Document:

<PAGE>

                                                                   EXHIBIT 10.36

                            SHAREHOLDERS AGREEMENT

                                 by and among

                              PAMECO CORPORATION

                           LITTLEJOHN FUND II, L.P.

                        QUILVEST AMERICAN EQUITY, LTD.

                                      and

                             Willem F. P. de Vogel

                                  dated as of

                               February 18, 2000
<PAGE>

                               TABLE OF CONTENTS
                               -----------------
<TABLE>
<CAPTION>
                                                                                  Page
                                                                                  ----
<S>                                                                               <C>
1.   Certain Defined Terms......................................................    1
2.   Agreements to Vote; Irrevocable Proxy......................................    4
3.   Transfers of Securities....................................................    6
4.   Participation Rights.......................................................    8
5.   Joinder Requirements.......................................................    9
6.   Composition, Nomination and Election of Board..............................    9
7.   Stock Splits...............................................................   11
8.   Representations and Warranties of Littlejohn...............................   11
9.   Representations and Warranties of Quilvest and de Vogel....................   12
10.  Representations and Warranties of the Company..............................   13
11.  Termination; Securities Free from Agreement................................   14
12.  Expenses...................................................................   14
13.  Fees.......................................................................   14
14.  Certain Covenants of Quilvest and de Vogel.................................   15
15.  Financial Reports and Information..........................................   16
16.  Transaction with Affiliates................................................   16
17.  Legend and Stop Transfer Instructions......................................   16
18.  Survival of Representations and Warranties.................................   17
19.  Notices....................................................................   17
20.  Entire Agreement; Amendment................................................   18
21.  Successors and Assigns.....................................................   18
22.  Governing Law; Consent to Jurisdiction.....................................   18
23.  Injunctive Relief..........................................................   19
24.  Counterparts; Facsimile Signatures.........................................   19
25.  Severability...............................................................   19
26.  Further Assurances.........................................................   19
27.  No Third Party Beneficiaries; No Partnership or Fiduciary Relationship.....   19
28.  Legal Expenses.............................................................   19
29.  Interpretation.............................................................   19
30.  Effectiveness..............................................................   20
</TABLE>

                                      -i-
<PAGE>

                            SHAREHOLDERS AGREEMENT
                            ----------------------

          SHAREHOLDERS AGREEMENT (this "Agreement"), dated as of February 18,
2000, by and among Littlejohn Fund II, L.P., a Delaware limited partnership
("Littlejohn"), Quilvest American Equity, Ltd., a British Virgin Islands
international business company ("Quilvest"), Willem F.P. de Vogel, a resident of
the State of New York ("de Vogel"; and together with Littlejohn and Quilvest,
the "Shareholders"), and Pameco Corporation, a Georgia corporation (the
"Company").

                             W I T N E S S E T H:
                             -------------------

          WHEREAS, as of the Effective Time (as defined in Section 1 below) each
of the Shareholders owns such number of shares of Common Stock, par value $.01
per share (the "Common Stock"), such number of shares of Series A Preferred
Shares (as defined in Section 1 hereof) and such number of warrants to purchase
Series A Preferred Shares (the "Warrants"), in each case indicated next to his
or its name on Schedule 1 attached hereto;

          WHEREAS, the Company and the Shareholders have agreed to provide for
certain restrictions with respect to the ownership and transfer of Securities
(as defined in Section 1 hereof) owned by the Shareholders and certain other
rights incident to the ownership of such Securities pursuant to this Agreement;
and

          WHEREAS, this Agreement is being entered into in order to induce
Littlejohn to enter into the Purchase Agreement (as defined in Section 1 hereof)
and to consummate the Contemplated Transactions (as defined in Section 1
hereof).

          NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other, good and valuable consideration, and
intending to be legally bound hereby, the parties hereto, hereby agree, as of
the Effective Time, as follows:

          1.  Certain Defined Terms.
              ---------------------

          As used in this Agreement, the following terms have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):

          "Additional Closing" has the meaning set forth in the Purchase
Agreement.

          "Affiliate" of a Person shall mean any Person which, directly or
indirectly, controls, is controlled by, or is under common control with such
Person.  The term "control" (including, with correlative meaning, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to elect
a majority of the board of directors (or other governing body) or to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise and, in any
event and without limiting the generality of the foregoing, any Person owning
10% or more of the voting securities of another Person shall be deemed to
control that Person.
<PAGE>

          "Aggregate Proceeds" shall be determined as of the date of an
applicable Participation Notice and shall equal the gross proceeds received as
of the date of determination by Littlejohn or Littlejohn Permitted Transferees
from sales, if any, of shares of Common Stock or Preferred Stock to any Person
who is not a Littlejohn Permitted Transferee (a) pursuant to an effective
registration statement, (b) pursuant to Rule 144 under the Securities Act or (c)
in transactions otherwise exempt from the registration requirements of the
Securities Act.

          "Applicable Percentage" has the meaning set forth in the Purchase
Agreement.

          "Articles of Incorporation" means the Articles of Incorporation of the
Company, as they may hereafter be amended or modified.

          "Beneficial Owner" and "beneficial ownership" shall be determined in
accordance with Rule 13d-3 promulgated under the Exchange Act.

          "Board" has the meaning set forth in Section 2.1(c) hereof.

          "Business Day" has the meaning set forth in the Purchase Agreement.

          "By-laws" means the By-laws of the Company, as they may hereafter be
amended or modified.

          "Class A Common Stock" means the Class A Common Stock of the Company,
par value $0.01 per share.

          "Class B Common Stock" means the Class B Common Stock of the Company,
par value $0.01 per share.

          "Commission" means the United States Securities and Exchange
Commission, or any successor thereto.

          "Common Stock" means the Class A Common Stock and Class B Common Stock
of the Company.

          "Contemplated Transactions" has the meaning set forth in the Purchase
Agreement.

          "Credit Agreement" has the meaning set forth in Section 13(a) hereof.

          "Effective Time" shall mean the time when the Initial Closing is
completed.

          "Exchange Act" means the Securities and Exchange Act of 1934, as
amended and the rules and regulations promulgated thereunder.

          "Family Trust" means with respect to any Shareholder who is a natural
person, a trust for the benefit of a member of such Shareholder's Immediate
Family.

          "GBCC" means the Georgia Business Corporation Code, as amended.

                                      -2-
<PAGE>

          "Immediate Family" means with respect to any Shareholder who is a
natural person, such Shareholder's parents, children, siblings, grandparents,
grandchildren, nieces and nephews.

          "Initial Closing" has the meaning set forth in the Purchase Agreement.

          "Initiating Holder" has the meaning set forth in Section 5.1 hereof.

          "Irrevocable Proxy" has the meaning set forth in Section 2.3 hereof.

          "Lenders" shall have the meaning set forth in the Credit Agreement.

          "Littlejohn" means Littlejohn Fund II, L.P., a Delaware limited
partnership.

          "Littlejohn Permitted Transferee" means (a) any Affiliate of
Littlejohn, or (b) any Immediate Family Member, or Family Trust established by
an Immediate Family Member, of an Affiliate of Littlejohn who is a natural
person.

          "Management Fee" has the meaning set forth in Section 13(a) hereof.

          "Offered Securities" has the meaning set forth in Section 4.1 hereof.

          "Option Period" has the meaning set forth in Section 4.3 hereof.

          "Overadvance Fee" has the meaning set forth in Section 13(b) hereof.

          "Participation Notice" has the meaning set forth in Section 4.1
hereof.

          "Participation Right" has the meaning set forth in Section 4.3 hereof.

          "Participating Shareholder" has the meaning set forth in Section 4.2
hereof.

          "Person" means any individual, corporation, partnership, firm, joint
venture, limited liability company or partnership, association, joint-stock
company, trust, unincorporated organization or Governmental Body.

          "Preferred Stock" means any series of preferred stock, par value $1.00
per share, of the Company, including the Series A Preferred Shares.

          "Purchase Agreement" means that certain Securities Purchase Agreement,
dated as of February 18, 2000, by and among the Company, Quilvest and
Littlejohn, as amended from time to time.

          "Purchaser" has the meaning set forth in Section 4.1 hereof.

          "Quilvest" means Quilvest American Equity, Ltd., a British Virgin
Islands international company.

                                      -3-
<PAGE>

          "Registrable Securities" has the meaning set forth in the Registration
Rights Agreement.

          "Registration Rights Agreement" means that certain registration rights
agreement, dated today's date, among the Company, Littlejohn and Quilvest, as
the same may be amended or modified from time to time.

          "Required Approval" has the meaning set forth in the Purchase
Agreement.

          "Return Amount" has the meaning set forth in Section 4.5 hereof.

          "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

          "Selling Shareholder" has the meaning set forth in Section 4.1 hereof.

          "Securities" means and include (a) all shares of the Common Stock and
Preferred Stock of the Company, (b) all options, warrants or rights to acquire
shares of Common Stock or Preferred Stock, (c) all securities which are
convertible into or exchangeable or exercisable for, Common Stock or Preferred
Stock, and (d) all other securities of the Company which may be issued in
exchange for or in respect of shares of Common Stock or Preferred Stock (whether
by way of stock split, stock dividend, combination, reclassification,
reorganization or any other means).

          "Series A Preferred Shares" means the Series A Cumulative Pay-in-Kind
Preferred Stock of the Company, as the same may be amended or modified from time
to time.

          "Subsequent Preferred Shares" has the meaning set forth in the
Certificate of Designation for the Series A Preferred Shares.

          "Third Party Offer Terms" has the meaning set forth in Section 4.1
hereof.

          "Transfer" means any transfer of Securities, whether by sale,
assignment, gift, will, devise, bequest, operation of the laws of descent and
distribution, or in trust, pledge, hypothecation, mortgage, encumbrance or other
disposition. The verb to "transfer" shall mean to sell, assign, give, dispose,
transfer (including by gift, will, devise, bequest, or operation of laws of
descent and distribution, or in trust), pledge, hypothecate, mortgage, or
encumber.

          "Voting Securities" has the meaning set forth in Section 2.1(a)
hereof.

          "Warrants" has the meaning set forth in the preamble hereof.

          2.  Agreements to Vote; Irrevocable Proxy.
              -------------------------------------

              2.1. Voting for Matters to be Considered. Each of the Shareholders
                   -----------------------------------
hereby agrees that, until the Required Approval is obtained or the Company's
shareholders vote to reject the matters contemplated to be voted on pursuant to
Section 7.6 of the Purchase

                                      -4-
<PAGE>

Agreement (the "Matters to be Considered"), whichever shall occur first, at any
meeting of the shareholders, however called, such Shareholder shall:

          (a) vote all Securities which are entitled by the GBCC, the Articles
of Incorporation or the By-laws to be voted ("Voting Securities") and which are
beneficially owned by it, in favor of the Matters to be Considered;

          (b) vote all Voting Securities beneficially owned by him or it against
any action or agreement that would result, to its or his knowledge, in a breach
of any covenant, obligation or agreement or any representation or warranty of
the Company or Quilvest under or pursuant to the Purchase Agreement;

          (c) vote all Voting Securities beneficially owned by him or it against
any action or agreement that would impede, interfere with, delay, postpone or
attempt to discourage obtaining the Required Approval, including (i) any
corporate transaction not entered into in the ordinary course of business,
including a merger, other business combination, reorganization, consolidation,
recapitalization, dissolution or liquidation involving the Company, (ii) a sale
or transfer of a material amount of assets of Company, (iii) any change in the
board of directors of Company (the "Board"), except in accordance with the
Purchase Agreement, (iv) any change in the capitalization of the Company, except
in accordance with the Purchase Agreement, (v) any change in the Articles of
Incorporation, By-laws or other organizational or constitutive documents of the
Company, except in accordance with the Purchase Agreement, or (vi) any other
material change in the corporate structure or business of the Company.  Each
Shareholder acknowledges receipt and review of a copy of the Purchase Agreement.

          2.2.   Agreement to Vote on All Other Matters.  Quilvest and de vogel
                 --------------------------------------
hereby agree that, so long as the Purchase Agreement has not been terminated in
accordance with its terms, at any meeting of the shareholders, however called,
such Shareholder shall vote all Voting Securities which are beneficially owned
by him or it in accordance with written instructions which such Shareholder
reasonably believes in good faith after reasonable inquiry were signed by an
authorized officer of Littlejohn. In the absence of receipt of such written
instructions as to how such Voting Securities should be voted with respect to a
particular meeting, Quilvest and de Vogel shall refrain from voting such Voting
Securities on such particular matter. Notwithstanding anything to the contrary,
Littlejohn shall be entitled to exercise the voting rights attributable to such
Voting Securities at any time pursuant to the Irrevocable Proxy without notice
to Quilvest or de Vogel. Nothing contained in this Section 2.2 shall require
Quilvest or de Vogel, or shall permit Littlejohn through the exercise of the
Irrevocable Proxy, to vote the Voting Securities beneficially owned by Quilvest
or de Vogel, in the case of the election of members of the Board, in
contravention of the provision of Section 6 hereof.

          2.3.   Irrevocable Proxy.  Contemporaneously with the execution of
                 -----------------
this Agreement:  (a) Quilvest and de Vogel shall deliver to Littlejohn a proxy
in the form attached hereto as Exhibit A, which shall become effective as of the
Effective Time and shall be irrevocable to the fullest extent permitted by law
(the "Irrevocable Proxy"), with respect to all Voting Securities owned of record
by each of them as of the Effective Time; and (b) Quilvest and de Vogel shall
cause to be delivered to Littlejohn additional Irrevocable Proxies executed on

                                      -5-
<PAGE>

behalf of each record owner of any Voting Securities owned beneficially (but not
owned of record) by him or it. From time to time after the date of this
Agreement: (i) if Quilvest or de Vogel shall become the record owner of
additional Voting Securities, it shall immediately deliver to Littlejohn an
Irrevocable Proxy with respect to such additional Voting Securities; and (ii) if
Quilvest or de Vogel shall become the beneficial owner (but not the record
owner) of additional Voting Securities, it shall immediately cause to be
delivered to Littlejohn an Irrevocable Proxy with respect to such additional
Voting Securities from the record holder of such additional Voting Securities.
The terms of any Irrevocable Proxy executed and delivered by de Vogel shall
automatically terminate and be of no further force or effect at and after the
earlier of (x) such time as he no longer beneficially owns any shares of Class B
Common Stock or (y) he is no longer a member of the Board. The terms of any
Irrevocable Proxy executed and delivered by a record owner of Voting Securities
which are beneficially owned by de Vogel shall automatically terminate and be of
no further force or effect at and after the earlier of (x) such time as de Vogel
no longer beneficially owns any shares of Class B Common Stock or (y) de Vogel
is no longer a member of the Board.

          2.4.   Written Consents.  The provisions of this Article 2 shall be
                 ----------------
equally applicable to any action taken or proposed to be taken by the Company's
shareholders without a meeting, including any such action taken or proposed to
be taken by written consent pursuant to Section 14-2-704 of the GBCC.

          2.5.   General.  The Company agrees to use its best efforts to cause
                 -------
the Matters to be Considered to be presented for a vote of the Company's
shareholders as soon as practicable. Quilvest and de Vogel hereby confirm each
and every action to be taken by Littlejohn pursuant to the Irrevocable Proxy (so
long as such action was taken when the Irrevocable Proxy was in effect) as if it
were its own and waives any right to make any claim against Littlejohn that may
arise, directly or indirectly, as a result of Littlejohn's voting of any of the
Voting Securities pursuant to the Irrevocable Proxy. Each of Quilvest and de
Vogel hereby agrees, severally and not jointly, to defend, indemnity and hold
Littlejohn harmless from and against any Losses and Investigatory and Defense
Costs (as such terms are defined in the Purchase Agreement) that Littlejohn may
sustain, suffer or incur, directly or indirectly, as a result of a breach by it
of any of its representations, warranties, covenants or agreements contained in
this Agreement.

     3.   Transfers of Securities.
          -----------------------

          3.1.      Except as expressly permitted by the terms of this
Agreement, each of de Vogel and Quilvest hereby agrees that he or it shall not
Transfer, or permit the Transfer of, all or any of the Securities beneficially
owned by him or it.  Littlejohn agrees that it will not transfer any Securities
if such Transfer is prohibited by the terms and conditions of this Agreement.
As a condition to any Transfer to a Littlejohn Permitted Transferee, such
Littlejohn Permitted Transferee shall execute a counterpart agreeing to be bound
by the terms and conditions of this Agreement to the same extent as its
transferor.  No Transfer shall be effective and the Company shall not, and shall
not be compelled to, recognize any Transfer or record any Transfer on its books
if such Transfer is prohibited by this Agreement, or issue any certificate
representing any Securities to any Person who has received such Securities in a
Transfer made in contravention of the terms of this Agreement, and only if such
Person has delivered to the

                                      -6-
<PAGE>

Company and Littlejohn an executed counterpart where one is required to be
delivered hereunder.

          3.2.      Each of Quilvest and de Vogel shall be permitted to Transfer
Securities beneficially owned by it to any Affiliate of such Shareholder, and de
Vogel shall be permitted to transfer Securities beneficially owned by him to a
member of his Immediate Family or to a Family Trust, provided that, in any such
case, any such transferee shall, as a condition to such Transfer, execute a
counterpart, and deliver such counterpart to the Company and Littlejohn,
providing that such transferee shall be bound by the terms and provisions of
this Agreement to the same extent as the transferor was bound.

          3.3.      In the case of a proposed Transfer of Securities by Quilvest
or de Vogel to someone other than one of its Affiliates, or, in the case of de
Vogel, to a member of his Immediate Family or to a Family Trust, then Quilvest
or de Vogel shall provide Littlejohn with written notice at least 20 days prior
to the anticipated Transfer.  Such notice shall contain (a) the identity of the
proposed transferor and (b) the proposed number of Securities to be transferred.
Within 15 days of receipt of written notice of a proposed Transfer, Littlejohn
shall provide either (i) written consent to the proposed Transfer, which consent
may be denied for any reason or for no reason, and which may be given or denied
in Littlejohn's sole and absolute discretion, (ii) written notice specifying an
alternate number of shares to be transferred to which it would be prepared to
provide consent, or (iii) written notice to the applicable Shareholder of
Littlejohn's decision not to consent to the proposed Transfer.  If Littlejohn
shall fail to respond, it shall be deemed not to have consented to such
Transfer.  The proposed transferor shall provide Littlejohn with such other
information as Littlejohn shall reasonably request, including the terms and
conditions of the Transfer and information concerning the proposed transferee.
Upon receipt of the written consent of Littlejohn, if at all, the transferring
Shareholder may consummate the proposed Transfer.  Such Shareholder may also
consummate a transfer of the number of Securities set forth in the alternate
proposal of Littlejohn, provided, however, that such Shareholder shall notify
Littlejohn of its decision to accept the Littlejohn alternate proposed number of
Securities to be transferred not less than 10 days after receipt of the same
from Littlejohn, if at all.  No Transfer may be effected pursuant to this
Section 3.3 until after receipt of the Required Approval.

          3.4.      Except as otherwise consented to in writing by Littlejohn,
which consent may be denied for any reason or for no reason, and which may be
given or denied in Littlejohn's sole and absolute discretion, in no event shall
any Transfer by Quilvest or de Vogel of its or his Class B Common Stock be
permitted under Section 3.3 if such Transfer would result in a conversion of the
Class B Common Stock into shares of Class A Common Stock.

          3.5.      Notwithstanding the provisions of Sections 3.3 and 3.4
hereof, commencing on the date which is five years after the date hereof, and
from time to time thereafter, so long as Littlejohn beneficially owns and is
entitled to the economic benefits of greater than 50% of the then outstanding
Common Stock and Preferred Stock (determined after giving effect to any Transfer
contemplated by this Section 3.5), Quilvest and de Vogel may sell Securities
pursuant to Rule 144 promulgated under the Securities Act and in private
transactions exempt from the Securities Act; provided, however, the amount of
Securities sold in all such

                                      -7-
<PAGE>

transactions shall not exceed, in the aggregate for any three-month period, the
volume limitation set forth in Rule 144, regardless if such rule or limitation
is applicable to the sale.

          3.6.      Notwithstanding the provisions of Sections 3.3 and 3.4
hereof, Quilvest and de Vogel shall be entitled to sell Registrable Securities
pursuant to and in accordance with the terms and conditions of the Registration
Rights Agreement.

          3.7.      The parties agree that the transfer restrictions set forth
in this Article 3 are not manifestly unreasonable.

     4.   Participation Rights.
          --------------------

          4.1.      If Littlejohn or a Littlejohn Permitted Transferee (for
purposes of this section, a "Selling Shareholder") proposes to sell a portion of
the Securities beneficially owned by it ("Offered Securities") in a transaction
which is exempt from the registration requirements of the Securities Act and the
proposed transferee is not a Littlejohn Permitted Transferee (the "Purchaser"),
it shall give written notice ("Participation Notice") to Quilvest and de Vogel
hereunder and comply with this Section 4 before making such sale.  The
Participation Notice shall identify the third party purchaser and the material
terms (including the proposed closing date) of the proposed sale of the Offered
Securities (the "Third Party Offer Terms").

          4.2.      Quilvest or de Vogel may elect to participate (such
Shareholder so electing being herein a "Participating Shareholder") in the
Selling Shareholder's sale of Offered Securities to the Purchaser in accordance
with this Section 4.

          4.3.      For a period of 15 days after receipt of the Participation
Notice (the "Option Period"), any such Participating Shareholder shall have the
right ("Participation Right") to Transfer to the Purchaser, on the same terms
and conditions as the Selling Shareholder, part or all of the Offered Securities
to be sold to the Purchaser.

          4.4.      The Participation Right shall be exercised, if at all, by
any Participating Shareholder giving written notice of exercise of the
Participation Right, including the number of Securities it desires to sell, to
the Selling Shareholder before the expiration of the Option Period.

          4.5.      The number of Offered Securities to be sold by the
Shareholders in a transaction governed by this Section 4 shall be determined as
follows:  (a) until Littlejohn and the Littlejohn Permitted Transferees shall
have received Aggregate Proceeds equal to the amount invested by Littlejohn and
its Affiliates to purchase Securities, plus the amount of accrued and unpaid
dividends, if any, thereon (whether or not declared), in each case through the
date of the particular Participation Notice (the "Return Amount"), the Offered
Securities shall be allocated (without priority between the two groups described
below), between Littlejohn and the Littlejohn Permitted Affiliates, on the one
hand, and Quilvest, de Vogel and their respective permitted transferees who are
party to this Agreement, on the other hand, such that Littlejohn and the
Littlejohn Permitted Transferees will be permitted to sell up to Littlejohn's
Applicable Percentage of the Offered Securities, allocated among them as they
shall so determine, and Quilvest, de Vogel and their respective permitted
transferees who are party to this Agreement will be permitted to sell up to
Quilvest's Applicable Percentage of the Offered Securities,

                                      -8-
<PAGE>

allocated among them as they shall so determine; and (b) after Littlejohn shall
have received the Return Amount, the Offered Securities shall be allocated among
Littlejohn, Quilvest, de Vogel and their respective permitted transferees who
are party to this Agreement pro rata based upon the number of shares of Common
Stock beneficially owned by them. If this Section 4 shall have terminated as to
de Vogel pursuant to Section 11.3 hereof, this Section 4.5 shall be construed to
exclude de Vogel and his permitted transferees from all aspects hereof.

          4.6.      Notwithstanding anything to the contrary contained in this
Section 4, any sale of Securities in connection with an effective registration
statement, or pursuant to the provisions of Rule 144 of the Securities Act,
shall not be restricted by Section 4 or 5 of this Agreement.

     5.   Joinder Requirements.
          --------------------

          5.1.      If at any time Littlejohn (for purposes of this section, the
"Initiating Holder") proposes to sell at least 90% of the Securities
beneficially owned by it to a prospective purchaser which is not an Affiliate of
Littlejohn, and the purchaser of such Securities requires as a condition of the
sale that it acquire the same percentage of the Securities beneficially owned by
Quilvest and de Vogel, then Quilvest and de Vogel shall be required to sell the
same percentage of its respective Securities to the purchaser as Littlejohn is
selling to the purchaser on terms providing Quilvest and de Vogel with
substantially the same economic benefit as was provided to the Initiating
Holder, after taking into consideration the relative rights, preferences and
privileges of the various Securities to be purchased and sold, and otherwise on
the same terms and conditions as those offered to the Initiating Holder.  Each
of Quilvest and de Vogel agrees to execute an irrevocable proxy in favor of the
purchaser under this Section 5 if the purchaser so requires it in order to
retain voting control of the Company, which proxy shall be in substantially the
form of Exhibit A attached hereto.

          5.2.      Any sale of Securities pursuant to this Section 5 shall not
be subject to the provisions of Sections 3 and 4 of this Agreement.  Nothing
contained in this Section 5 shall apply to sales made pursuant to Rule 144 under
the Securities Act or pursuant to an effective registration statement.

     6.   Composition, Nomination and Election of Board.
          ---------------------------------------------

               (a) The Board shall at all times have nine directors.

               (b) So long as there shall be any shares of Class B Common Stock
outstanding, the Board shall be comprised of two persons elected by the holders
of the Class A Common Stock (the "Class A Directors") and seven persons elected
by the holders of the Class B Common Stock (the "Class B Directors"). The Class
A Directors, neither of whom shall be Affiliates or Associates (as defined for
purposes of the Securities Act or the GBCC) of Littlejohn or Quilvest, shall be
nominated in accordance with the requirements of the GBCC, and the rules and
regulations of the Commission and the New York Stock Exchange. Littlejohn shall
nominate five persons to stand for election to serve as Class B Directors,
Quilvest shall nominate one person to stand for election to serve as a Class B
Director and the directors then in office, acting by a majority, shall nominate
one person to stand for election to serve as a Class B Director, which nominee
shall not be an Affiliate or Associate of Littlejohn. Each of the Shareholders
shall vote their Voting Securities, to the extent entitled to vote for the
election of

                                      -9-
<PAGE>

Class B Directors, in favor of the seven persons nominated as provided above in
this Section 6. If there shall occur a vacancy for any reason, whether by
resignation, removal or otherwise, in the position of any Class B Director, then
the Shareholder who originally nominated such Class B Director, or the Board,
acting by a majority of the Directors then in office, if such Class B director
was nominated by the Board, shall be entitled to nominate such Class B
Director's successor, and the Shareholders shall promptly take such action,
including causing such Shareholder's nominee(s) for Class B Director(s), if any,
to take such action, so as to cause the successor Class B Director to be duly
and properly elected or appointed. No Shareholder shall take any action, or
permit any Class B Director nominated by it to take any action, to remove a
Class B Director which was nominated by another Shareholder without the consent
of such other Shareholder. Any person nominated to serve as a Class B Director
by a Shareholder may be removed from such position, with or without cause, only
by the Shareholder nominating such Class B Director, and the other Shareholders
shall promptly take such action, including causing such Shareholder's nominee(s)
for Class B Director(s), if any, to take such action, as may be requested by the
Shareholder who nominated the Class B Director sought to be removed, to duly and
properly effect the removal of such Class B Director from such position. If
there shall occur a vacancy for any reason, whether by resignation, removal or
otherwise, in the position of any Class A Director, then the remaining Class A
Director, if there shall be one, shall be entitled to nominate an individual
(who shall be qualified to serve as a director by reason of his experience) to
fill the vacancy, and the other directors and the Shareholders shall promptly
take such action, including causing such Shareholder's nominee(s) for Class B
Director(s), if any, to take such action, so as to cause the proposed successor
Class A Director to be duly and properly elected or appointed. If there shall be
no Class A Directors, then the vacancies in such directorships shall be filled
by the Class B Directors with persons who are not Affiliates or Associates of
Littlejohn or Quilvest.

          (c) From and after the time that there are no longer any shares of
Class B Common Stock outstanding, Littlejohn shall nominate five persons to
stand for election to serve as directors, Quilvest shall nominate one person to
stand for election to serve as a director, and three persons, neither of whom
shall be Affiliates or Associates of Littlejohn or Quilvest, shall be nominated
in accordance with the requirements of the GBCC and the rules and regulations of
the Commission and the New York Stock Exchange. Each of the Shareholders shall
vote their Voting Securities in favor of the nine persons nominated as provided
above in this Section 6(c). If there shall occur a vacancy for any reason,
whether by resignation, removal or otherwise, in the position of any director
who was nominated by a particular Shareholder pursuant to this Agreement, then
the Shareholder who originally nominated such director, shall be entitled to
nominate such director's successor, and the Shareholders shall promptly take
such action, including causing such Shareholder's nominee(s) for director(s), if
any, to take such action, so as to cause the successor director to be duly and
properly elected or appointed. No Shareholder shall take any action, or permit
any director nominated by it to take any action, to remove a director which was
nominated by another Shareholder without the consent of such other Shareholder.
Any person nominated to serve as a director by a Shareholder pursuant to this
Agreement may be removed from such position, with or without cause, only by the
Shareholder nominating such director, and the other Shareholders shall promptly
take such action, including causing such Shareholder's nominee(s) for
director(s), if any, to take such action, as may be requested by the Shareholder
who nominated the director sought to be removed, to duly and properly effect the
removal of such director from such position. If there shall occur a vacancy
                                      -10-
<PAGE>

for any reason, whether by resignation, removal or otherwise, in the position of
any director who was not nominated by a particular Shareholder pursuant to this
Agreement, then the successor to any such director (who shall be qualified to
serve as a director by reason of his experience and who shall not be an
Affiliate or Associate of Littlejohn or Quilvest) shall be nominated by the
remaining directors, if any, who were not themselves nominated by any
Shareholder pursuant to this Agreement, and the other directors and the
Shareholders shall promptly take such action, including by causing the director
nominee(s), to cause the successor director to be duly and properly elected or
appointed. If there shall be no directors in office who were not nominated by a
Shareholder pursuant to this Agreement, then the vacancies in such directorships
shall be filled by the remaining directors then in office with persons who are
not Affiliates or Associates of Littlejohn or Quilvest.

                    (d)  Notwithstanding the foregoing, the provisions of
subsections (b) and (c) shall remain in full force and effect, in the case of
Littlejohn, so long as it beneficially owns at least 25% of the Class A Common
Stock then outstanding on a fully-diluted basis; and the provisions of
subsections (b) and (c) shall remain in full force and effect, in the case of
Quilvest, so long as it beneficially owns at least 5% of Class A Common Stock
then outstanding on a fully-diluted basis and Littlejohn beneficially owns at
least 25% of the Class A Common Stock then outstanding on a fully-diluted basis.
After such time, if any, that either Littlejohn or Quilvest shall no longer be
entitled to nominate persons to stand for election to serve as a director in
accordance with clause (i) or clause (ii) above, upon the expiration of the
term, resignation or removal of any director nominated by such Purchaser which
is no longer entitled to nominate persons to stand for election to serve as a
director, the successor to such director(s) shall be designated or nominated in
accordance with the requirements of the GBCC and the rules and regulation of the
Commission and the principal national securities exchange or trading market on
which shares of the Class A Common Stock are then listed.

                    (e)  Quilvest's initial director nominee shall be de Vogel.
Notwithstanding anything to the contrary, if, from and after the Effective Time
de Vogel ceases to serve as a member of the Board for any reason, he may not be
renominated or reappointed by Quilvest without the consent of Littlejohn.

                    (f)  Each Shareholder shall vote their Voting Securities
against any proposal brought before the Company's Shareholders, including a
proposal to amend the Articles of Incorporation or the By-laws, which, if
adopted, would frustrate the provisions of this Section 6.

          7.   Stock Splits. If there shall be any change in the Securities of
               ------------
the Company as a result of any merger, consolidation, reorganization,
recapitalization, stock dividend, split-up, combination, exchange or otherwise,
the provisions of this Agreement shall apply with equal force to additional
and/or substitute Securities, if any, received by each Shareholder in exchange
for or by virtue of its ownership of Securities.

          8.   Representations and Warranties of Littlejohn. Littlejohn
               --------------------------------------------
represents and warrants to Quilvest, de Vogel and the Company as follows:

               8.1. Ownership of Shares.  The Securities listed by its name on
                    -------------------
Schedule 1 are all of the Securities beneficially owned by Littlejohn.
Littlejohn has with respect

                                      -11-
<PAGE>

to the Securities listed by its name on Schedule 1 as of the consummation of the
Initial Closing, good, valid and marketable title, free and clear of all liens,
encumbrances, restrictions, options, warrants, rights to purchase, voting
agreements or voting trusts, and claims of every kind (other than the
encumbrances created by this Agreement and other than restrictions on transfer
under applicable Federal and State securities laws).

               8.2. Power; Non-Contravention; Binding Agreement.  Littlejohn has
                    -------------------------------------------
the full power and authority to enter into this Agreement and perform all of its
obligations herewith.  Neither the execution, delivery nor performance by
Littlejohn will violate its charter, by-laws or other organizational or
constitutive documents, or any other agreement, contract or arrangement to which
it is a party or is bound, including any voting agreement, shareholders
agreement or voting trust.  This Agreement has been duly executed and delivered
by Littlejohn and constitutes a legal, valid and binding agreement of
Littlejohn, enforceable in accordance with its terms.  Neither the execution or
delivery of this Agreement nor the consummation by Littlejohn of the
transactions contemplated hereby will (a) require any consent or approval of or
filing with any governmental or other regulatory body, other than filings
required under the federal or state securities laws, or (b) constitute a
violation of, conflict with or constitute a default under (i) any law, rule or
regulation applicable to Littlejohn, or (ii) any order, judgment or decree to
which Littlejohn is bound.

               8.3. Finder's Fees.  No person is, or will be, entitled to any
                    -------------
commission or finder's fees from Littlejohn in connection with this Agreement or
the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Purchase Agreement.

          9.   Representations and Warranties of Quilvest and de Vogel.  Each
               -------------------------------------------------------
of Quilvest and de Vogel represents and warrants, as to itself, to Littlejohn,
each other and the Company, as follows:

               9.1. Ownership of Securities.  The Securities listed by his or
                    -----------------------
its name on Schedule 1 are all of the Securities beneficially owned by him or it
as of the consummation of the Initial Closing.  Such Shareholder does not have
any rights to acquire any additional Securities other than, in the case of
Quilvest, pursuant to (a) the Warrants issued in connection with the Initial
Closing, (b) Securities to be issued in the future pursuant to the Purchase
Agreement, and (c) pursuant to the terms of, or upon the exercise or conversion
of, or any of the Securities described in clauses (a) or (b).  It has with
respect to the Securities listed by his, her or its name on Schedule 1 good,
valid and marketable title, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase, voting agreements or voting
trusts, and claims of every kind (other than the encumbrances created by this
Agreement and other than restrictions on transfer under applicable Federal and
State securities laws).  Neither the execution, delivery or performance of this
Agreement nor the consummation of the Contemplated Transactions will result in
or otherwise trigger an automatic conversion of the Class B Common Stock owned
by Quilvest or de Vogel into shares of Class A Common Stock, except as expressly
set forth in Section 14.2 hereof.

               9.2. Power; Non-Contravention; Binding Agreement.  Each of
                    -------------------------------------------
Quilvest and de Vogel has the full, right, power and authority (and in the case
of de Vogel, legal capacity)

                                      -12-
<PAGE>

to enter into this Agreement and perform all of its obligations hereunder.
Neither the execution, delivery nor performance of this Agreement by such
Shareholder will, in the case of Quilvest, violate the charter, by-laws or other
organizational or constitutive documents of Quilvest, or, in the case of either
Quilvest or de Vogel, any other agreement, contract or arrangement to which each
such Shareholder is a party or is bound, including any voting agreement,
shareholders agreement or voting trust. This Agreement has been duly executed
and delivered by each such Shareholder and constitutes a legal, valid and
binding agreement of such Shareholder, enforceable in accordance with its terms.
Neither the execution or delivery of this Agreement nor the consummation by such
Shareholder of the transactions contemplated hereby will (a) require any consent
or approval of or filing with any governmental or other regulatory body, other
than filings required under the federal or state securities laws, or (b)
constitute a violation of, conflict with or constitute a default under (i) any
law, rule or regulation applicable to any such Shareholder, or (ii) any order,
judgment or decree to which any such Shareholder is bound.

               9.3.  Finder's Fees.  No person is, or will be, entitled to any
                     -------------
commission or finder's fees from Quilvest or de Vogel in connection with this
Agreement or the transactions contemplated hereby.

Quilvest hereby represents and warrants to Littlejohn that the issuance of the
shares of Common Stock issued to Tinvest Limited pursuant to that certain merger
of Pameco Holdings Inc. with and into the Company on June 3, 1997 was approved
by the Board, and such merger was approved by the Board and, accordingly, the
transaction which resulted in Tinvest Limited, an Affiliate of Quilvest,
becoming an "interested shareholder" as defined in GBCC section 14-2-1110 was
approved by the Board.

          10.  Representations and Warranties of the Company. The Company
               ---------------------------------------------
represents and warrants to each Shareholder as follows:

               10.1. Power Authority; Non-Contravention; Binding Agreement.  The
                     -----------------------------------------------------
Company has full right, power and authority to enter into and perform all of its
obligations under this Agreement.  Neither the execution, delivery nor
performance of this Agreement by the Company will violate the charter, by-laws
or other organizational or constitutive documents of the Company or any of its
Subsidiaries, or any other agreement, contract or arrangement to which the
Company or any of its Subsidiaries is a party or is bound.  This Agreement has
been duly executed and delivered by the Company and constitutes a legal, valid
and binding agreement of the Company, enforceable in accordance with its terms.
Neither the execution of this Agreement nor the consummation by the Company of
the transactions contemplated hereby will (a) require any consent or approval of
or filing with any governmental or other regulatory body other than filings
required under federal or state securities laws, or (b) constitute a violation
of, conflict with or constitute a default under (i) any law, rule or regulation
applicable to the Company or any of its Subsidiaries, or (ii) any order,
judgment or decree to which the Company or any of its Subsidiaries is bound.

               10.2. Finder's Fees.  No person is, or will be, entitled to any
                     -------------
commission or finder's fee from the Company in connection with this Agreement or
the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Purchase Agreement.

                                      -13-
<PAGE>

          11.  Termination; Securities Free from Agreement.
               -------------------------------------------

               11.1. This Agreement (other than the provisions of the second and
third sentences of Section 2.5, and the provisions of Section 12 and Sections 18
through 30 which shall survive any termination of this Agreement), shall
terminate on the earliest of (i) 10 years from the date hereof, (ii) the mutual
agreement of the Shareholders which beneficially own a majority of the Class A
Common Stock issued or issuable upon conversion of the Series A Preferred Shares
or the Subsequent Preferred Shares or upon the exercise of the Warrants, in each
case which are subject to this Agreement, and (iii) the sale of 90% or more of
the Securities described in clause (ii) to a Person which is not a Littlejohn
Permitted Transferee or a permitted transferee of either Quilvest or de Vogel
who becomes party to this Agreement.

               11.2. Securities which are sold by a Shareholder pursuant to and
in accordance with the provisions of Section 3.5, Article IV or Article V
hereof, or Registrable Securities which are sold pursuant to and in accordance
with the terms and conditions of the Registration Rights Agreement, shall be
deemed sold, upon the consummation of such sale in accordance therewith, free
and clear of this Agreement and the Irrevocable Proxy granted to Littlejohn.

               11.3. From and after such time as de Vogel is no longer a member
of the Board, the provisions of Sections 3, 4 and 5 hereof will no longer be
applicable to him.

          12.  Expenses. Except as provided in Section 28, each party hereto
               --------
will pay all of its expenses in connection with the transactions contemplated by
this Agreement, including, without limitation, the fees and expenses of its
counsel and other advisors.

          13.  Fees.
               ----

                     (a) Commencing August 31, 2001, the Company shall pay to
Littlejohn & Co., LLC and Quilvest or its designees, pro rata based upon their
respective Applicable Percentages, a management fee in such amount, not to
exceed $500,000 for each annual period ended on August 31st, determined by
Littlejohn and the Company (the "Management Fee"), payable on the last Business
Day in February and August of each year, or on such dates as the parties shall
otherwise agree. The foregoing fee shall continue as long as Littlejohn has the
right to elect a majority of the members of the Board, whether through the
ownership of securities, by contract or otherwise. Notwithstanding the
foregoing, the Management Fee shall not be paid (and shall not accrue), if (i)
at the time of the payment of the Management Fee the Company would not be, in
violation of the financial covenants contained in the Loan and Security
Agreement between the Company, Fleet Bank, as agent, and the lenders named
therein), or (ii) the Board determines that the payment of the Management Fee is
reasonably likely to result in the Company not being able to achieve its
budgeted earnings before interest, takes, depreciation and amortization
(determined in accordance with generally accepted accounting principles) for
such fiscal year.

                     (b) To induce Littlejohn to enter into an agreement to
purchase or guarantee from the Lender any funds lent to the Company pursuant to
any overadvance under the Credit Agreement, up to $5 million,

                                      -14-
<PAGE>

the Company agrees to pay Littlejohn a fee calculated at a rate of 8% per annum
of the actual amount of such overadvance outstanding from time to time (the
"Overadvance Fee") which Littlejohn is then so required to guarantee or
purchase. The Overadvance Fee shall be payable quarterly in arrears commencing
three months after the first day in which there is an overadvance pursuant to
the Credit Agreement and only with respect to such days in which there is an
overadvance. Notwithstanding the foregoing, the Company shall not be required to
pay an Overadvance Fee to the extent that, at the time of the payment thereof,
or after giving effect to the payment thereof, the Company is, or would be in
violation of the financial covenants contained in the Credit Agreement, in which
case any such Overadvance Fee would accrue and be payable as soon as possible.

          14.  Certain Covenants of Quilvest and de Vogel.
               ------------------------------------------

               14.1. Except in accordance with the provisions of this Agreement
and the Purchase Agreement, each of Quilvest and de Vogel agree not to, directly
or indirectly:

                     (a) grant any proxies, deposit any Securities into a voting
trust or enter into a voting agreement with respect to any Securities; or

                     (b) except in connection with a Transfer permitted by and
made in accordance with Section 3.3, 3.5 or 3.6 or Article 4 or Article 5
hereof, and except as required in accordance with Section 14.2 below, convert
any shares of Class B Common Stock beneficially owned by it into shares of Class
A Common Stock or take any action or omit to take any action which could
reasonably be expected to result in the conversion of any Class B Common Stock
beneficially owned by it into shares of Class A Common Stock.

               14.2. Immediately after the Required Approval is obtained, each
Shareholder shall take such action pursuant to the Articles of Incorporation and
otherwise to cause any Class B Common Stock beneficially owned by it to be
converted into shares of Class A Common Stock as soon as possible thereafter.

               14.3. Each Shareholder agrees, while this Agreement is in effect
and to the extent disclosure would be required under the Exchange Act, to notify
the Company, as soon as practicable, of the number of any Voting Securities,
beneficial ownership of which is acquired by such Shareholder after the date
hereof, and to prepare and file with the Commission an amendment to its Schedule
13D, as and when required to be filed, which amendment shall comply as to form
in all material respects with the applicable provisions of the Exchange Act.
Such Shareholder represents and warrants that any such Schedule 13D amendment,
at the time it is filed with the Commission, will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, no
representation or warranty is deemed made by such Shareholder with respect to
information supplied by any other Shareholder for use in preparing the Schedule
13D or any such Schedule 13D amendment.  Such Shareholder will provide the other
Shareholders who are members of the "group" (within the meaning of the Exchange
Act) filing such Schedule 13D with a reasonable opportunity to review and
comment on any proposed Schedule 13D amendment prior to filing such with the
Commission (subject to any requirements of law to file promptly), will provide

                                      -15-
<PAGE>

such other Shareholders with a copy of all such filings made with the Commission
and will notify such other shareholders as promptly as practicable after the
receipt of any comments or any request for additional information from the
Commission or its staff and, upon request of any such other Shareholder, will
supply each of them and their legal counsel with copies of all correspondence
between it or any of its representatives, on the one hand, and the Commission,
its staff or any state securities administrators, on the other hand.

               14.4. In the event the Company determines to raise additional
monies through the sale of additional Securities and Littlejohn is afforded the
opportunity to purchase from the Company such additional Securities then, from
time to time after the date hereof, subject to applicable law, Littlejohn shall
permit Quilvest to purchase from the Company such additional securities offered
for sale to Littlejohn in proportion with Littlejohn pro rata based upon their
respective Applicable Percentages.  Notwithstanding the foregoing, the
provisions of this Section 14.4 shall not be applicable to any additional
issuances of securities set forth in or contemplated by the Purchase Agreement.

               14.5. Quilvest shall deliver to Littlejohn, as a condition to the
effectiveness of this Agreement and the Initial Closing under the Purchase
Agreement, (a) an opinion of Paul Weiss Rifkind Wharton & Garrison to
Littlejohn, (b) an opinion of Harney, Westwood & Riegels and (c) an opinion of
Smith, Gambrell & Russell LLP. in substantially the form as set forth in Exhibit
B, C and D, respectively.

          15.  Financial Reports and Information. If the Company is not required
               ---------------------------------
to file periodic reports under the Exchange Act, it will furnish to each
Shareholder financial statements (including accompanying notes) similar in form
and substance to those which would be required to be filed by it in any annual
or quarterly report filed under the Exchange Act if the Company were subject to
such Exchange Act. Such reports will be furnished within 45 days after the end
of the first, second and third fiscal quarters of each year, and within 90 days
after the end of each fiscal year.

          16.  Transaction with Affiliates. The Company hereby agrees that it
               ---------------------------
shall not enter into any transaction with an Affiliate except upon fair and
reasonable terms that are no less favorable to it than it reasonably believes it
could obtain in a comparable arm's length transaction with a Person not its
Affiliate.

          17.  Legend and Stop Transfer Instructions. Immediately after the
               -------------------------------------
execution of this Agreement (and from time to time prior to the termination of
this Agreement), each Shareholder, if the particular restriction is applicable
to it, shall request the Company to provide that each certificate representing
Securities beneficially owned by it will bear a legend in substantially the
following form:

     THE SHARES REPRESENTED BY THIS CERTIFICATE (I) MAY NOT BE SOLD,
     EXCHANGED OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE
     WITH THE TERMS AND CONDITIONS OF THE SHAREHOLDERS AGREEMENT, AND (II)
     ARE SUBJECT TO THE TERMS AND CONDITIONS OF THE SHAREHOLDERS AGREEMENT
     DATED AS OF FEBRUARY __, 2000, AND THE IRREVOCABLE PROXY REFERRED

                                      -16-
<PAGE>

     TO THEREIN, AS SUCH AGREEMENT MAY BE AMENDED FROM TIME TO TIME, AND
     COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
     ISSUER.

Immediately after the execution of this Agreement (and from time to time prior
to the termination of this Agreement), each Shareholder shall request the
Company to require that the transfer agent for its Securities shall make a
notation in its records prohibiting the transfer of any of the Securities owned
of record by such Shareholder, except in accordance with the terms and
conditions of this Agreement.  Each Shareholder agrees to surrender to the
Company each certificate representing Securities in order to effectuate the
provisions of this Section 17.

          18.  Survival of Representations and Warranties. Except as expressly
               ------------------------------------------
set forth herein, the representations, warranties, covenants and agreements made
by the Shareholders, or the Company in this Agreement shall survive the Initial
Closing.

          19.  Notices. All notices or other communications required or
               -------
permitted hereunder shall be in writing, shall be given by hand delivery, U.S.
Express Mail (return receipt requested), overnight courier guaranteeing next
business day delivery, or facsimile, and shall be deemed duly given when
received, addressed as follows:

          If to the Company, to:

               Pameco Corporation
               1000 Center Place
               Norcross, GA 30093
               Attention: Vice Chairman and Chief Financial Officer
               Facsimile: 770-798-7141
               Telephone: 770-798-0700

               with a copy to:

               Cadwalader, Wickersham & Taft
               100 Maiden Lane
               New York, NY 10038
               Attention: E. David Robertson, Esquire
               Facsimile: 212-504-6666
               Telephone: 212-504-6000

          If to Littlejohn, to:

               Littlejohn & Co., LLC
               115 East Putnam Avenue
               Greenwich, CT 06830
               Attention: Mr. Angus C. Littlejohn, Jr.
               Facsimile: 203-861-4009
               Telephone: 203-861-4005

                                      -17-
<PAGE>

               with a copy to:

               Pepper Hamilton LLP
               3000 Two Logan Square
               Eighteenth and Arch Streets
               Philadelphia, PA 19103-2799
               Attention: James D. Epstein, Esquire
               Facsimile: 215-981-4750
               Telephone: 215-981-4000

          If to Quilvest or de Vogel, to:

               c/o Three Cities Research, Inc.
               650 Madison Avenue
               New York, NY 10022
               Attention: Mr. Willem F. P. de Vogel
               Facsimile: 212-980-1142
               Telephone: 212-605-3213

               with a copy to:

               Paul, Weiss, Rifkind, Wharton & Garrison
               1285 Avenue of the Americas
               New York, NY 10019-6046
               Attention: Richard Borisoff, Esquire
               Facsimile: 212-757-3990
               Telephone: 212-373-3000

          20.  Entire Agreement; Amendment. This Agreement, together with the
               ---------------------------
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with respect
to such subject matter (including any agreements between Quilvest and the
Company regarding shareholder rights.) This Agreement may not be modified,
amended, altered or supplemented except by an agreement in writing executed by
the party against whom such modification, amendment, alteration or supplement is
sought to be enforced.

          21.  Successors and Assigns. This Agreement shall be binding upon and
               ----------------------
inure to the benefit of the parties hereto and their respective successors, and
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties.

          22.  Governing Law; Consent to Jurisdiction. This Agreement shall be
               --------------------------------------
construed and enforced in accordance with the laws of the State of Georgia
without regard to the application of the principles of conflicts or choice of
laws. Each party hereto submits to the jurisdiction of the courts of the State
of Georgia in Fulton County and to the jurisdiction of the United States
District Court for the Northern District of Georgia, and hereby agrees that
service

                                      -18-
<PAGE>

of process may be effected in accordance with the delivery methods described in
Section 19 hereof.

          23.  Injunctive Relief. The parties agree that in the event of a
               -----------------
breach of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party shall be entitled
to obtain in any court of competent jurisdiction a decree of specific
performance or to enjoin the continuing breach of such provision, in each case
without the requirement that a bond be posted, as well as to obtain damages for
breach of this Agreement. By seeking or obtaining such relief, the aggrieved
party will not be precluded from seeking or obtaining any other relief to which
it may be entitled.

          24.  Counterparts; Facsimile Signatures. This Agreement may be
               ----------------------------------
executed in any number of counterparts (including by facsimile signature), each
of which shall be deemed to be an original and all of which together shall
constitute one and the same documents.

          25.  Severability. Any term or provision of this Agreement which is
               ------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.

          26.  Further Assurances. Each party hereto shall execute and deliver
               ------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.

          27.  No Third Party Beneficiaries; No Partnership or Fiduciary
               ---------------------------------------------------------
Relationship. Nothing in this Agreement, expressed or implied, shall be
------------
construed to give any person, other than the parties hereto, any legal or
equitable right, remedy or claim under or by reason of this Agreement or any
provision contained herein. Nothing in this Agreement shall create, or is
intended to create, a fiduciary relationship among Quilvest, de Vogel and
Littlejohn or a partnership or similar relationship among Quilvest, de Vogel and
Littlejohn.

          28.  Legal Expenses. In the event any legal proceeding is commenced by
               --------------
any party to this Agreement to enforce, or recover damages for any breach of,
the provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees and disbursements.

          29.  Interpretation. Unless the context of this Agreement otherwise
               --------------
requires, (i) words of any gender include each gender and the neuter; (ii) words
using the singular or plural number also include the plural or singular number,
respectively; (iii) the terms "hereof," "herein," "hereby and derivative or
similar words refer to this entire Agreement; (iv) the term "Article" or
"Section" refer to the specified Article or Section of this Agreement; and (v)
the term "including" or similar words shall be construed as to refer to such
matter without limitation

                                      -19-
<PAGE>

thereof. Whenever this Agreement refers to a number of days, such number shall
refer to calendar days unless Business Days are specified. The table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.

          30.  Effectiveness. This Agreement shall become effective as of the
               -------------
Effective Time, and only if the Initial Closing actually occurs.

                                      -20-
<PAGE>

          IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date and year first above written.

                                    PAMECO CORPORATION

                                    By: /s/ Richard Martin
                                        ---------------------------------------
                                    Name: Richard Martin
                                    Title: Vice President

                                    LITTLEJOHN FUND II, L.P.

                                    By: Littlejohn Associates II, L.L.C.
                                         its General Partner

                                         By: /s/ Angus C. Littlejohn, Jr.
                                             ----------------------------------
                                            Name: Angus C. Littlejohn, Jr.
                                            Title: Managing Member

                                    QUILVEST AMERICAN EQUITY, LTD.

                                    By: /s/ J. Willem Uhrig
                                        ---------------------------------------

                                        Name: J. Willem Uhrig
                                        Title: Attorney-in-Fact

                                    /s/ Willem F. P. de Vogel
                                    -------------------------------------------
                                    Willem F. P. de Vogel

                                      -21-<PAGE>

                                                                   EXHIBIT 10.37

                         REGISTRATION RIGHTS AGREEMENT

                                     among

                              PAMECO CORPORATION

                           LITTLEJOHN FUND II, L.P.

                                      and

                        QUILVEST AMERICAN EQUITY, LTD.

                                      and

               INTERNATIONAL COMFORT PRODUCTS CORPORATION (USA)

                         Dated as of February 18, 2000
<PAGE>

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<CAPTION>
                                                               Page
                                                               ----
<S>                                                            <C>

  1.  Definitions...........................................      1
  2.  Demand Registrations..................................      4
  3.  Piggyback Registrations...............................      5
  4.  Registration Pursuant to Rule 415.....................      6
  5.  Obligations of the Company............................      7
  6.  Furnish Information...................................     10
  7.  Suspension of Disposition of Registrable Securities...     10
  8.  Expenses of Registration..............................     10
  9.  Underwriting Requirements; Priorities.................     11
 10.  Rule 144..............................................     14
 11.  Lockup Agreement......................................     14
 12.  Transfer of Registration Rights.......................     15
 13.  Indemnification and Contribution......................     15
 14.  Remedies..............................................     18
 15.  Amendments and Waivers................................     18
 16.  Filing Notices and Copies.............................     18
 17.  Notices...............................................     18
 18.  Counterparts and Facsimile Signatures.................     21
 19.  Interpretation........................................     21
 20.  Governing Law; Consent to Jurisdiction................     22
 21.  Severability..........................................     22
 22.  Entire Agreement; Other Registration Rights...........     22
 23.  No Third Parties Benefited............................     22
 24.  Successors and Assigns................................     22
 25.  Effectiveness.........................................     22
</TABLE>

<PAGE>

                         REGISTRATION RIGHTS AGREEMENT
                         -----------------------------

     THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of the 18th
day of February, 2000, by and among Pameco Corporation, a company organized
under the laws of the State of Georgia, Littlejohn Fund II, L.P., a Delaware
limited partnership ("Littlejohn"), Quilvest American Equity Ltd., a British
Virgin Islands international company ("Quilvest"), and International Comfort
Products Corporation (USA) ("ICPC").

                                  BACKGROUND
                                  ----------

     WHEREAS, pursuant to the terms of that certain Securities Purchase
Agreement (the "Purchase Agreement") dated as of February 18, 2000, each of
Littlejohn and Quilvest have purchased shares of Series A Preferred Shares (as
defined herein);

     WHEREAS, each of Littlejohn and Quilvest have entered into a shareholders
agreement dated today's date in connection with the Series A Preferred Shares,
Additional Preferred Shares (as defined herein) and the Common Stock (as defined
herein) underlying them, which sets forth certain rights and obligations of the
shareholders (the "Shareholders Agreement");

     WHEREAS, pursuant to a Warrant Agreement dated as of February 16, 2000 (the
"ICPC Warrant Agreement"), the Company has agreed to issue to ICPC certain
warrants to purchase Class A Common Stock (as defined herein); and

     WHEREAS, the Company (as defined herein) has agreed to provide certain
registration rights to each of Littlejohn, Quilvest and ICPC, in each case in
accordance with the terms and conditions of this Agreement.

     NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto, intending to be legally
bound hereby, do hereby agree as follows:

          1.   Definitions. For purposes of this Agreement, the following terms
               -----------
shall have the following respective meanings:

               (a)  "Act" means the Securities Act of 1933, as amended, or any
similar federal statute enacted hereafter, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.

               (b)  "Additional Preferred Shares" means (i) any series of
preferred stock issued pursuant to the Purchase Agreement, as the same may be
amended or modified from time to time, other than the Series A Preferred Shares,
and (ii) any other securities into which or for which any of the securities
described in clause (i) above may be converted or exchanged pursuant to or
arising from a plan of recapitalization, merger, sale of assets or otherwise.

               (c)  "Affiliate" has the meaning set forth in the Purchase
Agreement.
<PAGE>

               (d)  "Applicable Percentage" has the meaning set forth in the
Purchase Agreement.

               (e)  "Class A Common Stock" means (i) the Class A Common Stock,
par value $0.01 per share, of the Company and (ii) securities which were issued
or received in respect of, or in exchange or substitution for the securities
described in clause (i) above, including, but not limited to, those arising from
a stock dividend, distribution, stock split, reclassification, reorganization,
merger, consolidation, sale or transfer of assets or other exchange of
securities (including the conversion of Series A Preferred Shares or Class B
Common Stock into shares of Class A Common Stock).

               (f)  "Class B Common Stock" means (i) the Class B Common Stock,
par value $0.01 per share, of the Company and (ii) securities which were issued
or received in respect of, or in exchange or substitution for any of the
foregoing, including, but not limited to, those arising from a stock dividend,
distribution, stock split, reclassification, reorganization, merger,
consolidation, sale or transfer of assets or other exchange of securities.

               (g)  "Commission" means the Securities and Exchange Commission,
or any other federal agency at the time administering the Act.

               (h)  "Common Stock" means collectively the Class A Common Stock
and the Class B Common Stock.

               (i)  "Company" means Pameco Corporation, or any successor by
merger, consolidation or other transaction, and shall include any subsidiaries
thereof.

               (j)  "Counterpart" means a counterpart to this Agreement in the
form of Exhibit A hereto, pursuant to the execution of which a Person shall
become bound by all of the terms and conditions of this Agreement; it being
understood that any Person who shall become a Holder shall be required to
execute and become bound by all of the terms and conditions to this Agreement to
the same extent as its transferor.

               (k)  "Holder" means each of Littlejohn, Quilvest and ICPC to the
extent it holds Registrable Securities, and any other Person holding Registrable
Securities to whom registration rights granted under and pursuant to this
Agreement have been transferred pursuant to Section 12 hereof.

               (l)  "ICPC Warrants" means the warrants to be issued pursuant to
the ICPC Warrant Agreement to purchase Class A Common Stock.

               (m)  "Person" means an individual, a sole proprietorship, a
company, a partnership, a limited liability company, a limited liability
partnership, a joint venture, an association, a trust, or any other entity or
organization, including a government or a political subdivision, agency or
instrumentality thereof.

               (n)  "Preferred Stock" means (i) the preferred stock, par value
$1.00 per share, of the Company, and (ii) securities which were issued or
received in respect of, or in exchange or substitution for the securities
described in clause (i) above, including, but not

                                      -2-
<PAGE>

limited to, those arising from a stock dividend, distribution, stock split,
reclassification, reorganization, merger, consolidation, sale or transfer of
assets or other exchange of securities.

               (o)  The terms "register," "registered" and "registration" refer
to a registration effected by preparing and filing a registration statement
("Registration Statement") in compliance with the Act and the declaration or
ordering of effectiveness of such Registration Statement by the Commission.

               (p)  "Registered Holder" means, with respect to a particular
Registration Statement, each Holder which is including or has included
Registrable Securities in such Registration Statement.

               (q)  "Registered Securities" means, the Registrable Securities
included in a particular Registration Statement which has been declared
effective by the Commission and which has remained effective for the minimum
period required under and pursuant to the terms and conditions of this
Agreement.

               (r)  "Registrable Securities" means (i) any shares of Class A
Common Stock beneficially owned (which, for purposes of this Agreement, shall be
determined in accordance with Rule 13d-3 of the 1934 Act) by any Holder
including, those to be received upon conversion of Series A Preferred Shares,
Additional Preferred Shares or Class B Common Stock, to the extent such
securities are from time to time hereafter convertible into Class A Common Stock
and those to be received upon exercise of the ICPC Warrants, and (ii) securities
which were issued or received in respect of, or in exchange or in substitution
for any of the foregoing, including, but not limited to, those arising from a
stock dividend, distribution, stock split, reclassification, reorganization,
merger, consolidation, sale or transfer of assets or other exchange of
securities; it being understood that, as to any particular Registrable
Securities, once issued, such securities shall cease to be Registrable
Securities when (x) a Registration Statement with respect to the sale of such
securities shall have become effective under the Act and such securities shall
have been disposed of in accordance with such Registration Statement, (y) such
securities shall have ceased to be outstanding or (z) such securities shall have
been transferred as permitted by, and in compliance with, Rule 144 (or any
successor provision) promulgated under the Act.

               (s)  "Required Approval" has the meaning set forth in the
Purchase Agreement.

               (t)  "Series A Preferred Shares" means Series A Cumulative
Pay-in-Kind Preferred Stock of the Company, par value $1.00 per share, as the
same may be amended or modified from time to time, and (ii) any other securities
into which or for which any of the securities described in clause (i) above may
be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.

               (u)  "1934 Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.

                                      -3-
<PAGE>

               (v)  "Warrants" has the meaning set forth in the Purchase
Agreement.

          2.   Demand Registrations.
               --------------------

               (a)  At any time after the Required Approval is received, and
from time to time thereafter, upon the receipt of a written request from the
Holders of a majority of the Registrable Securities beneficially owned by
Littlejohn and its Affiliates that the Company file a Registration Statement
under the Act covering the registration for the offer and sale of all or part of
such Littlejohn's Registrable Securities (a "Littlejohn Demand Registration"),
as soon as practicable, the Company shall give written notice to all other
Holders of such Littlejohn Demand Registration and shall cause all such
Registrable Securities that Littlejohn and such other Holders have requested,
which written request must be received by the Company no later than 30 days
after the Company shall have given the aforesaid notice, to be registered under
the Act, subject to and in accordance with the terms, conditions, procedures and
limitations contained in this Agreement, including as set forth in Section 9
below. Three Littlejohn Demand Registrations are entitled to be effected
pursuant to this Section 2 and a registration requested pursuant to this Section
2 shall not be deemed to have been effected unless a Registration Statement with
respect thereto has become effective, and remained continuously effective
without interruption in accordance with the provisions of Section 5(a) hereof,
or not withdrawn as permitted in accordance with the terms and conditions of
this Agreement. The Holders initiating a Littlejohn Demand Registration may
terminate such Littlejohn Demand Registration prior to the filing of a
Registration Statement relating thereto, or require the Company to withdraw
promptly any Registration Statement which has been filed pursuant to this
Section 2 but which has not become effective under the Act, and such
registration shall not be deemed to be a Littlejohn Demand Registration if
either (i) the Holders of the Registrable Securities sought to be included in
such registration agree to pay the costs and expenses of such registration as
set forth in Section 8 below, pro rata in accordance with the number of
Registrable Securities sought to be sold by each of them in such registration,
subject to the provisions of Section 9 below, or (ii) such withdrawal is
accompanied by notice from Littlejohn that, in the good faith exercise of its
reasonable judgment, there has occurred either (A) a material adverse change in
the business, results of operations, financial condition or prospects of the
Company or (B) a misstatement or omission in any preliminary prospectus (other
than with respect to such information supplied in writing by or on behalf of
such Holder expressly for use in such preliminary prospectus) which makes it
inadvisable to proceed with the registration.

               (b)  At any time and from time to time after the date which is
five years after the date hereof, upon the receipt of a written request from the
Holders of a majority of the Registrable Securities beneficially owned by
Quilvest and its Affiliates that the Company file a Registration Statement under
the Act covering the registration for the offer and sale of all or part of such
Registrable Securities (the "Quilvest Demand Registration"), as soon as
practicable, the Company shall give written notice to all other Holders of such
Quilvest Demand Registration and shall cause all such Registrable Securities
that Quilvest and such other Holders have requested, which written request must
be received by the Company no later than 30 days after the Company shall have
given the aforesaid notice, to be registered under the Act, subject to and in
accordance with the terms, conditions, procedures and limitations contained in
this Agreement, including as set forth in Section 9 below. One Quilvest Demand
Registration is entitled to be effected pursuant to this Section 2 and a
registration requested pursuant to this

                                      -4-
<PAGE>

Section 2 shall not be deemed to have been effected unless a Registration
Statement with respect thereto has become effective, remained continuously
effective without interruption in accordance with the provisions of Section 5(a)
hereof, or not withdrawn as permitted in accordance with the terms and
conditions of this Agreement. The Holders initiating a Quilvest Demand
Registration may terminate its Quilvest Demand Registration prior to the filing
of a Registration Statement relating thereto, or require the Company to withdraw
promptly any Registration Statement which has been filed pursuant to this
Section 2 but which has not become effective under the Act, and such
registration shall not be deemed to be a Quilvest Demand Registration if either
(i) the Holders of the Registrable Securities sought to be included in such
registration agree to pay the costs and expenses of such registration as set
forth in Section 8 below, pro rata in accordance with the number of Registrable
Securities sought to be sold by each of them in such registration, subject to
the provisions of Section 9 below, or (ii) such withdrawal is accompanied by
notice from Quilvest that, in the good faith exercise of its reasonable
judgment, there has occurred either (A) a material adverse change in the
business, results of operations, financial condition or prospects of the
Company, or (B) a misstatement or omission in any preliminary prospectus (other
than with respect to such information supplied in writing by or on behalf of
such Holder expressly for use in such preliminary prospectus) which makes it
inadvisable to proceed with the registration.

               (c)  If at the time of any request to register Registrable
Securities pursuant to this Section 2, the Company is preparing or within 30
days thereafter engages a managing underwriter and commences to prepare a
Registration Statement for a public offering (other than a registration effected
solely to implement an employee benefit plan) which in fact is filed and becomes
effective within 120 days after the date the Holders initiating a Demand
Registration notify the Company of its intention to effect a Demand
Registration, respectively (any of which is herein a "Demand Registration"), or
is engaged in any material acquisition or divestiture or other business
transaction with a third party which would be adversely affected by the Demand
Registration to the material detriment of the Company, then the Company may at
its option direct that such request for a Demand Registration be delayed for a
period not in excess of 120 days from the date of such request, such right to
delay a request pursuant to this Section 2(c) or in Section 4 below to be
exercised by the Company not more than once in any one year period.

          3.   Piggyback Registrations.
               -----------------------

               (a)  If at any time after the Required Approval is received, and
from time to time thereafter, the Company proposes to register its Common Stock
under the Act, either for its own account or for the account of others
(including and to the extent any such registrations are effected pursuant to
Section 2 hereof), in connection with the public offering of such Common Stock
solely for cash, on a registration form that would also permit the registration
of Registrable Securities (other than registration statement on Form S-8 or any
successor form, or a registration on Form S-4 for the purpose of offering such
securities to another business entity or the shareholders of such entity in
connection with the acquisition of assets or shares of capital stock,
respectively, of such entity), the Company shall, each such time, promptly give
each Holder written notice of such proposal (a "Piggyback Registration Notice").
Within 30 days after the Piggyback Registration Notice is given, the Holders may
give notice as to the number of shares of Registrable Securities, if any, which
such Holders request to be registered simultaneously with such registration by
the Company ("Piggyback Registration").

                                      -5-
<PAGE>

The Company shall include any Registrable Securities in such Registration
Statement (or in a separate Registration Statement concurrently filed) which the
Holders thereof request to be registered under the Act, subject to and in
accordance with the terms, conditions, procedures and limitations contained in
this Agreement, including the provisions of Section 9 below.

               (b)  Notwithstanding the foregoing, if the Piggyback Registration
was initiated by the Company to effect a primary public offering of its
securities and, if at any time the Company decides after giving written notice
of its intention to so register securities and before the effectiveness of the
Registration Statement filed in connection with such registration, the Company
determines for any reason either not to effect such registration or to delay
such registration, the Company may, at its election, by prior written notice to
each Holder, (i) in the case of a determination not to effect such registration,
relieve itself of its obligation to register the Registrable Securities in
connection with such registration or (ii) in the case of a determination to
delay registration, delay the registration of such Registrable Securities for
the same period as the delay in the registration of such other securities. Each
Holder requesting inclusion in a registration pursuant to this Section 3 may, at
any time before the effective date of the Registration Statement relating to
such registration, revoke such request by written notice of such revocation to
the Company, in which case the Company shall cause such Holder's Registrable
Securities to be withdrawn from such Registration Statement.

          4.   Registration Pursuant to Rule 415. At such time as the Company
               ---------------------------------
shall have qualified for the use of Form S-3 or any similar form promulgated by
the Commission, Littlejohn shall have the right to require, subject to the last
sentence of this Section 4, on one occasion during each calendar year that the
Company file a Registration Statement on Form S-3 pursuant to Rule 415 under the
Act (a "Rule 415 Request"). Notwithstanding the foregoing, the Company shall not
be obligated to effect the filing of a registration pursuant to this Section 4
if, at the time of any request to register Registrable Securities pursuant to
Section 4, the Company is preparing, or within 30 days thereafter engages a
managing underwriter and commences to prepare, a Registration Statement for a
public offering (other than a registration effected solely to implement an
employee benefit plan) which in fact is filed and becomes effective within 120
days after the date Littlejohn makes the Rule 415 Request, or is engaged in any
material acquisition or divestiture or other business transaction with a third
party which would be adversely affected by the Rule 415 Request to the material
detriment of the Company, then the Company may at its option direct that such
Rule 415 Request be delayed for a period not in excess of 120 days from the date
of such request, such right to delay a request pursuant to this Section 4 or in
Section 2(c) above to be exercised by the Company not more than once in any one
year period. Upon receipt of a Rule 415 Request, as soon as practicable, the
Company shall give written notice thereof to all other Holders and shall cause
all such Registrable Securities that Littlejohn and such other Holders have
requested to be registered, no later than 30 days after the Company shall have
given the aforesaid notice, to be registered under the Act, subject to and in
accordance with the terms, conditions, procedures and limitations contained in
this Agreement, including as set forth in Section 9 below. No registration
pursuant to this Section 4 shall count as a Demand Registration pursuant to
Section 2. Three registrations are entitled to be effected pursuant to this
Section 4 and a registration requested pursuant to this Section 4 shall not be
deemed to have been effected unless a Registration Statement with respect
thereto has become effective, and remained continuously effective without
interruption in accordance with the provisions of Section 5(a) hereof, or not
withdrawn as permitted in accordance with the terms

                                      -6-
<PAGE>

and conditions of this Agreement.

          5.   Obligations of the Company. Whenever required under this
               --------------------------
Agreement to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:

               (a)  prepare and file with the Commission a Registration
Statement covering such Registrable Securities and use its best efforts to cause
such Registration Statement to be declared effective by the Commission, and keep
such registration effective, until the date when all Registrable Securities
covered by the Registration Statement have been sold; provided, however, unless
the Company and the Holders of a majority of the Registrable Securities covered
by a particular Registration Statement otherwise agree, the foregoing
effectiveness period shall not exceed, (x) in the case of registration under
Section 2 or 3 hereof, 180 days after the effective date of the Registration
Statement or any amendments thereto, and (y) in the case of a registration under
Section 4 hereof, 365 days after the effective date of the Registration
Statement, or any amendments thereto.

               (b)  furnish to each Holder of Registrable Securities covered by
such Registration Statement and the underwriters, if any, within a reasonable
period of time prior to the making of any filing thereof, copies of all such
documents proposed to be filed (excluding exhibits, unless any such person shall
specifically request exhibits), which documents will be subject to the review of
each Holder and the underwriters, and the Company will not file such
Registration Statement or any amendment thereto or any prospectus or any
supplement thereto including any documents incorporated by reference therein)
with the Commission if (i) the Holders of a majority of the Registrable
Securities covered by such Registration Statement or the underwriters, if any,
shall reasonably object to such filing or (ii) information in such Registration
Statement or prospectus concerning a particular Registered Holder is inaccurate;

               (c)  prepare and file with the Commission such amendments and
post-effective amendments to such Registration Statement as may be necessary to
keep such Registration Statement effective until the applicable date referred to
in Section 5(a) hereof and to comply with the provisions of the Act with respect
to the disposition of all securities covered by such Registration Statement, and
cause the prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed with the Commission pursuant to Rule 424
under the Act;

               (d)  furnish to the Registered Holders such number of copies of
such Registration Statement, each amendment thereto, the prospectus included in
such Registration Statement (including each preliminary prospectus), each
supplement thereto and such other documents, as they may reasonably request in
order to facilitate the disposition of Registered Securities owned by them;

               (e)  use its best efforts to register and qualify the Registered
Securities under such other securities laws of such jurisdictions as shall be
reasonably requested by any Registered Holder and do any and all other acts and
things which may be reasonably necessary or advisable to enable each Registered
Holder to consummate the disposition of the Registered Securities owned by such
Holder in such jurisdictions; provided, however, the Company shall

                                      -7-
<PAGE>

not be required in connection therewith or as a condition thereto to qualify
generally to transact business in any such states or jurisdictions;

               (f)  promptly notify each Registered Holder at any time when a
prospectus is required to be delivered under the Act of the happening of any
event (including a reasonably detailed description of such event) as a result of
which the prospectus included in such Registration Statement contains an untrue
statement of a material fact or omits any fact necessary to make the statements
therein not misleading and, at the request of any such Holder, the Company will
promptly prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registered Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not misleading;

               (g)  make available for inspection by any Registered Holder, any
underwriter participating in any disposition pursuant to such Registration
Statement and any attorney, accountant or other agent retained by any such
Registered Holder or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the officers,
directors, employees and independent accountants of the Company to supply all
information reasonably requested by any such Registered Holder, underwriter,
attorney, accountant or agent in connection with such Registration Statement;

               (h)  promptly notify the Registered Holders and the underwriters,
if any, of the following events and, if requested by any such Person, confirm
such notification in writing and provide copies of any relevant documents
relating to: (i) the filing of the prospectus or any prospectus supplement and
the Registration Statement and any amendment or post-effective amendment thereto
and, with respect to the Registration Statement and any amendment or post-
effective amendment thereto, the declaration of the effectiveness of such
documents, (ii) any comment letters from or requests by the Commission for
amendments or supplements to the Registration Statement or the prospectus or for
additional information, (iii) the issuance or threat of issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose, and (iv) the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Registered Securities for sale in any jurisdiction or the
initiation or threat of initiation of any proceeding for such purpose;

               (i)  use its best efforts to prevent the entry of any order
suspending the effectiveness of the Registration Statement, or the
qualification, or exemption from qualification, of such securities included
therein for sales in any jurisdiction, and to obtain the withdrawal of any such
order, if entered;

               (j)  if reasonably requested by any underwriter or a Registered
Holder in connection with any underwritten offering, incorporate in a prospectus
supplement or post-effective amendment such information as the underwriters and
the Holders of a majority of the Registrable Securities covered by the
particular Registration Statement agree should be included therein relating to
the sale of such Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being sold to
such underwriters, the purchase price being paid therefor by such underwriters
and any other terms of the

                                      -8-
<PAGE>

underwritten offering of such Registrable Securities to be sold in such
offering, and make all required filings of such prospectus supplement or post-
effective amendment after being notified of the matters to be incorporated in
such prospectus supplement or post-effective amendment;

               (k)  cooperate with the Registered Holders and the underwriters,
if any, to facilitate the timely preparation and delivery of certificates
evidencing Registered Securities and not bearing any restrictive legends, and
enable such Registered Securities to be in such lots and registered in such
names as the underwriters may request at least two business days prior to any
delivery of Registered Securities to the underwriters;

               (l)  provide a transfer agent, registrar and CUSIP number for all
Registrable Securities not later than the effective date of the Registration
Statement;

               (m)  prior to the effectiveness of the Registration Statement and
any post-effective amendment thereto and at each closing of any underwritten
offering, (i) make such representations and warranties to the Registered Holders
and the underwriters, if any, with respect to the Registered Securities and the
Registration Statement as are customarily made by issuers to underwriters in
primary underwritten public offerings and such other matters as may be
reasonably requested by such Registered Holders and underwriters or their
counsel, (ii) obtain opinions of counsel to the Company and updates thereof
(which opinions shall be reasonably satisfactory to the underwriters, if any,
and to the Holders of a majority of the Registered Securities) addressed to each
Registered Holder and the underwriters, if any, covering the matters customarily
covered in opinions requested in primary underwritten public offerings of
securities and such other matters as may be reasonably requested by such Holders
and underwriters or their counsel, (iii) obtain "cold comfort" letters and
updates thereof from the Company's independent certified public accountants
addressed to the Company's board of Directors, each Registered Holder and the
underwriters, if any, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters required by
underwriters in connection with primary underwritten public offerings of
securities (iv) deliver such documents and certificates as may be reasonably
requested by the Holders of a majority of the Registered Securities being sold
and by the underwriters, if any, to evidence compliance with clause (i) above
and with any customary conditions contained in the underwriting agreement or
other agreement entered into by the Company;

               (n)  enter into such agreements and take all such other
reasonable actions in connection therewith in order to expedite or facilitate
the disposition of such Registered Securities and in such connection, in the
case of an underwritten offering, enter into an underwriting agreement or other
similar agreement in form, scope and substance as is customary in primary
underwritten public offerings which underwriting agreement shall set forth in
full the indemnification provisions and procedures of Section 13 hereof with
respect to all parties to be indemnified pursuant to said Section; it being
understood that the foregoing shall be done at each closing under such
underwriting or similar agreement or as and to the extent required thereunder;

               (o)  use its best efforts to cause all Registered Securities
included in such Registration Statement to be listed, by the date of first sale
of Registered Securities pursuant to such registration statement, on the New
York Stock Exchange and on each other securities

                                      -9-
<PAGE>

exchange on which shares of Common Stock are then listed or proposed by the
Company to be listed, if any.

               (p)  provide such reasonable assistance in the marketing of the
Registered Securities as is customary of issuers in primary underwritten public
offerings (including participation by its senior management in "road shows");
and

               (q)  otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to its
security holders earnings statements satisfying the provisions of Section 11(a)
of the Act no later than 45 days after the end of any 12-month period (i)
commencing at the end of any fiscal quarter in which Registered Securities are
sold to underwriters in a firm or best efforts underwritten offering or (ii) if
not sold to underwriters in such an offering, beginning with the first day of
the first fiscal quarter of the Company commencing after the effective date of
the Registration Statement, which earnings statement will cover such 12-month
period.

          6.   Furnish Information. The Registered Holders shall furnish to the
               -------------------
Company such information regarding them, the Registrable Securities held by
them, and the intended method of disposition by them of such Registrable
Securities as is customarily provided by selling security holders and as any
underwriters shall reasonably request.

          7.   Suspension of Disposition of Registrable Securities. Each
               ---------------------------------------------------
Registered Holder agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 5(f) or 5(h)(3) or
(4) hereof, such Registered Holder will forthwith discontinue disposition of
Registered Securities until such Registered Holder's receipt of copies of a
supplemented or amended prospectus contemplated by Section 5(f) hereof, or until
it is advised in writing (the "Advice") by the Company that the use of the
prospectus may be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in the prospectus, and,
if so directed by the Company, such Registered Holder will deliver to the
Company (at the expense of the Company) all copies, other than permanent file
copies then in such Registered Holder's possession, of the prospectus covering
such Registered Securities at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period mentioned in Section
5(a) hereof shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to Section 5(f) or
5(h)(3) or (4) hereof to and including the date when each Registered Holder
shall have received the copies of the supplemented or amended prospectus
contemplated by Section 5(f) hereof or the Advice.

          8.   Expenses of Registration.
               ------------------------

               (a)  Except as provided in Section 8(b) through 8(d) hereof, all
expenses incurred in connection with a registration pursuant to this Agreement,
whether or not a registration is consummated, including expenses, fees and taxes
in connection with (i) the preparation and filing of any Registration Statement,
each preliminary prospectus, the final prospectus, and any amendments or
supplements thereto, and the printing and furnishing of copies of each thereof
to any underwriters and to dealers (including costs of mailing and shipment),
(ii) the preparation, issuance and delivery of the certificates for the
Registrable

                                     -10-
<PAGE>

Securities to offered and sold hereunder, including any stock or other transfer
taxes or duties payable upon the sale thereof, (iii) the printing of any
underwriting agreement and any dealer agreements and furnishing of copies of
each to the underwriters and to dealers (including costs of mailing and
shipment) participating in any registration, (iv) the qualification of the
Registrable Securities for offering and sale under state laws (including the
legal fees and filing fees and other disbursements of counsel in connection
therewith) and the printing and furnishing of copies of any blue sky surveys or
legal investment surveys to the Underwriters and to dealers, (v) the filing for
listing or approval for quotation of the Registrable Securities on the New York
Stock Exchange and on any national securities exchange (including the legal fees
and filing fees and other disbursements of counsel in connection therewith),
(vi) filing for review of the public offering of the Registrable Securities by
the National Association of Securities Dealers, Inc. (including the legal fees
and filing fees and other disbursements of counsel in connection therewith),
(vii) the fees and expenses of any transfer agent or registrar for the
Registrable Securities, (viii) making road show presentations with respect to
the offering of the Registrable Securities, (ix) the legal fees and
disbursements charged by counsel to the Company and by counsel to the
underwriters, if any, (x) the fees and disbursements charged by the accountants
to the Company, and (xi) fees and disbursements charged by one counsel either
(A) chosen by Littlejohn in the case of a Littlejohn Demand Registration, (B)
chosen by Quilvest in a Quilvest Demand Registration, or (C) chosen by the
Holders of a majority of the Registrable Securities being offered and sold in
any other registration pursuant to which Registrable Securities are being
offered.

               (b)  Each Holder agrees to pay all underwriting discounts and
commissions and the fees and disbursements of any legal counsel retained by it,
other than the legal counsel referred to in clause (xi) of Section 8(a) above.
Additionally, the Company agrees to use its best efforts to cause its transfer
agent or its counsel to serve as a custodian, to the extent any underwriters
participating in any such registration shall require the participation of a
custodian for any selling security holders and, in such event, the Company shall
be responsible for the fees and disbursements of its transfer agent or its
counsel acting in such custodial capacity.

               (c)  All expenses incurred in connection with a registration
which are, under this Section 8, to be borne by Registered Holders shall be
borne pro rata by the Registered Holders on the basis of the number of such
Holder's Registered Securities (or Registrable Securities proposed to be
registered, as the case may be); provided, however, that if any such cost or
expense is attributable solely to one Registered Holder and does not constitute
a normal cost or expense of such a registration, such cost or expense shall be
allocated to and borne by that Registered Holder.

          9.   Underwriting Requirements; Priorities.
               -------------------------------------

               (a)  With respect to a Littlejohn Demand Registration pursuant to
Section 2, the investment banker(s), book runner(s) and managing underwriter(s)
to administer such registration shall be selected by the Holders of Registrable
Securities initiating such Littlejohn Demand Registration, subject to the
approval of the Company, which approval will not be unreasonably withheld,
delayed or conditioned.  With respect to a Quilvest Demand Registration pursuant
to Section 2, the investment banker(s) book runner(s) and managing

                                      -11-
<PAGE>

underwriter(s) to administer such registration shall be selected by the Holders
of Registrable Securities initiating such Quilvest Demand Registration, subject
to the approval of the Company, which approval will not be unreasonably
withheld, delayed or conditioned.  The Company will have the right to select the
investment banker(s), book runners(s) and manager(s), if any, to administer any
offering which is initiated by the Company.

               (b)  (i)  If a registration under Section 2 hereof is an
underwritten offering and the managing underwriters advise the Company that in
their opinion the number of Registrable Securities and shares of Common Stock
requested to be registered exceeds the number of shares which can be sold in
such offering without materially and adversely affecting the marketability of
the offering, then the Company will include in such registration, such
Registrable Securities and other shares of Common Stock, until Littlejohn shall
have received Aggregate Proceeds (as determined pursuant to subsection (h)
below) equal to the amount invested by Littlejohn and its Affiliates to purchase
Series A Preferred Shares, Additional Preferred Shares and Warrants, plus the
amount of accrued and unpaid dividends thereon, in each case, through the date
of the filing of the applicable Registration Statement (determined from time to
time, the "Return Amount"), determined as follows: first, Registrable Securities
owned by Littlejohn (and its Affiliates), on the one hand, and Quilvest (and its
Affiliates), on the other hand, allocated between the two groups pro rata based
upon the Applicable Percentages of Littlejohn and Quilvest, respectively;
second, to any other Persons having a contractual right to cause the Company to
register shares of Common Stock, pro rata among them based upon the number of
shares of Common Stock which they have requested be registered; and thereafter,
to the Company.

                    (ii) If a registration under Section 2 hereof is an
underwritten offering and the managing underwriters advise the Company that in
their opinion the number of Registrable Securities and shares of Common Stock
requested to be registered exceeds the number of shares which can be sold in
such offering without materially and adversely affecting the marketability of
the offering, then the Company will include in such registration, such
Registrable Securities and other shares of Common Stock, after Littlejohn shall
have received the Return Amount, determined as follows: first, Registrable
Securities owned by Littlejohn (and its Affiliates), on the one hand, and
Quilvest (and its Affiliates), on the other hand, allocated between the two
groups pro rata based upon the number of Registrable Securities which they have
requested be registered; second, to any other Persons having a contractual right
to cause the Company to register shares of Common Stock, pro rata among them
based upon the number of shares of Common Stock which they have requested be
registered; and thereafter, to the Company.

               (c)  If a registration under Section 3 hereof is an underwritten
offering initiated by the Company and the managing underwriters advise the
Company that in their opinion the number of Registrable Securities and shares of
Common Stock requested to be included in such registration exceeds the number of
shares which can be sold in such offering without materially and adversely
affecting the marketability of the offering, then the Company will include in
such registration, such Registrable Securities and other shares of Common Stock
based on the allocations set forth in subsection (b) above, except that the
Company shall be permitted to include all shares of Common Stock proposed to be
registered and sold by it for its

                                     -12-
<PAGE>

own account before any Registrable Securities or shares of Common Stock are
included by any other Person, including Littlejohn, Quilvest, and their
respective Affiliates.

               (d)  If a registration under Section 3 hereof is an underwritten
offering initiated pursuant to contractual rights of shareholders of the Company
not party to this Agreement (the "Other Shareholders") and the managing
underwriters advise the Company that in their opinion the number of Registrable
Securities and shares of Common Stock requested to be included in such
registration exceeds the number of shares which can be sold in such offering
without materially and adversely affecting the marketability of the offering,
then the Company will include in such registration, such Registrable Securities
and other shares of Common Stock based on the allocations set forth in
subsection (b) above, except that the Other Shareholders shall be permitted to
include all shares of Common Stock proposed to be registered and sold by them
for their own account before any Registrable Securities or shares of Common
Stock are included by any other Person, including the Company, Littlejohn,
Quilvest, and their respective Affiliates.

               (e)  Notwithstanding anything to the contrary herein, in
connection with any registration as to which this Agreement applies, Littlejohn
(and its Affiliates), on the one hand, and Quilvest (and its Affiliates), on the
other hand, shall allocate between the two groups all Registrable Securities to
be sold by them as follows: until Littlejohn shall have received the Return
Amount, pro rata based upon the Applicable Percentages of Littlejohn and
Quilvest, respectively; and after Littlejohn has received the Return Amount, pro
rata based upon the number of shares of Common Stock which they have requested
be registered.

               (f)  No Holder may participate in any underwritten registration
hereunder unless such Holder (i) agrees to sell such Holder's Registrable
Securities on the basis provided in any underwriting arrangements approved by
the persons entitled hereunder to approve such arrangements and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.

               (g)  The Company shall not grant registration rights to any
Person which impair in any way the priorities for inclusion in a registration
set forth in this Section 9, including, without limitation, by providing any
such Person with higher priority than or equal priority to that provided to the
parties herein with regard to any Registration Statement filed by be Company,
whether upon such Person's demand or otherwise.

               (h)  For purposes of this Agreement, "Aggregate Proceeds" shall
be determined as of the original date of the filing of a particular Registration
Statement, and shall equal the gross proceeds received as of the date of
determination by Littlejohn or its Affiliates from sales, if any, of Registered
Securities, or from sales of Series A Preferred Shares, Additional Preferred
Shares or Common Stock in transactions which are otherwise exempt from the
registration requirements of the Act.

               (i)  The Company represents and warrants to the Holders that, as
of the date hereof, it is not a party to any binding agreement or understanding,
whether written or oral,

                                     -13-
<PAGE>

which provides for an obligation on the part of the Company to register any of
its Securities under or pursuant to the Securities Act.

          10.  Rule 144. The Company will timely file the reports required to be
               --------
filed by it under the Act and the 1934 Act and the rules and regulations adopted
by the Commission thereunder, and will use its best efforts to take such further
action as any Holder of Registrable Securities may reasonably deem to be
necessary, all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Act within the
limitation of the exemptions provided by (i) Rule 144 under the Act, as such
Rule may be amended from time to time, or (ii) any similar rule or regulation
hereafter adopted by the Commission. Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such information and requirements.

          11.  Lockup Agreement.
               ----------------

               (a)  Each Holder agrees that, upon the request of and to the
extent required by the managing underwriter(s) or book runner(s) for a
registration of the Common Stock at the time of which such Holder is either a
Restricted Holder (as defined in Section 11(a) hereof) or participating in such
registration as a selling shareholder, such Holder will not sell, make any short
sale of, pledge, grant any option for the purchase of or otherwise dispose of
any Registrable Securities (other than those included in the registration or in
any Registration Statement previously declared effective) without the prior
written consent of the Company or such underwriters, as the case may be, or
unless the Company is permitted to sell under Section 11(b) hereof, during the
seven days prior to, and during the 180-day period beginning on, the effective
date of such registration. Each Holder described in the immediately preceding
sentence agrees to confirm the substance and intent of this Section 11(a) in
writing directly to the managing underwriter(s) and book runner(s) in such form
as they shall reasonably request. "Restricted Holder" shall mean any Holder who
beneficially owns (as defined in Rule 13d-3 under the Exchange Act) 2% or more
of the then outstanding Common Stock, any director or executive officer of the
Company (without regard to his or her level of ownership of Common Stock), or
any Holder whose Registrable Securities are being included in the registration
(without regard to the amount of Registrable Securities being registered).

               (b)  The Company agrees (i) not to effect any public or private
sale or distribution of its equity securities, or any securities convertible
into or exchangeable or exercisable for such securities, or otherwise grant any
option for the purchase of its equity securities (other than options issued by
the Company pursuant to any stock option plan or other employee benefit plan),
during the seven days prior to and during the 180-day period beginning on the
effective date of any Registration Statement related to a registered
underwritten public offering pursuant to which Registrable Securities are to be
sold (other than registration statement on Form S-8 or any successor form, or a
registration on Form S-4 for the purpose of offering such securities to another
business entity or the shareholders of such entity in connection with the
acquisition of assets or shares of capital stock, respectively, of such entity),
unless the underwriters managing the registered public offering otherwise agree
and (ii) not to issue securities to any Person if, after giving effect to such
issuance, to the knowledge of the Company, such Person would be the beneficial
owner of in excess of 2% of the Common Stock

                                     -14-
<PAGE>

unless such Person agrees, in the context of a registration contemplated hereby,
not to effect any sale or distribution of any such securities during the period
referred to above (except as part of such underwritten registration, if
otherwise permitted), unless the underwriters managing the registered public
offering otherwise agree.

          12.  Transfer of Registration Rights. Provided that the Company is
               -------------------------------
given written notice by the Holder at the time of such transfer stating the name
and address of the transferee and identifying the securities with respect to
which the rights under this Agreement are being assigned, the registration
rights under this Agreement may be transferred in whole or in part in connection
with the transfer of Registrable Securities. Notwithstanding the foregoing, if
such transfer is subject to covenants, agreements or other undertakings
restricting transferability thereof the registration rights under this Agreement
shall not be transferred in connection with such transfer unless such transfer
complies with all such covenants, agreements and other undertakings. In all
cases, such registration rights shall not be transferred unless the transferee
thereof executes a Counterpart.

          13.  Indemnification and Contribution.
               --------------------------------

               (a)  To the full extent permitted by law, the Company will and
hereby does (i) indemnify and hold harmless each Holder, each director, officer,
partner, employee, affiliate, or agent of or for such Holder, any underwriter
(as defined in the Act), and each Person, if any, who controls such Holder or
underwriter within the meaning of the Act, against any losses, claims, damages,
costs or liabilities, joint or several, to which they may become subject insofar
as such losses, claims, damages, costs or liabilities (or actions in respect
thereof) arise out of, are caused by, or are based on any untrue or alleged
untrue statement of any material fact contained in such Registration Statement,
including any amendments or supplements thereto, or (A) arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading , (B) arise out of, are caused by, or are based on any untrue or
alleged untrue statement of any material fact contained in any preliminary
prospectus or final prospectus contained in such Registration Statement,
including any amendments or supplements thereto, or arise out of or are based
upon the omission or alleged omission to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, or (C) arise out of, or are caused by, any violation by the
Company of any securities law, rule or regulation applicable to the Company and
relating to action or inaction required of the Company in connection with any
such registration; and (ii) will reimburse each such Person or entity for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, costs, liability, or
action; provided, however, that the indemnity agreement contained in this
Section 13(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld,
delayed or conditioned) nor shall the Company be liable to a Holder, underwriter
or controlling person in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon an
untrue statement or an alleged untrue statement or omission or alleged omission
made in connection with such Registration Statement, preliminary prospectus,
final prospectus, or amendments or supplements thereto in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by or on

                                      -15-
<PAGE>

behalf of any such Holder, underwriter or controlling person. This indemnity
shall be in addition to other indemnification arrangements to which the Company
and any Holders may otherwise be party.

               (b)  To the full extent permitted by law, each Holder whose
Registrable Securities are included for offer and sale in a registration under
this Agreement, severally and not jointly, will and hereby does (i) indemnify
and hold harmless the Company, each of its directors, each of its officers who
have signed the Registration Statement, each Person, if any, who controls the
Company within the meaning of the Act, and any underwriter (as defined in the
Act), each other Holder and each Person, if any, who controls such underwriter
or other Holder within the meaning of Section 15 of the Act, against any losses,
claims, damages or liabilities, joint or several, to which the Company or any
such director, officer, controlling person, other Holder or underwriter may
become subject, under the Act and applicable state securities laws, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof) (A)
arise out of, are caused by, or are based on any untrue or alleged untrue
statement of any material fact contained in such Registration Statement,
including any amendments or supplements thereto, or arise out of or are based
upon the omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, (B)
arise out of, are caused by, or are based on any untrue or alleged untrue
statement of any material fact contained in any preliminary prospectus or final
prospectus contained in such Registration Statement, including any amendments or
supplements thereto, or arise out of or are based on the omission or alleged
omission to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, in each of
clauses (A) and (B) to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in such Registration Statement, preliminary or final prospectus, or amendments
or supplements thereto, in reliance upon and in conformity with written
information furnished by such Holder expressly for use in such Registration
Statement; and (ii) will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, other Holder, controlling
person or underwriter attributable to investigating or defending any loss,
claim, damage, liability or action indemnified by such Holder pursuant to clause
(i); provided, however, that the indemnity agreement contained in this Section
13(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of such Holder (which consent shall not be unreasonably withheld, delayed or
conditioned). In no event shall the liability of any Registered Holder be
greater than the dollar amount of the proceeds (net of payment of all expenses)
received by such Registered Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.

               (c)  Promptly after receipt by an indemnified party under this
Section 13 of notice of the commencement of any action or knowledge of a claim
that would, if asserted, give rise to a claim for indemnity hereunder, such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 13, notify the indemnifying party in
writing of the commencement thereof or knowledge thereof and the indemnifying
party shall have the right to participate in, and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties. If prejudicial to any material extent to his
ability to defend such action, the failure to notify an indemnifying party
promptly of the

                                     -16-
<PAGE>

commencement of any such action or of the knowledge of any such claim, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 13 to the extent so prejudiced, but the omission so to notify the
indemnifying party will not relieve him of any liability that he may have to any
indemnified party otherwise than under this Section 13. Each indemnified party
shall have the right to employ separate counsel in such action, claim or
proceeding and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of each indemnified party unless: (i) such
indemnifying party has agreed to pay such expenses, (ii) such indemnifying party
has failed promptly to assume the defense and employ counsel reasonably
satisfactory to such indemnified party or (iii) such indemnified party shall
have been advised in writing by counsel that either there may be one or more
legal defenses available to it which are different from or in addition to those
available to such indemnifying party or such affiliate or controlling person or
a conflict of interest may exist if such counsel represents such indemnified
party and such indemnifying party or its affiliate or controlling person;
provided, however, that such indemnifying party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be responsible hereunder for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel), which counsel shall be designated by such indemnified party.

               (d)  The indemnifying party's liability to any such indemnified
party hereunder shall not be extinguished solely because any other indemnified
party is not entitled to indemnity hereunder. The indemnification provided for
under this Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director or controlling person of such indemnified party, and will survive the
transfer of securities. No Person guilty of fraudulent misrepresentation within
the meaning of Section 11(f) of the Act shall be entitled to indemnification
from any Person who was not guilty of such fraudulent misrepresentation.

               (e)  If the indemnification provided for in this Section 13 is
for any reason, other than pursuant to the terms thereof, held to be unavailable
or insufficient to an indemnified party in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative fault of the
indemnifying and indemnified parties in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative fault but
also the relative benefits received by the indemnifying and indemnified parties
from the offering of Registrable Securities. The relative benefits received by a
party shall be deemed to be in the same proportion as the total proceeds from
the offering (before deducting expenses) received by such party bears to the
total proceeds from the offering received by all parties. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact relates to information supplied by
the Company or a Holder and the parties' relative intent, knowledge, access to
information and opportunity to

                                     -17-
<PAGE>

correct or prevent such statement or omission. The Company and the Holders agree
that it would not be just and equitable if contribution pursuant to this
subsection (e) were determined by pro rata allocation or by any other method of
allocation taking into account the equitable considerations referred to above in
this subsection (e). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (e) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. No Person
guilty of fraudulent misrepresentation within the meaning of Section 11(f) of
the Act shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation. Notwithstanding anything to the contrary, no
Holder shall be required to contribute pursuant to this subsection (e) any
amount in excess of the proceeds received by such Holder (net of all expenses of
such registration paid by such Holder).

          14.  Remedies. In addition to being entitled to exercise all rights
               --------
provided in this Agreement as well as all rights granted by law, including
recovery of damages, each Holder of Registrable Securities will be entitled to
specific performance of its rights under this Agreement without the requirement
that a bond be posted. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees not to raise the defense in any
action for specific performance that a remedy at law would be adequate.

          15.  Amendments and Waivers. The provisions of this Agreement,
               ----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has agreed in writing thereto and has
obtained the written consent of both the Holders of (i) a majority of the
Registrable Securities and (ii) Littlejohn (if Littlejohn is then a Holder of at
least 10% of the Registrable Securities then governed by this Agreement).

          16.  Filing Notices and Copies. The Company shall provide to each
               -------------------------
Holder of Registrable Securities such number of copies of any Registration
Statement, amendment thereto (including post-effective amendments) or other
report, document or notice that is filed with the Commission or other authority
under the securities laws, as may be reasonably requested by such Holder of
Registrable Securities. In addition, the Company shall provide prior notice to
any Holder of Registrable Securities of any such filing of a Registration
Statement or amendment thereto, provided that the foregoing notice provision
shall not shorten any other advance notice provision contained in this
Agreement.

          17.  Notices. All notices and other communications hereunder shall be
               -------
in writing and shall be given to the Person either by hand delivery or by United
States express mail, postage prepaid, or by overnight courier services
guaranteeing next business day delivery, charges prepaid, or by telecopier, to:

          If to the Company, to:

                                     -18-
<PAGE>

               Pameco Corporation
               1000 Center Place
               Norcross, GA 30093
               Attention: Vice Chairman and Chief Financial Officer
               Facsimile: 770-798-7141
               Telephone: 770-798-0700

                                     -19-
<PAGE>

               with a copy to:

               Cadwalader, Wickersham & Taft
               100 Maiden Lane
               New York, NY 10038
               Attention: E. David Robertson, Esquire
               Facsimile: 212-504-6666
               Telephone: 212-504-6000

          If to Littlejohn, to:

               Littlejohn & Co., LLC
               115 East Putnam Avenue
               Greenwich, CT 06830
               Attention: Mr. Angus C. Littlejohn, Jr.
               Facsimile: 203-861-4009
               Telephone: 203-861-4005

               with a copy to:

               Pepper Hamilton LLP
               3000 Two Logan Square
               Eighteenth and Arch Streets
               Philadelphia, PA 19103-2799
               Attention: James D. Epstein, Esquire
               Facsimile: 215-981-4750
               Telephone: 215-981-4000

          If to Quilvest, to:

               c/o Three Cities Research, Inc.
               650 Madison Avenue
               New York, NY 10022
               Attention: Mr. Willem F.P. De Vogel
               Facsimile: 212-980-1142
               Telephone: 212-838-9660

                                      -20-
<PAGE>

               with a copy to:

               Paul, Weiss, Rifkind, Wharton & Garrison
               1285 Avenue of the Americas
               New York, NY 10019-6046
               Attention: Richard Borisoff, Esquire
               Facsimile: 212-757-3990
               Telephone: 212-373-3000

          If to ICPC to:

               International Comfort Products Corporation (USA)
               650 Heil-Quaker Avenue
               P.O. Box 128
               Lewisburg, Tn 37091
               Attention: __________________
               Facsimile: 931-270-4166
               Telephone: _________________

               with a copy to:

               Bingham Dana LLP
               1 State Street
               Harford, CT 16103-3178
               Attention: Daniel Papermaster, Esquire
               Facsimile: 860-240-2700
               Telephone: 860-240-2800

If the notice is sent by United States express mail or by overnight courier
services, it shall be deemed to have been given to the Person entitled thereto
one business day after deposited with the post office or the courier service for
delivery to that Person or, in the case of a notice given by hand delivery or
telecopy, when received.  Notice of any change in any such address shall also be
given in the manner set forth above.  Whenever the giving of notice is required,
the giving of such notice may be waived by the party entitled to receive such
notice.

          18.  Counterparts and Facsimile Signatures. This Agreement may be
               -------------------------------------
executed, including by facsimile signature, in one or more counterparts, each of
which when so executed shall be deemed to be an original and all of which
together shall constitute one and the same instrument.

          19.  Interpretation. Unless the context of this Agreement otherwise
               --------------
requires, (i) words of any gender include each gender and the neuter; (ii) words
using the singular or plural number also include the plural or singular number,
respectively; (iii) the terms "hereof," "herein," "hereby" and derivative or
similar words refer to this entire Agreement; (iv) the terms "Article" or
"Section" refer to the specified Article or Section of this Agreement; and (v)
the term "including" or similar words shall be construed as to refer to such
matter without limitation

                                     -21-
<PAGE>

thereof. Whenever this Agreement refers to a number of days, such number shall
refer to calendar days unless business days are specified. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.

          20.  Governing Law; Consent to Jurisdiction. This Agreement shall be
               --------------------------------------
construed and enforced in accordance with the laws of the State of New York
without regard to the application of the principles of conflicts or choice of
laws. Each party hereto submits to the jurisdiction of the courts of the State
of New York in New York County and to the jurisdiction of the United States
District Court for the Southern District of New York, and hereby agrees that
service of process may be effected in accordance with the delivery methods
described in Section 17 above.

          21.  Severability. Whenever possible, each provision of this Agreement
               ------------
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.

          22.  Entire Agreement; Other Registration Rights. This Agreement is
               -------------------------------------------
intended by the parties as a final expression of their agreement with regard to
the subject matter hereof and intended to be a complete and exclusive statement
of the agreement and matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the rights granted by the Company with respect to the
Registrable Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter
(including and any prior arrangements and understandings between the Company, on
the one hand, and either Littlejohn, Quilvest, or their respective Affiliates,
on the other hand, relating to the registration of any securities under the
Act). The Company represents and warrants to Littlejohn and Quilvest that it is
not a party to any other contract, agreement or arrangement which provides for
the registration of its securities under the Act.

          23.  No Third Parties Benefited. Nothing in this Agreement, express or
               --------------------------
implied, is intended, except as set forth herein, to confer upon any third party
any rights, remedies, obligations or liabilities.

          24.  Successors and Assigns. This Agreement shall inure to the benefit
               ----------------------
of and be binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns including, without limitation,
subsequent Holders of Registrable Securities agreeing to be bound by all and the
terms and conditions of this Agreement.

          25.  Effectiveness. This Agreement shall become effective upon the
               -------------
completion of the Initial Closing (as such term is defined in the Purchase
Agreement), and only if the Initial Closing actually occurs.

                                     -22-
<PAGE>

     IN WITNESS WHEREOF, this Registration Rights Agreement has been executed as
of the date and year first above written.

                    COMPANY:

                    PAMECO CORPORATION

                    By:  /s/ Richard Martin
                       ---------------------------------------------------
                         Name: Richard Martin
                         Title:  Vice Presidet

                    LITTLEJOHN FUND II, L.P.

                    By:  Littlejohn Associates II, L.L.C., its General Partner

                    By:  /s/ Angus C. Littlejohn, Jr.
                       -------------------------------------
                         Name:  Angus C. Littlejohn, Jr.
                         Title:  Managing Member

                    QUILVEST AMERICAN EQUITY, LTD.

                    By:  /s/ Willem F.P. de Vogel
                       -------------------------------------
                         Name:  Willem F.P. de Vogel
                         Title: Attorney-in-Fact

                    INTERNATIONAL COMFORT PRODUCTS
                    CORPORATION (USA)

                    By:_____________________________________
                         Name:
                         Title:

                                     -23-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}]]