LOANS/APTS
0839/39038-028  NYLIB2/549862 v5                     10/07/98  10:39 AM  (10559)


     WARRANT  AGREEMENT  dated as of  September  15, 1998  between  Insignia/ESG
Holdings,  Inc., a Delaware corporation (the "Corporation"),  and APTS Partners,
L.P., a Delaware limited partnership ("APTS").


                              Preliminary Statement


     This  Warrant  Agreement  sets forth the terms and  conditions  of Warrants
transferred to APTS in connection with the exchange of the warrants held by APTS
to  purchase  shares of Class A Common  Stock,  par  value  $.01 per  share,  of
Insignia  Financial  Group,  Inc. ("IFG") under Warrant Nos. 13 and 14 dated May
10, 1995 of IFG registered in the name of APTS, such exchange resulting from the
distribution by IFG to its stockholders of all of the then outstanding shares of
Common  Stock of the  Corporation  in a  transaction  intending  to qualify as a
tax-free  distribution  and  reorganization  under  Sections  355 and 368 of the
Internal Revenue Code.

     Accordingly, the parties hereto agree as follows.


     1. DefinitionsDefinitions. As used in this Warrant Agreement, the following
terms shall have the following meanings, unless the context otherwise requires.

     a.  "Aggregate  Consideration  Receivable" by the Corporation in connection
with the  issuance  of any  shares of Common  Stock  (or any  rights,  warrants,
options or convertible or exercisable  securities  entitling the holders thereof
to  subscribe  for  or  purchase  any  shares  of  Common  Stock  or  any  stock
appreciation rights entitling the holders thereof to any interest in an increase
in value, however measured, of shares of Common Stock) shall mean the sum of:

     i. the aggregate  consideration  paid to the  Corporation  for such shares,
rights, warrants, options or convertible or exercisable securities, and

     ii.  the  aggregate  consideration  or  premiums  stated  in  such  rights,
warrants, options or convertible or exercisable securities to be payable for the
shares of Common Stock covered thereby.

     In case all or any  portion  of the  consideration  to be  received  by the
Corporation  may  be  paid  in a  form  other  than  cash,  the  value  of  such
consideration  shall be  determined in good faith by the Board of Directors or a
duly authorized  committee  thereof  (irrespective  of the accounting  treatment
thereof),  and  described  in a  resolution  of the Board of  Directors  or such
committee.





 LOAN/APTS
     b.   "APTS" shall mean APTS Partners, L.P., a Delaware limited partnership.

     c.   "Board  of  Directors"  shall  mean  the  board  of  directors  of the
          Corporation.

     d. "Business  Day" shall mean a day other than a Saturday,  Sunday or other
day on which  commercial  banks in New  York,  New York are  required  by law to
close.

     e.  "Capital  Stock"  shall mean any and all  shares,  rights to  purchase,
warrants,   options,   convertible   securities,   participations  in  or  other
equivalents  of  or  interests  (other  than  security  interests)  in  (however
designated and whether voting or nonvoting) corporate stock.

     f. "Change in Control"  shall mean the  occurrence  of any of the following
events:

     i.  Andrew  Farkas  has ceased to serve on a  full-time  basis as the Chief
Executive Officer of the Corporation for any reason;

     ii.  Andrew  Farkas has ceased to own  beneficially  (within the meaning of
rule 13d-3 promulgated under the Exchange Act) at least 700,000 shares of Common
Stock (as adjusted to reflect stock dividends or distributions,  subdivisions or
reclassifications, splits and combinations);

     iii.  any  Person or group  (within  the  meaning of  section  13(d)(3)  or
14(d)(2) of the Exchange Act) other than a group  controlled by Andrew Farkas or
by APTS or any affiliate of Andrew Farkas or APTS acquires beneficial  ownership
(within the meaning of Rule 13d-3  promulgated under the Exchange Act) of 45% or
more of the number of shares of Common  Stock or the  combined  voting  power of
Voting  Stock  of  the  Corporation   outstanding   immediately  prior  to  such
acquisition;

     iv. individuals who, as of the Distribution  Date,  constitute the Board of
Directors  and  individuals  nominated  or  elected  to  serve  on the  Board of
Directors by individuals described in this section 2(f)(iv) cease for any reason
to constitute at least a majority of the Board of Directors; and

     v. the Corporation  consummates any merger or  consolidation  (other than a
Permitted  Merger or  Consolidation)  of the Corporation  with or into any other
entity,  the sale of all or substantially  all of the assets of the Corporation,
the  reorganization,  liquidation  or  dissolution  of the  Corporation,  or any
similar transaction or event.

    
     g. "Common Stock" shall mean the Common Stock, par value $.01 per share, of
the  Corporation  and, in the case of a  reclassification,  recapitalization  or
other similar change in such Common Stock or in the case of a  consolidation  or
merger of the Corporation  with or into another Person,  such  consideration  to
which a holder of a share of Common  Stock  would  have been  entitled  upon the
occurrence of such event.

     h. "Common Stock Equivalents" shall mean, without double counting:

     i. shares of Common Stock, where one share of Common Stock shall constitute
one Common Stock Equivalent;

     ii. shares of Capital Stock  convertible  into Common Stock,  where any one
share of Capital  Stock shall  constitute a number of Common  Stock  Equivalents
equal to the number of shares of Common Stock  issuable in respect of such share
of Capital Stock;

     iii.  any  rights,   warrants,   options  and  convertible  or  exercisable
securities  entitling the holder thereof to subscribe for or purchase any shares
of Common Stock,  where any such rights,  warrants,  options and  convertible or
exercisable  securities  shall  constitute a number of Common Stock  Equivalents
equal to the  number of  shares of Common  Stock  issuable  in  respect  of such
rights, warrants, options or convertible or exercisable securities; and

     iv. any stock  appreciation  rights  entitling  the holders  thereof to any
interest in an increase in value,  however measured,  of shares of Common Stock,
where any such stock  appreciation  rights  shall  constitute a number of Common
Stock Equivalents  equal to the Common Stock equivalent,  as nearly as it may be
calculated, of such stock appreciation rights.

     i.  "Corporation"  shall mean  Insignia  /ESG  Holdings,  Inc.,  a Delaware
corporation.

     j. "Distribution"  shall mean the distribution by Insignia Financial Group,
Inc. to its stockholders of all of the then  outstanding  shares of Common Stock
of the Corporation.

     k. "Distribution Date" shall mean the record date for the Distribution.


    l. "Effective Purchase Price per Share" at which the Corporation issues any
shares of Common  Stock (or any  rights,  warrants,  options or  convertible  or
exercisable  securities  entitling  the  holders  thereof  to  subscribe  for or
purchase any shares of Common Stock or any stock  appreciation  rights entitling
the holders thereof to any interest in an increase in value,  however  measured,
of shares of Common Stock) shall mean an amount equal to the ratio of:

     i. the Aggregate Consideration  Receivable by the Corporation in connection
with the issuance of such shares of Common Stock (or any such rights,  warrants,
options, convertible or exercisable securities or stock appreciation rights) to

     ii. the number of shares of Common  Stock so issued (or  issuable  upon the
exercise or  conversion  of such rights,  warrants,  options or  convertible  or
exercisable  securities or the Common Stock Equivalents,  as nearly as it may be
calculated, of such stock appreciation rights).

     m.  "Exchange  Act"  shall mean the  Securities  Exchange  Act of 1934,  as
amended, or any successor federal statute.

     n. "Excluded Transaction" shall mean any of the following transactions:

     i. the  issuance  of any  shares of  Capital  Stock of the  Corporation  to
employees  or  directors of the  Corporation  under an employee  benefit plan or
arrangement adopted by the Corporation,  whether or not referred to or described
in the Form 10;

     ii. the  issuance of Common  Stock  Equivalents  in an amount not to exceed
200,000  (as  adjusted,   as  appropriate,   to  reflect  any  stock  dividends,
distributions,  subdivisions,  reclassifications  or  combinations of the Common
Stock),  provided that,  within 10 Business Days  following  such issuance,  the
Corporation has furnished to each Warrant Holder written notice of the fact that
the Corporation intends to treat such issuance as an Excluded Transaction within
the meaning of this clause (ii); and

     iii0 any issuance of securities referred to or described in the Form 10.

     o "Exercise Price per Share" of any Warrant shall mean:

     i0 until adjusted in accordance with section 12 hereof,  an amount equal to
$8.25 per share, and

     ii0 thereafter, such other amount as may from time to time be determined in
accordance with the provisions of section 12 hereof.

     p "Expiration Date" shall mean September 1, 1999.



<PAGE>

     q "Fair Market Value" of a share of Common Stock as of any date shall mean,
as of any date,  the  average of the closing  prices of Common  Stock for the 20
consecutive  Trading Days next preceding the date five days prior to the date in
question. The closing price for each day shall be:

     i0 the  average of the  closing  sale price or, in the absence of a closing
sale price, the highest bid and lowest asked prices of one share of Common Stock
quoted in the NYSE Composite Tape or, if not then listed on the NYSE, the NASDAQ
National  Market  System or any similar  system of  automated  dissemination  of
quotations of securities prices then in common use, if so quoted; or

     ii0 if not quoted as  described  in clause (i),  the average of the highest
bid and lowest  offered  quotations for Common Stock as reported by the National
Quotation Bureau  Incorporated if at least two securities  dealers have inserted
both bid and  offered  quotations  for  Common  Stock on at least five of the 20
consecutive  Trading Days next preceding the date five days prior to the date in
question; or

     iii0 if the Common  Stock is listed or admitted for trading on any national
securities  exchange,  the last sale price,  or the closing bid price if no sale
occurred,  of Common  Stock on the  principal  securities  exchange on which the
Common Stock is listed or admitted for trading.

     If none of the  conditions  set forth above is met,  the  closing  price of
Common  Stock on any day or the  average of such  closing  prices for any period
shall be the Fair  Market  Value  of  Common  Stock  for such day or  period  as
determined by a member firm of the NYSE selected by the Corporation and approved
by the Holders of a majority of the outstanding Warrants. If the Corporation and
such Holders are unable to agree on the  selection  of a member  firm,  then the
issue  of  selection  of a  member  firm  shall  be  submitted  to the  American
Arbitration Association.

     r  "Form  10"  shall  mean  the  Registration  Statement  on Form 10 of the
Corporation with respect to the Common Stock in the form in which it is declared
effective by the Securities and Exchange Commission.

     s "GAAP" shall mean those  generally  accepted  accounting  principles  and
practices  which are  recognized as such by the American  Institute of Certified
Public  Accountants  acting  through its Accounting  Principles  Board or by the
Financial  Accounting  Standards  Board or through other  appropriate  boards or
committees thereof and which are consistently  applied for all periods after the
date  hereof so as to  properly  reflect  the  financial  condition,  results of
operations  and changes in  financial  position  of any Person,  except that any
accounting  principle  or  practice  required  to be changed by such  Accounting
Principles Board or Financial  Accounting  Standards Board (or other appropriate
board or committee of such Boards) in order to continue as a generally  accepted
accounting principle or practice may be so changed.
<PAGE>


     t "Merger Transaction" shall mean any business  combination  transaction or
series of  transactions  involving the  Corporation,  regardless of whether such
transactions  take  the  form of a  merger,  purchase  and  sale of  securities,
purchase or sale of assets or otherwise,  immediately prior to which,  following
which or in connection with which a Change in Control occurs.

     u "NASDAQ"  shall  mean the  National  Association  of  Securities  Dealers
Automated Quotation System.

     v "NYSE" shall mean the New York Stock Exchange.

     w   "Permitted   Merger  or   Consolidation"   shall  mean  any  merger  or
consolidation of the Corporation:

     i0 with or into any wholly owned Subsidiary; or

     ii0  immediately   after  which  Persons  who  were   stockholders  of  the
Corporation  prior to such  merger  or  consolidation  hold at least  80% of the
outstanding shares of Capital Stock of the Corporation measured by voting power.

     x "Person" shall mean an individual, corporation, joint venture, general or
limited  partnership,  trust,  unincorporated  organization,  limited  liability
company,  limited liability  partnership,  government or any agency or political
subdivision  thereof,  association,  sole  proprietorship  or any other  form of
entity not specifically listed herein.

     y "Qualifying Transaction" shall mean:

     i0 any  acquisition by the Corporation of stock or other assets of any kind
in exchange,  in whole or in part,  for shares of any class of Capital  Stock of
the Corporation; and

     ii0 any transaction in which shares of Capital Stock of the Corporation are
issued for cash proceeds;

     provided, however, that the term "Qualifying Transaction" shall not include
a Merger Transaction.

     z "Securities  Act" shall mean the Securities  Act of 1933, as amended,  or
any successor federal statute.

     aa "Subsidiary" shall mean:

     i0 any  corporation  50% or more of the  Voting  Stock of  which is  owned,
directly or indirectly, by the Corporation; or
<PAGE>

    ii0 any other Person whose  accounts are required under GAAP to be included
in the Corporation's consolidated financial statements,

     but shall exclude limited partnerships.

     bb "Trading Day" shall mean,  with respect to the Common Stock:  (i) if the
Common  Stock is quoted on the NYSE,  the NASDAQ  National  Market  System,  any
similar system of automated dissemination of quotations of securities prices, or
the National Quotation Bureau Incorporated,  each day on which quotations may be
made on such  system;  or (ii) if the  Common  Stock is listed or  admitted  for
trading  on any  national  securities  exchange,  days on  which  such  national
securities   exchange  is  open  for  business;   or  (iii)~if   shares  of  the
Corporation's  Common  Stock are not quoted on any system or listed or  admitted
for trading on any securities exchange, a Business Day.

     cc "Voting  Stock" shall mean,  with respect to any Person,  all classes of
Capital Stock of such Person then outstanding and normally  entitled to vote for
the  election of  directors of such  Person.  Any  reference to a percentage  of
Voting Stock shall refer to the  percentage of votes eligible to be cast for the
election of directors which are attributable to the applicable  shares of Voting
Stock.

     dd "Warrant Agreement" shall mean this warrant agreement.

     ee "Warrant  Certificate"  shall mean a certificate  evidencing one or more
Warrants, substantially in the form of Exhibit~A hereto.

     ff "Warrant Holder" shall mean APTS, as the original  registered  holder of
the Warrants, and any registered transferee of a Warrant Holder.

     gg "Warrant  Office" shall mean the office or agency of the  Corporation at
which the Warrant  Register  shall be  maintained  and where the Warrants may be
presented for exercise,  exchange,  substitution  and transfer,  which office or
agency will be the office of the  Corporation at 200 Park Avenue,  New York, New
York 10166, which office or agency may be changed by the Corporation pursuant to
notice in writing to the Persons named in the Warrant Register as the holders of
the Warrants.

     hh "Warrant Register" shall mean the register,  substantially maintained by
the Corporation at the Warrant Office.

     ii  "Warrant  Shares"  shall  mean the  shares  of Common  Stock  issued or
issuable upon exercise of the Warrants, as the same may be adjusted from time to
time pursuant to section 12 hereof, and any other shares of Capital Stock issued
or issuable upon the exercise of the Warrants pursuant to section 12 hereof.



<PAGE>

    jj  "Warrants"  shall mean the warrants to purchase  Common Stock issued by
the Corporation pursuant to this Warrant Agreement; individually, a "Warrant."

     2  Representations  and   WarrantiesRepresentations   and  Warranties.  The
Corporation hereby represents and warrants as follows:

     a The Corporation is a corporation duly incorporated,  validly existing and
in good  standing  under the laws of the State of  Delaware,  has the  corporate
power and  authority  to conduct its business as  presently  conducted,  has the
corporate power and authority to execute and deliver this Warrant  Agreement and
the Warrant  Certificates,  to issue the Warrants and to perform its obligations
under this Warrant Agreement and the Warrant Certificates.

     b The  execution,  delivery  and  performance  by the  Corporation  of this
Warrant  Agreement and the Warrant  Certificates,  the issuance of the Warrants,
and the issuance of the Warrant  Shares upon  exercise of the Warrants have been
duly authorized by all necessary corporate action.

     c This  Warrant  Agreement  has been duly  executed  and  delivered  by the
Corporation and constitutes a legal, valid,  binding and enforceable  obligation
of the Corporation.  When the Warrants and Warrant Certificates have been issued
as contemplated hereby the Warrants and the Warrant Certificates will constitute
legal,  valid,  binding and  enforceable  obligations  of the  Corporation.  The
Warrant Shares, when issued upon exercise of the Warrants in accordance with the
terms  hereof,  will  be  duly  authorized,   validly  issued,  fully  paid  and
nonassessable  shares of the  Common  Stock  or,  in the event of an  adjustment
pursuant  to section  12,  other  shares of Capital  Stock.  Statements  in this
section 2(c) as to validity,  binding effect and  enforceability  are subject to
(i)  limitations as to  enforceability  imposed by  bankruptcy,  reorganization,
moratorium,  insolvency  and other laws of general  application  relating  to or
affecting  the   enforceability  of  creditors'   rights,   including,   without
limitation,  limitations as to enforceability  that may be imposed under Section
548 of the United  States  Bankruptcy  Code,  Article 10 of the New York  Debtor
Creditor Law or other  provisions  of law relating to  fraudulent  transfers and
obligations and (ii) equitable principles limiting the availability of equitable
remedies.

     3 Number of  WarrantsNumber of Warrants.  The Corporation  hereby agrees to
issue  and  deliver  to  APTS  on the  Distribution  Date  Warrant  Certificates
evidencing 316,667 Warrants.

     4 Registration, Transfer and Exchange of Certificates.

<PAGE>

     a The Corporation shall maintain at the Warrant Office the Warrant Register
for registration of the Warrants and Warrant Certificates and transfers thereof.
On the Distribution Date the Corporation shall register the Warrants and Warrant
Certificates  in the Warrant  Register in the name of the  Warrant  Holder.  The
Corporation   may  deem  and  treat  the  registered   holders  of  the  Warrant
Certificates as the absolute owners thereof and the Warrants represented thereby
(notwithstanding  any  notation  of  ownership  or other  writing on the Warrant
Certificates  made by any person) for the purpose of any exercise thereof or any
distribution to the Warrant Holders thereof, and for all other purposes, and the
Corporation shall not be affected by any notice to the contrary.

     b Subject to section 14 hereof, the Corporation shall register the transfer
of any  outstanding  Warrants  in the Warrant  Register  upon  surrender  of the
Warrant Certificates  evidencing such Warrants to the Corporation at the Warrant
Office,  accompanied  (if  so  required  by  it)  by  a  written  instrument  or
instruments  of  transfer  in form  satisfactory  to it,  duly  executed  by the
registered   holder  or  holders   thereof  or  by  the  duly  appointed   legal
representative  thereof.  Upon any such  registration  of transfer,  new Warrant
Certificates  evidencing  such  transferred  Warrants  shall  be  issued  to the
transferee and the surrendered Warrant Certificates shall be cancelled.  If less
than all the Warrants evidenced by Warrant Certificates surrendered for transfer
are to be transferred,  new Warrant  Certificates  shall be issued to the holder
surrendering  such Warrant  Certificates  evidencing  such  remaining  number of
Warrants.

     c Warrant  Certificates  may be  exchanged  at the  option  of the  holders
thereof when  surrendered to the Corporation at the Warrant Office,  for another
Warrant Certificate or other Warrant Certificates of like tenor and representing
in the aggregate a like number of Warrants. Warrant Certificates surrendered for
exchange shall be cancelled.

     d No charge shall be made for any such transfer or exchange  except for any
tax or other  governmental  charge  imposed in connection  therewith.  Except as
provided in section 14(b) hereof,  each Warrant Certificate issued upon transfer
or  exchange  shall bear the legend  set forth in  section  14(b)  hereof if the
Warrant Certificate presented for transfer or exchange bore such legend.



<PAGE>

     5 Mutilated or Missing  Warrant  CertificatesMutilated  or Missing  Warrant
Certificates.  If any Warrant  Certificate  shall be mutilated,  lost, stolen or
destroyed,  the Corporation  shall issue, in exchange and  substitution  for and
upon  cancellation  of the  mutilated  Warrant  Certificate,  or in  lieu of and
substitution  for the  Warrant  Certificate  lost,  stolen or  destroyed,  a new
Warrant  Certificate  of like tenor and  representing  an  equivalent  number of
Warrants,  but only upon receipt of evidence  satisfactory to the Corporation of
such loss,  theft or destruction of such Warrant  Certificate and, if requested,
indemnity  satisfactory  to it.  The  Corporation  acknowledges  that a  written
indemnity by the Warrant Holder shall be  satisfactory  to the  Corporation  for
such purpose. No service charge shall be made for any such substitution, but all
expenses and reasonable charges associated with procuring such indemnity and all
stamp, tax and other governmental duties that may be imposed in relation thereto
shall  be  borne  by the  holder  of  such  Warrant  Certificate.  Each  Warrant
Certificate  issued in any such substitution  shall bear the legend set forth in
section 14(b) hereof if the Warrant  Certificate for which such substitution was
made bore such legend.

6        Duration and Exercise of WarrantsDuration and Exercise of Warrants.

     a The Warrants  evidenced by a Warrant  Certificate shall be exercisable in
whole or in part by the registered  holder thereof on any Business Day after the
Distribution  Date  and on or  before  5:00  PM,  New  York  City  time,  on the
Expiration Date.

     b Upon presentation to the Corporation at the Warrant Office of the Warrant
Certificate  evidencing the Warrants to be exercised,  with the form of election
to purchase attached thereto duly completed,  signed by the Warrant Holder,  and
upon payment of an amount equal to the product of:

     i0 the Exercise Price per Share; and

     ii0 the number of Warrant Shares being purchased,

     in lawful  money of the United  States of America,  the  Corporation  shall
issue and cause to be delivered to or upon the written  order of the  registered
holders of such Warrants and in such name or names as such registered holder may
designate,  a certificate  for the Warrant  Share or Warrant  Shares issued upon
such exercise of the Warrants being  exercised.  Any Persons so designated to be
named therein shall be deemed to have become  Warrant  Holders of record of such
Warrant Share or Warrant Shares as of the date of exercise of such Warrants.

     Any  Persons  so  designated  to be named  therein  shall be deemed to have
become  holders of record of such Warrant Share or Warrant Shares as of the date
of exercise of such Warrants.

     c If less than all of the Warrants  evidenced by a Warrant  Certificate are
exercised at any time, a new Warrant Certificate or Certificates shall be issued
for the remaining number of Warrants evidenced by such Warrant Certificate. Each
new  Warrant  Certificate  so issued  shall bear the legend set forth in section
14(b) hereof if the Warrant  Certificate  presented in  connection  with partial
exercise  thereof bore such legend.  All Warrant  Certificates  surrendered upon
exercise of Warrants shall be cancelled.

     7 No Fractional  SharesNo  Fractional  Shares. The Corporation shall not be
required to issue  fractional  Warrant  Shares upon exercise of the Warrants but
shall  pay for any such  fraction  of a share an  amount  in cash  equal to such
fraction of the Fair Market Value of a share of Common Stock.



<PAGE>

    8 Payment of  TaxesPayment  of Taxes.  The  Corporation  will pay all taxes
attributable to the initial  issuance of Warrant Shares to a Warrant Holder upon
the  exercise  of his  Warrants,  provided  that the  Corporation  shall  not be
required to pay any income tax  incurred by the Warrant  Holder or the holder of
the  Warrant  Shares upon  exercise  of the  Warrants or issuance of the Warrant
Shares.

9        Stockholder RightsStockholder Rights.

     a Nothing  contained  in this  Warrant  Agreement  or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof the right
to vote or to consent or to receive  notice as a  stockholder  in respect of the
meetings of  stockholders or the election of directors of the Corporation or any
other matter, or any rights whatsoever as a stockholder of the Corporation.

     b Nothing  contained  in this  Warrant  Agreement  or in any of the Warrant
Certificates  shall be construed as imposing any  obligation  on the  registered
holders  thereof to purchase any  securities or as imposing any  liabilities  on
such Warrant Holders as stockholders of the Corporation, whether such obligation
or  liabilities  are  asserted  by  the  Corporation  or  by  creditors  of  the
Corporation.

     10 Reservation  and Issuance of Warrant  SharesReservation  and Issuance of
Warrant Shares.

     a The Corporation will at all times have  authorized,  and reserve and keep
available,  for the purpose of enabling  it to satisfy any  obligation  to issue
Warrant Shares upon the exercise of the Warrants, the number of shares of Common
Stock deliverable upon exercise of all outstanding Warrants.

     b The Corporation  will take any corporate action which may be necessary in
order  that the  Corporation  may  validly  and  legally  issue  fully  paid and
nonassessable Warrant Shares at the Exercise Price per Share.

     c The Corporation  covenants that all Warrant Shares will, upon issuance to
the Warrant  Holder in accordance  with the terms of this Warrant  Agreement and
the Corporation's certificate of incorporation,  be fully paid and nonassessable
and free from all taxes with respect to the issuance thereof and from all liens,
charges and  security  interests  (other than any created by or on behalf of any
Warrant Holder).



<PAGE>

     11 Obtaining of Governmental Approvals and Stock Exchange ListingsObtaining
of Governmental  Approvals and Stock Exchange Listings. The Corporation will, at
its own  expense,  from time to time take all action  which may be  necessary to
obtain and keep effective any and all permits, consents, orders and approvals of
governmental   agencies  and  authorities  which  are  or  become  requisite  in
connection  with the  issuance,  sale,  transfer  and  delivery  of the  Warrant
Certificates and the exercise of the Warrants and the issuance,  sale,  transfer
and  delivery of the Warrant  Shares,  and all action  which may be necessary so
that any Common  Stock,  immediately  upon its  issuance  upon the  exercise  of
Warrants,  will be listed on each  securities  exchange or listing or  quotation
service, if any, on which the Common Stock is then listed.

     12  Adjustment  of  Exercise  Price per Share and number of Warrant  Shares
issuable  on  exercise of  WarrantsAdjustment  of  Exercise  Price per Share and
number of Warrant Shares issuable on exercise of Warrants.

     a Prior to the Expiration  Date, the Exercise Price per Share,  and in some
cases the number of Warrant Shares  issuable upon exercise of each Warrant,  are
subject to adjustment  from time to time in the manner  provided in this section
12 upon the occurrence of any of the events enumerated in this section~12.

     b  In  the  event  that  the  Corporation  shall  at  any  time  after  the
Distribution Date:

     i0 declare a dividend  or make a  distribution  on any series of its Common
Stock in shares of any series of its Common Stock;

     ii0 subdivide or reclassify shares of any series of its outstanding  Common
Stock into a greater number of shares;

     iii0 combine  shares of any series of its  outstanding  Common Stock into a
smaller number of shares;

     iv0 pay a dividend or make a distribution on any series of its Common Stock
in shares of any series of its Capital Stock other than Common Stock; or

     v0 issue by  reclassification  of any series of its Common  Stock shares of
any series of its Capital Stock;

     then each  Warrant  outstanding  on the record  date for such  dividend  or
distribution or on the effective date of such subdivision,  reclassification  or
combination shall thereafter entitle the holder thereof to receive the aggregate
number and kind of shares,  other securities and property which, if such Warrant
had been exercised  immediately prior to such time, such holder would have owned
or have  become  entitled to receive by virtue of such  dividend,  distribution,
subdivision,  reclassification  or  combination  and,  if after  such  dividend,
distribution, subdivision, reclassification or combination the Warrants continue
to  represent  the right to purchase  only shares of Common Stock (and not other
securities or property), the Exercise Price per Share shall be adjusted to be an
amount equal to the product of:

     (x) the  Exercise  Price  per  Share in  effect  immediately  prior to such
dividend, distribution, subdivision, reclassification or combination and


  
     (y) the ratio of:

     (1) the number of shares of Common  Stock  issuable on exercise of a single
Warrant  immediately  before  giving  effect  to  the  dividend,   distribution,
subdivision, reclassification or combination and

     (2) the number of shares of Common  Stock  issuable on exercise of a single
Warrant  immediately  after  giving  effect  to  such  dividend,   distribution,
subdivision, reclassification or combination.


     If after such  dividend,  distribution,  subdivision,  reclassification  or
combination the Warrants  represent the right to purchase  securities other than
shares of Common Stock or other property,  the Exercise Price per Share shall be
adjusted  equitably.  An  adjustment  made  pursuant to this section 12(b) shall
become effective  immediately after the record date in the case of a dividend or
distribution and shall become effective  immediately after the effective date in
the case of subdivision, combination or reclassification.  Such adjustment shall
be made successively whenever any event listed above shall occur.

     c i0  "Full-ratchet"  Anti-dilution  Adjustment.  In  the  event  that  the
Corporation  shall at any time after the  Distribution  Date issue any shares of
Common Stock (or any rights,  warrants,  options or  convertible  or exercisable
securities entitling the holders thereof to subscribe for or purchase any shares
of Common Stock, or any stock appreciation  rights entitling the holders thereof
to any interest in an increase in value,  however measured,  of shares of Common
Stock)  other than in a  Qualifying  Transaction  and other than in an  Excluded
Transaction,  at an  Effective  Purchase  Price per Share less than the Exercise
Price per Share in effect immediately prior to such issuance, then:

     (1) the Exercise Price per Share shall be adjusted to be an amount equal to
such Effective Price per Share and

     (2) no adjustment  shall be made as a result of such issuance in the number
of Warrant Shares issuable on exercise of the Warrants.

<PAGE>

    For example,  if on any given date the Corporation  issues (other than in a
Qualifying  Transaction  and other  than in an  Excluded  Transaction)  warrants
exercisable at $3.00 per share to purchase shares of Common Stock for a purchase
price  of  $5.00  per  warrant  and the  Exercise  Price  per  Share  in  effect
immediately  prior to such issuance is $8.25 per share,  then the Exercise Price
per Share will be adjusted to $8.00 per share and no adjustment  will be made in
the number of Warrant Shares issuable upon exercise of a Warrant.

     ii0  "Proportional"   Anti-dilution  Adjustment.  In  the  event  that  the
Corporation  shall at any time after the  Distribution  Date issue any shares of
Common Stock (or any rights,  warrants,  options or  convertible  or exercisable
securities entitling the holders thereof to subscribe for or purchase any shares
of Common Stock, or any stock appreciation  rights entitling the holders thereof
to any interest in an increase in value,  however measured,  of shares of Common
Stock) in a Qualifying  Transaction or in an Excluded  Transaction  described in
clause (i) or (ii) of the  definition  of that term,  at an  Effective  Purchase
Price per Share  less than the  Exercise  Price per Share in effect  immediately
prior to such issuance, then:

     (1) the Exercise Price per Share shall be adjusted to be an amount equal to
the ratio of:

     (a) the sum of:

     (i) the product of:

     1 the number of shares of Common  Stock  outstanding  immediately  prior to
such issuance and

     2 the Exercise Price per Share in effect immediately prior to such issuance
and

     (ii)  the  Aggregate   Consideration   Receivable  by  the  Corporation  in
connection with such issuance, to

     (b) the sum of:

     (i) the number of shares of Common Stock  outstanding  immediately prior to
such issuance and

     (ii) the  number  of  additional  shares  of  Common  Stock to be so issued
(including the number of shares  underlying  such rights,  warrants,  options or
convertible or exercisable securities); and

     (2) no adjustment  shall be made as a result of such issuance in the number
of Warrant Shares issuable on exercise of the Warrants.


<PAGE>

     For example,  if on any given date the Corporation has 10,000,000 shares of
Common Stock outstanding, the Corporation issues (in a Qualifying Transaction or
in an Excluded Transaction  described in clause (i) or (ii) of the definition of
that term)  warrants  exercisable  at $3.00 per share to purchase an  additional
1,000,000  shares of Common Stock for a purchase  price of $5.00 per warrant and
the Exercise  Price per Share in effect  immediately  prior to such  issuance is
$8.25 per share,  then the Exercise  Price per Share shall be adjusted to $8.227
per share (calculated as follows: $8.227 per share = [(10,000,000 shares x $8.25
per share) +  $8,000,000]  /  (10,000,000  shares +  1,000,000  shares),  and no
adjustment  will be made in the number of Warrant Shares  issuable upon exercise
of a Warrant.

     d No change in either the Exercise Price per Share or the number of Warrant
Shares  issuable upon exercise of the Warrants  shall occur solely as the result
of the issuance by the  Corporation at any time after the  Distribution  Date of
any shares of Common Stock (or any rights,  warrants,  options or convertible or
exercisable  securities  entitling  the  holders  thereof  to  subscribe  for or
purchase any shares of Common Stock or any stock  appreciation  rights entitling
the holders thereof to any interest in an increase in value,  however  measured,
of shares of Common Stock) in an Excluded Transaction  described in clause (iii)
of the definition of that term.

     e In case all or any  portion of the  consideration  to be  received by the
Corporation  may  be  paid  in a  form  other  than  cash,  the  value  of  such
consideration  shall be  determined in good faith by the Board of Directors or a
duly authorized  committee  thereof  (irrespective  of the accounting  treatment
thereof),  and  described  in a  resolution  of the Board of  Directors  or such
committee.  An  adjustment  made  pursuant to section  12(c) hereof shall become
effective  immediately upon the effective date of the issuance resulting in such
adjustment.  Such  adjustment  shall be made  successively  whenever any shares,
rights, warrants, options or convertible or exercisable securities are so issued
at an Effective  Purchase  Price per Share that is less than the Exercise  Price
per Share in effect on the date of such  issuance.  To the extent  that any such
rights,  warrants,  options or convertible  or  exercisable  securities or stock
appreciation  rights expire  without  having been  converted or exercised,  each
Warrant  outstanding  shall,  as of the date of such  expiration,  have the same
Exercise  Price per Share as would have been the case had such  expired  rights,
warrants,  options,  convertible or exercisable securities or stock appreciation
rights not been  issued,  but such  readjustment  shall not affect the  Exercise
Price per Share paid for any shares of Common  Stock or other  shares of Capital
Stock delivered upon any exercise prior to the date such readjustment is made.



<PAGE>

    f In the event that the Corporation  shall distribute to all holders of its
Common Stock any of its assets or debt securities,  or rights, options, warrants
or  convertible  or  exercisable   securities  of  the  Corporation   (including
securities for cash, but excluding:

     i0 distributions of Capital Stock referred to in section 12(b) hereof,

     ii0 distributions of rights, warrants, options,  convertible or exercisable
securities or stock appreciation  rights referred to in section 12(c) hereof, if
the decrease in the Exercise Price per Share under section 12(c) hereof would be
greater  than the  decrease in the  Exercise  Price per Share under this section
12(f) (with section 12(c) applying rather than this section 12(f)), and

     iii0  cash  dividends  or  other  cash  distributions  that are paid out of
Consolidated  Net Income for any  dividend  period,  earned  surplus or retained
earnings,

     then in each such case:

     (1) the Exercise Price per Share shall be adjusted to be an amount equal to
the difference between:

     (a) the  Exercise  Price  per  Share in  effect  immediately  prior to such
issuance and

     (b) an amount equal to the then fair market value (as reasonably determined
by the Board of Directors, in good faith and as described in a resolution of the
Board of  Directors)  of the  portion  of the assets or debt  securities  of the
Corporation so distributed or of such rights,  options,  warrants or convertible
or exercisable securities applicable to one share of Common Stock, and

     (2) no  adjustment  shall be made in any such case in the number of Warrant
Shares issuable on exercise of the Warrants.

     Such adjustment  shall become effective  immediately  after the record date
for  the  determination  of  shares  entitled  to  receive  such   distribution.
Notwithstanding  the foregoing,  no such adjustment  shall be made upon any such
distribution  if the plan or arrangement  under which such  distribution is made
provides for a  distribution  to holders of Warrant  Shares in the same pro rata
amounts  upon  exercise  of  the  Warrants.   Such  adjustment   shall  be  made
successively whenever any event listed above shall occur.


     g If at any  time,  as a result  of an  adjustment  made  pursuant  to this
section 12, the holder of any Warrant thereafter exercised shall become entitled
to receive  any shares of the  Corporation  other than  shares of Common  Stock,
thereafter  the number of such other shares so  receivable  upon exercise of any
Warrant  shall be  subject  to  adjustment  from time to time in a manner and on
terms as nearly  equivalent as practicable to the provisions with respect to the
Warrant Shares  contained in this section 12, and the provisions of this Warrant
Agreement  with respect to the Warrant  Shares shall apply on like terms to such
other shares.

     h If any of the following events occur, namely:

     i0 any reclassification or change of Warrant Shares (other than a change in
par value, or from par value to no par value, or from no par value to par value,
or as a result of subdivision or combination);

     ii0 any  consolidation  or merger of the  Corporation  with another  Person
shall be  effected  as a result of which  holders  of  Warrant  Shares  shall be
entitled to receive  stock,  securities or other  property or assets  (including
cash) with respect to or in exchange for Warrant Shares; or

     iii0 any sale or conveyance of the properties and assets of the Corporation
as, or substantially as, an entirety to any other Person;

     then the  Corporation or such successor or purchasing  Person,  as the case
may be, shall make  provisions to establish  that each Warrant then  outstanding
shall be  exercisable  for the kind and  amount  of  shares  of stock  and other
securities or property or assets (including cash) receivable upon the occurrence
of such event by a holder of Warrant Shares immediately prior to such event. The
Corporation   shall  not  consummate   any  such  event  unless,   prior  to  or
simultaneously  with such consummation,  the successor Person (if other than the
Corporation)   resulting  from  such  consolidation  or  merger  or  the  Person
purchasing  such properties and assets shall assume by written  instrument,  the
obligation to deliver to each Warrant Holder the shares of stock,  securities or
assets to which, in accordance with the foregoing provisions, such holder may be
entitled  and all  other  obligations  of the  Corporation  under  this  Warrant
Agreement.  The  provisions  of this  section  12(h)  shall  similarly  apply to
successive reclassifications, consolidations, mergers, sales and conveyances.

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



<PAGE>

    j  Anything  in  this  section  12 to  the  contrary  notwithstanding,  the
Corporation  shall be entitled to make such  decreases in the Exercise Price per
Share and such  increases  in the number of  Warrant  Shares  issuable  upon the
exercise of each  Warrant,  in addition  to those  adjustments  required by this
section 12, as it in its sole  discretion  shall  determine  to be  advisable in
order that any dividends,  distributions  or,  issuances of securities,  rights,
options,  warrants  or  convertible  or  exchangeable  securities  made  by  the
Corporation to its stockholders shall not be taxable to them.

     13 Notices to HoldersNotices to Holders.

     a Upon any  adjustment  pursuant to section 12 hereof in the Exercise Price
per  Share or in the  number of  Warrant  Shares  issuable  upon  exercise  of a
Warrant,  the  Corporation  shall  promptly  but in any  event  within  30  days
thereafter,  cause to be given to each of the  Warrant  Holders,  at its address
appearing on the Warrant  Register by registered mail,  postage prepaid,  return
receipt  requested,  a certificate  signed by its  chairman,  president or chief
financial  officer  setting forth the Exercise Price per Share and the number of
Warrant  Shares  purchasable  upon  exercise  of a Warrant  as so  adjusted  and
describing in reasonable detail the facts accounting for such adjustment and the
method of calculation used. When  appropriate,  such certificate may be given in
advance  and  included as a part of the notice  required to be mailed  under the
other provisions of this section 13.

     b In the event:

     i0 that the  Corporation  shall  authorize  the  issuance to all holders of
Common Stock of rights or warrants to subscribe for or purchase Capital Stock of
the Corporation or of any other subscription rights or warrants;

     ii0 that the Corporation shall authorize the distribution to all holders of
Common Stock of  evidences of its  indebtedness  or assets  (including,  without
limitation,  cash dividends or cash  distributions  payable out of  consolidated
earnings or earned surplus or dividends payable in Common Stock);

     iii0 of any consolidation or merger to which the Corporation is a party and
for which approval of any stockholders of the Corporation is required, or of the
conveyance  or  transfer  of  the  properties  and  assets  of  the  Corporation
substantially   as  an   entirety,   or  of  any   capital   reorganization   or
reclassification  or  change of the  Common  Stock  (other  than a change in par
value,  or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination);

     iv0 of the voluntary or involuntary dissolution,  liquidation or winding up
of the Corporation; or

<PAGE>

    v0 that the  Corporation  proposes  to take any other  action  which  would
require  an  adjustment  in the  Exercise  Price per  Share or in the  number of
Warrant  Shares or other  securities  or assets to which each holder is entitled
pursuant to section 12 hereof;

     then the Corporation shall cause to be given to each of the Warrant Holders
at its address  appearing  on the Warrant  Register,  at least 30 calendar  days
prior to the applicable record date, if any,  hereinafter  specified,  or, if no
such  record  date is  specified,  30  calendar  days prior to the taking of any
action  referred to in clauses (i) through (v) above (except that, if the action
taken by the  Corporation is an issuance  described in section  12(c)(i) or (ii)
hereof,  then as promptly  as possible  but in no event later than the date that
the Corporation  provides public notice of such issuance),  by registered  mail,
postage prepaid, return receipt requested, a written notice stating (i) the date
as of which the holders of record of Common  Stock to be entitled to receive any
such rights, warrants or distribution are to be determined,  or (ii) the date on
which  any  such  consolidation,   merger,  conveyance,  transfer,  dissolution,
liquidation or winding up is expected to become effective,  or (iii) the date as
of which any such other action is to be effected,  and, if applicable  and known
to the  Corporation,  the date as of which it is expected that holders of record
of Common  Stock shall be entitled to exchange  their shares for  securities  or
other property, if any, deliverable upon such  reclassification,  consolidation,
merger, conveyance, transfer, dissolution,  liquidation or winding up; provided,
however,  that in the event that the Corporation  provides public notice of such
proposed action or event  specifying the information set forth above at least 10
days prior to the proposed  record date or effective  date, then the Corporation
shall be deemed to have satisfied its  obligation to provide notice  pursuant to
this section 13(b).  The failure to give the notice  required by this section 13
or any  defect  therein  shall  not  affect  the  legality  or  validity  of any
distribution,  right,  warrant,  consolidation,  merger,  conveyance,  transfer,
dissolution, liquidation or winding up or other action referred to above, or the
vote upon any such action.

     c The  Corporation  shall  promptly,  but in any event no less than 30 days
prior to the effective date of any Change in Control,  cause to be given to each
of the  registered  holders of the  Warrants,  at its address  appearing  on the
Warrant Register by registered mail, postage prepaid,  return receipt requested,
written notice of the pendency of such Change in Control.

     14 Restrictions on TransferRestrictions on Transfer; Subsequent Transferees
as Third Party Beneficiaries.



<PAGE>

    a The Warrant Holder  (i)~represents  that it is acquiring the Warrants for
its own account for investment and not with a view to any distribution or public
offering  within the meaning of the Securities Act,  (ii)~acknowledges  that the
Warrants and the Warrant  Shares  issuable upon  exercise  thereof have not been
registered   under  the  Securities  Act  or  any  state   securities  laws  and
(iii)agrees that it will not sell or otherwise  transfer any of its Warrants or
Warrant Shares except upon the terms and conditions  specified herein,  provided
that the Warrant  Holders may sell the Warrants or the Warrant Shares  purchased
upon exercise of the Warrants in one or more private  transactions not requiring
registration under the Securities Act.

     b Except as  otherwise  provided  in  section~14(d)  hereof,  each  Warrant
Certificate  and each  certificate  for the Warrant  Shares  issued to a Warrant
Holder shall include a legend in  substantially  the  following  form (with such
changes  therein as may be appropriate to reflect  whether such legend refers to
Warrants or Warrant Shares),  provided that such legend shall not be required if
such  transfer  is being made in  connection  with a sale  which is exempt  from
registration  pursuant to Rule~144 under the Securities Act or if the opinion of
counsel  referred  to in  section~14(c)  hereof is to the  further  effect  that
neither  such legend nor the  restrictions  on transfer in this  section~14  are
required in order to ensure compliance with the Securities Act:

     THE  [WARRANTS,  AND THE SHARES  ISSUABLE  ON  EXERCISE  OF THE  WARRANTS,]
[SHARES]  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE  STATE  SECURITIES  LAWS AND MAY NOT BE
SOLD  OR  TRANSFERRED  IN THE  ABSENCE  OF  SUCH  REGISTRATION  OR AN  EXEMPTION
THEREFROM UNDER SUCH ACT OR LAWS.

     c Each Warrant  Holder  wishing to effect such a transfer of any Warrant or
Warrant  Shares shall furnish to the  Corporation an agreement by the transferee
thereof  that it is  taking  and  holding  the same  subject  to the  terms  and
conditions  specified  herein  and a written  opinion of such  Warrant  Holder's
counsel, in form reasonably satisfactory to the Corporation,  to the effect that
the proposed transfer may be effected without  registration under the Securities
Act and any applicable state securities laws.

     d The  restrictions  set forth in this section~14 shall terminate and cease
to be effective with respect to any Warrants or Warrant Shares  registered under
the  Securities Act or receipt by the  Corporation of an opinion of counsel,  in
form reasonably  satisfactory to the Corporation,  to the effect that compliance
with such  restrictions  is not necessary in order to comply with the Securities
Act and any applicable state securities laws with respect to the transfer of the
Warrants  and/or  the  Warrant  Shares.  Whenever  such  restrictions  shall  so
terminate the holder of such Warrants and/or Warrant Shares shall be entitled to
receive from the  Corporation,  without  expense (other than transfer  taxes, if
any),  Warrant  Certificates or certificates for such Warrant Shares not bearing
the legend set forth in  section~14(b)  hereof and the Corporation  will rescind
any transfer restrictions relating thereto.

     e It is the  intention of the parties  hereto that each Warrant  Holder who
acquires  Warrants by transfer  be a third party  beneficiary,  to the extent of
Warrants  acquired and held by such Warrant  Holder,  of the  provisions of this
Warrant Agreement that bestow rights on Warrant Holders.



<PAGE>

     15  Covenants.  Holdings  covenants to include in any filings made with any
taxing authority the issuance of these warrants as being pursuant to the plan of
reorganization (with respect to the distribution of the Corporation by IFG).

     16 Amendments and Waivers.  Amendments  and Waivers.  Any provision of this
Warrant Agreement may be amended, supplemented, waived, discharged or terminated
by a written  instrument  signed by the  Corporation and the holders of not less
than a majority of the  outstanding  Warrants,  provided that the Exercise Price
per Share may not be  increased  by  amendment,  the  number of  Warrant  Shares
issuable  upon exercise of the Warrants may not be reduced by amendment and this
section~15 may not be changed by amendment except with the unanimous  consent of
the holders of outstanding Warrants.

     17 Specific Performance.  Specific Performance. The holders of the Warrants
shall  have  the  right  to  specific  performance  by  the  Corporation  of the
provisions of this Warrant Agreement. The Corporation hereby irrevocably waives,
to the extent that it may do so under  applicable  law, any defense based on the
adequacy  of a remedy  at law which may be  asserted  as a bar to the  remedy of
specific  performance in any action brought against the Corporation for specific
performance of this Warrant Agreement by the holders of the Warrants.

18       Notices.Notices.

     a Any  notice or demand to be given or made by the  Warrant  Holders or the
holders of Warrant  Shares to or on the  Corporation  pursuant  to this  Warrant
Agreement shall be sufficiently given or made if sent by registered mail, return
receipt requested,  postage prepaid, addressed to the Corporation at the Warrant
Office.

     b Any notice to be given by the  Corporation to the Warrant  Holders or the
holders  of  Warrant  Shares  shall  be  sufficiently  given  or made if sent by
registered mail, return receipt  requested,  postage prepaid,  addressed to such
holder as such holder's name and address shall appear on the Warrant Register or
the Common Stock registry of the Corporation, as the case may be.

     19 Binding Effect.  Binding Effect. This Warrant Agreement shall be binding
upon and inure to the sole and  exclusive  benefit  of the  Corporation  and the
Warrant Holder, and their respective successors and assigns.

     20 Continued  Validity.Continued Validity. A holder of Warrant Shares shall
continue to be entitled  with respect to such  Warrant  Shares to all rights and
subject to all  obligations to which it would have been entitled or subject as a
holder under sections~14 through 22 hereof.



<PAGE>

    21 Counterparts.  Counterparts.  This Warrant  Agreement may be executed in
one or more separate  counterparts and all of said  counterparts  taken together
shall be deemed to constitute one and the same instrument.

     22 New York Law.  New York Law.  THIS  WARRANT  AGREEMENT  AND EACH WARRANT
CERTIFICATE  SHALL BE GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF
THE STATE OF NEW YORK.

     23 Benefits of This Agreement.  Benefits of This Agreement. Nothing in this
Warrant  Agreement  shall  be  construed  to give  any  Person  other  than  the
Corporation and the Warrant Holder any legal or equitable right, remedy or claim
under this Warrant Agreement.

     IN WITNESS WHEREOF the parties hereto have caused this Warrant Agreement to
be duly executed and delivered by their proper and duly authorized officers,  as
of the date and year first above written.



                 INSIGNIA/ESG HOLDINGS, INC.


                 By:/s/ Andrew L. Farkas
                 -----------------------
                    Name: Andrew L. Farkas
                    Title:   Chairman and Chief Executive Officer



                 APTS PARTNERS, L.P.


                 By: APTS GP Partners, L.P.,
                          its general partner

                 By:  APTS Acquisition Corporation,
                          its general partner

                 By:/s/ John R. S. Jacobsson
                 ---------------------------
                    Name:  John R. S. Jacobsson
                    Title:    Vice President






<PAGE>

                                       A-1
0839/39038-028  NYLIB2/549862 v5                     10/07/98  10:39 AM  (10559)
                                    EXHIBIT A

                           FORM OF WARRANT CERTIFICATE

     THE  WARRANTS,  AND  THE  SHARES  ISSUABLE  ON  EXERCISE  OF THE  WARRANTS,
REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED  UNDER THE SECURITIES
ACT OF 1933  OR ANY  APPLICABLE  STATE  SECURITIES  LAWS  AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION  THEREFROM UNDER
SUCH ACT OR LAWS.

                          EXERCISABLE ONLY ON OR BEFORE
                                SEPTEMBER 1, 1999

[Date]                      Warrant Certificate                Warrant No. [   ]

     This Warrant Certificate is one of the Warrant Certificates  referred to in
the Warrant  Agreement dated as of September 15, 1998 (the "Warrant  Agreement")
between the Corporation and APTS Partners, L.P., a Delaware limited partnership.
The Warrant Agreement is hereby  incorporated by reference in and made a part of
this  instrument  and is hereby  referred  to for a  description  of the rights,
limitations,  obligations,  duties and immunities  thereunder of the Corporation
and the holders of Warrants.  Terms  defined in the Warrant  Agreement  and used
herein have the same meanings herein as therein.

     This Warrant Certificate certifes that___________________  , or registered
assigns, is the registered holder of _____ Warrants to purchase shares of Common
Stock  of   INSIGNIA/ESG   HOLDINGS,   INC.,   a   Delaware   corporation   (the
"Corporation").  Each  Warrant  entitles  the  holder,  but only  subject to the
conditions set forth herein and in the Warrant  Agreement,  to purchase from the
Corporation  before  5:00~PM,  New York City time, on the  Expiration  Date, one
fully paid and  nonassessable  share of Common Stock  (subject to  adjustment as
described below) at a price equal to the Exercise Price per Share.

     The Exercise Price per Share shall be payable in lawful money of the United
States of America. The Warrants represented by this certificate may be exercised
by  surrender of this Warrant  Certificate,  along with an executed  copy of the
annexed  Form of  Election to Purchase  and payment of the  applicable  Exercise
Price at the office of the  Corporation  at 200 Park Avenue,  New York, New York
10166,  or such other address as the  Corporation  may specify in writing to the
registered holder of the Warrants evidenced hereby. The Exercise Price per Share
and the  number of  shares of Common  Stock  purchasable  upon  exercise  of the
Warrants is subject to adjustment  prior to the Expiration  Date as set forth in
the Warrant Agreement.

     No Warrant  may be  exercised  after  5:00~PM,  New York City time,  on the
Expiration Date and (except as otherwise  provided in the Warrant Agreement) all
rights of the registered holders of the Warrants shall cease after 5:00~PM,  New
York City time, on the Expiration Date.



<PAGE>

                                      A-3
0839/39038-028  NYLIB2/549862 v5                     10/07/98  10:39 AM  (10559)

     The Corporation  may deem and treat the registered  holders of the Warrants
evidenced hereby as the absolute owners thereof (notwithstanding any notation of
ownership  or other  writing  hereon  made by  anyone)  for the  purpose  of any
exercise hereof and of any  distribution to the holders hereof and for all other
purposes,  and the  Corporation  shall  not be  affected  by any  notice  to the
contrary.

     This Warrant  Certificate,  when  surrendered  at the Warrant Office by the
registered holder hereof in person or by a legal  representative duly authorized
in  writing,  may be  exchanged,  in the manner and  subject to the  limitations
provided in the Warrant  Agreement,  but without  payment of any service charge,
for another Warrant Certificate or Warrant Certificates of like tenor registered
in the name of the holder and  representing  in the  aggregate  a like number of
Warrants.

     Upon  due  presentment  for   registration  of  transfer  of  this  Warrant
Certificate  at  the  Warrant  Office,  a new  Warrant  Certificate  or  Warrant
Certificates  of like tenor and  evidencing  in the  aggregate  a like number of
Warrants  shall be  issued  in  exchange  for this  Warrant  Certificate  to the
transferee(s)  and,  if less than all the  Warrants  evidenced  hereby are to be
transferred,  to the  registered  holder  hereof,  subject  to  the  limitations
provided in the Warrant  Agreement,  without  charge except for any tax or other
governmental charge imposed in connection therewith.

     IN WITNESS WHEREOF the  Corporation has caused this Warrant  Certificate to
be signed by its duly  authorized  officers and has caused its corporate seal to
be affixed hereunto.

                                            INSIGNIA/ ESG HOLDINGS, INC.

                                            By:__________________________
                                               Name:
                                               Title:
(CORPORATE SEAL)
ATTEST

____________________________
Secretary

<PAGE>



                          FORM OF ELECTION TO PURCHASE

                    (To be executed upon exercise of Warrant)

     The undersigned hereby  irrevocably elects to exercise,  in accordance with
section 6(b) of the Warrant Agreement, _________Warrants, representing the right
to  purchase________  shares of Common Stock,  and herewith  tenders payment for
such  shares of Common  Stock to the order of the  Corporation  in the amount of
$________ as payment of the exercise price in accordance with the terms hereof.

     The undersigned requests that a certificate for such shares of Common Stock
be registered in the name _______________ of whose address __________________ is
and  that  such  certificate  be  delivered   to_______________   whose  address
is_________________  . If said number of shares of Common Stock is less than all
of the shares of Common Stock  purchasable  hereunder,  the  undersigned  hereby
requests that a new Warrant  Certificate  representing the remaining  balance of
the  Warrants  be  registered  in  the  name  of_______________   whose  address
is_______________    and   that   such   Warrant    Certificate   be   delivered
to_________________ whose address is_____________________ .

Signature:



                                         
(Signature  must  conform in all  respects to name of holder as specified on the
face of the Warrant Certificate.)

Date: