Vivendi S.A. et al. - MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - relief granted, subject to certain conditions, fromthe prospectus and registration requirements in respect of trades in connection with a statutory arrangement.

Reporting issuer exempted from certain continuous disclosure and insider reporting requirements subject to certainconditions. Disclosure required to be provided by these provisions would not be meaningful to shareholders.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c.S.5, as am., ss. 25, 35(1)15.i, 53, 72(1)(i), 72(5), 74(1), 75, 77, 78, 79, 80(b)(iii), 81(2),107, 108, 109, 121(2)(a)(ii).

Applicable Ontario Rules

Rule 45-501 Exempt Distributions.

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,

MANITOBA, ONTARIO, QUEBEC, NEW BRUNSWICK,

PRINCE EDWARD ISLAND, NOVA SCOTIA, NEWFOUNDLAND,

THE YUKON TERRITORY, THE NORTHWEST TERRITORIES AND NUNAVUT

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

VIVENDI S.A., VIVENDI UNIVERSAL HOLDINGS COMPANY,
VIVENDI UNIVERSAL EXCHANGECO INC.

AND THE SEAGRAM COMPANY LTD.

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of BritishColumbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Prince Edward Island, Nova Scotia,Newfoundland, the Yukon Territory, the Northwest Territories and Nunavut (collectively, the "Jurisdictions") has receivedan application from Vivendi S.A. (the "Filer"), on behalf of itself, Vivendi Universal Holdings Company ("Holdings") andVivendi Universal Exchangeco Inc. ("Exchangeco"), for a decision pursuant to the securities legislation, regulationsand/or rules of the Jurisdictions (the "Legislation") that:

(a) The requirements contained in the Legislation to be registered to trade in a security (the "RegistrationRequirements") and to file a preliminary prospectus and a prospectus and receive receipts thereforprior to distributing a security (the "Prospectus Requirements") shall not apply to certain trades and/ordistributions of securities in connection with the proposed transactions (the "Transactions") involvingthe Filer, The Seagram Company Ltd. ("Seagram") and Canal Plus S.A. ("Canal"), to be effected byway of a plan of arrangement (the "Arrangement") under section 192 of the Canada BusinessCorporations Act, as amended (the "CBCA");

(b) the requirements contained in the Legislation to issue a press release and file a report upon theoccurrence of a material change (the "Material Change Reporting Requirements"), to file and deliveran annual report, where applicable, to file and deliver interim and annual financial statements, and tofile an information circular (collectively, the "Continuous Disclosure Requirements") shall not apply toExchangeco;

(c) the requirement contained in the Legislation for an insider of a reporting issuer to file reportsdisclosing the insider's direct or indirect beneficial ownership of, or control or direction over, securitiesof the reporting issuer (the "Insider Reporting Requirements") shall not apply to each insider ofExchangeco and its successors.

(d) the requirements in the Legislation of Ontario and Nova Scotia regulating the purchase by an issuerof its own securities and the reporting of such purchases (the "Issuer Bid Requirements") and theRegistration Requirements and Prospectus Requirements in those Jurisdictions shall not apply to thepurchase by Exchangeco of exchangeable shares of Exchangeco owned by Holdings in exchangefor common shares or preferred shares of Exchangeco.

AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the"System"), the Ontario Securities Commission is the principal regulator for this application;

AND WHEREAS the Filer has represented to the Decision Makers that:

1. The Filer is a public company in France, the shares of which are listed on the Paris Bourse. The Filer'sregistered office is located in Paris, France, and it is not a reporting issuer or the equivalent under theLegislation.

2. The Filer is subject to the reporting requirements of the Commission des Operations de Bourse (the "COB")and the Paris Bourse. The Filer is subject to the reporting requirements of the United States SecuritiesExchange Act of 1934, as amended.

3. As at October 2, 2000, the authorized capital of the Filer consisted of ordinary shares of nominal value ofEURO 5.50 each, of which 605,945,528 ordinary shares were issued and outstanding (which includes ordinaryshares held in treasury by the Filer or its subsidiaries).

4. Holdings is an indirect wholly-owned subsidiary of the Filer incorporated under the Company Act (Nova Scotia),has its registered office in Halifax, Nova Scotia, and is not, and does not intend to become a reporting issueror the equivalent under the Legislation. Holdings was incorporated in order to hold all of the common sharesof Exchangeco and to hold the various call rights related to the exchangeable non-voting shares of Exchangecoto be issued pursuant to the Arrangement (the "Exchangeable Shares").

5. The authorized capital of Holdings consists of 1,000,000 common shares. Upon completion of theArrangement, all of the issued and outstanding common shares of Holdings will be held indirectly by VivendiUniversal S.A.

6. Exchangeco is a direct wholly-owned subsidiary of Holdings incorporated under the CBCA, its registered officeis located in Toronto, Ontario, and it is not currently a reporting issuer or the equivalent under the Legislation.Exchangeco was incorporated for the purpose of implementing the Arrangement.

7. The authorized share capital of Exchangeco consists of an unlimited number of common shares. The articleswill be amended prior to implementation of the Arrangement to authorize the issuance of the ExchangeableShares and one or more classes of preference shares.

8. Upon completion of the Arrangement, Exchangeco will become a reporting issuer under the Legislation, andimmediately following completion of the Arrangement all of the outstanding common shares in the capital ofExchangeco will be held by Holdings and all of the outstanding Exchangeable Shares will be held by thoseholders of the Seagram Common Shares who validly elect to receive Exchangeable Shares in exchange fortheir Seagram Common Shares under the Arrangement. Exchangeco's only material assets upon completionof the Arrangement will be the Seagram Common Shares acquired by it under the Arrangement.

9. Seagram is incorporated under the CBCA, has its registered office in Waterloo, Ontario, is a reporting issueror the equivalent under the Legislation and is not on the list of defaulting reporting issuers maintained by theDecision Makers.

10. Seagram's authorized capital consists of an unlimited number of common shares and an unlimited number ofpreferred shares. As at October 24, 2000, there were issued and outstanding 444,026,907 Seagram CommonShares and no preferred shares.

11. As at September 30, 2000, Seagram had outstanding options (the "Seagram Options") to acquire an aggregateof not more than 41,893,366 Seagram Common Shares.

12. As at September 30, 2000, there were issued and outstanding Seagram stock appreciation rights (the"Seagram SARs") relating to not more than 836,499 Seagram Common Shares. As of May 31, 2000, Seagramwas obligated to issue up to 20,025,000 Seagram Common Shares in respect of "Seagram ACES" (which arethe 18,500,000 7.5% Adjustable Conversion Rate Security Units issued by Seagram and a subsidiary ofSeagram). Seagram and a subsidiary of Seagram have announced that they intend to launch a tender offerfor the Seagram ACES.

13. The Seagram Common Shares are listed on the New York, Toronto and London Stock Exchanges.

14. The Filer, Canal, Sofiée S.A. ("Sofiée"), Exchangeco and Seagram have entered into a merger agreementmade as of June 19, 2000 (the "Merger Agreement"). Sofiée is a wholly-owned subsidiary of the Filer. Canalis a public company 49 percent of the ordinary shares of which are owned directly and indirectly by the Filerand which is engaged in the production, marketing and distribution of subscription television services, theproduction of films and programs and the development of digital television technology, internet and interactiveservices.

15. Pursuant to the Merger Agreement and related agreements, (i) the Filer will merge with and into Sofiée, withSofiée being renamed Vivendi Universal S.A. ("Vivendi Universal"), (ii) Vivendi Universal will acquire the non-regulated businesses of Canal, (iii) the French regulated businesses of Canal will be retained by the existingshareholders of Canal, and (iv) Vivendi Universal will indirectly acquire the outstanding capital stock ofSeagram pursuant to the Plan of Arrangement.

16. Vivendi Universal's capital will consist of ordinary shares (the "Vivendi Universal Shares"). Vivendi Universalwill become subject to the reporting requirements of the United States Securities Exchange Act of 1934, asamended, as a result of the merger of the Filer into Sofiée.

17. The Vivendi Universal Shares will be listed on the Premier Marché of the Paris Bourse.

18. Vivendi Universal will also list American Depositary Shares (the "Vivendi Universal ADSs") on the New YorkStock Exchange, Inc. (the "NYSE"). Each Vivendi Universal ADS will represent one Vivendi Universal Share.Applications will be made as required by Vivendi Universal to the NYSE to list the Vivendi Universal ADSsissued pursuant to the Arrangement or issuable from time to time in exchange for Exchangeable Shares orupon exercise of any convertible securities.

19. Vivendi Universal has filed a registration statement on Form F-4 with the SEC in respect of the VivendiUniversal Shares to be issued under the Arrangement and related transactions.

20. The Merger Agreement also provides for the completion of the Arrangement, pursuant to which VivendiUniversal, through Exchangeco and Holdings, will acquire all of the issued and outstanding Seagram CommonShares (other than those held by dissenting shareholders entitled to be paid fair value and those held byVivendi Universal or any affiliate thereof).

21. On the Arrangement becoming effective, the steps described below will occur:

(a) Each Seagram Common Share, other than (i) Seagram Common Shares held by SeagramShareholders who are eligible to and who elect to receive Exchangeable Shares ("ExchangeableElected Shares"), (ii) Seagram Common Shares held by Seagram Shareholders exercising theirdissent rights who are ultimately entitled to be paid the fair value of the Seagram Common Sharesheld by them, and (iii) Seagram Common Shares held by Vivendi Universal or any affiliate thereofwhich shall not be exchanged under the Arrangement and shall remain outstanding as SeagramCommon Shares held by Vivendi Universal or any affiliate thereof, will be transferred by the holderthereof to Holdings in exchange for that number of Vivendi Universal ADSs equal to the exchangeratio (the "Exchange Ratio", defined as the number (rounded down to the nearest ten-thousandth)determined by dividing (i) U.S. $77.35 by (ii) the Average Market Price (as defined below) provided,however, that if the Average Market Price is equal to or greater than U.S. $124.3369, the ExchangeRatio shall be .6221, and if the Average Market Price is equal to or less than U.S. $96.6875, theExchange Ratio shall be .8000. The Average Market Price is the average of the closing price ofVivendi shares (rounded to the nearest one-hundredth of a cent) on the Paris Bourse during the 20consecutive trading days, ending on the third complete trading day prior to the date on which thecertificate is issued under the CBCA for the Articles of Arrangement (the "Effective Date") convertedto U.S. dollars.

(b) Each Exchangeable Elected Share will be transferred by the holder thereof to Exchangeco inexchange for (i) that number of Exchangeable Shares equal to the Exchange Ratio (as it may beadjusted), and (ii) that number of voting rights (the "Vivendi Universal Voting Rights", which are eachan "action en nue propriété" under French law, which represents one vote on the same basis and inthe same circumstances as one Vivendi Universal Share) equal to the number of ExchangeableShares issued pursuant to the foregoing clause (i), which Vivendi Universal Voting Rights VivendiUniversal shall transfer to the custodian (the "Custodian") for and on behalf of the holders of theExchangeable Shares issued pursuant to the foregoing clause (i), and coincident with such transferVivendi Universal, Exchangeco and the Custodian shall enter into the custody agreement (the"Custody Agreement") (as more fully described in paragraph 37 below).

(c) Coincident with the transfer of Exchangeable Elected Shares to Exchangeco, Vivendi Universal,Exchangeco and the trustee (the "Trustee") will enter into an exchange trust agreement (the"Exchange Trust Agreement") and all rights of holders of Exchangeable Shares under the ExchangeTrust Agreement shall be received by them as part of the property receivable by them in exchangefor the Exchangeable Elected Shares so transferred.

(d) Each Seagram Option outstanding on the Effective Date, will be exchanged for an option from VivendiUniversal or Seagram (a "Replacement Option") to purchase the number of Vivendi Universal ADSsequal to the product of the Exchange Ratio multiplied by the number of Seagram Common Sharesthat may be purchased as if such Seagram Option were exercisable and exercised immediately priorto the Effective Time and the option exercise price shall be adjusted accordingly. (Each ReplacementOption shall be non-transferable except by will or the laws of descent and distribution.)

(e) Each Seagram SAR outstanding on the Effective Date will be exchanged for a stock appreciation rightfrom Vivendi Universal or Seagram (a "Replacement SAR") in respect of the number of VivendiUniversal ADSs equal to the product of the Exchange Ratio multiplied by the number of SeagramCommon Shares that were the subject of the Seagram SARs immediately prior to the Effective Timeand the SAR exercise price shall be adjusted accordingly. (Each Replacement SAR shall be non-transferable except by will or the laws of descent and distribution.)

22. With respect to each of the Seagram ACES outstanding on the Effective Date, the purchase contract formingpart of such unit will become a purchase contract for Vivendi Universal ADSs.

23. The maximum number of Exchangeable Shares to be issued under the Arrangement is limited to 97,000,000.If the number of Exchangeable Shares issuable exceeds 97,000,000, the number of Exchangeable Sharesissued to each person electing to receive Exchangeable Shares will be adjusted to reflect the 97,000,000maximum that is available and the number of Vivendi Universal ADSs for which an Exchangeable Share isexchangeable will be appropriately increased.

24. The Exchangeable Shares are intended to be substantially the economic equivalent of the Vivendi UniversalADSs for which the Exchangeable Shares issuable under the Arrangement (the "Exchangeable Shares") willultimately be exchanged.

25. The Toronto Stock Exchange (the "TSE") has conditionally approved the listing of the Exchangeable Shares.

26. The required approval of the Seagram Shareholders to the Arrangement will be obtained by way of specialresolution, as defined under the CBCA, at a meeting of the Seagram Shareholders (the "Meeting") inaccordance with the provisions of the interim order (the "Interim Order") obtained from the Superior Court ofJustice (Ontario) (the "Court"). Each Seagram Shareholder will be entitled to one vote for each SeagramCommon Share held.

27. In connection with the Meeting, Seagram has sent a management proxy circular (the "Circular") to the SeagramShareholders. The Circular is included in the form of the Form F-4 registration statement filed by VivendiUniversal with the SEC. The Circular contains prospectus-level disclosure of the business and affairs of theFiler, Vivendi Universal and Seagram and a detailed description of the Arrangement.

28. The Exchangeable Shares, together with the Exchange Trust Agreement, the Custody Agreement, and theSupport Agreement described below, will provide holders thereof with securities having substantially equivalenteconomic rights to those of a Vivendi Universal ADS. The creation of the Vivendi Universal Voting Rights willprovide the holders of Exchangeable Shares with voting rights on the same basis and in the samecircumstances as the Vivendi Universal Shares. Exchangeable Shares will be received by certain holders ofSeagram Common Shares on a Canadian tax-deferred basis (provided appropriate tax elections are filed) and,if such shares are listed on a prescribed stock exchange (which currently includes the TSE), the ExchangeableShares will be "qualified investments" and will not constitute "foreign property", in each case, under the IncomeTax Act (Canada), as amended. The Exchangeable Shares will be exchangeable by a holder thereof forVivendi Universal ADSs on a one-for-one basis (subject to adjustment) at any time at the option of such holderand will be required to be exchanged upon the occurrence of certain events.

29. The Exchangeable Shares are entitled to a preference over common shares and any other shares rankingjunior to the Exchangeable Shares, with respect to the payment of dividends and the distribution of assets inthe event of the liquidation, dissolution or winding-up of Exchangeco. The rights, privileges, restrictions andconditions attaching to the Exchangeable Shares (the "Exchangeable Share Provisions") provide that eachExchangeable Share will entitle the holder to a dividend from Exchangeco payable at the same time as, andeconomically equivalent to, each dividend paid by Vivendi Universal on a Vivendi Universal ADS. Subject tothe overriding call right of Holdings referred to below, on the liquidation, dissolution or winding-up ofExchangeco, a holder of Exchangeable Shares will be entitled to receive from Exchangeco for eachExchangeable Share held an amount equal to the current market price of a Vivendi Universal ADS (asadjusted, if necessary) which shall be satisfied by delivery of one Vivendi Universal ADS (as adjusted, ifnecessary) (the "Vivendi Universal ADS Consideration") to the holder, together with all declared and unpaiddividends on each such Exchangeable Share (such aggregate amount, the "Liquidation Amount"). Upon aproposed liquidation, dissolution or winding-up of Exchangeco, Holdings will have an overriding call right (the"Liquidation Call Right") to purchase all of the outstanding Exchangeable Shares from the holders thereof (otherthan Vivendi Universal or its affiliates) for a price per share equal to the Liquidation Amount to be satisfied inthe manner described in this paragraph.

30. The Exchangeable Shares will be non-voting (except as required by the Exchangeable Share Provisions or byapplicable law) and will be retractable at the option of the holder at any time. Subject to the overriding call rightof Holdings, upon retraction the holder will be entitled to receive from Exchangeco for each ExchangeableShare retracted an amount equal to the current market price of a Vivendi Universal ADS (as adjusted, ifnecessary), to be satisfied by the delivery of the Vivendi Universal ADS Consideration, together with, on thedesignated payment date therefor and to the extent not already paid by Exchangeco on a dividend paymentdate, an amount equal to all declared and unpaid dividends on each such retracted Exchangeable Share (suchaggregate amount, the "Retraction Price"). Holdings will have an overriding call right (the "Retraction CallRight") to purchase from the holder all of the Exchangeable Shares that are the subject of the retraction noticedelivered by the holder for a price per share equal to the Retraction Price to be satisfied in the mannerdescribed in this paragraph unless the holder withdraws the notice of retraction.

31. Subject to the overriding call right of Holdings referred to below, Exchangeco shall redeem all theExchangeable Shares then outstanding on the date established by the Board of Directors (the "RedemptionDate", which shall be no earlier than the thirtieth anniversary of the date which is fourteen days prior to theEffective Date). The board of directors may accelerate the Redemption Date in certain circumstances,including if there are outstanding fewer than 5% of the actual number of Exchangeable Shares to be issuedas determined at the "Election Deadline" (at 5:00 p.m. (Toronto time) at the place of deposit three businessdays prior to the Meeting), other than Exchangeable Shares held by Vivendi Universal and its affiliates. Uponsuch redemption, a holder will be entitled to receive from Exchangeco for each Exchangeable Share redeemedan amount equal to the current market price of a Vivendi Universal ADS (as adjusted, if necessary) which shallbe satisfied by delivery of the Vivendi Universal ADS Consideration to the holder, together with, to the extentnot already paid by Exchangeco on a dividend payment date, an amount equal to all declared and unpaiddividends on each such redeemed Exchangeable Share (such aggregate amount, the "Redemption CallPurchase Price"). Holdings will have an overriding call right (the "Redemption Call Right") to purchase from theholders all of the outstanding Exchangeable Shares (other than those owned by Vivendi Universal or itsaffiliates) for a price per share equal to the Redemption Call Purchase Price to be satisfied in the mannerdescribed in this paragraph upon being notified by Exchangeco of a proposed redemption of ExchangeableShares.

32. Under the Exchange Trust Agreement, Vivendi Universal will grant to the Trustee for the benefit of the holdersof the Exchangeable Shares the right (the "Exchange Right"), exercisable upon certain events related to theinsolvency or bankruptcy of Exchangeco, to require Vivendi Universal to purchase from a holder ofExchangeable Shares all or any part of its Exchangeable Shares. The purchase price for each ExchangeableShare purchased by Vivendi Universal will be an amount equal to the current market price of a VivendiUniversal ADS (as adjusted, if necessary) which shall be satisfied by delivery of the Vivendi Universal ADSConsideration to the holder, together with an amount equal to all declared and unpaid dividends on suchExchangeable Share, to be satisfied by the delivery of this aggregate amount to the Trustee on behalf of theholder.

33. Under the Exchange Trust Agreement, upon the liquidation, dissolution or winding-up of Vivendi Universal,Vivendi Universal will be required to purchase each outstanding Exchangeable Share, and each holder will berequired to sell all of its Exchangeable Shares (such purchase and sale obligations are hereafter referred toas the "Automatic Exchange Right"), for a purchase price per share equal to the current market price of aVivendi Universal ADS (as adjusted, if necessary) which shall be satisfied by delivery of the Vivendi UniversalADS Consideration to the holder, together with an amount equal to all declared and unpaid dividends on eachsuch Exchangeable Share, to be satisfied by the delivery of this aggregate amount to the Trustee, on behalfof the holder.

34. The creation of the Vivendi Universal Voting Rights provides each holder of an Exchangeable Share with theright to vote at a Vivendi Universal shareholder meeting on the same basis and in the same circumstances asif the holder held one Vivendi Universal Share. To create the Vivendi Universal Voting Rights, VivendiUniversal will split shares held in treasury, as is permitted under French law, into bare legal title ("action en nuepropriété") and beneficial ownership ("usufruit"). The action en nue propriété will be transferred to theCustodian.

35. The Vivendi Universal Voting Rights will carry a number of voting rights, exercisable at any meeting of theholders of Vivendi Universal Shares, equal to the number of Exchangeable Shares outstanding from time totime that are not owned by Vivendi Universal and its affiliates. Holders of Exchangeable Shares will exercisethe voting rights attached to the Vivendi Universal Voting Rights through the mechanism of the CustodyAgreement described below.

36. Under the terms of the agreement under which the Vivendi Universal Voting Rights are transferred to theCustodian, the Vivendi Universal Voting Rights are surrendered to Vivendi Universal when the holders of thecorresponding Exchangeable Shares receive Vivendi Universal ADSs in exchange therefor, upon the retractionor redemption of the Exchangeable Shares, the exercise of the Exchange Right, the occurrence of theAutomatic Exchange Right, the liquidation, dissolution or winding up of Exchangeco, or the exercise of theRetraction Call Right, the Redemption Call Right, or the Liquidation Call Right by Holdings.

37. Under the terms of the Custody Agreement, each voting right attached to the Vivendi Universal Voting Rightsmust be voted by the Custodian pursuant to the instructions of the holder of the related Exchangeable Share.In the absence of any such instructions from a holder, the Custodian will not be entitled to exercise the relatedvoting rights.

38. Contemporaneously with the closing of the Arrangement, Vivendi Universal, Exchangeco and Holdings willenter into a support agreement (the "Support Agreement"). The Support Agreement will provide that VivendiUniversal will not declare or pay any dividend on the Vivendi Universal ADSs unless Exchangecosimultaneously declares and pays an equivalent dividend on the Exchangeable Shares, and that VivendiUniversal will ensure that Exchangeco and Holdings will be able to honour the redemption and retraction rightsand dissolution entitlements that are attributes of the Exchangeable Shares under the Exchangeable ShareProvisions and the related Redemption, Retraction and Liquidation Call Rights described above.

39. The Support Agreement will also provide that, without the prior approval of Exchangeco and the holders of theExchangeable Shares, actions such as distributions of stock dividends, options, rights and warrants for thepurchase of securities or other assets, subdivisions, combinations, reclassifications, reorganizations and otherchanges cannot be taken in respect of the Vivendi Universal ADSs generally without the same or aneconomically equivalent action being taken in respect of the Exchangeable Shares.

40. The steps under the Arrangement and the exercise of certain rights provided for in the Exchangeable ShareProvisions, the Exchange Trust Agreement, the Custody Agreement and the Support Agreement involve or mayinvolve a number of trades and/or distributions of securities, including trades and/or distributions related to theissuance of Exchangeable Shares pursuant to the Arrangement or upon the issuance of Vivendi UniversalADSs in exchange for Exchangeable Shares. The trades and/or distributions and possible trades and/ordistributions in securities to which the Arrangement gives rise are the following:

(a) the issuance or transfer of Vivendi Universal ADSs to Holdings and the subsequent transfer byHoldings of Vivendi Universal ADSs to holders of Seagram Common Shares or, at the direction ofHoldings, the issuance or transfer of Vivendi Universal ADSs to holders of Seagram Common Shares,in either case, in connection with the Arrangement;

(b) the transfer of Seagram Common Shares by Seagram Shareholders (other than those validly electingto receive Exchangeable Shares, those validly exercising their right of dissent, and those held byVivendi Universal or any of its affiliates) to Holdings;

(c) the transfer of Seagram Common Shares by validly electing Seagram Shareholders to Exchangeco,and the issuance of Exchangeable Shares by Exchangeco to such holders in return;

(d) the exchange of Seagram Options for Replacement Options to be granted by either Seagram orVivendi Universal and the issuance and delivery of Vivendi Universal ADSs to a holder of aReplacement Option upon the exercise thereof;

(e) the exchange of Seagram SARs for Replacement SARs to be granted by either Seagram or VivendiUniversal and the issuance and delivery of Vivendi Universal ADSs to a holder of a Replacement SARupon the exercise thereof;

(f) the issuance and delivery of Vivendi Universal ADSs to the holders of the Seagram ACESs under thepurchase contracts that form part of the Seagram ACES;

(g) the grant by Vivendi Universal of the Exchange Right and the Automatic Exchange Right to theTrustee under the Exchange Trust Agreement for the benefit of holders of Exchangeable Shares,pursuant to the Exchange Trust Agreement;

(h) the transfer by Vivendi Universal to the Custodian of the Vivendi Universal Voting Rights for thebenefit of the holders of the Exchangeable Shares;

(i) the surrender of the Vivendi Universal Voting Rights to Vivendi Universal upon the exercise of theExchange Right by the holders of Exchangeable Shares, the occurrence of the Automatic ExchangeRight, the retraction or redemption of the Exchangeable Shares under the Exchangeable ShareProvisions, the liquidation, dissolution or winding up of Exchangeco, or upon the exercise by Holdingsof the Retraction Call Right, the Redemption Call Right, or the Liquidation Call Right;

(j) the issuance by Vivendi Universal of Vivendi Universal ADSs to a holder of Exchangeable Sharesupon the exercise of the Exchange Right or pursuant to the Automatic Exchange Right;

(k) the transfer of Exchangeable Shares by a holder to Vivendi Universal upon the exercise of theExchange Right or pursuant to the Automatic Exchange Right;

(l) the grant of the Liquidation Call Right to Holdings to purchase all of the outstanding ExchangeableShares from the holders of such shares upon a proposed liquidation, dissolution or winding-up ofExchangeco;

(m) the grant of the Retraction Call Right to Holdings to purchase from a holder of Exchangeable Sharesall of the Exchangeable Shares of such holder that are the subject of a retraction notice;

(n) the grant of the Redemption Call Right to Holdings to purchase all of the outstanding ExchangeableShares from the holders of such shares upon notice from Exchangeco of a proposed redemption ofExchangeable Shares;

(o) the issuance or transfer of Vivendi Universal ADSs to Vivendi Exchangeco and the subsequenttransfer thereof by Exchangeco to a holder of Exchangeable Shares or the issuance or transfer ofVivendi Universal ADSs to Holdings and the subsequent transfer thereof by Holdings to Exchangecoand the transfer by Exchangeco to a holder of Exchangeable Shares, in either case, upon the

(i) retraction of the Exchangeable Shares,

(ii) redemption of the Exchangeable Shares, and

(iii) liquidation, dissolution or winding-up of Exchangeco;

(p) the transfer of Exchangeable Shares by the holder thereof to Exchangeco upon the

(i) retraction of the Exchangeable Shares,

(ii) redemption of the Exchangeable Shares, and

(iii) liquidation, dissolution or winding-up of Exchangeco;

(q) the issuance or transfer of Vivendi Universal ADSs to Holdings and the subsequent transfer thereofby Holdings to a holder of Exchangeable Shares or, at the direction of Vivendi Holdings, the issuanceor transfer of Vivendi Universal ADSs to a holder of Exchangeable Shares, in either case, uponexercise of the

(i) Retraction Call Right

(ii) Redemption Call Right

(iii) Liquidation Call Right;

(r) the transfer of Exchangeable Shares by the holder to Holdings upon Holdings exercising the

(i) Retraction Call Right

(ii) Redemption Call Right

(iii) Liquidation Call Right;

(s) any intra-group transfers of Vivendi Universal Shares and Vivendi Universal ADSs and issuances ofshares of Vivendi Universal affiliates in connection with any of the transactions referred to in theforegoing paragraphs (a) to (r); and

(t) the issuance and delivery of Vivendi Universal Shares to enable the creation and issuance of theapplicable Vivendi Universal ADSs, or upon the exchange of Vivendi Universal ADSs for VivendiUniversal Shares in accordance with the terms of the Vivendi Universal ADSs;

(collectively, "the Trades")

41. The fundamental investment decision to be made by a Seagram Shareholder is made at the time of theMeeting, when such holder votes in respect of the Arrangement. As a result of this decision, such holder (otherthan a holder who validly exercises its right of dissent) receives Exchangeable Shares or Vivendi UniversalADSs in exchange for the Seagram Common Shares of such holder. The Exchangeable Shares may, at theholder's option, be retracted for Vivendi Universal ADSs. As the Exchangeable Shares will provide certainCanadian tax benefits to certain Canadian holders but will otherwise be substantially the economic equivalentof the Vivendi Universal ADSs and the Vivendi Universal Voting Rights will provide holders of ExchangeableShares with voting rights on the same basis and in the same circumstances as the Vivendi Universal Shares,all subsequent exchanges of Exchangeable Shares are in furtherance of the holder's initial investment decisionat the time of the Meeting. That investment decision will be made on the basis of the Circular, which willcontain detailed disclosure of the business and affairs of each of Vivendi, Vivendi Universal and Seagram andof the particulars of the Arrangement.

42. If not for Canadian income tax considerations, Canadian resident holders of Seagram Common Shares couldhave received Vivendi Universal ADSs without the option of receiving Exchangeable Shares. The option infavour of certain holders of Seagram Common Shares to receive Exchangeable Shares under the Arrangementwill enable them to defer certain Canadian income tax that would otherwise arise on the exchange of SeagramCommon Shares for Vivendi Universal ADSs and, if the Exchangeable Shares are listed on a prescribed stockexchange in Canada, permit them to hold property that is a "qualified investment" and is not foreign propertyunder the Income Tax Act (Canada).

43. As a result of the substantial economic equivalency between the Exchangeable Shares and the VivendiUniversal ADSs and the creation of the Vivendi Universal Voting Rights, holders of Exchangeable Shares willhave a participating interest determined by reference to Vivendi Universal, rather than Exchangeco or itssuccessors. Accordingly, it is the information relating to Vivendi Universal, not Exchangeco or its successors,that will be relevant to holders of both the Vivendi Universal ADSs and the Exchangeable Shares. Certaininformation required to be provided in respect of Exchangeco or its successors as a reporting issuer under theLegislation would not be relevant (and would arguably be misleading) to the holders of Exchangeable Shares.

44. Vivendi Universal will send to all holders of Exchangeable Shares contemporaneously all disclosure materialfurnished to holders of Vivendi Universal ADSs resident in the United States including, without limitation, copiesof its annual and semi-annual financial statements and all notices prepared in connection with VivendiUniversal's shareholder meetings.

45. Vivendi Universal will send to all holders of Vivendi Universal ADSs and Vivendi Universal Shares resident inCanada contemporaneously all disclosure material furnished to holders of Vivendi Universal ADSs residentin the United States or to holders of Vivendi Universal Shares resident in France, as the case may be,including, without limitation, copies of its annual and semi-annual financial statements and all notices preparedin connection with Vivendi Universal's shareholder meetings.

46. The Circular discloses that, in connection with the Arrangement, applications have been made for prospectus,registration and resale exemptions and exemptions from disclosure and insider reporting obligations. TheCircular specifies the disclosure requirements from which Exchangeco has applied to be exempted andidentifies the disclosure that will be made in substitution therefor if such exemptions are granted.

47. For tax reasons, it is anticipated that subject to applicable law, Holdings will exercise the Redemption,Retraction and Liquidation Call Rights available on each occasion when such rights are available.

48. It may be advantageous from both a tax and an administrative perspective for Exchangeco to purchase fromHoldings, from time to time, all the Exchangeable Shares held by Holdings as a result of the exercise of theserights.

49. The purchase price to be paid by Exchangeco to Holdings for the Exchangeable Shares will be the fair marketvalue of the Exchangeable Shares on the date of purchase and the purchase price will be satisfied by the issueof common shares or preferred shares of Exchangeco.

50. It is intended that Exchangeco will immediately cancel any Exchangeable Shares it purchases from Holdings.

51. Such purchases will constitute issuer bids under the Legislation in Ontario and Nova Scotia and will not beexempt from the Issuer Bid Requirements under the Legislation in those Jurisdictions.

52. The issuance by Exchangeco of common shares or preferred shares to Holdings will be a distribution forpurposes of the Legislation in Ontario and Nova Scotia and will not be exempt in Nova Scotia from theRegistration and Prospectus Requirements.

AND WHEREAS pursuant to the System, this MRRS Decision Document evidences the decision of eachDecision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that providesthe Decision Maker with the jurisdiction to make the Decision has been met;

THE DECISION of the Decision Makers pursuant to the Legislation is that:

1. The Registration Requirements and Prospectus Requirements shall not apply to the Trades, provided that:

1.1 The first trade in the Exchangeable Shares acquired pursuant to this Decision in a Jurisdiction shallbe deemed a distribution or a primary distribution to the public under the Legislation of suchJurisdiction (the "Applicable Legislation") unless:

(a) at the time of the first trade, Exchangeco is a reporting issuer or the equivalent under the Legislationof the Jurisdiction in which the trade takes place (the "Applicable Legislation") or where the ApplicableLegislation does not recognize the status of a reporting issuer, the requirements described inparagraph 2 below are met;

(b) no unusual effort is made to prepare the market or to create a demand for the Exchangeable Shares;

(c) no extraordinary commission or consideration is paid to a person or company in respect of the trade;

(d) if the seller of the securities is an insider or officer of Exchangeco, the seller has no reasonablegrounds to believe that Exchangeco is in default of any requirement of the Applicable Legislation; and

(e) except in Quebec, the first trade is not from the holdings of a person or company or a combination ofpersons or companies holding a sufficient number of any securities of Vivendi Universal (withExchangeable Shares counted as securities of Vivendi Universal) so as to affect materially the controlof Vivendi Universal, or more than 20% of the outstanding voting securities of Vivendi Universalexcept where there is evidence showing that the holding of those securities does not affect materiallythe control of Vivendi Universal, unless:

(i) if applicable, Exchangeco is a reporting issuer or the equivalent under the ApplicableLegislation and is not in default of any requirement thereof;

(ii) the seller files with the applicable Decision Maker(s) and any other stock exchangerecognized by such Decision Maker(s) for this purpose on which the Exchangeable Sharesare listed at least seven days and not more than fourteen days prior to such first trade:

(A) a notice of intention to sell in the form prescribed by the Applicable Legislation forcontrol block distributions (the "Control Block Rules") disclosing particulars of thecontrol position known to the seller, the number of Exchangeable Shares to be soldand the method of distribution; and

(B) a declaration signed by the seller as at a date not more than twenty-four hours priorto its filing and prepared and executed in accordance with the Control Block Rulesand certified as follows:

"the seller for whose account the securities to which this certificate relates are to besold hereby represents that the seller has no knowledge of any material changewhich has occurred in the affairs of the issuer of the securities which has not beengenerally disclosed and reported to the securities regulatory authority in theJurisdiction where the trade takes place, nor has the seller any knowledge of anyother material adverse information in regard to the current and prospectiveoperations of the issuer which have not been generally disclosed",

provided that the notice required to be filed under section 1.1(e)(ii)(A) and the declarationrequired to be filed under section 1.1(e)(ii)(B) shall be renewed and filed at the end of sixtydays after the original date of filing and thereafter at the end of each twenty-eight day periodso long as any of the Exchangeable Shares specified under the original notice have not beensold or until notice has been filed that the Exchangeable Shares so specified or any partthereof are no longer for sale;

(iii) the seller files with the applicable Decision Maker(s) within three days after the completionof any such first trade, a report of the trade in the form prescribed by the ApplicableLegislation;

(iv) no unusual effort is made to prepare the market or to create a demand for the ExchangeableShares and no extraordinary commission or other consideration is paid in respect of suchfirst trade; and

(v) the seller (or affiliated entity) has held the Exchangeable Shares and/or Seagram CommonShares, in the aggregate, for a period of at least six months, provided that if:

(A) the Applicable Legislation provides that upon a seller to whom the Control BlockRules apply acquiring additional securities of a class pursuant to certain prescribedexemptions from prospectus requirements under such legislation, all securities ofsuch class are subject to a hold period commencing the date the last security of theclass was acquired under such prescribed exemptions; and

(B) the seller acquires Exchangeable Shares pursuant to any such prescribedexemptions;

then all Exchangeable Shares held by the seller will be subject to such hold period commencing onthe date any such subsequent Exchangeable Shares are so acquired; and

1.2 the first trade in Vivendi Universal ADSs acquired pursuant to one of the Trades in a Jurisdiction andthe first trade in Vivendi Universal Shares received upon the exchange of Vivendi Universal ADSs forVivendi Universal Shares in accordance with the terms of the Vivendi Universal ADSs shall bedeemed a distribution or a primary distribution to the public under the Applicable Legislation unlesssuch first trade is executed on an exchange or market outside of Canada.

2. The Continuous Disclosure Requirements shall not apply to Exchangeco and the Insider ReportingRequirements shall not apply to an insider of Exchangeco other than a director or senior officer of VivendiUniversal for so long as:

(i) Vivendi Universal sends to all holders of Exchangeable Shares contemporaneously all disclosurematerial furnished to holders of Vivendi Universal ADSs resident in the United States, including,without limitation, copies of its annual financial statements and all notices prepared in connection withVivendi Universal's shareholder meetings;

(ii) Vivendi Universal files with the Decision Makers copies of all documents required to be filed by it withthe United States Securities and Exchange Commission under the United States Securities ExchangeAct of 1934, as amended, including, without limitation, copies of any Form 20-F, Form 6-K and proxysolicitation materials prepared in connection with Vivendi Universal's shareholders' meetings;

(iii) Vivendi Universal complies with the requirements of the NYSE in respect of making public disclosureof material information on a timely basis and forthwith issues in Canada and files with the DecisionMakers any such press release that discloses a material change in Vivendi Universal's affairs;

(iv) Exchangeco complies with the Material Change Reporting Requirements in respect of materialchanges in the affairs of Exchangeco that would be material to holders of Exchangeable Shares butwould not be material to holders of Vivendi Universal ADSs;

(v) the Circular includes a statement that, as a consequence of this Decision, Exchangeco and its insiderswill be exempt from certain disclosure requirements in Canada applicable to reporting issuers andtheir insiders and specifying those requirements Exchangeco and its insiders have been exemptedfrom and identifying the disclosure that will be made in substitution therefor;

(vi) Vivendi Universal includes in all future mailings of proxy solicitation materials (if any) to holders ofExchangeable Shares a clear and concise statement explaining the reason for the mailed materialbeing solely in relation to Vivendi Universal and not in relation to Exchangeco, such statement toinclude a reference to the substantial economic equivalency between the Exchangeable Shares andthe Vivendi Universal ADSs and the manner in which the Vivendi Voting Rights are exercisable atmeetings of holders of Vivendi Universal Shares pursuant to the Custody Agreement;

(vii) Vivendi Universal remains the direct or indirect beneficial owner of all the issued and outstandingcommon shares of Exchangeco; and

(viii) Vivendi Universal's annual audited financial statements are reconciled to U.S. GAAP (or internationalGAAP, if this becomes acceptable in Canada) in its Form 20-F or equivalent documents and suchreconciliation is audited;

(ix) except for securities issued to Vivendi Universal or to wholly-owned subsidiaries of Vivendi Universal,Exchangeco does not issue any securities to the public other than the Exchangeable Shares anddividends and distributions thereon in accordance with the provisions thereof; and

(x) all filing fees that would otherwise be payable by Exchangeco in connection with the ContinuousDisclosure Requirements are paid.

IT IS ALSO THE DECISION of the Decision Makers in Ontario and Nova Scotia pursuant to the Legislationin those jurisdictions that the Issuer Bid Requirements and the Registration and Prospectus Requirements shall not applyto the purchase by Exchangeco of Exchangeable Shares of Exchangeco owned by Holdings in exchange for commonshares or preferred shares of Exchangeco.

December 6, 2000.

"R. W. Davis"       "Robert W. Korthals"