Richly Field China Development Limited - M&A Activity 2006

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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(Stock Code: 00176)

PROPOSED VERY SUBSTANTIAL ACQUISITION OF A CONTROLLING INTEREST IN SPEAR & JACKSON, INC.

AND

RESUMPTION OF TRADING

Adviser to United Pacific Industries Limited on Hong Kong Listing Rules requirements

CENTURION CORPORATE FINANCE LIMITED

The Board is pleased to announce that the Company has, on 23 March 2006, entered into a Stock Purchase Agreement with Jacuzzi Brands, Inc. to purchase approximately 61.8% of the outstanding common stock of Spear & Jackson, Inc. (“S&J”) from Jacuzzi for a total consideration of approximately US$5.0 million (HK$38.7) million, at a price of US$1.40 (HK$10.91) in cash for each share. The net asset value of S&J as at financial year end on 30 September 2005 was US$4.57 (HK$35.60) per share. The Company has no obligation to acquire the Minority Shares under applicable US laws, unlike takeover requirements in Hong Kong.

S&J, with net sales exceeding US$100 million (HK$779 million) in fiscal 2005, manufactures and distributes a broad line of hand tools, lawn and garden tools, industrial magnets and metrology tools primarily in the United Kingdom, Europe, Australasia, North and South America, Asia and the Far East, through various channels including a virtual store at www.SpearAndJacksonStore.com; Ebay.co.uk; Amazon.co.uk; Home Base, a leading UK DIY and home improvement chainstore; Agway, US farm cooperatives; and S&J’s own distribution subsidiaries in France and other countries. The products are sold under various brand names including:

Spear & Jackson - garden tools;
Neill - hand tools;
Bowers - bore gauges and precision measuring tools;
CV - precision measuring instruments;
Eclipse - blades and magnetic equipment.

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The rationale for the Acquisition and the benefits the Company expects to accrue from it include the following:

Consolidation of revenues
S&J’s brand names extended to the Company’s own-designed products
Access to S&J’s distribution channels
Facilitates the Company’s penetration into Europe
Facilitates S&J’s penetration into China
Collaborative engineering efforts by S&J and the Company.

The Acquisition is expected to close by 31 July 2006, subject to a number of conditions precedent which are summarized in this announcement. The Acquisition is also subject to Shareholders’ approval under Rule 14.49 of the Listing Rules as it constitutes a very substantial acquisition of the Company since S&J’s revenues of more than US$100 million (HK$779 million) for its latest financial year ended 30 September 2005 exceed by more than 100% the Company’s revenues of approximately US$50 million (HK$390 million) for its financial year ended 31 March 2005.

The Company will convene a Special General Meeting of Shareholders to consider and vote on the Acquisition, such voting to be taken on a poll. Mr Beazer and Mr Clarke have a material interest in the Acquisition and, pursuant to Rule 14.49 of the Listing Rules, are required to abstain from voting on the Acquisition. No other persons are required to abstain from voting on the Acquisition.

A circular containing the notice of the SGM, information on the Acquisition, and other information as required under the Listing Rules, will be despatched to Shareholders as soon as practicable.

There is no certainty that all or any of the conditions precedent to the Agreement will be satisfied or waived, or that the Acquisition, which is unsolicited by S&J, will be concluded within the original timeframe expected or at all. Shareholders and potential investors are advised to exercise caution in dealing in the Shares.

Trading in the Shares on the Stock Exchange was suspended at the request of the Company with effect from 9:30 a.m. on 24 March 2006 pending release of this announcement. Application has been made by the Company for resumption of trading in the Shares from 9:30 a.m. on 28 March 2006.

AGREEMENT

Date

The Agreement was signed on 23 March 2006.

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Parties

Seller: Jacuzzi Brands, Inc., a company incorporated in the State of Delaware, USA and listed on the New York Stock Exchange, trading under the symbol “JJZ”, and its wholly-owned subsidiary, USI American Holdings, Inc., a company incorporated in the State of Delaware, USA.
Purchaser: United Pacific Industries Limited, a company incorporated in Bermuda and listed on the Hong Kong Stock Exchange under Stock Code: 176. The Company has the option to use a wholly-owned subsidiary as an acquisition vehicle.
Target: Spear & Jackson, Inc., a company incorporated in the State of Nevada, USA and traded electronically on the Over-the-counter bulletin board (OTC BB) of the National Association of Securities Dealers of America, under the symbol “SJCK.PK”.

Additional information on the parties is disclosed below in this announcement.

SUMMARY OF THE TERMS OF THE AGREEMENT

Acquisition: Subject to the satisfaction of certain conditions precedent set out in the Agreement, the Company will purchase 3,543,281 shares of common stock of US$0.001 par value per share in S&J, with all rights attaching thereto as of the date of the Agreement. This represents approximately 61.8% of outstanding S&J Shares. S&J had 5,735,561 shares of common stock outstanding as of 14 February 2006, as disclosed in its quarterly report for the first quarter ended 31 December 2005, filed in Form 10-Q with the US Securities and Exchange Commission.

The Company considers that it would be advantageous to acquire the remaining 38.2% of S&J in due course but has made no commitment to do so at this time. However, to give assurance to the directors of S&J, the Company undertook in the Agreement that if the Company or its affiliates seek to acquire these Minority Shares within a year of the Closing, the price offered will not be less than US$1.40 for each share.

Conditions precedent: The Agreement is subject to certain conditions precedent summarised below.

Covenants: Each party has given various mutual covenants, including:

To use reasonable best efforts to consummate the transaction.
To use reasonable efforts to obtain a clearance from the Pensions Regulator as soon as reasonably practicable in respect of the transactions contemplated in the Agreement, to the effect that S&J, the Company, Jacuzzi, and their respective associates (each, a “Potential Target Person”) will not be required to make a contribution or provide financial support in respect of underfunded pension liabilities of S&J UK other than on terms acceptable to that Potential Target Person in its sole discretion ( see “Information on Spear & Jackson — Pension” below ). The clearance from the Pensions Regulator must be satisfactory in form and substance to each party.

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Individually, the parties have given various covenants. In the case of the Company, these include the following:

To offer not less than US$1.40 for each Minority Share in the event the Company or its affiliates seek to acquire any of the Minority Shares within a year from the Closing.
To use commercially reasonable efforts to help and support the pension clearance process by using its assets to fund or support a portion of the S&J Group’s underfunded pension liabilities in an amount to be mutually agreed by the Pensions Regulator, the Company and Jacuzzi.
Not to structure financing, if any, required for the Acquisition in a way that would weaken the financial covenant of the S&J Group in relation to any UK pension plan such that it would affect adversely the prospects of, or timing for, obtaining the clearance from the Pensions Regulator.

In the case of Jacuzzi, the covenants include the following:

Between the date of the Agreement and the Closing, not to seek another bidder for the Jacuzzi Shares.
After the Pensions Regulator issues a clearance to the Company and Jacuzzi, at the Company’s request, Jacuzzi, as controlling shareholder of S&J, will do the following:
cause the Company’s designees to be appointed or elected to the board of directors of S&J together with one designee of Jacuzzi reasonably acceptable to the Company, and use commercially reasonable best efforts so that the Company’s designees constitute a majority on the S&J board on or before the Closing Date;
cause the bylaws of S&J to be amended to elect not to be governed by the Nevada Control Share Statute ( See “Spear & Jackson — Nevada Statutes” below ), in the event that S&J is subject to the Nevada Control Share Statute prior to the Closing Date; and
take all other actions reasonably necessary to confer to the Company full and effective voting rights with respect to the Jacuzzi Shares under the Nevada Control Share Statute (with no obligation on Jacuzzi to purchase any additional shares of S&J from any person).
After the Closing, at the request of the Company, cause Jacuzzi’s representative on S&J’s Board, if any, to resign promptly.

Closing: The parties contemplate the Closing to be concluded not later than 31 July 2006, subject to satisfaction or waiver of all conditions precedent. As at the date of this announcement, save that the Company has received the opinions of Jacuzzi’s special Nevada counsel and the Company’s special Nevada counsel which confirmed that the Nevada Statutes are not applicable to S&J or the Acquisition, none of the other conditions precedent have been fulfilled.

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Termination: The Agreement may be terminated by mutual agreement or by either party if certain conditions precedent have not been satisfied or waived by 31 July 2006. The Agreement may also be terminated if consummation would violate any nonappealable final order, decree or judgment of a Governmental Authority. A non-breaching party may terminate the Agreement if the other party has committed a material breach of the Agreement that is incapable of being cured or has not been cured promptly. In the event of termination by breach, the non-breaching party is entitled to recover damages and certain transaction expenses from the breaching party.

Costs and expenses: Each party bears its own costs and expenses.

CONSIDERATION

The aggregate consideration of US$4,960,593.40 (HK$38,643,022.59) is based on a purchase price of US$1.40 (HK$10.91) per share. It will be paid wholly in cash at Closing.

The net asset value of S&J as at financial year end on 30 September 2005 was approximately US$4.57 (HK$35.60) per share (See “Information on Spear and Jackson — Background” below.)

Over the preceding 12 months ended 22 March 2006, being the day immediately proceeding the Agreement, the S&J Shares traded at an annual high of US$1.90 and an annual low of US$0.90. The per share price of US$1.40 (HK$10.91) represents a premium of approximately US$0.23 (HK$1.81) or approximately 19.9% to the average closing price of the S&J Shares of approximately US$1.17 (HK$9.10) over the five trading days ended 22 March 2006. Based on the closing price of S&J Shares on 22 March 2006 at US$1.18 (HK$9.19), the per share price of US$1.40 represents a premium of US$0.22 (HK1.71) or approximately 18.6% to the last closing price.

The Agreement and the consideration were negotiated on an arm’s length basis and on normal commercial terms, having regard to a number of factors, principally, the Board’s positive views of the business prospects of the S&J Group, S&J’s share price performance, which during the negotiation period reached a high of US$1.40, and during the preceding 52-week ranged between US$0.90 — US$1.90, the premium payable for a controlling bloc and S&J’s balance sheet and net asset value as at year ended 30 September 2005.

There are risks associated with the Shareholders’ Litigation ( see “Information on Spear & Jackson — Shareholders’ Litigation” below ) and the pension deficit (( see “Information on Spear & Jackson — Pension Plan Liabilities” below ). In relation to the Shareholders’ Litigation, the Company is advised that a sum of over US$6 million (HK$46.7 million) has been paid by the Former CEO into a fund to compensate certain shareholders. In relation to the pension deficit, it is a condition precedent to Closing that the Company obtains clearance from the Pensions Regulator in form and substance satisfactory to the Company, and further, the amount of funding or support from the Company to reduce the pension deficit must be mutually agreed by the Company, the Seller and the Pensions Regulator.

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The Board believes, having taken into consideration the risks and potential benefits associated with the Acquisition, that the consideration and the terms of the Agreement are fair and reasonable and in the interests of the Company and Shareholders as a whole.

FINANCING

The Acquisition is not conditional on the Company raising financing. The Company intends to raise all the funds required for the Acquisition, including for professional and advisory fees in this multi-jurisdictional transaction, through bank loans, internal resources or other financing sources. The Company is currently finalizing the bank financing arrangements.

CONDITIONS PRECEDENT

The Acquisition is subject to the satisfaction of certain conditions precedent which are summarized below. Some conditions are for the mutual benefit of the Company and Jacuzzi and others are specifically intended for the benefit of the Company or Jacuzzi individually. The mutual conditions include the following:

(a) There are no statutes, rules, regulations or court orders which prohibit the consummation of the Closing.
(b) All actions, consents or approvals by or in respect of or filings with any Governmental Authority required to permit the consummation of the Closing shall have been taken, made or obtained and shall be in full force and effect.
(c) The Company and Jacuzzi have obtained a clearance from the Pensions Regulator, in form and substance satisfactory to each of them.
(d) If required, the S&J Group companies have completed mandatory consultation with employee representative bodies and obtained their approval.

Conditions precedent intended only for the benefit of and which can only be waived by the Company, include the following principal conditions:

(i) There is no material litigation brought by any Governmental Authority which would prevent the Closing or impose material limitations on the Company’s ability to exercise full voting rights in the Jacuzzi Shares.
(ii) Jacuzzi’s representations and warranties shall remain effective as at the Closing Date and Jacuzzi shall have materially performed its other obligations under the Agreement.
(iii) The Jacuzzi Shares will not be less than 60% of the fully diluted issued and outstanding S&J Shares.
(iv) The Company shall have obtained Shareholders’ approval for the Acquisition.
(v) No material adverse change shall have affected the business, operations or financial condition of the S&J Group taken as a whole since the filing of the S&J 2005 Form 10-K until the Closing except for the following permissible changes:

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change in the status of the S&J Shareholders’ Litigation ( See “Spear & Jackson — Shareholders’ Litigation” below );
an increase in S&J UK’s underfunded pension fund liability from an estimated US$40 million as at December 2004 to not more than US$44 million at Closing Date, using the same assumptions as for December 2004;
certain changes beyond the control of S&J or Jacuzzi such as changes resulting from market response to the Acquisition, changes affecting global financial markets, industry-wide changes, changes in accounting requirements or principles, or acts of the Company or its agents.
(vi) The Company will have majority control of the board of directors of S&J as of the Closing Date.
(vii) Special Nevada counsel for Jacuzzi and special Nevada counsel for the Company will have issued their separate but concurring opinions, prior to the execution of the Agreement, that the Nevada Statutes are not applicable to S&J or the Acquisition, and Jacuzzi’s Nevada counsel shall have confirmed that the Nevada Statutes remain inapplicable to S&J and the Acquisition as at Closing Date by reason of the number of registered stockholders of record of S&J.
(viii) The Nevada Statutes shall remain inapplicable to S&J at Closing Date by reason of the number of registered stockholders of record of S&J.

Conditions precedent intended only for the benefit of and which can only be waived by Jacuzzi include the following principal conditions:

(1) The Company’s representations and warranties shall remain effective as at the Closing Date and the Company shall have materially performed its other obligations under the Agreement.
(2) Jacuzzi shall have received confirmatory documents as to the Company’s existence and authority to enter into the Agreement.
(3) The board of directors of Jacuzzi shall have received, within eight weeks from the date of the Agreement, a satisfactory opinion as to the “fairness” of the transaction from an appropriate professional adviser.
(4) The Company shall have received, within ten weeks from the date of the Agreement, all necessary approvals, if any, from the Stock Exchange. (However, the approval of the Stock Exchange is not required for the Acquisition.)

REASONS FOR AND BENEFITS OF THE ACQUISITION

The principal business of the UPI Group is the manufacture and sale of power supply products, electrical and electronic components and products including portable power tools. The Group maintains a head office in Hong Kong, has manufacturing plants in southern China, and operating subsidiaries strategically located in Hangzhou and Shanghai in

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Mainland China, and another subsidiary near Chicago, USA. The Group has traditionally focused on OEM (original equipment manufacturer) services but is increasingly diversifying and moving towards ODM (own design manufacturer) and OBM (own brand manufacturer) operations.

The Company has identified a number of potential synergies that could be achieved for the Company and S&J arising from the Acquisition, some of which are described below.

● Revenues

The annual revenues of the Company in respect of its financial year ended 31 March 2005 were approximately US$50 million, compared to the annual revenues of approximately US$100 million achieved by the S&J Group in respect of its financial year ended 30 September 2005. The Company therefore regards the Acquisition as a significant development which has the potential to increase the revenues of the UPI Group on a consolidated basis.

● Brand names

The S&J Group owns well-established brand names, including:

Spear & Jackson - garden tools;
Neill - hand tools;
Bowers - bore gauges and precision measuring tools;
CV - precision measuring instruments;
Robert Sorby - wood turning tools;
Moore & Wright - precision tools;
Eclipse - blades and magnetic equipment;
Elliot Lucas - pincers and pliers; and
Tyzack - builders’ tools.

Extending S&J’s brand names to encompass compatible ODM products manufactured by the UPI Group could give an immediate and higher profile in the market for UPI’s own products, while at the same time enhancing and diversifying S&J’s own product range.

● Distribution channels

The S&J Group has established distribution channels in Europe, Australasia and elsewhere. Access to these distribution channels could open up wider markets for the Company’s own products.

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S&J’s subsidiary companies in France, Holland, Australia and New Zealand act as distributors for products manufactured by the S&J Group and complementary products sourced from third party suppliers.

S&J products are carried by Homebase Ltd, a leading UK DIY and home improvement chainstore which has around 300 outlets in the UK and the Republic of Ireland. S&J products are also sold over the internet in a virtual store at www.SpearAndJacksonStore.com, on Ebay.co.uk, Amazon.co.uk. and other web-based locations. S&J garden tools are sold through the catalogues of Peaceful Valley in northern California, Agway, a large farm co-op with stores throughout Northeast USA, and other catalogues and garden tool outlets across the USA.

Marketing through S&J’s expansive distribution channels could significantly improve the Company’s sales efforts.

● Market penetration

The Company recently re-established operations in USA, and is actively exploring expansion opportunities in Europe. S&J’s long-established market presence, through about 25 subsidiaries located in England, Europe, Canada, USA, Australia and New Zealand, could be especially helpful in facilitating the Company’s efforts to penetrate these markets.

● China insight and experience

Conversely, the UPI Group is well-positioned to provide assistance to S&J in its efforts to penetrate the markets in Asia and especially Mainland China. S&J established an allied manufacturing, quality control and distribution centre in Shanghai, China in 2005 which is expected to be fully operational during the second quarter of fiscal 2006.

● Collaborative engineering

From January 2005, the range of S&J garden tools has been supplemented by a portfolio of electric powered garden tools. The combined engineering talent and expertise in S&J and UPI (UPI has a pool of approximately 90 engineers and technicians) offers opportunity for collaborative R&D efforts in designing and developing power tools.

For all the above reasons, the Company believes that the Acquisition could help to establish UPI as a worldwide business, better able to serve all its customers.

There is no assurance that all or any of the above synergies will be achieved in whole or in part. Shareholders and potential investors should exercise caution in dealing in the Shares.

INFORMATION ON JACUZZI BRANDS, INC.

Jacuzzi is listed on the New York Stock Exchange, trading under ticker symbol “JJZ”. As at 15 December 2005, the date Jacuzzi filed its Jacuzzi 2005 Form 10-K with the SEC, there were approximately 77 million shares of Jacuzzi common stock outstanding.

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Jacuzzi is a leading global manufacturer and distributor of branded whirlpool baths, other bath products and plumbing products which are marketed under brand names, including JACUZZI�, SUNDANCE�, ZURN�, and ASTRACAST�.

Jacuzzi holds 3,543,281 shares in S&J, representing approximately 61.8% of the issued S&J Shares.

Mr David H Clarke who is a Vice-Chairman and a substantial shareholder of the Company, holds approximately 22.88% of the issued Shares. He is also the Chairman and CEO of Jacuzzi, and holds approximately 2.1% of the outstanding stock of Jacuzzi. Mr Clarke acquired S&J Shares for his personal account. His shareholding is less than 0.5% of the issued S&J Shares. They were acquired in open market purchases some years ago, and do not form any part of the Acquisition.

Mr Brian C Beazer, the executive Chairman and a substantial shareholder of the Company with approximately 24.56% of the issued Shares, is a non-executive director of Jacuzzi. He holds approximately 0.16% of the outstanding stock of Jacuzzi. Mr Beazer does not hold any shares in S&J.

Both Mr Beazer and Mr Clarke abstained from voting on the Acquisition in their capacity as directors of UPI. Having carefully considered the Acquisition, the Board (with the abstention of Mr Beazer and Mr Clarke) has approved and authorised the Acquisition, subject to Shareholders’ approval. The Board has also appointed an Executive Committee comprising four Board members to manage the Acquisition. The Committee is chaired by Mr Henry W Lim, an Independent Director and a CPA, who has a casting vote. The other members are Mr Simon Hsu, a Vice Chairman who has a voting right, and Mr Beazer and Mr Clarke without voting rights.

The Finance Committee of Jacuzzi, comprising only independent directors, was appointed and authorized by the board of directors of Jacuzzi to deal with all matters relating to the Acquisition. Neither Mr Clarke nor Mr Beazer participated in any deliberations or decision of the Finance Committee or of the Jacuzzi board, or voted in their capacity as directors of Jacuzzi, in connection with the Acquisition.

Jacuzzi is not represented on the board of directors or management of S&J, and neither Mr Beazer nor Mr Clarke or any of their associates serve on the board of directors or in the management of S&J or its subsidiaries.

Jacuzzi is not a connected person of the Company. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiry, there was no previous business relationship between Jacuzzi and the Company.

Save as otherwise disclosed herein, to the best of the Directors’ knowledge, information and belief, having made all reasonable enquiry, the Seller and the ultimate beneficial owners of the Seller are third parties independent of the Company and connected persons (as defined under the Listing Rules) of the Company.

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INFORMATION ON SPEAR & JACKSON

(A) Spear & Jackson, Inc.

Background

Megapro Tools, Inc., the predecessor of S&J was incorporated in the State of Nevada, USA in 1998, and its shares are electronically traded on the over the counter bulletin board market, (“OTC BB”) of the National Association of Securities Dealers of America. With its acquisition of Spear & Jackson plc and Bowers Group plc in 2002, the company changed its name to “Spear & Jackson, Inc.” S&J now trades on the OTC BB under the symbol “SJCK.PK”.

Jacuzzi’s shareholding in S&J was enlarged to 61.8% as a result of the return of certain S&J Shares (currently held as treasury stock) pursuant to a court order. (See “ — SEC Enforcement Proceedings” below.) To the best of the knowledge and belief of the Directors, none of the S&J Shares are held on behalf of or for the benefit of the Company. As disclosed above, Mr Clarke holds less than 0.5% of S&J Shares for his personal account.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiry, there was no previous business relationship between S&J and the Company.

The following table shows the audited financial information, extracted from S&J 2005 Form 10-K which was prepared according to US GAAP as stipulated by the American Institute of Certified Public Accountants, of the S&J Group in each of its two fiscal years ended 30 September 2004 and 2005.

	For year ended 30	For year ended 30
	September 2005	September 2004
	US$’000	US$’000
Net sales	100,698 (approximately	99,485 (approximately
	HK$784.437 million)	HK$774.988 million)
Income from continuing operations before	2,034 (approximately	2,042 (approximately
unusual or infrequent items and income	HK$15.845 million)	HK$15.907 million)
taxes
Net income after taxation and	3,095 (approximately	436 (approximately
extraordinary items	HK$24.110 million)	HK$3.396 million)
Net asset value	26,203 (approximately	29,439 (approximately
	HK$204.12 million)	HK$229.3 million)
Net asset value per share (in dollars)	4.57 (approximately	5.13 (approximately
(based on 5,735,561 S&J Shares issued	HK$35.59)	HK$39.98)
and outstanding as at 14 February 2006)

Board of Directors

There are currently three directors on the board S&J. They are Mr John Harrington, Jr., chairman, Mr Robert Dinerman, director, and Mr William Fletcher, director and acting CEO of S&J. Immediately prior to Closing, Seller will cause designees of the Company to be appointed or elected to the board in such numbers to achieve majority representation on the board.

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Nevada Statutes

Certain Nevada corporate laws discourage potential investors from acquiring a controlling stake in Nevada corporations which meet the qualifying requirements and have the requisite number of registered shareholders. The Nevada Business Combination Statute imposes restrictions on business combinations with the acquirer, while the Nevada Control Share Statute imposes voting restrictions.

Prior to signing the Agreement, the Company has obtained the opinion in writing of both Jacuzzi’s special Nevada counsel and the Company’s special Nevada counsel, which confirmed that the Nevada Statutes are not applicable as at the signing date as S&J does not have the qualifying number of registered shareholders.

As stated above, as conditions precedent to Closing, the Company requires that (i) it is established that the Nevada Statutes are not applicable as at the Closing Date because S&J lacks the qualifying number of registered shareholders, and (ii) a confirmatory opinion in writing is rendered by Jacuzzi’s Nevada counsel to such effect.

SEC Enforcement Proceedings

On 15 April 2004, the SEC filed suit in the U.S. District Court for the Southern District of Florida against S&J, its then Chairman/CEO (“Former CEO”), and others alleging violations of federal securities laws. Specifically with regard to S&J, the SEC alleged that S&J violated the SEC’s registration, anti-fraud and reporting provisions. These allegations arose from the alleged failure of its Former CEO to accurately report his ownership of S&J’s stock, and his alleged manipulation of the price of S&J’s stock.

On 15 February 2005, the court approved a negotiated settlement with the SEC, without any admission of liability by the parties. S&J consented to a permanent injunction from violation of various provisions under federal securities laws. The Former CEO was required to disgorge his profits to recompense defrauded investors and to make other monetary compensation in an aggregate amount of US$6.1 million, and to return 6,005,561 S&J Shares he owned. These moneys were paid into an interest-bearing fund, created pursuant to the Sarbanes-Oxley Act of 2002, which is managed by a court-appointed fund administrator.

S&J kept the shares returned by the Former CEO as treasury stock, thereby reducing its issued and outstanding shares from 11,741,122 shares as of 31 December 2004 to 5,735,561 shares as of 23 December 2005, and correspondingly enlarging the shareholdings of the remaining shareholders. As a result, Jacuzzi, which was then a beneficial owner of 3,543,281 shares in S&J, increased its shareholding to approximately 61.8% of the outstanding common stock.

Corporate Monitor

In connection with the SEC complaint, the court appointed a Corporate Monitor on 15 April 2004 to oversee S&J’s operations, with power to review and approve all corporate actions. The fees and disbursements of the Corporate Monitor are borne by S&J. The term of office of the Corporate Monitor will cease when the Court determines the function of the Corporate Monitor is no longer necessary, or S&J and the Corporate Monitor so agree.

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Shareholders’ Litigation

Following the SEC action, S&J was named as one of the defendants in actions by certain shareholders of S&J who had suffered financial loss from their share dealings with the Former CEO and others. These actions were consolidated in a shareholders’ class action in federal court in Florida.

A derivative action was also commenced by certain shareholders in state court in Florida against certain former and current directors and officers of S&J, and naming S&J as a nominal defendant. The complaint alleges state law claims, among others, breaches of fiduciary duty.

The Company is monitoring the progress of the shareholders’ litigation.

(B) Spear & Jackson UK

History

Spear & Jackson plc traces its roots to the eponymous Spear & Jackson Garden Products Ltd., a premium tools manufacturer and one of the world’s oldest hand and garden tool manufacturers, which began its business in Sheffield, England in 1760. Neill Tools, from its modest beginning in 1889 in England, has built up its reputation as a supplier of quality hacksaw blades. In 1985, Neill Tools acquired Spear & Jackson, and in 1995, the company was renamed Spear & Jackson plc. In 2002, Spear & Jackson plc and its affiliate metrology group, Bowers Group plc, were acquired by Megapro Tools, Inc. which changed its name to Spear & Jackson, Inc. to promote public recognition and more accurately reflect its intended business focus.

Business

S&J operates principally through the UK sub-holding companies, Spear & Jackson plc and Bowers Group plc. The business of S&J UK is carried out by a number of subsidiaries located in England, Canada, USA, France, Netherlands, Australia, New Zealand and, most recently, in Shanghai, China.

S&J UK manufactures and distributes a broad line of hand tools, lawn and garden tools, industrial magnets and metrology tools primarily in the United Kingdom, Europe, Australasia, North and South America, Asia and the Far East. Hand and garden products are currently exported to over 115 countries and distributed through subsidiary companies in Australia, New Zealand and the USA. S&J products are manufactured and distributed under a number of well-established brand names. (See “Reasons for and Benefits of Acquisition” above.)

The four principal business units of S&J UK and their product offerings can be summarized as follows:

(1) NEILL TOOLS, which consists of Spear & Jackson Garden Tools and Neill Tools, manufactures hacksaws, garden and agricultural tools.

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(2) ECLIPSE MAGNETICS’ key products are magnetic tools, ranging from very simple low-cost items to technically complex high value added systems.
(3) MOORE & WRIGHT comprises the metrology division. The core product range principally includes measuring tools.
(4) BOWERS METROLOGY is a manufacturer of high specification metrology instruments including precision bore gauges that measure the diameter of machined components.

Pension Plan Liabilities

Certain past and current employees of S&J UK are covered under a defined benefit pension plan. At present, the actuarial value of the Pension Plan liabilities exceeds the Pension Plan assets. Under applicable UK laws and regulations, S&J UK is required to make cash contributions to a pension plan to the extent necessary to comply with minimum or statutory funding requirements. The S&J 2005 Form 10-K disclosed a pension deficit of approximately US$40 million on ongoing actuarial assumptions as at 31 December 2004, but there is no certainty that this amount will not increase or diminish over time. The Company has engaged Watson Wyatt as actuaries to advise on pension issues.

Under applicable UK laws and regulations, an acquirer of a controlling stake in a company may, under certain circumstances, be deemed or required to assume certain pension liabilities.

As disclosed above, as a condition precedent to Closing, both the Company and Jacuzzi intend to seek clearance from the Pensions Regulator, in relation to the Acquisition, from any obligation by S&J, Jacuzzi, UPI or their respective associates, to make any contribution or provide any financial support to cover pension liabilities, and either party has the right to withdraw from the transaction unless such clearance is in form and substance satisfactory to them individually. The Agreement also provides that no person shall be required, in connection with such clearance, to incur any economic liability other than on terms acceptable to that person in its sole discretion. In order to assist in the pension clearance process, the Company has agreed to use its commercially reasonable efforts to help and support the clearance process by using its assets to fund or support a portion of the underfunded liability in an amount to be mutually agreed upon by the Pensions Regulator, Jacuzzi and UPI.

SUSPENSION AND RESUMPTION OF TRADING IN THE SHARES

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INFORMATION REGARDING THE GROUP

Business of the Group

The Company, through its principal operating subsidiaries, is principally engaged in the manufacture and sale of power supply products and electronic components, but additionally, also offers OEM (original equipment manufacturing) and EMS (electronic/electrical manufacturing) services.

THE DIRECTORS OF THE COMPANY

At the date of this announcement, the Executive Directors of the Company are: Mr Brian C Beazer, Mr David H Clarke and Mr Simon N Hsu; the Non-Executive Directors are: Mr Ng Ching Wo and Mr Teo Ek Tor; and the Independent Non-Executive Directors are: Dr Wong Ho Ching, Chris, Mr Henry W Lim and Mr Ramon Sy Pascual.

EXCHANGE RATE

In this announcement, except as otherwise indicated, US$ has been converted to HK$ at the rate of US$1 = HK$7.79 for reference purpose only.

GENERAL

The Acquisition constitutes a very substantial acquisition for the Company under Chapter 14 of the Listing Rules as the revenues of S&J for its financial year ended 30 September 2005 exceed the Company’s revenues for its financial year ended March 2005 by more than 100%. The Company will convene a Special General Meeting of Shareholders to consider and vote on the Acquisition, such voting to be taken on a poll. Mr Beazer and Mr Clarke are required to abstain from voting on the Acquisition as they have a material interest in the Acquisition under Rule 14.49 of the Listing Rules. No other persons are required to abstain from voting on the Acquisition.

A circular containing, among others, notice of the SGM, information in respect of the Acquisition, and other information as required under the Listing Rules will be despatched to the Shareholders as soon as practicable.

As the Agreement is subject to a number of conditions precedent, there is no certainty that all or any of the conditions precedent to the Agreement will be satisfied or waived, or that the Acquisition, which is unsolicited by S&J, will be concluded within the original timeframe expected or at all. In addition, there is no certainty that the Company will proceed with an acquisition of the Minority Shares, or that if it does, that the attempt will be successful. Shareholders and potential investors are advised to exercise caution in dealing in the Shares of the Company.

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TERMS USED IN THIS ANNOUNCEMENT

In this announcement, unless otherwise defined, the following terms shall have the following meanings:

“Acquisition” the proposed acquisition by the Company from Jacuzzi of the Jacuzzi Shares
“Agreement”
the stock purchase agreement dated 23 March 2006 between the Seller and the Company in respect of the Acquisition
“Board”
“Board” the Board of Directors of the Company for the time being “Closing” the closing of the Acquisition
“Closing Date” a date not later than 31 July 2006, to be mutually agreed
“Company” or “UPI” United Pacific Industries Limited, a company listed on The Stock Exchange of Hong Kong Limited (Stock Code: 00176)
“Directors” the Directors of the Company for the time being
“Governmental Authority” any transnational, domestic or foreign federal, state or local governmental or quasi-governmental authority or regulatory authority, department, court, agency, commission or official, including any political subdivision thereof
“Hong Kong” Hong Kong, Special Administrative Region of the PRC
“Jacuzzi” Jacuzzi Brands, Inc., listed on the New York Stock Exchange and trading under the symbol “JJZ”
“Jacuzzi Shares” 3,543,281 S&J Shares in aggregate held by the Seller, representing approximately 61.8% of the S&J Shares
“Jacuzzi 2005 Form the annual report of Jacuzzi in respect of its financial year 10-K” ended 1 October 2005, filed on Form 10-K with the SEC on 15 December 2005
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited
“Minority Shares” the remaining 38.2% of S&J Shares which are not held by Jacuzzi
“Mr Beazer” Brian C Beazer, Chairman and substantial shareholder of the Company, and a non-executive director of Jacuzzi
“Mr Clarke” David H Clarke, a Vice Chairman and substantial shareholder of the Company, and Chairman and CEO of Jacuzzi

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“Nevada Business Combination Statute”
“Nevada Business Nev. Rev. Stat. Sec. 78.411 through 78.444 Combination Statute”
“Nevada Control Share Nev. Rev.Stat. Sec.78.378 through 78.3793 Statute”

“Nevada Statutes” Nevada Business Combination Statute and Nevada Control Share Statute

“PRC” or “China” the People’s Republic of China
“Pension Plan” the defined benefit pension plan of certain UK subsidiaries of S&J
“Pensions Act” United Kingdom Pensions Act 2004
“Pensions Regulator” The Pensions Regulator appointed pursuant to the Pensions Act
“Purchaser” The Company, and its wholly-owned subsidiary as the acquisition vehicle, if any
“S&J” Spear & Jackson, Inc., traded on NASD OTCBB under the symbol “SJCK.PK”
“S&J Group” S&J, its subsidiaries and associates, including S&J UK “S&J Shares” common stock of S&J of US$0.001 par value per share
“S&J UK” the UK subsidiaries of S&J, including Spear & Jackson plc, Bowers Group plc, and their respective subsidiaries
“S&J 2005 Form 10-K” the annual report of S&J in respect of its financial year ended 30 September 2005, filed on Form 10-K with the SEC on 23 December 2005
“SEC” the U.S. Securities and Exchange Commission “SGM” Special General Meeting of the Company “Shares” ordinary shares of HK$0.10 each in the share capital of the Company
“Seller” Jacuzzi and USIAH, collectively “Shareholders” the shareholders of the Company “Stock Exchange” The Stock Exchange of Hong Kong Limited “UPI Group” UPI, its subsidiaries and associates

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“USIAH” USI American Holdings, Inc., a company incorporated in the State of Delaware, USA, and a wholly-owned subsidiary of Jacuzzi “HK$” the lawful currency of Hong Kong Special Administrative Region, PRC “US$” The lawful currency of the United States of America

By order of the Board United Pacific Industries Limited Brian C Beazer Executive Chairman

27 March 2006 Hong Kong

Please also refer to the published version of this announcement in The Standard and South China Morning Post.

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