loans/topr
0532/39038-028  NYLIB2/513320 v7                     09/24/98  02:17 PM  (10559)
                                 EXECUTION COPY






                                WARRANT AGREEMENT
                                     BETWEEN
                           INSIGNIA/ESG HOLDINGS, INC.
                                       AND
                            FIRST UNION NATIONAL BANK
                         DATED AS OF SEPTEMBER 30, 1998

532/39038-028  NYLIB2/513320 v7                     09/24/98  02:17 PM  (10559)

     WARRANT  AGREEMENT,  dated as of September  30, 1998  between  INSIGNIA/ESG
HOLDINGS, INC., a Delaware corporation (the "Company"), and FIRST UNION NATIONAL
BANK, a national banking  association  incorporated under the laws of the United
States of America (the "Warrant Agent").

     WHEREAS, the Company issued to Insignia Financial Group, Inc.  ("Insignia")
on  September~18,  1998,  warrants (the  "Warrants") to purchase an aggregate of
1,196,000 shares (the "Warrant Shares") of the Company's common stock, par value
$.01 per share (the "Common  Stock"),  subject to adjustment as provided herein,
and Insignia  proposes to transfer  such  Warrants on September  30, 1998 to the
holders of record of 62% Trust Convertible Preferred Securities ("TOPRs") issued
by Insignia  Financing I, a Delaware  trust,  on September 15, 1998 (the "Record
Date"),  in connection  with (i)~the  proposed  merger of Insignia with and into
Apartment Investment and Management Company, a Maryland  corporation  ("AIMCO"),
pursuant to an Amended and  Restated  Agreement  and Plan of Merger  dated as of
May~26,  1998,  with  AIMCO  being  the  surviving  corporation,   and  (ii)~the
distribution  by Insignia  of the Common  Stock of the Company to the holders of
record of Insignia Class A Common Stock,  par value $.01 per share, on September
15, 1998.

     WHEREAS,  the Company  desires  the  Warrant  Agent to act on behalf of the
Company,  and the  Warrant  Agent is willing to so act, in  connection  with the
registration, transfer, exchange and exercise of the Warrants.

     THEREFORE,  in consideration of the mutual  undertakings  contained herein,
the Company and the Warrant Agent hereby agree as follows:

     1.  Appointment of Warrant Agent.  The Company hereby  appoints the Warrant
Agent  to  act  as  warrant  agent  for  the  Company  in  accordance  with  the
instructions  hereinafter set forth in this Warrant  Agreement,  and the Warrant
Agent hereby accepts such appointment.

     2.  Warrant  Certificates.   Each  certificate  for  Warrants  (a  "Warrant
Certificate")  shall be  substantially  as set forth in Annex A attached hereto.
The  Warrant  Certificates  shall be  executed  on behalf of the  Company by the
manual or  facsimile  signature  of the present or any future  Chairman or Chief
Executive Officer or President or Vice President of the Company,  attested to by
the manual or  facsimile  signature  of the present or any future  Treasurer  or
Secretary or Assistant Secretary of the Company.

     Warrant Certificates shall be dated as of the date of authentication by the
Warrant Agent upon transfer or exchange. The Warrant Agent shall countersign and
deliver  Warrant  Certificates to such Holders and in such number as provided in
this Warrant Agreement. The Warrant Certificates shall be countersigned manually
or by facsimile by the Warrant  Agent (or by any  successor to the Warrant Agent
then acting as warrant  agent  under this  Warrant  Agreement)  and shall not be
valid  for any  purpose  unless  so  countersigned.  Warrant  Certificates  may,
however,  be so  countersigned  by the  Warrant  Agent (or by its  successor  as
Warrant Agent) and be delivered by the Warrant Agent,  notwithstanding  that the
persons whose manual or facsimile  signatures  appear thereon as proper officers
of the  Company  shall  have  ceased  to be such  officers  at the  time of such
countersignature or delivery.



     14   0532/39038-028   NYLIB2/513320   v7  09/24/98   02:17  PM  (10559)  3.
Registration.  The Warrant  Agent shall  maintain a register for the Warrants at
its  principal  executive  offices  in  Charlotte,   North  Carolina,   for  the
registration  of the transfer and exchange of Warrants.  The Warrant Agent shall
register  the Warrants  initially  in the name of Insignia.  The Company and the
Warrant  Agent  each shall be  entitled  to treat the  registered  holder of any
Warrant  (the  "Holder") as the owner in fact thereof for all purposes and shall
not be bound to  recognize  any  equitable or other claim to or interest in such
Warrant on the part of any other person.

     4.  Transfer and Exchange of Warrants.  Any Warrant  shall be  transferable
only upon surrender thereof at the Warrant Agent's  principal  executive offices
located in  Charlotte,  North  Carolina,  duly endorsed by its Holder or by such
Holder's duly authorized  attorney or  representative,  or accompanied by proper
evidence of  succession,  assignment  or authority to transfer,  in each case in
form satisfactory to the Warrant Agent, together with payment of any taxes which
may be  payable in  connection  with such  transfer.  Upon any  registration  of
transfer,  the Warrant Agent shall deliver a new Warrant  Certificate(s)  to the
persons  entitled  thereto  and the  surrendered  Warrant  Certificate  shall be
canceled.  Warrants so canceled  shall be  delivered to the Company from time to
time upon request. In addition,  a Warrant Certificate may be exchanged,  at the
option of the Holder thereof,  for another Warrant  Certificate(s)  of different
denominations,  of like tenor and  representing  in the  aggregate  the right to
purchase a like number of Warrant Shares upon  surrender at the Warrant  Agent's
principal executive offices located in Charlotte,  North Carolina, duly endorsed
by its Holder or by such Holder's duly authorized attorney or representative, or
accompanied  by proper  evidence  of  succession,  assignment  or  authority  to
transfer,  in each case in form  satisfactory to the Warrant Agent. The Warrants
shall  be  freely  transferable,  subject  only to  compliance  with  applicable
securities laws.

     5. Exercise of Warrants.

     5.1 Exercise Price and Term.  Each Warrant shall entitle the Holder thereof
to purchase  from the Company  one Warrant  Share at a purchase  price per share
equal to $14.50 (the  "Exercise  Price"),  as such purchase  price and number of
Warrant  Shares may be adjusted from time to time pursuant to the  provisions of
Section 9 hereof,  payable in full at the time of exercise of such Warrant.  The
Warrants may be exercised, in whole or in part, at any time or from time to time
during the  three-year  period  commencing  on September  15, 2000 and ending at
5:00~p.m.,  New York City time, on September 15, 2003 or, in the event such date
is a Saturday or Sunday, or a legal holiday on which the New York Stock Exchange
("NYSE") is closed,  then the Warrants may be exercised until 5:00~p.m.  Eastern
time on the next succeeding  Business Day (the  "Expiration  Date"). A "Business
Day" shall be a day on which banks in New York City are open for business. After
the Expiration  Date, any  unexercised  Warrants shall be void and all rights of
the Holders with respect thereto shall cease.


    5.2 Payment of Exercise Price. At the election of any Holder, the aggregate
Exercise Price for any Warrants being  exercised may be paid: (a) in cash in the
amount of the aggregate Exercise Price then in effect for the number of Warrants
being  exercised,  (b) by  surrender  to the  Company of shares of Common  Stock
having an aggregate Fair Market Value (as defined below) on the date of exercise
equal to the aggregate  Exercise Price then in effect for the number of Warrants
being  exercised,  (c) by a surrender  of Warrants  covering a number of Warrant
Shares having an aggregate Fair Market Value,  net of the  applicable  aggregate
Exercise Price  therefor,  equal to the aggregate  Exercise Price then in effect
for the number of  Warrants  being  exercised,  or (d) by a  combination  of the
aforementioned  methods of payment.  For purposes of this  Agreement,  the "Fair
Market  Value"  per share of Common  Stock on a given  date shall be: (i) if the
Common  Stock is listed on a national  securities  exchange  or  included on the
NASDAQ National Market, the closing price per share of Common Stock on such date
(or, if there was no trading on such date,  on the next  preceding  day on which
there  was  trading);  (ii) if the  Common  Stock is not  listed  on a  national
securities  exchange or included on the Nasdaq National  Market,  the average of
the closing bid and asked  quotations  per share of Common  Stock as reported by
Nasdaq  (or  the  National   Quotation   Bureau   Incorporated  or  any  similar
organization) on such date (or, if there were no quotations for the Common Stock
on such date,  on the next  preceding  day on which  there were  quotations)  as
provided by such organization;  and (iii) if the Common Stock is not traded on a
national  securities  exchange or included on the Nasdaq National Market and bid
and asked  quotations  are not  provided  by Nasdaq (or the  National  Quotation
Bureau Incorporated or any similar organization), as determined by the agreement
of the parties in good faith or, in the absence of such agreement, as determined
pursuant  to  arbitration  under  the  auspices  of  the  American   Arbitration
Association;  provided, that if the Fair Market Value is determined by agreement
of the parties or arbitration, such agreement or arbitration determination shall
be  provided  to the  Warrant  Agent in  connection  with the  exercise  of such
Warrants.

     5.3 Exercise Procedure. Warrants may be exercised by their surrender to the
Company at the Warrant Agent's principal  executive offices in Charlotte,  North
Carolina, with the election to purchase form attached thereto duly completed and
executed, accompanied by payment of the aggregate Exercise Price for the Warrant
Shares to be purchased upon such exercise.  Payment for the Warrant Shares shall
be made (a) if payment is to be made in cash,  by a certified or bank  cashier's
check  payable  to the order of the  Company or by wire  transfer  to an account
designated  by the Company,  (b) if payment is to be made through a surrender of
shares of Common Stock, by surrender of certificates  duly endorsed for transfer
(with all transfer taxes paid or provided for), and (c) if payment is to be made
by a surrender of  Warrants,  by surrender  of  certificates  representing  such
Warrants. The Warrant Agent shall promptly forward to the Company all monies and
certificates  for shares of Common Stock  received by the Warrant  Agent for the
purchase of shares of Common Stock  through the  exercise of Warrants.  Promptly
after the exercise of any Warrants and the payment of the Exercise  Price,  upon
compliance  with  Section 6 hereof,  the Company  shall issue a  certificate  or
certificates  for the number of full Warrant  Shares to which the Holder thereof
is entitled,  registered in accordance  with the  instructions  set forth in the
election  to  purchase,  together  with cash as  provided  in Section 11 of this
Warrant  Agreement payable in respect of fractional shares and (if applicable) a
new Warrant Certificate  representing all remaining  unexercised  Warrants.  The
Warrant Agent is hereby irrevocably authorized to countersign and to deliver the
required new Warrant  Certificate(s)  pursuant to the provisions of this Section
and of Section 4 of this Warrant Agreement and the Company,  whenever  requested
by the Warrant  Agent,  will supply the Warrant Agent with Warrant  Certificates
duly  executed  on behalf of the Company for such  purpose.  All Warrant  Shares
shall be duly authorized, validly issued, fully paid, non-assessable and free of
preemptive rights,  and listed on the NYSE or on such other national  securities
exchange  or Nasdaq  National  Market,  as the case may be, on which such Common
Stock is listed or included. Upon compliance with Section 6 hereof, certificates
representing  such Warrant  Shares and remaining  unexercised  Warrants shall be
issued in such names and denominations,  and shall be delivered to such persons,
as are specified by written instructions of the Holder.


     5.4  Record  Holder.  Each  person in whose name any such  certificate  for
Warrant  Shares is issued  shall for all  purposes  be deemed to have become the
holder of record of the  Warrant  Shares  represented  thereby  on the date upon
which such Warrants were surrendered for exercise, accompanied by payment of the
aggregate Exercise Price and any taxes as aforesaid, irrespective of the date of
issuance or delivery of such certificate for Warrant Shares; provided,  however,
that if,  at the date of the  surrender  of such  Warrants  and  payment  of the
aggregate  Exercise Price and any taxes, the transfer books for the Common Stock
or any other class of stock purchasable upon the exercise of such Warrants shall
be closed,  the  certificates for the Warrant Shares or for shares of such other
class of stock in respect of which such Warrants are then  exercisable  shall be
issuable as of the date on which such books shall next be opened (whether before
or after the  Expiration  Date) and, until such date, the Company shall be under
no duty to deliver any certificate for such Warrant Shares or for shares of such
other class of stock.

     6. Payment of Taxes.  The Company shall promptly pay all documentary  stamp
taxes attributable to the issuance of Warrants or the issuance of Warrant Shares
upon the exercise of any  Warrants,  except that any taxes payable in connection
with the  issuance of Warrants or Warrant  Shares in any name other than that of
the Holder of the Warrants  surrendered shall be paid by such Holder and, if any
such tax would otherwise be payable by the Company, no such issuance or delivery
shall be made unless and until the person  requesting  such issuance has paid to
the Company the amount of any such tax or it is established to the  satisfaction
of the Company that any such tax has been paid.  The Company  shall  provide the
Warrant  Agent  with  information  as to any  applicable  taxes  to be  paid  in
connection  with the  issuance,  transfer or exercise of the  Warrants,  Warrant
Certificates and Warrant Shares, and the Warrant Agent shall be entitled to rely
on such  information in undertaking its duties under this Warrant  Agreement and
shall not be liable for any action taken in reliance thereon.  In no event shall
the Warrant  Agent be  responsible  for paying any such  taxes,  but the Warrant
Agent shall apply any tax payments received by it to the Company's account.

     7.  Replacement   Warrants.  In  case  any  Warrant  Certificate  shall  be
mutilated,  lost,  stolen or  destroyed,  the Company  shall  issue,  and,  upon
instruction of the Company,  the Warrant Agent shall countersign and deliver, in
exchange and  substitution  for and upon  cancellation of the mutilated  Warrant
Certificate  or in lieu of and  substitution  for the lost,  stolen or destroyed
Warrant Certificate, a new Warrant Certificate of like tenor and representing an
equivalent right or interest,  but only upon receipt of evidence satisfactory to
the Company and the Warrant  Agent of such loss,  theft or  destruction  of such
Warrant   Certificate,   together  with  an  appropriate   agreement   regarding
indemnification of the Warrant Agent and the Company relating to the issuance of
a  replacement   Warrant   Certificate.   Applicants  for   substitute   Warrant
Certificates  shall also comply with such other  reasonable  regulations and pay
such reasonable charges as the Company or the Warrant Agent shall prescribe.

         8.       Warrants.

     8.1 Reservation of Warrant  Shares.  The Company shall at all times reserve
and keep available for issuance the number of its authorized but unissued shares
of Common Stock or other capital stock sufficient to permit the exercise in full
of the  Warrants and any  transfer  agent for the Common Stock or other  capital
stock  issuable upon the exercise of Warrants  shall be directed at all times to
reserve such number as shall be sufficient  for such  purpose.  The Company will
keep a copy of this Warrant  Agreement on file with each such transfer agent and
will supply such transfer agent with duly executed stock  certificates  for such
purpose  and will  provide  or  otherwise  make  available  any cash that may be
payable as provided in  Section~11  hereof.  All Warrants  surrendered  upon the
exercise  thereof shall be canceled by the Warrant Agent and shall thereafter be
delivered to the Company, and such canceled Warrants shall constitute sufficient
evidence of the number of shares of Common Stock which have been issued upon the
exercise of such Warrants.  After the  Expiration  Date, the Warrant Agent shall
certify to the Company the total aggregate amount of Warrants then  outstanding,
and  thereafter,  no shares  shall be subject to  reservation  in respect of any
unexercised Warrants.

     8.2 Purchase of Warrants by the Company.  The Company shall have the right,
except as limited by law,  other  agreement or herein,  to purchase or otherwise
acquire Warrants at such times, in such manner and for such  consideration as it
may deem appropriate.

    8.3 Redemption of Warrants by the Company. The Company shall have the right
to redeem  any or all of the  Warrants  at $1.00 per  Warrant  at any time after
September 15, 2000,  except that the Warrants may not be so redeemed  unless the
closing  price (as  determined in accordance  with  Section~5.1  hereof) for the
Common  Stock on any 20 trading days within a period of 30  consecutive  trading
days  ending no more than five days prior to the date upon which  notice of call
is first mailed is at least 150% of the Exercise Price in effect on such day.

     Notice of the redemption shall be mailed at least 30 days prior to the date
scheduled for such redemption (the "Redemption  Date") and shall be given to the
Warrant  Agent and the Holders in accordance  with the  provisions of Section~20
hereof.  Such  notice  shall state the date,  place and price of such call.  The
notice of  redemption  also shall be given no more than 60 nor less than 30 days
prior to the  mailing of notice to the  Holders  pursuant  to this  Section,  by
publishing,  at least once in the Wall Street Journal (national edition),  or if
such edition is not then published,  then in one or more  newspapers  printed in
the  English  language  and in general  circulation  in New York City,  and such
notice shall state the date, place and price of such  redemption.  If fewer than
all the Warrants  outstanding  at the time are to be called,  the Company  shall
give the Warrant Agent written notice as to the aggregate  number of Warrants to
be called,  and  thereupon  the Warrant  Agent shall  select the  Warrants to be
called  in  such  manner  as  it  deems,  in  its  discretion,  to be  fair  and
appropriate;  provided, that the Warrant Agent shall not be liable to any Holder
for such selection and shall be  indemnified by the Company  pursuant to Section
14(v)  for any  liability  arising  out of such  selection.  Each  Holder  shall
continue to have the right to exercise  the Warrant  until the close of business
on the Business Day which is 15 days prior to the Redemption  Date. No less than
one Business Day prior to the  Redemption  Date,  the Company shall deposit with
the Warrant Agent funds  sufficient  to purchase all of the Warrants  called for
redemption  which are  outstanding at the close of business on the date when the
right to exercise expired.

     8.4  Cancellation  of Warrants.  In the event the Company shall purchase or
otherwise acquire Warrants, the same shall thereupon be delivered to the Warrant
Agent and be canceled by it and  retired.  The  Warrant  Agent shall  cancel any
Warrant surrendered for exchange, substitution, transfer or exercise in whole or
in part.  Warrant  Certificates  so cancelled  shall be delivered to the Company
from time to time upon request or disposed of at the instruction of the Company.

     9. Adjustments.

     9.1 Adjustment of Exercise Price.

     9.1.1 Initial Exercise Price.  The Exercise Price,  which initially will be
as provided in Section 5.1, shall be adjusted and  readjusted  from time to time
as provided in this Section 9.1 and, as so adjusted or readjusted,  shall remain
in effect until a further adjustment or readjustment thereof is required by this
Section 9.1.

     9.1.2 Issuance of Additional  Shares of Common Stock.  In case the Company,
at any time after the Record Date, shall issue additional shares of Common Stock
for no  consideration  in  connection  with a  dividend,  stock  split  or other
distribution  on  the  Common  Stock   (including,   without   limitation,   any
distribution of Common Stock by way of spin-off,  reclassification  or corporate
rearrangement), then, and in each such case, the Exercise Price shall be reduced
concurrently  with such  issuance to a price  (calculated  to the nearest  cent)
determined by multiplying such Exercise Price by a fraction of which:


    (a) the numerator shall be the number of shares of Common Stock outstanding
immediately prior to such issuance; and

     (b)  the  denominator  shall  be the  number  of  shares  of  Common  Stock
outstanding immediately after such issuance.

     9.1.3 Dividends and Distributions.  In case the Company,  at any time after
the Record  Date,  shall pay or make a  dividend  or other  distribution  on the
Common Stock (including,  without  limitation,  any distribution of stock (other
than  Common  Stock)  or  other  securities,   including   securities  that  are
convertible  into or exchangeable  or exercisable for Common Stock,  property or
options  by  way  of   dividend,   spin-off,   reclassification   or   corporate
rearrangement)  then,  and in each  such  case,  the  Exercise  Price in  effect
immediately  prior to the close of  business  on the  record  date fixed for the
determination  of the  holders  of the Common  Stock  entitled  to receive  such
dividend or other  distribution  shall be reduced,  effective as of the close of
business on such  record  date,  to a price  (calculated  to the  nearest  cent)
determined by multiplying such Exercise Price by a fraction of which:

     (a) the numerator shall be the Exercise Price in effect  immediately  prior
to the close of business on such record date minus the value on such record date
of such dividend or other distribution (as determined in good faith by the Board
of Directors of the Company) applicable to one share of Common Stock; and

     (b) the  denominator  shall be such  Exercise  Price in effect  immediately
prior to the close of business on such record date;

     provided,  however,  that no such reduction  shall be made pursuant to this
Section~9.1.3 for a dividend payable in shares of Common Stock (which is subject
to  Section~9.1.2)  or payable in cash or other property and declared out of the
earned surplus (i.e.,  retained  earnings) of the Company (excluding any portion
thereof  resulting  from a revaluation  of property) or which is declared but is
then not paid or made. For purposes of the foregoing, a dividend or distribution
payable  other than in cash shall be  considered  payable out of earned  surplus
only to the extent  that such earned  surplus is charged an amount  equal to the
fair value of such dividend or distribution at the time of payment as determined
in good  faith by the  Board of  Directors  of the  Company.  If a  dividend  or
distribution  covered  under  this  Section  9.1.3  is  declared  prior  to  the
Expiration Date but not paid by such date, the Expiration Date shall be extended
until the payment thereof.

     9.1.4 Adjustments for Combinations,  etc. In case the outstanding shares of
Common  Stock  shall  be  combined  or  consolidated,   by  reclassification  or
otherwise, into a lesser number of shares of Common Stock, the Exercise Price in
effect  immediately  prior  to  such  combination  or  consolidation   shall  be
proportionately   increased   concurrently   with  the   effectiveness  of  such
combination or consolidation.

     9.1.5 Minimum Adjustment of Exercise Price. If the amount of any adjustment
of the Exercise Price required  pursuant to this Section~9.1  would be less than
1% of  the  Exercise  Price,  such  amount  shall  be  carried  forward,  and an
adjustment  with respect  thereto shall be made at the time of and together with
any subsequent  adjustment that,  together with such amount and any other amount
or amounts so  carried  forward,  shall  aggregate  at least 1% of the  Exercise
Price.


     9.1.6 Minimum Exercise Price.  Notwithstanding anything to the contrary set
forth herein,  no  adjustment  provided for in this Section 9.1 shall reduce the
Exercise Price below the par or stated value of the Common Stock and the Company
shall have no obligation  to change such value to permit a further  reduction of
the  Exercise  Price;  provided,  however,  that,  except  in the  event  of any
transactions of the type  contemplated  under Section 9.1.4 hereof,  the Company
agrees not to change the par or stated value of the Common Stock.

     9.1.7 Voluntary  Adjustment by the Company.  The Company may at its option,
at any time during the term of the  Warrants,  reduce the then current  Exercise
Price to any amount and for any period of time deemed  appropriate  by the Board
of Directors of the Company.

     9.2  Adjustment of Number of Warrant  Shares.  Upon each  adjustment of the
Exercise  Price pursuant to the provisions of Section 9.1, the number of Warrant
Shares that the Holder of a Warrant  shall be entitled to receive upon  exercise
thereof shall be adjusted to equal that number of Warrant  Shares  determined by
multiplying  the number of Warrant Shares issuable upon exercise of such Warrant
immediately  prior to such  adjustment  of the  Exercise  Price by a fraction of
which:

     (a) the numerator shall be the Exercise Price in effect  immediately  prior
to such adjustment of the Exercise Price; and

     (b) the  denominator  shall be the  Exercise  Price in  effect  immediately
following such adjustment of the Exercise Price.

     9.3 Notice,  Evidence of  Adjustments.  Within a reasonable  time after the
close of the quarterly  fiscal  period of the Company  during which the Exercise
Price is adjusted as herein  provided,  the Company  shall file with the Warrant
Agent a certificate  signed by an executive officer of the Company setting forth
the adjusted  Exercise Price and adjusted number of Warrant Shares issuable upon
exercise of each  Warrant.  The Warrant Agent shall have no duty with respect to
any such certificate filed with it except to keep the same on file and available
for inspection by the Holders during reasonable  business hours, and the Warrant
Agent  may  conclusively  rely  upon  the  latest  certificate  furnished  to it
hereunder.  In the absence of a certificate  having been furnished,  the Warrant
Agent may conclusively rely upon the provisions of the Warrant Certificates with
respect to the Common Stock  deliverable  upon  exercise of the Warrants and the
Exercise  Price.  The  Company  shall  retain  a  firm  of  independent   public
accountants of nationally recognized standing selected by the Board of Directors
(who  may be the  regular  accountants  employed  by the  Company)  to make  any
computation  required by this Section 9, and a  certificate  signed by such firm
shall accompany said notice and shall be conclusive  evidence of the correctness
of such adjustments.  Notwithstanding  anything in this Warrant Agreement to the
contrary,  the  Warrant  Agent  shall  not at any  time  be  under  any  duty or
responsibility  to any  Holder or  beneficial  owner of a Warrant  to  determine
whether any facts exist which may require any  adjustment  pursuant to Section 9
hereof  or  otherwise,  or with  respect  to the  nature  or  extent of any such
adjustment  made  or  with  respect  to  the  method  employed  in  making  such
adjustment,  and shall be indemnified and held harmless to the extent  specified
in Section 14(v) hereof in connection with any claim or dispute arising from any
such adjustment, any failure or asserted failure to make such adjustment, or any
insufficiency or asserted insufficiency of any such adjustment.

     9.4 Statement on Warrants.  Irrespective of any adjustments in the Exercise
Price or the  number  or kind of shares  purchasable  upon the  exercise  of the
Warrants,  Warrants theretofore or thereafter issued may continue to express the
same price and number and kind of shares as are stated in the Warrants initially
issuable pursuant to this Warrant Agreement.


    10. Consolidation, Merger, Sale of Assets, Reorganization, etc.

     10.1 General  Provisions.  In case the Company at any time after the Record
Date  (a)~shall  consolidate  with or merge into any other person and not be the
continuing or surviving  person of such  consolidation  or merger,  or (b~shall
permit any other  person to  consolidate  with or merge into the Company and the
Company shall be the continuing or surviving person but, in connection with such
consolidation or merger, the Common Stock or other securities then issuable upon
exercise of the Warrants  shall be changed into or exchanged for cash,  stock or
other securities or property, or (c)~shall transfer, directly or indirectly, all
or substantially all its properties and assets to any other person, or (d)~shall
effect a capital reorganization or reclassification of the Common Stock or other
securities  then issuable  upon  exercise of the Warrants  (other than a capital
reorganization  or  reclassification  resulting in an adjustment of the Exercise
Price  as  provided  in  Section  9.1),  then,  and in the  case  of  each  such
transaction,  the Company shall make proper  provision such that, upon the terms
and in the  manner  provided  in this  Warrant  Agreement,  the  Holder  of each
Warrant,  upon the exercise  thereof at any time after the  consummation of such
transaction, shall be entitled to receive, at the Exercise Price then in effect,
in lieu of the Common  Stock or other  securities  issuable  upon such  exercise
immediately  prior to such  transaction,  the  amount  of  cash,  stock or other
securities  or property to which such  Holder  would have been  entitled if such
Warrant  had been  exercised  in full  immediately  prior  to such  transaction,
subject to adjustments  subsequent to such  transaction as nearly  equivalent as
possible to the adjustments provided for in Section 9 and this Section 10.

     10.2 Assumption of Obligation.  Notwithstanding  anything contained in this
Warrant  Agreement  to the  contrary,  the  Company  shall not effect any of the
transactions  described in Section 10.1(a), (b), (c) or (d) unless, prior to the
consummation  thereof,  the person (other than the Company) that may be required
to deliver any cash,  stock or other securities or property upon exercise of any
Warrant  as  provided  herein  shall  assume,  by  written  instrument,  (a)~the
obligations of the Company under this Warrant Agreement and the Warrants (and if
the  Company  shall  survive  the  consummation  of any such  transaction,  such
assumption shall not release the Company from any continuing  obligations of the
Company under this Warrant Agreement and the Warrants) and (b)~the obligation to
deliver to such Holder such cash, stock or other securities or other property as
such Holder may be entitled to receive in accordance with the provisions of this
Section~10; provided, however, that this Section~10.2 shall not be applicable to
any transaction  described in Section~10.1(c) if all such cash, stock,  property
or other  consideration  receivable  upon  consummation  of such  transaction is
delivered to the Company at such time.  Such person shall  similarly  deliver to
the Company an opinion of counsel to the effect that this Warrant  Agreement and
the Warrants shall continue in full force and effect after any such  transaction
and that the terms hereof  (including,  without limitation all of the provisions
of Section~9 and this  Section~10)  and thereof shall be applicable to the cash,
stock or other  securities  or  property  that such  person may be  required  to
deliver upon any exercise of the Warrants.


     10.3 No Dilution or Impairment.  The Company shall not, by amendment of its
certificate of  incorporation or by-laws or through any  consolidation,  merger,
reorganization,   transfer  of  assets,  dissolution,   issue,  sale,  grant  or
assumption of securities or any other voluntary  action,  avoid or seek to avoid
the observance or  performance of any of the terms of this Warrant  Agreement or
the Warrants,  but will at all times, whether or not requested to do so, in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or  appropriate in order to protect the rights of the
Holders against dilution or other impairment. Without limiting the generality of
the foregoing,  but subject to  Section~9.1.6,  the Company agrees that it shall
take all such reasonable action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and  non-assessable  shares
of stock upon the exercise of all Warrants from time to time outstanding.

     11.  Fractional  Interests.  The  Company  shall not be  required  to issue
fractions of shares of Common Stock upon the exercise of any  Warrants.  If more
than one Warrant  shall be  presented  for exercise at the same time by the same
Holder,  the number of Warrant  Shares that shall be issuable  upon the exercise
thereof shall be computed on the basis of the aggregate number of Warrant Shares
purchasable on exercise of the Warrants so presented. If any fraction of a share
of Common Stock would, except for the provisions of this Section 11, be issuable
on the exercise of any Warrant,  the Company shall purchase such fraction for an
amount in cash equal to the same  fraction of the Fair Market Value of one share
of Common Stock on the date of exercise.

     12.  Securities Law Compliance.  The Company covenants that it will use its
reasonable  best  efforts to timely file all reports  required to be filed by it
under the  Securities  Act of 1933, as amended (the "Act"),  and the  Securities
Exchange Act of 1934, as amended (the "Exchange Act"). So long as the Company is
subject to the periodic reporting  requirements of the Exchange Act, the Company
covenants to use its  reasonable  best efforts to make publicly  available  such
information  as may be  necessary to permit the sale of Warrant  Shares  without
registration  under the Act pursuant to the exemption provided by Rule 144 under
the Act, as such rule may be amended  from time to time,  or any similar rule or
regulation  hereafter  adopted by the Securities and Exchange  Commission.  Upon
request of any Holder of Warrants or Warrant Shares, the Company will deliver to
such  Holder a  written  statement  as to  whether  it has  complied  with  such
information requirements.

     13.  Merger  or  Consolidation  or  Change of Name of  Warrant  Agent.  Any
corporation or company which may succeed to the corporate  trust business of the
Warrant Agent by any merger, consolidation, asset transfer or otherwise shall be
the successor to the Warrant Agent hereunder  without the execution or filing of
any paper or any further act on the part of any of the parties hereto,  provided
that such corporation  would be eligible as a successor  Warrant Agent under the
provisions  of Section~15  of this Warrant  Agreement.  In case at the time such
successor  to the  Warrant  Agent  shall  succeed to the agency  created by this
Warrant  Agreement,  any of the Warrants shall have been  countersigned  but not
delivered,   any  such   successor   to  the   Warrant   Agent   may  adopt  the
countersignature  of the original  Warrant  Agent and deliver  such  Warrants so
countersigned.  In case at any  time  the  name of the  Warrant  Agent  shall be
changed and at such time any of the Warrants shall have been  countersigned  but
not delivered,  the Warrant Agent may adopt the countersignature under its prior
name and deliver  Warrants  so  countersigned.  In all such cases such  Warrants
shall  have  the  full  force  provided  in the  Warrants  and in  this  Warrant
Agreement.

     14. Duties of Warrant  Agent.  The Warrant Agent  undertakes the duties and
obligations  imposed by this  Warrant  Agreement  upon the  following  terms and
conditions,  by all of which the Company and the  Holders,  by their  acceptance
thereof, shall be bound:

     (i) The statements of fact and recitals contained herein and in the Warrant
Certificates shall be taken as statements of the Company,  and the Warrant Agent
assumes no responsibility  for the correctness of any of the same except such as
describe the Warrant  Agent.  The Warrant Agent assumes no  responsibility  with
respect to the distribution of the Warrants except as herein expressly provided.


    (ii) The  Warrant  Agent  shall not be  responsible  for any failure of the
Company to comply with any of the covenants in this Agreement or in the Warrants
to be complied with by the Company.

     (iii) The Warrant  Agent may consult at any time with counsel  satisfactory
to it (who may be counsel for the Company) and the Warrant  Agent shall incur no
liability  or  responsibility  to the Company or to any Holder in respect of any
action  taken,  suffered  or  omitted  by it  hereunder  in  good  faith  and in
accordance  with the opinion or the advice of such  counsel.  The Company  shall
promptly pay the reasonable fees and expenses of any such counsel.

     (iv) The Warrant  Agent shall incur no liability or  responsibility  to the
Company  or to any  Holder  for any  action  taken in  reliance  on any  notice,
resolution,  waiver, consent, order, certificate or other instrument believed by
it to be genuine and to have been signed,  sent or presented by the proper party
or parties.

     (v) The  Company  agrees to pay to the  Warrant  Agent  compensation  to be
agreed for all services  rendered by the Warrant Agent in the performance of its
duties under of this Warrant  Agreement,  to reimburse the Warrant Agent for all
expenses,  taxes  and  governmental  charges  and  other  charges  of  any  kind
reasonably  incurred by the Warrant Agent in the performance of its duties under
this Warrant  Agreement  and to indemnify  the Warrant  Agent and its  officers,
directors,  employees and agents and save each of them harmless  against any and
all losses, liabilities and expenses, including, without limitation,  judgments,
costs and reasonable  counsel fees,  for anything  arising from or in connection
with this Warrant  Agreement or done or omitted by the Warrant Agent pursuant to
this  Warrant  Agreement  except  as a  result  of  the  Warrant  Agent's  gross
negligence, willful misconduct or bad faith. In no event shall the Warrant Agent
be liable for incidental,  indirect, special, consequential or punitive damages.
All such amounts to which any  indemnified  party is entitled under this Section
14(v)  shall  be paid by the  Company  from  time to time as  incurred,  both in
advance of and after the final disposition of any action or claim giving rise to
such  indemnifiable  amount.  This Section 14(v) will survive any termination of
this Warrant Agreement and the resignation or removal of the Warrant Agent.

     (vi) The Warrant  Agent shall not be  obligated to take any legal action or
commence  any  proceeding  on behalf  of,  or at the  request  of,  any party in
connection with this Warrant Agreement, or to appear in, prosecute or defend any
such legal action or proceeding.  The Warrant Agent shall incur no liability for
delaying performance of its obligations under this Warrant Agreement if there is
any  dispute  regarding  the Warrant  Agent's  obligations  hereunder  or if the
Warrant  Agent is  otherwise  uncertain  of its  obligations  hereunder.  Unless
otherwise  agreed  between the Warrant Agent and the Company,  the Warrant Agent
shall have no liability  for interest on any monies at any time  received by the
Warrant  Agent  pursuant to any  provisions  of this  Warrant  Agreement  or the
Warrant  Certificates.  In no  event  shall  the  Warrant  Agent  be  under  any
obligation  to take any other  action  likely to  involve  expenses  unless  the
Company or one or more Holders shall  furnish the Warrant Agent with  reasonable
security and  indemnity  for any costs and expenses  which may be incurred,  but
this  provision  shall not  affect the power of the  Warrant  Agent to take such
action as the Warrant  Agent may  consider  proper,  whether with or without any
such security or indemnity. All rights of action under this Warrant Agreement or
under any of the  Warrants  may be  enforced by the  Warrant  Agent  without the
possession  of any of the  Warrants  or the  production  thereof at any trial or
other  proceeding,  and any such action,  suit or  proceeding  instituted by the
Warrant Agent shall be brought in its name as Warrant Agent, and any recovery or
judgment shall be for the ratable  benefit of the Holders,  as their  respective
rights and interests may appear.

     (vii) The Warrant Agent and any stockholder,  director, officer, partner or
employee of the Warrant  Agent may buy,  sell or deal in any of the  Warrants or
other  securities  of  the  Company  or  become  pecuniarily  interested  in any
transaction  in which the Company may be  interested,  or contract  with or lend
money to or otherwise  act as fully and freely as though it were not the Warrant
Agent under this  Warrant  Agreement  or such  stockholder,  director,  officer,
partner or employee. Nothing herein shall preclude the Warrant Agent from acting
in any other capacity for the Company or for any other legal entity.

     (viii)  The  Warrant  Agent  shall  act  hereunder  solely as agent for the
Company and its duties shall be determined solely by the provisions  hereof, and
no implied duties of the Warrant Agent shall be read into this Warrant Agreement
or  any  Warrant  Certificate  or  other  document  or  instrument  executed  in
connection  herewith.  The  Warrant  Agent does not assume  any  obligations  or
relationship  of agency or trust for or with the Holders of the  Warrants or the
beneficial  owners of the Warrant Shares.  The Warrant Agent shall not be liable
for  anything  which it may do or  refrain  from doing in  connection  with this
Warrant Agreement except for its own gross negligence, willful misconduct or bad
faith.

     (ix) The Warrant Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its  attorneys,  agents  or  employees,  and  the  Warrant  Agent  shall  not be
answerable or accountable for any such attorneys, agents or employees or for any
loss to the  Company  resulting  from  their  neglect  or  misconduct,  provided
reasonable  care had been  exercised in the selection  and continued  employment
thereof.

     (x)  The  Warrant  Agent  is  hereby  authorized  and  directed  to  accept
instruction  with respect to the  performance  of its duties  hereunder from any
executive  officer of the Company,  and to apply to such  officers for advice or
instructions  in  connection  with its  duties,  and shall not be liable for any
action taken or suffered to be taken by it in accordance  with  instructions  of
any such officer or officers. Any request, direction,  election, order or demand
of the Company shall be  sufficiently  evidenced by an instrument  signed in the
name of the Company by an executive  officer  (unless other  evidence in respect
thereof be herein specifically  prescribed);  and any resolution of the Board of
Directors may be evidenced to the Warrant  Agent by a copy thereof  certified by
the Secretary or an Assistant Secretary of the Company.

     (xi) The Warrant Agent shall not be under any  responsibility in respect of
the validity of this  Warrant  Agreement or the  execution  and delivery  hereof
(except  the due  execution  hereof by the  Warrant  Agent) or in respect of the
validity or execution of any Warrant (except its countersignature  thereof); nor
shall  the  Warrant   Agent  by  any  act   hereunder  be  deemed  to  make  any
representation or warranty as to the authorization or reservation of any Warrant
Shares or other stock) to be issued  pursuant to this  Warrant  Agreement or any
Warrant, or as to whether any Warrant Shares (or other stock) will, when issued,
be validly issued, fully paid and nonassessable,  or as to the Exercise Price or
the number or amount of Warrant  Shares or other  securities  or other  property
issuable upon exercise of any Warrant.


    15. Change of Warrant Agent. The Warrant Agent may resign and be discharged
from its duties under this Warrant  Agreement by giving to the Company notice in
writing,  and to the  Holders  notice by mailing  such  notice to the Holders at
their  addresses  appearing  on  the  Warrant  register,  of  such  resignation,
specifying a date when such resignation shall take effect. The Warrant Agent may
be removed by like  notice to the  Warrant  Agent from the  Company and the like
mailing  of notice to the  Holders.  If the  Warrant  Agent  shall  resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a  successor  to the  Warrant  Agent.  If the  Company  shall  fail to make such
appointment  within a period of thirty (30) days after such  removal or after it
has been notified in writing of such  resignation or incapacity by the resigning
or  incapacitated  Warrant  Agent or after the Company has received  such notice
from a Holder of a Warrant (who shall, with such notice,  submit his Warrant for
inspection by the Company), then such Holder may apply to any court of competent
jurisdiction  for the  appointment  of a  successor  to the Warrant  Agent.  Any
successor  Warrant Agent,  whether  appointed by the Company or by such a court,
shall be a bank or trust company, in good standing,  incorporated under the laws
of the  United  States  of  America  or any state  thereof.  The  Company  shall
indemnify and hold harmless the Warrant Agent to the extent set forth in Section
14(v)  hereof for any  failure  to  appoint a  successor  Warrant  Agent.  After
appointment,  the successor  Warrant Agent shall be vested with the same powers,
rights,  duties  and  responsibilities  as if it had  been  originally  named as
Warrant  Agent  without  further act or deed and the former  Warrant Agent shall
deliver and  transfer to the  successor  Warrant  Agent all  canceled  Warrants,
records and property at the time held by it  hereunder,  and execute and deliver
any further assurance or conveyance  necessary for the purpose.  Failure to file
or mail any notice  provided  for in this  Section  15,  however,  or any defect
therein,  shall not affect the  validity  of the  resignation  or removal of the
Warrant Agent or the appointment of the successor Warrant Agent, as the case may
be.

     160  Identity of Transfer  Agent.  Forthwith  upon the  appointment  of any
transfer  agent for the  shares of Common  Stock or of any  subsequent  transfer
agent for the shares of Common  Stock or other shares of the  Company's  capital
stock  issuable upon the exercise of the rights of purchase  represented  by the
Warrants, the Company will file with the Warrant Agent a statement setting forth
the name and address of such transfer agent.

     170 Notices to Holders.

     17.1 No Rights as Stockholders. Nothing contained in this Warrant Agreement
or in any of the  Warrants  shall be construed  as  conferring  upon the Holders
thereof  as such the right to vote or to receive  dividends  or to consent or to
receive notice as stockholders in respect of the meetings of stockholders or the
election of  directors  of the Company or any other  matter or any other  rights
whatsoever as stockholders of the Company.

     17.2 Required Notice to Holders from the Company.  In the event the Company
intends to:

     (a) make any  distribution on or with respect to its Common Stock (or other
securities  that may then be  issuable  in lieu  thereof  upon the  exercise  of
Warrants), including without limitation any dividend or distribution from earned
surplus,  any  dividend  or  distribution  of  stock,  assets  or  evidences  of
indebtedness, or any similar distribution,

     (b) issue subscription rights or warrants to holders of its Common Stock,

     (c) consolidate or merge with or into another entity,

     (d) liquidate,  dissolve or sell or otherwise  dispose of substantially all
its assets, or

     (e) take any  other  action  that  would  result  in an  adjustment  to the
Exercise  Price or an adjustment to the number of Warrant Shares that the Holder
of a Warrant shall be entitled to receive upon exercise thereof,


     then the Company  shall cause a notice of its intention to take such action
to be  delivered to the Warrant  Agent and, at the  Company's  expense,  sent by
first-class mail, postage prepaid, at least 10 days prior to the date fixed as a
record date or the date of closing the transfer books for the  determination  of
the stockholders  entitled to such distribution or issuance or to vote upon such
proposed consolidation, merger, liquidation, dissolution, sale or disposition to
each Holder at its address  appearing  on the Warrant  register,  but failure to
mail or to receive such notice or any defect  therein or in the mailing  thereof
shall not  affect  the  validity  of any action  taken in  connection  with such
distribution, issuance, consolidation, merger, liquidation, sale or conveyance.

     180 Governing  Law. The validity,  interpretation  and  performance of this
Warrant Agreement,  of each Warrant issued hereunder and of the respective terms
and  provisions  thereof  shall be governed by the laws of the State of New York
without giving effect to principles of conflicts of law.

     190  Counterparts.  This Warrant  Agreement  may be executed in two or more
counterparts,  each of which when so executed shall be deemed to be an original;
but such counterparts shall together constitute but one and the same instrument.

     200 Notices.  Any notice or demand required by this Warrant Agreement to be
given or made by any Holder or the Warrant  Agent to or on the Company  shall be
sufficiently  given or made if sent by  registered  or certified  mail,  postage
prepaid, or by facsimile transmission addressed as follows:

                  Insignia/ESG Holdings, Inc.
                  200 Park Avenue
                  New York, New York  10166
                  Telephone:  (212) 984-6644
                  Facsimile:  (212) 984-7153
                  Attention:  Adam B. Gilbert, Esq.

                  with a copy to:
                  Proskauer Rose LLP
                  1585 Broadway
                  New York, New York  10036
                  Tel:  (212) 969-3220
                  Fax: (212) 969-2900
                  Attn:  Allan R. Williams, Esq.

     Any notice or demand required by this Warrant Agreement to be given or made
by the Company or the Warrant  Agent to or on the Holder of any Warrant shall be
sufficiently  given or made,  whether or not such Holder receives the notice, if
sent by first-class mail, postage prepaid,  addressed to such Holder at his last
address as shown on the books of the Company.

     Any notice or demand required by this Warrant Agreement to be given or made
by the  Company or any Holder to or on the Warrant  Agent shall be  sufficiently
given or made if sent by registered or certified mail,  postage  prepaid,  or by
facsimile transmission addressed as follows:

                  First Union National Bank
                  Shareholder Services Group
                  1525 W. T. Harris Blvd., #3C3
                  Charlotte, North Carolina  28262-1153
                  Tel:  (704) 590-7387
                  Fax:  (704) 590-7598
                  Attn: Myron O. Gray

     210 Supplements and Amendments.  The Company and the Warrant Agent may from
time to time  supplement  or amend this  Warrant  Agreement in order to cure any
ambiguity or to correct or supplement any provision  contained  herein which may
be defective or  inconsistent  with any other provision  herein,  or to make any
other provisions in regard to matters or questions  arising  hereunder which the
Company and the Warrant  Agent may deem  necessary or desirable  and which shall
not be  inconsistent  with the  provisions  of the  Warrants and which shall not
adversely affect the interest of the Holders.

     220 Benefits of this Agreement.  Except as provided in Section~23,  nothing
in this Agreement shall be construed to give to any person or corporation  other
than the  Company,  the Warrant  Agent and the  Holders  any legal or  equitable
right, remedy or claim under this Warrant Agreement.

     230  Successors.  All of the  covenants  and  provisions  of  this  Warrant
Agreement  by or for the benefit of the Company or the Warrant  Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

     IN WITNESS WHEREOF,  the parties have executed this Warrant Agreement as of
the date first set forth above.

                       INSIGNIA/ESG HOLDINGS, INC.


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


                       FIRST UNION NATIONAL BANK, as Warrant Agent



                       By: /s/ Joan K. Kaprinski  
                       -------------------------  
                       Name:   Joan K. Kaprinski
                       Title:  Assistant Vice-President




                                     ANNEX A

     THE  WARRANTS  REPRESENTED  HEREBY  HAVE  NOT  BEEN  REGISTERED  UNDER  THE
SECURITIES  ACT OF 1933, AS AMENDED (THE "ACT"),  AND MAY NOT BE OFFERED OR SOLD
EXCEPT  PURSUANT TO (i)~AN  EFFECTIVE  REGISTRATION  STATEMENT UNDER THE ACT, OR
(ii)~AN  AVAILABLE  EXEMPTION  FROM  REGISTRATION  UNDER THE ACT RELATING TO THE
DISPOSITION  OF  SECURITIES  AND UPON  DELIVERY  TO THE COMPANY OF AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, THAT SUCH EXEMPTION
FROM REGISTRATION UNDER THE ACT IS AVAILABLE.



                         COMMON STOCK PURCHASE WARRANTS

C No. __ C                                                C [Number] Warrants C
                     Void After 5:00 p.m. New York City Time
                                                         CUSIP No. 45766D 1 1 8
                              On September 15, 2003

                           INSIGNIA/ESG HOLDINGS, INC.

     THIS CERTIFIES THAT, for value received,  [Name], or registered assigns, is
the Holder of the number of Warrants set forth above, each Warrant entitling the
Holder to purchase at any time during the period  commencing  on  September  15,
2000 and ending at 5:00 p.m.,  New York City time,  on  September  15, 2003 (the
"Expiration Date"), one fully paid and non-assessable share of common stock, par
value  $.01 per share  ("Common  Stock"),  of  Insignia/ESG  Holdings,  Inc.,  a
Delaware  corporation  (the  "Company"),  at a  purchase  price per  share  (the
"Exercise Price") initially equal to $_____,  upon presentation and surrender of
this Warrant Certificate with the Form of Election to Purchase (attached hereto)
duly executed. The number of Warrants evidenced by this Warrant Certificate (and
the number of shares that may be purchased  upon  exercise  hereof (the "Warrant
Shares") set forth above and the  Exercise  Price set forth above are the number
and  Exercise  Price  as of the  date  of  original  issuance  of  this  Warrant
Certificate,  based on the Common Stock as constituted at such date. As provided
in the Warrant Agreement referred to below, the Exercise Price and the number or
kind of shares that may be purchased upon the exercise of the Warrants evidenced
by this Warrant  Certificate are subject to modification and adjustment upon the
happening  of certain  events.  The Warrants  are subject to  redemption  by the
Company for $1.00 per Warrant at any time after  September  15, 2000 except that
the Warrants may not be so redeemed  unless the closing price (as  determined in
accordance  with  Section~5.1 of the Warrant  Agreement) for the Common Stock of
the  Company on any 20 trading  days within a period of 30  consecutive  trading
days  ending  no more than five  days  prior to the date  upon  which  notice of
redemption  is first mailed is at least 150% of the Exercise  Price in effect on
that day.

    This  Warrant  Certificate  is subject to, and entitled to the benefits of,
all of the terms, provisions and conditions of the Warrant Agreement dated as of
September 30, 1998 between the Company and First Union National Bank, a national
banking association incorporated under the laws of the United States of America,
which Warrant Agreement is hereby  incorporated herein reference and made a part
hereof  and to which  reference  is hereby  made for a full  description  of the
rights,  limitations of rights,  duties and immunities hereunder of the Company,
the Warrant Agent and the Holders.  Terms used herein and not otherwise  defined
shall  have the  meanings  set  forth in the  Warrant  Agreement.  A copy of the
Warrant Agreement is on file at the principal executive office of the Company.

     This Warrant Certificate, with or without other Warrant Certificates,  upon
surrender at the principal  office of the Company,  may be exchanged for another
Warrant Certificate or Warrant  Certificates of like tenor,  evidencing Warrants
entitling  the Holder to  purchase a like  aggregate  number of shares of Common
Stock (or other shares) as the Warrants evidenced by the Warrant  Certificate or
Warrant  Certificates  surrendered  entitled  such Holder to  purchase.  If this
Warrant  Certificate  shall be  exercised  in part,  the Holder  hereof shall be
entitled to receive upon surrender hereof another Warrant Certificate or Warrant
Certificates for the number of whole Warrants not exercised.

     The Exercise  Price may be paid in cash or by surrender of the  appropriate
number of  Warrants  or shares of Common  Stock in a cashless  exercise  or in a
combination thereof as provided in Section~5.2 of the Warrant Agreement.

     No  fractional  shares of Common  Stock will be issued upon the exercise of
any Warrant or Warrants  evidenced  hereby,  but in lieu  thereof a cash payment
will be made as provided in Section~11 of the Warrant Agreement.

     No Holder of this Warrant  Certificate,  as such, shall be entitled to vote
or to receive  dividends or to consent or to receive  notice as a stockholder of
the meetings of stockholders for the election of directors of the Company or any
other matter or to any rights  whatsoever as stockholder  of the Company,  until
the Warrant or Warrant  evidenced  by this Warrant  Certificate  shall have been
exercised  and the Warrant  Shares shall have been  delivered as provided in the
Warrant Agreement.

     If this Warrant  Certificate  shall be surrendered  for exercise within any
period  during which the  transfer  books for the Common Stock or other class of
stock  issuable  upon  exercise of this Warrant  Certificate  are closed for any
purpose,  the Company shall not be required to make delivery of certificates for
shares  issuable  upon such  exercise  until the date of the  reopening  of said
transfer books as provided in the Warrant Agreement.


     This Warrant  Certificate  shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Warrant Agent.

Dated: ______________________


INSIGNIA/ESG HOLDINGS, INC.


By:                                                  
Name:
Title:

Attest:                                        Countersigned:
                                               FIRST UNION NATIONAL BANK,
                                               WARRANT AGENT


By:                                            By :                  
    Name:                                          Authorized Officer
    Title:

                               FORM OF ASSIGNMENT




(To be executed by the Holder if such Holder  desires to transfer  this  Warrant
Certificate).

TO INSIGNIA/ESG HOLDINGS, INC.


     FOR VALUE RECEIVED, __________________________________________ hereby sells
assigns  and  transfers  unto  ________________________  (name  and  address  of
assignee must be printed or type written) ______________ Warrants represented by
this Warrant Certificate,  together with all rights, title and interest therein,
and does hereby  irrevocably  constitute and appoint  ______________________  to
transfer said Warrants on the books of the within-named Company, with full power
of  substitution,  and if said number of Warrants  shall not be all the Warrants
represented  by this Warrant  Certificate,  a new Warrant  Certificate  is to be
issued in the name of the undersigned for the remaining Warrants  represented by
this Warrant Certificate.

DATED:                              


                                    Signature                                  

Signature Guaranteed:






NOTICE:

     The signature on the foregoing  assignment  must  correspond to the name as
written upon the face of this Warrant  Certificate in every particular,  without
alteration or enlargement or any change whatsoever.


<PAGE>

                         FORM OF ELECTION TO PURCHASE


(To be executed if Holder  desires to exercise  the  Warrants  evidenced by this
Warrant Certificate).


TO INSIGNIA/ESG HOLDINGS, INC.

The    undersigned     hereby    (1)    irrevocably     elects    to    exercise
___________________________________   Warrants   represented   by  this  Warrant
Certificate  to purchase  __________  shares of Common  Stock (or other  shares)
issuable  upon the exercise of such  Warrants,  (2) makes payment in full of the
aggregate  Exercise  Price for such Warrants by enclosure of a certified or bank
cashier's check therefor or by  surrendering  Warrants or shares of Common Stock
for  application  to the  aggregate  Exercise  Price,  upon  condition  that new
Warrants be issued for the balance of the Warrants  remaining,  and (3) requests
that certificates for shares and Warrants be issued in the name of and delivered
to:

(Please insert social security or other
         identifying number)                                  



(Please print name and address)

If such  number of  Warrants  shall not be all the  Warrants  evidenced  by this
Warrant Certificate, a new Warrant Certificate for the balance remaining of such
Warrants shall be registered in the name of and delivered to:

Please insert social security or other
         identifying number)                                  



(Please print name and address)


DATED:                              

                                    Signature

Signature Guaranteed:

NOTICE:

The signature on the foregoing  election to purchase must correspond to the name
as  written  upon  the face of this  Warrant  Certificate  in every  particular,
without alteration or enlargement or any change whatsoever.