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Exhibit 2.2
SCHEDULE F
PLAN OF ARRANGEMENT
UNDER SECTION 192
OF THE CANADA BUSINESS CORPORATIONS ACT
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Plan of Arrangement, unless there is something in the subject
matter or context inconsistent therewith, the following terms shall have the
respective meanings set out below and grammatical variations of such terms shall
have corresponding meanings:
"AFFILIATE" has the meaning ascribed thereto in the Securities Act;
"ARRANGEMENT" means an arrangement under section 192 of the CBCA on the
terms and subject to the conditions set out in this Plan of Arrangement,
subject to any amendments or variations thereto made in accordance with
section 6.1 of the Merger Agreement or Article 6 or made at the direction
of the Court;
"ARRANGEMENT RESOLUTION" means the special resolution of the Seagram
Shareholders, to be substantially in the form and content of Schedule A
annexed to the Merger Agreement;
"ARTICLES OF ARRANGEMENT" means the articles of arrangement of Seagram in
respect of the Arrangement that are required by the CBCA to be sent to the
Director after the Final Order is made;
"AVERAGE MARKET PRICE" means the amount (rounded to the nearest one
hundredth of a cent) equal to the average of the Daily Market Price for
each trading day during the Measuring Period, with each such Daily Market
Price converted into U.S. dollars at the noon buying rate in New York City
on the applicable trading day for cable transfers in euros as certified for
customs purposes by the Federal Reserve Bank of New York;
"BUSINESS DAY" means any day on which commercial banks are generally open
for business in Toronto, Ontario, New York City, New York and France, other
than a Saturday, a Sunday or a day observed as a holiday in Toronto,
Ontario, in New York City, New York or in France under applicable laws;
"CANADIAN RESIDENT" means a resident of Canada for purposes of the ITA and
includes a partnership any member of which is a resident of Canada for
purposes of
the ITA;
"CBCA" means the Canada Business Corporations Act, as now in effect and as
it may be amended from time to time prior to the Effective Date;
"CERTIFICATE" means the certificate of arrangement giving effect to the
Arrangement, issued pursuant to subsection 192(7) of the CBCA after the
Articles of Arrangement have been filed;
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"COURT" means the Superior Court of Justice (Ontario);
"CURRENT MARKET PRICE" has the meaning ascribed thereto in the Exchangeable
Share Provisions;
"CUSTODY AGREEMENT" means the custody agreement to be made among Vivendi,
Vivendi Exchangeco and the Custodian in connection with this Plan of
Arrangement substantially in the form and content of Schedule C annexed to
the Merger Agreement, with such changes thereto as the parties to the
Merger Agreement, acting reasonably, may agree;
"CUSTODIAN" means the Person acting from time to time as custodian under
the Custody Agreement;
"DAILY MARKET PRICE" means, for any trading day during the Measuring
Period, the amount equal to the per share closing price of Vivendi Shares
on the PSE, as published by the SBF-Bourse de Paris for such trading day;
"DEPOSITARY" means - at its offices set out in the Letter of Transmittal
and Election Form;
"DIRECTOR" means the Director appointed pursuant to section 260 of the
CBCA;
"DISSENT RIGHTS" has the meaning ascribed thereto in section 3.1;
"DISSENTING SHAREHOLDER" means a holder of Seagram Common Shares who
dissents in respect of the Arrangement in strict compliance with the
Dissent Rights;
"DIVIDEND AMOUNT" means an amount equal to all declared and unpaid
dividends on an Exchangeable Share held by a holder on any dividend record
date which occurred prior to the date of purchase of such share by Vivendi
Holdings from such holder;
"EFFECTIVE DATE" means the date shown on the Certificate;
"EFFECTIVE TIME" means 12:01 a.m. (Toronto time) on the Effective Date;
"ELECTION DEADLINE" means 5:00 p.m. (Toronto time) at the place of deposit
on the date which is three Business Days prior to the Seagram Meeting Date;
"EXCHANGE RATIO" means the number (rounded to the nearest one
ten-thousandth) determined by dividing (i) U.S. $77.35 by (ii) the Average
Market Price; provided, however, that if the Average Market Price is equal
to or greater than U.S. $124.3369, the Exchange Ratio shall be .6221, and
if the Average Market Price is equal to or less than U.S. $96.6875, the
Exchange Ratio shall be .8000;
"EXCHANGEABLE ELECTED SHARES" means, subject to the limitations set forth
in section 2.3(a), any Seagram Common Share (other than a Seagram Common
Share held by Vivendi or any affiliate thereof) that the holder thereof
shall have elected in accordance with the limitations in section 2.3, in a
duly completed Letter of Transmittal and Election Form deposited with the
Depositary no later than the Election Deadline, to transfer to
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Vivendi Exchangeco under the Arrangement for a fraction of an Exchangeable
Share equal to the Exchange Ratio and certain ancillary rights;
"EXCHANGEABLE SHARES" means the non-voting exchangeable shares in the
capital of Vivendi Exchangeco, having the rights, privileges, restrictions
and conditions set out in the Exchangeable Share Provisions;
"EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges, restrictions
and conditions attaching to the Exchangeable Shares, which rights,
privileges, restrictions and conditions shall be substantially as set out
in Appendix 1 hereto;
"EXCHANGE TRUST AGREEMENT" means the exchange trust agreement to be made
among Vivendi, Vivendi Exchangeco and the Trustee in connection with this
Plan of Arrangement substantially in the form and content of Schedule D
annexed to the Merger Agreement, as amended pursuant to the terms of the
Exchange Trust Agreement;
"FINAL ORDER" means the final order of the Court approving the Arrangement
as such order may be amended by the Court at any time prior to the
Effective Date or, if appealed, then, unless such appeal is withdrawn or
denied, as affirmed or amended on appeal;
"GOVERNMENTAL ENTITY" means any (a) multinational, federal, provincial,
state, regional, municipal, local or other government, governmental or
public department, central bank, court, tribunal, arbitral body,
commission, board, bureau or agency, domestic or foreign, (b) any
subdivision, agent, commission, board, or authority of any of the foregoing
or (c) any quasi-governmental or private body exercising any regulatory,
expropriation or taxing authority under or for the account of any of the
foregoing;
"HOLDERS" means (a) when used with reference to the Seagram Common Shares,
the holders of such shares shown from time to time in the register
maintained by or on behalf of Seagram in respect thereof and (b) when used
with reference to Seagram Options and Seagram SARs means the holders
thereof from time to time;
"INTERIM ORDER" means the interim order of the Court, as the same may be
amended, in respect of the Arrangement, as contemplated by section 2.3 of
the Merger Agreement;
"ITA" means the Income Tax Act (Canada), as amended;
"LETTER OF TRANSMITTAL AND ELECTION FORM" means the letter of transmittal
and election form for use by holders of Seagram Common Shares, in the form
accompanying the Seagram Circular;
"LIQUIDATION AMOUNT" has the meaning ascribed thereto in the Exchangeable
Share Provisions;
"LIQUIDATION CALL PURCHASE PRICE" has the meaning ascribed thereto in
section 5.1(a);
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in section
5.1(a);
"LIQUIDATION DATE" has the meaning ascribed thereto in the Exchangeable
Share Provisions;
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"MARKET PRICE" means the amount equal to average closing sale prices of
Vivendi Shares on the PSE, as published by SBF - Paris Bourse SA, during
the Measuring Period, converted into U.S. dollars at the noon buying rate
in New York City on each trading day during the Measuring Period for cable
transfers in euros as certified
for customs purposes by the Federal Reserve Bank of New York;
"MEASURING PERIOD" means the 20 consecutive trading days on the PSE ending
on the third complete trading day prior to the Effective Date;
"MERGER AGREEMENT" means the merger agreement made as of June 19, 2000
among Vivendi (by a predecessor corporation), Seagram and the other parties
thereto, as amended, supplemented and/or restated in accordance therewith
prior to the Effective Date, providing for, among other things, the
Arrangement;
"PERSON" includes any individual, firm, partnership, limited partnership,
joint venture, venture capital fund, limited liability company, unlimited
liability company, association, trust, trustee, executor, administrator,
legal personal representative, estate, group, body corporate, corporation,
unincorporated association or organization, Governmental Entity, syndicate
or other entity, whether or not having legal status;
"PSE" means the Paris Bourse;
"REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed thereto in
section 5.2(a);
"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in section 5.2(a);
"REDEMPTION DATE" has the meaning ascribed thereto in the Exchangeable
Share Provisions;
"REPLACEMENT OPTION" has the meaning ascribed thereto in section 2.2(d);
"REPLACEMENT SAR" has the meaning ascribed thereto in section 2.2(e);
"SEAGRAM" means The Seagram Company Ltd., a corporation existing under the
CBCA;
"SEAGRAM CIRCULAR" means the notice of the Seagram Meeting and accompanying
management proxy circular, including all appendices thereto, to be sent to
Seagram Shareholders in connection with the Seagram Meeting;
"SEAGRAM COMMON SHARES" means the outstanding common shares in the capital
of Seagram;
"SEAGRAM MEETING" means the special meeting of Seagram Shareholders,
including any adjournment or postponement thereof, to be called and held in
accordance with the Interim Order to consider the Arrangement;
"SEAGRAM MEETING DATE" means the date of the Seagram Meeting;
"SEAGRAM OPTIONS" means the stock options to purchase Seagram Common Shares
granted under the Seagram Stock Plans;
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"SEAGRAM SARS" means any stock appreciation rights issued under any Seagram
Stock Plan;
"SEAGRAM SHAREHOLDERS" means the holders of Seagram Common Shares;
"SEAGRAM STOCK PLANS" means the Seagram 1983 Stock Appreciation Right and
Stock Unit Plan, the Seagram Stock Plan for Non-Employee Directors, the
Seagram 1988 Stock Option Plan, the Seagram 1992 Stock Incentive Plan and
the Seagram 1996 Stock Incentive Plan, in each case as amended to the date
of the Merger Agreement;
"SECURITIES ACT" means the Securities Act (Ontario) and the rules,
regulations and policies made thereunder, as amended;
"TRANSFER AGENT" has the meaning ascribed thereto in the Exchangeable Share
Provisions;
"TRUSTEE" means the trustee chosen by Vivendi and Seagram, acting
reasonably, to act as trustee under the Exchange Trust Agreement, being a
corporation organized and existing under the laws of Canada and authorized
to carry on the business of a trust company in all the provinces of Canada,
and any successor trustee appointed under the Exchange Trust Agreement;
"VIVENDI" has the meaning ascribed thereto in the Merger Agreement;
"VIVENDI ADRS" means the American depositary receipts of Vivendi, each
evidencing one Vivendi ADS;
"VIVENDI ADS ADJUSTMENT RATIO" has the meaning ascribed thereto in the
Exchangeable Share Provisions;
"VIVENDI ADS CONSIDERATION" has the meaning ascribed thereto in the
Exchangeable Share Provisions;
"VIVENDI ADSS" means the American depositary shares of Vivendi, each
representing one Vivendi Share;
"VIVENDI EXCHANGECO" means 3744531 Canada Inc., a corporation existing
under the CBCA and being a subsidiary of Vivendi Holdings;
"VIVENDI HOLDINGS" means 3045479 Nova Scotia Company, an unlimited
liability company existing under the laws of the Province of Nova Scotia
and wholly owned, directly or indirectly, by Vivendi through any number of
entities, each of which is a disregarded entity for U.S. federal income tax
purposes;
"VIVENDI SHARES" means the ordinary shares in the capital of Vivendi,
nominal value Euro -; and
"VIVENDI VOTING RIGHT" means an "action en nue propriete" under French law,
which, among other things, represents one vote on the same basis and in the
same circumstances as one Vivendi Share.
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1.2 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this Plan of Arrangement into Articles, Sections and
other portions and the insertion of headings are for convenience of reference
only and shall not affect the interpretation of this Plan of Arrangement. Unless
otherwise indicated, all references to an "Article" or "Section" followed by a
number and/or a letter refer to the specified Article or Section of this Plan of
Arrangement. The terms "this Plan of Arrangement", "hereof", "herein" and
"hereunder" and similar expressions refer to this Plan of Arrangement (including
the Appendices hereto) and not to any particular Article, Section or other
portion hereof and include any agreement or instrument supplementary or
ancillary hereto.
1.3 NUMBER, ETC.
Unless the context otherwise requires, words importing the singular
shall include the plural and vice versa and words importing any gender include
all genders.
1.4 DATE FOR ANY ACTION
In the event that any date on which any action is required to be taken
hereunder by any Person is not a Business Day, such action shall be required to
be taken on the next succeeding day which is a Business Day.
ARTICLE 2
ARRANGEMENT
2.1 BINDING EFFECT
This Plan of Arrangement will become effective at, and be binding at
and after, the Effective Time on (i) Seagram, (ii) Vivendi, (iii) Vivendi
Holdings, (iv) Vivendi Exchangeco, (v) all holders and all beneficial owners of
Seagram Common Shares, (vi) all holders of Seagram Options, Replacement Options,
Seagram SARs and Replacement SARs and (vii) all holders and all beneficial
owners of Exchangeable Shares from time to time.
2.2 ARRANGEMENT
Commencing at the Effective Time, the following shall occur and shall
be deemed to occur in the following order (except that the transfer of shares
pursuant to section 2.2(b) and the entering into of the Exchange Trust Agreement
pursuant to section 2.2(c) shall occur and shall be deemed to occur
simultaneously) without any further act or formality:
(a) each Seagram Common Share, other than (i) the Exchangeable Elected
Shares, (ii) Seagram Common Shares held by Dissenting Shareholders who
are ultimately entitled to be paid the fair value of the Seagram Common
Shares held by them and (iii) Seagram Common Shares held by Vivendi or
any affiliate thereof which shall not be exchanged under this
Arrangement and shall remain outstanding as Seagram Common Shares held
by Vivendi or any affiliate thereof, will be transferred by the holder
thereof, without any act or formality on its part, to Vivendi Holdings
in exchange for that number of fully paid and non-assessable Vivendi
ADSs equal to the Exchange Ratio (subject to section 4.4), and the name
of each such holder will
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be removed from the register of holders of Seagram Common Shares and
added to the register of holders of Vivendi ADSs and Vivendi Holdings
will be recorded as the registered holder of such Seagram Common Shares
and will be deemed to be the legal and beneficial owner thereof;
(b) each Exchangeable Elected Share will be transferred by the holder
thereof, without any act or formality on its part, to Vivendi
Exchangeco in exchange for (i) that number of fully paid and
non-assessable Exchangeable Shares equal to the Exchange Ratio (subject
to section 4.4), and the name of each such holder will be removed from
the register of holders of Seagram Common Shares and added to the
register of holders of Exchangeable Shares and Vivendi Exchangeco will
be recorded as the registered holder of such Seagram Common Shares and
will be deemed to be the legal and beneficial owner thereof and (ii)
that number of fully paid and non-assessable Vivendi Voting Rights
equal to the number of Exchangeable Shares issued pursuant to the
foregoing clause (i), which Vivendi Voting Rights Vivendi shall deposit
with or for the account of the Custodian for and on behalf of the
holders of the Exchangeable Shares issued pursuant to the foregoing
clause (i) in accordance with the Custody Agreement entered into by
Vivendi, Vivendi Exchangeco and the Custodian at such time;
(c) coincident with the transfer of Exchangeable Elected Shares to Vivendi
Exchangeco, Vivendi, Vivendi Exchangeco and the Trustee will enter into
the Exchange Trust Agreement and all rights of holders of Exchangeable
Shares under the Exchange Trust Agreement shall be received by them as
part of the property receivable by them under section 2.2(b) in
exchange for the Exchangeable Elected Shares so transferred;
(d) each Seagram Option outstanding at the Effective Time will be exchanged
for an option from Vivendi or Seagram (with, in the case of an option
from Seagram, a guarantee of performance by Vivendi, including all
obligations of Seagram to deliver Vivendi ADSs thereunder), as Vivendi
may determine, (a "REPLACEMENT OPTION") to purchase the number of
Vivendi ADSs equal to the product of the Exchange Ratio multiplied by
the number of Seagram Common Shares that may be purchased as if such
Seagram Option were exercisable and exercised immediately prior to the
Effective Time. Such Replacement Option shall provide for an exercise
price per Vivendi ADS equal to the exercise price per Seagram Common
Share of such Seagram Option immediately prior to the Effective Time
divided by the Exchange Ratio (rounded up to the nearest cent). If the
foregoing calculation results in the total Replacement Options of any
particular holder thereof being exercisable for a fraction of a Vivendi
ADS, then the number of Vivendi ADSs subject to such holder's total
Replacement Options shall be rounded down to the next whole number of
Vivendi ADSs and the total exercise price for such Replacement Options
will be reduced by the exercise price of the fractional Vivendi ADS.
Subject to the foregoing provisions of this section 2.2(d) and section
4.4(p) of the Merger Agreement and the changes contemplated thereby,
the term to expiry, conditions to and manner of exercising, vesting
schedule and all other terms and conditions of such Replacement Option
will be the same as the terms and conditions of such Seagram Option and
any document or agreement previously evidencing such Seagram Option
shall, until further notice is provided, evidence and be deemed to
evidence such Replacement Option; and
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(e) each Seagram SAR outstanding at the Effective Time will be exchanged
for a stock appreciation right from Vivendi or Seagram (with, in the
case of a stock appreciation right from Seagram, a guarantee of
performance by Vivendi, including all obligations of Seagram to deliver
cash or Vivendi ADSs, as appropriate, thereunder), as Vivendi may
determine, (a "REPLACEMENT SAR") in respect of the number of Vivendi
ADSs equal to the product of the Exchange Ratio multiplied by the
number of Seagram Common Shares that were the subject of the Seagram
SAR immediately prior to the Effective Time. Such Replacement SAR shall
provide for an exercise price (if any) per Vivendi ADS equal to the
exercise price per Seagram Common Share of such Seagram SAR immediately
prior to the Effective Time divided by the Exchange Ratio (rounded up
to the nearest cent). If the foregoing calculation results in the total
Replacement SARs of any particular holder thereof being exercisable for
a fraction of a Vivendi ADS, then the number of Vivendi ADSs subject to
such holder's Replacement SAR shall be rounded down to the next whole
number of Vivendi ADSs and the total exercise price for such
Replacement SARs will be reduced by the exercise price of the
fractional Vivendi ADS. Subject to the foregoing provisions of this
section 2.2(e) and section 4.4(p) of the Merger Agreement, the term to
expiry, conditions to and manner of exercising, vesting schedule and
all other terms and conditions of such Replacement SAR will be the same
as the terms and conditions of such Seagram SAR and any document or
agreement previously evidencing such Seagram SAR shall evidence and be
deemed to evidence such Replacement SAR.
2.3 ELECTIONS
(a) Each Person who, at or prior to the Election Deadline, is a holder of
record of Seagram Common Shares and who is either a Canadian Resident
that holds such shares on its own behalf or who holds such shares on
behalf of a Person who is a Canadian Resident will be entitled, with
respect to all or a portion of such shares, to make or deliver an
election at or prior to the Election Deadline to receive Exchangeable
Shares or Vivendi ADSs, or a combination thereof, in exchange for such
holder's Seagram Common Shares on the basis set forth herein and in the
Letter of Transmittal and Election Form. If the number of whole
Exchangeable Shares that would result from the exchange referred to in
section 2.2(b) exceeds 97,000,000, then the number of Exchangeable
Elected Shares shall be reduced to the number that, when the Exchange
Ratio is applied, would result in the issuance under section 2.2(b) of
97,000,000 Exchangeable Shares and each Letter of Transmittal and
Election Form received by the Depositary at or prior to the Election
Deadline will be deemed to be amended to reduce the number of
Exchangeable Elected Shares proportionately so that the number of whole
Exchangeable Shares resulting from the exchange referred to in section
2.2(b) is 97,000,000.
In the event that such maximum is exceeded, the parties to the Merger
Agreement have agreed that, at Seagram's election, the Vivendi ADS
Adjustment Ratio will be increased and the Exchange Ratio applicable to
the Exchangeable Elected Shares will be decreased as necessary to
permit a Vivendi Voting Right to be available in respect of each
Exchangeable Share and appropriate amendments to the economic
equivalence provisions in the Support Agreement and the Exchange
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Trust Agreement will be made to ensure that the increased Vivendi ADS
Adjustment Ratio is applied to any required adjustments.
(b) Each beneficial owner of Seagram Common Shares who is a Canadian
Resident, other than any such owner who is exempt from tax under the
ITA or is a partnership all of the members of which who are Canadian
Residents are also exempt from tax under the ITA, and who has validly
elected to receive Exchangeable Shares shall be entitled to make an
income tax election pursuant to subsection 85(1) of the ITA or, if such
beneficial owner is a partnership, subsection 85(2) of the ITA (and in
each case, where applicable, the analogous provisions of provincial
income tax law) with respect to the transfer of its Seagram Common
Shares to Vivendi Exchangeco by providing two signed copies of the
necessary prescribed election forms to the Depositary within 90 days
following the Effective Date, duly completed with the details of the
number of Seagram Common Shares transferred and the applicable agreed
amounts for the purposes of such elections. Thereafter, subject to the
election forms being correct and complete and complying with the
provisions of the ITA (or applicable provincial income tax law), the
forms will be signed by Vivendi Exchangeco and returned to such
beneficial owner of Seagram Common Shares within 30 days after the
receipt thereof by the Depositary for filing with the Canada Customs
and Revenue Agency (or the applicable provincial taxing authority).
Vivendi Exchangeco will not be responsible for the proper completion of
any election form and, except for Vivendi Exchangeco's obligation to
return duly completed election forms which are received by the
Depositary within 90 days of the Effective Date, within 30 days after
the receipt thereof by the Depositary, Vivendi Exchangeco will not be
responsible for any taxes, interest or penalties resulting from the
failure by a beneficial owner of Seagram Common Shares to properly
complete or file the election forms in the form and manner and within
the time prescribed by the ITA (or any applicable provincial
legislation). In its sole discretion, Vivendi Exchangeco may choose to
sign and return an election form received more than 90 days following
the Effective Date, but Vivendi Exchangeco will have no obligation to
do so.
2.4 ADJUSTMENTS TO EXCHANGE RATIO
The Exchange Ratio shall be adjusted to reflect fully the effect of any
stock split, reverse split, stock dividend (including any dividend or
distribution of securities convertible into Vivendi ADSs or Seagram Common
Shares, other than stock dividends paid in lieu of ordinary course dividends),
consolidation, reorganization, recapitalization or other like change with
respect to Vivendi ADSs, Vivendi Shares or Seagram Common Shares occurring after
the date of the Merger Agreement and prior to the Effective Time; provided,
however, that no such adjustment to the Exchange Ratio shall be made in
connection with the Vivendi/Canal Transactions (as defined in the Merger
Agreement).
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ARTICLE 3
RIGHTS OF DISSENT
3.1 RIGHTS OF DISSENT
Holders of Seagram Common Shares may exercise rights of dissent with
respect to such shares pursuant to and in the manner set forth in section 190 of
the CBCA and this section 3.1 (the "DISSENT RIGHTS") in connection with the
Arrangement; provided that, notwithstanding subsection 190(5) of the CBCA, the
written objection to the Arrangement Resolution referred to in subsection 190(5)
of the CBCA must be received by Seagram not later than 5:00 p.m. (Toronto time)
on the Business Day preceding the Seagram Meeting. Holders of Seagram Common
Shares who duly exercise such rights of dissent and who:
(a) are ultimately determined to be entitled to be paid fair value for
their Seagram Common Shares, shall be deemed to have transferred such
Seagram Common Shares as of the Effective Time, without any further act
or formality and free and clear of all liens, claims and encumbrances,
to Seagram and such shares shall be cancelled as of the Effective Time;
or
(b) are ultimately determined not to be entitled, for any reason, to be
paid fair value for their Seagram Common Shares, shall be deemed to
have participated in the Arrangement on the same basis as a
non-dissenting holder of Seagram Common Shares who did not make a valid
election to receive Exchangeable Shares and shall receive Vivendi ADSs
on the basis determined in accordance with section 2.2;
but in no case shall Vivendi, Vivendi Exchangeco, Vivendi Holdings, Seagram, the
Depositary or any other Person be required to recognize such Dissenting
Shareholders as holders of Seagram Common Shares after the Effective Time and
the names of such Dissenting Shareholders shall be deleted from the register of
holders of Seagram Common Shares at the Effective Time.
ARTICLE 4
CERTIFICATES AND FRACTIONAL SHARES
4.1 ISSUANCE OF CERTIFICATES REPRESENTING EXCHANGEABLE SHARES
At or promptly after the Effective Time, Vivendi Exchangeco shall
deposit with the Depositary, for the benefit of the holders of Exchangeable
Elected Shares, certificates representing that number of whole Exchangeable
Shares to be delivered pursuant to section 2.2(b). Upon surrender (on or prior
to the Election Deadline) to the Depositary for cancellation of a certificate
which immediately prior to the Effective Time represented Seagram Common Shares
that, under the Arrangement, were exchanged for Exchangeable Shares, together
with a duly completed Letter of Transmittal and Election Form and such
additional documents, instruments and payments as the Depositary may reasonably
require, the holder of such surrendered certificate shall be entitled to receive
in exchange therefor, and the Depositary shall deliver to such holder, a
certificate representing that number (rounded down to the nearest whole number)
of Exchangeable Shares which such holder has the right to receive (together with
any cash in lieu of fractional Exchangeable Shares pursuant to
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section 4.4), less any amounts withheld pursuant to section 4.7, and the
certificate so surrendered shall forthwith be cancelled. In the event of a
transfer of ownership of Seagram Common Shares that is not registered in the
transfer records of Seagram, a certificate representing the proper number of
Exchangeable Shares may, subject to section 2.2, be issued to the transferee if
the certificate representing such Seagram Common Shares is presented to the
Depositary, on or prior to the Election Deadline, accompanied by a duly
completed Letter of Transmittal and Election Form and all documents required to
evidence and effect such transfer.
4.2 EXCHANGE OF CERTIFICATES FOR VIVENDI ADSS
At or promptly after the Effective Time, Vivendi Holdings shall deposit
with the Depositary, for the benefit of the holders of Seagram Common Shares who
will receive Vivendi ADSs in connection with the Arrangement, Vivendi ADRs
representing that number of whole Vivendi ADSs to be received by holders of
Seagram Common Shares pursuant to section 2.2(a). Upon surrender to the
Depositary for cancellation of a certificate which immediately prior to the
Effective Time represented outstanding Seagram Common Shares that, under the
Arrangement, were transferred to Vivendi Holdings in exchange for Vivendi ADSs
pursuant to section 2.2(a), together with a duly completed Letter of Transmittal
and Election Form and such additional documents, instruments and payments as the
Depositary may reasonably require, the holder of such surrendered certificate
shall be entitled to receive in exchange therefor, and the Depositary shall
deliver to such holder, Vivendi ADRs representing that number (rounded down to
the nearest whole number) of Vivendi ADSs which such holder has the right to
receive (together with any dividends or distributions with respect to the
Vivendi ADSs pursuant to section 4.3 and any cash in lieu of fractional Vivendi
ADSs pursuant to section 4.4), less any amounts withheld pursuant to section
4.7, and the certificate so surrendered shall forthwith be cancelled. In the
event of a transfer of ownership of Seagram Common Shares which is not
registered in the transfer records of Seagram, Vivendi ADRs representing the
proper number of Vivendi ADSs may, subject to section 2.2, be issued to the
transferee if the certificate representing such Seagram Common Shares is
presented to the Depositary, accompanied by all documents required to evidence
and effect such transfer. Until surrendered as contemplated by this section 4.2,
each certificate which immediately prior to the Effective Time represented one
or more outstanding Seagram Common Shares that, under the Arrangement, were
transferred to Vivendi Holdings in return for Vivendi ADSs pursuant to section
2.2(a) shall be deemed at all times after the Effective Time to represent only
the right to receive upon such surrender (i) Vivendi ADRs representing the
Vivendi ADSs as contemplated by this section 4.2, (ii) a cash payment in lieu of
any fractional Vivendi ADSs as contemplated by section 4.4 and (iii) any
dividends or distributions with a record date after the Effective Time
theretofore paid or payable with respect to the Vivendi ADSs as contemplated by
section 4.3, in each case less any amounts withheld pursuant to section 4.7.
4.3 DISTRIBUTIONS WITH RESPECT TO UNSURRENDERED CERTIFICATES
No dividends or other distributions declared or made with respect to
the Vivendi ADSs with a record date after the Effective Time, shall be paid to
the holder of any unsurrendered certificate which immediately prior to the
Effective Time represented outstanding Seagram Common Shares, and no cash
payment in lieu of fractional Vivendi ADSs shall be paid to any such holder
pursuant to section 4.4, unless and until the holder of such certificate shall
surrender such certificate in accordance with section 4.2. Subject to applicable
law, at the time of such surrender of any such certificate (or, in the case of
clause
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(z) below, at the appropriate payment date), there shall be paid to the holder
of the certificates representing Seagram Common Shares, without interest, (x)
the amount of any cash payable in lieu of a fractional Vivendi ADS to which such
holder is entitled pursuant to section 4.4, (y) the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to the Vivendi ADSs to which such holder is entitled pursuant hereto and
(z) only to the extent not paid under clause (y), on the appropriate payment
date, the amount of dividends or other distributions with a record date after
the Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such Vivendi ADSs.
4.4 NO FRACTIONAL SHARES
No certificates representing fractional Exchangeable Shares or
fractional Vivendi ADSs shall be issued upon the surrender for exchange of
certificates pursuant to section 4.1 or 4.2 and no dividend, stock split or
other change in the capital structure of Vivendi Exchangeco or Vivendi shall
relate to any such fractional security and such fractional securities shall not
entitle the owner thereof to exercise any rights as a securityholder of Vivendi
Exchangeco or Vivendi. In lieu of any such fractional Exchangeable Shares each
Person otherwise entitled to a fractional interest in an Exchangeable Share will
be entitled to receive a cash payment equal to such Person's pro rata portion
(based on such Person's fractional interest in an Exchangeable Share) of the net
proceeds after expenses received by the Depositary upon the sale of whole shares
representing an accumulation of all fractional interests in Exchangeable Shares
to which all such Persons would otherwise be entitled. The Depositary will sell
such Exchangeable Shares by private sale (including by way of sale through the
facilities of any stock exchange upon which the Exchangeable Shares are then
listed) as soon as reasonably practicable following the Effective Date. Subject
to section 4.3, the aggregate net proceeds after expenses of such sale will be
distributed by the Depositary, pro rata in relation to the respective fractions,
among the Persons otherwise entitled to receive fractional interests in
Exchangeable Shares. In lieu of any such fractional Vivendi ADSs each Person
otherwise entitled to a fractional interest in a Vivendi ADS will be entitled to
receive a cash payment equal to such Person's pro rata portion (based on such
Person's fractional interest in a Vivendi ADS) of the net proceeds after
expenses received by the Depositary upon the sale of whole Vivendi ADSs
representing an accumulation of all fractional interests in Vivendi ADSs to
which all such Persons would otherwise be entitled. The Depositary will sell
such Vivendi ADSs by private sale (including by way of sale through the
facilities of any stock exchange upon which the Vivendi ADSs are then listed) as
soon as reasonably practicable following the Effective Date. Subject to section
4.3, the aggregate net proceeds after expenses of such sale will be distributed
by the Depositary, pro rata in relation to the respective fractions, among the
Persons otherwise entitled to receive fractional interests in Vivendi ADSs.
4.5 LOST CERTIFICATES
In the event any certificate which immediately prior to the Effective
Time represented one or more outstanding Seagram Common Shares that were
exchanged pursuant to section 2.2 shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the Person claiming such
certificate to be lost, stolen or destroyed, the Depositary will issue in
exchange for such lost, stolen or destroyed certificate any cash pursuant to
section 4.4 and/or one or more certificates representing one or more
Exchangeable Shares or Vivendi ADSs (and any dividends or distributions with
respect thereto) deliverable in accordance with section 2.2 and such holder's
Letter of Transmittal and Election Form. When authorizing
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such payment in exchange for any lost, stolen or destroyed certificate, the
Person to whom certificates representing Exchangeable Shares or Vivendi ADSs are
to be issued shall, as a condition precedent to the issuance thereof, give a
bond satisfactory to Vivendi Exchangeco, Vivendi (and their respective transfer
agents) and the Depositary in such sum as Vivendi Exchangeco, Vivendi or the
Depositary may direct or otherwise indemnify Vivendi Exchangeco, Vivendi and the
Depositary in a manner satisfactory to Vivendi Exchangeco, Vivendi and the
Depositary against any claim that may be made against Vivendi Exchangeco,
Vivendi or the Depositary with respect to the certificate alleged to have been
lost, stolen or destroyed.
4.6 EXTINCTION OF RIGHTS
Any certificate which immediately prior to the Effective Time
represented outstanding Seagram Common Shares that were exchanged pursuant to
section 2.2(a) that is not deposited with all other instruments required by
section 4.2 on or prior to the fifth anniversary of the Effective Date shall
cease to represent a claim or interest of any kind or nature as a securityholder
of Vivendi Holdings or Vivendi. On such date, Vivendi ADSs (and any cash in lieu
of fractional interests in Vivendi ADSs, as provided in section 4.4) to which
the former holder of the certificate referred to in the preceding sentence was
ultimately entitled shall be deemed to have been surrendered for no
consideration to Vivendi, together with all entitlements to dividends and
distributions in respect thereof held for such former holder. None of Vivendi,
Vivendi Holdings or the Depositary shall be liable to any person in respect of
any Vivendi ADSs or cash for fractional interests (or dividends or distributions
in respect thereof) delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
4.7 WITHHOLDING RIGHTS
Vivendi, Vivendi Holdings, Vivendi Exchangeco, Seagram and the
Depositary shall be entitled to deduct and withhold from any dividend or
consideration otherwise payable to any holder of Seagram Common Shares, Vivendi
ADSs or Exchangeable Shares such amounts as Vivendi, Vivendi Holdings, Vivendi
Exchangeco, Seagram or the Depositary determines, acting reasonably, are
required or permitted pursuant to section 116 of the ITA or any successor
provision thereto to be deducted and withheld with respect to such payment under
the ITA, the United States Internal Revenue Code of 1986, the tax laws of France
or any provision of federal, provincial, territorial, state, local or foreign
tax law, in each case, as amended. To the extent that amounts are so withheld,
such withheld amounts shall be treated for all purposes hereof as having been
paid to the holder of the securities in respect of which such deduction and
withholding was made, provided that such withheld amounts are actually remitted
to the appropriate taxing authority. To the extent that the amount so required
or permitted to be deducted or withheld from any payment to a holder exceeds the
cash portion of the consideration otherwise payable to the holder, Vivendi,
Vivendi Holdings, Vivendi Exchangeco and the Depositary are hereby authorized to
sell or otherwise dispose of such portion of the consideration as is necessary
to provide sufficient funds to Vivendi, Vivendi Holdings, Vivendi Exchangeco or
the Depositary, as the case may be, to enable it to comply with such deduction
or withholding requirement and Vivendi, Vivendi Holdings, Vivendi Exchangeco or
the Depositary shall notify the holder thereof and remit any unapplied balance
of the net proceeds of such sale.
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ARTICLE 5
CERTAIN RIGHTS OF VIVENDI HOLDINGS TO ACQUIRE
EXCHANGEABLE SHARES
5.1 VIVENDI HOLDINGS LIQUIDATION CALL RIGHT
In addition to Vivendi Holdings' rights contained in the Exchangeable
Share Provisions, including, without limitation, the Retraction Call Right (as
defined in the Exchangeable Share Provisions), Vivendi Holdings shall have the
following rights in respect of the Exchangeable Shares:
(a) Vivendi Holdings shall have the overriding right (the "LIQUIDATION CALL
RIGHT"), in the event of and notwithstanding the proposed liquidation,
dissolution or winding-up of Vivendi Exchangeco or any other
distribution of the assets of Vivendi Exchangeco among its shareholders
for the purpose of winding up its affairs, pursuant to Article 5 of the
Exchangeable Share Provisions, to purchase from all but not less than
all of the holders of Exchangeable Shares (other than any holder of
Exchangeable Shares which is Vivendi or an affiliate of Vivendi) on the
Liquidation Date all but not less than all of the Exchangeable Shares
held by each such holder upon payment by Vivendi Holdings of an amount
per Exchangeable Share (the "LIQUIDATION CALL PURCHASE PRICE") equal to
the sum of (i) the Current Market Price of a Vivendi ADS (multiplied by
the then current Vivendi ADS Adjustment Ratio) on the last Business Day
prior to the Liquidation Date, which shall be satisfied in full by
Vivendi Holdings delivering or causing to be delivered to such holder
the Vivendi ADS Consideration, plus (ii) any Dividend Amount. In the
event of the exercise of the Liquidation Call Right by Vivendi
Holdings, each holder shall be obligated to sell all the Exchangeable
Shares held by the holder to Vivendi Holdings on the Liquidation Date
upon payment by Vivendi Holdings to the holder of the Liquidation Call
Purchase Price for each such Exchangeable Share and Vivendi Exchangeco
shall have no obligation to pay any Liquidation Amount to any holder of
such Exchangeable Shares so purchased by Vivendi Holdings.
(b) To exercise the Liquidation Call Right, Vivendi Holdings must notify
the Transfer Agent, as agent for the holders of Exchangeable Shares,
and Vivendi Exchangeco of Vivendi Holdings' intention to exercise such
right, at least 30 days before the Liquidation Date in the case of a
voluntary liquidation, dissolution or winding-up of Vivendi Exchangeco
or any other voluntary distribution of the assets of Vivendi Exchangeco
among its shareholders for the purpose of winding up its affairs, and
at least five Business Days before the Liquidation Date in the case of
an involuntary liquidation, dissolution or winding-up of Vivendi
Exchangeco or any other involuntary distribution of the assets of
Vivendi Exchangeco among its shareholders for the purpose of winding up
its affairs. The Transfer Agent will notify the holders of Exchangeable
Shares as to whether or not Vivendi Holdings has exercised the
Liquidation Call Right forthwith after the earlier of (i) receipt of
notice by the Transfer Agent from Vivendi Holdings of its intention to
exercise such right and (ii) the expiry of the period during which such
right may be exercised by Vivendi Holdings. If Vivendi Holdings
exercises the Liquidation Call Right, then on the Liquidation Date
Vivendi Holdings will purchase and the
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holders will sell all of the Exchangeable Shares then outstanding for a
price per Exchangeable Share equal to the Liquidation Call Purchase
Price.
(c) For the purposes of completing the purchase of the Exchangeable Shares
pursuant to the Liquidation Call Right, Vivendi Holdings shall deposit
with the Transfer Agent, on or before the Liquidation Date, the
aggregate number of Vivendi ADSs deliverable by Vivendi Holdings upon
exercise of such right and a cheque or cheques of Vivendi Holdings
payable at par at any branch of the bankers of Vivendi Holdings
representing the aggregate Dividend Amount, if any, in payment of the
total Liquidation Call Purchase Price, less any amounts withheld
pursuant to section 4.7. Provided that Vivendi Holdings has complied
with the immediately preceding sentence, on and after the Liquidation
Date the rights of each holder of Exchangeable Shares will be limited
to receiving, without interest, such holder's proportionate part of the
total Liquidation Call Purchase Price payable by Vivendi Holdings upon
presentation and surrender by the holder of certificates representing
the Exchangeable Shares held by such holder and the holder shall on and
after the Liquidation Date be considered and deemed for all purposes to
be the holder of the Vivendi ADSs to which it is entitled. Upon
surrender to the Transfer Agent of a certificate or certificates
representing Exchangeable Shares, together with such other documents
and instruments as may be required to effect a transfer of Exchangeable
Shares under the governing corporate statute and the by-laws of Vivendi
Exchangeco and such additional documents, instruments and payments as
the Transfer Agent may reasonably require, the holder of such
surrendered certificate or certificates shall be entitled to receive in
exchange therefor, and the Transfer Agent on behalf of Vivendi Holdings
shall deliver to such holder, the Vivendi ADSs (which securities shall
be fully paid and non-assessable and shall be free and clear of any
lien, claim or encumbrance) to which the holder is entitled and a
cheque or cheques of Vivendi Holdings payable at par at any branch of
the bankers of Vivendi Holdings in payment of the remaining portion, if
any, of the total Liquidation Call Purchase Price, less any amounts
withheld pursuant to section 4.7. If Vivendi Holdings does not exercise
the Liquidation Call Right in the manner described above, on the
Liquidation Date the holders of the Exchangeable Shares will be
entitled to receive in exchange therefor the Liquidation Amount payable
by Vivendi Exchangeco in connection with the liquidation, dissolution
or winding-up of Vivendi Exchangeco or any other distribution of the
assets of Vivendi Exchangeco among its shareholders for the purpose of
winding up its affairs pursuant to Article 5 of the Exchangeable Share
Provisions.
5.2 VIVENDI HOLDINGS REDEMPTION CALL RIGHT
In addition to Vivendi Holdings' rights contained in the Exchangeable
Share Provisions, including, without limitation, the Retraction Call Right (as
defined in the Exchangeable Share Provisions), Vivendi Holdings shall have the
following rights in respect of the Exchangeable Shares:
(a) Vivendi Holdings shall have the overriding right (the "REDEMPTION CALL
RIGHT"), notwithstanding the proposed redemption of the Exchangeable
Shares by Vivendi Exchangeco pursuant to Article 7 of the Exchangeable
Share Provisions, to purchase from all but not less than all of the
holders of Exchangeable Shares (other than any holder of Exchangeable
Shares which is Vivendi or an affiliate of Vivendi)
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on the Redemption Date all but not less than all of the Exchangeable
Shares held by each such holder upon payment by Vivendi Holdings to
each such holder of an amount per Exchangeable Share (the "REDEMPTION
CALL PURCHASE PRICE") equal to the sum of (i) the Current Market Price
of a Vivendi ADS (multiplied by the then current Vivendi ADS Adjustment
Ratio) on the last Business Day prior to the Redemption Date, which
shall be satisfied in full by Vivendi Holdings delivering or causing to
be delivered to such holder the Vivendi ADS Consideration, plus (ii)
any Dividend Amount. In the event of the exercise of the Redemption
Call Right by Vivendi Holdings, each holder shall be obligated to sell
all the Exchangeable Shares held by the holder to Vivendi Holdings on
the Redemption Date upon payment by Vivendi Holdings to the holder of
the Redemption Call Purchase Price for each such Exchangeable Share,
and Vivendi Exchangeco shall have no obligation to redeem, or to pay
any Dividend Amount in respect of, such Exchangeable Shares so
purchased by Vivendi Holdings.
(b) To exercise the Redemption Call Right, Vivendi Holdings must notify the
Transfer Agent, as agent for the holders of Exchangeable Shares, and
Vivendi Exchangeco of Vivendi Holdings' intention to exercise such
right at least 30 days before the Redemption Date, except in the case
of a redemption occurring as a result of an Exchangeable Share Voting
Event or an Exempt Exchangeable Share Voting Event (each as defined in
the Exchangeable Share Provisions), in which case Vivendi Holdings
shall so notify the Transfer Agent and Vivendi Exchangeco on or before
the Redemption Date. The Transfer Agent will notify the holders of the
Exchangeable Shares as to whether or not Vivendi Holdings has exercised
the Redemption Call Right forthwith after the earlier of (i) receipt of
notice by the Transfer Agent from Vivendi Holdings of its intention to
exercise such right and (ii) the expiry of the period during which such
right may be exercised by Vivendi Holdings. If Vivendi Holdings
exercises the Redemption Call Right, then on the Redemption Date
Vivendi Holdings will purchase and the holders will sell all of the
Exchangeable Shares then outstanding for a price per Exchangeable Share
equal to the Redemption Call Purchase Price.
(c) For the purposes of completing the purchase of the Exchangeable Shares
pursuant to the Redemption Call Right, Vivendi Holdings shall deposit
with the Transfer Agent, on or before the Redemption Date, the
aggregate number of Vivendi ADSs deliverable by Vivendi Holdings upon
exercise of such right and a cheque or cheques of Vivendi Holdings
payable at par at any branch of the bankers of Vivendi Holdings
representing the aggregate Dividend Amount, if any, in payment of the
total Redemption Call Purchase Price, less any amounts withheld
pursuant to section 4.7. Provided that Vivendi Holdings has complied
with the immediately preceding sentence, on and after the Redemption
Date the rights of each holder of Exchangeable Shares will be limited
to receiving, without interest, such holder's proportionate part of the
total Redemption Call Purchase Price payable by Vivendi Holdings upon
presentation and surrender by the holder of certificates representing
the Exchangeable Shares held by such holder and the holder shall on and
after the Redemption Date be considered and deemed for all purposes to
be the holder of the Vivendi ADSs to which it is entitled. Upon
surrender to the Transfer Agent of a certificate or certificates
representing Exchangeable Shares, together with such other documents
and instruments as may be required to effect a transfer of Exchangeable
Shares under the governing corporate statute and the by-laws of Vivendi
Exchangeco and such additional documents, instruments and payments as
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the Transfer Agent may reasonably require, the holder of such
surrendered certificate or certificates shall be entitled to receive in
exchange therefor, and the Transfer Agent on behalf of Vivendi Holdings
shall deliver to such holder, the Vivendi ADSs to which the holder is
entitled and a cheque or cheques of Vivendi Holdings payable at par at
any branch of the bankers of Vivendi Holdings in payment of the
remaining portion, if any, of the total Redemption Call Purchase Price,
less any amounts withheld pursuant to section 4.7. If Vivendi Holdings
does not exercise the Redemption Call Right in the manner described
above, on the Redemption Date the holders of the Exchangeable Shares
will be entitled to receive in exchange therefor the Redemption Price
plus accrued and unpaid dividends payable by Vivendi Exchangeco in
connection with the redemption of the Exchangeable Shares pursuant to
Article 7 of the Exchangeable Share Provisions.
ARTICLE 6
AMENDMENTS
6.1 AMENDMENTS TO PLAN OF ARRANGEMENT
(a) Seagram reserves the right to amend, modify and/or supplement this Plan
of Arrangement at any time and from time to time prior to the Effective
Date, provided that each such amendment, modification and/or supplement
must be (i) set out in writing, (ii) approved by Vivendi, (iii) filed
with the Court and, if made following the Seagram Meeting, approved by
the Court and (iv) communicated to the Seagram Shareholders if and as
required by the Court.
(b) Any amendment, modification or supplement to this Plan of Arrangement
may be proposed by Seagram at any time prior to the Seagram Meeting
(provided that Vivendi shall have consented thereto) with or without
any other prior notice or communication and if so proposed and accepted
by the Persons voting at the Seagram Meeting (other than as may be
required under the Interim Order) shall become part of this Plan of
Arrangement for all purposes.
(c) Any amendment, modification or supplement to this Plan of Arrangement
that is approved by the Court following the Seagram Meeting shall be
effective only if (i) it is consented to by each of Seagram and Vivendi
and (ii) if required by the
Court, it is consented to by the Seagram Shareholders voting in the
manner directed by the Court.
(d) Any amendment, modification or supplement to this Plan of Arrangement
may be made following the Effective Date unilaterally by Vivendi,
provided that it concerns a matter which, in the reasonable opinion of
Vivendi, is of an administrative nature required to better give effect
to the implementation of this Plan of Arrangement and is not adverse to
the financial or economic interests of any holder of Exchangeable
Shares, Vivendi ADSs, Replacement Options or Replacement SARs.
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ARTICLE 7
FURTHER ASSURANCES
7.1 Notwithstanding that the transactions and events set out herein shall
occur and be deemed to occur in the order set out in this Plan of
Arrangement without any further act or formality, each of the parties
to the Merger Agreement shall make, do and execute, or cause to be
made, done and executed, all such further acts, deeds, agreements,
transfers, assurances, instruments or documents as may reasonably be
required by any of them in order further to document or evidence any of
the transactions or events set out herein.
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APPENDIX 1
TO THE PLAN OF ARRANGEMENT
PROVISIONS ATTACHING TO THE
EXCHANGEABLE SHARES OF
3744531 CANADA INC.
The Exchangeable Shares shall have the following rights,
privileges, restrictions and conditions:
ARTICLE 1
INTERPRETATION
1.1 For the purposes of these share provisions:
"AFFILIATE" has the meaning ascribed thereto in the Securities Act;
"ARRANGEMENT" means an arrangement under section 192 of the CBCA on the
terms and subject to the conditions set out in the Plan of Arrangement;
"BOARD OF DIRECTORS" means the board of directors of the Corporation;
"BUSINESS DAY" means any day on which commercial banks are generally
open for business in Toronto, Ontario, New York City, New York and
France, other than a Saturday, a Sunday or a day observed as a holiday
in Toronto, Ontario, in New York City, New York or in France under
applicable laws;
"CBCA" means the Canada Business Corporations Act, as amended;
"CANADIAN DOLLAR EQUIVALENT" means in respect of an amount expressed in
a currency other than Canadian dollars (the "FOREIGN CURRENCY AMOUNT")
at any date the product obtained by multiplying:
(a) the Foreign Currency Amount; by
(b) the noon spot exchange rate on such date for such foreign
currency expressed in Canadian dollars as reported by the Bank
of Canada or, in the event such spot exchange rate is not
available, such spot exchange rate on such date for such
foreign currency expressed in Canadian dollars as may be
deemed by the Board of Directors to be appropriate for such
purpose;
"COMMON SHARES" means the common shares in the capital of the
Corporation;
"CORPORATION" means 3744531 Canada Inc., a corporation existing under
the CBCA;
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"CURRENT MARKET PRICE" means, in respect of a Vivendi ADS on any date,
the Canadian Dollar Equivalent of the average of the closing prices (if
available) of Vivendi ADSs on the NYSE or NASDAQ during a period of 20
consecutive trading days ending on the third trading day before such
date, as provided by Reuters for the symbol "o", or, if the Vivendi
ADSs are not then listed on the NYSE or NASDAQ, the Canadian Dollar
Equivalent of the average of the closing prices (if available) of
Vivendi Shares on the principal exchange on which Vivendi Shares are
then listed; provided, however, that if in the opinion of the Board of
Directors the public distribution or trading activity of Vivendi ADSs
or Vivendi Shares, as the case may be, during such period does not
create a market which reflects the fair market value of a Vivendi ADS,
then the Current Market Price of a Vivendi ADS shall be determined by
the Board of Directors, in good faith and in its sole discretion, and
provided further that any such selection, opinion or determination by
the Board of Directors shall be conclusive and binding;
"CUSTODIAN" means the Person acting from time to time as custodian
under the Custody Agreement;
"CUSTODY AGREEMENT" means the custody agreement to be made among
Vivendi, Vivendi Exchangeco and the Custodian in connection with the
Plan of Arrangement substantially in the form and content of Schedule C
annexed to the Merger Agreement, as amended pursuant to the terms of
the Custody Agreement;
"DIRECTOR" means the Director appointed pursuant to section 260 of the
CBCA;
"DIVIDEND AMOUNT" means an amount equal to all declared and unpaid
dividends on an Exchangeable Share held by a holder on any dividend
record date which occurred prior to the date of purchase of such share
by Vivendi Holdings from such holder;
"EFFECTIVE DATE" means the date shown on the certificate of arrangement
to be issued by the Director under the CBCA giving effect to the
Arrangement;
"EXCHANGEABLE SHARES" means the non-voting exchangeable shares in the
capital of the Corporation, having the rights, privileges, restrictions
and conditions set forth herein;
"EXCHANGEABLE SHARE VOTING EVENT" means any matter other than an Exempt
Exchangeable Share Voting Event in respect of which holders of
Exchangeable Shares are entitled to vote as shareholders of the
Corporation and in respect of which the Board of Directors of the
Corporation has received and included in the proxy materials sent to
holders of Exchangeable Shares in respect of the meeting to consider
such matter an opinion of an internationally recognized investment bank
confirming that after giving effect to such matter the economic
equivalence of the Exchangeable Shares and the Vivendi ADSs is
maintained for the holders of Exchangeable Shares (other than Vivendi
and its affiliates);
"EXCHANGE TRUST AGREEMENT" means the exchange trust agreement to be
made among Vivendi, the Corporation and the Trustee in connection with
the Plan of Arrangement substantially in the form and content of
Schedule D annexed to the Merger Agreement, as amended pursuant to the
terms of the Exchange Trust Agreement;
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"EXEMPT EXCHANGEABLE SHARE VOTING EVENT" means any matter in respect of
which holders of Exchangeable Shares are entitled to vote as
shareholders of the Corporation in order to approve any change to, or
in the rights of the holders of, the Exchangeable Shares, where such
change would be required to maintain the economic equivalence of the
Exchangeable Shares and the Vivendi ADSs and the Board of Directors of
the Corporation has received and included in the proxy materials sent
to holders of Exchangeable Shares in respect of the meeting to consider
such matter an opinion of an internationally recognized investment bank
confirming such economic equivalence after giving effect to such
change;
"GOVERNMENTAL ENTITY" means any (a) multinational, federal, provincial,
state, regional, municipal, local or other government, governmental or
public department, central bank, court, tribunal, arbitral body,
commission, board, bureau or agency, domestic or foreign, (b) any
subdivision, agent, commission, board, or authority of any of the
foregoing or (c) any quasi-governmental or private body exercising any
regulatory, expropriation or taxing authority under or for the account
of any of the foregoing;
"HOLDERS" means, when used with reference to the Exchangeable Shares,
the holders of Exchangeable Shares shown from time to time in the
register maintained by or on behalf of the Corporation in respect of
the Exchangeable Shares;
"LIQUIDATION AMOUNT" has the meaning ascribed thereto in section 5.1;
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in the Plan
of Arrangement;
"LIQUIDATION DATE" has the meaning ascribed thereto in section 5.1;
"MERGER AGREEMENT" means the merger agreement made as of June 19, 2000
among Vivendi (by a predecessor corporation), Seagram and the other
parties thereto, as amended, supplemented and/or restated in accordance
therewith prior to the Effective Date, providing for, among other
things, the Arrangement;
"NASDAQ" means The NASDAQ Stock Market and any successor exchange or
market;
"NYSE" means the New York Stock Exchange, Inc. and any successor
exchange or market;
"PERSON" includes any individual, firm, partnership, limited
partnership, joint venture, venture capital fund, limited liability
company, unlimited liability company, association, trust, trustee,
executor, administrator, legal personal representative, estate, group,
body corporate, corporation, unincorporated association or
organization, Governmental Entity, syndicate or other entity, whether
or not having legal status;
"PLAN OF ARRANGEMENT" means the plan of arrangement relating to the
arrangement of Seagram under section 192 of the CBCA substantially in
the form and content of Schedule F annexed to the Merger Agreement and
any amendments or variations thereto made in accordance with section
6.1 of the Merger Agreement or Article 6 of the Plan of Arrangement or
made at the direction of the Court;
"PURCHASE PRICE" has the meaning ascribed thereto in section 6.3;
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"REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed thereto in
the Plan of Arrangement;
"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement;
"REDEMPTION DATE" means the date, if any, established by the Board of
Directors for the redemption by the Corporation of all but not less
than all of the outstanding Exchangeable Shares pursuant to Article 7,
which date shall be no earlier than the THIRTIETH anniversary of the
date which is fourteen days prior to the Effective Date, unless:
(a) there are fewer than [5% OF ACTUAL NUMBER OF EXCHANGEABLE
SHARES TO BE ISSUED AS DETERMINED AS AT THE ELECTION DEADLINE
AS DEFINED IN THE PLAN OF ARRANGEMENT] Exchangeable Shares
outstanding (other than Exchangeable Shares held by Vivendi
and its affiliates, and as such number of shares may be
adjusted as deemed appropriate by the Board of Directors to
give effect to any subdivision or consolidation of or stock
dividend on the Exchangeable Shares, any issue or distribution
of rights to acquire Exchangeable Shares or securities
exchangeable for or convertible into Exchangeable Shares, any
issue or distribution of other securities or rights or
evidences of indebtedness or assets, or any other capital
reorganization or other transaction affecting the Exchangeable
Shares), in which case the Board of Directors may accelerate
such redemption date to such date prior to the thirtieth
anniversary of the date which is fourteen days prior to the
Effective Date as it may determine, upon at least 60 days'
prior written notice to the registered holders of the
Exchangeable Shares and the Trustee;
(b) an Exchangeable Share Voting Event is proposed and (i) the
Board of Directors has determined, in good faith and in its
sole discretion, that it is not reasonably practicable to
accomplish the business purpose intended by the Exchangeable
Share Voting Event, which business purpose must be bona fide
and not for the primary purpose of causing the occurrence of a
Redemption Date, in any other commercially reasonable manner
that does not result in an Exchangeable Share Voting Event,
and (ii) the holders of the Exchangeable Shares fail to take
the necessary action at a meeting or other vote of holders of
Exchangeable Shares to approve or disapprove, as applicable,
the Exchangeable Share Voting Event, in which case the
redemption date shall be the Business Day following the day on
which the holders of the Exchangeable Shares failed to take
such action;
(c) an Exempt Exchangeable Share Voting Event is proposed and the
holders of the Exchangeable Shares fail to take the necessary
action at a meeting or other vote of holders of Exchangeable
Shares to approve or disapprove, as applicable, the Exempt
Exchangeable Share Voting Event, in which case the redemption
date shall be the Business Day following the day on which the
holders of the Exchangeable Shares failed to take such action;
provided, however, that the accidental failure or omission to give any
notice of redemption under clauses (a), (b) or (c) above to any of the
holders of Exchangeable Shares shall not affect the validity of any
such redemption;
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<PAGE> 23
"REDEMPTION PRICE" has the meaning ascribed thereto in section 7.1;
"RETRACTED SHARES" has the meaning ascribed thereto in section 6.1(a);
"RETRACTION CALL RIGHT" has the meaning ascribed thereto in section
6.1(c);
"RETRACTION DATE" has the meaning ascribed thereto in section 6.1(b);
"RETRACTION PRICE" has the meaning ascribed thereto in section 6.1;
"RETRACTION REQUEST" has the meaning ascribed thereto in section 6.1;
"SEAGRAM" means The Seagram Company Ltd., a corporation existing under
the CBCA;
"SECURITIES ACT" means the Securities Act (Ontario) and the rules,
regulations and policies made thereunder, as amended;
"SUPPORT AGREEMENT" means the support agreement to be made among
Vivendi, Vivendi Holdings and the Corporation in connection with the
Plan of Arrangement substantially in the form and content of Schedule H
annexed to the Merger Agreement, as amended pursuant to the terms of
the Support Agreement;
"TRANSFER AGENT" means o or such other Person as may from time to time
be appointed by the Corporation as the registrar and transfer agent for
the Exchangeable Shares;
"TRUSTEE" means the trustee under the Exchange Trust Agreement, being a
corporation organized and existing under the laws of Canada and
authorized to carry on the business of a trust company in all the
provinces of Canada, and any successor trustee appointed under the
Exchange Trust Agreement;
"VIVENDI" has the meaning ascribed thereto in the Merger Agreement;
"VIVENDI ADS ADJUSTMENT RATIO" means one, subject to adjustment
pursuant to section 11.3;
"VIVENDI ADS CONSIDERATION" means, from time to time, the number of
Vivendi ADSs resulting from multiplying one Vivendi ADS by the then
current Vivendi ADS Adjustment Ratio;
"VIVENDI ADS DIVIDEND DECLARATION DATE" means the date on which
dividends or distributions are declared on the Vivendi ADSs;
"VIVENDI ADSs" means the American depositary shares of Vivendi, each
representing one Vivendi Share;
"VIVENDI HOLDINGS" means 3045479 Nova Scotia Company, an unlimited
liability company existing under the laws of the Province of Nova
Scotia and wholly owned, directly or indirectly, by Vivendi through any
number of entities, each of which is a disregarded entity
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<PAGE> 24
for U.S. federal income tax purposes;
"VIVENDI HOLDINGS CALL NOTICE" has the meaning ascribed thereto in
section 6.3;
"VIVENDI PREEMPTIVE RIGHT" means any right arising from time to time in
favour of a holder of a Vivendi Voting Right to acquire from Vivendi
additional Vivendi Voting Rights;
"VIVENDI SHARES" means the ordinary shares in the capital of Vivendi
nominal value Euro o; and
"VIVENDI VOTING RIGHT" means an "action en nue propriete" under French
law, which, among other things, represents one vote on the same basis
and in the same circumstances as one Vivendi Share.
1.2 The division of these share provisions into Articles, Sections and other
portions and the insertion of headings are for convenience of reference only and
shall not affect the interpretation of this Plan of Arrangement. Unless
otherwise indicated, all references to an "Article" or "Section" followed by a
number and/or a letter refer to the specified Article or Section of these share
provisions. The terms "hereof", "herein" and "hereunder" and similar expressions
refer to these share provisions and not to any particular Article, Section or
other portion hereof and include any agreement or instrument supplementary or
ancillary hereto.
1.3 Unless the context otherwise requires, words importing the singular shall
include the plural and vice versa and words importing any gender include all
genders.
1.4 In the event that any date on which any action is required to be taken
hereunder by any Person is not a Business Day, such action shall be required to
be taken on the next succeeding day which is a Business Day.
ARTICLE 2
RANKING OF EXCHANGEABLE SHARES
2.1 The Exchangeable Shares shall be entitled to a preference over the Common
Shares and any other shares ranking junior to the Exchangeable Shares, with
respect to the payment of dividends and the distribution of assets in the event
of the liquidation, dissolution or winding-up of the Corporation, whether
voluntary or involuntary, or any other distribution of the assets of the
Corporation, among its shareholders for the purpose of winding up its affairs.
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<PAGE> 25
ARTICLE 3
DIVIDENDS
3.1 A holder of an Exchangeable Share shall be entitled to receive and the Board
of Directors shall, subject to applicable law, on each Vivendi ADS Dividend
Declaration Date, declare a dividend or other distribution on each Exchangeable
Share:
(a) in the case of a cash dividend or distribution declared on the
Vivendi ADSs, in an amount in cash for each Exchangeable Share
equal to, and in the currency of, the cash dividend or
distribution paid on each Vivendi ADS multiplied by the then
current Vivendi ADS Adjustment Ratio or the Canadian Dollar
Equivalent thereof on the Vivendi ADS Dividend Declaration
Date;
(b) in the case of a stock dividend or other distribution declared
on the Vivendi ADSs to be paid in Vivendi ADSs, by (i) the
issue or transfer by the Corporation of such number of
Exchangeable Shares for each Exchangeable Share as is equal to
the number of Vivendi ADSs to be paid on each Vivendi ADS as a
result of such stock dividend or other distribution plus (ii)
if an adjustment to the Vivendi ADS Adjustment Ratio has
occurred after the Effective Date, such additional
Exchangeable Shares, cash, securities or other consideration,
if any, which together with the Exchangeable Shares issued in
accordance with clause (i) will effect a corresponding and
contemporaneous and economically equivalent (as determined by
the Board of Directors in accordance with section 3.5)
dividend or other distribution unless in lieu of such stock
dividend or other distribution the Corporation elects to
effect a corresponding and contemporaneous and economically
equivalent (as determined by the Board of Directors in
accordance with section 3.5) subdivision of the outstanding
Exchangeable Shares; or
(c) in the case of a dividend or other distribution declared on
the Vivendi ADSs in property other than cash or Vivendi ADSs,
in such type and amount of property for each Exchangeable
Share as is economically equivalent to (to be determined by
the Board of Directors as contemplated by section 3.5) the
type and amount of property declared as a dividend or other
distribution on each Vivendi ADS.
Such dividends or other distributions shall be paid out of
money, assets or property of the Corporation properly applicable to the payment
of dividends, out of authorized but unissued shares of the Corporation or
through the subdivision of outstanding Exchangeable Shares, as applicable. The
holders of Exchangeable Shares shall not be entitled to any dividends or other
distributions other than or in excess of the dividends or other distributions
referred to in this section 3.1.
3.2 Cheques of the Corporation payable at par at any branch of the bankers of
the Corporation shall be issued in respect of any cash dividends or other
distributions contemplated by section 3.1(a) and the sending of such a cheque to
each holder of an Exchangeable Share shall satisfy the cash dividend or other
distribution represented thereby unless the cheque is not paid on presentation.
Certificates registered in the name of the holder shall be issued or transferred
in respect of any stock dividends or other distributions contemplated by section
3.1(b) and the sending of such a certificate to each holder of an Exchangeable
Share shall satisfy the stock dividend or other
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<PAGE> 26
distribution represented thereby. Such other type and amount of property in
respect of any dividends or other distributions contemplated by sections 3.1(b)
or (c) shall be issued, distributed or transferred by the Corporation in such
manner as it shall determine and the issuance, distribution or transfer thereof
by the Corporation to each holder of an Exchangeable Share shall satisfy the
dividend or other distribution represented thereby. No holder of an Exchangeable
Share shall be entitled to recover by action or other legal process against the
Corporation any dividend or other distribution that is represented by a cheque
that has not been duly presented to the Corporation's bankers for payment or
that otherwise remains unclaimed for a period of six years from the date on
which such dividend or other distribution was payable.
3.3 The record date for the determination of the holders of Exchangeable Shares
entitled to receive payment of, and the payment date for, any dividend or other
distribution declared on the Exchangeable Shares under section 3.1 shall be the
same dates as the record date and payment date, respectively, for the
corresponding dividend or other distribution declared on the Vivendi ADSs.
3.4 If on any payment date for any dividends or other distributions declared on
the Exchangeable Shares under section 3.1 the dividends or other distributions
are not paid in full on all of the Exchangeable Shares then outstanding, any
such dividends or other distributions that remain unpaid shall be paid on a
subsequent date or dates determined by the Board of Directors on which the
Corporation shall have sufficient moneys, assets or property properly applicable
to the payment of such dividends or other distributions.
3.5 The Board of Directors shall determine, in good faith and in its sole
discretion, economic equivalence for the purposes of sections 3.1(b) and (c),
and each such determination shall be conclusive and binding on the Corporation
and its shareholders. In making each such determination, the following factors
shall, without excluding other factors determined by the Board of Directors to
be relevant, be considered by the Board of Directors:
(a) in the case of any stock dividend or other distribution
payable in Vivendi ADSs, the number of Vivendi ADSs issued as
a result of such stock dividend or other distribution in
proportion to the number of Vivendi ADSs previously
outstanding;
(b) in the case of the issuance or distribution of any rights,
options or warrants to subscribe for or purchase Vivendi ADSs
(or securities exchangeable for or convertible into or
carrying rights to acquire Vivendi ADSs), the relationship
between the exercise price of each such right, option or
warrant, the number of such rights, options or warrants to be
issued or distributed in respect of each Vivendi ADS and the
Current Market Price of a Vivendi ADS;
(c) in the case of the issuance or distribution of any other form
of property (including without limitation any shares or
securities of Vivendi of any class other than Vivendi ADSs,
any rights, options or warrants other than those referred to
in section 3.5(b), any evidences of indebtedness of Vivendi or
any assets of Vivendi) the relationship between the fair
market value (as determined by the Board of Directors in the
manner above contemplated) of such property to be issued or
distributed with respect to each outstanding Vivendi ADS and
the Current Market Price of a Vivendi ADS;
(d) in the case of any subdivision, redivision or change of the
then outstanding Vivendi ADSs into a greater number of Vivendi
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<PAGE> 27
ADSs or the reduction, combination, consolidation or change of
the then outstanding Vivendi ADSs into a lesser number of
Vivendi ADSs or any amalgamation, merger, reorganization or
other transaction affecting Vivendi ADSs, the effect thereof
upon the then outstanding Vivendi ADSs;
(e) in all such cases, the general taxation consequences of the
relevant event to owners of Exchangeable Shares to the extent
that such consequences may differ from the taxation
consequences to such holders determined as if they had held
Vivendi ADSs at the relevant time as a result of differing tax
treatment under the laws of Canada, the United States and
France (except for any differing consequences arising as a
result of differing marginal taxation rates and without regard
to the individual circumstances of owners of Exchangeable
Shares); and
(f) the then current Vivendi ADS Adjustment Ratio and any rights
under the Vivendi Voting Rights.
ARTICLE 4
CERTAIN RESTRICTIONS
4.1 So long as any of the Exchangeable Shares is outstanding, the Corporation
shall not at any time without, but may at any time with, the approval of the
holders of the Exchangeable Shares given as specified in section 10.2:
(a) pay any dividends on the Common Shares or any other shares
ranking junior to the Exchangeable Shares, other than stock
dividends payable in Common Shares or any such other shares
ranking junior to the Exchangeable Shares, as the case may be;
(b) redeem or purchase or make any capital distribution in respect
of Common Shares or any other shares ranking junior to the
Exchangeable Shares;
(c) redeem or purchase any other shares of the Corporation ranking
equally with the Exchangeable Shares with respect to the
payment of dividends or the distribution of assets in the
event of the liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, or any other
distribution of the assets of the Corporation among its
shareholders for the purpose of winding up its affairs; or
(d) issue any Exchangeable Shares or any other shares of the
Corporation ranking equally with, or superior to, the
Exchangeable Shares other than by way of stock dividends to
the holders of such Exchangeable Shares or pursuant to the
exercise of Seagram ACES or Seagram LYONS (each as defined in
the Merger Agreement).
The restrictions in this section 4.1 shall not apply if all
dividends on the outstanding Exchangeable Shares corresponding to dividends
declared on and paid on Vivendi ADSs prior to the date of any such event
referred to in this section 4.1 shall have been declared and paid on the
Exchangeable Shares.
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<PAGE> 28
4.2 Any transfer of an Exchangeable Share shall be deemed also to constitute a
transfer of the holder's interest in any accompanying Vivendi Voting Right. A
holder shall also be deemed to have acknowledged and agreed that if it commences
any formal proceeding before a court or regulatory body having jurisdiction in
the matter claiming any economic proceeds as a result of its interest in any
Vivendi Voting Rights accompanying such holder's Exchangeable Shares then all
the Exchangeable Shares held by it shall be automatically redeemed and the
provisions of Article 7 hereof shall apply mutatis mutandis provided that in
such case the Redemption Date means the first date on which such proceedings are
commenced.
ARTICLE 5
DISTRIBUTION ON LIQUIDATION
5.1 In the event of the liquidation, dissolution or winding-up of the
Corporation or any other distribution of the assets of the Corporation among its
shareholders for the purpose of winding up its affairs, a holder of Exchangeable
Shares shall be entitled, subject to applicable law, to receive from the assets
of the Corporation in respect of each Exchangeable Share held by such holder on
the effective date (the "LIQUIDATION DATE") of such liquidation, dissolution,
winding-up or other distribution, before any distribution of any part of the
assets of the Corporation among the holders of the Common Shares or any other
shares ranking junior to the Exchangeable Shares, an amount per share (the
"LIQUIDATION AMOUNT") equal to the sum of (i) the Current Market Price of a
Vivendi ADS (multiplied by the then current Vivendi ADS Adjustment Ratio) on the
last Business Day prior to the Liquidation Date, which shall be satisfied in
full by the Corporation causing to be delivered to such holder the Vivendi ADS
Consideration, plus (ii) an amount equal to all declared and unpaid dividends on
each such Exchangeable Share held by such holder on any dividend record date
which occurred prior to the Liquidation Date.
5.2 On or promptly after the Liquidation Date, and provided that the Liquidation
Call Right has not been exercised by Vivendi Holdings, the Corporation shall pay
or cause to be paid to the holders of the Exchangeable Shares the Liquidation
Amount for each such Exchangeable Share upon presentation and surrender of the
certificates representing such Exchangeable Shares, together with such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the CBCA and the by-laws of the Corporation and such
additional documents, instruments and payments as the Transfer Agent and the
Corporation may reasonably require, at the registered office of the Corporation
or at any office of the Transfer Agent as may be specified by the Corporation by
notice to the holders of the Exchangeable Shares. Payment of the total
Liquidation Amount for such Exchangeable Shares shall be made by delivery to
each holder, at the address of the holder recorded in the register of
shareholders of the Corporation for the Exchangeable Shares or by holding for
pick-up by the holder at the registered office of the Corporation or at any
office of the Transfer Agent as may be specified by the Corporation by notice to
the holders of Exchangeable Shares, on behalf of the Corporation of Vivendi ADSs
(which securities shall be fully paid and non-assessable and shall be free and
clear of any lien, claim or encumbrance) and a cheque of the Corporation payable
at par at any branch of the bankers of the Corporation in respect of the
remaining portion, if any, of the total Liquidation Amount (in each case less
any amounts withheld on account of tax required to be deducted and withheld
therefrom). On and after the Liquidation Date, the holders of the Exchangeable
Shares shall cease to be holders of such Exchangeable Shares and shall not be
entitled to exercise any of the rights of holders in respect thereof, other than
the right to receive their proportionate part of the total
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<PAGE> 29
Liquidation Amount, unless payment of the total Liquidation Amount for such
Exchangeable Shares shall not be made upon presentation and surrender of share
certificates in accordance with the foregoing provisions, in which case the
rights of the holders shall remain unaffected until the total Liquidation Amount
has been paid in the manner hereinbefore provided. The Corporation shall have
the right at any time promptly after the Liquidation Date to deposit or cause to
be deposited the total Liquidation Amount in respect of the Exchangeable Shares
represented by certificates that have not at the Liquidation Date been
surrendered by the holders thereof in a custodial account with any chartered
bank or trust Corporation in Canada. Upon such deposit being made, the rights of
the holders of such Exchangeable Shares after such deposit shall be limited to
receiving, without interest, their proportionate part of the total Liquidation
Amount so deposited for such Exchangeable Shares and all dividends and other
distributions with respect to the Vivendi ADSs to which such holders are
entitled with a record date on or after the Liquidation Date and before the time
at which such holders become the holders of such Vivendi ADSs provided that a
corresponding amount has not been received by such holders on their Exchangeable
Shares (in each case less any amount withheld on account of tax required to be
deducted and withheld therefrom) against presentation and surrender of the
certificates for such Exchangeable Shares held by them, respectively, in
accordance with the foregoing provisions. Upon such payment or deposit of the
total Liquidation Amount, the holders of the Exchangeable Shares shall
thereafter be considered and deemed for all purposes to be holders of the
Vivendi ADSs delivered to them or the custodian on their behalf.
5.3 After the Corporation has satisfied its obligations to pay the holders of
the Exchangeable Shares the Liquidation Amount per Exchangeable Share pursuant
to section 5.1, such holders shall not be entitled to share in any further
distribution of the assets of the Corporation.
ARTICLE 6
RETRACTION OF EXCHANGEABLE SHARES BY HOLDER
6.1 A holder of Exchangeable Shares shall be entitled at any time, subject to
the exercise by Vivendi Holdings of the Retraction Call Right and otherwise upon
compliance with the provisions of this Article 6, to require the Corporation to
redeem any or all of the Exchangeable Shares registered in the name of such
holder for an amount per share equal to the sum of (i) the Current Market Price
of a Vivendi ADS (multiplied by the then current Vivendi ADS Adjustment Ratio)
on the last Business Day prior to the Retraction Date (the "RETRACTION PRICE"),
which shall be satisfied in full by the Corporation causing to be delivered to
such holder the Vivendi ADS Consideration for each Exchangeable Share presented
and surrendered by the holder, together with, (ii) on the designated payment
date therefor, the full amount of all declared and unpaid dividends on any such
Exchangeable Share held by such holder on any dividend record date which
occurred prior to the Retraction Date. To effect such redemption, the holder
shall present and surrender at the registered office of the Corporation or at
any office of the Transfer Agent as may be specified by the Corporation by
notice to the holders of Exchangeable Shares the certificate or certificates
representing the Exchangeable Shares which the holder desires to have the
Corporation redeem, together with such other documents and instruments as may be
required to effect a transfer of Exchangeable Shares under the CBCA and the
by-laws of the Corporation and such additional
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<PAGE> 30
documents, instruments and payments as the Transfer Agent and the Corporation
may reasonably require, and together with a duly executed statement (the
"RETRACTION REQUEST") in the form of Schedule A hereto:
(a) specifying that the holder desires to have all or any number
specified therein of the Exchangeable Shares represented by
such certificate or certificates (the "RETRACTED SHARES")
redeemed by the Corporation;
(b) stating the Business Day on which the holder desires to have
the Corporation redeem the Retracted Shares (the "RETRACTION
DATE"), provided that (i) the Retraction Date shall be not
less than 10 Business Days nor more than 15 Business Days
after the date on which the Retraction Request is received by
the Corporation and (ii) in the event that no such Business
Day is specified by the holder in the Retraction Request, the
Retraction Date shall be deemed to be the 15th Business Day
after the date on which the Retraction Request is received by
the Corporation and provided further that if the Retraction
Date resulting from the foregoing is not a Tuesday or Friday
then the Retraction Date shall be the nearest following
Tuesday or Friday (or, if such Tuesday or Friday is not a
Business Day, the Business Day preceding such Tuesday or
Friday); and
(c) acknowledging the overriding right (the "RETRACTION CALL
RIGHT") of Vivendi Holdings to purchase all but not less than
all the Retracted Shares directly from the holder and that the
Retraction Request shall be deemed to be a revocable offer by
the holder to sell the Retracted Shares to Vivendi Holdings in
accordance with the Retraction Call Right on the terms and
conditions set out in section 6.3.
6.2 Subject to the exercise by Vivendi Holdings of the Retraction Call Right,
upon receipt by the Corporation or the Transfer Agent in the manner specified in
section 6.1 of a certificate or certificates representing the number of
Retracted Shares, together with a Retraction Request, and provided that the
Retraction Request is not revoked by the holder in the manner specified in
section 6.7, the Corporation shall redeem the Retracted Shares effective at the
close of business on the Retraction Date and shall deliver or cause to be
delivered to such holder the Vivendi ADSs (which securities shall be fully paid
and non-assessable and shall be free and clear of any lien, claim or
encumbrance) to which such holder is entitled as a result of such Retraction
Request and, on the designated payment date therefor, a cheque of the
Corporation payable at par at any branch of the bankers of the Corporation in
respect of any dividends on the Retracted Shares for which the record date was
prior to the Retraction Date and the payment date was after the Retraction Date
(in each case less any amounts withheld on account of tax required to be
deducted and withheld therefrom). If only a part of the Exchangeable Shares
represented by any certificate is redeemed (or purchased by Vivendi Holdings
pursuant to the Retraction Call Right), a new certificate for the balance of
such Exchangeable Shares shall be issued to the holder at the expense of the
Corporation.
6.3 Upon receipt by the Corporation of a Retraction Request, the Corporation
shall immediately notify Vivendi Holdings thereof and shall provide to Vivendi
Holdings a copy of the Retraction Request. In order to exercise the Retraction
Call Right, Vivendi Holdings must notify the Corporation of its determination to
do so (the "VIVENDI HOLDINGS CALL NOTICE") within five Business Days of
notification to Vivendi Holdings by the Corporation of the receipt by the
Corporation of the Retraction Request. If Vivendi Holdings does not so notify
the Corporation within such five Business
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<PAGE> 31
Day period, the Corporation will notify the holder as soon as possible
thereafter that Vivendi Holdings will not exercise the Retraction Call Right. If
Vivendi Holdings delivers the Vivendi Holdings Call Notice within such five
Business Day period, and provided that the Retraction Request is not revoked by
the holder in the manner specified in section 6.7, the Retraction Request shall
thereupon be considered only to be an offer by the holder to sell the Retracted
Shares to Vivendi Holdings in accordance with the Retraction Call Right. In such
event, the Corporation shall not redeem the Retracted Shares and Vivendi
Holdings shall purchase from such holder and such holder shall sell to Vivendi
Holdings on the Retraction Date the Retracted Shares for a purchase price (the
"PURCHASE PRICE") per share equal to the sum of (i) the Retraction Price per
share, plus (ii) on the designated payment date therefor, to the extent not paid
by the Corporation on or before the designated payment date therefor, any
Dividend Amount. To the extent that Vivendi Holdings pays the Dividend Amount in
respect of the Retracted Shares, the Corporation shall no longer be obligated to
pay any declared and unpaid dividends on such Retracted Shares. Provided that
Vivendi Holdings has complied with section 6.4, the closing of the purchase and
sale of the Retracted Shares pursuant to the Retraction Call Right shall be
deemed to have occurred as at the close of business on the Retraction Date and,
for greater certainty, no redemption by the Corporation of such Retracted Shares
shall take place on the Retraction Date. In the event that Vivendi Holdings does
not deliver a Vivendi Holdings Call Notice within such five Business Day period,
and provided that the Retraction Request is not revoked by the holder in the
manner specified in section 6.7, the Corporation shall redeem the Retracted
Shares on the Retraction Date and in the manner otherwise contemplated in this
Article 6.
6.4 The Corporation or Vivendi Holdings, as the case may be, shall deliver or
cause the Transfer Agent to deliver to the relevant holder, at the address of
the holder recorded in the register of shareholders of the Corporation for the
Exchangeable Shares or at the address specified in the holder's Retraction
Request or by holding for pick-up by the holder at the registered office of the
Corporation or at any office of the Transfer Agent as may be specified by the
Corporation by notice to the holders of Exchangeable Shares, the Vivendi ADSs
(which securities shall be fully paid and non-assessable and shall be free and
clear of any lien, claim or encumbrance) registered in the name of the holder or
in such other name as the holder may request, and, if applicable and on or
before the payment date therefor, a cheque payable at par at any branch of the
bankers of the Corporation or Vivendi Holdings, as applicable, in an amount
equal to declared and unpaid dividends or the aggregate Dividend Amount, as the
case may be, in payment of the total Retraction Price or the total Purchase
Price, as the case may be, in each case, less any amounts withheld on account of
tax required to be deducted and withheld therefrom, and such delivery of such
Vivendi ADSs and cheques on behalf of the Corporation or by Vivendi Holdings, as
the case may be, or by the Transfer Agent shall be deemed to be payment of and
shall satisfy and discharge all liability for the total Retraction Price or
total Purchase Price, as the case may be, to the extent that the same is
represented by such share certificates and cheques (plus any tax deducted and
withheld therefrom and remitted to the proper tax authority).
6.5 On and after the close of business on the Retraction Date, the holder of the
Retracted Shares shall cease to be a holder of such Retracted Shares and shall
not be entitled to exercise any of the rights of a holder in respect thereof,
other than the right to receive his proportionate part of the total Retraction
Price or total Purchase Price, as the case may be, unless upon presentation and
surrender of certificates in accordance with the foregoing provisions, payment
of the total Retraction Price or the
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<PAGE> 32
total Purchase Price, as the case may be, shall not be made as provided in
section 6.4, in which case the rights of such holder shall remain unaffected
until the total Retraction Price or the total Purchase Price, as the case may
be, has been paid in the manner hereinbefore provided. On and after the close of
business on the Retraction Date, provided that presentation and surrender of
certificates and payment of the total Retraction Price or the total Purchase
Price, as the case may be, has been made in accordance with the foregoing
provisions, the holder of the Retracted Shares so redeemed by the Corporation or
purchased by Vivendi Holdings shall thereafter be considered and deemed for all
purposes to be a holder of the Vivendi ADSs delivered to it.
6.6 Notwithstanding any other provision of this Article 6, the Corporation shall
not be obligated to redeem Retracted Shares specified by a holder in a
Retraction Request to the extent that such redemption of Retracted Shares would
be contrary to solvency requirements or other provisions of applicable law. If
the Corporation believes, after due enquiry, that on any Retraction Date it
would not be permitted by any of such provisions to redeem the Retracted Shares
tendered for redemption on such date, and provided that Vivendi Holdings shall
not have exercised the Retraction Call Right with respect to the Retracted
Shares, the Corporation shall only be obligated to redeem Retracted Shares
specified by a holder in a Retraction Request to the extent of the maximum
number that may be so redeemed (rounded down to a whole number of shares) as
would not be contrary to such provisions and shall notify the holder and the
Trustee at least two Business Days prior to the Retraction Date as to the number
of Retracted Shares which will not be redeemed by the Corporation. In any case
in which the redemption by the Corporation of Retracted Shares would be contrary
to solvency requirements or other provisions of applicable law, the Corporation
shall redeem Retracted Shares in accordance with section 6.2 on a pro rata basis
in proportion to the total number of Exchangeable Shares tendered for retraction
and shall issue to each holder of Retracted Shares a new certificate, at the
expense of the Corporation, representing the Retracted Shares not redeemed by
the Corporation pursuant to section 6.2. Provided that the Retraction Request is
not revoked by the holder in the manner specified in section 6.7 and that
Vivendi Holdings has not exercised the Retraction Call Right with respect to the
Retracted Shares, the holder of any such Retracted Shares not redeemed by the
Corporation pursuant to section 6.2 as a result of solvency requirements or
other provisions of applicable law shall be deemed by giving the Retraction
Request to require Vivendi Holdings to purchase such Retracted Shares from such
holder on the Retraction Date or as soon as practicable thereafter on payment by
Vivendi Holdings to such holder of the Purchase Price for each such Retracted
Share, all as more specifically provided in the Exchange Trust Agreement.
6.7 Subject to Section 6.8, a holder of Retracted Shares may, by notice in
writing given by the holder to the Corporation before the close of business on
the Business Day immediately preceding the Retraction Date, withdraw its
Retraction Request, in which event such Retraction Request shall be null and
void and, for greater certainty, the revocable offer constituted by the
Retraction Request to sell the Retracted Shares to Vivendi Holdings shall be
deemed to have been revoked.
6.8 Any notice sent by a holder of Exchangeable Shares to the Custodian seeking
to exercise or otherwise deal in Vivendi Preemptive Rights will be deemed to be
delivery to the Corporation of an irrevocable Retraction Request for that number
of Exchangeable Shares held by such holder that is equal to the number of
Vivendi Voting Rights in respect of which such notice is sent.
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ARTICLE 7
REDEMPTION OF EXCHANGEABLE SHARES BY THE CORPORATION
7.1 Subject to applicable law, and provided Vivendi Holdings has not exercised
the Redemption Call Right, the Corporation shall on the Redemption Date redeem
all but not less than all of the then outstanding Exchangeable Shares (other
than the Exchangeable Shares held by Vivendi or an affiliate of Vivendi) for an
amount per share equal to the sum of (i) the Current Market Price of a Vivendi
ADS (multiplied by the then current Vivendi ADS Adjustment Ratio) on the last
Business Day prior to the Redemption Date (the "Redemption Price"), which shall
be satisfied in full by the Corporation causing to be delivered to each holder
of Exchangeable Shares the Vivendi ADS Consideration for each Exchangeable Share
held by such holder, together with (ii) the full amount of all declared and
unpaid dividends on each such Exchangeable Share held by such holder on any
dividend record date which occurred prior to the Redemption Date.
7.2 In any case of a redemption of Exchangeable Shares under this Article 7, the
Corporation shall, at least 30 days before the Redemption Date (other than a
Redemption Date established in connection with an Exchangeable Share Voting
Event or an Exempt Exchangeable Share Voting Event), send or cause to be sent to
each holder of Exchangeable Shares a notice in writing of the redemption by the
Corporation or the purchase by Vivendi Holdings under the Redemption Call Right,
as the case may be, of the Exchangeable Shares held by such holder. In the case
of a Redemption Date established in connection with an Exchangeable Share Voting
Event and an Exempt Exchangeable Share Voting Event, the written notice of
redemption by the Corporation or the purchase by Vivendi Holdings under the
Redemption Call Right will be sent on or before the Redemption Date, on as many
days prior written notice as may be determined by the Board of Directors of the
Corporation to be reasonably practicable in the circumstances. In any such case,
such notice shall set out the formula for determining the Redemption Price or
the Redemption Call Purchase Price, as the case may be, the Redemption Date and,
if applicable, particulars of the Redemption Call Right.
7.3 On or promptly after the Redemption Date and subject to the exercise by
Vivendi Holdings of the Redemption Call Right, the Corporation shall cause to be
delivered to the holders of the Exchangeable Shares to be redeemed the
Redemption Price for each such Exchangeable Share, together with the full amount
of all declared and unpaid dividends on each such Exchangeable Share held by
such holder on any dividend record date which occurred prior to the Redemption
Date, upon presentation and surrender at the registered office of the
Corporation or at any office of the Transfer Agent as may be specified by the
Corporation in such notice of the certificates representing such Exchangeable
Shares, together with such other documents and instruments as may be required to
effect a transfer of Exchangeable Shares under the CBCA and the by-laws of the
Corporation and such additional documents, instruments and payments as the
Transfer Agent and the Corporation may reasonably require. Payment of the total
Redemption Price for such Exchangeable Shares, together with payment of such
dividends, shall be made by delivery to each holder, at the address of the
holder recorded in the register of shareholders of the Corporation or by holding
for pick-up by the holder at the registered office of the Corporation or at any
office of the Transfer Agent as may be specified by the Corporation in such
notice, on behalf of the Corporation of Vivendi ADSs (which securities shall be
fully paid and non-assessable and shall be free and clear of any lien, claim or
encumbrance) and, if applicable, a cheque of the Corporation payable at par at
any branch of the bankers of the Corporation in payment of any such dividends,
in each case, less any amounts withheld on account of tax required to be
deducted and withheld therefrom. On and after the Redemption Date, the
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holders of the Exchangeable Shares called for redemption shall cease to be
holders of such Exchangeable Shares and shall not be entitled to exercise any of
the rights of holders in respect thereof, other than the right to receive their
proportionate part of the total Redemption Price and any such dividends, unless
payment of the total Redemption Price and any such dividends for such
Exchangeable Shares shall not be made upon presentation and surrender of
certificates in accordance with the foregoing provisions, in which case the
rights of the holders shall remain unaffected until the total Redemption Price
and any such dividends have been paid in the manner hereinbefore provided. The
Corporation shall have the right at any time after the sending of notice of its
intention to redeem the Exchangeable Shares as aforesaid to deposit or cause to
be deposited the total Redemption Price for and the full amount of such
dividends on (except as otherwise provided in this section 7.3) the Exchangeable
Shares so called for redemption, or of such of the said Exchangeable Shares
represented by certificates that have not at the date of such deposit been
surrendered by the holders thereof in connection with such redemption, in a
custodial account with any chartered bank or trust company in Canada named in
such notice, less any amounts withheld on account of tax required to be deducted
and withheld therefrom. Upon the later of such deposit being made and the
Redemption Date, the Exchangeable Shares in respect whereof such deposit shall
have been made shall be redeemed and the rights of the holders thereof after
such deposit or Redemption Date, as the case may be, shall be limited to
receiving their proportionate part of the total Redemption Price and such
dividends for such Exchangeable Shares so deposited and all dividends and other
distributions with respect to the Vivendi ADSs to which such holders are
entitled with a record date on or after the Redemption Date and before the time
at which such holders become the holders of such Vivendi ADSs provided that a
corresponding amount has not been received by such holders on their Exchangeable
Shares (in each case less any amounts withheld on account of tax required to be
deducted and withheld therefrom) without interest, against presentation and
surrender of the certificates for such Exchangeable Shares held by them,
respectively, in accordance with the foregoing provisions. Upon such payment or
deposit of the total Redemption Price and the full amount of such dividends, the
holders of the Exchangeable Shares shall thereafter be considered and deemed for
all purposes to be holders of the Vivendi ADSs delivered to them or the
custodian on their behalf.
ARTICLE 8
PURCHASE FOR CANCELLATION
8.1 Subject to applicable law, the Corporation may at any time and from time to
time purchase for cancellation all or any part of the Exchangeable Shares and
shall be entitled to pay and satisfy the purchase price through the issuance of
Common Shares or any other shares ranking junior to the Exchangeable Shares or
otherwise as the Corporation may determine.
8.2 Subject to applicable law, the Corporation may at any time and from time to
time purchase for cancellation all or any part of the outstanding Exchangeable
Shares at any price by tender to all the holders of record of Exchangeable
Shares then outstanding or through the facilities of any stock exchange on which
the Exchangeable Shares are listed or quoted at any price per share. If in
response to an invitation for tenders under the provisions of this section 8.2,
more Exchangeable Shares are tendered at a price or prices acceptable to the
Corporation than the Corporation is prepared to purchase, the Exchangeable
Shares to be purchased by the Corporation shall be purchased as nearly as may be
pro rata according to the number of shares tendered by each holder
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<PAGE> 35
who submits a tender to the Corporation, provided that when shares are tendered
at different prices, the pro rating shall be effected (disregarding fractions)
only with respect to the shares tendered at the price at which more shares were
tendered than the Corporation is prepared to purchase after the Corporation has
purchased all the shares tendered at lower prices. If only part of the
Exchangeable Shares represented by any certificate shall be purchased, a new
certificate for the balance of such shares be issued at the expense of the
Corporation.
ARTICLE 9
VOTING RIGHTS
9.1 Except as required by applicable law and by Article 10, the holders of the
Exchangeable Shares shall not be entitled as such to receive notice of or to
attend any meeting of the shareholders of the Corporation or to vote at any such
meeting.
ARTICLE 10
AMENDMENT AND APPROVAL
10.1 The rights, privileges, restrictions and conditions attaching to the
Exchangeable Shares may be added to, changed or removed but only with the
approval of the holders of the Exchangeable Shares given as hereinafter
specified.
10.2 Any approval given by the holders of the Exchangeable Shares to add to,
change or remove any right, privilege, restriction or condition attaching to the
Exchangeable Shares or any other matter requiring the approval or consent of the
holders of the Exchangeable Shares shall be deemed to have been sufficiently
given if it shall have been given in accordance with applicable law subject to a
minimum requirement that such approval be evidenced by resolution passed by not
less than two-thirds of the votes cast on such resolution at a meeting of
holders of Exchangeable Shares duly called and held at which the holders of at
least 20% of the outstanding Exchangeable Shares at that time are present or
represented by proxy; provided that if at any such meeting the holders of at
least 20% of the outstanding Exchangeable Shares at that time are not present or
represented by proxy within one-half hour after the time appointed for such
meeting, then such meeting shall be adjourned and be reconvened on such date as
is not less than five days thereafter and at such time and place as may be
designated by the Chairman of such meeting. At such reconvened meeting the
holders of Exchangeable Shares present or represented by proxy thereat may
transact the business for which the meeting was originally called and a
resolution passed thereat by the affirmative vote of not less than two-thirds of
the votes cast on such resolution at such meeting shall constitute the approval
or consent of the holders of the Exchangeable Shares.
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<PAGE> 36
ARTICLE 11
RECIPROCAL CHANGES, ETC. IN RESPECT OF VIVENDI ADSS
11.1 Each holder of an Exchangeable Share acknowledges that the Support
Agreement provides, in part, that Vivendi will not without the prior approval of
the Corporation and the prior approval of the holders of the Exchangeable Shares
given in accordance with section 10.2:
(a) issue or distribute Vivendi ADSs (or securities exchangeable
for or convertible into or carrying rights to acquire Vivendi
ADSs) to the holders of all or substantially all of the then
outstanding Vivendi ADSs by way of stock dividend or other
distribution, other than an issue of Vivendi ADSs (or
securities exchangeable for or convertible into or carrying
rights to acquire Vivendi ADSs) to holders of Vivendi ADSs who
exercise an option to receive dividends in Vivendi ADSs (or
securities exchangeable for or convertible into or carrying
rights to acquire Vivendi ADSs) in lieu of receiving cash
dividends;
(b) issue or distribute rights, options or warrants to the holders
of all or substantially all of the then outstanding Vivendi
ADSs entitling them to subscribe for or to purchase Vivendi
ADSs (or securities exchangeable for or convertible into or
carrying rights to acquire Vivendi ADSs); or
(c) issue or distribute to the holders of all or substantially all
of the then outstanding Vivendi ADSs:
(i) securities of Vivendi of any class other than Vivendi
ADSs (other than securities convertible into or
exchangeable for or carrying rights to acquire
Vivendi ADSs);
(ii) rights, options or warrants other than those referred
to in section 11.1(b);
(iii) evidences of indebtedness of Vivendi; or
(iv) assets of Vivendi,
unless the economic equivalent of such rights, options, securities, shares,
evidences of indebtedness or other assets is (a) issued or distributed or
otherwise provided simultaneously to, or (b) effected pursuant to section 11.3
for, holders of the Exchangeable Shares after giving effect to these share
provisions and taking into account the Vivendi Voting Rights; provided that, for
greater certainty, the above restrictions shall not apply to any securities
issued or distributed by Vivendi in order to give effect to and to consummate
the transactions contemplated by, and in accordance with, the Merger Agreement.
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<PAGE> 37
11.2 Each holder of an Exchangeable Share acknowledges that the Support
Agreement further provides, in part, that Vivendi will not without the prior
approval of the Corporation and the prior approval of the holders of the
Exchangeable Shares given in accordance with section 10.2:
(a) subdivide, redivide or change the then outstanding Vivendi
ADSs into a greater number of Vivendi ADSs (except as
contemplated in the Merger Agreement);
(b) reduce, combine, consolidate or change the then outstanding
Vivendi ADSs into a lesser number of Vivendi ADSs; or
(c) reclassify or otherwise change the Vivendi ADSs or effect an
amalgamation, merger, reorganization or other transaction
affecting the Vivendi ADSs,
unless the same or an economically equivalent change shall simultaneously be
made to, or in, the rights of the holders of the Exchangeable Shares; provided,
however, that, for greater certainty, the above restrictions shall not apply to
any securities issued or distributed by Vivendi in order to give effect to and
to consummate the transactions contemplated by and in accordance with the Merger
Agreement. The Support Agreement further provides, in part, that the aforesaid
provisions of the Support Agreement shall not be changed without the approval of
the holders of the Exchangeable Shares given in accordance with section 10.2.
11.3 Nothing in this Article 11 nor in the Support Agreement shall prohibit
Vivendi from entering into a transaction or effecting an action that results in
the issuance by Vivendi to holders of Vivendi ADSs of a preferential
subscription right entitling them to subscribe for additional Vivendi ADSs;
provided, however, that if and whenever at any time after the Effective Time
Vivendi issues such a preferential subscription right that permits the purchase
of Vivendi ADSs at less than the Current Market Price, then the Vivendi ADS
Adjustment Ratio shall be adjusted in accordance with the following formula:
R' = R / ((O+(C/M))/A)
where:
R' = the adjusted Vivendi ADS Adjustment Ratio
R = the Vivendi ADS Adjustment Ratio in effect immediately prior
to the event giving rise to such adjustment
O = the number of Vivendi Shares outstanding immediately prior to
the event giving rise to such adjustment
C = the aggregate consideration received by Vivendi in connection
with the event giving rise to such adjustment
M = the Current Market Price immediately prior
to the record date or if not applicable the
effective date of the event giving rise to
such adjustment
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<PAGE> 38
A = the number of Vivendi Shares outstanding immediately after the
event giving rise to such adjustment
All such adjustments shall be cumulative and made successively whenever an event
referred to in this section 11.3 shall occur. For greater certainty, no
adjustment which requires the issuance of additional securities shall be made in
respect of such preferential subscription right pursuant to Article 3, section
11.1 or the Support Agreement; provided, however, that this limitation shall not
preclude adjustments, if any, under Article 3.
ARTICLE 12
ACTIONS BY THE CORPORATION UNDER SUPPORT AGREEMENT AND
CUSTODY AGREEMENT
12.1 The Corporation will take all such actions and do all such things as shall
be necessary or advisable to perform and comply with and to ensure performance
and compliance by Vivendi, Vivendi Holdings and the Corporation with all
provisions of the Support Agreement and the Custody Agreement applicable to
Vivendi, Vivendi Holdings and the Corporation, respectively, in accordance with
the terms thereof including, without limitation, taking all such actions and
doing all such things as shall be necessary or advisable to enforce to the
fullest extent possible for the direct benefit of the Corporation all rights and
benefits in favour of the Corporation under or pursuant to such agreement.
12.2 The Corporation shall not propose, agree to or otherwise give effect to any
amendment to, or waiver or forgiveness of its rights or obligations under, the
Support Agreement without the approval of the holders of the Exchangeable Shares
given in accordance with section 10.2 other than such amendments, waivers and/or
forgiveness as may be necessary or advisable for the purposes of:
(a) adding to the covenants of the other parties to such agreement
for the protection of the Corporation or the holders of the
Exchangeable Shares thereunder;
(b) making such provisions or modifications not inconsistent with
such agreement as may be necessary or desirable with respect
to matters or questions arising thereunder which, in the good
faith opinion of the Board of Directors, it may be expedient
to make, provided that the Board of Directors shall be of the
good faith opinion, after consultation with counsel, that such
provisions and modifications will not be prejudicial to the
interests of the holders of the Exchangeable Shares; or
(c) making such changes in or corrections to such agreement which,
on the advice of counsel to the Corporation, are required for
the purpose of curing or correcting any ambiguity or defect or
inconsistent provision or clerical omission or mistake or
manifest error contained therein, provided that the Board of
Directors shall be of the good faith opinion, after
consultation with counsel, that such changes or corrections
will not be prejudicial to the interests of the holders of the
Exchangeable Shares.
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<PAGE> 39
ARTICLE 13
LEGEND; CALL RIGHTS; WITHHOLDING RIGHTS
13.1 The certificates evidencing the Exchangeable Shares shall contain or have
affixed thereto a legend in form and on terms approved by the Board of
Directors, with respect to the Support Agreement, the Custody Agreement, the
provisions of the Plan of Arrangement relating to the Liquidation Call Right,
the Redemption Call Right, and the Retraction Call Right, and the Exchange Trust
Agreement (including the provisions with respect to the exchange right and
automatic exchange thereunder).
13.2 Each holder of an Exchangeable Share, whether of record or beneficial, by
virtue of becoming and being such a holder shall be deemed to acknowledge each
of the Liquidation Call Right, the Retraction Call Right and the Redemption Call
Right, in each case, in favour of Vivendi Holdings, and the overriding nature
thereof in connection with the liquidation, dissolution or winding-up of the
Corporation or any other distribution of the assets of the Corporation among its
shareholders for the purpose of winding up its affairs or the retraction or
redemption of Exchangeable Shares, as the case may be, and to be bound thereby
in favour of Vivendi Holdings as therein provided.
13.3 The Corporation, Vivendi Holdings, Vivendi and the Transfer Agent shall be
entitled to deduct and withhold from any dividend or consideration otherwise
payable to any holder of Exchangeable Shares such amounts as the Corporation,
Vivendi Holdings, Vivendi or the Transfer Agent determines, acting reasonably,
are required or permitted pursuant to the provisions of section 116 of the
Income Tax Act (Canada) or any successor provision thereto to be deducted and
withheld with respect to such payment under the Income Tax Act (Canada), the
United States Internal Revenue Code of 1986, the tax laws of France or any
provision of federal, provincial, territorial, state, local or foreign tax law,
in each case, as amended. To the extent that amounts are so withheld, such
withheld amounts shall be treated for all purposes hereof as having been paid to
the holder of the Exchangeable Shares in respect of which such deduction and
withholding was made, provided that such withheld amounts are actually remitted
to the appropriate taxing authority. To the extent that the amount so required
or permitted to be deducted or withheld from any payment to a holder exceeds the
cash portion of the consideration otherwise payable to the holder, the
Corporation, Vivendi Holdings, Vivendi and the Transfer Agent are hereby
authorized to sell or otherwise dispose of such portion of the consideration as
is necessary to provide sufficient funds to the Corporation, Vivendi Holdings,
Vivendi or the Transfer Agent, as the case may be, to enable it to comply with
such deduction or withholding requirement and the Corporation, Vivendi Holdings,
Vivendi or the Transfer Agent shall notify the holder thereof and remit any
unapplied balance of the net proceeds of such sale.
ARTICLE 14
NOTICES
14.1 Any notice, request or other communication to be given to the Corporation
by a holder of Exchangeable Shares shall be in writing and shall be valid and
effective if given by mail (postage prepaid) or by telecopy or by delivery to
the registered office of the Corporation and addressed to the attention of the
Secretary of the Corporation. Any such notice, request or other
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<PAGE> 40
communication, if given by mail, telecopy or delivery, shall only be deemed to
have been given and received upon actual receipt thereof by the Corporation.
14.2 Any presentation and surrender by a holder of Exchangeable Shares to the
Corporation or the Transfer Agent of certificates representing Exchangeable
Shares in connection with the liquidation, dissolution or winding-up of the
Corporation or the retraction or redemption of Exchangeable Shares shall be made
by registered mail (postage prepaid) or by delivery to the registered office of
the Corporation or to such office of the Transfer Agent as may be specified by
the Corporation, in each case, addressed to the attention of the Secretary of
the Corporation. Any such presentation and surrender of certificates shall only
be deemed to have been made and to be effective upon actual receipt thereof by
the Corporation or the Transfer Agent, as the case may be. Any such presentation
and surrender of certificates made by registered mail shall be at the sole risk
of the holder mailing the same.
14.3 Any notice, request or other communication to be given to a holder of
Exchangeable Shares by or on behalf of the Corporation shall be in writing and
shall be valid and effective if given by mail (postage prepaid) or by delivery
to the address of the holder recorded in the register of shareholders of the
Corporation or, in the event of the address of any such holder not being so
recorded, then at the last known address of such holder. Any such notice,
request or other communication, if given by mail, shall be deemed to have been
given and received on the third Business Day following the date of mailing and,
if given by delivery, shall be deemed to have been given and received on the
date of delivery. Accidental failure or omission to give any notice, request or
other communication to one or more holders of Exchangeable Shares shall not
invalidate or otherwise alter or affect any action or proceeding to be taken by
the Corporation pursuant thereto.
ARTICLE 15
DISCLOSURE OF INTERESTS IN EXCHANGEABLE SHARES
15.1 The Corporation shall be entitled to require any holder of an Exchangeable
Share or any Person who the Corporation knows or has reasonable cause to believe
holds any interest whatsoever in an Exchangeable Share to confirm that fact or
to give such details as to whom has an interest in such Exchangeable Share as
would be required (if the Exchangeable Shares were a class of "equity shares" of
Seagram) under section 101 of the Securities Act or as would be required under
similar United States or French laws if the Exchangeable Shares were Vivendi
ADSs or Vivendi Shares.
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<PAGE> 41
SCHEDULE A
RETRACTION REQUEST
[TO BE PRINTED ON EXCHANGEABLE SHARE CERTIFICATES]
To: 3744531 Canada Inc. ("VIVENDI EXCHANGECO") and 3045479 Nova Scotia Company
("VIVENDI HOLDINGS")
This notice is given pursuant to Article 6 of the provisions
(the "SHARE PROVISIONS") attaching to the Exchangeable Shares of Vivendi
Exchangeco represented by this certificate and all capitalized words and
expressions used in this notice that are defined in the Share Provisions have
the meanings ascribed to such words and expressions in such Share Provisions.
The undersigned hereby notifies Vivendi Exchangeco that,
subject to the Retraction Call Right referred to below, the undersigned desires
to have Vivendi Exchangeco redeem in accordance with Article 6 of the Share
Provisions:
[ ] all share(s) represented by this certificate; or
[ ] _________________________share(s) only represented by this
certificate.
The undersigned hereby notifies Vivendi Exchangeco that the Retraction
Date shall be ___________________.
NOTE: The Retraction Date must be a Business Day and must not be less than 10
Business Days nor more than 15 Business Days after the date upon which
this notice is received by Vivendi Exchangeco. If no such Business Day
is specified above, the Retraction Date shall be deemed to be the 15th
Business Day after the date on which this notice is received by Vivendi
Exchangeco. If the Retraction Date resulting from the foregoing is not
a Tuesday or Friday, then the Retraction Date shall be the nearest
following Tuesday or Friday (or if such Tuesday or Friday is not a
Business Day, the Business Day preceding such Tuesday or Friday).
The undersigned acknowledges the overriding Retraction Call Right of
Vivendi Holdings to purchase all but not less than all the Retracted Shares from
the undersigned and that this notice is and shall be deemed to be a revocable
offer by the undersigned to sell the Retracted Shares to Vivendi Holdings in
accordance with the Retraction Call Right on the Retraction Date for the
Purchase Price and on the other terms and conditions set out in section 6.3 of
the Share Provisions. This Retraction Request, and this offer to sell the
Retracted Shares to Vivendi Holdings, may be revoked and withdrawn by the
undersigned only by notice in writing given to Vivendi Exchangeco at any time
before the close of business on the Business Day immediately preceding the
Retraction Date.
The undersigned acknowledges that if, as a result of solvency
provisions of applicable
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<PAGE> 42
law, Vivendi Exchangeco is unable to redeem all Retracted Shares and provided
that Vivendi Holdings shall not have exercised the Retraction Call Right with
respect to the Retracted Shares, the undersigned will be deemed to have
exercised the Exchange Right (as defined in the Exchange Trust Agreement) so as
to require Vivendi to purchase the unredeemed Retracted Shares.
The undersigned hereby represents and warrants to Vivendi
Holdings and Vivendi Exchangeco that the undersigned:
[ ] is
(select one)
[ ] is not
a non-resident of Canada for purposes of the Income Tax Act (Canada). THE
UNDERSIGNED ACKNOWLEDGES THAT, IN THE ABSENCE OF AN INDICATION THAT THE
UNDERSIGNED IS NOT A NON-RESIDENT OF CANADA, WITHHOLDING ON ACCOUNT OF CANADIAN
TAX MAY BE MADE FROM AMOUNTS PAYABLE TO THE UNDERSIGNED ON THE REDEMPTION OR
PURCHASE OF THE RETRACTED SHARES.
The undersigned, hereby represents and warrants to Vivendi
Holdings and Vivendi Exchangeco that the undersigned has good title to, and
owns, the share(s) represented by this certificate to be acquired by Vivendi
Holdings or Vivendi Exchangeco, as the case may be, free and clear of all liens,
claims and encumbrances.
--------------- ------------------------- -----------------------
(Date) (Signature of Shareholder) (Guarantee of Signature)
[ ] Please check box if the certificates for Vivendi ADSs and any
cheque(s) resulting from the retraction or purchase of the Retracted
Shares are to be held for pick-up by the shareholder from the Transfer
Agent, failing which such certificates and any cheque(s) will be mailed
to the last address of the shareholder as it appears on the register.
NOTE: This panel must be completed and this certificate, together with such
additional documents and payments as the Transfer Agent may require,
must be deposited with the Transfer Agent. The securities and any
cheque(s) resulting from the retraction or purchase of the Retracted
Shares will be issued and registered in, and made payable to,
respectively, the name of the shareholder as it appears on the register
of Vivendi Exchangeco and the certificates for Vivendi ADSs and any
cheque(s) resulting from such retraction or purchase will be delivered
to such shareholder as indicated above, unless the form appearing
immediately below is duly completed.
Date:
-----------------------------
Name of Person in Whose Name Securities or Cheque(s)
Are to be Registered, Issued or Delivered (please print):
-----------------------
Street Address or P.O. Box:
-----------------------------------------------------
Signature of Shareholder:
-------------------------------------------------------
City, Province and Postal Code:
-------------------------------------------------
Signature Guaranteed by:
--------------------------------------------------------
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<PAGE> 43
NOTE: If this Retraction Request is for less than all of the shares
represented by this certificate, a certificate representing the
remaining share(s) of Vivendi Exchangeco represented by this
certificate will be issued and registered in the name of the
shareholder as it appears, on the register of Vivendi Exchangeco,
unless the Share Transfer Power on the share certificate is duly
completed in respect of such share(s).
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