AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

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STANDARD MANAGEMENT CORP

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Title: AGREEMENT AND PLAN OF MERGER
Governing Law: Indiana Date: 8/3/2005
Industry: Insurance (Life) Law Firm: Sommer Barnard Attorneys, PC Sector: Financial

AGREEMENT AND PLAN OF MERGER, Parties: standard management corp

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EXHIBIT 2.2

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AGREEMENT AND PLAN OF MERGER

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By and Among

Standard Management Corporation,

an Indiana corporation,

Long Term Rx Acquisition Company,

an Indiana corporation

Long Term Rx, Inc.,

an Indiana corporation,

The Craig W. Trobaugh Revocable Trust, dated September 7, 2000,

The Lorenda K. Trobaugh Revocable Trust, dated September 7, 2000,

Craig W. Trobaugh,

and

Lorenda K. Trobaugh

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Dated July 29, 2005

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TABLE OF CONTENTS

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ARTICLE I DEFINITIONS; CONSTRUCTION......................................................... 1

1.1 Definitions...................................................................... 1

1.2 Construction..................................................................... 7

ARTICLE II THE MERGER....................................................................... 7

2.1 The Merger....................................................................... 7

2.2 Conversion of Equity Securities.................................................. 8

2.3 Payment of Conversion Price...................................................... 8

2.4 Working Capital Adjustment....................................................... 9

2.5 Closing of Transfer Records...................................................... 11

2.6 Delivery of Certificates......................................................... 11

2.7 Shareholders' Representative..................................................... 11

ARTICLE III THE CLOSING..................................................................... 11

3.1 Closing.......................................................................... 11

3.2 Closing Deliveries of Parent and Merger Sub...................................... 12

3.3 Closing Deliveries of the Shareholders........................................... 12

ARTICLE IV SHAREHOLDERS' REPRESENTATIONS AND WARRANTIES..................................... 13

4.1 Organization..................................................................... 13

4.2 Authorization.................................................................... 13

4.3 Validity; Binding Effect......................................................... 14

4.4 Noncontravention................................................................. 14

4.5 Capital Structure................................................................ 14

4.6 Financial Statements............................................................. 14

4.7 Title to and Sufficiency of Assets............................................... 15

4.8 Tax Matters...................................................................... 16

4.9 Litigation; Claims............................................................... 16

4.10 Legal Compliance................................................................. 17

4.11 Environmental Laws and Regulations............................................... 18

4.12 Permits.......................................................................... 19

4.13 Material Contracts............................................................... 19

4.14 Labor and Employment Matters..................................................... 20

4.15 Employee Benefits................................................................ 21

4.16 Intellectual Property............................................................ 21

4.17 Affiliate Transactions........................................................... 22

4.18 Broker's Fees.................................................................... 22

4.19 Warranty......................................................................... 22

4.20 Disclosure....................................................................... 22

ARTICLE V MERGER SUB'S AND PARENT'S REPRESENTATIONS AND WARRANTIES........................... 22

5.1 Organization of Merger Sub and Parent............................................ 22

5.2 Authorization.................................................................... 22

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5.3 Validity; Binding Effect......................................................... 23

5.4 Noncontravention................................................................. 23

5.5 Broker's Fees.................................................................... 23

ARTICLE VI COVENANTS PENDING CLOSING........................................................ 23

6.1 General.......................................................................... 23

6.2 Notices and Consents............................................................. 23

6.3 Due Diligence.................................................................... 23

6.4 The Company's Operation of Business Prior to Closing............................. 24

6.5 Notification..................................................................... 24

6.6 No Negotiation................................................................... 24

6.7 Interim Financial Statements..................................................... 24

6.8 Payment of Indebtedness.......................................................... 25

ARTICLE VII CONDITIONS PRECEDENT............................................................ 25

7.1 Merger Sub's Conditions Precedent................................................ 25

7.2 Shareholder's Conditions Precedent............................................... 26

ARTICLE VIII INDEMNIFICATION................................................................ 26

8.1 Indemnification by the Shareholders.............................................. 26

8.2 Indemnification by Merger Sub.................................................... 27

8.3 Limitations on Indemnity......................................................... 27

8.4 Third Party Claims............................................................... 27

ARTICLE IX ADDITIONAL COVENANTS............................................................. 28

9.1 General.......................................................................... 28

9.2 Noncompetition and Nonsolicitation............................................... 29

9.3 Confidentiality.................................................................. 29

9.4 Standard Management Shares....................................................... 30

ARTICLE X TERMINATION....................................................................... 30

10.1 Termination Events............................................................... 30

10.2 Effect of Termination............................................................ 31

ARTICLE XI MISCELLANEOUS.................................................................... 31

11.1 Assignment....................................................................... 31

11.2 Notices.......................................................................... 31

11.3 Expenses; Attorneys' Fees........................................................ 32

11.4 Governing Law; Forum............................................................. 32

11.5 Partial Invalidity............................................................... 33

11.6 Execution in Counterparts; Facsimile Signatures.................................. 33

11.7 Entire Agreement; Amendments and Waivers......................................... 33

</TABLE>

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Exhibits

Exhibit A Form of Release

Exhibit B Consents

Exhibit C Special Indemnity Matters

iii

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Schedules

Schedule 4.1(a) Foreign Qualifications

Schedule 4.1(b) Company Locations

Schedule 4.4 Noncontravention

Schedule 4.5 Capitalization

Schedule 4.6(a) Financial Statements

Schedule 4.6(b) Undisclosed Liabilities

Schedule 4.7(a) Real Property/Leaseholds

Schedule 4.7(b) Permitted Liens

Schedule 4.8 Audits

Schedule 4.9 Litigation; Claims

Schedule 4.10(d) Medicare/Medicaid Reports

Schedule 4.10(g) Health Care Compliance Matters

Schedule 4.11 Environmental Matters

Schedule 4.12 Permits

Schedule 4.13 Material Contracts

Schedule 4.14 Labor and Employment Matters

Schedule 4.15 Employee Benefits

Schedule 4.16 Intellectual Property

Schedule 4.17 Affiliate Transactions

Schedule 4.18 Broker's Fees

Schedule 4.19 Warranties

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AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), made and entered

into as of July 29, 2005, by and among Standard Management Corporation, an

Indiana corporation ("Parent"), Long Term Rx Acquisition Company, an Indiana

corporation ("Merger Sub"), Long Term Rx, Inc., an Indiana corporation (the

"Company"), The Craig W. Trobaugh Revocable Trust, dated September 7, 2000 (the

"Craig Trust"), The Lorenda K. Trobaugh Revocable Trust, dated September 7, 2000

(the "Lorenda Trust," and together with the Craig Trust, the "Shareholders"),

Craig W. Trobaugh ("Craig"), and Lorenda K. Trobaugh ("Lorenda"),

WITNESSETH THAT:

WHEREAS, the Shareholders are the sole shareholders of the Company, and

collectively own all of the issued and outstanding shares of the Company; and

WHEREAS, the parties hereto desire to cause Merger Sub to be merged with

and into the Company, with the Company surviving such merger (the "Merger"), all

on the terms and subject to the conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the premises, and for other good and

valuable consideration, the receipt and sufficiency of which hereby are

acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS; CONSTRUCTION

1.1 Definitions. All initially-capitalized terms used in this Agreement

shall have the meanings given to such terms in this Section 1.1 below:

"Accounts Receivable" has the meaning ascribed to it in Section 4.6(d) of

this Agreement.

"Affiliate" means, with respect to any Person, any other Person that

directly, or indirectly through one or more intermediaries, controls, is

controlled by, or is under common control with, such Person.

"Aggregate Adjustment Amount" means an amount equal to the difference

between Closing Date Working Capital and Base Working Capital. If Closing Date

Working Capital exceeds Base Working Capital, the Aggregate Adjustment Amount

shall be a positive number. If Base Working Capital exceeds Closing Date Working

Capital, the Aggregate Adjustment Amount shall be a negative number.

"Agreement" has the meaning ascribed to it in the introductory paragraph

of this Agreement.

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"Average Price" has the meaning ascribed to it in Section 9.4(b) of this

Agreement.

"Base Working Capital" means $446,144.

"Benefit Plan" has the meaning ascribed to it in Section 4.15.

"Carve-Out Claims" has the meaning ascribed to it in Section 8.3(a).

"Cash Amount" has the meaning ascribed to it in Section 2.2(a).

"Closing" means the time at which the parties hereto consummate the

Merger.

"Closing Date" means the date on which the Closing actually occurs.

"Closing Date Balance Sheet" has the meaning ascribed to it in Section

2.4(a)(i) of this Agreement.

"Closing Date Shares" means the total number of common shares of the

Company issued and outstanding immediately prior to the Effective Time.

"Closing Date Working Capital" means an amount equal to the difference

between Current Assets and Current Liabilities. If Current Assets exceed Current

Liabilities, Closing Date Working Capital shall be a positive number. If Current

Liabilities exceed Current Assets, Closing Date Working Capital shall be a

negative number.

"Code" means the Internal Revenue Code of 1986, as amended.

"Company" has the meaning ascribed to it in the introductory paragraph of

this Agreement.

"Competing Business" has the meaning ascribed to it in Section 9.2(a) of

this Agreement.

"Craig" has the meaning ascribed to it in the introductory paragraph of

this Agreement.

"Craig Trust" has the meaning ascribed to it in the introductory paragraph

of this Agreement.

"Current Assets" means all current assets of the Company immediately prior

to the Effective Time (including, without limitation, cash and cash

equivalents), other than (i) contractual allowables with respect to accounts

receivable, and (ii) all accounts receivable aged more than 120 days.

"Current Liabilities" means all current liabilities of the Company

immediately prior to the Effective Time (including, without limitation, accruals

for amounts alleged in certain audits by the State of Indiana to be owed

regarding certain Medicaid overpayments made to the

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Company in the amounts of $41,134.55 and $6,268.75, respectively (the "Medicaid

Overpayments")), other than accrued federal income tax liability for the period

beginning January 1, 2005 and ending as of the Closing Date, all as reflected on

the Closing Date Balance Sheet (as finally determined pursuant to this

Agreement).

"Dispute Notice" has the meaning ascribed to it in Section 2.4(b) of this

Agreement.

"Dispute Period" has the meaning ascribed to it in Section 2.4(b) of this

Agreement.

"Effective Time" means the effective time set forth in the certified

copies of the articles of merger issued by the Indiana Secretary of State with

respect to the Merger.

"Environmental Laws" means all Laws concerning pollution or protection of

the environment, including, without limitation, all those relating to the

presence, use, production, generation, handling, transportation, treatment,

storage, disposal, distribution, labeling, testing, processing, discharge,

release, threatened release, control or cleanup of any Hazardous Material.

"ERISA" means the Employee Retirement Income Security Act of 1974, as

amended.

"ERISA Affiliate" means any member of a controlled group of corporations

under Section 414(b) of the Code of which the Company is or was a member, and

any trade or business (whether or not incorporated) who is or was under common

control with the Company under Section 414(c) of the Code, and all other

entities which together with the Company are or were prior to the date hereof

treated as a single employer under Section 414(m) or 414(o) of the Code.

"Final Disposition" has the meaning ascribed to it in Section 2.4 (a) of

this Agreement.

"Financial Statements" has the meaning ascribed to it in Section 4.6(a) of

this Agreement.

"GAAP" means generally accepted accounting principles in the United States

of America, consistently applied.

"GLB" has the meaning ascribed to it in Section 4.10(h).

"Hazardous Activity" means the distribution, generation, handling,

importing, management, manufacturing, processing, production, refinement,

release, storage, transfer, transportation, treatment or use of Hazardous

Material in, on, under about or from any of the real estate owned, used or

leased by the Company or any part thereof and any other act, business, operation

or thing that violates any Environmental Law, or increases the danger, or risk

of danger, or poses an unreasonable risk of harm, to Persons or property.

"Hazardous Material" means any substance, material or waste which is or

will foreseeably be regulated by any governmental authority, including any

material, substance or waste defined as a "hazardous waste," "hazardous

material," "hazardous substance," "extremely hazardous waste," "restricted

hazardous waste," contaminant," toxic waste" or "toxic substance"

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under any provision of Environmental Law, including lead paint, petroleum,

petroleum products, asbestos, presumed asbestos-containing material or

asbestos-containing material, urea formaldehyde and polychlorinated biphenyls.

"HIPAA" has the meaning ascribed to it in Section 4.10(h).

"IBCL" means the Indiana Business Corporation Law, as amended.

"Indebtedness" means any and all liabilities and obligations of the

Company immediately prior to the Effective Time (i) for the repayment of

borrowed money (whether owed to lenders, affiliates or any other Person),

including amounts owed in respect of principal, interest, fees, charges,

premiums and prepayment penalties, (ii) in respect of capital leases, (iii) for

Pre-Closing Company Transaction Expenses, or (iv) Simple IRA contribution

accruals.

"Indemnified Person" has the meaning ascribed to it in Section 8.4(a) of

this Agreement.

"Indemnifying Person" has the meaning ascribed to it in Section 8.4(a) of

this Agreement.

"Independent Accountants" has the meaning ascribed to it in Section

2.4(e).

"Intellectual Property" has the meaning ascribed to it in Section 4.16.

"Interim Balance Sheet" has the meaning ascribed to it in Section 4.6(a)

of this Agreement.

"IRS" means the Internal Revenue Service.

"Labor and Employment Law" means all Laws relating to employment

practices, terms and conditions of employment, equal opportunity,

nondiscrimination, immigration, wages, hours, benefits and collective

bargaining, the payment of social security and similar taxes, unemployment

compensation, workers compensation and occupational safety and health.

"Law" means all laws, statutes, rules, regulations, ordinances, codes,

bulletins, opinions, decisions, plans, injunctions, judgments, orders, decrees,

rulings, and charges thereunder of federal, state, local and foreign governments

(and all agencies thereof).

"Liens" means any and all liens, security interests, mortgages, easements,

restrictions, encumbrances, pledges, conditional sales contracts, or other

similar conflicting ownership or security interest in favor of any Person.

"Losses" has the meaning ascribed to it in Section 8.1.

"Lorenda" has the meaning ascribed to it in the introductory paragraph of

this Agreement.

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"Lorenda Trust" has the meaning ascribed to it in the introductory

paragraph of this Agreement.

"Material Contract" has the meaning ascribed to it in Section 4.13.

"Medicaid Overpayments" has the meaning ascribed to it in the definition

of Current Liabilities.

"Medicare Laws" means any and all Laws applicable to reimbursement by

Medicare, Medicaid or any other governmental healthcare program for services or

items rendered by the Company, including all federal and state laws relating to

the referral of patients to the Company's business.

"Merger" has the meaning ascribed to it in the second recital of this

Agreement.

"Merger Sub" has the meaning ascribed to in the introductory paragraph of

this Agreement.

"Minimum Share Value" means three dollars and twenty-eight cents ($3.28).

"Multiemployer Plan" means a plan as defined in ERISA Section 4001(a)(3)

to which Company or any ERISA Affiliate of Company is making or accruing an

obligation to make contributions or has preceding the date hereof made or

accrued an obligation to make contributions.

"Notice" has the meaning ascribed to it in Section 11.2 of this Agreement.

"Notice Party" has the meaning ascribed to it in Section 11.2 of this

Agreement.

"Order" has the meaning ascribed to it in Section 4.9 of this Agreement.

"Parent" has the meaning ascribed to it in the introductory paragraph of

this Agreement.

"Payor" has the meaning ascribed to it in Section 4.10(d) of this

Agreement.

"Pension Plan" means an employee pension benefit plan, as defined in ERISA

Section 3(2), other than a Multiemployer Plan, which is covered by Title IV of

ERISA and which either (i) is maintained by the Company and/or any ERISA

Affiliate of the Company for employees of such Person, or (ii) has at any time

preceding the date hereof been maintained by the Company and/or any ERISA

Affiliate of the Company for employees of such Person.

"Permit" has the meaning ascribed to such term in Section 4.12 of this

Agreement.

"Per Share Adjustment Amount" has the meaning ascribed to such term in

Section 2.2(a) of this Agreement.

<PAGE>

"Per Share Value" means, with respect to the Standard Management Shares an

amount equal to the greater of (i) the average per-share closing price of a

Standard Management Share determined over the 10 trailing days immediately

preceding the date which is two days prior to the Closing Date, or (ii) the

Minimum Share Value.

"Person" means an individual, partnership, corporation, business trust,

limited liability company, limited liability partnership, joint stock company,

trust, unincorporated association, joint venture, company or other entity or any

governmental authority.

"PHI" has the meaning ascribed to it in Section 4.10(h) of this Agreement.

"Position Statement" has the meaning ascribed to it in Section 2.4(e) of

this Agreement.

"Post-Closing Delivery" has the meaning ascribed to it in Section 2.4(a)

of this Agreement.

"Pre-Closing Company Transaction Expense" means, without any duplication

that might otherwise result from the working capital adjustment contemplated by

Section 2.4, all fees and expenses incident to the transactions contemplated by

this Agreement and which are incurred by or are for the account of the Company

or the Shareholders' Representative, including without limitation, fees and

expenses payable to their representatives (including any attorneys', broker's or

finder's fees), in respect of services performed on or before the Closing Date,

whether or not such expenses have accrued or have been billed or become due

prior to Closing and all amounts payable to consultants or others arising out of

or relating to the transactions contemplated by this Agreement.

"Report" has the meaning ascribed to it in Section 4.10(d) of this

Agreement.

"Resolution Period" has the meaning ascribed to it in Section 2.4(d) of

this Agreement.

"Restrictions" means any and all liens, restrictions, restrictions on

transfer, options, pledges, voting agreements, rights of first refusal,

tag-along, co-sale or other rights, licenses, security interests, claims,

charges or encumbrances of any kind or nature whatsoever.

"Share Amount" has the meaning ascribed to it in Section 2.2(a) of this

Agreement.

"Shareholder" has the meaning ascribed to it in the introductory paragraph

of this Agreement.

"Shareholders' Representative" has the meaning ascribed to it in Section

2.7 of this Agreement.

"Shelf Registration" means a registration for sale from time to time in

accordance with Rule 415 under the Securities Act of 1933, as amended.

"Standard Management Share" means a common share of Parent.

<PAGE>

"Surviving Corporation" means the Company, immediately following the

Effective Time of the Merger.

"Third-Party Claim" has the meaning ascribed to it in Section 8.4(a) of

this Agreement.

1.2 Construction.

(a) The meanings of terms defined herein are equally applicable to

the singular and plural of such defined terms.

(b) The headings of articles and sections to this Agreement are

provided for convenience only and will not affect the construction or

interpretation hereof.

result of negotiations among the parties hereto. Accordingly, neither this

Agreement nor any Exhibit or Schedule hereto shall be construed against any

party hereto because of its or its counsel's involvement in its preparation.

ARTICLE II

THE MERGER

2.1 The Merger.

(a) On the terms and subject to the conditions set forth in this

Agreement and in accordance with the IBCL, the parties hereto shall cause Merger

Sub to be merged with and into the Company on the Closing Date. The parties

shall so cause the Merger to occur by filing with the Indiana Secretary of State

articles of merger executed in accordance with the IBCL and by making all other

filings or recordings required thereby to effect the Merger. As a result of the

Merger, and at the Effective Time, the separate corporate existence of Merger

Sub will cease and the Company will continue to survive the Merger. As a result

of the Merger, the Company will succeed to and assume all of the rights and

obligations of Merger Sub in accordance with the IBCL. The Merger will also have

such other effects as are set forth and described in the IBCL.

(b) The officers and directors of Merger Sub at the Effective Time

shall become the officers and directors of the Surviving Corporation and

continue as such until his or her successor shall have been elected and

qualified or until his or her earlier resignation or removal.

Effective Time shall become the Articles of Incorporation and By-Laws of the

Surviving Corporation and shall continue as such until altered, amended or

repealed; provided, however, that the Articles of Incorporation of the Surviving

Corporation shall be amended to change the name of the Surviving Corporation,

immediately following the Effective Time, to "Long Term Rx, Inc."

<PAGE>

2.2 Conversion of Equity Securities. On the terms and subject to the

conditions set forth in this Agreement, at the Effective Time, by virtue of the

Merger and without any action on the part of Merger Sub or the Company:

(a) Each common share of the Company owned by the Shareholders

immediately prior to the Effective Time shall be cancelled and converted into

the right to receive (i) an amount equal to the result obtained by dividing

$1,600,000 by the Closing Date Shares (the "Cash Amount"), (ii) the number of

Standard Management Shares equal to the result obtained by dividing (A) $600,000

divided by the Per Share Value, by (B) the Closing Date Shares (the "Share

Amount"), and (iii) an amount equal to the result obtained by dividing the

Aggregate Adjustment Amount (if a positive number) by the Closing Date Shares

(the "Per Share Adjustment Amount"). The Cash Amount, the Share Amount, and the

Per Share Adjustment Amount (if any) shall be paid as set forth in Section 2.3

below.

(b) Each common share of the Company held in the treasury of the

Company immediately prior to the Effective Time shall be canceled and

extinguished without any conversion thereof and no payment will be made with

respect thereto.

Effective Date of the Merger will be cancelled and converted into one common

share of the Surviving Corporation immediately following the Effective Time.

2.3 Payment of Conversion Price.

(a) At the Closing, each Shareholder shall receive an amount equal

to the result obtained by multiplying the Cash Amount by the total number of

common shares of the Company owned beneficially and of record by such

Shareholder immediately prior to the Effective Time, paid by wire transfer of

immediately available funds to the account designated by such Shareholder in

writing.

(b) At the Closing, each Shareholder shall receive that number of

Standard Management Shares equal to the result obtained by multiplying the Share

Amount by the total number of common shares of the Company owned beneficially

and of record by such Shareholder immediately prior to the Effective Time.

Adjustment Amount is finally determined pursuant to this Agreement:

(i) if the Aggregate Adjustment Amount is a positive number, the

Surviving Corporation shall pay each Shareholder, in immediately available

funds to an account designated by such Shareholder in writing, an amount

equal to the result obtained by multiplying (A) the Per Share Adjustment

Amount, by (B) the total number of common shares of the Company owned

beneficially and of record by such Shareholder immediately prior to the

Effective Time; and

<PAGE>

(ii) if the Aggregate Adjustment Amount is a negative number, each

Shareholder shall pay the Surviving Corporation, in immediately available

funds to an account designated by the Surviving Corporation in writing, an

amount equal to the result obtained by multiplying (A) the Per Share

Adjustment Amount, by (B) the total number of Shares owned beneficially

and of record by such Shareholder on the Closing Date.

2.4 Working Capital Adjustment.

(a) As promptly as reasonably practicable after the Closing Date,

and in any event not later than sixty (60) days after the Closing Date, the

Surviving Corporation shall prepare and deliver to the Shareholders'

Representative (such delivery, the "Post-Closing Delivery"):

(i) a balance sheet of the Company (without giving effect to the

consummation of the transactions contemplated hereby) prepared as of the

close of business on the Closing Date in accordance with GAAP (the

"Closing Date Balance Sheet"); and

(ii) calculations, in reasonable detail, of the Closing Date Working

Capital and the Aggregate Adjustment Amount.

Merger Sub and the Shareholders agree that (x) if there is a disposition

of the audits by the State of Indiana with respect to the Medicaid Overpayments

that is final and binding on all parties involved with such audits (a "Final

Disposition") prior to the final resolution of the working capital adjustment,

as set forth in this Section 2.4, which results in the State of Indiana having

no further claim (absolute, contingent or otherwise) with respect to the

Medicaid Overpayments (or any portion thereof), the Closing Date Balance Sheet

shall not reflect a liability accrual for the Medicaid Overpayments to the

extent such favorable Final Disposition resolves the State of Indiana's claims

with respect to the Medicaid Overpayments, and (y) if and to the extent there is

no such favorable Final Disposition (or if there is a Final Disposition

resulting in the Surviving Corporation becoming obligated to pay any portion of

the Medicaid Overpayments) prior to the final resolution of the working capital

adjustment, as set forth in this Section 2.4, the Closing Date Balance shall

reflect a liability accrual for all such Medicaid Overpayments, and the

Shareholders agree not to object to any such accruals. Notwithstanding the

foregoing, if there is no Final Disposition prior to the final resolution of the

working capital adjustment and, as a result of subparagraph (y) immediately

above, the final Closing Date Balance Sheet reflects a liability accrual for the

Medicaid Overpayments (or any portion thereof) and the Aggregate Adjustment

Amount has been paid (either to the Shareholders or to the Surviving

Corporation, as the case may be), the Surviving Corporation shall pay to the

Shareholders (pro-rata) any amounts successfully challenged by the Surviving

Corporation pursuant to a favorable Final Disposition which occurs after the

final resolution of the working capital adjustment (as set forth in this Section

2.4) and prior to the third anniversary of the Closing Date. If and to the

extent there has been no Final Disposition prior to the third anniversary of the

Closing Date, the Surviving Corporation shall pay the amount of the Medicaid

Overpayments remaining unresolved pursuant to the audits to the Shareholders

(pro-rata in immediately available funds and pursuant to such wire transfer

instructions provided by the

<PAGE>

Shareholders in writing) within five (5) business days of such third year

anniversary and, thereafter, any Losses of the Surviving Corporation with

respect to the audits and the Medicaid Overpayments shall be subject to

indemnification pursuant to Article VIII.

(b) The Shareholders' Representative (for and on behalf of the

Shareholders) shall have thirty (30) days from the date the Surviving

Corporation makes the Post-Closing Delivery (such period, the "Dispute Period")

to notify the Surviving Corporation, in writing, as to whether the Shareholders'

Representative agrees or disagrees with the Post-Closing Delivery (such written

notice, the "Dispute Notice"). During the Dispute Period, the Shareholders'

Representative and its accountants shall be permitted to review (during regular

business hours and upon reasonable prior notice) the working papers of the

Surviving Corporation and (where applicable) the Surviving Corporation's

accountants relating to the matters set forth in the Post-Closing Delivery.

Notice to the Surviving Corporation during the Dispute Period, (i) the Closing

Date Balance Sheet as prepared by the Surviving Corporation shall be deemed to

have been correctly prepared, and (ii) the Surviving Corporation's calculation

of Closing Date Working Capital and the Aggregate Adjustment Amount shall be

deemed to be final and correct and shall be binding upon each of the parties

hereto.

(d) If the Shareholders' Representative delivers a Dispute Notice to

the Surviving Corporation during the Dispute Period, the Shareholders'

Representative and the Surviving Corporation shall, for a period of forty-five

(45) days from the date the Dispute Notice is delivered to the Surviving

Corporation (such period, the "Resolution Period"), use their respective best

efforts to amicably resolve the items in dispute. Any items so resolved by them

shall be deemed to be final and correct as so resolved and shall be binding upon

each of the parties hereto.

(e) If the Shareholders' Representative and the Surviving

Corporation are unable to resolve all of the items in dispute during the

Resolution Period, then either the Surviving Corporation or the Shareholders'

Representative may refer the items remaining in dispute to Deloitte & Touche

(the "Independent Accountants"). Such referral shall be made in writing to the

Independent Accountants, copies of which shall concurrently be delivered to the

non-referring party hereto. The referring party shall furnish the Independent

Accountants, at the time of such referral, with the Post-Closing Delivery and

the Dispute Notice. The parties shall also furnish the Independent Accountants

with such other information and documents as the Independent Accountants may

reasonably request in order for them to resolve the items in dispute. The

parties hereto shall also, within ten (10) days of the date the items in dispute

are referred to the Independent Accountants, provide the Independent Accountants

with a written notice (a "Position Statement") describing in reasonable detail

their respective positions on the items in dispute (copies of which will

concurrently be delivered to the other party hereto). If any party fails to

timely deliver its Position Statement to the Independent Accountants, the

Independent Accountants shall resolve the items in dispute solely upon the basis

of the information otherwise provided to them. The Independent Accountants shall

resolve all disputed items in a written determination to be delivered to each of

the parties hereto within forty-five

<PAGE>

(45) days after such matter is referred to them; provided, however, that any

delay in delivering such determination shall not invalidate such determination

or deprive the Independent Accountants of jurisdiction to resolve the items in

dispute. The decision of the Independent Accountants as to the items in dispute

shall be final and binding upon the parties hereto and shall not be subject to

judicial review. The fees and expenses of the Independent Accountants incurred

in the resolution of any items in dispute shall be determined by the Independent

Accounts and shall be paid by the party that did not substantially prevail in

the dispute (also to be finally determined by the Independent Accountants).

(f) The Shareholders acknowledge and agree that (i) Merger Sub shall be

entitled to all cash and cash equivalents of the Company as of the Closing Date,

and (ii) such cash and cash equivalents shall not be distributed to the

Shareholders, but shall remain an asset of the Surviving Corporation after the

Closing.

2.5 Closing of Transfer Records. After the close of business on the

Closing Date, transfers of any of the Company's common shares outstanding prior

to the Effective Time will not be made on the transfer books of the Surviving

Corporation.

2.6 Delivery of Certificates. On the Closing Date, each Shareholder shall

surrender all certificates representing the common shares of the Company held by

such Shareholder (or if lost, an affidavit, indemnity and such other security as

is reasonably required by Merger Sub and its counsel).

2.7 Shareholders' Representative. Each Shareholder hereby irrevocably

constitutes and appoints Craig W. Trobaugh as its lawful attorney-in-fact, as

the "Shareholders' Representative" under this Agreement, with the exclusive

authority to act as such hereunder. In the event of the death, resignation or

inability of Craig W. Trobaugh to act as the Shareholders' Representative

hereunder, Lorenda K. Trobaugh will be the successor Shareholders'

Representative with all powers of his predecessor. The Shareholders'

Representative will have full power to act on each Shareholder's behalf

according to the terms of this Agreement to give and receive notices on behalf

of the Shareholders and in general to do all things and to perform all acts on

each Shareholder's behalf as may be contemplated by this Agreement, including

the resolution of indemnification claims, all in the absolute discretion of the

Shareholders' Representative. The Shareholders shall be bound by all acts of the

Shareholders' Representative taken in connection with this Agreement.

ARTICLE III

THE CLOSING

3.1 Closing. The Closing shall take place on July 29, 2005, at the offices

of Merger Sub's counsel, Sommer Barnard Attorneys, PC, in Indianapolis, Indiana,

or at such other time and place as the parties may mutually agree. Subject to

the provisions of Section 10.1 below, failure to consummate the purchase and

sale provided for in this Agreement on the date and time and at the place

determined above in this Section 3.1 will not result in the termination of this

Agreement and will not relieve any party of any obligation under this Agreement.

<PAGE>

3.2 Closing Deliveries of Parent and Merger Sub. At the Closing, in

addition to any other documents specifically required to be delivered pursuant

to this Agreement, Parent and Merger Sub shall deliver to the Shareholders:

(a) the immediately available funds as required by Section 2.3(a)

above;

(b) the Standard Management Shares, as required by Section 2.3(b)

above;

Sub, dated as of the date hereof, certifying (i) the resolutions duly adopted by

the Board of Directors and shareholder of Merger Sub authorizing and approving

the execution, delivery and performance of this Agreement and the consummation

of the transactions contemplated hereby, and (ii) that such resolutions have not

been rescinded or modified and remain in full force and effect as of the Closing

Date; and

(d) a certificate, duly executed by a duly authorized officer of

Merger Sub, dated as of the Closing Date, certifying (i) that Merger Sub has

performed and complied in all material respects with all of the terms,

provisions and conditions of this Agreement to be performed and complied with by

it prior to the Closing, and (ii) that Merger Sub's representations and

warranties in this Agreement are true and correct in all material respects as of

the Closing Date.

3.3 Closing Deliveries of the Shareholders. At the Closing, in addition to

any other documents specifically required to be delivered pursuant to this

Agreement, each Shareholder shall deliver to Merger Sub the following:

(a) certificates representing all of the common shares of the

Company owned beneficially and of record by such Shareholder as of the date

hereof;

(b) a Release, duly executed by such Shareholder, in the form

attached hereto as Exhibit A;

hereof, addressed to Merger Sub, and containing customary legal opinions,

exceptions and qualifications;

(d) copies of the Company's Articles of Incorporation, as amended to

date, duly certified by the Indiana Secretary of State dated no more than 10

days prior to the Closing Date;

(e) a Certificate of Existence for the Company from the Indiana

Secretary of State dated no more than 10 days prior to the Closing Date;

(f) a certificate, duly executed by such Shareholder, dated as of

the Closing Date, certifying (i) that such Shareholder has performed and

complied in all material respects

<PAGE>

with all of the terms, provisions and conditions of this Agreement to be

performed and complied with by it prior to the Closing, and (ii) that such

Shareholder's representations and warranties in this Agreement are true and

correct in all material respects as of the Closing Date;

(g) the original minute books, stock ledgers and corporate seal (if

any) of the Company;

(h) evidence of the payment in full and satisfaction of all

Indebtedness; and

(i) such other documents, instruments and agreements as Parent or

Merger Sub or their counsel may reasonably request to consummate the

transactions contemplated hereby, in form and substance reasonably acceptable to

Parent or Merger Sub and their counsel.

ARTICLE IV

SHAREHOLDERS' REPRESENTATIONS AND WARRANTIES

The Shareholders, jointly and severally, represent and warrant to Parent

and Merger Sub as follows:

4.1 Organization.

(a) The Company is a corporation duly organized, validly existing

and in good standing under the laws of the State of Indiana. Schedule 4.1(a)

contains a true, accurate and complete list of each jurisdiction in which the

Company is qualified to do business as a foreign corporation. The Company is

duly qualified to do business as a foreign corporation and is in good standing

under the Laws of each state or other jurisdiction in which either the ownership

or use of the properties owned or used by it, or the nature of the activities

conducted by it, requires such qualification.

(b) The Company has full power and authority to own or use its

properties and assets and carry on its business activities as now conducted.

Schedule 4.1(b) lists the addresses of all locations at which the Company

conducts its business.

By-Laws, minute books and stock transfer books of the Company have been

delivered to Merger Sub. The minute books of the Company fairly and accurately

reflect all material actions of the Board of Directors and the shareholders of

the Company. The stock transfer books of the Company are correct, complete and

current, and, to the extent applicable, all documentary and stock transfer tax

stamps required in connection with the issuance and transfer of shares of the

Company's stock have been duly paid, affixed or canceled.

4.2 Authorization. The Company and each Shareholder has full power and

authority to execute and deliver this Agreement and to perform his, her or its

respective obligations hereunder. The Merger and the execution, delivery and

performance of this Agreement have been duly authorized by all necessary action

on the part of the Company and each Shareholder.

<PAGE>

4.3 Validity; Binding Effect. This Agreement has been duly and validly

executed and delivered by the Company and each Shareholder. This Agreement

constitutes a valid and legally binding obligatio

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