Exhibit 5 Execution Copy
XXXXXX XXXXXXXXX
- and -
GENERAL MOTORS CORPORATION
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RIGHT OF FIRST REFUSAL AGREEMENT
October 16, 2001
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THIS AGREEMENT is made October 16, 2001
BETWEEN:
XXXXXX XXXXXXXXX, and individual resident in the Province of
Ontario
(the "Founder")
- and -
GENERAL MOTORS CORPORATION, a corporation governed by the laws
of the State of Delaware,
("GM")
RECITALS:
A. GM and the Founder each beneficially owns or exercises control or
direction over common shares in the capital of Hydrogenics Corporation
(the "Corporation"); and
B. The Parties wish to enter into an agreement granting GM with a right of
first refusal to acquire the shares of the Corporation owned by the
Founder.
THEREFORE, the Parties agree as follows:
ARTICLE 1
DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1.1 Definitions
Whenever used in this Agreement, the following words and terms have the meanings
set out below:
"Acceptance Notice" has the meaning given to it in subsection 2.3.
"Acceptance Period" has the meaning given to it in subsection 2.2.
"Affiliate" means, with respect to any specified Party, any company that
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Party specified. For
purposes of this definition, "control" including with correlative
meanings, the terms "controlled by" and "under common control with" means
ownership directly or indirectly of more than fifty percent (50%) of the
equity capital having the right to vote for election of directors (or in
the case of an entity other than a corporation, the equivalent management
authority); provided that a pension plan, profit sharing plan, or advisor
to such a plan that does not buy, sell or vote securities at the order,
direction or recommendation of GM shall not be deemed to be an "Affiliate"
of GM.
"Agreement" means this agreement, including all schedules, and all
amendments or restatements as permitted, and references to "Article" or
"Section" mean the specified Article or Section of this Agreement.
"Business Day" means any day, other than a Saturday or Sunday, on which
the Corporation's principal bank is open for commercial banking business
in both Toronto, Ontario and New York, New York during normal banking
hours.
"Competitor" means any Person in active competition with GM in the
automotive or fuel cell industry.
"Offeror" has the meaning given to it in subsection 2.1.
"Parties" means, collectively, GM and the Corporation and "Party" means
any one of them.
"Person" means any individual, sole proprietorship, partnership, firm,
entity, unincorporated association, unincorporated syndicate,
unincorporated organization, trust, body corporate, government, government
regulatory authority, governmental department, agency, commission, board,
tribunal, dispute settlement panel or body, bureau, court, and where the
context requires any of the foregoing when they are acting as trustee,
executor, administrator or other legal representative.
"Purchase Offer" has the meaning given to it in subsection 2.1.
"Sale Notice" has the meaning given to it in subsection 2.2.
"Shares" means common shares in the capital of the Corporation owned by
the Founder.
1.2 Certain Rules of Interpretation
In this Agreement:
(a) Governing Law - This Agreement is a contract made under and shall be
governed by and construed in accordance with the laws of the
Province of Ontario and the federal laws of Canada applicable in the
Province of Ontario.
(b) Headings - Headings of Articles and Sections are inserted for
convenience of reference only and shall not affect the construction
or interpretation of this Agreement.
(c) Including - Where the word "including" or "includes" is used in this
Agreement, it means "including (or includes) without limitation".
(d) No Strict Construction- The language used in this Agreement is the
language chosen by the Parties to express their mutual intent, and
no rule of strict construction shall be applied against any Party.
(e) Number and Gender - Unless the context otherwise requires, words
importing the singular include the plural and vice versa and words
importing gender include all genders.
(f) Severability - If, in any jurisdiction, any provision of this
Agreement or its application to any Party or circumstance is
restricted, prohibited or unenforceable, such provision shall,
as to such jurisdiction, be ineffective only to the extent of
such restriction, prohibition or unenforceability without
invalidating the remaining provisions of this Agreement and without
affecting the validity or enforceability of such provision in any
other jurisdiction or without affecting its application to other
Parties or circumstances.
(g) Statutory References - A reference to a statute includes all
regulations made pursuant to such statute and, unless otherwise
specified, the provisions of any statute or regulation which amends,
supplements or supersedes any such statute or any such regulation.
(h) Time - Time is of the essence in the performance of the Parties'
respective obligations.
(i) Time Periods - Unless otherwise specified, time periods within or
following which any payment is to be made or act is to be done shall
be calculated by excluding the day on which the period commences and
including the day on which the period ends and by extending the
period to the next Business Day following if the last day of the
period is not a Business Day.
1.3 Entire Agreement
This Agreement and the agreements and other documents required to be delivered
pursuant to this Agreement, constitute the entire agreement between the Parties
and set out all the covenants, promises, warranties, representations,
conditions, understandings and agreements between the Parties pertaining to the
subject matter of this Agreement and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written. There are
no covenants, promises, warranties, representations, conditions, understandings
or other agreements, oral or written, express, implied or collateral between the
Parties in connection with the subject matter of this Agreement except as
specifically set forth in this Agreement and any document required to be
delivered pursuant to this Agreement.
ARTICLE 2
RIGHT OF FIRST REFUSAL
2.1 Third Party Offer
For so long as GM and its Affiliates continue to hold in the aggregate not less
than 10% of the issued and outstanding common shares in the capital of the
Corporation, in the event that:
(a) the Founder receives from any Person a bona fide offer to purchase
or otherwise acquire, directly or indirectly, substantially all of
the Shares for a purchase price payable in cash, shares or other
consideration upon closing, or
(b) the Founder receives from a Competitor a bona fide offer to purchase
or otherwise acquire, directly or indirectly, any of the Shares for
a purchase price payable in cash, shares or other consideration upon
closing,
(each such offer being referred to in this section 2 as a "Purchase Offer" and
each such offeror or Competitor, as the case may be, being referred to in this
section 2 as the "Offeror") and the Founder intends to accept such Purchase
Offer if the right of first refusal provided herein is not exercised, the
Founder shall be free, subject to the terms hereof, to sell the Shares to the
Offeror at the price and upon the terms and conditions set forth in the Purchase
Offer, provided the Founder has first offered the Shares to GM in the manner and
on the terms specified below and GM has not given proper notice as specified
below that it intends to purchase the Shares.
2.2 Sale Notice
Whenever the Founder receives a Purchase Offer which satisfies the requirements
of subsection 2.1 and intends to accept such Purchase Offer subject only to the
provisions of this Agreement, the Founder shall so advise GM by giving to it a
notice of sale (a "Sale Notice"), together with a true copy of the Purchase
Offer within 5 (five) Business Days of receipt of such Purchase Offer. In such
Sale Notice, the Founder shall identify the Offeror (and any persons controlling
the Offeror to the knowledge of the Founder) and shall offer to sell the Shares
to GM at the same or cash equivalent aggregate purchase price (which shall be
specified in the Sale Notice) and in all other respects on the same terms and
conditions as provided in the Purchase Offer. The offer contained in the Sale
Notice shall be irrevocable, except with the consent of GM, and shall be open
for acceptance for a period of 5 (five) Business Days after the date upon which
the Sale Notice was received by GM (the "Acceptance Period").
2.3 Rights of GM
Upon receiving the Sale Notice GM shall have the right to purchase the Shares
upon the terms set forth in the Sale Notice.
Within the Acceptance Period GM may give to the Founder a notice in writing (an
"Acceptance Notice") accepting the offer contained in the Sale Notice. If GM
does not give an Acceptance Notice within the Acceptance Period the rights of GM
to purchase the Shares shall cease and the Founder may sell the Shares, in
accordance with this section 2 and free of GM's right of first refusal, to the
Offeror at the price and upon the terms and conditions specified in the Purchase
Offer.
2.4 Completion of Transfer
Any transfer to GM, pursuant to this section 2, shall be completed upon the date
selected by GM, provided that such date may be no later than 5 (five) Business
Days after the expiry of the Acceptance Period.
Any transfer of the Shares to the Offeror in accordance with this section 2 must
be completed upon the terms of the Purchase Offer failing which the provisions
of this section 2 shall again apply to any proposed transfer of the Shares.
2.5 Rights of the Founder
For greater certainty, GM acknowledges that nothing in this Agreement is
intended to prohibit the Founder from making ordinary market sales of Shares
using the facilities of the Nasdaq National Market or the Toronto Stock Exchange
in accordance with applicable securities laws.
ARTICLE 3
GENERAL
3.1 Termination
This Agreement shall terminate upon termination of the Corporate Alliance
Agreement entered into between GM and the Corporation on the date hereof.
3.2 Public Notices
All public notices to third parties and all other publicity concerning the
transactions contemplated by this Agreement shall be jointly planned and
co-ordinated by the Corporation and GM and no Party shall act unilaterally in
this regard without the prior approval of the other Parties, such approval not
to be unreasonably withheld, unless such disclosure shall be required to meet
timely disclosure obligations of any Party under applicable securities laws and
stock exchange rules in circumstances where prior to consultation with the other
Parties is not practicable.
3.3 Notices
Any notice, consent or approval required or permitted to be given in connection
with this Agreement (in this Section referred to as a "Notice") shall be in
writing and shall be sufficiently given if delivered (whether in person, by
courier service or other personal method of delivery), or if transmitted by
facsimile or e-mail:
The Founder
Hydrogenics Corporation
0000 XxXxxxxxxx Xxxx
Xxxxxxxxxxx, XX X0X 0X0
Facsimile: 000-000-0000
Attention: Xxxxxx Xxxxxxxxx
with a copy to:
Osler, Xxxxxx & Xxxxxxxx, XXX
Xxx 00, 0 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX X0X 0X0
Facsimile: 000-000-0000
Attention: Xxxx Xxxxxxx
GM:
General Motors Corporation
000 Xxxxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, XX 00000-0000
MC 482-C23-D24
Facsimile: 313-667-3188
Attention: General Counsel
Any Notice delivered or transmitted to a Party as provided above shall be deemed
to have been given and received on the day it is delivered or transmitted,
provided that it is delivered or transmitted on a Business Day prior to 5:00
p.m. local time in the place of delivery or receipt. However, if the Notice is
delivered or transmitted after 5:00 p.m. local time or if such day is not a
Business Day then the Notice shall be deemed to have been given and received on
the next Business Day. Any Party may, from time to time, change its address by
giving Notice to the other Parties in accordance with the provisions of this
Section.
3.4 Amendment
No amendment, supplement, modification or waiver or termination of this
Agreement and, unless otherwise specified, no consent or approval by any Party,
shall be binding unless executed in writing by the Party to be bound thereby.
3.5 Assignment
Neither this Agreement nor any rights or obligations under this Agreement shall
be assignable by any Party without the prior written consent of each of the
other Parties. Subject thereto, this Agreement shall enure to the benefit of and
be binding upon the Parties and their respective successors (including any
successor by reason of amalgamation of any Party) and permitted assigns.
3.6 Further Assurances
The Parties shall with reasonable diligence do all such things and provide all
such reasonable assurances as may be required to consummate the transactions
contemplated by this Agreement, and each Party shall provide such further
documents or instruments required by any other Party as may be reasonably
necessary or desirable to effect the purpose of this Agreement and carry out its
provisions.
3.7 Execution and Delivery
This Agreement may be executed by the Parties in counterparts and may be
executed and delivered by facsimile and all such counterparts and facsimiles
shall together constitute one and the same agreement.
IN WITNESS OF WHICH the parties have duly executed this Agreement.
SIGNED, SEALED & DELIVERED
In the presence of:
Xxxxxxxx Xxxxx Xxxxxx Xxxxxx
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Witness
GENERAL MOTORS CORPORATION
By: Xxxxxxxx X. Xxxxx
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Name: Xxxxxxxx X. Xxxxx
Title: Vice President, Research
& Development and Planning
