-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WUja9teWFj60uuu/SFBMl6PT2kSKjS9Vb4LkjK3YzmTfmdGcGRbkYIecuUHrYLu8 OfubHsFLfE3vTz3NOWrznQ== 0001178858-07-000005.txt : 20070322 0001178858-07-000005.hdr.sgml : 20070322 20070322115756 ACCESSION NUMBER: 0001178858-07-000005 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20070322 DATE AS OF CHANGE: 20070322 GROUP MEMBERS: JUDEAN A. SCHMIDT GROUP MEMBERS: THE SCHMIDT FAMILY TRUST SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD MANAGEMENT CORP CENTRAL INDEX KEY: 0000853971 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DRUG STORES AND PROPRIETARY STORES [5912] IRS NUMBER: 351773567 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-51173 FILM NUMBER: 07711049 BUSINESS ADDRESS: STREET 1: 10689 NORTH PENNSYLVANIA AVENUE CITY: INDIANAPOLIS STATE: IN ZIP: 46240 BUSINESS PHONE: 3175746200 MAIL ADDRESS: STREET 1: 10689 NORTH PENNSYLVANIA AVE CITY: INDIANAPOLIS STATE: IN ZIP: 46240 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SCHMIDT MARVIN L CENTRAL INDEX KEY: 0001239684 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O COPART INC STREET 2: 4665 BUSINESS CENTER DR CITY: FAIRFIELD STATE: CA ZIP: 94534 BUSINESS PHONE: 7076395007 SC 13D/A 1 amdschedule13d-03192007.htm AMENDMENT NO. 1 TO SCHEDULE 13D

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

SCHEDULE 13D

Under the Securities Exchange Act of 1934

Standard Management Corporation

(Name of Issuer)

Common Stock

(Title of Class of Securities)

853612 10 9

(CUSIP Number)

Sam Schmidt

2202 Chatsworth Court

Henderson, Nevada 89074

(702) 454-7227

(Name, Address and Telephone Number of

Person Authorized to Receive Notices and Communications)

March 9, 2007

(Date of Event Which Requires

Filing of this Statement)

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CUSIP NO.:

853612 10 9

--------------------------------------------------------------------------------------------------------------------------------------------

(1) Names of reporting persons .........................................................................................

Sheila J. Schmidt

S.S. or I.R.S. Identification Nos.

of above persons (entities only).....................................................................................

--------------------------------------------------------------------------------------------------------------------------------------------

(2) Check the appropriate box if a member of a group

(a)

(b)

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(3) SEC use only ....................................................................................................................

--------------------------------------------------------------------------------------------------------------------------------------------

(4) Source of Funds (see instructions)......................................................................................

--------------------------------------------------------------------------------------------------------------------------------------------

(5) Check if disclosure of legal proceedings is required

pursuant to Items 2(d) or 2(e)

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(6) Citizenship or place of organization .................................................................................

United States

--------------------------------------------------------------------------------------------------------------------------------------------

Number of shares beneficially owned by each reporting

person with:

(7) Sole voting power .................................................................................

----------------------------------------------------------------------------------------------------------------------

(8) Shared voting power .............................................................................

3,000,000

----------------------------------------------------------------------------------------------------------------------

(9) Sole dispositive power ..........................................................................

3,000,000

----------------------------------------------------------------------------------------------------------------------

(10) Shared dispositive power ....................................................................

----------------------------------------------------------------------------------------------------------------------

(11) Aggregate amount beneficially owned by each

reporting person....................................................................................................................

3,000,000

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(12) Check if the aggregate amount in Row (11) excludes certain shares (see instructions).

--------------------------------------------------------------------------------------------------------------------------------------------

(13) Percent of class represented by amount in Row (11) ........................................................

8.29%

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(14) Type of reporting person (see instructions) ......................................................................

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CUSIP NO.:

853612 10 9

--------------------------------------------------------------------------------------------------------------------------------------------

(1) Names of reporting persons .........................................................................................

Sam Schmidt

S.S. or I.R.S. Identification Nos.

of above persons (entities only).....................................................................................

--------------------------------------------------------------------------------------------------------------------------------------------

(2) Check the appropriate box if a member of a group

(a)

(b)

--------------------------------------------------------------------------------------------------------------------------------------------

(3) SEC use only ....................................................................................................................

--------------------------------------------------------------------------------------------------------------------------------------------

(4) Source of Funds (see instructions)......................................................................................

--------------------------------------------------------------------------------------------------------------------------------------------

(5) Check if disclosure of legal proceedings is required

pursuant to Items 2(d) or 2(e)

--------------------------------------------------------------------------------------------------------------------------------------------

(6) Citizenship or place of organization .................................................................................

United States

--------------------------------------------------------------------------------------------------------------------------------------------

Number of shares beneficially owned by each reporting

person with:

(7) Sole voting power .................................................................................

----------------------------------------------------------------------------------------------------------------------

(8) Shared voting power .............................................................................

11,900,000

----------------------------------------------------------------------------------------------------------------------

(9) Sole dispositive power ..........................................................................

11,900,000

----------------------------------------------------------------------------------------------------------------------

(10) Shared dispositive power ....................................................................

----------------------------------------------------------------------------------------------------------------------

(11) Aggregate amount beneficially owned by each

reporting person....................................................................................................................

11,900,000

--------------------------------------------------------------------------------------------------------------------------------------------

(12) Check if the aggregate amount in Row (11) excludes certain shares (see instructions).

--------------------------------------------------------------------------------------------------------------------------------------------

(13) Percent of class represented by amount in Row (11) ........................................................

32.90%

--------------------------------------------------------------------------------------------------------------------------------------------

(14) Type of reporting person (see instructions) ......................................................................

--------------------------------------------------------------------------------------------------------------------------------------------

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CUSIP NO.:

853612 10 9

--------------------------------------------------------------------------------------------------------------------------------------------

(1) Names of reporting persons .........................................................................................The Schmidt Family Trust

dated September 29, 1982

S.S. or I.R.S. Identification Nos.

of above persons (entities only).....................................................................................

--------------------------------------------------------------------------------------------------------------------------------------------

(2) Check the appropriate box if a member of a group

(a)

(b)

--------------------------------------------------------------------------------------------------------------------------------------------

(3) SEC use only ....................................................................................................................

--------------------------------------------------------------------------------------------------------------------------------------------

(4) Source of Funds (see instructions)......................................................................................

--------------------------------------------------------------------------------------------------------------------------------------------

(5) Check if disclosure of legal proceedings is required

pursuant to Items 2(d) or 2(e)

--------------------------------------------------------------------------------------------------------------------------------------------

(6) Citizenship or place of organization .................................................................................

United States

--------------------------------------------------------------------------------------------------------------------------------------------

Number of shares beneficially owned by each reporting

person with:

(7) Sole voting power .................................................................................

----------------------------------------------------------------------------------------------------------------------

(8) Shared voting power .............................................................................

17,000,000

----------------------------------------------------------------------------------------------------------------------

(9) Sole dispositive power ..........................................................................

----------------------------------------------------------------------------------------------------------------------

(10) Shared dispositive power ....................................................................

17,000,000

----------------------------------------------------------------------------------------------------------------------

(11) Aggregate amount beneficially owned by each

reporting person....................................................................................................................

17,000,000

--------------------------------------------------------------------------------------------------------------------------------------------

(12) Check if the aggregate amount in Row (11) excludes certain shares (see instructions).

--------------------------------------------------------------------------------------------------------------------------------------------

(13) Percent of class represented by amount in Row (11) ........................................................

47.00%

--------------------------------------------------------------------------------------------------------------------------------------------

(14) Type of reporting person (see instructions) ......................................................................

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ITEM 1. Security and Issuer

Name of issuer:

Standard Management Corporation

Address of issuer’s

principal executive offices:

10689 North Pennsylvania Street

Indianapolis, Indiana 46280

Title of class of securities:

Common Stock

ITEM 2.

Identity and Background

(a) Name of person filing:

Shelia J. Schmidt, as custodian

Sam Schmidt

The Schmidt Family Trust dated September 29, 1982

(Marvin J. Schmidt and Judean A. Schmidt, Trustees)

(b) Residence or business address:

Sam Schmidt and Sheila J. Schmidt

2202 Chatsworth Court

Henderson, Nevada 89074

The Schmidt Family Trust

282 Francisco Street

Henderson, Nevada 89014

(c)	Present principal occupation and

name, principal business and address

where employment is conducted:

Investment Manager (Sam Schmidt)

Performance Consulting Inc.

2202 Chatsworth Court

Henderson, Nevada 89074

(d)	During the last five years the persons filing this statement have not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e)

During the last five years the persons filing this statement have not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which the persons filing this statement were or are subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f)	Citizenship: United States

ITEM 3. Source and Amount of Funds or Other Consideration.

The purchase of the shares by The Schmidt Family Trust was funded by funds in the trust.

ITEM 4. Purpose of Transaction.

The shares were acquired from the issuer as an investment to provide additional capital to the issuer. The shares were purchased in partial satisfaction of an obligation under a letter agreement between Sam Schmidt and the

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Issuer, pursuant to which Sam Schmidt agreed to purchase a total of 20 million shares of the Issuer’s common stock subject to certain conditions (the “Letter Agreement”). The first 3 million of such shares were purchased on February 23, 2007 by Sheila J. Schmidt as custodian for the minor children of Sam and Sheila J. Schmidt. The remaining 17 million of such shares were purchased on March 9, 2007 by The Schmidt Family Trust dated September 29, 1982. The Letter Agreement, as more fully described in Item 6 below, also provides for the designation of two directors for the Issuer by Sam Schmidt, a Voting Agreement and for the granting by the purchasers thereunder to certain executive officers of the Issuer of an option to purchase up to five million of the shares purchased pursuant to the Letter Agreement. The reporting persons have other no plans or proposals of the types described in the instructions to Item 4 of Schedule 13D.

ITEM 5. Interest in Securities of the Issuer.

(a)

Amount beneficially owned by Sheila J. Schmidt:

3,000,000

Amount beneficially owned by Sam Schmidt:

11,900,000

Amount beneficially owned by The Schmidt Family Trust:

17,000,000

Amount beneficially owned by Group:

20,000,000

Percent of class:

Sheila J. Schmidt:

8.29%

Sam Schmidt:

32.90%

The Schmidt Family Trust:

47.00%

Group

55.29%

---------------

Consists of 1,500,000 shares of common stock owned as custodian for each of two minor children. Sheila J. Schmidt has sole dispositive control over such shares in connection with each such custodianship arrangement. Her voting control is shared by virtue of a Voting Agreement, as described in Item 6.

Sam Schmidt entered into the Letter Agreement with the Issuer pursuant to which he agreed to purchase, or cause affiliates or other related persons to purchase, an aggregate of 20 million shares of the Issuer’s common stock, subject to certain conditions. The shares of common stock purchased by Sheila J. Schmidt as custodian for the minor children of Sam Schmidt and Sheila J. Schmidt and by The Schmidt Family Trust were each purchased in partial satisfaction of this obligation and, accordingly, Sam Schmidt, Sheila J. Schmidt and The Schmidt Family Trust were acting in concert with respect to the purchase of these shares. Prior to the purchase by The Schmidt Family Trust, Mr. Schmidt was the owner of a $2.5 million 6% convertible note that was currently convertible into 762,195 shares of the Issuer’s common stock, which Mr. Schmidt was deemed to own beneficially pursuant to Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended. Upon the purchase of the shares by The Schmidt Family Trust under the Letter Agreement, this convertible note was exchanged for a replacement secured note that is not convertible into Issuer common stock, and Mr. Schmidt, therefore, ceased to beneficially own these shares. Mr. Schmidt does not own any Issuer common stock of record in his name at this time. However, The Schmidt Family Trust has granted Mr. Schmidt an option, as described more fully in Item 6, to purchase up to 11,900,000 shares of the Issuer’s common stock. Mr. Schmidt and The Schmidt Family Trust are also parties to the Voting Agreement described in Item 6.

(b) Number of shares as to which Sheila J. Schmidt has:

(i)

Sole power to vote or direct the vote:

(ii)

Shared power to vote or direct the vote:

3,000,000

(iii)

Sole power to dispose or to direct the disposition of:

3,000,000

(iv)

Shared power to dispose or to direct the disposition of:

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Number of shares as to which Sam Schmidt has:

(i)

Sole power to vote or direct the vote:

(ii)

Shared power to vote or direct the vote:

11,900,000

(iii)

Sole power to dispose or to direct the disposition of:

(iv)

Shared power to dispose or to direct the disposition of:

11,900,000

Number of shares as to which The Schmidt Family Trust has:

(i)

Sole power to vote or direct the vote:

(ii)

Shared power to vote or direct the vote:

17,000,000

(iii)

Sole power to dispose or to direct the disposition of:

(iv)

Shared power to dispose or to direct the disposition of:

17,000,000

Number of shares as to which the Group in the aggregate has:

(i)

Sole power to vote or direct the vote:

(ii)

Shared power to vote or direct the vote:

20,000,000

(iii)

Sole power to dispose or to direct the disposition of:

(iv)

Shared power to dispose or to direct the disposition of:

20,000,000

(c)

No transactions in the Issuer’s common stock were effected by the reporting persons during the past 60 days except for:

(1)

the purchase on February 23, 2007 from the Issuer of 3 million shares at a price of $0.10 per share by Sheila J. Schmidt, as custodian for the minor children of Sam Schmidt and Sheila J. Schmidt;

(2)

the purchase on March 9, 2007 from the Issuer of 17 million shares at a price of $0.10 per share by The Schmidt Family Trust;

(3)

the granting on March 9, 2007 by The Schmidt Family Trust to Ronald D. Hunter of an immediately exercisable option to purchase 3 million shares at an option price of $0.20 per share;

(4)

the granting on March 9, 2007 by The Schmidt Family Trust to Mark B. L. Long of an immediately exercisable option to purchase 1 million shares at an option price of $0.20 per share;

(5)

the granting on March 9, 2007 by The Schmidt Family Trust to Martial R. Knieser M.D. of an immediately exercisable option to purchase 1 million shares at an option price of $0.20 per share;

(6)

the granting on March 9, 2007 by The Schmidt Family Trust to Sam Schmidt of an immediately exercisable option to purchase 11,900,000 million shares at an option price of $0.20 per share; and

(7)

the disposition to the Issuer on March 9, 2007 by Sam Schmidt of a $2.5 million 6% convertible note that was currently convertible into 762,195 shares of the Issuer’s common stock, in exchange for a $2.5 million secured note from the Issuer that is not convertible into Issuer common stock.

(d)

No other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such securities, other than the minor children of Sheila J. Schmidt and Sam Schmidt in connection with the custodianship arrangement pursuant to which the shares are held.

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(e)	Not applicable.

ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

The Letter Agreement to which Sam Schmidt and the Issuer are parties required Mr. Schmidt and/or designated affiliates (the “Schmidt Parties”) to make an initial purchase of 3 million shares of the Issuer’s common stock at a purchase price of $0.10 per share. This purchase was made on February 23, 2007 by Sheila J. Schmidt (Mr. Schmidt’s spouse) as custodian for the minor children of Mr. and Mrs. Schmidt.

Mr. Schmidt also agreed that the Schmidt Parties would purchase an additional 17 million of the Issuer’s common shares for an aggregate purchase price of $1,700,000 subject to the fulfillment of certain conditions. On March 9, 2007, The Schmidt Family Trust dated September 29, 1982 (“The Schmidt Family Trust”) purchased such shares. In connection with that purchase, and pursuant to the Letter Agreement, the Issuer provided to Mr. Schmidt a first priority security interest in certain real estate located in Bloomington, Indiana, owned by a subsidiary of the Issuer, to secure existing indebtedness in the principal amount of $2.5 million owed to Mr. Schmidt by the Issuer pursuant to a 6% convertible note due 2008 (the “Convertible Note”). The Issuer sold the Convertible Note to Mr. Schmidt in November 2004. In connection with the granting of the security interest, the Convertible Note was cancelled and replaced with a replacement note that is not convertible into common stock. The Issuer also granted Mr. Schmidt a first priority security interest in the personal property of the Issuer and a pledge of the shares of the Issuer’s subsidiary, Precision Healthcare, Inc., to secure the same indebtedness.

Mr. Schmidt, Mrs. Schmidt and The Schmidt Family Trust entered into a Voting Agreement dated March 9, 2007, with the Issuer pursuant to which they agreed to vote the purchased shares for the election to the Issuer’s board of directors at the annual meetings held in 2007, 2008 and 2009 of Mr. Schmidt (or a designee of Mr. Schmidt), Mr. Dennis King (or another designee of Mr. Schmidt), Mr. Ronald D. Hunter, James H. Steane II, and Mr. Dainforth B. French, Jr. Mr. Hunter, Mr. Steane and Mr. French are all of the current members of the board of directors of the Issuer.

Also on March 9, 2007, The Schmidt Family Trust granted options to purchase three million of the Issuer’s common shares to Mr. Ronald D. Hunter, one million of the Issuer’s common shares to Dr. Mark B.L. Long, and one million of the Issuer’s common shares to Dr. Martial R. Knieser. The exercise price of the options is $0.20 per share, and the options have a term of two years. Each of Mr. Hunter, Dr. Long and Dr. Knieser is an officer of the Issuer. In addition, on March 9, 2007, The Schmidt Family Trust granted an option to Mr. Schmidt with a term of two years to purchase 11,900,000 shares of the Issuer’s common stock at an exercise price of $0.20 per share.

Mr. Schmidt, Mrs. Schmidt and The Schmidt Family Trust entered into a Registration Rights Agreement dated March 9, 2007, with the Issuer pursuant to which the Issuer is required within a specified period to register the resale of the shares purchased by the Schmidt Parties.

Pursuant to the Letter Agreement, within 15 days after the earlier of (i) the purchase by the Schmidt Parties of all of the shares contemplated by the Letter Agreement (that is, March 9, 2007), or (ii) the Issuer’s sale of Precision Healthcare, Inc. to Universal HealthCare Company, LLC, the Issuer is obligated to repay certain indebtedness owed either to Mr. Schmidt or his affiliates in the approximate principal amount of $200,000.

The Reporting Persons have not entered into any other contracts, arrangements or understandings with respect to the acquisition, ownership, voting or disposition of the securities of the Issuer.

ITEM 7. Material to Be Filed as Exhibits.

99.1	Written Agreement Relating to the Filing of Joint 13D Statement – SEC Rule 13d-1(k).

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99.2	Letter Agreement between Sam Schmidt and Standard Management Corporation, incorporated by reference to Exhibit 99.1 to the Current Report of Standard Management Corporation on Form 8-K (File No. 0-20882) filed March 1, 2007.

99.3	Voting Agreement dated March 9, 2007, by and among Sam Schmidt, Sheila J. Schmidt, as custodian for the minor children of Sam Schmidt and Sheila J. Schmidt, The Schmidt Family Trust dated September 29, 1982, and Standard Management Corporation.

99.4	Option Agreement dated March 9, 2007, by and among The Schmidt Family Trust dated September 29, 1982, and Ronald D. Hunter, Mark B. L. Long and Martial R. Knieser, M.D.

99.5	Option Agreement dated March 9, 2007, by and between The Schmidt Family Trust dated September 29, 1982, and Sam Schmidt.

99.6	Registration Rights Agreement dated March 9, 2007, by and among Standard Management Corporation, Sam Schmidt, Sheila J. Schmidt as custodian for the minor children of Sam Schmidt and Sheila J. Schmidt and The Schmidt Family Trust dated September 29, 1982.

Signature.

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: March __, 2007

/s/ Sheila J. Schmidt

Sheila J. Schmidt

/s/ Sam Schmidt

Sam Schmidt

/s/ Marvin L. Schmidt

Marvin L. Schmidt, as Trustee of

The Schmidt Family Trust dated

September 29, 1982

/s/ Judean A. Schmidt

Judean A. Schmidt, as Trustee of

The Schmidt Family Trust dated

September 29, 1982

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EX-99.6 2 regrightsagrmt-03192007.htm EXHIBIT 99.6 REGISTRATION RIGHTS AGREEMENT

EXHIBIT 99.6

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of March 9, 2007, by and between Standard Management Corporation, an Indiana corporation (the “Company”) and each of the Investors listed on Schedule A attached hereto.

1. Certain Definitions. As used in this Agreement, the following terms shall have the following respective meanings:

“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in Indianapolis, Indiana are authorized or obligated by law or executive order to close.

“Commission” means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

“Common Stock” means the common stock of the Company.

“Letter Agreement” means the Letter Agreement dated February 20, 2007 between the Company and Sam Schmidt.

“Effectiveness Period” means the period commencing with the date 90 days after the date hereof and ending on the date that all Registrable Securities have ceased to be Registrable Securities.

“Filing Date” has the meaning given in Section 2(a) of this Agreement.

“Initial Shelf Registration” has the meaning given in Section 2(a) of this Agreement.

“Investor or Investors” means the Investors listed on Schedule A attached hereto and their permitted successors and assigns pursuant to Section 7 hereof who hold Registrable Securities, and any other holder of Common Stock of the Company who by amendment has been granted registration rights under this Agreement by the Company with the consent of Investors holding a majority of the Registrable Securities.

“Registrable Securities” shall mean (i) the shares of Common Stock of the Company owned by the Investors as of the date of this Agreement, and (ii) any other shares of Common Stock issued to the Investors with respect to such shares of Common Stock upon any stock dividend, stock split or similar event; provided, however, that shares of Common Stock of the Company which are Registrable Securities shall cease to be Registrable Securities upon the earlier of (A) any sale or transfer in any manner to any person or entity after which such Registrable Securities are freely tradable, including, but not limited to, sales pursuant to a registration statement, Rule 144(k) sales or otherwise, but excluding any sale or transfer in connection with which the rights of the Investors hereunder are assignable pursuant to Section 7 or (B) such shares are saleable by the holder thereof pursuant to Rule 144(k) (or any successor provision) under the Securities Act.

The terms “register,” “registered” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement.

“Registration Expenses” means all expenses, other than Selling Expenses (as defined below), incurred by the Company in complying with this Agreement, including, without limitation, all registration, qualification and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company, blue sky fees and expenses if any, and the expense of any special audits incident to or required by any such registration.

“Securities Act” means 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.

“Selling Expenses” means all underwriting discounts, selling commissions and stock transfer taxes applicable to the securities registered by the Investors and all fees and disbursements of counsel for the Investors.

“Selling Period” has the meaning given in Section 2(d) of this Agreement.

“Shelf Registration” means any registration statement under the Securities Act for an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act registering the resale from time to time of Registrable Securities.

“Subsequent Shelf Registration” has the meaning given in Section 2(b) of this Agreement.

Shelf Registration.

(a) Shelf Registration. The Company shall prepare and file with the Commission, as soon as practicable but in any event on or prior to the date ninety (90) days following the date of this Agreement (the “Filing Date”), a registration statement for a Shelf Registration registering the resale from time to time by the Investors of all of the Registrable Securities (the “Initial Shelf Registration”). The Initial Shelf Registration shall be on Form S-3 or another appropriate form permitting registration of such Registrable Securities for resale by the Investors in the manner or manners designated by them. An offering of Registrable Securities pursuant to the Initial Shelf Registration may be effected in the form of an underwritten offering; provided that the Company shall not be obligated to arrange for such underwritten offerings other than as required by Section 4 of this Agreement. The Company shall use its reasonable efforts to cause the Initial Shelf Registration to be declared effective under the Securities Act as soon as practicable and to keep the Initial Shelf Registration continuously effective under the Securities Act until the earlier of the expiration of the Effectiveness Period or the date a Subsequent Shelf Registration, as defined below, covering all of the Registrable Securities has been declared effective under the Securities Act. The Company may delay the Filing Date for the Initial Shelf Registration by up to 45 days from the otherwise required filing date, and shall give notice of any such delay to the Investors.

(b) If the Initial Shelf Registration or any Subsequent Shelf Registration, as defined below, ceases to be effective for any reason as a result of the issuance of a stop order by the Commission at any time during the Effectiveness Period, the Company shall use its reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within thirty (30) days of such cessation of effectiveness amend the Shelf Registration in a manner reasonably expected to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional Shelf Registration covering all of the Registrable Securities (a “Subsequent Shelf Registration”). If a Subsequent Shelf Registration is filed, the Company shall use its reasonable efforts to cause the Subsequent Shelf Registration to be declared effective as soon as practicable after such filing and to keep such registration statement continuously effective until the end of the Effectiveness Period.

(c) The Company shall supplement and amend the Shelf Registration if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration, if required by the Securities Act, or if reasonably requested by the Investors or by any managing underwriter of such Registrable Securities in the event of an underwritten offering of the Registrable Securities.

(d) Each Investor agrees that if such Investor wishes to sell its Registrable Securities pursuant to a Shelf Registration and related prospectus, it will do so only in accordance with this Section 2(d). Each Investor agrees to given written notice to the Company at least five Business Days prior to any intended distribution of Registrable Securities under the Shelf Registration, which notice shall specify the date on which such Investor intends to begin such distribution and any information with respect to such Investor and the intended distribution of Registrable Securities by such Investor as may be required to amend the Registration Statement or supplement the related prospectus with respect to such intended distribution of Registrable Securities by such Investor (the “Requisite Information”). In the event the Investor fails to provide the Requisite Information in its initial notice of its intention to distribute the Registrable Securities pursuant to the Shelf Registration, the Company will promptly request such Investor to provide such Requisite Information. As soon as practicable after the date such notice and Requisite Information is provided, and in any event within four Business Days after such date, the Company shall, subject to Sections 2(e) and 2(f), (i) if necessary, prepare and file with the Commission a post-effective amendment to the Shelf Registration or a supplement to the related prospectus or a supplement or amendment to any document incorporated therein by reference or file any other required document so that such registration statement will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and so that, as thereafter delivered to purchasers of the Registrable Securities being sold thereunder, such prospectus will comply in all material respects with the rules and requirements under the Securities Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) provide each Notice Holder (as defined below) copies of any documents filed pursuant to Section 2(d)(i); and (iii) inform each Notice Holder that the Company has complied with its obligations in Section 2(d)(i) (or that, if the Company has filed a post-effective amendment to the Shelf Registration which has not yet been declared effective, the Company will notify the Notice Holder to that effect, will use its reasonable efforts to secure the effectiveness of such post-effective amendment and will promptly notify the Notice Holder when the amendment has become effective). Each Investor who has given notice of intention to distribute such Investor’s Registrable Securities in accordance with Section 2(d) hereof (a “Notice Holder”) will sell all or any of such Registrable Securities pursuant to the Shelf Registration and related prospectus only during the 45-day period commencing with the date on which the Company gives notice, pursuant to Section 2(d)(iii), that the Registration Statement and prospectus may be used for such purpose (such 45-day period is referred to as a “Selling Period”). The Notice Holders will not sell any Registrable Securities pursuant to such Registration Statement or prospectus after such Selling Period without giving a new notice of intention to sell pursuant to Section 2(d) hereof and receiving a further notice from the Company pursuant to Section 2(d)(iii) hereof.

(e) The Company is not required to take any action under Section 2(d) or permit any sales thereunder during the period starting with the date ten (10) days prior to the Company’s estimated date of filing of any registration statement or preliminary or final prospectus supplement (other than a registration of securities in a Rule 145 transaction or with respect to an employee benefit plan or with respect to a dividend reinvestment or direct stock purchase plan (DRIP) or with respect to which Section 4(a) applies), and continuing up to the earlier of (x) 30 days immediately following the effective date of any such registration statement or the date of any such final prospectus supplement, pertaining to securities of the Company, (y) the date when the Common Stock is trading at an average (for the trailing 20 trading days) of 110% of the offering price for such registration statement or prospectus supplement, and (z) the expiration of any lock-up periods to which the Company is subject in an underwritten offering, provided that the Company is actively employing in good faith all reasonable efforts to cause any such registration statement to become effective. The Company shall give written notice to any Investor requesting a sale under Section 2(d) if this Section 2(e) is applicable.

(f) If the Company shall furnish to the Notice Holders a certificate signed by the Chief Executive Officer of the Company stating that in the good faith judgment of the Board of Directors, the Company is in possession of material non-public information (including but not limited to information regarding a contemplated debt or equity financing) , disclosure of which would cause a serious detrimental effect to the Company or its shareholders if a prospectus supplement were filed in the near future, then the Company’s obligations under Section 2(d) shall be deferred for a period not to exceed 45 days; provided, however, that in no event may the Company delay the filing of a prospectus supplement pursuant to this Section 2(f) more than twice in any twelve (12) month period.

3. Expenses of Registration. All Registration Expenses incurred in connection with all registrations shall be borne by the Company. All Selling Expenses relating to securities registered on behalf of the Investors shall be borne by the Investors.

4. Registration Procedures. In the case of each registration, qualification or compliance effected by the Company pursuant to Section 2(a) of this Agreement, the Company will keep the Investors advised in writing as to the initiation of each registration, qualification and compliance and as to the completion thereof. The Company will use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof and pursuant thereto the Company will as expeditiously as possible:

(a) prepare and file with the Commission a registration statement with respect to such Registrable Securities and use its reasonable best efforts to cause such registration statement to become effective;

(b) during the period in which the Company is required under the provisions hereof to keep a registration statement effective, furnish to the seller of Registrable Securities such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller;

(c) use its reasonable best efforts to register or qualify such Registrable Securities under any applicable securities or blue sky laws of such jurisdictions as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller (provided that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph, (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction);

(d) notify the seller of such Registrable Securities, any time the Company becomes aware a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, subject to the rights of the Company to suspend or delay sales stated elsewhere in this Agreement, at the request of such seller, the Company will prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading;

(e) use its reasonable best efforts to cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed and, if not so listed, use its best efforts to secure NASDAQ authorization for the trading of such Registrable Securities;

(f) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement;

(g) enter into such customary agreements (including underwriting agreements in customary form with underwriters selected by the Investors subject to the Company’s reasonable approval, not to be unreasonably withheld) and take all such other actions as the holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including, without limitation, (i) not effecting any public sale or distribution of its equity securities, or any securities convertible into or exchangeable or exercisable for such securities, during a period customary for such agreements of no more than seven days prior to and no more than 30 days following the date of the final prospectus supplement for any underwritten offering with a Shelf Registration (except pursuant to registrations on Form S-8 or any successor form or registrations involving dividend reinvestment or direct share purchase plans), unless the underwriters managing the underwritten public offering otherwise agree, and (ii) using its reasonable efforts to cause each holder of its Common Stock, or any securities convertible into or exchangeable or exercisable for Common Stock, acquired from the Company at any time after the date of this Agreement (other than in a registered public offering) to agree not to effect any public sale or distribution (excluding sales pursuant to Rule 144) of any such securities during such period unless the underwriters managing the public offering otherwise agree);

(h) upon receipt and execution of such confidentiality agreements as the Company may reasonably request from parties who are not otherwise subject to confidentiality obligations because of the nature of their profession (e.g., underwriters, attorneys and accountants), make available for inspection by the seller of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other agent retained by any such seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors, employees and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement (including, without limitation, accountants’ “cold comfort” letters and opinions of counsel);

(i) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least 12 months beginning with the first day of the Company’s first full calendar quarter after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

(j) in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any common stock included in such registration statement for sale in any jurisdiction, the Company will use its reasonable best efforts promptly to obtain the withdrawal of such order;

(k) if the disposition of the Registrable Securities is pursuant to an underwritten offering, cause the appropriate officers and advisors of the Company to meet with the underwriters and the investors whose Common Stock is registered for resale thereunder.

Indemnification.

(a) The Company agrees to indemnify, to the extent permitted by law, each holder of Registrable Securities, its officers and directors and each person who controls such holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses caused by any untrue or alleged untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any affidavits or written information supplied or withheld from the Company relating to such holder’s ownership of Registrable Securities or as otherwise required under the Securities Act furnished by such holder expressly for use in such registration statement or by such holder’s failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished such holder with the number of copies of the same reasonably requested by such holder.

(b) Each holder of Registrable Securities will furnish to the Company in writing such information and affidavits relating to such holder’s ownership of Registrable Securities or as otherwise required under the Securities Act as the Company reasonably requests for use in connection with the Shelf Registration or any applicable prospectus supplement and, to the extent permitted by law, will indemnify the Company, its directors and officers and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses resulting from any untrue or alleged untrue statement of material fact contained in the registration statement or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such holder which was expressly provided for use in such registration statement or amendment thereof or supplement thereto and was included in such registration statement or amendment thereof or supplement thereto in reliance on and in conformity with such written information or affidavit.

(c) Any person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed or not defended because of a conflict of interest pursuant to clause (ii) of the preceding sentence, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim.

(d) The indemnification provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and will survive the transfer of securities. The Company also agrees to make such provisions, as are reasonably requested by any indemnified party, for contribution to such party in the event the Company’s indemnification is unavailable for any reason.

6. Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its reasonable best efforts to:

(a) Make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times hereafter.

(b) File with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Securities Exchange Act of 1934, as amended.

(c) So long as any Investor owns any Registrable Securities, to furnish to such Investor forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 and of the Securities Act and the Securities Exchange Act of 1934, and a copy of the most recent annual or quarterly report of the Company.

7. Transfer of Registration Rights. Subject to the termination provisions of Section 8 and the definition of “Registrable Securities,” the rights granted to the Investors hereunder may be assigned, in connection with any transfer or assignment of Registrable Securities by an Investor, to any transferee or assignee to whom the Investor may transfer or assign shares of Common Stock.

8. Termination of Registration Rights. The Company’s obligations pursuant to Sections 2 and 3 shall expire when all Registrable Securities have ceased to be Registrable Securities.

9. Miscellaneous.

(a) Governing Law. This Agreement shall be governed in all respects by the internal laws of the State of Indiana.

(b) Survival. The representations, warranties, covenants and agreements made herein shall survive any investigation made by the Investors and the closing of the transactions contemplated hereby.

(c) Successors and Assigns. The provisions hereof shall inure to the benefit of, and be binding upon, the successors, permitted assigns, heirs, executors and administrators of the parties hereto, including as specifically provided by Section 7 hereof.

(d) Entire Agreement; Amendment. This Agreement and its attachments constitute the full and entire understanding and agreement between the parties with regard to the subject hereof. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the Company and Investors holding at least 67% of the Registrable Securities.

(e) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

(f) Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.

(g) Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not considered in construing or interpreting this Agreement.

[SIGNATURES ON NEXT PAGE]

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

STANDARD MANAGEMENT CORPORATION

By: /s/ Ronald D. Hunter

Ronald D. Hunter

Chairman, President and Chief Executive

Officer

/s/ Sam Schmidt

Sam Schmidt

/s/ Sheila J. Schmidt

Sheila J. Schmidt, as Custodian for

Nicole Schmidt and Samuel

Spencer Schmidt

/s/ Marvin L. Schmidt

/s/ Judean A. Schmidt

The Schmidt Family Trust dated September 29, 1982

Marvin L. and Judean A. Schmidt, as Trustees

851888.1

SCHEDULE A

SCHEDULE OF INVESTORS

Sam Schmidt

Sheila J. Schmidt, as Custodian

for Nicole Schmidt and Samuel

Spencer Schmidt

The Schmidt Family Trust dated September 29, 1982

Marvin L. and Judean A. Schmidt, as Trustees

EX-99.5 3 schmidtoptionagrmt-03192007.htm EXHIBIT 99.5 OPTION AGREEMENT

EXHIBIT 99.5

OPTION AGREEMENT

THIS AGREEMENT, dated and effective as of the 9th day of March 2007, by and among The Schmidt Family Trust dated 9/29/82, by Marvin L. and Judean A. Schmidt, as Trustees (collectively, “Grantors” and individually, “Grantor”), and Sam Schmidt (“Grantee”).

W I T N E S S E T H T H A T:

WHEREAS, Grantors own 17,000,000 common shares (the “Grantor Shares”) of Standard Management Corporation, an Indiana corporation (“SMAN”); and

WHEREAS, Grantee desires to obtain an option to purchase 11,900,000 of the Grantor Shares (the “Option Shares”) on the terms and conditions set forth in this Agreement and Grantor desires to grant to Grantee the right to purchase the Option Shares, on those terms and conditions;

NOW, THEREFORE, in consideration of the promises, the mutual covenants herein contained and each act done pursuant hereto, the parties hereby agree as follows:

1. Grant of Option to Purchase Option Shares. Pursuant to this Agreement, Grantor hereby grants to Grantee the right and privilege to purchase the Option Shares (the “Option Rights”) during the period set forth in Section 2 of this Agreement at the price set forth in Section 4 of this Agreement.

2. Period During Which Option Right May Be Exercised; Termination of Option Period. The Option Rights may be exercised within twenty-four (24) months after the date of execution of this Agreement; provided, however, that the period (the "Option Period") during which the Option Right may be exercised shall terminate at such time as the Option Right has been fully exercised.

3. Adjustments. If any stock dividend shall be declared upon SMAN’s issued and outstanding common shares, or if such shares shall be subdivided, consolidated or changed to other securities of SMAN, or in the event of any like adjustment or change in SMAN’s capitalization, then the Option Shares shall, if the occurrence of the event would have resulted in a change in the number and/or kind of such shares had they been then outstanding, be similarly adjusted in number and/or kind, with the nature and extent of any such adjustments to be determined by treating the Option Shares as being outstanding at the time of and immediately prior to the occurrence of the event, and the purchase price to be paid for the Option Shares shall be appropriately changed to give effect to any such adjustment.

4. Option Price. The price at which the Option Rights may be exercised is Twenty Cents ($0.20) per share (the "Option Price").

5. How Exercised. The Option Rights may be exercised by giving Grantor written notice of an intention to purchase all or part of the Option Shares, as applicable. Such notice shall state the number of shares in respect of which the Option Right is being exercised and shall be signed by Grantee. At the expiration of 15 days after any such written notice is received by Grantor, or at such other time as may be mutually agreed upon, Grantor shall deliver to Grantee a certificate representing the portion of the Grantor Shares intended to be purchased, endorsed to Grantee or accompanied by an executed stock power assigning the purchased shares to Grantee, in exchange for a certified check reflecting payment of the Option Price for the shares of Grantor Shares being acquired. The mailing or delivery of any such notice shall constitute an exercise of the Option Right obligating Grantee to purchase and pay for the portion of the Grantor Shares designated therein.

6. Representations and Warranties of Grantor. Grantor represents and warrants to Grantee that Grantor has good and marketable title to the Option Shares, and can transfer the shares subject to the Option Right free and clear of any lien or other claims.

7. Restrictive Legend. Grantor agrees to the placement of the following legend on a certificate or certificates representing a number of the Grantor Shares equal to the full number of Option Shares:

“The Shares represented by this certificate are subject to an Option Agreement dated March _, 2007, by and among The Schmidt Family Trust dated 9/29/82, by Marvin L. and Judean A. Schmidt, as Trustees, and Sam Schmidt.”

8. Acknowledgement of Grantee. Grantee understands and acknowledges that the Option Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any other applicable securities law, are being offered for sale by the Grantor in transactions not requiring registration under the Securities Act and that such exemption depends, in part, upon the Grantee having such knowledge and experience in business and investment matters that he is able to evaluate the merits and risks of owning the Option Shares. Grantee further understands and agrees that the Option Shares may not be offered, sold, pledged, or otherwise transferred by the Grantee except in compliance with the registration requirements of the Securities Act or any other applicable securities laws, pursuant to an exemption therefrom or in a transaction not subject thereto.

9. Representations and Warranties of Grantee. Grantee represents and warrants that he is purchasing the applicable Option Shares for his own account, for investment, and not with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or other applicable securities laws, subject to any requirement of law that the disposition of his property be at all times within his control and subject to his ability to resell such Option Shares pursuant to an effective registration statement under the Securities Act or an exemption from registration available under the Securities Act or any other applicable securities law.

10. Controlling Law. This Agreement is to be governed and controlled by the laws of the State of Indiana.

11. Binding Upon Successors; No Assignment. This Agreement shall inure to the benefit of and be binding upon the parties and or any successors or assigns of either of them. Grantee shall be permitted to assign his rights under this Agreement without the consent of Grantor.

12. Notices. Any notice required hereunder shall be sufficiently given if in writing and delivered personally to the party to whom notice is sent or sent by first class mail to the address set forth in the introductory paragraph.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

The Schmidt Family Trust dated 9/29/82

By: /s/ Marvin L. Schmidt

/s/ Judean A. Schmidt

Marvin L. and Judean A. Schmidt, as Trustees

/s/ Sam Schmidt

Sam Schmidt

853312.1

EX-99.4 4 hunteroptionagrmt-03192007.htm EXHIBIT 99.4 OPTION AGREEMENT

EXHIBIT 99.4

OPTION AGREEMENT

THIS AGREEMENT, dated and effective as of the 9th day of March 2007, by and among The Schmidt Family Trust dated September 29, 1982, Marvin L. and Judean A. Schmidt, as Trustees (collectively, “Grantors” and individually, “Grantor”), Ronald D. Hunter (“Hunter”), 10689 N. Pennsylvania St., Indianapolis, IN 46280, Mark B.L. Long (“Long”), 10689 N. Pennsylvania St., Indianapolis, IN 46280 and Martial R. Knieser, M.D. (“Knieser”) 10689 N. Pennsylvania St., Indianapolis, IN 46280,

W I T N E S S E T H T H A T:

WHEREAS, Grantors own 17,000,000 common shares (the “Grantor Shares”) of Standard Management Corporation, an Indiana corporation (“SMAN”); and

WHEREAS, Hunter desires to obtain an option to purchase 3,000,000 of the Grantor Shares (the “Hunter Shares”), Long desires to obtain an option to purchase 1,000,000 of the Grantor Shares (the “Long Shares”) and Knieser desires to obtain an option to purchase 1,000,00 of the Grantor Shares (the “Knieser Shares” and, together with the Hunter Shares and the Long Shares, the “Option Shares”) on the terms and conditions set forth in this Agreement and Grantor desires to grant to Hunter, Long and Knieser (collectively, the “Grantees”) the right to purchase the Hunter Shares, the Long Shares and the Knieser Shares, respectively, on those terms and conditions;

NOW, THEREFORE, in consideration of the promises, the mutual covenants herein contained and each act done pursuant hereto, the parties hereby agree as follows:

1. Grant of Option to Purchase Option Shares. Pursuant to this Agreement, Grantor hereby grants to Hunter the right and privilege to purchase the Hunter Shares (the “Hunter Option”), to Long the right and privilege to purchase the Long Shares (the “Long Option”) and to Knieser the right and privilege to purchase the Knieser Shares (the “Knieser Option”, and together with the Hunter Option and the Long Option, the “Option Rights”) during the period set forth in Section 2 of this Agreement at the price set forth in Section 4 of this Agreement.

3. Adjustments. If any stock dividend shall be declared upon SMAN’s issued and outstanding common shares, or if such shares shall be subdivided, consolidated or changed to other securities of SMAN, or in the event of any like adjustment or change in SMAN’s capitalization, then the Hunter Shares, Long Shares and Knieser Shares shall, if the occurrence of the event would have resulted in a change in the number and/or kind of such shares had they been then outstanding, be similarly adjusted in number and/or kind, with the nature and extent of any such adjustments to be determined by treating the Hunter Shares, Long Shares and Knieser Shares as being outstanding at the time of and immediately prior to the occurrence of the event, and the purchase price to be paid for the Hunter Shares, Long Shares and Knieser Shares shall be appropriately changed to give effect to any such adjustment.

4. Option Price. The price at which the Option Rights may be exercised is Twenty Cents ($0.20) per share (the "Option Price").

5. How Exercised. The Option Rights may be exercised by giving Grantor written notice of an intention to purchase all or part of the Hunter Shares, Long Shares and Knieser Shares, as applicable. Such notice shall state the number of shares in respect of which the Option Right is being exercised and shall be signed by the Hunter, Long or Knieser, as applicable (the “Purchaser”). At the expiration of 15 days after any such written notice is received by Grantor, or at such other time as may be mutually agreed upon, Grantor shall deliver to the Purchaser a certificate representing the portion of the Grantor Shares intended to be purchased, endorsed to the Purchaser or accompanied by an executed stock power assigning the purchased shares to the Purchaser, in exchange for a certified check reflecting payment of the Option Price for the shares of Grantor Stock being acquired. The mailing or delivery of any such notice shall constitute an exercise of the Option Right obligating the Purchaser to purchase and pay for the portion of the Grantor Shares designated therein.

6. Representations and Warranties of Grantor. Grantor represents and warrants to the Purchasers that Grantor has good and marketable title to the Grantor Shares, and can transfer the shares subject to the Hunter Option, the Long Option and Knieser Option on exercise of the applicable Option Right free and clear of any lien or other claims.

7. Restrictive Legend. Grantor agrees to the placement of the following legend on a certificate or certificates representing a number of the Grantor Shares equal to the full number of Hunter Shares, Long Shares and Knieser Shares:

“The Shares represented by this certificate are subject to an Option Agreement dated March _, 2007, by and among Sam Schmidt, Ronald D. Hunter, Mark B.L. Long and Martial R. Knieser, M.D.”

8. Acknowledgement of Grantees. Each of the Grantees understands and acknowledges that the Option Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any other applicable securities law, are being offered for sale by the Grantor in transactions not requiring registration under the Securities Act and that such exemption depends, in part, upon the Grantee having such knowledge and experience in business and investment matters that he is able to evaluate the merits and risks of owning the Option Shares. Each Grantee further understands and agrees that the Option Shares may not be offered, sold, pledged, or otherwise transferred by the Grantee except in compliance with the registration requirements of the Securities Act or any other applicable securities laws, pursuant to an exemption therefrom or in a transaction not subject thereto.

9. Representations and Warranties of Grantees. Each Grantee represents and warrants that it is purchasing the applicable Option Shares for its own account, for investment, and not with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or other applicable securities laws, subject to any requirement of law that the disposition of its property be at all times within its control and subject to its ability to resell such Option Shares pursuant to an effective registration statement under the Securities Act or an exemption from registration available under the Securities Act or any other applicable securities law.

10. Controlling Law. This Agreement is to be governed and controlled by the laws of the State of Indiana.

11. Binding Upon Successors; No Assignment. This Agreement shall inure to the benefit of and be binding upon the parties and or any successors or assigns of either of them; provided, however, that no Grantee shall be permitted to assign his rights under this Agreement without the prior, written consent of Grantors.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

/s/ Ronald D. Hunter

Ronald D. Hunter

/s/ Mark B.L. Long

/s/ Martial R. Knieser, M.D.

Mark B.L. Long

Martial R. Knieser, M.D.

/s/ Marvin L. Schmidt

/s/ Judean A. Schmidt

The Schmidt Family Trust dated September 29, 1982

Marvin L. and Judean A. Schmidt, as Trustees

852107_3

EX-99.3 5 votingagrmt-03192007.htm EXHIBIT 99.3 VOTING AGREEMENT

EXHIBIT 99.3

VOTING AGREEMENT

THIS VOTING AGREEMENT (this “Agreement”), dated and effective as of March 9, 2007, and entered into by and between Sam Schmidt, a resident of the State of Nevada (“Schmidt”), Sheila J. Schmidt, a resident of the State of Nevada, as custodian for the minor children of Sam Schmidt and Sheila J. Schmidt (“Custodian”), The Schmidt Family Trust dated September 29, 1982, Marvin L. and Judean A. Schmidt as Trustees (the “Schmidt Trust” and, together with Schmidt and Custodian, the “Schmidt Shareholders”), and Standard Management Corporation, an Indiana corporation (“SMAN”),

WITNESSETH THAT:

WHEREAS, Custodian and the Schmidt Trust are shareholders of SMAN, and Schmidt is the grantee of an option to acquire shares of SMAN common stock from the Schmidt Trust; and

WHEREAS, the Schmidt Shareholders are willing to restrict the manner in which they will vote the shares of common stock of SMAN (whether now held by such Schmidt Shareholder, or hereafter acquired by such Schmidt Shareholder, “Common Shares”) in connection with the election of SMAN’s Board of Directors, upon the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of premises and covenants set forth in this Agreement, the Schmidt Shareholders agree as follows:

1. During the term of this Agreement, the Schmidt Shareholders agree to vote all of their Common Shares to effectuate the election of the Company’s Board of Directors as set forth in this Section 1. The Schmidt Shareholders shall, and shall cause any of their transferees of Common Shares to, vote all Common Shares owned by them in any election of directors held in 2007, 2008 or 2009 in favor of such of the following persons as may be nominees for election in such election:

(a)

Sam Schmidt, or an alternate person designated by Sam Schmidt;

(b)

Dennis King, or an alternate person designated by Sam Schmidt;

(c)

Ronald D. Hunter;

(d)

James H. Steane II; and

(e)

Dainforth B. French, Jr.

2. In consideration of the foregoing, SMAN agrees to cause Schmidt or his designee to be appointed and, as necessary, reappointed or re-elected to the Board of Managers of its subsidiary, Universal Health Care, LLC, an Indiana limited liability company.

3. The following restrictive legend shall be placed on each certificate evidencing Common Shares which are subject to this Voting Agreement:

The voting of the Common Shares represented by this certificate are restricted by the terms of a Voting Agreement, dated March __, 2007, among Standard Management Corporation and certain of its shareholders. A copy of that Voting Agreement is on file with, and available for inspection at, the offices of the corporation.

4. This Agreement will terminate upon the first to occur of the following events: (a) all Schmidt Shareholders cease to own any Common Shares; (b) the dissolution or termination of existence of SMAN; and/or (c) the execution and delivery of a written termination agreement by SMAN and Schmidt on behalf of the Schmidt Shareholders. Unless this Agreement first terminates in its entirety, the obligations of the Schmidt Shareholders under Section 1 of this Agreement will terminate upon the first to occur of the following events: (a) the conclusion of the 2009 annual meeting of the shareholders of SMAN; or (b) any amendment of the articles of incorporation or bylaws of SMAN the effect of which is to make the Control Share Acquisition provisions of the Indiana Business Corporation Law (Ind. Code 23-1-42) applicable to SMAN.

5. This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. Facsimile signatures shall be deemed original signatures and the facsimile transmission of a signed counterpart shall be deemed delivery of an originally signed counterpart.

6. This Agreement embodies the entire agreement and understanding of the parties hereto in respect of the subject matter of this Agreement. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

7. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Indiana, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE MEMBERS IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.

8. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof. Each party hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the United States District Courts and the courts of the State of Indiana, in each case located in Marion County, Indiana for any actions, suits or

proceedings arising out of or relating to this Agreement (and each party hereto agrees not to commence any action, suit or proceeding relating thereto except in such courts). Each party hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of or relating to this Agreement, in the United States District Courts located in the State of Indiana (unless such courts assert no jurisdiction, in which case each party waives any objection to the laying of venue in the courts of the State of Indiana as described above). Each party hereby further irrevocably and unconditionally waives and agrees not to plead or to claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

[signature page follows]

483443_2.DOC

[Signature Page to Voting Agreement]

Standard Management Corporation

By: /s/ Ronald D. Hunter

/s/ Sam Schmidt

Ronald D. Hunter, Chairman, President

Sam Schmidt

and CEO

/s/ Sheila J. Schmidt

Sheila J. Schmidt, as custodian

for the minor children of Sam and

Sheila J. Schmidt

/s/ Marvin L. Schmidt

/s/ Judean A. Schmidt

The Schmidt Family Trust dated

September 29, 1982, Marvin L. and

Judean A. Schmidt as Trustees

EX-99 6 ex991-03192007.htm EXHIBIT 99.1

EXHIBIT 99.1

WRITTEN AGREEMENT RELATING TO THE FILING

OF JOINT 13D STATEMENT -- SEC RULE 13d-1(k)

Pursuant to Rule 13d-1(k) of the Securities and Exchange Commission, each of the undersigned hereby agrees to the joint filing of a Schedule 13D statement under the Securities Exchange Act of 1934 and any amendments thereto relating to acquisitions of the common stock of Standard Management Corporation, and such Schedule 13D statement and amendments thereto when signed and filed by the undersigned shall be deemed filed on behalf of each of them.

Dated: March __, 2007

/s/ Sheila J. Schmidt

Sheila J. Schmidt

/s/ Sam Schmidt

Sam Schmidt

/s/ Marvin L. Schmidt

Marvin L. Schmidt, as Trustee of

The Schmidt Family Trust dated

September 29, 1982

/s/ Judean A. Schmidt

Judean A. Schmidt, as Trustee of

The Schmidt Family Trust dated

September 29, 1982

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