UTC Offer to Acquire Clipper (5321U)

TIDMCWP

RNS Number : 5321U

Clipper Windpower Plc

18 October 2010

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM CANADA, AUSTRALIA, JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

18 October 2010

RECOMMENDED ACQUISITION

of

Clipper Windpower Plc ("Clipper" or the "Company")

by

United Technologies Corporation ("UTC")

Summary

-- The Independent Clipper Directors and UTC are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition by UTC (or a wholly-owned subsidiary of UTC) of the entire issued and to be issued ordinary share capital of Clipper not already owned by UTC (the "Acquisition").

-- The Acquisition values the entire issued ordinary share capital of Clipper at approximately GBP139.5 million.

-- Under the terms of the Acquisition, Clipper Shareholders will be entitled to receive 65 pence in cash for each Clipper Share held, representing a premium of approximately:-

-- 31.3 per cent. to 49.5 pence, being the closing mid-market price per Clipper Share on 15 October 2010 (being the last Business Day prior to the date of this announcement); and

-- 47.7 per cent. to 44 pence, being the closing mid-market price per Clipper Share on 17 September 2010 (being the last Business Day prior to the date on which Clipper announced that it had received an approach from UTC).

-- UTC is a global provider of high technology products and services to the building systems and aerospace industries. Its principal operating units include Otis, Carrier, UTC Fire & Security, Pratt & Whitney, Hamilton Sundstrand and Sikorsky. UTC employs approximately 207,000 people and operates in more than 180 countries. UTC is quoted on the New York Stock Exchange with a market capitalisation of approximately US$69 billion. For the year ended 31 December 2009, UTC revenues were US$52.9 billion.

-- Clipper (www.clipperwind.com) is a company engaged in wind energy technology, turbine manufacturing, and wind project development. The Clipper Group designs advanced wind turbines, manufactures its 2.5 MW Liberty wind turbine, and actively develops wind power generating projects in the Americas and Europe. Clipper's headquarters are in Carpinteria, California, US.

-- UTC currently holds approximately 49.9 per cent of the issued share capital of Clipper. The Acquisition will allow UTC to secure full control of Clipper, thereby creating the long term financial stability necessary for Clipper's continued growth. The Acquisition will enable Clipper to fully leverage UTC's management and operational expertise as well as its advanced technology in blades, turbines and gearbox design. It also builds on UTC's existing portfolio of energy efficient products and power generation systems that respond to the world's growing demand for cleaner, more efficient products.

-- The Independent Clipper Directors, who have been advised by Goldman Sachs International, consider the terms of the Acquisition to be fair and reasonable. In providing advice to the Independent Clipper Directors Goldman Sachs International has taken into account the commercial assessments of the Independent Clipper Directors. In addition, the Independent Clipper Directors consider the terms of the Acquisition to be in the best interests of Clipper Shareholders as a whole. Accordingly the Independent Clipper Directors intend unanimously to recommend that Clipper Shareholders vote in favour of the Acquisition and the Scheme Resolutions as the Independent Clipper Directors have irrevocably undertaken to do in respect of their entire beneficial holdings in Clipper, amounting to, in aggregate, 195,000 Clipper Shares, representing approximately 0.09 per cent. of the existing issued ordinary share capital of Clipper.

-- In addition, James GP Dehlsen (the Chairman and founder of the Company) and James B Dehlsen (a director of the Company) who are not regarded as Independent Clipper Directors due to the arrangements relating to the Acquisition described in Section 13 below, have also irrevocably undertaken to vote in favour of the Acquisition and the Scheme Resolutions in respect of 3,938,797 Clipper Shares in aggregate (representing approximately 1.83 per cent. of the existing issued ordinary share capital of Clipper).

-- Dehlsen Associates LLC and Dehlsen Family Trust (in which James GP Dehlsen and James B Dehlsen both have beneficial interests) have also irrevocably undertaken to vote in favour of the Acquisition and the Scheme Resolutions in respect of 14,878,365 Clipper Shares (representing approximately 6.93 per cent. of the existing issued ordinary share capital of Clipper).

-- Further, UTC has received irrevocable undertakings from certain key institutional Shareholders to vote or procure the vote in favour of the Acquisition and the Scheme Resolutions, in respect of a total of 44,955 574 Clipper Shares, representing approximately 20.9 per cent. of the existing issued ordinary share capital of Clipper. These irrevocable undertakings would be released if Clipper announces receipt of a subsequent competing offer which if completed would be at a price per Scheme Share (or equivalent thereof) which is higher than the price per Scheme Share pursuant to the Acquisition.

-- In aggregate, the irrevocable undertakings received represent approximately 29.80 per cent. of the existing issued ordinary share capital of Clipper, and approximately 59.47 per cent. of the Scheme Shares.

-- In addition, one institutional third party investor in Clipper has entered into swap contracts with various swap counterparties with respect to Clipper Shares. Whilst this third party is not able to provide irrevocable undertakings to vote in favour of the Acquisition and the Scheme Resolutions in respect of the 10,015,960 Clipper Shares (representing approximately 4.7 per cent. of the existing issued ordinary share capital of Clipper) relating to these swap contracts, it has provided Clipper with written confirmation that it has requested these swap counterparties to vote in favour of the Acquisition and the Scheme Resolutions in respect of such Clipper Shares as are held by such swap counterparties at such time.

-- It is intended that the Acquisition will be implemented by way of a court sanctioned scheme of arrangement under Part 26 of the Act. UTC may (with the consent of the Company) make an offer to Clipper Shareholders by way of a Takeover Offer rather than pursuing the scheme of arrangement detailed in this announcement, though this will be subject to UTC negotiating its release from the Standstill Provision with Clipper.

-- The Acquisition will be conditional on the conditions set out in Appendix I to this announcement, including the passing of the Scheme Resolutions required to implement the Scheme by Scheme Shareholders at the Court Meeting and by Clipper Shareholders at the General Meeting, and the sanction of the Court. UTC will not be entitled to attend or vote at the Court Meeting.

-- It is expected that the Scheme Document will be posted to Clipper Shareholders in early November 2010 and the Court Meeting and General Meeting are also expected to take place in November 2010. Completion of the Acquisition is expected in December 2010. Further details will be set out in the Scheme Document.

-- UTC has agreed to make available to Clipper's wholly-owned subsidiary Clipper Windpower, Inc. ("CWI"), a 362-day term loan facility (the "Facility"), to be used for general corporate purposes, under the terms of which CWI will be able to borrow in tranches (with (a) $10 million available prior to 31 October 2010, (b) to the extent not previously borrowed, $30.0 million available through 30 November 2010, and (c) to the extent not previously borrowed, $50.0 million available through 31 January 2011) up to an aggregate principal amount equal to US$50 million. Each borrowing under Facility will bear interest at a rate per annum equal to the LIBOR Rate plus 7.00 per cent. The Facility is repayable by CWI if the Acquisition is not consummated by 31 January 2011. CWI shall have 60 days from receipt of UTC's written notice demanding repayment to make such repayments, save in the event that (a) a bankruptcy event occurs with respect to CWI or its subsidiaries, in which case the Facility shall be automatically accelerated without notice, or (b) the Board recommends a Third Party Transaction, Clipper ceases to beneficially own (directly or indirectly) 100% of the outstanding capital stock in CWI and/or its subsidiary Clipper Windpower Development Company, Inc. ("CWDCI"), or CWI breaches a specified covenant (relating to maintenance of corporate existence, incurrence of debt or sales of assets, in each case other than as permitted under the Facility), in which case CWI will have 14 days from such recommendation, cessation or breach, as applicable, to make such repayments. The Facility will be guaranteed by Clipper and CWDCI and secured by lien over certain assets of CWI, subject to the granting of such lien being approved by Clipper Shareholders.

Commenting on the Acquisition, Mauricio Quintana, President and Chief Executive Officer of Clipper, said:

"Clipper has made significant progress during 2010 as we have established a positive momentum and sought to position the business for the future. Part of this progress has been as a result of our partnership with UTC and today's announcement represents the next stage in this relationship. In the context of the challenging environment that Clipper has faced in recent years, we believe that the transaction represents good value for our shareholders and provides substantial benefits for our customers and employees."

Enquiries

INVESTORS

Clipper Windpower Plc Jenny Matthews, Investor Relations Tel: [phone]

Goldman Sachs International (Nominated Adviser and Corporate Broker to Clipper) Phil Raper

Brian Bolster

Nick Harper Tel: [phone]

FINANCIAL PRESS

M:Communications Patrick d'Ancona / Charlotte Kirkham Tel: [phone] / 2331

BUSINESS AND TRADE

Mary Gates, (Director, Global Communications, Clipper Windpower Plc) Tel: [phone]

This announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy any securities, pursuant to the Acquisition or otherwise. The Acquisition will be made solely by means of a Scheme Document, which will contain the full terms and conditions of the Acquisition, including details of how the Acquisition can be approved and completed, and the conditions set out in Appendix I to this announcement. Certain terms used in this announcement are defined in Appendix II to this announcement.

Goldman Sachs International is acting exclusively for Clipper and no one else in connection with the Acquisition and will not be responsible to anyone other than Clipper for providing the protections afforded to clients of Goldman Sachs International or for providing advice in connection with the Acquisition or any matter referred to herein.

The Acquisition will not be subject to the City Code on Takeovers and Mergers.

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.

Unless otherwise determined by UTC and permitted by applicable law and regulation, the proposal relating to the Acquisition will not be made, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction. Accordingly, copies of this announcement and all documents relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this announcement and all documents relating to the Acquisition (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions.

The rights of Clipper Shareholders who are not resident in the United Kingdom in connection with the Acquisition may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

If you are a resident of the United States, please read the following:

In accordance with normal UK market practice, UTC, or its nominees, or its brokers (acting as agents) may from time to time make certain purchases of, or arrangements to purchase, Clipper Shares, other than pursuant to the Acquisition. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the United Kingdom.

Forward Looking Statements

This announcement contains statements about UTC and Clipper that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of UTC's or Clipper's operations and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on UTC's or Clipper's business.

Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. Each of UTC and Clipper disclaims any obligation to update any forward looking or other statements contained herein, except as required by applicable law.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM CANADA, AUSTRALIA, JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

18 October 2010

RECOMMENDED ACQUISITION

of

Clipper Windpower Plc by

United Technologies Corporation

1 Introduction

The Independent Clipper Directors and UTC are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition by UTC (or a wholly-owned subsidiary of UTC) of the entire issued and to be issued ordinary share capital of Clipper not already owned by UTC (the "Acquisition"). It is intended that the Acquisition will be effected by way of a Court-sanctioned scheme of arrangement under Part 26 of the Act.

2 The Acquisition

Under the Acquisition, which will be subject to the conditions set out in Appendix I (which will be set out in the Scheme Document), Clipper Shareholders will be entitled to receive:

for each Clipper Share 65p in cash

The Acquisition values the entire existing issued share capital of Clipper at approximately GBP139.5 million and represents a premium of approximately:

-- 31.3 per cent. to 49.5 pence, being the closing mid-market price per Clipper Share on 15 October 2010 (being the last Business Day prior to the date of this announcement); and

-- 47.7 per cent. to 44.0 pence, being the closing mid-market price per Clipper Share on 17 September 2010 (being the last Business Day prior to the date on which Clipper announced that it has received an approach from UTC).

The Acquisition will be achieved by the cancellation of the Scheme Shares held by Scheme Shareholders (pursuant to the Capital Reduction) and the application of the reserve arising from such cancellation in paying up in full new Clipper shares which have an aggregate nominal value and share premium value equal to the aggregate nominal value of the Scheme Shares cancelled and issuing the same to UTC (or a wholly-owned subsidiary of UTC). Scheme Shareholders will then receive the cash consideration referred to above.

3 Background to and reasons for the Acquisition

UTC currently holds approximately 49.9 per cent of the issued share capital of Clipper. The Acquisition will allow UTC to secure full control of Clipper, thereby creating the long term financial stability necessary for Clipper's continued growth.

The Acquisition will enable Clipper to fully leverage UTC's management and operational expertise as well as its advanced technology in blades, turbines and gearbox design. It also builds on UTC's existing portfolio of energy efficient products and power generation systems that respond to the world's growing demand for cleaner, more efficient products.

4 Recommendation

The Independent Clipper Directors, who have been advised by Goldman Sachs International, consider the terms of the Acquisition to be fair and reasonable. In providing advice to the Independent Clipper Directors Goldman Sachs International has taken into account the commercial assessments of the Independent Clipper Directors. In addition, the Independent Clipper Directors consider the terms of the Acquisition to be in the best interests of Clipper Shareholders as a whole. Accordingly the Independent Clipper Directors intend unanimously to recommend that Clipper Shareholders vote in favour of the Acquisition and the Scheme Resolutions as the Independent Clipper Directors have irrevocably undertaken to do in respect of their entire beneficial holdings in Clipper, amounting to, in aggregate, 195,000 Clipper Shares, representing approximately 0.09 per cent. of the existing issued ordinary share capital of Clipper.

5 Background to and reasons for the recommendation

During the current fiscal year Clipper has started to demonstrate important operational improvements within the Clipper Group, primarily the conclusion of significant remediation programmes, improved turbine performance as measured by turbine availability, and significant improvement in gross margins and other financial metrics. The strategic partnership between Clipper and UTC, which was formed at the start of the year, has delivered significant benefits in areas of technology access, market reach and warranty support for selected new orders of Liberty Turbines. The Independent Clipper Directors believe that the combination of the operational improvements and the strategic partnership with UTC highlight the positive momentum within Clipper and, when combined with an improving outlook for the US and international wind markets, the long term positive potential of the Clipper Group.

These improvements have been achieved in the context of challenging economic and financing markets as the global economic and credit crisis has continued to materially impact the availability of financing for wind projects. Power market and credit conditions have caused many of Clipper's customers to reduce capital expenditure, delay projects, and defer turbine deliveries under existing contracts. In the US, project developers and electric utilities have dramatically reduced new orders for turbines at the same time as lower prices for oil, natural gas and coal have contributed to lower prices for power purchase agreements. Although these conditions have started to stabilise, the Clipper Group has experienced, and expects to continue to experience, an adverse impact on its projected cash flows. This impact is reflected in delayed timing and lower receipts of deposits and progress payments from customers under new and existing orders in comparison to the operating cash needed to complete such orders and fund the Clipper Group's operations. As a result, Clipper's consolidated unrestricted cash position of US$140 million at 30 June 2010 has decreased to approximately US$85 million at the end of September and, in the event no further new orders are received, it is expected to further decline in the fourth quarter of 2010.

Clipper's management has prepared operating plans and projections for the foreseeable future which indicate that while the Clipper Group's resources and operating flexibilities may be adequate, there are risks and uncertainties on the timing of cash flows which mean that additional funding may be necessary. Historically, Clipper has met its operating capital requirements through a combination of the deposits and progress payments provided by customers and equity capital provided by institutional and strategic investors, such as UTC. As a result, Clipper explored numerous alternatives to raise capital including private and public equity issuances and working capital credit lines with third party financial institutions and with UTC. Discussions with UTC ranged from providing credit support for a working capital facility to equity purchases. During these discussions, UTC submitted a conditional proposal to acquire all of the ordinary shares of Clipper not currently owned by UTC. Following receipt of the proposal, the Independent Clipper Directors retained financial and legal advisers and initiated a full review of the strategic and financing options for the Company, which included discussions with UTC regarding a possible offer for the Company.

When evaluating the strategic and financing options and in entering into discussions with UTC, the Independent Clipper Directors have considered the long-term business potential of the Clipper Group, and the risks to the Company's ability to realise this long term potential in light of its current financial position. The Independent Clipper Directors also considered:

-- the business outlook for the Clipper Group, including the risks posed by the difficult economic and trading environment in which it operates;

-- the losses that the Clipper Group has incurred since flotation and, in particular, the loss of US$241.4 million for 2009 (which included significant expenses and provisions relating to remediation) and US$27 million for the six months ended 30 June 2010;

-- the need for Clipper to have a strong balance sheet in order to provide confidence to customers in the financial stability of the business;

-- the negative net asset position of the Clipper Group which was a net deficit of US$168 million as at 30 June 2010 and the likely requirement for additional capital to be raised for Clipper to continue operations in the current environment;

-- the cash balances of Clipper which have declined substantially during 2009 and 2010; and

-- the material uncertainties that the current business circumstances have created on Clipper's ability to continue as a going concern.

In arriving at its decision to recommend the Acquisition, the Independent Clipper Directors have taken into account the deliverability and certainty for Clipper Shareholders of the Acquisition as an option relative to other available proposals, together with the potential benefits for all Clipper's stakeholders of UTC as a full owner of Clipper. As a result, the Independent Clipper Directors believe that the terms of the Acquisition represent attractive value now for Clipper Shareholders.

On the basis of these factors the Independent Clipper Directors concluded that the terms of Acquisition are fair and reasonable and should be recommended to Clipper Shareholders.

6 Irrevocable undertakings

James GP Dehlsen (the Chairman and founder of the Company) and James B Dehlsen (a director of the Company) are not regarded as Independent Clipper Directors due to the arrangements relating to the Acquisition described in Section 13 below. In addition to the irrevocable undertakings referred to in section 4 above, James GP Dehlsen and James B Dehlsen have also irrevocably undertaken to UTC to vote in favour of the Acquisition and the Scheme Resolutions in respect of their 3,938,797 Clipper Shares in aggregate (representing approximately 1.83 per cent. of the existing issued ordinary share capital of Clipper).

Dehlsen Associates LLC and the Dehlsen Family Trust (in which James GP Dehlsen and James B Dehlsen both have beneficial interests) have also irrevocably undertaken to vote in favour of the Acquisition and the Scheme Resolutions in respect of 14,878,365 Clipper Shares (representing approximately 6.93 per cent. of the existing issued ordinary share capital of Clipper).

Further, UTC has received irrevocable undertakings from certain key institutional Shareholders to vote or procure the vote in favour of the Acquisition and the Scheme Resolutions, in respect of a total of 44,955 574 Clipper Shares, representing approximately 20.9 per cent. of the existing issued ordinary share capital of Clipper. These irrevocable undertakings would be released if Clipper announces a subsequent competing offer which if completed would be at a price per Scheme Share (or equivalent thereof) which is higher than the price per Scheme Share pursuant to the Acquisition.

In aggregate, the number of Clipper Shares in respect of which irrevocable undertakings have been received represent approximately 29.80 per cent. of the existing issued ordinary share capital of Clipper and approximately 59.47 per cent. of the Scheme Shares.

In addition, one institutional third party investor in Clipper has entered into swap contracts with various swap counterparties with respect to Clipper Shares. Whilst this third party is not able to provide irrevocable undertakings to vote in favour of the Acquisition and the Scheme Resolutions in respect of the 10,015,960 Clipper Shares (representing approximately 4.67 per cent. of the existing issued ordinary share capital of Clipper) relating to these swap contracts, it has provided Clipper with written confirmation that it has requested these swap counterparties to vote in favour of the Acquisition and the Scheme Resolutions in respect of such Clipper Shares as are held by such swap counterparties at such time.

Further details of these irrevocable undertakings (including the circumstances in which they will be released) will be set out in the Scheme Document.

7 Current Trading

Since 30 June 2010, Liberty turbines have been delivered to three customer sites in the United States and Mexico. These deliveries are in line with management expectations which anticipate higher delivery volumes and revenues for the second half of 2010 than the first half of 2010. For the full year Clipper expects to deliver to customers against firm orders in the range of 140 to 150 turbines (350 to 375 MW). The Company has also continued to experience positive gross margin generation in recent months through a combination of these higher delivery volumes and the trends experienced in the first half of 2010 of an improvement in gross margin through lower net remediation and warranty related costs, lower component costs and improved average turbine sales prices.

However, as announced on 30 September 2010, the Clipper Group expects that in the second half of 2010 it could face an adverse impact on its projected cash flows. This adverse impact is as a result of the timing and lower receipts of deposits and progress payments from customers expected under new and existing orders in comparison to the operating cash needed to complete these orders and fund operations. The Clipper Group's consolidated cash position of US$140 million (excluding US$13 million restricted cash) at 30 June 2010 has decreased to approximately US$85 million (excluding US$22 million restricted cash) at 30 September 2010. Clipper has initiated a full review of the strategic and financing options for the Company and continues to manage its working capital efficiently, maintaining lower inventory balances and expanding its use of multiple suppliers for components resulting in improved delivery schedules and terms.

8 Information on UTC

UTC is a global provider of high technology products and services to the building systems and aerospace industries. Its principal operating units include Otis, Carrier, UTC Fire & Security, Pratt & Whitney, Hamilton Sundstrand and Sikorsky. Otis, Carrier and UTC Fire & Security serve customers in the commercial and residential property industries worldwide. Carrier also serves commercial, industrial, transport and refrigeration and food service equipment customers. Pratt & Whitney, Hamilton Sundstrand and Sikorsky primarily serve commercial and government customers in both the original equipment and aftermarket parts and services markets of the aerospace industry. Hamilton Sundstrand and Pratt & Whitney also serve customers in certain industrial markets, including power generation.

UTC employs approximately 207,000 people and operates in more than 180 countries. UTC is quoted on the New York Stock Exchange with a market capitalisation of approximately US$69 billion. For the year ended 31 December 2009, UTC revenues were US$52.9 billion.

UTC is an existing shareholder in Clipper, and currently holds approximately 49.9 per cent. of the issued share capital of Clipper.

Additional information regarding UTC which has been publicly filed with, or furnished to, the SEC may be obtained via the SEC's EDGAR filing system, accessible from the SEC's website at www.sec.gov.

9 Information on Clipper

Clipper (www.clipperwind.com) is a company engaged in wind energy technology, turbine manufacturing, and wind project development. The Clipper Group designs advanced wind turbines, manufactures its 2.5 MW Liberty wind turbine, and actively develops wind power generating projects in the Americas and Europe. Clipper's headquarters are in Carpinteria, California, US. The Company's 330,000 square foot manufacturing and assembly facility for land-based wind turbines is located in Cedar Rapids, Iowa, and its development centre for offshore wind turbine development is located in Blyth, UK.

Clipper is a public company with its issued shares traded on AIM of the London Stock Exchange. Clipper's ticker symbol is CWP. The ordinary shares of Clipper are not registered under the U.S. Securities Act of 1933, as amended. Such shares may not be offered or sold to residents of the United States or to persons acting on their behalf, or to other persons who are "United States Persons" within the meaning of Regulation S as promulgated under the Securities Act of 1933, unless such shares have been registered under the Securities Act or there is an available exemption from registration.

10 Financing

The cash consideration payable by UTC for the Acquisition will be funded using UTC's existing cash resources. UTC has provided Clipper with confirmation that has the ability using such resources to fund the payment of the cash consideration to each Scheme Shareholder and to each option holder who exercises its options pursuant to the Share Plan after the Effective Date.

11 Implementation Agreement

UTC and Clipper have entered into an Implementation Agreement in relation to the Acquisition which contains provisions regarding the implementation of the Acquisition and certain assurances and confirmations between the parties. The Implementation Agreement is subject to the Conditions and termination rights described in Appendix 1.

Non solicitation arrangements

Clipper has undertaken, amongst other things, not to, and to procure that no member of the Clipper Group and their respective directors, employees and advisers shall not, save in accordance with the fiduciary duties of the Independent Clipper Directors:-

(i) solicit, initiate, encourage, negotiate, discuss or otherwise seek to procure any initial or further approach to or from any other person with a view to a Third Party Transaction taking place; or

(ii) enter into or continue discussions and/or negotiations with, any other person with a view to a Third Party Transaction taking place.

Clipper has also undertaken to notify UTC immediately of any approach that is made to it or any other member of the Clipper Group or the directors, employees, advisers or agents thereof in relation to a Third Party Transaction.

Break fee arrangements

Clipper has agreed to pay UTC a break fee of GBP1,368,145 if:-

(a) the recommendation of the Independent Clipper Directors of the Acquisition is either (i) withdrawn or (ii) qualified or modified adversely, or

(b) a Third Party Transaction (or any amendment, variation or revision of such proposal) is announced with Clipper which results, or would result in any person, directly or indirectly, acquiring (in one transaction or a series of transactions) (i) Clipper shares (excluding Clipper shares issued and allotted pursuant to the Share Plan) issued and allotted by Clipper after the date of the Implementation Agreement which in aggregate equate to more than 5 per cent. of the enlarged issued share capital of Clipper as at the relevant time or (ii) a material part of Clipper Group's business or assets, in either case at any time before the Scheme lapses or is withdrawn.

12 Interim Credit Facility

UTC has agreed to make available to Clipper Windpower, Inc. ("CWI"), a wholly-owned subsidiary of Clipper, a 362-day term loan facility (the "Facility"), to be used for general corporate purposes, under the terms of which CWI will be able to borrow in tranches (with (a) $10.0 million available prior to 31 October 2010 (b) to the extent not previously borrowed, US$30.0 million available through 30 November 2010, and (c) to the extent not previously borrowed, US$50.0 million available through 31 January 2011) up to an aggregate principal amount equal to US$50.0 million. Each borrowing under the Facility will bear interest at a rate per annum equal to the LIBOR Rate plus 7.00 per cent. The Facility is repayable by CWI if the Acquisition is not consummated by 31 January 2011. CWI shall have 60 days from receipt of UTC's written notice demanding repayment to make such repayments, save in the event that (a) a bankruptcy event occurs with respect to CWI or its subsidiaries, in which case the Facility shall be automatically accelerated without notice, or (b) the Board recommends a Third Party Transaction, Clipper ceases to beneficially own (directly or indirectly) 100% of the outstanding capital stock in CWI and/or its subsidiary Clipper Windpower Development Company, Inc. ("CWDCI"), or CWI breaches a specified covenant (relating to maintenance of corporate existence, incurrence of debt or sales of assets, in each case other than as permitted under the Facility), in which case CWI shall have 14 days from such recommendation cessation or breach, as applicable, to make such repayments. The Facility will be guaranteed by Clipper and CWDCI. The Facility contains customary representations, warranties, covenants and events of default for this type of financing, including customary and appropriate grace periods, materiality thresholds, and permitted baskets and exceptions. In particular, each of the following events is an event of default under the Facility:

-- nonpayment of principal when due;

-- nonpayment of interest, fees or other amounts after a grace period of three days;

-- material inaccuracy of representations and warranties given by CWI;

-- violation of covenants (subject, in the case of certain affirmative covenants, to a grace period of 30 days);

-- cross default, bankruptcy events, certain ERISA events monetary or non-monetary judgments, material adverse change and actual or asserted invalidity of any guarantee or security document or security interest;

-- any change of control in CWI or CWDI; and

-- termination of the Acquisition, or failure of the Acquisition to complete for any reason, including because of a Third Party Transaction.

CWI is not permitted to make any drawdowns under the Facility until such time as certain members of the Clipper Group provide security to UTC in connection with CWI's obligations under the Facility. The security required is a pledge over all intellectual property rights of CWI, together with a guaranty of CWI's obligations from each of the Company and Clipper Windpower Development Company, Inc.

The granting of security over certain business and assets of the Clipper Group in favour of UTC could in certain circumstances lead to UTC enforcing rights under the security arrangements, which in turn could result in the Clipper Group being required to dispose of assets and business. These disposals, either in a single transaction or as a series of linked transactions over a 12 month period, could in aggregate exceed 75 per cent. in each of the class tests (as defined in the AIM Rules for Companies). Consequently, in accordance with Rule 15 of the AIM Rules, Clipper will seek the necessary approvals from its Shareholders for the granting of such security.

13 Termination of arrangements with James G. P. Dehlsen and his affiliates

Patent and Royalty Arrangements

James G.P. Dehlsen, Clipper's founder and Chairman, and certain affiliates are parties to various agreements with Clipper relating to the technology used in Clipper's business. These agreements were entered into in 2001 and 2002 in connection with the original formation of Clipper and the original funding of institutional equity capital. The agreements provide for royalties to be paid in a sliding scale percentage based on the gross margin realized by the Clipper Group on sales of wind turbines that include the technology covered by the patents. The royalties due under these arrangements are based on Clipper's future levels of turbine sales and the gross margins realized therefrom, and could result in significant future payments by Clipper as its business grows. At the request of UTC and Clipper, it has been agreed that these arrangements shall be terminated, conditional on completion of the Acquisition, in order to create certainty over Clipper's future royalty obligations under these arrangements.

Dehlsen Associates LLC, which is owned by James GP Dehlsen and his son, James. B Dehlsen, has agreed to sell to the Clipper Group, in conjunction with the closing of the Acquisition, all its rights under the original patent sale and transfer agreements (including all rights to receive royalties) for a payment of US$9,950,000, which both Clipper and UTC believe to be appropriate and in the long term interests of the Company. As part of this settlement, James GP Dehlsen and Dehlsen Associates LLC have agreed to relinquish any and all claims they have or may have to future royalty payments from Clipper.

Severance arrangements

Under James GP Dehlsen's existing employment agreement and other contractual arrangements with the Clipper Group, James GP Dehlsen receives remuneration and benefits including stock options, is eligible to participate in the Clipper Group's bonus scheme, has the benefit of a change of control payment and enjoys various additional post-employment retirement benefits (collectively the "Benefits").

In conjunction with the closing of the Acquisition, in consideration of a final settlement payment of US$800,000 from the Company, James GP Dehlsen's employment contract will terminate with immediate effect from such date, his existing rights to all Benefits would immediately be extinguished and at such time he would irrevocably waive his rights to bring claims (if any) against any member of the Company's Group. The settlement payment would be made 60 days after James GP Dehlsen's retirement and such sum is substantially less than the value of the Benefits which would otherwise be due to James GP Dehlsen over the coming years had his employment continued under the prior contract. As part of the severance arrangements Mr Dehlsen also agrees not to compete with the business of the Clipper Group for a period of three years.

14 Related party transactions

The Implementation Agreement, the Facility (and related security arrangements) and the termination arrangements with James G P Dehlsen and his affiliates will all be related party transactions pursuant to Rule 13 of the AIM Rules. As such, the Independent Clipper Directors confirm that, having consulted with Clipper's Nominated Adviser, Goldman Sachs International, they consider that the terms of the Implementation Agreement, the Facility (and related security arrangements) and the termination arrangements with James G. P. Dehlsen and his affiliates are fair and reasonable insofar as Clipper Shareholders are concerned.

15 Directors, management and employees

Following completion of the Acquisition, save as described in the below paragraph, the existing employment rights of the directors, management and employees of Clipper will be fully safeguarded. UTC's plans for Clipper do not involve any material change in the conditions of employment of Clipper employees.

Following completion of the Acquisition, each of James GP Dehlsen, Albert J Baciocco, Jr, James B Dehlsen, Anthony RC Durrant and Sidney L Tassin will resign as a Director of the Company with immediate effect.

16 Clipper Share Plan

Holders of options under the Share Plan will be contacted regarding the effect of the Acquisition on their rights under the Share Plan and appropriate proposals will be made to such participants in due course. The Acquisition will extend to any Clipper Shares which are unconditionally allotted or issued as a result of the exercise of existing options and vesting of awards under the Share Plan before the date on which the Acquisition completes.

17 Scheme Document

It is expected that the Scheme Document setting out the details of the Acquisition will be despatched to Clipper shareholders in early November 2010 and the Court Meeting and General Meeting are expected to take place later in November 2010. Completion of the Acquisition is expected in December 2010. Further details will be set out in the Scheme Document.

Clipper shareholders are urged to read the Scheme Document and any accompanying documentation when they are sent to them because they will contain important information.

18 Scheme of arrangement

It is intended that the Acquisition will be implemented by means of a Court-sanctioned scheme of arrangement between Clipper and its shareholders under Part 26 of the Act. The Scheme will involve an application by Clipper to the Court to sanction the Scheme and to confirm the cancellation of all the Scheme Shares, in consideration for which Scheme Shareholders will receive consideration in accordance with the terms of the Acquisition. It is also intended as part of the Scheme to effect the Capital Reduction.

The Scheme will be subject to the Conditions and certain further terms referred to in Appendix I to this announcement, and to be included in the Scheme Document. The Code does not apply to the Scheme Document, the Acquisition or the Scheme. As such the rules of the Code, including in particular Rules 2.7 and 13.4, which would, if the Code applied, restrict the ability of UTC not to proceed with the Acquisition or the Scheme or to invoke a Condition or fail to waive a Condition, do not apply.

In particular, to become effective, the Scheme requires the approval of Scheme Shareholders by a majority in number present and voting at the Scheme Meeting, either in person or by proxy, representing not less than 75 per cent. in value of the Scheme Shares which are voted at the Scheme Meeting (or any adjournment thereof).

UTC holds 107,098,020 Clipper Shares, representing approximately 49.9 per cent. of Clipper's issued share capital, and will not be entitled to attend or vote at the Scheme Meeting.

In addition, to become effective, the Scheme also requires the passing at the Clipper General Meeting of certain resolutions which are necessary to implement the Scheme. These resolutions are in respect of, among others:-

-- the cancellation of existing Scheme Shares and the approval of the issue of new ordinary shares in Clipper to UTC (and/or its nominee(s)) in accordance with the Scheme; and

-- the amendment of Clipper's articles of association to ensure that the Clipper Shares issued under the Share Plan following the Scheme becoming effective be automatically transferred to UTC on the same terms as under the Scheme.

These resolutions require the approval of Clipper Shareholders representing at least 75 per cent. of the votes cast (either in person or by proxy) at the General Meeting which will be held immediately after the Scheme Meeting.

Following the Scheme Meeting and the General Meeting, the Scheme must be sanctioned and the Capital Reduction confirmed by the Court, and will only become effective on delivery to the Registrar of Companies of a copy of the Court Order, together with the statement of capital attached to it.

UTC may, with the consent of the Company, make an offer to Shareholders by way of a Takeover Offer for the entire issued share capital of Clipper rather than pursuing the scheme of arrangement detailed in this announcement. Any such Takeover Offer shall be subject to UTC negotiating its release from the Standstill Provision with Clipper. Any such Takeover Offer will be subject to an acceptance condition of UTC having acquired (whether pursuant to the Takeover Offer or otherwise) such percentage (being more than 50 per cent.) of the Clipper Shares, as UTC may decide, having consulted with Clipper, and will otherwise be implemented on the same terms (subject to appropriate amendments) including the price, so far as applicable, as those which would apply to the Scheme and in compliance with applicable laws and regulations.

Upon the Scheme becoming effective, it will be binding on all Scheme Shareholders, irrespective of whether or not they attended or voted at the Scheme Meeting or the General Meeting.

The Scheme Document will include full details of the Scheme, together with notices of the Scheme Meeting and the General Meeting and the expected timetable, and will specify the action to be taken by Scheme Shareholders. As at the date of this announcement, the expected timetable is for the Scheme Meeting to be held on 24 November 2010 and for the Court hearing to take place on 14 December 2010.

19 Subscription Agreement

The surviving provisions of the Subscription Agreement remain in effect. In particular, the standstill provision in the Subscription Agreement that prevents UTC and its associates from acquiring more than 55 per cent. of Clipper's issued share capital (the "Standstill Provision") shall only be released on the Effective Date, or as otherwise necessary to give effect to the provisions of the Implementation Agreement. UTC shall retain its powers to appoint members to the Board of Clipper under the Subscription Agreement, and its consent rights over matters such as (i) the appointment or replacement of the President and Chief Executive Officer of Clipper, (ii) the entering of Clipper into or termination of any arrangement, contract or transaction outside the normal course of the Clipper Group's business which would be material to the Clipper Group taken as a whole; and the entering of Clipper into a Substantial Transaction other than (a) the sale or supply of wind turbines to Clipper Group customers in the normal course of business or (b) the sale of project development assets, in each case only to the extent that Board approval would not have been required.

20 Regulatory issues

The Acquisition is conditional upon, inter alia, the applicable waiting period in respect of the Acquisition under the HSR Act having expired or terminated.

21 Delisting, cancellation of trading and re-registration

Upon the Scheme becoming effective UTC intends to procure that Clipper cancels admission to trading in Clipper Shares on AIM.

It is anticipated that cancellation of admission of Clipper's shares to trading on AIM will take effect on or shortly after the date that the Scheme becomes effective.

Simultaneous with the cancellation of admission of Clipper's shares to trading on AIM, Clipper will be re-registered as a private company.

22 General

The Acquisition will be made on the terms and subject to the Conditions and further terms set out herein and in Appendix I to this announcement and to be set out in the Scheme Document. Certain terms used in this announcement are defined in Appendix II to this announcement.

Goldman Sachs International is acting exclusively for Clipper and no one else in connection with the Acquisition and will not be responsible to anyone other than Clipper for providing the protections afforded to clients of Goldman Sachs International or for providing advice in connection with the Acquisition or any matter referred to herein.

This announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy any securities, pursuant to the Acquisition or otherwise.

This announcement has been prepared for the purpose of complying with English law and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom. The Acquisition will not be subject to the Code.

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.

Unless otherwise determined by UTC and permitted by applicable law and regulation, the proposal relating to the Acquisition will not be made, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction. Accordingly, copies of this announcement and all documents relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this announcement and all documents relating to the Acquisition (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions as doing so may invalidate the Acquisition.

The rights of Clipper Shareholders who are not resident in the United Kingdom in connection with the Acquisition may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

If you are a resident of the United States, please read the following:

In accordance with normal UK market practice, UTC, or its nominees, or its brokers (acting as agents) may from time to time make certain purchase of, or arrangements to purchase, Clipper Shares, other than pursuant to the Acquisition. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the United Kingdom.

The Acquisition will be subject to the applicable requirements of the London Stock Exchange and the Financial Services Authority.

Forward looking statements

This announcement contains statements about UTC and Clipper that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of UTC's or Clipper's operations and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on UTC's or Clipper's business.

Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. Each of Clipper and UTC disclaims any obligation to update any forward looking or other statements contained herein, except as required by applicable law.

Enquiries

INVESTORS

Clipper Windpower Plc Jenny Matthews, Investor Relations Tel: [phone]

Goldman Sachs International (Nominated Adviser and Corporate Broker to Clipper) Phil Raper

Brian Bolster

Nick Harper Tel: [phone]

FINANCIAL PRESS

M:Communications Patrick d'Ancona / Charlotte Kirkham Tel: [phone] / 2331

BUSINESS AND TRADE

Mary Gates, (Director, Global Communications, Clipper Windpower PLC) Tel: [phone]

APPENDIX I CONDITIONS OF THE ACQUISITION

The Acquisition

The Acquisition, which will be made by UTC (or a wholly-owned subsidiary of UTC), will be governed by English law and subject to the jurisdiction of the English courts. The Acquisition will be subject to the following conditions:

1 with regard to the Scheme:

1.1 the approval of the Scheme by a majority in number representing not less than three fourths in value of the Scheme Shareholders (or the relevant class or classes thereof, if applicable) who are on the register of members of the Company at the Scheme Voting Record Time, present and voting, whether in person or by proxy, at the Court Meeting and any separate class meeting which may be required by the Court or any adjournment thereof;

1.2 the resolutions required to approve and implement the Scheme being duly passed at the General Meeting (or any adjournment thereof); and

1.3 the sanction of the Scheme and the confirmation of the Capital Reduction by the Court (in either case with or without modification (but subject to such modification being acceptable to UTC and the Company)), office copies of the Court Order and of a statement of capital being delivered to the Registrar of Companies and, if the Court so orders for the Scheme to become effective, registration of the Court Order confirming the Capital Reduction with the Registrar of Companies; and

2 the applicable waiting period in respect of the Acquisition under the HSR Act having expired or been terminated;

3 all necessary material notifications and filings having been made in connection with the Acquisition and all statutory and regulatory obligations in connection with the Acquisition in any relevant jurisdiction having been complied with in respect of the Acquisition and except pursuant to Part 26, Chapter 3 of the 2006 Act, all necessary material consents for the Acquisition having been obtained from all appropriate third parties, and all such authorisations or consents remaining in full force and effect at the time at which the Court sanctions the Scheme and confirms the Capital Reduction;

4 save as Disclosed, since 30 June 2010, no Governmental Body, customer, supplier, or financial institution having taken any step that would make the Acquisition void, unenforceable or illegal, or restrict, prohibit or delay to a material extent or otherwise materially interfere with the implementation of, or impose material additional conditions or obligations with respect to the Acquisition, or otherwise materially challenge or require material amendment of, the Acquisition;

5 save as Disclosed, there being no provision of any arrangement, agreement, lease, licence, permit or other instrument to which any member of the Wider Company Group is a party or by or to which any such member or any of its assets is or may be bound or be subject, which as a consequence of the Acquisition, or because of a change in the control or management of any member of the Wider Company Group or otherwise, would result in the rights, liabilities, obligations or interests of any member of the Wider Company Group in, or the business of any such member with, any person, firm or body (or any arrangement or arrangements relating to any such interest or business) being terminated, adversely modified or affected, in each case which would have a Material Adverse Effect;

6 save as Disclosed, no member of the Wider Company Group having since 30 June 2010:

6.1 save always in connection with the incorporation of any company as members of the Company Group, issued or agreed to issue, authorised, proposed, or announced its intention to authorise or propose, the issue of additional shares of any class, or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities save for the issue of Scheme Shares pursuant to or in connection with the exercise or vesting of options or awards granted under, or the grant of options or awards under, the Share Plan, such grants or awards having been disclosed to UTC prior to the date of the Implementation Agreement;

6.2 save in respect of transactions between members of the Clipper Group recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus issue, dividend or other distribution whether payable in cash or otherwise;

6.3 other than pursuant to the implementation of the Acquisition (and save for transactions in the ordinary course of business or in respect of transactions between members of the Clipper Group) implemented, effected or authorised any merger, demerger, reconstruction, amalgamation, scheme of arrangement, commitment or acquisition or disposal of assets or shares (or the equivalent thereof) in any undertaking or undertakings or any change in its share or loan capital (save for the issue of Scheme Shares on the exercise or vesting of options or awards granted before the date of this announcement under the Share Plan);

6.4 save in respect of the existing security granted by members of the Clipper Group to UTC, transferred, created or triggered the enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the Wider Company Group (whenever arising or having arisen) or authorised, proposed or announced any intention to do so;

6.5 issued, authorised or proposed or announced an intention to authorise or propose, the issue of any debentures or (save for transactions between the Company and its wholly-owned subsidiaries or transactions under existing credit arrangements or in the ordinary course of business of the Wider Company Group) incurred any indebtedness or contingent liability;

6.6 entered into or varied to a material extent or authorised the terms of, or make any offer (which remains open for acceptance) to enter into or vary to a material extent the terms of, any service agreement with any director or Executive of any member of the Wider Company Group;

6.7 agreed to provide or modified the terms of any Share Plan, incentive scheme or, to the extent not de minimis in nature and within the ordinary course of business, other benefit relating to the employment or termination of employment of any person employed by the Clipper Group;

6.8 purchased, redeemed or repaid or announced a proposal to purchase, redeem or repay any of its own shares or other securities (or the equivalent) or reduced or made any other change to or proposed the reduction or other change to any part of its share capital;

6.9 the Company or any relevant member of the Clipper Group having been permitted to draw down sums under the terms of the Credit Facility Agreement, being unable, or admitted in writing that it is unable, to pay its debts or ceased or threatened to cease carrying on all or a substantial part of any business; or

6.10 the Company or any relevant member of the Clipper Group having been permitted to draw down sums under the terms of the Credit Facility Agreement, in respect of any of the Company, Clipper Windpower Development, Inc or Clipper Windpower, Inc., having taken any corporate action or had any proceedings initiated by any court against it for its winding-up (voluntary or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any material part of its assets or revenues or any analogous proceedings in any jurisdiction or appointed any analogous person in any jurisdiction,

or having entered into any agreement or commitment to effect any of the transactions, matters or events referred to in this paragraph 6;

7 save as Disclosed,:-

7.1 there having been no material defect, malfunction or other error with respect to the design, manufacture, operation or servicing of the Wider Company Group's products (including any component thereof, whether supplied by the Wider Company Group or any third party) discovered since 30 September 2010 which would require the Wider Company Group or UTC to undertake a material programme of inspection, servicing, repair or replacement of any of the Wider Company Group's products or material component thereof, in each case which would have a Material Adverse Effect;

7.2 since 30 September 2010, the Wider Company Group having not received any notices in writing from customers that would cancel, in the aggregate, delivery of turbines representing in excess of thirty per cent. (30%) measured in megawatts of the Wider Company Group's firm backlog, which firm orders have not been replaced by new firm orders prior to the Court Hearing, the net impact of which is a Material Adverse Effect;

7.3 since 30 September 2010, no litigation, arbitration proceedings, prosecution or other legal proceedings (including, for this purpose, any Governmental Body, regulatory or similar investigation or enquiry) (a "Proceeding") having been announced or instituted by or against or remaining outstanding against or in respect of any member of the Wider Company Group which have had or would reasonably be expected to have a Material Adverse Effect and no executive officer of the Wider Company Group having received a written notice from any third party that any such proceedings are pending or threatened, and for the avoidance of doubt any legal proceeding shall only be considered "announced or instituted" for the purposes of this Condition 7.3 if (i) a filing or delivery of notice of a Proceeding is made with any court, tribunal, panel or other arbitration body, or (ii) a public announcement regarding a government investigation is made by any Governmental Body or (iii) written notice of such a Proceeding has been received by a member of the Wider Company Group;

7.4 there being no behaviour of a Director, officer or employee of the Wider Company Group Company that could reasonably be considered to be fraud or wilful misconduct and which has a Material Adverse Effect; or

7.5 the operations of the Wider Company Group not infringing any rights or interests of third parties in intellectual property where such infringement has had, or would reasonably be expected to have, a Material Adverse Effect;

8 since 30 September 2010 and save as Disclosed, no fact, circumstance, event, change, effect or occurrence having arisen which, individually or in the aggregate, has or would reasonably be expected to have a material adverse effect on or with respect to the business, results of operation or financial condition of the Wider Company Group taken as a whole (other than (i) a change affecting all companies, without disproportionate impact, carrying on business similar to that of the Wider Company Group in similar countries in which the Wider Company Group carries on business or (ii) changes that relate to changes in stock markets, interest rates, exchange rates, commodity prices or other general economic conditions outside the control of the Wider Company Group or (iii) movements in the market price of the Clipper Shares) (and so that this Condition 8 shall be interpreted in a manner consistent with UK Takeover Panel's practice in relation to Rule 13.4(a) of the Code as set out in Practice Statement No. 5 dated 28 April 2004 as amended on 30 March 2009 as if the Code applied to such Condition); and

9 UTC not having discovered after the date of this Agreement that any financial, business or other information concerning the Wider Company Group as contained in the information Disclosed which is material in the context of the Acquisition, was, at the time Disclosed, misleading or contained any misrepresentation of fact or omitted to state a fact necessary to make any information contained therein not misleading at the time Disclosed, in each case to an extent which would have a Material Adverse Effect.

UTC reserves the right to waive any of the above Conditions 2 to 9 (inclusive).

The Acquisition will not proceed unless all the above Conditions have been fulfilled or, where permitted, waived or, where appropriate, have been determined by UTC to be or remain satisfied, prior to the Court Hearing.

UTC shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as fulfilled Condition 2 to 9 (inclusive) by a date earlier than the latest date for the fulfilment of that Condition notwithstanding that the other Conditions of the Acquisition may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment.

Termination Rights

UTC and Clipper shall have the right to terminate the Implementation Agreement with immediate effect (and upon such termination for the avoidance of doubt the Scheme shall be withdrawn) if any of the following events occur:

-- if any Condition becomes incapable of satisfaction or is invoked so as to cause the Acquisition not to proceed; or

-- if (i) the Scheme is not approved by the Scheme Shareholders at the Court Meeting; (ii) the resolutions are not passed at the General Meeting; (iii) the Court refuses to sanction the Scheme or grant the Court Order; or (iv) (save as the parties may otherwise agree in writing) the Effective Date has not occurred on or before the Long Stop Date; or

-- a Third Party Transaction is entered into with Clipper which results in any person, directly or indirectly, acquiring (in one transaction or a series of transactions): (i) more than 10 per cent. of the issued share capital of Clipper; or (ii) a material part of the Clipper Group's business or assets, in either case at any time before the Scheme lapses or is withdrawn; or

-- the recommendation of the Independent Clipper Directors to Scheme Shareholders to vote in favour of the Scheme is subsequently either: (i) withdrawn; or (ii) qualified or modified adversely.

APPENDIX II DEFINITIONS

The following definitions apply throughout this announcement unless the context requires otherwise.

 
 "Acquisition"                the recommended cash offer being made by 
                               UTC (or a wholly-owned subsidiary of UTC) 
                               to acquire the entire issued and to be 
                               issued share capital of Clipper not otherwise 
                               held by UTC to be implemented by way of 
                               a scheme of arrangement in accordance with 
                               Part 26 of the Act on the terms and subject 
                               to the conditions to be set out in the 
                               Scheme Document, including, where the context 
                               requires, any subsequent revision, variation, 
                               extension or renewal of such offer 
 "Act"                        the Companies Act 2006 
 "AIM"                        AIM, the market of the same name operated 
                               by the London Stock Exchange 
 "Australia"                  the commonwealth of Australia, its territories 
                              and possessions and all areas subject to its 
                              jurisdiction and all political sub-divisions 
                              thereof 
 "Board"                      the board of directors of Clipper 
 "Business Day"               a day (other than Saturdays, Sundays and 
                               public holidays in the UK) on which banks 
                               are open for business in the City of London 
 
 "Canada"                     Canada, its provinces and territories and 
                               all areas subject to its jurisdiction and 
                               all political sub-divisions thereof 
 "Capital Reduction"          the proposed reduction of Clipper's share 
                              capital in connection with the Scheme under 
                              section 648 of the Act, including the 
                              cancellation and the extinguishing of the Scheme 
                              Shares provided for by the Scheme 
 "Clipper Group"              Clipper, its subsidiaries and subsidiary 
                               undertakings 
 "Clipper Shareholders"       the holders of Clipper Shares 
  or "Shareholders" 
 "Clipper Shares"             the existing unconditionally allotted or 
                               issued and fully paid ordinary shares of 
                               10 pence each in the capital of Clipper 
                               at such time as; 
                               (a) if the Acquisition is implemented by 
                                way of the Scheme, the Scheme having become 
                                effective pursuant to its terms; or 
                                (b) (if the Acquisition is (with the consent 
                                of the Company) implemented by way of a 
                                Takeover Offer, such offer having been 
                                declared or become unconditional in all 
                                respects in accordance with the requirements 
                                of the Takeover Offer 
 "Code"                       the City Code on Takeovers and Mergers 
 "Conditions"                 the conditions to the Acquisition and the 
                               Scheme as set out in Appendix 1 to this 
                               announcement 
 "Court"                      the High Court of Justice in England and 
                               Wales 
 "Court Hearing"              the hearing of the Court to sanction the 
                               Scheme and confirm the Capital Reduction 
 "Court Meeting"              the meeting of the Scheme Shareholders 
                               to be convened by order of the Court pursuant 
                               to Part 26 of the 2006 Act to consider 
                               and, if thought fit, approve the Scheme 
                               including any adjournment hearing 
 "Court Order"                the order of the Court sanctioning the 
                               Scheme under Section 899 of the 2006 Act, 
                               and confirming the Capital Reduction, to 
                               be granted at the Court Hearing 
 "CWI"                        Clipper Windpower, Inc., a wholly-owned 
                               subsidiary of Clipper 
 "Data Rooms"                 the electronic data rooms prepared by Clipper 
                               for UTC in connection with both UTC's original 
                               investment in the Company (as at 10 December 
                               2009) and in connection with the Acquisition 
                               (as at 13 October 2010) 
 "Disclosed"                  disclosed in (i) the annual report and 
                               accounts of Clipper for the financial year 
                               ended 31 December 2009 or the interim results 
                               of Clipper for the 6 months ended 30 June 
                               2010, (ii) any public announcement by or 
                               on behalf of Clipper on or before 5 p.m. 
                               on 15 October 2010 (by the delivery of 
                               an announcement to a Regulatory Information 
                               Service), or (iii) the Data Rooms and any 
                               documents or information delivered in writing 
                               (or by email) to UTC (including its directors 
                               and employees) between 20 August 2010 and 
                               15 October 2010 (both dates inclusive), 
                               solely and directly in connection with 
                               the due diligence exercise conducted by 
                               UTC for the Acquisition 
 "Effective Date"             the date on which the Acquisition becomes 
                               effective in accordance with the terms 
                               of the Scheme 
 "Executive"                  any employee of the Clipper Group identified 
                               in the document entitled "Implementation 
                               Agreement - Executive List" located at 
                               Project Bruin>Shared Documents>4.0 Benefits 
                               Compensation in the electronic data room 
                               prepared by Clipper for UTC in connection 
                               with the Acquisition 
 "Facility"                   has the meaning given to it in paragraph 
                               11 of this announcement 
 "Financial Services          the Financial Services Authority in its 
  Authority"                   capacity as the competent authority for 
                               the purposes of Part VI of the Financial 
                               Services and Markets Act 2000 
 "General Meeting"            the general meeting of Shareholders to 
                               be held immediately after the Scheme Meeting 
                               for the purposes of implementing the Scheme 
 
 "Governmental Body"          any government, government department, or 
                              governmental, quasi-governmental, supranational, 
                              statutory, regulatory, environmental or 
                              investigative body, institution or authority 
                              (including any anti-trust or merger control 
                              body) or any court 
 "Group"                      in relation to any person, its subsidiaries, 
                              subsidiary undertakings and holding companies 
                              and the subsidiaries and subsidiary undertakings 
                              of any such holding company 
 "HSR Act"                    the United States Hart-Scott Rodino Antitrust 
                              Improvements Act of 1976, as amended, and the 
                              rules and regulations promulgated thereunder 
 "Implementation Agreement"   the implementation agreement entered into 
                               between UTC and Clipper on the date of 
                               this announcement relating to the Acquisition 
 "Independent Clipper         the independent directors of Clipper being 
  Directors"                   each of Mauricio F. Quintana, Michael E. 
                               Keane, Albert J. Baciocco, Jr., Anthony 
                               R.C. Durrant and Sidney L. Tassin 
 "Japan"                      Japan, its cities and prefectures, territories 
                               and possessions 
 "London Stock Exchange"      London Stock Exchange plc 
 "Long Stop Date"             31 January 2011 
 "Material Adverse            a change, effect, event, occurrence, state of 
  Effect"                     facts or development that will, or would 
                              reasonably be expected to, result in an 
                              incremental cash expense or loss of profit, 
                              irrespective of whether such amount has been 
                              provided for in reserves or included in 
                              forecasts for the Clipper Group of US$50,000,000 
                              or greater; 
 "Registrar of Companies"     the Registrar of Companies in England and 
                               Wales 
 "Re-organisation             the time and date specified as such in 
  Record Time"                 the Scheme Document, expected to be 6.00 
                               p.m. on the Business Day immediately preceding 
                               the Court Hearing 
 "Restricted Jurisdiction"    Canada, Australia or Japan and any other 
                               jurisdiction into which it would be unlawful 
                               to make the Acquisition 
 "Scheme"                     the proposed scheme of arrangement of Clipper 
                              under Part 26 of the Act to implement the 
                              Acquisition, with or subject to any 
                              modification, addition or condition thereto 
                              approved or imposed by the Court and agreed by 
                              UTC and Clipper 
 "Scheme Document"            the document to be despatched to Clipper 
                              Shareholders in relation to the Scheme 
                              including, amongst other things, the particulars 
                              required by section 897 of the Act and the 
                              notices of the Scheme Meeting and the General 
                              Meeting 
 "Scheme Meeting"             the meeting of the Scheme Shareholders 
                               to be convened by an order of the Court 
                               under section 896 of the Act to consider 
                               and, if thought fit, approve the Scheme 
                               (with or without amendment) and any adjournment 
                               thereof 
 "Scheme Resolutions"         the resolutions to be proposed at the Court 
                               Meeting and the General Meeting to approve, 
                               amongst other things, the Scheme 
 "Scheme Shareholders"        the holders of the Scheme Shares 
 "Scheme Shares"               (a) the Clipper Shares in issue at the 
                                date of the Scheme Document; 
                               (b) any Clipper Shares issued after the 
                                date of the Scheme Document but before 
                                the Scheme Voting Record Time; and 
                               (c) any Clipper Shares issued at or after 
                                the Scheme Voting Record Time but before 
                                the Re-organisation Record Time in respect 
                                of which the original or any subsequent 
                                holders thereof are, or shall have agreed 
                                in writing to be, bound by the Scheme, 
                              in each case other than any Clipper Shares 
                               beneficially owned by UTC or any subsidiary 
                               undertaking of UTC 
 "Scheme Voting Record        the time and date specified in the Scheme 
  Time"                        Document by reference to which entitlement 
                               to vote on the Scheme will be determined, 
                               expected to be 6.00 p.m. on the second 
                               day before the Scheme Meeting or, if the 
                               Scheme Meeting is adjourned, 6.00 p.m. 
                               on the second day before the date of such 
                               adjourned Scheme Meeting 
 "Share Plan"                 Clipper's 2005 Unapproved Executive Share 
                               Option Plan 
 "Standstill Provision"       has the meaning given to it in paragraph 
                               19 of this announcement 
 "Subscription Agreement      the agreement to subscribe for shares in 
  "                            Clipper entered into between UTC and Clipper 
                               on 10 December 2009 
 "Substantial Transaction"    a "Substantial Transaction" under the AIM 
                               Rules 
 "Takeover Offer "            a takeover offer as that term is defined 
                               in section 974 of the Act 
 "Third Party Transaction"    any offer, possible offer, tender offer, merger, 
                              acquisition, scheme of arrangement, dual listed 
                              company structure or proposal or indication of 
                              interest from, or on behalf of, any person other 
                              than UTC (or a wholly-owned subsidiary of UTC), 
                              whether or not subject to any pre-conditions and 
                              howsoever to be implemented, with a view to such 
                              person, directly or indirectly, acquiring (in 
                              one transaction or a series of transactions) (i) 
                              more than 10 per cent. of the issued or enlarged 
                              share capital of Clipper (as the case may be) or 
                              (ii) a material part of the Wider Clipper 
                              Group's business or assets; 
 "UK Takeover Panel"          the Panel on Takeovers and Mergers 
 "United Kingdom"             the United Kingdom of Great Britain and 
  or "UK"                      Northern Ireland 
 "United States" or           the United States of America, its territories 
  "US"                         and possessions, any State of the United 
                               States of America and the District of Columbia 
 "UTC"                        United Technologies Corporation 
 "UTC Group"                  UTC, its subsidiaries and subsidiary 
                              undertakings 
 "Wider Clipper Group"        Clipper, its subsidiaries, subsidiary 
                              undertakings and associated undertakings and any 
                              other body corporate, partnership, joint venture 
                              or person in which Clipper and such undertakings 
                              (aggregating their interests) have a direct or 
                              indirect interest of 20 per cent. or more of the 
                              voting or equity capital or the equivalent. 
 

For the purposes of this announcement, "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the respective meanings given thereto by the Act.

All the times referred to in this announcement are London times unless otherwise stated.

References to the singular include the plural and vice versa.

This information is provided by RNS

The company news service from the London Stock Exchange

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