Preview | Master Separation Agreement |

TABLE OF CONTENTS


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ARTICLE 1		DEFINITIONS		1

	1.1	Defined Terms		1

	1.2	Construction		9

	1.3	Conflicts With Other Separation Agreements		10

ARTICLE 2		PHOTOWATT ASSETS AND LIABILITIES		10

	2.1	Transfer of Photowatt Assets		10

	2.2	Non-Transferred Assets		10

	2.3	No Representations or Warranties		11

	2.4	Assumption of Photowatt Liabilities		11

ARTICLE 3		THE OFFERING		11

	3.1	Proceeds of the Offering		11

ARTICLE 4		MATTERS RELATING TO A SPIN-OFF		11

	4.1	Spin-Off		11

	4.2	Actions Prior to a Spin-Off		12

	4.3	Stockholder-Related Matters Regarding a Spin-Off		13

ARTICLE 5		EMPLOYEE MATTERS AND NON-COMPETITION		14

	5.1	Employee Matters		14

	5.2	Non-Competition		15

ARTICLE 6		ACCESS TO AND DISCLOSURE OF INFORMATION		15

	6.1	Restrictions on Disclosure of Information		15

	6.2	Legally Required Disclosure of Information		17

	6.3	Access to Information		17

	6.4	Record Retention		18

	6.5	Production of Witnesses		18

	6.6	Reimbursement		18

	6.7	Other Agreements Regarding Access to Information		19

	6.8	Acquisition of Photowatt by Another Person		19

ARTICLE 7		ADDITIONAL COVENANTS		19

	7.1	Further Assurances		19

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TABLE OF CONTENTS
(continued)


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	7.2	Performance		20

	7.3	ATS Guarantees		20

	7.4	TPC Contribution Agreement		20

	7.5	Original Corporate Records		21

	7.6	License of ATS Solar Automation Know-How		21

	7.7	Legal and Regulatory Matters		23

ARTICLE 8		MUTUAL RELEASES; INDEMNIFICATION		24

	8.1	Release of Pre-Closing Claims		24

	8.2	Indemnification by Photowatt		25

	8.3	Indemnification by ATS		26

	8.4	Claim Procedure		26

	8.5	Survival; Limitations		28

	8.6	Production of Witnesses and Documents		30

ARTICLE 9		MISCELLANEOUS		31

	9.1	Assignment		31

	9.2	Entire Agreement		31

	9.3	No Agency		31

	9.4	Future Litigation and Other Proceedings		32

	9.5	Further Assurances		32

	9.6	Notices		32

	9.7	Time of Essence		33

	9.8	Governing Law		33

	9.9	Severability		33

	9.10	Force Majeure		33

	9.11	Publicity		34

	9.12	Specific Performance		34

	9.13	Currency		34

	9.14	Time Periods		34

	9.15	Amendment		34

	9.16	Counterparts		34

- ii -

MASTER SEPARATION AGREEMENT

This Master Separation Agreement (this Agreement) is made and entered into as of [ ], 2007, by and between ATS Automation Tooling Systems Inc., a corporation governed by the laws of Ontario (ATS), and Photowatt Technologies Inc., a corporation governed by the laws of Canada (Photowatt). ATS and Photowatt are sometimes referred to herein separately as a Party and together as the Parties.

RECITALS

A.		[ATS owns, directly or indirectly, 100% of the issued and outstanding common shares of Photowatt.]

Photowatt is undertaking an initial public offering (the Offering) of its common shares pursuant to a registration statement on Form F-1 under the U.S. Securities Act of 1933 and a prospectus filed with Canadian Securities Regulatory Authorities (as defined below).


C.		Immediately prior to the completion of the Offering, ATS and Photowatt intend to enter into a Master Separation Agreement (the Master Separation Agreement), containing the key provisions relating to the separation of ATS and Photowatt, and the other Separation Agreements (as defined in the Master Separation Agreement).


D.		Immediately following completion of the Offering, ATS will own, directly or indirectly approximately [ ]% of the outstanding Photowatt Common Shares (as defined below).


E.		ATS and Photowatt desire to maintain the ability of ATS (if so determined by the ATS board of directors) to distribute to holders of ATS Common Shares (as defined below) all or a portion of the outstanding Photowatt common shares then owned by ATS (a Spin-Off).

F.		The Parties intend in this Agreement and the other Separation Agreements to set forth the principal arrangements between them regarding the Offering and their operations thereafter.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth below, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties hereby agree as follows:

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9.17	Authority		34

9.18	Jurisdiction		34

9.19	Dispute Resolution		35

9.20	Binding Effect		38

9.21	Expenses		38

9.22	Waiver		38

9.23	Compliance With Laws		38