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                                                            EXHIBIT 4.8





                 WARRANT AGREEMENT dated as of August 19, 1996 between Standard
Management Corporation, an Indiana corporation (the "Company") and Sands
Brothers & Co., Ltd., a Delaware corporation (hereinafter referred to variously
as the "Holder" or "Sands Brothers").

                                        W I T N E S S E T H:
                 WHEREAS, the Company and Sands Brothers have entered into a
certain financial advisory agreement of even date herewith (hereinafter the
"Advisory Agreement"), pursuant to which Sands Brothers is entitled to receive
certain compensation, including, among other things, warrants ("Warrants") to
purchase 100,000 shares of the Company's common stock, no par value per share
("Common Stock"), upon and subject to the terms and conditions of the Advisory
Agreement.
                 NOW, THEREFORE, in consideration of the premises, the payment
by the Holder to the Company of TWENTY FIVE ($25.00) DOLLARS, the agreements
herein set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agrees as
follows:
                 1.       Grant.  The Holder is hereby granted the right to
purchase, at any time from August 19, 1996, until 5:30 p.m., New York time, on
August 19, 1998, up to an aggregate of 100,000 shares of Common Stock at the
initial exercise price per share (subject to adjustment as provided in Section
8 hereof) as provided in Section 6 hereof.


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                 2.       Warrant Certificates.  The warrant certificates (the
"Warrant Certificates") delivered and to be delivered pursuant to this
Agreement shall be in the form set forth in Exhibit A
attached hereto and made a part hereof, with such appropriate insertions,
omissions, substitutions, and other variations as required or permitted by this
Agreement.
                 3.       Exercise of Warrant.
                 Section 3.1      Method of Exercise.  The Warrants initially
are exercisable at an initial exercise price (subject to adjustment as provided
in Section 8 hereof) per share of Common Stock set forth in Section 6 hereof
payable by certified or official bank check in New York Clearing House funds,
subject to adjustment as provided in Section 8 hereof.  Upon surrender of a
Warrant Certificate with the annexed Form of Election to Purchase duly
executed, together with payment of the Exercise Price (as hereinafter defined)
for the shares of Common Stock purchased at the Company's principal offices in
Indiana (presently located at 9100 Keystone Crossing, Suite 600, Indianapolis,
IN 46240) the registered holder of a Warrant Certificate ("Holder" or
"Holders") shall be entitled to receive a certificate or certificates for the
shares of Common Stock so purchased.  The purchase rights represented by each
Warrant Certificate are exercisable at the option of the Holder thereof, in
whole or in part (but not as to fractional shares of the Common Stock
underlying the Warrants).  Warrants may be exercised to purchase all or part of
the shares of Common Stock represented thereby.  In the case of the purchase of
less than all the shares of Common Stock purchasable under any Warrant
Certificate, the Company shall cancel said Warrant Certificate upon the
surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the balance of the shares of Common Stock.

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                 Section 3.2      Exercise by Surrender of Warrant.
                 (a)  In addition to the method of payment set forth in Section
3.1 and in lieu of any cash payment required thereunder, the Holder(s) of the
Warrants shall have the right at any time and from time to time exercise the
Warrants in full or in part by surrendering the Warrant Certificate in the
manner specified in Section 3.1 in exchange for the number of shares of Common
Stock equal to the product of (x) the number of shares to which the Warrants
are being exercised multiplied by (y) a fraction, the numerator of which is the
Market Price (as defined in Section 8.1 (vi) hereof) of the Common Stock less
the Exercise Price and the denominator of which is such Market Price.
                 (b)  Solely for the purposes of this Section 3.2, Market Price
shall be calculated either (i) on the date on which the form of election
attached hereto is deemed to have been sent to the Company pursuant to Section
13 hereof ("Notice Date") or (ii) as the average of the Market Price for each
of the ten trading days preceding the Notice Date, whichever of (i) or (ii) is
greater.
                 4.       Issuance of Certificates.  Upon the exercise of the
Warrants, the issuance of certificates for shares of Common Stock or other
securities, properties or rights underlying such Warrants, shall be made
forthwith (and in any event such issuance shall be made within five (5)
business days thereafter) without charge to the Holder thereof including,
without limitation, any tax which may be payable in respect of the issuance
thereof, and such certificates shall (subject to the provisions of Sections 5
and 7 hereof) be issued in the name of, or in such names as may be directed by,
the Holder thereof; provided, however, that the Company shall not be required
to pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any such certificates in a name other than that of the
Holder and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall





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<PAGE>   4


have paid to the Company the amount of such tax or shall have established to
the satisfaction of the Company that such tax has been paid.
                 The Warrant Certificates and the certificates representing the
shares of Common Stock (and/or other securities, property or rights issuable
upon exercise of the Warrants) shall be executed on behalf of the Company by
the manual or facsimile signature of the then present Chairman or Vice Chairman
of the Board of Directors or President or Vice President of the Company under
its corporate seal reproduced thereon, attested to by the manual or facsimile
signature of the then present Secretary or Assistant Secretary of the Company.
Warrant Certificates shall be dated the date of execution by the Company upon
initial issuance, division, exchange, substitution or transfer.
                 5.       Restriction On Transfer of Warrants.  The Holder of a
Warrant Certificate, by its acceptance thereof, covenants and agrees that the
Warrants are being acquired as an investment and not with a view to the
distribution thereof.
                 6.       Exercise Price.
                 Section 6.1      Initial and Adjusted Exercise Price.  Except
as otherwise provided in Section 8 hereof, the initial exercise price of each
Warrant shall be $4.3125 per share of Common Stock.  The adjusted exercise
price shall be the price which shall result from time to time from any and all
adjustments of the initial exercise price in accordance with the provisions of
Section 8 hereof.

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                 Section 6.2      Exercise Price.  The term "Exercise Price"
herein shall mean the initial exercise price or the adjusted exercise price,
depending upon the context.

                 7.       Registration Rights.

                 Section 7.1      Registration Under the Securities Act of
1933.  The Warrants and the shares of Common Stock issuable upon exercise of
the Warrants and any of the other securities issuable upon exercise of the
Warrants have not been registered under the Securities Act of 1933, as amended
(the "Act") for public resale.  Upon exercise, in part or in whole, of the
Warrants, certificates representing the shares of Common Stock and any other
securities issuable upon exercise of the Warrants (collectively, the "Warrant
Securities") shall bear the following legend:

                 The securities represented by this certificate have not been
                 registered under the Securities Act of 1933, as amended
                 ("Act") for public resale, and may not be offered or sold
                 except pursuant to (i) an effective registration statement
                 under the Act, (ii) to the extent applicable, Rule 144 under
                 the Act (or any similar rule under such Act relating to the
                 disposition of securities), or (iii) an opinion of counsel, if
                 such opinion shall be reasonably satisfactory to counsel to
                 the issuer, that an exemption from registration under such Act
                 is available.

                 Section 7.2      Piggyback Registration.  If, at any time
during the five year period commencing after the date hereof, the Company
proposes to register any of its securities under the Act (other than in
connection with a merger or pursuant to Form S-8, S-4 or comparable
registration statement) it will give written notice by registered mail, at
least thirty (30) days prior to the filing of each registration statement, to
Sands Brothers and to all other Holders of the Warrants and/or the Warrant
Securities of its intention to do so.  If Sands Brothers or other Holders of
the Warrants and/or Warrant Securities notify the Company within twenty (20)
days after receipt of any such notice of its or their desire to include any
such securities in such proposed registration statement, the Company shall
afford Sands Brothers and such Holders of the Warrants and/or Warrant
Securities the opportunity to have any such Warrant Securities registered under
such registration statement.  The Company shall thereupon include in such
filing the number of shares of Common Stock for





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         which registration is so requested, subject to the next sentence, and
         shall use its best efforts to effect registration under the Act of
         such shares.  If the managing underwriter of a proposed underwritten
         public offering of Common Stock shall advise the Company in writing
         that, in its reasonable opinion, the distribution of the Common Stock
         requested to be included in the registration concurrently with the
         securities being registered by the Company or any demanding security
         holder would materially and adversely affect the distribution of such
         securities by the Company or such demanding security holder, then the
         number of shares of Common Stock determined by such underwriter to be
         the maximum number capable of being included by the holders of
         Warrants and/or Warrant Shares, pro rata based upon the numbers of
         Warrants and/or Warrant Shares held by each such holder.
         Alternatively, in the event of such reasonable advice by the managing
         underwriter, any holder of the Common Stock may at its option delay
         its offering and sale for a period not to exceed ninety (90) days
         after the effective date of such registration as such managing
         underwriter shall reasonably request.  In the event of such delay, the
         Company shall use its best efforts to effect any registration or
         qualification under the Act and the securities or blue sky laws of any
         jurisdiction as may be necessary to permit such holder to make its
         proposed offering and sale following the end of such period of delay.



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                 Section 7.3      Demand Registration.

                 (a)      At any time after the date hereof, the
Holders of the Warrants and/or Warrant Securities representing a
"Majority" (as hereinafter defined) of such securities (assuming the exercise
of all of the Warrants) shall have the right (which right is in addition to the
registration rights under Section 7.2 hereof), exercisable by written notice to
the Company, to have the Company prepare and file with the Commission, on one
occasion, a registration statement and such other documents, including a
prospectus, as may be necessary in the opinion of both counsel for the Company
and counsel for Sands Brothers and Holders, in order to comply with the
provisions of the Act, so as to permit a public offering and sale of their
respective Warrant Securities for six (6) consecutive months by such Holders
and any other Holders of the Warrants and/or Warrant Securities who notify the
Company within ten (10) days after receiving notice from the Company of such
request.

                 (b)      The Company covenants and agrees to give written
notice of any registration request under this Section 7.3 by any Holder or
Holders to all other registered Holders of the Warrants and the Warrant
Securities within (10) days from the date of the receipt of any such
registration request.
                 (c)  Notwithstanding anything to the contrary contained
herein, if the Company shall not have filed a registration statement for the
Warrant Securities within the time period specified in Section 7.4(a) hereof
pursuant to the written notice specified in Section 7.3(a) of a Majority of the
Holders of the Warrants and/or Warrant Securities, the Company agrees that upon
the written notice of election of a Majority of the Holders of the Warrants
and/or Warrant Securities it shall repurchase (i) any and all Warrant
Securities at higher of the Market Price (as defined in Section 8.1(vi)) per
share of Common Stock on (x) the date of the notice sent pursuant to Section
7.3(a) or (y) the expiration of the period in Section 7.4(a) and (ii) any and
all Warrants at such Market Price less the exercise price of such Warrant.
Such repurchase shall be in immediately available funds and shall close within
two (2) days after the later of (i) the expiration of the period specified in
Section 7.4(a) or (ii) the delivery of the written notice of election specified
in this Section 7.3(d).





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                 Section 7.4      Covenants of the Company With Respect to
Registration.  In connection with any registration under Section 7.2 or 7.3
hereof, the Company covenants and agrees as follows:
                 (a)      The Company shall use its best efforts to file a
registration statement within ninety (90) days of receipt of any demand
therefor, shall use its best efforts to have any registration statements
declared effective at the earliest possible time, and shall furnish the Holder
desiring to sell Warrant Securities such number of prospectuses as shall
reasonably be requested.
                 (b)      The Company shall pay all costs (excluding any
underwriting or selling commissions or other charges of any broker-dealer
acting on behalf of Holders), fees and expenses in connection with all
registration statements filed pursuant to Sections 7.2 and 7.3(a) hereof
including, without limitation, the Company's legal and accounting fees,
printing expenses, blue sky fees and expenses.
                 (c)      The Company will take all necessary action which may
be required in qualifying or registering the Warrant Securities included in a
registration statement for offering and sale under the securities or blue sky
laws of the state requested by the Holder.

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                 (d)      The Company shall indemnify the Holder(s) of the
Warrant Securities to be sold pursuant to any registration statement and each
person, if any, who controls such Holder within the meaning of Section 15 of
the Act or Section 20(a) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), against all loss, claim, damage, expense or liability
(including all expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which any of them may become subject
under the Act, the Exchange Act or otherwise, arising from such registration
statement, except insofar as such losses, claims, damages, liabilities or
expenses are caused by any untrue statement or alleged untrue statement or
omission or alleged omission based upon information furnished to the
Company expressly for use therein in a writing signed by the Holder(s) of the
Warrant Securities or arising from an underwriter's or holder's actual failure
to deliver a prospectus to a purchaser when the delivery was required by law.

                 (e)      Nothing contained in this Agreement shall be
construed as requiring the Holder(s) to exercise their Warrants prior to the
initial filing of any registration statement or the effectiveness thereof.
                 (f)      Excluding existing outstanding warrants issued by the
Company as of the date of this Agreement and not otherwise covered by a
Registration on Form S-8, and the Convertible Subordinated Debenture to be
issued to Conseco, Inc. or a subsidiary thereof, the Company shall not permit
the inclusion of any securities other than the Warrant Securities to be
included in any registration statement filed pursuant to Section 7.3 hereof, or
permit any other registration statement to be or remain effective during the
effectiveness of a registration statement filed pursuant to Section 7.3 hereof,
without the prior written consent of the Holders of the Warrants and Warrant
Securities representing a Majority of such securities (assuming an exercise of
all of the Warrants).

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                 (g)      The Company shall furnish to each Holder
participating in the offering and to each underwriter, if any, a signed
counterpart, addressed to such Holder or underwriter, of (i) an opinion of
counsel to the Company, dated the effective date of such registration statement
(and, if such registration includes an underwritten public offering, an opinion
dated the date of the closing under the underwriting agreement), and (ii) a
"cold comfort" letter dated the effective date of such registration statement
(and, if such registration includes an underwritten public offering; a letter
dated the date of the closing under the underwriting agreement) signed by the
independent public accountants who have issued a report on the Company's
financial statements included in such registration statement, in each
case covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of such
accountants' letter, with respect to agents subsequent to the date of such
financial statements, are as customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to underwriters in underwritten
public offering of securities.

                 (h)      The Company shall as soon as practicable after the
effective date of the registration statement, and in any event within 15 months
thereafter, make "generally available to its security holders" (within the
meaning of Rule 158 under the Act) an earnings statement (which need not be
audited) complying with Section 11(a) of the Act and covering a period of at
least 12 consecutive months beginning after the effective date of the
registration agreement.

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                 (i)      The Company shall deliver promptly to each Holder
participating in the offering requesting the correspondence and memoranda
described below and the managing underwriter copies of all correspondence
between the Commission and the Company, its counsel or auditors and all
memoranda relating to discussions with the Commission or its staff with respect
to the registration statement and permit the Holder and underwriter to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules of the National
Association of Securities Dealers, Inc. ("NASD").  Such investigation shall
include access to books, records and properties and opportunities to discuss
the business of the Company with its officers and independent auditors, all to
such reasonable extent and at such reasonable times and as often as any such
Holder shall reasonably request as it deems necessary to comply with applicable
securities laws or NASD rules.
                 (j)      In addition to the Warrant Securities, upon the
written request therefor by any Holder(s), the Company shall include in the
registration statement any other securities of the Company held by such
Holder(s) as of the date of filing of such registration statement, including
without limitation, restricted shares of Common Stock, options, warrants or any
other securities convertible into shares of Common Stock.
                 (k)      For purposes of this Agreement, the term "Majority"
in reference to the Holders of Warrants or Warrant Securities, shall mean in
excess of fifty percent (50%) of the then outstanding Warrants or Warrant
Securities that (i) are not held by the Company, an affiliate, officer,
creditor, employee or agent thereof or any of their respective affiliates,
members of their family, persons acting as nominees or in conjunction therewith
or (ii) have not been resold to the public pursuant to a registration statement
filed with the Commission under the Act.


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                 8.       Adjustments to Exercise and Number of Securities.
                 Section 8.1      Computation of Adjusted Exercise Price.
Except as hereinafter provided, in case the Company shall at any time after the
date hereof issue or sell any shares of Common Stock (other than the issuances
or sales referred to in Section 8.7 hereof), including shares held in the
Company's treasury and shares of Common Stock issued upon the exercise of any
options, rights or warrants, to subscribe for shares of Common Stock and shares
of Common Stock issued upon the direct or indirect conversion or exchange of
securities for shares of Common Stock, for a consideration per share less than
the Exercise Price in effect immediately prior to the issuance or sale of such
shares or the "Market Price" (as defined in Section 8.1(vi) hereof) per share
of Common Stock on the date immediately prior to the issuance or sale of such
shares, or without consideration, then forthwith upon such issuance or sale,
the Exercise Price shall (until another such issuance or sale) be
reduced to the price (calculated to the nearest full cent) equal to the
quotient derived by dividing (A) an amount equal to the sum of (X) the product
of (a) the lower of (i) the Exercise Price in effect immediately prior to such
issuance or sale and (ii) the Market Price per share of Common Stock on the
date immediately prior to the issuance or sale of such shares, multiplied by
(b) the total number of shares of Common Stock outstanding immediately prior to
such issuance or sale, plus (Y) the aggregate of the amount of all
consideration, if any, received by the Company upon such issuance or sale, by
(B) the total number of shares of Common Stock outstanding immediately after
such issuance or sale; provided, however, that in no event shall the Exercise
Price be adjusted pursuant to this computation to an amount in excess of the
Exercise Price in effect immediately prior to such computation, except in the
case of a combination of outstanding shares of Common Stock, as provided by
Section 8.3 thereof.
                 For the purposes of this Section 8 the term Exercise Price
shall mean the Exercise Price per share of Common Stock set forth in Section 6
hereof, as adjusted from time to time pursuant to the provisions of this
Section 8.
                 For the purposes of any computation to be made in accordance
with this Section 8.1, the following provisions shall be applicable:
                 (i)      In case of the issuance or sale or shares of Common
Stock for a consideration part or all of which shall be cash, the amount of the
cash consideration therefor shall be deemed to be the amount of cash received
by the Company for such shares (or, if shares of Common Stock are offered by
the Company for subscription, the subscription price, or, if either of such
securities shall be sold to underwriters or dealers for public offering without
a subscription offering, the initial public offering price) before deducting
therefrom any compensation paid or discount allowed in the





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sale, underwriting or purchase thereof by underwriters or dealers or others
performing similar services, or any expenses incurred in connection therewith
and less any amounts payable to security holders or any affiliate thereof,
including without limitation, any employment agreement, royalty, consulting
agreement, covenant not to compete, earned or contingent payment right or
similar arrangement, agreement or understanding, whether oral or written, but
excluding all such existing agreements as of the date of this Warrant
Agreement; all such amounts shall be valued at the aggregate amount payable
thereunder whether such payments are absolute or contingent and irrespective of
the period or uncertainty of payment, the rate of interest, if any, or the
contingent nature thereof.
                 (ii)     In case of the issuance or sale (otherwise then as a
dividend or other distribution on any stock of the Company) of shares of Common
Stock for a consideration part or all of which shall be other than cash, the
amount of the consideration therefor other than cash shall be deemed to be the
value of such consideration as determined in good faith by the Board of
Directors of the Company.
                 (iii)  Shares of Common Stock issuable by way of dividend or
other distribution on any stock of the Company shall be deemed to have been
issued immediately after the opening of business on the day following the
record date for the determination of stockholders entitled to receive such
dividend or other distribution and shall be deemed to have been issued without
consideration.
                 (iv)     The reclassification of securities of the Company
other than shares of Common Stock shall be deemed to involve the issuance of
such shares of Common Stock for a consideration other than cash immediately
prior to the close of business on the date fixed for the





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determination of security holders entitled to receive such shares, and the
value of the consideration allocable to such shares of Common Stock shall be
determined as provided in subsection (ii) of this Section 8.1.
                 (v)      The number of shares of Common Stock at any one time
outstanding shall include the aggregate number of shares issued or issuable
(subject to readjustment upon the actual issuance thereof) upon the exercise of
options, rights, warrants and upon the conversion or exchange of convertible or
exchangeable securities.
                 (vi)     As used herein, the phase "Market Price" at any date
shall be deemed to be the last reported sale price, or, in case no such
reported sale takes place on such day, the average of the last reported sale
prices for the last three (3) trading days, in either case as officially
reported by the principal securities exchange on which the Common Stock is
listed or admitted to trading, or, if the Common Stock is not listed or
admitted to trading on any national securities exchange, the average closing
bid price as furnished by the NASD through NASDAQ or similar organization if
NASDAQ is no longer reporting such information, or if the Common stock is not
quoted on NASDAQ, as determined in good faith by resolution of the Board of
Directors of the Company, based on the best information available to it.
                 Section 8.2 Options, Rights, Warrants and Convertible and
Exchangeable Securities.  In case the Company shall at any time after the date
hereof issue options, rights or warrants to subscribe for shares of Common
Stock, or issue any securities convertible into or exchangeable for shares of
Common Stock, for a consideration per share less than the Market Price
immediately prior to the issuance of such options, rights or warrants, or such
convertible or exchangeable securities, or without consideration, the exercise
Price in effect immediately prior to the issuance of such options,





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rights or warrants, or such convertible or exchangeable securities, as the case
may be, shall be reduced to a price determined by making a computation in
accordance with the provisions of Section 8.1 hereof, provided that:
                 (l)      The aggregate maximum number of shares of Common
Stock, as the case may be, issuable under such options, rights or warrants
shall be deemed to be issued and outstanding at the time such options, rights
or warrants were issued, and for a consideration equal to the minimum purchase
price per share provided for in such options, rights or warrants at the time of
issuance, plus the consideration (determined in the same manner as
consideration received on the issue or sale of shares in accordance with the
terms of the Warrants), if any, received by the Company for such options,
rights or warrants.
                 (m)      The aggregate maximum number of shares of Common
Stock issuable upon conversion or exchange of any convertible or exchangeable
securities shall be deemed to be issued and outstanding at the time of issuance
of such securities, and for a consideration equal to the consideration
(determined in the same manner as consideration received on the issue or sale
of shares of Common Stock in accordance with the terms of the Warrants)
received by the Company for such securities, plus the minimum consideration, if
any, receivable by the Company upon the conversion or exchange thereof.
                 (n)      If any change shall occur in the price per share
provided for in any of the options, rights or warrants referred to in
subsection (a) of this Section 8.2, or in the price per share at which the
securities referred to in subsection (b) of this Section 8.2 are convertible or
exchangeable, such options, rights or warrants or conversion or exchange
rights, as the case may be, shall be deemed to have expired or terminated on
the date when such price change became effective





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in respect of shares not theretofore issued pursuant to the exercise or
conversion or exchange thereof, and the Company shall be deemed to have issued
upon such date new options, rights or warrants or convertible or exchangeable
securities at the new price in respect of the number shares issuable upon the
exercise of such options, rights or warrants or the conversion or exchange of
such convertible or exchangeable securities.
                 Section 8.3  Subdivision and Combination.  In case the Company
shall at any time subdivide or combine the outstanding shares of Common Stock,
the Exercise Price shall forthwith be proportionately decreased in the case of
subdivision or increased in the case of combination.
                 Section 8.4  Adjustment in Number of Securities.  Upon each
adjustment of the Exercise Price pursuant to the provisions of this Section 8,
the number of Securities issuable upon the exercise of each Warrant shall be
adjusted to the nearest full amount by multiplying a number equal to the
Exercise Price in effect immediately prior to such adjustment by the number of
Warrant Securities issuable upon exercise of the Warrants immediately prior to
such adjustment and dividing the product so obtained by the adjusted Exercise
Price.
                 Section 8.5  Definition of Common Stock.  For the purpose of
this Agreement, the term "Common Stock" shall mean (i) the class of stock
designated as Common Stock in the Articles of Incorporation of the Company as
may be amended as of the date hereof, or (ii) any other class of stock
resulting from successive changes or reclassifications of such Common Stock
consisting solely of changes in par value, or from par value to no par value,
or from no par value to par value.  In the event that the Company shall after
the date hereof issue securities with greater or superior voting rights than
the shares of Common Stock outstanding as of the date hereof, the Holder, at
its option,





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may receive upon exercise of any Warrant either shares of Common Stock or a
like number of such securities with greater or superior voting rights.
                 Section 8.6      Merger or Consolidation.  In case of any
consolidation of the Company with, or merger of the Company with, or merger of
the Company into, another corporation (other than a consolidation or merger
which does not result in any reclassification or change of the outstanding
Common Stock), the corporation formed by such consolidation or merger shall
execute and deliver to the Holder a supplemental warrant agreement providing
that the holder of each Warrant then outstanding or to be outstanding shall
have the right thereafter (until the expiration of such Warrant) to receive,
upon exercise of such warrant, the kind and amount of shares of stock and other
securities and property receivable upon such consolidation or merger, by a
holder of the number of shares of Common Stock of the Company for which such
warrant might have been exercised immediately prior to such consolidation,
merger, sale or transfer.  Such supplemental warrant agreement shall provide
for adjustments which shall be identical to the adjustments provided in Section
8.  The above provision of this Subsection shall similarly apply to successive
consolidations or mergers.
                 Section 8.7  No Adjustment of Exercise Price in Certain Cases.
                 No adjustment of the Exercise Price shall be made: (a)
                 Upon the issuance or sale of the Warrants or the shares of
                 Common Stock issuable upon the exercise of the
Warrants; or
                 (b)      Upon the exercise of existing stock options or
warrants as of the date of this Warrant Agreement or upon the conversion of the
Convertible Subordinated Debentures to be issued to Conseco, Inc. or a
subsidiary thereof; or





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<PAGE>   18

                 (c)  If the amount of said adjustment shall be less than 2
cents ($.02) per Security, provided, however, that in such case any adjustment
that would otherwise be required then to be made shall be carried forward and
shall be made at the time of and together with the next subsequent adjustment
which, together with any adjustment so carried forward, shall amount to at
least 2 cents ($.02) per Security.
                 Section 8.8  Intentionally Omitted.
                 9.  Exchange and Replacement of Warrant Certificates.  Each
Warrant Certificate is exchangeable without expense, upon the surrender thereof
by the registered Holder at the principal executive office of the Company, for
a new Warrant Certificate of like tenor and date representing in the aggregate
the right to purchase the same number of Securities in such denominations as
shall be designated by the Holder thereof at the time of such surrender.
                 Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of any Warrant
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it, and reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
the Warrants, if mutilated, the Company will make and deliver a new Warrant
Certificate of like tenor, in lieu thereof.
                 10.  Elimination of Fractional Interests.  The Company shall
not be required to issue certificates representing fractions of shares of
Common Stock upon the exercise of the Warrants, nor shall it be required to
issue scrip or pay cash in lieu of fractional interests, it being the intent of
the parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of shares of Common Stock or other
securities, properties or rights.





                                       18

<PAGE>   19

                 11.  Reservation and Listing of Securities.  The Company shall
at all times reserve and keep available out of its authorized shares of Common
Stock, solely for the purpose of issuance upon the exercise of the Warrants,
such number of shares of Common Stock or other securities, properties or rights
as shall be issuable upon the exercise thereof.  The Company covenants and
agrees that, upon exercise of the Warrants and payment of the Exercise Price
therefor, all shares of Common Stock and other securities issuable upon such
exercise shall be duly and validly issued, fully paid, non-assessable and not
subject to the preemptive rights of any stockholder.  As long as the Warrants
shall be outstanding, the Company shall use its best efforts to cause all
shares of Common Stock issuable upon the exercise of the Warrants to be listed
(subject to official notice of issuance) on all securities exchanges on which
the Common Stock issued to the public in connection herewith may then be listed
and/or quoted on NASDAQ.
                 12.  Notice to Warrant Holders.  Nothing contained in this
Agreement shall be construed as conferring upon the Holders the right to vote
or to consent or to receive notice as a stockholder in respect of any meetings
of stockholders for the election of directors or any other manner, or as having
any rights whatsoever as a stockholder of the Company.  If, however, at any
time prior to the expiration of the Warrants and their exercise, any of the
following events shall occur:
                 (a)  the Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive a dividend
or distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment of such dividend or distribution on the
books of the Company; or





                                       19
<PAGE>   20

                 (b)  the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or securities
convertible into or exchange for shares of capital stock of the Company, or any
option, right or warrant to subscribe therefor; or
                 (c)  a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed; then, in any one or more of said events, the Company shall give
notice of such event at least fifteen (15) days prior to the date fixed as a
record date or the date of the closing the transfer books for the determination
of the stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale.  Such notice shall
specify such record date or the date of closing the transfer books, as the case
may be.  Failure to give such notice or any defect therein shall not affect the
validity of any action taken in connection with the declaration or payment of
any such dividend, or the issuance of any convertible or exchangeable
securities, or subscription rights, options or warrants, or any proposed
dissolution, liquidation, winding up or sale.
                 13.      Notices.  All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly made when delivered, or mailed by registered or certified mail, return
receipt requested:
                 (a)  If to the Holders, Sands Brothers & Co., Ltd., 90 Park
Avenue, 39th Floor, New York, New York 10016 as shown on the books of the
Company; or
                 (b)      If to the Company, to the address set forth in
Section 3 hereof or to such other address as the Company may designate by
notice to the Holders.





                                       20

<PAGE>   21

                 14.      Supplements and Amendments.   Except as otherwise
expressly provided herein, the provisions of this Agreement may be amended or
waived at any time only by the written agreement of the parties hereto.  Any
waiver, permit, consent or approval of kind or character on the part of each
Company or the Holder of any provisions or conditions of this Agreement must be
made in writing and shall be effective only to the extent specifically set
forth in such writing.
                 15.      Successors.  All the covenants and provisions of this
Agreement shall be binding upon and inure to the benefit of the Company, the
Holder and their respective successors and assigns hereunder.
                 16.      Governing Law; Submission to Jurisdiction.  This
Agreement and each Warrant Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of New York and for all the purposes
shall be construed in accordance with the laws of said State without giving
effect to the rules of said State governing the conflicts of laws.
                 The Company and the Holder hereby agree that any action,
proceeding or claim against it arising out of, or relating in any way to, this
Agreement shall be brought and enforced in the courts of the State of New York
or of the United States of America for the Southern District of New York, and
irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive.  The Company, and the Holder hereby irrevocably waive any objection
to such exclusive jurisdiction or inconvenient forum.  Any such process or
summons to be served upon any of the Company and the Holder (at the option of
the party bringing such action, proceeding or claim) may be served by
transmitting a copy thereof, by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address as set forth in
Section 13 hereof.  Such mailing shall be deemed personal service and shall be
legal and binding upon the party so served in any action, proceeding





                                       21

<PAGE>   22

or claim.  The Company and the Holder agree that the prevailing party(ies) in
any such action or proceeding shall be entitled to recover from the other
party(ies) all of its/their reasonable legal costs and expenses relating to
such action or proceeding and/or incurred in connection with the preparation
therefor.
                 17.      Entire Agreement; Modification.  This Agreement and
the Purchase Agreement (to the extent portions thereof are referred to herein)
contain the entire understanding between the parties hereto with respect to the
subject matter hereof and may not be modified or amended except by a writing
duly signed by the party against whom enforcement of the modification or
amendment is sought.
                 18.      Severability.  If any provision of this Agreement
shall be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision of this Agreement.
                 19.  Captions.  The caption headings of the Sections of this
Agreement are for convenience of reference only and are not intended, nor
should they be construed as, a part of this Agreement and shall be given no
substantive effect.
                 20.      Benefits of this Agreement.  Nothing in this
Agreement shall be construed to give to any person or corporation other than
the Company and the Holder any legal or equitable right, remedy or claim under
this Agreement; and this Agreement shall be for the sole and exclusive benefit
of the Company and the Holder.
                 21.      Counterparts.  This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.





                                       22
<PAGE>   23




         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.  [SEAL]
                        STANDARD MANAGEMENT CORPORATION



                        By: Ronald D. Hunter
                            ---------------------------
                                                      Ronald D. Hunter, Chairman
                                                     and Chief Executive Officer



Attest:

Stephen M. Coons
----------------------------
Stephen M. Coons, Secretary


                                                       SANDS BROTHERS & CO., LTD



                                                   By: Steven B. Sands
                                                      -------------------------
                                                   Authorized Officer





                                       23
<PAGE>   24
                                  EXHIBIT A-1

                          FORM OF WARRANT CERTIFICATE

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.

THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.

                            EXERCISABLE ON OR BEFORE
                   5:30 P.M., NEW YORK TIME, AUGUST 19, 1998


No. SB-1
100,000 Warrants

                              WARRANTS CERTIFICATE

                 This Warrant Certificate certifies that
__________________________, or registered assigns, is the registered holder of
100,000 Warrants to purchase initially, at any time from August 19, 1996, until
5:30 p.m. New York time on August 19, 1998 ("Expiration Date"), up to 100,000
fully-paid and non-assessable shares of common stock, no par value per share
("Common Stock") of STANDARD MANAGEMENT CORPORATION, an Indiana corporation
(the "Company"), at an initial exercise price, subject to adjustment in certain
events (the "Exercise Price"), of $4.3125 per share of Common Stock, upon
surrender of this Warrant Certificate and payment of the Exercise Price at an
office or agency of the Company, or by surrender of this Warrant Certificate in
lieu of cash payment, but subject to the conditions set forth herein and in the
warrant agreement dated as of August 19, 1996 between the Company and Sands
Brothers & Co., Ltd. (the "Warrant Agreement").  Payment of the Exercise Price
shall be made by certified or official bank check in New York Clearing House
funds payable to the order of the Company.

                 No Warrant may be exercised after 5:30 p.m., New York time, on
the Expiration Date, at which time all Warrants evidenced hereby, unless
exercised prior thereto, hereby shall thereafter be void.





                                    - A-1 -
<PAGE>   25
                 The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants issued pursuant to the Warrant Agreement,
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the rights,
obligations, duties and immunities thereunder of the Company and the holders
(the words "holders" or "holder" meaning the registered holders or registered
holder) of the Warrants.

                 The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price and the type and/or number of the Company's
securities issuable thereupon may, subject to certain conditions, be adjusted.
In such event, the Company will, at the request of the holder, issue a new
Warrant Certificate evidencing the adjustment in the Exercise Price and the
number and/or type of securities issuable upon the exercise of the Warrants;
provided, however, that the failure of the Company to issue such new Warrant
Certificates shall not in any way change, alter, or otherwise impair, the
rights of the holder as set forth in the Warrant Agreement.

                 Upon due presentment for registration of transfer of this
Warrant Certificate at an office or agency of the Company, a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued to the transferee(s) in
exchange for this Warrant Certificate, subject to the limitations provided
herein and in the Warrant Agreement, without any charge except for any tax in
other governmental charge imposed in connection with such transfer.

                 Upon the exercise of less than all of the Warrants evidenced
by this Certificate, the Company shall forthwith issue to the holder hereof a
new Warrant Certificate representing such numbered unexercised Warrants.

                 The Company may deem and treat the registered holder(s) hereof
as the absolute owner(s) of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, and of any distribution to the holder(s) hereof, and
for all other purposes, and the Company shall not be affected by any notice to
the contrary.

                 All terms used in this Warrant Certificate which are defined
in the Warrant Agreement shall have the meanings to them in the Warrant
Agreement.





                                    - A-2 -

<PAGE>   26

                 IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed under its corporate seal.

Dated as of August 19, 1996.

                        STANDARD MANAGEMENT CORPORATION



[SEAL]                                     By:
______________________________________
Title:



Attest:



Secretary





                                    - A-3 -

<PAGE>   27

             [FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.1]


                 The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to purchase ______ shares of
Common Stock at an exercise price of $_______ per share and herewith tenders in
payment for such Securities a certified or official bank check payable in New
York Clearing House Funds to the order of ______________ in the amount of
$____, all in accordance with the terms hereof.  The undersigned requests that
a certificate for such Securities be registered in the name of _____________
whose address is _____________ and that such Certificate be delivered to
_____________ whose address is _____________.

                                            Signature __________________________
                                        (Signature must conform in all respects
                                                  to name of holder as
                                                  specified on the face of the
                                                  Warrant Certificate.)


                                            ____________________________________
                  (Insert Social Security or Other Identifying Number of Holder)





                                    - A-4 -

<PAGE>   28

             [FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.2]


                 The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to purchase         shares of
Common Stock in accordance with the terms of Section 3.2 of that certain
Warrant Agreement dated as of August 19, 1996 among STANDARD MANAGEMENT
CORPORATION and SANDS BROTHERS & CO., LTD.  The Undersigned requests that a
certificate for such Securities be registered in the name of _____________
whose address is _____________ and that such Certificate be delivered to
_____________ whose address is _____________.


                                            Signature __________________________
                                        (Signature must conform in all respects
                                                  to name of holder as
                                                  specified on the face of the
                                                  Warrant Certificate.)


                                                ________________________________
                  (Insert Social Security or Other Identifying Number of Holder)





                                    - A-5 -

<PAGE>   29

                              [FORM OF ASSIGNMENT]

                 (To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)




           FOR VALUE RECEIVED ________________ here sells, assigns and transfers


unto



                 (Please print name and address of transferee)


this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ________________ Attorney,
to transfer the within Warrant Certificate on the books of the within-named
Company, with full power of substitution.



Dated:                                             Signature:

                                        (Signature must conform in all respects
                                                  to name of holder as
                                                  specified on the face of the
                                                  Warrant Certificate.)



                                    (Insert Social Security or other Identifying
Number of Assignee)





                                    - A-6 -

<PAGE>   30

ACTUAL WARRANT FOLLOWS:





                                    - A-7 -

<PAGE>   31

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.

THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.

                            EXERCISABLE ON OR BEFORE
                   5:30 P.M., NEW YORK TIME, AUGUST 19, 1998


No. SB-1
100,000 Warrants

                              WARRANTS CERTIFICATE

                 This Warrant Certificate certifies that Sands Brothers & Co.,
Ltd., or registered assigns, is the registered holder of 100,000 Warrants to
purchase initially, at any time from August 19, 1996, until 5:30 p.m. New York
time on August 19, 1998 ("Expiration Date"), up to 100,000 fully-paid and
non-assessable shares of common stock, no par value ("Common Stock") of
STANDARD MANAGEMENT CORPORATION, an Indianapolis corporation (the "Company"),
at an initial exercise price, subject to adjustment in certain events (the
"Exercise Price"), of $4.3125 per share upon surrender of this Warrant
Certificate and payment of the Exercise Price at an office or agency of the
Company, or by surrender of this Warrant Certificate in lieu of cash payment,
but subject to the conditions set forth herein and in the warrant agreement
dated as of August 19, 1996 between the Company and Sands Brothers & Co., Ltd.
(the "Warrant Agreement").  Payment of the Exercise Price shall be made by
certified or official bank check in New York Clearing House funds payable to
the order of the Company.

                 No Warrant may be exercised after 5:30 p.m., New York time, on
the Expiration Date, at which time all Warrants evidenced hereby, unless
exercised prior thereto, hereby shall thereafter be void.

                 The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants issued pursuant to the Warrant Agreement,
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the rights,
obligations, duties and immunities thereunder of the Company and the holders
(the words "holders" or "holder" meaning the registered holders or registered
holder) of the Warrants.

<PAGE>   32

                          The Warrant Agreement provides that upon the
         occurrence of certain events the Exercise Price and the type and/or
         number of the Company's securities issuable thereupon may, subject to
         certain conditions, be adjusted.  In such event, the Company will, at
         the request of the holder, issue a new Warrant Certificate evidencing
         the adjustment in the Exercise Price and the number and/or type of
         securities issuable upon the exercise of the Warrants; provided,
         however, that the failure of the Company to issue such new Warrant
         Certificates shall not in any way change, alter, or otherwise impair,
         the rights of the holder as set forth in the Warrant Agreement.

                 Upon due presentment for registration of transfer of this
Warrant Certificate at an office or agency of the Company, a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued to the transferee(s) in
exchange for this Warrant Certificate, subject to the limitations provided
herein and in the Warrant Agreement, without any charge except for any tax in
other governmental charge imposed in connection with such transfer.

                 Upon the exercise of less than all of the Warrants evidenced
by this Certificate, the Company shall forthwith issue to the holder hereof a
new Warrant Certificate representing such numbered unexercised Warrants.

                 The Company may deem and treat the registered holder(s) hereof
as the absolute owner(s) of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, and of any distribution to the holder(s) hereof, and
for all other purposes, and the Company shall not be affected by any notice to
the contrary.

                 All terms used in this Warrant Certificate which are defined
in the Warrant Agreement shall have the meanings to them in the Warrant
Agreement.





                                       2

<PAGE>   33

                 IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed under its corporate seal.

Dated as of August 19, 1996.


[SEAL]
                        STANDARD MANAGEMENT CORPORATION



                        By:____________________________
                                                      Ronald D. Hunter, Chairman
                                                     and Chief Executive Officer



Attest:


______________________________
Stephen M. Coons, Secretary





                                       3

<PAGE>   34


             [FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.1]


                 The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to purchase ______ shares of
Common Stock at an exercise price of $___ per share and herewith tenders in
payment for such Securities a certified or official bank check payable in New
York Clearing House Funds to the order of ______________ in the amount of
$____, all in accordance with the terms hereof.  The undersigned requests that
a certificate for such Securities be registered in the name of _____________
whose address is _____________ and that such Certificate be delivered to
_____________ whose address is _____________.

                                            Signature __________________________
                                        (Signature must conform in all respects
                                                  to name of holder as
                                                  specified on the face of the
                                                  Warrant Certificate.)


                                            ____________________________________
                  (Insert Social Security or Other Identifying Number of Holder)





                                       4
<PAGE>   35

             [FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.2]


                 The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to purchase         shares of
Common Stock in accordance with the terms of Section 3.2 of that certain
Warrant Agreement dated as of August 19, 1996 among STANDARD MANAGEMENT
CORPORATION and SANDS BROTHERS &  CO., LTD.  The Undersigned requests that a
certificate for such Securities be registered in the name of _____________
whose address is _____________ and that such Certificate be delivered to
_____________ whose address is _____________.


                                            Signature __________________________
                                        (Signature must conform in all respects
                                                  to name of holder as
                                                  specified on the face of the
                                                  Warrant Certificate.)


                                                ________________________________
                  (Insert Social Security or Other Identifying Number of Holder)





                                       5

<PAGE>   36

                              [FORM OF ASSIGNMENT]

                 (To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)


           FOR VALUE RECEIVED ________________ here sells, assigns and transfers
unto
                 (Please print name and address of transferee)

this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ________________ Attorney,
to transfer the within Warrant Certificate on the books of the within-named
Company, with full power of substitution.



Dated:                                             Signature:

                                        (Signature must conform in all respects
                                                  to name of holder as
                                                  specified on the face of the
                                                  Warrant Certificate.)



                                    (Insert Social Security or other Identifying
Number of Assignee)





                                       6