THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE
SECURITIES ACT.

No. of Shares of Common Stock:                  Warrant No. 5
                                 WARRANT
                       To Purchase Common Stock of
                     STANDARD MANAGEMENT CORPORATION

          THIS IS TO CERTIFY THAT FLEET NATIONAL BANK, or its registered
assigns, is entitled, at any time or from time to time prior to the
Expiration Date (as hereinafter defined), to purchase from Standard
Management Corporation, an Indiana corporation (the "COMPANY"), 20,000
shares of Common Stock (as hereinafter defined and subject to adjustment
as provided herein), in whole or in part, at a purchase price of $7.125
per share, all on the terms and conditions and pursuant to the provisions
hereinafter set forth.

1.DEFINITIONS.  As used in this Warrant, the following terms have the
respective meanings set forth below:

"ADDITIONAL SHARES OF COMMON STOCK" shall mean all shares of Common Stock
issued or issuable by the Company after the Closing Date, other than the
Warrant Stock.

"AFFILIATE" shall have the meaning set forth in the Revolving Line of
Credit Agreement.

"ASSIGNED VALUE" shall mean, in respect of any share of Common Stock on
any date herein specified (i) if there is a public market for Common
Stock, the average closing price of the Common Stock on the largest
exchange on which such shares are traded (or if not traded on an
exchange, then the average of the closing bid and ask prices quoted
over-the-counter) over the 10 trading days prior to the date of the
determination (as such prices are reported in The Wall Street Journal or
if not so reported, in any nationally recognized financial journal or
newspaper), (ii) if there is no public market for Common Stock, the
highest price at which shares of Common Stock are offered for sale in a
public offering registered pursuant to the Securities Act or in an
arms-length private offering, if any such offering is pending (unless
such offer is revoked prior to such sale) on the date of determination of
the Assigned Value, or (iii) if there is no public market for Common
Stock and no such offering is pending, the fair market value per share of
Common Stock as determined in good faith by the Company's board of
directors.

"BUSINESS DAY" shall mean any day that is not a Saturday or Sunday or a
day on which banks are required or permitted to be closed in the State of
Connecticut.

"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of
capital stock, including each class of common stock and preferred stock
of such Person.

"CLOSING DATE" shall mean August 19, 1998.

"COMMISSION" shall mean the Securities and Exchange Commission or any
other federal agency then administering the Securities Act and other
federal securities laws.

"COMMON STOCK" shall mean (except where the context otherwise indicates)
the Common Stock, no par value, of the Company as constituted on the
Closing Date, and any Capital Stock into which such Common Stock may
thereafter be changed, and shall also include (i) Capital Stock of the
Company of any other class (regardless of how denominated) issued to the
holders of shares of Common Stock upon any reclassification thereof which
is also not preferred as to dividends or assets over any other class of
stock of the Company and which is not subject to redemption and (ii)
shares of common stock of any successor or acquiring corporation (as
defined in Section 4.7) received by or distributed to the holders of
Common Stock of the Company in the circumstances contemplated by Section
4.7.

"COMMON STOCK OUTSTANDING" shall mean, at any date as of which the number
of shares thereof is to be determined, all issued and outstanding shares
of Common Stock and shall include all shares issuable in respect of
outstanding scrip or any certificates representing fractional interests
in shares of Common Stock.

"CONVERTIBLE SECURITIES" shall mean evidences of indebtedness, shares of
stock or other securities which are convertible into or exchangeable,
with or without payment of additional consideration in cash or property,
for Additional Shares of Common Stock, either immediately or upon the
occurrence of a specified date or a specified event.

"CURRENT MARKET PRICE" shall mean, in respect of any share of Common
Stock on any date herein specified, the Assigned Value per share of
Common Stock as at such date.

"CURRENT WARRANT PRICE" shall mean, in respect of a share of Common Stock
at any date herein specified, the price at which a share of Common Stock
may be purchased pursuant to exercise of this Warrant on such date.

"EXPIRATION DATE" shall mean August 19, 2005.

"FULLY-DILUTED OUTSTANDING" shall mean, (i) when used with reference to
Common Stock, at any date as of which the number of shares thereof is to
be determined, the number of shares of Common Stock Outstanding at such
date and the number of shares of Common Stock which would be outstanding
if the Warrants, the Company's convertible preferred stock, if any, and
all other outstanding rights, options or warrants to purchase, or
securities convertible into, shares of Common Stock and all security
convertible or exchangeable into any of the foregoing, that are "in-the-
money" were converted into or exercised or exchanged for shares of Common
Stock on such date, and (ii) when used with reference to Voting
Securities, at any date as of which the number of shares thereof is to be
determined, the number of shares of Voting Securities Outstanding at such
date and the number of shares of Voting Securities which would be
outstanding if any outstanding rights, warrants or options to purchase,
or securities convertible into, shares of Voting Securities and all
securities convertible or exchangeable into any of the foregoing, that
are "in-the-money" were converted into or exercised or exchanged for
shares of Voting Securities on such date.

"GAAP" shall mean generally accepted accounting principles in the United
States of America as from time to time in effect.

"HOLDER" shall mean the Person or Persons in whose name this Warrant or,
as applicable, the Warrant Stock, is registered on the books of the
Company maintained for such purpose.

"INITIAL PUBLIC OFFERING" shall mean the first time a registration
statement filed by the Company under the Securities Act with respect to
its securities, whether on behalf of itself or otherwise, is declared
effective, other than a registration statement filed on Form S-8 or any
successor forms thereto.

"LIEN" means any mortgage, pledge, lien, encumbrance, charge or adverse
claim affecting title or resulting in an encumbrance against real or
personal property, or a security interest of any kind (including, without
limitation, any conditional sale or other title retention agreement or
any lease in the nature thereof, and any filing of or agreement to give
any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).

"MAJORITY HOLDERS" shall mean Holders of more than 50% of (i) Warrants
exercisable for the aggregate number of shares of Common Stock then
purchasable upon exercise of all Warrants, whether or not then
exercisable, PLUS (ii) where a provision affects Holders of the Warrant
Stock, the Warrant Stock.

"OTHER PROPERTY" is defined in Section 4.7.

"PERSON" shall have the meaning defined in the Revolving Line of Credit
Agreement.

"REGISTRATION RIGHTS AGREEMENT" shall mean that certain Amended and
Restated Registration Rights Agreement dated as of August 19, 1998 by and
between the Company and Holder.

"RESTRICTED COMMON STOCK" shall mean shares of Common Stock which are, or
which upon their issuance on the exercise of this Warrant would be,
evidenced by a certificate bearing the restrictive legend set forth in
Section 9 herein.

"REVOLVING LINE OF CREDIT AGREEMENT" shall mean that certain Amended and
Restated Revolving Line of Credit Agreement dated as of November 8, 1996,
by and between the Company and Holder, as amended by that certain
Amendment No. 1 to Amended and Restated Revolving Line of Credit
Agreement and Other Loan Documents dated as of March 10, 1998 by and
between the Company and Holder, as amended by that certain Amendment No.
2 to Amended and Restated Revolving Line of Credit Agreement and Other
Loan Documents dated as of September 24, 1998 by and between the Company
and the Holder.

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

"SUBSIDIARY" shall have the meaning set forth in the Revolving Line of
Credit Agreement.

"VOTING SECURITIES" means any class of Capital Stock of a corporation or
other equity shares, interests, participations, rights in or other
equivalents (however designated) of a Person other than a corporation,
and any rights (including without limitation debt securities convertible
into Capital Stock), warrants or options exercisable or exchangeable for
or convertible into such Capital Stock or other equity securities,
pursuant to which the holders thereof have (or would have upon exercise,
conversion or exchange) the general voting power under ordinary
circumstances to vote for the election of directors, managers, trustees
or general partners of any Person (irrespective of whether or not at the
time any other class or classes will have or might have voting power by
reason of the happening of any contingency).

"VOTING SECURITIES OUTSTANDING" shall mean, at any date as of which the
number of shares thereof is to be determined, all issued and outstanding
shares of Voting Securities, and shall include all shares issuable in
respect of outstanding scrip or any certificates representing fractional
interests in shares of Voting Securities.

"WARRANTS" shall mean all of the Warrants of the Company issued prior to
or on the date hereof or to be issued subsequent to the date hereof
pursuant to the Revolving Line of Credit Agreement, including this
Warrant, and all warrants issued upon transfer, division or combination
of, or in substitution for, any thereof.  All Warrants shall at all times
be identical as to terms and conditions, except as to date of issuance,
the purchase price, the number of shares of Common Stock for which they
may be exercised and the date by which such Warrants must be exercised.

"WARRANT PRICE" shall mean an amount equal to (i) the number of shares of
Common Stock being purchased upon exercise of this Warrant pursuant to
Section 2.1 multiplied by (ii) the Current Warrant Price as of the date
of such exercise.

"WARRANT STOCK" shall mean the shares of Common Stock issuable to the
Holders upon the exercise of this Warrant.


2.EXERCISE OF WARRANT: OTHER AGREEMENTS

          2.1.MANNER OF EXERCISE.

               (i)From and after the date hereof until 5:00 P.M., New
York City time, on the Expiration Date, Holder may exercise this Warrant,
on any Business Day, for all or any part of the number of shares of
Common Stock purchasable hereunder. In order to exercise this Warrant, in
whole or in part, Holder shall deliver to the Company at its principal
office at 9100 Keystone Crossing, Suite 600, Indianapolis, Indiana 46240,
or at the office or agency designated by the Company pursuant to Section
11, (a) a written notice of Holder's election to exercise this Warrant,
which notice shall specify the number of shares of Common Stock to be
purchased, (b) this Warrant, (c) payment of the Warrant Price by
certified or official bank check from Holder, unless the Holder is making
a cashless exercise pursuant to Section 2.1(iii) herein, and (d) if the
Holder is making a cashless exercise pursuant to Section 2.1(iii) herein,
a statement.  Such notice shall be substantially in the form of EXHIBIT A
hereto, duly executed by Holder or its agent or attorney.

               (ii)Upon receipt thereof, the Company shall, as promptly
as practicable, and in any event within ten (10) Business Days
thereafter, execute or cause to be executed and deliver or cause to be
delivered to Holder a certificate or certificates representing the
aggregate number of shares of Common Stock issuable upon such exercise as
hereinafter provided. The stock certificate or certificates so delivered
shall be, to the extent possible, in such denomination or denominations
as such Holder shall request in the notice and shall be registered in the
name of Holder or such other name as shall be designated in the notice.
This Warrant shall be deemed to have been exercised and such certificate
or certificates shall be deemed to have been issued, and Holder or any
other Person so designated to be named therein shall be deemed to have
become a holder of record of such shares for all purposes, as of the date
the notice, together with the check or checks and this Warrant, is
received by the Company as described above and all taxes required to be
paid by Holder, if any, pursuant to Section 2.2 prior to the issuance of
such shares have been paid. If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or
certificates representing the Warrant Stock, deliver to Holder a new
Warrant evidencing the rights of Holder to purchase the unpurchased
shares of Common Stock called for by this Warrant, which new Warrant
shall in all other respects be identical with this Warrant, or, at the
request of Holder, appropriate notation may be made on this Warrant and
the same returned to Holder.

                    (iii)(1)In lieu of paying the Warrant Price, Holder
may elect to receive shares of the Company's Common Stock equal to the
value of this Warrant (or the portion thereof being exercised), in which
event the Company shall issue to Holder the number of shares of the
Company's Common Stock computed using the following formula:

                    X  =  Y (A-B)
                                  A

                    Where:

X  =the number of shares of Warrant Stock to be issued to the Holder;

Y  =the number of shares of Warrant Stock otherwise purchasable (or the
portion thereof being exercised) under this Warrant (at the date of
exercise);

A  =the Current Market Price of one share of the Company's Common Stock
(at the date of such exercise); and

B  =the Current Warrant Price (as adjusted to the date of such exercise).

                    (2)In lieu of paying the Warrant Price, Holder may
elect to receive cash equal to the value of this Warrant (or the portion
thereof being exercised), in which event the Company shall pay to Holder
cash in an amount computed using the following formula:

                    X  =  Y  (A-B)

                    Where:

X  =the amount of cash to be paid to Holder;

Y  =the number of shares of Warrant Stock otherwise purchasable (or the
portion thereof being exercised) under this Warrant (at the date of
exercise);

A  =the Current Market Price of one share of the Company's Common Stock
(at the date of such exercise); and

B  =the Current Warrant Price (as adjusted to the date of such exercise).


          2.2.PAYMENT OF TAXES. All shares of Common Stock issuable upon
the exercise of this Warrant pursuant to the terms hereof shall be
validly issued, fully paid and nonassessable and, to the extent permitted
by law, free of liens or preemptive rights. The Company shall pay all
expenses in connection with, and all taxes and other governmental charges
that may be imposed with respect to, the issue or delivery thereof unless
such tax is imposed by law on Holder, in which case such tax or charge
shall be paid by Holder. The Company shall not be required, however, to
pay any tax or other charge imposed in connection with any transfer
involved in the issue of any certificate for shares of Common Stock
issuable upon exercise of this Warrant in any name other than that of
Holder, and in such case, the Company shall not be required to issue or
deliver any stock certificate until such tax or other charge has been
paid or it has been established to the satisfaction of the Company that
no such tax or other charge is due.

          2.3.OTHER AGREEMENTS.  This Warrant and the Warrant Stock shall
be governed by the terms of this Warrant, the Registration Rights
Agreement and, to the extent applicable, the Revolving Line of Credit
Agreement (the terms of which are hereby incorporated herein by this
reference). Each Holder agrees to be bound by, and shall enjoy the
benefits of, this Warrant, the Registration Rights Agreement and the
Revolving Line of Credit Agreement.  The registered holder of the Warrant
Stock issued upon exercise of this Warrant (in whole or in part) shall be
entitled to all rights granted pursuant to the Registration Rights
Agreement and agrees to be bound by all of the obligations and
limitations thereof, including the ability of the Company to elect to
make a cash payment to the Holder as more particularly described in
Section 1.1(ii) of the Registration Rights Agreement in lieu of
proceeding with a Demand Registration (as such term is defined in the
Registration Rights Agreement).


3.TRANSFER. DIVISION AND COMBINATION.

          3.1.TRANSFER.  Subject to compliance with Section 9 herein,
Holder shall have the right to transfer of this Warrant and all rights
hereunder and the Warrant Stock, in each case, in whole or in part.  Such
transfer shall be registered on the books of the Company to be maintained
for such purpose, upon surrender of this Warrant or the Warrant Stock at
the principal office of the Company referred to in Section 2.1 or the
office or agency designated by the Company pursuant to Section 11,
together with, in the case of this Warrant, a written assignment of this
Warrant substantially in the form of EXHIBIT B hereto duly executed by
Holder or its agent or attorney and, in the case of Warrant Stock, stock
powers or other instrument of assignment duly executed, and, in each
case, funds sufficient to pay any transfer taxes payable upon the making
of such transfer.

          3.2.DIVISION AND COMBINATION. This Warrant may be divided or
combined with other Warrants upon presentation hereof at the aforesaid
office or agency of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be
issued, signed by Holder or its agent or attorney. Subject to compliance
with this Section 3, as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new
Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.

          3.3.EXPENSES. The Company shall prepare, issue and deliver at
its own expense (other than transfer taxes) the new Warrant or Warrants
under this Section 3.

          3.4.MAINTENANCE OF BOOKS. The Company agrees to maintain, at
its aforesaid office or agency, books for the registration and the
registration of transfer of the Warrants.


4.ADJUSTMENTS.

The number of shares of Common Stock for which this Warrant is
exercisable shall be subject to adjustment from time to time as set forth
in this Section 4.  The Company shall give each Holder notice of any
event described below which requires an adjustment pursuant to this
Section 4 at the time of such event.

          4.1.STOCK DIVIDENDS. SUBDIVISIONS AND COMBINATIONS.  If, at any
time, the Company shall:

               (i)pay holders of its Common Stock a dividend in, or
otherwise make a distribution of, Additional Shares of Common Stock,

               (ii)subdivide its outstanding shares of Common Stock into
a larger number of shares of Common Stock,

               (iii)combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or

               (iv)issue any shares of equity securities pursuant to a
reclassification of shares of Common Stock,

then the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be
adjusted to equal the number of shares of Common Stock which a record
holder of the same number of shares of Common Stock for which this
Warrant is exercisable immediately prior to the occurrence of such event
would own or be entitled to receive after the happening of such event.

          The Current Warrant Price shall be adjusted to equal the
Current Warrant Price hereunder immediately prior to any such adjustment
multiplied by a fraction, the numerator of which shall be the number of
shares on a Fully Diluted Outstanding basis immediately prior to such
adjustment and the denominator of which shall be the number of shares on
a Fully Diluted Outstanding basis immediately after such event.

          4.2.CERTAIN OTHER DISTRIBUTIONS. If, at any time, the Company
shall pay holders of its Common Stock a dividend in, or otherwise
distribute:

               (i)cash,

               (ii)any evidences of its indebtedness, any shares of its
stock or any other securities or property of any nature whatsoever (other
than cash, Convertible Securities or Additional Shares of Common Stock),
or

               (iii)any warrants or other rights to subscribe for or
purchase any evidences of its indebtedness, any shares of its stock or
any other securities or property of any nature whatsoever (other than
cash, Convertible Securities or Additional Shares of Common Stock),

then the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product of the number of
shares of Common Stock for which this Warrant is exercisable immediately
prior to such adjustment by a fraction (I) the numerator of which shall
be the Current Market Price per share of Common Stock at the date of such
payment and (II) the denominator of which shall be (x) such Current
Market Price per share of Common Stock minus (y) the amount allocable to
one share of Common Stock of any such cash so distributable and of the
fair value (as determined in good faith by the Board of Directors of the
Company) of any and all such evidences of indebtedness, shares of stock,
other securities or property or warrants or other subscription or
purchase rights so distributable. A reclassification 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) into shares of Common Stock and shares of
any other class of stock shall be deemed a distribution by the Company to
the holders of its Common Stock of such shares of such other class of
stock within the meaning of this Section 4.2 and, if the outstanding
shares of Common Stock shall be changed into a larger or smaller number
of shares of Common Stock as a part of such reclassification, such change
shall be deemed a subdivision or combination, as the case may be, of the
outstanding shares of Common Stock within the meaning of Section 4.1.

The Current Warrant Price shall be adjusted to equal the Current Warrant
Price hereunder immediately prior to any such adjustment multiplied by a
fraction, the numerator of which shall be the number of shares for which
this Warrant is exercisable immediately prior to such adjustment and the
denominator of which shall be the number of shares for which this Warrant
is exercisable immediately after such adjustment, as calculated above.

          4.3.ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK.

               (i)If at any time the Company shall (except as hereinafter
provided) issue or sell any Additional Shares of Common Stock for
consideration in an amount per Additional Share of Common Stock less than
the Current Market Price, then the number of shares of Common Stock for
which this Warrant is exercisable shall be adjusted to equal the product
obtained by multiplying the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to such issue or sale by a
fraction (I) the numerator of which shall be the number of Fully Diluted
Outstanding shares of Common Stock immediately after such issue or sale,
and (II) the denominator of which shall be the number of Fully Diluted
Outstanding shares of Common Stock immediately prior to such issue or
sale plus the number of shares which the aggregate offering price of the
total number of such Additional Shares of Common Stock would purchase at
the then Current Market Price.  Current Warrant Price shall be adjusted
to equal the Current Warrant Price hereunder immediately prior to any
such adjustment multiplied by a fraction, the numerator of which shall be
the number of shares for which this Warrant is exercisable immediately
prior to such adjustment, and the denominator is the number of shares for
which this Warrant is exercisable immediately after such adjustment, as
calculated above.

               (ii)The provisions of Section 4.3(i) shall not apply to
any issuance of Additional Shares of Common Stock for which an adjustment
is provided under Section 4.1. No adjustment of the number of shares of
Common Stock for which this Warrant shall be exercisable shall be made
under Section 4.3(i) upon the issuance of any Additional Shares of Common
Stock which are issued pursuant to the exercise of any warrants, options
or other subscription or purchase rights or pursuant to the exercise of
any conversion or exchange rights in any Convertible Securities, if any
such adjustment shall previously have been made upon the issuance of such
warrants or other rights or upon the issuance of such Convertible
Securities (or upon the issuance of any warrant or other rights therefor)
pursuant to Section 4.4.

          4.4.ISSUANCE OF WARRANTS, CONVERTIBLE SECURITIES OR OTHER
RIGHTS. If, at any time, the Company shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive a
distribution of, or shall in any manner (whether directly or by
assumption in a merger in which the Company is the surviving corporation
or otherwise) issue or sell, any warrants, options or other rights to
subscribe for or purchase any Additional Shares of Common Stock or any
Convertible Securities, whether or not the rights to exercise, purchase,
exchange or convert thereunder are immediately exercisable, and the price
per share for which Common Stock is issuable upon the exercise of such
warrants, options or other rights or upon conversion or exchange of such
Convertible Securities shall be less than the Current Market Price in
effect immediately prior to the exercise of this Warrant, then the number
of shares for which this Warrant is exercisable and the Current Warrant
Price shall each be adjusted as provided in Section 4.3 on the basis that
the maximum number of Additional Shares of Common Stock issuable
(assuming immediate exercisability for all shares covered) pursuant to
all such warrants, options or other rights or necessary to effect the
conversion or exchange of all such Convertible Securities shall be deemed
to have been issued as of the date of the exercise of this Warrant. No
further adjustments of the number of shares for which this Warrant is
exercisable or the Current Warrant Price shall be made upon the actual
issue of such Common Stock or of such Convertible Securities upon
exercise of such warrants or other rights or upon the actual issue of
such Common Stock upon such conversion or exchange of such Convertible
Securities.

          4.5.OTHER ACTION AFFECTING WARRANT. If at any time or from time
to time the Company shall take any action in respect of or affecting the
Common Stock other than an action described in any of the foregoing
Sections 4.1 to 4.4, inclusive, then, unless in the reasonable judgment
of the Board of Directors of the Company such action will not have a
materially adverse effect upon the rights of any Holder, the number of
shares of Common Stock for which this Warrant is exercisable shall be
adjusted in such manner and at such time as the Board of Directors of the
Company may in good faith determine to be equitable under the
circumstances.

          4.6.OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER SECTION
4.6. The following provisions shall be applicable to the making of
adjustments of the number of shares of Common Stock for which this
Warrant is exercisable provided for in this Section 4:

               (i)COMPUTATION OF CONSIDERATION. To the extent that any
Additional Shares of Common Stock or any Convertible Securities or any
warrants, options or other rights to subscribe for or purchase any
Additional Shares of Common Stock or any Convertible Securities shall be
issued for cash consideration, the consideration received by the Company
therefor shall be the amount of the cash received by the Company
therefor, or, if such Additional Shares of Common Stock or Convertible
Securities are offered by the Company for subscription, the subscription
price, or, if such Additional Shares of Common Stock or Convertible
Securities are sold to underwriters or dealers for public offering
without a subscription offering, the initial public offering price (in
any such case subtracting any amounts paid or receivable for accrued
interest or accrued dividends and without taking into account any
compensation, discounts or expenses paid or incurred by the Company for
and in the underwriting of, or otherwise in connection with, the issuance
thereof). To the extent that such issuance shall be for a consideration
other than cash, then, except as herein otherwise expressly provided, the
amount of such consideration shall be deemed to be the fair value of such
consideration at the time of such issuance as determined in good faith by
the Board of Directors of the Company (excluding therefrom any director
designated by the transferor thereof). In case any Additional Shares of
Common Stock or any Convertible Securities or any warrants, options or
other rights to subscribe for or purchase such Additional Shares of
Common Stock or Convertible Securities shall be issued in connection with
any merger in which the Company issues any securities, the amount of
consideration therefor shall be deemed to be the fair value, as
determined in good faith by the Board of Directors of the Company
(excluding therefrom any director designated by the transferor thereof),
of such portion of the assets and business of the nonsurviving
corporation as such Board in good faith shall determine to be
attributable to such Additional Shares of Common Stock, Convertible
Securities, warrants, options or other rights, as the case may be. The
consideration for any Additional Shares of Common Stock issuable pursuant
to any warrants, options or other rights to subscribe for or purchase the
same shall be the consideration received by the Company for issuing such
warrants, options or other rights plus the additional consideration
payable to the Company upon exercise of such warrants or other rights.
The consideration for any Additional Shares of Common Stock issuable
pursuant to the terms of any Convertible Securities shall be the
consideration received by the Company for issuing warrants, options or
other rights to subscribe for or purchase such Convertible Securities,
plus the consideration paid or payable to the Company in respect of the
subscription for or purchase of such Convertible Securities, plus the
additional consideration, if any, payable to the Company upon the
exercise of the right of conversion or exchange in such Convertible
Securities. In case of the issuance at any time of any Additional Shares
of Common Stock or Convertible Securities in payment or satisfaction of
any dividends upon any class of stock other than Common Stock, the
Company shall be deemed to have received for such Additional Shares of
Common Stock or Convertible Securities a consideration equal to the
amount of such dividend so paid or satisfied.

               (ii)WHEN ADJUSTMENTS TO BE MADE. The adjustments required
by this Section 4 shall be made whenever and as often as any specified
event requiring an adjustment shall occur, except that any adjustment of
the number of shares of Common Stock for which this Warrant is
exercisable that would otherwise be required may be postponed (except in
the case of a subdivision or combination of shares of the Common Stock,
as provided for in Section 4.1) up to, but not beyond the date of
exercise if such adjustment either by itself or with other adjustments
not previously made adds or subtracts less than 1% of the shares of
Common Stock for which this Warrant is exercisable immediately prior to
the making of such adjustment. Any adjustment representing a change of
less than such minimum amount (except as aforesaid) which is postponed
shall be carried forward and made as soon as such adjustment, together
with other adjustments required by this Section 4 and not previously
made, would result in a minimum adjustment or on the date of exercise.
For the purpose of any adjustment, any specified event shall be deemed to
have occurred at the close of business on the date of its occurrence.

               (iii)FRACTIONAL INTERESTS. In computing adjustments under
this Section 4, fractional interests in Common Stock shall be taken into
account to the nearest one-tenth of a share.

               (iv)WHEN ADJUSTMENT NOT REQUIRED. If the Company shall
take a record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend or distribution or subscription or
purchase rights and shall, thereafter and before the distribution to
stockholders thereof, legally abandon its plan to pay or deliver such
dividend, distribution, subscription or purchase rights, then thereafter
no adjustment shall be required by reason of the taking of such record
and any such adjustment previously made in respect thereof shall be
rescinded and annulled.

          4.7.REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION OR
DISPOSITION OF ASSETS.

               (i)In case the Company shall reorganize its capital,
reclassify its Capital Stock, consolidate or merge with or into another
corporation, or sell, transfer or otherwise dispose of all or
substantially all its property, assets or business to another corporation
and, pursuant to the terms of such reorganization, reclassification,
merger, consolidation or disposition of assets, shares of common stock of
the successor or acquiring corporation, or any cash, shares of stock or
other securities or property of any nature whatsoever (including warrants
or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation ("OTHER
PROPERTY"), are to be received by or distributed to the holders of Common
Stock of the Company, then each Holder shall have the right thereafter to
receive, upon exercise of such Warrant, the number of shares of common
stock of the successor or acquiring corporation or of the Company, if it
is the surviving corporation, and Other Property receivable upon or as a
result of such reorganization, reclassification, merger, consolidation or
disposition of assets by a holder of the number of shares of Common Stock
for which this Warrant is exercisable immediately prior to such event.

               (ii)In case of any such reorganization, reclassification,
merger, consolidation or disposition of assets, (a) Holder shall continue
to enjoy, with respect to any shares of common stock of the successor or
acquiring corporation or the Company or any Other Property consisting of
Capital Stock or warrants acquired by Holder, all the rights and benefits
available to Holder pursuant to this Warrant and all other agreements
executed in connection with this Warrant and/or the Warrant Stock, and
(b) the successor or acquiring corporation (if other than the Company)
shall expressly assume the due and punctual observance and performance of
each and every covenant and condition of this Warrant to be performed and
observed by the Company and all the obligations and liabilities
hereunder, subject to such modifications as may be deemed appropriate (as
determined by resolution of the Board of Directors of the Company) in
order to provide for adjustments of shares of the Common Stock for which
this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 3.

               (iii)For purposes of this Section 4.7, "COMMON STOCK OF
THE SUCCESSOR OR ACQUIRING CORPORATION" shall include stock of such
corporation of any class which is not preferred as to dividends or assets
over any other class of stock of such corporation and which is not
subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible
into or exchangeable for any such stock, either immediately or upon the
arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 4.7 shall similarly apply to
successive reorganizations, reclassifications, mergers, consolidations or
disposition of assets.

               (iv)The Company shall not consolidate or merge with or
into an Affiliate of the Company, nor sell, transfer or otherwise dispose
of all or substantially all its property, assets or business to such an
Affiliate unless and until (a) such consolidation, merger, sale, transfer
or disposition is fair and equitable to the Company, each Holder and all
holders of Warrant Stock and is on terms which are at least as favorable
as those that would be obtainable in a similar transaction with an
unrelated third party, and (b) each Holder shall have received, at the
Company's sole cost and expense, the opinion of a financial advisor
satisfactory to such Holder in such Holder's reasonable discretion to the
effect that the proposed consolidation, merger, sale, transfer or
disposition satisfies the conditions set forth in the immediately
preceding clause (a).

          4.8.CERTAIN LIMITATIONS. Notwithstanding anything to the
contrary contained in the Company's Articles of Incorporation, Bylaws or
other documents governing the terms of the Company's Capital Stock, the
Company agrees not to amend its Articles of Incorporation or Bylaws,
enter into any other transaction or execute any other document that would
cause a reduction in the par value per share of Common Stock below the
Current Warrant Price.


5.NOTICES TO WARRANT HOLDERS.

          5.1.NOTICE OF ADJUSTMENTS. Whenever the number of shares of
Common Stock for which this Warrant is exercisable is subject to
adjustment pursuant to Section 4, the Company shall forthwith prepare a
certificate to be executed by the chief financial officer of the Company
setting forth, in reasonable detail, the event requiring the adjustment
and the method by which such adjustment was calculated (including a
description of the basis on which the Board of Directors of the Company
determined the fair value of any evidences of indebtedness shares of
stock, other securities or property or warrants or other subscription or
purchase rights referred to in Section 4.6(i)), specifying the number of
shares of Common Stock for which this Warrant is exercisable and (if such
adjustment was made pursuant to Section 4.7) describing the number and
kind of any other shares of stock or Other Property for which this
Warrant is exercisable, and any change in the purchase price or prices
thereof, after giving effect to such adjustment or change. The Company
shall promptly cause a signed copy of such certificate to be delivered to
each Holder in accordance with Section 17.1. The Company shall keep at
its office or agency designated pursuant to Section 11 copies of all such
certificates and cause the same to be available for inspection at said
office during normal business hours by any Holder or any prospective
purchaser of a Warrant designated by a Holder thereof.

          5.2.NOTICE OF CORPORATE ACTION. If at any time:

               (i)the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend
(other than a cash dividend payable out of earnings or earned surplus
legally available for the payment of dividends under the laws of the
jurisdiction of incorporation of the Company) or other distribution, or
any right to subscribe for or purchase any evidences of its indebtedness,
any shares of stock of any class or any other securities or property, or
to receive any other right, or

               (ii)there shall be any capital reorganization of the
Company, any reclassification or recapitalization of the Capital Stock of
the Company or any consolidation or merger of the Company with, or any
sale, transfer or other disposition of all or substantially all the
property, assets or business of the Company to, another corporation, or

               (iii)there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;

then, in any one or more of such cases, the Company shall give to Holder
(a) at least 20 days' prior written notice of the date on which a record
date shall be selected for such dividend, distribution or right or for
determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up, and (b) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least 20 days'
prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clauses also shall specify (I)
with respect to clause (a), the date on which any such record is to be
taken for the purpose of such dividend, distribution or right, the date
on which the holders of Common Stock shall be entitled to any such
dividend, distribution or right, and the amount and character thereof,
and (II) with respect to clauses (a) and (b), the date on which any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up is to take place and
the time, if any such time is to be fixed, as of which the holders of
Common Stock shall be entitled to exchange their shares of Common Stock
for securities or other property deliverable upon such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up. Each such written notice shall be
sufficiently given if addressed to Holder at the last address of Holder
appearing on the books of the Company and delivered in accordance with
Section 17.1.


6.NO IMPAIRMENT.  The Company shall not by any action, including, without
limitation, amending its articles of incorporation or through any
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, winding up, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking
of all such actions as may be necessary or appropriate to protect the
rights of Holder against impairment. Without limiting the generality of
the foregoing, the Company will (i) not increase the par value of any
shares of Common Stock receivable upon the exercise of this Warrant above
the amount payable therefor upon such exercise immediately prior to such
increase in par value, (ii) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares of Common Stock upon the exercise of this
Warrant, including reducing the par value of its Common Stock, and (iii)
use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as
may be necessary to enable the Company to perform its obligations under
this Warrant.


7.RESERVATION AND AUTHORIZATION OF COMMON STOCK: REGISTRATION WITH OR
APPROVAL OF ANY GOVERNMENTAL AUTHORITY.
From and after the date hereof, the Company shall at all times reserve
and keep available for issue upon the exercise of Warrants such number of
its authorized but unissued shares of Common Stock as will be sufficient
to permit the exercise in full of all outstanding Warrants. All shares of
Common Stock which shall be so issuable, when issued upon exercise of any
Warrant and payment therefor in accordance with the terms of such
Warrant, shall be duly and validly issued and fully paid and
nonassessable, and, to the extent permitted by law, free of liens or
preemptive rights.

Before taking any action which would result in an adjustment in the
number of shares of Common Stock for which this Warrant is exercisable,
the Company shall obtain all such authorizations or exemptions thereof,
or consents thereto, as may be necessary from any public regulatory body
or bodies having jurisdiction thereof.


8.TAKING OF RECORD: STOCK AND WARRANT TRANSFER BOOKS.  In the case of all
dividends or other distributions by the Company to the holders of its
Common Stock with respect to which any provision of Section 4 refers to
the taking of a record of such holders, the Company will in each such
case take such a record as of the close of business on a Business Day.
The Company will not, at any time, except upon dissolution, liquidation
or winding up of the Company, close its stock transfer books or Warrant
transfer books so as to result in preventing or delaying the exercise or
transfer of any Warrant.


9.RESTRICTIONS OF TRANSFERABILITY.  Each Warrant shall be stamped or
otherwise imprinted with a legend in substantially the following form:

"THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT") AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE
SECURITIES ACT."


10.LOSS OR MUTILATION.  Upon receipt by the Company from any Holder of
evidence reasonably satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of this Warrant and indemnity reasonably
satisfactory to it, and in case of mutilation upon surrender and
cancellation hereof, the Company will execute and deliver in lieu hereof
a new Warrant of like tenor to such Holder; PROVIDED, in the case of
mutilation, no indemnity shall be required if this Warrant in
identifiable form is surrendered to the Company for cancellation.


11.OFFICE OF THE COMPANY.  As long as any of the Warrants remain
outstanding, the Company shall maintain an office or agency (which may be
the principal executive offices of the Company) where the Warrants may be
presented for exercise, registration of transfer, division or combination
as provided in this Warrant.  The Company shall notify each Holder in
writing prior to any change of address of the office at which the
Warrants may be presented.


12.LIMITATION OF LIABILITY.  No provision hereof, in the absence of
affirmative action by Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of Holder hereof, shall
give rise to any liability of such Holder for the purchase price of any
Common Stock or as a stockholder of the Company, whether such liability
is asserted by the Company or by creditors of the Company.


13.CAPITALIZATION.  As of August 19, 1998, there are outstanding
7,228,058 shares of Common Stock; 879,802 shares of treasury stock of the
Company; and 37,300 outstanding shares of Series A Preferred Stock and 0
shares of treasury Series A Preferred Stock, which are convertible into a
maximum number of 438,823 shares of Common Stock.


14.REGISTERED HOLDER.  Notwithstanding any other provision of this
Warrant, Holder and/or its affiliates may exercise this Warrant solely to
the extent such exercise would not result in Holder and/or its affiliates
holding, directly or indirectly, in excess of 4.99% of the outstanding
Common Stock of the Company (such determination to be made by Holder),
except for an exercise in connection with (i) a widely dispersed public
offering of the Warrant Stock, (ii) a sale of the Warrant Stock in the
secondary market pursuant to the transaction and volume limitations of
Rule 144 under the Securities Act (irrespective of holding periods), or
(iii) a private placement or sale, including those made pursuant to Rule
144A under the Securities Act, so long as Holder and/or its affiliates do
not collectively acquire more than 2% of the Common Stock of the Company
pursuant to any such transfer.


15.UNDERTAKINGS.  Holder covenants with the Company that it will not
exercise or attempt to exercise influence over the management or policies
of the Company in connection with this Warrant or any shares of Common
Stock for which this Warrant may be exercised.


16.SHAREHOLDER COMMUNICATIONS.  The Company will provide the Registered
Holder with copies of all written communications distributed to
shareholders generally.


17.MISCELLANEOUS.

          17.1.NOTICE GENERALLY.  Any notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder to be
made pursuant to the provisions of this Warrant 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, or by telecopy and confirmed by telecopy
answerback, addressed as follows:

               (i)If to any Holder or holder of the Warrant Stock, at its
last known address appearing on the books of the Company maintained for
such purpose.

               (ii)If to the Company at:
9100 Keystone Crossing
Suite 600
Indianapolis, Indiana 46240
Attention:  Stephen M. Coons, Esq.

Telecopy:  (317) 574-6227

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,
telecopied and confirmed by telecopy answerback, or three (3) Business
Days after the same shall have been deposited in the United States mail.
Failure or delay in delivering copies of any notice, demand, request,
approval, declaration, delivery or other communication to the person
designated above to receive a copy shall in no way adversely affect the
effectiveness of such notice, demand, request, approval, declaration,
delivery or other communication.

          17.2.SUCCESSORS AND ASSIGNS.  This Warrant and the rights
evidenced hereby (including, without limitation, those relating to the
Warrant Stock) shall inure to the benefit of and be binding upon the
successors of the Company and the successors and assigns of Holder. The
provisions of this Warrant are intended to be for the benefit of all
Holders from time to time of this Warrant and all Holders from time to
time of the Warrant Stock, and shall be enforceable by any such
Holder(s).

          17.3.AMENDMENT.

               (i)This Warrant and all other Warrants may be modified or
amended or the provisions hereof waived with the written consent of the
Company and the Majority Holders, PROVIDED that no such Warrant may be
modified or amended to reduce the number of shares of Common Stock for
which such Warrant is exercisable or to increase the Warrant Price
without the prior written consent of Holder thereof.

               (ii)No waivers of, or exceptions to, any term, condition
or provision of this Warrant, in any one or more instances, shall be
deemed to be, or construed as, a further or continuing waiver of any such
term, condition or provision.

          17.4.SEVERABILITY. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant 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 Warrant.

          17.5.HEADINGS. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant.

          17.6.GOVERNING LAW. This Warrant shall be governed by the laws
of the State of Connecticut, without regard to the provisions thereof
relating to conflict of laws.

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed.

Dated:  August 19, 1998

STANDARD MANAGEMENT CORPORATION


By:__________________________________
Name:  Stephen M. Coons, Esq.
Its:Executive Vice President and General
Counsel

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<PAGE>




                                EXHIBIT A

                            SUBSCRIPTION FORM

             [To be executed only upon exercise of Warrant]

The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for the purchase of _______ shares of Common Stock of the
Company, and herewith makes payment in the amount of $________ therefor,
and requests that certificates for the shares of Common Stock hereby
purchased (and any securities or other property issuable upon such
exercise) be issued in the name of and delivered to ___________, whose
address is ____________ and, if such shares of Common Stock shall not
include all of the shares of Common Stock issuable as provided in this
Warrant, that a new Warrant of like tenor and date for the balance of the
shares of Common Stock issuable hereunder be delivered to the
undersigned.  In lieu of paying the purchase price, I hereby make a
cashless exercise of this Warrant for the purchase of _______ shares of
Common Stock of the Company pursuant to Section 2.1(iii) of this Warrant
and request that [$______] [certificates representing _____ shares] be
[paid][issued] and delivered to _______, whose address is ____________.

____________________________________
(Name of Registered Owner)



(Signature of Registered Owner)



(Street Address)



(City) (State) (Zip Code)




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<PAGE>




                                EXHIBIT B

                             ASSIGNMENT FORM

          FOR VALUE RECEIVED the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the Assignee named below
all of the rights of the undersigned under this Warrant, with respect to
the number of shares of Common Stock set forth below:

<TABLE>
<CAPTION>
         NAME AND ADDRESS OF ASSIGNEE                  No. of Shares of Common Stock
<S>                                            <C>
</TABLE>

and does hereby irrevocably constitute and appoint __________________
attorney-in-fact to register such transfer on the books of
______________________ maintained for the purpose, with full power of
substitution in the premises.

Dated:    
                                             Name:
                                             Signature:
                                             Witness:

         NOTICE:The signature on this assignment must correspond with the
name as written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.





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