Transition Agreement

December 8, 2005

VIA HAND DELIVERY

Kevin G. Gregory

9137 Whispering Pines

Saline, MI 48176

This letter along with the Exhibits attached hereto sets forth the substance of the separation agreement (collectively, the “Agreement”) that ProQuest Company (the “Company”) is offering to you to aid in your employment transition.

(a)         Your last day of employment with the Company and your employment termination date will be December 31, 2005 unless an earlier date is mutually agreed upon by both signing parties or required under paragraph 1(d) below (the “Separation Date”).

(b)         You agreed to resign your position as Senior Vice President and CFO upon November 11, 2005 (the “Transition Date”); provided, however, you will remain a regular full-time employee from the Transition Date until the Separation Date (the “Transition Period”). In addition, you shall resign from any other offices and positions you hold with the Company and with any affiliated entities at such times on or prior to the Separation Date as determined in the sole discretion of the CEO. During the Transition Period, you will provide internal consulting and transition assistance (including but not limited to activities as reasonably requested to assist in an orderly transition of duties) to the Company, and work on special projects within your area of expertise, as reasonably requested by the CEO or successor CFO, that may arise with respect to subject matters that are within the scope of your expertise. You will be provided reasonable release time to interview with prospective employers, provided that you remain available to fulfill your duties under this Agreement. You agree to cooperate fully, at the Company’s request, to promptly sign, execute, make and do all such deeds, acts and things as the Company may reasonably request, which may be necessary or appropriate to effectuate the

Kevin G. Gregory

December 8 , 2005

Page 2

termination of your employment and affiliation with the Company, its affiliated entities and their respective employee benefit plans.

(c)         Subject to compliance with your obligations hereunder, you will continue to receive your current base salary and be eligible for the same benefits currently available to you (including paid vacation time accrual and participation in the Company’s group health, dental and vision insurance plans, 401(k) plan, supplemental executive retirement plan, executive deferred compensation plan) through the Separation Date notwithstanding any reduced responsibilities on the Transition Date, except that paragraph 2 below shall apply in lieu of any existing bonus arrangements for the 2005 fiscal year. On the Separation Date, the Company will pay you all accrued salary, and all accrued and unused vacation, earned through the Separation Date. The Company has paid fees for outplacement services with Lee Hecht Harrison under its senior management program in Michigan and Chicago. Since you have accepted other employment which shall commence in January 2006, outplacement assistance shall no longer be made available to you.

(d)         Provided that you (i) remain employed with the Company until the Separation Date, and (ii) perform in a satisfactory and cooperative manner as described under paragraph 1(e) below, the Company agrees to retain you to provide certain consulting services to the Company in lieu of any separation benefits to which you may be entitled under the Company Separation Plan (as defined below) or any other arrangement or understanding. Such consulting services shall be provided in accordance with the attached consulting agreement attached hereto as Exhibit C (the “Consulting Agreement”).

(e)         The Company reserves the right to immediately terminate your employment if you fail to act in a satisfactory and cooperative manner at any time prior to December 31, 2005. For purposes of this Agreement, you will be deemed not to have acted in a “satisfactory and cooperative manner” if you (1) commit any act (or refrain from taking any act) that would constitute “Cause” as defined in the ProQuest Company Separation Benefits Plan, a copy of which is attached hereto as Exhibit B (the “Separation Plan”), or (2) fail to perform any of the duties outlined in this Agreement, particularly with respect to duties outlined in paragraph 1(a) and (b) above.

(a)         The Company agrees that despite your anticipated transition from active employment as Senior Vice President and CFO effective upon the Transition Date, following the effective date of this Agreement (as defined in paragraph 9(e) below), and provided you remain employed with the Company until December 31, 2005 and meet all conditions of this Agreement, you shall be eligible to receive a bonus in the Financial bonus program (the “Annual Incentive Bonus”) for fiscal year 2005 (ending December 31, 2005). The Annual Incentive Bonus, through the Transition Date, will be paid based on the financial goals established for the Company’s Executive Committee, and from the Transition Date through the Separation Date will be based exclusively upon your effectiveness and contribution during this

Kevin G. Gregory

December 8 , 2005

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period as reasonably determined by the CEO. Payment of the bonus under this paragraph 2(a), if any, shall be made to you in a lump sum in 2006 at the same time that bonus payments for fiscal year 2005 are made to other executive officers of the Company. Notwithstanding the foregoing, in the event of your death or disability (as defined in the Company’s long-term disability program) prior to the Transition Date, a bonus under this paragraph 2(a) will be paid on a pro rata basis to the extent that the financial goals established for the Company’s Executive Committee are achieved for fiscal year 2005.

(b)         In addition to the Annual Incentive Bonus, so long as you are employed by the Company on December 30, 2005 and meet all conditions of this Agreement, you will receive a supplemental bonus in the amount of $200,000 based upon your input and advice of the success of certain special strategic projects that include, without limitation, the sale and disposition of the periodical microfilm business, the electronic coursepack business and the facility located at 300 Zeeb Rd., Ann Arbor, MI (the “Supplemental Bonus”).

As part of your employment, the Company granted you certain options to buy common stock of the Company pursuant to the 2003 ProQuest Strategic Performance Plan or the Company’s 1995 Employee Stock Option Plan (collectively, your “Options”). Except as set forth herein, all terms, conditions, and limitations applicable to these Options will remain in full force and effect pursuant to the applicable stock option agreements between you and the Company, and the applicable plan provisions under the 2003 ProQuest Strategic Performance Plan or the 1995 Employee Stock Option Plan, as applicable. Notwithstanding the foregoing, any and all Options granted to you pursuant to the 2004 multi-year stock option grant shall be immediately forfeited.

Within ten (10) business days of the effective date of this Agreement, the Company will pay you directly an amount equal to ten thousand dollars ($10,000) for professional fees you incur pursuant to the Agreement. The professional fee assistance will be reported by the Company as taxable income to you. The Company shall not make a tax gross-up payment with respect to such fees.

Kevin G. Gregory

December 8 , 2005

Page 4

     5.       Separation Benefits

The basic separation pay benefit that you would otherwise be entitled to without execution of this Agreement is limited to your rights under the Separation Plan. Notwithstanding anything to the contrary in this Agreement, if your employment terminates prior to the Separation Date, the Company shall only be obligated to pay you those benefits to which you are entitled under the Separation Plan, subject to any right of offset if you have received any benefits prior to completion of your obligations under this Agreement or the Consulting Agreement. In no event will you be eligible to receive any benefits under this Agreement or the Separation Plan if you terminate your employment without providing the Company at least two weeks advance notice.

You acknowledge that, except as expressly provided in this Agreement, you will not earn or receive any additional compensation, severance or benefits after the Separation Date. If you are not eligible to receive health and welfare benefits under your new employer’s benefit plans, the Company will pay you an amount equal to the costs to provide health and welfare benefits under the Company’s plans pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA). In no instance shall this payment extend beyond the term of the consulting arrangement attached as Exhibit C. For avoidance of doubt, the Separation Date shall be treated as the date when you ceased employment with the Company for all purposes. By signing this Agreement, you specifically acknowledge that the Separation Benefits payable under this Agreement are in lieu of any benefits under the Separation Plan.

On the Separation Date or as earlier requested by the Company, you agree to return to the Company all documents that you have had in your possession acquired during the course of your employment (and all copies thereof) and other Company property which you have had in your possession at any time, including, but not limited to, Company files, notes, drawings, records, plans, forecasts, reports, studies, analyses, proposals, agreements, financial information, research and development information, sales and marketing information, operational and personnel information, specifications, code, software, databases, computer-recorded information, tangible property and equipment (including, but not limited to, computers, facsimile machines, mobile telephones, servers, but excluding your Company laptop and its related peripheral equipment and software), credit cards, entry cards, identification badges and keys; and any materials of any kind which contain or embody any proprietary or confidential information of the Company (and all reproductions thereof in whole or in part). If you have used any personal computer, server, or e-mail system to receive, store, review, prepare or transmit any Company confidential or proprietary data, materials or information, you agree to provide the Company with a computer-useable copy of such information and then permanently delete and expunge such