Document:

EX-10.1

 Exhibit 10.1 
 SUBSCRIPTION AGREEMENT 
 dated as of March 13, 2012 

by and among 
 WATSCO, INC., 
 UTC CANADA CORPORATION 

and 

CARRIER CORPORATION 

 SUBSCRIPTION AGREEMENT 

THIS SUBSCRIPTION AGREEMENT (this “Agreement”) dated as of March 13, 2012, is by and among Watsco, Inc., a Florida
corporation (“Watsco”), UTC Canada Corporation, a corporation existing under the laws of the Province of New Brunswick, Canada (“UTC Canada”), and, solely for the purposes of Section 4 and
Section 5.1(c) herein, Carrier Corporation, a Delaware corporation (“Carrier”). 
 WHEREAS, Watsco
and UTC Canada have entered into that certain Agreement, dated as of the date hereof (the “Asset Purchase Agreement”), by and among Watsco, UTC Canada, WATSCO Canada Inc., a corporation existing under the laws of the Province of New
Brunswick, Canada (hereinafter referred to as “Watsco Canada”), and Carrier Enterprise Canada L.P., a limited partnership existing under the laws of the Province of Ontario, Canada (the “JV”); and 

WHEREAS, this Agreement is entered into pursuant to and in accordance with the Asset Purchase Agreement, and is the “Subscription
Agreement” identified in Section 8.5 thereof, pursuant to which UTC Canada will contribute its distribution business for “Carrier,” “Bryant,” and “Payne” branded residential and light commercial HVAC products
and Carrier branded commercial applied HVAC equipment to the JV in exchange for $CDN 168,870,000 and a 40% limited partnership interest in the JV; and 
 WHEREAS, in exchange for a 60% limited partnership interest in the JV, Watsco Canada will contribute $CDN 168,870,000 to the JV; and 

WHEREAS, pursuant to the terms of this Agreement, UTC Canada subscribes for that number of shares of $.50 par value Common stock of
Watsco between 750,000 and 1,250,000 (inclusive) as such number is designated by UTC Canada pursuant to Section 3 below (the “Purchased Shares”), for a purchase price equal to the Volume Weighted Average Trading Price of the
Purchased Shares (the “Purchased Shares Consideration”), with respect to which Watsco’s Board of Directors (the “Board”) has determined to be adequate in accordance with Section 607.0621 of the Florida
Business Corporations Act (the “FBCA”); and 
 WHEREAS, shareholders of Watsco holding in excess of 50% of the
aggregate voting power of Watsco’s issued and outstanding Common stock, par value $0.50 per share (“Common Shares”), and Class B common stock, par value $0.50 per share (“Class B Shares”), have, by written
consent in accordance with the FBCA and Watsco’s by-laws, approved the issuance and sale of the Purchased Shares solely for purposes of New York Stock Exchange Rule 312.03 (the “Watsco Shareholder Approval”); and 

WHEREAS, capitalized terms used herein but not herein defined shall have the respective meanings ascribed thereto in the Asset Purchase
Agreement. 
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and intending to be legally
bound hereby, Watsco and UTC Canada agree as follows: 
 SECTION 1. Definitions. The following terms, whenever used
herein, shall have the following respective meanings for all purposes of this Agreement. 

  
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 1.1 “Affiliate” means as to any Person (a) any Person which directly
or indirectly controls, is controlled by, or is under common control with such Person, and (b) any Person who is a director, officer, partner or principal of such Person or of any Person which directly or indirectly controls, is controlled by,
or is under common control with such Person. For purposes of this definition, “control” of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by ownership of
voting stock, by contract or otherwise. 
 1.2 “Articles of Incorporation” means the Amended and Restated
Articles of Incorporation of Watsco, as amended through the date hereof. 
 1.3 “Bylaws” means the Bylaws of
Watsco, as amended through the date hereof. 
 1.4 “Encumbrances” means any and all liens, encumbrances,
charges, mortgages, deeds of trust, options, pledges, restrictions on transfer, preemptive rights, rights of first refusal or offer, security interests, hypothecations, easements, rights of way or encroachments of any nature whatsoever, whether
voluntarily incurred or arising by operation of law. 
 1.5 “Exchange Act” means the Securities Exchange Act of
1934, as amended. 
 1.6 “Governmental Authority” means any nation or country (including but not limited to the
United States) and any state, commonwealth, territory or possession thereof and any political subdivision of any of the foregoing, including but not limited to courts, departments, commissions, boards, bureaus, agencies, ministries or other
instrumentalities. 
 1.7 “Material Adverse Effect” means a material adverse effect on the business, results of
operations, properties or assets of a Person; provided, however, that “Material Adverse Effect” shall not include the impact on such business, results of operations, properties or assets of a Person arising out of or
attributable to (i) economic conditions affecting the United States generally, (ii) conditions or effects affecting the capital markets in the United States generally or (iii) effects relating to the announcement of the execution of
this Agreement or otherwise to the pendency of the transactions contemplated hereby, except to the extent that the impact of any of the conditions or events described in the foregoing clauses (i), (ii) or (iii) disproportionally affects
such Person. 
 1.8 “Person” means any individual, corporation (including any not-for-profit corporation),
general or limited partnership, limited liability partnership, joint venture, estate, trust, firm, company (including any limited liability company or joint stock company), association, organization, entity or Governmental Authority. 

1.9 “SEC” means the United States Securities and Exchange Commission. 

1.10 “Securities Act” means the Securities Act of 1933, as amended. 

1.11 “Subsidiary” means with respect to any Person, (i) any corporation fifty percent (50%) or more of whose
stock of any class or classes having by the terms thereof 

  
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ordinary voting power to elect a majority of the directors of such corporation is at the time owned by such Person, directly or indirectly through one or more Subsidiaries, and (ii) any
other Person, including but not limited to a joint venture, a general or limited partnership or a limited liability company, in which such Person, directly or indirectly through one or more Subsidiaries, at the time owns at least fifty percent
(50%) or more of the ownership interests entitled to vote in the election of managing partners, managers or trustees thereof (or other Persons performing such functions) or acts as the general partner, managing member, trustee (or Persons
performing similar functions) of such other Person. 
 1.12 “Volume Weighted Average Trading Price” means the
weighted average of the reported per share prices at which transactions in the Common Shares are executed on the New York Stock Exchange (the “NYSE”) during the ten (10) consecutive trading days ending on and including the second
(2nd) trading day immediately prior to the Closing Date as such weighted average price is reported by Bloomberg Financial Markets. 
 SECTION 2. Authorization of Sale of the Shares. In consideration for the Purchased Shares Consideration, subject to the terms and conditions of this Agreement, the Board has authorized the
issuance and sale to UTC Canada of the Purchased Shares. 
 SECTION 3. Agreement to Sell and
Purchase the Shares. On or prior to the third
(3rd) trading day immediately prior to the Closing
Date, UTC Canada shall deliver to Watsco written notice of the exact number of Purchased Shares between 750,000 and 1,250,000 (inclusive) that it will purchase hereunder, and such number shall become the Purchased Shares for all purposes under this
Agreement. Subject to the terms and conditions of this Agreement, at the Closing, Watsco shall issue and sell to UTC Canada, and UTC Canada shall purchase from Watsco, the Purchased Shares in exchange for the Purchased Shares Consideration;
provided, that if the Volume Weighted Average Trading Price of the Common Shares is less than $50.00, by not later than the trading day prior to the Closing Date Watsco may give UTC Canada a notice requesting that UTC Canada accept a Purchased
Shares Consideration per share of $50.00, in which case, (A) if UTC Canada gives Watsco a notice accepting the request before Closing, the Purchased Shares Consideration per share will be deemed to be $50.00 for purposes of this Agreement and
(B) otherwise, this Agreement will terminate and shall cease to be of any force or effect. Termination of this Agreement solely as a result of clause (B) of the immediately preceding sentence shall be independent of and shall not cause a
termination of the Asset Purchase Agreement. On the other hand, if Closing does not occur under the Asset Purchase Agreement, this Agreement shall terminate and shall cease to be of any force or effect. 

SECTION 4. Amendment to Shareholder Agreement; Schedule 14C. At Closing, Watsco, Carrier Corporation and UTC Canada shall
enter into a Second Amended and Restated Shareholders Agreement (the “Amended Shareholders Agreement”), which shall be substantially similar to, and which shall amend and restate in its entirety, that certain Amended and Restated
Shareholder Agreement, dated as of January 24, 2012 between Watsco and Carrier (the “Existing Shareholder Agreement”), for the purposes of (i) UTC Canada becoming a party to, and bound by, the Existing Shareholder
Agreement, as a “Shareholder” thereto, as such agreement is amended by the Amended Shareholders Agreement, (ii) including the Purchased Shares within the definition of “Registrable Securities” contained therein,
(iii) revising the definition of “Closing Date” contained therein to include, as applicable, the “Closing Date” as defined in the 

  
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Asset Purchase Agreement, (iv) providing that Carrier’s and UTC Canada’s respective Percentage Interests (as defined in the existing Shareholder Agreement) shall be aggregated and
attributed to each of Carrier and UTC Canada for purposes of Article II of the Existing Shareholder Agreement and (v) making such other changes on which Watsco, Carrier Corporation and UTC Canada mutually agree. As soon as practicable after the
Closing Date, but in no event later than one hundred eighty (180) days after the Closing Date, Watsco shall use reasonable best efforts to prepare and file with the Commission a Registration Statement covering the resale of all of the Purchased
Shares pursuant to Section 3.1(a)(i) of the Amended Shareholders Agreement. Watsco shall otherwise perform its obligations under Article III of the Amended Shareholders Agreement with respect to such Registration Statement. Within five
(5) days after the date of this Agreement, Watsco shall file with the SEC, in accordance with the applicable rules and regulations promulgated by the SEC under the Exchange Act, a preliminary Information Statement on Schedule 14C (the
“Preliminary 14C”) in respect of shareholder approval of the issuance of the Purchased Shares for purposes of New York Stock Exchange Rule 312.03 (the “Shareholder Approval”), and, on the later of (i) the
eleventh (11th) day immediately following the date of
such filing or (ii) the second (2nd) Business
Day following the date on which the SEC clears any and all SEC Staff comments to the Preliminary 14C, Watsco shall file with the SEC and mail to Watsco’s non-consenting shareholders a definitive Information Statement on Schedule 14C in respect
of the Shareholder Approval (the “Definitive 14C”). 
 SECTION 5. Closing; Conditions 

5.1 Closing Deliverables. At the Closing, 
 (a) Watsco shall deliver to UTC Canada one or more stock certificates registered in the name of UTC Canada, with its address at One Germain Street, Suite 1500, Saint-John, New Brunswick, Canada, E2L 4H8,
and with Canadian tax identification number 88173 1814 RC0001, each such certificate bearing a restrictive legend, substantially in the form set forth in Section 8.2; 

(b) UTC Canada shall deliver the Purchased Shares Consideration to Watsco by wire transfer of U.S. federal funds to an account
identified by Watsco in writing at least three business days prior to the Closing Date; 
 (c) Carrier, UTC Canada and Watsco
shall execute and deliver the Amended Shareholders Agreement. 
 5.2 Conditions to Watsco’s Obligations.
Watsco’s obligation to complete the sale of the Shares at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions, unless otherwise waived by Watsco in its sole discretion (“Watsco
Closing Conditions”): 
 (a) each of the representations and warranties of UTC Canada set forth in
Section 7 shall be true and correct on the Closing Date; 

  
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 (b) UTC Canada shall have performed and complied with all covenants, agreements and
obligations contained in this Agreement that are required to be performed or complied with by UTC Canada on or prior to the Closing; and 
 (c) the number of days set forth in either Rule 14c-2(b) under the Exchange Act or Note D(3) to Schedule 14A, as applicable, following the date of mailing of the Definitive 14C shall have elapsed.

 5.3 Conditions to UTC Canada’s Obligations. UTC Canada’s obligation to purchase the Purchased Shares at
Closing is subject to the satisfaction, at or prior to Closing, of each of the following conditions, unless otherwise waived by UTC Canada in its sole discretion (“UTC Canada Closing Conditions” and, together with Watsco Closing
Conditions, the “Closing Conditions”): 
 (a) each of the representations and warranties of Watsco set forth
in Section 6 that is qualified by materiality or Material Adverse Effect or words of similar effect shall be accurate in all respects as of the Closing Date (except to the extent any such representations and warranties expressly relate
to a specific date, in which case such representations and warranties shall be accurate as of such date), and each of the representations and warranties of Watsco set forth in Section 6 that is not so qualified shall be accurate in all
material respects as of the Closing Date (except to the extent such representations and warranties expressly relate to a specific date, in which case such representations and warranties shall be accurate in all material respects as of such date);

 (b) Watsco shall have performed and complied with all covenants, agreements and obligations contained in this Agreement that
are required to be performed or complied with by Watsco on or before the Closing; and 
 (c) (i) Watsco shall have filed with
the SEC and mailed to Watsco’s non-consenting shareholders, in accordance with in Section 4 above and the applicable rules and regulations promulgated by the SEC under the Exchange Act, the Definitive 14C, and (ii) the number of days
set forth in either Rule 14c-2(b) under the Exchange Act or Note D(3) to Schedule 14A, as applicable, following the date of mailing of the Definitive 14C shall have elapsed. 
 5.4 Watsco Conduct of Business. Watsco agrees that, between the date of this Agreement and the Closing Date, except as expressly contemplated by any other provision of this Agreement, unless
UTC Canada shall otherwise consent in writing (such consent not to be unreasonably withheld or delayed), Watsco shall not, and shall not permit any Subsidiaries to, directly or indirectly, do any of the following: 

(a) solely in the case of Watsco, declare or pay any dividends on or make any other distributions (whether in cash, stock or property)
in respect of any Capital Stock, except for regular quarterly cash dividends in the ordinary course consistent with past practice in an amount not greater than $.62 per share, or split, combine, or reclassify, or otherwise amend any terms of
any Capital Stock; 

  
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 (b) issue (or authorize the issuance of), sell, bid for, redeem, purchase or otherwise
acquire (A) any Capital Stock, (B) any rights, warrants or options to acquire any shares of Capital Stock, or (C) any other securities in respect of, in lieu of or in substitution for shares of Capital Stock, or induce, or attempt to
induce any other Person to do any of the foregoing, except (1) for issuances of, and issuances of Capital Stock pursuant to the exercise of, employee and director stock options in the ordinary course of business consistent with past practice;
(2) for issuances of Capital Stock that are not required to be submitted to a vote of the holders of any class or series of Capital Stock under the rules and regulations of the NYSE; and (3) for unsolicited purchases of Capital Stock
effected prior to the Measurement Period, which purchases are not effected (x) from or through a broker or dealer, (y) on a securities exchange or (z) through an inter-dealer quotation system or electronic communications network (as
such term is defined under Rule 600 of Regulation NMS under the Exchange Act); 
 (c) take any action with the primary purpose
of affecting the trading price of any Capital Stock; 
 (d) amend any of its organizational documents or the Original Revolving
Credit Agreement, the Amendment or the Revolving Credit Agreement in a manner that would reasonably be expected to adversely impact (A) the consummation of the transactions contemplated by this Agreement or (B) UTC Canada; 

(e) enter into any agreement that would purport to limit the freedom of Watsco or its Subsidiaries (whether prior to or following the
Closing) to compete freely in any line of business or in any geographic area relating to their respective business (other than this Agreement and/or the Ancillary Agreements); 

(f) make any material change in any of its accounting methods or practices, except as required by GAAP; 

(g) sell, assign, transfer or otherwise dispose of any equity interests in any of its Subsidiaries, or any securities convertible into
or exchangeable for equity interests therein; 
 (h) enter into any new line of business outside of its existing business; or

 (i) agree to do, or make any announcement with respect to, any of the foregoing. 

SECTION 6. Representations, Warranties and Covenants of Watsco. Watsco hereby represents and warrants to UTC Canada as
follows: 
 6.1 Issuance of Shares. Watsco has taken all necessary corporate action to authorize the execution, delivery
and performance of this Agreement and Watsco’s issuance and sale of the Purchased Shares. The Purchased Shares, when issued and delivered and paid for as provided herein, will be duly authorized, validly issued, fully paid and nonassessable and
will be issued free and clear of any Encumbrances (other than as arising under applicable securities laws, this Agreement or any Encumbrances created by UTC Canada). Assuming the accuracy of 

  
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the representations and warranties of UTC Canada set forth in Section 7 of this Agreement, the Purchased Shares will be issued in compliance with all applicable federal and state
securities laws. 
 6.2 Organization and Qualification. Watsco is a Florida corporation duly organized, validly existing
and in good standing under the laws of the State of Florida, and has the power to own, manage, lease and hold its properties and assets and to carry on its business as and where such properties and assets are presently located and such business is
presently conducted. Each of Watsco and its Subsidiaries is duly qualified or licensed to do business and is in good standing as a foreign entity in each of the jurisdictions where the character of its properties owned, managed, leased or held or
the nature of its business makes such qualification or licensing necessary, except for any such failures to be so qualified or licensed and in good standing that, individually or in the aggregate, have not had and would not reasonably be expected to
have a Material Adverse Effect. 
 6.3 Articles of Incorporation and Bylaws. Watsco has made available to UTC Canada
true, accurate and complete copies of the Articles and Bylaws, each of which is in full force and effect. Watsco is not in violation of any of the provisions of its Articles or Bylaws. 

6.4 Capitalization. The authorized capital stock of Watsco consists of sixty million (60,000,000) Common Shares and ten
million (10,000,000) Class B Shares (Common Shares and Class B Shares are referred to collectively as “Capital Stock”). As of March 13, 2012, (i) 28,362,424 Common Shares were issued and outstanding, all of which were
validly issued, fully paid and are nonassessable, (ii) 4,709,932 Class B Shares were issued and outstanding, all of which were validly issued, fully paid and are nonassessable, and (iii) 6,322,650 Common Shares and 48,263 Class B Shares
were held in the treasury of Watsco or by its Subsidiaries. As of March 13, 2012, 524,989 shares of Capital Stock were reserved for future issuance pursuant to warrants, stock options and other stock awards, and restricted stock awards granted
and outstanding as of March 13, 2012 under Watsco’s compensation plans, and such shares are sufficient in number for such future issuances. All shares of Capital Stock subject to issuance as specified above are duly authorized and, upon
issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, shall be validly issued, fully paid and nonassessable. There are no obligations, contingent or otherwise, of Watsco or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of Capital Stock or the equity interests of any Subsidiary of Watsco. Watsco has not repurchased any outstanding shares of Capital Stock since December 31, 2011, other than pursuant to ordinary
course commitments. All of the outstanding equity interests of each of Watsco’s Subsidiaries are duly authorized, validly issued, fully paid and nonassessable and all such equity interests are owned by Watsco or a Subsidiary of Watsco (except
for Carrier Enterprise, LLC, of which Watsco owns only 60% of such entity’s issued and outstanding equity interests), free and clear of any preemptive rights or Encumbrances with respect thereto. 

6.5 Authorization, Enforceability and Related Matters. (i) Watsco has full right, power, authority and capacity to enter into
this Agreement and to consummate the transactions contemplated hereby and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement; (ii) the making and performance of this Agreement by
Watsco and the consummation by Watsco of the transactions contemplated herein 

  
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will not violate any provision of Watsco’s Articles or Bylaws or, except to the extent that it would not have a Material Adverse Effect on Watsco or adversely affect Watsco’s ability to
consummate the transactions contemplated hereby, conflict with, result in the breach or violation of, or constitute, either by itself or upon notice or the passage of time or both, a default under any material agreement, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other instrument to which Watsco is a party, or any statute or any authorization, judgment, decree, order, rule or regulation of any court or any regulatory body, administrative agency or other
governmental agency or body applicable to Watsco; (iii) except for Watsco Shareholder Approval, which has been obtained, no consent, approval, authorization or other order of any court, regulatory body, administrative agency or other
governmental agency or body is required in respect of Watsco’s execution and delivery of this Agreement or the consummation by Watsco of the transactions contemplated by this Agreement; (iv) upon the execution and mutual delivery of this
Agreement by the parties hereto, this Agreement shall constitute a legal, valid and binding obligation of Watsco, enforceable against Watsco in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to the enforcement of creditor’s rights and the application of equitable principles relating to the availability of remedies, and except as rights to indemnity or
contribution may be limited by federal or state securities laws or the public policy underlying such laws; and (v) there is not in effect any order enjoining or restraining Watsco from entering into or engaging in any of the transactions
contemplated by this Agreement. 
 6.6 Brokers or Finders. No broker, investment banker, financial advisor or other
individual, corporation, general or limited partnership, limited liability company, firm, joint venture, association, enterprise, joint securities company, trust, unincorporated organization or other person or entity is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Watsco or any of its Affiliate. 

6.7 SEC Reports. 
 (a) Watsco has filed all registration statements, forms, reports, definitive proxy statements and other documents required to be filed by Watsco or its Subsidiaries with the SEC since February 29,
2012. All such registration statements, forms, reports and other documents (not including any information furnished to the SEC, including, but not limited to, all information furnished under Items 2.02, 7.01 or 9.01 of Form 8-K) are referred to
herein as the “SEC Reports.” The SEC Reports (i) were filed on a timely basis and (ii) at the time filed, complied in all material respects with the applicable requirements of the Securities Act and the Exchange Act
applicable to such SEC Reports. 
 (b) Each of the consolidated financial statements (including, in each case, any related
notes and schedules) contained in the SEC Reports at the time filed (i) complied in all material respects with applicable generally accepted accounting requirements and the published rules and regulations of the SEC with respect thereto,
(ii) were prepared in accordance with applicable generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as may be indicated in the notes to such financial statements or, in the case of
unaudited interim financial statements, as permitted by the SEC under the Exchange Act) and (iii) fairly presented in all material respects the consolidated financial position of 

  
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Watsco and its Subsidiaries as of the dates indicated and the consolidated results of its operations and cash flows for the periods indicated, except that the unaudited interim financial
statements were subject to normal and recurring year end adjustments which were not material in amount. 
 (c) Except as
disclosed in Watsco’s annual report on Form 10-K filed on February 29, 2012 and any subsequent quarterly reports on Form 10-Q or current reports on Form 8-K (excluding any risk factor disclosure contained in such documents under the
heading “Risk Factors” and any disclosure of risks included in any “forward-looking statements” disclaimer or other statements that are similarly non-specific and are predictive or forward-looking in nature) filed and publicly
available prior to the date of this Agreement, (i) Watsco and its Subsidiaries have devised and maintain a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with applicable generally accepted accounting principles, (ii) each of Watsco and its Subsidiaries maintains disclosure controls and procedures required by Rules 13a-15
or 15d-15 under the Exchange Act, and such disclosure controls and procedures are effective to ensure that all material information concerning Watsco is made known on a timely basis to the individuals responsible for the preparation of Watsco’s
filings with the SEC and other public disclosure documents as appropriate to allow timely decisions regarding required disclosure and to make the certifications required by the Exchange Act with respect to the SEC Reports, (iii) there are no
significant deficiencies or material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect Watsco’s ability to
record, process, summarize and report financial information, Watsco has disclosed to its outside auditors any significant deficiencies or material weaknesses in internal controls, and, to Watsco’s knowledge, there is no reason to believe that
Watsco’s outside auditors and Chief Executive Officer and Chief Financial Officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the
Sarbanes-Oxley Act of 2002, without qualification, when next due, (iv) to Watsco’s knowledge, there is no fraud, whether or not material, that involves management or other employees who have a significant role in Watsco’s internal
controls and (v) Watsco is in compliance in all material respects with the applicable listing and other rules and regulations of the New York Stock Exchange and the NYSE Amex. 

6.8 Material Changes; Undisclosed Events, Liabilities or Developments. Since February 29, 2012, except as specifically
disclosed in any SEC Report filed subsequent to February 29, 2012 and prior to the date hereof: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse
Effect; (ii) Watsco has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in Watsco’s financial statements pursuant to generally accepted accounting principals in the United States; (iii) Watsco has not altered its method of accounting; (iv) Watsco has not declared or made any
dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its Capital Stock; and (v) Watsco has not issued any equity securities to any of its
officers, directors or Affiliates. 

  
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 6.9 Full Disclosure. No representation or warranty made by Watsco in this Agreement
contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained herein not misleading. 
 SECTION 7. Representations, Warranties and Covenants of UTC Canada. UTC Canada represents and warrants to Watsco that: 
 7.1 Experience. (i) UTC Canada is knowledgeable, sophisticated and experienced in financial and business matters, and is making, and is qualified to make, decisions with respect to investments
in shares representing an investment decision like that involved in the purchase of the Purchased Shares, including investments in securities issued by Watsco and/or comparable entities, has the ability to bear the economic risks of an investment in
the Purchased Shares and has had the opportunity to request, receive, review and consider all information it deems relevant in making an informed decision to purchase the Purchased Shares; (ii) UTC Canada is acquiring the Purchased Shares for
its own account, solely for investment and with no present intention to distribute any of such Purchased Shares and is subject to no arrangement or understanding with any other persons regarding the distribution of the Purchased Shares;
(iii) UTC Canada will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the Purchased Shares, except in compliance with
the Securities Act and the rules and regulations promulgated thereunder and any other applicable state securities laws; (iv) UTC Canada has, in connection with its decision to purchase the Purchased Shares, relied solely upon the
representations and warranties of Watsco contained in this Agreement; (v) UTC Canada has had an opportunity to discuss this investment with representatives of Watsco and ask questions of them; and (vi) UTC Canada is either a
“qualified institutional buyer” as defined by Rule 144A promulgated under the Securities Act or an “accredited investor” as defined by Rule 501(a) of Regulation D promulgated under the Securities Act. 

7.2 Reliance on Exemptions. UTC Canada understands that the Purchased Shares are being offered and sold to in reliance upon
specific exemptions from the registration requirements of the Securities Act and state securities laws and that Watsco is relying upon the truth and accuracy of, and UTC Canada’s compliance with, the representations, warranties, covenants,
agreements, acknowledgments and understandings of UTC Canada contained in this Agreement in order to determine the availability of such exemptions and the eligibility of UTC Canada to acquire the Purchased Shares. 

7.3 Confidentiality. UTC Canada understands that this Agreement, the information contained in all materials provided to UTC Canada
by Watsco and its representatives, including any information conveyed orally, in connection with the transactions contemplated hereunder (“Confidential Information”), is strictly confidential and proprietary to Watsco and is being
provided to UTC Canada solely for UTC Canada’s confidential use in connection with the transactions contemplated hereunder. UTC Canada agrees to use the Confidential Information solely for the purpose of evaluating a possible investment in the
Purchased Shares, and UTC Canada acknowledges that it is prohibited from distributing, divulging or discussing any Confidential Information, in whole or in part, with any Person, except to UTC Canada’s financial, investment or legal advisors
(such Persons, “Authorized Advisors”), solely to the extent necessary for such Authorized Advisors to assist UTC Canada 

  
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with its proposed investment in the Purchased Shares. To the extent that UTC Canada provides, directly or indirectly, any Confidential Information to any Authorized Advisor, UTC Canada shall
ensure that such Authorized Advisor maintains the confidentiality of the Confidential Information to the same extent applicable to UTC Canada as set forth in this Section 7.3. Confidential Information does not include any information
that is or becomes publicly available through no fault of UTC Canada, or that UTC Canada is required to disclose pursuant to applicable law, regulation or legal process; provided, however, that if UTC Canada is requested or ordered to
disclose any Confidential Information pursuant to any court or other government order or any other applicable legal procedure, it shall provide Watsco with prompt notice of any such request or order so that Watsco may seek an appropriate protective
order. 
 7.4 Investment Decision. UTC Canada understands that nothing in this Agreement or any other materials presented
to UTC Canada in connection with the purchase and sale of the Purchased Shares constitutes legal, tax or investment advice. UTC Canada has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Purchased Shares. 
 7.5 Risk of Loss. UTC Canada understands that its
investment in the Purchased Shares involves a significant degree of risk, including a risk of total loss of UTC Canada’s investment, and UTC Canada has full cognizance of and understands all of the risk factors related to its purchase of the
Purchased Shares, including, but not limited to, those set forth in the SEC Reports. UTC Canada understands that no representation is being made as to the future value of the Purchased Shares. 

7.6 Authorization, Enforceability and Related Matters. (i) UTC Canada has full right, power, authority and capacity to enter
into this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and performance of this Agreement; (ii) the making and performance of this Agreement by UTC
Canada and the consummation by UTC Canada of the transactions contemplated herein will not violate any provision of the organizational documents of UTC Canada or, except to the extent that it would not have a Material Adverse Effect on UTC
Canada’s ability to consummate the transactions contemplated hereby, conflict with, result in the breach or violation of, or constitute, either by itself or upon notice or the passage of time or both, a default under any material agreement,
mortgage, deed of trust, lease, franchise, license, indenture, permit or other instrument to which UTC Canada is a party, or any statute or any authorization, judgment, decree, order, rule or regulation of any court or any regulatory body;
administrative agency or other governmental agency or body applicable to UTC Canada, (iii) no consent, approval, authorization or other order of any court, regulatory body, administrative agency or other governmental agency or body is required
in respect of UTC Canada’s execution and delivery of this Agreement or the consummation by UTC Canada of the transactions contemplated by this Agreement; (iv) upon the execution and mutual delivery of this Agreement by the parties hereto,
this Agreement shall constitute a legal, valid and binding obligation of UTC Canada, enforceable against UTC Canada in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application relating to the enforcement of creditor’s rights and the application of equitable principles relating to the availability of remedies, and except as rights to indemnity or contribution may be
limited by federal or state securities laws or the public policy underlying such laws; and (v) there is not in effect any order enjoining or restraining UTC Canada from entering into or engaging in any of the transactions contemplated by this
Agreement. 

  
 11 

 7.7 Brokers or Finders. No broker, investment banker, financial advisor or other
individual, corporation, general or limited partnership, limited liability company, firm, joint venture, association, enterprise, joint securities company, trust, unincorporated organization or other person or entity is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of UTC Canada or of its Affiliates. 

SECTION 8. Restrictions on Transfer. 
 8.1 Restrictions on Transfer. The Purchased Shares may be disposed of only in compliance with state and federal securities laws. In connection with any transfer of any Purchased Shares other than
pursuant to an effective registration statement or Rule 144 under the Securities Act, Watsco may require the transferor thereof to provide to Watsco an opinion of counsel selected by the transferor and reasonably acceptable to Watsco, the form and
substance of which opinion shall be reasonably satisfactory to Watsco, to the effect that such transfer does not require registration of such transferred Purchased Shares under the Securities Act. As a condition of transfer, any such transferee
shall agree in writing to be bound by the terms of this Agreement. 
 8.2 General Legend. UTC Canada agrees that a
restrictive legend, in substantially the following form, shall be imprinted on the Purchased Shares: 
 THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO WATSCO, INC., A FLORIDA CORPORATION, AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED. 
 SECTION 9. Survival of Representations, Warranties and Agreements. All covenants, representations and warranties made by Watsco and UTC Canada herein and in any documents delivered pursuant
hereto shall survive for a period of two (2) years following the Closing Date. 

  
 12 

 SECTION 10. Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon delivery to the party to be notified; (ii) when received by confirmed facsimile or (iii) one (1) business day after deposit with a nationally recognized overnight carrier,
specifying next business day delivery, with written verification of receipt. All communications shall be sent to Watsco and UTC Canada as follows or at such other addresses as Watsco or UTC Canada may designate upon five (5) days’ advance
written notice to the other party: 
  

	 	(a)	if to Watsco, to: 

 Watsco, Inc. 
 2665 South Bayshore Drive, 

Suite 901 
 Coconut Grove, FL 33133 
 Attn: Barry S. Logan 

Senior Vice President 
 Fax: (305) 858-4492 
 with a copy (that shall not constitute
notice) to: 
 Greenberg Traurig, P.A. 

333 Avenue of the Americas 

(333 S.E. 2nd Avenue) 
 Miami, Florida 33131 
 Attn: Jaret L. Davis, Esq. 

Fax: (305) 579-9676 
  

	 	(b)	if to UTC Canada, to: 

 c/o UTC Climate Controls & Security 
 One Carrier Place

 Farmington, CT 06034-4015 

Attn:      General Counsel 

Fax:       (860) 674-3246 

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

K&L Gates, LLP 
 K&L Gates Center 
 210 Sixth Avenue 

Pittsburgh, PA 15222-2613 
 Attn: David L. Forney 
 Fax: (412) 355-6501 

SECTION 11. Amendments. This Agreement may not be modified or amended except pursuant to an instrument in writing signed by
Watsco and UTC Canada. No waiver of any provision this Agreement shall be binding unless executed in writing by the party to be bound thereby. No waiver of any provision of this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (regardless of whether similar), nor shall any such waiver constitute a continuing waiver unless otherwise expressly provided. 
 SECTION 12. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement. 

SECTION 13. Severability. In case any provision contained in this Agreement should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 

  
 13 

 SECTION 14. Governing Law. This Agreement and any disputes or claims arising out
of or in connection with its subject matter shall be governed by and construed in accordance with the laws of the State of Florida without regard to the rules of conflict of laws of such state that would cause the laws of another jurisdiction to
apply. The parties hereto acknowledge and agree that venue and jurisdiction for any claim, suit or controversy related to or arising out of this Agreement shall lie in the state or federal courts located in Miami-Dade County, Florida. THE PARTIES
HEREBY WAIVE THE RIGHT TO JURY TRIAL OF ANY MATTERS ARISING OUT OF THIS AGREEMENT OR THE CONDUCT OF THE RELATIONSHIP BETWEEN THEM. 
 SECTION 15. Counterparts; Facsimile Signatures. This Agreement may be executed in one or more counterparts, each of which shall constitute an original, but all of which, taken together, shall
constitute but one instrument. Facsimile or other electronically scanned and transmitted signatures shall be deemed originals for all purposes of this Agreement. 
 SECTION 16. Entire Agreement. This Agreement and the Asset Purchase Agreement contain the entire understanding of the parties with respect to the matters covered herein and therein; and,
except as specifically set forth herein or therein, neither Watsco nor UTC Canada makes any representation, warranty, covenant or undertaking with respect to such matters. 
 SECTION 17. Fees and Expenses. Except as expressly set forth herein, Watsco, on the one hand, and UTC Canada, on the other hand, shall pay their respective fees and expenses related to the
transactions contemplated by this Agreement. 
 SECTION 18. Parties. This Agreement is made solely for the benefit
of and is binding upon Watsco and UTC Canada, and no other Person shall acquire or have any right under or by virtue of this Agreement. 
 SECTION 19. Assignment. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the parties hereto and their respective
successors and assigns. This Agreement and the rights of UTC Canada hereunder may be assigned by UTC Canada only with the prior written consent of Watsco. Watsco may not assign this Agreement without the written consent of UTC Canada. 

SECTION 20. Further Assurances. Each party agrees to cooperate fully with the other party hereto and to execute such further
instruments, documents and agreements and to give such further written assurance as may be reasonably requested by the other party to evidence and reflect the transactions described herein and contemplated hereby and to carry into effect the intents
and purposes of this Agreement. 
 SECTION 21. Liability Not Affected by Knowledge or Waiver. The right to recovery
of losses or other remedy based upon breach of representations, warranties or covenants will not be affected by any investigation conducted, or knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and
delivery of this Agreement, with respect to the accuracy or inaccuracy of or compliance or noncompliance with any such representation, warranty, or covenant. 
 [Signature pages follow] 

  
 14 

 IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed by their
respective duly authorized representatives as of the day and year first above written. 
  

			
	ISSUER:
	
	WATSCO, INC.
		
	By:	 	 /s/ Barry S. Logan

	Name:	 	Barry S. Logan
	Title:	 	Senior Vice President
	
	PURCHASER:
	
	UTC CANADA CORPORATION
		
	By:	 	 /s/ William F. Striebe

	Name:	 	William F. Striebe
	Title:	 	Authorized Signatory

  

			
	Solely for purposes of Section 4 and Section 5.1(c):
	
	CARRIER CORPORATION
		
	By:	 	 /s/ William F. Striebe

	Name:	 	William F. Striebe
	Title:	 	Vice President, Business Development

 Signature page to Subscription AgreementFIRST AMENDMENT TO CREDIT AGREEMENT

 EXHIBIT 10.69 
 FIRST AMENDMENT TO CREDIT AGREEMENT 
 This FIRST AMENDMENT TO
CREDIT AGREEMENT dated as of March 9, 2012 (this “First Amendment”) is made by and among GSI Group Corporation, a Michigan corporation (the “Borrower”), GSI Group Inc., a company continued and existing
under the laws of the Province of New Brunswick, Canada (“Holdings”), each of the other Guarantors party hereto, each lender party hereto (collectively, the “Lenders” and individually, a “Lender”),
and BANK OF AMERICA, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”), Swing Line Lender and L/C Issuer. 
 The Borrower, the Lenders and the Administrative Agent are parties to that certain Credit Agreement dated as of October 19, 2011 (as in effect on the date hereof, the “Credit
Agreement”), pursuant to which the Lenders have agreed to make certain financial accommodations to the Borrower. The Borrower, the Lenders and Administrative Agent wish to amend the Credit Agreement in certain respects, all on the terms and
conditions hereinafter set forth. 
 NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties signatory hereto agree as follows: 
 1. Definitions. Except as otherwise defined in this First Amendment, terms defined in the Credit Agreement are used herein as defined therein. 

2. Amendments. Subject to the satisfaction of the conditions precedent specified in Section 3 below, the Credit Agreement
shall be amended as follows: 
 (a) A new definition of “Credit Insurance” shall be inserted in
proper alphabetical order in Section 1.01 of the Credit Agreement as follows: 
 “‘Credit
Insurance’ means insurance covering payment of the applicable Receivables, which (a) names the Administrative Agent as loss payee (through provision of a loss payee endorsement), (b) provides prompt notice to the Administrative
Agent of termination, lapse or cancellation of such insurance or any change in the approved coverage amount with respect to any account debtor and (c) is otherwise reasonably acceptable to the Administrative Agent.” 

(b) The definition of “Eligible Receivables” in Section 1.01 of the Credit Agreement shall be
amended by deleting clauses (b) and (i) in their entirety and restating them as follows: 
 “(b)
Receivables payable other than in Dollars, Euro, Japanese Yen or pounds sterling or that are otherwise on terms other than those normal or customary in the Borrower’s or the relevant Subsidiary’s business;” 

 “(i) Receivables arising out of sales to account debtors outside the
United States or the United Kingdom, unless such Receivables are (x) fully backed by an irrevocable letter of credit on terms, and issued by a financial institution, acceptable to the Administrative Agent and such irrevocable letter of credit
is in the possession of the Administrative Agent or (y) covered by Credit Insurance, and then only to the extent of the approved coverage amount for any applicable account debtor, and in the case of subclauses (x) and (y), not to exceed
$7,000,000 in the aggregate; provided that for purposes of subclause (y), the Administrative Agent shall put in place a reserve in an amount equal to the deductible on the applicable Credit Insurance;” 

(c) Exhibit I to the Credit Agreement (Form of Borrowing Base Certificate) is hereby replaced in its entirety by
Exhibit A attached hereto. 
 3. Representations and Warranties. The Borrower and the other Loan Parties each
represents and warrants to the Lenders that the representations and warranties of the Loan Parties contained in Article V of the Credit Agreement or any other Loan Document, or which are contained in any document furnished at any time under
or in connection herewith or therewith, are true and correct in all material respects on the date hereof, except (a) to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true
and correct as of such earlier date, (b) the representations and warranties contained in Sections 5.05(a) and (b) of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to
Sections 6.01(a) and (b) of the Credit Agreement, respectively; and (c) as if each reference therein to “this Agreement” or the “Credit Agreement” or the like include reference to this First Amendment and
the Credit Agreement as amended hereby; provided that any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct in all respects on such
respective dates. 
 4. Conditions Precedent. The amendments to the Credit Agreement set forth in Section 2 hereof
shall become effective, as of the date hereof, upon satisfaction of the following conditions precedent: 
 (a)
the Borrower shall have delivered to the Administrative Agent a counterpart of this First Amendment executed by the Borrower; 
 (b) the Required Lenders and the Administrative Agent shall have indicated their consent and agreement by executing this First Amendment; and 

(c) no Event of Default shall have occurred and be continuing. 

5. Effect on Loan Documents. The Credit Agreement (as amended hereby) and the other Loan Documents shall be and remain in full
force and effect in accordance with their terms and hereby are ratified and confirmed in all respects. Except as expressly set forth herein the execution, delivery, and performance of this First Amendment shall not operate as a waiver or an
amendment of any right, power, or remedy of the Administrative Agent or any Lender under the Credit Agreement or any other Loan Document, as in effect prior to the date hereof. Each of the Loan Parties hereby ratifies and confirms in all respects
all of its obligations under the Credit Agreement (as amended hereby) and the other Loan Documents to which it is a party. 

  
 2 

 6. No Novation; Entire Agreement. This First Amendment evidences solely the amendment
of the terms and provisions of the obligations of the Borrower and the other Loan Parties under the Loan Documents and is not a novation or discharge thereof. There are no other understandings, express or implied, among the Borrower, the other Loan
Parties, the Administrative Agent and the Lenders regarding the subject matter hereof or thereof. 
 7. Choice of Law.
This First Amendment shall be governed by, and construed in accordance with, the laws of the State of New York. 
 8.
Counterparts; Facsimile Execution. This First Amendment may be executed in any number of counterparts and by different parties and separate counterparts, each of which when so executed and delivered shall be deemed an original, and all of
which, when taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this First Amendment by facsimile shall be as effective as delivery of a manually executed counterpart of this First
Amendment. 
 9. Construction. This First Amendment is a Loan Document. This First Amendment and the Credit Agreement
shall be construed collectively and in the event that any term, provision or condition of any of such documents is inconsistent with or contradictory to any term, provision or condition of any other such document, the terms, provisions and
conditions of this First Amendment shall supersede and control the terms, provisions and conditions of the Credit Agreement. Upon and after the effectiveness of this First Amendment, each reference in the Credit Agreement to “this
Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”,
“therein”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified and amended hereby. 

[Remainder of Page Intentionally Left Blank] 

  
 3 

 IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be executed as of
the date first above written. 
  

			
	 BORROWER:

GSI GROUP CORPORATION

		
	By:	 	 
	Name:	 	Robert Buckley
	Title:	 	Chief Financial Officer
	
	 HOLDINGS:

GSI GROUP INC.

		
	By:	 	 
	Name:	 	Robert Buckley
	Title:	 	Chief Financial Officer
	
	 GUARANTORS:

EXCEL TECHNOLOGY, INC.
 MICROE SYSTEMS
CORP.
 MES INTERNATIONAL INC.

		
	By:	 	 
	Name:	 	Robert Buckley
	Title:	 	Secretary
	
	 CAMBRIDGE TECHNOLOGY, INC.
 CONTINUUM ELECTRO-OPTICS, INC.
 CONTROL LASER CORPORATION (D/B/A BAUBLYS CONTROL LASER)

THE OPTICAL CORPORATION
 PHOTO RESEARCH,
INC.
 QUANTRONIX CORPORATION
 SYNRAD,
INC.

		
	By:	 	 
	Name:	 	Robert Buckley
	Title:	 	Assistant Secretary

 [First Amendment to Credit Agreement] 

			
	
	GSI GROUP LIMITED
		
	By:	 	 
	Name:	 	Robert Buckley
	Title:	 	Director

 [First Amendment to Credit Agreement] 

 
			
	 BANK OF AMERICA, N.A., as
 Administrative Agent

		
	By:	 	 
	Name:	 	 
	Title:	 	 

 [First Amendment to Credit Agreement] 

 
			
	BANK OF AMERICA, N.A., as a Lender, L/C Issuer and Swing Line Lender
		
	By:	 	 
	Name:	 	 
	Title:	 	 

 [First Amendment to Credit Agreement] 

 
			
	SILICON VALLEY BANK
		
	By:	 	 
	Name:	 	 
	Title:	 	 

 [First Amendment to Credit Agreement] 

 
			
	HSBC BANK USA N.A.
		
	By:	 	 
	Name:	 	 
	Title:	 	 

 [First Amendment to Credit Agreement] 

 EXHIBIT A 

FORM OF BORROWING BASE CERTIFICATE 
 Quarterly Period ended                     ,
20         
 Reference is made to that certain Credit Agreement, dated as of
October 19, 2011 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among GSI GROUP CORPORATION, a
Michigan corporation (the “Borrower”), GSI Group Inc., a company continued and existing under the laws of the Province of New Brunswick, Canada, the other Guarantors from time to time party thereto, the Lenders from time to time
party thereto, Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender and Silicon Valley Bank as Syndication Agent. 
 Pursuant to Section 6.02(i) of the Agreement, the undersigned, being the duly elected, acting and qualified [President] [Chief Financial Officer] [Vice President of Finance] of the Borrower,
hereby certifies that attached hereto as Annex 1 is a true and accurate calculation of the sum of the Loan Values of the Eligible Collateral as at the end of the quarterly period ended
                    , 20         determined in accordance with the requirements of the
Agreement. 
 [Remainder of page intentionally left blank] 

  
 I-1

 Form of Borrowing Base Certificate 

 IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly executed
as of this          day of                     ,
20        . 
  

			
	GSI GROUP CORPORATION
		
	By:	 	 
	Name:	 	
	Title:	 	

  
 I-2

 Form of Borrowing Base Certificate 

 Annex 1 
 to the Borrowing Base Certificate 
 For the Quarter/Year ended
                         (“Statement Date”) 

 

					
	 I.       Loan Values
	  			
		
	 A.     Value of Eligible Inventory (from Schedule 1)
	  	$	___________	  
		
	 B.     Line I.A × 50%
	  	$	___________	  
		
	 C.     Value of Eligible Receivables (from Schedule 2), less any unapplied cash
	  	$	___________	  
		
	 D.     Line I.C × 85%
	  	$	___________	  
		
	 E.     Value of Eligible Cash
	  	$	___________	  
		
	 Loan Values (Line I.B + I.D + I.E)
	  	$	___________	  

 Schedule 1 
 to the Borrowing Base Certificate 
 For the Quarter/Year ended
                         (“Statement Date”) 

 

					
		
	 II.     Eligible Inventory: Value of the following:
	  			
		
	 A.     Inventory
	  	$	___________	  
		
	 1.      Inventory located on leaseholds as to which the lessor has not entered into a Collateral
Access Agreement
	  	$	___________	  
		
	 2.      Inventory that is obsolete, unusable or otherwise unavailable for sale
	  	$	___________	  
		
	 3.      Inventory consisting of promotional, marketing, packaging or shipping materials and
supplies
	  	$	___________	  
		
	 4.      Inventory that fails to meet all standards imposed by any Governmental Authority having
regulatory authority over such Inventory or its use or sale
	  	$	___________	  
		
	 5.      Inventory that is subject to any licensing, patent, royalty, trademark, trade name or
copyright agreement with any third party from which the Borrower or any of its Subsidiaries has received notice of a dispute in respect of any such agreement
	  	$	___________	  
		
	 6.      Inventory located outside the United States or the United Kingdom
	  	$	___________	  
		
	 7.      Inventory that is not in the possession of or under the sole control of the Borrower or any
of its Subsidiaries
	  	$	___________	  
		
	 8.      Inventory that represents intercompany profits
	  	$	___________	  
		
	 9.      Inventory with respect to which the representations and warranties set forth in
Section 5(e) of the Security Agreement applicable to Inventory are not correct
	  	$	___________	  
		
	 10.    Inventory in respect of which the Security Agreement, after giving effect to the related filings of
financing statements that have then been made, if any, does not or has ceased to create a valid and perfected first priority lien or security interest in favor of the Administrative Agent, on behalf of the Secured Parties, securing the
Obligations
	  	$	___________	  
		
	 B.     Value of Eligible Inventory (Line II.A – sum of Line II.A.1 through Line
II.A.10)
	  	$	___________	  

  
 I-4

 Form of Borrowing Base Certificate 

 Schedule 2 
 to the Borrowing Base Certificate 
 For the Quarter/Year ended
                         (“Statement Date”) 

 

					
		
	 III.    Eligible Receivables: Value of the following:
	  			
		
	 A.     Receivables
	  	$	___________	  
		
	 1.      Receivables that do not arise out of sales of goods or rendering of services in the
ordinary course of the Borrower’s or the relevant Subsidiary’s business
	  	$	___________	  
		
	 2.      Receivables payable other than in Dollars, Euro, Japanese Yen or pounds sterling or that
are otherwise on terms other than those normal or customary in the Borrower’s or the relevant Subsidiary’s business
	  	$	___________	  
		
	 3.      Receivables owing from any Person that is an Affiliate of the Borrower
	  	$	___________	  
		
	 4.      Receivables more than 90 days past original invoice date or more than 60 days past the date
due (not to be reduced by any aged credit)
	  	$	___________	  
		
	 5.      Receivables owing from any Person from which an aggregate amount of more than 50% of the
Receivables owing therefrom is more than 90 days past original invoice date or more than 60 days past the date due
	  	$	___________	  
		
	 6.      Receivables owing from any Person that (i) has disputed liability for any Receivable
owing from such Person or (ii) has otherwise asserted any claim, demand or liability against the Borrower or any of its Subsidiaries, whether by action, suit, counterclaim or otherwise; provided that for purposes of subclause (i), such
Receivables shall be excluded only to the extent of the amounts being disputed by such Person at any date of determination
	  	$	___________	  
		
	 7.      Receivables owing from any Person that shall take or be the subject of any action or
proceeding of a type described in Section 8.01(f) of the Agreement
	  	$	___________	  
		
	 8.      Receivables (i) owing from any Person that is also a supplier to or creditor of the
Borrower or any of its Subsidiaries unless such Person has waived any right of setoff in a manner acceptable to the Administrative Agent or (ii) representing any manufacturer’s or supplier’s credits, discounts, incentive plans or
similar arrangements entitling the Borrower or any of its Subsidiaries to discounts on future purchase therefrom; provided that for purposes of subclause (ii), such Receivables shall be excluded only to the extent of the amounts of such credits,
discounts, incentive plans or similar arrangements at any date of determination
	  	$	___________	  

  
 I-5

 Form of Borrowing Base Certificate 

					
		
	 9.      Receivables arising out of sales to account debtors outside the United States or the United
Kingdom
	  	$	___________	  
		
	 10.    Receivables arising out of sales on a bill-and-hold, guaranteed sale, sale-or-return, sale on approval
or consignment basis or subject to any right of return, setoff or charge back
	  	$	___________	  
		
	 11.    Receivables owing from an account debtor that is an agency, department or instrumentality of the
United States or any state thereof unless the Borrower or its relevant Subsidiary shall have satisfied the requirements of the Assignment of Claims Act of 1940, and any similar state legislation and the Administrative Agent is satisfied as to the
absence of setoffs, counterclaims and other defenses on the part of such account debtor
	  	$	___________	  
		
	 12.    Receivables with respect to which the representations and warranties set forth in Section 5(e) of
the Security Agreement applicable to Receivables are not correct
	  	$	___________	  
		
	 13.    Receivables in respect of which the Security Agreement, after giving effect to the related filings of
financing statements that have then been made, if any, does not or has ceased to create a valid and perfected first priority lien or security interest in favor of the Administrative Agent, on behalf of the Secured Parties, securing the
Obligations
	  	$	___________	  
		
	 14.    An amount equal to the deductible on the Credit Insurance applicable to the Receivables in Line
III.A.15 below which the Administrative Agent has put in place as a reserve
	  	$	___________	  
		
	 15.    Receivables arising out of sales to account debtors outside the United States or the United Kingdom
which are: (1) covered by Credit Insurance, to the extent of the approved coverage amount for any applicable account debtor, or (2) fully backed by an irrevocable letter of credit on terms, and issued by a financial institution, acceptable
to the Administrative Agent and such irrevocable letter of credit is in the possession of the Administrative Agent; provided that the sum of clauses (1) and (2) of this Line III.A.15 shall not exceed $7,000,000 in the
aggregate
	  	$	___________	  
		
	 B.     Value of Eligible Receivables (Line III.A – (sum of Line III.A.1 through Line III.A.14) +
Line III.A.15)
	  	$	___________	  

  
 I-6

 Form of Borrowing Base Certificate

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