<PAGE>   1


                                   EXHIBIT 99

   EXCERPT OF PORTIONS OF THE COMPANY'S PROXY STATEMENT FOR ITS 1997 ANNUAL
MEETING OF SHAREHOLDERS WHICH HAVE BEEN INCORPORATED BY REFERENCE INTO THE FORM
10-KSB,

I. "THE COMPANY AND THE COMBINED COMPANY -- BUSINESS, COMBINED REVENUES,
EMPLOYEES, PRODUCTS, SUPPLIERS AND PRICING, DISTRIBUTION SYSTEMS, MARKETING AND
SALES, THE SMARTS SYSTEM, CUSTOMERS AND COMPETITION"

                      THE COMPANY AND THE COMBINED COMPANY

         BUSINESS

                  The Company is a regional wholesaler of periodicals. It
         distributes its products to retail outlets such as supermarkets,
         discount variety stores, convenience stores, drug stores, and
         newsstands that offer mass market reading materials to consumers. The
         Company conducts its operations through the following three active
         operating subsidiaries: Service News Company of Connecticut, ("Yankee"
         or "Connecticut"); Service News Company of Wilmington, North Carolina
         ("Service News" or "Wilmington"); and Triangle News Company of
         Pittsburgh, Pennsylvania ("Triangle" or "Pittsburgh").

                  During June of 1996, the Company sold its other active
         subsidiary, Reader's Choice, Inc. of Dublin, Ohio, a company engaged in
         the business of managing and reporting information on retail display
         allowances and collecting these allowances which are paid by publishers
         to retailers. The operations of Reader's Choice, Inc. are not
         significant, and the sale will not have a material effect on the
         Company. In addition, the Company has three inactive subsidiaries which
         have ceased operations: Sportstuff Marketing, Inc., Team Logos
         Sportstuff, Inc. (which includes its inactive subsidiary UNIMAG I) and
         Imperial News Co., Inc.

         COMBINED REVENUE

                  Following the consummation of the proposed exchange and
         acquisition transactions, the Combined Company will be the dominant
         regional periodical wholesaler in Ohio, Indiana, Michigan and western
         Pennsylvania, with an estimated market share of greater than fifty
         percent (50%). It is expected that the proposed transactions with the
         Acquisition Parties will transform the Company from an entity which
         generated annualized net sales of approximately $57 million in fiscal
         year 1995 (from Yankee, Wilmington, and Pittsburgh) to a Company with
         combined net sales, on a pro forma basis, for fiscal year 1996 of
         approximately $281 million for all entities.

         EMPLOYEES

                  At September 30, 1996, the Company employed approximately 398
         employees, of which 124 were represented by various locals of the
         Teamsters Union with contracts expiring in 1996 through 2001. Such
         employees were staffed substantially as set forth in the tables below.
         It is anticipated that the Combined Company initially will employ
         approximately 1,993 individuals, of which 246 will be represented by
         various locals of the Teamsters Union with contracts expiring through
         2001. In the opinion of management of each of the Acquisition Parties,
         relations with both union and non-union employees of such Acquisition
         Parties have been satisfactory.


<PAGE>   2


The Company
<TABLE>
<CAPTION>

                                                                                           Part-time
           Position                  Union          Non-Union           Total         (Included in Total)
-----------------------------------------------------------------------------------------------------------
<S>                                   <C>              <C>               <C>                  <C>
Management
     and Supervisors                   1                15                16                   0
Administrative and Office              7                32                39                   2
Sales                                  4                4                 8                    0
Warehouse                             48                40                88                   21
Drivers                               64                24                88                   5
In-Store Service                       0               125               125                   92
Retail and Other                       0                34                34                   23
                                       -                --                --                   --
Total                                 124              274               398                  143
                                      ===              ===               ===                  ===

The Combined Company

<CAPTION>

                                                                                           Part-time
           Position                  Union          Non-Union           Total         (Included in Total)
-----------------------------------------------------------------------------------------------------------
<S>                                   <C>              <C>               <C>                  <C>
Management and
     Supervisors                       1               159               160                   0
Administrative and Office             15               170               185                   13
Sales                                  4                67                71                   0
Warehouse                             104              295               399                   65
Drivers                               122              160               282                   8
In-Store Service                       0               695               695                  620
Retail and Other                       0               201               201                  145
                                       -               ---               ---                  ---
Total                                 246             1,747             1,993                 851
                                      ===             =====             =====                 ===
</TABLE>

                  Management is currently reviewing the appropriate staffing
         plan for the Combined Company and expects significant employee
         reductions and labor cost savings as the operations of the Acquisition
         Parties are consolidated in the 12 months following the consummation of
         the proposed transactions.

         PRODUCTS

                  The Company generates revenue primarily from the sale and
         distribution of mass market reading materials including magazines,
         paperback and hardback books, newspapers and other complementary items.

                  -   Magazines. There are over 3,500 different magazine titles
                      published annually which focus on a diverse range of
                      consumer interest topics. Sales of magazines currently
                      represent approximately 83% of total Company revenue.

                  -   Books. The Company distributes an average of 2,750
                      different paperback and hardcover titles per year at an
                      average retail price of $5.25 per book. The process by
                      which the Company selects book titles for resale is
                      different from the


<PAGE>   3


                      periodical selection process in that book publishers, 
                      rather than regional periodical wholesalers, customarily
                      control the product allocation process. Historically, book
                      publishers have allocated most of their available titles
                      to the large book store chains where a high level of
                      retail sales was assured. However, because of recent
                      pricing pressure exerted by the large retailers, book
                      publishers have become interested in allocating more books
                      and titles to alternative retailers like supermarkets
                      where gross margins are higher.

                           Sales of paperback and hardcover books currently
                      represent approximately 15% of total Company revenue.
                      However, management believes that because of the pricing
                      pressure experienced by book publishers from large book
                      store chains, as well as the desire of the Company's
                      existing customer base (especially large supermarket
                      chains) to carry alternative products, sales of paperback
                      and hardcover books are expected to become a more
                      significant percentage of total Combined Company revenue.

                 -    Newspapers. In selected markets, specifically Connecticut
                      and Pennsylvania, the Company distributes over 50 local
                      and national newspapers including daily, weekly and Sunday
                      only titles seven days a week. The newspaper routes are
                      run separately and on an earlier schedule than
                      periodicals. Although profit margins on newspapers are
                      lower than books and magazines, the Company will continue
                      to provide this service to those select retail customers.
                      Sales of newspapers currently represent approximately 1%
                      of total Company revenues.

                 -    Other. The Company also distributes other items such as
                      trading cards, maps and calendars; however, this category
                      does not represent a significant component of the
                      Company's business. Sales of these items currently
                      represent approximately 1% of total Company revenues.

                  It is anticipated that the Combined Company will also generate
         revenues from substantially the same product segments, although the
         Company expects that, with the customer and market diversification
         which will occur following the completion of all of the transactions,
         the relative contribution of certain product segments to revenues of
         the Combined Company may differ significantly from those experienced by
         the Company.

         SUPPLIERS AND PRICING

                  The Company purchased approximately 75% of its product from
         four publishers. These publishers represent approximately 70% of
         accounts payable. The retail prices of the periodicals that the Company
         distributes are established by publishers such as Time Warner, Hearst
         and Hachette. The Company purchases periodicals from national
         wholesalers such as Warner Distribution Services, ICD/The Hearst
         Corporation and Curtis Circulation Co. at a discount to the suggested
         retail price and then sells them to retailers at a smaller discount.
         Most of the larger retailers, such as The Kroger Company, Giant Eagle,
         Meijer and Big Bear Stores, a division of the Penn Traffic Company,
         have entered into multi-year contracts with wholesale distributors.
         This has resulted in an increase in the discount to retailers and a
         reduction in the gross margin to the wholesale distributors.


<PAGE>   4


         DISTRIBUTION SYSTEM

                  The distribution system starts with the publisher who provides
         editorial content to printers who prepare the product and ship it
         directly to the wholesale distributor. The national distributors do not
         physically touch the product. Instead, they function as brokers of
         information and collectors of funds from the wholesale distributor for
         remittance to the publishers. The more sophisticated wholesale
         distributors maintain and analyze data on product, customers, and
         consumers and make product allocation decisions as category managers
         for the retailers. In addition, the wholesale distributors provide
         packaging, delivery, display and in-store merchandising services to the
         retailers. The wholesale distributors bill the retailer, collect the
         receivables, and remit payments to the national distributors.

                  The Company's distribution facilities receive product in bulk
         form every day during the week. The distribution facilities are
         especially active on Fridays and Mondays when weekly titles such as
         People Magazine, TV Guide and the National Enquirer are received,
         packaged and delivered to retailers. Delivery of weekly periodicals
         must be made within 24 hours after receipt of such periodicals by the
         distribution facilities.

                  As inventory is received a copy of each title is sent to the
         receiving department where a validation clerk scans the title to verify
         the BIPAD number and quantity. After the quantity is verified the
         receiving department enters the item into the tracking system. If the
         allotted quantity in the system does not match the quantity received,
         the clerk manually enters the correct amount. A receiving clerk scans
         the product and identifies the location for the product on the
         automatic conveyor system (the "Tie Line"). The product is then
         immediately routed to the proper position on the Tie Line where it is
         stacked and bundled for shipment.

                  The Tie Line operates throughout the week. Because magazines
         have a limited shelf life, a minimum inventory level is maintained to
         meet daily delivery needs. Packing receipts are transported down the
         Tie Line with corresponding order information displayed automatically
         in front of each packaging station indicating the appropriate count for
         each title to be stacked for that particular order. Stacks are bundled
         at the end of the Tie Line by a strap machine and placed onto route
         sequenced interbodies and loaded into trucks for delivery to the
         retailer.

                  Sales to both the wholesaler and retailer are made on a
         guaranteed basis. Retailers are able to return unsold product to the
         wholesaler for full credit. The wholesaler, in turn, is able to receive
         full credit from the publisher and/or national distributor.

                  When product is returned to the Company, titles are
         individually scanned into a returned inventory tracking system and sent
         down a conveyer belt to be shredded and baled. The Company generates
         additional revenue from the sale of these bales of scrap paper to a
         recycler. The price for baled paper fluctuates on the open market.

                  It is anticipated that although distribution methods utilized
         by the various Acquisition Parties may differ at this time, gradually
         the Combined Company's distribution activities will become more
         consistent throughout the Combined Company, subject to the various
         requirements, customs and practices in a particular market.


<PAGE>   5


         MARKETING AND SALES

                  The increasing size and sophistication of retailers has led
         them to demand more assistance in managing and positioning their
         product lines to maximize sales and eliminate unnecessary costs. In
         response to these demands, the Company has sought ways to expand upon
         the wholesaler's basic delivery service to seek ways to provide value
         added services to its customer base. The Company has determined that by
         integrating certain of its basic marketing programs described below
         with a sophisticated and proprietary system known as the "SMARTS
         System" (which stands for Sales Magazine Analysis React Transmit
         System) developed by Scherer Companies, the Company and the Combined
         Company will be able to effectively position its products leading to
         higher revenues and more efficient product allocation. The Company's
         basic marketing programs include the following:

                 -    Impact Marketing Program. This marketing program
                      customizes magazine displays to utilize otherwise wasted
                      space in retail outlets like structural columns, freezer
                      bases and end caps, thereby increasing the number of
                      displays within a store from two to up to seven. These
                      locations are usually in the highest traffic areas within
                      the store and represent excellent cross merchandising
                      opportunities.

                 -    Mainline Fixture Program. This program is the basis of all
                      magazine sales beyond those at the checkout line. Mainline
                      fixtures serve as the primary location of magazines within
                      a store. Mainline fixtures include a minimum four foot
                      long rack capable of holding up to 26 titles per foot.
                      Mainline titles typically have a higher cover price (over
                      $3.00) and produce over 50% of revenues in a given
                      location.

                 -    Auxiliary Display Program. This program utilizes small
                      spinner racks, special promotion dump displays and counter
                      displays to create additional display opportunities within
                      a retail outlet to increase sales. These displays can be
                      uniquely placed throughout the store for one to three week
                      periods of increased sales.

                 -    Checkout Sales. This component is designed to promote the
                      sale of magazines at the checkout counter by closely
                      managing title selection. Services include display fixture
                      production and installation for which the Company receives
                      display placement fees from publishers.

                 -    Family Reading Center. Family Reading Centers provide up
                      to 40 running feet of shelf space which allow the
                      wholesaler to showcase more titles than a Mainline Fixture
                      Program and display them with a full facing rather than
                      the typical quarter or half facing.

                 -    Store Within a Store. This component replicates the
                      product selection and size of a newsstand but is housed
                      within a larger retailer such as a supermarket. It
                      represents the transition from the "pass and browse"
                      approach of the mainline fixtures to a "stop and shop"
                      theme. The Store Within a Store can range anywhere from 50
                      to 150 running feet and delivers maximum results for high
                      traffic oriented retailers by increasing the number of
                      unit purchases per customer.

<PAGE>   6

                 -    Display Growth - Incentive. This component is tailored to
                      existing retailers to provide incentives to expand their
                      display space for magazines by offering display placement
                      allowances and rebates for increased sales. It is part of
                      the Company's strategy to up-tier its basic marketing
                      programs with retailers into those that utilize more floor
                      space.

         THE SMARTS SYSTEM

                  The SMARTS System, which is the only system of its kind in the
         wholesale periodical distribution industry, was developed by internal
         management information systems professionals at Scherer Companies. The
         SMARTS System analyzes the market area of each retail location to
         customize product allocation to correspond to the buying habits and
         trends of the primary consumer base. Through customer profiling and
         product placement programs, the SMARTS System increases sales by
         pinpointing the product that the consumer is most likely to buy and
         strategically placing it on display in an optimum location within the
         store.

                 -    Consumer Profiling. Utilizing sophisticated data from the
                      US Census Bureau, the SMARTS System is a proprietary
                      product allocation system that provides a detailed
                      consumer profile for a particular market area, enabling
                      the Company to target its product mix based upon the
                      demographic (i.e., age, population, gender, occupation,
                      income, ethnicity, marital status, religion and education
                      level) and psychographic (i.e., lifestyle and purchasing
                      behavior) characteristics of the market area. These
                      characteristics group consumers into lifestyle cluster
                      groups. A retail location is assigned to one of 72
                      lifestyle cluster groups. Examples of two lifestyle
                      cluster groups are as follows:

                       Executive Suites:    Professional/White Collar
                                            College Graduate
                                            Age 25 - 44
                                            White/High % of Asian
                                            More likely to:
                                                     - Go jogging
                                                     - Use financial planning 
                                                       services
                                                     - Read Fortune magazine

                       Gray Collars:         Blue Collar
                                             High School education
                                             Age 55 +
                                             Mixed Ethnicity
                                             More likely to:
                                                     - Join a religious group
                                                     - Drive a Chevrolet Truck
                                                     - Read Guns & Ammo magazine
                                                    
                                    The preferences of lifestyle cluster groups
                           are compared to historical sales information to
                           optimize sales opportunities and product mix in each
                           retail location. The Company is able to tailor its
                           distribution focus to products


<PAGE>   7


                           identified by the cluster group that meet the demand
                           of the consumer at each retail location, ultimately
                           improving sales and distribution efficiency. The
                           SMARTS System provides the Company with a key
                           competitive advantage over other regional wholesalers
                           and is expected to become more valuable to the
                           Combined Company as it expands its market area
                           throughout the midwestern United States.

                  -        Product Placement. The SMARTS System also provides
                           product placement assistance in two ways. The Floor
                           Planogram is used to determine the location of
                           display fixtures within the store. This sophisticated
                           program increases sales potential by positioning
                           displays in high traffic, high visibility areas while
                           maximizing the available display space. This program
                           enables management to exploit additional selling
                           opportunities by identifying under-utilized space in
                           the store such as structural columns, in aisle
                           freezer bases, and the sides of end aisle displays.
                           These opportunities are targeted for customer design
                           display racks to feature titles focused around
                           particular products and topics reflective of the
                           products offered in that area. For example, a display
                           may be positioned in the wine section to display
                           magazines such as Food and Wine.

                                    The Display Planogram is used to determine
                           the position of a specific title and/or category of
                           titles within the display fixture. Product space is
                           allocated based on sales performance of each category
                           within the store and benchmarked against other
                           comparable stores in comparable lifestyle cluster
                           groups. Better ranked categories receive larger
                           and/or better positions on the displays. The titles
                           within each category are ranked based upon consumer
                           interest, cluster rank, profitability, and
                           seasonality to determine which titles earn the best
                           locations within the category blocks. "A" titles
                           occupy more desirable positions on the fixtures and
                           receive more consumer exposure, while "B" and "C"
                           titles earn and receive progressively less desirable
                           locations. This ranking system then places the titles
                           most likely to sell at the consumer's fingertips.

                  It is anticipated that the SMARTS System will be expanded and
         rolled out to the various operating locations of the Combined Company
         until, eventually, all locations of the Combined Company will utilize
         the SMARTS System.

         CUSTOMERS

                  The Company and the individual Acquisition Parties have
         developed long standing, trusted vendor relationships with their
         respective customer bases. The customer bases range from large national
         retailers such as The Kroger Company to smaller local retailers. It is
         estimated that the Combined Company has a large and more diverse
         customer base comprised of approximately 18,000 different retail
         locations representing approximately 12,000 different customers, with
         no one customer representing more than 5% of sales.

         COMPETITION

                  The Company and the Combined Company face competition from
         three different areas. These areas include competition from other
         wholesalers, competition from alternative delivery channels and
         competition from substitute products.
<PAGE>   8

                  -        Competition From Other Wholesalers. Principal
                           competitors of the Company and the Combined Company
                           include The Anderson Group, ARAMARK and the Charles
                           Levy Company, all of which are regional wholesalers
                           in neighboring territories. Although these regional
                           wholesalers represent potential competition in
                           certain markets in which the current Company and the
                           Combined Company will operate, management does not
                           believe that competition will be significant due to
                           the "Post Office" economic model of distribution
                           which makes it difficult for other wholesalers to
                           profitably compete in the Combined Company's market
                           areas.

                                    Because most wholesalers have access to the
                           same periodical titles, they must differentiate
                           themselves from neighboring regional wholesalers by
                           providing value added services to their retail
                           customers. With the ultimate goal of efficiently
                           maximizing sales of periodicals in their stores,
                           management believes that retailers generally have
                           selected wholesalers based upon the following
                           considerations:

                                    -      The accuracy of packaging and
                                           accounting systems and the timeliness
                                           of delivery service;

                                    -      The effectiveness of its product
                                           allocation and display systems to the
                                           retailer;

                                    -      Technological capabilities and the
                                           resulting cost saving afforded to the
                                           retailer;

                                    -      Competitive pricing and terms;

                                    -      The wholesaler's reputation as a
                                           "direct store delivery" vendor and
                                           success as an overall category
                                           manager to the retailer; and

                                    -      The wholesaler's ability to generate
                                           and communicate new specific customer
                                           knowledge to the retailer.

                  -        Competition From Alternative Channels of
                           Distribution. Periodical wholesalers compete with
                           other delivery sources for the sale of periodicals to
                           the consumer. These alternative delivery sources
                           include subscriptions offered by the publishers and
                           electronic transmissions over the Internet.

                                    At one time, subscription sales represented
                           the only alternative source of delivery for a
                           periodical to the ultimate consumer. Although it is
                           not a profitable delivery channel for most
                           publishers, subscription sales are principally used
                           to establish information about the circulation base
                           of a magazine to assist the publisher in attracting
                           focused advertisers and in establishing advertising
                           rates. Management believes that the vast majority of
                           magazine sales are a retail impulse purchase and that
                           subscriptions do not represent a significant
                           competitive threat. In addition, management believes
                           that as the SMARTS System (as described and defined
                           above) becomes integrated and utilized by the


<PAGE>   9


                           Combined Company in all of its businesses, the
                           demographic and psychographic information utilized in
                           the product allocation decision can be used by
                           publishers to attract focused advertisers and
                           establish advertising rates. See "The Company and The
                           Combined Company -Business -The SMARTS System".

                                    Many of the major publishers are now
                           offering samples of their magazines on the Internet
                           through either direct ordering, viewing on line, or
                           downloading of articles. Although certain sources
                           estimate that as much as 11% of the population has
                           access to the Internet, this service has not had any
                           quantifiable effect on retail periodical sales due to
                           the impulse nature of the purchase.

                  -        Competition From Substitute Products. The periodical
                           industry competes for the non-active leisure time of
                           consumers (in contrast to active leisure time which
                           includes activities such as participant sports). For
                           several decades, the periodical industry has competed
                           with alternative products such as the radio,
                           television, home videos, home computers and the
                           Internet for consumers' non-active leisure time.
                           Rather than hindering the growth in the wholesale
                           periodical distribution industry, the growth of these
                           substitute products has generated increased consumer
                           interest in new magazines like Stereo Review, TV
                           Guide, Video Review, PC magazine and Internet Life
                           which are focused on the interests and hobbies of
                           consumers.

II. "THE COMPANY AND THE COMBINED COMPANY -- FACILITIES"

FACILITIES

                  Currently, the Company owns or leases the following
properties:

Company's Wholesale Facilities:

                  -      34,000 sq. ft.     Waterbury, CT       Monthly Lease
                  -      62,400 sq. ft.     Pittsburgh, PA      4 Year Lease
                  -      20,000 sq. ft.     Wilmington, NC      4 Year Lease

Company's Retail Facilities:

                  The Company also maintains lease agreements with respect to
         approximately 7,500 sq. ft. for one bookstore and four Newsrack retail
         outlets in Connecticut.

Company's Corporate Facilities:

                  Additionally, the Company is provided approximately 814 square
         feet of space at 5131 Post Road, Dublin, Ohio, for its corporate
         offices, from Scherer Companies pursuant to a Management Agreement with
         Scherer Companies. Upon completion of the acquisition transactions, the
         Company intends to add 16,583 square feet of space previously leased by
         Scherer Companies. Such lease will be for a term of 9 years. Management
         believes that the leased facilities are and will be adequate for the
         Company's operations in the foreseeable future. See "The Stock and
         Asset Exchanges - Conflicts of Interest and Related Party
         Transactions".


<PAGE>   10


Facilities of the Combined Company:

                  In addition to the Company's current properties and
         facilities, the Combined Company will hold additional facilities as
         described more particularly below.

Combined Company's Wholesale Facilities:

                  Generally, such facilities are utilized as warehouse and
         distribution centers although certain of the facilities may also
         contain the respective company's executive or principal business
         offices. A number of these facilities, identified below with an
         asterisk, are leased from principals of the Acquisition Parties. See
         "The Stock and Asset Exchanges - Conflicts of Interest and Related
         Party Transactions."

<TABLE>
<CAPTION>

Scherer Affiliates Wholesale Facilities:

<S>                      <C>                <C>                  <C>         
                  -      65,000 sq. ft.     Columbus, OH*        3 Year Lease
                  -      35,000 sq. ft.     Cincinnati, OH       Owned (Subject to Mortgage)
                  -      17,000 sq. ft.     Petoskey, MI*        3 Year Lease
                  -      17,000 sq. ft.     Mt. Pleasant, MI*    10 Year Lease

Stoll Wholesale Facilities:

                  -      84,000 sq. ft.     Jackson, MI*         10 Year Lease
                  -      45,000 sq. ft.     Jackson, MI*         5 Year Lease
                  -      53,000 sq. ft.     Grand Rapids, MI*    5 Year Lease
                  -      30,000 sq. ft.     Toledo, OH           Owned
                  -      78,000 sq. ft.     Indianapolis, IN*    3 Year Lease
                  -      20,000 sq. ft.     Galesburg, MI*       5 Year Lease

Michiana Wholesale Facilities:

                  -      46,800 sq. ft.     Niles, MI*           3 Year Lease
                  -      14,200 sq. ft.     Ft. Wayne, IN*       Being Purchased

Klein Wholesale Facilities:

                  -      98,000 sq. ft.     Cleveland, OH*       Month-to-Month Lease
                  -      38,000 sq. ft.     Akron, OH*           Month-to-Month Lease
                  -      10,000 sq. ft.     Cleveland, OH*       3 Year Lease

Combined Company's Retail Facilities:
</TABLE>



                  The Combined Company also will maintain lease agreements with
         respect to an additional approximately 90,000 sq. ft., for an
         additional 26 retail outlets and bookstore locations. After the
         transaction it will add 13 leased retail locations from Stoll, 6 leased
         retail locations from Read-Mor (a company managed by Scherer
         Companies), 2 leased retail locations from MacGregor and 5 leased
         retail locations from Klein. Management does not consider any one of
         these properties to be materially important to the Company.

<PAGE>   11
                  Certain of the retail leases require landlord consent to
         assignment. Although consent to assignments have not been received from
         all landlords, failure to receive one or more assignments would not
         have a material adverse effect on the Company.

         In the opinion of management of the Company, all of the foregoing
described properties which are owned by the Company or are to be acquired in the
transactions and all of the contents of the owned and leased facilities are
adequately covered by insurance.

It is anticipated that as the operations of the Combined Company are
consolidated over the next 12 months, the Combined Company will require less
operational space to service and expand current market territories. Management
expects to achieve significant cost savings by selling or subleasing certain of
these facilities when consolidation plans are finalized and operations are
merged. Pursuant to the Debenture Agreement, the Company has agreed that, until
$12,000,000 of Senior Debentures owed to Stoll Shareholders and issued in the
acquisition have been paid, it will not effect any consolidation(s) of
operations if a review of the proposed consolidation(s) is requested by an
appropriate member of the Executive Committee, unless the consolidation is
approved by at least a majority of the Executive Committee consisting of Ronald
E. Scherer, Thaddeus S. Majerek, Richard H. Stoll, Sr., Richard H. Stoll, Jr.,
and George R. Klein. See "Introduction and Summary - Debentures".

III. "ELECTION OF DIRECTORS -- NOMINEES FOR ELECTION".

NOMINEES FOR ELECTION

         The following  information  is set forth with respect to each person  
nominated for election as a director and with respect to the executive  officers
of the Company:

         Director Nominees

Name                                Age   Positions Held with the Company
----                                ---   -------------------------------

Ronald E. Scherer(1)(2)             46    Chairman of the Board of Directors;
                                          President and Chief Executive Officer

Eugene J. Alfonsi(1)(2)             59    Director; Vice-President

Thaddeus A. Majerek(1)(2)           46    Director

David B. Thompson(1)(2)             57    Director; Treasurer

Robert H. Monnaville(1)(2)          52    Director

Richard Stoll, Sr.(1)               63    None

Nancy Stoll Lyman(1)                36    None

George R. Klein(1)                  54    None

R.L. Richards(1)                    48    None



<PAGE>   12


         Executive Officer Not Named Above

Thomas L. Gerlacher                     54       Chief Financial Officer

         (1)  Nominee for Director if Proposals 1 through 4 above are approved
              by the shareholders 
         (2)  Nominee for Director if Proposals 1 through 4 above are not
              approved by the shareholders.

         RONALD E. SCHERER, age 46, has been a member of the Board of Directors
since 1989. Mr. Scherer was appointed President and Chief Executive Officer of
the Company in August 1989, became Chairman of the Board of Directors in
February 1992, and has acted in those capacities since his respective
appointments. Mr. Scherer has also served as Chairman of the Board of Directors
of Scherer Companies since 1982 and was appointed Senior Chairman of such Board
of Directors in 1993. Other companies under Mr. Scherer's ownership, control or
management have engaged in such businesses as real estate, manufacturing,
pharmaceutical distribution, and data processing. Mr. Scherer is an executive
officer and shareholder of the National Wholesale Drug Co. which filed a
voluntary petition under Chapter 11 in the United States Bankruptcy Court for
the Eastern District of Michigan in February 1993.

         EUGENE J. ALFONSI, age 59, has been a member of the Board of Directors
since 1992. Mr. Alfonsi was the President of the Periodical Division of Scherer
Companies from 1986 to September 1993. In September 1993, Mr. Alfonsi was
appointed as the President and Chief Operating Officer of Scherer Companies,
which positions he still holds today. Prior to joining Scherer Companies in
1986, he owned and managed several wholesale periodical distribution companies,
a business in which he has been employed for most of his life. Mr. Alfonsi
graduated in 1963 with a B. A. degree in Economics and Finance from Milliken
University in Illinois.

         THADDEUS A. MAJEREK, age 46, has been a member of the Board of
Directors since 1992. Since 1988, Mr. Majerek has served as the President and
Chief Executive Officer of Michiana News Service, Inc. in Niles, Michigan. Mr.
Majerek graduated in 1974 with a BS degree in Business and Physical Education
from Eastern Michigan University, and in 1989 with an MBA degree from the
University of Notre Dame. Mr. Majerek has been active in the magazine
distribution business since 1971. He has managed magazine distribution companies
in Utah, Indiana, and Michigan.

         DAVID B. THOMPSON, age 57, has been a member of the Board of Directors
since 1988. He also was appointed Treasurer and Chief Financial Officer of the
Company in August 1989, but ceased serving as Chief Financial Officer in
December 1993. Additionally, Mr. Thompson, a Certified Public Accountant, has
been affiliated with Scherer Companies since 1973 when he was elected as a
Director and appointed Treasurer and Chief Financial Officer. In 1993, Mr.
Thompson became Chairman of the Board of Directors and Chief Executive Officer
of Scherer Companies. Currently, Mr. Thompson is an officer and/or a director of
a number of companies owned, controlled or managed by Mr. Scherer, including
OPD, Wholesalers, Northern and MacGregor. Mr. Thompson graduated in 1963 with a
BS degree in Accounting from the University of Detroit. Mr. Thompson is an
executive officer of the National Wholesale Drug Co. which filed a voluntary
petition under Chapter 11 in the United States Bankruptcy Court for the Eastern
District of Michigan in February 1993.


<PAGE>   13


         ROBERT H. MONNAVILLE, JR., age 52, has been a member of the Board of
Directors of the Company and President of Service News Company, d/b/a Yankee
News Company, one of the Company's subsidiaries, since March of 1995. From May,
1993 to March, 1995, Mr. Monnaville served as the General Manager of Yankee News
Company. From September, 1992 to May, 1993, Mr. Monnaville served as the General
Manager of National Wholesale Drug Co., a wholesale pharmaceutical distributor,
and, again, from 1990 to July, 1992, Mr. Monnaville served as General Manager of
Yankee News Company. Altogether, Mr. Monnaville has served in several executive
capacities with the Company since 1982. Mr. Monnaville is a graduate of John
Carroll University and has a law degree from Cleveland State University. Prior
to joining Yankee News Company, Mr. Monnaville engaged in the practice of law as
a labor attorney for United Technologies in Connecticut. Additionally, Mr.
Monnaville serves on the Board of Directors of Blue Cross/Blue Shield of
Connecticut.

         RICHARD H. STOLL, SR., age 63, has been nominated for election to the
Board of Directors. Mr. Stoll Sr. is the Chairman of the Board of Directors and
Chief Executive Officer of The Stoll Companies and has been employed by The
Stoll Companies since July 1954. Mr. Stoll Sr. is a graduate of Colgate
University in 1954 with a degree in history. Mr. Stoll is the father of Nancy
Stoll Lyman.

         NANCY STOLL LYMAN, age 36, has been nominated for election to the Board
of Directors. Ms. Lyman is a Director of The Stoll Companies. Ms. Lyman is the
Founder and Managing Consultant for the Executive Development Group, a
management and consulting firm formed in 1991. Previously Ms. Lyman was the
Manager of Management Training and Development at Merrill Lynch and an Associate
with Morgan Stanley in the Fixed Income Division. Ms. Lyman is a Certified
Public Accountant and graduated from Saint Mary's College of Notre Dame,
Indiana, with a Bachelor of Business Administration and from Boston College with
an MBA. Mrs. Lyman is the daughter of Richard H. Stoll, Sr.

         GEORGE R. KLEIN, age 54, has been nominated for election to the Board
of Directors. Mr. Klein is Vice Chairman of The George R. Klein News Co.,
Central News Co. and Newspaper Sales, Inc. In addition, Mr. Klein is President
and Chairman of the Executive Committees for [East Texas Distributing Co.], a
magazine wholesaler located in [Houston], Texas. Mr. Klein also has ownership
interests in other magazine wholesale companies and in other companies including
companies that provide real estate and management services to Klein. Mr. Klein
is a graduate of Colorado College in 1964 with a Bachelor of Science degree and
has an MBA from the University of Denver in 1965.

         R.L. RICHARDS, age 48, has been nominated for election to the Board of
Directors. Mr. Richards currently is managing director of RDT Limited, a private
investment company owned by R. David Thomas, a principal shareholder of the
Company. Mr. Richards is also a member of KDR Limited. Mr. Richards has been
employed by affiliates of Mr. Thomas since 1978. Mr. Richards is a graduate of
Wittenberg University with a degree in economics and political science, and has
a law degree from The Ohio State University. Mr. Richards serves as a director
of Acceptance Insurance Companies (NYSE), and of several non-public companies
including Fifth Third Bank of Columbus, Inc. and Stanley Steemer International,
Inc. Previously, Mr. Richards served as a director for Clinton Gas Systems, Inc.
(OTC) and Orange Co. (NYSE).


<PAGE>   14


         Other Executive Officer

         THOMAS L. GERLACHER, age 54, has served as Chief Financial Officer of
the Company since December 1993. Since July 1992, Mr. Gerlacher has also served
in other financial executive capacities in the Company's wholly-owned
subsidiaries. From December 1991 to July 1992, Mr. Gerlacher was employed as
Chief Financial Officer of Team Logos Corporation. From 1987 through 1992, Mr.
Gerlacher, who is a Certified Public Accountant, was President of CFO Resource
Network Company. From 1976 through 1987, Mr. Gerlacher was employed as Vice
President of Budgeting and Planning of Chemlawn, Inc. Mr. Gerlacher graduated in
1964 with a BS degree in Accounting from the University of Notre Dame and in
1967 with an MBA degree from The Ohio State University

IV.  "ELECTION OF DIRECTORS -- EXECUTIVE COMPENSATION"

EXECUTIVE COMPENSATION

         The following table sets forth the compensation of the Company's Chief
Executive Officer and the only other executive officer whose total compensation
in fiscal 1996 exceeded $100,000 for the fiscal years ended September 30, 1996,
1995 and 1994. No other executive officer of the Company or any of its
subsidiaries received salary and bonus compensation in the most recent completed
fiscal year which exceeded $100,000.

Summary Compensation Table


<TABLE>
<CAPTION>

                                                                              Long Term Compensation
                                                                     ------------------------------------------
                                      Annual Compensation                       Awards               Payouts
                            -----------------------------------------------------------------------------------
     (a)           (b)          (c)          (d)           (e)            (f)            (g)           (h)          (i)
                                                          Other                      Securities
                                                         Annual       Restricted       Under-                    All Other
                                                         Compen-         Stock          lying         LTIP        Compen-
   Name and       Fiscal       Salary       Bonus        sation        Award(s)       Options/       Payouts       sation
  Positions        Year         ($)          ($)           ($)            ($)         SAR's(#)         ($)          ($)
--------------- ----------- ------------- ----------- -------------- -------------- -------------- ------------ -------------
<S>                <C>        <C>            <C>          <C>            <C>            <C>           <C>           <C>         
Ronald E.          1996       $50,000        None         None           None           None          None          None
Scherer,           1995         None         None         None           None           None          None          None
Chairman of        1994         None         None         None           None           None          None          None
the Board of
Directors,
President and
Chief
Executive 
Officer(1)

Robert H.          1996       $130,000       None         None           None           None          None          None
Monnaville,        1995       $52,000        None         None           None           None          None        $58,800
President,         1994         None         None         None           None           None          None        $84,650
Service News
Company(2)

</TABLE>


<PAGE>   15


         (1)      Mr. Scherer, although president and chief executive officer of
                  the Company, was not an employee of the Company prior to July
                  of 1996. Mr. Scherer was employed by Scherer Companies, and
                  his services were provided to the Company pursuant to a
                  management agreement between Scherer Companies and the
                  Company. Prior to September 30, 1995, the Company did not owe
                  or was not required to pay any amount of a management fee to
                  Scherer Companies because the management agreement requires
                  profits from operations before any management fees are earned.
                  See "The Stock and Asset Exchanges - Conflicts of Interest and
                  Related Party Transactions."

         (2)      During 1994 and part of 1995, Mr. Monnaville provided services
                  to the Company as an independent contractor, for which he
                  received consulting fees. He became an employee of Service
                  News Company in April of 1995.

         Employment Agreements

                  The Stock Exchange Agreement with Stoll requires, as a
         condition to closing, that the Company enter into employment agreements
         with three individuals, one of whom is Richard Stoll, Jr., who will be
         a significant shareholder of the Company and who is the son of Richard
         Stoll, Sr. and the brother of Nancy Stoll Lyman, both of whom have been
         nominated to the board of directors. Mr. Stoll's employment agreement
         is for a term of three years and provides for an annual salary of
         $160,000, along with potential bonuses upon the achievement of certain
         objectives. In accordance with the terms of the Michiana Exchange
         Agreement, the Company agreed that, following the acquisition of
         Michiana, it would enter, or cause Michiana to enter, into employment
         agreements with certain employees of Michiana, one of whom is Thaddeus
         A. Majerek, a director of the Company. The employment agreement is to
         be for a three year term and Mr. Majerek is to receive an annual salary
         of $160,000. See "The Stock and Asset Exchanges - Conflicts of Interest
         and Related Party Transactions." In addition, the Company has entered
         into three year employment agreements with Ronald E. Scherer, David B.
         Thompson, and Eugene J. Alfonsi, in amounts to be established after
         consultation with the Hay Group.

         Deferred Compensation Agreement

                  Stoll has entered into a deferred compensation agreement with
         Richard Stoll, Sr., who has been nominated to the Company's board of
         directors. Under the agreement, Stoll will pay Mr. Stoll the sum of
         $250,000 per year for a period of five years and $100,000 per year for
         a period of seven years thereafter. See "The Stock and Asset Exchanges
         - Conflicts of Interest and Related Party Transactions."

         Management Agreement

                  In accordance with the terms of the Klein Exchange Agreement,
         the Company agreed that, following the acquisition of Klein, it would
         enter, or cause Klein to enter, into employment agreements with certain
         employees of Klein. In addition, George R. Klein, nominee for director
         of the Company, is president of Klein Management Company. The Company
         will enter into a management agreement for a three year term, pursuant
         to which Mr. Klein and Klein Management Company will provide services
         to the Company. Klein Management Company is to receive an annual fee of
         $134,000. See "The Stock and Asset Exchanges - Conflicts of Interest
         and Related Party Transactions."


<PAGE>   16


COMPENSATION OF DIRECTORS

         The Company has a policy which provides that each director who lives in
Columbus, Ohio, will receive the sum of $50.00 for each meeting of the Board of
Directors attended by such director. A director who lives outside of Columbus,
Ohio, will receive the sum of $100.00 per meeting attended. Notwithstanding the
foregoing policy, the Company has not paid any such director's fees; however,
the Company does pay reasonable out-of-pocket expenses incurred in the
attendance of meetings of the Board of Directors.

V.   "THE STOCK AND ASSET EXCHANGES -- CONFLICTS OF INTEREST AND RELATED PARTY 
      TRANSACTIONS"

CONFLICTS OF INTEREST AND  RELATED PARTY TRANSACTIONS

         There are various conflicts of interest and related party transactions
in connection with the acquisitions and from other contractual arrangements.

EXISTING COMPANY RELATED PARTY TRANSACTIONS

         The following are transactions between the Company and its officers,
directors and principal shareholders which are currently in effect regardless of
the acquisition transactions.

         MANAGEMENT SERVICES

                  Pursuant to a management agreement, Scherer Companies has been
         providing management services to the Company in the nature of
         accounting, administration, legal and other supervisory services. The
         services of Ronald E. Scherer, David B. Thompson and Eugene J. Alfonsi,
         directors and officers of the Company, are provided to the Company
         through this arrangement. On October 1, 1995, Scherer Companies began
         to charge the Company for these services, because, under the agreement,
         the management fee is due once the Company generates net income, which
         it did during the fiscal year ended September 30, 1995. From October 1,
         1995 forward through June 30, 1996, a fee of $30,000 per month , or
         $270,000 was due. Following the acquisitions, the persons providing the
         various management services were direct employees of the Company or one
         of its subsidiaries, and the management services arrangement was
         terminated effective July 1, 1996. Additionally, Scherer Companies has
         also been providing management services to OPD, Wholesalers, Northern
         and MacGregor. These services arrangements will be terminated at the
         time of the final closing of the acquisitions.

         PUT AGREEMENTS WITH PRINCIPAL SHAREHOLDER

                  In connection with its acquisition of Service News Company of
         Wilmington ("Wilmington"), the Company granted rights to put certain
         shares of Common Stock of the Company back to the Company. These rights
         were granted to the former shareholder of Wilmington, Doris R.
         Marshall, a principal shareholder of the Company, and her children,
         David E. Marshall and Miranda Marshall (collectively, the "Marshalls").
         Under the put agreements, the Marshalls are entitled, after April 1997,
         to cause the Company to repurchase from them up to an aggregate of
         4,821,398 shares of Common Stock. In the event the put options are
         exercised as they become exercisable, the related payments would be
         $167,916 in


<PAGE>   17


         1997, $335,832 in 1998, $3,599,534 in 1999, $335,832 in 2000, and 
         $3,497,212, in total over the succeeding 13 years. The Company's
         obligation to pay the put amounts is secured by a security interest in
         all of the assets of the Company's subsidiary, Service News Company of
         Connecticut ("Yankee").

         LEASE AGREEMENTS

                  The Company's subsidiary, Service News Company of Wilmington,
         has entered into a lease agreement to lease an approximately 20,000
         square foot warehouse and distribution facility from Doris R. Marshall,
         the former owner of this subsidiary, who owns more than 5% of the
         outstanding shares of Common Stock of the Company. The terms of the
         lease provide for monthly rent of $5,347; the lease has approximately
         three years left on the term.

         CONSULTING AGREEMENT WITH FORMER DIRECTOR

                  On June 27, 1994, the Company and its subsidiary, Service News
         Company, d/b/a Yankee News Company (of Waterbury, Connecticut)
         ("Yankee"), entered into a consulting agreement with a former officer
         of Yankee and former director of the Company. The consulting agreement
         is for a term of eight years expiring in 2002. During the first two
         years, the consultant was paid $4,000 per month. During years three
         through five, the consultant is to be paid $5,000 per month. During
         years six through eight, the consultant is to be paid $8,500 per year.

         YANKEE AGREEMENTS WITH MDI, L.P.

                  On May 24, 1993, the Company's wholly-owned subsidiary,
         Yankee, re-acquired the net operating assets of Yankee from MDI, L.P.,
         a limited partnership in which Yankee and Magazine Distributors, Inc.
         ("MDI") were partners. MDI holds more than 5% of the outstanding shares
         of Common Stock of the Company. As part of this acquisition, the
         Company, Yankee, OPD and Northern entered into non-competition
         agreements with MDI and with Robert B. Cohen, James S. Cohen, and
         Michael Cohen, the majority shareholders of MDI, pursuant to which MDI
         and the Cohens agreed not to compete for a period of ten years within a
         specified Yankee distribution area. During the first five years of the
         agreements, MDI and the Cohens are to receive compensation equal to an
         aggregate of 2% of Yankee's agency net sales, payable 1% in cash and 1%
         in Common Stock of the Company valued at $1.00 per share for this
         purpose. During the last five years of the agreements, MDI and the
         Cohens are to receive compensation equal to 1% of Yankee's agency net
         sales, payable in cash. The compensation was $501,920 in 1996, $468,982
         in 1995 and $446,092 in 1994 (one-half paid in cash and one-half paid
         in shares).

                  As part of the acquisition of Yankee, the Company entered into
         a limited consulting agreement dated May 24, 1993, with Robert B.
         Cohen, the principal owner of MDI, for a ten year consulting period.
         Under the agreement, Mr. Cohen is to consult on matters relating to the
         potential acquisition of entities engaged in the wholesale distribution
         of books, magazines and/or periodicals in Maine, Vermont, Connecticut,
         New Hampshire, New Jersey, New York or Massachusetts which are
         identified by the Company. As a consulting fee, Mr. Cohen is to
         receive, during the first five years of the consulting arrangement, 1%
         of the annual net sales of an acquired agency, payable in cash, plus 1%
         of an acquired agency's net sales payable in Common Stock of the
         Company, valued at $1.00 per share for this purpose. During the last
         five years of the agreement, the consulting fee is calculated as 1% of
         an acquired agency's net sales, payable in cash. The Company has not
         acquired any companies specified in the consulting agreement, and no
         amount has been paid to Mr. Cohen under this agreement to date.
<PAGE>   18

                  In connection with the acquisition of Yankee from MDI, L.P.,
         the Company, Ronald E. Scherer, Yankee, OPD and Northern entered into a
         non-competition agreement with MDI, which provides that the Company,
         Mr. Scherer, Yankee, OPD and Northern will not compete in the wholesale
         distribution of periodicals for a period of ten years within certain
         specified counties of New York, Connecticut, Massachusetts and New
         Jersey.

         EMPLOYMENT AGREEMENTS

                  In connection with the acquisition transactions, the Company
         will enter into employment agreements with three officers and
         directors, Ronald E. Scherer, David B. Thompson and Eugene J. Alfonsi,
         for a term of three years each. The Company has contracted with a
         national consulting firm, Hay Group, to establish appropriate levels of
         compensation for these three individuals. Each of these individuals has
         served the Company as an officer and director without compensation for
         the last four years.

SCHERER AFFILIATE RELATED PARTY TRANSACTIONS

         COMMON OWNERSHIP AND MANAGEMENT

                  The acquisitions of the Scherer Affiliates involve
         transactions between related parties, because substantially the same
         management operates the Scherer Affiliates and the Company, and because
         Ronald E. Scherer, the principal shareholder of the Company, is also,
         either directly or through family trusts, the principal shareholder of
         each of the Scherer Affiliates. The Company has taken a number of steps
         to help assure itself that the acquisitions involving the Scherer
         Affiliates are on an arm's length basis and no more favorable to the
         Scherer Affiliates than would be a transaction with independent
         unrelated parties: (1) the acquisition agreements are on substantially
         the same terms as the acquisition agreements with Stoll, Michiana, and
         Klein, independent parties; (2) the Company used a standard in
         establishing the purchase price which has been used in connection with
         other acquisitions in the periodical industry of which the Company is
         aware, which was also used in connection with the Stoll, Michiana and
         Klein acquisitions (except that Wholesaler's and Scherer Companies'
         price is based upon fair market value); (3) the acquisition agreements
         provide for an independent audit of the financial statements of the
         acquired companies by the Company's independent auditors and
         adjustments of the purchase prices based upon the results of the
         audits; (4) the acquisitions involving the Scherer Affiliates were
         reviewed and approved by an independent committee appointed by the
         Board of Directors, consisting of Thaddeus A. Majerek, a non-employed
         board member (see, however, "Michiana Related Party Transactions",
         below); and (5) the Company has received a fairness opinion from the
         Corporate Finance Department of the First National Bank of Boston that
         states, from a financial point of view, the consideration to be paid by
         the Company for Michiana, Stoll, Klein, OPD, Northern, MacGregor and
         Scherer Companies, is fair to the shareholders of the Company. (See
         "The Stock and Asset Exchanges - Opinion of the Financial Advisors to
         the Company's Board of Directors.") A copy of the fairness opinion is
         attached to this proxy statement as Exhibit C. Additionally, Mr.
         Scherer abstained from all voting of the Board of Directors with
         respect to the acquisitions of the Scherer Affiliates.


<PAGE>   19


         LEASE OF OFFICE AND WAREHOUSE FACILITIES

                  Upon completion of the acquisition from Northern of the assets
         related to its wholesale periodical distribution business, the Company
         will enter into a real estate lease with Northern, pursuant to which
         the Company will lease for a three-year term the approximately 17,000
         square foot warehouse and distribution facility located in Petoskey,
         Michigan. The lease is to be a triple net lease, with the Company
         paying the cost of all taxes, insurance, utilities and other expenses,
         and the annual rental amount is to be $3.00 per square foot. Because
         the stock of Northern is owned by a trust of which Ronald E. Scherer is
         a primary beneficiary, he could benefit from the lease arrangement.
         Management believes that the terms of this lease are no less favorable
         to it than it could obtain from an independent party in an arms-length
         transaction.

         LEASE OF OFFICE FACILITIES

                  Scherer Companies leases approximately 17,400 square feet of
         office space for its principal executive offices at 5131 Post Road,
         Dublin, Ohio, from NRS Equities, Inc., an entity controlled by Ronald
         E. Scherer. The lease is for a term of 10 years, commencing November 1,
         1995. The current rental rate is $14.50 per square foot. Pursuant to
         its management agreement with the Company, Scherer Companies subleases
         office and conference facilities in this building to the Company.

         EMPLOYMENT AGREEMENTS

                  The Stock Exchange Agreement with Scherer Companies requires,
         as a condition to closing, that the Company enter into employment
         agreements with four individuals, one of whom is Ronald E. Scherer,
         Jr., the son of Ronald E. Scherer. The employment agreement is for a
         term of three years, and provides for an anticipated annual salary of
         $60,000.

         INTERCOMPANY ADVANCES

                  The Company and the Scherer Affiliates have made a number of
         non-interest bearing advances to each other for purposes of paying
         slotting fees and making payments to publishers. It is intended that
         all of these advances will be eliminated at the closing and in the
         consolidated financial statements.

         AMOUNT OWED BY OPD TO PRINCIPAL SHAREHOLDER

                  OPD owes $5,000,000, plus accrued interest, to KDR Limited, an
         Ohio limited liability company ("KDR"), whose owners include R. David
         Thomas, a principal shareholder of the Company, and R.L. Richards, a
         director nominee. This debt is evidenced by a promissory note dated
         July 31, 1992, from OPD to RDT Corp., and subsequently assigned to KDR,
         in the principal amount of $5,000,000 with interest at the rate of
         11.75% per annum (the "Note"). The Note is currently due on demand. The
         Note is secured by a pledge from OPD of 5,000,000 shares of Common
         Stock of the Company owned by OPD. KDR, OPD and the Company have
         entered into discussions regarding the assumption by the Company of the
         obligations of OPD under the note. As proposed, KDR will exchange the
         Note for a new note from UNIMAG. Although the Company and KDR have not
         reached a final agreement on the new note, it is


<PAGE>   20


         contemplated that the interest rate would be changed, the new note
         would become a long-term note due at a future date, and the new note
         would be subordinated to certain other debt of the Company. In
         consideration for KDR's agreement to the new note, the Company would
         pay KDR accrued interest, make a partial payment of the principal of
         the note (a payment of $500,000 is currently proposed), and issue to
         KDR warrants to purchase additional shares of Common Stock of the
         Company. The terms of these warrants have not been decided.
         Additionally, the Company has discussed with KDR, in connection with
         the exchange of the notes, nominating R.L. Richards for election to the
         Company's board of directors. The Company has also discussed with Mr.
         Thomas a proposal for Mr. Thomas to purchase from the Company an
         additional $500,000 of Common Stock of the Company for a purchase price
         of $1.50 per share (pre-split). There can be no assurance that any of
         the transactions described in this paragraph will occur or that the
         transactions, if consummated, will be on the terms described in this
         paragraph.

STOLL RELATED PARTY TRANSACTIONS

         EMPLOYMENT AGREEMENTS

                  The Stock Exchange Agreement with Stoll requires, as a
         condition to closing, that the Company enter into employment agreements
         with three individuals, one of whom is Richard Stoll, Jr., who will be
         a significant shareholder of the Company and who is the son of Richard
         Stoll, Sr. and the brother of Nancy Stoll Lyman, both of whom have been
         nominated to the board of directors. Mr. Stoll's employment agreement
         is for a term of three years and provides for an annual salary of
         $160,000, along with potential bonuses upon the achievement of certain
         objectives.

         DEFERRED COMPENSATION AGREEMENT

                  Stoll has entered into a deferred compensation agreement with
         Richard Stoll, Sr., who has been nominated to the Company's board of
         directors. Under the agreement, Stoll will pay Mr. Stoll the sum of
         $250,000 per year for a period of five years and $100,000 per year for
         a period of seven years thereafter.

         LEASE AGREEMENTS

                  Stoll leases a 78,000 square foot facility located in
         Indianapolis, Indiana from Richard Stoll, Sr. for a monthly rental of
         $25,000. This lease is on a month-to-month tenancy. As part of the
         Stoll Exchange Agreement, the Company has agreed to lease this facility
         from Richard Stoll, Sr. for a period of 36 months for a monthly rental
         of $12,000.

                  A trust which has been established for the benefit of the
         Stoll family owns seven parcels of real property which are leased to
         Stoll. The terms of such leases are as follows:

                                    (a) Three are retail leases located in
                  Michigan for three-year terms expiring September 30, 1996,
                  providing for monthly rentals of $1,460, $2,250 and $1,330.
                  The renewal of these leases is being evaluated by the Company;

                                    (b) Two are wholesale leases, owned 45% by
                  the trust, located in Jackson, Michigan for ten-year terms
                  expiring September 1998 providing for total monthly rentals of
                  $22,500 and $2,500; and
<PAGE>   21

                                    (c) Two are wholesale leases located in
                  Galesburg and Wyoming, Michigan expiring September 1996
                  providing for monthly rentals of $6,300 and $20,000,
                  respectively. The renewal of these leases is being evaluated
                  by the Company.

         LOANS TO STOLL SHAREHOLDERS

                  Stoll had made a number of loans to its shareholders in the
         aggregate amount of $3,034,053. Included in this loan total were
         amounts owed by Richard Stoll, Sr. of $1,343,687. This debt has been
         eliminated by the purchase of an aircraft, formerly leased to Stoll by
         Stoll Air, Inc., for $600,000, and by a distribution of the balance
         owed as a dividend. Mr. Stoll has been nominated for election to the
         Company's board of directors. Additionally, the remaining balance due
         on Stoll Shareholder loans has been eliminated through Shareholder
         distributions, effective June 30, 1996.

MICHIANA RELATED PARTY TRANSACTIONS

         BENEFICIAL OWNERSHIP

                  Thaddeus A. Majerek, a director of the Company, is an officer,
         director and a beneficiary of a trust which owns stock of Michiana.
         Accordingly, he is not disinterested with respect to the Michiana
         acquisition. Although Mr. Majerek engaged in negotiations with the
         Company with respect to its acquisition of Michiana, he did not
         participate in the deliberations of the Board of Directors of the
         Company with respect to the acquisition and abstained in all voting by
         the Board of Directors of the Company related thereto. Mr. Majerek was
         appointed to act as the member of an independent committee of the Board
         of Directors of the Company to consider the exchange agreements with
         the Scherer Affiliates. He was selected to serve in this capacity
         because, at the time, he was an outside director not employed by the
         Company or any of its subsidiaries.

         EMPLOYMENT AGREEMENTS

                  In accordance with the terms of the Michiana Exchange
         Agreement, the Company agreed that, following the acquisition of
         Michiana, it would enter into, or cause Michiana to enter into,
         employment agreements with certain employees of Michiana, one of whom
         is Thaddeus A. Majerek, a director of the Company, another of whom is
         David W. Majerek, the brother of Thaddeus A. Majerek, and another of
         whom is Michael Gilbert, the brother-in-law of Thaddeus A. Majerek. The
         employment agreements are to be for three year terms; Thaddeus A.
         Majerek is to receive an annual salary of $160,000, David W. Majerek is
         to receive an annual salary of $60,000, and Michael Gilbert is to
         receive an annual salary of $100,000.

         TRANSACTIONS WITH HALL OF CARDS AND BOOKS, INC.

                  Some of the principal shareholders of Michiana are also
         shareholders of Hall of Cards and Books, Inc. ("HOCAB"), which operates
         approximately 27 retail stores, including Hallmark stores, paperback
         stores and newsstands. HOCAB is a principal customer of Michiana for
         books and magazines, constituting 17% of Michiana's net revenues during
         its fiscal year ended June 30, 1996. In connection with the closing of
         the Michiana transaction, The Company and HOCAB are to enter into a
         five year exclusive supply agreement pursuant to which The Company is
         to be the exclusive supplier of magazines, books and other related
         periodical items to HOCAB, at


<PAGE>   22


         special prices negotiated in the agreement. These discounts
         are below the prices charged other retailers, and HOCAB is expected to
         benefit by an aggregate of approximately $165,000 per year from the
         extra discount received by it. HOCAB is also indebted to the Company in
         the amount of $3,589,389. HOCAB has executed a promissory note to the
         Company which bears interest at the rate of 9.25% per annum and which
         provides that: (1) $1,089,389 of the principal will be payable July 15,
         1997, (2) $1,250,000 of the principal will be payable in 60 consecutive
         monthly installments of $20,833, beginning April 1, 1997, and that (3)
         $1,250,000 of the principal will be payable in 20 consecutive quarterly
         payments of $62,499, beginning April 1, 1997 (provided that quarterly
         payments are payable only if the Michiana Shareholders have received
         the quarterly payments on the Senior Debentures to be paid to them).
         The note is secured by a pledge of all of the stock of HOCAB and by a
         pledge of 2,392,926 shares of the Common Stock of the Company to be
         received in the Michiana Transaction. In addition, Michiana is
         guaranteeing payment of all indebtedness of a line of credit to HOCAB
         by 1st Source Bank. The current outstanding principal balance of this
         guaranteed debt is $0 at December 31, 1996. 1st Source Bank has agreed
         to terminate this guaranty upon the consummation of the Company's
         acquisition of Michiana and the repayment by Michiana of loan amounts
         totaling approximately $1,501,000 to 1st Source Bank.

         LOANS FROM MAJEREKS

                  Thaddeus A. Majerek, who is a director of the Company, and his
         parents, Thaddeus S. Majerek and A. Marie Majerek, have loaned various
         amounts to Michiana. The current outstanding balance of these loans is
         $209,000. The loans are on demand and unsecured, with interest rates of
         8%-10%.

         LEASE OF WAREHOUSE FACILITY

                  Michiana has entered into a lease agreement with a trust
         established for A. Marie Majerek, the spouse of Thaddeus S. Majerek, to
         lease a warehouse building containing approximately 46,800 square feet
         of space located in Niles, Michigan. The lease is for a term of three
         years, and the rent is $12,000 per month.

         PURCHASE OF REAL PROPERTY

                  Michiana currently leases a 14,200 square foot distribution
         facility in Fort Wayne, Indiana from a trust established for A. Marie
         Majerek. The Company has entered into a real estate purchase contract
         with the trust to purchase this property at a price to be established
         by an independent appraisal firm acceptable to both the seller and the
         Company.

         PURCHASE OF TOMAN DISTRIBUTION SERVICES, INC.'S ASSETS

                  Michiana leased one semi-tractor truck from Toman Distribution
         Services, Inc., a Michigan corporation ("Toman"), for the annual lease
         amount of $28,968. The Company has entered into an agreement with Toman
         to purchase certain of its assets, consisting of six trailers, office
         equipment, customer lists and records, and goodwill. The purchase is to
         be effective upon the closing of the Michiana acquisition. The purchase
         price is to be $1.00, plus the assumption of liabilities in an amount
         equal to the value of the assets being acquired and the assumption of


<PAGE>   23


         obligations under leases. Toman is owned by members of the
         Majerek family, including Thaddeus A. Majerek, a director of the
         Company. As part of the transaction, the Company will assume an
         employment agreement with Mr. Steven M. Toman, brother-in-law of
         Thaddeus A. Majerek, which expires June 30, 1999, and which provides
         for an annual salary of $60,000. This transaction is deemed immaterial
         for financial reporting purposes.

         GUARANTY OF MICHIANA DEBT

                  At December 31, 1996 Michiana owed 1st Source Bank the amount
         of $1,501,000. These loans have been guaranteed by Thaddeus S. Majerek
         and A. Marie Majerek, the parents of Thaddeus A. Majerek, who is a
         director of the Company. It is the Company's intention to eventually
         refinance this indebtedness. To the extent that this debt is satisfied,
         Mr. & Mrs. Majerek will be personally benefited.

KLEIN RELATED PARTY TRANSACTIONS

         GUARANTY OF DEBT

                  The George R. Klein News Company has guaranteed $320,940 of
         certain debt incurred by Northwest News Company ("Northwest") in
         connection with Northwest's acquisition of several wholesale periodical
         distributors. George R. Klein, who has been nominated as a director of
         the Company, is a 50% owner of Northwest and will benefit from the
         transaction.

         LEASES OF FACILITIES

                  There are a number of facilities that are leased by Klein from
         George R. Klein or persons or entities affiliated with him. The George
         R. Klein News Co. leases a 98,000 square foot warehouse and
         distribution facility located on 30th Street in Cleveland, Ohio.
         Central News Company leases a 38,000 square foot warehouse and
         distribution facility in Akron, Ohio. Newspaper Sales, Inc. leases a
         10,000 square foot facility located on Paynes Avenue in Cleveland,
         Ohio.

                  All leases expire on December 31, 1996. The Company will enter
         into a new three year lease with Newspaper Sales, Inc., and
         month-to-month leases with a six month termination clause with The
         George R. Klein News Co. and Central News Company. The new lease rates
         will be at a market value to be determined independently.

         MANAGEMENT SERVICES

                  Klein is managed by Klein Management Company, which is an
         independent company owned by George R. Klein, and which is not being
         acquired by the Company. For the fiscal year ended December 31, 1995,
         Klein paid $990,000 for management services. For the 1996 period
         through August 23, 1996, Klein paid approximately $650,000 for
         management services. At the closing, the Company will enter into a new
         management agreement with the Klein Management Company pursuant to
         which Klein Management Company will provide the services of George R.
         Klein to the Company for a term of three years in exchange for an
         annual management fee of $134,000.