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                         INSIGNIA FINANCIAL GROUP, INC.

                             401(K) RESTORATION PLAN

                                 Amendment No. 2


         Pursuant to Section 21, the Plan is hereby amended, effective December
19, 2001, as follows:



         1.  Section 6 is amended by deleting the current provision in its
entirety and substituting in its place the following new provision:

               6. MATCHING CREDITS. An Executive's Account shall be credited
          each year with an Employer matching credit in such amount, if any, as
          the Employer's Board of Directors may, in its sole discretion,
          authorize for that year.



         2.  Section 10 is amended by adding to the end thereof the following
new distribution provision:

              In-Service Distributions.

              (a) Financial Hardship. The Committee may, in its sole discretion,
              authorize an in-service withdrawal on account of an Executive's
              unforeseeable emergency. For this purpose, an unforeseeable
              emergency means an unanticipated emergency that is caused by an
              event beyond the control of the Executive and that would result in
              severe financial hardship to the Executive if early withdrawal
              were not permitted. The amount that may be paid on account of
              hardship is limited to the amount necessary to meet the emergency.
              This amount shall be distributed from the Executive's Account as
              soon as administratively practicable following the Committee's
              approval of the distribution.

              (b) Non-Financial Hardship. At the request of an Executive, the
              Committee may, in its discretion, approve a distribution for any
              reason and for any amount from an Executive's Account provided
              that the Account value is permanently and irrevocably reduced by
              the lesser of (1) $50,000 or (2) 10 percent of the amount of the
              withdrawal.

              (c) Beneficiary Distributions. In the event an Executive is
              deceased and payments are being made to his beneficiary in
              installment payments, such payments may be withdrawn earlier than
              the scheduled distribution dates in accordance with the terms and
              conditions in (a) and (b), treating the beneficiary for this
              purpose as an Executive would be treated for purposes of
              in-service withdrawals.

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              (d) Limitation on Timing of In- Service Distributions.
              Distributions under (a), (b), and (c) above are permitted only
              during December of each year, provided that the Committee, in its
              sole discretion, may authorize distributions at other times of the
              year pursuant to such rules as it may prescribe.


         IN WITNESS WHEREOF, the Company has executed this plan amendment as of
December 19, 2001.


Dated:  ____________________           INSIGNIA FINANCIAL GROUP, INC.


                                            By  /s/ Adam B. Gilbert
                                              --------------------------------

                                            Title  Executive Vice-President
                                                 -------------------------------