SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of the earliest event reported):October 13, 1998
STANDARD MANAGEMENT CORPORATION
(Exact name of registrant as specified in its charter)
INDIANA 0-20882 35-1773567
(State or other jurisdiction (Commission File Number) (IRS Employer
Identification No.)of incorporation)
9100 KEYSTONE CROSSING, INDIANAPOLIS, INDIANA 46240
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (317) 574-6200
N/A
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
On June 4, 1998, Standard Management Corporation ("SMC" or the
"Registrant"), and MC Equities, Inc. entered into a definitive Stock Purchase
Agreement. This Stock Purchase Agreement was amended by the Third Amendment to
Stock Purchase Agreement dated as of October 8, 1998. This Third Amendment to
Stock Purchase Agreement is attached hereto as Exhibit 2.4
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS:
2.4 Third Amendment to Stock Purchase Agreement dated as of October 8,
1998 by and among SMC and MC Equities, Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
STANDARD MANAGEMENT CORPORATION
(Registrant)
Date: October 12, 1998 By: /s/ RONALD D. HUNTER
Ronald D. Hunter
Chairman of the Board, President and
Chief Executive Officer
THIRD AMENDMENT
TO
STOCK PURCHASE AGREEMENT
THIRD AMENDMENT TO STOCK PURCHASE AGREEMENT, dated as of October 8,
1998, by and between STANDARD MANAGEMENT CORPORATION, an Indiana
corporation (the "Buyer") and MC EQUITIES, INC., a Delaware corporation
(the "Seller").
RECITALS
WHEREAS, Seller is the beneficial owner of 1,000 shares of the
issued and outstanding shares of the 11,765 authorized capital and common
stock ("Common Stock"), $1.00 par value per share (the "Shares") of
Midwestern National Life Insurance Company of Ohio, an Ohio corporation
(the "Company'); and
WHEREAS, Seller has agreed to sell, and Buyer has agreed to
purchase, all of the Shares of the Company and executed a Stock Purchase
Agreement dated as of June 4, 1998 (the "Agreement"), the First Amendment
thereto dated July 1, 1998 and the Second Amendment thereto dated July
23, 1998; and
WHEREAS, all regulatory and financial conditions, consents and
authorizations to the Closing specified by SECTIONS 7.6, 7.9 and 7.11
have been satisfied except for Seller Stockholder Approval; and
WHEREAS, Buyer and Seller have agreed to adjust the purchase price
to be paid for the Shares; and
NOW THEREFORE, pursuant to SECTION 12.8 of the Agreement and in
consideration of the mutual representations, warranties and covenants
made herein and of the mutual benefits to be derived herefrom, the
parties hereto agree to amend the Agreement as follows:
1. ADJUSTED CAPITAL AND SURPLUS OF COMPANY AS OF THE CLOSING DATE
PURSUANT TO SECTION 2.3(B). Notwithstanding anything to the contrary
contained in this SECTION 2.3(B), Seller and Buyer agree that Closing
Adjusted Capital and Surplus of the Company on the Closing Date shall be
reduced by $1,511,000 so that the Purchase Price pursuant to SECTION 2.3
is now equal to the sum of $13,500,000.
2. PURCHASE PRICE. SECTION 2.2 of the Agreement shall be deleted
in its entirety and the following shall be inserted therefor:
(a) The purchase price (the "Purchase Price") for the Shares
payable at Closing shall be equal to $13,500,000, of which
$2,886,000 is payable by wire transfer in immediately available
funds to such bank and account as the Seller may specify by written
notice received by the Purchaser at least two (2) Business Days
prior to the Closing Date. The balance of the Purchase Price is
payable at Closing as follows (i) Assumption of certain debt due
Fleet National Bank in the sum of $6,000,000 from the Seller (the
"Fleet Loan") upon restructured terms and conditions satisfactory to
Purchaser in it sole discretion; and (ii) The issuance of 696,453
shares of Standard Management Corporation's restricted common stock
("SMC Common Stock"), which SMC Common stock is valued at $6.625 per
share; (b) Not later than two (2) Business Days prior to the Closing
Date, the Seller shall cause the Company to prepare and deliver to
the Buyer a statutory balance sheet of the Company as of the last
day of the most recent calendar month prior to the Closing for which
such a balance sheet is available (the "Closing Balance Sheet"),
together with a list of the investment securities to be held by the
Company at the Closing and the respective Fair Market Value and
statutory carrying value of each such investment security as of the
date which is three (3) Business Days prior to the Closing Date (the
"Closing Asset Statement"). The foregoing documents shall be
accompanied by a certificate of the Company, executed by its chief
financial officer, to the effect that (i) the Closing Balance Sheet
has been prepared in accordance with the books and records of the
Company and SAP, and fairly presents the financial position of the
Company as of the date thereof, and (ii) the Closing Asset Statement
has been prepared in accordance with the books and records of the
Company and this Agreement.
3. SHARING OF LOSS. SECTION 6.4 shall be deleted in its entirety
and the following shall be inserted therefor:
For a period of ninety (90) days from the date hereof, Buyer
will share up to twenty-five percent (25%) of the loss, if any, on a
certain deposit in escrow in the sum of $500,000 regarding
Consolidare Enterprises, Inc. The Buyer's maximum sharing of loss
shall be no greater than $125,000, assuming a loss of the entire
$500,000 deposit in escrow.
4. TERMINATION. SECTION 11.1(E) shall be deleted in its entirety
and the following shall be inserted therefor:
(e) at any time after October 30, 1998, by the Seller or the
Buyer, if the transactions contemplated by this Agreement have not
been consummated on or before such date and such failure to
consummate is not caused by a breach of this Agreement (or any
representation, warranty, covenant, or agreement included herein) by
the party electing to terminate pursuant to this clause (e).
5. DEFINITIONS OF TERMS. The definition of "Closing Date" in
EXHIBIT A to the Agreement shall be deleted in its entirety and the
following shall be inserted therefor:
"Closing Date" shall mean the earlier of (a) October 30, 1998,
or (b) such other date as the Buyer and Seller may mutually agree
upon in writing.
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6. SMC WARRANTS. SECTION 2.6 shall be inserted into the Agreement
as follows:
Buyer shall issue a warrant to purchase 75,000 shares of SMC
Common Stock at a price of $8.00 per share, for a term of three (3)
years from the Closing Date to Seller. The SMC Warrants transferred
to the Seller pursuant to SECTION 2.6 hereof shall be non-
transferrable by the Seller for a period of one (1) year from the
date of Closing; provided that the Seller may distribute some or all
of such SMC Warrants to holders of the capital stock of the Seller
(a "Permitted Distributee"), if each Permitted Distributee agrees in
writing to be bound by the terms of this SECTION 2.6. Subject to
applicable rules and regulations, Seller (and each Permitted
Distributee) shall have the right to sell or transfer any portion of
the SMC Warrants at any time after the first anniversary of the
Closing Date.
IN WITNESS THEREOF, this THIRD AMENDMENT TO STOCK PURCHASE AGREEMENT
has been duly executed and delivered by the parties hereto, effective as
of the date first written above.
MC EQUITIES, INC.
By: /s/ Richard C. Hoffman
Name: Richard C. Hoffman
Title: Secretary and General Counsel
STANDARD MANAGEMENT CORPORATION
By: /s/ Ronald D. Hunter
Name: Ronald D. Hunter
Title: Chairman, President and CEO
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