Securities Law & Instruments

Headnote

Section 147 - exempting issuer from eligibility requirements of section 4.1 of NationalPolicy 44, to permit use of the post receipt pricing procedures, in connection withdemutualization.

Statutes Cited

Securities Act. R.S.O. 1990, c.S.5, as am., s. 147.

Rules Cited

In The Matter of Rules for Shelf Prospectus Offerings and for Pricing Offerings after theProspectus is Receipted (1997) 20 OSCB 1217 (National Policy Statement No. 44).

Policies Cited

National Policy Statement No. 44.

National Policy Statement No. 47.

IN THE MATTER OF THE SECURITIES LEGISLATION OFBRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,MANITOBA, ONTARIO, QUEBEC, NEW BRUNSWICK, NOVA SCOTIA,PRINCE EDWARD ISLAND AND NEWFOUNDLAND

AND

IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF
HYDROGENICS CORPORATION

MRRS DECISION DOCUMENT


WHEREAS the Canadian securities regulatory authority or regulator (the "DecisionMaker") in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec,New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland (the"Jurisdictions") have received an application from Hydrogenics Corporation (the"Corporation") for a decision pursuant to the securities legislation of the Jurisdictions (the"Legislation") exempting the Corporation from the prospectus requirements of theLegislation and permitting the use by the Corporation of the PREP Procedures (as suchterm is defined in section 4.1 of National Policy Statement 44 - Rules for Shelf ProspectusOfferings and for Pricing of Offerings after the Final Prospectus is Receipted ("NationalPolicy 44") and similar procedures under the Legislation of Quebec (the "QuebecProcedures")) as if the Corporation was eligible under National Policy 44 and sections37.5, 37.6 and 37.7 of the Regulation respecting Securities under the Legislation ofQuebec (the "Quebec Regulation") in connection with the Corporation's proposed initialpublic offering of common shares (the "Shares");

AND WHEREAS pursuant to the Mutual Reliance System for Exemptive ReliefApplications (the "System"), the Ontario Securities Commission is the principal regulatorfor this application;

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

1. The Corporation is organized under the laws of Canada with its registered officelocated at 100 Caster Avenue, Woodbridge, Ontario L4L 5Y9. The Corporation isnot a reporting issuer or equivalent in any of the Jurisdictions.

2. The Corporation's proposed offering (the "Offering") will be its initial public offeringof the Shares, made concurrently to the public in Canada and the United States.

3. The size of the Offering is currently anticipated to be approximately US$100 million.

4. The Corporation filed a preliminary long form prospectus dated July 31, 2000 (the"Preliminary Prospectus") on August 1, 2000 with the securities regulatoryauthorities and filed a registration statement on Form F-1 containing the PreliminaryProspectus (the "Registration Statement") on July 31, 2000 with the United StatesSecurities and Exchange Commission (the "SEC").

5. There is presently no public market for the Shares. However, the Corporation hasapplied to the Toronto Stock Exchange to list the Shares for trading and to theNASDAQ National Market to have the Shares approved for quotation.

6. In connection with the Offering in the United States, the Corporation plans to usethe procedures permitted by Rule 430A under the Securities Act of 1933, pursuantto which the Corporation will be permitted to omit from the Registration Statementcertain price-related information and file a form of prospectus containing thepreviously omitted pricing information after the Registration Statement has beendeclared effective by the SEC.

7. Use of the PREP Procedures and the Quebec Procedures would permit theCorporation and the underwriters to better co-ordinate the pricing, prospectusdelivery, confirmation of purchase and closing processes in Canada with thosebeing used in the United States.

8. Neither the Corporation nor the Shares meet the eligibility criteria which otherwisewould enable the Corporation to use the PREP Procedures set forth in NationalPolicy 44 and the Quebec Procedures.

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

AND WHEREAS each of the Decision Makers is satisfied that the test contained inthe Legislation that provides the Decision Maker with the jurisdiction to make the Decisionhas been met;

IT IS HEREBY DECIDED by the Decision Makers, pursuant to the Legislation, thatthe Corporation is hereby exempted from the prospectus requirements of the Legislationwith respect to the distribution of Shares under the Offering effected in compliance with thePREP Procedures and the Quebec Procedures insofar as such requirements concern:

1. the form and content of a preliminary prospectus or a prospectus, including the formof prospectus certificates, filed under the Legislation;

2. the filing of an amendment or supplement to a preliminary prospectus or prospectusfiled under the Legislation;

provided that:

3. the Preliminary Prospectus is supplemented and amended pursuant to and inaccordance with the requirements and procedures set forth in National Policy 44and the Quebec Regulation, including the filing of amendments complying with therequirements of the Legislation;

4. a prospectus complying with National Policy 44 and the Quebec Regulation is filedunder the Legislation pursuant to and in accordance with the requirements andprocedures set forth in National Policy 44 and the Quebec Regulation, as if theCorporation was eligible to use the PREP Procedures and the Quebec Procedures;and

5. such prospectus is supplemented and amended pursuant to and in accordance withthe requirements and procedures set forth in National Policy 44 and the QuebecRegulation, including the filing of amendments complying with the requirements ofthe Legislation.

September 8th, 2000.

"J. A. Geller"      "Stephen N. Adams"