Fill and Sign the Walter J Johnson 88 Refugee Who Founded Academic Press Form

ISSUANCE OF COMMON STOCK IN CONNECTION WITH ACQUISITION OF ABLEX PUBLISHING CORPORATION The Company has conducted discussions with Walter J. Johnson, a Director, concerning the possible acquisition of certain assets of Ablex Publishing Corporation ("Ablex"), a scientific book and journal publisher owned wholly by Mr. Johnson, in exchange for shares of HBJ Common Stock. Ablex is located at 355 Chestnut Street, Norwood, New Jersey 07648 (telephone: 201-767-8450). Under the rules of the New York Stock Exchange, as presently in effect, the issuance of HBJ Common Stock to Mr. Johnson or Ablex in these circumstances requires shareholder approval. While no definitive agreement has been reached, the Company believes that a proper valuation of the asse ts of Ablex it wishes to acquire would entail the issuance of HBJ Common Stock calculated to have a value of $2,000,000, with the number of shares to be determined by using a weighted average of the closing prices of HBJ Common Stock during a period of ten trading days ending shortly before the closing of the transaction. Such closing is not anticipated to occur earlier than late August 1989. If such weighted average price were equal to $9.875. the closing price on March 17. 1989, approximately 202.531 shares of HBJ Common Stock, representing 0.28 percent of the outstanding shares on March 17, 1989, would be issued in the transaction. Ablex, which commenced doing business in 1978, publishes a number of scientific books and journals. In general, these publications complement those published by HBJ. In the proposed transaction, HBJ plans to acquire certain of Ablex's assets, principally inventories. receivables, contracts for both published and still unpublished books and journals as well as all copyrights, and, as part of the transaction, will assume certain current liabilities incurred in the ordinary course of busi- ness. There are no employment contracts, and severance for discontinued employees is expected to be de minimis . Based on an examination of records and bulk storage of inventories, and giving a reasonable allowance for obsolete stock, HBJ believes that the journal and book inventories have a value of approxi- mately $750,000 and the receivables, given an allowance for bad debts, have a value of approximately $250,000. Further, HBJ considers Ablex's book and journal contracts and copyrights to have a value of at least $ 1,000,000. These values do not give effect to the expense savings which HBJ believes may be realized through combining Ablex's marketing, production, order-billing, and shipping with those of HBJ's scientific publishing operations. Ablex's unaudited financial statements indicate that its revenues for the year ended December 31, 1988 were approximately $1,500,000. The accounting treatment of the transaction as well as the tax consequences to the transferor (whether taxable or tax-free) have not yet been determined and will depend on the final terms of the transaction. HBJ, however, anticipates that the transaction, if consummated, will be accounted for as a purchase transaction. In light of (a) the small number of shares of HBJ Common Stock involved in the proposed transaction, (b) HBJ's belief that the transaction is not material to HBJ or its shareholders, (c) the fact that, absent the rule s of the New York Stock Exchange, shareholder approval would not be required, (d) the judgment of the Board of Directors of HBJ that the transaction is in the best interests of HBJ and its shareholders, and (e) HBJ's belief that financial information as to Ablex and HBJ (including pro forma financial information), in addition to that set forth above or incorporated by reference herein (see INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE), is not material for the exercise of a prudent judgment by shareholders as to the approval of the issuance of HBJ Common Stock in the transaction, such information has been omitted. The Board of Directors will present for consideration at the Meeting a resolution enabling the Company to issue up to $2,000,000 in market value of HBJ Common Stock (determined as set forth above) in exchange for assets of Ablex in the transaction described here. Such resolution requires the approval of the holders of a majority of the shares of HBJ Common Stock entitled to vote at the Meeting. No further authorization of shareholders will be required for the issuance of such shares. The Board of Directors recommends a vote FOR approval of such resolution. Proxies will be voted FOR approval of such resolution unless otherwise specified in the proxy. Harcourt Brace Jovanovich, Inc. 4/11/89