– with Reopening Possibility – Unconditionally and Ir Revocably

Listing prospectus dated 14 April 2000

– with reopening possibility –

unconditionally and ir revocably, jointly and severally guaranteed by Reed International P.L.C., London, and Elsevier NV, Amsterdam

Bor rower ’s name and address Elsevier Finance SA, Rue du Seyon 5, CH-2004 Neuchâtel, Switzerland.

Guarantors’ name and address Reed International P.L.C., 25, Victoria Street, London SW1H 0EX, United Kingdom (“Reed”) Elsevier NV, Van de Sande Bakhuyzenstraat 4, 1061 AG Amsterdam, The Netherlands (“Elsevier”)

Interest Rate 4.375% p.a., payable annually on 20 April, first coupon payable on 20 April 2001.

Life 7 years bullet.

Reopening of the Issue Elsevier Finance SA reserves the right to reopen this issue according to the terms and conditions of the Bonds.

Issue price The Syndicate Banks named below have subscribed for the Bonds at 100.50% of their nominal amount (before commissions).

Price for placement The price for placement of the Bonds will be fixed by the banks in accordance with supply and demand.

Payment Date Swi 20 April 2000.

Redemption 20 April 2007.

Denomination CHF 5,000 and multiples thereof.

Form of Deed The Bonds will be represented by a Global Bond Certificate. Bondholders do not have the right to request the delivery of the definitive Bonds.

Covenants Pari-Passu-clause Negative pledge clause with restrictions Cross Default Clause (with threshold amount).

Listing Trading at the SWX Swiss Exchange starts as from 18 April 2000 (provisional admission). Definitive Listing will be applied for on the SWX Swiss Exchange.

Governing Law and Swiss law and Zurich. Jurisdiction

Sales Restrictions U.S.A., U.S. persons, United Kingdom.

Rating Swi On 24 February 2000, Standard & Poor’s affirmed its AA–/A-1+ rating on Reed Elsevier related entities and reiterated its negative outlook. At the same time Moody’s announced a review of its Aa3 long-term ratings for possible downgrade, the Prime 1 rating is not affected.

Lead Manager Warburg Dillon Read

Syndicate Banks Swi Warburg Dillon Read • Credit Suisse First Boston • Cantonalbanks of Switzerland • Group of Swiss-German Private Banks • Groupement des Banquiers Privés Genevois • Coop Bank • ABN AMRO Bank N.V., Zurich Branch • Salomon Brothers International Limited

Securities number Swiss Sec. Nr.: 1066063 ISIN: CH0010660634

Warburg Dillon Read is the Investment Banking Division of UBS AG. Table of Contents

Page

1. Sales Restrictions ...... 3

2. General Information ...... 4

3. Terms of the Bonds ...... 6

4. Guarantee ...... 13

5. Information on Elsevier Finance SA (the “Borrower”) ...... 15

6. Information on Reed International P.L.C. and Elsevier NV (“the Guarantors”) and the Reed Elsevier combined businesses ...... 21

7. Press Release on 27 March 2000 ...... 25

Annex A: Reed Elsevier Annual Reports & Financial Statements 1999

Annex B: Excerpt of the Reed Elsevier Annual Review 1998

The full Annual Review and audited financial statements for the Reed Elsevier combined businesses, Reed International P.L.C. and Elsevier NV for the year ended 31 December 1999 can be derived from the Reed Elsevier Annual Reports and Financial Statements 1999 and the Reed Elsevier Annual Review & Summary Financial Statements 1999 taken together.

These documents can be downloaded from the website of Reed Elsevier: www.reed-elsevier.com or are available at the address mentioned below. Extracts are included in the information contained in this prospectus.

Copies of the Prospectus as well as of the documents mentioned above are available at Warburg Dillon Read, Legal Transactions, P.O. Box, CH-8098 Zurich, Switzerland, or can be ordered by telephone (+41 1 239 47 03) and fax (+41 1 239 21 11) or by e:mail: [email protected].

2 1. Sales Restrictions

United States of America

The Bonds are issued in bearer form and have not been and will not be registered under the U.S. Securities Act of 1933 as amended (the “Securities Act”) and may not be offered or sold within the United States of America (the “United States”) or to, or for the account or benefit of, U.S. persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

Each of the Syndicate Banks has agreed that it will not offer, sell or deliver the Bonds within the United States and except in accordance with Regulation S, will not offer, sell or deliver the Bonds to, or for the account or benefit of, U.S. persons.

The Bonds are subject to U.S. tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to, or for the account or benefit of, a U.S. person except in certain transactions permitted by U.S. tax regulations. Terms used in this paragraph have the meanings given to them by the U.S. Internal Revenue Code and regulations thereunder.

United Kingdom

Each Bank represents and agrees that (i) it has not offered or sold and, prior to the date six months after the date of the issue of the Bonds, will not offer or sell any Bonds to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purpose of their business or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (ii) it has complied and will comply with all applicable provisions of the Financial Services Act 1986 and the Public Offers of Securities Regulations 1995 with respect to anything done by it in relation to the Bonds in, from or otherwise involving the United Kingdom; and (iii) it has only issued or passed on and will only issue or pass on to any person in the United Kingdom any document received by it in connection with the issue of the Bonds if that person is a person of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996, as amended, or is a person to whom such document may otherwise lawfully be issued or passed on.

General

Each of the Syndicate Banks has agreed that it will observe all applicable laws and regulations in each country or jurisdiction in or from which it may acquire, offer or deliver Bonds or have in its possession or distribute this Prospectus or any other offering material.

3 2. General Information

1. Authorisation

Pursuant to the resolutions of its Board of Directors passed on 2 March, 2000 and the Bond Purchase and Paying Agency Agreement, dated as of 14 April 2000 with UBS AG acting through its division Warburg Dillon Read (“Warburg Dillon Read”) and other institutions named therein, the Borrower has decided to issue 4.375% Bonds 2000–2007 of CHF 500,000,000.– to be paid on 20 April 2000 and maturing on 20 April 2007 (the “Bonds”).

Warburg Dillon Read and the Syndicate Banks have agreed to underwrite the Bonds at the issue price of 100.50% and to offer the Bonds for public subscription.

2. Net Proceeds

The net proceeds of the Bonds, being the amount of CHF 493,200,000.– will be applied by the Borrower for general corporate purposes. None of the Syndicate Banks shall have any responsibility for or be obliged to concern itself with the application of the net proceeds of the Bonds.

3. Representation

In accordance with Article 50 of the Listing Rules of the SWX Swiss Exchange Warburg Dillon Read has been appointed by the Borrower and the Guarantors as representative to lodge the listing application with the Admission Board of the SWX Swiss Exchange.

4. Prospectus and Annual Reports

This Prospectus is available in English only and does not constitute an offer of or an invitation to subscribe for or purchase any Bonds.

The Prospectus as prepared by UBS AG contains all the information on the Borrower and each of the Guarantors which is material and does not contain an untrue statement of material fact and there are no other facts the omission of which would make any material statement therein misleading in any material respect.

In connection with the offering of the Bonds, no person has been authorised to give any information or make any representation other than as contained in this Prospectus and if given or made, any such information or representation should not be relied upon as having been authorised by the Borrower, any of the Guarantors or any of the Syndicate Banks. Neither the delivery of this Prospectus, nor the issue of the Bonds, nor any sale thereof shall, in any circumstances, create any implication that there has been no material adverse change in the affairs of the Borrower, each of the Guarantors or the Reed Elsevier combined businesses since the date hereof.

The Borrower and each of the Guarantors have agreed to provide the SWX Swiss Exchange as soon as available copies in English of, a) in the case of the Borrower its annual balance sheet and profit and loss statement together with a copy of the report of its independent auditors, or b) in the case of each Guarantor such annual reports and audited annual financial statements as are made available generally to its shareholders.

Copies of the Prospectus and of the above mentioned reports are available at Warburg Dillon Read, P.O. Box, CH-8098 Zurich (Switzerland) or can be ordered by telephone (number +41-1-239 47 03) or fax (number +41-1-239 48 09) 24-hours a day.

In this Prospectus, unless otherwise specified or the context otherwise requires, references to “CHF”, “Swiss Francs” or “Swiss francs” are to the lawful currency of Switzerland.

5. Litigation

Save as disclosed in this Prospectus, no litigation, arbitration or administrative proceeding or judgement or award is current or pending or, so far as the Borrower and each of the Guarantors is aware threathened to a) restrain the entry into, exercise of its rights under and/or performance or enforcement of or compliance with its obliga-

4 tions under the Bond Purchase and Paying Agency Agreement, the Permanent Global Certificate, the Bonds and the Coupons and the Guarantee, or b) which has or could have a material adverse effect on Reed Elsevier.

6. No Material Adverse Change

Other than disclosed herein, there has been no material adverse change in the financial condition or operations of the Borrower or of any of the Guarantors or of the Reed Elsevier combined businesses respectively since 31 December 1999.

7. Responsibility

The Borrower and the Guarantors accept responsibility for the respective information contained in this Prospectus and have taken all reasonable care to ensure that the facts stated herein are true and accurate in all material respects and that there are no other material facts, the omission of which would make any material statement herein, whether of fact or opinion, misleading in any material respect.

For Elsevier Finance SA

For Reed International P.L.C.

For Elsevier NV

5 3. Terms of the Bonds

The Terms of the Bonds issued by Elsevier Finance SA (the “Borrower”) and unconditionally and irrevocably guaranteed by Reed International P.L.C. (“Reed” or a “Guarantor”) and Elsevier NV (“Elsevier” or a “Guarantor”) according to a Bond Purchase and Paying Agency Agreement dated 14 April 2000 (the “Agreement”) between the Borrower and the Guarantors on the one hand and UBS AG acting through its division Warburg Dillon Read (“UBS AG”), Credit Suisse First Boston, Group of Swiss-German Private Banks, Cantonalbanks of Switzerland, Groupement des Banquiers Privés Genevois, Coop Bank, ABN AMRO Bank N.V., Zurich Branch and Salomon Brothers International Limited (each a “Bank” and together with UBS AG called the “Banks”) on the other hand are as follows:

1. For m and Denomination

a) The Bonds and Coupons if printed shall be evidenced in bearer form and title thereto shall pass by delivery. The Bonds have not been and will not be registered under the United States Securities Act of 1933 and may not be converted into registered Bonds.

b) This issue of Bonds (the “Issue”) is represented by a permanent global certificate (the ”Permanent Global Certificate”) and is divided into co-ownership quotas (the “Bonds”) of CHF 5000 or multiples thereof, rendering the entitlement to payment of interest (the “Coupons”). The persons rendered co- ownership quotas and the persons rendered entitlements to payment of interest will be herein referred to as the “Bondholders” and the “Couponholders” respectively. The Permanent Global Certificate will be deposited with SIS SEGAINTERSETTLE AG, in Olten, Switzerland, until final redemption or printing of the Bonds.

c) Bondholders and Couponholders do not have at any time the right to demand the printing of Bonds and Coupons. If UBS AG deems the printing of the Bonds to be necessary or if, under Swiss or foreign law, the enforcement of obligations under this Issue can only be ensured by means of effective Bonds and Coupons, e.g. in the case of bankruptcy, relief of debtors or reorganisation of the Borrower, UBS AG shall provide, without any costs to Bondholders, for the printing and delivery of the effective Bonds and Coupons.

d) Printed and effective Bonds or Coupons which are mutilated, lost or destroyed may be replaced, at the head office of UBS AG, on payment of such costs as may be incurred in connection therewith, and on such terms as to evidence and indemnity as the Borrower and UBS AG may require and, in the case of mutilation, upon surrender of the Bond or Coupons.

e) So long as no effective Bonds and Coupons have been issued, the expressions “Bonds” and “Coupons” and “Bondholder” and “Couponholder” herein shall mean and include the persons entitled to co- ownership quotas and the bearer of the Permanent Global Certificate therein.

f) The Borrower reserves the right to reopen this Issue without the consent of the Bondholders by the issue of further bonds which will be fungible with the Bonds (i.e. identical especially in respect of the Terms of the Bonds, security number, final maturity and interest rate).

2. Interest

The Bonds bear interest from 20 April 2000 at the rate of 4.375% per annum, payable annually on 20 April (the “Interest Payment Date”) in arrears. For this purpose, each Bond is furnished with annual Coupons, the first of which will become due and payable on 20 April 2001. Interest payments are subject to Swiss Withholding Tax of currently 35% on the interest nominal amount.

When interest is required to be calculated for a period of less than one year, it shall be calculated on the basis of a 360-day year consisting of 12 months of 30 days each.

6 3. Redemption

The Borrower undertakes to repay all the Bonds at par on 20 April 2007.

The Borrower may, however, purchase Bonds in the market at any time, at any price and for any purpose.

4. Payments

Amounts payable on the Coupons (after deduction of the Swiss Withholding Tax of 35% on the face amount of the Coupon) and amounts payable on the Bonds will be made available in good time in freely disposable Swiss Francs which will be placed with UBS AG in Switzerland on behalf of the Bondholders and/or the Couponholders, irrespective of any future transfer restrictions and outside of any bilateral or multilateral payment or clearing agreement which may be applicable at the time of such payments.

Upon receipt of the funds in Switzerland and under the same conditions as received, UBS AG will arrange for payment to the Bondholders and/or Couponholders.

The Borrower undertakes that Bonds and Coupons shall be payable upon their surrender in freely disposable Swiss Francs without collection cost to the Bondholders and Couponholders, without any restrictions and whatever the circumstances may be, irrespective of nationality, residence or domicile of the Bondholders or Couponholders and without requiring any affidavit or the fulfilment of any other formality at the counters in Switzerland of any of the following banks (the “Paying Agents”):

UBS AG, Credit Suisse First Boston, Credit Suisse, Group of Swiss-German Private Banks, Cantonalbanks of Switzerland, Groupement des Banquiers Privés Genevois, Coop Bank, ABN AMRO Bank N.V., Zurich Branch.

The receipt of the funds by UBS AG in Swiss Francs in Switzerland shall release the Borrower of its obligations under the Bonds to the extent of the amounts paid.

Bonds presented for redemption shall be delivered together with all unmatured Coupons. Unmatured Coupons so delivered will be cancelled without payment. The face amount of missing Coupons shall be deducted from the amount otherwise repayable, but the amount so deducted shall be paid upon sub- sequent presentation of the matured Coupons provided such amount is still enforceable in accordance with Swiss law.

5. Status of the Bonds / Guarantee and Status of the Guarantee / Negative Pledge

a) Status of the Bonds

The Bonds constitute direct, unconditional, unsubordinated and, subject to Section 5.c), unsecured obligations of the Borrower which will at all times rank pari passu among themselves and, subject as aforesaid, at least pari passu with all other present and future unsecured and unsubordinated obligations of the Borrower, save for such obligations as may be preferred by statute, all limited by provisions of law that are both mandatory and of general application.

b) Guarantee and Status of the Guarantee

The payment of principal and interest in respect of the Bonds has been unconditionally and irrevocably guaranteed on a joint and several basis by the Guarantors pursuant to Section 11.

The obligations of each of the Guarantors under the Guarantee constitute direct, unconditional, unsubordinated and (subject to the provisions of Section 5.c) unsecured obligations of such Guarantor and (subject as aforesaid) rank and will rank pari passu with all other present and future unsecured and unsubordinated obligations of such Guarantor, save for such obligations as may be preferred by statute, all limited by provisions of law that are both mandatory and of general application.

c) Negative Pledge

So long as any of the Bonds remains outstanding neither the Borrower nor either of the Guarantors nor any other Component Company will hereafter secure, by any mortgage, charge, pledge, lien or other encumbrance, on any of its present or future undertaking or assets (i) any Obligation of the Borrower

7 or either of the Guarantors or any other person or (ii) any guarantee or indemnity in respect of any Obligation of the Borrower or either of the Guarantors or any other person without at the same time securing the Bonds equally and rateably therewith to the satisfaction of UBS AG or providing other security therefor which UBS AG in its absolute discretion shall deem satisfactory or as shall be approved by an extraordinary resolution of the Bondholders.

For the purpose of this Section 5., “Obligation“ means any present or future indebtedness evidenced by bonds, debentures or other securities which are quoted or traded for the time being on any stock exchange or other organised market for securities which is denominated or contains a right or requirement for any payment in respect thereof to be made in any currency other than pounds sterling (the lawful currency of the United Kingdom “Sterling” ).

“Component Company“ means any one of Reed, Elsevier, Reed Elsevier plc, Elsevier Reed Finance BV or their respective Subsidiaries for the time being (or the successor to any such company).

“Subsidiary” with respect to any entity means a corporation a majority of the outstanding voting stock of which is owned, directly or indirectly, by such entity.

“Reed Elsevier” is the collective reference to the separate legal entities of Reed, Elsevier, Reed Elsevier plc, Elsevier Reed Finance BV and their resepective subsidiaries, associates and joint ventures.

6. Events of Default

UBS AG at its discretion may (but in the case of the happening of any of the events mentioned in (b) to (g) inclusive below (other than an order being made of an effective resolution being passed for the winding-up or the appointment of a receiver or manager of the whole or a major part of the undertaking or assets of the Borrower or either Guarantor) only if UBS AG shall have certified in writing that such event is in its opinion materially prejudicial to the interests of the Bondholders) give notice to the Borrower and the Guarantors that the Bonds are, and they shall accordingly immediately become, due and repayable at their principal amount together with accrued interest if any of the following events occurs and is continuing: (a) if default is made for a period of 14 days or more in the payment of any principal or interest on the Bonds or any of them; or (b) if: (i) an order is made for winding-up of the Borrower or either of the Guarantors and is not set aside within 90 days of the date of such order or pursuant to an appeal lodged within 14 days of the date of such order; or

(ii) an effective resolution is passed for the winding-up of the Borrower or either of the Guarantors, except a winding-up of the Borrower;

(1) the substantive terms of which have previously been approved in writing by UBS AG; or

(2) which is a voluntary solvent winding-up in connection with the transfer of all or the major part of the business or undertaking of the Borrower to a Component Company other than the Borrower; or

(c) if the Borrower or either of the Guarantors stops payment of its debts or ceases to carry on its business or a major part thereof unless the cessation:

(i) is for the purpose of a reconstruction or amalgamation the substantive terms of which have previously been approved in writing by UBS AG; or

(ii) (in respect of the Borrower) is in connection with the transfer of all or the major part of the business or undertaking of the Borrower to a Component Company other than the Borrower; or

(d) if:

(i) an encumbrancer takes possession, or any administrative or other receiver or any manager is appointed, of the whole or any substantial part of the undertaking or assets of the Borrower or either of the Guarantors; or

8 (ii) a distress or execution is levied or enforced upon or sued out against all or any substantial part of the chattels or property of the Borrower or either of the Guarantors and, in each case, is not discharged within 90 days; or

(e) If the Borrower or either of the Guarantors is deemed unable to pay its debts or is declared in suspen- sion of payments; or

(f) if:

(i) any indebtedness for Moneys Borrowed (as defined below) of the Borrower or either of the Guarantors shall be or be declared due and payable prior to the date on which the same would otherwise become due and payable by reason of the occurrence of a default on the part of the Borrower or either of the Guarantors in relation thereto; or

(ii) the Borrower or either of the Guarantors defaults in the repayment of any indebtedness for Moneys Borrowed at the maturity thereof or at the expiration of any applicable grace period; or

(iii) any guarantee of any indebtedness for Moneys Borrowed given by the Borrower or either of the Guarantors shall not be paid when due and called upon or at the expiry of any applicable grace period,

save (x) in any such case where there is a bona fide dispute as to whether payment or repayment is due or (y) where the amount of the indebtedness for Moneys Borrowed in respect of which default is made does not exceed U.S.$ 20,000,000 or its then equivalent in other currencies or (z) in the case of the Borrower where the amount of the indebtedness for Moneys Borrowed in respect of which default is made exceeds U.S.$ 20,000,000 or its then equivalent in other currencies and the obligations of the Borrower under the Bonds shall have been assumed during the 60 day period immediately following the relevant event described in (i), (ii) or (iii) above by a Component Company other that the Borrower; or

(g) if default is made by the Borrower or either of the Guarantors in the performance or observance of any obligation, condition or provision binding on it under the Bonds (other than any obligation for the payment of principal or interest) and, except where such default is not capable of remedy (in which case the Bonds will, if UBS AG has so certified as aforesaid, immediately become due and repayable), such default continues for 60 days after notice thereof by UBS AG to the Borrower and the Guarantors requiring the same to be remedied.

“Moneys Bor rowed” means (a) borrowed moneys and (b) liabilities under any bond, note, bill, deben- ture, loan stock or other security issued in respect of acceptance credit facilities or as consideration for assets or services but excluding such liabilities incurred in relation to the acquisition of goods or services in the ordinary course of trading.

7. Taxation

a) All amounts payable (whether in respect of principal, interest or otherwise) in respect of the Guarantee of the Bonds will be made free and clear of and without withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of the United Kingdom and The Netherlands or any political subdivision thereof or any authority or agency therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments or governmental charges is required by law. In that event, the respective Guarantor will pay such additional amounts as may be necessary in order that the net amounts receivable by the Bondholder and/or Couponholder (in this Section 7. a “Holder“ ) after such withholding or deduction shall equal the respective amounts which would have been receivable by such Holder in the absence of such withholding or deduction, except that no such additional amounts shall be payable in respect of any Bond presented for payment:

(i) by a Holder who is liable to such taxes, duties, assessments or governmental charges in respect of such Bond by reason of its having some connection with the United Kingdom or The Netherlands other than the mere holding of such Bond; or

(ii) more than 30 days after the Relevant Date, except to the extent that the relevant Holder would have been entitled to such additional amounts if it had presented the relevant Bond for payment on the last day of such period of 30 days.

9 b) For the purposes of these Terms, the “Relevant Date” means, in respect of any payment, the date on which such payment first becomes due and payable, but if the full amount of the moneys payable has not been received by UBS AG on or prior to such due date, it means the first date on which, the full amount of such moneys having been so received and being available for payment to Holders, notice to that effect shall have been duly given to the Holders of the Bonds in accordance with Section 12.

c) Any reference in these Terms to “principal“ and “interest“ in respect of the Bonds shall be deemed also to refer to any additional amounts which may be payable under this Section 7. Unless the context otherwise requires, any reference in these Terms to “principal” shall include any premium payable in respect of a Bond, any Redemption Amount and any other amounts in the nature of principal payable pursuant to these Terms and “interest“ shall include all amounts payable pursuant to Section 2. and any other amounts in the nature of interest payable pursuant to these Terms.

8. Substitution

Any Swiss Component Company or its Swiss successor in business may be substituted as the principal debtor in respect of the Bonds and the Coupons with the consent of UBS AG which shall not be unreasonably with- held.

UBS AG shall agree, without the consent of the Bondholders, to the substitution of:

(i) the successor in business of a Guarantor; or

(ii) any holding company of a Guarantor,

in place of that Guarantor as a guarantor of the Bonds and the Coupons subject to such reasonable requirements as UBS AG may direct in the interests of the Bondholders.

In connection with any proposed substitution as aforesaid, apart from Swiss withholding tax considerations, UBS AG shall not have regard to the consequences of substitution for individual Bondholders resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory and no person shall, in connection with such substitution, be entitled to claim from the Borrower or either of the Guarantors or UBS AG any indemnification or payment in respect of any tax consequence of any such substitution upon individual Bondholders or Couponholders except to the extent already provided for in any undertaking given in addition thereto or in substitution therefor.

9. Prescription

Coupons, by virtue of the Statute of Limitations of Swiss law at the date of the prospectus offering these Bonds, shall become time-barred after a period of five years and the Bonds after a period of ten years, calculated from their respective due dates.

10. Listing

The Borrower and each Guarantor will use their best endeavours to have the Bonds listed on the SWX Swiss Exchange, and to maintain such listing during the whole life of the Bonds.

11. Guarantee

For the CHF 500,000,000 4.375% Swiss franc bonds due 20 April 2007 (the “Bonds”) issued by Elsevier Finance SA (the “Borrower”), Reed International P.L.C and Elsevier NV (each a “Guarantor”) have supplied UBS AG with the following guarantee (the “Guarantee”):

Subject to the provisions of this Section 11., each of the Guarantors hereby jointly and severally unconditionally and irrevocably guarantees to each Holder of a Bond authenticated and delivered by UBS AG on behalf of each such Guarantor, the due and punctual payment of the principal of (and premium, if any, on) and interest, if any, on each such Bond (including any additional amounts payable in accordance with the terms of such Bond and this agreement) when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption, request for redemption, repayment

10 at the option of the Holder or otherwise, in accordance with the terms of such bond and this agreement. In case of the failure of the Borrower punctually to make any such payment of principal (or premium, if any) or interest, if any, (including any additional amounts as referred to above), each of the Guarantors hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption, request for redemption, repayment at the option of the Holder or otherwise, and as if such payment were made by the Borrower.

Each of the Guarantors hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute and unconditional, irrespective of the validity, regularity or enforceability of any Bond or this agreement, the absence of any action to enforce the same, any waiver or consent by the Holder of such Bond or by UBS AG with respect to any provisions thereof or of this agreement, any release of any other guarantor, the recovery of any judgement against the Borrower or any action to enforce the same or any other circumstances which might otherwise constitute a legal or equitable discharge or defence of any Guarantor. Each Guarantor hereby waives the benefit of diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Borrower, any right to require a proceeding first against the Borrower, protest or notice with respect to such Bond or the indebtedness evidenced thereby or with respect to any sinking fund payment required pursuant to the terms of such Bond and all demands whatsoever, and covenants that its Guarantees will not be discharged except by complete performance of all of the obligations of such Guarantor contained in this agreement and the Debt Securities and in such Guarantees. If the Trustee or the Holder of any Bond is required by any court or otherwise to return (and does so return) to the Borrower or to any Guarantor, or any custodian, receiver, liquidator, trustee, sequestrator or other similar official acting in relation to the Borrower or such Guarantor, any amount paid to UBS AG or such Holder in respect of a Bond, these Guarantees, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor further agrees, to the fullest extent that it lawfully may do so, that, as between it, on the one hand, and the Holders and UBS AG, on the other hand, the Maturity of the obligations guaranteed hereby may be accelerated as provided in Section 6. hereof for the purposes of these Guarantees, notwithstanding any stay, injunction or other prohibition extant under any applicable Bankruptcy Law preventing such acceleration in respect of the obligations guaranteed hereby.

The Guarantees of each Guarantor constitute direct, unconditional, unsubordinated and unsecured obligations of such Guarantor without preference among themselves and will rank at least equally with all other unsecured and unsubordinated obligations of such Guarantor (including unsecured and unsubordinated guarantees by such Guarantor of Indebtedness of others), subject, in the event of insolvency, to laws of general applicability relating to or affecting creditors’ rights. Each of the Guarantors hereby agrees that its obligations hereunder may be enforced against either of the Guarantors, in the event of a default in payment with respect to the Bonds by the Borrower, without making prior demand upon or seeking to enforce remedies against the Borrower, the other Guarantor or other persons.

Each Guarantor shall be subrogated to all rights of the Holders of the Bonds against the Borrower in respect of any amounts paid to such Holders by such Guarantor pursuant to the provisions of the Guarantees of this agreement; provided, however, that no Guarantor shall be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until the principal of (and premium, if any, on) and interest, if any, on all Bonds of such series (including any additional amounts as referred to above) issued hereunder shall have been paid in full.

To evidence the Guarantees set forth in Section 11., each Guarantor hereby agrees to execute these Guarantees in a form established pursuant to Annex F of this agreement, to be endorsed on each Bond authenticated and delivered by UBS AG. The Guarantees shall be executed on behalf of each Guarantor by any one of its Directors. The signature on such Guarantees may be manual or facsimile.

Any Guarantees bearing the manual or facsimile signature of an individual who was at the time of signature the proper Director of any Guarantor shall bind such Guarantor, notwithstanding that such individual has ceased to hold such office prior to the authentication and delivery of the Bonds upon which any such Guarantees are endorsed or did not hold such office at the date of such Bonds.

The delivery of any Bond by UBS AG, after the authentication thereof hereunder, shall constitute due delivery of the Guarantees endorsed thereon on behalf of each Guarantor. Each Guarantor hereby agrees that its Guarantees set forth in this Section 11. shall remain in full force and effect notwithstanding any failure to endorse on each Bond a notation of such Guarantees.

11 12. Notices

All notices regarding the Bonds and/or the Coupons shall be published in accordance with the applicable regulations of the SWX Swiss Exchange.

13. Governing Law and Jurisdiction

The form, construction and interpretation of the Bonds, the Coupons and the Guarantee shall be subject to and governed by Swiss law.

Any dispute which might arise between Bondholders or Couponholders on the one hand and the Borrower and/or a Guarantor on the other hand regarding the Bonds, the Coupons or the Guarantee shall be settled in accordance with Swiss law, the place of jurisdiction being Zurich.

Only for that purpose the Borrower and the Guarantors empower UBS AG as long as the Bonds are outstanding to act as their agent for receiving service of process. UBS AG undertakes to forthwith notify the Borrower of any communication received under this Section 13.

The above-mentioned jurisdiction is also exclusively competent for the declaration of cancellation of Bonds and Coupons.

The Borrower and/or a Guarantor shall be discharged by and to the extent of any payment made to a holder recognised as creditor by an enforceable judgement of a Swiss Court.

The Bondholders and Couponholders are at liberty to enforce their rights and to take legal action against any Guarantor before the competent Courts outside Switzerland, in which case Swiss law shall be applicable with respect to the terms, conditions and form of the Bonds and/or Coupons.

14. Currency Indemnity

If any payment obligation of the Borrower and/or a Guarantor in favour of the Bondholders or Couponholders has to be changed from Swiss Francs into a currency other than Swiss Francs (to obtain a judgement, execution or for any other reason) the Borrower and each Guarantor undertake as a separate and independent obligation, to indemnify the Bondholders or Couponholders for any shortfall in Swiss Francs caused by fluctuation of the exchange rates applied for such conversions.

15. Powers of UBS AG

UBS AG may, without the consent of the Bondholders or the Couponholders agree to any modification or arrangement of the terms and conditions of the Bonds or the Coupons which, in the opinion of UBS AG, is of a formal, minor or technical nature or is made to correct a manifest error.

In connection with any exercise of said powers UBS AG shall not have regard to the consequences thereof for individual Bondholders such as those arising from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory.

It is expressly agreed that all actions taken and any agreements or waivers or authorisations made by UBS AG under this Section 15. shall be definitive and irrevocable and bind all parties without any necessity to obtain any confirmation or registration whatsoever.

12 4. Guarantee

Guarantee in connection with the CHF 500,000,000 4.375% Bonds 2000–2007 (the “Bonds”) of Elsevier Finance SA (the “Borrower”) issued on the basis of a Bond Purchase and Paying Agency Agreement dated 14 April 2000 (the “Agreement”) and entered into between UBS AG and a syndicate of banks.

Guarantee For the CHF 500,000,000 4.375% Swiss franc bonds due 20 April 2007 issued by Elsevier Finance SA (the “Borrower”), Reed International P.L.C and Elsevier NV (each a “Guarantor”) have supplied UBS AG with the following guarantee (the “Guarantee”):

Subject to the provisions of this Guarantee, each of the Guarantors hereby jointly and severally unconditionally and irrevocably guarantees to each Holder of a Bond authenticated and delivered by UBS AG on behalf of each such Guarantor, the due and punctual payment of the principal of (and premium, if any, on) and interest, if any, on each such Bond (including any additional amounts payable in accordance with the terms of such Bond and this Agreement) when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption, request for redemption, repayment at the option of the Holder or otherwise, in accordance with the terms of such Bond and this Agreement. In case of the failure of the Borrower punctually to make any such payment of principal (or premium, if any) or interest, if any, (including any additional amounts as referred to above), each of the Guarantors hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption, request for redemption, repayment at the option of the Holder or otherwise, and as if such payment were made by the Borrower.

Each of the Guarantors hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute and unconditional, irrespective of the validity, regularity or enforceability of any Bond or this Agreement, the absence of any action to enforce the same, any waiver or consent by the Holder of such Bond or by UBS AG with respect to any provisions thereof or of this Agreement, any release of any other guarantor, the recovery of any judgement against the Borrower or any action to enforce the same or any other circumstances which might otherwise constitute a legal or equitable discharge or defence of any Guarantor. Each Guarantor hereby waives the benefit of diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Borrower, any right to require a proceeding first against the Borrower, protest or notice with respect to such Bond or the indebtedness evidenced thereby or with respect to any sinking fund payment required pursuant to the terms of such Bond and all demands whatsoever, and covenants that its Guarantees will not be discharged except by complete performance of all of the obligations of such Guarantor contained in this Agreement and the Debt Securities and in such Guarantees. If UBS AG or the Holder of any Bond is required by any court or otherwise to return (and does so return) to the Borrower or to any Guarantor, or any custodian, receiver, liquidator, trustee, sequestrator or other similar official acting in relation to the Borrower or such Guarantor, any amount paid to UBS AG or such Holder in respect of a Bond, these Guarantees, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor further agrees, to the fullest extent that it lawfully may do so, that, as between it, on the one hand, and the Holders and UBS AG, on the other hand, the Maturity of the obligations guaranteed hereby may be accelerated as provided in Section 6. of the Terms of the Bonds for the purposes of these Guarantees, notwithstanding any stay, injunction or other prohibition extant under any applicable Bankruptcy Law preventing such acceleration in respect of the obligations guaranteed hereby.

The Guarantees of each Guarantor constitute direct, unconditional, unsubordinated and unsecured obligations of such Guarantor without preference among themselves and will rank at least equally with all other unsecured and unsubordinated obligations of such Guarantor (including unsecured and unsubordinated guarantees by such Guarantor of Indebtedness of others), subject, in the event of insolvency, to laws of general applicability relating to or affecting creditors’ rights. Each of the Guarantors hereby agrees that its obligations hereunder may be enforced against either of the Guarantors, in the event of a default in payment with respect to the Bonds by the Borrower, without making prior demand upon or seeking to enforce remedies against the Borrower, the other Guarantor or other persons.

Each Guarantor shall be subrogated to all rights of the Holders of the Bonds against the Borrower in respect of any amounts paid to such Holders by such Guarantor pursuant to the provisions of the Guarantees of this Agreement; provided, however, that no Guarantor shall be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until the principal of (and premium, if any, on) and interest, if any, on all Bonds (including any additional amounts as referred to above) issued hereunder shall have been paid in full.

13 To evidence the Guarantees set forth in Section 11. of the Terms of the Bonds, each Guarantor hereby agrees to execute these Guarantees in a form established pursuant to Annex F of this Agreement, to be endorsed on each Bond authenticated and delivered by UBS AG. The Guarantees shall be executed on behalf of each Guarantor by any one of its Directors. The signature on such Guarantees may be manual or facsimile.

The delivery of any Bond by UBS AG, after the authentication thereof hereunder, shall constitute due delivery of the Guarantees endorsed thereon on behalf of each Guarantor. Each Guarantor hereby agrees that its Guarantees set forth in Section 11. of the Terms of the Bonds shall remain in full force and effect notwithstanding any failure to endorse on each Bond a notation of such Guarantees.

This guarantee shall be subject to and governed by Swiss law.

[Date and Place]

Reed International P.L.C. Elsevier NV

______

14 5. Information on Elsevier Finance SA (the “Bor rower”)

1. Name, Elsevier Finance SA Registered office, head office Rue du Seyon 5, CH-2004 Neuchâtel, Switzerland (the “Borrower”)

2. Incorporation, Duration The Borrower was incorporated for an indefinite period of time as a company with shares under the laws of Switzerland as well as under cantonal laws and was registered in the Register of Commerce of the Canton of Neuchâtel on 16 December, 1998. It is wholly owned by Elsevier Swiss Holdings SA.

3. Purpose The purpose of the Borrower is to effect all operations of a financial nature, including the provision of related services.

4. Capital The share capital of the Borrower amounts to CHF 508,750,000 and is divided into fully paid registered shares of CHF 100 nominal each. Each share entitles to one vote. There are no other classes or categories of shares. All shares have the same dividend rights. There is no authorised or conditional capital. Capital changes as from incorporation of the Borrower are contained in the Balance Sheet. The Company has not paid any dividend for the year 1999.

5. Business activities Elsevier Finance SA is the principal treasury centre for the Reed Elsevier combined businesses. It holds direct regional responsibility for all treasury advice and services to Reed Elsevier plc businesses in continental Europe and related areas. Elsevier Finance SA is also responsible, inter alia, for providing financing at arm-length for a full range of currencies and maturities as well as currency and derivative dealing services to all Reed Elsevier plc businesses. At 31 December 1999, Elsevier Finance SA shareholders’ funds were CHF 3.24 bn. Long-term assets comprised mainly loans receivable from Reed Elsevier plc operating companies and investments of CHF 5.60 bn, whilst liabilities were pre d o m i n a n t l y commitments to repay debt of CHF 3.40 bn split between CHF 878 m for intra affiliate liabilities, CHF 1.566 bn to third parties and CHF 956 m in provisions.

6. Board of Directors Cornelis Bastiaan Alberti, Chairman Leon DuPasquier, Secretary Jacques Billy, Managing Director Neil Sunderland, Director Daniel Urech, Director

7. Management Jacques Billy, Managing Director

8. Auditors PricewaterhouseCoopers AG, Stampfenbachstrasse 109, 8035 Zurich. They are also elected for the current financial year.

15 9. Report of the Auditors to the General Meeting of Shareholders for the year 1999

PricewaterhouseCoopers AG Stampfenbachstrasse 109 Postfach 8035 Zürich Telephone 01 630 11 11 Fax 01 630 21 15

Report of the statutory auditors to the general meeting of Elsevier Finance S.A. Neuchâtel

As statutory auditors, we have audited the accounting records and the financial statements (balance sheet, income statement and notes), of Elsevier Finance S.A. for the year ended 31 December 1999.

These financial statements are the responsibility of the board of directors. Our responsibility is to express an opinion on these financial statements based on our audit. We confirm that we meet the legal requirements con- cerning professional qualification and independence.

Our audit was conducted in accordance with auditing standards promulgated by the profession, which require that an audit be planned and performed to obtain reasonable assurance about whether the financial statements are free from material misstatement. We have examined on a test basis evidence supporting the amounts and disclosures in the financial statements. We have also assessed the accounting principles used, significant estimates made and the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the accounting records and financial statements and the proposed appropriation of available earnings comply with the law and the company’s articles of incorporation.

We recommend that the financial statements submitted to you be approved.

PricewaterhouseCoopers AG

J.D. Wilkinson L. Galbiati

Zürich, 23 February 2000

Enclosures

– Financial statements (balance sheet, income statement and notes) – Proposed appropriation of the available earnings

16 Elsevier Finance SA, Neuchâtel BALANCE SHEET AS AT DECEMBER 31,

ASSETS 1999 1998 CHF CHF

Cash and cash equivalents 5,240,048 324,810 Time deposits 4,413,835 8,008,517 Accounts receivable from Reed Elsevier companies 1,010,074,339 736,872,273 from third parties 17,651,553 9,067,819 Prepaid expenses and accrued income 238,716 143,955

Current assets 1,037,618,491 754,417,374

Financial fixed assets Investments – 120,129 Loans to Reed Elsevier companies 5,600,854,292 4,256,414,516 Tangible fixed assets 375,202 632,645 Intangible fixed assets Stamp duty on capital increase – 2,046,743

Fixed assets 5,601,229,494 4,259,214,033

Total assets 6,638,847,985 5,013,631,407

LIABILITIES AND SHAREHOLDERS, EQUITY 1999 1998 CHF CHF

Bank overdrafts 848,423 194,466 Accounts payable to Reed Elsevier companies 107,257,949 65,685,174 to third parties 1,566,105,060 1,161,945,788 Accrued liabilities 1,539,558 1,900,740 Long-term payables to Reed Elsevier companies 771,016,560 503,169,654 Provisions 956,162,239 138,364,001

Current and long-term liabilities 3,402,929,789 1,871,259,823

Share capital 508,750,000 443,600,000 Paid in surplus 2,500,474,739 2,500,474,739 Legal reserve 9,915,000 – Available earnings Profit carried forward 187,820,845 – Profit for the year/period 28,957,612 216,778,457 198,296,845

Shareholders’ equity 3,235,918,196 3,142,371,584

Total liabilities and shareholders’ equity 6,638,847,985 5,013,631,407

17 Elsevier Finance SA, Neuchâtel STATEMENT OF INCOME FOR THE PERIOD FROM

1.1.1999 to 16.12.1998 to 31.12.1999 31.12.1998 CHF CHF

Interest income 401,336,114 31,374,218 Interest expense (95,050,580) (7,684,129)

Net interest income 306,285,534 23,690,089

Dividend income 186,630 27,261,600 Service / Cash management fee income 4,657,275 538,413 Gain of foreign exchange – 149,233,812

4,843,905 177,033,825

Total income 311,129,439 200,723,914

Personnel expenditure (1,999,365) (44,418) Administrative expenses (3,604,897) (1,889,216) Depreciation of tangible fixed assets (411,818) (31,521) Stamp duty (2,698,243) – Loss on foreign exchange (274,209,442) – Other expenses (164,217) (20,787)

Total expenses (283,087,982) (1,985,942)

Profit before taxation 28,041,457 198,737,972

Taxation – ordinary (2,338,705) (441,127) Taxation – exceptional 3,254,860 –

Total taxation 916,155 (441,127)

Net profit for the year/period 28,957,612 198,296,845

18 Elsevier Finance SA, Neuchâtel NOTES TO THE FINANCIAL STATEMENTS 1999

1. Company foundation

Elsevier Finance SA was founded in December 1998. Consequently, the financial statements for 1999 are not comparable to the financial statements as at 31 December 1998.

1999 1998 CHF CHF

2. Guarantees

Used portion of guarantees 51,206,000 15,862,000 Unused portion of guarantees 14,817,000 10,702,000

Total Guarantees 66,023,000 26,564,000

3. Leasing liabilities not included in balance sheet 1,275,000 417,000

4. Fire insurance value of equipment 1,000,000 900,000

5. Euro Commercial Paper

Included within “Accounts payable to third parties” at December 31, 1999 are amounts due at that date to Citibank N.A., as common depositary for the Euroclear and Cedelbank clearance systems in respect of issues of Euro Commercial Paper (ECP) made under the Company’s approved ECP programme.

The total amount due at December 31, 1999 was CHF 1,560,220,926 relating to ECP issues with repayment date of less than eight months.

6. Material Investments

Elsevier Finance SA owned in 1998 100% of Elsevier Reed Finance Ireland, whose share capital amounted to USD 99,481. Elsevier Reed Finance Ireland was liquidated in December 1999.

7. Stamp duty

Commencing in 1999, all stamp duty costs are to be expensed as incurred. The prior year balance and current year costs of CHF 2,698,243 have therefore been expensed in 1999.

19 Elsevier Finance SA, Neuchâtel PROPOSED APPROPRIATION OF THE AVAILABLE EARNINGS 1999

1999 CHF

Proposal of the board of directors:

Retained earnings December 31, 1998 198,296,845 Dividend in respect of 1998 (561,000) Attribution to the legal reserve in respect of 1998 (9,915,000)

Available earnings 187,820,845

Profit for the year 28,957,612

Available earnings 216,778,457

Attribution of 5% of profit for the year to the legal reserve (1,448,000) Proposed dividend for 1999 –

Carried forward to new account 215,330,457

20 6. Information on Reed International P .L.C. and Elsevier NV (the “Guarantors”) and the Reed Elsevier combined businesses

1. General information

Name, registered office Reed International P.L.C. (“Reed”), 25 Victoria Street, London SW1H 0EX, United Kingdom Elsevier NV (“Elsevier”), Van de Sande Bakhuyzenstraat 4, 1061 AG Amsterdam, The Netherlands

Incorporation 28 May 1903 (Reed); 23 January 1979 (Elsevier)

Duration Both Guarantors have been registered for an infinite life.

Purpose Reed: To carry on business as a holding company. Elsevier: Participation in administration and financing of and the providing of services to other companies and in particular companies or businesses which are managed by Reed Elsevier plc or Elsevier Reed Finance BV and by companies in the same group, as well as compliance with the commitments resulting from the governing agreement with Reed in London.

Auditors Deloitte & Touche, Chartered Accountants and Registered Auditors, London (acting as auditors for Reed since 1995). Deloitte & Touche, Accountants, Amsterdam (acting as auditors for Elsevier since 1994).

Directors and officers The directors and executive officers of each of Reed and Elsevier are

Name (Age) Reed Elsevier Mark Armour (45) Chief Financial Officer Member of the Executive Board and Chief Financial Officer

John Brock (51) Non-executive Director Member of the Supervisory Board

Crispin Davis (50) Chief Executive Officer Member of the Executive Board and Chief Executive Officer

Jules Van Dijck (63) Member of the Supervisory Board

Derk Haank (46) Executive Director

Otto ter Haar (70) Member of the Supervisory Board

Roelof Nelissen (68) Non-executive Director Member of the Supervisory Board

Steven Perrick (51) Non-executive Director Member of the Supervisory Board

Dr. Rolf Stomberg (59) Non-executive Director Member of the Supervisory Board

Morris Tabaksblat (62) Non-executive Director Chairman of the Supervisory Board

David Webster (55) Non-executive Director Member of the Supervisory Board

Erik Ekker (51) Company Secretary

Mark Radcliffe (53) Company Secretary 21 Mr Armour was appointed Finance Director of Reed and Chief Financial Officer of Reed Elsevier plc in July 1996, having been Deputy Chief Financial Officer of Reed Elsevier plc since February 1995. He was appointed Chief Financial Officer of Reed and Elsevier in April 1999. He became a member of the Supervisory Board of Elsevier Reed Finance BV in December 1998. He was previously a partner in Price Waterhouse.

Mr Brock was appointed a non-executive director of Reed Elsevier plc and Reed and a member of the Supervisory Board of Elsevier in April 1999. He is a director of Cadbury Schweppes plc and Chief Executive Officer of its Global Beverages Stream.

Mr Davis became Chief Executive Officer of Reed Elsevier plc, Reed and Elsevier in September 1999. He was previously Chief Executive Officer of Aegis Group plc from 1994 to 1999.

Mr van Dijck has been a member of the Supervisory Board of Elsevier since 1984 and was appointed a member of the Supervisory Board of Elsevier Reed Finance BV in June 1999. He will retire from these appointments following the Elsevier Annual General Meeting in April 2000. He is professor of Industrial and Organisational Sociology at the University of Tilburg. Mr van Dijck is a member of the Supervisory Boards of ABN AMRO Bank NV, Hoechst Holland NV and Dutch Philips Industries NV.

Mr Haank was appointed an executive director of Reed Elsevier plc and Reed in November 1999. He has been Chief Executive Officer of Elsevier Science since 1998, and was Chief Executive Officer of Elsevier Business Information from 1996 to 1998. A resolution will be proposed at the Elsevier Annual General Meeting in April 2000 to appoint Mr Haank a member of the Executive Board of Elsevier.

Mr ter Haar has been a member of the Supervisory Board of Elsevier since 1990. He was previously a member of the Executive Board of Elsevier, and was Chief Executive Officer of Elsevier Science from 1977 to 1987. He was appointed a member of the Supervisory Board of Elsevier Reed Finance BV in June 1999.

Mr Nelissen was appointed a non-executive Director of Reed and Reed Elsevier plc in April 1999, having previously been a non-executive Director of Reed Elsevier plc since the Merger until July 1998. He has been a member of the Supervisory Board of Elsevier since 1990, Mr Nelissen is also a member of the Supervisory Board of ABN AMRO Bank NV. He was formerly Chief Executive Officer of ABN AMRO and Finance and Economics Minister of the Netherlands.

Mr Perrick was appointed a member of the Supervisory Board of Elsevier in April 1998, a non-executive director of Reed Elsevier plc in June 1998 and a non-executive Director of Reed in April 1999. He was a member of the Supervisory Board of Elsevier Reed Finance BV from July 1998 until August 1999. Mr Perrick is a partner in the Amsterdam offices of the law firm Freshfields, Deputy Judge at Arnhem Court of Appeal and Professor at Erasmus University, Rotterdam.

Dr Stomberg was appointed a non-executive director of Reed and Reed Elsevier plc in January 1999 and a member of the Supervisory Board of Elsevier in April 1999. Dr Stomberg is also Chairman of John Mowlem & Co plc and visiting professor of Imperial College Management School in London and the Institut Français du Pétrole in Paris.

Mr Tabaksblat was appointed a member of the Supervisory Board of Elsevier in April 1998 and a non-executive director of Reed Elsevier plc in June 1998. He became a non- executive director and Chairman of Reed in April 1999, when he was also appointed Chairman of the Supervisory Board of Elsevier and Chairman of Reed Elsevier plc. Mr Tabaksblat is a member of the Supervisory Boards of Aegon NV, TPG Group NV and VEBA AG, and Chairman of the European Round Table of Industrialists. He was Chairman and Chief Executive Officer of Unilever NV from 1994 to 1999.

22 Mr Webster has been a non-executive Director of Reed Elsevier plc since the Merger, a non-executive Director of Reed since 1992 and a member of the Supervisory Board of Elsevier since April 1999. He was non-executive Chairman of Reed Elsevier plc from August 1998 until April 1999. He is Chairman of Safeway plc.

Mr Ekker, a Dutch lawyer, has been Legal Director (Continental Europe) of Reed Elsevier plc since 1993. He has been Company Secretary of Elsevier since 1989. He joined Elsevier in 1977 as Legal Counsel.

Mr Radcliffe, an English barrister, has been Company Secretary and Director of Corporate Services of Reed Elsevier plc and Company Secretary of Reed since 1995. He joined Reed in 1986.

A recommendation will be made to the Elsevier Annual General Meeting in April 2000 to appoint Mrs G J de Boer-Kruyt as a member of the Elsevier Supervisory Board.

2. Summary description of the Reed Elsevier organisation

Introduction

Reed Elsevier is a world leading publisher and information provider. Its activities include scientific, legal and business publishing. Its principal operations are in North America and Europe. For the year ended 31 December 1999, Reed Elsevier had total turnover of approximately £ 3,4 billion and an average of approximately 27,700 employ- ees. In 1999, North America represented Reed Elsevier’s largest single geographic market, based on turnover by destination, contributing 56% of Reed Elsevier’s total turnover.

Structure

Reed Elsevier came into existence on 1 January 1993 when Reed and Elsevier contributed their business to two jointly owned companies, Reed Elsevier plc, a U.K. registered company which owns all the publishing and information businesses, and Elsevier Reed Finance BV, a Dutch registered company which owns the finance activities. Reed and Elsevier have retained their separate legal and national identities and are publicly held companies with separate stock exchange listings in London, Amsterdam and New York.

Reed and Elsevier each holds a 50% interest in Reed Elsevier plc, Reed holds a 46% interest in Elsevier Reed Finance BV, with Elsevier holding a 54% interest. Reed additionally holds a 5.8% indirect economic interest in Elsevier, as shown in the structure diagram. This equity interest has been taken into account in determining the equalisation ratio whereby one Elsevier Ordinary Share, is, in broad terms, intended to confer equivalent economic interests to 1.538 Reed Ordinary Shares. The equalisation ratio is subject to change to reflect share splits and similar events that affect the number of outstanding ordinary shares of either Reed or Elsevier.

Under the equalisation arrangements, Reed shareholders have a 52.9% economic interest in Reed Elsevier and Elsevier shareholders (other than Reed) have a 47.1% economic interest in Reed Elsevier. Holders of ordinary shares in Reed and Elsevier enjoy substantially equivalent dividend and capital rights with respect to their ordinary shares.

The boards of both Reed and Elsevier have agreed, except in exceptional circumstances, to recommend equivalent gross dividends (including, with respect to the dividend on Reed Ordinary Shares, the associated U.K. tax credit), based on the equalisation ratio. A Reed Ordinary Share pays dividends in sterling and is subject to U.K. tax law with respect to dividend and capital rights. An Elsevier Ordinary Share pays dividends in euros and is subject to Dutch tax law with respect to dividend and capital rights.

23 The following diagram presents a simplified view of the structure of Reed Elsevier:

5,8%

50% 50% 46% 54%

F I N A N C E O P E R AT I N G S U B S I D I A R I E S S U B S I D I A R I E S (incl. Elsevier Finance SA)

The principal assets of Reed comprise its 50% interest in Reed Elsevier plc, its 46% interest in Elsevier Reed Finance BV, its 5.8% indirect economic interest in Elsevier and certain amounts receivable from subsidiaries of Reed Elsevier plc. The principal assets of Elsevier comprise its 50 % interest in Reed Elsevier plc, its 54% interest in Elsevier Reed Finance BV and certain amounts receivable from subsidiaries of Reed Elsevier plc and Elsevier Reed Finance BV. Elsevier also owns shares, carrying special dividend rights, in certain of the Dutch subsidiaries of Reed Elsevier plc. These shares enable Elsevier to receive dividends from companies within its tax jurisdiction, thereby mitigating potential tax costs for Reed Elsevier.

24 7. Press Release on 27 March 2000

25 26 ANNEX A

The following is the text of the Reed Elsevier Annual Reports & Financial Statements 1999, which include the full audited financial statements for the Reed Elsevier combined businesses, Reed International P.L.C. and Elsevier NV for the year ended 31 December 1999. The auditors’ reports contained therein were addressed to the shareholders of Reed International P.L.C. and Elsevier NV in the specific context of the Reed Elsevier Annual Reports & Financial Statements 1999. They are reproduced in this Prospectus for information only. The full report can be derived from the Reed Elsevier Annual Reports and Financial Statements 1999 and the Reed Elsevier Annual Review & Summary Financial Statements 1999 taken together. These documents can be downloaded from the website of Reed Elsevier: www.reed-elsevier.com and are available at Warburg Dillon Read, Legal Transactions, P.O. Box, CH-8098 Zurich, Switzerland, or can be ordered by telephone (+41 1 239 47 03) and fax (+41 1 239 21 11) or by e-mail: [email protected].

27 (This page has been left blank intentionally.)

28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 ANNEX B

Excerpt from Reed Elsevier Annual Review 1998

Combined profit and loss statement ...... Combined cash flow statement ...... Combined balance sheet ...... Combined shareholders’ funds reconciliation ...... Combined statement of total recognised gains and losses ......

The following pages contain excerpts from the Reed Elsevier Annual Review 1998. They do not contain sufficient information to allow as full an understanding of the results and state of affairs of the Reed Elsevier combined businesses as would be provided by the full Annual Review 1998.

Copies of the Reed Elsevier Annual Review 1998 are available from the registered offices of Reed International P.L.C. and Elsevier NV at 25 Victoria Street, London SW1H 0EX, UK, and Van de Sande Bakhuysenstraat 4, 1061 AG Amsterdam, The Netherlands, respectively, or from the Reed Elsevier website at www.reed-elsevier.com.

109 110 111 112 113 114