preferred Stock for an equal number
of shares of Series A Convertible Preferred Stock.

                  WHEREAS, each share of Series B Convertible Preferred Stock
and each share of Series A Convertible Preferred Stock (collectively, the
"Convertible Preferred Stock") acquired pursuant to the Stock Subscription and
Exchange Agreement is convertible into Common Shares (as defined below), and the
Company has further agreed to provide certain registration rights in respect of
the Registrable Securities (as defined below) on the terms and subject to the
conditions set forth herein.

                  NOW, THEREFORE, in consideration of the premises and of the
mutual agreements contained herein, and for other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:

1.       Definitions. As used in this Agreement, the following terms shall have
the following meanings:

                  "Affiliate" shall mean (i) with respect to any Person, any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such Person, and (ii) with respect to any
individual, shall also mean the spouse, sibling, child, step-child, grandchild,
niece, nephew or parent of such Person, or the spouse thereof.

                  "Blackout Period" shall have the meaning set forth in Section
2.7.

                  "Common Shares" shall mean shares of common stock, par value
$0.01 per share, of the Company.

                  "Company" shall have the meaning set forth in the preamble.

                  "Convertible Preferred Stock" shall have the meaning set forth
in the recitals hereto.

                  "Demand Registration" shall mean a registration required to be
effected by the Company pursuant to Section 2.1.

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                  "Demand Registration Statement" shall mean a registration
statement of the Company which covers the Registrable Securities requested to be
included therein pursuant to the provisions of Section 2.1 and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time, and the rules and regulations thereunder, or any
successor statute.

                  "Existing Preferred Stock" means the convertible preferred
stock of the Company, par value $0.01 per share, having a liquidation preference
of $100.00 per share and such other rights and preferences as are set forth in
the Certificate of Designation filed with the Secretary of State of the State of
Delaware on February 3, 2000.

                  "Incidental Registration" shall mean a registration required
to be effected by the Company pursuant to Section 2.2.

                  "Incidental Registration Statement" shall mean a registration
statement of the Company which covers the Registrable Securities requested to be
included therein pursuant to the provisions of Section 2.2 and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.

                  "Initial Stockholders" shall have the meaning set forth in the
preamble.

                  "Initiating Stockholders" shall mean, with respect to a
particular registration, the Stockholders who initiated the Request for such
registration.

                  "Inspectors" shall have the meaning set forth in Section
4.1(g).

                  "Majority Stockholders" shall mean one or more Stockholders of
Registrable Securities who would hold a majority of the Registrable Securities
then outstanding.

                  "Majority Stockholders of the Registration" shall mean, with
respect to a particular registration, one or more Stockholders of Registrable
Securities who would hold (or will hold upon conversion of the Convertible
Preferred Stock) a majority of the Registrable Securities to be included in such
registration.

                  "NASD" shall mean the National Association of Securities
Dealers, Inc.

                  "Offer" shall have the meaning set forth in Section 2.8(a).

                  "Offeree" shall have the meaning set forth in Section 2.8(a).

                  "Person" shall mean any individual, firm, partnership,
corporation, trust, joint venture, association, joint stock company, limited
liability company, unincorporated organization

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or any other entity or organization, including a government or agency or
political subdivision thereof, and shall include any successor (by merger or
otherwise) of such entity.

                  "Prospectus" shall mean the prospectus included in a
Registration Statement (including, without limitation, any preliminary
prospectus and any prospectus that includes any information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A promulgated under the Securities Act), and any such
Prospectus as amended or supplemented by any prospectus supplement, and all
other amendments and supplements to such Prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
(or deemed to be incorporated by reference) therein.

                  "Purchaser" shall have the meaning set forth in Section
2.8(a).

                  "Registrable Securities" shall mean (i) any Common Shares
issued or issuable upon conversion of the Convertible Preferred Stock, (ii) any
Common Shares issued as dividends on the Existing Preferred Stock and (iii) any
other securities of the Company (or any successor or assign of the Company,
whether by merger, consolidation, sale of substantially all the assets or
otherwise) which may be issued or issuable with respect to, in exchange for, or
in substitution of, the Convertible Preferred Stock or the Registrable
Securities referenced in clauses (i) and (ii) above by reason of any dividend or
stock split, combination of shares, merger, consolidation, recapitalization,
reclassification, reorganization, sale of assets or similar transaction. As to
any particular Registrable Securities, such securities shall cease to be
Registrable Securities when (A) a registration statement with respect to the
sale of such securities shall have been declared effective under the Securities
Act and such securities shall have been disposed of in accordance with such
registration statement, (B) such securities are sold pursuant to Rule 144 (or
any similar provisions then in force) under the Securities Act, (C) such
securities have been otherwise transferred, a new certificate or other evidence
of ownership for them not bearing the legend restricting further transfer shall
have been delivered by the Company and subsequent public distribution of them
shall not require registration under the Securities Act, or (D) such securities
shall have ceased to be outstanding.

                  "Registration Expenses" shall mean any and all expenses
incident to performance of or compliance with this Agreement by the Company and
its subsidiaries, including, without limitation, (i) all SEC, stock exchange,
NASD and other registration, listing and filing fees, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue sky laws
and compliance with the rules of any U.S. stock exchange (including fees and
disbursements of counsel in connection with such compliance and the preparation
of a blue sky memorandum), (iii) all reasonable expenses of any Persons in
preparing or assisting in preparing, printing, distributing and mailing any
Registration Statement, any Prospectus, any underwriting agreements and
transmittal letters, (iv) the fees and disbursements of counsel for the Company,
(v) the fees and disbursements of Stockholders' Counsel to the extent that such
fees and expenses do not exceed $25,000, and (vi) the fees and disbursements of
all independent public accountants (including the expenses of any audit and/or
"cold comfort" letters) and the fees and expenses of other Persons, including
experts, retained by the Company; provided, however, Registration Expenses shall
not include discounts and commissions payable to underwriters, selling brokers,
dealer managers or other similar Persons engaged in the distribution of any of
the Registrable

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Securities; and provided further, that in any case where Registration Expenses
are not to be borne by the Company, such expenses shall not include salaries of
Company personnel or general overhead expenses of the Company, auditing fees or
other expenses for the preparation of financial statements or other data
normally prepared by the Company in the ordinary course of its business.

                  "Registration Statement" shall mean any registration statement
of the Company which covers any Registrable Securities and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.

                  "Request" shall have the meaning set forth in Section 2.1(a).

                  "S-3 Registration" shall mean a registration required to be
effected by the Company pursuant to Section 2.3(a).

                  "SEC" shall mean the Securities and Exchange Commission, or
any successor agency having jurisdiction to enforce the Securities Act.

                  "Securities Act" shall mean the Securities Act of 1933, as
amended from time to time, and the rules and regulations thereunder, or any
successor statute.

                  "Series A Convertible Preferred Stock" means the Series A
Convertible Preferred Stock of the Company, par value $0.01 per share, having a
liquidation preference of $100.00 per share and such other rights and
preferences as are set forth in the Certificate of Designation filed with the
Secretary of State of the State of Delaware on June 7, 2002.

                  "Series B Convertible Preferred Stock" means the Series B
Convertible Preferred Stock of the Company, par value $0.01 per share, having a
liquidation preference of $100.00 per share and such other rights and
preferences as are set forth in the Certificate of Designation filed with the
Secretary of State of the State of Delaware on June 7, 2002.

                  "Shelf Registration" shall have the meaning set forth in
Section 2.1(a).

                  "Stockholders" shall mean each of the Initial Stockholders for
so long as such Person owns any Registrable Securities and such of its
respective heirs, successors and permitted assigns (including any permitted
transferees of Registrable Securities) who acquire or are otherwise the
transferee of Registrable Securities, directly or indirectly, from such Initial
Stockholder (or any subsequent Stockholder), for so long as such heirs,
successors and permitted assigns own any Registrable Securities. For purposes of
this Agreement, a Person will be deemed to be a Stockholder whenever such Person
holds any Convertible Preferred Stock that is convertible into Registrable
Securities, whether or not such conversion has actually been effected.
Registrable Securities issuable upon conversion of any Convertible Preferred
Stock shall be deemed outstanding for the purposes of this Agreement.

                  "Stockholders' Counsel" shall mean one firm of counsel (per
registration) to the Stockholders owning the Registrable Securities
participating in such registration, which counsel

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shall be selected (i) in the case of a Demand Registration or an S-3
Registration, by the Initiating Stockholders holding a majority of the
Registrable Securities for which registration was requested in the Request, and
(ii) in all other cases, by the Majority Stockholders participating in the
Registration.

                  "Stock Subscription and Exchange Agreement" shall have the
meaning set forth in the recitals hereto.

                  "Underwriters" shall mean the underwriters, if any, of the
offering being registered under the Securities Act.

                  "Underwritten Offering" shall mean a sale of securities of the
Company to an Underwriter or Underwriters for re-offering to the public.

                  "Withdrawn Demand Registration" shall have the meaning set
forth in Section 2.1(a).

                  "Withdrawn Request" shall have the meaning set forth in
Section 2.1(a).

2.       REGISTRATION UNDER THE SECURITIES ACT.

         2.1      Demand Registration.

                  (a) Right to Demand Registration. Subject to Section 2.1(c)
and to this Section, at any time or from time to time, the Majority Stockholders
shall have the right to request in writing that the Company register all or part
of such Stockholders' Registrable Securities having an aggregate expected
offering price of at least $10 million (or, if the expected offering price of
all remaining Registrable Securities should be less than $10 million, such
lesser amount) (a "Request") (which Request shall specify the amount of
Registrable Securities intended to be disposed of by such Stockholders and the
intended method of disposition thereof) by filing with the SEC a Demand
Registration Statement. As promptly as practicable, but no later than twenty
(20) days after receipt of a Request, the Company shall give written notice of
such requested registration to all Stockholders owning Registrable Securities.
Subject to Section 2.1(b), the Company shall include in a Demand Registration,
in addition to any other securities it may elect to include, (i) the Registrable
Securities intended to be disposed of by the Initiating Stockholders and (ii)
the Registrable Securities intended to be disposed of by any other Stockholder
which shall have made a written request (which request shall specify the amount
of Registrable Securities to be registered and the intended method of
disposition thereof) to the Company for inclusion thereof in such registration
within twenty (20) days after the receipt of such written notice from the
Company. The Company shall, as expeditiously as possible following a Request,
use its commercially reasonable efforts to cause to be filed with the SEC a
Demand Registration Statement providing for the registration under the
Securities Act of the Registrable Securities which the Company has been so
requested to register by all such Stockholders, to the extent necessary to
permit the disposition of such Registrable Securities so to be registered in
accordance with the intended methods of disposition thereof specified in such
Request (including, without limitation, by means of a shelf registration
pursuant to Rule 415 under the Securities Act (a "Shelf Registration") if so
requested and if the Company is then eligible to use such a registration). The
Company shall use its commercially reasonable efforts

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to have such Demand Registration Statement declared effective by the SEC as soon
as practicable thereafter and to keep such Demand Registration Statement
continuously effective for the period specified in Section 4.1(b).

                  A Request may be withdrawn prior to the filing of the Demand
Registration Statement by the Majority Stockholders of the Registration (a
"Withdrawn Request") and a Demand Registration Statement may be withdrawn prior
to the effectiveness thereof by the Majority Stockholders of the Registration (a
"Withdrawn Demand Registration"), and such withdrawals shall be treated as a
Demand Registration which shall have been effected pursuant to this Section 2.1,
unless the Stockholders of Registrable Securities to be included in such
Registration Statement reimburse the Company for its reasonable out-of-pocket
Registration Expenses relating to the preparation and filing of such Demand
Registration Statement (to the extent actually incurred and no Request for a
Demand Registration may be made for 90 days following the date of such
withdrawal); provided; however, that if a Withdrawn Request or Withdrawn Demand
Registration is made (A) because of a material adverse change in the business,
financial condition or prospects of the Company, or (B) because of a
postponement of such registration pursuant to Section 2.7, then such withdrawal
shall not be treated as a Demand Registration effected pursuant to this Section
2.1 (and shall not be counted toward the number of Demand Registrations), the
Company shall pay all Registration Expenses in connection therewith and the 90
day limitation referred to above shall not be applicable.

                  The registration rights granted pursuant to the provisions of
this Section 2.1 shall be in addition to the registration rights granted
pursuant to the other provisions of Section 2 hereof.

                  (b) Priority in Demand Registrations. If a Demand Registration
involves an Underwritten Offering, and the sole or lead managing Underwriter, as
the case may be, of such Underwritten Offering shall advise the Company in
writing (with a copy to each Stockholder requesting registration) on or before
the date five (5) days prior to the date then scheduled for such offering that,
in its opinion, the amount of Registrable Securities requested to be included in
such Demand Registration exceeds the number which can be sold in such offering
without interfering with the successful marketing of the securities being
offered, the Company shall include in such Demand Registration, to the extent of
the number which the Company is so advised may be included in such offering,
first, the Registrable Securities requested to be included in the Demand
Registration by the Initiating Stockholders and those other Stockholders who
have made a written request to the Company for inclusion thereof, allocated pro
rata in proportion to the number of Registrable Securities requested to be
included in such Demand Registration by each of them and second, any other
securities to be registered.

                  (c) Limitations on Registrations. In no event shall the
Company be required to effect more than three (3) Demand Registrations in total,
or more than one (1) Demand Registration in any six (6) month period, pursuant
to Section 2.1(a).

                  (d) Underwriting; Selection of Underwriters. Notwithstanding
anything to the contrary contained in Section 2.1(a), if the Initiating
Stockholders so elect, the offering of such Registrable Securities pursuant to
such Demand Registration shall be in the form of a firm commitment Underwritten
Offering; and such Initiating Stockholders may require that all

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Persons participating in such registration sell their securities to the
Underwriters at the same price and on the same terms of underwriting applicable
to the Initiating Stockholders. If any Demand Registration involves an
Underwritten Offering, the sole or managing Underwriters and any additional
investment bankers and managers to be used in connection with such registration
shall be selected by the Initiating Stockholders, subject to the approval of the
Company (such approval not to be unreasonably withheld).

                  (e) Effective Registration Statement; Suspension. A Demand
Registration Statement shall not be deemed to have become effective (and the
related registration will not be deemed to have been effected) (i) unless it has
been declared effective by the SEC and remains effective in compliance with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Demand Registration Statement for the
time period specified in Section 4.1(b), (ii) if the offering of any Registrable
Securities pursuant to such Demand Registration Statement is interfered with by
any stop order or injunction of the SEC or any other governmental agency or
court, or (iii) if, in the case of an Underwritten Offering, the conditions to
closing specified in an underwriting agreement to which the Company is a party
are not satisfied (other than by the sole reason of (x) any breach or failure by
the Stockholders owning the Registrable Securities and (y) any breach or failure
by the Underwriters) or are not otherwise waived.

                  (f) Other Registrations. During the period (i) beginning on
the date of a Request and (ii) ending on the date that is sixty (60) days after
the date that a Demand Registration Statement pertaining to an Underwritten
Offering filed pursuant to such Request has been declared effective by the SEC,
the Company shall not, without the consent of the Majority Stockholders of the
Registration, file a registration statement pertaining to the Common Shares
(other than a registration on Form S-8 or Form S-4 or any successor form to such
forms).

                  (g) Registration Statement Form. Registrations under this
Section 2.1 shall be on such appropriate registration form of the SEC which
shall be available for the sale of Registrable Securities in accordance with the
intended method or methods of disposition specified in the requests for
registration.

         2.2      Incidental Registration.

                  (a) Right to Include Registrable Securities. If the Company at
any time or from time to time proposes to register any of its Common Shares
under the Securities Act (other than in a registration on Form S-4 or S-8 or any
successor form to such forms and other than pursuant to Section 2.1 or 2.3)
whether or not pursuant to registration rights granted to other holders of its
securities and whether or not for sale for its own account, the Company shall
deliver prompt written notice (which notice shall be given at least 30 days
prior to such proposed registration) to all Stockholders known to the Company of
its intention to undertake such registration, describing in reasonable detail
the proposed registration and distribution (including the anticipated range of
the proposed offering price, the number of securities proposed to be registered
and the distribution arrangements) and of such Stockholders' right to
participate in such registration under this Section 2.2 as hereinafter provided.
Subject to the other provisions of this paragraph (a) and Section 2.2(b), upon
the written request of any Stockholder made within 20 days after the receipt of
such written notice (which request shall specify the amount of

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Registrable Securities to be registered), the Company shall effect the
registration under the Securities Act of all Registrable Securities requested by
Stockholders to be so registered (an "Incidental Registration"), by inclusion of
such Registrable Securities in the Registration Statement which covers the
Common Shares which the Company proposes to register and shall cause such
Registration Statement to become and remain effective with respect to such
Registrable Securities in accordance with the registration procedures set forth
in Section 4. If an Incidental Registration involves an Underwritten Offering,
immediately upon notification to the Company from the Underwriter of the price
at which such securities are to be sold, the Company shall so advise each
participating Stockholder. The Stockholders requesting inclusion in an
Incidental Registration may, at any time prior to the effective date of the
Incidental Registration Statement (and for any reason), revoke such request by
delivering written notice to the Company revoking such requested inclusion if
such pricing is anticipated to be lower than the lower end of the anticipated
range of the proposed offering price specified in the Company's notice of
registration. If such Incidental Registration is an Underwritten Offering, the
Company may require all Persons participating in such Incidental Registration
(not to include any Stockholder that has revoked its request for inclusion prior
to the effective date) to sell all of its securities so registered in the
Underwritten Offering.

                  If at any time after giving written notice of its intention to
register any Common Shares and prior to the effective date of the Incidental
Registration Statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
Common Shares, the Company may, at its election, give written notice of such
determination to each Stockholder owning Registrable Securities who had elected
to participate and, thereupon, (A) in the case of a determination not to
register, the Company shall be relieved of its obligation to register any
Registrable Securities in connection with such registration (but not from its
obligation to pay the reasonable out-of-pocket Registration Expenses actually
incurred in connection therewith), without prejudice, however, to the rights of
Stockholders to cause such registration to be effected as a registration under
Section 2.1 or 2.3(a), and (B) in the case of a determination to delay such
registration, the Company shall be permitted to delay the registration of such
Registrable Securities for the same period as the delay in registering such
other Common Shares ; provided, however, that if such delay shall extend beyond
120 days from the date the Company received a request to include Registrable
Securities in such Incidental Registration, then the Company shall again give
all Stockholders the opportunity to participate therein and shall follow the
notification procedures set forth in the preceding paragraph. There is no
limitation on the number of such Incidental Registrations pursuant to this
Section 2.2 which the Company is obligated to effect.

                  The registration rights granted pursuant to the provisions of
this Section 2.2 shall be in addition to the registration rights granted
pursuant to the other provisions of Section 2 hereof.

                  (b) Priority in Incidental Registration. If an Incidental
Registration involves an Underwritten Offering (on a firm commitment basis), and
the sole or the lead managing Underwriter, as the case may be, of such
Underwritten Offering shall advise the Company in writing (which advice the
Company shall promptly forward to each Stockholder requesting registration) on
or before the date five days prior to the date then scheduled for such offering
that, in its opinion, the amount of Common Shares (including Registrable
Securities) requested

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to be included in such registration exceeds the amount which can be sold in such
offering without interfering with the successful marketing of the securities
being offered, the Company shall include in such registration, to the extent of
the number which the Company is so advised may be included in such offering
without such effect, (i) in the case of an Incidental Registration initiated by
the Company, (A) first, the securities that the Company proposes to register for
its own account, (B) second, the Registrable Securities requested to be included
in such registration by the Stockholders and those other holders of Common
Shares that shall be entitled to piggyback registration rights on the same level
of priority as the Stockholders (as explicitly provided for in the registration
rights agreement pertaining to such other Common Shares), allocated pro rata in
proportion to the number of Registrable Securities and Common Shares requested
to be included in such registration by each of them, and (C) third, other
securities of the Company to be registered on behalf of any other Person, and
(ii) in the case of an Incidental Registration initiated by a Person other than
the Company, (A) first, the registrable securities requested to be included in
such Incidental Registration by any Persons initiating such Incidental
Registration, (B) second, the Registrable Securities requested to be included in
such registration by the Stockholders and those other holders of Common Shares
that shall be entitled to piggyback registration rights on the same level of
priority as the Stockholders (as explicitly provided for in the registration
rights agreement pertaining to such other Common Shares), allocated pro rata in
proportion to the number of Registrable Securities and Common Shares requested
to be included in such registration by each of them, (C) third, the securities
that the Company proposes to register for its own account, and (D) fourth, other
securities of the Company to be registered on behalf of any other Person.

         2.3      S-3 Registration; Shelf Registration.

                  (a) S-3 Registration. If at any time (i) one or more
Stockholders of Registrable Securities representing 50% or more of the
Registrable Securities then outstanding request that the Company file a
registration statement on Form S-3 or any successor form thereto for a public
offering of all or any portion of the shares of Registrable Securities held by
such Stockholder or Stockholders, the reasonably anticipated aggregate price to
the public of which would exceed $10 million and (ii) the Company is a
registrant entitled to use Form S-3 or any successor form thereto to register
such securities, then the Company shall, as expeditiously as possible following
such Request, use its commercially reasonable efforts to register under the
Securities Act on Form S-3 or any successor form thereto, for public sale in
accordance with the intended methods of disposition specified in such Request or
any subsequent requests (including, without limitation, by means of a Shelf
Registration) the Registrable Securities specified in such Request and any
subsequent requests; provided, that if such registration is for an Underwritten
Offering, the terms of Sections 2.1(b) and 2.1(d) shall apply (and any reference
to "Demand Registration" therein shall, for purposes of this Section 2.3,
instead be deemed a reference to "S-3 Registration"). Whenever the Company is
required by this Section 2.3 to use its commercially reasonable efforts to
effect the registration of Registrable Securities, each of the procedures and
requirements of Section 2.1(a) (including but not limited to the requirements
that the Company (A) notify all Stockholders owning Registrable Securities from
whom such Request for registration has not been received and provide them with
the opportunity to participate in the offering and (B) use its commercially
reasonable efforts to have such S-3 Registration Statement declared and remain
effective for the time period specified herein) shall apply to such registration
(and any reference in such Section 2.1(a) to "Demand Registration" shall, for

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purposes of this Section 2.3, instead be deemed a reference to "S-3
Registration"). Notwithstanding anything to the contrary contained herein, no
Request may be made under this Section 2.3 within ninety (90) days after the
effective date of a Registration Statement filed by the Company covering a firm
commitment Underwritten Offering in which the Stockholders owning Registrable
Securities shall have been entitled to join pursuant to this Agreement. The
number of S-3 Registrations that the Company is obligated to effect shall be
limited to three, and the Company shall not be obligated to effect more than two
S-3 Registrations in any calendar year.

                  The registration rights granted pursuant to the provisions of
this Section 2.3(a) shall be in addition to the registration rights granted
pursuant to the other provisions of this Section 2.

                  (b) Shelf Registration. If a request made pursuant to Section
2.1 or 2.3(a) is for a Shelf Registration, the Company shall use its
commercially reasonable efforts to keep the Shelf Registration continuously
effective for a period of one hundred and eighty (180) days or through the date
on which all of the Registrable Securities covered by such Shelf Registration
may be sold pursuant to Rule 144(k) under the Securities Act (or any successor
provision having similar effect) (whichever is shorter).

         2.4 Expenses. The Company shall pay all Registration Expenses in
connection with any Demand Registration, Incidental Registration, S-3
Registration or Shelf Registration, whether or not such registration shall
become effective and whether or not all Registrable Securities originally
requested to be included in such registration are withdrawn or otherwise
ultimately not included in such registration, except as otherwise provided with
respect to a Withdrawn Request and a Withdrawn Demand Registration in Section
2.1(a). Each Stockholder shall pay all fees, discounts and commissions payable
to underwriters, selling brokers, managers or other similar Persons engaged in
the distribution of such Stockholder's Registrable Securities pursuant to any
registration pursuant to this Section 2.

         2.5      Underwritten Offerings.

                  (a) Demand Underwritten Offerings. If requested by the sole or
lead managing Underwriter for any Underwritten Offering effected pursuant to a
Demand Registration or an S-3 Registration, the Company shall enter into a
customary underwriting agreement with the Underwriters for such offering, such
agreement to be reasonably satisfactory in substance and form to each
Stockholder of Registrable Securities participating in such offering and to
contain such representations and warranties by the Company and such other terms
as are generally prevailing in agreements of that type, including, without
limitation, indemnification and contribution to the effect and to the extent
provided in Section 5.

                  (b) Stockholders of Registrable Securities to be Parties to
Underwriting Agreement. The Stockholders owning Registrable Securities to be
distributed by Underwriters in an Underwritten Offering contemplated by Section
2 shall be parties to the underwriting agreement between the Company and such
Underwriters and may, at such Stockholders' option, require that any or all of
the representations and warranties by, and the other agreements on the part of,
the Company to and for the benefit of such Underwriters shall also be made to
and for the

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benefit of such Stockholders owning Registrable Securities and that any or all
of the conditions precedent to the obligations of such Underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Stockholders owning Registrable Securities; provided, however, that the Company
shall not be required to make any representations or warranties with respect to
written information specifically provided by a selling Stockholder for inclusion
in the Registration Statement. No Stockholder shall be required to make any
representations or warranties to, or agreements with, the Company or the
Underwriters other than representations, warranties or agreements regarding such
Stockholder, such Stockholder's Registrable Securities and such Stockholder's
intended method of disposition.

                  (c) Participation in Underwritten Registration.
Notwithstanding anything herein to the contrary, no Person may participate in
any Registration Statement which involves an Underwritten Offering hereunder
unless such Person (i) agrees to sell its securities on the same terms and
conditions provided in such underwritten arrangements and (ii) accurately
completes and executes in a timely manner all questionnaires, powers of
attorney, indemnities, custody agreements, underwriting agreements and other
documents reasonably required under the terms of such underwriting arrangements.

         2.6 Conversions; Exercises. Notwithstanding anything to the contrary
herein, in order for any Registrable Securities that are issuable upon the
conversion of the Convertible Preferred Stock to be included in any registration
pursuant to Section 2 hereof, the conversion of the Convertible Preferred Stock
must be effected no later than immediately prior to the closing of any sales
under the Registration Statement pursuant to which such Registrable Securities
are to be sold.

         2.7 Postponements. The Company shall be entitled to postpone a Demand
Registration or an S-3 Registration and to require the Stockholders owning
Registrable Securities to discontinue the disposition of their securities
covered by a Shelf Registration during any Blackout Period (as defined below)
(i) if the Board of Directors of the Company determines in good faith that
effecting such a registration or continuing such disposition at such time would
have an adverse effect upon a material proposed transaction affecting or by the
Company, or (ii) if the Company is in possession of material information which
the Board of Directors of the Company determines in good faith is not in the
best interests of the Company to disclose in a registration statement at such
time provided, however, that the Company may delay a Demand Registration or an
S-3 Registration and require the Stockholders owning Registrable Securities to
discontinue the disposition of their securities covered by a Shelf Registration
only for a reasonable period of time not to exceed ninety (90) days (or such
earlier time as such transaction is consummated or no longer proposed or the
material information has been made public) (the "Blackout Period"); provided,
further that the effectiveness period shall be extended by the number of days in
any Blackout Period to the extent that the Registration Statement already was
effective at the commencement of the Blackout Period. There shall not be more
than two Blackout Periods in any twelve (12) month period. The Company shall
promptly notify the Stockholders in writing (a "Blackout Notice") of any
decision to postpone a Demand Registration or an S-3 Registration or to
discontinue sales of Registrable Securities covered by a Shelf Registration or
an S-3 Registration pursuant to this Section 2.7 and shall include an
undertaking by the Company to promptly notify the Stockholders as soon as a
Demand Registration may be effected or sales of Registrable Securities covered
by a Shelf Registration

                                       11


<PAGE>


may resume. In making any such determination to initiate or terminate a Blackout
Period, the Company shall not be required to consult with or obtain the consent
of any Stockholder, and any such determination shall be the Company's sole
responsibility. Each Stockholder shall treat all notices received from the
Company pursuant to this Section 2.7 in the strictest confidence and shall not
disseminate such information. If the Company shall postpone the filing of a
Demand Registration Statement or an S-3 Registration pursuant to this Section
2.7, the Majority Stockholders of Registrable Securities who were to participate
therein shall have the right to withdraw the request for registration. Any such
withdrawal shall be made by giving written notice to the Company within thirty
(30) days after receipt of the Blackout Notice. Such withdrawn registration
request shall not be treated as a Demand Registration effected pursuant to
Section 2.1 (and shall not be counted towards the number of Demand Registrations
effected), and the Company shall pay all Registration Expenses in connection
therewith.

3.       HOLDBACK ARRANGEMENTS.

         3.1 Restrictions on Sale by Stockholders Owning Registrable Securities.
Each Stockholder owning Registrable Securities agrees, by acquisition of such
Registrable Securities, if requested in writing by the sole or lead managing
Underwriter in an Underwritten Offering of any Registrable Securities, not to
transfer, hedge or make any short sale of, loan, grant any option for the
purchase of or effect any public sale or distribution, including a sale pursuant
to Rule 144, of any Registrable Securities or any other equity security of the
Company (or any security convertible into or exchangeable or exercisable for any
equity security of the Company) (except as part of such underwritten
registration), during the five business days (as such term is used in Regulation
M under the Exchange Act) prior to, and during the time period reasonably
requested by the sole or lead managing Underwriter not to exceed ninety (90)
days, beginning on the effective date of the applicable Registration Statement.

         3.2 Restrictions on Sale by the Company and Others. The Company agrees
that if timely requested in writing by the sole or lead managing Underwriter in
an Underwritten Offering of any Registrable Securities, it will not effect any
public sale or distribution of any of the Company's equity securities (or any
security convertible into or exchangeable or exercisable for any of the
Company's equity securities) during the five business days (as such term is used
in Regulation M under the Exchange Act) prior to, and during the time period
reasonably requested by the sole or lead managing Underwriter not to exceed
ninety (90) days, beginning on the effective date of the applicable Registration
Statement (except as part of such underwritten registration or pursuant to
registrations on Forms S-4 or S-8 or any successor form to such forms).

4.       REGISTRATION PROCEDURES.

         4.1 Obligations of the Company. Whenever the Company is required to
effect the registration of Registrable Securities under the Securities Act
pursuant to Section 2 of this Agreement, the Company shall, as expeditiously as
possible:

                  (a) prepare and file with the SEC (promptly, and in any event
within sixty (60) days after receipt of a request to register Registrable
Securities) the requisite Registration Statement to effect such registration,
which Registration Statement shall comply as to form in all

                                       12


<PAGE>


material respects with the requirements of the applicable form and include all
financial statements required by the SEC to be filed therewith, and the Company
shall use its commercially reasonable efforts to cause such Registration
Statement to become effective (provided, that the Company may discontinue any
registration of its securities that are not Registrable Securities, and, under
the circumstances specified in Sections 2.2 or 2.7, its securities that are
Registrable Securities); provided, however, that before filing a Registration
Statement or Prospectus or any amendments or supplements thereto, or comparable
statements under securities or blue sky laws of any U.S. jurisdiction, the
Company shall (i) provide Stockholders' Counsel with an adequate and appropriate
opportunity to participate in the preparation of such Registration Statement and
each Prospectus included therein (and each amendment or supplement thereto or
comparable statement) to be filed with the SEC, which documents shall be subject
to the review and comment of Stockholders' Counsel, and (ii) not file any such
Registration Statement or Prospectus (or amendment or supplement thereto or
comparable statement) with the SEC to which Stockholder's Counsel or any selling
Stockholder shall have reasonably objected on the grounds that such filing does
not comply in all material respects with the requirements of the Securities Act
or of the rules or regulations thereunder;

                  (b) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary (i) to keep such Registration Statement effective,
and (ii) to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such Registration
Statement, in each case until such time as all of such Registrable Securities
have been disposed of in accordance with the intended methods of disposition by
the seller(s) thereof set forth in such Registration Statement or one hundred
and eighty (180) days, whichever is shorter; provided, that with respect to any
Shelf Registration, such period need not extend beyond the time period provided
in Section 2.3, and which periods, in any event, shall terminate when all
Registrable Securities covered by such Registration Statement have been sold
(but not before the expiration of the ninety (90) day period referred to in
Section 4(3) of the Securities Act and Rule 174 thereunder, if applicable);

                  (c) furnish, without charge, to each selling Stockholder of
such Registrable Securities and each Underwriter, if any, of the securities
covered by such Registration Statement, such number of copies of such
Registration Statement, each amendment and supplement thereto, and the
Prospectus included in such Registration Statement (including each preliminary
Prospectus) in conformity with the requirements of the Securities Act, as such
selling Stockholder and Underwriter may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Securities
owned by such selling Stockholder (the Company hereby consenting (subject only
to the provisions of subparagraph (f) below to the use in accordance with
applicable law of each such Registration Statement (or amendment or
post-effective amendment thereto) and each such Prospectus (or preliminary
prospectus or supplement thereto) by each such selling Stockholder of
Registrable Securities and the Underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by such Registration
Statement or Prospectus);

                  (d) prior to any public offering of Registrable Securities,
use its commercially reasonable efforts to register or qualify all Registrable
Securities under such other securities or blue sky laws of such U.S.
jurisdictions as any selling Stockholder of Registrable Securities

                                       13


<PAGE>


covered by such Registration Statement or the sole or lead managing Underwriter,
if any, may reasonably request to enable such selling Stockholder to consummate
the disposition in such jurisdictions of the Registrable Securities owned by
such selling Stockholder and to continue such registration or qualification in
effect in each such jurisdiction for as long as such Registration Statement
remains in effect (including through new filings or amendments or renewals), and
do any and all other acts and things which may be reasonably necessary or
advisable to enable any such selling Stockholder to consummate the disposition
in such jurisdictions of the Registrable Securities owned by such selling
Stockholder; provided, however, that the Company shall not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 4.1(d), (ii) subject
itself to taxation in any such jurisdiction, or (iii) consent to general service
of process in any such jurisdiction;

                  (e)      [intentionally omitted]

                  (f) promptly notify Stockholders' Counsel, each Stockholder
owning Registrable Securities covered by such Registration Statement and the
sole or lead managing Underwriter, if any: (i) when the Registration Statement,
any pre-effective amendment, the Prospectus or any prospectus supplement related
thereto or post-effective amendment to the Registration Statement has been filed
and, with respect to the Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the SEC or any state
securities or blue sky authority for amendments or supplements to the
Registration Statement or the Prospectus related thereto or for additional
information, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation or threat of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose, (v) of the
existence of any fact of which the Company becomes aware or the happening of any
event which results in (A) the Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein not misleading, or
(B) the Prospectus included in such Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein, in the light of the
circumstances under which they were made, not misleading, (vi) if at any time
the representations and warranties contemplated by Section 2.5(b) cease to be
true and correct in all material respects, and (vii) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate or that there exists circumstances not yet disclosed to the
public which make further sales under such Registration Statement inadvisable
pending such disclosure and post-effective amendment; and, if the notification
relates to an event described in any of the clauses (ii) through (vii) of this
Section 4.1(f), the Company shall promptly prepare a supplement or
post-effective amendment to such Registration Statement or related Prospectus or
any document incorporated therein by reference or file any other required
document so that (1) such Registration Statement shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(2) as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder, such Prospectus shall not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein

                                       14


<PAGE>


or necessary to make the statements therein in the light of the circumstances
under which they were made not misleading (and shall furnish to each such
Stockholder and each Underwriter, if any, a reasonable number of copies of such
Prospectus so supplemented or amended); and if the notification relates to an
event described in clause (iii) of this Section 4.1(f), the Company shall take
all reasonable action required to prevent the entry of such stop order or to
remove it if entered;

                  (g) make available for inspection by any selling Stockholder
of Registrable Securities, any sole or lead managing Underwriter participating
in any disposition pursuant to such Registration Statement, Stockholders'
Counsel and any attorney retained by any such seller or any Underwriter (each,
an "Inspector" and, collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company and any
subsidiaries thereof as may be in existence at such time (collectively, the
"Records") as shall be necessary, in the opinion of such Stockholders' and such
Underwriters' respective counsel, to enable them to exercise their due diligence
responsibility and to conduct a reasonable investigation within the meaning of
the Securities Act, and cause the Company's and any subsidiaries' officers,
directors and employees, and the independent public accountants of the Company,
to supply all information reasonably requested by any such Inspectors in
connection with such Registration Statement;

                  (h) in the event of an Underwritten Offering, obtain an
opinion from the Company's counsel and a "cold comfort" letter from the
Company's independent public accountants who have certified the Company's
financial statements included or incorporated by reference in such Registration
Statement, in each case dated the effective date of such Registration Statement
(and if such registration involves an Underwritten Offering, dated the date of
the closing under the underwriting agreement), in customary form and covering
such matters as are customarily covered by such opinions and "cold comfort"
letters delivered to underwriters in underwritten public offerings, which
opinion and letter shall be reasonably satisfactory to the sole or lead managing
Underwriter, if any, and furnish to each Underwriter, if any, a copy of such
opinion and letter addressed to such Underwriter;

                  (i) provide a CUSIP number for all Registrable Securities and
provide and cause to be maintained a transfer agent and registrar for all such
Registrable Securities covered by such Registration Statement not later than the
effectiveness of such Registration Statement;

                  (j) otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the SEC and any other
governmental agency or authority having jurisdiction over the offering, and make
available to its security holders, as soon as reasonably practicable but no
later than 90 days after the end of any 12-month period, an earnings statement
(i) commencing at the end of any month in which Registrable Securities are sold
to Underwriters in an Underwritten Offering and (ii) commencing with the first
day of the Company's calendar month next succeeding each sale of Registrable
Securities after the effective date of a Registration Statement, which statement
shall cover such 12-month periods, in a manner which satisfies the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;


                                       15


<PAGE>


                  (k) if so requested by the Majority Stockholders of the
Registration, use its commercially reasonable efforts to cause all such
Registrable Securities to be listed on each national securities exchange on
which the Common Shares are then listed;

                  (l) keep each selling Stockholder of Registrable Securities
reasonably advised in writing as to the initiation and progress of any
registration under Section 2 hereunder;

                  (m) enter into and perform customary agreements (including, if
applicable, an underwriting agreement in customary form) and provide officers'
certificates and other customary closing documents;

                  (n) cooperate with each selling Stockholder of Registrable
Securities and each Underwriter participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with the NASD;

                  (o)      [intentionally omitted]

                  (p) cooperate with the selling Stockholders of Registrable
Securities and the sole or lead managing Underwriter, if any, to facilitate the
timely preparation and delivery of certificates not bearing any restrictive
legends representing the Registrable Securities to be sold, and cause such
Registrable Securities to be issued in such denominations and registered in such
names in accordance with the underwriting agreement prior to any sale of
Registrable Securities to the Underwriters or, if not an Underwritten Offering,
in accordance with the instructions of the selling Stockholders of Registrable
Securities at least three business days prior to any sale of Registrable
Securities;

                  (q) if requested by the sole or lead managing Underwriter or
any selling Stockholder of Registrable Securities, as promptly as practicable
incorporate in a prospectus supplement or post-effective amendment such
information concerning such selling Stockholder of Registrable Securities, the
Underwriters or the intended method of distribution as the sole or lead managing
Underwriter or the selling Stockholder of Registrable Securities reasonably
requests to be included therein and as is appropriate in the reasonable judgment
of the Company, including, without limitation, information with respect to the
number of shares of the Registrable Securities being sold to the Underwriters,
the purchase price being paid therefor by such Underwriters and with respect to
any other terms of the Underwritten Offering of the Registrable Securities to be
sold in such offering; make all required filings of such Prospectus supplement
or post-effective amendment as soon as notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment; and
supplement or make amendments to any Registration Statement if requested by the
sole or lead managing Underwriter of such Registrable Securities; and

                  (r) use all commercially reasonable efforts to take all other
steps necessary to expedite or facilitate the registration and disposition of
the Registrable Securities contemplated hereby.

         4.2  Seller   Information.   The  Company  may  require   each  selling
Stockholder  of  Registrable  Securities as to which any  registration  is being
effected to furnish to the Company such information  regarding such Stockholder,
such Stockholder's Registrable Securities and such

                                       16


<PAGE>


Stockholder's intended method of disposition as the Company may from time to
time reasonably request in writing; provided that such information shall be used
only in connection with such registration.

         4.3 Notice to Discontinue. Each Stockholder owning Registrable
Securities agrees by acquisition of such Registrable Securities that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 4.1(f)(ii) through (vii), such Stockholder shall forthwith
discontinue disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until such Stockholder's receipt
of the copies of the supplemented or amended prospectus contemplated by Section
4.1(f) and, if so directed by the Company, such Stockholder shall deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in such Stockholder's possession of the Prospectus covering such
Registrable Securities which is current at the time of receipt of such notice.
If the Company shall give any such notice, the Company shall extend the period
during which such Registration Statement shall be maintained effective pursuant
to this Agreement (including, without limitation, the period referred to in
Section 4.1(b)) by the number of days during the period from and including the
date of the giving of such notice pursuant to Section 4.1(f) to and including
the date when the Stockholder shall have received the copies of the supplemented
or amended prospectus contemplated by and meeting the requirements of Section
4.1(f).

5.       INDEMNIFICATION; CONTRIBUTION.

         5.1 Indemnification by the Company. The Company agrees to indemnify and
hold harmless, to the fullest extent permitted by law, each Stockholder owning
Registrable Securities, and each Person who controls such Stockholder (within
the meaning of the Securities Act) with respect to each registration which has
been effected pursuant to this Agreement, against any and all losses, claims,
damages or liabilities, joint or several, actions or proceedings (whether
commenced or threatened) in respect thereof, and out-of-pocket expenses (as
incurred or suffered and including, but not limited to, any and all reasonable
expenses incurred in investigating, preparing or defending any litigation or
proceeding, whether commenced or threatened, and the reasonable fees,
disbursements and other charges of legal counsel) in respect thereof
(collectively, "Claims"), insofar as such Claims arise out of or are based upon
any untrue or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (including any preliminary, final or
summary prospectus and any amendment or supplement thereto) related to any such
registration or any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the Company will not be liable in any such
case to the extent that any such Claims arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission of a material fact so made in reliance upon and in conformity
with written information furnished by the Stockholder or its representative to
the Company for use therein. The Company shall also indemnify any Underwriters
of the Registrable Securities, and each Person who controls any such Underwriter
(within the meaning of the Securities Act) to the same extent as provided above
with respect to the indemnification of the Stockholders owning Registrable
Securities. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of any Person who may be entitled to

                                       17


<PAGE>


indemnification pursuant to this Section 5 and shall survive the transfer of
securities by such Stockholder or Underwriter.

         5.2 Indemnification by Stockholders. Each Stockholder, if Registrable
Securities held by it are included in the securities as to which a registration
is being effected, agrees to, severally and not jointly, indemnify and hold
harmless, to the fullest extent permitted by law, the Company, its directors and
officers, each other Person who participates as an Underwriter in the offering
or sale of such securities, each Person who controls the Company or any such
Underwriter (within the meaning of the Securities Act) and any other Person
selling Common Shares in such Registration Statement against any and all Claims,
insofar as such Claims arise out of or are based upon any untrue or alleged
untrue statement of a material fact contained in any Registration Statement or
Prospectus (including any preliminary, final or summary prospectus and any
amendment or supplement thereto) related to such registration, or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by the Stockholder
or its representative for use therein; provided, however, that the aggregate
amount which any such Stockholder shall be required to pay pursuant to this
Section 5.2 shall in no event be greater than the amount of the net proceeds
received by such Stockholder upon the sale of the Registrable Securities
pursuant to the Registration Statement giving rise to such Claims less all
amounts previously paid by such Stockholder with respect to any such Claims.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such indemnified party and shall survive
the transfer of such securities by such Stockholder or Underwriter.

         5.3 Conduct of Indemnification Proceedings. Promptly after receipt by
an indemnified party of notice of any Claim or the commencement of any action or
proceeding involving a Claim under this Section 5, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party
pursuant to Section 5, (i) notify the indemnifying party in writing of the Claim
or the commencement of such action or proceeding; provided, that the failure of
any indemnified party to provide such notice shall not relieve the indemnifying
party of its obligations under this Section 5, except to the extent the
indemnifying party is actually prejudiced thereby and shall not relieve the
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Section 5, and (ii) permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party; provided, however, that any indemnified party shall have the
right to employ separate counsel and to participate in the defense of such
claim, but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (A) the indemnifying party has agreed in writing to pay
such fees and expenses, (B) the indemnifying party shall have failed to assume
the defense of such claim and employ counsel reasonably satisfactory to such
indemnified party within twenty (20) days after receiving notice from such
indemnified party, (C) in the reasonable judgment of any such indemnified party,
based upon advice of counsel, a conflict of interest is reasonably likely to
exist between such indemnified party and the indemnifying party with respect to
such claims (in which case, if the indemnified party notifies the indemnifying
party in writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the

                                       18


<PAGE>


defense of such claim on behalf of such indemnified party) or (D) such
indemnified party is a defendant in an action or proceeding which is also
brought against the indemnifying party and reasonably shall have concluded that
there may be one or more legal defenses available to such indemnified party
which are not available to the indemnifying party. No indemnifying party shall
be liable for any settlement of any such claim or action effected without its
written consent, which consent shall not be unreasonably withheld. In addition,
without the consent of the indemnified party (which consent shall not be
unreasonably withheld), no indemnifying party shall be permitted to consent to
entry of any judgment with respect to, or to effect the settlement or compromise
of any pending or threatened action or claim in respect of which indemnification
or contribution may be sought hereunder (whether or not the indemnified party is
an actual or potential party to such action or claim), unless such settlement,
compromise or judgment (1) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim, and (2) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party, and (3) does not provide for any
action on the part of any party other than the payment of money damages which is
to be paid in full by the indemnifying party.

         5.4 Contribution. If the indemnification provided for in Section 5.1 or
5.2 from the indemnifying party for any reason is unavailable to (other than by
reason of exceptions provided therein), or is insufficient to hold harmless, an
indemnified party hereunder in respect of any Claim, then the indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such Claim in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and the indemnified party, on the other
hand, in connection with the actions which resulted in such Claim, as well as
any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. If, however, the foregoing allocation is not permitted by applicable
law, then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not
only such relative faults but also the relative benefits of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations.

                  The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5.4 were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by a party as a result of any Claim
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth in Section 5.3, any legal or other fees,
costs or expenses reasonably incurred by such party in connection with any
investigation or proceeding. Notwithstanding anything in this Section 5.4 to the
contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 5.4 to contribute any amount in excess of the net
proceeds received by such indemnifying party from the sale of the Registrable
Securities pursuant to the Registration Statement giving rise to such Claims,

                                       19


<PAGE>


less all amounts previously paid by such indemnifying party with respect to such
Claims. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

         5.5 Other Indemnification. Indemnification similar to that specified in
the preceding Sections 5.1 and 5.2 (with appropriate modifications) shall be
given by the Company and each selling Stockholder of Registrable Securities with
respect to any required registration or other qualification of securities under
any Federal or state law or regulation of any governmental authority, other than
the Securities Act. The indemnity agreements contained herein shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract.

         5.6 Indemnification Payments. The indemnification and contribution
required by this Section 5 shall be made by periodic payments of the amount
thereof during the course of any investigation or defense, as and when bills are
received or any expense, loss, damage or liability is incurred.

6.       General.

         6.1 Registration Rights to Others. Other than as set forth on Schedule
A attached hereto, the Company is not party to any agreement with respect to its
securities granting any registration rights to any Person. If the Company shall
at any time hereafter provide to any holder of any securities of the Company
rights with respect to the registration of such securities under the Securities
Act, such rights shall not be in conflict with or materially adversely affect
any of the rights provided in this Agreement to the Stockholders.

         6.2 Availability of Information. The Company covenants that it shall
timely file any reports required to be filed by it under the Securities Act or
the Exchange Act (including, but not limited to, the reports under Sections 13
and 15(d) of the Exchange Act referred to in subparagraph (c) of Rule 144 under
the Securities Act), all to the extent required from time to time to enable such
Stockholder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (i) Rule 144
and Rule 144A under the Securities Act, as such rules may be amended from time
to time, or (ii) any other rule or regulation now existing or hereafter adopted
by the SEC.

         6.3 Amendments and Waivers. The provisions of this Agreement may not be
amended, modified, supplemented or terminated, and waivers or consents to
departures from the provisions hereof may not be given, without the written
consent of the Company and the Stockholders beneficially owning more than 50% of
the Registrable Securities then outstanding; provided, however, that no such
amendment, modification, supplement, waiver or consent to departure shall reduce
the aforesaid percentage of Registrable Securities without the written consent
of all of the Stockholders beneficially owning Registrable Securities; and
provided further, that nothing herein shall prohibit any amendment,
modification, supplement, termination, waiver or consent to departure the effect
of which is limited only to those Stockholders who have agreed to such
amendment, modification, supplement, termination, waiver or consent to
departure.

                                       20


<PAGE>




         6.4 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, telecopier, any
courier guaranteeing overnight delivery or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to the applicable
party at the address set forth below or such other address as may hereafter be
designated in writing by such party to the other parties in accordance with the
provisions of this Section:

                  (i)      If to the Company, to:

                           Insignia Financial Group, Inc.
                           200 Park Avenue
                           New York, NY  10166
                           Attn: Adam B. Gilbert, Esq.
                           Telecopy:  212-984-6644
                           Telephone:  212-984-6649

                           With a copy to:

                           Proskauer Rose LLP
                           1585 Broadway
                           New York, New York  10036
                           Attn: Allan R. Williams, Esq.
                           Telecopy:  212-969-2900
                           Telephone:  212-969-3000


                  (ii)     If to the Initial Stockholders, to:

                           Blackacre Capital Management L.L.C.
                           450 Park Avenue
                           New York, NY  10022
                           Attn:  Ronald J. Kravit
                           Telecopy:  212-891-2104
                           Telephone:  212-891-2100

                           With a copy to:

                           Schulte Roth & Zabel LLP
                           919 Third Avenue
                           New York, NY  10022
                           Attn:  Marc Weingarten, Esq.
                                   Michael R. Littenberg, Esq.
                             Telecopy: 212-593-5955
                             Telephone: 212-756-2000

                  (iii)    If to any subsequent Stockholder, to the address of
                           such Person set forth in the records of the Company.

                                       21


<PAGE>


                  All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; when
receipt is acknowledged, if telecopied; on the next business day, if timely
delivered to a courier guaranteeing overnight delivery; and five days after
being deposited in the mail, if sent first class or certified mail, return
receipt requested, postage prepaid.

         6.5 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, successors
and permitted assigns (including any permitted transferee of Registrable
Securities). Any Stockholder may assign to any permitted (as determined under
the Stock Subscription and Exchange Agreement) transferee of its Registrable
Securities (other than a transferee that acquires such Registrable Securities in
a registered public offering or pursuant to a sale under Rule 144 of the
Securities Act (or any successor rule)), its rights and obligations under this
Agreement; provided, however, if any permitted transferee shall take and hold
Registrable Securities, such transferee shall promptly notify the Company and by
taking and holding such Registrable Securities such permitted transferee shall
automatically be entitled to receive the benefits of and be conclusively deemed
to have agreed to be bound by and to perform all of the terms and provisions of
this Agreement as if it were a party hereto (and shall, for all purposes, be
deemed a Stockholder under this Agreement). If the Company shall so request, any
heir, successor or permitted assign (including any permitted transferee) shall
agree in writing to acquire and hold the Registrable Securities subject to all
of the terms hereof. For purposes of this Agreement, "successor" for any entity
other than a natural person shall mean a successor to such entity as a result of
such entity's merger, consolidation, sale of substantially all of its assets, or
similar transaction. Except as provided above or otherwise permitted by this
Agreement, neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by any Stockholder
without the consent of the Company.

         6.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original, but all of which counterparts, taken together, shall constitute
one and the same instrument.

         6.7 Descriptive Headings, Etc. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Agreement
otherwise requires: (1) words of any gender shall be deemed to include each
other gender; (2) words using the singular or plural number shall also include
the plural or singular number, respectively; (3) the words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and paragraph references are to the Sections and
paragraphs of this Agreement unless otherwise specified; (4) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless otherwise specified; (5) "or" is not
exclusive; and (6) provisions apply to successive events and transactions.

         6.8 Severability. In the event that any one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in

                                       22


<PAGE>



every other respect and of the other remaining provisions, paragraphs, words,
clauses, phrases or sentences hereof shall not be in any way impaired, it being
intended that all rights, powers and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.

         6.9 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York (without giving effect to
the conflict of laws principles thereof).

         6.10 Remedies; Specific Performance. The parties hereto acknowledge
that money damages would not be an adequate remedy at law if any party fails to
perform in any material respect any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to seek to compel
specific performance of the obligations of any other party under this Agreement,
without the posting of any bond, in accordance with the terms and conditions of
this Agreement in any court of the United States or any State thereof having
jurisdiction, and if any action should be brought in equity to enforce any of
the provisions of this Agreement, none of the parties hereto shall raise the
defense that there is an adequate remedy at law. Except as otherwise provided by
law, a delay or omission by a party hereto in exercising any right or remedy
accruing upon any such breach shall not impair the right or remedy or constitute
a waiver of or acquiescence in any such breach. No remedy shall be exclusive of
any other remedy. All available remedies shall be cumulative.

         6.11 Entire Agreement. This Agreement, the Convertible Preferred Stock
(and the Certificates of Designation describing the rights and preferences
thereof) and the Stock Subscription and Exchange Agreement (collectively, the
"Other Agreements") are intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, representations,
warranties, covenants or undertakings relating to such subject matter, other
than those set forth or referred to herein or in the Other Agreements. This
Agreement and the Other Agreements supersede all prior agreements and
understandings between the Company and the other parties to this Agreement with
respect to such subject matter. Without limiting the foregoing, the Stockholders
hereby acknowledge and agree that this Agreement supersedes the Registration
Rights Agreement by and among the Company and Madeleine L.L.C., dated February
9, 2000.

         6.12 Nominees for Beneficial Owners. In the event that any Convertible
Preferred Stock or Registrable Securities are held by a nominee for the
beneficial owner thereof, the beneficial owner thereof may, at its election in
writing delivered to the Company, be treated as the holder of such Convertible
Preferred Stock or Registrable Securities for purposes of any request or other
action by any holder or holders of Convertible Preferred Stock or Registrable
Securities pursuant to this Agreement or any determination of any number or
percentage of shares of Registrable Securities held by any holder or holders of
Convertible Preferred Stock or Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Convertible Preferred Stock or
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Convertible
Preferred Stock or Registrable Securities.

                                       23


<PAGE>


         6.13 Consent to Jurisdiction; Waiver of Jury. Each party to this
Agreement hereby irrevocably and unconditionally agrees that any legal action,
suit or proceeding arising out of or relating to this Agreement or any
agreements or transactions contemplated hereby may be brought in any federal
court of the Southern District of New York or any state court located in New
York County, State of New York, and hereby irrevocably and unconditionally
expressly submits to the personal jurisdiction and venue of such courts for the
purposes thereof and hereby irrevocably and unconditionally waives any claim (by
way of motion, as a defense or otherwise) of improper venue, that it is not
subject personally to the jurisdiction of such court, that such courts are an
inconvenient forum or that this Agreement or the subject matter may not be
enforced in or by such court. Each party hereby irrevocably and unconditionally
consents to the service of process of any of the aforementioned courts in any
such action, suit or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to the address set forth or provided for in
Section 6.4 of this Agreement, such service to become effective 10 days after
such mailing. Nothing herein contained shall be deemed to affect the right of
any party to serve process in any manner permitted by law or commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction to enforce judgments obtained in any action, suit or proceeding
brought pursuant to this Section. Each of the parties hereby irrevocably waives
trial by jury in any action, suit or proceeding, whether at law or equity,
brought by any of them in connection with this Agreement or the transactions
contemplated hereby.

         6.14 Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.

         6.15 Construction. The Company and the Initial Stockholders acknowledge
that each of them has had the benefit of legal counsel of its own choice and has
been afforded an opportunity to review this Agreement with its legal counsel and
that this Agreement shall be construed as if jointly drafted by the Company and
the Stockholders.



                                       24


<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed as of the date first written above.


INSIGNIA FINANCIAL GROUP, INC.


By:/s/
   -----------------------------------
     Name:  Adam B. Gilbert
     Title:  Executive Vice President


                                             INITIAL HOLDERS:


                                             MADELEINE L.L.C.


                                             By:/s/
                                                ---------------------------

                                                Name:  Ronald J. Kravit
                                                Title:  Vice President



<PAGE>


                                   SCHEDULE A


1.       Registration rights granted pursuant to the three separate registration
         rights agreements,  each dated as of September 15, 1998, by and between
         APTS Partners, L.P. and Insignia/ESG Holdings, Inc.

2.       Registration   rights  granted  pursuant  to  the  Registration  Rights
         Agreement,  dated as of  September  15,  1998,  by and between  APTS V,
         L.L.C. and Insignia/ESG Holdings, Inc.



<PAGE>


                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                               Page





<S>                                                                                                              <C>
1.   Definitions..................................................................................................1


2.   REGISTRATION UNDER THE SECURITIES ACT........................................................................5

      2.1   Demand Registration...................................................................................5
      2.2   Incidental Registration...............................................................................7
      2.3   S-3 Registration; Shelf Registration..................................................................9
      2.4   Expenses.............................................................................................10
      2.5   Underwritten Offerings...............................................................................10
      2.6   Conversions; Exercises...............................................................................11
      2.7   Postponements........................................................................................11

3.   HOLDBACK ARRANGEMENTS.........................................................................................

      3.1   Restrictions on Sale by Stockholders Owning Registrable Securities...................................12
      3.2   Restrictions on Sale by the Company and Others.......................................................12

4.   REGISTRATION PROCEDURES.....................................................................................13

      4.1   Obligations of the Company...........................................................................13
      4.2   Seller Information...................................................................................17
      4.3   Notice to Discontinue................................................................................17

5.   INDEMNIFICATION; CONTRIBUTION...............................................................................17

      5.1   Indemnification by the Company.......................................................................17
      5.2   Indemnification by Stockholders......................................................................18
      5.3   Conduct of Indemnification Proceedings...............................................................18
      5.4   Contribution.........................................................................................19
      5.5   Other Indemnification................................................................................20
      5.6   Indemnification Payments.............................................................................20

6.   GENERAL.....................................................................................................20

      6.1   Registration Rights to Others........................................................................20
      6.2   Availability of Information..........................................................................20
      6.3   Amendments and Waivers...............................................................................21
      6.4   Notices..............................................................................................21
      6.5   Successors and Assigns...............................................................................22
      6.6   Counterparts.........................................................................................23
      6.7   Descriptive Headings, Etc............................................................................23
      6.8   Severability.........................................................................................23
      6.9   Governing Law........................................................................................23
      6.10  Remedies; Specific Performance.......................................................................23
      6.11  Entire Agreement.....................................................................................24
      6.12  Nominees for Beneficial Owners.......................................................................24
      6.13  Consent to Jurisdiction; Waiver of Jury..............................................................24
      6.14  Further Assurances...................................................................................25
      6.15  Construction.........................................................................................25


</TABLE>