1
EXHIBIT 3.3
EXECUTION COPY
VIVENDI S.A.
AND
CANAL PLUS S.A.
AND
SOFIEE S.A.
AND
3744531 CANADA INC.
AND
THE SEAGRAM COMPANY LTD.
MERGER AGREEMENT
DATED AS OF
JUNE 19, 2000
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TABLE OF CONTENTS
PAGE
ARTICLE 1
INTERPRETATION.................................................................. A-2
Section 1.1 Definitions................................................... A-2
Section 1.2 Interpretation Not Affected by Headings, etc.................. A-13
Section 1.3 Currency...................................................... A-14
Section 1.4 Number, etc................................................... A-14
Section 1.5 Date For Any Action........................................... A-14
Section 1.6 Entire Agreement.............................................. A-14
Section 1.7 Schedules..................................................... A-14
Section 1.8 Accounting Matters............................................ A-15
Section 1.9 Knowledge..................................................... A-15
ARTICLE 2
THE ARRANGEMENT................................................................. A-15
Section 2.1 Implementation Steps by Seagram............................... A-15
Section 2.2 Implementation Steps by the Vivendi Parties, Canal............ A-16
Section 2.3 Interim Order................................................. A-17
Section 2.4 Articles of Arrangement....................................... A-18
Section 2.5 Seagram Circular.............................................. A-18
Section 2.6 Vivendi Circular.............................................. A-18
Section 2.7 Canal Circular................................................ A-18
Section 2.8 Securities Compliance......................................... A-19
Section 2.9 Preparation of Filings, etc................................... A-20
ARTICLE 3
REPRESENTATIONS AND WARRANTIES.................................................. A-22
Section 3.1 Representations and Warranties of Seagram..................... A-22
Section 3.2 Representations and Warranties of the Vivendi Parties, Canal.. A-31
Section 3.3 Survival...................................................... A-43
ARTICLE 4
COVENANTS....................................................................... A-43
Section 4.1 Retention of Goodwill......................................... A-43
Section 4.2 Consultation.................................................. A-43
Section 4.3 Covenants of Seagram.......................................... A-43
Section 4.4 Covenants of the Vivendi Parties, Sofiee and Canal............ A-49
Section 4.5 Covenants Regarding Non-Solicitation of Seagram............... A-59
Section 4.6 Covenants Regarding Non-Solicitation of Vivendi............... A-62
Section 4.7 Covenants Regarding Non-Solicitation of Canal................. A-63
Section 4.8 Access to Information......................................... A-65
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 4.9 Indemnification.................................................... A-66
Section 4.10 Safe Income........................................................ A-67
ARTICLE 5
CONDITIONS........................................................................... A-69
Section 5.1 Mutual Conditions Precedent........................................ A-69
Section 5.2 Additional Conditions Precedent to the Obligations of the Vivendi
Parties, Sofiee and Canal.......................................... A-70
Section 5.3 Additional Conditions Precedent to the Obligations of Seagram...... A-71
Section 5.4 Notice and Cure Provisions......................................... A-73
Section 5.5 Satisfaction of Conditions......................................... A-74
ARTICLE 6
AMENDMENT AND TERMINATION............................................................ A-74
Section 6.1 Amendment.......................................................... A-74
Section 6.2 Termination........................................................ A-74
Section 6.3 Termination and Other Fees......................................... A-77
Section 6.4 Remedies........................................................... A-79
ARTICLE 7
GENERAL.............................................................................. A-80
Section 7.1 Notices............................................................ A-80
Section 7.2 Assignment......................................................... A-83
Section 7.3 Binding Effect..................................................... A-83
Section 7.4 Waiver and Modification............................................ A-83
Section 7.5 Further Assurances................................................. A-83
Section 7.6 Expenses........................................................... A-84
Section 7.7 Press Releases..................................................... A-84
Section 7.8 Governing Laws..................................................... A-84
Section 7.9 Time of Essence.................................................... A-84
Section 7.10 Counterparts....................................................... ▇-▇▇
▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ OF AGREEMENT made as of the 19th day of June, 2000.
AMONG:
VIVENDI S.A.
a corporation existing under the laws of France
(hereinafter referred to as "VIVENDI" as such term is
modified in Section 1.1),
- and -
CANAL PLUS S.A.
a corporation existing under the laws of France
(hereinafter referred to as "CANAL")
- and -
SOFIEE S.A.
a corporation existing under the laws of France
(hereinafter referred to as "SOFIEE")
- and -
3744531 CANADA INC.,
a corporation existing under the laws of Canada
(hereinafter referred to as "VIVENDI EXCHANGECO")
- and -
THE SEAGRAM COMPANY LTD.
a corporation existing under the laws of Canada
(hereinafter referred to as "SEAGRAM")
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THIS AGREEMENT WITNESSES THAT in consideration of the respective
covenants and agreements herein contained, the parties hereto covenant and agree
as follows:
ARTICLE 1
INTERPRETATION
SECTION 1.1 DEFINITIONS.
In this Agreement, unless there is something in the subject matter or
context inconsistent therewith, the following terms shall have the following
meanings respectively:
"1933 ACT" means the United States Securities Act of 1933, as amended;
"AFFILIATE" means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls,
is controlled by or is under common control with, such specified
Person;
"AFFILIATES LETTER" means with respect to Rule 145 under the 1933 Act a
letter in form and substance reasonably satisfactory to Vivendi and
Seagram;
"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,
subject to any amendments or variations thereto made in accordance with
Section 6.1 hereof, Section 6.1 of the Plan of Arrangement or made at
the direction of the Court in the Final Order;
"ARRANGEMENT RESOLUTION" means the special resolution of the Seagram
shareholders, to be substantially in the form and content of Schedule B
annexed hereto;
"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;
"BOARD OF DIRECTORS" means the Board of Directors of any specified
Person and any committees thereof;
"BUSINESS DAY" means any day on which commercial banks are generally
open for business in Toronto, Ontario, New York, New York and France
other than a Saturday, a Sunday or a day observed as a holiday in
Toronto, Ontario, in New York, New York or in France under applicable
Laws;
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"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;
"CANADIAN TAX ACT" means the Income Tax Act (Canada), as amended;
"CANAL ACQUISITION PROPOSAL" means any bona fide proposal or offer with
respect to (i) any merger, reorganization, business combination, share
exchange, liquidation, dissolution, recapitalization, or similar
transaction involving Canal or any Canal Material Subsidiary that if
consummated would result in any Person (or the shareholders of such
Person) owning securities representing 50% or more of the voting power
of Canal (or the surviving or ultimate parent entity in such
transaction) or (ii) any direct or indirect acquisition, purchase or
sale of assets involving Canal or any Canal Material Subsidiary
representing 50% or more of the consolidated assets (including shares
of its subsidiaries) of Canal and its consolidated subsidiaries, taken
as a whole, or (iii) any direct or indirect acquisition, purchase or
sale of, or tender or exchange offer (or shareholders
recapitalization), or similar transaction involving Canal, that if
consummated would result in any Person (or the shareholders of such
Person) owning securities representing 50% or more of the voting power
of Canal (or the surviving or ultimate parent entity in such
transaction), in each case excluding the transactions contemplated by
this Agreement and any other proposal or offer made by Vivendi, Seagram
or their respective affiliates;
"CANAL CIRCULAR" means as the context requires, (i) the circular to be
sent to, or put at the disposal of, the Canal Shareholders, including
the notice of the Canal Meeting and all appendices thereto, containing
information relating to the Vivendi/Canal Transactions and/or (ii) the
prospectus included in the Form F-4 pursuant to which the Vivendi
Shares to be acquired by the Canal Shareholders pursuant to the
Vivendi/Canal Transactions will be registered under the 1933 Act;
"CANAL DISCLOSURE LETTER" means that certain letter dated as of even
date herewith and delivered by Canal to Seagram and in a form
reasonably acceptable to Seagram;
"CANAL DOCUMENTS" has the meaning ascribed thereto in Section
3.2(2)(i);
"CANAL IP" has the meaning ascribed thereto in Section 3.2(2)(l);
"CANAL MATERIAL SUBSIDIARY" means any subsidiary of Canal that is a
"Significant Subsidiary" as defined in Rule 1-02 of Regulation S-X of
the SEC;
"CANAL MEETING" means the extraordinary meeting of Canal Shareholders,
including any adjournment or postponement thereof, to be called and
held in accordance with applicable Laws to consider the Canal
Resolution;
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"CANAL RESOLUTION" means the resolution of the Canal Shareholders to
approve the Vivendi/Canal Transactions to the extent applicable to
Canal;
"CANAL SHARES" means the shares in the capital of Canal;
"CANAL SHAREHOLDERS" means the holders of Canal Shares;
"CANAL SUPERIOR PROPOSAL" means any bona fide written unsolicited
proposal made by a third party (other than Vivendi or its affiliates)
which if consummated would result in such third party (or the
shareholders of such third party) acquiring, directly or indirectly,
securities representing more than 50% of the voting power of the shares
of Canal (or the surviving or ultimate parent entity in such
transaction) or all or substantially all the assets of Canal and its
subsidiaries, taken as a whole, (i) on terms which the Canal Board of
Directors in good faith reasonably concludes (following receipt of
advice of its financial advisors and outside counsel) would, if
consummated, be superior from a financial point of view to the Canal
Shareholders to the transactions contemplated by this Agreement
(including the terms of any proposal by Seagram to amend or modify the
terms of the transactions contemplated by this Agreement), taking into
account all of the terms and conditions of such proposal and such
transactions and (ii) which is reasonably capable of being completed,
taking into account all financial, regulatory, legal and other aspects
of such proposal;
"CMF" means the Conseil des Marches Financiers;
"COB" means the Commission des Operations de Bourse;
"CODE" means the United States Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder;
"CONFIDENTIALITY AGREEMENT" means the confidentiality letter agreement
dated June 4, 2000 between Vivendi and Seagram;
"COURT" means the Superior Court of Justice (Ontario);
"CUSTODIAN" means the custodian to be chosen by Vivendi and Vivendi
Exchangeco, acting reasonably, to act as custodian under the Custody
Agreement and any successor appointed under the Custody Agreement;
"CUSTODY AGREEMENT" means the custody agreement to be made between
Vivendi, Vivendi Exchangeco and the Custodian, substantially in the
form and content of Schedule C annexed hereto, with such changes
thereto as the parties may agree;
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"DIRECTOR" means the Director appointed pursuant to Section 260 of the
CBCA;
"DISSENT RIGHTS" means the rights of dissent in respect of the
Arrangement described in Section 3.1 of the Plan of Arrangement;
"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;
"EFFECTIVE TIME" has the meaning ascribed thereto in the Plan of
Arrangement;
"ENVIRONMENTAL LAWS" means all applicable Laws, including applicable
common law, relating to the protection of the environment and public
health and safety as affected by the environment or Hazardous
Substances;
"ENVIRONMENTAL PERMITS" has the meaning ascribed thereto in Section
3.1(h)(ii)(c);
"ERISA" has the meaning ascribed thereto in Section 3.1(j)(ii);
"EXCHANGE ACT" means the United States Securities Exchange Act of 1934,
as amended;
"EXCHANGE RATIO" has the meaning ascribed thereto in the Plan of
Arrangement;
"EXCHANGEABLE SHARES" means the non-voting exchangeable shares in the
capital of Vivendi Exchangeco, having substantially the rights,
privileges, restrictions and conditions set out in Appendix 1 to the
Plan of Arrangement;
"EXCHANGE TRUST AGREEMENT" means an agreement to be made among Vivendi,
Vivendi Exchangeco, Vivendi Holdings, Seagram and the Trustee, in
connection with the Plan of Arrangement substantially in the form and
content of Schedule D annexed hereto, with such changes thereto as the
parties hereto, acting reasonably may agree;
"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 as amended on appeal;
"FORM F-4" has the meaning ascribed thereto in Section 2.8(5);
"FORM S-8" has the meaning ascribed thereto in Section 4.4(p)(iv);
"FRENCH GAAP" has the meaning ascribed thereto in Section 3.2(1)(f);
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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;
"HAZARDOUS SUBSTANCE" means any pollutant, contaminant, waste of any
nature, hazardous substance, hazardous material, toxic substance,
dangerous substance or dangerous good as defined or identified in,
regulated by or that could reasonably be expected to result in
Liability under any Environmental Law;
"HOLDERS" means, when used with reference to the Seagram Common Shares,
the holders thereof shown from time to time in the register maintained
by or on behalf of Seagram in respect of such securities, when used
with reference to Seagram Options or Seagram SARs, means the holders of
Seagram Options or Seagram SARs (as applicable) shown from time to time
on the books of Seagram, and when used with reference to the
Exchangeable Shares, means the holders of Exchangeable Shares shown
from time to time in the register maintained by or on behalf of Vivendi
Exchangeco in respect of the Exchangeable Shares;
"INCLUDING" means including without limitation;
"INFORMATION" has the meaning ascribed thereto in Section 4.8(2);
"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;
"LAWS" means all statutes, regulations, statutory rules, orders, and
terms and conditions of any grant of approval, permission, authority or
license of any court, arbitral tribunal, Governmental Entity, statutory
body (including the OSC, the TSE, the PSE, the NYSE, NASDAQ, the SEC,
the CMF and the COB) or self-regulatory authority, and the term
"applicable" with respect to such Laws and in the context that refers
to one or more Persons, means that such Laws apply to such Person or
Persons or its or their business, undertaking, property or securities
and emanate from a Governmental Entity having jurisdiction over the
Person or Persons or its or their business, undertaking, property or
securities;
"MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT", when used in
connection with any party, means any change, effect, event or
occurrence (a) with respect to the financial condition, businesses or
results of operations of such party or those of its subsidiaries that
is, or is reasonably likely to be, materially adverse to such party and
its
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subsidiaries taken as a whole, other than any change, effect, event or
occurrence (i) relating to the economy or securities markets in
general, (ii) affecting the industries in which such party operates in
general and not specifically relating to (or having the effect of
specifically relating to or having a materially disproportionate effect
(relative to most other industry participants) on) such party and its
subsidiaries, taken as a whole, or (iii) relating to the announcement
and performance of this Agreement and the transactions contemplated by
this Agreement and compliance with the covenants set forth in this
Agreement, or (b) that is materially adverse to the ability of such
party to consummate the transactions contemplated by this Agreement;
"MEASURING PERIOD" has the meaning ascribed thereto in the Plan of
Arrangement;
"MATERIAL FACT" shall have the meaning ascribed thereto under the
Securities Act;
"NASDAQ" means The NASDAQ Stock Market;
"NYSE" means the New York Stock Exchange;
"OPTION AGREEMENT" means the option agreement dated the date hereof
between Vivendi and Seagram;
"OSC" means the Ontario Securities Commission;
"OUTSIDE DATE" means, subject to Section 6.2(4), March 19, 2001 or such
later date as may be mutually agreed by the parties;
"PSE" means the Paris Bourse;
"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, and any group (as defined in Section
13(d)(3) of the Exchange Act) comprised of more than one Person;
"PLAN OF ARRANGEMENT" means the plan of arrangement substantially in
the form and content of Schedule F annexed hereto and any amendments or
variations thereto made in accordance with Section 6.1 hereof, Section
6.1 of the Plan of Arrangement or made at the direction of the Court in
the Final Order;
"PRE-EFFECTIVE DATE PERIOD" shall mean the period from and including
the date hereof to and including the Effective Time;
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"PUBLICLY DISCLOSED BY SEAGRAM" means disclosed by Seagram in a public
filing made by it with the OSC, the TSE, the NYSE or the SEC from July
1, 1998 to the date hereof;
"PUBLICLY DISCLOSED BY VIVENDI" means disclosed by Vivendi or Canal (a)
in a public filing made by Vivendi or Canal with the PSE, the COB, the
CMF, the NYSE, NASDAQ or the SEC or (b) in a registration statement
confidentially submitted to the SEC and made available to Seagram by
Vivendi prior to the date hereof, in each case from January 1, 1998 to
the date hereof;
"REGULATORY APPROVALS" means those sanctions, rulings, consents,
orders, exemptions, waivers, permits and other approvals (including the
lapse, without objection, of a prescribed time under a statute or
regulation that states that a transaction may be implemented if a
prescribed time lapses following the giving of notice without an
objection being made) of Governmental Entities, regulatory agencies or
self-regulatory organizations, as set out in Schedule G hereto;
"REPRESENTATIVES" has the meaning ascribed thereto in Section 4.8(1);
"SEAGRAM ACES" means 18,500,000 7.5% Adjustable Conversion Rate Equity
Security Units issued by Seagram and a subsidiary of Seagram;
"SEAGRAM ACQUISITION PROPOSAL" means any bona fide proposal or offer
with respect to (i) any merger, reorganization, consolidation,
amalgamation, arrangement, business combination, share exchange,
liquidation, dissolution, recapitalization, or similar transaction
involving Seagram or any Seagram Material Subsidiary or (ii) any direct
or indirect acquisition, purchase or sale of assets involving Seagram
or any Seagram Material Subsidiary representing 20% or more of the
consolidated assets (including shares of subsidiaries) of Seagram and
its consolidated subsidiaries, taken as a whole, or (iii) any direct or
indirect acquisition, purchase of or sale of, or tender or exchange
offer (or shareholders recapitalization) or similar transaction
involving Seagram, that if consummated would result in any Person (or
shareholders of such Person) owning securities representing 20% or more
of the voting power of Seagram (or the surviving or ultimate parent
entity in such transaction), in each case excluding the transactions
contemplated by this Agreement and any other proposal or offer made by
Vivendi, Canal or their respective affiliates;
"SEAGRAM CIRCULAR" means, as the context requires, (i) the notice of
the Seagram Meeting and accompanying management information circular,
including all appendices thereto, to be sent to Seagram Shareholders in
connection with the Seagram Meeting and/or (ii) the prospectus included
in the Form F-4 pursuant to which the Vivendi Securities will be
registered under the 1933 Act;
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"SEAGRAM COMMON SHARES" means the common shares in the capital of
Seagram;
"SEAGRAM DESIGNEES" means five designees of the Seagram Board of
Directors selected by Seagram to serve, as of the Effective Date, for
an initial four-year term, as members of the Board of Directors of
Vivendi;
"SEAGRAM DISCLOSURE LETTER" means that certain letter dated as of even
date herewith and delivered by Seagram to the Vivendi Parties and Canal
and in a form reasonably acceptable to the Vivendi Parties and Canal;
"SEAGRAM DOCUMENTS" has the meaning ascribed thereto in Section 3.1(k);
"SEAGRAM EMPLOYEES" has the meaning ascribed thereto in Section 3.1(j);
"SEAGRAM FEE" has the meaning ascribed thereto in Section 6.3(1);
"SEAGRAM IP" has the meaning ascribed thereto in Section 3.1(l);
"SEAGRAM ▇▇▇▇▇" means the zero coupon liquid yield option notes issued
by Seagram and a subsidiary of Seagram;
"SEAGRAM MATERIAL SUBSIDIARY" means any subsidiary of Seagram that is a
"Significant Subsidiary" as defined in Rule 1-02 of Regulation S-X of
the SEC;
"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 OPTIONS" means the stock options to purchase Seagram Common
Shares granted under the Seagram Stock Plans;
"SEAGRAM PLANS" has the meaning ascribed thereto in Section 3.1(j)(i);
"SEAGRAM SARS" has the meaning ascribed thereto in Section 3.1(b);
"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;
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"SEAGRAM SUPERIOR PROPOSAL" means any bona fide written unsolicited
proposal made by a third party (other than Vivendi or its affiliates)
which if consummated would result in such third party (or the
shareholders of such third party) acquiring, directly or indirectly,
securities representing more than 50% of the voting power of the shares
of Seagram (or the surviving or ultimate parent entity in such
transaction) or all or substantially all the assets of Seagram and its
subsidiaries, taken as a whole, (i) on terms which the Seagram Board of
Directors in good faith reasonably concludes (following receipt of
advice of its financial advisors and outside counsel) would, if
consummated, be superior from a financial point of view to the Seagram
Shareholders to the transactions contemplated by this Agreement
(including the terms of any proposal by Vivendi to amend or modify the
terms of the transactions contemplated by this Agreement), taking into
account all of the terms and conditions of such proposal and such
transactions and (ii) which is reasonably capable of being completed,
taking into account all financial, regulatory, legal and other aspects
of such proposal;
"SEC" means the United States Securities and Exchange Commission;
"SECURITIES ACT" means the Securities Act (Ontario) and the rules,
regulations and policies made thereunder, as now in effect and as they
may be amended from time to time prior to the Effective Date;
"SOFIEE MEETING" means the extraordinary meeting of Sofiee
shareholders, including any adjournment or postponement thereof, to be
called and held in accordance with applicable Laws to consider the
Sofiee Resolution;
"SOFIEE MERGER" means the merger of Vivendi with and into Sofiee as
part of the Vivendi/Canal Transactions;
"SOFIEE RESOLUTION" means the resolution of the holders of shares in
the capital of Sofiee to approve the Vivendi/Canal Transactions to the
extent applicable to Sofiee, including (i) the Sofiee Merger, (ii) the
election of the Seagram Designees, (iii) the adoption of the Vivendi
By-Laws and (iv) certain matters relating to the Arrangement;
"SUBSIDIARY" means, with respect to a specified body corporate, any
body corporate of which more than 50% of the outstanding shares
ordinarily entitled to elect a majority of the board of directors
thereof (whether or not shares of any other class or classes shall or
might be entitled to vote upon the happening of any event or
contingency) are at the time owned directly or indirectly by such
specified body corporate, and shall include any body corporate,
partnership, joint venture or other entity over which it exercises
direction or control or which is in a like relation to a subsidiary;
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"SUPPORT AGREEMENT" means an agreement to be made among Vivendi,
Vivendi Holdings and Vivendi Exchangeco, substantially in the form and
content of Schedule H annexed hereto, with such changes thereto as the
parties hereto may agree;
"TAX" and "TAXES" have the respective meanings ascribed thereto in
Section 3.1(i)(iii);
"TAX RETURNS" means all returns, declarations, reports, information
returns and statements required to be filed with any taxing authority
relating to Taxes;
"TREASURY REGULATIONS" means the regulations promulgated under the
Code;
"TRUSTEE" means the trustee to be chosen by Vivendi and Seagram, acting
reasonably, to act as trustee under the Exchange Trust Agreement, and
any successor trustee appointed under the Exchange Trust Agreement;
"TSE" means The Toronto Stock Exchange;
"U.S. GAAP" has the meaning ascribed thereto in Section 3.1(f);
"VIVENDI" means prior to the completion of the Vivendi/Canal
Transactions, Vivendi and from and after the completion of the
Vivendi/Canal Transactions the surviving corporation resulting from the
Sofiee Merger;
"VIVENDI ADRS" means the American depositary receipts of Vivendi, each
evidencing one Vivendi ADS;
"VIVENDI ADSS" means the American depositary shares of Vivendi, each
representing one Vivendi Share;
"VIVENDI ACQUISITION PROPOSAL" means any bona fide proposal or offer
with respect to (i) any merger, reorganization, business combination,
share exchange, liquidation, dissolution, recapitalization, or similar
transaction involving Vivendi or any Vivendi Material Subsidiary that
if consummated would result in any Person (or the shareholders of such
Person) owning securities representing 50% or more of the voting power
of Vivendi (or the surviving or ultimate parent entity in such
transaction) or (ii) any direct or indirect acquisition, purchase or
sale of assets involving Vivendi or any Vivendi Material Subsidiary
representing 50% or more of the consolidated assets (including shares
of its subsidiaries) of Vivendi and its consolidated subsidiaries,
taken as a whole, or (iii) any direct or indirect acquisition, purchase
or sale of, or tender or exchange offer (or shareholders
recapitalization), or similar transaction involving Vivendi, that if
consummated would result in any Person owning securities representing
50% or more of the voting power of Vivendi (or the surviving or
ultimate parent entity in such
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transaction), in each case excluding the transactions contemplated by
this Agreement and any other proposal or offer made by Canal, Seagram
or their respective affiliates;
"VIVENDI BY-LAWS" means the by-laws of the surviving entity of the
Sofiee Merger, which by-laws shall be identical to the by-laws and
statutes of Vivendi as of the date of this Agreement, except that they
shall reflect those changes specified in the Vivendi Disclosure Letter;
"VIVENDI/CANAL AGREEMENTS" means the agreements specified in Schedule I
hereto and all other agreements necessary to effect the Sofiee Merger
and the other Vivendi/Canal Transactions;
"VIVENDI/CANAL TRANSACTIONS" means the Sofiee Merger and the other
transactions set forth on Schedule I hereto;
"VIVENDI CIRCULAR" means, as the context requires, (i) the circular to
be sent to, or put at the disposal of, the Vivendi Shareholders,
including the notice of the Vivendi Meeting and all appendices thereto,
containing information relating to the transactions contemplated herein
and/or (ii) the prospectus included in the Form F-4 pursuant to which
the Vivendi Shares to be issued to the Vivendi Shareholders pursuant to
the Sofiee Merger will be registered under the 1933 Act;
"VIVENDI DISCLOSURE LETTER" means that certain letter dated as of even
date herewith and delivered by Vivendi to Seagram and in a form
reasonably acceptable to Seagram;
"VIVENDI DOCUMENTS" has the meaning ascribed thereto in Section
3.2(l)(i);
"VIVENDI FEE" has the meaning ascribed thereto in Section 6.3(2);
"VIVENDI HOLDINGS" means 3045479 Nova Scotia Company, an unlimited
liability company existing under the laws of the Province of Nova
Scotia and wholly owned, directly or indirectly, by Vivendi through any
number of entities, each of which is a disregarded entity for U.S.
Federal income tax purposes;
"VIVENDI IP" has the meaning ascribed thereto in Section 3.2(1)(l);
"VIVENDI MATERIAL SUBSIDIARY" means (i) Sofiee and (ii) any other
subsidiary of Vivendi that is a "Significant Subsidiary" as defined in
Rule 1-02 of Regulation S-X of the SEC;
"VIVENDI MEETING" means the extraordinary meeting of Vivendi
Shareholders, including any adjournment or postponement thereof, to be
called and held in accordance with applicable Laws to consider the
Vivendi Resolution;
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"VIVENDI PARTIES" means Vivendi and Vivendi Exchangeco;
"VIVENDI RESOLUTION" means the resolution of the Vivendi Shareholders
to approve the Vivendi/Canal Transactions to the extent applicable to
Vivendi, including the Sofiee Merger, and certain matters relating to
the Arrangement;
"VIVENDI SECURITIES" means the Vivendi ADSs, the Vivendi ADRs, the
Vivendi Shares underlying the Vivendi ADSs, the Exchangeable Shares and
the Vivendi Voting Rights related thereto to be issued in connection
with the Arrangement and the Vivendi ADSs into which the Exchangeable
Shares are exchangeable;
"VIVENDI SHARES" means the shares in the capital of Vivendi;
"VIVENDI SHAREHOLDERS" means the holders of Vivendi Shares;
"VIVENDI SUPERIOR PROPOSAL" means any bona fide written unsolicited
proposal made by a third party (other than Canal or its affiliates)
which if consummated would result in such third party (or the
shareholders of such third party) acquiring, directly or indirectly,
securities representing more than 50% of the voting power of the shares
of Vivendi (or the surviving or ultimate parent entity in such
transaction) or all or substantially all the assets of Vivendi and its
subsidiaries, taken as a whole, (i) on terms which the Vivendi Board of
Directors in good faith reasonably concludes (following receipt of
advice of its financial advisors and outside counsel) would, if
consummated, be superior from a financial point of view to the Vivendi
Shareholders to the transactions contemplated by this Agreement
(including the terms of any proposal by Seagram to amend or modify the
terms of the transactions contemplated by this Agreement), taking into
account all of the terms and conditions of such proposal and such
transactions and (ii) which is reasonably capable of being completed,
taking into account all financial, regulatory, legal and other aspects
of such proposal; and
"VIVENDI VOTING RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement.
SECTION 1.2 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this Agreement into Articles, Sections and other
portions and the insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation hereof. 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 Agreement.
The terms "this Agreement", "hereof", "herein" and "hereunder" and similar
expressions refer to this Agreement (including the Schedules hereto) and not to
any particular Article, Section or other portion hereof and include any
agreement or instrument supplementary or ancillary hereto.
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Unless the context otherwise requires, all references to the "transactions
contemplated by this Agreement" include the Arrangement and the Vivendi/Canal
Transactions.
SECTION 1.3 CURRENCY.
Unless otherwise specifically indicated, all sums of money referred to
in this Agreement are expressed in lawful money of the United States.
SECTION 1.4 NUMBER, ETC.
Unless the context otherwise requires, words importing the singular
shall include the plural and vice versa and words importing any gender shall
include all genders.
SECTION 1.5 DATE FOR ANY ACTION.
In the event that any date on which any action is required to be taken
hereunder by any of the parties hereto is not a Business Day, such action shall
be required to be taken on the next succeeding day which is a Business Day.
SECTION 1.6 ENTIRE AGREEMENT.
This Agreement, the agreements and other documents and agreements
herein referred to and the Confidentiality Agreement constitute the entire
agreement between the parties hereto pertaining to the terms of the Arrangement
and supersede all other prior agreements, understandings, negotiations and
discussions, whether oral or written, between the parties hereto with respect to
the terms of the Arrangement and the Vivendi/Canal Transactions.
SECTION 1.7 SCHEDULES.
The following Schedules are annexed to this Agreement and are hereby
incorporated by reference into this Agreement and form part hereof:
Schedule A - [intentionally omitted]
Schedule B - Arrangement Resolution
Schedule C - Custody Agreement
Schedule D - Exchange Trust Agreement
Schedule E - [intentionally omitted]
Schedule F - Plan of Arrangement
Schedule G - Regulatory Approvals
Schedule H - Support Agreement
Schedule I - Vivendi/Canal Transactions
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SECTION 1.8 ACCOUNTING MATTERS.
Unless otherwise stated, all accounting terms used in this Agreement in
respect of any party shall have the meanings attributable thereto under
generally accepted accounting principles applicable to such party's published
financial statements and all determinations of an accounting nature in respect
of any party required to be made shall be made in a manner consistent with
generally accepted accounting principles applicable to such party's published
financial statements and past practice.
SECTION 1.9 KNOWLEDGE.
Each reference in this Agreement to "known" or "knowledge" means, with
respect to any party, the actual knowledge of such party's executive officers
after reasonable inquiry.
ARTICLE 2
THE ARRANGEMENT
SECTION 2.1 IMPLEMENTATION STEPS BY SEAGRAM.
Seagram covenants in favour of the Vivendi Parties, Sofiee and Canal
that Seagram shall:
(a) as soon as reasonably practicable, apply in a manner
acceptable to the Vivendi Parties, acting reasonably, under
Section 192 of the CBCA for an order approving the Arrangement
and for the Interim Order, and thereafter proceed with and
diligently seek the Interim Order;
(b) as soon as reasonably practicable, convene and hold the
Seagram Meeting for the purpose of considering the Arrangement
Resolution; provided, however, that Seagram shall be permitted
to hold the Seagram Meeting on such later date as the later of
the Vivendi Meeting and the Canal Meeting is held;
(c) except as required for quorum purposes, not adjourn (except as
required by Law or by valid shareholder action), postpone or
cancel (or propose for adjournment, postponement or
cancellation) the Seagram Meeting without the Vivendi Parties'
prior written consent;
(d) subject to obtaining the approvals as are required by the
Interim Order, proceed with and diligently pursue the
application to the Court for the Final Order; and
(e) subject to obtaining the Final Order and the satisfaction or
waiver of the other conditions herein contained in favour of
each party, send to the Director, for
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endorsement and filing by the Director, the Articles of
Arrangement and such other documents as may be required in
connection therewith under the CBCA to give effect to the
Arrangement.
SECTION 2.2 IMPLEMENTATION STEPS BY THE VIVENDI PARTIES, CANAL AND SOFIEE.
(1) The Vivendi Parties covenant in favour of Seagram that the Vivendi
Parties shall:
(a) as soon as reasonably practicable, convene and hold the
Vivendi Meeting for the purpose of considering the Vivendi
Resolution;
(b) except as required for quorum purposes, not adjourn (except as
required by Law), postpone or cancel (or propose for
adjournment, postponement or cancellation) the Vivendi Meeting
without Seagram's prior written consent; provided, however,
that Vivendi shall be permitted to hold the Vivendi Meeting on
such later date as the date of the Seagram Meeting;
(c) use best efforts to prepare, complete and execute the
Vivendi/Canal Agreements in a manner consistent with Section
4.4(z), as promptly as practicable, and use reasonable best
efforts to satisfy each of the conditions to closing set forth
in the Vivendi/Canal Agreements as promptly as practicable and
diligently pursue and implement the transactions contemplated
thereby;
(d) incorporate and organize Vivendi Holdings no later than
June 30, 2000;
(e) subject to obtaining the Final Order and the satisfaction or
waiver of the other conditions herein contained in its favour,
Vivendi shall (and shall cause Vivendi Holdings and Vivendi
Exchangeco to) execute and deliver the Support Agreement;
(f) subject to obtaining the Final Order and the satisfaction or
waiver of the other conditions herein contained in its favour,
Vivendi shall (and shall cause Vivendi Holdings to) execute
and deliver the Exchange Trust Agreement;
(g) subject to obtaining the Final Order and the satisfaction or
waiver of the other conditions herein contained in its favor,
Vivendi shall (and shall cause Vivendi Exchangeco to) execute
and deliver the Custody Agreement and issue the Vivendi Voting
Rights in accordance with the Custody Agreement; and
(h) use reasonable best efforts to implement each of the matters
contemplated by the Vivendi Resolution.
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(2) Canal covenants in favour of Seagram that Canal shall:
(a) as soon as reasonably practicable, convene and hold the Canal
Meeting for the purpose of considering the Canal Resolution;
(b) not adjourn (except as required by Law), postpone or cancel
(or propose for adjournment, postponement or cancellation) the
Canal Meeting without Seagram's prior written consent;
provided, however, that Canal shall be permitted to hold the
Canal Meeting on such later date as the date of the Seagram
Meeting;
(c) use best efforts to prepare, complete and execute promptly the
Vivendi/Canal Agreements in a manner consistent with Section
4.4(z), and use reasonable best efforts to satisfy each of the
conditions to closing set forth in the Vivendi/Canal
Agreements as promptly as practicable and diligently pursue
and implement the transactions contemplated thereby; and
(d) use reasonable best efforts to implement each of the matters
contemplated by the Canal Resolution.
(3) Sofiee covenants in favour of Seagram that Sofiee shall:
(a) as soon as reasonably practicable, convene and hold the Sofiee
Meeting for the purpose of considering the Sofiee Resolution;
(b) not adjourn, postpone or cancel (or propose for adjournment,
postponement or cancellation) the Sofiee Meeting without
Seagram's prior written consent;
(c) use reasonable best efforts to satisfy each of the conditions
to closing set forth in the Vivendi/Canal Agreements as
promptly as practicable and diligently pursue and implement
the transactions contemplated thereby; and
(d) use reasonable best efforts to implement each of the matters
contemplated by the Sofiee Resolution.
SECTION 2.3 INTERIM ORDER.
The notice of motion for the application referred to in Section 2.1(a)
shall request that the Interim Order provide:
(a) for the class of Persons to whom notice is to be provided in
respect of the Arrangement and the Seagram Meeting and for the
manner in which such notice is to be provided;
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(b) that the requisite approval for the Arrangement Resolution
shall be 66 2/3% of the votes cast on the Arrangement
Resolution by Seagram Shareholders present in person or by
proxy at the Seagram Meeting (such that each holder of Seagram
Common Shares is entitled to one vote for each Seagram Common
Share held);
(c) that, in all other respects, the terms, restrictions and
conditions of the by-laws and articles of Seagram, including
quorum requirements and all other matters, shall apply in
respect of the Seagram Meeting; and
(d) for the grant of the Dissent Rights.
SECTION 2.4 ARTICLES OF ARRANGEMENT.
The Articles of Arrangement shall, with such other matters as are
necessary to effect the Arrangement, implement the Plan of Arrangement.
SECTION 2.5 SEAGRAM CIRCULAR.
As promptly as reasonably practicable after the execution and delivery
of this Agreement, Seagram shall complete the Seagram Circular together with any
other documents required by the Securities Act, the 1933 Act or other applicable
Laws in connection with the Arrangement, and as promptly as practicable after
the execution and delivery of this Agreement, Seagram shall, unless otherwise
agreed by the parties and subject to the contemporaneous mailing of the Vivendi
Circular and the Canal Circular, cause the Seagram Circular and other
documentation required in connection with the Seagram Meeting to be sent to each
Seagram Shareholder and filed as required by the Interim Order and applicable
Laws.
SECTION 2.6 VIVENDI CIRCULAR.
As promptly as reasonably practicable after the execution and delivery
of this Agreement, Vivendi shall complete the Vivendi Circular together with any
other documents required by the COB, the PSE, the 1933 Act or other applicable
Laws in connection with the Vivendi Meeting and shall, or as otherwise agreed by
the parties and subject to the contemporaneous mailing of the Seagram Circular,
cause the Vivendi Circular and other documentation required in connection with
the Vivendi Meeting to be sent to each Vivendi Shareholder as required by
applicable Laws.
SECTION 2.7 CANAL CIRCULAR.
As promptly as reasonably practicable after the execution and delivery
of this Agreement, Canal shall complete the Canal Circular together with any
other documents required by the COB, the PSE, the 1933 Act or other applicable
Laws in connection with the Canal Meeting and shall, or as otherwise agreed by
the parties and subject to the contemporaneous mailing of the Seagram
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Circular, cause the Canal Circular and other documentation required in
connection with the Canal Meeting to be sent to each Canal Shareholder as
required by applicable Laws.
SECTION 2.8 SECURITIES COMPLIANCE.
(1) Vivendi shall use its reasonable best efforts to obtain all orders
required from the applicable Canadian securities regulatory authorities
to permit the issuance and first resale of (a) the Exchangeable Shares,
the Vivendi Voting Rights and the Vivendi ADSs issued pursuant to the
Arrangement, and (b) the Vivendi ADSs provided from time to time upon
exchange of the Exchangeable Shares, in each case without further
qualification with or approval of or the filing of any prospectus, or
the taking of any proceeding with, or the obtaining of any further
order, ruling or consent from, any Governmental Entity or regulatory
authority under any Canadian federal, provincial or territorial
securities or other Laws or pursuant to the rules and regulations of
any regulatory authority administering such Laws, or the fulfillment of
any other legal requirement in any such jurisdiction (other than, with
respect to such first resales, any restrictions on transfer by reason
of, among other things, a holder being a "control person" of Vivendi or
Vivendi Exchangeco for purposes of Canadian federal, provincial or
territorial securities Laws) (for greater certainty, in each case
without affecting the need to comply with applicable United States,
French or other Laws).
(2) Each of Vivendi and Vivendi Exchangeco shall use its reasonable best
efforts to obtain the approval of the TSE for the listing of the
Exchangeable Shares, such listing to be effective prior to or as of the
Effective Time.
(3) Vivendi and Canal shall use their respective best efforts to obtain the
approval of the COB and the PSE for the listing of the Vivendi Shares
to be issued in connection with the transactions contemplated by this
Agreement, such listing to be effective prior to or as of the Effective
Time.
(4) Vivendi and Canal shall use their respective best efforts to obtain the
approval of the NYSE or NASDAQ, as applicable, for the listing of the
Vivendi ADRs and the Vivendi ADSs, such listing to be effective as of
the time of issuance of the Vivendi ADSs, whether pursuant to the
Arrangement or to be provided from time to time upon exchange of the
Exchangeable Shares or the exercise of the Seagram Converted Options.
(5) As promptly as reasonably practicable after the execution and delivery
of this Agreement, the Vivendi Parties shall file a registration
statement on Form F-4 (or other applicable form) (the "FORM F-4") , in
which (x) each of the Canal Circular and the Vivendi Circular shall be
included as a prospectus in order to register under the 1933 Act the
Vivendi Shares to be issued in connection with the Vivendi/Canal
Transactions and (y) the Seagram Circular shall be included as a
prospectus in order for Vivendi to register under
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the 1933 Act the Vivendi Securities, and shall use its reasonable best
efforts to cause the Form F-4 to become effective as soon as
practicable after it is filed.
(6) Seagram and Vivendi shall take all such steps as may be required to
cause the transactions contemplated by Article 2 and any other
dispositions of Seagram equity securities and/or acquisitions of
Vivendi equity securities (including, in each case derivative
securities) in connection with this Agreement or the transactions
contemplated hereby by any individual who is a director or officer of
Seagram, to be exempt under Rule 16b-3 promulgated under the Exchange
Act.
SECTION 2.9 PREPARATION OF FILINGS, ETC.
(1) Vivendi, Canal and Seagram shall use their respective reasonable best
efforts to cooperate in the preparation, seeking and obtaining of all
circulars, filings, consents, Regulatory Approvals and other approvals
and other matters in connection with this Agreement and the
transactions contemplated by this Agreement. Each of Vivendi, Canal and
Seagram shall use its reasonable best efforts to have its Circular
cleared by the SEC and/or each other applicable Government Entity and
the Form F-4 declared effective by the SEC and to keep the Form F-4
effective as long as is necessary to consummate the transactions
contemplated hereby. Each of Vivendi, Canal and Seagram shall, as
promptly as practicable after receipt thereof, provide the other
parties copies of any written comments and advise the other party of
any oral comments with respect to its Circular or the Form F-4 received
from the SEC or any other Governmental Entity. The parties shall
cooperate and provide the other with a reasonable opportunity to review
and comment on any amendment or supplement to the Circulars and the
Form F-4 prior to filing such with the SEC and/or each other applicable
Government Entity, and will provide each other with a copy of all such
filings made. Each party will advise the other parties, promptly after
it receives notice thereof, of the time when the Form F-4 has become
effective, the issuance of any stop order, the suspension of the
qualification of any of the Vivendi Securities for offering or sale in
any jurisdiction, or any request by the SEC or any other Governmental
Entity for amendment of the Circulars or the Form F-4.
(2) Each of Vivendi, Canal and Seagram shall furnish to the other all such
information concerning it and its shareholders as may be required (and,
in the case of its shareholders, available to it) for the effectuation
of the actions described in Sections 2.5, 2.6, 2.7 and 2.8 and the
foregoing provisions of this Section 2.9, and each covenants that no
information furnished by it (to its knowledge in the case of
information concerning its shareholders) in connection with such
actions or otherwise in connection with the consummation of the
transactions contemplated by this Agreement will contain any untrue
statement of a material fact or omit to state a material fact required
to be stated in any such document or necessary in order to make any
information so furnished for use in any such document not misleading in
the light of the circumstances in which it is furnished.
▇-▇▇
▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ and Seagram shall use their respective reasonable best
efforts to cooperate in the preparation of the Seagram Circular, the
Canal Circular and the Vivendi Circular and shall cause the same to be
distributed to shareholders of Vivendi, Canal or Seagram, as
applicable, and/or filed with the relevant securities regulatory
authorities and/or stock exchanges.
(3) Vivendi, Canal and Seagram shall each promptly notify each other if at
any time before the Effective Time it becomes aware that the Seagram
Circular, Canal Circular or the Vivendi Circular, respectively, an
application for an order or any other document described in Section 2.8
contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements contained therein not misleading in light of the
circumstances in which they are made, or that otherwise requires an
amendment or supplement to the Seagram Circular, the Canal Circular or
the Vivendi Circular or such application or other document. In any such
event, Vivendi, Canal and Seagram shall use their respective reasonable
best efforts to cooperate in the preparation of a supplement or
amendment to the Seagram Circular, the Canal Circular or the Vivendi
Circular or such application or other document, as required and as the
case may be, and, if required, shall cause the same to be distributed
to shareholders of Vivendi, Canal or Seagram and/or filed with the
relevant securities regulatory authorities and/or stock exchanges.
(4) Seagram shall ensure that the Seagram Circular complies with all
applicable Laws and, without limiting the generality of the foregoing,
that the Seagram Circular does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements contained therein not
misleading in light of the circumstances in which they are made (other
than with respect to any information relating to and provided by a
Vivendi Party, Canal or any third party that is not an affiliate of
Seagram) and each of Vivendi and Canal shall provide all information
regarding it and the Vivendi Securities necessary to do so.
(5) Vivendi shall ensure that the Vivendi Circular and that the Form F-4
and Form S-8 comply with all applicable Laws and, without limiting the
generality of the foregoing, that the Vivendi Circular and such
documents do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements contained therein not misleading in
light of the circumstances in which they are made (other than with
respect to any information relating to and provided by Seagram or any
third party that is not an affiliate of Vivendi), and Seagram shall
provide all information regarding it necessary to do so.
(6) Canal shall ensure that the Canal Circular complies with all applicable
Laws and, without limiting the generality of the foregoing, that the
Canal Circular and such documents do not contain any untrue statement
of a material fact or omit to state a material fact required to
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be stated therein or necessary to make the statements contained therein
not misleading in light of the circumstances in which they are made
(other than with respect to any information relating to and provided by
Seagram or any third party that is not an affiliate of Canal), and
Seagram shall provide all information regarding it necessary to do so.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF SEAGRAM.
Except as Publicly Disclosed by Seagram or as set forth in the Seagram
Disclosure Letter, Seagram represents and warrants to and in favour of the
Vivendi Parties and Canal as follows and acknowledges that the Vivendi Parties
and Canal are relying upon such representations and warranties in connection
with the matters contemplated by this Agreement:
(a) Organization.
(i) Each of Seagram and the Seagram Material Subsidiaries
has been duly incorporated or formed under all
applicable Laws, is validly subsisting and has full
corporate or legal power and authority to own its
properties and conduct its businesses as currently
owned and conducted, except, in the case of the
Seagram Material Subsidiaries, where the failure to
be so incorporated or formed or subsisting or to have
such power and authority would not, individually or
in the aggregate, have a Material Adverse Effect on
Seagram. All of the outstanding shares and other
ownership interests of the Seagram Material
Subsidiaries which are held directly or
indirectly by Seagram are validly issued, fully paid
and non-assessable and all such shares and other
ownership interests are owned directly or indirectly
by Seagram, free and clear of all material liens,
claims or encumbrances, or pursuant to restrictions
on transfers contained in articles or similar
documents, and except as aforesaid there are no
outstanding options, rights, entitlements,
understandings or commitments (contingent or
otherwise) regarding the right to acquire any such
shares or other ownership interests in any of the
Seagram Material Subsidiaries.
(ii) Neither Seagram nor any Seagram Material Subsidiary
has any minority interest in any other corporation or
entity which minority interest is material in
relation to the consolidated financial position of
Seagram.
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(b) Capitalization. The authorized capital of Seagram consists of
an unlimited number of Seagram Common Shares and an unlimited
number of Seagram Preferred Shares, issuable in Series. As of
May 31, 2000, there were 436,493,537 Seagram Common Shares and
no Seagram Preferred Shares issued and outstanding. In
addition, as of May 31, 2000, options to acquire an aggregate
of not more than 41,487,599 Seagram Common Shares were granted
and outstanding under the Seagram Stock Plans and obligations
to issue up to 20,025,000 Seagram Common Shares in respect of
the Seagram ACES and 194,896 Seagram Common Shares in respect
of the Seagram ▇▇▇▇▇ were outstanding. Except as described in
the preceding sentences of this Section 3.1(b) or Section
3.1(a), there are no options, warrants, securities, conversion
privileges or other rights, agreements, arrangements or
commitments (pre-emptive, contingent or otherwise) obligating
Seagram or any Seagram Material Subsidiary to issue or sell
any shares of capital stock of Seagram or any of the Seagram
Material Subsidiaries or securities or obligations of any kind
convertible into or exchangeable for any shares of Seagram or
any Seagram Material Subsidiary. As of May 31, 2000, there
were issued and outstanding 1,625,757 Seagram SARs. Except as
set forth in the preceding sentence, there are no outstanding
stock appreciation rights or other rights that are linked to
the price of Seagram Common Shares or the book value, income
or any other attribute of Seagram or any of its subsidiaries
("SEAGRAM SARS"). All outstanding Seagram Common Shares have
been duly authorized and are validly issued and outstanding as
fully paid and non-assessable shares, free of pre-emptive
rights. Except as described in the preceding sentences of this
Section 3.1(b), there are no outstanding bonds, debentures or
other evidences of indebtedness of Seagram or any subsidiary
having the right to vote (or that are convertible for or
exercisable into securities having the right to vote) with the
holders of the Seagram Common Shares on any matter. There are
no outstanding contractual obligations of Seagram or any of
the Seagram Material Subsidiaries to repurchase, redeem or
otherwise acquire any of its outstanding securities or with
respect to the voting or disposition of any outstanding
securities of any of the Seagram Material Subsidiaries.
(c) Authority and No Violation.
(i) Seagram has the requisite corporate power and
authority to enter into this Agreement and the Option
Agreement and to perform its obligations hereunder
and thereunder. The execution and delivery of this
Agreement and the Option Agreement by Seagram and the
consummation by Seagram of the transactions
contemplated by this Agreement have been duly
authorized by its Board of Directors and no other
corporate proceedings
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on its part are necessary to authorize this Agreement
and the Option Agreement or the transactions
contemplated hereby or thereby, other than:
(A) with respect to the Seagram Meeting, the
Seagram Circular and other matters relating
solely thereto; and
(B) with respect to the completion of the
Arrangement, the approval of the Arrangement
by the requisite votes cast by the Seagram
Shareholders as required by the Interim
Order.
(ii) Each of this Agreement and the Option Agreement has
been duly executed and delivered by Seagram and
constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency and other
applicable Laws affecting creditors' rights
generally, and to general principles of equity.
(iii) The Board of Directors of Seagram has (A) determined
as of the date hereof unanimously that the
Arrangement is fair to the holders of the Seagram
Common Shares and is in the best interests of
Seagram, (B) received opinions from ▇▇▇▇▇▇▇, Sachs &
Co. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated to the
effect that, as of the date of this Agreement, the
Exchange Ratio is fair from a financial point of view
to the Seagram Shareholders, and (C) determined as of
the date hereof to unanimously recommend that the
Seagram Shareholders vote in favour of the
Arrangement. Seagram is not subject to a shareholder
rights plan or "poison pill" or similar plan.
(iv) The approval of this Agreement and the Option
Agreement, the execution and delivery by Seagram of
this Agreement and the Option Agreement and the
performance by it of its obligations hereunder and
thereunder and the completion of the transactions
contemplated hereby and thereby, will not, subject to
obtaining the Regulatory Approvals:
(A) result (with or without notice or the
passage of time) in a violation or breach
of, require any consent to be obtained under
or give rise to any termination, purchase or
sale rights or payment obligation under any
provision of:
(I) its or any Seagram Material
Subsidiary's certificate of
incorporation, articles, by-laws or
other charter documents;
▇-▇▇
▇▇
(▇▇) any Laws, judgment or decree
(subject to obtaining the Regulatory
Approvals relating to Seagram),
except to the extent that the
violation or breach of, or failure
to obtain any consent under, any
Laws, judgment or decree would not,
individually or in the aggregate,
have a Material Adverse Effect on
Seagram; or
(III) except as would not, individually or
in the aggregate, have a Material
Adverse Effect on Seagram, any
contract, agreement, license,
franchise or permit to which Seagram
or any Seagram Material Subsidiary
is party or by which it is bound or
subject or is the beneficiary;
(B) give rise to any right of termination or
acceleration of indebtedness of Seagram or
any subsidiary, or cause any such
indebtedness to come due before its stated
maturity, or cause any available credit of
Seagram or any subsidiary to cease to be
available, other than as would not,
individually or in the aggregate, have a
Material Adverse Effect on Seagram;
(C) except as would not, individually or in the
aggregate, have a Material Adverse Effect on
Seagram, result in the imposition of any
encumbrance, charge or lien upon any of its
assets or the assets of any Seagram Material
Subsidiary;
(D) except as would not, individually or in the
aggregate, have a Material Adverse Effect on
Seagram, restrict, hinder, impair or limit
the ability of Seagram or any Seagram
Material Subsidiary to carry on the business
of Seagram or any Seagram Material
Subsidiary as and where it is now being
carried on; or
(E) result in any payment (including severance,
unemployment compensation, golden parachute,
bonus or otherwise) becoming due to any
director, officer or employee of Seagram or
any subsidiary or increase any benefits
otherwise payable under any Seagram Plan or
result in the acceleration of time of
payment or vesting of any such benefits,
including the time of exercise of stock
options.
No consent, approval, order or authorization of, or
declaration or filing with, any Governmental Entity
is required to be obtained by Seagram or its
subsidiaries in connection with the execution and
delivery of this
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Agreement, the Option Agreement (other than the
approval of the TSE), the Exchange Trust Agreement
and the Support Agreement or the consummation by
Seagram of the transactions contemplated hereby or
thereby other than (A) any approvals required by the
Interim Order, (B) the Final Order, (C) filings with
the Director under the CBCA, (D) the Regulatory
Approvals relating to Seagram and (E) any other
consents, approvals, orders, authorizations,
declarations or filings of or with a Governmental
Entity which have been set forth in the Seagram
Disclosure Letter, or which, if not obtained, would
not, individually or in the aggregate, have a
Material Adverse Effect on Seagram.
(d) No Defaults. Subject to obtaining the Regulatory Approvals
relating to Seagram, neither Seagram nor any of its
subsidiaries is in default under, and there exists no event,
condition or occurrence which, after notice or lapse of time
or both, would constitute such a default under, any contract,
agreement, license or franchise to which it is a party which
would, individually or in the aggregate, have a Material
Adverse Effect on Seagram.
(e) Absence of Certain Changes or Events. Since June 30, 1999
through to the date hereof, each of Seagram and each Seagram
Material Subsidiary has conducted its business only in the
ordinary course of business consistent with past practice
(except in connection with the transactions contemplated in
this Agreement) and there has not occurred a Material Adverse
Change with respect to Seagram (which has not been cured).
(f) Financial Statements; Contingent Liabilities. The audited
consolidated financial statements for Seagram as at and for
each of the 12-month periods ended on June 30, 1999, 1998 and
1997 and the unaudited consolidated financial statements for
the 3-month, 6-month and 9-month periods ended September 30,
1999, December 31, 1999 and March 31, 2000 have been prepared
in accordance with United States generally accepted accounting
principles ("U.S. GAAP") (subject, in the case of such
unaudited financial statements, to the absence of notes and to
customary year-end adjustments that are not expected to be
material in amount); such financial statements present fairly,
in all material respects, the consolidated financial position
and results of operations and cash flows of Seagram and its
subsidiaries as of the respective dates thereof and for the
respective periods covered thereby, subject, in the case of
such unaudited financial statements, to customary year-end
adjustments that are not expected to be material in amount.
Except as Publicly Disclosed by Seagram (including on the most
recent consolidated balance sheet and the footnotes thereto
included in the Seagram Documents Publicly Disclosed by
Seagram), Seagram and its subsidiaries have not incurred any
liabilities that are of a nature that would be required to be
disclosed
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on a balance sheet of Seagram and its subsidiaries or the
footnotes thereto prepared in conformity with U.S. GAAP, other
than (i) liabilities incurred in the ordinary course of
business, (ii) liabilities incurred in accordance with Section
4.3(a) hereof, (iii) liabilities for Taxes and (iv)
liabilities that, individually or in the aggregate, would not
have a Material Adverse Effect on Seagram.
(g) Litigation, etc. As of the date of this Agreement, there is
no claim, action, proceeding or suit pending or, to the
knowledge of Seagram, threatened against Seagram or any
Seagram Material Subsidiary before any court or Governmental
Entity that would, individually or in the aggregate, have a
Material Adverse Effect on Seagram. Neither Seagram nor any
Seagram Material Subsidiary, nor any of their respective
assets and properties, is subject to any outstanding judgment,
order, writ, injunction or decree that would, individually or
in the aggregate, have a Material Adverse Effect on Seagram.
(h) Environmental. Except for any matters that would not,
individually or in the aggregate, have a Material Adverse
Effect on Seagram:
(i) all operations of Seagram and the Seagram Material
Subsidiaries have been conducted, and are now, in
compliance with all Environmental Laws;
(ii) neither Seagram nor any Seagram Material Subsidiary
is subject to:
(A) any Environmental Law which, to the
knowledge of Seagram, requires or may
reasonably be expected to require any
material work, repairs, construction, change
in business practices or operations, or
expenditures;
(B) any written demand or written notice with
respect to a breach of or liability under
any Environmental Laws applicable to Seagram
or any subsidiary; or
(C) any changes in the terms or conditions of
any permits, authorizations, certificates,
registrations, approvals or consents
necessary under Environmental Laws for
Seagram and its Material Subsidiaries to
own, lease or operate their properties or to
conduct their respective businesses as they
are now being conducted (collectively,
"ENVIRONMENTAL PERMITS") or any renewal,
modification, revocation, reissuance,
alteration, transfer or amendment of such
Environmental Permits, or any review by, or
approval of, any Governmental Entity of such
Environmental Permits that are required in
connection with the execution or
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delivery of this Agreement, the consummation
of the transactions contemplated hereby or
the continuation of business of Seagram or
any subsidiaries following such
consummation; and
(iii) to the knowledge of Seagram, there is no reasonable
basis for any claim against Seagram or any of its
current or former subsidiaries or any of their
respective predecessor entities, divisions, or any
formerly owned, leased, or operated properties or
assets of the foregoing, under any Environmental Laws
or with respect to any Hazardous Substances.
(i) Tax Matters.
(i) Seagram and each of its subsidiaries have timely
filed, or caused to be timely filed, all Tax Returns
required to be filed by them, and have timely paid,
or caused to be timely paid, all material amounts of
Taxes due and payable by them, except for any such
failure to file or failure to pay which would not,
individually or in the aggregate, have a Material
Adverse Effect on Seagram.
(ii) Neither Seagram nor any of its subsidiaries has
received any written notification that any issues
involving a material amount of Taxes have been raised
(and are currently pending) by the Canada Customs and
Revenue Agency, the United States Internal Revenue
Service or any other taxing authority, including,
without limitation, any sales tax authority, in
connection with any of the Tax Returns filed or
required to be filed, which would, individually or in
the aggregate, have a Material Adverse Effect on
Seagram. Neither Seagram nor any of its subsidiaries
has taken any action, or failed to take any action,
or has knowledge of any fact, agreement, plan or
other circumstance that is reasonably likely to
prevent the Arrangement and the Vivendi/Canal
Transactions from constituting a transaction
described in Section 351 of the Code.
(iii) "TAX" and "TAXES" means, with respect to any entity,
all income taxes (including any tax on or based upon
net income, gross income, income as specially
defined, earnings, profits or selected items of
income, earnings or profits) and all capital taxes,
gross receipts taxes, environmental taxes, sales
taxes, use taxes, ad valorem taxes, value added
taxes, transfer taxes, franchise taxes, license
taxes, withholding taxes or other withholding
obligations, payroll taxes, employment taxes, Canada
or Quebec Pension Plan premiums, excise, severance,
social security premiums, workers' compensation
premiums, unemployment insurance or compensation
premiums, stamp taxes, occupation taxes, premium
taxes, property taxes,
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windfall profits taxes, alternative or add-on minimum taxes,
goods and services tax, customs duties or other taxes of any
kind whatsoever, together with any interest and any penalties
or additional amounts imposed by any taxing authority
(domestic or foreign) on such entity or for which such entity
is responsible, and any interest, penalties, additional taxes,
additions to tax or other amounts imposed with respect to the
foregoing.
(iv) For purposes of this Section 3.1(i), the term "material amount
of Taxes" shall mean an amount of Taxes that is material to
Seagram and its subsidiaries taken as a whole.
(j) Pension, Employee Benefits and Employment.
(i) "SEAGRAM PLAN" shall mean each employee benefit, welfare,
supplemental unemployment benefit, bonus, pension, profit
sharing, deferred compensation, stock option, stock
compensation, stock purchase, retirement, hospitalization
insurance, medical, dental, legal, disability, incentive
compensation, stock appreciation, restricted stock, phantom
stock, thrift, savings, cafeteria, paid time off, perquisite,
fringe benefit, vacation, severance, death benefit or other
plan, program, policy or arrangement and each collective
bargaining agreement providing benefits to any current or
former directors, officers, employees or consultants of
Seagram or any of its subsidiaries ("SEAGRAM EMPLOYEES"),
pursuant to which Seagram or any of its subsidiaries has any
current or future liabilities.
(ii) With respect to each Seagram Plan, no liability has been
incurred and there exists no condition or circumstances in
connection with which Seagram or any of its subsidiaries could
be subject to any liability that would, individually or in the
aggregate, have a Material Adverse Effect on Seagram, in each
case under the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), the Code, or any other applicable
law, rule or regulation.
(iii) As of the date of this Agreement, there is no labor dispute,
strike or work stoppage against Seagram or any of its
subsidiaries pending or, to the knowledge of Seagram,
threatened which may interfere with the business activities of
Seagram or any of its subsidiaries, except where such dispute,
strike or work stoppage would not, individually or in the
aggregate, have a Material Adverse Effect on Seagram.
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(k) Reports. Seagram has filed with the OSC, TSE, SEC and with the NYSE
true and complete copies of all material forms, reports, schedules,
statements and other documents required to be filed by it since July
1, 1998 (such forms, reports, schedules, statements and other
documents, including any financial statements or other documents,
including any schedules included therein, are referred to as the
"SEAGRAM DOCUMENTS"). The Seagram Documents at the time filed (i)
did not contain any misrepresentation of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, and (ii) complied in all
material respects with the requirements of applicable securities
Laws. Seagram has not filed any material confidential material
change report with the OSC or any other securities authority or
regulator or any stock exchange or other self-regulatory authority
which at the date hereof remains confidential.
(l) Compliance with Laws. Since January 1, 1998, Seagram and the Seagram
Material Subsidiaries have complied with and are not in violation of
any applicable Laws, orders, judgments and decrees other than
non-compliance or violations which would not, individually or in the
aggregate, have a Material Adverse Effect on Seagram.
(m) Licences, etc. Seagram and each Seagram Material Subsidiary owns,
possesses, or has obtained and is in compliance with, all licences,
permits, certificates, orders, grants and other authorizations of or
from any Governmental Entity necessary to conduct its businesses as
now conducted except for such failure that would not, individually
or in the aggregate, have a Material Adverse Effect on Seagram.
(n) Registration Rights. No holder of securities issued by Seagram has
any right to compel Seagram to register or otherwise qualify such
securities for public sale in Canada or the United States.
(o) Intellectual Property. None of Seagram nor any Seagram Material
Subsidiary has received written notice or is aware that its use of
its material registered trade- marks, service marks, copyrights,
industrial designs, patents, design patents and all applications
therefor ("SEAGRAM IP") infringes upon or breaches the industrial or
intellectual property rights of any other Person, except with
respect to any such infringements or breaches which would not,
individually or in the aggregate, have a Material Adverse Effect on
Seagram. Except as set forth in the Seagram Disclosure Letter,
Seagram has not commenced material legal proceedings relating to an
infringement by any Person of the Seagram IP. Seagram, to its
knowledge, has or has rights to use all of the intellectual property
necessary to conduct the business of Seagram as currently carried on
except where the failure to do so
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would not, individually or in the aggregate, have a Material Adverse
Effect on Seagram.
(p) Non-Arm's Length Transactions. There are no contracts, commitments,
agreements, arrangements or other transactions between Seagram or
any of its subsidiaries, on the one hand, and any (i) officer or
director of Seagram or any of its subsidiaries, (ii) record or
beneficial owner of five percent or more of the voting securities of
Seagram or (iii) affiliate of any such officer, director or
beneficial owner, on the other hand, except for contracts,
commitments, agreements, arrangements or other transactions that are
either on arm's length terms or, to the extent not on arm's length
terms, would not, individually or in the aggregate, have a Material
Adverse Effect on Seagram.
SECTION 3.2 REPRESENTATIONS AND WARRANTIES OF THE VIVENDI PARTIES, CANAL AND
SOFIEE.
(1) Except as Publicly Disclosed by Vivendi or as set forth in the Vivendi
Disclosure Letter, each of the Vivendi Parties and Sofiee represent and
warrant to and in favour of Seagram as follows and acknowledge that
Seagram is relying upon such representations and warranties in connection
with the matters contemplated by this Agreement:
(a) Organization.
(i) Each of the Vivendi Parties and each of the Vivendi Material
Subsidiaries has been duly incorporated or formed under all
applicable Laws, is validly subsisting and has full corporate
or legal power and authority to own its properties and conduct
its businesses as currently owned and conducted, except, in
the case of the Vivendi Material Subsidiaries (other than
Sofiee and Vivendi Exchangeco), where the failure to be so
incorporated or formed or subsisting or to have such power and
authority would not, individually or in the aggregate, have a
Material Adverse Effect on Vivendi. All of the outstanding
shares and other ownership interests of the Vivendi Material
Subsidiaries which are held directly or indirectly by Vivendi
are owned directly or indirectly by Vivendi, free and clear of
all material liens, claims or encumbrances, or pursuant to
restrictions on transfers contained in articles or similar
documents.
(ii) All of the Vivendi Shares, Vivendi ADSs, Vivendi ADRs and the
Vivendi Voting Rights to be issued by Vivendi in connection
with the transactions contemplated by this Agreement, and all
of the Exchangeable Shares to be issued by Vivendi Exchangeco
in connection with the Arrangement and all Vivendi ADRs and
Vivendi ADSs issuable upon exchange of the Exchangeable Shares
or exercise of Seagram Converted Options, will be,
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when issued, duly authorized, validly issued, fully paid and
non- assessable. There shall be not less than 97,000,000
Vivendi Voting Rights available for deposit with or for the
account of the Custodian pursuant to the Custody Agreement as
of the Effective Time.
(b) Capitalization. The issued capital of Vivendi consists of
605,476,749 Vivendi Shares, Euro 5.50 nominal value each, as of
April 28, 2000, which excludes Vivendi Shares held in treasury by
Vivendi or its subsidiaries. In addition, as of April 28, 2000,
options to acquire an aggregate of not more than 3,237,925 Vivendi
Shares were granted and outstanding under Vivendi stock option plans
and obligations to issue up to 62,186,127 Vivendi Shares in respect
of convertible debt and other convertible instruments (and no other
obligations to issue capital stock of Vivendi existed as of such
date). Neither Vivendi nor any of its affiliates beneficially own
any Seagram Shares.
(c) Authority and No Violation.
(i) Each of the Vivendi Parties and Sofiee has the requisite
corporate power and authority to enter into this Agreement,
the Option Agreement, the Exchange Trust Agreement, the
Support Agreement, the Custody Agreement and the Vivendi/Canal
Agreements and to perform its obligations hereunder and
thereunder, in each case to the extent it is a party thereto.
The execution and delivery of this Agreement, the Option
Agreement, the Exchange Trust Agreement, the Support
Agreement, the Custody Agreement and the Vivendi/Canal
Agreements and the consummation by each of the Vivendi Parties
and Sofiee of the transactions contemplated by this Agreement
have been duly authorized by its Board of Directors and no
other corporate proceedings on its part are necessary to
authorize this Agreement, the Option Agreement, the Exchange
Trust Agreement, the Support Agreement, the Custody Agreement
and the Vivendi/Canal Agreements or the transactions
contemplated hereby or thereby, other than:
(A) with respect to the Vivendi Meeting, the Vivendi
Circular and other matters relating solely thereto; and
(B) with respect to the Vivendi Resolution and the Sofiee
Resolution, the approval thereof by not less than
two-thirds of the votes cast by the applicable
shareholders.
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(ii) Each of this Agreement and the Option Agreement has been duly
executed and delivered by each of Vivendi and Sofiee, to the
extent a party thereto, and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with
its terms, subject to bankruptcy, insolvency and other
applicable Laws affecting creditors' rights generally, and to
general principles of equity. Each of the Support Agreement,
the Custody Agreement, the Exchange Trust Agreement and the
Vivendi/Canal Agreements will be duly executed and delivered
by each of the Vivendi Parties (or its successor interest) and
its subsidiaries, in each case to the extent a party thereto
and, when so executed and delivered, will constitute their
respective legal, valid and binding obligations, enforceable
against them in accordance with their respective terms,
subject to bankruptcy, insolvency and other applicable Laws
affecting creditors' rights generally, and to general
principles of equity.
(iii) The Board of Directors of Vivendi has approved as of the date
hereof this Agreement and the transactions contemplated by
this Agreement (including the Vivendi/Canal Transactions).
Vivendi is not subject to a shareholder rights plan or "poison
pill" or similar plan.
(iv) The approval of this Agreement, the Option Agreement, the
Exchange Trust Agreement, the Support Agreement, the Custody
Agreement and the Vivendi/Canal Agreements, the execution and
delivery by the Vivendi Parties, Sofiee and each of their
respective subsidiaries, in each case, to the extent a party
thereto, of this Agreement, the Option Agreement, the Exchange
Trust Agreement, the Support Agreement, the Custody Agreement
and the Vivendi/Canal Agreements and the performance by each
of them of their respective obligations hereunder and
thereunder and the completion of the transactions contemplated
hereby and thereby, will not, subject to obtaining the
Regulatory Approvals:
(A) result (with or without notice or the passage of time)
in a violation or breach of, require any consent to be
obtained under or give rise to any termination, purchase
or sale rights or payment obligation under any provision
of:
(I) its or any Vivendi Material Subsidiary's
certificate of incorporation, articles, by-laws or
other charter documents;
(II) any Laws, judgment or decree (subject to obtaining
the Regulatory Approvals relating to the Vivendi
Parties), except to the extent that the violation
or breach of, or
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failure to obtain any consent under, any Laws,
judgment or decree would not, individually or in
the aggregate, have a Material Adverse Effect on
Vivendi; or
(III) except as would not, individually or in the
aggregate, have a Material Adverse Effect on
Vivendi, any contract, agreement, license,
franchise or permit to which Vivendi or any
Vivendi Material Subsidiary is party or by which
it is bound or subject or is the beneficiary;
(B) give rise to any right of termination or acceleration of
indebtedness of any Vivendi Party or any subsidiary, or
cause any such indebtedness to come due before its
stated maturity, or cause any available credit of any
Vivendi Party or any subsidiary to cease to be
available, other than as would not, individually or in
the aggregate, have a Material Adverse Effect on
Vivendi;
(C) except as would not, individually or in the aggregate,
have a Material Adverse Effect on Vivendi, result in the
imposition of any encumbrance, charge or lien upon any
of its assets or the assets of any Vivendi Material
Subsidiary; or
(D) except as would not, individually or in the aggregate,
have a Material Adverse Effect on Vivendi, restrict,
hinder, impair or limit the ability of Vivendi or any
Vivendi Material Subsidiary to carry on the business of
Vivendi or any Vivendi Material Subsidiary as and where
it is now being carried on.
No consent, approval, order or authorization of, or
declaration or filing with, any Governmental Entity is
required to be obtained by any Vivendi Party, Sofiee or their
respective subsidiaries in connection with the execution and
delivery of this Agreement, the Option Agreement (other than
the approval of the TSE), the Exchange Trust Agreement, the
Support Agreement, the Custody Agreement and the Vivendi/Canal
Agreements, in each case to the extent it is a party thereto,
or the consummation by any Vivendi Party or Sofiee of the
transactions contemplated hereby or thereby other than (A) the
Regulatory Approvals relating to the Vivendi Parties and
Sofiee, (B) any filings required in connection with the
creation and issue of the Vivendi ADSs, (C) any approval
required in connection with the amendment to the articles of
Vivendi Exchangeco to create the Exchangeable Shares and (D)
any other consents, approvals, orders, authorizations,
declarations or filings of or with a Governmental Entity
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which have been set forth in the Vivendi Disclosure Letter, or
which, if not obtained, would not, individually or in the
aggregate, have a Material Adverse Effect on Vivendi.
(d) No Defaults. Subject to obtaining the Regulatory Approvals relating
to Vivendi, neither Vivendi nor any of its subsidiaries is in
default under, and there exists no event, condition or occurrence
which, after notice or lapse of time or both, would constitute such
a default under, any contract, agreement, license or franchise to
which it is a party which would, individually or in the aggregate,
have a Material Adverse Effect on Vivendi.
(e) Absence of Certain Changes or Events. Since December 31, 1999
through to the date hereof, each of Vivendi, Vivendi Exchangeco and
each Vivendi Material Subsidiary has conducted its business only in
the ordinary course of business consistent with past practice
(except in connection with the transactions contemplated in this
Agreement) and there has not occurred a Material Adverse Change with
respect to Vivendi (which has not been cured).
(f) Financial Statements; Contingent Liabilities. The audited
consolidated financial statements for Vivendi as at and for each of
the 12-month periods ended on December 31, 1999, 1998 and 1997 have
been prepared in accordance with French generally accepted
accounting principles ("FRENCH GAAP"); such financial statements
present fairly, in all material respects, the consolidated financial
position and results of operations and cash flows of Vivendi and its
subsidiaries as of the respective dates thereof and for the
respective periods covered thereby. Except as Publicly Disclosed by
Vivendi (including on the most recent consolidated balance sheet and
the footnotes thereto included in the Vivendi Documents Publicly
Disclosed by Vivendi), Vivendi and its subsidiaries have not
incurred any liabilities that are of a nature that would be required
to be disclosed on a balance sheet of Vivendi and its subsidiaries
or the footnotes thereto prepared in conformity with French GAAP,
other than (i) liabilities incurred in the ordinary course of
business, (ii) liabilities for Taxes and (iii) liabilities that
would not, individually or in the aggregate, have a Material Adverse
Effect on Vivendi.
(g) Litigation, etc. There is no claim, action, proceeding or suit
pending or, to the knowledge of Vivendi, threatened against Vivendi
or any Vivendi Material Subsidiary before any court or Governmental
Entity that would, individually or in the aggregate, have a Material
Adverse Effect on Vivendi or that would prevent or materially delay
consummation of the transactions contemplated by this Agreement or
the Arrangement. Neither Vivendi nor any Vivendi Material
Subsidiary, nor any of their respective assets and properties, is
subject to any outstanding judgment, order, writ, injunction or
decree that would, individually or in the aggregate, have
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a Material Adverse Effect on Vivendi or that would prevent or
materially delay consummation of the transactions contemplated by
this Agreement or the Arrangement.
(h) Environmental. Except for any matters that would not, individually
or in the aggregate, have a Material Adverse Effect on Vivendi:
(i) all operations of Vivendi and the Vivendi Material
Subsidiaries have been conducted, and are now, in compliance
with all Environmental Laws; and
(ii) neither Vivendi nor any Vivendi Material Subsidiary is subject
to:
(A) any Environmental Law which, to the knowledge of
Vivendi, requires or may reasonably be expected to
require any material work, repairs, construction, change
in business practices or operations, or expenditures; or
(B) any written demand or written notice with respect to a
breach of or liability under any Environmental Laws
applicable to Vivendi or any subsidiary; and
(iii) to the knowledge of Vivendi, there is no reasonable basis for
any claim against Vivendi or any of its current or former
subsidiaries or any of their respective predecessor entities,
divisions, or any formerly owned, leased, or operated
properties or assets of the foregoing, under any Environmental
Laws or with respect to any Hazardous Substances.
(i) Reports. Vivendi has filed with the PSE, the CMF and the COB true
and complete copies of all material forms, reports, schedules,
statements and other documents required to be filed by it since
January 1, 1998 (such forms, reports, schedules, statements and
other documents, including any financial statements or other
documents, including any schedules included therein, are referred to
as the "VIVENDI DOCUMENTS"). The Vivendi Documents and any
registration statements confidentially submitted with the SEC prior
to the date hereof that have been made available to Seagram, at the
time filed, (i) did not contain any misrepresentation of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (ii)
complied in all material respects with the requirements of
applicable securities Laws.
(j) Compliance with Laws. Since January 1, 1998, Vivendi and the Vivendi
Material Subsidiaries have complied with and are not in violation of
any applicable Laws,
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orders, judgments and decrees other than non-compliance or
violations which would not, individually or in the aggregate, have a
Material Adverse Effect on Vivendi.
(k) Licences, etc. Vivendi and each Vivendi Material Subsidiary owns,
possesses, or has obtained and is in compliance with, all licences,
permits, certificates, orders, grants and other authorizations of or
from any Governmental Entity necessary to conduct its businesses as
now conducted except for such failure that would not, individually
or in the aggregate, have a Material Adverse Effect on Vivendi.
(l) Intellectual Property. None of Vivendi nor any Vivendi Material
Subsidiary has received written notice or is aware that its use of
its material registered trade- marks, service marks, copyrights,
industrial designs, patents, design patents and all applications
therefor ("VIVENDI IP") infringes upon or breaches the industrial or
intellectual property rights of any other Person, except with
respect to any such infringements or breaches which would not,
individually or in the aggregate, have a Material Adverse Effect on
Vivendi. Except as set forth in the Vivendi Disclosure Letter,
Vivendi has not commenced material legal proceedings relating to an
infringement by any Person of the Vivendi IP. Vivendi, to its
knowledge, has or has rights to use all of the intellectual property
necessary to conduct the business of Vivendi as currently carried on
except where the failure to do so would not, individually or in the
aggregate, have a Material Adverse Effect on Vivendi.
(m) Tax Matters. Neither Vivendi nor any of its subsidiaries has taken
any action or failed to take any action, or has knowledge of any
fact, agreement, plan or other circumstance that is reasonably
likely to prevent the Arrangement and the Vivendi/Canal Transactions
from constituting a transaction described in Section 351 of the
Code.
(2) Except as Publicly Disclosed by Vivendi or as set forth in the Canal
Disclosure Letter, Canal represents and warrants to and in favour of
Seagram as follows and acknowledges that Seagram is relying upon such
representations and warranties in connection with the matters contemplated
by this Agreement:
(a) Organization. Each of Canal and the Canal Material Subsidiaries has
been duly incorporated or formed under all applicable Laws, is
validly subsisting and has full corporate or legal power and
authority to own its properties and conduct its businesses as
currently owned and conducted , except, in the case of the Canal
Material Subsidiaries, where the failure to be so incorporated or
formed or subsisting or to have such power and authority would not,
individually or in the aggregate, have a Material Adverse Effect on
Canal. All of the outstanding shares and other ownership interests
of the Canal Material Subsidiaries which are held
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directly or indirectly by Canal are owned directly or indirectly by
Canal, free and clear of all material liens, claims or encumbrances,
or pursuant to restrictions on transfers contained in articles or
similar documents.
(b) Capitalization. The issued capital of Canal consists of 125,953,464
Canal Shares, Euro 0.75 nominal value each, as of the date hereof.
There are warrants, options or other rights to issue not more than
2,340,144 new Canal Shares outstanding as of the date hereof (and no
other obligations to issue capital stock of Canal existed as of such
date, except as provided in the following sentence). In addition,
there are options outstanding to acquire not more than 2,034,400
Canal Shares, in each case subject to customary adjustments. Neither
Canal nor any of its affiliates beneficially own any (i) Seagram
Shares or (ii) except for a de minimus amount, Vivendi Shares.
(c) Authority and No Violation.
(i) Canal has the requisite corporate power and authority to enter
into this Agreement and the Vivendi/Canal Agreements to which
it is a party and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement, the
Option Agreement and the Vivendi/Canal Agreements to which it
is a party and the consummation by Canal of the transactions
contemplated by this Agreement have been duly authorized by
its Board of Directors and no other corporate proceedings on
its part are necessary to authorize this Agreement and the
Vivendi/Canal Agreements to which it is a party or the
transactions contemplated hereby or thereby, other than:
(A) with respect to the Canal Meeting, the Canal Circular
and other matters relating solely thereto; and
(B) with respect to the Canal Resolution, the approval
thereof by not less than two-thirds of the votes cast by
the Canal Shareholders.
(ii) This Agreement has been duly executed and delivered by Canal
and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject
to bankruptcy, insolvency and other applicable Laws affecting
creditors' rights generally, and to general principles of
equity. Each of the Vivendi/Canal Agreements will be delivered
by each of Canal and its subsidiaries, in each case to the
extent a party thereto and, when so executed and delivered,
will constitute their respective legal, valid and binding
obligations, enforceable against them in accordance with their
respective terms, subject to bankruptcy, insolvency
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and other applicable Laws affecting creditors' rights
generally, and to general principles of equity.
(iii) The Board of Directors of Canal has approved as of the date
hereof this Agreement and the transactions contemplated by
this Agreement. Canal is not subject to a shareholder rights
plan or "poison pill" or similar plan.
(iv) The approval of this Agreement and the Vivendi/Canal
Agreements, the execution and delivery by Canal and each of
its subsidiaries, in each case to the extent a party thereto,
of this Agreement, and the Vivendi/Canal Agreements and the
performance by each of them of their respective obligations
hereunder and thereunder and the completion of the
transactions contemplated hereby and thereby, will not,
subject to obtaining the Regulatory Approvals:
(A) result (with or without notice or the passage of time)
in a violation or breach of, require any consent to be
obtained under or give rise to any termination, purchase
or sale rights or payment obligation under any provision
of:
(I) its certificate of incorporation, articles,
by-laws or other charter documents;
(II) any Laws, judgment or decree (subject to obtaining
the Regulatory Approvals relating to Canal),
except to the extent that the violation or breach
of, or failure to obtain any consent under, any
Laws, judgment or decree would not, individually
or in the aggregate, have a Material Adverse
Effect on Canal; or
(III) except as would not, individually or in the
aggregate, have a Material Adverse Effect on
Canal, any contract, agreement, license, franchise
or permit to which Canal or any Canal Material
Subsidiary is party or by which it is bound or
subject or is the beneficiary;
(B) give rise to any right of termination or acceleration of
indebtedness of Canal or any subsidiary, or cause any
such indebtedness to come due before its stated
maturity, or cause any available credit of Canal or any
subsidiary to cease to be available, other than as would
not, individually or in the aggregate, have a Material
Adverse Effect on Canal;
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(C) except as would not, individually or in the aggregate,
have a Material Adverse Effect on Canal, result in the
imposition of any encumbrance, charge or lien upon any
of its assets or the assets of any Canal Material
Subsidiary; or
(D) except as would not, individually or in the aggregate,
have a Material Adverse Effect on Canal, restrict,
hinder, impair or limit the ability of Canal or any
Canal Material Subsidiary to carry on the business of
Canal or any Canal Material Subsidiary as and where it
is now being carried on.
No consent, approval, order or authorization of, or
declaration or filing with, any Governmental Entity is
required to be obtained by Canal or its subsidiaries in
connection with the execution and delivery of this Agreement
and the Vivendi/Canal Agreements, in each case to the extent
it is a party thereto, or the consummation by Canal of the
transactions contemplated hereby or thereby other than (A) the
Regulatory Approvals relating to Canal and (B) any other
consents, approvals, orders, authorizations, declarations or
filings of or with a Governmental Entity which have been set
forth in the Canal Disclosure Letter, or which, if not
obtained, would not, individually or in the aggregate, have a
Material Adverse Effect on Canal.
(d) No Defaults. Subject to obtaining the Regulatory Approvals relating
to Canal, neither Canal nor any of its subsidiaries is in default
under, and there exists no event, condition or occurrence which,
after notice or lapse of time or both, would constitute such a
default under, any contract, agreement, license or franchise to
which it is a party which would, individually or in the aggregate,
have a Material Adverse Effect on Canal.
(e) Absence of Certain Changes or Events. Since December 31, 1999
through to the date hereof, each of Canal and each Canal Material
Subsidiary has conducted its business only in the ordinary and
regular course of business consistent with past practice (except in
connection with the transactions contemplated hereby) and there has
not occurred a Material Adverse Change with respect to Canal (which
has not been cured).
(f) Financial Statements; Contingent Liabilities. The audited
consolidated financial statements for Canal as at and for each of
the 12-month periods ended on December 31, 1999, 1998 and 1997 have
been prepared in accordance with French GAAP; such financial
statements present fairly, in all material respects, the
consolidated financial position and results of operations and cash
flows of Canal
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and its subsidiaries as of the respective dates thereof and for the
respective periods covered thereby. Except as Publicly Disclosed by
Vivendi (including on the most recent consolidated balance sheet and
the footnotes thereto included in the Canal Documents Publicly
Disclosed by Vivendi), Canal and its subsidiaries have not incurred
any liabilities that are of a nature that would be required to be
disclosed on a balance sheet of Canal and its subsidiaries or the
footnotes thereto prepared in conformity with French GAAP, other
than (i) liabilities incurred in the ordinary course of business,
(ii) liabilities for Taxes and (iii) liabilities that would not,
individually or in the aggregate, have a Material Adverse Effect on
Canal.
(g) Litigation, etc. There is no claim, action, proceeding or suit
pending or, to the knowledge of Canal, threatened against Canal or
any Canal Material Subsidiary before any court or Governmental
Entity that would, individually or in the aggregate, have a Material
Adverse Effect on Canal or that would prevent or materially delay
consummation of the transactions contemplated by this Agreement or
the Arrangement. Neither Canal nor any Canal Material Subsidiary,
nor any of their respective assets and properties, is subject to any
outstanding judgment, order, writ, injunction or decree that would,
individually or in the aggregate, have a Material Adverse Effect on
Canal or that would prevent or materially delay consummation of the
transactions contemplated by this Agreement or the Arrangement.
(h) Environmental. Except for any matters that would not, individually
or in the aggregate, have a Material Adverse Effect on Canal:
(i) all operations of Canal and the Canal Material Subsidiaries
have been conducted, and are now, in compliance with all
Environmental Laws; and
(ii) neither Canal nor any Canal Material Subsidiary is subject to:
(A) any Environmental Law which, to the knowledge of Canal,
requires or may reasonably be expected to require any
material work, repairs, construction, change in business
practices or operations, or expenditures; or
(B) any written demand or written notice with respect to a
breach of or liability under any Environmental Laws
applicable to Canal or any subsidiary; and
(iii) to the knowledge of Canal, there is no reasonable basis for
any claim against Canal or any of its current or former
subsidiaries or any of their respective predecessor entities,
divisions, or any formerly owned, leased, or
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operated properties or assets of the foregoing, under any
Environmental Laws or with respect to any Hazardous
Substances.
(i) Reports. Canal has filed with the PSE, the CMF and the COB true and
complete copies of all material forms, reports, schedules,
statements and other documents required to be filed by it since
January 1, 1998 (such forms, reports, schedules, statements and
other documents, including any financial statements or other
documents, including any schedules included therein, are referred to
as the "CANAL DOCUMENTS"). The Canal Documents at the time filed (i)
did not contain any misrepresentation of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, and (ii) complied in all
material respects with the requirements of applicable securities
Laws.
(j) Compliance with Laws. Since January 1, 1998, Canal and the Canal
Material Subsidiaries have complied with and are not in violation of
any applicable Laws, orders, judgments and decrees other than
non-compliance or violations which would not, individually or in the
aggregate, have a Material Adverse Effect on Canal.
(k) Licences, etc. Canal and each Canal Material Subsidiary owns,
possesses, or has obtained and is in compliance with, all licences,
permits, certificates, orders, grants and other authorizations of or
from any Governmental Entity necessary to conduct its businesses as
now conducted except for such failure that would not, individually
or in the aggregate, have a Material Adverse Effect on Canal.
(l) Intellectual Property. None of Canal nor any Canal Material
Subsidiary has received written notice or is aware that its use of
its material registered trade- marks, service marks, copyrights,
industrial designs, patents, design patents and all applications
therefor ("CANAL IP") infringes upon or breaches the industrial or
intellectual property rights of any other Person, except with
respect to any such infringements or breaches which would not,
individually or in the aggregate, have a Material Adverse Effect on
Canal. Except as set forth in the Canal Disclosure Letter, Canal has
not commenced material legal proceedings relating to an infringement
by any Person of the Canal IP. Canal, to its knowledge, has or has
rights to use all of the intellectual property necessary to conduct
the business of Canal as currently carried on except where the
failure to do so would not, individually or in the aggregate, have a
Material Adverse Effect on Canal.
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SECTION 3.3 SURVIVAL.
For greater certainty, the representations and warranties of Seagram,
Canal, the Vivendi Parties and Sofiee contained herein shall survive the
execution and delivery of this Agreement and shall terminate at the
Effective Time. Any investigation by a party hereto and its advisors shall
not mitigate, diminish or affect the representations and warranties of
another party to this Agreement.
ARTICLE 4
COVENANTS
SECTION 4.1 RETENTION OF GOODWILL.
During the Pre-Effective Date Period, each of Seagram, Vivendi and Canal will,
subject to the fact that a transaction involving its businesses is contemplated
hereby, continue to carry on its business in a manner consistent with prior
practice, working to preserve the attendant goodwill of such entities and to
contribute to retention of that goodwill to and after the Effective Date, but
subject to the following provisions of this Article 4. The following provisions
of this Article 4 are intended to be in furtherance of this general commitment.
Nothing contained in this Agreement shall give Vivendi or Canal, directly or
indirectly, the right to control or direct Seagram's operations and nothing
contained in this Agreement shall give Seagram, directly or indirectly, the
right to control or direct Vivendi's or Canal's operations during the
Pre-Effective Date Period. During the Pre-Effective Date Period, each of
Vivendi, Canal and Seagram shall exercise, consistent with, and subject to the
limitations provided by, the terms and conditions of this Agreement, complete
control and supervision over its operations.
SECTION 4.2 CONSULTATION.
Subject to applicable Law, any applicable confidentiality agreements and
the other provisions of this Agreement, during the Pre-Effective Date Period,
Seagram and its subsidiaries, on the one hand, and Vivendi and Canal and their
respective subsidiaries, on the other hand, will consult on an ongoing basis
with senior officers of the other party in order that the representatives of the
other party will become more familiar with the philosophy and techniques of such
company and its subsidiaries, as well as with its business and financial affairs
and in order to provide experience as a basis for ongoing relationships
following the Effective Date.
SECTION 4.3 COVENANTS OF SEAGRAM.
(a) Seagram covenants and agrees that, until the Effective Date or the
earlier termination of this Agreement in accordance with Article 6,
except (i) with the consent of Vivendi on behalf of the Vivendi
Parties, Sofiee and Canal to any
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deviation therefrom, which consent shall not be unreasonably
withheld or delayed; (ii) with respect to any matters disclosed in
the Seagram Disclosure Letter; (iii) with respect to any matter
expressly contemplated by this Agreement or the Plan of Arrangement,
including the transactions involving the businesses of Seagram,
Vivendi and Canal contemplated hereby; or (iv) with respect to
anything required by Laws, Seagram will, and will cause its
subsidiaries to:
(i) carry on its business in the ordinary course consistent with
past practice in all material respects and use its reasonable
best efforts to preserve intact its present business
organization and preserve its relationship with those having
material business dealings with it to the end that its
goodwill and ongoing business shall not be impaired in any
material respect, provided, however, that no action by Seagram
or its subsidiaries with respect to matters specifically
addressed by any other provision of this Section 4.3(a) shall
be deemed a breach of this Section 4.3(a)(i) unless such
action would constitute a breach of one or more of such other
provisions;
(ii) not split, consolidate or reclassify any of the outstanding
shares of Seagram nor declare, set aside or pay any dividends
on or make any other distributions on or in respect of the
outstanding shares of Seagram other than declaration and
payment of regular quarterly cash dividends on the shares of
Seagram in an amount not to exceed $0.165 per share, and for
any period ending on the Effective Date and commencing on the
record date for the prior dividend, a cash dividend in an
amount not to exceed a fraction, the numerator of which equals
$0.165 per share multiplied by the number of days comprising
such period and the denominator of which is 90;
(iii) not amend the articles or by-laws of Seagram;
(iv) except to the extent otherwise provided in subsection (ix)
hereof, not set aside or issue, authorize or propose the sale,
setting aside or issuance of, or purchase or redeem or propose
the purchase or redemption of, or enter into any commitment,
arrangement, undertaking or agreement with respect to any of
the foregoing in respect of, any shares in Seagram's capital
or of any Seagram Material Subsidiary thereof or any class of
securities convertible or exchangeable into, or rights,
warrants, calls or options to acquire, any such shares or
other convertible or exchangeable securities or bonds,
debentures or other evidences of indebtedness of Seagram or
any subsidiary having the right to vote (or that are
convertible for or exercisable into securities having the
right to vote) with the holders of the Seagram Common Shares,
except for (a) transactions between two or more
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wholly-owned Seagram subsidiaries or between a wholly-owned
subsidiary of Seagram and Seagram, (b) the issuance of Seagram
Common Shares pursuant to fully vested and duly exercised
Seagram Options and upon the conversion of Seagram ▇▇▇▇▇ and
Seagram ACESs and (c) issuances pursuant to the Option
Agreement;
(v) not, whether through its board of directors or otherwise,
accelerate the vesting of any unvested Seagram Options or
accelerate the release of, or the expiry date of any hold
period relating to any Seagram Common Shares, other than in
connection with settling non-officer employee terminations in
the ordinary course of business consistent with past practice;
(vi) not reorganize, amalgamate or merge Seagram or any of the
Seagram Material Subsidiaries with any other Person, except
any Seagram Material Subsidiary may merge with a wholly-owned
subsidiary of Seagram;
(vii) not acquire or agree to acquire by amalgamating, merging or
consolidating with, purchasing a substantial equity interest
in or a substantial portion of the assets of or otherwise, any
business or Person, except acquisitions in existing or related
lines of business of Seagram or its subsidiaries the fair
market value of the total consideration (including the value
of indebtedness acquired or assumed) for which does not exceed
the amount specified in the aggregate for such acquisitions in
Section 4.3(a)(vii) of the Seagram Disclosure Letter, none of
which acquisitions presents a material risk of making it
materially more difficult to obtain under applicable Laws any
approval or authorization required in connection with the
transactions contemplated by this Agreement;
(viii) other than (A) internal transfers between, or reorganizations
or consolidations involving, subsidiaries of Seagram or (B)
dispositions referred to in the Seagram Documents filed prior
to the date hereof, Seagram shall not, and shall not permit
any of its subsidiaries, to sell, lease or otherwise dispose
of, or agree to sell, lease or otherwise dispose of, any of
its assets, if the fair market value of the total
consideration (including the value of any indebtedness
acquired or assumed) therefor exceeds the amount specified in
the aggregate for all such dispositions in Section
4.3(a)(viii) of the Seagram Disclosure Letter;
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(ix) not:
(A) other than pursuant to existing Seagram Plans, in the
case of officers and directors of Seagram or any Seagram
Material Subsidiary, establish, adopt, enter into or
modify in any material respect any Seagram Plan
generally applicable to the employees of Seagram or any
Seagram Material Subsidiaries, or grant any bonuses,
salary increases, stock options, pension or supplemental
pension benefits, profit sharing, retirement allowances,
deferred compensation, incentive compensation, severance
or termination pay to or any other form of compensation
or with respect to any increase of benefits payable to,
or make any loan or other financial assistance to, any
officers or directors of Seagram or any Seagram Material
Subsidiary, in each case other than in the ordinary
course of business and consistent with past practice
(including upon or in anticipation of any contract
expiration); or
(B) other than in the ordinary course of business and
consistent with past practice or pursuant to existing
Seagram Plans, in the case of employees of Seagram who
are not officers or directors, establish, adopt, enter
into or amend in any material respect any Seagram Plan
generally applicable to the employees of Seagram or any
of its subsidiaries, or grant any material bonuses,
salary increases, pension or supplemental pension
benefits, profit sharing, retirement allowances,
deferred compensation, incentive compensation, severance
or termination pay or any other form of compensation or
with respect to any material increase of benefits
payable, or make any material loans to such employees;
(x) not guarantee the payment of any indebtedness for money
borrowed incur any indebtedness for money borrowed, issue or
sell any debt securities or warrants or other rights to
acquire debt securities of Seagram or any of its subsidiaries,
guarantee any debt securities or enter into any "keep well" or
other agreement to maintain the financial statement condition
of another Person (other than a subsidiary) or enter into any
arrangement having the economic effect of any of the
foregoing, except short-term borrowings in the ordinary course
of business consistent with past practice;
(xi) not make any loans, advances or capital contributions to, or
investments in, any other Person, except for (A) in connection
with acquisitions permitted by Section 4.3(a)(vii), (B) loans
or investments by Seagram or a subsidiary of Seagram to or in
Seagram or any subsidiary of Seagram or, in the
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ordinary course of business consistent with past practice, any
other Person in which Seagram or any of its subsidiaries has
an existing equity interest, (C) artist and employee loans or
advances made in the ordinary course of business, or (D) in
the ordinary course of business consistent with past practice
which are not, individually or in the aggregate, material to
Seagram and its subsidiaries taken as a whole (provided that
none of such transactions referred to in this clause (D)
presents a material risk of making it more difficult to
obtain, under applicable Laws, any approval or authorization
required in connection with the transactions contemplated by
this Agreement);
(xii) other than in connection with acquisitions permitted by
Section 4.3(a)(vii) or with investments permitted by Section
4.3(a)(xi) or as provided in Seagram's capital expenditure
plans made available to Vivendi prior to the date of this
Agreement, incur or commit to capital expenditures prior to
the Effective Date, other than in the ordinary course
consistent with past practice;
(xiii)not make any material changes to existing accounting practices
relating to Seagram or any subsidiary, except as required by
Canadian or U.S. Law, a Government Entity or by Canadian or
U.S. generally accepted accounting principles or make any Tax
election that would have a Material Adverse Effect on Seagram;
and
(xiv) agree to take any actions described in Section 4.3(a)(i)
through 4.3(a)(xiii);
(b) Except to the extent restricted by applicable Law, Seagram shall and
shall cause its subsidiaries to perform all obligations required or
desirable to be performed by Seagram or any of its subsidiaries
under this Agreement, to co-operate with Vivendi and Canal in
connection therewith, and to do all such other acts and things as
may be necessary or desirable in order to consummate and make
effective, as soon as reasonably practicable, the transactions
contemplated by this Agreement and, without limiting the generality
of the foregoing, Seagram shall and where appropriate shall cause
its subsidiaries to:
(i) use its reasonable best efforts to obtain the requisite
approvals of the Seagram Shareholders to the Arrangement,
except to the extent that the Board of Directors of Seagram
has withdrawn, modified or qualified its recommendation to
shareholders in accordance with the terms of this Agreement
(provided that no such withdrawal, modification or
qualification will affect Seagram's obligation under Section
2.1(b));
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(ii) apply for and use its reasonable best efforts to obtain all
Regulatory Approvals relating to Seagram or any of its
subsidiaries and other approvals, consents or waivers of
Governmental Entities required or desirable as soon as
practicable in connection with the transactions contemplated
by this Agreement and, in doing so, to keep Vivendi and Canal
reasonably informed, subject to applicable Laws, as to the
status of the proceedings related to obtaining the Regulatory
Approvals and other approvals, consents and waivers,
including, but not limited to, (A) consulting with Vivendi and
Canal to the extent practicable in advance of any meeting or
conference with Governmental Entities or, in connection with
any proceeding by a private party, with any other Person, and
to the extent permitted by such applicable Governmental Entity
or other Person, give Vivendi and Canal the opportunity to
attend and participate in such meetings and conferences, in
each case to the extent relating to the transactions
contemplated by this Agreement, (B) providing Vivendi and
Canal with copies of all related applications and
notifications, in draft form, in order for Vivendi and Canal
to provide its reasonable comments, and (C) providing Vivendi
and Canal with copies of all material correspondence relating
to the Regulatory Approvals;
(iii) apply for and use its reasonable best efforts to obtain the
Interim Order and the Final Order;
(iv) defend all lawsuits or other legal, regulatory or other
proceedings to which it is a party challenging or affecting
this Agreement or the consummation of the transactions
contemplated by this Agreement;
(v) use its reasonable best efforts to have lifted or rescinded
any injunction or restraining order or other order relating to
Seagram, which may materially adversely affect the ability of
the parties to consummate the transactions contemplated by
this Agreement;
(vi) effect all necessary registrations, filings and submissions of
information required by Governmental Entities from Seagram or
any of its subsidiaries relating to the transactions
contemplated by this Agreement, including (A) an appropriate
filing of a Notification and Report Form pursuant to the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended ("HSR ACT"), with respect to the transactions
contemplated by this Agreement (which filing shall be made in
any event within 10 Business Days of the date hereof) and (B)
appropriate filings with the European Commission in accordance
with applicable competition, merger control, antitrust,
investment or similar laws and any necessary filings under the
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Investment Canada Act within the time periods specified
thereunder, and, in the case of both (A) and (B), to supply as
promptly as practicable any additional information and
documentary material that may be requested pursuant to such
laws or by such authorities and to use reasonable best efforts
to cause the expiration or termination of the applicable
waiting periods under the HSR Act and the receipt of the
requisite approvals under such other laws or from such
authorities as soon as practicable;
(vii) use its reasonable best efforts to obtain all necessary
waivers, consents and approvals required to be obtained by
Seagram or any of its subsidiaries in connection with the
transactions contemplated by this Agreement from other parties
to any material loan agreements, leases or other material
contracts; and
(viii)use its reasonable best efforts to ensure that Seagram's
affiliates (for the purposes of Rule 145 under the ▇▇▇▇ ▇▇▇)
execute and deliver to Vivendi, on or prior to the Effective
Date, an Affiliate's Letter;
(c) Seagram shall use its reasonable best efforts to carry out the terms
of the Interim Order and Final Order applicable to it and comply
promptly with all requirements which applicable Laws may impose on
Seagram or its subsidiaries with respect to the transactions
contemplated by this Agreement; and
(d) Seagram shall not, and shall not permit any of its subsidiaries to,
take any action or fail to take any action that would reasonably be
expected to prevent the transactions contemplated by this Agreement
from constituting a transaction described in Section 351 of the
Code.
SECTION 4.4 COVENANTS OF THE VIVENDI PARTIES, SOFIEE AND CANAL.
Each of the Vivendi Parties, Sofiee and Canal hereby covenants and agrees
as to itself and its subsidiaries:
(a) Except to the extent restricted by applicable Law, to perform all
obligations required or desirable to be performed by it or its
subsidiaries under this Agreement, to co-operate with Seagram in
connection therewith, and to do all such other acts and things as
may be necessary or desirable in order to consummate and make
effective, as soon as reasonably practicable, the
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transactions contemplated by this Agreement and, without limiting
the generality of the foregoing, each of the Vivendi Parties, Sofiee
and Canal shall and shall cause their respective subsidiaries to:
(i) use its reasonable best efforts to obtain the requisite
approvals of the Vivendi Shareholders or the Canal
Shareholders, as the case may be, to the Vivendi Resolution or
the Canal Resolution, as the case may be, except to the extent
that the Board of Directors of Vivendi or Canal (as
applicable) has withdrawn, modified or qualified its
recommendation to shareholders in accordance with the terms of
this Agreement (provided that no such withdrawal, modification
or qualification will affect Vivendi's or Canal's obligations,
applicable, under Section 2.2(1)(a) and Section 2.2(2)(a), as
applicable);
(ii) apply for and use its reasonable best efforts to obtain all
Regulatory Approvals, or best efforts in the case of the
Regulatory Approvals listed in part B of Schedule G, relating
to the Vivendi Parties or Canal, as the case may be, or any of
their respective subsidiaries and other approvals, consents or
waivers of Governmental Entities required or desirable as soon
as practicable in connection with the transactions
contemplated by this Agreement (including the Vivendi/Canal
Transactions) and, in doing so, to keep Seagram reasonably
informed, subject to applicable Laws, as to the status of the
proceedings related to obtaining the Regulatory Approvals and
other approvals, consents and waivers, including, but not
limited to, (A) consulting with Seagram the extent practicable
in advance of any meeting or conference with Governmental
Entities or, in connection with any proceeding by a private
party, with any other Person, and to the extent permitted by
such applicable Governmental Entity or other Person, give
Seagram the opportunity to attend and participate in such
meetings and conferences, in each case to the extent relating
to the transactions contemplated by this Agreement, (B)
providing Seagram with copies of all related applications and
notifications, in draft form, in order for Seagram to provide
its reasonable comments, (C) providing Seagram with copies of
all material correspondence relating to the Regulatory
Approvals and (D) cooperating with Seagram in making necessary
applications relating to any wholesale or retail beverage
alcohol licenses in connection with the transactions
contemplated by this Agreement;
(iii) defend all lawsuits or other legal, regulatory or other
proceedings to which it is a party challenging or affecting
this Agreement or the consummation of the transactions
contemplated by this Agreement;
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(iv) use its reasonable best efforts to have lifted or rescinded
any injunction or restraining order or other order relating to
the Vivendi Parties or Canal, as the case may be, which may
materially adversely affect the ability of the parties to
consummate the transactions contemplated by this Agreement;
(v) effect all necessary registrations, filings and submissions of
information required by Governmental Entities from the Vivendi
Parties, Canal or any of their respective subsidiaries, as the
case may be, relating to the transactions contemplated by this
Agreement, including (A) an appropriate filing of a
Notification and Report Form pursuant to the HSR Act, with
respect to the transactions contemplated by this Agreement
(which filing shall be made in any event within 10 Business
Days of the date hereof) and (B) appropriate filings with the
European Commission in accordance with applicable competition,
merger control, antitrust, investment or similar laws and any
necessary filings under the Investment Canada Act within the
time periods specified thereunder, and, in the case of both
(A) and (B), to supply as promptly as practicable any
additional information and documentary material that may be
requested pursuant to such laws or by such authorities and to
use reasonable best efforts to cause the expiration or
termination of the applicable waiting periods under the HSR
Act and the receipt of the requisite approvals under such
other laws or from such authorities as soon as practicable;
(vi) use its reasonable best efforts to obtain all necessary
waivers, consents and approvals required to be obtained by
Vivendi, Canal or any of their respective subsidiaries, as the
case may be, in connection with the transactions contemplated
by this Agreement from other parties to any material loan
agreements, leases or other material contracts;
(vii) reserve for issuance, as required, Vivendi Shares in
connection with the transactions contemplated by this
Agreement (including upon exercise of options or convertible
securities) consistent with the provisions of the Support
Agreement;
(viii)cause the articles of Vivendi Exchangeco to be amended to,
among other things, create the Exchangeable Shares, and
otherwise to reflect the transactions contemplated by this
Agreement;
(ix) take all necessary actions, including in connection with the
Sofiee Merger, in order to be in a position to make available
the Vivendi Voting Rights as contemplated in the Plan of
Arrangement and the Custody Agreement;
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(x) take all necessary actions for Vivendi, Vivendi Exchangeco or
Vivendi Holdings, as the case may be, to be in a position to
deliver Vivendi ADSs upon the exchange from time to time of
the Exchangeable Shares; and
(xi) increase, at Seagram's election, the Vivendi ADS Adjustment
Ratio (as defined in the Plan of Arrangement) as necessary to
permit a Vivendi Voting Right to be available in respect of
each Exchangeable Share and appropriate amendments to the
economic equivalence provisions in the Support Agreement and
the Exchange Trust Agreement will be made to ensure that the
increased Vivendi ADS Adjustment Ratio is applied to any
required adjustments.
(b) to use its best efforts to (i) cause the Exchangeable Shares to be
listed on the TSE by the Effective Time and to maintain such
listings for so long as there are Exchangeable Shares outstanding
(other than those Exchangeable Shares held by Vivendi or any of its
affiliates), and (ii) ensure that Vivendi Exchangeco remains a
"public corporation" within the meaning of the Income Tax Act
(Canada) for so long as there are Exchangeable Shares outstanding
(other than those Exchangeable Shares held by Vivendi or any of its
affiliates);
(c) to use its best efforts to cause the Vivendi ADSs and Vivendi ADRs
to be listed on the NYSE or NASDAQ by the Effective Time and be
registered under the Exchange Act prior to the Effective Date;
(d) to carry out the terms of the Interim Order and Final Order
applicable to it and use its reasonable best efforts to comply
promptly with all requirements which applicable Laws may impose on
Vivendi, Canal or their respective subsidiaries, as the case may be,
with respect to the transactions contemplated by this Agreement;
(e) to use its best efforts to cause the Vivendi Shares underlying the
Vivendi ADSs to be issued at the Effective Time to be listed on the
PSE by the Effective Time;
(f) to use its best efforts to cause (i) the Vivendi ADSs to be issued
from time to time upon the exchange of Exchangeable Shares to be
listed on the NYSE or NASDAQ at the time of issue, and (ii) the
Vivendi Shares underlying such Vivendi ADSs to be issued from time
to time upon the exchange of Exchangeable Shares and to be listed on
the PSE at the time of issue;
(g) until the Effective Date or the earlier termination of this
Agreement in accordance with Article 6, except (i) with the consent
of Seagram to any deviation therefrom, which consent shall not be
unreasonably withheld or delayed; (ii) with respect to any matters
disclosed by Vivendi in the Vivendi Disclosure Letter or Canal in
the
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Canal Disclosure Letter; or (iii) with respect to any matter
expressly contemplated by this Agreement or the Plan of Arrangement,
including the transactions involving the businesses of Seagram,
Vivendi and Canal contemplated hereby, each of Vivendi and Canal
will, and will cause its subsidiaries to:
(i) not split, consolidate or reclassify any of the outstanding
Vivendi Shares, Vivendi ADRs or Vivendi ADSs or Canal Shares,
as the case may be, nor declare, set aside or pay any
dividends on or make any other distributions on or in respect
of the outstanding Vivendi Shares or Canal Shares, as the case
may be, other than normal and customary cash dividends on
Vivendi Shares or Canal Shares, as the case may be;
(ii) not acquire or agree to acquire by amalgamating, merging or
consolidating with, purchasing a substantial equity interest
in or a substantial portion of the assets of or otherwise
(other than the Vivendi/Canal Transactions), any business or
Person which acquisition or other transaction (A) would
reasonably be expected to prevent or materially delay the
transactions contemplated by this Agreement or (B) is in the
music, movie or United States television production or
distribution business for a total consideration acquisition
price (including the value of indebtedness acquired or
assumed) greater than Euro 500 million in a single transaction
or series of related transactions;
(iii) not amend the statutes or by-laws of Vivendi or Canal; or
(iv) not to amend, terminate (other than terminations that arise as
a result of termination of this Agreement), grant any waiver
in respect of or waive any condition under the Vivendi/Canal
Agreements;
(h) to not take any action or fail to take any action that would
reasonably be expected to prevent the transactions contemplated by
this Agreement from constituting a transaction described in Section
351 of the Code;
(i) Vivendi will (i) cast votes in respect of all the Canal Shares it
owns, and cause Sofiee and any other of its affiliates to cast votes
in respect of all the Canal Shares, it owns, (A) in favour of the
Canal Resolution, (B) against any action (including, for greater
certainty, a Canal Superior Proposal) that would impede, interfere
with, or discourage the transactions contemplated by this Agreement,
and (C) against any action that would result in any material breach
by Canal of any representation, warranty or covenant contained in
this Agreement and (ii) take all steps necessary, and cause Sofiee
to take all steps necessary, to have Sofiee approve the Canal
Resolution;
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(j) Vivendi will cast votes in respect of all the Sofiee Shares it owns
in favour of the Sofiee Resolution;
(k) Vivendi, Canal and their respective affiliates shall not, either
directly or through an agent, purchase or otherwise acquire, sell or
otherwise dispose of, or engage in any other transactions having the
economic effect of a purchase or sale in respect of, Vivendi Shares
during the period beginning on the tenth Business Day prior to the
Measuring Period and ending on the last Business Day after the
Measuring Period;
(l) Vivendi will not, and it will cause Sofiee and its other affiliates
not to, between the date hereof and the Effective Time, (A) sell,
transfer, gift, assign, pledge, hypothecate, encumber or otherwise
dispose of any of the Canal Shares or shares of capital stock of
Sofiee, or enter into any agreement, arrangement or understanding in
connection therewith (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise), without
having first obtained the prior written consent of Seagram, or (B)
grant any proxies or powers of attorney, deposit any Canal Shares or
shares of capital stock of Sofiee into a voting trust or enter into
a voting agreement, understanding or arrangement with respect to
such Canal Shares or shares of capital stock of Sofiee;
(m) neither Vivendi nor Canal shall take any action which could
reasonably be expected to prevent the exchange by Canadian resident
holders of Seagram Common Shares for Exchangeable Shares from being
treated as a tax deferred transaction for purposes of the Canadian
Tax Act to holders who are otherwise eligible for such treatment;
(n) the Vivendi Securities to be issued in connection with the
Arrangement and the Vivendi ADSs to be provided upon the exchange
from time to time of the Exchangeable Shares and upon the exercise
of the Seagram Options will, in all cases, be duly and validly
issued by Vivendi on their respective dates of issue as fully paid
and non-assessable securities;
(o) Vivendi and Canal shall take all actions required to treat Vivendi
Holdings and each direct or indirect parent of Vivendi Holdings
(other than Vivendi) as a disregarded entity under Section
301.7701-3 of the Treasury Regulations and shall refrain from taking
any actions that would prevent any of such entities from being
treated as a disregarded entity under Section 301.7701-3 of the
Treasury Regulations. Vivendi Holdings and each of such other
entities shall at all times be wholly owned by Vivendi or by one of
such other entities;
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(p) with respect to Seagram Options and Seagram SARs:
(i) each Seagram Option granted prior to the Effective Time
that remains outstanding immediately prior to the Effective Time
shall cease to represent a right to acquire Seagram Common Shares
and shall be converted (each, as so converted, a "Seagram Converted
Option"), at the Effective Time, into an option to acquire, on the
same terms and conditions as were applicable under the Seagram
Option (including, without limitation, the practice of "rule of 65"
retirement, applied on a basis consistent with past practice, which
allows an option holder who is at least 50 years old to retire under
the Seagram Stock Plans so long as the sum of such holder's age and
years of service is at least 65), that number of Vivendi ADSs
determined by multiplying the number of Seagram Common Shares
subject to such Seagram Option by the Exchange Ratio, rounded up to
the nearest whole Vivendi ADS, at a price per share (rounded off to
the nearest cent) equal to the per share exercise price specified in
such Seagram Option divided by the Exchange Ratio; provided,
however, that 50% of each holder's outstanding, unvested Seagram
Converted Options shall be immediately vested and exercisable at the
Effective Time (applied pro rata against each subsequent vesting
installment); provided, further, that the remainder of a holder's
outstanding, unvested Seagram Converted Options shall become
immediately vested and exercisable if, following the Effective Time,
(A) such holder's employment is terminated by Vivendi, Canal,
Seagram or any of their respective affiliates without Cause (as
defined below) or (B) such holder terminates his or her employment
by reason of Vivendi, Canal, Seagram or any of their respective
affiliates requiring such holder to relocate his or her primary
place of employment by more than 35 miles. For purposes of this
Agreement, "Cause" shall mean (A) the holder's conviction of, or
plea of no contest to, a felony or (B) the holder's willful
malfeasance or willful misconduct in connection with his or her
duties to Seagram, or the holder's willful refusal to perform his or
her duties which, in each case, results in demonstrable harm to the
financial condition or business reputation of Vivendi, Canal,
Seagram or any of their respective affiliates;
(ii) each Seagram SAR granted prior to the Effective Time that
remains outstanding immediately prior to the Effective Time shall be
converted so that the number and kind of shares subject to such
right and the exercise price thereof (if any) shall be adjusted, at
the Effective Time, in the same manner as provided in Section
4.4(p)(i) above for the conversion of Seagram Options;
(iii) as soon as practicable after the Effective Time, Vivendi
shall deliver or cause to be delivered to the holders of Seagram
Converted Options and Seagram SARs appropriate notices setting forth
such holders' rights pursuant to the respective Seagram Stock Plans
and agreements evidencing the grants of such
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Seagram Converted Options and Seagram SARs and stating that such
Seagram Converted Options and Seagram SARs and agreements have been
assumed by Vivendi or Seagram as Vivendi shall determine and shall
continue in effect on the same terms and conditions (subject to the
adjustments required by this Section 4.4(p) after giving effect to
the transactions hereunder and the terms of the Seagram Stock
Plans); and
(iv) prior to the Effective Time, Vivendi shall take all
necessary action to assume or have Seagram assume as of the
Effective Time all obligations undertaken by Vivendi under this
Section 4.4(p) and to adopt at the Effective Time the Seagram Stock
Plans and each Seagram Converted Option and Seagram SAR and to take
all other actions called for by this Section 4.4(p), including the
reservation, issuance and listing by Vivendi of a number of Vivendi
ADSs at least equal to the number of Vivendi ADSs that will be
subject to Seagram Converted Options and Seagram SARs; provided,
however, that nothing in subsections (iii) and (iv) hereof shall
relieve Vivendi of its obligations to provide Vivendi ADSs to
satisfy all obligations hereunder, and Vivendi hereby guarantees the
performance of such obligations by Seagram in any event. No later
than the Effective Time, Vivendi shall file a registration statement
on Form S-8 (or any successor or, including if Form S-8 is not
available, other appropriate forms) ("FORM S-8") with respect to the
Vivendi ADSs subject to such Seagram Converted Options and Seagram
SARs and shall maintain the effectiveness of such registration
statement or registration statements (and maintain the current
status of the prospectus or prospectuses contained therein) for so
long as such options remain outstanding;
(q) with respect to any Seagram North American retiree medical and life
plan, neither Vivendi nor Canal shall, and they shall cause Seagram
not to, amend or terminate such plan following the Effective Time in
any manner which results in the reduction or elimination of the
benefits available thereunder or increases in costs, other than any
copayment and cost sharing increases (which may be continued in the
same proportions to Seagram-provided portions of cost) to any former
Seagram Employee (and his or her eligible dependents) who is
receiving such benefits thereunder as of the date hereof, or any
active Seagram Employee (and his or her eligible dependents) who
would be eligible for such benefits if he or she retired on the
Effective Date (or who, as of the Effective Date, is within two
years of being able to retire and receive benefits thereunder);
(r) until the second anniversary of the Effective Date (or longer, if
required by Law), Vivendi and/or Canal shall, or shall cause Seagram
or its subsidiaries to, provide each Seagram Employee (who is
employed on the Effective Time and who continues his or her
employment with Vivendi, Canal, Seagram or any of their respective
affiliates) with a base salary at least equal to that provided to
such
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Seagram Employee immediately prior to the Effective Time, and
overall employee benefits (but excluding for these purposes any
retention bonuses or plans that provide for equity or equity-based
compensation) that are no less favorable, in the aggregate, than
those provided immediately prior to the Effective Time to Seagram
Employees generally, except for any changes made to comply with
applicable Law or tax qualification nondiscrimination rules. Vivendi
and/or Canal shall, or shall cause Seagram to, maintain the
severance related provisions of existing Seagram Plans as currently
administered and to provide the current cash severance payments
required thereunder, for at least two years following the Effective
Time, to the Seagram Employees, reduced by any severance payments
otherwise required under existing severance and employment
agreements or applicable Law (unless, with respect to the severance
benefit, no such reduction is permitted or provided for); provided
however, that any Seagram Employee eligible to receive severance
under a Seagram Plan but for the transactions contemplated herein,
shall be deemed so eligible. Seagram Employees shall be credited for
service with Seagram and its current and former affiliates for all
purposes under each employee benefit plan, program or arrangement of
Vivendi, Canal or their respective affiliates in which such
employees are eligible to participate (unless such credit would
result in a duplication of benefits). If Seagram Employees become
eligible to participate in a medical, dental or health plan, program
or arrangement of Vivendi, Canal or their respective affiliates,
such arrangement sponsor shall cause such arrangement to (i) waive
any preexisting condition limitations (to the extent such
limitations were inapplicable to a Seagram Employee immediately
before such arrangement was so made available to such Seagram
Employee) and (ii) honor any deductible and out-of-pocket expenses
incurred by the Seagram Employees and their dependents under similar
Seagram Plans during the portion of the plan year prior to such
participation. Nothing in this Agreement shall restrict, limit or
interfere with the ability (after the Effective Time) of Seagram,
Vivendi, Canal or their respective affiliates to terminate, amend or
replace any particular agreement, plan or program, or terminate the
employment of any person, provided that the requirements of Sections
4.4(p) through (w) are otherwise satisfied;
(s) Seagram shall be permitted to award a bonus, in respect of Seagram's
fiscal year 2000, to each Seagram Employee who currently
participates in a Seagram bonus plan, pursuant to the existing terms
and conditions of such plan on the date hereof. With respect to
Seagram's fiscal year 2001 and any stub period between the end of
fiscal year 2001 and the beginning of calendar year 2002 ("Stub
Period"), Seagram shall be permitted to award a bonus to each
Seagram Employee who participates in a Seagram bonus plan, in an
amount no less than 80% of such employee's target bonus as of the
Effective Time, or one half thereof in the case of the Stub Period
pursuant to the existing terms and conditions of such plan on the
date hereof, provided, however, if any such employee is terminated
by Vivendi, Canal, Seagram
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or any of their respective affiliates without Cause, such employee
will be entitled to receive an amount equal to 80% of his or her
target bonus as of the Effective Time, or one-half thereof in the
case of the Stub Period, prorated based on the number of days in
fiscal year 2001 or the Stub Period, as applicable, prior to such
termination;
(t) Vivendi shall, or shall cause Seagram to, provide as a retention
pool the amount set forth on the Seagram Disclosure Letter, for the
purpose of retaining the services of selected key Seagram Employees
through the Effective Time and thereafter. Prior to the Effective
Time, the CEO of Seagram, in close cooperation with the CEO of
Vivendi, shall select those Seagram Employees who may receive awards
from such pool, shall establish any criteria for allocating such
awards and shall determine the final allocation of awards from such
pool. Fifty percent of such awards shall be paid in cash, in a lump
sum, at the Effective Time, with the balance payable in cash on the
first anniversary of the Effective Time (provided the recipient
remains employed by Seagram, Vivendi, Canal or any of their
respective affiliates through such dates, or is terminated without
Cause prior to such dates);
(u) Seagram, Vivendi and Canal agree to cooperate reasonably during the
period prior to the Effective Time to ensure the continuity of the
workforce of Seagram and its subsidiaries and to preserve the human
resources of Seagram and its subsidiaries;
(v) effective as of the Effective Time, Vivendi expressly assumes the
obligations and liabilities under the termination protection
agreements and employment agreements set forth on the Seagram
Disclosure Letter between Seagram and various employees;
(w) Seagram shall enter into the employment agreement and other
arrangements contemplated by the Seagram Disclosure Letter, to be
effective as of the Effective Time, in accordance with the terms and
conditions disclosed in the Seagram Disclosure Letter, and such
employment agreement and other arrangements shall continue in effect
from and after the Effective Time;
(x) the parties to this Agreement agree that provision of charitable
contributions and community support serves a number of important
goals. Vivendi and its subsidiaries (including Seagram following the
Effective Time) currently intend to continue, after the Effective
Time, to provide charitable contributions and community support
within each of the jurisdictions in which Seagram conducts its
business at levels comparable to those Seagram and its subsidiaries
have historically provided within such jurisdictions;
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(y) Vivendi shall take all necessary actions (including, in connection
with any proposed preemptive rights offering, make any necessary
securities laws filing) to ensure that all holders of Vivendi Shares
or Vivendi Securities, regardless of jurisdiction of residence, are
entitled to all the benefits (including the right to acquire Vivendi
Securities pursuant to preemptive rights) related to such Vivendi
Shares or Vivendi Securities to which holders of Vivendi Shares are
entitled pursuant to French Law;
(z) Vivendi, Sofiee and Canal shall provide Seagram with a reasonable
opportunity to review and comment upon the agreements related to the
creation of the Vivendi ADSs and Vivendi ADRs and each of the
Vivendi/Canal Agreements, in each case prior to the execution and
delivery of such agreements, and such agreements shall be reasonably
acceptable to Seagram. Vivendi, Sofiee and Canal agree that the
Vivendi/Canal Transactions shall be effected by them in the manner
and on the terms specified in Schedule I, including application of
the exchange ratio specified therein, and on such other terms and
agreements as are reasonably acceptable to Seagram;
(aa) At the request of Seagram, Vivendi shall enter into a supplemental
agreement pursuant to the Purchase Contract Agreement, dated as of
June 21, 1999, between Seagram and The Bank of New York whereby
Vivendi shall assume the obligations of Seagram under the Seagram
ACES (which supplemental agreement shall include appropriate
provisions pursuant to which holders of Seagram ACES shall
thereafter be entitled to purchase Vivendi ADSs in lieu of Seagram
Common Shares); and
(bb) Vivendi, Sofiee and Vivendi Exchangeco shall increase, at Seagram's
election, the Vivendi ADS Adjustment Ratio (as defined in the Plan
of Arrangement) and decrease the Exchange Ratio applicable to
Exchangeable Elected Shares (as defined in the Plan of Arrangement)
as necessary to permit a Vivendi Voting Right to be available in
respect of each Exchangeable Share, and appropriate amendments to
the economic equivalence provisions in the Support Agreement and the
Exchange Trust Agreement will be made in connection therewith to
ensure that the increased Vivendi ADS Adjustment Ratio is applied to
any required adjustments.
SECTION 4.5 COVENANTS REGARDING NON-SOLICITATION OF SEAGRAM.
(1) Seagram shall not, directly or indirectly, through any officer or director
of Seagram or any of its subsidiaries, and shall use its reasonable best
efforts to cause its and its subsidiaries' employees, agents and
representatives (including any investment banker, lawyer or accountant)
not to (i) solicit, initiate, knowingly encourage or otherwise facilitate
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(including by way of furnishing information) the initiation of any
inquiries or proposals regarding a Seagram Acquisition Proposal or (ii)
participate in any discussions or negotiations regarding, or provide
any confidential information with respect to, any Seagram Acquisition
Proposal. None of Seagram or the Board of Directors of Seagram shall
(i) withdraw or modify, or propose publicly to withdraw or modify, in a
manner adverse to Vivendi or Canal the approval or recommendation of
the Board of Directors of Seagram or any committee thereof of the
transactions contemplated by this Agreement, (ii) approve or recommend,
or propose publicly to approve or recommend, any Seagram Acquisition
Proposal or (iii) accept or enter into, or propose publicly to accept
or enter into, any letter of intent, agreement in principle, merger
agreement, acquisition agreement, option agreement or voting agreement
related to any Seagram Acquisition Proposal.
(2) Notwithstanding Section 4.5(1) and any other provision of this
Agreement, the Board of Directors of Seagram shall be permitted to (A)
to the extent applicable, comply with Rule 14a-9, Rule 14d-9 and Rule
14e-2 promulgated under the Exchange Act or Section 99 of the
Securities Act with regard to any Seagram Acquisition Proposal, or make
any other disclosure required by applicable Law so long as any such
disclosure rejects any Seagram Acquisition Proposal and reaffirms its
recommendation of the transactions contemplated by this Agreement, or
take any other action to the extent ordered or otherwise mandated by
any court of competent jurisdiction, (B) withdraw, modify or qualify
(or propose to withdraw, modify or qualify), in any manner adverse to
Vivendi or Canal, the approval or recommendation of the transactions
contemplated by this Agreement, or (C) engage in any discussions or
negotiations with, or provide any information to, any Person in
response to a Seagram Acquisition Proposal by any such Person, if and
only to the extent that, in any such case referred to in clause (B) or
(C), (i) the Seagram Meeting shall not have occurred, (ii) (x) in the
case of clause (B) above, it has received an unsolicited written
Seagram Acquisition Proposal and its Board of Directors concludes in
good faith that such Seagram Acquisition Proposal constitutes a Seagram
Superior Proposal and (y) in the case of clause (C) above, its Board of
Directors concludes in good faith there is a reasonable likelihood that
its Board of Directors, after taking the steps described in clause (C)
above, would determine that such Seagram Acquisition Proposal could
reasonably constitute a Seagram Superior Proposal, (iii) in the case of
clause (B) or (C) above, its Board of Directors, after consultation
with outside counsel, determines in good faith that the failure to take
such action would be inconsistent with its fiduciary duties under
applicable law, (iv) prior to providing any confidential information or
data to any Person in connection with a Seagram Acquisition Proposal by
any such Person, its Board of Directors receives from such Person an
executed confidentiality agreement having provisions that are customary
in such agreements, as advised by counsel, provided that if such
confidentiality agreement contains provisions that are less restrictive
than the comparable provisions, or omits restrictive provisions,
contained in the Confidentiality Agreement, then the Confidentiality
Agreement will be deemed to be amended to contain only such less
restrictive provisions or to omit such
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restrictive provisions, as the case may be, and (v) prior to providing
any information or data to any Person or entering into discussions or
negotiations with any Person, Seagram notifies Vivendi promptly of such
inquiries, proposals or offers received by, any such information
requested from, or any such discussions or negotiations sought to be
initiated or continued with, any of its representatives indicating, in
connection with such notice, the name of such Person and the material
terms and conditions of such inquiries, proposals or offers, and
thereafter keeps Vivendi informed with respect to the status of such
inquiries, proposals or offers (including any change to the material
terms thereof).
Notwithstanding anything to the contrary herein, upon taking
any of the actions permitted by clause (B) of Section 4.5(2), Seagram may, to
the extent permitted by applicable Law, convene and hold the Seagram Meeting as
soon as possible and earlier than any then scheduled date. Seagram shall, and
shall cause the officers, directors, representatives and agents of Seagram and
its subsidiaries to, cease immediately all current discussions and negotiations
as of the date of this Agreement regarding any proposal that constitutes, or
could reasonably likely constitute, a Seagram Acquisition Proposal, and shall
promptly request the return or destruction of all confidential information
provided in connection therewith.
(3) Seagram shall use its reasonable best efforts to ensure that its
officers, directors and key employees and its subsidiaries and their
officers, directors and key employees and any financial advisors or
other advisors or representatives retained by it or its subsidiaries
are aware of the provisions of this Section 4.5.
(4) Nothing contained in this Section 4.5 shall limit in any way the
obligation of Seagram to convene and hold the Seagram Meeting in
accordance with Section 2.1 of this Agreement. Nothing in this Section
4.5 shall permit Seagram to terminate this Agreement (except as
specifically provided in Article 6 hereof). Seagram shall not submit to
the vote of its shareholders any Seagram Acquisition Proposal other
than the transactions contemplated by this Agreement, unless required
by Section 137 (in the case of an annual meeting) or Section 143 of the
CBCA, provided, however, Seagram will not call any shareholder meeting
pursuant to such provisions of the CBCA to consider a Seagram
Acquisition Proposal unless the Board of Directors of Seagram receive a
written legal opinion that the failure to do so would be in breach of
its statutory duties and provided, further, that before the Board of
Directors of Seagram calls any such meeting it will consult with
Vivendi in order to ensure that the timing, calling and holding of such
meeting, to the extent permitted by Law, will not be inconsistent with
the completion of the transactions contemplated by this Agreement.
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SECTION 4.6 COVENANTS REGARDING NON-SOLICITATION OF VIVENDI.
(1) Vivendi shall not, directly or indirectly, through any officer or
director of Vivendi or any of its subsidiaries, and shall use its
reasonable best efforts to cause its and its subsidiaries' employees,
agents and representatives (including any investment banker, lawyer or
accountant) not to, (i) solicit, initiate, knowingly encourage or
otherwise facilitate (including by way of furnishing information) the
initiation of any inquiries or proposals regarding a Vivendi
Acquisition Proposal or (ii) participate in any discussions or
negotiations regarding, or provide any confidential information with
respect to, any Vivendi Acquisition Proposal. None of Vivendi or the
Board of Directors of Vivendi shall (i) withdraw or modify, or propose
publicly to withdraw or modify, in a manner adverse to Seagram the
approval or recommendation of the Board of Directors of Vivendi or any
committee thereof of the transactions contemplated by this Agreement,
(ii) approve or recommend, or propose publicly to approve or recommend,
any Vivendi Acquisition Proposal or (iii) accept or enter into, or
propose publicly to accept or enter into, any letter of intent,
agreement in principle, merger agreement, acquisition agreement, option
agreement or voting agreement related to any Vivendi Acquisition
Proposal.
(2) Notwithstanding Section 4.6(1) and any other provision of this
Agreement, the Board of Directors of Vivendi shall be permitted to (A)
to the extent applicable, comply with Rule 14a-9, Rule 14d-9 and Rule
14e-2 promulgated under the Exchange Act or applicable French Law to
the extent similar to such U.S. regulations with regard to any Vivendi
Acquisition Proposal, or make any other disclosure required by
applicable Law so long as any such disclosure rejects any Vivendi
Acquisition Proposal and reaffirms its recommendation of the
transactions contemplated by this Agreement, or take any other action
to the extent ordered or otherwise mandated by any court of competent
jurisdiction, (B) withdraw, modify or qualify (or propose to withdraw,
modify or qualify) in any manner adverse to Seagram, the approval or
recommendation of the transactions contemplated by this Agreement, or
(C) engage in any discussions or negotiations with, or provide any
information to, any Person in response to Vivendi Acquisition Proposal
by any such Person, if and only to the extent that, in any such case
referred to in clause (B) or (C), (i) the Vivendi Meeting shall not
have occurred, (ii) (x) in the case of clause (B) above, it has
received an unsolicited written Vivendi Acquisition Proposal and its
Board of Directors concludes in good faith that such Vivendi
Acquisition Proposal constitutes a Vivendi Superior Proposal and (y) in
the case of clause (C) above, its Board of Directors concludes in good
faith there is a reasonable likelihood that its Board of Directors,
after taking the steps described in clause (C) above, would determine
that such Vivendi Acquisition Proposal could reasonably constitute a
Vivendi Superior Proposal, (iii) in the case of clause (B) or (C)
above, its Board of Directors, after consultation with outside counsel,
determines in good faith that the failure to take such action would be
inconsistent with its fiduciary duties under applicable law, (iv) prior
to providing any confidential information or data to any Person in
connection with a Vivendi Acquisition Proposal by
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any such Person, its Board of Directors receives from such Person an
executed confidentiality agreement having provisions that are customary
in such agreements, as advised by counsel, provided that if such
confidentiality agreement contains provisions that are less restrictive
than the comparable provisions, or omits restrictive provisions,
contained in the Confidentiality Agreement, then the Confidentiality
Agreement will be deemed to be amended to contain only such less
restrictive provisions or to omit such restrictive provisions, as the
case may be, and (v) prior to providing any information or data to any
Person or entering into discussions or negotiations with any Person,
Vivendi notifies Seagram promptly of such inquiries, proposals or
offers received by, any such information requested from, or any such
discussions or negotiations sought to be initiated or continued with,
any of its representatives indicating, in connection with such notice,
the name of such Person and the material terms and conditions of such
inquiries, proposals or offers, and thereafter keeps Seagram informed
with respect to the status of such inquiries, proposals or offers
(including any change to the material terms thereof).
Notwithstanding anything to the contrary herein, upon taking
any of the actions permitted by clause (B) of Section 4.6(2), Vivendi may, to
the extent permitted by applicable Law, convene and hold the Vivendi Meeting as
soon as possible and earlier than any then scheduled date. Vivendi shall, and
shall cause the officers, directors, representatives and agents of Vivendi and
its subsidiaries to, cease immediately all current discussions and negotiations
as of the date of this Agreement regarding any proposal that constitutes, or
could reasonably likely constitute, a Vivendi Acquisition Proposal, and shall
promptly request the return or destruction of all confidential information
provided in connection therewith.
(3) Vivendi shall use its reasonable best efforts to ensure that its
officers, directors and key employees and its subsidiaries and their
officers, directors and key employees and any financial advisors or
other advisors or representatives retained by it or its subsidiaries
are aware of the provisions of this Section 4.6.
(4) Nothing contained in this Section 4.6 shall limit in any way the
obligations of Vivendi to convene and hold the Vivendi Meeting in
accordance with Section 2.2 of this Agreement. Nothing in this Section
4.6 shall permit Vivendi to terminate this Agreement (except as
specifically provided in Article 6 hereof). Vivendi shall not submit to
the vote of its shareholders any Vivendi Acquisition Proposal other
than the transactions contemplated by this Agreement.
SECTION 4.7 COVENANTS REGARDING NON-SOLICITATION OF CANAL.
(1) Canal shall not, directly or indirectly, through any officer or
director of Canal or any of its subsidiaries, and shall use its
reasonable best efforts to cause its and its subsidiaries' employees,
agents and representatives (including any investment banker, lawyer or
accountant) not to, (i) solicit, initiate, knowingly encourage or
otherwise facilitate
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(including by way of furnishing information) the initiation of any
inquiries or proposals regarding any Canal Acquisition Proposal or (ii)
participate in any discussions or negotiations regarding, or provide
any confidential information with respect to, any Canal Acquisition
Proposal. None of Canal or the Board of Directors of Canal shall (i)
withdraw or modify, or propose publicly to withdraw or modify, in a
manner adverse to Seagram the approval or recommendation of the Board
of Directors of Canal or any committee thereof of the transactions
contemplated by this Agreement, (ii) approve or recommend, or propose
publicly to approve or recommend, any Canal Acquisition Proposal or
(iii) accept or enter into, or propose publicly to accept or enter
into, any letter of intent, agreement in principle, merger agreement,
acquisition agreement, option agreement or voting agreement related to
any Canal Acquisition Proposal.
(2) Notwithstanding Section 4.7(2) and any other provision of this
Agreement, the Board of Directors of Canal shall be permitted to (A) to
the extent applicable, comply with Rule 14a-9, Rule 14d-9 and Rule
14e-2 promulgated under the Exchange Act or applicable French Law to
the extent similar to such U.S. regulations with regard to any Canal
Acquisition Proposal, or make any other disclosure required by
applicable Law so long as any such disclosure rejects any Canal
Acquisition Proposal and reaffirms its recommendation of the
transactions contemplated by this Agreement, or take any other action
to the extent ordered or otherwise mandated by any court of competent
jurisdiction, (B) withdraw, modify or qualify (or propose to withdraw,
modify or qualify) in any manner adverse to Seagram, the approval or
recommendation of the transactions contemplated by this Agreement, or
(C) engage in any discussions or negotiations with, or provide any
information to, any Person in response to a Canal Acquisition Proposal
by any such Person, if and only to the extent that, in any such case
referred to in clause (B) or (C), (i) the Canal Meeting shall not have
occurred, (ii) (x) in the case of clause (B) above, it has received an
unsolicited written Canal Acquisition Proposal and its Board of
Directors concludes in good faith that such Canal Acquisition Proposal
constitutes a Canal Superior Proposal and (y) in the case of clause (C)
above, its Board of Directors concludes in good faith that there is a
reasonable likelihood that its Board of Directors, after taking the
steps described in clause (C) above, would determine that such Canal
Acquisition Proposal could reasonably constitute a Canal Superior
Proposal, (iii) in the case of clause (B) or (C) above, its Board of
Directors, after consultation with outside counsel, determines in good
faith that the failure to take such action would be inconsistent with
its fiduciary duties under applicable law, (iv) prior to providing any
confidential information or data to any Person in connection with a
Canal Acquisition Proposal by any such Person, its Board of Directors
receives from such Person an executed confidentiality agreement having
provisions that are customary in such agreements, as advised by
counsel, provided that if such confidentiality agreement contains
provisions that are less restrictive than the comparable provisions, or
omits restrictive provisions, contained in the Confidentiality
Agreement, then the Confidentiality Agreement will be deemed to be
amended to contain only such less restrictive provisions or to omit
such restrictive
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provisions, as the case may be, and (v) prior to providing any
information or data to any Person or entering into discussions or
negotiations with any Person, Canal notifies Seagram promptly of such
inquiries, proposals or offers received by, any such information
requested from, or any such discussions or negotiations sought to be
initiated or continued with, any of its representatives indicating, in
connection with such notice, the name of such Person and the material
terms and conditions of such inquiries, proposals or offers, and
thereafter keeps Seagram informed with respect to the status of such
inquiries, proposals or offers (including any change to the material
terms thereof).
Notwithstanding anything to the contrary herein, upon taking
any of the actions permitted by clause (B) of Section 4.7(2), Canal may, to the
extent permitted by applicable Law, convene and hold the Canal Meeting as soon
as possible and earlier than any then scheduled date. Canal shall, and shall
cause the officers, directors, representatives and agents of Canal and its
subsidiaries to, cease immediately all current discussions and negotiations as
of the date of this Agreement regarding any proposal that constitutes, or could
reasonably likely constitute, a Canal Acquisition Proposal, and shall promptly
request the return or destruction of all confidential information provided in
connection therewith.
(3) Canal shall use its reasonable best efforts to ensure that its
officers, directors and key employees and its subsidiaries and their
officers, directors and key employees and any financial advisors or
other advisors or representatives retained by it or its subsidiaries
are aware of the provisions of this Section 4.7.
(4) Nothing contained in this Section 4.7 shall limit in any way the
obligations of Canal to convene and hold the Canal Meeting in
accordance with Section 2.2 of this Agreement. Nothing in this Section
4.7 shall permit Canal to terminate this Agreement (except as
specifically provided in Article 6 hereof). Canal shall not submit to
the vote of its shareholders any Canal Acquisition Proposal other than
the transactions contemplated by this Agreement.
SECTION 4.8 ACCESS TO INFORMATION.
(1) Subject to Section 4.8(2) and applicable Laws, upon reasonable notice,
Seagram, on the one hand, and Vivendi and Canal, on the other hand,
shall (and shall cause each of its subsidiaries to) afford the other
party's officers, employees, counsel, accountants and other authorized
representatives and advisors ("REPRESENTATIVES") access, during normal
business hours from the date hereof and until the earlier of the
Effective Date or the termination of this Agreement, to its and its
subsidiaries' properties, books, contracts and records as well as to
its management personnel, and, during such period, Seagram, on the one
hand, and Vivendi and Canal, on the other hand, shall (and shall cause
each of its subsidiaries to) furnish promptly to the other party all
information concerning its and its subsidiaries' businesses, properties
and personnel as such other party may reasonably
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request, in each case subject to confidentiality obligations and other
protection of proprietary information. Subject to Section 4.8(2) and
applicable Laws, upon reasonable notice, Seagram, on the one hand, and
Vivendi and Canal, on the other hand, shall afford the other party's
Representatives the opportunity, upon reasonable notice and during
normal business hours from the date hereof and until the earlier of the
Effective Date or termination of this Agreement, to speak to
appropriate management personnel as such other party may reasonably
request, without materially interfering with their other
responsibilities. In addition, subject to applicable Law, during the
Pre-Effective Date Period, the Chief Executive Officer of Seagram will
be provided with reasonable notice of meetings of Vivendi's and Canal's
Board of Directors and may attend any such meetings.
(2) Each of Vivendi, Canal and Seagram acknowledges that certain
information provided to it under Section 4.8(1) above will be
non-public and/or proprietary in nature (the "INFORMATION") and will be
subject to the terms of the Confidentiality Agreement and Section
4.8(1). For greater certainty, the provisions of the Confidentiality
Agreement shall survive the termination of this Agreement, provided
that the Confidentiality Agreement, shall apply to each of the parties
hereto and Section 4.8(1) shall terminate at the Effective Time
notwithstanding anything to the contrary contained therein.
SECTION 4.9 INDEMNIFICATION.
From and after the Effective Time, Vivendi and Seagram jointly and
severally shall (i) indemnify and hold harmless, and provide advancement of
expenses to, all past and present directors, officers and employees of Seagram
and its subsidiaries (in all of their capacities) (a) to the same extent such
persons are indemnified or have the right to advancement of expenses as of the
date of this Agreement by Seagram pursuant to Seagram's articles of
incorporation, bylaws and indemnification agreements, if any, in existence on
the date hereof with any directors, officers and employees of Seagram and its
subsidiaries and (b) without limitation to clause (a), to the fullest extent
permitted by Law, in each case for acts or omissions occurring at or prior to
the Effective Time (including for acts or omissions occurring in connection with
the approval of this Agreement and the consummation of the transactions
contemplated by this Agreement) and (ii) include and cause to be maintained in
effect in Seagram's (or any successor's) articles of incorporation and bylaws
after the Effective Time, provisions regarding elimination of liability of
directors, indemnification of officers, directors and employees and advancement
of expenses which are, in the aggregate, no less advantageous to the intended
beneficiaries than the corresponding provisions contained in the current
articles of incorporation and bylaws of Seagram as of the date of this Agreement
and (iii) cause to be maintained for a period of six years after the Effective
Time the current policies of directors' and officers' liability insurance and
fiduciary liability insurance maintained by Seagram (provided that Vivendi and
Seagram (or any successor) may substitute therefor one or more policies of at
least the same coverage and amounts containing terms and conditions which are,
in the aggregate, no less advantageous to the insured) with respect to claims
arising from facts or events that occurred on or before the Effective Time;
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provided, however, that in no event shall Vivendi be required to expend in any
one year an amount in excess of 200% of the annual premiums currently paid by
Seagram for such insurance; and provided further that if the annual premiums of
such insurance coverage exceed such amount, Vivendi shall be obligated to obtain
a policy with the greatest coverage available for a cost not exceeding such
amount. The obligations of Vivendi and Seagram under this Section 4.9 shall not
be terminated or modified in such a manner as to adversely affect any indemnitee
to whom this Section 4.9 applies without the consent of such affected indemnitee
(it being expressly agreed that the indemnitees to whom this Section 4.9 applies
shall be third party beneficiaries of this Section 4.9).
SECTION 4.10 SAFE INCOME.
Seagram shall arrange for a "safe income tuck-in" transaction (the
"TUCK-IN") or another form of safe income access transaction, to be
offered to any Shareholder with respect to its shares of Seagram
provided that:
(a) only two forms of transaction will be permitted;
(b) such transaction is to be completed in accordance with
applicable Laws prior to the Effective Date, or on the
Effective Date but prior to the Effective Time so long as
Vivendi, acting reasonably, agrees to such timing;
(c) such transaction must be accomplished in a manner that
(i) provides for (A) the payment by each applicable
Shareholder of any material (or, if required by any
regulatory authority, all) costs and expenses
incurred in connection with such transaction by
Seagram and Vivendi, Vivendi Holdings and Vivendi
Exchangeco and any corporation acquired by any of
them, and (B) an indemnity in favor of Seagram and
Vivendi, Vivendi Holdings and Vivendi Exchangeco and
any corporation acquired by any of them by the
Shareholder and any vendor (each, a "VENDOR") of
Shares beneficially owned by such Shareholder from
all claims, demands, proceedings, losses, damages,
liabilities, deficiencies, taxes (including, without
limitation, federal or provincial taxes on income,
property, capital, sales, goods and services, and
excise duties, and any interest and penalties with
respect thereto, whether or not such taxes have been
assessed or reassessed as at the date of such
transaction), costs and expenses (including, without
limitation, all legal and other professional fees and
disbursements, interest, penalties and amounts paid
in settlement) (collectively, "LIABILITIES") suffered
or incurred by Seagram, Vivendi, Vivendi Holdings and
Vivendi Exchangeco or any corporation acquired by any
of them in such transaction (each, a "SUBCO") (and
their directors,
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officers, employees and agents), the whole to be
computed on an after-tax basis, as a result of or
arising directly or indirectly out of or in respect
of or in connection with: (A) any breach by each such
Shareholder or Vendor of any representation,
warranty, obligation or covenant of the Shareholder
or Vendor to Seagram; (B) any Liability sustained,
incurred, assumed or acquired by any Subco on or
before, or related to any matter occurring on or
before, the completion of such transaction; and (C)
any Liability which would not have been sustained,
suffered or incurred by (or which would not have been
asserted, threatened, or be pending against) Seagram,
Vivendi, Vivendi Exchangeco and Vivendi Holdings but
for the transaction including, without limitation,
all Liabilities which are assumed or incurred by any
of Subco or Seagram, Vivendi, Vivendi Exchangeco and
Vivendi Holdings directly or indirectly in respect of
such transactions; and
(ii) does not entail any delay in completing the
Arrangement, to Seagram, Vivendi or their respective
subsidiaries or shareholders; and
(d) the terms and conditions of such transaction must be
satisfactory to Vivendi and Seagram, acting reasonably, and
must include representations and warranties which are
satisfactory to Vivendi, acting reasonably, and an indemnity
from each applicable Shareholder and any Vendor which is in
form and substance satisfactory to Vivendi, acting reasonably.
In the event that the terms and conditions of such transaction are not
satisfactory to Vivendi, acting reasonably, or the Quebec Securities
Commission or any other securities regulatory authority in Canada or a
court pursuant to section 204 of the Canada Business Corporations Act
refuses to grant any relief required in connection with any such
transaction, Vivendi will use its reasonable best efforts, for a period
not to exceed 15 Business Days, to assist Seagram in structuring such a
transaction in a manner satisfactory to Vivendi, acting reasonably.
In the event that the terms and conditions of such transaction are not
satisfactory to Vivendi, acting reasonably, and no alternative
transaction can be agreed upon as aforesaid where Vivendi has used its
reasonable best efforts as aforesaid, this shall not affect the
completion of the Arrangement or the other transactions contemplated by
this Agreement.
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ARTICLE 5
CONDITIONS
SECTION 5.1 MUTUAL CONDITIONS PRECEDENT.
The respective obligations of the parties hereto to complete the
Arrangement shall be subject to the satisfaction, on or before the
Effective Date, of the following conditions precedent, each of which
may only be waived by the mutual consent of Vivendi on behalf of the
Vivendi Parties and Sofiee, Canal and Seagram:
(a) the Arrangement shall have been approved at the Seagram
Meeting by not less than two-thirds of the votes cast by the
Seagram Shareholders who are represented at the Seagram
Meeting;
(b) the Arrangement shall have been approved at the Seagram
Meeting in accordance with any conditions in addition to those
set out in Section 5.1(a) which may be imposed by the Interim
Order;
(c) the Interim Order and the Final Order shall each have been
obtained in form and on terms satisfactory to each of Seagram,
Vivendi and Canal, acting reasonably, and shall not have been
set aside or modified in a manner unacceptable to such
parties, acting reasonably, on appeal or otherwise;
(d) the Vivendi Resolution shall have been approved at the Vivendi
Meeting by not less than two-thirds of the votes cast by the
Vivendi Shareholders who are represented at the Vivendi
Meeting, and the Canal Resolution shall have been approved at
the Canal Meeting by not less than two-thirds of the votes
cast by the Canal Shareholders who are represented at the
Canal Meeting;
(e) the Sofiee Merger and the other Vivendi/Canal Transactions
shall have been completed in accordance with the Vivendi/Canal
Agreements, in each case immediately prior to the closing of
the Plan of Arrangement;
(f) there shall not be in force any final and non-appealable
injunction, order or decree issued by a court or other
Governmental Entity of competent jurisdiction restraining or
enjoining the consummation of the transactions contemplated by
this Agreement;
(g) the Vivendi Shares to be issued in connection with the
Arrangement and such other Vivendi Shares to be reserved for
issuance in connection with the Arrangement (including those
underlying the Vivendi ADSs to be issued from time to time
upon the exchange of Exchangeable Shares) shall have been
approved for
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listing on the PSE such listing to be effective as of the
Effective Time, subject to the filing of required
documentation, notice of issuance and/or other usual
requirements, and the Vivendi ADRs and the Vivendi ADSs to be
issued under the Arrangement or to be issued from time to time
upon the exchange of Exchangeable Shares shall have been
approved for listing on the NYSE or NASDAQ, as applicable
(subject only to notification of issuance);
(h) the Vivendi ADRs and Vivendi ADSs shall have been registered
under the Exchange Act and approved for listing by the NYSE or
NASDAQ, such listing to be effective as of the Effective Time;
(i) the Exchangeable Shares shall have been conditionally approved
for listing on the TSE (subject only to the filing of required
documentation), such listing to be effective as of the
Effective Time; and
(j) the Regulatory Approvals shall have been obtained or satisfied
or, if applicable, the related waiting period shall have
expired; provided, however, that a party shall not be entitled
to rely on this closing condition where the failure of such
party or any of its affiliates to fulfill its obligations
pursuant to this Agreement has been the cause of or shall have
resulted in, the failure to obtain the foregoing.
SECTION 5.2 ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE VIVENDI
PARTIES, SOFIEE AND CANAL.
(1) The obligations of the Vivendi Parties, Sofiee and Canal to complete
the Arrangement shall also be subject to the satisfaction of each of
the following conditions precedent (each of which is for the Vivendi
Parties', Sofiee's and Canal's exclusive benefit and may be waived by
Vivendi, on behalf of the Vivendi Parties, Sofiee or Canal, as the case
may be):
(a) Seagram shall have performed or complied in all material
respects with all agreements and covenants required to be
performed by it under this Agreement at or prior to the
Effective Date, and Vivendi and Canal shall have received a
certificate of a senior executive officer and a senior
financial officer of Seagram to such effect;
(b) (i) the representations and warranties of Seagram set forth in
this Agreement that are qualified by Material Adverse Effect
shall be true and correct, (ii) the representations and
warranties of Seagram not so qualified (other than those
contained in Section 3.1(b)) shall be true and correct (except
where the failure of any such representation and warranty
referred to in this clause (ii) to be true and correct,
individually or in the aggregate, has not had a Material
Adverse Effect on Seagram), and (iii) the representations and
warranties of Seagram contained in
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Section 3.1(b) shall be true and correct in all material
respects, in each case as of the date of this Agreement and as
of the Effective Date as though made on and as of the
Effective Date (except in the case of representations and
warranties that speak as of another date, in which case only
with reference to such other date), and the Vivendi Parties,
Sofiee and Canal shall have received a certificate of a senior
executive officer and a senior financial officer of Seagram to
such effect;
(c) between the date hereof and the Effective Date, there shall
not have occurred a Material Adverse Change to Seagram which
has not been cured; and
(d) the holders of Seagram Common Shares representing in excess of
9.9% of the outstanding Seagram Common Shares shall not have
exercised dissent or similar rights in connection with the
Arrangement.
(2) None of the Vivendi Parties, Sofiee and Canal may rely on the failure
to satisfy any of the above conditions precedent if the condition
precedent would have been satisfied but for a material default by any
Vivendi Party, Sofiee or Canal in complying with its obligations
hereunder.
SECTION 5.3 ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SEAGRAM.
(1) The obligations of Seagram to complete the Arrangement shall also be
subject to the satisfaction of each of the following conditions
precedent (each of which is for the exclusive benefit of Seagram and
may only be waived by Seagram):
(a) each of the Vivendi Parties, Sofiee and Canal shall have
performed or complied in all material respects with all
agreements and covenants required to be performed by it under
this Agreement at or prior to the Effective Date, and Seagram
shall have received a certificate of a senior executive
officer and a senior financial officer of each of Vivendi, in
respect of the Vivendi Parties, Sofiee and Canal to such
effect;
(b) (i) the representations and warranties of the Vivendi Parties,
Sofiee and Canal set forth in this Agreement that are
qualified by Material Adverse Effect shall be true and
correct, (ii) the representations and warranties of the
Vivendi Parties, Sofiee and Canal not so qualified (other than
those contained in Section 3.2(1)(a)(ii), 3.2(1)(b) and
3.2(2)(b)) shall be true and correct (except where the failure
of any such representation and warranty referred to in this
clause (ii) to be true and correct, individually or in the
aggregate, has not had a Material Adverse Effect on Vivendi or
Canal), and (iii) the representations and warranties of the
Vivendi Parties, Sofiee and Canal contained in Section
3.2(1)(a)(ii), 3.2(1)(b) and 3.2(2)(b) shall be true and
correct in all material respects, in each case as of the
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date of this Agreement and as of the Effective Date as though
made on and as of the Effective Date (except in the case of
representations and warranties that speak as of another date,
in which case only with reference to such other date), and
Seagram shall have received a certificate of a senior
executive officer and a senior financial officer of each of
Vivendi in respect of the Vivendi Parties, Sofiee and Canal to
such effect;
(c) the Vivendi Voting Rights relating to the Exchangeable Shares
shall entitle the beneficiaries thereof to have one vote per
such Vivendi Voting Right on the same basis and in the same
circumstances as one Vivendi Share;
(d) the Board of Directors of each Vivendi Party, Sofiee and Canal
shall have adopted all necessary resolutions, and all other
necessary corporate action shall have been taken by the
Vivendi Parties, Sofiee and Canal to permit the consummation
of the transactions contemplated by this Agreement;
(e) between the date hereof and the Effective Date, there shall
not have occurred a Material Adverse Change to Vivendi or
Canal which has not been cured;
(f) the orders referred to in Section 2.8(1) shall have been
obtained and the Exchangeable Shares shall have been
conditionally approved for listing as of the Effective Time on
the TSE;
(g) Seagram shall have received a written opinion, dated as of the
Effective Date, from (i) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel
to Seagram, to the effect that the transactions contemplated
by this Agreement will be treated for U.S. income tax purposes
as constituting a transaction described in Section 351 of the
Code and that no gain or loss will be recognized by U.S.
shareholders of Seagram who exchange their shares of Seagram
for Vivendi ADSs (it being understood that the Vivendi
Parties, Sofiee, Canal and Seagram shall provide customary
representations upon which such tax counsel shall be entitled
to rely in rendering such opinion) and (ii) Osler, ▇▇▇▇▇▇ &
Harcourt LLP, counsel to Seagram, to the effect that (A)
Canadian resident holders of Seagram Common Shares who elect
to receive Exchangeable Shares pursuant to the Plan of
Arrangement and who make a valid election under subsection
85(1) or 85(2) of the Canadian Tax Act will not generally
recognize gain or loss for purposes of the Canadian Tax Act
and (B) the Exchangeable Shares will not, at the date of
issue, be "foreign property" for purposes of the Canadian Tax
Act; and
(h) the Sofiee Resolution, including the election of the Seagram
Designees to the Board of Directors of the surviving entity of
the Sofiee Merger and the adoption of the Vivendi By-Laws,
shall have been approved.
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(2) Seagram may not rely on the failure to satisfy any of the above
conditions precedent if the condition precedent would have been
satisfied but for a material default by Seagram in complying with its
obligations hereunder.
SECTION 5.4 NOTICE AND CURE PROVISIONS.
(1) The Vivendi Parties, Sofiee and Canal, on the one hand, and Seagram, on
the other hand, will give prompt notice to the other of the occurrence,
or failure to occur, at any time from the date hereof until the
Effective Date, of any event or state of facts which occurrence or
failure would, or would be likely to:
(a) cause any of the representations or warranties of the other
party contained herein to be untrue or inaccurate such that
the conditions set forth in Section 5.2(b) or 5.3(b), as
applicable, would not be satisfied as of the Effective Date;
or
(b) result in the failure to comply with or satisfy any covenant
or agreement to be complied with such that the conditions set
forth in Section 5.2(a) or 5.3(a), as applicable, would not be
satisfied as of the Effective Date.
(2) None of the Vivendi Parties, Sofiee, Canal or Seagram may rely upon any
conditions precedent contained in Sections 5.1, 5.2 or 5.3, or exercise
any termination right arising therefrom (except by the Vivendi Parties
or Canal in respect of a breach of Sections 4.5 or by Seagram in
respect of a breach of Section 4.6 or 4.7) unless forthwith and in any
event prior to the filing of the Articles of Arrangement for acceptance
by the Director, the Vivendi Parties, Sofiee and Canal, on the one
hand, or Seagram, on the other hand, as the case may be, has delivered
a written notice to the other specifying in reasonable detail all
breaches of covenants, representations and warranties or other matters
which the Vivendi Parties, Sofiee and Canal, on the one hand, and
Seagram, on the other hand, as the case may be, are asserting as the
basis for the non-fulfilment of the applicable condition precedent or
the exercise of the termination right, as the case may be. If any such
notice is delivered, provided that Seagram, on the one hand, or the
Vivendi Parties, Sofiee and Canal, on the other hand, as the case may
be, are proceeding diligently to cure such matter, if such matter is
susceptible to being cured (for greater certainty, except by way of
disclosure in the case of representations and warranties), the other
may not terminate this Agreement as a result thereof until the earlier
of the Outside Date and the expiration of a period of 60 days from such
notice. If such notice has been delivered prior to the making of the
application for the Final Order or the filing of the Articles of
Arrangement with the Director, such application and such filing shall
be postponed until the expiry of such period. For greater certainty, in
the event that such matter is cured within the time period referred to
herein without a Material Adverse Effect on the curing party, this
Agreement may not be terminated as a result of the cured breach.
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SECTION 5.5 SATISFACTION OF CONDITIONS.
The conditions precedent set out in Sections 5.1, 5.2 and 5.3 shall be
conclusively deemed to have been satisfied, waived or released when,
with the agreement of Vivendi, Canal and Seagram, a certificate of
arrangement in respect of the Arrangement is issued by the Director.
ARTICLE 6
AMENDMENT AND TERMINATION
SECTION 6.1 AMENDMENT.
This Agreement and the Plan of Arrangement may, at any time and from
time to time before or after the holding of the Seagram Meeting, the Vivendi
Meeting or the Canal Meeting but not later than the Effective Date, be amended
by mutual written agreement of Vivendi (on behalf of the Vivendi Parties and
Sofiee), Canal and Seagram, and any such amendment may, subject to applicable
Laws and the Interim Order, without limitation:
(a) change the time for performance of any of the obligations or
acts of the parties;
(b) waive any inaccuracies or modify any representation or
warranty contained herein or in any document delivered
pursuant hereto;
(c) waive compliance with or modify any of the covenants herein
contained and waive or modify performance of any of the
obligations of the parties; and/or
(d) waive compliance with or modify any conditions precedent
herein contained;
provided, however, any such change, waiver or modification does not invalidate
any required security holder approval of the Arrangement.
SECTION 6.2 TERMINATION.
(1) This Agreement may be terminated by Vivendi or Canal if Seagram shall
be in material breach of any of its covenants or other agreements
contained in this Agreement, which breach (A) would give rise to the
failure of a condition set forth in Section 5.2(1)(a) and (B) has not
been cured in accordance with Section 5.4.
(2) This Agreement may be terminated by Seagram if the Vivendi Parties,
Sofiee or Canal shall be in material breach any of its covenants or
other agreements contained in this
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Agreement, which breach (A) would give rise to the failure of a
condition set forth in Section 5.3(1)(a) and (B) has not been cured in
accordance with Section 5.4.
(3) This Agreement may be terminated at any time prior to the Effective
Date, by action taken or authorized by the Board of Directors of the
terminating party or parties, and except as provided below, whether
before or after approval of the matters presented at the Vivendi
Meeting, the Canal Meeting or the Seagram Meeting:
(a) by the mutual agreement of Seagram and Vivendi (for greater
certainty, without further action on the part of the Seagram
Shareholders, Canal Shareholders or the Vivendi Shareholders
if terminated after the holding of the Seagram Meeting, Canal
Meeting or the Vivendi Meeting, as applicable);
(b) by either Seagram, Canal or Vivendi if any Governmental Entity
shall have passed any Law that makes consummation of the
transactions contemplated by this Agreement illegal or
otherwise prohibited or if any injunction, order or decree
enjoining any Vivendi Party, Sofiee, Canal or Seagram from
consummating the transactions contemplated by this Agreement
is entered by a court of competent jurisdiction and such
injunction, order or decree shall become final and
non-appealable, provided that the right to terminate this
Agreement pursuant to this Section 6.2(3)(b) shall not be
available to the party seeking to terminate if any action of
such party or its affiliates or the failure of such party or
its affiliates to perform any of its obligations under this
Agreement required to be performed at or prior to the
Effective Time shall have resulted in such impediment to the
Closing having been imposed or having failed to be lifted;
(c) by Vivendi if (A) the Board of Directors of Seagram shall have
failed to recommend or shall have withdrawn, modified or
changed in a manner adverse to the Vivendi Parties or Canal
its approval or recommendation of this Agreement or the
transactions contemplated by this Agreement (it being
understood and agreed that a communication by the Board of
Directors of Seagram to the Seagram Shareholders pursuant to
Rule 14d-9(f)(3) of the Exchange Act, or any similar type of
communication to the Seagram Shareholders in connection with
the making or amendment of a tender offer or exchange offer,
shall not be deemed to constitute a withdrawal, modification
or change of its recommendation of this Agreement or the
transactions contemplated by this Agreement) or (B) the Board
of Directors of Seagram shall have approved or recommended any
Seagram Acquisition Proposal;
(d) by Seagram if (A) the Board of Directors of Vivendi or Canal
shall have failed to recommend or shall have withdrawn,
modified or changed in a manner adverse to Seagram its
approval or recommendation of this Agreement or the
transactions
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contemplated by this Agreement or (B) the Board of Directors
of Vivendi or Canal shall have approved or recommended any
Vivendi Acquisition Proposal or any Canal Acquisition
Proposal, as the case may be;
(e) by Seagram or Vivendi if the Seagram Shareholder approval
shall not have been obtained by reason of the failure to
obtain the vote required by the Interim Order at the Seagram
Meeting or any adjournment thereof at which the vote was
taken;
(f) by Vivendi, Canal or Seagram if the Vivendi Resolution shall
not have been obtained by reason of the failure to obtain the
required vote at the Vivendi Meeting or any adjournment
thereof at which the vote was taken or if the Canal Resolution
shall not have been obtained by reason of the failure to
obtain the required vote at the Canal Meeting or any
adjournment thereof at which the vote was taken;
(g) by Seagram if the Vivendi/Canal Agreements are terminated; or
(h) by Seagram if a Vivendi Acquisition Proposal is consummated or
a Canal Acquisition Proposal is consummated in each case,
prior to the Effective Date.
(4) If the Effective Date does not occur on or prior to the Outside Date,
then, unless otherwise agreed in writing by the parties, either
Vivendi, Canal or Seagram may terminate this Agreement, provided that
in the event that the conditions set forth in Section 5.1(j) above
shall not have been satisfied by that date, either Vivendi, Canal or
Seagram may unilaterally extend the Outside Date until June 19, 2001
upon written notice to the other by March 12, 2001, in which case the
Outside Date shall be deemed for all purposes to be June 19, 2001,
provided that the right to terminate this Agreement pursuant to this
Section 6.2(4) shall not be available to the party seeking to terminate
if any action of such party or its affiliates or the failure of such
party or its affiliates to perform any of its obligations under this
Agreement required to be performed at or prior to the Effective Time
shall have resulted in the conditions contained in Sections 5.1 and
Section 5.2 or 5.3 (as applicable) not having been satisfied prior to
the Outside Date.
(5) If this Agreement is terminated in accordance with the foregoing
provisions of this Section 6.2, no party shall have any further
liability hereunder except as provided in Section 6.3 and as otherwise
contemplated hereby, and provided that neither the termination of this
Agreement nor anything contained in this Section 6.2(5) shall relieve
any party from any liability for any willful and material breach by it
of this Agreement.
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SECTION 6.3 TERMINATION AND OTHER FEES.
(1) If:
(a) Vivendi shall terminate this Agreement pursuant to Section
6.2(3)(c) or pursuant to Section 6.2(1) as a result of a
breach by Seagram of Section 4.5; or
(b) either Seagram or Vivendi shall terminate this Agreement
pursuant to Section 6.2(3)(e) and (x) a Seagram Acquisition
Proposal shall have been publicly announced or otherwise
communicated to the senior management, Board of Directors or
shareholders of Seagram after the date of this Agreement and
prior to the Seagram Meeting and (y) Seagram enters into a
definitive agreement with respect to a Seagram Acquisition
Proposal, or a Seagram Acquisition Proposal is otherwise
consummated (for purposes of this Section 6.3(1)(b)(y), the
term "Seagram Acquisition Proposal" shall have the meaning
assigned to such term in Section 1.1, except that references
to "20%" therein shall be deemed to be references to "40%"),
after the date hereof and prior to the expiration of 12 months
following termination of this Agreement;
then in any such case Seagram shall pay to Vivendi $800 million (the
"SEAGRAM FEE") less any amount paid pursuant to Section 6.3(1)(c) below
in immediately available funds to an account designated by Vivendi.
Such payment shall be due (A) in the case of a termination specified in
clause (a), within one Business Day after written notice of termination
by Vivendi or (B) in the case of a termination specified in clause (b),
on the date of execution of such agreement or, if earlier, consummation
of such transaction. Seagram shall not be obligated to make more than
one payment pursuant to the foregoing provisions of this Section
6.3(1).
(c) either Seagram or Vivendi shall terminate this Agreement
pursuant to Section 6.2(3)(e) and Seagram is not obligated to
pay the Seagram Fee at the time of termination, Seagram shall
reimburse Vivendi for all of its out-of-pocket documented
expenses (including without limitation all fees and expenses
of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by
a party or on its behalf in connection with or related to the
authorization, preparation, negotiation, execution and
performance of this Agreement and the transactions
contemplated hereby, including without limitation the
preparation, printing, filing and mailing of its Circular and
the solicitation of its shareholder approval and all other
matters related to the transactions contemplated hereby
(collectively, "EXPENSES") in immediately available funds to
an account designated by Vivendi up to a maximum reimbursement
of $25 million. Such reimbursement shall be due within one
Business Day after this Agreement is terminated.
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(2) If:
(a) Seagram shall terminate this Agreement pursuant to Section
6.2(3)(d) or pursuant to Section 6.2(2) as a result of a
breach by Vivendi of Section 4.6 or a breach by Canal of
Section 4.7;
(b) either Seagram or Vivendi shall terminate this Agreement
pursuant to Section 6.2(3)(f) and (x) a Vivendi Acquisition
Proposal shall have been publicly announced or otherwise
communicated to the senior management, Board of Directors or
shareholders of Vivendi after the date of this Agreement and
prior to the Vivendi Meeting and (y) Vivendi enters into a
definitive agreement with respect to such Vivendi Acquisition
Proposal (or a Vivendi Acquisition Proposal with the Person or
an affiliate thereof making such Vivendi Acquisition Proposal
or any other Person who shall have made a Vivendi Acquisition
Proposal within 90 days of such Person's Vivendi Acquisition
Proposal (any such other Person, a "VIVENDI ALTERNATIVE
PERSON")) or such Vivendi Acquisition Proposal (or a Vivendi
Acquisition Proposal with the Person making such Vivendi
Acquisition Proposal or an affiliate thereof or with a Vivendi
Alternative Person or any affiliate thereof) is otherwise
consummated, after the date hereof and prior to the expiration
of 12 months following termination of this Agreement;
(c) either Seagram or Vivendi shall terminate this Agreement
pursuant to Section 6.2(3)(f) and (x) a Canal Acquisition
Proposal shall have been publicly announced or otherwise
communicated to the senior management, Board of Directors or
shareholders of Canal by any Person after the date of this
Agreement and prior to the Canal Meeting and (y) Canal enters
into a definitive agreement with respect to such Canal
Acquisition Proposal (or a Canal Acquisition Proposal with the
Person or an affiliate thereof making such Canal Acquisition
Proposal or any other Person who shall have made a Canal
Acquisition Proposal within 90 days of such Person's Canal
Acquisition Proposal (any such other Person, a "CANAL
ALTERNATIVE PERSON")) or such Canal Acquisition Proposal (or a
Canal Acquisition Proposal with the Person making such Canal
Acquisition Proposal or an affiliate thereof or with a Canal
Alternative Person or an affiliate thereof) is otherwise
consummated, after the date hereof and prior to the expiration
of 12 months following termination of this Agreement; or
(d) (i) Seagram shall terminate this Agreement pursuant to Section
6.2(2) as a result of a breach by a Vivendi Party, Sofiee or
Canal of Section 4.4(a)(ii) or (ix) or Section 4.4(c) or (ii)
Seagram, Vivendi or Canal shall terminate this Agreement
pursuant to Section 6.2(4) and, at the time of such
termination, the condition set forth in Section 5.1(h) or
Section 5.3(c) shall not have been satisfied or the Regulatory
Approvals listed in Part B of Schedule G shall not have been
obtained;
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then in the case of a termination specified in clauses (a), (b) or (c)
Vivendi shall pay to Seagram $800 million (the "VIVENDI FEE") less any
amount paid pursuant to Section 6.3(2)(e) below or in the case of a
termination specified in clause (d) $50 million. Such payment shall be
due (A) in the case of a termination specified in clause (a) or clause
(d), within one Business Day after written notice of termination by
Seagram or (B) in the case of a termination specified in clause (b) or
clause (c), on the date of execution of such agreement or, if earlier,
consummation of such transaction. Vivendi shall not be obligated to
make more than one payment pursuant to the foregoing provisions of this
Section 6.3(2).
(e) either Seagram, Vivendi or Canal shall terminate this
Agreement pursuant to Section 6.2(3)(f) and Vivendi is not
obligated to pay the Vivendi Fee at the time of termination,
Vivendi shall reimburse Seagram for all of its Expenses in
immediately available funds to an account designated by
Seagram up to a maximum reimbursement of $25 million. Such
reimbursement shall be due within one Business Day after this
Agreement is terminated.
SECTION 6.4 REMEDIES.
The parties hereto acknowledge and agree that an award of money damages
would be inadequate for any breach of this Agreement by any party or
its representatives and any such breach would cause the non-breaching
party irreparable harm. Accordingly, the parties hereto agree that, in
the event of any breach or threatened breach of this Agreement by one
of the parties, the non-breaching party will also be entitled, without
the requirement of posting a bond or other security, to equitable
relief, including injunctive relief and specific performance. Such
remedies will not be the exclusive remedies for any breach of this
Agreement but will be in addition to all other remedies available at
law or equity to each of the parties (subject to Section 6.2(5) above).
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ARTICLE 7
GENERAL
SECTION 7.1 NOTICES.
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All notices and other communications which may or are required to be
given pursuant to any provision of this Agreement shall be given or
made in writing and shall be deemed to be validly given and received
(i) on the date of delivery, if delivered personally or (ii) upon
confirmation of transmission by the sender's fax machine, if delivered
by facsimile, in each case addressed to the particular party at:
(a) If to a Vivendi Party, at:
Vivendi S.A.
▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ Cedex 08
France
Attention: Guillame Hannenzo
Telecopier No.: ▇▇-▇-▇▇-▇▇-▇▇-▇▇
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Prat
▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇-▇▇▇▇▇▇▇▇ Prat
Telecopier No.: ▇▇-▇-▇▇-▇▇-▇▇-▇▇
Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Box 25, Commerce Court West
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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(b) If to Seagram at:
The Seagram Company Ltd.
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Gide ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Attention: Youssef Djehane
Telecopier No.: ▇▇-▇-▇▇-▇▇-▇▇-▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ & Harcourt
1 First Canadian Place
P.O. Box 50
Toronto, Ontario, Canada
M5X 1B8
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) If to Canal at:
Canal Plus S.A.
▇▇/▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ Cedex 15
France
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier No.: ▇▇-▇-▇▇-▇▇-▇▇-▇▇
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with a copy to:
Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇-Tanugi
Telecopier No.: ▇▇-▇▇-▇▇-▇▇-▇▇
or at such other address of which any party may, from time to time, advise the
other parties by notice in writing given in accordance with the foregoing. The
date of receipt of any such notice shall be deemed to be the date of delivery or
telecopying thereof.
SECTION 7.2 ASSIGNMENT.
No party hereto may assign its rights or obligations under this
Agreement or the Arrangement.
SECTION 7.3 BINDING EFFECT.
This Agreement and the Arrangement shall be binding upon and shall
enure to the benefit of the parties hereto and their respective
successors and permitted assigns and no third party shall have any
rights hereunder.
SECTION 7.4 WAIVER AND MODIFICATION.
Seagram, on the one hand, and Vivendi on its behalf and on behalf of
the Vivendi Parties, Sofiee and Canal, on the other hand, may waive or
consent to the modification of, in whole or in part, any inaccuracy of
any representation or warranty made to them hereunder or in any
document to be delivered pursuant hereto and may waive or consent to
the modification of any of the covenants herein contained for their
respective benefit or waive or consent to the modification of any of
the obligations of the other parties hereto. Any waiver or consent to
the modification of any of the provisions of this Agreement, to be
effective, must be in writing executed by the party granting such
waiver or consent.
SECTION 7.5 FURTHER ASSURANCES.
Each party hereto shall, from time to time, and at all times hereafter,
at the request of the other parties hereto, but without further
consideration, do all such further acts and execute and deliver all
such further documents and instruments as shall be reasonably required
in order to fully perform and carry out the terms and intent hereof.
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SECTION 7.6 EXPENSES.
(1) Subject to Section 6.3, the parties agree that all out-of-pocket
expenses of the parties relating to the Arrangement and the
transactions contemplated hereby, including legal fees, accounting
fees, financial advisory fees, regulatory filing fees, stock exchange
fees, all disbursements of advisors and printing and mailing costs,
shall be paid by the party incurring such expenses.
(2) Seagram represents and warrants to Vivendi that, except for amounts to
be paid to those financial advisers referred to in Section 3.1(c)(iii)
by Seagram, no broker, finder or investment banker is or will be
entitled to any brokerage, finder's or other fee or commission from
Seagram or any subsidiary of Seagram in connection with the
transactions contemplated hereby or by the Arrangement.
SECTION 7.7 PRESS RELEASES.
Vivendi, Canal and Seagram agree to consult with each other as to the
general nature of any news releases or public statements with respect
to this Agreement or the Arrangement, and to use their respective
reasonable best efforts not to issue any news releases or public
statements inconsistent with the results of such consultations. Subject
to applicable Laws, each party shall use its reasonable best efforts to
enable the other parties to review and comment on all such news
releases prior to the release thereof. The parties agree to issue
jointly the news release in the agreed form with respect to this
Arrangement as soon as practicable following the execution of this
Agreement. Vivendi, Canal and Seagram also agree to consult with each
other in preparing and making any filings and communications in
connection with any Regulatory Approvals or other regulatory approvals
and in seeking any third party consents under leases, joint ventures or
other agreements.
SECTION 7.8 GOVERNING LAWS.
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable
therein and shall be treated in all respects as an Ontario contract.
Each party hereby irrevocably attorns to the jurisdiction of the courts
of the Province of Ontario in respect of all matters arising under or
in relation to this Agreement.
SECTION 7.9 TIME OF ESSENCE.
Time shall be of the essence in this Agreement.
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SECTION 7.10 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF the parties hereto have executed this Merger
Agreement as of the date first written above.
VIVENDI S.A.
By: /s/ ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman & Chief Executive Officer
3744531 CANADA INC.
By: /s/ ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signing Officer
CANAL PLUS S.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
SOFIEE S.A.
By: /s/ ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signing Officer
THE SEAGRAM COMPANY LTD.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
Title: President & Chief Executive Officer
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SCHEDULE G
REGULATORY APPROVALS
PART A - CANADA
- expiration or earlier termination of the waiting period under Part IX
of the Competition Act (Canada) and receipt of an advance ruling
certificate ("ARC") pursuant to the Competition Act (Canada) or, in the
alternative to an ARC, a no action letter from the Commissioner of
Competition
- determination by the Minister of Industry and the Minister of Canadian
Heritage under the Investment Canada Act and applicable policies that
the Arrangement is of "net benefit to Canada" for purposes of such Act
on terms and conditions satisfactory to Vivendi, acting reasonably
- exemption orders from the provincial securities regulators from the
registration and prospectus requirements with respect to the
Exchangeable Share structure, including nue propriete and safe income
transactions and exemption from the court under Section 204 of the CBCA
for safe income transactions.
- conditional approval for the listing of the Exchangeable Shares on The
Toronto Stock Exchange
PART B - FRANCE
- approval of the COB to the publication of the Vivendi Circular and of
the COB and PSE to the listing of the additional Vivendi Shares to be
issued on the Effective Date and related matters
- the filing of a registration statement issued in connection with the
transactions related to the Arrangement with the COB and the approval
(visa) of such registration statement by the COB
PART C - UNITED STATES
- expiration or earlier termination of the waiting period under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976
- effectiveness of the registration statement on Form F-4, in which each
of the Seagram Circular, the Canal Circular and the Vivendi Circular
will be included as a prospectus, regarding the Vivendi Securities
related thereto
- compliance with the applicable requirements of U.S. state blue sky laws
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- any other compliance with any applicable requirements of the U.S.
Securities Act of 1933 and the U.S. Securities Exchange Act of 1934,
each as amended
- approval of the NYSE or NASDAQ for the listing of the Vivendi ADSs, to
be issued on the Effective Date and to be provided from time to time
upon exchange of the Exchangeable Shares or the exercise of the Seagram
Options (subject to notice of issuance)
PART D - EU/GENERAL
- confirmation by way of a decision from the Commission of the European
Union under Regulation 4064/89 (with or without the initiation of
proceedings under Article 6(1)(c) thereof) that the Sofiee Merger and
the transactions contemplated by this Agreement and any matters arising
therefrom are compatible with the common market;
- compliance with other laws regulating competition, antitrust,
investment or exchange controls (as appropriate) on terms and
conditions satisfactory to Vivendi and Canal, acting reasonably, or
Vivendi and Canal obtaining confirmation on terms satisfactory to it
that the transactions referred to in this Agreement or any matter
relating thereto will not be referred to such authorities.
G-2