EXHIBIT 4.3

                                                                       EXHIBIT C

                                ESCROW AGREEMENT

     THIS ESCROW AGREEMENT (this "Agreement") is made as of December 1, 2004, by
and among Insignia Systems, Inc., a Minnesota corporation (the "Company"), the
purchasers signatory hereto (each a "Purchaser" and together the "Purchasers"),
and Feldman Weinstein LLP, with an address at 420 Lexington Avenue, New York,
New York 10170-0002 (the "Escrow Agent"). CAPITALIZED TERMS USED BUT NOT DEFINED
HEREIN SHALL HAVE THE MEANINGS SET FORTH IN THE SECURITIES PURCHASE AGREEMENT
REFERRED TO IN THE FIRST RECITAL.

                              W I T N E S S E T H:

     WHEREAS, the Purchasers will be purchasing from the Company, severally and
not jointly with the other Purchasers, in the aggregate, up to $2,490,000, in
the aggregate, of the Common Stock on the Closing Date as set forth in the
Securities Purchase Agreement (the "Purchase Agreement") dated the date hereof
between the Purchasers and the Company, which securities will be issued under
the terms contained herein and in the Purchase Agreement; and

     WHEREAS, it is intended that the purchase of the securities be consummated
in accordance with the requirements set forth in Regulation D promulgated under
the Securities Act of 1933, as amended; and

     WHEREAS, the Company and the Purchasers have requested that the Escrow
Agent hold the Subscription Amounts in escrow until the Escrow Agent has
received the Release Notice in the form attached hereto from the Company and
each Purchaser;

     NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged and intending to be legally
bound hereby, the parties agree as follows:

                                   ARTICLE 1

                               TERMS OF THE ESCROW

     1.1. The parties hereby agree to establish an escrow account with the
Escrow Agent whereby the Escrow Agent shall hold the funds for the purchase of
up to $2,490,000, in the aggregate, of Common Stock as contemplated by the
Purchase Agreement.

     1.2. Upon the Escrow Agent's receipt of the aggregate Subscription Amounts
for the Closing into its master escrow account, together with executed
counterparts of this Agreement, the Purchase Agreement and the Registration
Rights Agreement, it shall telephonically advise the Company, or the Company's
designated attorney or agent, of the amount of funds it has received into its
master escrow account.



                                       1
<PAGE>

     1.3. Wire transfers to the Escrow Agent shall be made as follows:

                  STERLING NATIONAL BANK
                  622 3RD AVENUE
                  NEW YORK, NY 10017
                  Account Name:  Feldman Weinstein LLP
                  ABA ROUTING NO: 026007773
                  ACCT NO: 0814180101
                  Remark:  ISIG/[FUND NAME]

     1.4 The Company, promptly following being advised by the Escrow Agent that
the Escrow Agent has received the Subscription Amounts for the Closing along
with facsimile copies of counterpart signature pages of the Purchase Agreement,
Registration Rights Agreement and this Agreement from each Purchaser, shall
deliver to the Escrow Agent the certificates representing the certificates
evidencing the Securities to be issued to each Purchaser at the Closing together
with:

          (a) the Company's executed counterpart of the Purchase Agreement;

          (b) the Company's executed counterpart of the Registration Rights
     Agreement;

          (c) the executed opinion of Company Counsel, in the form of Exhibit B
     to the Purchase Agreement; and

          (d) the Company's original executed counterpart of this Escrow
     Agreement.

     1.5 In the event that the foregoing items are not in the Escrow Agent's
possession within five (5) Trading Days of the Escrow Agent notifying the
Company that the Escrow Agent has custody of the Subscription Amount for the
Closing, then each Purchaser shall have the right to demand the return of their
portion of the Subscription Amount.

     1.6 Once the Escrow Agent receives a Release Notice in the form attached
hereto as Exhibit X (the "Release Notice") executed by the Company and each
Purchaser, it shall (a) wire 95% of the aggregate Subscription Amounts to the
Company's account listed in Section 1.7 below, net of $20,000 to the Feldman
Weinstein LLP, and (b) wire the remaining 5% of the aggregate Subscription
Amounts per the written instructions of TR Winston & Company, Inc.

     1.7 Wire transfers to the Company shall be made pursuant to written
instructions from the Company provided to the Escrow Agent on the date of the
Purchase Agreement.

     1.8 Once the funds (as set forth above) have been sent per the Company's
instructions, the Escrow Agent shall then arrange to have the Shares, the
Purchase Agreement, the Registration Rights Agreement, the Escrow Agreement and
the opinion of counsel delivered to the appropriate parties.

                                       2
<PAGE>

                                   ARTICLE II

                                  MISCELLANEOUS

     2.1 No waiver or any breach of any covenant or provision herein contained
shall be deemed a waiver of any preceding or succeeding breach thereof, or of
any other covenant or provision herein contained. No extension of time for
performance of any obligation or act shall be deemed an extension of the time
for performance of any other obligation or act.

     2.2 All notices or other communications required or permitted hereunder
shall be in writing, and shall be sent as set forth in the Purchase Agreement.

     2.3 This Escrow Agreement shall be binding upon and shall inure to the
benefit of the permitted successors and permitted assigns of the parties hereto.

     2.4 This Escrow Agreement is the final expression of, and contains the
entire agreement between, the parties with respect to the subject matter hereof
and supersedes all prior understandings with respect thereto. This Escrow
Agreement may not be modified, changed, supplemented or terminated, nor may any
obligations hereunder be waived, except by written instrument signed by the
parties to be charged or by its agent duly authorized in writing or as otherwise
expressly permitted herein.

     2.5 Whenever required by the context of this Escrow Agreement, the singular
shall include the plural and masculine shall include the feminine. This Escrow
Agreement shall not be construed as if it had been prepared by one of the
parties, but rather as if all parties had prepared the same. Unless otherwise
indicated, all references to Articles are to this Escrow Agreement.

     2.6 The parties hereto expressly agree that this Escrow Agreement shall be
governed by, interpreted under and construed and enforced in accordance with the
laws of the State of New York. Any action to enforce, arising out of, or
relating in any way to, any provisions of this Escrow Agreement shall only be
brought in a state or Federal court sitting in New York City.

     2.7 The Escrow Agent's duties hereunder may be altered, amended, modified
or revoked only by a writing signed by the Company, each Purchaser and the
Escrow Agent.

     2.8 The Escrow Agent shall be obligated only for the performance of such
duties as are specifically set forth herein and may rely and shall be protected
in relying or refraining from acting on any instrument reasonably believed by
the Escrow Agent to be genuine and to have been signed or presented by the
proper party or parties. The Escrow Agent shall not be personally liable for any
act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while
acting in good faith and in the absence of gross negligence, fraud and willful
misconduct, and any act done or omitted by the Escrow Agent pursuant to the
advice of the Escrow Agent's attorneys-at-law shall be conclusive evidence of
such good faith, in the absence of gross negligence, fraud and willful
misconduct.

     2.9 The Escrow Agent is hereby expressly authorized to disregard any and
all warnings given by any of the parties hereto or by any other person or
corporation, excepting only


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<PAGE>

orders or process of courts of law and is hereby expressly authorized to comply
with and obey orders, judgments or decrees of any court. In case the Escrow
Agent obeys or complies with any such order, judgment or decree, the Escrow
Agent shall not be liable to any of the parties hereto or to any other person,
firm or corporation by reason of such decree being subsequently reversed,
modified, annulled, set aside, vacated or found to have been entered without
jurisdiction.

     2.10 The Escrow Agent shall not be liable in any respect on account of the
identity, authorization or rights of the parties executing or delivering or
purporting to execute or deliver the Purchase Agreement or any documents or
papers deposited or called for thereunder in the absence of gross negligence,
fraud and willful misconduct.

     2.11 The Escrow Agent shall be entitled to employ such legal counsel and
other experts as the Escrow Agent may deem necessary properly to advise the
Escrow Agent in connection with the Escrow Agent's duties hereunder, may rely
upon the advice of such counsel, and may pay such counsel reasonable
compensation; provided that the costs of such compensation SHALL BE BORNE BY THE
ESCROW AGENT. THE ESCROW AGENT HAS ACTED AS LEGAL COUNSEL FOR BRISTOL INVESTMENT
FUND, LTD. ("BRISTOL"), AND MAY CONTINUE TO ACT AS LEGAL COUNSEL FOR BRISTOL
FROM TIME TO TIME, NOTWITHSTANDING ITS DUTIES AS THE ESCROW AGENT HEREUNDER. THE
COMPANY AND THE OTHER PURCHASERS CONSENT TO THE ESCROW AGENT IN SUCH CAPACITY AS
LEGAL COUNSEL FOR BRISTOL AND WAIVES ANY CLAIM THAT SUCH REPRESENTATION
REPRESENTS A CONFLICT OF INTEREST ON THE PART OF THE ESCROW AGENT. THE COMPANY
AND THE PURCHASERS UNDERSTAND THAT BRISTOL AND THE ESCROW AGENT ARE RELYING
EXPLICITLY ON THE FOREGOING PROVISION IN ENTERING INTO THIS ESCROW AGREEMENT.

     2.12 The Escrow Agent's responsibilities as escrow agent hereunder shall
terminate if the Escrow Agent shall resign by giving written notice to the
Company and the Purchasers. In the event of any such resignation, the Purchasers
and the Company shall appoint a successor Escrow Agent and the Escrow Agent
shall deliver to such successor Escrow Agent any escrow funds and other
documents held by the Escrow Agent.

     2.13 If the Escrow Agent reasonably requires other or further instruments
in connection with this Escrow Agreement or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.

     2.14 It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the documents or the
escrow funds held by the Escrow Agent hereunder, the Escrow Agent is authorized
and directed in the Escrow Agent's sole discretion (1) to retain in the Escrow
Agent's possession without liability to anyone all or any part of said documents
or the escrow funds until such disputes shall have been settled either by mutual
written agreement of the parties concerned by a final order, decree or judgment
or a court of competent jurisdiction after the time for appeal has expired and
no appeal has been perfected, but the Escrow Agent shall be under no duty
whatsoever to institute or defend any such proceedings or (2) to deliver the
escrow funds and any other property and documents held by the Escrow Agent
hereunder to a state or Federal court having competent subject matter
jurisdiction and located in the City of New York in accordance with the
applicable procedure therefore

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<PAGE>

     2.15 The Company and each Purchaser agree jointly and severally to
indemnify and hold harmless the Escrow Agent and its partners, employees, agents
and representatives from any and all claims, liabilities, costs or expenses in
any way arising from or relating to the duties or performance of the Escrow
Agent hereunder or the transactions contemplated hereby or by the Purchase
Agreement other than any such claim, liability, cost or expense to the extent
the same shall have been determined by final, unappealable judgment of a court
of competent jurisdiction to have resulted from the gross negligence, fraud or
willful misconduct of the Escrow Agent.

                            ************************




















                                       5
<PAGE>




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


INSIGNIA SYSTEMS, INC.


By:  /s/ Scott Drill
     -----------------------------------
     Name:   Scott Drill
     Title:  President and CEO

With a copy to (which shall not constitute notice):





ESCROW AGENT:

FELDMAN WEINSTEIN LLP


By:  /s/ Robert Charron
     -----------------------------------
     Name:   Robert Charron
     Title:  Partner



                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                     SIGNATURE PAGES FOR PURCHASERS FOLLOW]


<PAGE>


                  [SIGNATURE PAGE OF PURCHASERS TO ISIG ESCROW]


<TABLE>
<S>                              <C>
Name of Investing Entity:        Bear Stearns Securities Corp. Inc., FBO J. Steven Emerson Roth IRA
                                 G. Tyler Runnels or Jasmine Niklas Runnels
                                 TTEES The Runnels Family Trust dtd 1-11-2000
                                 High Tide, LLC
                                 JMG Capital Partners, LP
                                 JMG Triton Offshore Fund, Ltd.
                                 Bristol Investment Fund, Ltd
                                 Potomac Capital Partners, LP
                                 Pleiades Investment Partners-R, L.P.
                                 Potomac Capital International Ltd.
                                 Hammond Holdings, LLC
SIGNATURE OF AUTHORIZED SIGNATORY OF INVESTING ENTITY: _________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________
</TABLE>




                     [SIGNATURE PAGE OF PURCHASERS FOLLOWS]




<PAGE>

                                                                    Exhibit X to
                                                                Escrow Agreement
                                 RELEASE NOTICE

     The UNDERSIGNED, pursuant to the Escrow Agreement, dated as of December 1,
2004, among Insignia Systems, Inc., the Purchasers signatory thereto and Feldman
Weinstein LLP, as Escrow Agent (the "Escrow Agreement"; capitalized terms used
herein and not defined shall have the meaning ascribed to such terms in the
Escrow Agreement), hereby notify the Escrow Agent that each of the conditions
precedent to the purchase and sale of the Shares set forth in the Securities
Purchase Agreement have been satisfied. The Company and the undersigned
Purchaser hereby confirm that all of their respective representations and
warranties contained in the Purchase Agreement remain true and correct and
authorize the release by the Escrow Agent of the funds and documents to be
released at the Closing as described in the Escrow Agreement. This Release
Notice shall not be effective until executed by the Company and the Purchaser.

     This Release Notice may be signed in one or more counterparts, each of
which shall be deemed an original.

     IN WITNESS WHEREOF, the undersigned have caused this Release Notice to be
duly executed and delivered as of this 1st day of December, 2004.


INSIGNIA SYSTEMS, INC.


By:  /s/ Scott Drill
     -----------------------------------
     Name:   Scott Drill
     Title:  President and CEO


                     [SIGNATURE PAGE OF PURCHASERS FOLLOWS]


<PAGE>


                 [SIGNATURE PAGE OF PURCHASERS TO ISIG RELEASE]

<TABLE>
<S>                              <C>
Name of Investing Entity:        Bear Stearns Securities Corp. Inc., FBO J. Steven Emerson Roth IRA
                                 G. Tyler Runnels or Jasmine Niklas Runnels
                                 TTEES The Runnels Family Trust dtd 1-11-2000
                                 High Tide, LLC
                                 JMG Capital Partners, LP
                                 JMG Triton Offshore Fund, Ltd.
                                 Bristol Investment Fund, Ltd
                                 Potomac Capital Partners, LP
                                 Pleiades Investment Partners-R, L.P.
                                 Potomac Capital International Ltd.
                                 Hammond Holdings, LLC
SIGNATURE OF AUTHORIZED SIGNATORY OF INVESTING ENTITY: __________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________
</TABLE>


                     [SIGNATURE PAGE OF PURCHASERS FOLLOWS]