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THIS DEED OF VARIATION is made on the 5 MARCH 1999

BETWEEN:-

(1)     INSIGNIA FINANCIAL GROUP, INC. ("INSIGNIA"), incorporated in the State 
        of Delaware, U.S.A., whose principal office is at 200 Park Avenue, 
        New York, New York 10166, U.S.A.; and

(2)     ALAN CHARLES FROGGATT, as agent and attorney for the Covenantors as
        defined below (the "COVENANTORS' REPRESENTATIVE").

RECITALS

(A)     Pursuant to an offer document dated 20 February 1998 (the "OFFER
        DOCUMENT"), Insignia's predecessor, also known as Insignia Financial
        Group, Inc. ("OLD INSIGNIA"), offered to acquire all the issued and to
        be issued share capital of Richard Ellis Group Limited ("REGL") and the
        offers contained in the Offer Document were declared unconditional on 25
        February 1998.

(B)     Old Insignia and Andrew Huntley and Others entered into a deed of
        warranty and indemnity dated 25 February 1998 (the "DEED OF WARRANTY AND
        INDEMNITY") pursuant to which Old Insignia and the Covenantors assumed
        obligations towards and acquired rights against each other.

(C)     By an agreement dated 26 May 1998, Old Insignia agreed to merge with
        Apartment Investment and Management Company with the latter company
        operating as the surviving corporation.

(D)     Prior to the merger referred to in Recital (C), Old Insignia transferred
        its commercial business including REGL and its subsidiaries, to a
        subsidiary of Insignia/ESG Holdings, Inc., ("IESG"), at that time a
        wholly owned subsidiary of Old Insignia. Prior to such merger, Old
        Insignia agreed to transfer its rights, obligations and liabilities
        under and in respect of the Deed of Warranty and Indemnity and the Offer
        Document to IESG.

(E)     By a Deed of Assumption and Variation (the "DEED OF ASSUMPTION AND
        VARIATION") which took effect from 30 September 1998, IESG was
        substituted for Old Insignia in respect of the rights, obligations and
        liabilities of Old Insignia under the Offer Document and the Deed of
        Warranty and Indemnity.

(F)     On 30 October 1998, IESG changed its name to "Insignia Financial Group,
        Inc."

(G)     The Covenantors' Representative was given power under the Deed of
        Warranty and Indemnity and the Offer Document on behalf of the
        Covenantors to vary, waive or agree any changes to the method of
        calculating REGL Modified Pre-Tax Profit, Base Amount and Principal
        Amount of Deferred Loan Notes to be issued, including, 


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        without limitation, in order to address any issues that may arise from 
        the acquisition or merger of a company by or with any member of the 
        Group.

(H)     The parties to this Deed wish to vary the terms of the offers contained
        in the Offer Document and the terms of the Deed of Warranty and
        Indemnity (as varied by the Deed of Assumption and Variation) in
        accordance with the terms set out in this Deed.

NOW IT IS HEREBY AGREED:-

1.      DEFINITIONS

1.1     In this Deed, including the Recitals, unless otherwise provided, words
        and expressions defined in the Offer Document and the Deed of Warranty
        and Indemnity bear the same meaning and in addition, the following words
        and expressions shall bear the following meanings:-

        "DEED"               this Deed of Variation;

        "OFFER DOCUMENT"     has the meaning given to it in Recital (A);

        "COVENANTORS"        means each of the "Covenantors" as defined in the 
                             Deed of Warranty and Indemnity;

        "RELEVANT OFFERS"    the C Ordinary Share Offer, the Cancellation
                             Alternative, the Convertible Share Offer and the 
                             Ordinary Share Offer (as each such term is defined
                             in the Offer Document)


1.2     Unless otherwise stated, in this Deed:-

        (a)    references to the parties hereto include their respective
               permitted assignees and/or the respective successors in title to
               substantially the whole of their respective undertakings and, in
               the case of individuals, to their respective estates and personal
               representatives;

        (b)    references to persons shall include bodies corporate and
               incorporated, associations, partnerships and individuals;

        (c)    words denoting the singular shall include the plural and words
               denoting any gender shall include all genders;

        (d)    references to clauses are to clauses of this Deed; and

        (e)    a reference to (or any specified provision of) the Deed of
               Warranty and Indemnity or the Offer Document is to be construed
               as a reference to the Deed of Warranty and Indemnity or the Offer
               Document (or that provision) as it has been, is by this Deed or
               may hereafter be, from time to time, amended, varied,
               supplemented, re-stated or novated.


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2.      EFFECT OF THE DEED

2.1     It is the intention of the parties to this Deed that the provisions of
        this Deed shall become binding and effective on the date stated at the
        beginning of this Deed.

2.2     Save to the extent amended by this Deed, the Deed of Warranty and
        Indemnity (as subsequently amended by the Deed of Assumption and
        Variation) and the Offer Document shall continue in full force and
        effect.

3.      VARIATION

3.1     The parties agree that the terms of the Relevant Offers as set out in
        the Offer Document shall be varied as set out in this clause 3.

3.2     The calculation of the Principal amount of Deferred Loan Notes to be
        issued under the Relevant Offers be and is hereby amended by making the
        following amendments to paragraph 15(A) of Appendix III of the Offer
        Document (Certain Definitions):-

        (a)    the  definition of "BASE AMOUNT" be deleted and replaced by the 
               following definition:-

               "BASE AMOUNT"    shall mean in respect of the First Period, the 
                                sum of (pounds sterling)5,750,000 and in respect
                                of each subsequent Relevant Period, the sum of:-

                                (a) (pounds sterling)6,000,000; and

                                (b) an amount equal to the aggregate of one 
                                    third of the Deferred Loan Notes payable in
                                    respect of each preceding Relevant 
                                    Period(s);"

        (b)    the definition of "REGL Modified Pre-tax Profit" be deleted and
               replaced by the following definition:-

               "REGL MODIFIED
               PRE-TAX PROFIT"      shall mean in respect of each Relevant 
                                    Period the profit of the combined businesses
                                    of the REGL Group (excluding Insignia RE
                                    GmbH) and the St. Quintin Group (the
                                    "ENLARGED GROUP") determined in accordance
                                    with UK GAAP applied consistently (including
                                    the recognition of all liabilities under
                                    contractual obligations) with the audited
                                    accounts of REGL for the year ending 31
                                    December 1998, before UK Corporation Tax,
                                    provided that such amount shall be adjusted
                                    as follows:-


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                                    (a)  increased by an amount equal to the
                                         effect of amortising the goodwill
                                         arising as a result of the acquisition
                                         of St. Quintin Holdings Limited or any
                                         other acquisition, the financial
                                         results of which would be included in
                                         the combined profit of the Enlarged
                                         Group;

                                    (b)  increased by any amount that is
                                         deducted from the combined profit of
                                         the Enlarged Group during the Relevant
                                         Period in respect of relevant claims
                                         under, and as defined in, the St.
                                         Quintin Agreement, provided that the
                                         aggregate of all such adjustments may
                                         never exceed(pounds sterling)100,000 in
                                         respect of all Relevant Periods;

                                    (c)  increased by an amount that is deducted
                                         from the combined profit of the
                                         Enlarged Group during the Relevant
                                         Period in respect of relevant claims
                                         under the Deed of Warranty and
                                         Indemnity provided that the aggregate
                                         of all such adjustments may never
                                         exceed(pounds sterling)150,000 in 
                                         respect of all Relevant Periods;

                                    (d)  in addition to any adjustments in
                                         accordance with paragraphs (b) and (c)
                                         above, increased by any amount that is
                                         deducted from the combined profit of
                                         the Enlarged Group during the Relevant
                                         Period in respect of relevant claims
                                         under the St Quintin Agreement or
                                         relevant claims under the Deed of
                                         Warranty and Indemnity but only to the
                                         extent that such amount is recovered by
                                         Insignia from the Escrow Fund or the
                                         escrow fund (as such latter term is
                                         defined in the St. Quintin Agreement);

                                    (e)  decreased by any gain on sale, or
                                         increased by any loss on disposal, of
                                         any portion of the business of the
                                         Enlarged Group or any sale of assets of
                                         the Enlarged Group not in the ordinary
                                         course of business;

                                    (f)  decreased by an amount equal to a rate
                                         of ten per cent. per annum (calculated
                                         on a daily basis) of all additional
                                         capital contributed or lent by Insignia
                                         (including any Insignia securities or,
                                         for the avoidance of doubt, any
                                         retained profits of the Enlarged Group)
                                         or provided in connection with any
                                         acquisitions (other than the
                                         acquisition 


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                                         of St. Quintin Holdings Limited), the
                                         results of which are included in the
                                         accounts of the Enlarged Group for any
                                         Relevant Period and so that any amount
                                         calculated in accordance with this
                                         sub-paragraph (f) shall be in
                                         substitution for any other interest
                                         charged in respect of the same capital
                                         contributed or money lent and included
                                         in the accounts of the Enlarged Group
                                         in any Relevant Period;

                                    (g)  increased by an amount equal to any
                                         interest charged on any loan provided
                                         by Insignia to the REGL Group so that
                                         REGL may purchase the business and
                                         assets of the St. Quintin Group;

                                    (h)  increased by an amount equal to ten
                                         per cent of the value of the aggregate
                                         of the proceeds of disposal in any
                                         Relevant Period of any portion of the
                                         existing UK business of the St. Quintin
                                         Group or REGL but only to the extent
                                         that such proceeds are remitted to
                                         Insignia;

                                    (i)  by disregarding, in respect of the 
                                         First Period, any profits or losses of
                                         the St. Quintin Group up to and
                                         including 28 February 1999;

                                    (j)  by disregarding any profit of REGL
                                         attributable to its business outside
                                         the United Kingdom applying its normal
                                         criteria for determining such
                                         attributions; and

                                    (k)  increased by an amount of any
                                         professional and other external costs
                                         incurred by the Enlarged Group in
                                         connection with any acquisitions or
                                         proposed acquisitions outside the
                                         United Kingdom."

        (c)    the following definitions be included:-

                      (i)    "references to the "FIRST PERIOD" are to the period
                             commencing  on 1  January  1999  and  ending  on 31
                             December 1999 (both dates inclusive), references to
                             the "SECOND PERIOD" are to the period commencing on
                             1  January  2000 and  ending on 31  December  2000,
                             references to the "THIRD  PERIOD" are to the period
                             commencing  on 1  January  2001  and  ending  on 31
                             December 2001 and references to the "FOURTH PERIOD"
                             are to the period  commencing on 1 January 2002 and
                             ending on 31 December 2002;"


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                      (ii)   "RELEVANT PERIOD" shall mean, as appropriate, the
                             First Period, the Second Period, the Third Period
                             and the Fourth Period;"

                      (iii)  "ST. QUINTIN GROUP" shall mean St. Quintin
                             Holdings Limited and its subsidiaries from time to
                             time;"

                      (iv)   "ST. QUINTIN AGREEMENT" shall mean the agreement
                             between  Insignia  Financial  Group  Inc.,  and the
                             Vendors as defined therein, whereby Insignia agrees
                             to buy and the  Vendors  agree to sell  the  entire
                             issued  share  capital  of  St.  Quintin   Holdings
                             Limited.

        (d)    the definition of "Principal amount of Deferred Loan Notes to be
               issued" be deleted and replaced by the following definition:-

                      "PRINCIPAL AMOUNT OF DEFERRED LOAN NOTES TO BE ISSUED"
                      shall mean, for each Relevant Period, the amount, if any,
                      equal to 3 times the amount by which REGL Modified Pre-tax
                      Profit exceeds the Base Amount.

        (e)    the definition of "MAXIMUM AMOUNT" be amended by deleting the
               words from the beginning of the second line of the definition to
               the end of section C on page 33 of the Offer Document and
               substituting therefor the words "below shall not exceed
               (pounds sterling)7,500,000."; and

        (f)    the definitions of "RICHARD ELLIS AUDITED FINANCIALS" and
               "PENSION FUND INDEMNITY" shall be deleted.

3.3     In consideration of the amendments made hereby, the parties hereby agree
        that Insignia shall pay to each Covenantor his appropriate proportion
        (as defined in the Deed of Warranty and Indemnity) of the sum of
        (pounds sterling)2,000,000, such payment to be made in cleared funds on 
        6 April 1999 to such account as the relevant Covenantor shall have 
        specified in writing or if no such bank account is specified, by cheque 
        to the relevant Covenantor sent to his address shown in the register of 
        such Covenantors maintained by Insignia.

3.4     In consideration of the amendments made hereby, Insignia hereby agrees
        to pay to the Covenantors an amount (the "ACQUISITION FEE") equal to 5
        per cent. of the aggregate of all consideration paid or earned (as the
        case may be) from time to time to any vendor(s) of any European (for
        these purposes, excluding the United Kingdom) companies, partnerships,
        businesses or operations of any other description acquired prior to 31
        December 2002 by Insignia or any of its subsidiary undertakings from
        time to time, provided that:-

        (a)    the acquisition of Insignia RE GmbH and Colliers Macaulay
               Nicholls, Inc. ("CMN") (but not any interest in any subsidiary of
               CMN held by any person 



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               other than CMN or a subsidiary of CMN) shall be  disregarded  for
               the purposes of determining the Acquisition Fee; and

        (b)    the Acquisition Fee for all such acquisitions shall not exceed
               (pound)1,000,000 in the aggregate.

3.5     For the purposes of clause 3.4:-

        (a)     "consideration paid or earned" shall include, without 
                limitation:-

               (i)    consideration in money or money's worth;

               (ii)   any consideration which is to be held subject to any
                      escrow arrangements (without discounting its value by
                      reason of being held subject to such escrow arrangements);

               (iii)  any signing-on fees paid to, or earned by, any vendor(s);
                      and

               (iii)  any stock options which will be deemed to have the same
                      value as attributed to such options in the transaction
                      from which they arise; and

        (b)    "vendor(s)" shall include any individual or corporate entity who/
               which is entitled to receive any consideration (excluding salary,
               on-going  consultancy fees or other normal benefits in accordance
               with any contract of  employment  or contract for  services) as a
               consequence  of becoming an employee or consultant of Insignia or
               any  of  its   subsidiary   undertakings   from   time  to  time,
               notwithstanding  that such  person or  corporate  entity  may not
               dispose  of  any  business  in  connection  with  receiving  such
               consideration.

3.6     Insignia shall pay to each Covenantor his appropriate proportion of any
        Acquisition Fee within 10 business days of the consideration to which
        such Acquisition Fee relates having been agreed or determined. Any
        payment of an Acquisition Fee shall be made in the manner provided in
        clause 3.3.

3.7     Notwithstanding anything to the contrary in the Deed of Warranty and
        Indemnity or the Offer Document, the payments to the Covenantors
        referred to in clauses 3.3, 3.4 and 3.6 shall be paid free from all
        claims, liens, charges, mortgages, pledges, encumbrances and shall not
        be subject to any equity set-off or cross-claim on the part of the
        Company against any Covenantor, including, without limitation, the
        escrow arrangements set out in clause 5 of Schedule 2 of the Deed of
        Warranty and Indemnity.

3.8     Notwithstanding anything to the contrary in the Deed of Warranty and
        Indemnity or the Offer Document, the Principal amount of Deferred Loan
        Notes issued in any Relevant Period shall be issued to the Covenantors
        free from all claims, liens, charges, mortgages, pledges, encumbrances
        and shall not be subject to any equity set-off or cross-claim on the
        part of the Company against any Covenantor and shall not be subject to
        the Escrow Arrangements, unless and save only to the extent that if, at
        the 


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        date  when  the  Deferred  Loan  Notes  are  issued,  each  Covenantor's
        appropriate  proportion of the value of any relevant  claim  outstanding
        under the Deed of  Warranty  and  Indemnity  exceeds  the amount of such
        Covenantor's  Retained Escrow  Security.  In such event,  Insignia shall
        deliver to the Escrow  Agent  Deferred  Loan Notes equal to the value of
        such shortfall of each  Covenantor's  Escrow Security and will deliver a
        copy of such certificate to each Covenantor.

4       GOVERNING LAW

4.1     This Deed (and any dispute, controversy, proceedings or claim of
        whatever nature arising out of or in any way relating to this agreement
        or its formation) shall be governed by and construed in accordance with
        English law.

4.2     The parties irrevocably submit to the non-exclusive jurisdiction of the
        High Court of Justice in London for the purpose of hearing and
        determining any dispute arising out of or in connection with this Deed
        and for the purpose of enforcement of any judgement against their
        respective assets.

EXECUTED and DELIVERED as a DEED by the parties on the date stated at the
beginning of the DEED.


EXECUTED and DELIVERED              )       By: /s/ Steven B. Siegel          
as a deed by INSIGNIA FINANCIAL     )          ------------------------------
GROUP, INC. acting by:-             )               Steven B. Siegel
                                                    President                

                                            By: /s/ Adam B. Gilbert
                                               ------------------------------
                                                    Adam B. Gilbert          
                                                    Executive Vice President 
                      Director
                      Director/Authorised Signatory



EXECUTED and DELIVERED              )       By: /s/ Alan Charles Froggatt    
as a DEED by ALAN CHARLES           )          ------------------------------
FROGGATT as agent and attorney      )               Alan Charles Froggatt    
for the Covenantors, in the                         Chief Executive Officer  
presence of:-                       )             
                                                    


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                               DATED 5 March 1999
                               ------------------






                      (1)    INSIGNIA FINANCIAL GROUP, INC.




                      (2)    ALAN CHARLES FROGGATT








                                DEED OF VARIATION


                               GPE(824.cln)/758725