Charles B. and Teresa A. Thompson, et al. - Page 7

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          in public accounting with Peat Marwick & Mitchell and other                 
          accounting firms.  Von Allmen had substantial experience with               
          purchasing, operating, and selling various types of businesses.             
          He had no personal contacts or experience in the beauty supply              
               Olson had an undergraduate degree from the University of               
          Michigan in economics and a master's degree in business from                
          Columbia University.  Olson worked for the Bank of New York for 9           
          years, part of the time as a vice president.  She was the primary           
          person dealing with First National Bank of Cincinnati (the bank)            
          in obtaining the acquisition loan (described infra).                        
          Group One's Offer to Purchase State Supply                                  
               In early 1987, Von Allmen received a telephone call from a             
          broker in Springfield, Missouri, advising him that State Supply             
          was for sale.  Von Allmen and Olson conducted an investigation              
          and analysis of the financial background of State Supply (the               
          investigation).  Based on his experience, Von Allmen believed               
          that the value of State Supply, as a distributor, would be equal            
          to three to five times "trailing earnings", which means the                 
          earnings in the prior year.  Believing that State Supply was a              
          high risk company, Von Allmen used a multiple in the range of 3-�           
          to 4 times earnings in determining a price to offer for the                 
          shares.  Von Allmen learned through the investigation that State            
          Supply had 1986 pretax earnings of approximately $1.5 million.              
          On June 2, 1987, Group One offered in writing (the offer) to                

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