Exhibit 10.2

CARRIER ENTERPRISE CANADA (G.P.), INC.

SHAREHOLDERS’ AGREEMENT

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TABLE OF CONTENTS

 

ARTICLE 1    DEFINITIONS AND INTERPRETATION   

1.1

   Definitions      2   

1.2

   Rules of Construction      6   

1.3

   Time of Essence      7    ARTICLE 2    ORGANIZATIONAL MATTERS   

2.1

   Business of the Corporation      7   

2.2

   Filings      7   

2.3

   Interested Transactions      7   

2.4

   Review of Corporate Records      8   

2.5

   Registered Office      8   

2.6

   Principal Place of Business      8    ARTICLE 3    BOARD OF DIRECTORS   

3.1

   Authority of the Board      8   

3.2

   Composition of the Board      8   

3.3

   Resignation and Removal      9   

3.4

   Compensation      10   

3.5

   Meetings of the Board      10   

3.6

   No Exclusivity of Duty to Corporation      12   

3.7

   Equity Plans      12    ARTICLE 4    OFFICERS   

4.1

   Appointment and Removal of Officers      12   

4.2

   Chairman of the Board      13   

4.3

   President      13   

4.4

   Chief Financial Officer      13   

4.5

   Vice Presidents      13   

4.6

   Secretary      13   

4.7

   Authority and Duties of the Officers      13    ARTICLE 5    SHAREHOLDERS   

5.1

   Power of Shareholders      14   

5.2

   Other Activities      14   

5.3

   Actions Requiring Approval of the Requisite Shareholders      15   

5.4

   Meetings of Shareholders      18   

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5.5

   Proxies      19   

5.6

   No Liability      19   

5.7

   Nature of Obligations between Shareholders      20   

5.8

   Non-Solicitation      20   

5.9

   Representations and Warranties of Shareholders      20    ARTICLE 6    SHARES
  

6.1

   Initial Shareholdings      21   

6.2

   Certificates      21    ARTICLE 7    BOOKS AND RECORDS; TAX MATTERS   

7.1

   Books and Records      22   

7.2

   Reporting Requirements      22   

7.3

   Financial Information      23    ARTICLE 8    TRANSFER OF SHARES   

8.1

   Transfer of Shares      23    ARTICLE 9    INDEMNIFICATION   

9.1

   Liability for Certain Acts      25   

9.2

   Indemnification      25    ARTICLE 10    MISCELLANEOUS   

10.1

   Acknowledgement by the Corporation      27   

10.2

   Further Assurances      27   

10.3

   Notices      28   

10.4

   Termination      29   

10.5

   Confidentiality      29   

10.6

   Dispute Resolution      30   

10.7

   Headings      31   

10.8

   No Third Party Beneficiaries      31   

10.9

   Extension Not a Waiver      31   

10.10

   Advice and Construction      31   

10.11

   Specific Performance      32   

10.12

   Severability      32   

10.13

   Assignment      32   

10.14

   Entire Agreement      32   

10.15

   Amendment      32   

10.16

   Counterparts      33   

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10.17

   Successors and Assigns      33   

SCHEDULES:

SCHEDULE A - FORM OF ASSUMPTION AGREEMENT (Section 8.1(d)(iii))

SCHEDULE B - SHAREHOLDERS

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SHAREHOLDERS’ AGREEMENT

THIS AGREEMENT made as of the 27th day of April, 2012,

B E T W E E N:

CARRIER ENTERPRISE CANADA (G.P.), INC.,

(hereinafter referred to as the “Corporation”),

- and -

WATSCO INTERNATIONAL, LLC,

(hereinafter referred to as “Watsco”),

- and -

CARLYLE SCROLL HOLDINGS, INC.,

(hereinafter referred to as “Carrier”),

- and -

Each other Person who becomes a Shareholder

in accordance with the terms of this Agreement.

RECITALS

A. The Corporation has been incorporated under the Act.

B. The authorized capital of the Corporation consists of an unlimited number of
common shares, of which one hundred (100) are issued and outstanding.

C. Carrier is the registered and beneficial owner of forty (40) common shares in
the capital of the Corporation and Watsco is the registered and beneficial owner
of sixty (60) common shares in the capital of the Corporation.

D. Carrier and Watsco wish to establish their respective rights and obligations
in respect of the shares of the Corporation now or hereafter owned by them, the
management and control of the Corporation and other matters set forth in this
Agreement.

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NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the respective
covenants and agreements of the parties herein contained and for other good and
valuable consideration (the receipt and sufficiency of which are acknowledged by
each party), the parties agree as follows:

ARTICLE 1

DEFINITIONS AND INTERPRETATION

1.1 Definitions

Where used in this Agreement, unless there is something in the context or the
subject matter inconsistent therewith, the following terms shall have the
following meanings:

“Act” means the Business Corporations Act (New Brunswick) as it may be amended
or replaced from time to time;

“Affiliate” means, with respect to a specified Person, any Person that directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, the specified Person. As used in this
definition, the term “control” means the possession, directly or indirectly, of
the power to substantially direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, as
director or manager, as trustee or executor, by contract or credit arrangement
or otherwise, and for the avoidance of doubt, neither Watsco (or its ultimate
parent entity) nor any of its (or its ultimate parent entity’s) Subsidiaries
(other than, if applicable, the Partnership, the Corporation and any of their
respective Subsidiaries) shall be deemed an Affiliate of a Carrier Holder for
any purpose hereunder, and neither Carrier (or its ultimate parent entity) nor
any of its (or its ultimate parent entity’s) Subsidiaries (other than, if
applicable, the Partnership, the Corporation and any of their respective
Subsidiaries) shall be deemed an Affiliate of a Watsco Holder for any purpose
hereunder;

“Ancillary Agreements” has the meaning set forth in the Asset Purchase
Agreement;

“Approved by,” “Approval of,” “Consent of,” “Determined by,” or any equivalent,
each mean, with respect to the Board, approval or consent of the Board as set
forth in Section 3.5(f), and with respect to the Shareholders, approval or
consent of the Shareholders as set forth in Section 5.4(f);

“Articles” means the articles of incorporation of the Corporation;

“Asset Purchase Agreement” means the asset purchase agreement dated March 13,
2012 between Watsco, Inc., Watsco Canada, Inc., UTC Canada Corporation and the
Partnership;

“Board” means the board of directors of the Corporation;

“Business Day” means any day, other than a Saturday, Sunday or statutory holiday
in the Province of Ontario, State of Florida or State of Connecticut, on which
commercial banks in Toronto, Ontario, Miami, Florida and Farmington, Connecticut
are open for business;

 

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“Carrier Deciding Shareholder” means Carrier or, if Carrier has Transferred its
Shares to a Permitted Transferee in accordance with the terms of this Agreement,
its Permitted Transferee;

“Carrier Holders” means Carrier and any direct or indirect wholly-owned
Subsidiary of Carrier’s ultimate parent entity that is a Transferee of Shares
pursuant to Section 8.1(c);

“Carrier Scale-Down Partnership Interest” has the meaning set forth in
Section 3.2(a);

“Confidential Information” has the meaning ascribed thereto in Section 10.5;

“Covered Person” has the meaning ascribed thereto in Section 9.2(a);

“Director” means a Person who is listed as a director of the Corporation in this
Agreement, or who becomes a substituted or additional director of the
Corporation as herein provided and who is listed as a director in the books and
records of the Corporation;

“Dispute” has the meaning set forth in Section 10.6(a);

“Entity” means any corporation, partnership, limited liability company,
unincorporated association, joint venture, firm and any other organization,
association or other entity, and any trust or estate;

“Fiscal Quarter” means any fiscal quarter of any Fiscal Year;

“Fiscal Year” means (i) the period commencing on the date of this Agreement and
ending on December 31, 2012, or (ii) any subsequent 12-month period commencing
on January 1 and ending on December 31;

“GAAP” has the meaning set forth in Section 7.1(a);

“Governmental Authority” shall mean any nation or country (including Canada and
the United States) and any commonwealth, province, territory, municipality or
possession thereof and any political subdivision of any of the foregoing,
including but not limited to courts, departments, commissions, boards, bureaus,
agencies, tribunals, ministries or other instrumentalities.

“HVAC/R Products” means heating and cooling products, systems, equipment,
components, accessories and parts, and brands thereof, in each case to the
extent identified as “Products” in any of the distributor agreements between the
Partnership and Carrier (or any of its Affiliates from time to time);

“Indebtedness” means, with respect to any Person, (i) indebtedness of such
Person for borrowed money, (ii) other indebtedness of such Person evidenced by
notes, bonds or debentures, (iii) capitalized leases classified as indebtedness
of such Person under GAAP, (iv) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and

 

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remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (v) any obligation of
such Person for the deferred purchase price of property or services (other than
trade payables and other current liabilities), (vi) any indebtedness of another
Person referred to in clauses (i) through (v) above guaranteed directly or
indirectly, jointly or severally, in any manner by such Person, (vii) any
indebtedness referred to in clauses (i) through (v) above secured by (or for
which the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) any lien or encumbrance on property (including,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such indebtedness, and
(viii) the maximum amount of all direct or contingent obligations of such Person
with respect to letters of credit, bankers’ acceptances, bank guaranties, surety
bonds or similar facilities or instruments;

“Interested Transaction” means, with respect to a Person, any transaction or
agreement (including, but not limited to, the purchase, sale, lease, or exchange
of any property or the rendering of any service, or the establishment of any
salary, other compensation, or other terms of employment) with any Affiliate of
such Person;

“Limited Partner” means a limited partner of the Partnership;

“Limited Partner Interest” means the interest of a Limited Partner in the
Partnership;

“Major Decisions” has the meaning set forth in Section 5.3(a);

“Mediation Termination” has the meaning set forth in Section 10.6(b);

“Partners” means the partners of the Partnership;

“Partnership” means Carrier Enterprise Canada, L.P.;

“Partnership Agreement” means the amended and restated limited partnership
agreement relating to the Partnership made as of the date hereof between Watsco,
Carrier and the Corporation, as such agreement may be amended or supplemented
from time to time;

“Partnership Assets” has the meaning ascribed thereto in the Partnership
Agreement;

“Partnership Interest” means, at any time with reference to a Partner, the
proportion which the amount of Capital Contributions (as defined in the
Partnership Agreement) made by the Partner at such time as recorded in the
record of Partners is of the aggregate amount of Capital Contributions so
recorded in the names of all Partners at such time;

“Permitted Lien” means a lien, mortgage, pledge, security interest or similar
encumbrance of a Shareholder’s Shares granted to a lender or lenders (or agent
for a lender or lenders) to secure any obligations under any credit agreements
and/or related documents in respect of any loan to the Shareholder and/or any of
such Shareholder’s direct or indirect wholly-owned Subsidiaries (or, so long as
such Shareholders, directly or indirectly, a wholly-owned Subsidiary of its
ultimate parent entity, such ultimate parent entity’s direct or indirect
wholly-owned Subsidiaries);

 

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“Permitted Transferee” has the meaning set forth in Section 8.1(c);

“Person” means any natural person or Entity;

“Requisite Shareholders” means Watsco and Carrier; provided, that if (i) the
Partnership Interest owned by the Carrier Holders, in the aggregate, ceases to
be at least ten percent (10%), Requisite Shareholders shall be deemed to be
Watsco, and (ii) the Partnership Interest owned by the Watsco Holders, in the
aggregate, ceases to be at least ten percent (10%), Requisite Shareholders shall
be deemed to be Carrier;

“Resolution of the Board” means a resolution Approved by the Board;

“Shareholders” means each Person who is admitted as a shareholder of the
Corporation and listed on Schedule B and each additional Person who shall
hereafter be admitted as a Shareholder hereof in accordance with the provisions
of this Agreement;

“Shares” means common shares in the capital of the Corporation as constituted at
the date hereof, any other securities into which such common shares may be
converted, exchanged, reclassified, redesignated, subdivided, consolidated or
otherwise changed from time to time, any securities of any successor corporation
to or corporation continuing from the Corporation which such common shares or
other securities may be changed into or become as a result of any amalgamation,
continuance, merger, consolidation, plan of arrangement or reorganization,
statutory or otherwise, and any securities received as a stock dividend or other
distribution on or in respect of such common shares or other securities;

“Subsidiary” means, with respect to any Person, (i) any corporation fifty
percent (50%) or more of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation is at the time owned by such Person, directly or indirectly through
one or more Subsidiaries, and (ii) any other Person, including but not limited
to a joint venture, a general or limited partnership or a limited liability
Corporation, in which such Person, directly or indirectly through one or more
Subsidiaries, at the time owns at least fifty percent (50%) or more of the
ownership interests entitled to vote in the election of managing partners,
managers or trustees thereof (or other Persons performing such functions) or
acts as the general partner, managing Shareholder, trustee (or Persons
performing similar functions) of such other Person;

“Tax Act” means the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), the Income
Tax Application Rules, R.S.C. 1985, c. 2 (5th Supp.), and the Income Tax
Regulations, C.R.C., c. 945, in each case as amended to the date of this
Agreement;

“Transfer” means the voluntary or involuntary sale, assignment, transfer (by
gift or otherwise), lien, mortgage, pledge, grant of a security interest,
encumbrance, hypothecation, grant of a participation interest or other
disposition or conveyance of legal or beneficial interest, directly or
indirectly, whether in one transaction or in a series of related transactions;

 

- 5 -

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“Transferee” means any Person that is a transferee of Shares in the Corporation;

“Transferor” means any Shareholder that proposes to Transfer or does Transfer
Shares in the Corporation;

“Watsco Credit Facility” means the Revolving Credit Facility dated as of
August 3, 2007 among Watsco, Inc., Bank of America, N.A., as Administrative
Agent, Bank of America, N.A., as Swingline Lender and Issuing Bank, and the
Lenders referred to therein, as amended by Amendment No. 2 to the Revolving
Credit Facility dated March 30, 2011;

“Watsco Deciding Shareholder” means Watsco or, if Watsco has Transferred its
Shares to a Permitted Transferee in accordance with the terms of this Agreement,
its Permitted Transferee;

“Watsco Holders” means Watsco and any direct or indirect wholly-owned Subsidiary
of Watsco’s ultimate parent entity that is Transferee of Shares pursuant to
Section 8.1(c); and

“Watsco Scale-Down Partnership Interest” has the meaning set forth in
Section 3.2(a).

1.2 Rules of Construction

Except as may be otherwise specifically provided in this Agreement and unless
the context otherwise requires, in this Agreement:

 

  (a) the terms “Agreement”, “this Agreement”, “the Agreement”, “hereto”,
“hereof”, “herein”, “hereby”, “hereunder” and similar expressions refer to this
Agreement in its entirety and not to any particular provision hereof;

 

  (b) references to an “Article”, “Section”, “Schedule” or “Exhibit” followed by
a number or letter refer to the specified Article or Section of or Schedule or
Exhibit to this Agreement;

 

  (c) the division of this Agreement into articles and sections and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Agreement;

 

  (d) words importing the singular number only shall include the plural and vice
versa and words importing the use of any gender shall include all genders;

 

  (e) the word “including” is deemed to mean including without limitation;

 

  (f) the terms “party” and “the parties” refer to a party or the parties to
this Agreement;

 

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  (g) any reference to this Agreement means this Agreement as amended, modified,
replaced or supplemented from time to time;

 

  (h) all dollar amounts refer to Canadian dollars;

 

  (i) any time period within which a payment is to be made or any other action
is to be taken hereunder shall be calculated excluding the day on which the
period commences and including the day on which the period ends;

 

  (j) whenever any payment is required to be made, action is required to be
taken or period of time is to expire on a day other than a Business Day, such
payment shall be made, action shall be taken or period shall expire on the next
following Business Day; and

 

  (k) unless specified as being a Business Day, any reference to day means a
calendar day.

1.3 Time of Essence

Time shall be of the essence of this Agreement.

ARTICLE 2

ORGANIZATIONAL MATTERS

2.1 Business of the Corporation

The business of the Corporation is hereby agreed to be limited to carrying out
the responsibilities of the general partner of the Partnership as described in
the Partnership Agreement, and engaging in any activities directly or indirectly
related thereto. As general partner, the Corporation agrees to be bound by all
the provisions of the Partnership Agreement as a party thereto.

2.2 Filings

The Shareholders and the Corporation promptly shall execute and deliver such
documents and perform such acts consistent with the terms of this Agreement as
may be reasonably necessary to comply with the requirements of law for the
qualification and continuation of existence of the Corporation under the laws of
each jurisdiction in which the Corporation shall conduct business or to carry
out the intentions of this Agreement.

2.3 Interested Transactions

The Corporation, the Partnership and any of their Subsidiaries may engage in any
Interested Transaction so long as the following conditions are satisfied:
(a) the Interested Transaction is not expressly prohibited by this Agreement
and, if Major Decisions then require the affirmative vote or consent of the
Requisite Shareholders pursuant to the terms of Section 5.3(a), the Interested
Transaction has been approved in accordance with Section 5.3; and (b) either
(i) the Interested Transaction is in the ordinary course of business at prices
and on terms

 

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and conditions not less favorable to the Corporation, the Partnership or either
of their respective Subsidiaries than could be obtained on an arm’s-length basis
from unrelated third parties or (ii) the Interested Transaction is with Carrier
or any of its Affiliates. The parties acknowledge that the transactions
contemplated in the Asset Purchase Agreement and the Ancillary Agreements in
each case satisfy the conditions specified in this Section 2.3.

2.4 Review of Corporate Records

Each Shareholder shall be entitled from time to time, during usual business
hours on reasonable notice to the Corporation, to examine (or cause its
representatives to examine) the minute books of the Corporation.

2.5 Registered Office

The Corporation’s registered office is 44 Chipman Hill, Suite 1000, St. John,
New Brunswick. At any time, the registered office may be changed with the
Approval of the Board, provided that the registered office shall be in the
Province of New Brunswick.

2.6 Principal Place of Business

The principal place of business of the Corporation is 1515 Drew Road,
Mississauga, Ontario. At any time, the Corporation’s principal place of business
may be changed with the Approval of the Board.

ARTICLE 3

BOARD OF DIRECTORS

3.1 Authority of the Board

Except as otherwise provided in this Agreement, the business and affairs of the
Corporation shall be controlled, directed and managed exclusively by the Board.
Except when the Approval of the Shareholders (or the Requisite Shareholders) is
expressly required by the Act, the Articles or this Agreement, the Board shall
have full, complete and exclusive authority, power, and discretion to manage and
control the business, property and affairs of the Corporation, to make all
decisions regarding those matters and to perform any and all other acts or
activities customary or incident to the management of the Corporation’s
business, property and affairs. The Board shall be responsible, without
limitation, at its meetings for (i) review of the performance by the
Corporation’s management, (ii) review, approval and update of the Partnership’s
annual operating plan and the Partnership’s needs and requirements for growth
and development of market share, (iii) review of the Partnership’s financial
performance, business issues and opportunities, (iv) distributions, and
(v) review of leadership and succession, in each case subject to Section 5.3.

3.2 Composition of the Board

(a) For so long as the Partnership Interest held by the Carrier Holders, in the
aggregate, is at least twenty percent (20%) (the “Carrier Scale-Down Partnership
Interest”)

 

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and the Partnership Interest held by the Watsco Holders, in the aggregate, is at
least fifty percent (50%) (the “Watsco Scale-Down Partnership Interest”), the
Board shall be composed of five (5) Directors, of whom two (2) Directors shall
be designated by the Carrier Deciding Shareholder and three (3) Directors shall
be designated by the Watsco Deciding Shareholder. Notwithstanding the forgoing,
the number of Directors constituting the entire Board may be increased or
decreased beyond the number set forth above from time to time by Approval of the
Board, subject to Section 5.3; provided that, so long as the Partnership
Interest of the Carrier Holders is equal to or greater than the Carrier
Scale-Down Partnership Interest, in the case of any increase or decrease in the
number of Directors constituting the entire Board, the composition of the Board
shall be adjusted to provide the Carrier Deciding Shareholder with the right to
designate the whole number (rounding up) of Directors that is closest to forty
percent (40%) of the entire Board.

(b) Following such time as the Partnership Interest held by the Carrier Holders
is less than the Carrier Scale-Down Partnership Interest, the number of
Directors designated by the Carrier Deciding Shareholder shall be reduced to the
whole number (rounding up) of Directors that is closest to the product of
(i) the Partnership Interest held by the Carrier Holders at such time and
(ii) the number of Directors constituting the entire Board. Any Directors with
respect to whom the Carrier Deciding Shareholder’s designation rights are
terminated pursuant to this Section 3.2(b), shall be removed from the Board as
of the date of such termination of such designation rights. In such event, the
replacements of such removed Directors shall be determined by the Approval of
the Shareholders.

(c) Following such time as the Partnership Interest held by the Watsco Holders
is less than the Watsco Scale-Down Partnership Interest, the Watsco Deciding
Shareholder shall only be entitled to designate the whole number (rounding up)
of Directors that is closest to the product of (i) the Partnership Interest held
by the Watsco Holders at such time and (ii) the number of Directors constituting
the entire Board. Any Directors with respect to whom the Watsco Deciding
Shareholder’s designation rights are terminated pursuant to this Section 3.2(c),
shall be removed from the Board as of the date of such termination of such
designation rights. In such event, the replacements of such removed Directors
shall be determined by the Approval of the Shareholders.

3.3 Resignation and Removal

(a) Subject to Section 3.2, any Director may resign at any time by giving
written notice of his or her resignation to the Board. A resignation shall take
effect at the time specified therein or if no time is specified therein,
immediately upon its receipt, and, unless otherwise specified therein, the
acceptance of a resignation shall not be necessary to make it effective.

(b) Each Shareholder may require the removal of any Director designated by it at
any time, with or without cause, by delivering written notice to the other
Shareholders and the Chairman of the Board. Following receipt of such notice,
each of the Shareholders shall forthwith execute such resolutions or other
instruments (or request their designees to the Board to execute such resolutions
or instruments) as may be necessary or desirable to give effect to such removal
and to fill any resulting vacancy in accordance with Section 3.3(c).

 

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(c) If there is a vacancy on the Board resulting from the removal or
resignation, death, retirement or disability of a Director, the Shareholder that
designated such Director shall be entitled to designate a replacement Director
upon written notice to the other Shareholders and the Chairman of the Board. If
such Shareholder fails to fill the vacancy, the directorship will remain vacant
until such time that a replacement is designated by the Shareholder who
designated such Director and the requisite resolution is passed by the Board or
Shareholders in accordance with Section 3.3(b).

3.4 Compensation

Subject to Section 5.3, as Determined by the Board, the Directors may be paid
their expenses, if any, of attendance at each meeting of the Board and may be
paid a fixed sum for attendance at each meeting of the Board or a stated salary
as Director. No such payment shall preclude any Director from serving the
Corporation in any other capacity and receiving compensation therefor.
Shareholders of special or standing committees may be allowed like compensation
for attending committee meetings.

3.5 Meetings of the Board

(a) Quarterly Meetings; Calling of Meetings; Notice. The Board shall hold
regular meetings at such times as may be specified by it but no less often than
quarterly. Special meetings of the Board may be called at any time and for any
purpose or purposes by (i) the President or his designee, (ii) by Resolution of
the Board in which at least a majority of all Directors call for such meeting,
(iii) by any Shareholder. Subject to the notice provisions set forth in
Section 10.3, notice of the place, date and hour of each meeting of the Board
will be given by registered or certified mail, by nationally recognized
overnight delivery service, by telephone (which shall be deemed given upon oral
acknowledgment by the Director receiving notice), by facsimile or by personal
delivery, or by email, to each Director entitled to vote at the meeting, not
fewer than three (3) Business Days prior to the meeting, and in any case not
more than thirty (30) days prior to the meeting. A notice shall state, in
general terms, the purpose or purposes for the calling of a meeting. If such
notice is mailed, emailed or sent by overnight delivery service, it will be
directed to each Director at such Director’s address as it appears on the record
of Directors, or, if a Director had filed with the Corporation a written request
that notices to such Director be sent to some other address, then directed to
such Director at such other address. Notice of a meeting need not be given to
any Director who signs a waiver of notice or a consent to holding the meeting or
an approval of the minutes of such meeting, whether before or after the meeting,
or who participates in the meeting without protesting, prior to the commencement
of such Director’s participation in the meeting, the lack of notice to such
Director. All such waivers, consents and approvals shall be filed with the
Corporation records or made a part of the minutes of the meeting.

(b) Time and Place of Meetings. Meetings of the Board may be held at any place
which has been designated in the notice of the meeting or at such place as may
be Approved by the Board.

(c) Quorum. A majority of Directors shall constitute a quorum of the Board for
the transaction of business. The Directors present at a duly called or held
meeting at which a quorum is present may continue to do business until
adjournment, notwithstanding the loss of a quorum.

 

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(d) Adjourned Meetings. A majority of the Directors present, whether or not a
quorum is present, may adjourn any meeting to another time and place. If the
meeting is adjourned for more than twenty-four (24) hours, notice of such
adjournment shall be given prior to the time the adjourned meeting is to be
resumed to all Directors who were not present at the time of the adjournment.

(e) Telephonic Participation by Directors at Meetings. Directors may participate
in a meeting through the use of conference telephone or similar communications
equipment, so long as all Directors participating in such meeting can hear one
another. Participation in a meeting in such manner constitutes presence in
person at such meeting.

(f) Approval of the Board

 

  (i) At a Meeting. Unless specifically provided otherwise by law or this
Agreement, whenever the Board is entitled to vote on any matter or exercise any
power under this Agreement, such matter shall be considered approved or
consented to upon the receipt of the affirmative vote of at least a majority of
all Directors entitled to vote thereon, with each Director having one (1) vote.
Except in such person’s capacity as an officer of the Corporation, no Director
acting individually shall have the authority or right to act on behalf of, or to
take any action to bind, the Corporation in connection with any matter, except
as provided in this Agreement.

 

  (ii) Conduct of Disputes. Notwithstanding anything to the contrary in this
Agreement, (A) only Directors designated by Watsco shall be entitled to vote on
any matter relating to the conduct and settlement of any claim, action, suit,
proceeding or dispute between the Corporation, and/or any of its Subsidiaries,
on the one hand and Carrier, and/or any of its Affiliates, on the other hand,
and (B) only Directors designated by Carrier shall be entitled to vote on any
matter relating to the conduct and settlement of any claim, action, suit,
proceeding or dispute between the Corporation, and/or any of its Subsidiaries,
on the one hand and Watsco, and/or any of its Affiliates, on the other hand.

 

  (iii) By Written Resolution. Any action required or permitted to be taken by
the Board may be taken by the Directors without a meeting, if a resolution in
writing, setting forth the action so taken, is signed by all Directors.

 

  (iv) Matters Requiring Approval. The Corporation and the Partnership may not,
without Approval of the Board, engage, directly or indirectly, including,
through one or more Subsidiaries of the Corporation or the Partnership, and
shall cause the Partnership and such Subsidiaries not to engage, in any
transaction or series of related transactions or take any action, which if
engaged in or taken by a corporation under the Act would require action by the
board of directors of that corporation, other than transactions in the ordinary
course of the Corporation’s or the Partnership’s business.

 

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3.6 No Exclusivity of Duty to Corporation

Except as otherwise provided herein, no Director shall be required to serve on
the Board as his or her sole and exclusive function and such Director may engage
in or possess any interest in another business or venture of any nature and
description, independently or with others, to the fullest extent permitted by
law, and neither the Corporation nor any Shareholder shall have any rights in or
to any such independent ventures or the income or proceeds derived therefrom.
Directors shall not incur any liability to the Corporation or to any of the
Shareholders as a result of engaging in any other business or venture to the
fullest extent permitted by law. Any Director shall be able to transact business
or enter into agreements with the Corporation to the fullest extent permitted by
law, subject to the terms and conditions of this Agreement.

3.7 Equity Plans

Subject to Section 5.3, the Board is authorized to (i) adopt such equity option
plans, restricted equity plans and other rights plans as it shall deem necessary
from time to time and (ii) grant such options, equity interests and other rights
under such plans to such persons, including officers, directors, employees,
consultants and others, as the Board may Approve.

ARTICLE 4

OFFICERS

4.1 Appointment and Removal of Officers

(a) The Board shall Approve the appointment of the officers of the Corporation
on an annual basis. The officers of the Corporation shall consist of a
President, a Chief Financial Officer, a Secretary and other officers, including
one or more Vice Presidents, and assistant and subordinate officers as the Board
may deem necessary, each of whom shall hold their offices for one-year terms and
shall exercise such powers and perform such duties as shall be Determined from
time to time by the Board until their successors are appointed and qualified.
Any officer or agent selected or appointed by the Board may be removed at any
time, with or without cause, by Resolution of the Board. Vacancies of officer
positions shall be filled by Approval of the Board. The salaries, other
compensation and business expense reimbursement of all officers and agents of
the Corporation shall be Determined and fixed by the Board. Unless otherwise
expressly approved herein, subject to Approval of the Board, any two or more
offices may be held by the same Person.

(b) In addition, notwithstanding anything to the contrary contained herein, an
officer may not be removed without cause unless by Resolution of the Board in
which at least a majority of all Directors approve the removal.

 

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4.2 Chairman of the Board

The Board shall appoint a Director to act as Chairman of the Board. The Chairman
of the Board shall preside at all meetings of the Shareholders and of the Board
at which he is present, subject to the ultimate authority of the Board to
appoint an alternate presiding officer at any meeting. The Chairman of the Board
may be an officer of the Corporation if so designated by the Board and shall
also perform such other duties and may exercise such other powers as from time
to time may be assigned to him by the Board.

4.3 President

The President shall have general supervision and control over, and
responsibility for, the day-to-day operations of the Corporation, subject to the
ultimate authority of the Board, and shall have such other powers and shall
perform such other duties as may from time to time be assigned to him or her by
the Board. The initial President shall be the person Determined by the Requisite
Shareholders. The initial President shall serve for a one-year term commencing
on the date of execution hereof unless the Requisite Shareholders agree
otherwise.

4.4 Chief Financial Officer

The Chief Financial Officer shall have such other powers and shall perform such
other duties as may from time to time be assigned to the Chief Financial Officer
by the President and by the Board. The initial Chief Financial Officer shall be
the person Determined by the Requisite Shareholders. The initial President shall
serve for a one-year term commencing on the date of execution hereof unless the
Requisite Shareholders agree otherwise.

4.5 Vice Presidents

One or more Vice Presidents shall perform such duties and have such powers as
may from time to time be assigned to them by the President or the Board. In the
absence or disability of the President, the President’s duties will be performed
and powers may be exercised by one or more such Vice Presidents, as will be
designated by the Board.

4.6 Secretary

The Secretary will attend all meetings of the Shareholders and the Board will
record all votes and the minutes of all proceedings in a book to be kept for
that purpose, unless the Shareholders or the Board, as applicable, designate
another person for such purpose. Unless otherwise provided in this Agreement,
the Secretary will attend to the giving of notice of all meetings of the
Shareholders and the Board, have custody of the Corporation’s seal, if any, and,
when authorized by the Board, will have authority to affix the same to any
instrument and, when so affixed, it will be attested by the Secretary’s
signature or by the signature of the President, the Chief Financial Officer or
an Assistant Secretary.

4.7 Authority and Duties of the Officers

The Shareholders hereby grant authority and responsibility for the day-to-day
operation of the business and affairs of the Corporation to the officers. Any
action required by

 

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this Agreement to be performed by the Corporation shall be deemed to have been
taken by the Corporation if such action is Approved by the Board and taken or
approved by the President or other authorized officer, unless otherwise
indicated in this Agreement. The officers, to the extent of their powers set
forth in this Agreement or in a Resolution of the Board, are agents of the
Corporation for the purposes of the Corporation’s business, and the actions of
the officers taken in accord with such powers shall bind the Corporation. Any
agreement, deed, lease, note or other document or instrument executed on behalf
of the Corporation by the President or other authorized officer as Approved by
the Board, shall be deemed to have been duly executed; no other person’s
signature shall be required in connection with the foregoing and third parties
shall be entitled to rely upon the President’s or other authorized officer’s
power to bind the Corporation without otherwise ascertaining that the
requirements of this Agreement have been satisfied. Notwithstanding the
foregoing grant of authority to the officers, no act shall be taken, sum
expended, decision made or obligation incurred by the officers (a) which
requires for its authorization and/or implementation, the vote, approval or
consent of Shareholders pursuant to the Act, or (b) which constitutes a matter
designated for Approval of the Board or the Shareholders under this Agreement.

ARTICLE 5

SHAREHOLDERS

5.1 Power of Shareholders

Except as expressly provided in this Agreement or the Act, no Shareholder shall
take any part in the management of the business or transact any business for the
Corporation or shall have any power, solely in its capacity as a Shareholder, to
sign for, act for, bind, or assume any obligation or responsibility on behalf
of, any other Shareholder or the Corporation; provided, however, that the
Shareholders shall have the voting and approval rights as described in this
Agreement and as provided under the Act. Except as specifically provided in this
Agreement, with respect to any action of the Corporation submitted to a vote of
the Shareholders, any Shareholder may vote or refrain from voting for or against
any such action of the Corporation, in such Shareholder’s sole and absolute
discretion.

5.2 Other Activities

(a) Any Shareholder may engage in or possess any interest in another business or
venture of any nature and description, independently or with others, and neither
the Corporation nor any other Shareholder shall have any rights in or to any
such independent ventures or the income or proceeds derived therefrom. Any
Shareholder shall be able to transact business or enter into agreements with the
Corporation to the fullest extent permissible under the Act, subject to the
terms and conditions of this Agreement.

(b) If a Shareholder (or any Director appointed by such Shareholder) acquires
knowledge of a potential transaction or matter which may be a business
opportunity for both such Shareholder and the Corporation or another
Shareholder, such Shareholder (and its Director designees) shall, to the fullest
extent permitted by law, have no duty to communicate or offer such business
opportunity to the Corporation or any other Shareholder and shall not, to the
fullest extent permitted by law, be liable to the Corporation or the other
Shareholders for breach of any

 

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duty (including, fiduciary duties) as a Shareholder or Director of the
Corporation by reason of the fact that such Shareholder or Director pursues or
acquires such business opportunity for itself, directs such opportunity to
another Person, or does not communicate information regarding such opportunity
to the Corporation.

(c) In connection with the exercise of any voting rights pursuant to this
Agreement, a Shareholder may consider its own best interests when determining
how to cast its vote and shall in no event shall have or be deemed to have any
fiduciary duty to any other Shareholder or to the Corporation.

(d) No Shareholders or any of its Affiliates shall transmit to the public any
press releases or other written statements concerning material developments in
the Corporation’s, the Partnership’s and its Subsidiaries’ businesses without
the prior written consent (not to be unreasonably withheld or delayed) of the
other Shareholders.

5.3 Actions Requiring Approval of the Requisite Shareholders

(a) Notwithstanding anything in this Agreement to the contrary, for so long as
the Partnership Interest owned by the Carrier Holders, in the aggregate, or the
Watsco Holders, in the aggregate, is at least twenty percent (20%), the Board
shall not, and shall cause the Corporation, the Partnership and their respective
Subsidiaries not to, take, cause to be taken, or agree to or authorize, any of
the following actions (each, a “Major Decision” and collectively, the “Major
Decisions”), without the affirmative vote or consent of the Requisite
Shareholders (it being understood that the thresholds below shall apply to the
Corporation, the Partnership and their respective Subsidiaries in the
aggregate):

 

  (i) the entry into any new line of business outside of its existing business,
including but not limited to any change in the scope of the business purpose of
the Partnership beyond the sale of HVAC/R Products or the Corporation beyond
being the general partner of the Partnership;

 

  (ii) the entry into an agreement to effect, or, in the absence of such an
agreement, the consummation, of any merger, sale of all or substantially all of
the assets of the Corporation, the Partnership and their Subsidiaries,
consolidation, reorganization, joint venture or alliance involving a material
amount of assets of the Corporation, the Partnership or any of their
Subsidiaries, or similar transaction;

 

  (iii) the entry by the Corporation, the Partnership or any of their
Subsidiaries into an agreement to effect, or, in the absence of such an
agreement, the consummation of any acquisition (A) with an aggregate purchase
price (including the assumption of liabilities) in excess of $5 million in the
aggregate in any Fiscal Year or (B) reasonably expected to generate cash flow in
excess of $1 million in the aggregate in any Fiscal Year;

 

  (iv) any divestiture, sale or other disposal by the Corporation, the
Partnership or any of their Subsidiaries of any investments, properties or
assets in a single transaction or a series of related transactions in excess of
$5 million in the aggregate in any Fiscal Year;

 

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  (v) the incurrence or assumption of any Indebtedness or other obligation with
respect to any such Indebtedness by the Corporation, the Partnership or any of
their Subsidiaries other than (A) in the ordinary course of the business or
(B) amounts not in excess of $25 million in the aggregate outstanding at any
given time;

 

  (vi) the creation or imposition of any lien, mortgage or encumbrance on any
properties or assets of the Corporation, the Partnership or any of their
Subsidiaries in excess of $25 million in the aggregate at any given time;

 

  (vii) the incurrence or assumption of any Indebtedness by the Corporation, the
Partnership or any of their Subsidiaries that provides for lender(s) to have
recourse to the Shareholders or the Partners;

 

  (viii) the issuance, sale, repurchase, or redemption of any equity interest,
any other securities or rights convertible into, exchangeable or exercisable
for, or evidencing the right to subscribe for, or any warrants or options to
acquire, any such shares, interests, voting securities or convertible securities
of the Corporation, the Partnership or any of their Subsidiaries;

 

  (ix) the making of any capital expenditures by the Corporation, the
Partnership or any of their Subsidiaries in excess of $25 million in the
aggregate during any Fiscal Year;

 

  (x) except as otherwise expressly provided herein or in the Partnership
Agreement, any amendment or modification to the terms of this Agreement, the
Partnership Agreement or any material terms of any other governance document of
the Corporation, the Partnership or any of their Subsidiaries or any material
terms of any security issued by the Corporation, the Partnership or any of their
Subsidiaries;

 

  (xi) the entry by the Corporation, the Partnership or any of their
Subsidiaries into any Interested Transaction other than the transactions
contemplated in the Asset Purchase Agreement and the Ancillary Agreements;

 

  (xii) the entry into any “non-compete” or any other agreement or the taking of
any action that would purport to limit or could reasonably be expected to limit,
the freedom of the Corporation, the Partnership or any of their Subsidiaries or
Affiliates that they control to compete freely in any line of business or in any
geographic area;

 

  (xiii) the filing of a prospectus qualifying the offering of securities of the
Corporation, the Partnership or any of their Subsidiaries in any province or
territory in Canada or the filing of a registration statement under the
Securities Act of 1933, as amended;

 

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  (xiv) the entry into (and any amendment, alteration or cancellation of) by the
Corporation, the Partnership or any of their Subsidiaries of any contract (other
than contracts entered into, amended, altered or cancelled in the ordinary
course of business), involving the commitment or transfer of value in excess of
$1 million in the aggregate in any Fiscal Year;

 

  (xv) (A) the commencement of a voluntary case, proceeding or other action
(1) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to the Corporation, the
Partnership or any of their Subsidiaries, or seeking to adjudicate the
Corporation, the Partnership or any such Subsidiary bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to the Corporation, the
Partnership or any such Subsidiary or the Corporation’s, the Partnership’s or
any such Subsidiary’s debts, or (2) seeking appointment of a receiver, trustee,
custodian or other similar official for the Corporation, the Partnership or any
such Subsidiary or for all or any substantial part of the Corporation’s, the
Partnership’s or any such Subsidiary’s assets, or (B) the making of a general
assignment for the benefit of the Corporation’s, the Partnership’s or any such
Subsidiary’s creditors;

 

  (xvi) the commencement of any termination, plan of liquidation or dissolution
or winding-up of the business and affairs of the Corporation, the Partnership or
any of their Subsidiaries, or the selection of any Liquidating Trustee;

 

  (xvii) any change to the name of the Corporation, the Partnership or any of
their Subsidiaries;

 

  (xviii) the increase or decrease of the number of Directors constituting the
entire Board; and

 

  (xix) any material change in any accounting methods or practices of the
Corporation, the Partnership or any of their Subsidiaries, except as required by
GAAP or as is necessary for conformity with any change in accounting methods or
practices of Watsco that is required by GAAP.

(b) For the avoidance of doubt, the Corporation shall cause the Partnership and
its Subsidiaries not to, at any time, take any action or effect any transaction,
or enter any agreement to take any action or effect any transaction, to which
the prior approval provisions of Section 5.3(a) apply, unless such action or
transaction has been approved by the Requisite Shareholders of the Corporation
in accordance with the provisions of Section 5.3(a).

(c) No Shareholder shall, and shall ensure that its Affiliates (other than the
Corporation, the Partnership and their respective Subsidiaries) do not, at any
time, take any

 

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action or effect any transaction, or enter any agreement to take any action or
effect any transaction, binding, on behalf of, or in relation to, the
Corporation, the Partnership or any of their Subsidiaries, which action or
transaction, if undertaken by the Corporation, the Partnership or any of their
Subsidiaries, would require the prior approval under Section 5.3(a) or
Section 5.3(b) unless such action or transaction has been approved by the
Requisite Shareholders of the Corporation in accordance with the provisions of
Section 5.3(a).

5.4 Meetings of Shareholders

(a) Calling of Meetings; Notice. Subject to the Act, Meetings of the
Shareholders may be called at any time and for any purpose or purposes by
Resolution of the Board in which at least a majority of all Directors call for
such meeting, or by any Shareholder. Subject to the notice provisions set forth
in Section 10.3, notice of the place, date and hour of each meeting of the
Shareholders will be given by registered or certified mail, by nationally
recognized overnight delivery service, by telephone (which shall be deemed given
upon oral acknowledgment by the Shareholder receiving notice), by facsimile or
by personal delivery or by email, to each Shareholder entitled to vote at such
meeting, not fewer than five (5) Business Days prior to the meeting, and in any
case not more than thirty (30) days prior to the meeting. A notice shall state,
in general terms, the purpose or purposes for the calling of a meeting. If such
notice is mailed, emailed or sent by overnight delivery service, it will be
directed to each Shareholder at such Shareholder’s address as it appears on the
record of Shareholders, or, if a Shareholder had filed with the Corporation a
written request that notices to such Shareholder be sent to some other address,
then directed to such Shareholder at such other address. Notice of a meeting
need not be given to any Shareholder who signs a waiver of notice or a consent
to holding the meeting or an approval of the minutes of such meeting, whether
before or after the meeting, or who participates in the meeting without
protesting, prior to the commencement of such Shareholder’s participation in the
meeting, the lack of notice to such Shareholder. All such waivers, consents and
approvals shall be filed with the Corporation records or made a part of the
minutes of the meeting.

(b) Time and Place of Meetings. Meetings of the Shareholders may be held at any
place which has been designated in the notice of the meeting or at such place as
may be Determined by the Board from time to time.

(c) Quorum. Except as otherwise provided by this Agreement, at all meetings, all
Shareholders will be required for and will constitute a quorum for the
transaction of business. The Shareholders present at a duly called or held
meeting at which a quorum is present may continue to do business until
adjournment, notwithstanding the loss of a quorum.

(d) Adjourned Meetings. Shareholder(s) holding at least a majority Partnership
Interest calculated with reference to all Shareholders present, whether or not a
quorum is present, may adjourn any meeting to another time and place. At any
such adjourned meeting at which a quorum will be present, any business may be
transacted that might have been transacted at the meeting as originally called.
If the meeting is adjourned for more than twenty-four (24) hours, notice of such
adjournment shall be given prior to the time the adjourned meeting is resumed to
all Shareholders who were not present at the time of the adjournment.

 

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(e) Telephonic Participation by Shareholders at Meetings. Shareholders may
participate in a meeting through the use of conference telephone or similar
communications equipment, so long as all Shareholders participating in such
meeting can hear one another. Participation in a meeting in such manner
constitutes presence in person at such meeting.

(f) Approval of Shareholders.

 

  (i) At a Meeting. Unless specifically provided otherwise in this Agreement,
whenever the Shareholders are entitled to vote on any matter under the Act or
this Agreement, such matter shall be considered approved or consented to upon
the receipt of the affirmative vote at a meeting at which a quorum is present,
of the Shareholder(s) holding at least a majority Partnership Interest
calculated with reference to all Shareholders entitled to vote thereon at such
meeting; provided that any Major Decision shall be considered approved or
consented to only as provided by Section 5.3(a).

 

  (ii) By Written Resolution. Unless specifically provided otherwise in this
Agreement, any action required or permitted to be taken by the Shareholders may
be taken by the Shareholders without a meeting, if a resolution in writing,
setting forth the action so taken, is signed by all Shareholders.

5.5 Proxies

Each Shareholder holding Shares entitled to vote at a meeting of Shareholders or
to express consent or dissent without a meeting may authorize another Person or
Persons to act for such Shareholder by proxy. Without limiting the manner in
which a Shareholder may authorize another Person to act for such Shareholder as
proxy, a writing which has been executed by such Shareholder and entered into
the books and records of the Corporation, shall be a valid means by which a
Shareholder may grant such authority. Each proxy is revocable at the pleasure of
the Shareholder executing it, except in those cases where a proxy is made
irrevocable and an irrevocable proxy is permitted by the Act.

5.6 No Liability

(a) No Shareholder shall be liable, responsible or accountable in damages or
otherwise to the Corporation or to any other Shareholder for (i) any act
performed within the scope of the authority conferred on the Shareholders by
this Agreement except for the wilful misconduct of such Shareholder in carrying
out the obligations of such Shareholder hereunder, (ii) such Shareholder’s
failure or refusal to perform any act, except those expressly required by or
pursuant to the terms of this Agreement, or (iii) such Shareholder’s performance
of, or failure to perform, any act on the reasonable reliance on advice of legal
counsel.

(b) The debts, obligations, expenses and liabilities of the Corporation, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations,
expenses and liabilities of the Corporation, and no Shareholder or Director
shall be obligated personally for any such debt, obligation, expense or
liability of the Corporation solely by reason of being a Shareholder or
Director. No Shareholder shall be required by this Agreement to loan the
Corporation any funds or otherwise provide any financial or credit support.

 

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5.7 Nature of Obligations between Shareholders

Except as otherwise expressly provided herein, nothing contained in this
Agreement shall be deemed to constitute any Shareholder an agent or legal
representative of any other Shareholder or to create any fiduciary relationship
for any purpose whatsoever, apart from such obligations between the Shareholders
of a corporation as may be created by the Act. Except as otherwise expressly
provided in this Agreement, a Shareholder shall not have any authority to act
for, or to assume any obligation or responsibility on behalf of, any other
Shareholder or the Corporation.

5.8 Non-Solicitation

(a) Each Shareholder will not and from and after the date hereof will cause its
Affiliates (other than the Corporation and the Corporation’s Subsidiaries) not
to, without the prior written approval of the Requisite Shareholders, directly
or indirectly, hire or solicit, encourage, entice or induce to terminate his or
her employment with the Corporation or any of the Corporation’s Subsidiaries any
person who is an employee of the Corporation or any Corporation Subsidiary at
the date hereof or at any time hereafter.

(b) Notwithstanding anything to the contrary in this Agreement, in the event,
and from the date, that a party is no longer a Shareholder hereunder, the
provisions of this Section 5.8 shall survive for a period of three (3) years.

5.9 Representations and Warranties of Shareholders

Each of the Shareholders hereby represents and warrants with each other
Shareholder and the Corporation that:

 

  (a) there are no consents or approvals of any Governmental Authority or third
parties that are required for the execution and delivery of this Agreement other
than those, if any, that have been obtained;

 

  (b) neither the entering into nor the delivery of this Agreement nor the
execution and performance of its obligations and covenants provided or
contemplated by this Agreement will conflict with or constitute a default or
breach under any of its constating documents, rules, by-laws or under any law,
rule or regulation to which it is subject;

 

  (c) the execution and delivery of this Agreement shall not constitute or cause
a default under any contract or agreement by which it is bound;

 

  (d) no agreement or obligation exists that restricts its ability to perform
its obligations under this Agreement;

 

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  (e) there is no litigation, action or proceeding to which it is party that if
adversely determined could have an adverse effect on, or enjoin, restrict or
otherwise prevent, the consummation of any of the transactions contemplated by
this Agreement or its ability to perform its obligations under this Agreement;

 

  (f) this Agreement and all related agreements, instruments and documents to be
executed and delivered by it as of the date of this Agreement have been duly
authorized, executed and delivered by it and constitute valid and binding
obligations of such Shareholder enforceable against such Shareholder in
accordance with its and their terms in all material respects;

 

  (g) it is duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly authorized and qualified to do
all things required of it under this Agreement and any agreement executed in
connection with the transactions herein contemplated; and

 

  (h) it has the capacity and authority to enter into this Agreement and nothing
prohibits or restricts the right or ability of it to carry out the terms hereof.

ARTICLE 6

SHARES

6.1 Initial Shareholdings

The parties acknowledge and agree that on the date of this Agreement, Watsco and
Carrier hold the number and the type of Shares set forth opposite their
respective names in Schedule B.

6.2 Certificates.

Each certificate representing Shares shall be stamped or otherwise imprinted
with a legend in substantially the following form, or such similar legend as may
be specified in any other agreement with the Corporation:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFER AND
OTHER RESTRICTIONS SET FORTH IN THE SHAREHOLDERS’ AGREEMENT OF CARRIER
ENTERPRISE CANADA (G.P.), INC. (AS AMENDED FROM TIME TO TIME) AMONG CARRIER
ENTERPRISE CANADA (G.P.), INC. AND ITS SHAREHOLDERS AND, AMONG OTHER THINGS, MAY
NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH SUCH TRANSFER RESTRICTIONS.
COPIES OF THE AFORESAID AGREEMENT ARE ON FILE WITH THE SECRETARY OF THE
CORPORATION AND ARE AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST THEREFOR. THE
HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE
BOUND BY ALL OF THE PROVISIONS OF THE AFORESAID AGREEMENT.

 

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If a share certificate is lost or destroyed, the Secretary shall cancel the
certificate so lost or destroyed upon receiving a sworn declaration of the
Shareholder recorded in the Corporation’s books as the holder of the
certificate, as to such loss or destruction, and reissue a replacement share
certificate to the Shareholder.

ARTICLE 7

BOOKS AND RECORDS; TAX MATTERS

7.1 Books and Records

(a) The Corporation shall maintain, at its principal place of business, separate
books of account for the Corporation that shall show a true and accurate record
of all costs and expenses incurred, all charges made, all credits made and
received and all income derived in connection with the operation of the
Corporation business in accordance with United States generally accepted
accounting principles (“GAAP”) consistently applied, and, to the extent
inconsistent therewith, in accordance with this Agreement. Notwithstanding any
provision to the contrary of the Act, such books of account, together with this
Agreement and the Articles, shall at all times be maintained at the principal
place of business of the Corporation. In addition to any other rights
specifically set forth in this Agreement, each Shareholder shall have access to
all information to which a Shareholder is entitled to have access pursuant to
the Act. The Corporation shall maintain its books of account and its records in
accordance with applicable laws.

(b) A Shareholder may, at its own expense, use its internal resources, or
appoint an accounting firm on behalf of such Shareholder, to audit the accounts
of the Corporation and its Subsidiaries and to perform internal controls
assessments of the Corporation and its Subsidiaries. The Corporation shall
provide reasonable cooperation and complete access to the books and records,
including, original expense reports, invoices, contracts, and other original
records and documents, to such auditor provided, that, if the auditor is a third
party, such auditor executes an appropriate confidentiality agreement and
undertakes to keep such records confidential and withhold from unaffiliated
third parties the information disclosed during the course of this audit, except
as is otherwise required by applicable law. Such audits and assessments may be
conducted at any time with or without prior notice.

7.2 Reporting Requirements

The Directors shall use reasonable best efforts to cause the preparation and
timely filing of all tax returns required to be filed by the Corporation deemed
necessary and required by each jurisdiction in which the Corporation does
business.

 

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7.3 Financial Information

The Corporation shall furnish to each Shareholder the information to be provided
to the Limited Partners pursuant to Section 9.2 of the Partnership Agreement, in
accordance with the terms of Section 9.2 of the Partnership Agreement, mutatis
mutandis.

ARTICLE 8

TRANSFER OF SHARES

8.1 Transfer of Shares

(a) Restriction on Transfer. Other than pursuant to Section 8.1(b),
Section 8.1(c) or Section 8.1(e), or a Transfer of Shares approved by the
Requisite Shareholders, prior to July 1, 2019, no Transfer or offer to Transfer
may be made by a Shareholder of all or any part of such Shareholder’s Shares. In
addition, and notwithstanding any other provision of this Agreement, no Transfer
of Shares by a Shareholder (other than pursuant to Section 8.1(e)) may be made
pursuant to this Agreement unless such Transfer is accompanied by a concurrent
conveyance by such Shareholder or an Affiliate of such Shareholder, as the case
may be, of its entire Partnership Interest pursuant to the provisions of the
Partnership Agreement. Nothing herein shall be deemed to prevent a change of
control of, or any other transfer of capital stock or other equity interests in,
a Watsco Holder or a Carrier Holder, provided, that any such transaction does
not primarily involve a change of control of, or any other transfer of capital
stock or other equity interests in, a Watsco Holder or a Carrier Holder, when
such Watsco Holder’s or Carrier Holder’s assets are primarily composed of
Shares.

(b) Concurrent Transfer of Partnership Interest. If a Shareholder or its
Affiliate sells its entire Partnership Interest pursuant to the Partnership
Agreement, such Shareholder shall concurrently with such sale sell to the
purchaser of such Partnership Interest (or an Affiliate thereof, as directed by
the purchaser), all of such Shareholder’s Shares for the aggregate purchase
price of $1.00 per Share, such sale to be completed concurrently with the
completion of the sale of the Partnership Interest in accordance with the
Partnership Agreement.

(c) Intra-group Transfers. Each Shareholder shall have, and at all times retain
the right to Transfer, all or any portion of such Shareholder’s Shares, and the
rights granted under this Agreement relating to such Shareholder, to such
Shareholder’s wholly-owning ultimate parent entity or to any direct or indirect
wholly-owned Subsidiary of such Shareholder’s wholly-owning ultimate parent
entity (each, a “Permitted Transferee”); provided, that if any Permitted
Transferee ceases to be such a wholly-owned Subsidiary, it shall no longer be a
Permitted Transferee hereunder and all of its Shares, if any, shall be deemed to
have been Transferred back to such Shareholder for all purposes hereunder.

(d) Effectiveness. A Transfer of Shares in the Corporation (other than pursuant
to Section 8.1(e)) shall be effective only upon satisfaction of the following
conditions:

 

  (i) the Shares so transferred were acquired by means of a Transfer permitted
under this Article 8;

 

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  (ii) the Transferee furnishes copies of all instruments effecting the Transfer
and such other customary certificates, instruments and documents as the
Corporation may reasonably require as necessary and appropriate to memorialize
and confirm the Transfer;

 

  (iii) the Corporation has no reason to believe that the Transfer of Shares is
not being made in compliance with applicable securities laws or will subject the
Corporation to additional regulation of any kind;

 

  (iv) the Transferee shall have agreed in writing with the other Shareholder
and the Corporation to assume and be bound by all the obligations of the
Transferor pursuant to this Agreement arising from and after the date of such
Transfer, and to be subject to all the restrictions to which the Transferor is
subject under the terms of this Agreement, which agreement shall be in the form
of Schedule A; and

 

  (v) the Transferee, or an Affiliate of the Transferee, acquires ownership of
the entire Partnership Interest of the Transferor, or an Affiliate of the
Transferor, in accordance with the provisions of the Partnership Agreement.

(e) Pledges of Shares.

 

  (i) Notwithstanding any other provision in this Agreement, including the other
provisions of this Article 8, a Shareholder shall be entitled to grant a
Permitted Lien over its Shares in favor of, any lender or lenders (or agent on
behalf of such lender or lenders) pursuant to a bona fide financing transaction.

 

  (ii) The Shareholders will consent to the Transfer to the lienee under a
Permitted Lien of a Shareholder’s Shares that are subject to the Permitted Lien
upon the exercise of such lienee’s rights under the Permitted Lien.

 

  (iii) Carrier acknowledges that Watsco has pledged or will pledge its Shares
to, and has granted or will grant a security interest in all of their right,
title and interest under this Agreement in favor of, the agent for the lenders
under the Watsco Credit Agreement.

(f) Transfers in Violation. No Transfer of Shares, or any part thereof, that is
in violation of this Article 8, shall be valid or effective against, or shall
bind, the Corporation, and neither the Corporation nor the Shareholders shall
recognize the same for the purpose of making allocations, distributions or other
payments pursuant to this Agreement with respect to such Shares or part thereof.
Neither the Corporation nor the non-transferring Shareholders shall incur any
liability as a result of refusing to make any such distributions to the
Transferee of any such invalid Transfer, or any other Person, and no such
purported Transferee shall have any right to receive allocations or payments of
any profits or losses or distributions.

 

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(g) Approvals. The Transfer of Shares under this Article 8 shall be subject to
any necessary consent, approval, authorization or permit of, action by, filing
with or notification to any Governmental Authority including, without limiting
the generality of the foregoing, the Competition Act (Canada) and the Investment
Canada Act.

ARTICLE 9

INDEMNIFICATION

9.1 Liability for Certain Acts

Subject to applicable law, no Shareholders and officers, employees or agents
appointed pursuant to this Agreement (each in their capacity as such an
“Exculpated Person”) shall be liable, in damages or otherwise, to the
Corporation, the Shareholders or their Affiliates, or any other Exculpated
Person for any act or omission performed or omitted by them in good faith
(including, any act or omission performed or omitted by any of them in reliance
upon and in accordance with the opinion or advice of experts, including, of
legal counsel as to matters of law, of accountants as to matters of accounting,
or of investment bankers or appraisers as to matters of valuation). Neither
Shareholder shall bring or cause the Corporation to bring a proceeding against a
Director alleging a breach of such Director’s fiduciary duties.

9.2 Indemnification

(a) The Corporation shall indemnify to the fullest extent permitted by law any
Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation), or any appeal thereof by reason of the fact that such
Person is or was a Shareholder, Director, an officer, employee or agent of the
Board or the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another Person (any such Person in
their capacity as such, a “Covered Person”), against any losses or damages
(including reasonable attorneys’ fees and any amount expended in settlement of
any claim or loss or damage) actually incurred by such Person in connection with
investigating, preparing or defending any such action, suit or proceeding if
(i) the Covered Person acted honestly and in good faith with a view to the best
interests of the Corporation, and (ii) in the case of a criminal or
administrative action or proceeding that is enforced by a monetary penalty, the
Covered Person had reasonable grounds for believing that such Person’s conduct
was lawful.

(b) The Corporation shall indemnify to the fullest extent permitted by law, and
shall apply to The Court of Queen’s Bench of New Brunswick as and when it is
necessary or desirable to obtain approval to indemnify, any Covered Person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that such Covered Person
is or was a Director, an officer, employee or agent of the Board or the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another Person against any losses or
damages (including reasonable attorneys’ fees and any amount expended in
settlement of any claim or loss or damage) actually incurred by such Covered
Person in connection with investigating, preparing or defending any such action,
suit or

 

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proceeding if (i) the Covered Person acted honestly and in good faith with a
view to the best interests of the Corporation, and (ii) in the case of a
criminal or administrative action or proceeding that is enforced by a monetary
penalty, the Covered Person had reasonable grounds for believing that such
Person’s conduct was lawful.

(c) Expenses (including attorneys’ fees) reasonably incurred by any Covered
Person in defending any civil, criminal, administrative or investigative action,
suit or proceeding shall be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding promptly upon receipt of an
undertaking by or on behalf of such Covered Person to repay such amount if it
shall be determined upon final adjudication after all possible appeals have been
exhausted that such Person is not entitled to be indemnified by the Corporation
authorized in this Section 9.2. In addition, any expenses (including attorneys’
fees) reasonably incurred by any Covered Person in enforcing their right to
indemnification pursuant to this Section 9.2 shall be paid or reimbursed by the
Corporation promptly upon receipt by it of an undertaking by such Covered Person
to repay such expenses if it shall ultimately be determined that such Covered
Person is not entitled to indemnification by the Corporation.

(d) The indemnification and advancement of expenses provided by, or granted
pursuant to, this Section 9.2 shall not be deemed exclusive of any other rights
to which those seeking indemnification or advancement of expenses may be
entitled under any law, agreement, or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office.

(e) The Corporation may purchase and maintain insurance on behalf of any Covered
Person against any liability asserted against such Covered Person and incurred
by such Covered Person in any such capacity, or arising out of such Covered
Person’s status as such, whether or not the Corporation would have the power to
indemnify such Person against such liability under this Section 9.2, except
where (i) in the case of a director or officer of the Corporation, the liability
relates to his failure to act honestly and in good faith with a view to the best
interests of the Corporation or (ii) in the case of a director or officer of
another Person, where the liability relates to his failure to act honestly and
in good faith with a view to the best interests of that Person.

(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, this Section 9.2 shall, unless otherwise provided when authorized
or ratified, continue as to a Covered Person who has ceased to be a Shareholder,
Director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a Person.

(g) The termination of any civil, criminal, administrative or investigative
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not of itself create a
presumption that the Covered Person was not entitled to indemnification pursuant
to this Section 9.2.

(h) Notwithstanding anything to the contrary in this Agreement, the provisions
of this Section 9.2 shall survive the termination of this Agreement or
dissolution of the Corporation.

 

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(i) Nothing in this Section 9.2 is intended to relieve any Shareholder or any
other Person from any liability or other obligation of such Person pursuant to
the Asset Purchase Agreement or any Ancillary Agreement, or to in any way impair
the enforceability of any provision of such agreements against any party
thereto.

(j) Any indemnity under this Section 9.2 shall be provided solely out of, and
only to the extent of, the Corporation’s assets, and no Shareholder shall be
required directly to indemnify any Covered Person pursuant to this Section 9.2.
None of the provisions of this Article 9 shall be deemed to create any rights in
favor of any person other than Covered Persons and Exculpated Persons.

ARTICLE 10

MISCELLANEOUS

10.1 Acknowledgement by the Corporation

The Corporation, by its execution hereof, acknowledges that it has actual notice
of the terms of this Agreement, consents to this Agreement and covenants with
each of the other parties that it will at all times during the continuance of
this Agreement give or cause to be given such notices, execute or cause to be
executed such deeds, transfers and documents, and do or cause to be done all
such acts, matters and things as may from time to time be necessary or conducive
to the carrying out of the terms and intent of this Agreement.

10.2 Further Assurances

Each Shareholder agrees to execute, acknowledge, deliver, file, record and
publish such further certificates, amendments to certificates, instruments and
documents as may be reasonably requested by the Corporation, and do all such
other acts and things as may be required by law, or as may be required to carry
out the intent and purposes of this Agreement.

 

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10.3 Notices

Any notice to be given hereunder shall be in writing and delivered personally or
mailed by registered or certified mail, postage prepaid and return receipt
requested, or by telecopier, as follows:

(a) IF TO WATSCO OR THE WATSCO DECIDING SHAREHOLDER:

Watsco, Inc.

2665 South Bayshore Drive

Suite 901

Coconut Grove, FL 33133

Attn: Barry S. Logan,

Senior Vice President

Telecopy No. (305) 858-4492

with a copy (which shall not constitute notice) to:

Davies Ward Phillips & Vineberg LLP

44th Floor

1 First Canadian Place

Toronto, ON M5X 1B1

Attn: Cameron Rusaw

Telecopy No. (416) 863-0871

(b) IF TO CARRIER OR THE CARRIER DECIDING SHAREHOLDER:

c/o Carrier Corporation

One Carrier Place

Farmington, CT 06034-4015

Attn: General Counsel

Telecopy No. (860) 674-3246

With a copy (which shall not constitute notice) to:

Fraser Milner Casgrain LLP

77 King Street West, Suite 400

Toronto-Dominion Centre

Toronto, ON M5K 0A1

Attn: Matthew Hibbert

Telecopy No. (416) 863-4592

(c) IF TO ANY OTHER SHAREHOLDER

To such addresses reflected in the books and records of the Corporation.

Any Shareholder may designate another addressee (and/or change its address) for
notices hereunder by a notice given pursuant to this Section 10.3. Notice given
by personal delivery or registered mail shall be effective upon actual receipt.
Notice given by telecopier shall be effective upon actual receipt if received
during the recipient’s normal business hours, or at the beginning of the
recipient’s next normal business day after receipt if not received during the
recipient’s normal business hours. All notices by telecopier shall be confirmed
by the sender

 

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thereof promptly after transmission in writing by registered mail or personal
delivery. Anything to the contrary contained herein notwithstanding, notices to
any party shall not be deemed effective with respect to such party until such
notice would, but for this sentence, be effective both as to such party and as
to all other Persons to whom copies are to be given as provided above.

10.4 Termination

Upon any of the Shareholders ceasing, by virtue of the operation of this
Agreement, to be the beneficial owner of Shares, all rights and obligations of
such former Shareholder arising under this Agreement shall be at an end, except
such rights and other obligations as such Person may, at the time of ceasing to
be a beneficial owner of Shares, have become entitled to enforce or become
liable for, as the case may be, and subject as aforesaid, on ceasing to be the
beneficial owner of Shares, any such Person shall cease to be regarded as a
party to this Agreement. This Agreement (other than such rights and obligations
as the Shareholders have become entitled to enforce or become liable for) shall
terminate and be of no further force and effect upon there being only one
Shareholder.

10.5 Confidentiality

Subject to the provisions of this Section 10.5, each Shareholder and its
Affiliates shall keep confidential all information, documentation and records
obtained from the other Shareholder, the Corporation and the Partnership with
respect to the business of the Corporation and the Partnership and the
Partnership Assets as well as any information arising out of such Shareholder’s
access to the Corporation’s and the Partnership’s records and any records of the
Partnership Assets (collectively, the “Confidential Information”), shall not
disclose any Confidential Information to any Person and shall only use the
Confidential Information for the benefit of the Corporation; provided that,
nothing herein contained shall restrict or prohibit any Shareholder from
disclosing Confidential Information to the consultants, agents, advisors and
solicitors of such Shareholder or its Affiliates or any purchaser of a Share (or
a prospective purchaser of a Share) and the consultants, agents, advisors,
solicitors and lenders (or prospective lenders) of such purchaser (or
prospective purchaser), so long as such Shareholder instructs such Persons to
comply with such Shareholder’s obligations under this Section 10.5.

The Confidential Information referred to in this Section shall not include:

 

  (a) public information or information in the public domain at the time of
receipt by a Shareholder or its consultants, agents, advisors, solicitors and
permitted assignees;

 

  (b) information which becomes public information or information in the public
domain through no fault or act of a Shareholder or its consultants, agents,
advisors, solicitors and permitted assignees; or

 

  (c) information received by a Shareholder in good faith from a third party
lawfully in possession of the information and not in breach of any
confidentiality obligations.

Notwithstanding anything to the contrary contained herein, nothing in this
Agreement shall prevent or restrict any Shareholder or any of its Affiliates
from disclosing, without the agreement

 

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of the other Shareholder: (i) Confidential Information required to be disclosed
under any applicable law, regulation or policy governing the business or
administration of such Shareholder or such Affiliates (including, without
limiting the generality of the foregoing, such Confidential Information as may
be required to be disclosed under Section 2.10 of the Partnership Agreement); or
(ii) Confidential Information required to be disclosed to its lenders or other
creditors or to its shareholders or investors. Any Shareholder disclosing
Confidential Information in accordance with this Section 10.5 shall use
reasonable efforts to advise the other Shareholder of the details of the
required disclosure and obtain the comments of such other Shareholder on the
wording of the proposed disclosure prior to making such disclosure and to make
such disclosure (to the extent possible) in a manner that ensures the party
receiving such disclosure will comply with the provisions of this Section 10.5,
mutatis mutandis. The Shareholders also agree to use reasonable efforts to
coordinate any news release or other public disclosures in connection with the
business of the Corporation or the Partnership.

10.6 Dispute Resolution

(a) Initial Dispute Resolution Procedures. Any dispute, claim or controversy (a
“Dispute”) related to or arising out of this Agreement, including, without
limitation, any Dispute between the Corporation, Carrier and Watsco, shall be
subject to the following dispute resolution procedure: first, such Dispute shall
be addressed to the President of Carrier or Senior Vice President of Watsco, as
applicable, for discussion and attempted resolution; second, if any such Dispute
cannot be resolved by such individuals within twenty (20) Business Days from the
date that the Dispute is submitted to such Persons, then such Dispute shall be
immediately referred to the appropriate, respective senior officer of each of
Carrier or Watsco (or equivalent level person), as applicable, for discussion
and attempted resolution; third, if any such Dispute cannot be resolved by such
officers within twenty (20) Business Days from the date that the Dispute is
submitted to such Persons, then such Dispute shall be immediately referred to
the respective Chief Executive Officers of each of Carrier or Watsco (or
equivalent level person), as applicable for discussion and attempted resolution;
and fourth, if any such Dispute cannot be resolved by such Chief Executive
Officers within twenty (20) Business Days from the date that the Dispute is
submitted to such Persons, then such dispute shall be immediately referred to
non-binding mediation as provided in Section 10.6(b) below.

(b) Mediation. Following the initial dispute resolution procedures set forth in
Section 10.6(a), the Parties agree to submit any Dispute to mediation before a
neutral mediator in Toronto, Ontario who will be requested to conduct informal,
nonbinding mediation of the Dispute. Each Party will work with the other to
select an acceptable mediator and to work with the mediator to resolve the
Dispute. The mediation process shall continue until the Dispute is resolved or
until either the mediator makes a finding that there is no possibility of
settlement through the mediation or one of the Parties elects not to continue
the mediation (“Mediation Termination”).

(c) Litigation. In the event of a Mediation Termination, then such Dispute shall
be resolved through legal action or proceeding in the Ontario Superior Court of
Justice - Commercial List located in Toronto, Ontario, or, if the subject matter
of the dispute is not eligible for the Commercial List then the Ontario Superior
Count of Justice located in Toronto, Ontario and any court of appeal therefrom.
Each Party irrevocably submits and attorns to the

 

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jurisdiction of such courts located in the Province of Ontario, in any action or
proceeding arising out of or relating to this Agreement, and each Party hereby
irrevocably agrees that all claims in respect of any such action or proceeding
must be brought or defended in such court; and each Party hereby waives any
obligation or requirement to post any security for costs. Each Party agrees that
service of process on such Party as provided in Section 10.3 shall be deemed
effective service of process on such Party. Service made pursuant to the
foregoing sentence shall have the same legal force and effect as if served upon
such Party personally within the Province of Ontario, and each Party irrevocably
waives, to the fullest extent each may effectively do so, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, TRIAL BY JURY IN ANY SUIT,
ACTION OR PROCEEDING ARISING HEREUNDER.

(d) Governing Law. The provisions of this Agreement shall be governed by and
construed in accordance with the laws of the Province of Ontario (excluding any
conflict of law rule or principle that would refer to the laws of another
jurisdiction) and the federal laws of Canada applicable in such jurisdiction.

10.7 Headings

All titles or captions contained in this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.

10.8 No Third Party Beneficiaries

This Agreement shall be binding upon and inure solely to the benefit of the
parties hereto and their permitted assigns, and nothing herein, express or
implied, is intended to or shall confer upon any other Person any legal or
equitable rights benefit or remedy of any nature whatsoever.

10.9 Extension Not a Waiver

No delay or omission in the exercise of any power, remedy or right herein
provided or otherwise available to a party or the Corporation shall impair or
affect the right of such party or the Corporation thereafter to exercise the
same. Any extension of time or other indulgence granted to a party hereunder
shall not otherwise alter or affect any power, remedy or right of any other
party or of the Corporation, or the obligations of the party to whom such
extension or indulgence is granted. The single or partial exercise of any power,
remedy or right herein provided or otherwise available to a party or the
Corporation shall not preclude any other or further exercise of any power,
remedy, or right.

10.10 Advice and Construction

Each Shareholder has been advised, or has had the opportunity to be advised, by
respective counsel as to its respective rights and obligations under this
Agreement and clearly understands and agrees with all terms and conditions of
this Agreement as set forth herein; and the principle of construction against
draftsmen shall have no application in the interpretation of this Agreement.

 

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10.11 Specific Performance

The parties hereto agree that irreparable damage would occur if any of the
provisions of this Agreement were not performed in accordance with its specific
terms or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in
addition to any other remedy to which they are entitled at law or in equity.

10.12 Severability

If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any law or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.

10.13 Assignment

Neither this Agreement nor any rights hereunder may be assigned by operation of
law or otherwise without the express written resolution of all the Shareholders,
except as permitted pursuant to Article 8.

10.14 Entire Agreement

This Agreement (including the Schedules hereto) constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof and all prior
oral or written agreements relative hereto which are not contained herein are
terminated.

10.15 Amendment

(a) Except as otherwise provided in this Section 10.15, this Agreement may be
amended only by the written approval of all of the Shareholders.

(b) This Agreement may be amended from time to time by the Board to amend any of
the schedules to this Agreement to provide any necessary information regarding
any Shareholder.

(c) Amendments, variations, modifications or changes herein may be made
effective and binding upon the parties by, and only by, the setting forth of
same in a document duly executed in accordance with the foregoing, and any
alleged amendment, variation, modification or change herein which is not so
documented shall not be effective as to any party.

 

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10.16 Counterparts

This Agreement may be executed in one or more counterparts (including by
facsimile transmission), and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which when taken together shall constitute one and the same agreement.

10.17 Successors and Assigns

This Agreement shall be binding upon and inure to the benefit of the
Shareholders and their respective successors and permitted assigns.

IN WITNESS WHEREOF this Agreement has been executed by the parties on the date
first above written.

 

CARRIER ENTERPRISE CANADA (G.P.), INC. By:  

/s/ Barry S. Logan

Name:   Barry S. Logan Title:   President and Secretary WATSCO INTERNATIONAL,
LLC By:  

/s/ Barry S. Logan

Name:   Barry S. Logan Title:   Authorized Signing Authority CARLYLE SCROLL
HOLDINGS, INC. By:  

/s/ Sarah David

Name:   Sarah David Title:   Authorized Signing Authority

 

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SCHEDULE A

FORM OF ASSUMPTION AGREEMENT

(Section 8.1(d)(iv))

 

Re: Shareholders Agreement dated April 27, 2012 governing the affairs of Carrier
Enterprise Canada (G.P.), Inc. (the “Shareholders’ Agreement”)

The undersigned (the “Transferee”), the proposed transferee of the Share
presently owned by [insert name of transferor] (the “Transferor”), for good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged by the Transferee), hereby represents and warrants to the other
parties to the Shareholders’ Agreement as to the matters set out in Section 5.9
of the Shareholders’ Agreement and covenants with the other parties to the
Shareholders’ Agreement to observe, perform and be bound by, from and after the
date the sale of such Share to the Transferee is completed, all the covenants
and obligations of the Transferor under the Shareholders’ Agreement, and to be
subject to all the restrictions to which the Transferor is subject under the
terms of the Shareholders’ Agreement. All capitalized terms used herein shall
have the same meaning as in the Shareholders’ Agreement, except as otherwise
expressly provided herein.

IN WITNESS WHEREOF the undersigned has executed under seal this agreement.

DATED this     day of                

 

[NAME OF PROPOSED TRANSFEREE] By:  

 

Name:   Title:  

 

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SCHEDULE B

SHAREHOLDERS

 

Name of Shareholder

  

Shares Held

Watsco

   60 common shares

Carrier

   40 common shares