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                         REGISTRATION RIGHTS AGREEMENT

         This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
September 7, 1999, is by and among GOTHAM PARTNERS, L.P., a Delaware limited
partnership ("Gotham"), GOTHAM PARTNERS III, L.P., a Delaware limited
partnership ("Gotham III"), and INSIGNIA FINANCIAL GROUP, INC., a Delaware
corporation (the "Company").

                                  WITNESSETH:

     WHEREAS, the Company and Gotham had entered into a registration rights
agreement dated as of September 15, 1998 regarding the registration of an
aggregate of 42,500 shares of Common Stock, par value $0.01 per share, of the
Company (the "Common Stock"), which shares were subject to the Gotham Warrants
(as defined below);

     WHEREAS, on September 1, 1999 Gotham and Gotham III, exercised the Gotham
Warrants and received an aggregate of 42,500 shares of Common Stock (the
"Gotham Shares");

     WHEREAS, the parties hereto desire to terminate the existing registration
rights agreement covering the Gotham Shares and to enter into this Agreement to
provide for registration rights for such shares;

     NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     SECTION 1. DEFINED TERMS. The following terms shall have the following
meanings:

     "COMMISSION" means the Securities and Exchange Commission or any similar
federal agency then having jurisdiction to enforce the Securities Act and other
federal securities laws.

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or
any successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.

     "GOTHAM WARRANTS" means (i) Warrant Certificate No. G-2 dated October 9,
1998 for 42,037 shares of Common Stock registered in the name of Gotham and
(ii) Warrant Certificate No. G-3 dated October 9, 1998 for 463 shares of Common
Stock registered in the name of Gotham III.

     "HOLDER" means any Person owning or having the right to acquire
Registrable Securities, or any assignee thereof in accordance with Section
8(d).


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     "INVESTOR REQUEST" means a request from Holders that in the aggregate
beneficially own at least 50% of the Registrable Securities outstanding as of
the date of such request, which shall set forth the number of Registrable
Securities to be registered (which shall be at least 50% of the Registrable
Securities outstanding as of the date of the request).

     "ORIGINAL REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of September 15, 1998 between the Company and Gotham
regarding the registration of 42,500 shares of Common Stock subject to the
Gotham Warrants.

     "PERSON" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
government (or an agency or political subdivision thereof), or other entity of
any kind.

     "REGISTERABLE SECURITIES," collectively, means (i) the Gotham Shares and
(ii) any shares of Common Stock or other securities of the Company hereafter
distributed to the Holders by the Company with respect to the Gotham Shares as
a stock dividend or otherwise; provided, however, that any such securities
shall cease to be Registerable Securities when (a) such securities shall have
been registered under the Securities Act, the registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act, and such securities shall have been disposed of pursuant to
such effective registration statement, (b) such securities shall have been
otherwise transferred, if new certificates or other evidences of ownership for
them not bearing a legend restricting further transfer and not subject to any
stop transfer order or other restrictions on transfer shall have been delivered
by the Company and subsequent disposition of such securities shall not require
registration or qualification of such securities under the Securities Act or
any state securities law then in force, or (c) such securities shall cease to
be outstanding.

     "SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.

SECTION 2.  REGISTRATION RIGHTS.

     (a) Upon the receipt of a written Investor Request that the Company file a
registration statement under the Securities Act to register that number of
Registrable Securities set forth in the Investor Request, the Company shall,
within twenty (20) days from receipt thereof, give written notice of such
request to all Holders and, subject to the other provisions of this Agreement,
the Company shall file (as expeditiously as possible, and in any event within
sixty (60) days after receipt of the Investor Request), and use its
commercially reasonable best efforts to have declared effective a registration
statement under the Securities Act with respect to the resale (in a
non-underwritten offering) of all Registrable Securities which Holders request
to be registered by the giving of notice to the Company within twenty (20) days
after the mailing of the Company's notice referred to above, each such notice
to be given in accordance with Section 8 below. The Company shall be obligated
to effect only one registration pursuant to this Agreement.



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     (b) Notwithstanding Section 2(a) above, if the Company shall furnish to
the Holders who have submitted the Investor Request a certificate signed by an
executive officer of the Company stating that in the good faith judgment of the
Board of Directors of the Company, it would be detrimental to the Company and
its stockholders for such registration statement to be filed and it is
therefore essential to defer the filing of such registration statement, the
Company shall have the right to defer such filing for up to one hundred twenty
(120) days after receipt of the Investor Request; provided, however, that, if
at the time of receipt of the Investor Request for a registration, the Company
has fixed plans to file within sixty (60) days after such request a
registration statement covering the sale of any of its securities in a public
offering under the Securities Act, no registration shall be required to be
initiated pursuant to Section 2(a) until ninety (90) days after the effective
date of such Company registration unless the Company is no longer proceeding
diligently to effect such registration.

     (c) In addition to its obligations pursuant to Section 2(a), the Company
shall, as expeditiously as possible:

          (i) file with the Commission such amendments and supplements to such
     registration statement and the prospectus used in connection therewith as
     may be necessary to keep such registration statement effective and to
     comply with the provisions of the Securities Act with respect to the sale
     or other disposition of all Registerable Securities covered by such
     registration statement until such time as all of such securities have been
     disposed of in a public offering or otherwise cease to be Registerable
     Securities.

          (ii) furnish to such selling security holders such number of copies
     of a prospectus or other prospectus, including a preliminary prospectus,
     in conformity with the requirements of the Securities Act, and such other
     documents as such selling security holders may reasonably request;

          (iii) use its commercially reasonable best efforts to register or
     qualify the securities covered by such registration statement under such
     other securities or blue sky laws of such jurisdictions within the United
     States and Puerto Rico as each Holder shall request (provided, however,
     that the Company shall not be obligated to qualify as a foreign
     corporation to do business under the laws of any jurisdiction in which it
     is not then qualified or to file any general consent to service of
     process), and do such other reasonable acts and things as may be required
     of it to enable such Holder to consummate the disposition in such
     jurisdiction of the securities covered by such registration statement; and

          (iv) otherwise use its commercially reasonable best efforts to comply
     with all applicable rules and regulations of the Commission, and make
     available to its security holders, as soon as reasonably practicable, but
     not less than 18 months after the effective date of the registration
     statement, an earnings statement covering the period of at least 12 months
     beginning with the first full month after the effective date of such
     registration statement, which earnings statements shall satisfy the
     provisions of Section 11(a) of the Securities Act.

     (d) It shall be a condition precedent to the obligation of the Company to
take any action pursuant to this Section 2 in respect of the Registerable
Securities which are to be registered for any

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Holder that such Holder shall furnish to the Company in writing such
information regarding the securities held by such Holder and the intended
method of disposition thereof as the Company shall reasonably request and as
shall be required under the Securities Act in connection with the action to be
taken by the Company.

     (e) If the Company has delivered preliminary or final prospectuses to a
Holder and after having done so the prospectus is amended or supplemented to
comply with the requirements of the Securities Act, the Company shall promptly
notify such Holder and, if requested by the Company, such Holder shall
immediately cease making offers of securities and return all prospectuses to
the Company. The Company shall promptly provide such holder with revised
prospectuses and, following receipt of the revised prospectuses, such Holder
shall be free to resume making offers of the securities.

     SECTION 3. REGISTRATION EXPENSES. All expenses incurred in complying with
Section 2 of this Agreement, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel for the
Company, expense of any special audits incident to or required by such
registration, time charges of Company personnel and expenses of complying with
the securities or blue sky laws of any jurisdictions pursuant to Section
2(c)(iii), shall be paid by the Company, except that the Company shall not be
liable for or pay the fees and disbursements of counsel for any Holder or any
fees, discounts, or commissions to any Person in respect of the Registerable
Securities sold by such Holder.

     SECTION 4. INDEMNIFICATION AND CONTRIBUTION. (a) In connection with the
registration of Registerable Securities under the Securities Act pursuant to
this Agreement, the Company shall indemnify and hold harmless the seller of
such Registerable Securities and each other Person, if any, who controls such
seller within the meaning of the Securities Act or the Exchange Act, against
any losses, claims, damages, or liabilities, joint or several to which such
seller or controlling person may become subject under the Securities Act, the
Exchange Act or any other statute or at common law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue or alleged untrue statement of any material fact
contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, or (ii)
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading;
and the Company shall reimburse such seller and each such controlling person
for any legal or any other expenses reasonably incurred by such Person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, or liability
arises out of or is based upon any untrue or alleged untrue statement or
omission or alleged omission made in such registration statement, preliminary
prospectus, prospectus, or amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on behalf
such Person specifically for use therein.

     (b) In connection with the registration of Registerable Securities under
the Securities Act pursuant to this Agreement, each Holder, by acceptance
thereof and as a condition to the rights granted in this Agreement, agrees to
indemnify and hold harmless the Company, each of its directors

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and officers, and each Person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages, or liabilities, joint or several, to which the Company or any such
director or officer or any such Person may become subject under the Securities
Act, the Exchange Act or any other statute or at common law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any registration statement under which such
securities were registered on behalf of the holder under the Securities Act,
any preliminary prospectus or final prospectus contained in the registration
statement, or any amendment or supplement to the registration statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statement
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of the holder, specifically for use in connection with the preparation
of such registration statement, prospectus, amendment or supplement.

     (c) Each party entitled to indemnification under this Section 4 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnifying
Party has actual knowledge of any claim as to which indemnify may be sought,
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting therefrom; provided, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld); and, provided, further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 4, except to the
extent that such failure to give notice prejudices the Indemnifying Party. The
Indemnified Party may participate in such defense at such party's expense;
provided, however, that the Indemnifying Party shall pay the expense of one law
firm for all Indemnified Parties if representation of such Indemnified Parties
by the counsel retained by the Indemnifying Party would be inappropriate due to
actual or potential differing interests between an Indemnified Party and any
other party represented by such counsel in such proceeding. No Indemnifying
Party, in the defense of any such claim or litigation shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect of such claim or litigation, and no Indemnified Party
shall consent to entry of any judgment or settle such claim or litigation
without the prior written consent of the Indemnifying Party.

     (d) If the indemnification provided for in this Section 4 from the
Indemnifying Party is unavailable to an Indemnified Party hereunder in respect
of any losses, claims, damages, liabilities, or expenses referred to herein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such losses, claims, damages, liabilities, or expenses in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and the Indemnified Parties in connection with the actions which resulted
in such losses, claims, damages, liabilities, or expenses, as well as any other
relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Parties shall be determined by reference to, among other
things, whether any action in question, including any

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untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such Indemnifying Party or Indemnified Parties, as the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities, and expenses referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with any investigation or proceeding.

         The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 4(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not also guilty of such fraudulent misrepresentation.

     SECTION 5. "STAND-OFF" AGREEMENT. Each Holder, if requested by the Company
and an underwriter of Common Stock, shall agree not to sell or otherwise
transfer or dispose of any Common Stock held by it for a specified period of
time (not to exceed an aggregate of ninety (90) days in any three hundred
sixty-five (365) day period) following the effective date of a registration
statement under the Securities Act filed by the Company with respect to an
underwritten offering to the public; provided, that:

          (i) the Company shall not make such a request more than twice in any
     calendar year; and

          (ii) all investors in Common Stock of the Company (other than holders
     which purchased registered shares in the open market) holding not less
     than the number of shares of Common Stock held by such Holder (in each
     case including shares of Common Stock issuable upon the conversion of
     convertible securities, or upon the exercise of options, warrants or
     rights) and all executive officers and directors of the Company enter into
     similar agreements.

     SECTION 6. CERTAIN LIMITATIONS ON REGISTRATION RIGHTS. Notwithstanding the
other provisions of this Agreement, the Company shall not be obligated to
register or maintain the registration of the Registerable Securities of any
holder if, in the opinion of Proskauer Rose LLP or such other counsel to the
Company knowledgeable in securities law matters, the public sale of such
holder's Registerable Securities may be effected without registering such
Registerable Securities under the Securities Act.

     SECTION 7. TERMINATION OF ORIGINAL REGISTRATION RIGHTS AGREEMENT. The
parties hereto agree that the Original Registration Rights Agreement is hereby
terminated and all obligations of the Company thereunder are hereby
extinguished.

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         SECTION 8.  MISCELLANEOUS.

         (a) REMEDIES. Each Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company agrees
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of this Agreement and hereby
agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate. In any action or proceeding brought to enforce
any provision of this Agreement or where any provision hereof is validly
asserted as a defense, the successful party shall be entitled to receive
reasonable attorneys' fees in addition to any other available remedy.

     (b) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified, or supplemented, and
waivers or consents to departure from the provisions hereof may not be given,
unless the Company has obtained the written consent of Holders of at least a
majority of the Registerable Securities then outstanding.

     (c) NOTICES. Any notice, demand, request, consent, approval, declaration,
delivery or other communication hereunder to be made pursuant to the provisions
of this Agreement shall be sufficiently given or made if in writing and either
delivered in person with receipt acknowledged or sent by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:

                  (i)      If to Gotham or Gotham III:

                  Gotham Partners, L.P.
                  110 East 42nd Street
                  18th Floor
                  New York, New York 10017

                  (i)      If to the Company:

                  Insignia Financial Group, Inc.
                  200 Park Avenue
                  New York, New York  10166
                  Attention:  General Counsel

     (ii) If to any Holder other than the Persons listed above, at its last
known address appearing on the books of the Company maintained for such
purpose, or at such other address as may be substituted by notice given as
herein provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Every notice, demand,
request, consent, approval declaration, delivery, or other communication
hereunder shall be deemed to have been duly given or served on the date on
which personally delivered, with receipt acknowledged, or three (3) business
days after the same shall have been deposited in the United States mail.

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     (d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties hereto,
including any Person to whom Registerable Securities are transferred.

     (e) HEADINGS. The headings in this Agreement are for convenience of
reference only, and shall not limit or otherwise affect the meaning thereof.

     (f) GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York, without regard to the provisions thereof relating to
conflict of laws.

     (g) SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

     (h) ENTIRE AGREEMENT. This Agreement represents the complete agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to the subject matter hereof.


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

                    GOTHAM PARTNERS, L.P.

                    By:      Section H Partners, L.P.,
                             its general partner

                             By:      DPB Corp, a general partner

                                      By: /s/ David Berkowitz
                                      ---------------------------
                                            David Berkowitz
                                            President

                    GOTHAM PARTNERS III, L.P.

                    By: Section H Partners, L.P.,
                          its general partner

                    By: DPB Corp, a general partner

                             By: /s/ David Berkowitz
                                 ---------------------------
                                   Name: David Berkowitz
                                   Title: President

                    INSIGNIA FINANCIAL GROUP, INC.

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


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