Confidentiality Agreement - United Technologies Corp. and International Comfort Products Corp.
19 March, 1999
Mr. Ari Bousbib
Vice President Strategic Planning
United Technologies Corporation
United Technologies Bldg.
Hartford, CT 06101
Dear Mr. Bousbib:
You have expressed interest in pursuing a transaction (the 'Transaction')
involving the capital stock or assets of International Comfort Products
Corporation (the 'Company'). You understand that prior to or during the course
of negotiations in respect of the Transaction, certain confidential information
concerning the Company and/or the Company's affiliates, including, without
limitation, the Information Memorandum prepared in connection therewith, may be
disclosed to you or your directors, officers, employees, affiliates and advisors
(your 'Representatives'), either in written form or orally (the 'Evaluation
Material'). In consideration of the Company agreeing to make the Evaluation
Material available to you or your Representatives, you agree as follows:
1. No disclosure of your interest in the Company will be made by you or your
Representatives prior to the execution of a definitive, written purchase
agreement between you and the Company in respect of the Transaction, except
as may be otherwise agreed upon by you and the Company.
2. The fact that the Company is providing Evaluation Material to you, the fact
that the parties have had, are having or may have discussions concerning the
Transaction, and any negotiations that may occur between you and the Company
shall also be deemed Evaluation Material and treated in accordance with the
provisions hereof. All Evaluation Material will be held in complete
confidence (i.e., using the same degree of care that you use for your own
confidential, non-public proprietary information of a similar nature) and,
without the Company's prior written consent, will not be disclosed, in whole
or in part, to any other person (other than such of your Representatives who
need access to any such materials or information for purposes of your
evaluating or negotiating the Transaction), nor will any Evaluation Material
be used in any way directly or indirectly detrimental to the Company or its
affiliates or for any purpose other than your evaluation or negotiation of
the Transaction. The term 'Evaluation Material' does not include any
(a) which, at the time of disclosure to you or your Representatives, is in
the public domain or which after such disclosure comes into the public
domain through no fault of you or your Representatives;
(b) which was available to you on a non-confidential basis from a source
other than the Company or its advisors, provided that such source is
not and was not bound by a confidentially agreement with the Company;
Mr. Ari Bousib, p. 2
(c) which, after notifying the Company pursuant to paragraph 5, is required
by applicable law or regulatory authority to be disclosed; or
(d) which was independently developed by you.
3. You shall be responsible for ensuring that your Representatives adhere to
the terms of the undertakings of this agreement as if such persons were
original parties hereto.
4. You and your Representatives will, at your option, either destroy or return
to the Company upon demand or in the event you cease to be interested in
pursuing the Transaction, all Evaluation Material provided to you or your
Representatives, including all copies thereof which may have been made by or
on behalf of you or your Representatives. You shall destroy, or cause to be
destroyed, all notes or memoranda or other stored information of any kind
prepared by you or your Representatives relating to the Evaluation Material
or negotiations generally.
5. If you or your Representatives become (or if it is reasonably likely that
you or they shall become) legally compelled to disclose any Evaluation
Material, prompt notice of such fact shall be given to the Company so that
appropriate action may be taken by the Company.
6. Without prejudice to any other rights or remedies the Company may have, you
acknowledge and agree that money damages may not be an adequate remedy for
any breach of this agreement and that the Company may be entitled to the
remedies of injunction, specific performance and other equitable relief for
any threatened or actual breach of this agreement.
7. You acknowledge that, except as may be set forth in a definitive, written
purchase agreement in respect of the Transaction, neither the Company nor
any of its directors, officers, employees, affiliates or advisors shall have
been deemed to make, or shall be responsible for, any representations or
warranties, express or implied, with respect to the accuracy or completeness
of the Evaluation Material supplied under this agreement. Further, it is
acknowledged hereby by you that only those representations and warranties
made by the Company in a definitive, written purchase agreement in respect
of the Transaction shall have any force or effect.
8. During the period of one year commencing on the date hereof, you shall not
solicit or actively seek to hire any person who during such period is
employed by the Company, whether or not such person would commit any breach
of such person's contract of service in leaving such employment. This
provision shall not apply to any general solicitation for employment not
specifically targeted at such employee.
9. You agree that until six months from the date of this agreement, you will
not without the prior approval of the Board of Directors of the Company (i)
acquire or make any proposal to acquire any securities or property of the
Company, (ii) propose to enter into any merger or business combination
involving the Company or purchase a material portion of the assets of the
Company; (iii) make or participate in any solicitation of proxies to vote,
or seek to advise or influence any person with respect to the voting of any
Mr. Ari Bousbib, p. 3
the Company, (iv) form, join or participate in a 'group' (within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934) with respect to
any voting securities of the Company, (v) otherwise and to seek to control
or influence the management, Board of Directors or policies of the Company,
(vi) disclose any intention, plan or arrangement inconsistent with the
foregoing or (vii) take any action which might require the Company to make a
public announcement regarding the possibility of a business combination or
merger. This provision shall not apply to investments in the Company that
are made by or through your employee pension fund in the ordinary course and
without your specific direction.
10. You acknowledge and confirm that no limitation provided, or statements made,
to you or your Representatives prior to, in the course of or for the purpose
of negotiations, will constitute an offer by the Company or on the Company's
behalf, nor will any such information or statements form the basis of any
contract or agreement (including, without limitation, an agreement in
principle), to sell the Company or any of its capital stock or assets.
11. You acknowledge that the Company and the Company's advisors shall be free to
conduct the process in respect of the Transaction as they in their sole
discretion shall determine, including, without limitation, negotiating with
any prospective or interested parties.
12. You will maintain contact with the Company at all times only through Credit
Suisse First Boston Corporation, the Company's financial advisor, and will
not attempt any direct communication with the Company relating to the
Transaction without the express permission of Credit Suisse First Boston
13. No failure or delay by the Company in exercising any right, power or
privilege under this agreement shall operate as a waiver thereof, and no
modification hereof shall be effective, unless in writing and signed by an
officer of the Company or other authorized person on its behalf.
14. The illegality, invalidity or unenforceability of any provision hereof under
the laws of any jurisdiction shall not affect its legality, validity or
enforceability under the laws of any other jurisdiction, nor the legality,
validity or enforceability of any other provision.
15. This agreement shall terminate two years from the date hereof.
This agreement shall be governed by and construed in accordance with the laws of
the State of New York, applicable to contracts made and to be performed therein.
Very truly yours,
International Comfort Products Corporation
By CREDIT SUISSE FIRST BOSTON
CORPORATION, solely as the Company's
By: /s/ David M. Sultan
Name: David M. Sultan
Accepted and agreed to as of the date hereof:
United Technologies Corporation
By: /s/ Ari Bousbib
Name: Ari Bousbib
Title: Vice President Strategic Planning