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Exhibit 3.4
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:
"Adjustment Fraction" means (i) if the Aggregate Number of
Exchangeable Shares exceeds the Maximum Number of Exchangeable Shares, the
fraction the numerator of which is the Maximum Number of Exchangeable
Shares and the denominator of which is the Aggregate Number of Exchangeable
Shares or (ii) if the Aggregate Number of Exchangeable Shares is equal to
or less than the Maximum Number of Exchangeable Shares, one;
"Affiliate" has the meaning ascribed thereto in the Securities Act;
"Aggregate Number of Exchangeable Shares" means the greatest whole
number of Exchangeable Shares equal to the product of the number of
Exchangeable Elected Shares and the Exchange Ratio;
"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 B
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;
"Court" means the Superior Court of Justice (Ontario);
"Current Market Price" has the meaning ascribed thereto in the
Exchangeable Share Provisions;
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"Custody Agreement" means the custody agreement to be made among
Vivendi, Vivendi Universal 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 CIBC Mellon Trust Company 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
Universal 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 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 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 Vivendi
Universal Exchangeco under the Arrangement for a fraction of an
Exchangeable Share equal to the product of the Exchange Ratio and the
Adjustment Fraction and certain ancillary rights;
"Exchangeable Shares" means the non-voting exchangeable shares in the
capital of Vivendi Universal 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 Universal 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;
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"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;
"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;
"Maximum Number of Exchangeable Shares" means 97,000,000 Exchangeable
Shares;
"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;
"Redemption Price" 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);
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"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;
"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;
"Transfer Agreement" means the transfer agreement to be made between
Vivendi and the Custodian pursuant to which Vivendi will transfer the
Vivendi Voting Rights to the Custodian;
"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" means Vivendi Universal S.A., the surviving corporation
resulting from the merger of Vivendi S.A. with and into Sofiee S.A. as part
of the Vivendi/Canal Transactions (as defined 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 Universal Exchangeco" means Vivendi Universal Exchangeco
Inc., a corporation existing under the CBCA and being a subsidiary of
Vivendi Holdings;
"Vivendi Universal Holdings" means Vivendi Universal Holdings 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;
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"Vivendi Shares" means the ordinary shares in the capital of Vivendi,
nominal value Euro 5.50; 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 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 Universal Holdings, (iv) Vivendi Universal 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 Universal 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 be removed from the register of holders of Seagram Common Shares and
added to the register of holders of Vivendi ADSs and Vivendi Universal
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 Universal
Exchangeco in exchange for (i) that number of fully paid and non-assessable
Exchangeable Shares equal to the product of the Exchange Ratio and the
Adjustment Fraction (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 Universal 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
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(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 transfer to the
Custodian in accordance with the terms of the Transfer Agreement (which
Transfer Agreement is being entered into concurrently with the transfer of
the Exchangeable Elected Shares and the exchange described in this section
2.2(b)) for and on behalf of the holders of the Exchangeable Shares issued
pursuant to the foregoing clause (i), and, coincident with such transfer to
the Custodian, Vivendi, Vivendi Universal Exchangeco and the Custodian
shall enter into the Custody Agreement;
(c) coincident with the transfer of Exchangeable Elected Shares to
Vivendi Universal Exchangeco, Vivendi, Vivendi Universal 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 for holders other than holders subject to tax under the
ITA, 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 in the case of holders subject to tax under the ITA and rounded off to
the nearest cent for all other holders). 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
(i) 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 in the case of holders subject to tax
under the ITA and (ii) rounded up to the nearest whole Vivendi ADS for all
other holders. 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 changed in accordance with such Replacement Option, evidence
and be deemed to evidence such Replacement Option; and
(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 for holders other than
holders subject to tax under the ITA, 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 in the case of
holders subject to tax under the ITA and rounded off to the nearest cent
for all other holders). 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 (i) 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 in the case
of holders subject to tax under the ITA and (ii) rounded up to the nearest
whole Vivendi ADS
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for all other holders. 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, until changed in accordance with such
Replacement SAR 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.
(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, or for whom the
holder of record has validly elected on such owner's behalf 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 Universal 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 Universal
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 Universal Exchangeco will not be responsible for the proper completion
of any election form and, except for Vivendi Universal 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 Universal 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 Universal Exchangeco
may choose to sign and return an election form received more than 90 days
following the Effective Date, but Vivendi Universal Exchangeco will have no
obligation to do so.
2.4 Adjustments to Exchange Ratio. The Exchange Ratio and the Maximum
Number of Exchangeable Shares 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, Vivendi Shares 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 or the
Maximum Number of Exchangeable Shares shall be made in connection with the
Vivendi/Canal Transactions (as defined in the Merger Agreement).
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
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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 Universal Exchangeco, Vivendi Universal
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 Universal 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 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 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 Universal 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 of a certificate
which immediately prior to the Effective Time represented outstanding Seagram
Common Shares that, under the Arrangement, were transferred to Vivendi Universal
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
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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 Universal 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 (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.
(a) 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 Universal 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 Universal 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
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<PAGE> 10
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.
(b) A holder of an Exchangeable Share shall not be entitled to any fraction
of a Vivendi ADS upon the exercise by Vivendi Universal Holdings of the
Liquidation Call Right or the Redemption Call Right and no certificates
representing any such fractional interest shall be issued and such holder
otherwise entitled to a fractional interest will receive for such fractional
interest from Vivendi Universal Holdings on the designated payment date to the
extent not paid by Vivendi Universal Exchangeco a cash payment equal to such
fractional interest multiplied by the Current Market Price.
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 one or more 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 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 Universal Exchangeco, Vivendi (and their respective
transfer agents) and the Depositary in such sum as Vivendi Universal Exchangeco,
Vivendi or the Depositary may direct or otherwise indemnify Vivendi Universal
Exchangeco, Vivendi and the Depositary in a manner satisfactory to Vivendi
Universal Exchangeco, Vivendi and the Depositary against any claim that may be
made against Vivendi Universal 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 Universal 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 Universal 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 Universal Holdings, Vivendi
Universal 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 Universal Holdings, Vivendi Universal 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
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<PAGE> 11
portion of the consideration otherwise payable to the holder, Vivendi, Vivendi
Universal Holdings, Vivendi Universal 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 Universal Holdings,
Vivendi Universal Exchangeco or the Depositary, as the case may be, to enable it
to comply with such deduction or withholding requirement and Vivendi, Vivendi
Universal Holdings, Vivendi Universal Exchangeco or the Depositary shall notify
the holder thereof and remit any unapplied balance of the net proceeds of such
sale.
ARTICLE 5
CERTAIN RIGHTS OF VIVENDI UNIVERSAL HOLDINGS TO ACQUIRE
EXCHANGEABLE SHARES
5.1 Vivendi Universal Holdings Liquidation Call Right. In addition to
Vivendi Universal Holdings' rights contained in the Exchangeable Share
Provisions, including, without limitation, the Retraction Call Right (as defined
in the Exchangeable Share Provisions), Vivendi Universal Holdings shall have the
following rights in respect of the Exchangeable Shares:
(a) Vivendi Universal 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 Universal Exchangeco or
any other distribution of the assets of Vivendi Universal 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 Universal Holdings
to each such holder 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 Universal 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 Universal Holdings, each holder shall be obligated to sell all
the Exchangeable Shares held by the holder to Vivendi Universal Holdings on
the Liquidation Date upon payment by Vivendi Universal Holdings to the
holder of the Liquidation Call Purchase Price for each such Exchangeable
Share and Vivendi Universal Exchangeco shall have no obligation to pay any
Liquidation Amount to any holder of such Exchangeable Shares so purchased
by Vivendi Universal Holdings.
(b) To exercise the Liquidation Call Right, Vivendi Universal Holdings
must notify the Transfer Agent, as agent for the holders of Exchangeable
Shares, and Vivendi Universal Exchangeco of Vivendi Universal 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 Universal Exchangeco or any other voluntary distribution of the
assets of Vivendi Universal 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 Universal Exchangeco or any other involuntary
distribution of the assets of Vivendi Universal 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
Universal Holdings has exercised the Liquidation Call Right forthwith after
the earlier of (i) receipt of notice by the Transfer Agent from Vivendi
Universal Holdings of its intention to exercise such right and (ii) the
expiry of the period during which such right may be exercised by Vivendi
Universal Holdings. If Vivendi Universal Holdings exercises the Liquidation
Call Right, then on the Liquidation Date Vivendi Universal Holdings will
purchase and the holders will sell all of the Exchangeable Shares then
outstanding for a price per Exchangeable Share equal to the Liquidation
Call Purchase Price.
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<PAGE> 12
(c) For the purposes of completing the purchase of the Exchangeable
Shares pursuant to the Liquidation Call Right, Vivendi Universal Holdings
shall deposit with the Transfer Agent, on or before the Liquidation Date,
the aggregate number of Vivendi ADSs deliverable by Vivendi Universal
Holdings upon exercise of such right and a cheque or cheques of Vivendi
Universal Holdings payable at par at any branch of the bankers of Vivendi
Universal 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 Universal 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 Universal
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 Universal
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 Universal 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 Universal Holdings payable at par at any branch of the
bankers of Vivendi Universal 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 Universal 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
Universal Exchangeco in connection with the liquidation, dissolution or
winding-up of Vivendi Universal Exchangeco or any other distribution of the
assets of Vivendi Universal 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
Universal Holdings' rights contained in the Exchangeable Share Provisions,
including, without limitation, the Retraction Call Right (as defined in the
Exchangeable Share Provisions), Vivendi Universal Holdings shall have the
following rights in respect of the Exchangeable Shares:
(a) Vivendi Universal Holdings shall have the overriding right (the
"Redemption Call Right"), notwithstanding the proposed redemption of the
Exchangeable Shares by Vivendi Universal 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) on the
Redemption Date all but not less than all of the Exchangeable Shares held
by each such holder upon payment by Vivendi Universal 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 Universal 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 Universal
Holdings, each holder shall be obligated to sell all the Exchangeable
Shares held by the holder to Vivendi Universal Holdings on the Redemption
Date upon payment by Vivendi Universal Holdings to the holder of the
Redemption Call Purchase Price for each such Exchangeable Share, and
Vivendi Universal Exchangeco shall have no obligation to redeem, or to pay
any Dividend Amount to any holder in respect of, such Exchangeable Shares
so purchased by Vivendi Universal Holdings.
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<PAGE> 13
(b) To exercise the Redemption Call Right, Vivendi Universal Holdings
must notify the Transfer Agent, as agent for the holders of Exchangeable
Shares, and Vivendi Universal Exchangeco of Vivendi Universal 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 Universal Holdings shall so notify the Transfer Agent and Vivendi
Universal Exchangeco on or before the Redemption Date. The Transfer Agent
will notify the holders of the Exchangeable Shares as to whether or not
Vivendi Universal Holdings has exercised the Redemption Call Right
forthwith after the earlier of (i) receipt of notice by the Transfer Agent
from Vivendi Universal Holdings of its intention to exercise such right and
(ii) the expiry of the period during which such right may be exercised by
Vivendi Universal Holdings. If Vivendi Universal Holdings exercises the
Redemption Call Right, then on the Redemption Date Vivendi Universal
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 Universal Holdings
shall deposit with the Transfer Agent, on or before the Redemption Date,
the aggregate number of Vivendi ADSs deliverable by Vivendi Universal
Holdings upon exercise of such right and a cheque or cheques of Vivendi
Universal Holdings payable at par at any branch of the bankers of Vivendi
Universal 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 Universal 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 Universal
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 Universal
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 Universal Holdings
shall deliver to such holder, the Vivendi ADSs to which the holder is
entitled and a cheque or cheques of Vivendi Universal Holdings payable at
par at any branch of the bankers of Vivendi Universal 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
Universal 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
Universal 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.
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(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.
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
VIVENDI UNIVERSAL EXCHANGECO 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:
"Adjustment Fraction" has the meaning set forth in the Plan of
Arrangement;
"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 Vivendi Universal Exchangeco Inc., a corporation
existing under the CBCA;
<PAGE> 16
-2-
"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 "V", 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, the Corporation 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 Universal
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);
<PAGE> 17
-3-
"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;
"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 (a) any 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;
<PAGE> 18
-4-
"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;
"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 the Exchangeable Shares to be issued in
accordance with the Plan of Arrangement as determined as at the
"Election Deadline", as defined in the Plan of Arrangement, 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 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;
<PAGE> 19
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(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;
"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 Universal 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 CIBC Mellon Trust Company 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;
<PAGE> 20
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"Vivendi ADS Adjustment Ratio" means the product of (i) one, subject to
adjustment pursuant to section 11.3 and (ii) the reciprocal of the Adjustment
Fraction;
"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 on the Effective Date;
"Vivendi Universal Holdings" means Vivendi Universal Holdings 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 Universal 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 5.50; 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 these share provisions. Unless otherwise
indicated, all references in this Part to an "Article" or "section" followed by
a number and/or a letter refer to the specified Article or section of the share
provisions in this Part. The terms "hereof", "herein" and "hereunder" and
similar expressions in this Part refer to the share provisions in this Part 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.
<PAGE> 21
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ARTICLE 2
RANKING OF EXCHANGEABLE SHARES
2.1 The Exchangeable Shares shall be entitled, subject to the prior rights of
the holders of the First Preferred Shares, to a preference over the Common
Shares, the Second Preferred 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.
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 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,
(i) if the one to one ratio between Vivendi Voting Rights and
the Exchangeable Shares can be maintained because the
Custodian will receive additional Vivendi Voting Rights for
and on behalf of the holders of the Exchangeable Shares, (A)
by 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 ADSs as
a result of such stock dividend or other distribution plus (B)
if the then current Vivendi ADS Adjustment Ratio is greater
than one, such additional cash, securities or other
consideration, if any, which together with the Exchangeable
Shares issued or transferred in accordance with clause (A)
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; or
(ii) if the one to one ratio between Vivendi Voting Rights and
the Exchangeable Shares cannot be maintained because the
Custodian will not receive Vivendi Voting Rights for and on
behalf of the holders of the Exchangeable Shares, in cash,
securities or other consideration to effect a corresponding,
contemporaneous and economically equivalent (as determined by
the Board of Directors in accordance with section 3.5)
dividend or other distribution after
<PAGE> 22
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giving effect to the then current Vivendi ADS Adjustment
Ratio; provided that no Exchangeable Shares, cash, securities
or other consideration will be issued or transferred under
clauses (i) or (ii) of this section 3.1(b) to the extent that
in lieu of such stock dividend or other distribution the
Corporation elects to effect a corresponding (which maintains
the one to one ratio between Vivendi Voting Rights and the
Exchangeable Shares) 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 multiplied by
the then current Vivendi ADS Adjustment Ratio, unless, in the case of
an issuance by Vivendi of preferential subscription rights to holders
of Vivendi ADSs entitling them to subscribe for additional Vivendi ADSs
at less than the Current Market Price, an adjustment is made to the
Vivendi ADS Adjustment Ratio pursuant to section 11.3.
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 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
<PAGE> 23
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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 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
<PAGE> 24
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marginal taxation rates and without regard to the individual
circumstances of owners of Exchangeable Shares);
(f) the then current Vivendi ADS Adjustment Ratio; and
(g) the economic effects of changes in the Vivendi ADS Adjustment Ratio
on a subsequent stock dividend of Exchangeable Shares paid on
Exchangeable Shares.
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 (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.
4.2 Except upon a surrender of a Vivendi Voting Right to Vivendi Universal as
provided in the Custody Agreement, 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 alleging any rights
to any economic entitlement 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 of this Part shall apply mutatis
<PAGE> 25
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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 Universal 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 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
<PAGE> 26
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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 company
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 Universal 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 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:
<PAGE> 27
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(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 Universal 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 Universal 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 Universal 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 Universal Holdings thereof and shall provide to
Vivendi Universal Holdings a copy of the Retraction Request. In order to
exercise the Retraction Call Right, Vivendi Universal Holdings must notify the
Corporation of its determination to do so (the "VIVENDI UNIVERSAL HOLDINGS CALL
NOTICE") within five Business Days of notification to Vivendi Universal Holdings
by the Corporation of the receipt by the Corporation of the Retraction Request.
If Vivendi Universal Holdings does not so notify the Corporation within such
five Business Day period, the Corporation will notify the holder as soon as
possible thereafter that
<PAGE> 28
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Vivendi Universal Holdings will not exercise the Retraction Call Right. If
Vivendi Universal Holdings delivers the Vivendi Universal 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 Universal Holdings in accordance
with the Retraction Call Right. In such event, the Corporation shall not redeem
the Retracted Shares and Vivendi Universal 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 Universal 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 Universal
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 Universal
Holdings does not deliver a Vivendi Universal 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 Universal 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
Universal 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 Universal 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
<PAGE> 29
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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 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 Universal 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 Universal
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 Universal 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 constitute notice by the holder to
the Trustee instructing the Trustee to require Vivendi to purchase such
Retracted Shares from such holder on the Retraction Date or as soon as
practicable thereafter on payment by Vivendi to such holder of the Purchase
Price for each such Retracted Share, all as more specifically provided in the
Exchange Trust Agreement.
6.7 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
<PAGE> 30
-16-
Request to sell the Retracted Shares to Vivendi Universal Holdings shall be
deemed to have been revoked.
ARTICLE 7
REDEMPTION OF EXCHANGEABLE SHARES BY THE CORPORATION
7.1 Subject to applicable law, and provided Vivendi Universal 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 Universal 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 Universal
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 Universal 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
<PAGE> 31
-17-
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 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.
<PAGE> 32
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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 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 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
<PAGE> 33
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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.
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 Vivendi ADSs (or securities
exchangeable for or convertible into or carrying rights to acquire
Vivendi ADSs), rights, options, warrants, securities, shares, evidences
of indebtedness or other assets is (A) issued or distributed or
<PAGE> 34
-20-
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; 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.
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 (a) 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; (b)
Subject to any economic equivalence determination under section 3.5 and these
share provisions 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 Board of Directors
may adjust the Vivendi ADS Adjustment Ratio in accordance with the following
formula:
R1=R/((O+(C/M))/A)
where:
R1 = 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
<PAGE> 35
-21-
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
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.
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 Universal Holdings and the Corporation with
all provisions of the Support Agreement and the Custody Agreement applicable to
Vivendi, Vivendi Universal 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
<PAGE> 36
-22-
opinion, after consultation with counsel, that such changes or
corrections will not be prejudicial to the interests of the holders of
the Exchangeable Shares.
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 Universal 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 Universal Holdings as therein provided.
13.3 The Corporation, Vivendi Universal 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 Universal 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 Universal 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 Universal 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 Universal
<PAGE> 37
-23-
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 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
<PAGE> 38
-24-
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.
ARTICLE 16
NO FRACTIONAL SHARES
16.1 A holder of an Exchangeable Share shall not be entitled to any fraction of
a Vivendi ADS upon the exchange or purchase of such holder's Exchangeable Shares
pursuant to Articles 5, 6 and 7 and no certificates representing any such
fractional interest shall be issued and such holder otherwise entitled to a
fractional interest will receive for such fractional interest from the
Corporation or Vivendi Universal Holdings as the case may be on the designated
payment date a cash payment equal to such fractional interest multiplied by the
Current Market Price.
<PAGE> 39
-25-
SCHEDULE A
RETRACTION REQUEST
[TO BE PRINTED ON EXCHANGEABLE SHARE CERTIFICATES]
TO THE CORPORATION AND VIVENDI UNIVERSAL HOLDINGS
This notice is given pursuant to Article 6 of the provisions (the
"Share Provisions") attaching to the Exchangeable Share(s) of the Corporation
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 the Corporation that, subject to the
Retraction Call Right referred to below, the undersigned desires to have the
Corporation 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 the Corporation 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 the Corporation. 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 the
Corporation. 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 Universal 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
Universal 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 Universal Holdings, may be revoked
and withdrawn by the undersigned only by notice in writing given to the
Corporation at any time before the close of business on the Business Day
immediately preceding the Retraction Date.
<PAGE> 40
-26-
The undersigned acknowledges that if, as a result of solvency
provisions of applicable law, the Corporation is unable to redeem all Retracted
Shares and provided that Vivendi Universal 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 Universal to purchase the unredeemed
Retracted Shares.
The undersigned hereby represents and warrants to the Corporation and
Vivendi Universal Holdings that the undersigned:
| | is a non-resident of Canada for the purposes of the Income Tax Act
(Canada) and is a resident of ____________________________.
(select one)
| | is not a non-resident of Canada for the 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 the Corporation and
Vivendi Universal Holdings that the undersigned has good title to, and owns, the
share(s) represented by this certificate to be acquired by the Corporation or
Vivendi Universal Holdings, 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 Vivendi Universal American Depositary Receipts
("Vivendi Universal ADRs") representing Vivendi Universal 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
Vivendi Universal ADRs 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 the Corporation and the Vivendi Universal ADRs representing Vivendi
Universal 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.
<PAGE> 41
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--------------------------------------------------------------------------------
Name of Person in Whose Name Securities or Cheque(s) Are Date
to be Registered, Issued or Delivered (please print)
--------------------------------------------------------------------------------
Street Address or P.O. Box Signature of Shareholder
--------------------------------------------------------------------------------
City - Province Postal Code Signature Guaranteed by
--------------------------------------------------------------------------------
NOTE: If this Retraction Request is for less than all of the share(s)
represented by this certificate, a certificate representing the
remaining share(s) of the Corporation represented by this certificate
will be issued and registered in the name of the shareholder as it
appears on the register of the Corporation, unless the Share Transfer
Power on this share certificate is duly completed in respect of such
share(s).
