<PAGE>


                                 AMENDMENT NO. 7



         AMENDMENT No. 7, dated as of July 31, 2001, to WARRANT AGREEMENT dated
as of September 15, 1998, as previously amended by Amendment No. 1 dated as of
August 30, 1999, Amendment No. 2 dated as of September 15, 1999, Amendment No. 3
dated as of July 27, 2000, Amendment No. 4 dated as of August 15, 2000,
Amendment No. 5 dated as of September 15, 2000 and Amendment No. 6 dated as of
September 18, 2000 (as amended, the "Original Agreement") between Insignia
Financial Group, Inc., a Delaware corporation formerly known as Insignia/ESG
Holdings, Inc. (the "Corporation"), and APTS Partners, L.P., a Delaware limited
partnership ("APTS"), providing for the issuance of warrants to purchase 316,667
shares of common stock, par value $.01 per share, of the Corporation.

             WHEREAS, the Corporation and APTS desire to extend the Expiration
Date (as defined in the Original Agreement) and modify certain other terms of
the Warrants provided for in the Original Agreement;

         NOW, THEREFORE, the parties hereto agree as follows:

     1.   Terms used herein shall have the meanings set forth in the Original
          Agreement, unless otherwise defined herein.

     2.   The Expiration Date of the Warrants is hereby extended from August 1,
          2001 to August 15, 2001.

     3.   The following is hereby added to the Original Agreement as Section
          6(d):

               d.   Notwithstanding the foregoing, if, and only if, the Cashless
                    Exercise Value of one share of Common Stock is greater than
                    the Exercise Price per Share, then in lieu of exercising the
                    Warrants for cash, the holder may elect to receive shares of
                    Common Stock equal to the value (as determined below) of the
                    Warrants being exercised by surrender of the Warrant
                    Certificate at the principal office of the Company together
                    with notice of such election and the properly endorsed form
                    of election to purchase by Cashless Exercise, in which event
                    the Company shall issue to the holder a number of shares of
                    Common Stock computed using the following formula:

                                                  Y(A-B)
                                                  ------
                                            X =      A

         Where X =  the number of shares of Common Stock to be issued to the
                    holder;

               Y =  the number of shares of Common Stock purchasable under the
                    Warrants being exercised (at the date of such exercise);



<PAGE>


               A =  the Cashless Exercise Value of one share of Common Stock (at
                    the date of such exercise); and

               B =  the Exercise Price per Share (as adjusted to the date of
                    such exercise).

             "Cashless Exercise Value" of one share of Common Stock as of any
date shall mean the closing price of one share of Common Stock on the Trading
Day next preceding such date. The closing price for any Trading Day shall be:

                    i.   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 Stock Market or any similar system
                         of automated dissemination of quotations of securities
                         prices then in common use, if so quoted, or if not then
                         so quoted, the last sale price, or the closing bid
                         price if no sale occurred, of Common Stock on the
                         principal national securities exchange on which the
                         Common Stock is listed or admitted for trading; or

                    ii.  if not quoted as described in clause (i), the average
                         of the highest bid and lowest offered quotations for
                         one share of Common Stock as reported by the National
                         Quotation Bureau Incorporated if at least two
                         securities dealers have inserted both bid and offered
                         quotations for the Common Stock.

If none of the conditions set forth above is met, the Cashless Exercise Value of
one share of Common Stock as of such date shall be 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, the issue of selection of a
member firm shall be submitted to the American Arbitration Association.

     4.   The "Form of Election to Purchase by Cashless Exercise" annexed to
          this Amendment No. 7 is hereby added as an additional Annex to the
          Form of Warrant Certificate attached to the Original Agreement as
          Exhibit A.

     5.   The third paragraph of the Form of Warrant Certificate annexed to the
          Original Warrant as Exhibit A is amended by the addition of the
          following as the last sentence of the paragraph:

                  Notwithstanding the foregoing, the Warrants represented by
                  this Warrant Certificate may be exercised by Cashless
                  Exercise, as provided in Section 6(d) of the Warrant
                  Agreement, as amended.

     6.   Except as set forth in this Amendment No. 7, the Original Agreement is
          hereby ratified and confirmed in all respects.




                                       2
<PAGE>

     7.   Any Warrant Certificate evidencing Warrants need not be amended to
          reflect the changes provided for herein in order to give full effect
          to such changes.

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 7
to the Original Agreement to be duly executed and delivered by their proper and
duly authorized officers, as of the date and year first above written.

                                INSIGNIA FINANCIAL GROUP, INC.


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


                                APTS PARTNERS, L.P.


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

                                By: APTS Acquisition Corporation, its general
                                    partner

                                By: /s/ Stuart Koenig
                                    -------------------------------------------
                                    Name:  Stuart Koenig
                                    Title: Vice President










                                       3
<PAGE>


                                                                           ANNEX



                      ANNEX TO FORM OF WARRANT CERTIFICATE

                FORM OF ELECTION TO PURCHASE BY CASHLESS EXERCISE

              (To be executed upon a Cashless Exercise of Warrant)


             The undersigned hereby irrevocably elects to exercise, in
accordance with Section 6(d) of the Warrant Agreement, __________ Warrants,
representing the right to purchase __________ shares of Common Stock, by
Cashless Exercise in accordance with the terms hereof.

             The undersigned requests that a certificate for the shares of
Common Stock to be issued upon such Cashless Exercise 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:
     --------------------






                                       4