The Competition Tribunal

Bulletin

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IN THE MATTER OF the Competition Act R.S.C. 1985, c. C-35 as amended...

BETWEEN:

THE COMMISSIONER OF COMPETITION

- and -

[ACQUIRING COMPANY]

CONSENT AGREEMENT OUTLINE

WHEREAS acquiring company has entered into an agreement to acquire acquired company, pursuant to the describe acquisition agreement, among name all the parties to the transaction (hereinafter referred to as the "Transaction", as more particularly defined below);

AND WHEREAS the Transaction will:

• product and geographic market definition;
• market shares; and
• other relevant considerations under section 93 of the Competition Act;

AND WHEREAS the Commissioner of Competition (the "Commissioner") has concluded that the Transaction is likely to result in a substantial lessening and/or prevention of competition in the provision of product(s) involved in the relevant geographic market(s); specify particulars as appropriate;

AND WHEREAS the Commissioner is satisfied that the implementation of this Consent Agreement (“Agreement”) will be sufficient to ensure that a likely substantial lessening and/or prevention of competition will not result from the completion of the Transaction;

AND WHEREAS acquiring and acquired companies consensually attorn to the jurisdiction of the Competition Tribunal ("Tribunal") for purposes of this Agreement and any proceeding initiated by the Commissioner relating to the Agreement;

AND WHEREAS the Commissioner and the acquiring company agree to immediate registration of the Agreement;

NOW THEREFORE the parties to the Transaction and the Commissioner have agreed to the terms of this Agreement as follows:

I. DEFINITIONS

• For the purposes of this Agreement, the following capitalized terms have the following meanings DEFINE BELOW ALL KEY TERMS USED IN THE AGREEMENT:
  
  
  • "Acquiring company" means;
    
    
  • "Act" means the Competition Act, R.S.C., 1985, c. C-34, as amended;
    
    
  • "Affiliate" has the meaning given to it in subsection 2 (2) of the Act;
    
    
  • "Agreement" means this Consent Agreement entered into by the parties to the Transaction and the Commissioner pursuant to section 105 of the Act;
    
    
  • "Assets" means acquiring company's right, title, and interest in and to all assets, tangible or intangible, relating to the assets to be divested including, but not limited to:
    
    
    1. all real and personal property;
    2. all inventories;
    3. WHERE APPLICABLE all Intellectual Property;
    4. all rights of acquiring company under any contract;
    5. all pending and issued governmental approvals, registrations, consents, licences, permits, waivers, or other authorizations held by acquiring company], including foreign equivalents with respect to the Assets;
    6. all rights under any warranty and guarantee;
    7. all items of prepaid expense; and
    8. all books, records, and files;
       
       
  • “Closing Date” means;
    
    
  • "Commissioner" means the Commissioner of Competition appointed pursuant to section 7 of the Act;
    
    
  • "Confidential Information" means;
    
    
  • "Divest" means to implement any Divestiture pursuant to this Agreement;
    
    
  • "Divestiture" means the sale, transfer, assignment, or other disposal of the Assets, such that [acquiring company will have no further direct or indirect interest except as permitted herein or upon the consent of the Commissioner;
    
    
  • "Divestiture Agreement” means;
    
    
  • "Divestiture Monitor" means WHERE APPLICABLEmay also be the Hold Separate Monitor, if appropriate;
    
    
  • "Divestiture Plus" means THE “CROWN JEWEL”, WHERE APPLICABLE;
    
    
  • "Divestiture Trustee" means;
    
    
  • "Divestiture Trustee Sale" means;
    
    
  • "Hold Separate Manager" means;
    
    
  • "Hold Separate Monitor" means;
    
    
  • "Hold Separate Period" means;
    
    
  • “Initial Sale Period” means;
    
    
  • "Intellectual Property" WHERE APPLICABLE means all of the following related to the Assets:
    
    
    1. patents;
    2. copyrights;
    3. software;
    4. trademarks;
    5. trade secrets, know-how, techniques, data, inventions, practices, methods and other confidential or proprietary technical business, research, development and other information, and all rights in any jurisdiction to limit the use or disclosure thereof;
    6. rights to obtain and file for patents and registrations thereof; and
    7. rights to sue and recover damages or obtain injunctive relief for infringement, dilution, misappropriation, violation or breach of any of the foregoing;
       
       
• "Person" means;
  
  
• "Purchaser" means;
  
  
• "Technical Assistance" WHERE APPLICABLE means;
  
  
• "Transaction" means;
  
  
• "Tribunal" means the Competition Tribunal established by the Competition Tribunal Act, R.S.C. 1985, c. 19 (2nd Supp.), as amended;
  
  
• “Trustee Sale Period” means;
  
  
• such other definitions as appropriate in the circumstances.

II. APPLICATION

• The provisions of this Agreement apply to:
  
  
  1. parties to the Transaction;
     
     
  2. each officer, director, employee, agent or other Person acting for or on behalf of parties to the Transaction and any successors and assigns of the parties to the Transaction;
     
     
  3. all other Persons acting in concert or participating with one or more of those listed in (a) and (b);
     
     
  4. the Commissioner;
     
     
  5. the Hold Separate Monitor WHERE APPLICABLE;
     
     
  6. the Hold Separate Manager WHERE APPLICABLE;
     
     
  7. the Divestiture Monitor WHERE APPLICABLE;
     
     
  8. the Divestiture Trustee; and
     
     
  9. the Purchaser and the Purchaser's successors and assigns.

III. HOLD SEPARATE [WHERE APPLICABLE]

• Commissioner to appoint a Hold Separate Manager for the property acquired pursuant to the Transaction or some portion thereof, hereinafter "TP" to manage and operate the TP independently.
  
  
• Acquiring company to transfer to the Hold Separate Manager all rights, powers and authority necessary to perform his or her duties and responsibilities under the Agreement.
  
  
• Acquiring company to be responsible for all expenses related to the Hold Separate Manager.
  
  
• Acquiring company :
  
  
  • to ensure that the TP are independent of acquiring company;
    
    
  • not to exercise any direction or control over TP operations;
    
    
  • to cause the operational manager to follow the directions of the Hold Separate Manager.
    
    
• Hold Separate Manager to manage the TP and report directly to the Hold Separate Monitor.
  
  
• Hold Separate Manager to have either no or negligible financial interests affected by acquiring company except for fees.
  
  
• Hold Separate Manager to employ such Persons as are reasonably necessary to fulfill its obligations, in addition to existing employees of the TP, all costs associated therewith to be borne by acquiring company.
  
  
• Hold Separate Manager to have responsibility and resources to implement existing TP business plans.
  
  
• Hold Separate Monitor can, with Commissioner’s approval, remove the Hold Separate Manager for cause and Commissioner select a substitute manager.
  
  
• Pending the completion of the Divestiture of the Assets, Hold Separate Manager to take all necessary steps to preserve the independence and competitive viability of the TP, including:
  
  
  • operate TP independently;
    
    
  • operate TP in compliance with all applicable laws;
    
    
  • maintain all material licences, etc., necessary for the operation of TP;
    
    
  • maintain and enhance the competitiveness and customer base of TP;
    
    
  • maintain TP in good condition and repair;
    
    
  • establish all fees with respect to the goods and services provided by TP;
    
    
  • honour all customer contracts and maintain quality/service standards for TP customers;
    
    
  • except with the approval of the Hold Separate Monitor and the Commissioner, ensure that TP does not engage in any other type of business;
    
    
  • not communicate any Confidential Information related to the TP to anyone other than the Hold Separate Monitor, the Commissioner, or as otherwise permitted herein;
    
    
  • not take any action that materially and adversely affects the competitiveness, operations or financial status of TP;
    
    
  • maintain the marketing, sales, promotional and other activities of TP;
    
    
  • maintain the existing management of TP; and
    
    
  • not terminate or alter existing TP employee agreements.
    
    
• In addition to the foregoing, acquiring company to provide sufficient financial resources, as appropriate in the judgment of the Hold Separate Manager, with the concurrence of the Hold Separate Monitor:
  
  
  • to operate the TP at least at current rates of operation and to carry on all business plans and promotional activities, including capital investments;
    
    
  • to continue any additional expenditures for the TP authorized prior to the date of the Transaction;
    
    
  • to perform all maintenance to, and replacements of, TP; and
    
    
  • to maintain the viability, competitive vigour, and marketability of TP.
    
    
• Acquiring company to indemnify and hold harmless the Hold Separate Manager save where malfeasance, gross negligence, or bad faith by Hold Separate Manager.
  
  
• Hold Separate Manager, and employees of the TP, to execute a confidentiality agreement in the form stipulated by the Commissioner.
  
  
• Hold Separate Manager can provide Confidential Information to the following persons: LIST.
  
  
• Acquiring company not to receive or have access to, or use or continue to use, any Confidential Information relating to the TP, save as expressly permitted herein
  
  
• Notwithstanding the above, acquiring company and acquired company may be provided with information summaries with the prior consent, and approval thereof, from the Commissioner.
  
  
• TP to be staffed with sufficient employees to maintain its viability and competitiveness.
  
  
• Acquiring company not to offer TP employees positions with acquiring company until Purchaser has had a reasonable opportunity to offer employment; acquiring company not to interfere with the employment, by the Purchaser, of such employees.
  
  
• Acquiring company not to employ/offer employment to employees of TP who have accepted offers of employment with the Purchaser for a stated period of time.
  
  
• Acquiring company to offer a bonus or severance to employees that continue their employment with the TP until termination of the Hold Separate Period; the terms thereof to be determined by the Hold Separate Manger, with the concurrence of the Hold Separate Monitor.
  
  
• Acquiring company to ensure that TP employees receive, during the Hold Separate Period, their salaries, and other current and accrued benefits.

IV. MONITOR

• Commissioner to appoint a Hold Separate Monitor and/or a Divestiture Monitor (collectively “Monitor”), responsible for monitoring the compliance of acquiring company and the Hold Separate Manager with the Agreement; acquiring company to be responsible for all related expenses.
  
  
• If the Monitor ceases to act or fails to act diligently and consistent with the purposes of this Agreement, the Commissioner may appoint a substitute Monitor consistent with the terms of this paragraph, subject to the consent of acquiring company, which consent shall not be unreasonably withheld. If acquiring company has not opposed, in writing, including the reasons for opposing, the selection of the substitute Monitor within ten (10) days after notice by the Commissioner to acquiring company of the identity of any substitute Monitor, acquiring company shall be deemed to have consented to the selection of the proposed substitute Monitor. Acquiring company and the substitute Monitor shall execute an agreement, subject to the approval of the Commissioner, consistent with this paragraph. In the event that acquiring company objects to the Commissioner’s appointment of a proposed substitute Monitor, acquiring company may apply to the Competition Tribunal for appropriate relief on five days’ notice to the Commissioner setting out the ground for the objection. This Agreement shall apply to any substitute Monitor appointed pursuant to this paragraph.
  
  
• Monitor to have full access to all personnel, records and facilities of the Assets or any other relevant information Monitor requests; acquiring company and the Hold Separate Manager to assist Monitor, and neither may interfere with the Monitor's execution of its obligations herein.
  
  
• Monitor to serve at expense of acquiring company on terms to be approved by the Commissioner, and to employ, at the cost and expense of acquiring company, consultants, counsel, etc., as reasonably necessary in the Monitor’s opinion.
  
  
• Acquiring company to indemnify and hold harmless Monitor save where malfeasance, gross negligence, or bad faith by Monitor.
  
  
• Monitor to report to Commissioner on a regular basis concerning compliance with this Agreement; in addition, the Commissioner can request a report from the Monitor at any time, which shall be provided by the Monitor forthwith.
  
  
• Neither acquiring company nor the Hold Separate Manager may attempt to influence, direct or control the Monitor.
  
  
• Agreement does not provide Monitor with ownership of the TP.
  
  
• Monitor to execute a confidentiality agreement in the form stipulated by the Commissioner.
  
  
• Where Monitor considers acquiring company or the Hold Separate Manager in default of obligations, Monitor to notify the Commissioner immediately.
  
  

V. DIVESTITURE OF THE ASSETS (INITIAL SALE PERIOD)

• During the Initial Sale Period, acquiring company to divest the Assets absolutely and in good faith, by date to a Person(s) approved by the Commissioner, and pursuant to an agreement approved by the Commissioner.
  
  
• Acquiring company to offer the Assets for sale by way of a public tender, bidding, or other procedure approved by the Commissioner that allows a fair opportunity for one or more bona fide prospective Purchasers to offer to acquire the Assets pursuant to the Agreement.
  
  
• Acquiring company to promptly commence and use all reasonable commercial efforts to effect Divestiture.
  
  
• Acquiring company to immediately advise the Commissioner of any material changes in the Assets, including their value or status;
  
  
• If the Divestiture is not completed during the Initial Sale Period, the Divestiture or Divestiture Plus Assets, WHERE APPLICABLE to be carried out by the Divestiture Trustee.

VI. DIVESTITURE PROCEDURE

• Divestiture or Divestiture Plus WHERE APPLICABLE to be completed on the following general terms, the compliance with which is not a matter for the acquiring company to assess or determine:
  
  
  1. by sale, assignment, transfer, sale of shares or other disposition necessary to ensure that, by completion of the Divestiture, acquiring company has, directly or indirectly, no remaining title, right or interest in the Assets divested, pursuant to the Agreement;
     
     
  2. by way of disposition as a going concern;
     
     
  3. to a Purchaser who is at arm's length and who:
     
     
     1. shall effect the purchase with a demonstrated commitment to carrying on the business and competing effectively identify the relevant markets; and
        
        
     2. shall have the managerial, operational and financial capability to compete effectively in the market for the relevant markets;
        
        

     Compliance with the foregoing is a matter for the Commissioner’s consideration and approval only.

• All Persons making a bona fide inquiry of acquiring company, or the Divestiture Trustee, to be notified that the Divestiture is being made pursuant to the Agreement.
  
  
• Any prospective Purchaser with a bona fide interest (if Divestiture Trustee is concerned as to bona fides, Divestiture Trustee to advise Commissioner and the final determination is for the Commissioner alone):
  
  
  • to be furnished with all pertinent information; and
    
    
  • to be permitted to make such reasonable inspection of the Assets and of all financial, operational or other non-privileged documents and information which may be relevant to the Divestiture.
    
    
• Purchaser’s access to above information to be conditional on execution of a confidentiality agreement in the form stipulated by the Commissioner.
  
  
• Acquiring company, at Commissioner’s request, to forthwith file a progress report regarding efforts and events related to a Divestiture and, within five (5) days, to respond to any further Commissioner requests for supplemental information; acquiring company forthwith to notify the Commissioner of any negotiations with a prospective Purchaser that may lead to a sale and to forward copies to the Commissioner of any legal agreement which it signs with a prospective Purchaser, including non-binding expressions of intent.
  
  
• Acquiring company to provide reasonable and ordinary commercial representations and warranties to the Purchaser.
  
  
• Acquiring company to allow Purchaser opportunity to employ any employees of the Assets.
  
  
• Acquiring company or the Hold Separate Manager: WHERE APPLICABLE to provide to the Purchaser a list of all employees of the Assets, allow Purchaser to interview such employees, and allow Purchaser to inspect documentation relating to such employees.
  
  
• Acquiring company is to:
  
  
  • not offer any incentive to any employee of the Assets to decline employment with any Purchaser;
    
    
  • remove any contractual impediments with acquiring company that may deter any such employment;
    
    
  • not interfere with Purchaser’s employment of any such employee, and;
    
    
  • continue employee benefits offered until the Divestiture has been completed.
    
    
• Acquiring company to protect pension benefits for any employee who accepts an offer of employment from the Purchaser, and pay a bonus to any employee who accepts an offer of employment from any Purchaser.
  
  
• Acquiring company not to hire any Person employed by any Purchaser for stated period of time unless such Person's employment was terminated by the Purchaser without the consent of the Person.
• WHERE APPLICABLE Acquiring company to grant Purchaser:
  
  
  • a licence to acquiring company's rights to the Intellectual Property; and
    
    
  • immunity from suit by acquiring company for infringement of acquiring company's Intellectual Property.
    
    
• WHERE APPLICABLE If the Purchaser so requests, acquiring company to provide Technical Assistance to enable the Purchaser to operate the Assets in substantially the same manner as that employed by acquiring company prior to the Divestiture. The Divestiture Trustee, once appointed, is free to communicate with potential Purchasers the opportunity to make such a request.
  
  
• To determine or secure compliance with the Agreement, the Commissioner has the right, on two (2) business days’ notice to the acquiring company:
  
  
  • to access all records of acquiring company relating to compliance with the Agreement; and
    
    
  • to interview employees and officers of acquiring company on matters relating to compliance with the Agreement.
    
    
• Acquiring company not to disclose any Confidential Information to any Person or use any Confidential Information save as permitted herein.
  
  
• Acquiring company only to disclose Confidential Information to Persons who require such information for the purposes permitted under this Agreement, and provided the confidentiality agreement is executed in advance.
  
  
• Acquiring company shall enforce the terms of this Part as to any Person and take such action as is necessary to cause each such Person to comply with the terms of this Part, including training and all other actions that acquiring company would take to protect its own trade secrets and proprietary information.
  
  

VII. PRESERVATION OF THE ASSETS [MAY BE UNNECESSARY IF "HOLD SEPARATE" PROVISIONS ARE INCLUDED]

• Acquiring company to take all necessary steps to maintain the viability, marketability, and competitiveness of the Assets.
  
  
• Acquiring company to maintain the operations of the Assets in the regular and ordinary course of business and in accordance with past practices.
  
  
• Acquiring company to provide necessary sales, managerial, etc., support for the continued operation of Assets.
  
  
• Without prior Commissioner approval, acquiring company not to encumber the Assets, enter into/ withdraw from/ amend or otherwise take steps to alter their obligations under material contracts, make any material changes to Assets operations, or terminate any current employment for any management personnel.

VIII. DIVESTITURE TRUSTEE SALE

• If acquiring company has not effected a Divestiture before sixty (60) days before the expiration of the Initial Sale Period and in the manner required by the Agreement, Commissioner to select and appoint a Divestiture Trustee.
  
  
• In the above circumstance, acquiring company consents to the following terms and conditions regarding the Divestiture Trustee immediately upon the expiration of the Initial Sale Period:
  
  
  1. Divestiture Trustee to have exclusive authority, subject to oversight and approval by the Commissioner only, to control the Divestiture process and to accomplish the Divestiture by whatever procedure the Divestiture Trustee believes in its sole discretion is suitable to effecting a Divestiture in the time allotted therefor under this Agreement;
     
     
  2. the acquiring company will not be included in the Divestiture process, including negotiations, nor will the acquiring company have contact with prospective purchasers, unless approved by the Commissioner;
     
     
  3. Divestiture Trustee’s obligations and powers do not expire under this Agreement until the Divestiture is accomplished;
     
     
  4. Divestiture Trustee to execute a confidentiality agreement, in the form stipulated by the Commissioner, and to refrain from communicating any Confidential Information to anyone except to the extent reasonably required to effect the Divestiture;
     
     
  5. Divestiture Trustee to have specified period months to accomplish the Divestiture (“Trustee Sale Period”); the Trustee Sale Period may be extended at the sole discretion of the Commissioner;
     
     
  6. Divestiture Trustee to have full access to the personnel, books, records and facilities related to the Assets to be divested or any other information deemed relevant by the Divestiture Trustee to effect the Divestiture, and acquiring company to take no action to interfere with the Divestiture;
     
     
  7. Acquiring company to fully and promptly respond to all requests from the Divestiture Trustee; to assist, the acquiring company to identify a person responsible for responding to such Divestiture Trustee requests;
     
     
  8. Divestiture Trustee to use commercially reasonable efforts to negotiate the most favourable terms and conditions available at that time and, if necessary to effect the Divestiture, shall sell the Assets at no minimum price. The Divestiture Trustee’s opinion of what constitutes most favourable terms and conditions is subject to approval by the Commissioner only;
     
     
  9. Divestiture Trustee to have sole authority to determine, and the power to impose, the reasonable and ordinary commercial representations and warranties for the purpose of effecting the Divestiture;
     
     
  10. Divestiture Trustee to serve at the expense of acquiring company on customary terms set by the Commissioner, including a requirement that all invoices submitted by the Divestiture Trustee shall be paid on a monthly basis, and any outstanding monies owed to the Divestiture Trustee shall be paid out of the proceeds of the Divestiture;
      
      
  11. Divestiture Trustee to have authority to employ, at expense of acquiring company, such consultants and counsel as considered necessary by the Divestiture Trustee to carry out its obligations. The acquiring company shall be responsible for all reasonable fees and expenses properly charged or incurred by the Divestiture Trustee in the course of carrying out his or her duties and responsibilities under this Agreement.
      
      
  12. Acquiring company to indemnify and hold harmless the Divestiture Trustee save where malfeasance, gross negligence or bad faith on the part of the Divestiture Trustee;
      
      
  13. Commissioner alone may appoint a substitute Divestiture Trustee;
      
      
  14. Divestiture Trustee to have no obligation to operate the Assets to be divested;
      
      
  15. Divestiture Trustee to report to the Commissioner on a regular basis and, additionally, forthwith upon Commissioner request;
      
      
  16. As the Divestiture Trustee’s primary obligation is to divest the Assets to a Person(s) approved by the Commissioner, the acquiring company may only challenge the terms and conditions of the Divestiture, and only on the basis of malfeasance, gross negligence, or bad faith on the part of the Divestiture Trustee in executing its obligations hereunder. If acquiring company objects to the terms and conditions of a Divestiture that has been proposed by the Divestiture Trustee, acquiring company or the Commissioner may apply to the Tribunal for directions;
      
      
  17. Following the appointment of the Divestiture Trustee but prior to the end of the Initial Sale Period, acquiring company to provide complete access to the Divestiture Trustee to all information relating to the Assets to facilitate a speedy Divestiture by the Divestiture Trustee should the Assets not be divested in the Initial Sale Period;
      
      
  18. Upon the expiration of the Initial Sale Period, confidential terms in the Agreement relating to time periods, crown jewel provisions and no minimum price shall immediately become public.

IX. CROWN JEWEL/DIVESTITURE PLUS PROVISIONS (IF APPROPRIATE)

X. FAILURE OF DIVESTITURE TRUSTEE SALE

• If the Assets have not been divested in the Trustee Sale Period (including any extensions) or if the Commissioner is of the opinion that the Divestiture will not likely be completed prior to the expiry of the Trustee Sale Period, the Commissioner may apply to the Tribunal for such order as is necessary to effect the Divestiture, including an order that other asset(s) be offered for sale or additional steps be taken, to effect the Divestiture.
  
  
• Acquiring company will submit to the Tribunal’s jurisdiction to grant such relief required to effect the Divestiture.

XI. [ANY COMPLEMENTARY BEHAVIOURAL REMEDIES, WHERE APPLICABLE]

XII. NOTIFICATION

• Acquiring company to provide a copy of the Agreement to each of its officers, employees, or agents having managerial responsibility for any obligations under the Agreement.
  
  
• Communications required/permitted by the Agreement to all parties in writing.

XIII. DURATION

• Acquiring company to be bound by the Agreement until a Divestiture of the Assets is effected and all other obligations discharged in accordance with this Agreement or further order of the Tribunal.
  
  
• Divestiture contemplated by the Agreement to be complete when all right, title and interest in acquiring company has been conveyed pursuant to the Agreement.

XIV. GENERAL

• Parties to the Transaction agree to the registration of the Agreement with the Tribunal, and that the Commissioner may agree to extend any of the time periods contemplated by the Agreement.
  
  
• Acquiring company and Commissioner may mutually agree to amend the Agreement in any manner pursuant to subsection 106 (1) of the Act.
  
  
• Computation of time periods contemplated by the Agreement to be in accordance with the Interpretation Act, R.S.C. 1985, c. I-21. For the purpose of this Agreement, the definition of “holiday” in the Interpretation Act shall be deemed to include Saturday.
  
  
• The Agreement to constitute the entire agreement between the Commissioner and acquiring company and to supersede all prior agreements.
  
  
• Nothing in the Agreement to abrogate the notification obligations set out in Part IX of the Act.
  
  
• Any dispute as to the interpretation, application or implementation of the Agreement may be resolved by application to the Tribunal.
  
  
• The Agreement may be executed in counterparts.

DATED at, this day of mm/dd/yy.

________________________________
Commissioner of Competition

________________________________
acquiring company
Per:

FILED AND REGISTERED BY the Tribunal, this day of mm/dd/yy.
______________