[Federal Register Volume 66, Number 136 (Monday, July 16, 2001)]
[Notices]
[Pages 37051-37072]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-17480]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. The Thomson Corporation, Harcourt General, Inc. 
& Reed Elsevier Inc.; Proposed Final Judgment and Competitive Impact 
Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, 
Hold Separate Stipulation and Order and Competitive Impact Statement 
have been filed with the United States District Court for the District 
of Columbia in United States of America v. The Thomson Corporation, 
Harcourt General, Inc., and Reed Elsevier Inc., No. 1:01CV01419. On 
June 27, 2001, the United States filed a Complaint alleging that The 
Thomson Corporation's proposed acquisition of the college textbook 
publishing and computer-based testing businesses of Harcourt General, 
Inc. from Reed Elsevier Inc. would violate section 7 of the Clayton 
Act, 15 U.S.C. 18. The proposed Final Judgment, filed at the same time 
as the Complaint, requires the defendants to divest textbooks and 
related ancillary educational materials for thirty-eight college 
courses and Harcourt's national computer-basing testing business. 
Copies of the Complaint, proposed Final Judgment, and Competitive 
Impact Statement are available for inspection at the Department of 
Justice in Washington, DC in Room 200, 325 Seventh Street, NW., and at 
the Office of the Clerk of the United States District Court for the 
District of Columbia, 333 Constitution Avenue, NW., Washington, DC.
    Public comment is invited within sixty days of the date of this 
notice. Such comments, and responses thereto, will be published in the 
Federal Register and filed with the Court. Comments should be directed 
to James R. Wade, Chief, Civil Task Force, Antitrust Division, 
Department of Justice, 325 Seventh Street, NW., Suite 300, Washington, 
DC 20530 (telephone: (202) 616-5935).

Constance K. Robinson,
Director of Operations and Merger Enforcement.

United States District Court for the District of Columbia

[Civil Action No: 01-1419 (Antitrust)]

United States of America, Plaintiff, v. The Thomson Corporation, 
Harcourt General, Inc. and Reed Elsevier Inc., Defendants

Filed: June 27, 2001.

Hold Separate Stipulation and Order

    It is hereby stipulated and agreed by and between the undersigned 
parties, subject to approval and entry by the Court, that:

I. Definitions

    As used in this Hold Separate Stipulation and Order:
    A. ``Acquirer'' or ``Acquirers'' means the entity or entities to 
whom defendants divest any of the Divestiture Assets.
    B. ``AIMS Business'' means Harcourt's Agency Information Management 
Services business, which provides assistance to state agencies, 
departments, or other such organizations in the management of the state 
licensing process, including:
    1. All tangible assets that are used exclusively for the AIMS 
Business, including research and development activities, all networking 
equipment, tooling and fixed assets, personal property, inventory, 
office furniture, materials, supplies, and other tangible property, and 
all assets used exclusively in connection with the AIMS Business; all 
licenses, permits and authorizations issued by any governmental 
organization relating exclusively to the AIMS Business; all contracts, 
teaming arrangements, agreements, leases, commitments, certifications, 
and understandings relating exclusively to the AIMS Business, including 
supply agreements; all customer lists, contracts, accounts, and credit 
records or similar records of all sales and potential sales by the AIMS 
Business; all sales support and promotional materials, advertising 
materials and production, sales, and marketing files relating 
exclusively to the AIMS Business; all repair and performance records, 
and all other records relating exclusively to the AIMS Business.
    2. All intangible assets that are used exclusively in the AIMS 
Business and are used in the development, production, servicing, sale, 
administration, assessment, and

[[Page 37052]]

dissemination of tests and test results including, but not limited to, 
all patents, licenses and sublicenses, intellectual property, 
copyrights, trademarks, trade names, service marks, service names, but 
no corporate trademarks or trade names of Thomson or Harcourt; 
technical information; computer software and related documentation; 
know-how, trade secrets, drawings, blueprints, designs, design 
protocols, specifications for materials, specifications for parts and 
devices; all research data concerning historic and current research and 
development relating exclusively to the AIMS Business including, but 
not limited to the designs of experiments, and the results of 
successful and unsuccessful designs and experiments; quality assurance 
and control procedures; design tools and simulation capability; and all 
manuals and technical information defendants provide to those 
employees, customers, suppliers, agents or licensees exclusively 
devoted to the AIMS Business.
    C. ``ASI'' means all of the assets of defendant Harcourt's wholly-
owned subsidiary Assessment Systems, Inc., a Pennsylvania corporation 
with its headquarters in Bala Cynwyd, Pennsylvania, excluding 
Harcourt's AIMS Business and State Testing Business, as defined in the 
proposed Final Judgment, but including the following:
    1. All tangible assets that comprise ASI, including research and 
development activities, all fixed, mobile, and other testing centers 
listed in Exhibit B of the proposed Final Judgment, any accompanying 
property rights in real estate or equipment used in any of those 
testing centers, all networking equipment, tooling and fixed assets, 
personal property, inventory, office furniture, materials, supplies, 
and other tangible property, and all assets used exclusively in 
connection with ASI; all licenses, permits and authorizations issued by 
any governmental organization relating to ASI; all contracts, teaming 
arrangements, agreements, leases, commitments, certifications, and 
understandings relating to ASI, including supply agreements; all 
customer lists, contracts, accounts, and credit records or similar 
records of all sales and potential sales by ASI; all sales support and 
promotional materials, advertising materials and production, sales, and 
marketing files relating to ASI; all repair and performance records, 
and all other records relating to ASI.
    2. All intangible assets used in the development, production, 
servicing, sale, administration, assessment, and dissemination of tests 
and test results including, but not limited to, all patents, licenses 
and sublicenses, intellectual property, copyrights, trademarks, trade 
names, service marks, service names, but no corporate trademarks or 
trade names of Thomson or Harcourt; technical information; computer 
software and related documentation including, but not limited to, test 
drivers, scheduling software, and the OMEGA, EXPro, and REG2000 
software platforms; know-how, trade secrets, drawings, blueprints, 
designs, design protocols, specifications for materials, specifications 
for parts and devices; all research data concerning historic and 
current research and development relating to ASI including, but not 
limited to, all test item banks, psychometric data, statistical reports 
of test results, designs of computer-based examinations and testing 
centers, and the designs of experiments, and the result of successful 
and unsuccessful designs and experiments; quality assurance and control 
procedures, including all security measures used in the development, 
administration, and assessment of computer-based tests and the report 
of exam results; design tools and simulation capability; and all 
manuals and technical information defendants provide to their own 
employees, customers, suppliers, agents or licensees.
    D. ``College Textbook Products'' means all of the college textbooks 
identified on Exhibit A of the proposed Final Judgment. Each College 
Textbook Product also includes all ancillary educational materials 
offered for sale or under development by any subsidiary or division of 
the defendants that are designed to be specific to a textbook product 
identified in Exhibit A, including teacher editions, workbooks, 
notebooks, charts, audio, video, software, any CD-ROM, DVD-ROM, 
Internet and broadcast components, teacher support and staff 
development materials, and any other materials in any form, format or 
media, and also includes:
    1. All tangible assets that comprise the College Textbook Products, 
including research and development activities; all original and digital 
artwork, film plates, and other reproductive materials relating to the 
College Textbook Products including, but not limited to, all 
manuscripts, illustrations, any other content, and any revisions or 
revision plans thereof in print or digital form; all licenses, permits 
and authorizations issued by any governmental organization relating to 
the College Textbook Products; all contracts, teaming arrangements, 
agreements, commitments, certifications, and understandings relating to 
the College Textbook Products including, but not limited to, author 
permissions and other similar agreements, supply and distribution 
agreements; all customer lists, contracts, accounts, and credit 
records, or similar records of all sales and potential sales of the 
College Textbook Products; all sales support and promotional materials, 
advertising materials, and production, sales and marketing files 
relating to the College Textbook Products; at the Acquirer(s)' option, 
computers and other tangible assets used primarily for the production 
of the College Textbook Products; and all performance and all other 
records relating to the College Textbook Products;
    2. All intangible assets used in the development, production, 
servicing, marketing, and sale of the College Textbook Products 
including, but not limited to, all patents, licenses and sublicenses, 
intellectual property, copyrights, trademarks (registered and 
unregistered), trade names, service marks, service names, including all 
titles of existing products comprising the College Textbook Products, 
but no corporate trademarks or trade names of Thomson or Harcourt; all 
technical information, computer software and related documentation, 
know-how, trade secrets, drawings, blueprints, designs, design 
protocols, specifications for materials, specifications for parts and 
devices, safety procedures for the handling of materials and 
substances, quality assurance and control procedures, all manuals and 
technical information defendants provide to their own employees, 
customers, suppliers, agents or licensees; and all research data 
concerning historic and current research and development efforts 
relating to the College Textbook Products, including, but not limited 
to designs of experiments, and the results of successful and 
unsuccessful designs and experiments.
    Defendants shall use their best efforts to facilitate the 
assignment to the Acquirer(s) of any of the above that defendants 
presently hold or use pursuant to a license or any other agreement.
    E. ``Complete ASI Assets'' means ASI, the AIMS Business, and the 
State Testing Business, as defined in this Hold Separate Stipulation 
and Order.
    F. ``Divestiture Assets'' means the College Textbook Products and 
the Complete ASI Assets, as defined in this Hold Separate Stipulation 
and Order.

[[Page 37053]]

    G. ``Harcourt'' means defendant Harcourt General, Inc., a Delaware 
corporation with its headquarters in Chestnut Hill, Massachusetts, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, and their directors, 
officers, managers, agents, and employees.
    H. ``Reed Elsevier'' means defendant Reed Elsevier Inc., a 
Massachusetts corporation with its headquarters in Newton, 
Massachusetts, its successors and assigns, and its subsidiaries, 
divisions, groups, affiliates, partnerships and joint ventures, and 
their directors, officers, managers, agents, and employees.
    I. ``State Testing Business'' means only those contracts, 
agreements, or other understandings between Harcourt and any entity for 
the development, delivery, or administration of any licensing 
examinations to any state agencies or departments that are in effect as 
of the date of the filing of the Complaint in this matter, including:
    1. All tangible assets that are used exclusively for the State 
Testing Business, including research and development activities, all 
networking equipment, tooling and fixed assets, personal property, 
office furniture, materials, supplies, and other tangible property, and 
all assets used exclusively in connection with the State Testing 
Business, including supply agreements; all customer lists, contracts, 
accounts, and credit records or similar records of all sales and 
potential sales relating exclusively to the State Testing Business; all 
sales support and promotional materials, advertising materials and 
production, sales, and marketing files relating exclusively to the 
State Testing Business; and
    2. All intangible assets that are used exclusively in the State 
Testing Business and are used in the development, production, 
servicing, sale and assessment of tests and test results including, but 
not limited to, all patents, licenses and sublicenses, intellectual 
property, copyrights, trademarks, trade names, service marks, service 
names, but no corporate trademarks or trade names of Thomson or 
Harcourt; technical information; computer software and related 
documentation; know-how, trade secrets, drawings, blueprints, designs, 
design protocols, specifications for materials, specifications for 
parts and devices; all research data concerning historic and current 
research and development relating exclusively to the State Testing 
Business including, but not limited to, all item banks, psychometric 
data, test development resources, statistical reports of test results, 
designs of computer-based examinations, the designs of experiments, and 
the results of successful and unsuccessful designs and experiments; 
quality assurance and control procedures; design tools and simulation 
capability; and all manuals and technical information defendants 
provide to those employees, customers, suppliers, agents or licensees 
exclusively devoted to the State Testing Business.
    Provided, however that, to the extent that any of these assets are 
also employed in the delivery or administration of any tests that are 
the subject of these contracts, such assets shall not deem to be part 
of the State Testing Business.
    J. ``Thomson'' means defendant The Thomson Corporation, a foreign 
corporation with its headquarters in Toronto, Ontario, its successors 
and assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, and their directors, officers, 
managers, agents, and employees.

II. Objectives

    The proposed Final Judgment filed in this case is meant to ensure 
the defendants' prompt divestiture of the College Textbook Products and 
either ASI or the Complete ASI Assets for the purposes of establishing 
one or more viable competitors in the college textbook publishing and 
computer-based testing businesses, to remedy the effects the United 
States alleges would otherwise result from Thomson's acquisition of 
certain assets of the Higher Education and Corporate and Professional 
Services Groups of Harcourt from Reed Elsevier. This Hold Separate 
Stipulation and Order ensures that, prior to such divestitures, the 
Divestiture Assets will continue to be economically viable and ongoing 
business concerns that will remain independent and uninfluenced by the 
defendants and, further, that competition will be maintained during the 
pendency of the ordered divestitures.

III. Jurisdiction and Venue

    The Court has jurisdiction over the subject matter of this action 
and over each of the parties hereto, and venue of this action is proper 
in the United States District Court for the District of Columbia.

IV. Compliance With and Entry of Proposed Final Judgment

    A. The parties stipulate that a Final Judgment in the form attached 
hereto as Exhibit A may be filed with and entered by the Court upon the 
motion of any party or upon the Court's own motion, at any time after 
compliance with the requirements of the Antitrust Procedures and 
Penalties Act (15 U.S.C. 16), and without further notice to any party 
or other proceedings, provided that the United States has not withdrawn 
its consent, which it may do at any time before the entry of the 
proposed Final Judgment by serving notice thereof on the defendants and 
by filing that notice with the Court.
    B. Defendants shall abide by and comply with the provisions of the 
proposed Final Judgment pending its entry by the Court, or until 
expiration of time for all appeals of any Court ruling declining entry 
of the proposed Final Judgment, and shall, from the date of the signing 
of this Hold Separate Stipulation and Order by the parties, comply with 
all the terms and provisions of the proposed Final Judgment as though 
the same were in full force and effect as an order of the Court.
    C. Defendants shall not consummate the transaction sought to be 
enjoined by the Compliant herein before the Court has signed this Hold 
Separate Stipulation and Order.
    D. This Hold Separate Stipulation and Order shall apply with equal 
force and effect to any amended proposed Final Judgment agreed upon in 
writing by the parties and submitted to the Court.
    E. In the event that: (1) The United States has withdrawn its 
consent, as provided in Section IV.A above; or (2) the proposed Final 
Judgment is not entered pursuant to this Hold Separate Stipulation and 
Order, the time has expired for all appeals of any Court ruling 
declining entry of the proposed Final Judgment, and the Court has not 
otherwise ordered continued compliance with the terms and provisions of 
the proposed Final Judgment, the parties are released from all further 
obligations under this Hold Separation Stipulation and Order, and the 
making of this Hold Separate Stipulation and Order shall be without 
prejudice to any party in this or any other proceeding.
    F. Defendants represent that the divestitures ordered in the 
proposed Final Judgment can and will be made, and that defendants will 
later raise no claim of mistake, hardship or difficulty of compliance 
as grounds for asking the Court to modify any of the provisions 
contained therein.

V. Hold Separate Provisions

    Until the divestitures required by the proposed Final Judgment have 
been accomplished:

[[Page 37054]]

    A. Defendants shall preserve, maintain, and continue to operate the 
Divestiture Assets as independent, ongoing, economically viable 
competitive businesses, with management, production, operation, 
marketing, distribution, licensing, or sale of such assets held 
entirely separate, distinct and apart from those of defendants' other 
operations. Defendants shall not coordinate the production, operation, 
development, delivery, marketing, distribution, licensing, sale, or 
editorial content of any products or services with those produced, 
operated, developed, delivered, marketed, distributed, licensed, or 
sold under any of the Divestiture Assets. Within twenty (20) calendar 
days after the entry of this Hold Separate Stipulation and Order, 
defendants will inform the United States of the steps taken to comply 
with this Hold Separate Stipulation and Order.
    B. Defendants shall take all steps necessary to ensure that: (1) 
The Divestiture Assets will be maintained and operated as independent, 
ongoing, economically viable and active competitors in the college 
textbook publishing and computer-based testing businesses; (2) 
management of the Divestiture Assets will not be influenced by 
defendants; and (3) the books, records, competitively sensitive sales, 
marketing, and pricing information, and decision-making concerning 
production, operation, development, delivery, marketing, distribution, 
licensing, sale, or editorial content of products, services, or 
facilities by or under any of the Divestiture Assets will be kept 
separate and apart from defendants' other operations.
    C. Defendants shall use all reasonable efforts to maintain and 
increase the sales and revenues of the products and services produced, 
operated, developed, delivered, marketed, distributed, licensed, or 
sold under the Divestiture Assets, and shall maintain at 2001 or 
previously approved levels for 2002, whichever are higher, all 
promotional, advertising, sales, technical assistance, marketing and 
merchandising support for the Divestiture Assets.
    D. Defendants shall provide sufficient working capital and lines 
and sources of credit to continue to maintain the Divestiture Assets as 
economically viable and competitive ongoing businesses, consistent with 
the requirements of Sections V.A and B of this Hold Separate 
Stipulation and Order.
    E. Defendants shall take all steps necessary to ensure that the 
Divestiture Assets are fully maintained in operable and saleable 
condition at no less than their current capacity and sales, and shall 
maintain and adhere to normal repair and maintenance schedules for the 
Divestiture Assets.
    F. Defendants shall not, except as part of a divestiture approved 
by the United States in accordance with the terms of the proposed Final 
Judgment, remove, sell, lease, assign, transfer, pledge or otherwise 
dispose of any of the Divestiture Assets.
    G. Defendants shall maintain, in accordance with sound accounting 
principles, separate, accurate, and complete financial ledgers, books 
and records that report on a periodic basis, such as the last business 
day of every month, consistent with past practices, the assets, 
liabilities, expenses, revenues and income of the Divestiture Assets.
    H. Defendants shall take no action that would jeopardize, delay, or 
impede the sale of the Divestiture Assets.
    I. Defendants' employees with primary responsibility for the 
production, operation, development, delivery, marketing, distribution, 
licensing, sale, or editorial content of the Divestiture Assets shall 
not be transferred or reassigned to other areas within the company 
except for transfer bids initiated by employees pursuant to defendants' 
regular, established job posting policy. Defendants shall provide the 
United States with ten (10) calendar days notice of such transfer.
    J. Defendants shall appoint a person or persons to oversee the 
Divestiture Assets and be responsible for defendants' compliance with 
this section. This person shall have complete managerial responsibility 
for the Divestiture Assets, subject to the provisions of the proposed 
Final Judgment. In the event such person is unable to perform his 
duties, defendants shall appoint, subject to the approval of the United 
States, a replacement within ten (10) working days. Should defendants 
fail to appoint a replacement acceptable to the United States within 
this time period, the United States shall appoint a replacement.
    K. Defendants shall take no action that would interfere with the 
ability of any trustee appointed pursuant to the Final Judgment to 
complete the divestiture pursuant to the Final Judgment to an Acquirer 
or Acquirers acceptable to the United States.
    L. This Hold Separate Stipulation and Order shall remain in effect 
until consummation of the divestitures required by the proposed Final 
Judgment or until further Order of the Court.

      Respectfully submitted,

For Plaintiff United States of America

James D. Villa,
D.C. Bar #417471, U.S. Department of Justice, Antitrust Division, 
Civil Task Force, 325 Seventh Street, NW., Washington, DC 20530, 
(202) 514-8361.

For Defendant Thomson Corporation

Paul L. Yde, Esq.,
D.C. Bar #449751, Vinson & Elkins, LLP, The Willard Office Building, 
1455 Pennsylvania Ave. NW., Washington, DC 20004-1008, (202) 639-
6685.

For Defendant Harcourt General, Inc.

Stephen M. Axinn, Esq.,
John D. Harkrider, Esq.,
Axinn, Veltrop & Harkrider LLP, 1370 6th Avenue, 19th Floor, New 
York, NY 10019, (212) 728-2222.

For Defendant Reed Elsevier Inc.

Robert A. Lipstein,
D.C. Bar #253724, Lipstein, Jaffe & Lawson, LLP, 1225 I Street, NW., 
Suite 700, Washington, DC 20005-3914, (202) 296-6655.

Order

    It is so ordered by the Court, this ______day of June, 2001.

----------------------------------------------------------------------
United States District Judge

Parties Entitled to Notice of Entry of Order

Counsel for Plaintiff United States of America

James R. Wade, U.S. Department of Justice, Antitrust Division, Civil 
Task Force, 325 Seventh Street, NW., Suite 300, Washington, DC 
20530.

Counsel for Defendant The Thomson Corporation

Paul L. Yde, Esq., Vinson & Elkins, LLP, The Willard Office 
Building, 1455 Pennsylvania Avenue, NW., Washington, DC 20004-1008.

Counsel for Harcourt General, Inc.

Stephen M. Axinn, Esq., Axinn, Veltrop & Harkrider LLP, 1370 6th 
Avenue, 19th Floor, New York, NY 10019.

Counsel for Reed Elsevier Inc.

Robert A. Lipstein, Esq., Lipstein, Jaffe & Lawson LLP, 1225 I 
Street, NW., Washington, DC 20005-3914.

Final Judgment

    Whereas, plaintiff, the United States of America (``United 
States''), filed its Complaint on June 27, 2001, plaintiff and 
defendants, The Thomson Corporation (``Thomson''), Harcourt General, 
Inc. (``Harcourt''), and Reed Elsevier Inc. (``ReedElsevier''), by 
their respective attorneys, have consented to the entry of this Final 
Judgment without trial or adjudication of any issue of fact or law, and 
without this Final Judgment constituting any evidence against or 
admission by any party regarding any issue of fact or law;

[[Page 37055]]

    And Whereas, defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    And Whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights or assets by defendants to assure 
that competition is not substantially lessened;
    And Whereas, plaintiff requires defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    And Whereas, defendants have represented to the United States that 
the divestitures required below can and will be made and that 
defendants will later raise no claim of hardship or difficulty as 
grounds for asking the Court to modify any of the divestiture 
provisions contained below;
    Now Therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is Ordered, Adjudged and Decreed:

I. Jurisdiction

    The Court has jurisdiction over the subject matter of and each of 
the parties to this action. The Complaint states a claim upon which 
relief may be granted against defendants under Section 7 of the Clayton 
Act, as amended (15 U.S.C. 18).

II. Definitions

    As used in this Final Judgment:
    A. ``Acquirer'' or ``Acquirers'' means the entity or entities to 
whom defendants divest any of the Divestiture Assets.
    B. ``AIMS Business'' means Harcourt's Agency Information Management 
Services business, which provides assistance to state agencies, 
departments, or other such organizations in the management of the state 
licensing process, including:
    1. All tangible assets that are used exclusively for the AIMS 
Business, including research and development activities, all networking 
equipment, tooling and fixed assets, personal property, inventory, 
office furniture, materials, supplies, and other tangible property, and 
all assets used exclusively in connection with the AIMS Business; all 
licenses, permits and authorizations issued by any governmental 
organization relating exclusively to the AIMS Business; all contracts, 
teaming arrangements, agreements, leases, commitments, certifications, 
and understandings relating exclusively to the AIMS Business, including 
supply agreements; all customer lists, contracts, accounts, and credit 
records or similar records of all sales and potential sales by the AIMS 
Business; all sales support and promotional materials, advertising 
materials and production, sales, and marketing files relating 
exclusively to the AIMS Business; all repair and performance records, 
and all other records relating exclusively to the AIMS Business;
    2. All intangible assets that are used exclusively in the AIMS 
Business and are used in the development, production, servicing, sale, 
administration, assessment, and dissemination of tests and test results 
including, but not limited to, all patents, licenses and sublicenses, 
intellectual property, copyrights, trademarks, trade names, service 
marks, service names, but no corporate trademarks or trade names of 
Thomson or Harcourt; technical information; computer software and 
related documentation; know-how, trade secrets, drawings, blueprints, 
design, design protocols, specifications for materials, specifications 
for parts and devices; all research data concerning historic and 
current research and development relating exclusively to the AIMS 
Business including, but not limited to the designs of experiments, and 
the results of successful and unsuccessful designs and experiments; 
quality assurance and control procedures; design tools and simulation 
capability; and all manuals and technical information defendants 
provide to those employees, customers, suppliers, agents or licensees 
exclusively devoted to the AIMS Business.
    C. ``ASI'' means all of the assets of defendant Harcourt's wholly-
owned subsidiary Assessment Systems, Inc., a Pennsylvania corporation 
with its headquarters in Bala Cynwyd, Pennsylvania, excluding 
Harcourt's AIMS Business and State Testing Business, as defined in this 
Final Judgment, but including the following:
    1. All tangible assets that comprise ASI, including research and 
development activities, all fixed, mobile, and other testing centers 
listed in Exhibit B, any accompanying property rights in real estate or 
equipment used in any of those testing centers, all networking 
equipment, tooling and fixed assets, personal property, inventory, 
office furniture, materials, supplies, and other tangible property, and 
all assets used exclusively in connection with ASI; all licenses, 
permits and authorizations issued by any governmental organization 
relating to ASI; all contracts, teaming arrangements, agreements, 
leases, commitments, certifications, and understandings relating to 
ASI, including supply agreements, all customer lists, contracts, 
accounts, and credit records or similar records of all sales and 
potential sales by ASI; all sales support and promotional materials, 
advertising materials and production, sales, and marketing files 
relating to ASI; all repair and performance records, and all other 
records relating to ASI;
    2. All intangible assets used in the development, production, 
servicing, sale, administration, assessment, and dissemination of tests 
and test results including, but not limited to, all patents, licenses 
and sublicenses, intellectual property, copyrights, trademarks, trade 
names, service marks, service names, but no corporate trademarks or 
trade names of Thomson or Harcourt; technical information; computer 
software and related documentation including, but not limited to, test 
drivers, scheduling software, and the OMEGA, EXPro, and REG2000 
software platforms; know-how, trade secrets, drawings, blueprints, 
designs, design protocols, specifications for materials, specifications 
for parts and devices; all research data concerning historic and 
current research and development relating to ASI including, but not 
limited to, all test item banks, psychometric data, statistical reports 
of test results, designs of computer-based examinations and testing 
centers, and the designs of experiments, and the results of successful 
and unsuccessful designs and experiments; quality assurance and control 
procedures, including all security measures used in the development, 
administration, and assessment of computer-based tests and the 
reporting of exam results; design tools and simulation capability; and 
all manuals and technical information defendants provide to their own 
employees, customers, suppliers, agents or licensees.
    D. ``College Textbook Products'' means all of the college textbooks 
identified on Exhibit A attached hereto. Each College Textbook Product 
also includes all ancillary educational materials offered for sale or 
under development by any subsidiary or division of the defendants that 
are designed to be specific to a textbook product identified in Exhibit 
A, including teacher editions, workbooks, notebooks, charts, audio, 
video, software, any CD-ROM, DVD-ROM, Internet and broadcast 
components, teacher support and staff development materials, and any 
other materials in any form, format or media, and also includes:
    1. All tangible assets that comprise the College Textbook Products,

[[Page 37056]]

including research and development activities, all original and digital 
artwork, film plates, and other reproductive materials relating to the 
College Textbook Products including, but not limited to, all 
manuscripts, illustrations, any other content, and any revisions or 
revision plans thereof in print or digital form; all licenses, permits 
and authorizations issued by any governmental organization relating to 
the College Textbook Products; all contracts, teaming arrangements, 
agreements, commitments, certifications, and understandings relating to 
the College Textbook Products including, but not limited to, author 
permissions and other similar agreements, supply and distribution 
agreements; all customer lists, contracts, accounts, and credit 
records, or similar records of all sales and potential sales of the 
College Textbook Products; all sales support and promotional materials 
advertising materials, and production, sales and marketing files 
relating to the College Textbook Products; at the Acquirer(s)' option, 
computers and other tangible assets used primarily for the production 
of the College Textbook Products; and all performance and all other 
records relating to the College Textbook Products;
    2. All intangible assets used in the development, production, 
servicing, marketing, and sale of the College Textbook Products 
including, but not limited to, all patents, licenses and sublicenses, 
intellectual property, copyrights, trademarks (registered and 
unregistered), trade names, service marks, service names, including all 
titles of existing products comprising the College Textbook Products, 
but no corporate trademarks or trade names of Thomson or Harcourt; all 
technical information, computer software and related documentation, 
know-how, trade secrets, drawings, blueprints, designs, design 
protocols, specifications for materials, specifications for parts and 
devices, safety procedures for the handling of materials and 
substances, quality assurance and control procedures, all manuals and 
technical information defendants provide to their own employees, 
customers, suppliers, agents or licensees; and all research data 
concerning historic and current research and development efforts 
relating to the College Textbook Products, including, but not limited 
to designs of experiments, and the results of successful and 
unsuccessful designs and experiments.
    Defendants shall use their best efforts to facilitate the 
assignment to the Acquirer(s) of any of the above that defendants 
presently hold or use pursuant to a license or any other agreement.
    E. ``Complete ASI Assets'' means ASI, the AIMS Business, and the 
State Testing Business, as defined in this Final Judgment.
    F. ``Divestiture Assets'' means the College Textbook Products and 
the Complete ASI Assets, as defined in this Final Judgment.
    G. ``Harcourt'' means defendant Harcourt General, Inc., a Delaware 
corporation with its headquarters in Chestnut Hill, Massachusetts, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnership and joint ventures, and their directors, 
officers, managers, agents, and employees.
    H. ``Reed Elsevier'' means defendant Reed Elsevier Inc., a 
Massachusetts corporation with its headquarters in Newton, 
Massachusetts, its successors and assigns, and subsidiaries, divisions, 
groups, affiliates, partnerships and joint ventures, and their 
directors, officers, managers, agents, and employees.
    I. ``Retained Products'' means any product offered for sale or in 
development by defendants as of the date of the filing of the Complaint 
in this matter that are not Divestiture Assets.
    J. ``State Testing Business'' means only those contracts, 
agreements, or other understandings between Harcourt and any entity for 
the development, delivery, or administration of any licensing 
examinations to any state agencies or departments that are in effect as 
of the date of the filing of the Complaint in this matter, including
    1. All tangible assets that are used exclusively for the State 
Testing Business, including research and development activities, all 
networking equipment, tooling and fixed assets, personal property, 
office furniture, materials, supplies, and other tangible property, and 
all assets used exclusively in connection with the State Testing 
Business, including supply agreements; all customer lists, contracts, 
accounts, and credit records or similar records of all sales and 
potential sales relating exclusively to the State Testing Business; all 
sales support and promotional materials, advertising materials and 
production, sales, and marketing files relating exclusively to the 
State Testing Business; and
    2. All intangible assets that are used exclusively in the State 
Testing Business and are used in the development, production, 
servicing, sale and assessment of tests and test results including, but 
not limited to, all patents, licenses and sublicenses, intellectual 
property, copyrights, trademarks, trade names, service marks, service 
names, but no corporate trademarks or trade names of Thomson or 
Harcourt; technical information; computer software and related 
documentation; know-how, trade secrets, drawings, blueprints, designs, 
design protocols, specifications for materials, specifications for 
parts and devices; all research data concerning historic and current 
research and development relating exclusively to the State Testing 
Business including, but not limited to, all item banks, psychometric 
data, test development resources, statistical reports of test results, 
designs of computer-based examinations, the designs of experiments, and 
the results of successful and unsuccessful designs and experiments; 
quality assurance and control procedures; design tools and simulation 
capability; and all manuals and technical information defendants 
provide to those employees, customers, suppliers, agents or licensees 
exclusively devoted to the State Testing Business.
    Provided, however that, to the extent that any of these assets are 
also employed the delivery or administration of any tests that are the 
subject of these contracts, such assets shall not be deemed to be part 
of the State Testing Business.
    K. ``Thomson'' means defendant The Thomson Corporation, a foreign 
corporation with its headquarters in Toronto, Ontario, its successors 
and assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, and their directors, officers, 
managers, agents, and employees.

III. Applicability

    A. This Final Judgment applies to Thomson, Harcourt, and Reed 
Elsevier, as defined above, and all other persons in active concert or 
participation with any of them who receive actual notice of this Final 
Judgment by personal service or otherwise.
    B. Defendant Thomson shall require, as a condition of the sale or 
other disposition of all or substantially all of their assets or of 
lesser business units that include the Divestiture Assets, that the 
purchaser agrees to be bound by the provisions of this Final Judgment, 
provided, however, that defendant Thomson need not obtain such an 
agreement from the Acquirer(s).

IV. Divestitures

    A. Defendants are ordered and directed, within one hundred and 
twenty (120) calendar days after the filing of the Complaint in this 
matter, or five (5) days after notice of the entry of

[[Page 37057]]

this Final Judgment by the Court, whichever is later, to divest the 
College Textbook Products in a manner consistent with this Final 
Judgment to an Acquirer or Acquirers acceptable to the United States in 
its sole discretion. The United States, in its sole discretion, may 
agree to one extension of time of up to thirty (30) calendar days, and 
shall notify the Court in such circumstances. Defendants agree to use 
their best efforts to divest the College Textbook Products as 
expeditiously as possible.
    B. Defendants are ordered and directed, within one hundred and 
twenty (120) calendar days after the filing of the Complaint in this 
matter, or five (5) days after notice of the entry of this Final 
Judgment by the Court, whichever is later, to divest in accordance with 
the procedures set forth in this paragraph, either ASI or the Complete 
ASI Assets to an Acquirer or Acquirers acceptable to the United States 
in its sole discretion. The United States, in its sole discretion, may 
agree to up to two extensions of this time period of up to thirty (30) 
calendar days each, and shall notify the Court in such circumstances. 
Defendants shall invite bids for both: (1) ASI, as defined in this 
Final Judgment, as well as (2) the Complete ASI Assets, as defined in 
this Final Judgment. Defendants shall permit all Acquirers to make an 
offer to purchase either or both ASI or the Complete ASI Assets. 
Defendants agree to use their best efforts to accomplish such 
divestitures as expeditiously as possible.
    C. In accomplishing the divestitures ordered by this Final 
Judgment, defendants promptly shall make known, by usual and customary 
means, the availability of the Divestiture Assets. Defendants shall 
inform any person making inquiry regarding a possible purchase of the 
Divestiture Assets that they are being divested pursuant to this Final 
Judgment and provide that person with a copy of this Final Judgment. 
Defendants shall offer to furnish to all prospective Acquirers, subject 
to customary confidentiality assurances, all information and documents 
relating to the Divestiture Assets customarily provided in a due 
diligence process except such information or documents subject to the 
attorney-client or work-product privileges. Defendants shall make such 
information available to the United States at the same time that such 
information is made available to any other person.
    D. Defendants shall provide the Acquirer(s) and the United States 
information relating to the personnel responsible for the editorial 
content of any College Textbook Product identified in Exhibit A to 
enable the Acquirer(s) to make offers of employment. In addition, 
defendants shall provide the Acquirer(s) and the United States 
information relating to all personnel of ASI or the Complete ASI 
Assets, as appropriate, including employees, agents, consultants, and 
independent contractors, to enable the Acquirer(s) to make offers of 
employment. Defendants shall not interfere with any negotiations by the 
Acquirer(s) to employ any defendant employee whose primary 
responsibility is for the editorial content of any College Textbook 
Product listed in Exhibit A, nor interfere with any negotiations by the 
Acquirer(s) to employ any employee, agent, consultant, or independent 
contractor of ASI or the Complete ASI Assets, as appropriate.
    E. Defendants shall permit prospective Acquirers of the Divestiture 
Assets to have reasonable access to personnel responsible for the 
editorial content of any College Textbook Product identified in Exhibit 
A and to all personnel of the Complete ASI Assets. Defendants shall 
permit prospective Acquirers of ASI to make inspections of the physical 
facilities of ASI, and to have access to any and all environmental, 
zoning, and other permit documents and information of ASI. Further, 
defendants shall permit prospective Acquirers of the Complete ASI 
Assets to make inspections of the physical facilities of the Complete 
ASI Assets, and to have access to any and all environmental, zoning, 
and other permit documents and information of the Complete ASI Assets. 
Defendants shall also permit prospective Acquirers of the Divestiture 
Assets to have reasonable access to any and all financial, operational, 
or other documents and information related to the Divestiture Assets 
that are customarily provided as part of a due diligence process.
    F. Defendants shall warrant to all Acquirers of the Divestiture 
Assets that each asset will be operational on the date of sale. 
Defendants Reed Elsevier and Harcourt shall make the warrants required 
under this provision to Thomson at the time of the sale by Reed 
Elsevier to Thomson of the Harcourt assets identified in Paragraph 10 
of the complaint filed in this matter, and shall thereafter have no 
further obligations under this provision.
    G. Defendants shall take no action that will impede in any way the 
permitting, publication, marketing, sale, development, administration, 
operation, or divestiture of the Divestiture Assets.
    H. Defendants shall warrant to the Acquirer(s) of the Divestiture 
Assets that there are no material defects in the environmental, zoning, 
or other permits pertaining to the operation of each asset, and that 
following the sale of the Divestiture Assets, defendants will not 
undertake, directly or indirectly, any challenges to the environmental, 
zoning, or other permits relating to the operation of the Divestiture 
Assets. Defendants Reed Elsevier and Harcourt shall make the warrants 
required under this provision to Thomson at the time of the sale by 
Reed Elsevier to Thomson of the Harcourt assets identified in Paragraph 
10 of the complaint filed in this matter, and shall thereafter have no 
further obligations under this provision.
    I. Defendant Thomson shall retain the right to use any College 
Textbook Product listed on Exhibit A to the extent necessary to fulfill 
the terms of agreements, in effect as of the date this Final Judgment 
is filed with the Court, with purchasers of the product lines listed on 
Exhibit A. The Acquirer of any College Textbook Product listed on 
Exhibit A shall grant defendant Thomson a royalty-free license to 
continue to use that College Textbook Product to the extent necessary 
to fulfill the terms of such existing agreements. The Acquirer of any 
College Textbook Product that defendants currently use, in whole or in 
part, in any Retained Product, shall grant to defendant Thomson a 
royalty-free license to continue to use the College Textbook Product to 
the same extent in the production or sale of the Retained Product.
    J. At the option of the Acquirer(s) of ASI and upon commercially 
reasonable terms, defendant Thomson shall contract with the Acquirer(s) 
to allow the Acquirer(s) to provide the delivery and administration of 
the State Testing Business. Such contractual arrangement between 
defendant Thomson and Acquirer(s) shall continue for the duration of 
the terms of each state contract, agreement or other understanding 
included in the State Testing Business. The Acquirer(s) of ASI shall 
grant to defendant Thomson a royalty-free license to any patents, 
licenses, or other intellectual property divested pursuant to Section 
IV.B of this Final Judgment to the extent that such intellectual 
property is used in the AIMS Business or the State Testing Business as 
of the date of the filing of the Complaint in this matter. This 
paragraph shall not apply in the event that defendant Thomson divests 
the Complete ASI Assets.
    K. Unless the United States otherwise consents in writing, the 
divestitures pursuant to Section IV, or by trustee appointed pursuant 
to Section V, of this Final Judgment, shall include the entire

[[Page 37058]]

Divestiture Assets, and shall be accomplished in such a way as to 
satisfy the Untied States, in its sole discretion, that the Divestiture 
Asset can and will be used by the Acquirer(s) of the College Textbook 
Products as part of a viable, ongoing college textbook publishing 
business and by the Acquirer of ASI or the Complete ASI Assets as part 
of a viable, ongoing computer-based testing business. Divestiture of 
the Divestiture Assets may be made to one or more Acquirers, provided 
that in each instance it is demonstrated to the sole satisfaction of 
the United States that the Divestiture Assets will remain viable and 
that the divestiture of such assets will remedy the competitive harm 
alleged in the Complaint. The divestitures, whether pursuant to Section 
IV or Section V of this Final Judgment.
    (1) Shall be made to an Acquirer (or Acquirers), that, in the 
United States's sole judgment, has the intent and capability (including 
the necessary managerial, operational, technical and financial 
capability) of competing effectively in the business of college 
textbook publishing in the case of the Acquirer(s) of the College 
Textbook Products and in the business of computer-based testing in the 
case of the Acquirer(s) of ASI or the complete ASI Assets; and
    (2) Shall be accomplished so as to satisfy the United States, in 
its sole discretion, that none of the terms of any agreement between an 
Acquirer (or Acquirers) and Thomson, Harcourt, and/or Reed Elsevier 
give Thomson, Harcourt, and/or Reed Elsevier the ability unreasonably 
to raise the Acquirer's or (Acquirers') costs, to lower the Acquirer's 
or (Acquirers') efficiency, or otherwise to interfere in the ability of 
the Acquirer(s) to compete effectively.

V. Appointment of Trustee

    A. If defendant Thomson has not divested the College Textbook 
Products and either ASI or the Complete ASI Assets within the time 
periods specified in Sections IV.A and B of this Final Judgment, 
defendant Thomson shall notify the United States of that fact in 
writing. Upon application of the United States, the Court shall appoint 
a trustee selected by the United States and approved by the Court to 
effect the divestitures of the College Textbook Products and the 
Complete ASI Assets, which are defined herein as the Divestiture 
Assets. Upon appointment, the trustee may only sell the Complete ASI 
Assets.
    B. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the Divestiture Assets. Upon 
notice to defendant Thomson, the trustee shall have the power and 
authority to accomplish the divestitures to an Acquirer (or Acquirers) 
acceptable to the Untied States at such price and on such terms as are 
then obtainable upon reasonable effort by the trustee, subject to the 
provisions of Sections IV, V, and VI of this Final Judgment, and shall 
have such other powers as the Court deems appropriate. Subject to 
Section V.D of this Final Judgment, the trustee may hire, at the cost 
and expense of defendant Thomson, any investment bankers, attorneys, or 
other agents, who shall be solely accountable to the trustee and are 
reasonably necessary in the trustee's judgment to assist in the 
divestitures.
    C. Defendants shall not object to a sale by the trustee on any 
ground other than the trustee's malfeasance. Any such objections must 
be conveyed in writing to the United States and the trustee within ten 
(10) calendar days after the trustee has provided the notice required 
under Section VI of this Final Judgment.
    D. The trustee shall serve at the cost and expense of defendant 
Thomson on such terms and conditions as the United States approves, and 
shall account for all monies derived from the sale of the assets sold 
by the trustee and all costs and expenses so incurred. After approval 
by the Court of the trustee's accounting, including fees for its 
services and those of any professionals and agents retained by the 
trustee, all remaining money shall be paid to defendant Thomson and the 
trust shall then be terminated. The compensation of the trustee and any 
professionals and agents retained by the trustee shall be reasonable in 
light of the value of the Divestiture Assets and based on a fee 
arrangement providing the trustee with an incentive based on the price 
and terms of the divestitures and the speed with which they are 
accomplished, but timeliness is paramount.
    E. Defendants Thomson and Harcourt shall use their best efforts to 
assist the trustee in accomplishing the required divestitures. The 
trustee and any consultants, accountants, attorneys, and other persons 
retained by the trustee shall have full and complete access to the 
personnel, books, records, and facilities of the businesses to be 
divested, and defendants Thomson and Harcourt shall develop financial 
and other information relevant to such businesses as the trustee may 
reasonably request, subject to reasonable protection for trade secret 
or other confidential research, development, or commercial information. 
Defendants shall take no action to interfere with or impede the 
trustee's accomplishment of the divestitures.
    F. After its appointment, the trustee shall file monthly reports 
with the United States and the Court setting forth the trustee's 
efforts to accomplish the divestitures ordered under this Final 
Judgment. To the extent that such reports contain information that the 
trustee deems confidential, such reports shall not be filed in the 
public docket of the Court. Such reports shall include the name, 
address, and telephone number of each person who, during the preceding 
month, made an offer to acquire, expressed an interest in acquiring, 
entered into negotiations to acquire, or was contacted or made an 
inquiry about acquiring, any interest in the Divestiture Assets, and 
shall describe in detail each contact with any such person. The trustee 
shall maintain full records of all efforts made to divest the 
Divestiture Assets.
    G. If the trustee has not accomplished such divestitures within six 
(6) months after its appointment, the trustee shall promptly file with 
the Court a report setting forth: (1) The trustee's efforts to 
accomplish the required divestitures; (2) the reasons, in the trustee's 
judgment, why the required divestitures have not been accomplished; and 
(3) the trustee's recommendations. To the extent that such reports 
contain information that the trustee deems confidential, such reports 
shall not be filed in the public docket of the Court. The trustee shall 
at the same time furnish such report to the United States who shall 
have the right to make additional recommendations consistent with the 
purpose of the trust. The Court thereafter shall enter such orders as 
it shall deem appropriate to carry out the purpose of the Final 
Judgment which may necessary, include extending the trust and the term 
of the trustee's appointment by a period requested by the United 
States.

VI. Notice of Proposed Divestitures

    A. Within two (2) business days following the execution of a 
definitive divestiture agreement, defendant Thomson or the trustee, 
whichever is then responsible for effecting the divestitures required 
herein, shall notify the United States of any proposed divestitures 
required by Section IV or V of this Final Judgment. If the trustee is 
responsible, it shall similarly notify defendant Thomson. The notice 
shall set forth the details of the proposed divestitures and list the 
name, address, and telephone number of each person not previously 
identified who offered or expressed an interest in or desire to acquire 
any ownership interest in any of

[[Page 37059]]

the Divestiture Assets, together with full details of the same.
    B. Within fifteen (15) calendar days of receipt by the United 
States of such notice, the United States may request from defendant 
Thomson and Harcourt, the proposed Acquirer(s), any other third party, 
or the trustee, if applicable, additional information concerning the 
proposed divestitures, the proposed Acquirer(s), and any other 
potential Acquirer. Defendants Thomson and Harcourt and the trustee 
shall furnish any additional information requested within fifteen (15) 
calendar days of the receipt of the request, unless the parties shall 
otherwise agree.
    C. Within thirty (30) calendar days after receipt of the notice or 
within twenty (20) calendar days after the United States has been 
provided the additional information requested from defendants, the 
proposed Acquirer(s), any third party, and the trustee, whichever is 
later, the United States shall provide written notice to defendant 
Thomson and the trustee, if there is one, stating whether or not it 
objects to the proposed divestitures. If the United States provides 
written notice that it does not object, the divestitures may be 
consummated, subject only to defendants' limited right to object to the 
sale under Section V. C of this Final Judgment. Absent written notice 
that the United States does not object to the proposed Acquirer(s) or 
upon objection by the United States, a divestiture proposed under 
Section IV or Section V shall not be consummated. Upon objection by 
defendants under Section V C, a divestiture proposed under Section V 
shall not be consummated unless approved by the Court.

VII. Financing

    Defendants shall not finance all or any part of any purchase made 
pursuant to Section IV or V of this Final Judgment.

VIII. Hold Separate

    Until the divestitures required by this Final Judgment have been 
accomplished, defendants shall take all steps necessary to comply with 
the Hold Separate Stipulation and Order entered by the Court. 
Defendants shall take no action that would jeopardize the divestitures 
ordered by the Court.

IX. Affidavits

    A. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, and every thirty (30) calendar days thereafter until 
the divestitures have been completed under Section IV or V, defendants 
shall deliver to the United States an affidavit as to the fact and 
manner of their compliance with Section IV or V of this Final Judgment. 
Each such affidavit shall include the name, address, and telephone 
number of each person who, during the preceding thirty (30) days, made 
an offer to acquire, expressed an interest in acquiring, entered into 
negotiations to acquire, or was contacted or made an inquiry about 
acquiring, any interest in any of the Divestiture assets, and shall 
describe in detail each contact with any such person during that 
period. Each such affidavit shall also include a description of the 
efforts defendants have taken to solicit buyers for the Divestiture 
Assets, and to provide required information to prospective purchasers, 
including the limitations, if any, on such information. Assuming the 
information set forth in the affidavit is true and complete, any 
objection by the United States to information provided by defendants, 
including limitations on information, shall be made within fourteen 
(14) days of receipt of such affidavit.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, each defendant shall deliver to the United States an 
affidavit that describes in reasonable detail all actions that have 
been taken and all steps such defendant has implemented on an ongoing 
basis to comply with Section VIII of this Final Judgment. Each 
defendant shall deliver to the United States an affidavit describing 
any changes to the efforts and actions outlined in such defendant's 
earlier affidavits filed pursuant to this section within fifteen (15) 
calendar days after the change is implemented.
    C. Defendants shall keep all records of all efforts made to 
preserve and divest the Divestiture Assets until one year after such 
divestiture has been completed.
    D. Defendant Reed Elsevier's obligations under paragraphs A. and B. 
of this Section shall cease upon completion of its sale to Thomson of 
the Harcurt assets identified in Paragraph 10 of the Complaint filed in 
this matter.

X. Compliance Inspection

    A. For the purposes of determining or securing compliance with this 
Final Judgment, or of determining whether the Final Judgment should be 
modified or vacated, and subject to any legally recognized privilege, 
from time to time duly authorized representatives of the United States 
Department of Justice, including consultants and other persons retained 
by the United States, shall, upon written request of a duly authorized 
representative of the Assistant Attorney General in charge of the 
Antitrust Division, and on reasonable notice to defendants, be 
permitted:
    (1) Access during defendants' office hours to inspect and copy or, 
at plaintiff's option, to require defendants to provide copies of, all 
books, ledgers, accounts, records and documents in the possession, 
custody, or control of defendants, relating to any matters contained in 
this Final Judgment; and
    (2) To interview, either informally or on the record, defendants' 
officers, employees, or agents, who may have their individual counsel 
present, regarding such matters. The interviews shall be subject to the 
reasonable convenience of the interviewee and without restraint or 
interference by defendants.
    B. Upon the written request of a duly authorized representative of 
the Assistant Attorney General in charge of the Antitrust Division, 
defendants shall submit written reports, under oath if requested, 
relating to any of the matters contained in this Final Judgment as may 
be requested.
    C. No information or documents obtained by the means provided in 
this section shall be divulged by the United States to any person other 
than an authorized representative of the executive branch of the United 
States, except in the course of legal proceedings to which the United 
States is a party (including grand jury proceedings), or for the 
purpose of securing compliance with this Final Judgment, or as 
otherwise required by law.
    D. If at the time information or documents are furnished by a 
defendant to the United States, such defendant represents and 
identifies in writing the material in any such information or documents 
to which a claim of protection may be asserted under Rule 26(c)(7) of 
the Federal Rules of Civil Procedure, and such defendant marks each 
pertinent page of such material, ``Subject to claim of protection under 
Rule 26(c)(7) of the Federal Rules of Civil Procedure,'' then the 
United States shall give such defendant ten (10) calendar days notice 
prior to divulging such material in any legal proceeding (other than a 
grand jury proceeding).

XI. No Reacquisition

    Defendant Thomson may not reacquire any part of the Divestiture 
Assets during the term of this Final Judgment.

XII. Retention of Jurisdiction

    The Court retains jurisdiction to enable any party to this Final 
Judgment to apply to the Court at any time for

[[Page 37060]]

further orders and directions as may be necessary or appropriate to 
carry out or construe this Final Judgment, to modify any of its 
provisions, to enforce compliance, and to punish violations of its 
provisions.

XIII. Expiration of Final Judgment

    Unless the Court grants an extension, this Final Judgment shall 
expire ten years from the date of its entry.

XIV. Public Interest Determination

    Entry of this Final Judgment is in the public interest.

Date:-----------------------------------------------------------------

Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16

----------------------------------------------------------------------
United States District Judge

                                Exhibit A
------------------------------------------------------------------------
             College course                     Divesture products
------------------------------------------------------------------------
Accounting: Financial: Introductory:     Pratt, Financial Accounting in
 Graduate.                                an Economic Context (2000)
                                          (Thomson)
Chemistry: Biochemistry: Principles:     Boyer, Concepts in Biochemistry
 One Term.                                (1999) (Thomson)
Chemistry: Introductory: Nursing/Allied  Hein, Introduction to General,
 Health.                                  Organic, and Biochemistry
                                          (1997) (Thomson)
                                         Lygre, General, Organic, and
                                          Biological Chemistry (1995)
                                          (Thomson)
Chemistry: Organic: Introductory: One    Brown, Introduction to Organic
 Term.                                    Chemistry (2000) (Harcourt)
Communication: Communication:            Alder, Interplay (1998)
 Interpersonal Communications.            (Harcourt)
                                         Verderber, Inter-Act: Using
                                          Interpersonal Communication
                                          Skills (1998) (Thomson)
                                         Trenholm, Interpersonal
                                          Communication (2000) (Thomson)
Communication: Communication:            Alder, Understanding Human
 Principles.                              Communication (2000)
                                          (Harcourt)
Communication: Journalism: Reporting...  Felder, Reporting for the Media
                                          (1997) (Harcourt)
                                         Lanson, Writing and Reporting
                                          the News (1994) (Harcourt)
                                         Scanlan, Reporting and Writing,
                                          Basics for the 21st Century
                                          (1999) (Harcourt)
Criminal Justice: Introductory.........  Inciardi, Elements of Criminal
                                          Justice (1996) (Harcourt)
                                         Inciardi, Criminal Justice
                                          (1998) (Harcourt)
Economics: Introductory................  Welch, Economics (1998)
                                          (Harcourt)
Economics: Microeconomics: Managerial    Samuelson, Managerial Economics
 Economics.                               (1998) (Harcourt)
                                         Truett, Managerial Economics
                                          (1998) (Thomson)
Education: Psychology: Learning and      Best, Cognitive Psychology
 Cognition.                               (1999) (Thomson)
 
                                         Medin, Cognitive Psychology
                                          (1996) (Harcourt)
                                         Matlin, Cognition (1998)
                                          (Harcourt)
Environmental Science: Introductory....  Raven, Environment (2000)
                                          (Harcourt)
Family and Consumer Studies: Nutrition.  Smolin, Nutrition: Science &
                                          Application (2000) (Harcourt)
Finance: Financial Markets and           Fraser, Commercial Banking: The
 Institutions: Commercial Bank            Management of Risk (1995)
 Management.                              (Thomson)
Finance: Financial Markets and           Kidwell, Financial
 Institutions: Financial Institutions     Institutions, Markets & Money
 and Markets.                             (2000) (Harcourt)
Finance: Survey........................  Melicher, Finance, Introduction
                                          to Institituions (2000)
                                          (Thomson)
Foreign Languages & Literature: French:  Magnan, Paroles (1999)
 Language: Elementary.                    (Harcourt)(Harcourt)
                                         Siskin, Situations et Contexts
                                          (1994) (Harcourt)
                                         Rassias, Le Francais Depart
                                          Arrivee (1992) (Thomson)
                                         Rosenthal, Objectif France:
                                          Introduction to French (1993)
                                          (Thomson)
                                         Rosenthal, Objectif France:
                                          Travaux Pratiques (1993)
                                          (Thomson)
Foreign languages and Literature:        Comeau, Ensemble (all versions
 French: Language: Intermediate.          and years) (Harcourt)
Foreign Language and Literature:         Berg, Litterature francaise
 French: Literature.                      (Vol. I) (1980) (Harcourt)
                                         Berg, Litterature francaise
                                          (Vol. II) (1997) (Harcourt)
Foreign Languages & Literature:          Gilman, Horizontes: Cultura Y
 Spanish: Language: Intermediate.         Literatura (1997) (Thomson)
                                         Gilman, Horizontes: Gramatica Y
                                          Conversacioin (1997) (Thomson)
Foreign Languages & Literature:          Anderson-Imber, Literatura
 Spanish: Literature: Literature.         Hispanoamerica (1970)
                                          (Harcourt)
                                         Mujica, Texto Y Vida:
                                          Introduction a La Literatura
                                          Hispanoamerica (1992)
                                          (Harcourt)
Geology: History.......................  Wicander & Monroe, Historical
                                          Geology: Evolution of the
                                          Earth (2000) (Thomson)
Management: Strategic Management: Small  Hodgetts, Effective Small
 Business Management.                     Business Management (1998)
                                          (Harcourt)
Marketing: Research....................  McDaniel/Gates, Contemporary
                                          Marketing Research (1999)
                                          (Thomson)
                                         McDaniel/Gates, Marketing
                                          Research Essentials (1998)
                                          (Thomson)
Mathematics: Calculus: General: Reform.  Ostebee, Calculus from
                                          Graphical, Numerical &
                                          Symbolic Points (1997)
                                          (Harcourt)
Mathematics: Trigonometry..............  Barnett, Analytical
                                          Trigonometry with Applications
                                          (1999) (Thomson)
Music: Applied: Piano/Organ............  Mach, Contemporary Class Piano
                                          (1997) (Harcourt)
Music: Music Theory: All Other.........  Benjamin, Music for Analysis:
                                          Examples from the Common
                                          Practice (1996) (Thomson)
Philosophy: Introductory...............  Solomon, Introducing Philosophy
                                          (1997) (Harcourt)
                                         Pojman, Philosophy: the Quest
                                          for Truth (1999)(Thomson)
                                         Pojman, Introduction to
                                          Philosophy: Classical and
                                          Contemporary Readings (2000)
                                          (Thomson)
                                         Kolak, Experience of Philosophy
                                          (1999) (Thomson)
                                         Titus, Living Issues in
                                          Philosophy (1995) (Thomson)

[[Page 37061]]

 
                                         Barcalow, Open Questions: An
                                          Introduction to Philosophy
                                          (1997) (Thomson)
Philsophy: Logic: Logic................  Kalish, Logic (1980) (Harcourt)
                                         Bonevac, Simple Logic (1999)
                                          (Harcourt)
                                         Baum, Logic (1996) (Harcourt)
                                         Pine, Essential Logic (1996)
                                          (Harcourt)
                                         Herrick The Many Worlds of
                                          Logic (1999) (Harcourt)
Philosophy: Philosophy of: Law.........  Schauer, Philosophy of Law
                                          (1996) (Harcourt)
Philosophy: Philosophy of: Religion....  Rowe & Wainright Philosophy of
                                          Religion: Selected Readings
                                          (1997) (Harcourt)
Psychology: Adjustment.................  Rathus, Adjustment and Growth
                                          (1998) (Harcourt)
Psychology: Clinical: Personality......  Monte, Beneth the Mask (1998)
                                          (Harcourt)
                                         McAdams, The Person: An
                                          Introduction to Personality
                                          (1994) (Harcourt)(Harcourt)
                                         Mischel, Introduction to
                                          Personality  (1998) (Harcourt)
Psychology: Development: Motivation and  Reeve, Understanding Motivation
 Emotion.                                 and Emotion (1997) (Harcourt)
Psychology: Physiological: Sensation     Coren, Sensation and Perception
 and Perception.                          (1999) (Harcourt)
Psychology: Research: Statistics.......  Witte, Statistics (1996)
                                          (Harcourt)
                                         Welkowitz, Introductory
                                          Statistics for Behavioral
                                          Sciences (1991) (Harcourt)
Psychology: Social: of Women...........  Rider, Our Voices: Psychology
                                          of Women (2000) (Thomson)
------------------------------------------------------------------------


    Exhibit B.--Locations of Assessment Systems, Inc. Testing Centers
------------------------------------------------------------------------
        Test center No.                Type               Address
------------------------------------------------------------------------
0019..........................  Flex.............  DBM-Falls Church Test
                                                    Center, 3141
                                                    Fairview Park Drive,
                                                    Suite 410, Falls
                                                    Church, VA 22042.
0020..........................  Flex.............  DBM/ASI Richmond
                                                    Center, 9011
                                                    Arboretum Parkway,
                                                    #150, Richmond, VA
                                                    23236.
0174..........................  Lease............  New York ASI
                                                    Assessment Center,
                                                    15 East 26th Street,
                                                    1st Floor, New York,
                                                    NY 10010.
0176..........................  Lease............  Tarrytown ASI Center,
                                                    220 White Plains,
                                                    2nd Floor,
                                                    Tarrytown, NY 10591.
0179..........................  Lease............  Westbury ASI Center,
                                                    1600 Stewart Avenue,
                                                    Suite 109, Westbury,
                                                    NY 11590.
0180..........................  Lease............  Binghamton ASI
                                                    Center, 49 Court
                                                    Street/Metro Center,
                                                    Binghamton, NY
                                                    13901.
0182..........................  Lease............  Albany ASI Center, 14
                                                    Computer Drive East,
                                                    2nd Floor, Albany,
                                                    NY 12205.
0183..........................  Lease............  Amherst/Buffalo ASI
                                                    Center, 385 N.
                                                    French Road, Suite
                                                    104, Amherst, NY
                                                    14228.
0184..........................  Lease............  Syracuse ASI Center,
                                                    6315 Fly Road, Suite
                                                    3, Syracuse, NY
                                                    13057.
0185..........................  Lease............  Rochester ASI Center,
                                                    1200-A Scottsville
                                                    Rd., Suite 397-Floor
                                                    C, Rochester, NY
                                                    14624.
0270..........................  Lease............  Boston ASI/Harcourt
                                                    Learning Center, 745
                                                    Boylston Street,
                                                    Suite #300, Boston,
                                                    MA 02116.
0271..........................  Flex.............  Downes Professional
                                                    Building, 1201
                                                    Westford Street,
                                                    Lowell, MA 01851.
0272..........................  Lease............  Springfield ASI
                                                    Center, Tower
                                                    Square, 1500 Main
                                                    Street, 25th Floor,
                                                    Springfield, MA
                                                    01115.
0273..........................  Lease............  Dartmouth ASI Center,
                                                    Smith Mill Shops,
                                                    331 State Road,
                                                    Suite D, North
                                                    Dartmouth, MA 02747.
0274..........................  Lease............  Malden ASI
                                                    Cosmetology Center,
                                                    Gateway Apartment
                                                    Building, 14 Summer
                                                    Street, Malden, MA
                                                    02148.
0275..........................  Flex.............  Mansfield Beauty
                                                    Academy, 266 Bridge
                                                    Street, Springfield,
                                                    MA 01103.
0277..........................  Flex.............  Rob Roy Academy, 150
                                                    Pleasant Street,
                                                    Worcester, MA 01608.
0330..........................  Flex.............  ASI Phoenix/DBM, 2398
                                                    E. Camelback Road,
                                                    Suite 600, Phoenix,
                                                    AZ 85016.
0331..........................  Lease............  Tucson ASI Center,
                                                    1605 N. Wilmot,
                                                    Suite 105 B, Tucson,
                                                    AZ 85712.
0416..........................  Lease............  Little Rock ASI
                                                    Assessment,
                                                    University Tower
                                                    Building, 1123 S.
                                                    University, Suite
                                                    915, Little Rock, AR
                                                    72204.
0417..........................  Lease............  Springdale ASI Center-
                                                    Building H,
                                                    Springdale Business
                                                    Park, 3291 S.
                                                    Thompson, Suite 102
                                                    B, Springdale, AR
                                                    72764.
0418..........................  Flex.............  El Dorado, Arkansas.
0540..........................  Lease............  Sacramento ASI
                                                    Center, 1300 Ethan
                                                    Way, Suite 330,
                                                    Sacramento, CA
                                                    95825.
0541..........................  Flex.............  DBM/ASI, 100 Bayview
                                                    Circle, Suite 5500,
                                                    Newport Beach, CA
                                                    92660.

[[Page 37062]]

 
0542..........................  Flex.............  San Jose ASI Center,
                                                    1735 Technology
                                                    Drive, Suite 150,
                                                    Career Transition
                                                    Center, San Jose, CA
                                                    95110.
0543..........................  Lease............  San Diego ASI Center,
                                                    Kearny Office Park,
                                                    Suite 109, 8334
                                                    Claremont Mesa
                                                    Boulevard, San
                                                    Diego, CA 92111.
0545..........................  Lease............  Glendale ASI
                                                    Assessment Center,
                                                    213 N. Orange
                                                    Street, Suite D,
                                                    Glendale, CA 91203.
0546..........................  Lease............  DBM-Bakersfield Test
                                                    Center, Ming Office
                                                    Park, 5500 Ming
                                                    Avenue, Suite 490,
                                                    Bakersfield, CA
                                                    93309.
0547..........................  Lease............  Edgewater Park Plaza,
                                                    7700 Edgewater
                                                    Drive, 600 Building,
                                                    Suite 602, Oakland,
                                                    CA 94621.
0550..........................  Flex.............  DBM Site/Los Angeles,
                                                    6701 Center Drive
                                                    West, Suite 11011,
                                                    Los Angeles, CA
                                                    90045.
0623..........................  Lease............  Colorado Springs ASI
                                                    Center, 1045 Garden
                                                    of Gods Road, Unit
                                                    F, Colorado Springs,
                                                    CO 80907.
0624..........................  Lease............  Grand Junction ASI
                                                    Center, Skyline
                                                    Building, 751
                                                    Horizon Court #101,
                                                    Grand Junction, CO
                                                    81506.
0625..........................  Lease............  Denver ASI Center,
                                                    Denver Interplaza,
                                                    Suite G, 601 S.
                                                    Broadway, Denver, CO
                                                    80209.
0626..........................  Lease............  Pueblo ASI Center,
                                                    University Center,
                                                    41 Montebello, 2nd
                                                    Floor, Pueblo, CO
                                                    81001.
0627..........................  Flex.............  Bayfield Senior High
                                                    School, 800 County
                                                    Road 501, Room 103,
                                                    Bayfield, CO 81122.
0629..........................  Lease............  Greeley ASI Center,
                                                    5754 West 11th
                                                    Street, #203,
                                                    Greeley, CO 80634.
0714..........................  Lease............  Rocky Hill ASI
                                                    Center, Pavilion-
                                                    West Shopping
                                                    Center, 632 Cromwell
                                                    Avenue, Unit A,
                                                    Rocky Hill, CT
                                                    06067.
0716..........................  Flex.............  DBM-Stamford Test
                                                    Center, Drake Beam
                                                    Morin, One Station
                                                    Place, 3rd Floor
                                                    South, Stamford, CT
                                                    06901.
0805..........................  Lease............  Dover ASI Center,
                                                    Kays Building-Suite
                                                    202, 1012 College
                                                    Road, Dover, DE
                                                    19904.
0807..........................  Lease............  Wilmington/New Castle
                                                    ASI Center, New
                                                    Castle Corporation
                                                    Common Complex, 2
                                                    Reads Way-Suite 212,
                                                    New Castle, DE
                                                    19720.
0918..........................  Lease............  DC ASI Center, Suite
                                                    820, 1000 Vermont
                                                    Avenue, NW.,
                                                    Washington, DC
                                                    20005.
1055..........................  Lease............  Harcourt/ASI Orlando
                                                    Center, Harcourt
                                                    Building, 6277 Sea
                                                    Harbor Drive,
                                                    Orlando, FL 32887.
1056..........................  Lease............  Boynton Beach ASI
                                                    Center, Woolbright
                                                    Professional
                                                    Building, 2240
                                                    Woolbright Road,
                                                    Suite #403, Boynton
                                                    Beach, FL 33426.
1057..........................  Lease............  Ft. Lauderdale ASI
                                                    Center, Oakland
                                                    Commerce Center,
                                                    3317 NW 10th
                                                    Terrace, Suite 401,
                                                    Ft. Lauderdale, FL
                                                    33309.
1058..........................  Lease............  Ft. Myers ASI Center,
                                                    11691 Gateway
                                                    Boulevard/Bank of
                                                    America Building/
                                                    Suite 200, Ft.
                                                    Myers, FL 33913.
1059..........................  Lease............  Gainesville ASI
                                                    Center, Northwood
                                                    Park, 5000 NW 34th
                                                    Street, Unit #10,
                                                    Gainesville, FL
                                                    32606.
1060..........................  Lease............  Jacksonville ASI
                                                    Center, Centurion
                                                    Square, Suite #11,
                                                    8380 Baymeadows
                                                    Road, Jacksonville,
                                                    FL 32256.
1061..........................  Lease............  Miami ASI Center,
                                                    Atrium Office Park,
                                                    3900 NW 79th Avenue,
                                                    Suite 518, Miami, FL
                                                    33166.
1062..........................  Lease............  Pensacola ASI Center,
                                                    Eastgate Plaza,
                                                    7143A North 9th
                                                    Avenue, Pensacola,
                                                    FL 32504.
1063..........................  Lease............  Tallahassee ASI
                                                    Center, Capital
                                                    Circle Commerce
                                                    Center, 508 Capital
                                                    Circle SE, Suite D-
                                                    1, Tallahassee, FL
                                                    32301.
1064..........................  Lease............  Tampa ASI Center,
                                                    Carrollwood
                                                    Crossing, 4012 Gunn
                                                    Highway/Suite 110,
                                                    Tampa, FL 33624.
1065..........................  Lease............  Hollywood ASI Center,
                                                    6363 Taft Street,
                                                    Suite 101,
                                                    Hollywood, FL 33024.
1066..........................  Lease............  St. Petersburg ASI
                                                    Center, Bay View
                                                    Centre Building,
                                                    Suite 250, 11300 4th
                                                    Street North, St.
                                                    Petersburg, FL
                                                    33716.
1067..........................  Lease............  Miami 2 ASI Center,
                                                    5805 Blue Lagoon
                                                    Drive-Suite #380,
                                                    Waterford Building
                                                    Complex, Miami, FL
                                                    33126.
1068..........................  Lease............  Daytona Beach ASI
                                                    Center, Sun Trust
                                                    Bank Building, 501
                                                    N. Grandview Avenue/
                                                    Suite #205, Daytona
                                                    Beach, FL 32118.
1070..........................  Lease............  Lake Mary ASI Center,
                                                    100 Technology Park,
                                                    Suite 165, Lake
                                                    Mary, FL 32746.
1072..........................  Flex.............  DBM-Boca Raton Test
                                                    Center, 777 Yamato
                                                    Road, Suite 310,
                                                    Boca Raton, FL
                                                    33431.
1073..........................  Flex.............  DBM-Miami 4 Test
                                                    Center, 5200 Blue
                                                    Lagoon Drive, Suite
                                                    #110, Miami, FL
                                                    33126.
1120..........................  Lease............  Norcross ASI Center,
                                                    6500 McDonough
                                                    Drive, Building E--
                                                    Suite 5, Norcross,
                                                    GA 30093.
1121..........................  Lease............  Marietta ASI Center,
                                                    Cobb Corporate
                                                    Center, 425 Franklin
                                                    Road, Suite 525,
                                                    Marietta, GA 30067.

[[Page 37063]]

 
1122..........................  Lease............  Macon ASI Center, 828
                                                    Walnut Street, Suite
                                                    B, Macon, GA 31201.
1123..........................  Flex.............  Realty Exec., 231
                                                    Stephenson Avenue,
                                                    2nd Floor Training
                                                    Room, Savannah, GA
                                                    31405.
1124..........................  Lease............  Augusta ASI Center,
                                                    Westgate Center
                                                    Office Park, 2531
                                                    Center West Parkway,
                                                    Suite 232, Augusta,
                                                    GA 30909.
1125..........................  Lease............  Tifton ASI Center,
                                                    114 West 12th
                                                    Street, Suite G,
                                                    Tifton, GA 31794.
1128..........................  Lease............  Marietta North ASI
                                                    Center, 1279
                                                    Kennestone Circle,
                                                    Suite 100, Marietta,
                                                    GA 30066.
1236..........................  Lease............  Honolulu ASI Center,
                                                    Kapiolani Business
                                                    Plaza, 1580 Makaloa,
                                                    Suite 900, Honolulu,
                                                    HI 96814.
1237..........................  Flex.............  Waikloa ASI Center,
                                                    68-1845 Waikoloa
                                                    Shopping Center,
                                                    Suite 211, Waikoloa
                                                    Highlands, HI 96738.
1238..........................  Flex.............  Kauai Community
                                                    College, Campus
                                                    Center Building,
                                                    Room 214, 3-1901
                                                    Kaumaulii Highway,
                                                    Lihue, HI 96766.
1239..........................  Flex.............  Lihikai School, 335
                                                    S. Papa Avenue,
                                                    Building C, Rooms
                                                    1&2, Kahula-Maui, HI
                                                    96732.
1320..........................  Lease............  Boise ASI Center,
                                                    Blackeagle Center,
                                                    9376 Overland Road,
                                                    Boise, ID 83709.
1321..........................  Flex.............  Tesh, Inc., 3803
                                                    Industrial Avenue
                                                    South, Coeur d'
                                                    Alene, ID 83814.
1322..........................  Lease............  Pocatello ASI Center,
                                                    Re/Max Building, 812
                                                    E. Clark Street,
                                                    Pocatello, ID 83201.
1440..........................  Lease............  Springfield ASI
                                                    Center, Realty
                                                    Plaza, Suite 301,
                                                    3180 Adloff Lane,
                                                    Springfield, IL
                                                    62703.
1441..........................  Lease............  Schaumberg ASI
                                                    Center, Salem Plaza,
                                                    1089 North Salem
                                                    Plaza, Schaumberg,
                                                    IL 60194.
1442..........................  Lease............  Chicago ASI Center,
                                                    645 North Michigan
                                                    Avenue, Room 410,
                                                    Michigan & Erie,
                                                    Chicago, IL 60611.
1445..........................  Lease............  Westmont ASI Center,
                                                    508 A East Ogden
                                                    Avenue, Westmont, IL
                                                    60559.
1446..........................  Flex.............  Knox College, Corner
                                                    of South & West
                                                    Street, Science-Math
                                                    Center, Room A-107,
                                                    Galesburg, IL 61401.
1448..........................  Flex.............  DBM-Deerfield Test
                                                    Center, 520 Lake
                                                    Cook Road, Suite
                                                    200, Deerfield, IL
                                                    60015.
1451..........................  Flex.............  John A Logan College,
                                                    700 John Logan
                                                    Drive,
                                                    Administrative
                                                    Building, E-132,
                                                    Carterville, IL
                                                    62918.
1541..........................  Lease............  Evansville ASI
                                                    Center, 125 N.
                                                    Weinbach Avenue,
                                                    Suite 720,
                                                    Evansville, IN
                                                    47711.
1542..........................  Lease............  Schererville ASI
                                                    Center, Oak Ridge
                                                    Center, 142-4 East
                                                    Highway 30,
                                                    Schererville, IN
                                                    46375.
1543..........................  Lease............  Indianapolis ASI
                                                    Center, First Floor,
                                                    Room 170, 9102 North
                                                    Meridian Street,
                                                    Indianapolis, IN
                                                    46260.
1620..........................  Flex.............  Univ Park Holiday
                                                    Inn, 1800 50th
                                                    Street, Lucas Room,
                                                    W. Des Moines, IA
                                                    50266.
1621..........................  Mobile...........  Holiday Inn Express,
                                                    North Cedar Rapids,
                                                    1230 Collins Road,
                                                    Cedar Rapids, IA
                                                    52402.
1622..........................  Mobile...........  Sioux City Hilton,
                                                    707 4th Street,
                                                    Sioux City, IA
                                                    51106.
1704..........................  Flex.............  DBM-Overland Park
                                                    Test Center, 7400
                                                    West 130th Street,
                                                    Suite 150, Overland
                                                    Park, KS 66213.
1705..........................  Flex.............  Johnson County
                                                    Community College,
                                                    12345 College
                                                    Boulevard, CC
                                                    Building, 2nd Floor,
                                                    Room 224, Overland
                                                    Park, KS 66210.
1706..........................  Lease............  Wichita ASI Center,
                                                    Building 400,
                                                    Northrock Business
                                                    Park, 3450 N. Rock
                                                    Road, Suite 407,
                                                    Wichita, KS 67266.
1707..........................  Lease............  Topeka ASI Center,
                                                    2942 B Wanamaker
                                                    Drive, Suite #2D,
                                                    Topeka, KS 66604.
1708..........................  Flex.............  Hays High School,
                                                    2300 East 13th
                                                    Street, Room 102
                                                    Hays, KS 67601.
1827..........................  Lease............  Lexington ASI Center,
                                                    2365 Harrodsburg
                                                    Road, Suite B-175,
                                                    Lexington, KY 40504.
1828..........................  Lease............  Louisville ASI
                                                    Center, 11003
                                                    Bluegrass Parkway,
                                                    Suite 590,
                                                    Louisville, KY
                                                    40299.
1942..........................  Lease............  Shreveport ASI
                                                    Center, Harry
                                                    Patterson Tower,
                                                    6007 Financial
                                                    Plaza, Suite 505,
                                                    Shreveport, LA
                                                    71129.
1943..........................  Lease............  Metairie ASI Center,
                                                    Hibernia Bank
                                                    Building, Suite 411,
                                                    2201 Veterans
                                                    Memorial Boulevard
                                                    Metairie, LA 70005.
2015..........................  Flex.............  Beal College, 629
                                                    Main Street, Bangor,
                                                    ME 04401.
2016..........................  Lease............  Portland ASI Center,
                                                    500 Southborough
                                                    Drive, S. Portland,
                                                    ME 04106.
2150..........................  Lease............  Parkville ASI Center,
                                                    North Plaza Office
                                                    Building, #204, 8813
                                                    Waltham Woods Road,
                                                    Parkville, MD 21234.
2151..........................  Lease............  Crofton ASI Center,
                                                    2137 Epsey Court,
                                                    Unit #5, Crofton, MD
                                                    21114.
2152..........................  Flex.............  Landover ASI Center,
                                                    Metro-Plex II, Suite
                                                    400, 8201 Corporate
                                                    Drive, Landover, MD
                                                    20785.

[[Page 37064]]

 
2153..........................  Flex.............  Allegany Community
                                                    College, 12401
                                                    Willowbrook Road,
                                                    Room 20, Continuing
                                                    Education Building,
                                                    Cumberland, MD
                                                    21502.
2260..........................  Lease............  Anchorage ASI Center,
                                                    2217 E. Tudor Road,
                                                    Suite 5, Anchorage,
                                                    AK 99503.
2261..........................  Lease............  Fairbanks ASI Center,
                                                    Eagle Plaza Mall,
                                                    418 3rd Avenue, Unit
                                                    1B, Fairbanks, AK
                                                    99701.
2262..........................  Lease............  University of Alaska,
                                                    11120 Glasier
                                                    Highway, Juneau, AK
                                                    99801.
2345..........................  Lease............  Redford ASI Center,
                                                    Heritage Plaza
                                                    Shopping Center,
                                                    14645 Telegraph
                                                    Road, Redford, MI
                                                    48239.
2346..........................  Lease............  Lansing ASI Center,
                                                    6920 S. Cedar, Suite
                                                    6, Lansing, MI
                                                    48911.
2347..........................  Lease............  Grand Rapids ASI Test
                                                    Center, 4489 Byron
                                                    Center Drive,
                                                    Wyoming, MI 49509.
2348..........................  Flex.............  DBM Troy Test Center,
                                                    201 West Big Beaver
                                                    Road, Suite 450,
                                                    Troy, MI 48007.
2353..........................  Flex.............  Marquette High
                                                    School, 1203 W. Fair
                                                    Avenue, Room 222, NE
                                                    entrance, Marquette,
                                                    MI 49855.
2440..........................  Lease............  Edina ASI Center,
                                                    4550 W. 77th Street,
                                                    Suite 224, Edina, MN
                                                    55435.
2441..........................  Lease............  Duluth ASI Center,
                                                    718 Medical Arts
                                                    Building, 324 W.
                                                    Superior Street,
                                                    Suite 718, Duluth,
                                                    MN 55802.
2442..........................  Flex.............  University Rochester
                                                    Center (UCR), 851
                                                    30th Avenue SE, Room
                                                    SH105--Singley Hall,
                                                    Rochester, MN 55904.
2443..........................  Lease............  Waite Park/St. Cloud
                                                    ASI Center, Market
                                                    Place Annex, 256 2nd
                                                    Avenue South, Waite
                                                    Park, MN 56387.
2444..........................  Lease............  Moorhead ASI Center,
                                                    McDonald's Plaza,
                                                    501 Main Avenue,
                                                    Moorhead, MN 56560.
2445..........................  Flex.............  Marshall High School,
                                                    401 South Saratoga
                                                    Street, Room C20,
                                                    Marshall, MN 56258.
2520..........................  Lease............  Ridgeland ASI Center,
                                                    Odyssey North
                                                    Shopping Center, 731
                                                    S. Pear Orchard
                                                    Road, Suite 35,
                                                    Ridgeland, MS 39157.
2616..........................  Lease............  St. Ann ASI Center,
                                                    500 Northwest Plaza
                                                    Office Tower, Suite
                                                    813, St. Ann, MO
                                                    63074.
2617..........................  Lease............  Kansas City ASI
                                                    Center, Broadway
                                                    Summit Building,
                                                    3101 Broadway, Suite
                                                    214, Kansas City, MO
                                                    64111.
2618..........................  Lease............  Springfield ASI
                                                    Center, 3046 S.
                                                    Delaware, Suite K,
                                                    Springfield, MO
                                                    65804.
2620..........................  Flex.............  DBM--St. Louis Test
                                                    Center, Clayton
                                                    Mercantile Center,
                                                    8000 Maryland
                                                    Avenue, Suite 1300,
                                                    St. Louis, MO 63105.
2722..........................  Mobile...........  The Billings Hotel
                                                    and Conference
                                                    Center, 1223
                                                    Mullowny Lane,
                                                    Billings, MT 59101.
2730..........................  Flex.............  Billings Skyview High
                                                    School, 1775 High
                                                    Sierra Boulevard,
                                                    Room #126, Billings,
                                                    MT 59105.
2731..........................  Flex.............  University of
                                                    Montana, The Lodge
                                                    Building, Room 231,
                                                    Arthur & University
                                                    Avenues, Missoula,
                                                    MT 59812.
2820..........................  Lease............  Omaha ASI Center,
                                                    11635 Arbor Street
                                                    #100, Omaha, NE
                                                    68144.
2914..........................  Lease............  Las Vegas ASI Center,
                                                    Renaissance III,
                                                    3230 E. Flamingo
                                                    Road, Suite #1, Las
                                                    Vegas, NV 89121.
2915..........................  Lease............  Reno ASI Center, 5250
                                                    S. Virginia Street,
                                                    Suite 255, Reno, NV
                                                    89502.
3020..........................  Lease............  Lebanon ASI Center,
                                                    Miracle Mile Plaza
                                                    #8, Route #4,
                                                    Lebanon, NH 03766.
3180..........................  Lease............  Milburn ASI Center,
                                                    15 Bleeker Street,
                                                    Suite #102,
                                                    Millburn, NJ 07041.
3183..........................  Lease............  Mt. Laurel ASI
                                                    Center, Princeton
                                                    Place, 3747 Church
                                                    2nd Floor, Mount
                                                    Laurel, NJ 08054.
3184..........................  Lease............  Cedar Knolls ASI
                                                    Center, 14 Ridgedale
                                                    Avenue, Cedar
                                                    Knolls, NJ 07927.
3185..........................  Lease............  Northfield ASI
                                                    Center, 950 Tilton
                                                    Road, Northfield, NJ
                                                    08225.
3186..........................  Lease............  Toms River ASI,
                                                    Summer Plaza, 1228
                                                    Route 27 West, Suite
                                                    5, Toms River, NJ
                                                    08753.
3187..........................  Lease............  Hamilton Township ASI
                                                    Center, Quakerbridge
                                                    Plaza, Building 2,
                                                    3444 Quakerbridge
                                                    Road--Rear, Hamilton
                                                    Township, NJ 08619.
3188..........................  Lease............  Pompton Plains ASI
                                                    Center, Scott
                                                    Center, 449 Route 23
                                                    (Southbound),
                                                    Pompton Plains, NJ
                                                    07444.
3220..........................  Lease............  Albuquerque ASI
                                                    Center, 2815
                                                    Broadbent Parkway,
                                                    NE, Suite C,
                                                    Albuquerque, NM
                                                    87107.
3320..........................  Lease............  Montgomery ASI
                                                    Center, East Park
                                                    Plaza, 140 Mendel
                                                    Parkway, Montgomery,
                                                    AL 36117.
3221..........................  Lease............  BZirmingham ASI
                                                    Center, 216
                                                    Acquarius Drive,
                                                    Suite 305,
                                                    Homewoodd, AL 35209.
3440..........................  Flex.............  DBM--Charlotte Test
                                                    Center, 8720 Red Oak
                                                    Boulevard, Suite
                                                    301, Charlotte, NC
                                                    28217.

[[Page 37065]]

 
3441..........................  Flex.............  DBM--Raleigh Test
                                                    Cetner, 1121 Situs
                                                    Court, Suite 100,
                                                    Raleigh, NC 27606.
3442..........................  Lease............  Wilmington ASI
                                                    Center, Pine Valley
                                                    II Shopping Center,
                                                    3534 S. College
                                                    Road, Unit D,
                                                    Wilmington, NC
                                                    28412.
3443..........................  Lease............  Raleigh ASI Center,
                                                    2801 Blue Ridge
                                                    Road, Suite 110,
                                                    Raleigh, NC 27607.
3444..........................  Lease............  Statesville ASI
                                                    Center, City Center
                                                    Building, 211 S.
                                                    Center Street, Suite
                                                    218, Statesville, NC
                                                    28687.
3445..........................  Lease............  Huntersville ASI
                                                    Center, Northcross
                                                    Corporate Center,
                                                    16419 B Northcross
                                                    Drive Hunterville,
                                                    NC 28078.
3446..........................  Lease............  Ascheville ASI
                                                    Center, 1316 D
                                                    Patton Avenue,
                                                    Asheville, NC 28806.
3447..........................  Lease............  New Bern ASI Center,
                                                    3515 Trent Road, #16
                                                    Village Square, New
                                                    Bern, NC 28562.
3520..........................  Mobile...........  Radisson Inn
                                                    Bismarck, 800 South
                                                    Third Street,
                                                    Bismarck, ND 58504.
3521..........................  Mobile...........  Westward Ho Grand
                                                    Forks, 3500 Gateway
                                                    Drive, Grand Forks,
                                                    ND 58206.
3522..........................  Mobile...........  Holiday Inn Minot,
                                                    2200 Burdick
                                                    Expressway, East,
                                                    Minot, ND 58206.
3656..........................  Lease............  Columbus ASI Center,
                                                    6555 Busch
                                                    Boulevard, Suite
                                                    101, Columbus, OH
                                                    43229.
3657..........................  Lease............  Cleveland ASI Center,
                                                    The Superior
                                                    Building, Suite
                                                    1420, 815 Superior
                                                    Avenue NE,
                                                    Cleveland, OH 44114.
3658..........................   Lease...........  Cincinnati ASI,
                                                    Center, Court Street
                                                    Center, Suite 475 E,
                                                    250 West Court
                                                    Street, Cincinnati,
                                                    OH 45202.
3720..........................  Lease............  Oklahoma City ADSI
                                                    Center, Shepherd
                                                    Mall, Suite 45, 2401
                                                    NW 23rd Street,
                                                    Oklahoma City, OK
                                                    73107.
3721..........................  Lease............  Tulsa ASI Center,
                                                    Business Common Tech
                                                    Center, 5115 S.
                                                    122nd E. Avenue,
                                                    Suite 201, Tulsa, OK
                                                    74146.
3722..........................  Mobile...........  Ardmore Omega Mobile,
                                                    Best Western/ASI, 6
                                                    Holiday Drive,
                                                    Ardmore, OK 73401.
3819..........................  Flex.............  Portland ASI/DBM
                                                    Center, 2
                                                    Centerpointe Drive,
                                                    Suite 100, Lake
                                                    Oswego, OR 97035.
3820..........................  Lease............  Springfield ASI
                                                    Center, Gateway
                                                    Market Place, 840
                                                    Beltline Road, #206,
                                                    Springfield, OR
                                                    97477.
3972..........................  Lease............  Bala Cynwyd ASI
                                                    Center, 3 Bala Plaza
                                                    West, 2nd Floor,
                                                    Bala Cynwyd, PA
                                                    19004.
3973..........................  Lease............  Pittsburgh ASI
                                                    Center, Campbell Run
                                                    Business Center, 500
                                                    Business Center
                                                    Drive, Suite 501,
                                                    Pittsburgh, PA
                                                    15205.
3974..........................  Flex.............  DBM-Berwyn Test
                                                    Center, 1205
                                                    Westlakes Drive,
                                                    Suite 250, Berwyn,
                                                    PA 19312.
3976..........................  Flex.............  South Hills Business
                                                    School, 480
                                                    Waupelani Drive,
                                                    State College, PA
                                                    16801.
3977..........................  Lease............  Scranton ASI Center,
                                                    409 Lackawanna
                                                    Avenue, Mezzanine
                                                    Level, Scranton, PA
                                                    18503.
3979..........................  Mobile...........  Lemoyne ASI Center,
                                                    20 Erford Road,
                                                    Suite 204, Lemoyne,
                                                    PA 17043.
4011..........................  Lease............  Providence ASI
                                                    Center, 36 Hemingway
                                                    Drive, E.
                                                    Providence, RI
                                                    02815.
4108..........................  Lease............  Greenville ASI
                                                    Center, Greengate
                                                    Office Park, 25
                                                    Woodslake Road,
                                                    Suite 708,
                                                    Greenville, SC
                                                    29607.
4109..........................  Lease............  Charleston ASI
                                                    Center, 7410
                                                    Northside Drive,
                                                    Suite 103,North
                                                    Charleston, SC
                                                    29420.
4110..........................  Lease............  Columbia ASI Center,
                                                    Converse Building,
                                                    250 Berryhill Road,
                                                    Suite 210, Columbia,
                                                    SC 29210.
4218..........................  Mobile...........  Sioux Falls Mobile
                                                    Test Center,
                                                    Sheraton Hotel and
                                                    Convention Center,
                                                    1211 N. West Avenue,
                                                    Sioux Falls, SC
                                                    57104.
4219..........................  Mobile...........  Ramada Inn Aberdeen,
                                                    272 6th Avenue SE,
                                                    Aberdeen, SD 57401.
4220..........................  Mobile...........  Rapid City Mobile
                                                    Test Center, Holiday
                                                    Inn Rushmore Plaza
                                                    Hotel and Conference
                                                    Center, 505 North
                                                    Fifth Street, Rapid
                                                    City, SD 57701.
4322..........................  Lease............  Nashville ASI Center,
                                                    Bell Trace Plaza,
                                                    Suite 106, 5814
                                                    Nolensville Pike,
                                                    Nashville, TN 37211.
4323..........................  Lease............  Knoxville ASI Center,
                                                    The Terraces 154-F,
                                                    Market Place
                                                    Boulevard,
                                                    Knoxville, TN 37922.
4324..........................  Lease............  Memphis ASI Center,
                                                    6073 Mt. Moriah
                                                    Extended, Appletree
                                                    Center, Suite 8,
                                                    Memphis, TN 38115.
4340..........................  Lease............  Johnson City ASI
                                                    Assessment Center,
                                                    503 Princeton Road,
                                                    Suite E, Johnson
                                                    City, TN 37601.
4341..........................  Lease............  Jackson ASI Center,
                                                    77B Executive Drive,
                                                    Jackson, TN 38305.
4342..........................  Lease............  Chattanooga ASI
                                                    Center, 115 Nowlin
                                                    Lane, Suite 3000,
                                                    Chattanooga, TN
                                                    37421.

[[Page 37066]]

 
4402..........................  Lease............  El Paso ASI Center,
                                                    10737 Gateway West,
                                                    Suite 220, El Paso,
                                                    TX 79935.
4407..........................  Lease............  Arlington ASI Center,
                                                    2201 North Collins,
                                                    Suite 230,
                                                    Arlington, TX 76011.
4408..........................  Flex.............  Lubbock Christian
                                                    University, Nursing
                                                    and Math Building,
                                                    Room 1, 5601 19th
                                                    Street, Lubbock, TX
                                                    79407.
4412..........................  Flex.............  Del Mar College-West
                                                    Campus, Morgan St.-
                                                    at Old Airport road,
                                                    Coleman Center, Room
                                                    144, Corpus Christi,
                                                    TX 78404.
4421..........................  Flex.............  DBM-Suite 200 E, 9600
                                                    Great Hills Trail,
                                                    Great Hills Plaza,
                                                    Austin, TX 78759.
4422..........................  Lease............  Houston ASI Center,
                                                    2424 Wilcrest, Suite
                                                    240, Houston, TX
                                                    77042.
4423..........................  Flex.............  Texas Careers, 1015
                                                    Jackson Keller Road,
                                                    Suite 204, San
                                                    Antonio, TX 78213.
4517..........................  Flex.............  Midvale ASI Center,
                                                    7302 South 300 West,
                                                    Suite B, 301,
                                                    Midvale, UT 84047.
4813..........................  Flex.............  Wenatchee Valley
                                                    College, Eller Fox
                                                    Building, Rooms 3012
                                                    and 3016, Wenatchee,
                                                    WA 98195.
4814..........................  Lease............  Lacey ASI Center, 719
                                                    Sleater-Kinney Road,
                                                    Suite 124, Lacey, WA
                                                    98503.
4815..........................  Lease............  Kennewick ASI Center,
                                                    1149 N. Edison,
                                                    Suite B, Kennewick,
                                                    WA 99336.
4816..........................  Lease............  Seattle/Tukwila ASI
                                                    Assessment Center,
                                                    12720 Gateway Drive,
                                                    Suite 208, Tukwila,
                                                    WA 98168.
4817..........................  Lease............  Spokane ASI Center,
                                                    North 505 Argonne
                                                    Road, Suite 4,
                                                    Spokane, WA 99212.
4818..........................  Lease............  Vancouver ASI Center,
                                                    First Place Plaza,
                                                    12503 SE Mill Plain
                                                    Road, #130,
                                                    Vancouver, WA 98684.
4819..........................  Lease............  Yakima, Washington.
4931..........................  Lease............  Dunbar ASI Center,
                                                    1400 Ohio Avenue,
                                                    Suite C, Dunbar, WV
                                                    25064.
4932..........................  Flex.............  West Virginia
                                                    University, Oakland
                                                    Street, 701 B Allen/
                                                    Percival Hall,
                                                    Morgantown, WV
                                                    26506.
4933..........................  Flex.............  Beckley High School,
                                                    410 Stanford Road,
                                                    Room #D-12, Beckley,
                                                    WV 25801.
5050..........................  Lease............  Elm Grove ASI Center,
                                                    Enterprise Center,
                                                    2nd Floor, 12700
                                                    West Blue Mound
                                                    Road, Elm Grove, WI
                                                    53122.
5051..........................  Lease............  Madison ASI Center,
                                                    582 Grand Canyon
                                                    Drive, Madison, WI
                                                    53719.
5052..........................  Lease............  Green Bay ASI Center,
                                                    2350 University
                                                    Avenue, #100, Green
                                                    Bay, WI 54302.
5053..........................  Lease............  Menomonie ASI Center,
                                                    2521 South Broadway,
                                                    Office 101 (lower
                                                    level), Menomonie,
                                                    WI 54751.
5054..........................  Flex.............  University of
                                                    Wisconsin Center,
                                                    Marathon County,
                                                    Room 070, 518 South
                                                    7th Avenue, Wausau,
                                                    WI 54401.
5055..........................  Flex.............  DBM-Milwaukee, 18000
                                                    West Sara Lane,
                                                    Suite 300,
                                                    Brookfield, WI 53045
5118..........................  Mobile...........  Rock Springs Holiday
                                                    Inn, 1675 Sunset
                                                    Boulevard, Rock
                                                    Springs, WY 99999.
5119..........................  Mobile...........  Sharidan Holiday Inn
                                                    and Convention
                                                    Center, 1809
                                                    Sugurland Drive,
                                                    Sharidan, WY 99999.
5121..........................  Mobile...........  Holiday Inn Casper,
                                                    300 West ``F''
                                                    Street, Casper, WY
                                                    82601.
------------------------------------------------------------------------

United States District Court for the District of Columbia

CASE NUMBER 1:01CV01419
JUDGE: Gladys Kessler
DECK TYPE: Antitrust
DATE STAMP: 06/27/2001

United States of America, Plaintiff, v. The Thomson Corporation, 
Harcourt General, Inc., and Reed Elsevier Inc., Defendants

Competitive Impact Statement

    The United States, pursuant to section 2(b) of the Antitrust 
procedures and Penalties Act (``APPA''), 15 U.S.C. 16(b)-(h), files 
this Competitive Impact Statement relating to the proposed Final 
Judgment submitted for entry in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    On June 27, 2001, the United States filed a civil antitrust 
Complaint alleging that the proposed acquisition by The Thomson 
Corporation (``Thomson'') of the college textbook publishing and 
computer-based testing businesses of Harcourt General, Inc. 
(``Harcourt'') from Reed Elsevier Inc. (``Reed Elsevier'') would 
violate Section 7 of the Clayton Act, 15 U.S.C. 18. The Complaint 
alleges that Thomson and Harcourt, two of the world's largest 
publishers of textbooks and other educational materials, are direct 
competitors in the development, marketing, and sale of textbooks and 
print and Internet-based supplemental educational materials used in 
college courses. For dozens of college courses, they publish textbooks 
that are close substitutes. Unless the acquisition is blocked, 
competition in certain markets for college textbooks and ancillary 
educational materials will be substantially lessened and likely will 
lead to higher textbook prices and a reduction in the number and 
quality of ancillary educational materials provided to teachers and 
students.
    Thomson and Harcourt also are direct competitors in the market for 
nationwide delivery and administration

[[Page 37067]]

of certain high stakes computer-based tests used by professional 
organizations and state and local government agencies for licensure and 
certification. Further, the Complaint alleges that competition in the 
market for nationwide delivery and administration of certain high 
stakes computer-based examinations will be substantially lessened and 
likely will result in both test sponsors and candidates paying higher 
prices for such examinations and in a reduction in the quality of test 
delivery and administration services.
    The request for relief in the Complaint seeks: (1) A judgment that 
Thomson's proposed acquisition would violate section 7 of the Clayton 
Act; (2) a preliminary and permanent injunction preventing consummation 
of the merger agreement; (3) an award of costs to the plaintiff; and 
(4) such other relief as the Court may deem just and proper.
    Shortly before the Complaint was filed, the parties reached a 
proposed settlement that permits Thomson to complete its acquisition of 
Harcourt's college textbook publishing and computer-based testing 
businesses, yet preserves competition in the markets in which the 
transaction would raise significant competitive concerns. Along with 
the Complaint, the parties filed a Hold Separate Stipulation and Order 
and a proposed Final Judgment which establishes the terms of the 
settlement.
    The proposed Final Judgment orders the defendants to divest sixty-
eight (68) college textbooks and related ancillary educational 
materials so that competition in the development, marketing, and sale 
of textbooks in each of the thirty-eight (38) courses identified in the 
Complaint will be preserved. In addition, the proposed Final Judgment 
orders the defendants to make certain divestitures of Harcourt's 
computer-based testing business, specifically, Harcourt's subsidiary 
Assessment Systems, Inc. (``the Complete ASI Assets'') or ASI, which 
includes all the assets of Assessment Systems, Inc., excluding the 
Agency Information Management Services Business and the State Testing 
Business, as such terms are defined in the proposed Final Judgment. 
Unless the United States agrees to an extension of time, the defendants 
must complete all of these divestitures within one hundred and twenty 
(120) calendar days of the filing of the Complaint, or within five (5) 
days of the expiration of the sixty-day (60) statutory notice-and-
comment period that commenced upon the publication of this Competitive 
Impact Statement, whichever is later.
    If defendant Thomson does not complete the college textbook 
divestitures within the appropriate time period, the Court, upon 
application of the United States, will appoint a trustee selected by 
the United States to complete the remaining divestitures. Should 
defendant Thomson fail to complete the computer-based testing business 
divestitures within the specified time period, the Court, upon 
application of the United States, will appoint a trustee selected by 
the United States to accomplish the divestiture of the Complete ASI 
Assets. The proposed Final Judgment also requires the defendants to 
take all steps necessary to maintain, operate, and market the 
divestiture assets as independent and active competitors until the 
divestitures mandated by the proposed Final Judgment have been 
accomplished.
    The plaintiff and defendants have stipulated that the Court may 
enter the proposed Final Judgment after compliance with the APPA. Entry 
of the proposed Final Judgment would terminate this action, except that 
the Court would retain jurisdiction to construe, modify, or enforce 
provisions of the Final Judgment and punish violations thereof.

II. Description of the Events Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction

    The Thomson Corporation is a foreign corporation organized and 
existing under the laws of Canada, with its headquarters in Toronto, 
Ontario. Thomson publishes textbooks and other educational materials 
used in higher education under such names as Southwestern, Wadsworth, 
Heinle & Heinle, and Brooks/Cole. It is one of the world's largest 
commercial publishers and a leading competitor in many segments of the 
educational publishing marketplace. In addition, through its subsidiary 
Prometric, Inc., a Maryland corporation, Thomson offers computer-based 
testing services, including test delivery and administration, 
throughout the United States. Prometric is one of the few companies 
that operates a nationwide network of testing facilities, and/or is 
offering high stakes computer-based testing delivery and administration 
services.
    Harcourt General, Inc. is a corporation organized and existing 
under the laws of Delaware, with its headquarters in Chestnut Hill, 
Massachusetts. Harcourt publishes textbooks and other educational 
materials under the Harcourt, Saunders, Dryden, and Holt Rinehart 
Winston imprints. It is one of the world's largest publishing companies 
and a leading competitor in many segments of the educational publishing 
marketplace. In addition, through its subsidiary Assessment Systems, 
Inc., a Pennsylvania corporation, Harcourt offers computer-based 
testing services, including test development, delivery, and 
administration, throughout the United States. Assessment Systems, Inc. 
is one of the few companies that operates a nationwide network of 
facilities, and/or is offering high stakes computer-based testing 
delivery and administration services.
    Reed Elsevier Inc. is a corporation organized and existing under 
the laws of Massachusetts, with its headquarters in Newton, 
Massachusetts. Reed Elsevier and Harcourt reached in agreement on 
October 27, 2000, under which Reed Elsevier will purchase all of the 
assets of Harcourt. On the same date, Reed Elsevier and Thomson reached 
a separate agreement under which Thomson will acquire from Reed 
Elsevier: (1) Harcourt's Higher Education Group, which publishes 
textbooks and print and Internet-based ancillary educational materials 
in major academic disciplines in higher education, and (2) most of 
Harcourt's Corporate and Professional Services Group, the latter of 
which includes Assessment Systems, Inc.

B. Product Markets

1. College Textbook Markets
    a. Description of the Markets. Publishers market textbooks and 
ancillary educational materials to professors and in colleges and 
universities throughout the country. College professors generally 
select textbooks to serve as the primary teaching material for their 
courses. Textbooks provide the core written material for a course, 
serve as the foundation for the professor's overall lesson plan, and 
establish the framework for class discussions. Professors choose among 
textbooks that can provide this core content and structure. Students 
then buy the selected textbooks, typically at college bookstores.
    Publishers often attempt to induce a professor to select their 
textbooks by offering free ancillary educational materials, such as a 
teacher's edition of the textbooks, audio-visual teaching tools, and 
copies of the textbooks for teaching assistants. In addition, sometimes 
students buy the textbooks as part of a discounted package that 
includes further ancillary educational materials, such as CD-ROMs, 
workbooks, and study guides.

[[Page 37068]]

    The Complaint identifies thirty-eight (38) college courses in which 
Thomson and Harcourt are among the leading competitors in the provision 
of textbooks and related educational materials. These courses fall 
primarily within the disciplines of chemistry, communications, finance, 
foreign languages, philosophy, and psychology. In most of these 
courses, textbooks are used as a primary teaching material. A small but 
significant increase in the price of textbooks for a college course--or 
a small but significant decrease in the number of quality of ancillary 
educational materials provided with the textbooks--would not cause a 
significant number of professors or students to switch to alternative 
products. In addition, used textbooks cannot defeat an increase in the 
price of new textbooks or a decrease in the supply of ancillaries 
provided with them. The supply of used textbooks is limited, and 
professors usually require their students to use the newest edition of 
a textbook, which, generally, is revised every three to four years.
    b. Harm to Competition as a Consequence of the Merger. In each of 
the thirty-eight (38) college textbook markets identified in the 
Complaint, Thomson and Harcourt compete vigorously by offering 
textbooks that are close substitutes. Together, they account for a 
major share of new textbook sales and face significant competition from 
only a few other publishers. Thus, the proposed acquisition would 
significantly increase concentration in already high concentrated 
markets.
    Competition between Thomson and Harcourt has resulted in lower 
prices and has created a significant incentive for each to publish new 
titles and improve product quality. The proposed acquisition would 
eliminate this competition, giving Thomson the ability to raise the 
prices of its or Harcourt's textbooks or reduce the number of quality 
of ancillary educational materials provided with the textbooks.
    In each of the thirty-eight (38) college textbook markets, there is 
unlikely to be timely entry by any company that would be sufficient to 
defeat an anticompetitive increase in textbook prices or a decrease in 
the number or quality of ancillary educational materials or that would 
spur continuing innovation in the development and production of such 
products. Successful entry involves a costly and time-consuming process 
in which a publisher must locate an author qualified to write a new 
textbook and assemble an editorial staff to edit and develop the 
textbook, which then must be reviewed by numerous professors prior to 
its publication. In addition, effectively selling college textbooks 
require a trained and knowledgeable sales force to visit and foster 
relationships with professors at each school to which the textbooks are 
sold, along with direct mail solicitation and participation in 
educational conventions. Entry is also impeded by the difficulty in 
challenging the reputation of successful incumbent textbooks.
    The Complaint alleges that the transaction likely will have the 
following effects:
    i. Actual and future competition between Thomson and Harcourt will 
be eliminated;
    ii. Competition generally in the markets for the textbooks and 
ancillary educational materials for each of the college courses 
identified in the Complaint will be substantially lessened;
    iii. Prices for college textbooks and ancillary educational 
materials for each of the college courses identified in the Complaint 
will increase or the number and quality of materials will decline; and
    iv. Competition in the development and improvement of college 
textbooks and ancillary educational materials in each of the college 
courses identified in the Complaint will be substantially lessened.
2. Computer-Based Testing Markets
    a. Description of the Markets. Many different test sponsors, 
including professional associations and state and local governments, 
use computer-based testing for licensing and certification. The 
creation, delivery, and evaluation of a test involves three stages: (1) 
Developing test content; (2) delivering and administering tests; and 
(3) processing and reporting test results. Test sponsors using 
computer-based testing generally rely upon outside companies to perform 
each of the steps involved in developing and delivering their tests and 
evaluating the results.
    Test sponsors' examinations may be classified as either ``high 
stakes'' or ``low stakes.'' High stakes tests involve those that have 
very important consequences for the candidates, such as real estate or 
stockbroker licenses, and certification to assist in surgical 
procedures, while low stakes tests include practice, training, and 
self-improvement tests. Test sponsors invariably require a higher level 
of security during the delivery and administration of high stakes tests 
than of low stakes tests.
    Traditionally, licensing and certification examinations have been 
administered through paper-and-pencil tests. However, computer-based 
testing offers both test sponsors and candidates a number of 
significant advantages compared to paper-and-pencil testing. Typically, 
paper-and-pencil tests are given only a few times each year at 
specified dates and times, while computer-based testing allows test 
sponsors to offer a test throughout the year on multiple days of the 
week. Candidates can therefore schedule the test at a convenient time. 
Such flexible schedule also benefits test sponsors, enabling them to 
distribute work evenly throughout the year, rather than in concentrated 
periods surrounding the test dates, thus increasing the efficiency of 
their business operations.
    Computer-based testing also allows the use of more innovative 
testing features than paper-and-pencil testing. Computer-based tests 
can be scored instantly, and test questions are more easily updated and 
improved. Computer-based tests also allow test sponsors to better 
identify questions that lead to false positives or false negatives. 
Further, ``computer adaptive testing'' allows for the test to adapt to 
the test taker's performance (e.g., correct responses lead to 
increasingly difficult questions), thereby providing for more effective 
evaluations.
    Test sponsors that offer high stakes computer-based examinations to 
a nationwide pool of candidates require that the computer-based testing 
company with whom they contract have a network of testing centers 
throughout the United States. Test sponsors require that, while 
examinations are occurring, such testing centers be devoted solely to 
testing and have adequate security to ensure the integrity of the 
sponsor's examination and to prevent candidates from cheating. 
Requisite security measures include having secure computer servers, 
checking each candidate's identification prior to the examination, and 
providing proctors to ensure that candidates are not using unauthorized 
materials during the examination period. Because the proctors' 
attention and time must be dedicated to monitoring the candidates, they 
cannot perform other tasks during the examination period. Additional 
security measures that may be used include video cameras, fingerprint 
checks, viewing windows, and additional proctors.
    Test sponsors using or considering nationwide high stakes computer-
based tests would not turn to any alternative product in sufficient 
numbers to defeat a small but significant increase in the price of 
delivery and administration services provided through a secure testing 
center network. As discussed

[[Page 37069]]

above, computer-based testing providing numerous advantages over paper-
and-pencil testing. As a result, the existence of paper-and-pencil 
testing cannot defeat an increase in the price of computer-based test 
delivery and administration given through a nationwide secure testing 
center network.
    Test sponsors also would not self-deliver and administer computer-
based tests in response to a small but significant increase in the 
price of such services. Individual test sponsors do not have the 
testing volume to justify operating a network of year-round testing 
centers or purchasing the necessary computer equipment and software to 
operate such centers. Additionally, computer-based testing administered 
via the Internet cannot defeat a small but significant increase in the 
price of delivery and administration services given through a secure 
testing center network because the security required for high stakes 
examinations still requires that they be administered in a secure, 
proctored environment. Currently, the technology is not available to 
enable test proctoring via the Internet.
    b. Harm to Competition as a Consequence of the Acquisition. Both 
Prometric and Assessment Systems, Inc. offer a nationwide network of 
secure testing centers for the delivery and administration of high 
stakes computer-based examinations that are close substitutes. They are 
among the very few firms that compete to provide such a network and 
account for a significant share of all new contracts.
    Competition between Prometric and Assessment Systems, Inc. to 
provide nationwide high stakes computer-based testing delivery and 
administration services has resulted in lower prices for test sponsors 
and candidates, and has created significant incentives for each to 
maintain and expand its nationwide network of testing centers and 
improve service quality. The proposed transaction would eliminate this 
competition, give Prometric the ability to raise the prices for, or 
reduce the quality of, its high stakes computer-based testing delivery 
and administration services, and significantly increase concentration 
in this already highly concentrated market.
    If Thomson acquires Assessment Systems, Inc. there is unlikely to 
be timely entry by any company offering a nationwide network of secure 
testing sites for the delivery and administration of high stakes 
computer-based examinations sufficient to defeat an anticompetitive 
increase in the price of such services. Successful entry requires a 
computer-based testing vendor to develop a nationwide network of 
approximately 200 secure testing centers that meet the requirements for 
high stakes computer-based testing. The ongoing, day-to-day operation 
of such a network is costly and time-consuming.
    In addition, to successfully enter the market for nationwide 
delivery and administration of high stakes computer-based tests, a 
vendor must be able to obtain contracts with enough test sponsors to 
cover the cost building and maintaining a nationwide network. A new 
entrant faces a number of hurdles in attempting to obtain the requisite 
amount of business. First, the duration for contracts for high stakes 
computer-based testing delivery and administration services typically 
is several years, and test sponsors generally contract with a single 
company to provide these services. A computer-based testing vendor 
attempting to enter the market for delivery and administration services 
therefore must wait until a contract is near its expiration before the 
company has an opportunity to bid for it. Second, because there are 
significant costs involved in switching computer-based test providers, 
an incumbent provider has a substantial advantage in bidding for such 
contracts. Third, it is expensive and time-consuming to convert an 
examination from paper-and-pencil to computer-based format, thus making 
it difficult for a new entrant to enter the market through conversion 
of sponsors currently using paper-and-pencil testing. Finally, many 
test sponsors will contract only with a provider whose testing centers 
are currently operational, and who has demonstrated an ability to 
successfully administer high stakes examinations.
    The complaint alleges that the transaction likely will have the 
following effects:
    i. Actual and future competition between Thomson and Harcourt will 
be eliminated;
    ii. Competition generally in the market for nationwide computer-
based testing delivery and administration services will be 
substantially lessened;
    iii. Prices for nationwide computer-based testing delivery and 
administration services will increase or the value of services will 
decline; and
    iv. Competition in the development and improvement of nationwide 
computer-based testing delivery and administration services will be 
substantially lessened.

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment is designed to eliminate the 
anticompetitive effects of the proposed acquisition by Thomson of 
Harcourt's college textbook publishing and computer-based testing 
businesses from Reed Elsevier and to ensure that adequate competition 
is maintained in each of the relevant product markets identified in the 
Complaint.
    The proposed Final Judgment requires the defendants to divest the 
sixty-eight (68) college textbooks identified on Exhibit A to the 
proposed Final Judgment to an acquirer(s) acceptable to the United 
States within one hundred and twenty (120) calendar days after the 
filing of the Complaint in this matter, or within five (5) days after 
the expiration of the sixty-day (60) statutory notice-and-comment 
period that commenced with the publication of this Competitive Impact 
Statement in the Federal Register, whichever is later, so as to ensure 
competition in the market for the development, marketing, and sale of 
college textbooks and other ancillary educational materials. The United 
States, in its sole discretion, may agree to an extension of time for 
one additional thirty (30) day period, and shall notify the Court in 
such circumstances. Defendants agree to use their best efforts to 
divest the college textbook assets as expeditiously as possible.
    Exhibit A to the proposed Final Judgment specifies the one or more 
textbooks in each course that must be divested to ensure that there is 
no reduction in competition in each such course. The college textbook 
divestitures include all textbooks and ancillary educational materials 
offered for sale or under development by any subsidiary or division of 
the defendants that are designed to be specific to a textbook product 
listed in Exhibit A of the proposed Final Judgment, including all the 
tangible and intangible assets that constitute the college textbook 
products identified in the Complaint including, but not limited to, 
teacher editions, workbooks, notebooks, charts, audio, video, software, 
any CD-ROM, DVD-ROM, Internet and broadcast components, teacher support 
and staff development materials, and any other materials in any form, 
format or media.
    The proposed Final Judgment also requires the defendants to divest 
all of Assessment Systems, Inc. (as previously defined, the ``Complete 
ASI Assets'') or that entity excluding Harcourt's Agency Information 
Management Services and State Testing Businesses (as previously

[[Page 37070]]

defined, ``ASI'') to an acquirer or acquirers acceptable to the United 
States within one hundred and twenty (120) days after the filing of the 
Complaint in this matter, or within five (5) days after the expiration 
of the sixty-day (60) statutory notice-and-comment period that 
commenced with the publication of this Competitive Impact Statement in 
the Federal Register, whichever is later, so as to ensure competition 
in the market for the nationwide delivery and administration of high 
stakes computer-based tests. The United States, in its sole discretion, 
may agree to an extension of time for two additional thirty (30) day 
periods, not to exceed sixty (60) calendar days in total, and shall 
notify the Court in such circumstances. Defendants shall offer for sale 
to an Acquirer or Acquirers both: (1) ASI, as well as (2) the Complete 
ASI Assets. The proposed acquirers may then make an offer to purchaser 
either ASI or the Complete ASI Assets, or both. The United States shall 
decide which, if any, of the proposed divestitures of the computer-
based testing business adequately resolve the competitive harms 
identified in the Complaint. Defendants agree to use their best efforts 
to divest either ASI or the Complete ASI Assets as expeditiously as 
possible.
    In the event that ASI also is divested, at the acquirer's or 
acquirers' option and on commercially reasonable terms, defendant 
Thomson shall contract with the acquirer(s) to allow the acquirer(s) to 
provide the delivery and administration of the State Testing Business. 
Any such contractual arrangement shall continue for the duration of the 
terms of each currently existing state contract, agreement, or other 
understanding included in the State Testing Business.
    Divestiture of ASI alone shall include all tangible and intangible 
assets of ASI including, but not limited to, all research and 
development activities, all fixed, mobile, and other testing centers 
listed in Exhibit B of the proposed Final Judgment, any accompanying 
property rights in real estate or equipment used in any of those 
testing centers, all networking equipment, licenses, permits and 
authorizations issued by any governmental organization relating to ASI, 
all patents, intellectual property, copyrights, trademarks, trade 
names, service marks, service names, but no corporate trademarks or 
trade names of Thomson or Harcourt, technical information, computer 
software and related documentation including, but not limited to, test 
drivers, scheduling software, and the OMEGA, EXPro, and REG2000 
software platforms, all test item banks, psychometric data, statistical 
reports of test results, designs of computer-based examinations and 
testing centers, and all security measures used in the development, 
administration, and assessment of computer-based tests and the 
reporting of exam results. Divestiture of the Complete ASI Assets shall 
include the foregoing list of tangible and intangible assets, as well 
as the Agency Information Management Systems and State Testing 
Businesses.
    Until the divestitures occur, the defendants are required to 
develop and maintain all assets to be divested as independent, ongoing, 
economically viable, and active competitors, and to continue to fund 
their development, operations, promotional advertising, sales, 
marketing, merchandising, and support at existing or already approved 
levels. If defendant Thomson fails to make the required divestitures 
within the applicable time periods, the Court will appoint a trustee 
selected by the United States to effect the remaining divestitures. 
With regard to the computer-based testing business, should defendant 
Thomson fail to divest either ASI or the Complete ASI Assets within the 
requisite time periods, the trustee will effect the divestiture of the 
Complete ASI Assets. The proposed Final Judgment provides that 
defendant Thomson will pay all costs and expenses of the trustee. After 
the trustee's appointment becomes effective, the trustee will file 
monthly reports with the parties and the Court setting forth the 
trustee's efforts to accomplish the divestitures. At the end of six (6) 
months, if the divestitures have not been accomplished, the trustee and 
the parties will have the opportunity to make recommendations to the 
Court, which shall enter such orders as appropriate to carry out the 
purpose of the trust, including extending the trust and the term of the 
trustee's appointment.
    The proposed Final Judgment takes steps to ensure that the 
acquirer(s) of the college textbook assets will be viable and effective 
competitors in the college textbook publishing. The United States must 
be satisfied that the acquiring parties of each of the college textbook 
products have the ability and intention (including the necessary 
managerial, operational, technical and financial capability) to operate 
and market the divestiture assets as viable, ongoing businesses, as 
appropriate. The proposed Final Judgment requires defendants to provide 
the acquirer(s) and the United States with information relating to the 
personnel responsible for the editorial content of the college 
textbooks to be divested, including employees, agents, consultants, and 
independent contractors, to enable the acquirer(s) to make offers of 
employment. The proposed Final Judgment forbids the defendants from 
interfering with any acquirer's employment negotiations with those 
employees, and from transferring those employees to new positions prior 
to the divestitures.
    Further, the proposed Final Judgment takes steps to ensure that the 
acquirer(s) of the computer-based testing assets will be viable and 
effective competitors in the computer-based testing business. The 
United States must be satisfied that the acquiring parties of the 
computer-based testing business have the ability and intention 
(including the necessary managerial, operational, technical and 
financial capability) to operate and market the divestiture assets as 
viable, ongoing businesses. The proposed Final Judgment requires 
defendants to provide the acquirer(s) and the United States with 
information relating to all personnel of either ASI or Complete ASI 
Assets, as appropriate, including employees, agents, consultants, and 
independent contractors, to enable the acquirer(s) to make offers of 
employment. The proposed Final Judgment forbids the defendants from 
interfering with any acquirer's employment negotiations with those 
employees, and from transferring those employees to new positions prior 
to the divestitures.
    The proposed Final Judgment is designed to maintain the present 
level of competition in the college textbook publishing market 
identified in the Compliant in this matter by replacing the competitor 
eliminated as a result of the merger with one or more that is equally 
effective. It accomplishes this goal by: (1) Requiring prompt 
divestitures of the college textbook products so that the acquirer(s) 
has adequate time to participate in the significant upcoming sales 
opportunities in colleges and universities; (2) providing the 
acquirer(s) with an opportunity to employ the personal that are 
critical to the success of the divestiture assets; and (3) requiring 
divestiture of all tangible and intangible assets that make up each of 
those assets.
    Further, the proposed Final Judgment is designed to maintain the 
present level of competition in the computer-based testing market 
identified in the Compliant in this matter by replacing the competitor 
eliminated as a result of the merger with one or more that is equally 
effective. It accomplishes this goal by: (1) Affording the acquirer(s) 
an opportunity to purchase either ASI or

[[Page 37071]]

the Complete ASI Assets, thus ensuring a viable competitor in the 
computer-based testing market; (2) in the event that ASI alone is 
divested, and should the acquirer(s) so choose, requiring that 
defendant Thomson contract with the acquirer of ASI for the delivery 
and administration of the State Testing Business for the duration of 
all existing state contracts; (3) providing the acquirer(s) with an 
opportunity to employ the personnel that are critical to the success of 
the divestiture assets; and (4) requiring divestiture of all tangible 
and intangible assets that make up each of those assets.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of section 5(a) of the Clayton Act, 15 U.S.C. 
16(a), the Final Judgment has no prima facie effect in any subsequent 
private lawsuit that may be brought against the defendants.

V. Procedures Available for Modification of the Proposed Final 
Judgment

    The United States and defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry of the proposed Final 
Judgment upon the Court's determination that it is in the public 
interest.
    The APPA provides a period of at least sixty (60) days preceding 
the effective date of the proposed Final Judgment within which any 
person may submit to the United States written comments regarding the 
proposed Final Judgment. Any person who wishes to comment should do so 
within sixty (60) days of the date of publication of this Competitive 
Impact Statement in the Federal Register. The United States will 
evaluate and respond to the comments. All comments will be given due 
consideration by the Department of Justice, which remains free to 
withdrawn its consent to the proposed Final Judgment at any time prior 
to entry. The comments and the response to the United States will be 
filed with the Court and published in the Federal Register.
    Written comments should be submitted to: James R. Wade, Chief, 
Civil Task Force, Antitrust Division, United States Department of 
Justice, 325 Seventh Street, N.W., Suite 300, Washington, D.C. 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits against the defendants. The 
United States is satisfied that the divestitures required by the 
proposed Final Judgment will facilitate continued viable competition in 
the college textbook publishing and computer-based testing markets 
identified in the Compliant and will effectively prevent the 
anticompetitive effects that the Compliant alleges would result from 
the proposed acquisition.

VII. Standard of Review Under the APPA for Proposed Final Judgment

    The APPA requires that consent judgments in antitrust cases brought 
by the United States be subject to a sixty-day (60) comment period, 
after which the Court shall determine whether entry of the proposed 
Final Judgment ``is in the public interest.'' In making that 
determination, the Court may consider
    (1) The competitive impact of such judgment, including termination 
of alleged violations, provisions for enforcement and modification, 
duration or relief sought, anticipated effects of alternative remedies 
actually considered, and any other considerations bearing upon the 
adequacy of such judgment;
    (2) The impact of entry of such judgment upon the public generally 
and individuals alleging specific injury from the violations set forth 
in the compliant including consideration of the public benefit, if any, 
to be derived from a determination of the issues at trial.

15 U.S.C. 16(e).

    As the Court of Appeals for the District of Columbia Circuit held, 
the APPA permits a court to consider, among other things, the 
relationship between the remedy secured and the specific allegations 
set forth in the government's complaint, whether the decree is 
sufficiently clear, whether enforcement mechanisms are sufficient, and 
whether the decree may positively harm third parties. See United States 
v. Microsoft, 56 F.3d 1448 (D.C. Cir. 1995). The courts have recognized 
that the `` `term ``public interest' * * * take[s] meaning from the 
purposes of the regulatory legislation.'' NAACP v. Federal Power 
Comm'n, 425 U.S. 662, 669 (1976). Since the purpose of the antitrust 
laws is to preserve ``free and unfettered competition as the rule of 
trade,'' Northern Pacific Railway Co v. United States, 356 U.S. 1, 4 
(1958), the focus of the ``public interest'' inquiry under the APPA is 
whether the proposed Final Judgment would serve the public interest in 
free and unfettered competition. United States v. American Cyanamid 
Co., 719 F.2d 558, 565 (2d Cir. 1983), cert. denied 465 U.S. 1101 
(1984); United States v. Waste Management Inc., 1985-2 Trade Cas. para. 
66,651, at 63,046 (D.D.C. 1985). In conducting this inquiry, ``the 
Court is nowhere compelled to go to trial or to engage in extended 
proceedings which might have the effect of vitiating the benefits of 
prompt and less costly settlement through the consent decree 
process.''\1\ Rather,

    \1\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette 
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest'' 
determination can be made properly on the basis of the Competitive 
Impact Statement and Response to Comments filed pursuant to the 
APPA. Although the APPA authorizes the use of additional procedures, 
15 U.S.C. 16(f), those procedures are discretionary. A court need 
not invoke any of them unless it believes that the comments have 
raised significant issues and that further proceedings would aid the 
court in resolving those issues. See H.R. 93-1463, 93rd Cong. 2d 
Sess. 8-9, reprinted in (1974) U.S.C.C.A.N. 6535, 6538.
---------------------------------------------------------------------------

[a]bsent a showing of corrupt failure of the government to discharge 
its duty, the Court, in making its public interest finding, should * 
* * carefully consider the explanations of the government in the 
competitive impact statement and its responses to comments in order 
to determine whether those explanations are reasonable under the 
circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. para. 
61,508, at 71,980 (W.D. Mo. 1977).
    Accordingly, with respect to the adequacy of the relief secured by 
the decree, a court may not ``engage in an unrestricted evaluation of 
what relief would best serve the public.'' United States v. BNS. Inc., 
858 F.2d 456, 462 (9th Cir. 1988) (quoting United States v. Bechtel 
Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 1083 
(1981)). Precedent requires that

[t]he balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the

[[Page 37072]]

Attorney General. The court's role in protecting the public interest 
is one of insuring that the government has not breached its duty to 
the public in consenting to the decree. The court is required to 
determine not whether a particular decree is the one that will best 
serve society, but whether the settlement is `within the reaches of 
the public interest.' More elaborate requirements might undermine 
the effectiveness of antitrust enforcement by consent decree.\2\
---------------------------------------------------------------------------

    \2\ United States v. Bechtel, 648 F.2d at 666 (emphasis added) 
(internal citations omitted). See United States v. BNS, Inc., 858 
F.2d at 463; United States v. National Broadcasting Co., 449 F. 
Supp. 1127, 1143 (C.D. Cal. 1978); Gillette, 406 F. Supp. at 716. 
See also United States v. American Cyanamid Co., 719 F.2d 558, 565 
(2d Cir. 1983).

    A proposed consent decree is an agreement between the parties that 
is reached after exhaustive negotiations and discussions. Parties do 
not hastily and thoughtlessly stipulate to a decree because, in doing 
---------------------------------------------------------------------------
so, they

waive their right to litigate the issues involved in the case and 
thus save themselves the time, expense, and inevitable risk of 
litigation. Naturally, the agreement reached normally embodies a 
compromise; in exchange for the saving of cost and the elimination 
of risk, the parties each give up something they might have won had 
they proceeded with the litigation.

United States v. Armour & Co., 402 U.S. 673, 681 (1971).
    The proposed Final Judgment, therefore, should not be reviewed 
under a standard of whether it is certain to eliminate every 
anticompetitive effect of a particular practice or whether it mandates 
certainty of free competition in the future. Court approval of a final 
judgment requires a standard more flexible and less strict than the 
standard required for a finding of liability. ``[A] proposed decree 
must be approved even if it falls short of the remedy the court would 
impose on its own, as long as it falls within the range of 
acceptability or is `within the reaches of public interest'''\3\
---------------------------------------------------------------------------

    \3\ United States v. American Tel. & Tel. Co., 552 F. Supp. 131, 
151 (D.D.C. 1982), aff'd sub nom. Maryland v. United States, 460 
U.S. 1001 (1983) (quoting Gillette, 406 F. Supp. at 716, other 
citations omitted); United States v. Alcan Aluminum Ltd., 605 F. 
Supp. 619, 622 (W.D. Ky. 1985).
---------------------------------------------------------------------------

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment.

For Plaintiff United States of America

Dated: June 27, 2001.

      Respectfully submitted,
James D. Villa,
(D.C. Bar #417471),
Ahmed E. Taha,
Jacqueline S. Kelley,
Laura A. Brill,
Trial Attorneys, U.S. Department of Justice, Antitrust Division, 
Civil Task Force, 325 Seventh Street, NW., Suite 300, Washington, DC 
20530, Telephone: (202) 514-8361, Facsimile: (202) 307-9952.

[FR Doc. 01-17480 Filed 7-13-01; 8:45 am]
BILLING CODE 4410-11-M