Richly Field China Development Limited - Proxy Solicitation & Information Statement 2007

456

United Pacific

Industries

Website: http://www.irasia.com/listco/hk/upi

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A (Rule 14a-101)
SCHEDULE 14A
INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

Filed by the Registrant 

Filed by a Party other than the Registrant 

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Under Rule 14a-12

SPEAR & JACKSON, INC.

(Name of Registrant as Specified In Its Charter)

_____________________________________________________________________________________________

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1)

Title of each class of securities to which transaction applies: Common Stock

(2)

Aggregate number of securities to which transaction applies: 2,192,280

(3)

Per unit price or other underlying value of transaction computed pursuant to exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

$1.96 per share of Common Stock

(4)

Proposed maximum aggregate value of transaction: $4,296,869

(5)

Total fee paid: $459.77

Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

(1)

Amount Previously Paid:

(2)

Form, Schedule or Registration Statement No.:

(3)

Filing Party:

(4)

Date Filed:

Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

SPEAR & JACKSON, INC.

12012 SOUTHSHORE BOULEVARD, SUITE 103

WELLINGTON, FLORIDA 33414
OCTOBER 18, 2007

DEAR STOCKHOLDERS:

You are cordially invited to attend a special meeting of stockholders of Spear & Jackson, Inc. (“S&J” or the “Company”), to be held on October 18, 2007, at 10:00 a.m. local time, at 200 East Last Olas Boulevard, Suite 1700, Fort Lauderdale, Florida 33301.

At the special meeting, you will be asked to approve the Agreement and Plan of Merger, dated June 22, 2007 (the “Merger Agreement”), among S&J, United Pacific Industries Limited, a Bermuda corporation (“UPI”), Pantene Global Holdings Limited, a Hong Kong corporation and wholly owned subsidiary of UPI (“Pantene”, and collectively with UPI the “Parent”), and Pantene Global Acquisition Corp., a Nevada corporation and wholly owned subsidiary of Pantene (“Newco”).

Patrick J. Dyson is our Chairman, Chief Financial Officer, Secretary, and a member of our Board of Directors, and is UPI’s Chief Financial Officer; Lewis Hon Ching Ho is our Chief Administrative Officer and a member of our Board of Directors, and is a director and the general manager of Pantene Electronics (Hangzhou) Co. Ltd., a subsidiary of UPI; Brian C. Beazer is our Assistant Treasurer and is the Chairman of UPI; Nila Ibrahim is our General Counsel and is the General Counsel of UPI.

Parent holds 3,543,281 shares of our common stock, representing approximately 61.78% of our outstanding common stock. Each share of our common stock is entitled to one vote.

Under the Merger Agreement, S&J will be merged with and into Newco, with Newco as the surviving corporation. Under the Merger Agreement, upon the consummation of the merger, each holder of outstanding shares of our common stock other than (i) Parent and (ii) stockholders who validly exercise and perfect dissenter’s rights under Nevada law, will be entitled to receive $1.96 per share in cash without interest. Shares held by stockholders who validly exercise and perfect their dissenter’s rights under Nevada law will be converted into the right to receive such consideration as may be determined to be due pursuant to the provisions of Sections 92A.300 through 92A.500 of the Nevada Revised Statutes.

After the merger, Newco will continue its operations as a privately held company. Current stockholders of S&J, other than Parent, will not participate in any future earnings and growth of Newco, as the surviving corporation. Parent will own all of the equity of the surviving corporation.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of this transaction, passed upon the fairness or merits of this transaction, or passed upon the accuracy or adequacy of the disclosure in this document. Any representation to the contrary is a criminal offense.

Details of the merger and the Merger Agreement are discussed in the enclosed proxy statement, the forepart of which includes a summary of the terms of the merger and certain questions and answers relating to the proposed transaction. A copy of the Merger Agreement is attached as Exhibit A to the proxy statement.

In order to reduce any conflict of interest in evaluating, negotiating and recommending the merger and the terms of the Merger Agreement, our Board of Directors delegated those duties to our Finance Committee. Dr. J. Preston Jones is the chairperson and sole member of the Finance Committee. Dr. Jones has been determined to be independent by our Board of Directors. No particular standard was used by our Board of Directors to determine that Dr. Jones is independent, rather, Dr. Jones was determined to be independent after our Board of Directors conducted a thorough analysis of the relevant facts and concluded: (i) the bio submitted by Dr. Jones evidences no prior or current affiliations with the Company, its subsidiaries, or its affiliates, (ii) Dr. Jones has not, and is not expected to, directly or indirectly, receive any fees from the Company, its subsidiaries, or its affiliates other than fees of US $30,000 per annum, payable quarterly, with respect to his service on the Company's Board of Directors and Finance Committee, and a fee of US $30,000 payable upon the completion of his duties as an independent

director, (iii) Dr. Jones is not an officer, employee, or stockholder of the Company, its subsidiaries, or its affiliates, and (iv) Dr. Jones has no financial incentive or interest in the outcome of the merger.

Our Board of Directors has unanimously adopted and approved the merger and the Merger Agreement. Our Board of Directors and the Finance Committee believe that the terms of the merger and the Merger Agreement are substantively and procedurally fair to, and in the best interests of, S&J’s unaffiliated stockholders.

In reaching its decision, the Finance Committee considered, among other factors, the written opinion of Capitalink, L.C. (“Capitalink”), a division of Ladenburg Thalmann & Co. Inc. (“Ladenburg”), the Finance Committee’s financial advisor. Based upon and subject to the considerations and limitations set forth in its opinion, Capitalink concluded that the $1.96 per share cash consideration to be received in the merger by the holders of our common stock is fair, from a financial point of view, to the holders of our capital stock, other than Parent.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE MERGER AGREEMENT AND “FOR” THE ADJOURNMENT OF THE SPECIAL MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL VOTES IN FAVOR OF APPROVAL OF THE MERGER AGREEMENT.

The affirmative vote of a majority of the outstanding shares of our common stock is required to adopt and approve the Merger Agreement. Each outstanding share of common stock will be entitled to one vote. Parent currently holds in excess of a majority of the outstanding shares of our common stock and intends to vote its shares in favor of the merger.

Our stockholders will be entitled to dissenter’s rights under Nevada law in connection with the merger as described in the accompanying proxy statement.

It is very important to us that your shares be represented at the special meeting, whether or not you plan to attend personally. Therefore, you should complete and sign the enclosed proxy card and return it as soon as possible in the enclosed postage paid envelope. This will ensure that your shares are represented at the special meeting.

The accompanying notice of meeting and proxy statement explain the merger and the Merger Agreement and provide specific information concerning the special meeting of stockholders. Please read these materials carefully.



	Sincerely,


	Dr. J. Preston Jones, Chairperson of the
	Finance Committee

This proxy statement is dated September 21, 2007 and is first being mailed to stockholders on or about September 26, 2007.

iii

SPEAR & JACKSON, INC.

12012 SOUTHSHORE BOULEVARD, SUITE 103

WELLINGTON, FLORIDA 33414

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 18, 2007

Notice is hereby given that a special meeting of the stockholders of Spear & Jackson, Inc. (“S&J” or the “Company”) will be held on October 18, 2007 at 10:00 a.m. local time at 200 East Last Olas Boulevard, Suite 1700, Fort Lauderdale, Florida 33301, for the following purposes:

APPROVAL OF THE MERGER AGREEMENT. To consider and vote upon a proposal to adopt and approve the Agreement and Plan of Merger dated as of June 22, 2007, among United Pacific Industries Limited, a Bermuda corporation (“UPI”), Pantene Global Holdings Limited, a Hong Kong corporation and wholly owned subsidiary of UPI (“Pantene,” and collectively with UPI the “Parent”), and Pantene Global Acquisition Corp., a Nevada corporation and wholly owned subsidiary of Pantene (“Newco”), and S&J (the “Merger Agreement”), pursuant to which S&J will be merged with and into Newco with Newco being the surviving corporation, and each of our stockholders, other than (i) Parent, and (ii) stockholders who exercise and perfect dissenter’s rights under Nevada law, will be entitled to receive $1.96 per share in cash, without interest, in accordance with and subject to the terms and conditions contained in the Merger Agreement. Shares held by stockholders who validly exercise and perfect their dissenter’s rights under Nevada law will be converted into the right to receive such consideration as may be determined to be due pursuant to the provisions of Sections 92A.300 through 92A.500 of the Nevada Revised Statutes.The Merger Agreement is more fully described in the accompanying proxy statement and a copy of the Merger Agreement is attached as Exhibit A to the accompanying proxy statement.

ADJOURNMENT. To approve adjournment of the Special Meeting, if necessary or appropriate, to provide time to solicit additional proxies if it does not appear that there will be enough shares voted in favor of the Merger Agreement to approve the Merger Agreement at the time of the special meeting.

OTHER MATTERS. To consider, act upon and transact such other matters as may properly come before the special meeting or any adjournments or postponements thereof.

The affirmative vote of a majority of the outstanding shares of our common stock is required to adopt and approve the Merger Agreement and the transactions contemplated thereby, including the merger. Each outstanding share of common stock will be entitled to one vote. Parent currently holds in excess of a majority of the outstanding shares of our common stock and intends to vote its shares in favor of the Merger Agreement and the merger.

Our Board of Directors has fixed the close of business on September 10, 2007 as the record date for determining the stockholders entitled to notice of and to vote at the special meeting and any adjournments or postponements thereof. Only holders of record of shares of our common stock at the close of business on the record date are entitled to notice of and to vote at the Special Meeting.

If the Merger Agreement is adopted and approved by the stockholders at the Special Meeting and the merger is completed, any stockholder (a) who files with S&J before the taking of the vote on the adoption and approval of the Merger Agreement, a written demand stating that they intend to seek appraisal of their shares of capital stock if the merger is completed and (b) whose shares are not voted in favor of the Merger Agreement, will have the right to seek appraisal of their shares of capital stock. S&J and any stockholder seeking an appraisal shall have the rights and duties and shall follow the procedures set forth in Sections 92A.300 to 92A.500 of the Nevada Revised Statutes, a copy of which is attached as Exhibit C to the accompanying proxy statement. See the section entitled “DISSENTER’S RIGHTS” in the proxy statement for more information.

Your vote is very important regardless of how many shares of our capital stock you own. Whether or not you plan to attend the special meeting, you are requested to sign, date and return the enclosed proxy without delay in the enclosed postage paid envelope. You may revoke your proxy at any time prior to its exercise. If you are present at the special meeting or any adjournments thereof, you may revoke the proxy and vote personally on the matters properly brought before the special meeting.



	By Order of the Board of Directors

	/s/ Patrick J. Dyson
	Patrick J. Dyson
	Chairman

Wellington, Florida

September 21, 2007

As at the date hereof, 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. Teo Ek Tor; and the independent non-executive directors are Dr. Wong Ho Ching, Chris, Mr. Henry W Lim and Mr. Ramon Sy Pascual.

TABLE OF CONTENTS



SUMMARY TERM SHEET 1 Questions and Answers about the Merger 5 Cautionary Statement Concerning Forward-Looking Information 8 PROPOSAL ONE APPROVAL OF THE MERGER AGREEMENT 9 SPECIAL FACTORS 9 Background of the Merger 9 Recommendation of the Finance Committee and the Board of Directors; Fairness of the Merger 13 Determination of the Fairness of the Merger by the Parent and Newco 16 Opinion of Financial Advisor to the Finance Committee 19 Purpose and Structure of the Merger 27 Effects of the Merger 27 Risks that the Merger Will Not Be Completed 28 Interests of the Parent in the Merger 29 Interests of Our Directors and Executive Officers in the Merger 29 Continuing Equity Interests of the Parent 30 Merger Financing 30 Estimated Fees and Expenses of the Merger 30 Federal Income Tax Considerations 31 Anticipated Accounting Treatment of Merger 31 Certain Regulatory Matters 31 Dissenter’s Rights 32 SPEAR & JACKSON, INC. HISTORICAL FINANCIAL DATA 35 MARKET AND MARKET PRICE 36 Market Information 36 Number of Stockholders 37 Dividends 37 THE SPECIAL MEETING 38 General 38 Matters to be Considered at the Special Meeting 38 Record Date and Voting Information 39 Quorum 39 Proxies; Revocation 39 Expenses of Proxy Solicitation 40 Dissenter’s Rights 40 PARTIES TO THE MERGER AGREEMENT 41 Related Parties 41 THE MERGER AGREEMENT 42 The Merger 42 Effective Time of Merger 42 Articles of Incorporation, Bylaws and Directors and Officers the Surviving Corporation 42 Conversion of Capital Stock 42 Payment For Shares 43 Transfer of Shares 43 S&J Stockholder Approval 43 Indemnification 43 Representations and Warranties 44 Covenants 45 Conduct of Business Pending the Merger 45 Access to Information 46 Conditions to the Merger 46

SUMMARY TERM SHEET 1 Questions and Answers about the Merger 5 Cautionary Statement Concerning Forward-Looking Information 8 PROPOSAL ONE APPROVAL OF THE MERGER AGREEMENT 9 SPECIAL FACTORS 9 Background of the Merger 9 Recommendation of the Finance Committee and the Board of Directors; Fairness of the Merger 13 Determination of the Fairness of the Merger by the Parent and Newco 16 Opinion of Financial Advisor to the Finance Committee 19 Purpose and Structure of the Merger 27 Effects of the Merger 27 Risks that the Merger Will Not Be Completed 28 Interests of the Parent in the Merger 29 Interests of Our Directors and Executive Officers in the Merger 29 Continuing Equity Interests of the Parent 30 Merger Financing 30 Estimated Fees and Expenses of the Merger 30 Federal Income Tax Considerations 31 Anticipated Accounting Treatment of Merger 31 Certain Regulatory Matters 31 Dissenter’s Rights 32 SPEAR & JACKSON, INC. HISTORICAL FINANCIAL DATA 35 MARKET AND MARKET PRICE 36 Market Information 36 Number of Stockholders 37 Dividends 37 THE SPECIAL MEETING 38 General 38 Matters to be Considered at the Special Meeting 38 Record Date and Voting Information 39 Quorum 39 Proxies; Revocation 39 Expenses of Proxy Solicitation 40 Dissenter’s Rights 40 PARTIES TO THE MERGER AGREEMENT 41 Related Parties 41 THE MERGER AGREEMENT 42 The Merger 42 Effective Time of Merger 42 Articles of Incorporation, Bylaws and Directors and Officers the Surviving Corporation 42 Conversion of Capital Stock 42 Payment For Shares 43 Transfer of Shares 43 S&J Stockholder Approval 43 Indemnification 43 Representations and Warranties 44 Covenants 45 Conduct of Business Pending the Merger 45 Access to Information 46 Conditions to the Merger 46



Termination of the Merger Agreement 47 Expense Reimbursement 48 Amendments; Extensions; Waivers 48 PROPOSAL TWO ADJOURNMENT OF THE SPECIAL MEETING 49 STOCK PURCHASE INFORMATION 50 Purchases by S&J 50 Purchases by the Parent 50 Purchases by Newco 50 Recent Transactions 50 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 51 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 51 FUTURE STOCKHOLDER PROPOSALS 51 WHERE STOCKHOLDERS CAN FIND MORE INFORMATION 52 EXHIBIT A – Agreement and Plan of Merger EXHIBIT B – Opinion of Capitalink, L.C. EXHIBIT C – Sections 92A.300 to 92A.500 of the Nevada Revised Statutes EXHIBIT D – Annual Report on Form 10-K for the year ended September 30, 2006 EXHIBIT E – Quarterly Report on Form 10-Q for the quarter ended December 31, 2006 EXHIBIT F – Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 EXHIBIT G – Quarterly Report on Form 10-Q for the quarter ended June 30, 2006

Termination of the Merger Agreement 47 Expense Reimbursement 48 Amendments; Extensions; Waivers 48 PROPOSAL TWO ADJOURNMENT OF THE SPECIAL MEETING 49 STOCK PURCHASE INFORMATION 50 Purchases by S&J 50 Purchases by the Parent 50 Purchases by Newco 50 Recent Transactions 50 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 51 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 51 FUTURE STOCKHOLDER PROPOSALS 51 WHERE STOCKHOLDERS CAN FIND MORE INFORMATION 52 EXHIBIT A – Agreement and Plan of Merger EXHIBIT B – Opinion of Capitalink, L.C. EXHIBIT C – Sections 92A.300 to 92A.500 of the Nevada Revised Statutes EXHIBIT D – Annual Report on Form 10-K for the year ended September 30, 2006 EXHIBIT E – Quarterly Report on Form 10-Q for the quarter ended December 31, 2006 EXHIBIT F – Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 EXHIBIT G – Quarterly Report on Form 10-Q for the quarter ended June 30, 2006

vii

SUMMARY TERM SHEET

This summary term sheet highlights selected information contained in this proxy statement and may not contain all of the information that is important to you. We urge you to read this entire proxy statement carefully, including the exhibits. The term “Newco” refers to Pantene Global Acquisition Corp., a Nevada corporation; the term “Parent” refers collectively to United Pacific Industries Limited, a Bermuda corporation (“UPI”) and Pantene Global Holdings Limited, a Hong Kong corporation and wholly owned subsidiary of UPI (“Pantene”).

The Merger. Spear & Jackson, Inc. (“S&J” or the “Company”) has entered into an agreement and plan of merger (the “Merger Agreement”) which provides for the merger of S&J with Newco, a newly formed Nevada corporation controlled by Parent. Following the merger, S&J will cease to be a publicly held company. See “The Merger Agreement” beginning on page 42.

S&J. S&J, through its principal operating entities, 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. In order to reduce any conflict of interest in evaluating, negotiating and recommending the merger and the terms of the Merger Agreement, our Board of Directors delegated those duties to the Finance Committee of the Board of Directors. The Finance Committee consists of Dr. J. Preston Jones. Dr. Jones has been determined to be independent by our Board of Directors. No particular standard was used by our Board of Directors to determine that Dr. Jones is independent, rather, Dr. Jones was determined to be independent after our Board of Directors conducted a thorough analysis of the relevant facts and concluded: (i) the bio submitted by Dr. Jones evidences no prior or current affiliations with the Company, its subsidiaries, or its affiliates, (ii) Dr. Jones has not, and is not expected to, directly or indirectly, receive any fees from the Company, its subsidiaries, or its affiliates other than fees of US $30,000 per annum, payable quarterly, with respect to his service on the Company's Board of Directors and Finance Committee, and a fee of US $30,000 payable upon the completion of his duties as an independent director, (iii) Dr. Jones is not an officer, employee, or stockholder of the Company, its subsidiaries, or its affiliates, and (iv) Dr. Jones has no financial incentive or interest in the outcome of the merger. Our Board of Directors has unanimously approved the merger and the Merger Agreement. Our Board of Directors and the Finance Committee believe that the terms of the merger and the Merger Agreement are fair to, and in the best interests of, S&J’s unaffiliated stockholders. Our common stock is traded on the Pink Sheets in the over the counter market under the symbol “SJCK.PK.” Our corporate headquarters are located at 12012 Southshore Boulevard, Suite 103, Wellington, Florida 33414, and our telephone number is (561) 793-7233. See “Parties to the Merger Agreement” beginning on page 41.

Newco. Newco is a newly organized Nevada corporation formed and currently wholly owned by Pantene, which is wholly owned by UPI (collectively referred to herein as “Parent”). Parent formed Newco for the purpose of engaging in the merger. Immediately following the merger, Newco, as the surviving corporation, will be wholly-owned by Parent. See “Parties to the Merger Agreement” beginning on page 41.

Parent. UPI is a Bermuda corporation. UPI is a holding company. Apart from its holdings in S&J, UPI is primarily engaged, through its Asia-based principal operating subsidiaries, in the manufacture and sale of power supply products and electronic components, and offers original equipment manufacturer (OEM) services and electronics/electrical manufacturing services (EMS). Pantene is a Hong Kong corporation and wholly owned subsidiary of UPI. Pantene is a special purpose investment vehicle and holds only 61.8% of S&J and 100% of Newco. UPI and Pantene are collectively referred to herein as “Parent”. See “Parties to the Merger Agreement” beginning on page 41.

Related Parties. Patrick J. Dyson is our Chairman, Chief Financial Officer, Secretary, and a member of our Board of Directors, and is UPI’s Chief Financial Officer; Lewis Hon Ching Ho is our Chief Administrative Officer and a member of our Board of Directors, and is a director and the general manager of Pantene Electronics (Hangzhou) Co. Ltd., a subsidiary of UPI; Brian C. Beazer is our Assistant Secretary and is the Chairman of UPI; Nila Ibrahim is our General Counsel and is the General Counsel of UPI; David H. Clarke owns 28,350 shares of our common stock (representing approximately 0.49% of our outstanding shares), and is the Executive Vice Chairman and a director of UPI.

Stockholder Vote. You are being asked to consider and vote upon a proposal to adopt and approve the Merger Agreement. The Merger Agreement must be adopted and approved by the affirmative vote of the holders of a majority of the outstanding shares of our common stock. The Merger Agreement does not need to be approved by the holders of a majority of the outstanding shares of our common stock held by unaffiliated stockholders. Each outstanding share of common stock will be entitled to one vote. Parent currently holds in excess of a majority of the outstanding shares of our common stock and therefore has sufficient shares to approve the Merger Agreement and the merger. Parent intends to vote its shares in favor of the Merger Agreement and the merger.

Payment. In the merger, all of the outstanding shares of our common stock (other than those shares held by the Parent and stockholders who exercise and perfect dissenter’s rights under Nevada law) will be converted into the right to receive the merger consideration of $1.96 in cash, without interest. Shares held by stockholders who validly exercise and perfect their dissenter’s rights under Nevada law will be converted into the right to receive such consideration as may be determined to be due pursuant to the provisions of Sections 92A.300 through 92A.500 of the Nevada Revised Statutes. See “The Merger Agreement” beginning on page 42.

Management. Our current management will continue as management of the surviving corporation on the same terms as they are presently employed. See “Special Factors -- Interests of the Parent in the Merger” beginning on page 29.

Interests of the Parent in the Merger. The opportunity to retain an equity interest in S&J and to continue as management of the surviving corporation following the merger provides the Parent with interests in the merger that are different from, or in addition to, your interests as a S&J stockholder. See “Special Factors -- Interests of the Parent in the Merger” beginning on page 29.

Interests of Our Directors and Executive Officers in the Merger. In considering the recommendation of our Board of Directors with respect to the merger, you should be aware that some of our directors and executive officers have interests in the merger that are different from, or in addition to, the interests of our stockholders generally. Patrick J. Dyson has an employment agreement which provides that in the event of termination of employment other than for cause, Mr. Dyson would be entitled to severance pay equal to twelve months of his current base salary and other benefits. Dr. J. Preston Jones, the sole member of the Finance Committee, receives US $30,000 per annum with respect to his service on our Board of Directors and the Finance Committee, and will receive an additional US $30,000 upon completion of his duties as an independent director. Further, our officers and directors will be entitled to certain additional indemnification rights and will likely hold offices in S&J post closing.

Fairness of the Merger. Our Board of Directors has unanimously determined that the terms of the Merger Agreement and the merger are substantively and procedurally fair to, and in the best interests of, S&J’s unaffiliated stockholders. Parent and Newco also believe that the terms of the Merger Agreement and the merger are substantively and procedurally fair to, and in the best interests of, S&J’s unaffiliated stockholders. See “Special Factors -- Recommendation of the Board of Directors; Fairness of the Merger” beginning on page 13; and “Determination of the Fairness of the Merger by Parent and Newco” beginning on page 16.

Reasons for the Merger. In reaching the conclusion that the terms of the merger and the Merger Agreement are fair to, and in the best interests of, the S&J stockholders other than the Parent, the Finance Committee and our Board of Directors considered the following factors, among others:



the fact that the $1.96 per share to be paid to stockholders in the merger represents (i) a premium of approximately 92% over the $1.02 closing sale price for the shares of our common stock on the Pink Sheets of the over the counter market on May 14, 2007, the trading day preceding our announcement of UPI’s initial offer of $1.483 per share, and (ii) a premium of approximately 32% over the $1.48 closing sale price for the shares of our common stock on each of the five trading days preceding June 14, 2007, the day the Finance Committee determined to recommend that our Board of Directors approve the Merger Agreement;



the opinion of Capitalink, dated June 14, 2007, that the cash consideration of $1.96 per share to be received by the holders of our common stock (other than the Parent) is fair to such holders from a financial point of view;



the fact that Parent’s significant equity interest in S&J would likely deter potential strategic and financial third party buyers in light of Parent’s stated intention not to sell its interest;



the Finance Committee’s conclusion that it was unlikely that any party other than Parent would propose and complete a transaction that was more favorable than the merger; and



the history of negotiations between the Finance Committee and Parent regarding the price per share offered to stockholders and the terms and conditions of the merger.

See “Special Factors -- Recommendation of the Finance Committee and the Board of Directors; Fairness of the Merger” beginning on page 13.

Opinion of Financial Advisor. In deciding to approve the terms of the Merger Agreement and the merger, one factor our Board of Directors and the Finance Committee considered was the opinion of the Finance Committee’s financial advisor, Capitalink. Capitalink concluded that the merger consideration to be received by the holders of our capital stock (other than the Parent) in the merger is fair, from a financial viewpoint, to such holders. The complete Capitalink’s opinion, including applicable limitations and assumptions, describes the basis for the opinion and is attached as Exhibit B to this proxy statement. See “Special Factors -- Opinion of Financial Advisor to the Finance Committee” beginning on page 19.

Merger Financing. Parent and Newco estimate that $5 million will be necessary to complete the merger and pay their related fees and expenses. Such amount is to be funded directly by Parent from acquisition financing and out of its working capital. The source of the acquisition financing is Orix Asia Limited, a restricted license bank in Hong Kong. The parties have entered into a definitive loan agreement dated August 22, 2007, for approximately US $5 million. The borrower under the loan agreement is Pantene, with UPI and its wholly owned subsidiaries Pantene Industrial Co. Ltd and Pin Xin International Ltd. serving as guarantors. The maximum term of the loan facility is 36 months. The interest rate is 4.75% per annum, with principal and interest payable monthly during the term. The borrower's obligations under the facility are secured by a security interest in certain equipment with a value of at least HK$10 million. The loan agreement provides for the following material conditions to funding: (i) joint and several corporate guarantees being given by UPI and its wholly owned subsidiaries Pantene Industrial Co. Ltd and Pin Xin International Ltd; (ii) the creation of a security interest in equipment valued at HK$10 million to secure the loan; (iii) insurance coverage on the equipment that is serving as collateral; (iv) an undertaking by Mr. Brian Beazer, the Chairman of UPI, not to dispose of or reduce his shareholding in UPI during the term of the loan; (v) due notice of drawdown being given; (vi) all relevant organizational documents and resolutions of Pantene and the corporate guarantors being provided to Orix; and (vii) there being no material adverse change in the business, financial condition, operations or prospects of Pantene or the other corporate guarantors. No alternative financing arrangements or alternative financing plans have been made in the event the loan facility described herein is not available as anticipated. Parent does not have any specific plans or arrangements in place to finance or repay the loan, but anticipates repaying the loan from working capital. No alternative financing arrangements or alternative financing plans have been made in the event the loan facility described herein is not available as anticipated. S&J estimates it will incur $275,000 in fees and expenses to complete the merger, which amount will be funded out of working capital. See “Special Factors -- Merger Financing” beginning on page 30.

Conditions. The Merger Agreement and the merger are subject to approval by the holders of a majority of the outstanding shares of our common stock. The merger also is subject to other conditions, including:



the merger shall have been approved by the holders of a majority of the outstanding ordinary shares of UPI;



the absence of any law or regulation or any judgment, injunction, order or decree prohibiting the consummation of the merger;



S&J shall have performed in all material respects all of its obligations required by the Merger Agreement;



the absence of any action or proceeding (a) seeking to restrain or prohibit Parent’s ownership or operation of all or a material portion of S&J’s business or (b) that is reasonably likely to have a material adverse effect on S&J; and



obtaining required authorizations, consents, waivers, orders and approvals, except as would not, individually or in the aggregate have a materially adverse effect on S&J.

Covenants. We gave an undertaking in the Merger Agreement not to solicit, encourage or facilitate any Acquisition Proposal (as defined in the Merger Agreement), but we may furnish information, or enter into discussions and negotiations with, any person in response to an unsolicited, bona fide written proposal that constitutes or has a reasonable likelihood of resulting in a “Superior Offer.” This is defined to mean an unsolicited bona fide written Acquisition Proposal that our Board of Directors or Finance Committee determines, by resolution duly adopted, in its good faith reasonable judgment, and after consulting with its independent financial advisor, and after taking into account the likelihood and anticipated timing of consummation of such offer, which provides the following: (a) a tender for all, and not less than all, of the minority shares of common stock of the Company, (b) commencement of the tender to occur within fourteen (14) days of the date of the Superior Offer, (c) reasonable and customary closing conditions and no additional material conditions, (d) a financing commitment from a recognized national financing institution, and (e) the potential bidder has been informed and acknowledges that, in accordance with the UK Pensions Act of 2004 (as may be amended from time to time), in certain circumstances, an owner of shares in the Company that exceeds a threshold of 29.9% of the issued and outstanding shares, may be required to make contributions to reduce the underfunded pension liability of certain of the Company’s UK subsidiaries. The exception for a "Superior Offer" does not extend to transactions other than an unsolicited tender offer for all, and not less than all, of the minority stockholders' interests in the Company.

Termination of the Merger Agreement. The parties may agree to terminate the Merger Agreement at any time before the merger. In addition, the Merger Agreement may be terminated for a number of reasons, including



the merger is not completed on or before December 31, 2007;



our Board of Directors withdraws or modifies its recommendation in a manner adverse to Parent;



the parties breach any of their representations, warranties or covenants in the Merger Agreement and are unable to cure such breach by a specified date; or



a court of competent jurisdiction or other governmental body shall have issued a final and nonappealable order permanently restraining, enjoining or otherwise prohibiting the consummation of the merger. See “The Merger Agreement -- Termination of the Merger Agreement” beginning on page 47.

After the Merger. Upon completion of the merger, Newco as the surviving corporation will be a privately held corporation, wholly owned by the Parent. There will be no public market for shares of the common stock of Newco. The shares of common stock of S&J will cease to be traded on the Pink Sheets in the over the counter market and registration of the common stock of S&J under the Securities Exchange Act of 1934, as amended, will be terminated. The Parent will own 100% of the outstanding equity interest in Newco as the surviving corporation. See “Special Factors -- Effects of the Merger” beginning on page 27 and “-- Interests of the Parent in the Merger” beginning on page 29.

Questions and Answers about the Merger

Q: What am I being asked to vote upon?

A: You are being asked to consider and vote upon a proposal to adopt and approve the agreement and plan of merger (the “Merger Agreement”). Each outstanding share of common stock will be entitled to one vote. The Merger Agreement must be adopted and approved by the affirmative vote of the holders of a majority of the outstanding shares of our common stock. Parent currently holds in excess of a majority of the outstanding shares of our common stock and therefore has sufficient votes to approve the Merger Agreement. Parent intends to vote its shares in favor of the Merger Agreement. The Merger Agreement does not need to be approved by the holders of a majority of the outstanding shares of our common stock held by unaffiliated stockholders.

Under the Merger Agreement, Spear & Jackson, Inc., a Nevada corporation (“S&J” or the “Company”), will be merged with and into Pantene Global Acquisition Corp., a Nevada corporation (“Newco”), with Newco as the surviving corporation. Newco is a wholly owned subsidiary of Pantene Global Holdings Limited, a Hong Kong corporation (“Pantene”). Pantene is a wholly owned subsidiary of United Pacific Industries Limited, a Bermuda corporation (“UPI” and together with Pantene the “Parent”).

Parent holds approximately 61.78% of our common stock and therefore has sufficient shares to approve the Merger Agreement and the merger. Parent intends to vote its shares in favor of the Merger Agreement and the merger. Each share of our common stock is entitled to one vote. If the Merger Agreement is adopted and approved and the merger is completed, S&J will no longer be a publicly held corporation. Parent will own all of the equity interest in Newco as the surviving corporation.

Q: What will I receive in the merger? (See “The Special Meeting” beginning on page 38.)

A: Upon completion of the merger each outstanding share of our common stock, other than those shares held by the Parent and stockholders who exercise and perfect dissenter’s rights under Nevada law, will be converted into the right to receive $1.96 in cash, without interest. Shares held by stockholders who validly exercise and perfect their dissenter’s rights under Nevada law will be converted into the right to receive such consideration as may be determined to be due pursuant to the provisions of Sections 92A.300 through 92A.500 of the Nevada Revised Statutes.

Q: What role did the Finance Committee play in the merger? (See “Special Factors -- Background of the Merger” beginning on page 9.)

A: Parent will own all of the continuing equity interests in Newco as the surviving corporation immediately following completion of the merger. Parent holds approximately 61.78% of our common stock and, therefore, has sufficient shares to approve the Merger Agreement and the merger. Parent intends to vote its shares in favor of the Merger Agreement and the merger. Each share of our common stock is entitled to one vote. Certain of our officers and directors are also officers and directors of UPI. Accordingly, our Board of Directors believed that the Finance Committee would reduce any potential conflict of interest in evaluating, negotiating and recommending the merger and the terms of the Merger Agreement. The chairman and sole member of the Finance Committee is Dr. J. Preston Jones. Dr. Jones has been determined to be independent by our Board of Directors. No particular standard was used by our Board of Directors to determine that Dr. Jones is independent, rather, Dr. Jones was determined to be independent after our Board of Directors conducted a thorough analysis of the relevant facts and concluded: (i) the bio submitted by Dr. Jones evidences no prior or current affiliations with the Company, its subsidiaries, or its affiliates, (ii) Dr. Jones has not, and is not expected to, directly or indirectly, receive any fees from the Company, its subsidiaries, or its affiliates other than fees of US $30,000 per annum, payable quarterly, with respect to his service

on the Company's Board of Directors and Finance Committee, and a fee of US $30,000 payable upon the completion of his duties as an independent director, (iii) Dr. Jones is not an officer, employee, or stockholder of the Company, its subsidiaries, or its affiliates, and (iv) Dr. Jones has no financial incentive or interest in the outcome of the merger.

Q: Why is the Board of Directors recommending that I vote in favor of the Merger Agreement? (See “Special Factors -- Reasons for the Board of Directors’ Determination” beginning on page 16.)

A: Our Board of Directors has unanimously determined that the terms of the Merger Agreement and the merger are substantively and procedurally fair to, and in the best interests of, our unaffiliated stockholders. Our Board of Directors, unanimously recommends that you vote for the adoption and approval of the Merger Agreement.

Q: When do you expect the merger to be completed? (See “The Merger Agreement -- Effective Time of Merger” beginning on page 42.)

A: S&J, Parent and Newco are working toward completing the merger as quickly as possible. If the Merger Agreement is adopted and approved and the other conditions to the merger are satisfied or waived, the merger is expected to be completed promptly after it is approved by the stockholders of UPI.

Q: What are the U.S. federal income tax consequences of the merger? (See “Special Factors -- Federal Income Tax Considerations” beginning on page 31.)

A: Generally, the merger will be taxable for U.S. federal income tax purposes. You will recognize taxable gain or loss in the amount of the difference between $1.96 and your adjusted tax basis for each share of our common stock that you own. The Parent will have different tax consequences from the merger.

The tax consequences of the merger to you will depend on the facts of your own situation. You should consult your own tax advisor for a full understanding of the tax consequences of the merger to you.

Q: When and where is the special meeting?

A: The special meeting of our stockholders will be held at 10:00 a.m. local time on October 18, 2007, at 200 East Last Olas Boulevard, Suite 1700, Fort Lauderdale, Florida 33301.

Q: Who can vote on the Merger Agreement?

A: Holders of our common stock at the close of business on September 10, 2007, the record date for the special meeting, may vote in person or by proxy at the special meeting.

Q: How do I vote?

A: You should read this proxy statement carefully, including the exhibits accompanying this proxy statement, and consider how the merger affects you. Then, please mark your vote on your proxy card and date, sign and mail it in the enclosed, postage paid return envelope as soon as possible so that your shares can be voted at the special meeting.

Shareholders may also vote via the Internet by accessing www.proxyvote.com or by telephone at 1-800-690-6903. The telephone and Internet voting procedures are designed to authenticate the shareholder’s identity, to allow the shareholder to give voting instructions and to confirm that such instructions have been properly recorded. Shareholders may vote via the Internet or by telephone up to 11:59 p.m. Eastern Time the day before the special meeting. Shareholders that vote via the Internet should understand that there might be costs associated with electronic access that they must bear, such as usage charges from Internet access providers and telephone companies.

Q: What happens if I do not return a proxy card, vote via the Internet or vote by phone?

A: The failure to return your proxy card, vote via the Internet, or vote by phone will have the same effect as voting against the Merger Agreement.

Q: May I vote in person?

A: Yes. You may attend the special meeting and vote your shares in person whether or not you sign and return your proxy card, vote by Internet, or vote by phone. If your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy from the broker, bank or other nominee.

Q: May I change my vote after I have mailed my signed proxy card, voted via the Internet or voted by phone?

A: Yes. The shareholder giving the proxy may revoke it before it is exercised, either in person, by mail or by messenger, by submitting a later dated proxy card to the Secretary at 12012 Southshore Boulevard, Suite 103, Wellington, Florida 33414 at least 48 hours prior to the date of the special meeting. If the proxy was voted via the Internet or by telephone, the shareholder may revoke the proxy by entering a new vote via the Internet or telephone prior to the time that Internet and telephone voting closes. The shareholder giving the proxy may also revoke it by openly stating the revocation at the meeting or by voting at the meeting in person. If you have instructed a broker to vote your shares, you must follow directions received from your broker to change those instructions. ANY ATTEMPTED REVOCATIONS NOT MEETING THE ABOVE REQUIREMENTS WILL BE RULED INVALID.

Q: If my shares are held in “street name” by my broker, will my broker vote my shares for me?

A: No. Your broker will not be able to vote your shares without instructions from you. You should instruct your broker to vote your shares by following the procedures provided by your broker.

Q: Should I send in my stock certificates now?

A: No. After the merger is completed, you will receive written instructions for exchanging your shares of common stock for a cash payment of $1.96 per share, without interest.

Q: Do I have a right to seek an appraisal of my shares? (See “Special Factors -- Dissenter’s Rights” beginning on page 32.)

A: Yes. If you wish, you may seek an appraisal of the fair value of your shares, but only if you comply with all requirements of Nevada law. (See “Exhibit C” and “Special Factors -- Dissenter’s Rights” beginning on page 32. Based on the determination of the Nevada courts, the appraised fair value of your shares of our common stock, which will be paid to you if you seek an appraisal, may be more than, less than or equal to the amount to be paid in the merger.

Q: Is there any litigation challenging the merger?

A: No. However, a complaint could be filed at any time. There can be no guarantee that such a claim would not interfere with the merger.

Q: Who can help answer my questions?

A: The information provided above in question and answer format is for your convenience only and is merely a summary of the information contained in this proxy statement. You should carefully read this entire proxy statement, including the exhibits. If you would like additional copies, without charge, of this proxy statement or if you have questions about the merger, including the procedures for voting your shares, you should contact:

Spear & Jackson, Inc.

12012 Southshore Boulevard, Suite 103

Wellington, Florida 33414

Telephone: (561) 793-7233

Fax: (561) 793-7966

Email: [email protected]

Attn: Investor Relations

Cautionary Statement Concerning Forward-Looking Information

This proxy statement includes statements that are not historical facts. These forward-looking statements are based on our current estimates and assumptions and, as such, involve uncertainty and risk. Forward-looking statements include the information concerning our possible or assumed future results of operations and also include those preceded or followed by the words “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “should,” “plans,” “targets” and/or similar expressions.

The forward-looking statements are not guarantees of future performance, and actual results may differ materially from those contemplated by these forward-looking statements. In evaluating any forward-looking statements, you should consider various risk factors, including those summarized in (i) Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2006, as filed with the SEC, (ii) other sections of this proxy statement, (iii) the other reports the Company files with the SEC, and (iv) the Company’s press releases. Such factors may cause the Company’s actual results to differ materially from any forward-looking statement. Except to the extent required under the federal securities laws, we do not intend to update or revise the forward-looking statements to reflect circumstances arising after the date of the preparation of the forward-looking statements.

PROPOSAL ONE APPROVAL OF THE MERGER AGREEMENT

SPECIAL FACTORS

Background of the Merger

In November 2004, S&J entered into a Stock Purchase Agreement with PNC Tool Holdings LLC (“PNC”) and Dennis Crowley, the sole member of PNC. Under the Stock Purchase Agreement S&J for $100 acquired 6,005,561 common shares of S&J held by PNC, which constituted approximately 51.1% of the outstanding common shares of S&J.

With the return of the S&J shares to S&J by PNC, the percentage of S&J stock held by S&J stockholders increased correspondingly. Jacuzzi Brands, Inc. (“Jacuzzi”), which at the time was the beneficial owner of 3,543,281 shares of S&J common stock, had its interest in S&J increase to approximately 61% of the then outstanding common stock.

On April 21, 2005, Jacuzzi’s Board of Directors adopted a plan of disposition of its interest in S&J’s common stock, pursuant to which it engaged in an extensive process identifying potential purchasers and obtaining indications of interest, which eventually led to the sale in July 2006, to UPI. Jacuzzi received and assessed offers from, and engaged in discussions with, numerous bidders, including UPI. Jacuzzi weighed the range of potential value under each offer as well as the different structures proposed, the proposed form and source of any financing, the conditions to each offer and the likelihood that such conditions would be satisfied, the proposed form of agreement submitted by the bidders and the other risks presented in respect of consummation of the various proposed transactions. At the end of an eleven month process, Jacuzzi determined that the offer from UPI was superior to the other offers, and decided to sell all its shares to UPI for $1.40 per share. Jacuzzi engaged Houlihan, Lokey, Howard and Zukin, an independent financial advisor, to render a fairness opinion to the effect that the sale of the shares to UPI was fair to Jacuzzi from a financial point of view.

In January 2006, S&J’s corporate monitor, Soneet Kapila, suggested that S&J consider third party approaches involving the purchase of all of S&J’s outstanding share capital. Mr. Kapila had the following responsibilities as S&J's corporate monitor: (i) review and approve all corporate actions by S&J and by all agents of S&J, including all S&J employees, and all other persons or entities acting or purporting to act on S&J's behalf; (ii) devise and implement any procedures, systems, and controls that he deemed appropriate to ensure that all prospective S&J actions were brought to his attention and to document his approval of such actions; (iii) retain other persons and/or firms to assist him in carrying out his duties and responsibilities; (iv) report to the SEC and to the court that appointed him corporate monitor if he became aware of any evidence or indication of violation of the court order pursuant to which he was authorized to act as corporate monitor; (v) oversight responsibility with respect to all compensation paid by S&J; (vi) call and order meetings of S&J's board of directors; and (vii) designate and empower, subject to the prior written approval of the SEC or the court that appointed him corporate monitor, one or more other persons to carry out his duties and responsibilities to the extent he was not available for a limited period of time.

Several investor groups expressed interest in S&J, but none delivered a formal proposal. On March 15, 2006, S&J and Jacuzzi did, however, receive a non-binding merger proposal from Rosewood Partnership LLP, a U.K. private equity company, which, if consummated, would have resulted in the acquisition of all the outstanding shares of S&J for $2.25 per share, subject to certain conditions, including approval by Jacuzzi, other S&J stockholders, and the U.K. Pension Regulator. The Rosewood proposal was subject to financing which was to be leveraged against the assets of S&J, thereby potentially compromising S&J’s ability to clear the deficit on its UK defined benefit pension plan. S&J issued a press release on March 27, 2006 indicating that the Board of Directors had not had a full opportunity to evaluate the proposal due to its apparent rejection by Jacuzzi, whose consent was a prerequisite to the merger. S&J was not privy to the exact reason(s) Jacuzzi elected to sell its shares of S&J common stock to UPI as opposed to considering further the Rosewood proposal, though S&J understood that Jacuzzi's Board of Directors determined that the structure of the Rosewood proposal was such that it was highly unlikely the transaction would close.

On July 28, 2006, Jacuzzi’s sale of its shares of S&J common stock to UPI closed, after UPI received stockholder approval and the other closing conditions were satisfied or waived. At the closing, UPI assigned the S&J shares to its wholly-owned subsidiary, Pantene.

In January 2007, S&J's corporate monitor petitioned the court to permit the corporate monitor to cease providing services to S&J, which petition was granted. The corporate monitor ceased providing services to the Company on January 22, 2007, and had no role in the Company from that point forward. Specifically, the corporate monitor was not involved in the discussions set forth below with UPI, Newco or their representatives regarding the merger or the Merger Agreement, though he was aware of said discussions.

In January 29, 2007, Brian C. Beazer, the chairman of UPI, indicated to Arnstein & Lehr, via electronic mail, that S&J should expect to receive a merger proposal from a UPI nominated subsidiary, indicating their desire to acquire the remaining equity interests which UPI did not own in S&J. The determination was made by UPI after a thorough analysis of the S&J's financial condition, business operations, business prospects, the market price of S&J's common stock, the condition of the securities markets generally, the condition of the industry in which S&J operates, and the condition of the economy in general.

In November 2006, Ms. Maria Lam had tendered her resignation as Chairman of the Board of Directors of S&J to take effect in January 2007, and effective as of the close of business on February 14, 2007, the Board of Directors of S&J elected Patrick J. Dyson as a director and Chairman of the Board.

In February 2007, the Board of Directors established a Finance Committee, which would be comprised of independent directors and would be charged with reviewing and advising S&J’s Board of Directors regarding any proposed bid by UPI or other third parties to acquire S&J. On February 8, 2007, S&J engaged Capitalink to issue a fairness opinion on any potential proposed transaction with UPI.

In order to allow the Finance Committee to comply with its responsibilities, the Board of Directors sought and selected an independent director to chair the Finance Committee. The Board of Directors of S&J, effective April 17, 2007, appointed Dr. J. Preston Jones as director. Dr. Jones was provided an annual director’s fee of $30,000, payable in quarterly installments, with respect to his service on the Company’s Board of Directors and Finance Committee, and a fee of US $30,000 payable upon the completion of his duties as an independent director. S&J and Dr. Jones subsequently entered into an indemnification agreement.

On May 14, 2007, S&J reported that its Finance Committee received an offer from UPI to acquire, for $1.483 per share in cash, the remaining outstanding shares of common stock of S&J that UPI did not then own. The offer was subject to all regulatory approvals, including board approval, stockholder approvals, Securities and Exchange Commission approval and Hong Kong Stock Exchange approval.

On May 15, 2007, a telephonic meeting of the Board of Directors of S&J was held. All members of the Board of Directors of S&J participated. Also participating were representatives of Capitalink and representatives of Arnstein & Lehr LLP, the Company’s counsel. Representatives of Arnstein & Lehr reviewed with the Directors the structure and terms of the proposal, and their fiduciary obligations in connection therewith. After a discussion of the basic terms of the proposal, the Board of Directors unanimously agreed to have the Finance Committee, comprised solely of Dr. Preston Jones, an independent director, receive, review, evaluate and study the proposal and any alternative proposals or strategic alternatives, negotiate on behalf of S&J, if appropriate, the terms and conditions of the proposal from UPI or any alternative proposals with applicable parties and make a recommendation to the Board of Directors at the appropriate time as to the proposal from UPI or any alternative proposals or strategic alternatives. At such meeting, Capitalink reviewed with the Board of Directors the steps it would undertake to determine the fairness of the offer and highlighted certain issues, including issues associated with S&J’s pension liability.

On May 18, 2007, a telephonic meeting of S&J’s Board of Directors was held on which each of the members of the Board, excluding Mr. Ho, participated. Also in attendance were representatives of Capitalink and Arnstein & Lehr and representatives of Price Waterhouse Coopers (“PWC”). The PWC representative reviewed with the Board numerous issues concerning S&J’s pension liability, including its amount, mechanisms for determining such liability and the process for funding such liability.

During May 2007, representatives of Capitalink received due diligence materials and conducted telephonic due diligence meeting with representatives of S&J’s management.

On May 23, 2007, a telephonic meeting of the Finance Committee was held. Dr. Jones was present; also in attendance were representatives of Arnstein & Lehr and Capitalink. At the meeting, representatives of Capitalink discussed with the Finance Committee its preliminary view of the valuation of S&J. After a thorough discussion, the parties determined that an additional market check was not required. During the discussion the parties reviewed that the prior sale process in which Jacuzzi initially engaged was focused on the sale of Jacuzzi's shares of common stock of the Company; that the Company and Jacuzzi thereafter engaged in a lengthy, thorough, process to identify potential purchasers for the Company as a whole, in which several groups expressed interest but only one group submitted a proposal (the Rosewood proposal); that the Rosewood proposal was, to the Company's knowledge, rejected by Jacuzzi's Board of Directors after a determination that the structure of the Rosewood proposal was such that it was unlikely the transaction would close; and, that the Finance Committee determined that any potential strategic and financial third party buyers would likely be deterred by UPI's stated position that UPI was not inclined to sell to a third party buyer resulting in the inability of any such buyer to obtain a majority equity interest in the Company, majority voting power, or the ability to control the management or cash flow of the Company. Ultimately, the Finance Committee through its sole member Dr. Jones, decided to defer reaching any conclusion regarding a response to the UPI proposal until after reviewing Capitalink’s completed financial analysis.

On May 24, 2007, a telephonic meeting of the S&J Board of Directors was held. Each of the members of the Board of Directors participated. Also in attendance were representatives of Capitalink and Arnstein & Lehr. Dr. Jones reviewed with the Board the status of the Finance Committee’s review of the UPI proposal. The Board of Directors discussed that the Company’s pension plan is currently under-funded, the various options available to attempt to resolve the under-funding are complicated and provide no reasonable guaranty of success, and under the laws of the United Kingdom the merger transaction as structured would result in an obligation on the part of UPI to assume responsibility for the funding of any Company pension obligations that the Company cannot ultimately fund itself. The Board of Directors also discussed the fact that the Stock Exchange of Hong Kong would require that the transaction be approved by the majority of UPI's stockholders and that an informational circular, which must be approved by the Stock Exchange of Hong Kong, must be distributed to each such UPI stockholder.

On May 31, 2007, the Finance Committee and representatives of Capitalink and Arnstein & Lehr held a telephonic meeting with representatives of UPI to discuss the proposed offer and the Finance Committee’s concerns relating to S&J’s pension plan liability obligations.

On May 31, 2007, the Finance Committee had a telephonic meeting with representatives of Capitalink and Arnstein & Lehr to further discuss the offer from UPI. The Finance Committee concluded that the offer from UPI was not sufficient. Dr. Jones, on behalf of the Finance Committee, indicated that he would have discussions with Mr. Brian C. Beazer of UPI to determine if their proposed price could be increased to adequately represent the full value of S&J.

On June 6, 2007, Dr. Jones had a conversation with Mr. Beazer of UPI concerning the UPI offer. Dr. Jones advised Mr. Beazer that a range of $2.00 per share would most likely be appropriate. Dr. Jones’ position was based on his review and analysis of the Company's financial statements and the documentation prepared by Capitalink, as well as consultations with representatives of Capitalink and Arnstein & Lehr. Mr. Beazer suggested that Dr. Jones speak with Mr. David H. Clarke. Mr. Clarke is a director and the Executive Vice Chairman of UPI, holds 28,350 shares of common stock of the Company (representing approximately 0.49% of the outstanding shares, all of which would be acquired by Parent in the merger transaction on the same terms as the unaffiliated stockholders), and represented Parent, from time to time, in its negotiations with the Company.

On June 7, 2007, Dr. Jones spoke with Mr. Clarke and indicated the Finance Committee’s concern about the level of the proposed bid by UPI. Mr. Clarke indicated that the UPI offer could be increased to $1.80 per share. On June 7, 2007, a telephonic meeting of the Finance Committee was held. Dr. Jones participated, as did representatives of Capitalink and Arnstein & Lehr. The Finance Committee concluded that the offer was still not sufficient and Dr. Jones indicated that he would continue discussions with Mr. Clarke.

On June 8, 2007, Dr. Jones again spoke with Mr. Clarke to discuss the proposed transaction and concerns with the earlier revised offer price. As a result of these discussions, Mr. Clarke verbally indicated that UPI was willing to raise its offer to $1.90 per share.

On June 11, 2007, a telephonic meeting of the Finance Committee was held. Dr. Jones participated, as did representatives of Capitalink and Arnstein & Lehr. Based upon the discussions at the meeting, the Finance Committee concluded that an offer of $1.96 would be sufficient to recommend the proposal to S&J’s stockholders. The conclusion was reached by Dr. Jones, the sole member of the Finance Committee, after further review and analysis of the Company's financial statements and the documentation prepared by Capitalink, as well as consultations with representatives of Capitalink and Arnstein & Lehr. Dr. Jones indicated that he would continue discussions with Mr. Clarke to achieve such result. None of the parties involved in the June 13, 2007, meeting disclosed the $1.96 offer price to UPI, its affiliates, or its representatives.

On June 12, 2007, Dr. Jones had a further conversation with Mr. Clarke and discussed how the current verbal offer of $1.90 was not sufficient. Dr. Jones and Mr. Clarke agreed that they would have a telephonic conference with Capitalink and their respective attorneys to pursue price negotiations.

From May 15, 2007 to June 13, 2007, UPI, its counsel Schneider Weinberger & Beilly, the Finance Committee and Arnstein & Lehr conducted several telephonic conferences concerning the definitive Merger Agreement and related documents and exchanged approximately five drafts of the Merger Agreement reflecting their negotiations. During this period, the Finance Committee met with its advisors to discuss the various drafts and to formulate responses.

On June 13, 2007, the Finance Committee, representatives of Capitalink and Arnstein & Lehr had a telephonic meeting with UPI, represented by Mr. Clarke, and its legal counsel Schneider, Weinberger and Beilly, to discuss the valuation of S&J. After lengthy discussions, Mr. Clarke indicated that UPI was willing to raise its offer to $1.96 per share, provided that this would enable S&J’s Board of Directors to receive a fairness opinion from Capitalink.

On June 14, 2007, the Finance Committee held a meeting at which representatives of Capitalink and Arnstein & Lehr were present. During the meeting representatives of Arnstein & Lehr presented a summary of the terms of the Merger Agreement and related agreements. Capitalink made a financial presentation regarding the proposed transaction. During that session, representatives of Capitalink provided the Finance Committee with its oral opinion (subsequently confirmed in writing), that based upon and subject to various qualifications and limitations as of the date of such opinion, the merger consideration was fair, from a financial point of view, to the holders of Company common stock other than UPI and its affiliated entities. With the benefit of that presentation and advice the Finance Committee, having deliberated regarding the terms of the proposed acquisition, determined that the merger and the Merger Agreement are substantively and procedurally fair to, and in the best interests of, S&J and S&J’s unaffiliated stockholders and recommended that the Board of Directors approve the Merger Agreement and the transactions contemplated thereby and that our Board of Directors recommend that S&J’s stockholders vote to adopt the Merger Agreement.

On June 15, 2007, following that resolution, a telephonic meeting of the Board of Directors was held with representatives of Capitalink and Arnstein & Lehr. Following the Finance Committee’s recommendation to the Board of Directors, the Board of Directors, by unanimous vote, determined that the merger and the Merger Agreement are substantively and procedurally fair to, and in the best interests of S&J and S&J’s unaffiliated stockholders, declared the Merger Agreement and the merger to be advisable, and recommended that S&J’s stockholders vote to adopt the Merger Agreement. The recommendation was subject to the execution of the Merger Agreement for which there remained several open points.

On June 19, 2007, a revised draft of the Merger Agreement was presented by counsel for UPI to the Finance Committee and counsel. The material revisions included (i) adjustments to various representations and warranties of the parties; (ii) adjustments to the various covenants of the parties; (iii) adjustments to the indemnification provisions; (iv) the insertion of a non-solicitation/superior offer provision; and (v) the insertion of a break-up fee. The parties negotiated the terms of the Merger Agreement and reached agreement in-principle on the definitive terms on June 20, 2007.

On June 22, 2007, the Merger Agreement was executed by the parties. On June 25, 2007, S&J filed a current report on 8-K announcing the signing of the Merger Agreement and issued a press release announcing the signing of the Merger Agreement.

Recommendation of the Finance Committee and the Board of Directors; Fairness of the Merger

Reasons for the Recommendation of the Finance Committee

The Finance Committee of our Board of Directors has determined that the terms of the Merger Agreement and the merger are substantively and procedurally fair to, and in the best interests of, S&J’s unaffiliated stockholders. The Finance Committee recommended to our Board of Directors that the Merger Agreement and the merger be adopted and approved. The Finance Committee considered a number of factors, as more fully described above under “Background of the Merger,” and as described below in making its recommendation.

In determining the substantive fairness of the merger and recommending adoption and approval of the Merger Agreement and the merger to our Board of Directors, the Finance Committee considered a number of factors that it believed supported its recommendation and determination, including:



the merger will provide our stockholders a substantial premium for their shares compared to the market price of our common stock, as set forth in the analysis of Capitalink; the Finance Committee adopted the analysis of Capitalink with respect to current and historical prices of our common stock and considered the premium paid in relation to the current and historical prices;



as the sole member of the Finance Committee, Dr. Jones’ analysis of our business, as developed independently through conversations with the Company's management, review of the Company's periodic reports as filed with the SEC, and personal research about the marketplace in which the Company operates, together with his knowledge of our financial results and prospects, and our industry generally; through which he developed the view that being a public company had not resulted in an ability to more easily raise capital when necessary, and that the costs of remaining public would negatively impact our overall results of operation and financial condition;



UPI’s controlling 61.78% equity interest in S&J, which it has stated it is not interested in selling, has, and would likely continue to, deter potential strategic and financial third party buyers who would not be able to obtain a majority equity interest in the Company, majority voting power, or the ability to control the management or cash flow of the Company, which position is supported by the facts that the Company and Jacuzzi unsuccessfully solicited third party bids in connection with their efforts to sell the Company, and, the Finance Committee has not received any expression of interest in the Company since the May 17, 2007, announcement of UPI's offer;



Based on UPI's stated position that UPI is not inclined to sell to a third party buyer, resulting in the inability of any such buyer to obtain a majority equity interest in the Company, majority voting power, or the ability to control the management or cash flow of the Company; and that the Company and Jacuzzi had unsuccessfully solicited third party bids in connection with their efforts to sell the Company; and that the Finance Committee has not received any expression of interest since the May 17, 2007 announcement of UPI's offer, it is unlikely that any party other than the Parent would propose and complete a transaction that was more favorable than the merger to S&J’s unaffiliated stockholders;



the limitations we suffered and could likely continue to suffer as a public company, including our limited trading volume of an average of 6,200 shares a day, that we have virtually no institutional investors, and that no research analysts currently follow us, all of which adversely affect the trading market and the value of our common stock;



the accounting, legal and other expenses we are required to incur to remain a public company; if we were to remain a public company we would experience significant expenses totaling

approximately $150,000 per year, including director and officer insurance, public registration expenses (registration fees, printing, mailing annual reports and proxy), audit fees, and legal fees, with an additional approximately $250,000 to be incurred in connection with initial compliance with the internal controls provision of Sarbanes Oxley; if the transaction is closed, and the Company is no longer a public company, the Parent may initially benefit from the cost savings associated with the Company's new status as private company, though, any such cost savings associated with the Company’s new status as private company, though, any such cost savings would likely be offset by additional costs that will be incurred as a result of the transaction by Parent, a public company listed on the Stock Exchange of Hong Kong;



the history of the negotiations with respect to the merger consideration that, among other things, led to an increase in the Parent’s offer to $1.96 per share of our common stock and the belief of the Finance Committee, based on representations of Mr. Clarke (the Executive Vice Chairman and a director of UPI) that $1.96 per share of our common stock was the highest price that the Parent would agree to pay; together with the opinion of Capitalink, as discussed below, that, as of the date of such opinion, the $1.96 per share consideration to be received by stockholders (other than the Parent) in the merger is fair to such stockholders from a financial point of view;



the $1.96 per share to be paid to stockholders in the merger represents a premium of approximately 92% over the $1.02 closing sale price for the shares of our common stock on the Pink Sheets of the over the counter market on May 14, 2007, the trading day preceding our announcement of UPI’s initial offer of $1.483 per share;



the $1.96 per share to be paid to stockholders other than the Parent in the merger represents (i) a premium of approximately 32% over the $1.48 closing sale price for the shares of our common stock on the Pink Sheets of the over the counter market on each of the five trading days preceding June 14, 2007, the day the Finance Committee determined to recommend that our Board of Directors approve the Merger Agreement;



the presentations of Capitalink at various Finance Committee meetings, its final presentation at the June 14, 2007 meeting, its updates to that presentation including the opinion of Capitalink dated June 14, 2007, based on and subject to the limitations, assumptions and qualifications set forth in its opinion, as to the fairness, from a financial point of view, of the merger consideration to the holders of our common stock (other than Parent); see “Opinion of Financial Advisor to the Finance Committee”, and a copy of the opinion of Capitalink attached as Exhibit B to the proxy statement;



the financial resources of Parent, which the Finance Committee believes, as a result of the personal knowledge of its sole member, reasonably supports the Parent’s ability to meet its financial obligations to pay up to a total of $1.96 to our stockholders pursuant to the Merger Agreement;



cash will be paid to our stockholders (other than the Parent) in the merger, eliminating any uncertainties in valuing the merger consideration to be received by our stockholders (other than the Parent); and



the Finance Committee’s judgment, based on the trading price of our common stock over the past year, that it is unlikely our stockholders will realize in excess of $1.96 per share due to the current and prospective environment in which we operate.

The Finance Committee also determined that the merger is procedurally fair due to a number of factors. All of the material positive factors considered by the Finance Committee in this determination were as follows:



our Board of Directors empowered its Finance Committee to consider and negotiate the Merger Agreement;



the Finance Committee was given exclusive authority to, among other things, evaluate, negotiate and recommend the terms of any proposed transactions;



the Finance Committee received advice from its legal counsel and financial advisors in evaluating, negotiating and recommending the terms of the Merger Agreement;



Capitalink rendered an opinion concerning the fairness, from a financial point of view, of the consideration to be received by our stockholders (other than the Parent) in the merger;



the price of $1.96 per share and the other terms and conditions of the Merger Agreement resulted from active and lengthy negotiations between the Finance Committee and its representative, on the one hand, and the Parent and its representatives on the other hand;



the Merger Agreement permits us to terminate the Merger Agreement in the event our Board of Directors withdraws their recommendation of the Merger Agreement and the merger, which the Finance Committee believes is relevant notwithstanding Parent's control of our Board of Directors, for the following reasons: (i) the members of our Board of Directors are required under the laws of the State of Nevada to perform their duties in compliance with certain fiduciary obligations which, in part, require that they act in a manner they believe to be in the best interests of the Company; (ii) Dr. Jones is the sole independent director on our Board of Directors and is the sole member of the Finance Committee, and as such the position of Dr. Jones with respect to the Merger Agreement must be carefully considered by our Board of Directors; and (iii) any determination by Parent (as our majority stockholder) to remove from and/or add to the members of our Board of Directors would require the effectuation of certain procedural steps required under the Federal securities laws that would significantly delay the effectuation of any such action; and



The merger as structured invokes stockholder appraisal rights under Nevada law, which entitles each of our stockholders to certain adjudication rights if they are dissatisfied with the consideration payable pursuant to the Merger Agreement, provided they perfect said appraisal rights by timely filing a written intent to demand payment with S&J and by otherwise following the procedures prescribed by Nevada law.

The Finance Committee also considered the lack of certain procedural safeguards, specifically, that the law firm engaged by the Finance Committee also provided services to the Company's Board of Directors with respect to the Merger Agreement and the merger, and therefore was not independent, and that the approval of the Merger Agreement does not require the approval of the holders of a majority of the shares held by our nonaffiliated stockholders.

The Finance Committee also considered a variety of risks and other potentially negative factors concerning the merger. These included the following:



the cash consideration received by a stockholder generally will be taxable to the stockholder in an amount equal to the excess of the merger consideration received by such stockholder over such stockholder’s tax basis in the stockholder’s capital stock; and



following the merger, our stockholders, other than the Parent will cease to participate in any future earnings growth of the surviving corporation or benefit from any increase in the value of the surviving corporation.

The Finance Committee did not ask Capitalink to attempt to determine the liquidation value of S&J and gave little consideration to the net book value of S&J’s assets because it believed that those measures of asset value were not relevant to the market value of our business and would be considerably less than the merger consideration of $1.96 per share of our common stock and our going concern value. The Finance Committee’s belief regarding liquidation value was based upon its understanding of our industry, its general business knowledge that liquidation sales generally result in proceeds substantially less than the sale of a going concern business such as in this

transaction, and an understanding of the UK regulations regarding the requirements to fully fund an underfunded pension of a company in liquidation. Based upon the various analyses of value by Capitalink, the Finance Committee concluded that the liquidation value and book value were not materially relevant to the market value of our business. While the Finance Committee reviewed with Capitalink its various financial analyses and reviewed with our officers our historical results and budget, the Finance Committee did not independently generate its own separate financial analysis of the merger. The Finance Committee adopted the analysis produced by Capitalink.

Because of the variety of factors considered, the Finance Committee did not find it practicable to quantify or otherwise assign relative weights to, and did not make specific assessments of, the specific factors considered in reaching its determination. Rather the Finance Committee based its position on the totality of the information presented and considered. After considering all such factors, the Finance Committee concluded that the Merger Agreement and the merger are substantively and procedurally fair to, and in the best interests of, our unaffiliated stockholders, declared the Merger Agreement and the merger to be advisable, and recommended that the Company's Board of Directors adopt and approve the Merger Agreement and the merger.

Reasons for the Recommendation of the Board of Directors

Our Board of Directors consists of three directors, one of whom serves on the Finance Committee. At the June 15, 2007 meeting of our Board of Directors, the Finance Committee, with its legal advisers participating, reported to the other members of our Board of Directors on the course of its negotiations with the Parent and its legal counsel, its review of the Merger Agreement and the factors it took into account in reaching its determination that the merger is substantively and procedurally fair to, and in the best interests of, our unaffiliated stockholders. In view of the wide variety of factors considered in its evaluation of the Merger Agreement and the merger, our Board of Directors did not find it practicable to quantify or otherwise assign relative weights to, and did not make specific assessments of, the specific factors considered in reaching its determination. Rather, our Board of Directors based its position on the totality of the information presented and considered. At the conclusion of the June 15, 2007, meeting, our Board of Directors reviewed and adopted the analysis of the Finance Committee and reviewed and adopted the analysis produced by Capitalink, and based thereon, determined that the Merger Agreement and the merger are substantively and procedurally fair to, and in the best interests of, our unaffiliated stockholders, declared the Merger Agreement and the merger to be advisable, and recommended that the Company’s stockholders vote “FOR” the approval of the Merger Agreement.

Determination of the Fairness of the Merger by the Parent and Newco

The rules of the Securities and Exchange Commission require Parent and Newco to express their belief as to the fairness of the merger to all our other holders of common stock. Parent and Newco are making the statements included in this section solely for the purposes of complying with such rules. The views of Parent and Newco as to the fairness of the merger should not be construed as a recommendation to any stockholder as to how that stockholder should vote on the proposal to approve the Merger Agreement. Neither Parent nor Newco participated in the deliberations of the Finance Committee regarding, and did not receive advice from Capitalink as to the fairness to the stockholders of the merger. Neither Parent nor Newco retained an unaffiliated representative to act on behalf of the other S&J stockholders for the purpose of negotiating the terms of the merger or for the purposes of preparing a report concerning the fairness of the transaction.

Based on their belief regarding the reasonableness of the analysis of the Finance Committee and Capitalink, which Parent and Newco hereby adopt, and their consideration of the following factors, Parent and Newco believe that the Merger Agreement and the merger are substantively and procedurally fair to, and in the best interests of, S&J’s unaffiliated stockholders (the term "unaffiliated stockholders" has the same meaning as the terms "non-upi shareholders" and "shareholders other than Parent," which are used in the Capitalink opinion).



the $1.96 per share to be paid to stockholders other than the Parent in the merger is higher than any firm offer received by the Company as described in “Background of the Merger;”



the fact that the $1.96 per share to be paid to stockholders other than the Parent in the merger represents (i) a premium of approximately 92% over the $1.02 closing sale price for the shares of

our common stock on the Pink Sheets of the over the counter market on May 14, 2007, the trading day preceding our announcement of UPI’s initial offer of $1.483 per share, (ii) a premium of approximately 32% over the $1.48 closing sale price for the shares of our common stock on the Pink Sheets of the over the counter market on each of the five trading days preceding June 14, 2007, the day the Finance Committee determined to recommend that our Board of Directors approve the Merger Agreement, and (ii) a premium of approximately 82% over the $1.08 average closing sale price for the shares of common stock from July 28, 2006, when Parent first acquired the controlling block of 61.8% of our outstanding common stock, through May 14, 2007, the day immediately preceding the first announcement of Parent’s bid at $1.483;



the fact that the Finance Committee determined that the merger is substantively and procedurally fair to, and in the best interests of, S&J’s unaffiliated stockholders and the Finance Committee’s recommendation that the Board of Directors adopt and approve the Merger Agreement and the merger;



the fact of the receipt by, and acceptance of the Capitalink opinion by the Finance Committee;



the nature of the extensive negotiations between the Finance Committee and the Parent;



the involvement of the Finance Committee and its representation by counsel and engagement of a financial advisor;



their general knowledge of the Company’s business, financial results and prospects, as well as their knowledge of our industry generally, and their views regarding the Company’s financial condition, results of operations, business and prospects, including our prospects if the Company were to remain publicly owned;



the limitations the Company suffered and could likely continue to suffer as a public company, including our limited trading volume of an average of 6,200 shares a day, that we have virtually no institutional investors, and that no research analysts currently follow the Company, all of which adversely affect the trading market and the value of our common stock;



the accounting, legal and other expenses we are required to incur to remain a public company; if we were to remain a public company we would experience significant expenses totaling approximately $150,000 per year, including director and officer insurance, public registration expenses (registration fees, printing, mailing annual reports and proxy), audit fees and legal fees, with an additional approximately $250,000 to be incurred in connection with initial compliance with the internal controls provision of Sarbanes Oxley if the transaction is closed, and the Company is no longer a public company, the Parent may initially benefit from the cost savings associated with the Company’s new status as private company, though, any such cost savings would likely be offset by additional costs that will be incurred as a result of the transaction by Parent, a public company listed on the Stock Exchange of Hong Kong;



cash will be paid to the Company stockholders (other than the Parent) in the merger, eliminating any uncertainties in valuing the merger consideration to be received by the Company’s stockholders (other than the Parent);



the fact that after the Parent announced its consideration of possibly taking the Company private, the Company’s common stock price generally stayed in the range of $1.42 to $1.48 per share, and no buyers for the Company or its assets emerged in response to such announcement;



the belief that the principal advantage of the Company continuing as a public company would be to allow public stockholders to continue to participate in any growth in the value of the Company’s equity, but that, based on the trading prices of the Company’s common stock over the prior year,

the value to stockholders that would be achieved by continuing as a public company was not likely to be as great as the merger consideration of $1.96; and



the fact that the Parent and others are essentially acquiring the Company “as-is”, the representations and warranties are limited and do not survive the closing, and there are no holdbacks or escrows that would affect the proceeds received by the stockholders.

The Parent and Newco also believe that the merger is procedurally fair to our unaffiliated stockholders due to the following factors, among other things:



the Company’s Board of Directors empowered its Finance Committee to consider and negotiate the Merger Agreement;



the Finance Committee was given exclusive authority to, among other things, evaluate, negotiate and recommend the terms of any proposed transactions;



the Finance Committee received advice from its legal counsel and financial advisors in evaluating, negotiating and recommending the terms of the Merger Agreement;



Capitalink rendered an opinion concerning the fairness, from a financial point of view, of the consideration to be received by the Company’s stockholders (other than the Parent) in the merger;



the price of $1.96 per share and the other terms and conditions of the Merger Agreement resulted from active and lengthy negotiations between the Finance Committee and its representatives, on the one hand, and the Parent and its representations on the other hand;



the Merger Agreement permits us to terminate the Merger Agreement in the event our Board of Directors withdraws its recommendation of the Merger Agreement, and the merger, which the Parent and Newco believe is relevant notwithstanding Parent’s control of our Board of Directors, for the following reasons: (i) the members of our Board of Directors are required under the laws of the State of Nevada to perform their duties in compliance with certain fiduciary obligations which, in part, require that they act in a manner they believe to be in the best interests of the Company; (ii) Dr. Jones is the sole independent director on our Board of Directors and is the sole member of the Finance Committee, and as such the position of Dr. Jones with respect to the Merger Agreement must be carefully considered by our Board of Directors; and (iii) any determination by Parent (as our majority stockholder) to remove from and/or add to the members of our Board of Directors would require the effectuation of certain procedural steps required under the Federal securities laws that would significantly delay the effectuation of any such action; and



The merger as structured invokes stockholder appraisal rights under Nevada law, which entitles our stockholders to certain adjudication rights if they are dissatisfied with the consideration payable pursuant to the Merger Agreement, provided they perfect said appraisal rights by timely filing a written intent to demand payment with us and by otherwise following the procedures prescribed by Nevada law.

The Parent and Newco also considered the lack of certain procedural safeguards, specifically, that the law firm engaged by the Finance Committee also provided services to the Company's Board of Directors with respect to the Merger Agreement and the merger, and therefore was not independent, and that the approval of the Merger Agreement does not require the approval of the holders of a majority of the shares held by our nonaffiliated stockholders.

In addition, the Parent and Newco also considered a variety of risks and other potentially negative factors concerning the Merger Agreement and the transactions contemplated by it, including the merger. These negative factors included:



the fact that, following the merger, the Company’s stockholders, other than Parent, will cease to participate in any future earnings of the Company or benefit from any future increase in the Company’s value, if any;



the fact that, for U.S. federal income tax purposes, the merger consideration will be taxable to the Company’s stockholders receiving the merger consideration to the extent the merger consideration exceeds a stockholder’s basis in stock it holds;



the possible disruption to the Company’s business that may result from the announcement of the merger and the resulting distraction of the attention of the Company’s management; and



the fact that the failure to consummate the merger could negatively impact the market price of the Company’s common stock.

Parent and Newco did not assign relative weights to these factors. Rather, they viewed their position as being based on the totality of the information presented to and considered by them, except that particular consideration was placed on (a) the measures taken by the Finance Committee and our Board of Directors to ensure the procedural fairness of the transaction, including the involvement of the Finance Committee, the retention of legal and financial advisors by the Finance Committee and the nature of the negotiations between Finance Committee and Parent, and (b) receipt and acceptance by the Finance Committee of the Capitalink opinion.

The foregoing constitutes all the material factors considered by Parent and Newco in making their respective fairness determination. Parent and Newco did not consider whether the merger consideration constitutes fair value in relation to liquidation value as relevant to their determination as to the fairness of the merger. S&J did not receive any firm offers more favorable than that of Parent to acquire S&J during the past 18 months. Consequently, the Finance Committee could not and Parent and Newco did not, consider any other firm offers.

Other than the recommendations of the Finance Committee that our Board of Directors adopt and approve the Merger Agreement, and of our Board of Directors that our stockholders vote in favor of the adoption and approval of the Merger Agreement, no other person filing the Schedule 13E-3 with the Securities and Exchange Commission has made any recommendation with respect to the merger.

S&J, Parent and Newco have not made any provision in connection with the merger to grant our unaffiliated stockholders access to our corporate records, or to obtain counsel or appraisal services at the expense of S&J, Parent or Newco.

Opinion of Financial Advisor to the Finance Committee

Capitalink made a presentation and delivered its written opinion to our Finance Committee of the Board of Directors on June 14, 2007, and based upon and subject to the assumptions made, matters considered, and limitations on its review as set forth in the opinion, the merger consideration per share is fair, from a financial point of view, to our stockholders other than Parent (the group represented by the term our "stockholders other than Parent" consists of the same members as the group represented by the term our "unaffiliated shareholders"). The amount of the merger consideration was determined pursuant to negotiations between the Finance Committee and UPI and not pursuant to recommendations of Capitalink. The full text of the written opinion of Capitalink is attached as Exhibit B.

You are urged to read the Capitalink opinion carefully and in its entirety for a description of the assumptions made, matters considered, procedures followed and limitations on the review undertaken by Capitalink in rendering its opinion. The summary of the Capitalink opinion set forth in this proxy statement is qualified in its entirety by reference to the full text of the opinion.

The Capitalink opinion is for the use and benefit of our Board of Directors in connection with its consideration of the merger and is not intended to be and does not constitute a recommendation to you as to how you should vote or proceed with respect to the merger. Capitalink was not requested to opine as to, and its opinion does not in any manner address, the relative merits of the merger as compared to any alternative business strategy that

might exist for us, our underlying business decision to proceed with or effect the merger, and other alternatives to the merger that might exist for us. Capitalink does not express any opinion as to the underlying valuation or future performance of S&J or the price at which our securities might trade at any time in the future.

In arriving at its opinion, Capitalink took into account an assessment of general economic, market and financial conditions, as well as its experience in connection with similar transactions and securities valuations generally. In so doing, among other things, Capitalink:



Reviewed the Merger Agreement.



Reviewed our publicly available financial information and other data that Capitalink deemed relevant, including our Annual Report on Form 10-K for the year ended September 30, 2006, our Quarterly Report on Form 10-Q for the six months ended March 31, 2007, and our Current Reports on Form 8-K filed January 26, 2007, February 9, 2007, February 21, 2007, April 25, 2007, May 15, 2007 and June 12, 2007.



Reviewed non-public information and other data with respect to us, including, financial projections for the five years ending September 30, 2011 (the “Projections”), management estimates of the current projected benefit obligations in excess of plan assets (the “PBO Estimate”) and other internal financial information and management reports.



Considered our historical financial results and present financial condition.



Reviewed and compared the trading of, and the trading market for our common stock, the Comparable Companies (as hereinafter defined), and two general market indices



Reviewed and analyzed our projected unlevered free cash flows and prepared a discounted cash flow analysis.



Reviewed and analyzed certain financial characteristics of publicly-traded companies that were deemed by Capitalink to have characteristics comparable to us (the “Comparable Companies”).



Reviewed and analyzed certain financial characteristics of target companies in transactions where such target company was deemed by Capitalink to have characteristics comparable to us.



Reviewed and analyzed the premiums paid in certain other transactions.



Reviewed and discussed with representatives of our management and their advisors certain financial and operating information furnished by them, including the Projections, the PBO Estimate and other analyses with respect to the our business, operations and obligations.



Performed such other analyses and examinations as were deemed appropriate.

In arriving at its opinion, Capitalink relied upon and assumed the accuracy and completeness of all of the financial and other information that was supplied or otherwise made available to Capitalink without assuming any responsibility for any independent verification of any such information. Further, Capitalink relied upon the assurances of our management that they were not aware of any facts or circumstances that would make any such information inaccurate or misleading. With respect to the financial information and projections utilized, Capitalink assumed that such information has been reasonably prepared on a basis reflecting the best currently available estimates and judgments, and that such information provides a reasonable basis upon which it could make an analysis and form an opinion. The projections were solely used in connection with the rendering of Capitalink’s fairness opinion. Our stockholders should not place reliance upon such projections, as they are not necessarily an indication of what our revenues and profit margins will be in the future. The projections were prepared by our management and are not to be interpreted as projections of future performance (or “guidance”) by us. Capitalink did not evaluate the solvency or fair value of us under any foreign, state or federal laws relating to bankruptcy, insolvency or similar matters. Capitalink did not make a physical inspection of our properties and facilities and did not make or obtain any evaluations or appraisals of our assets and liabilities (contingent or otherwise). In addition, Capitalink did not attempt to confirm whether we have good title to our assets.

Capitalink assumed that the merger will be consummated in a manner that complies in all respects with the applicable provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all other applicable foreign, federal and state statutes, rules and regulations. Capitalink assumes that the merger will be consummated substantially in accordance with the terms set forth in the Merger Agreement, without any further amendments thereto, and that any amendments, revisions or waivers thereto will not be detrimental to our stockholders.

Capitalink’s analysis and opinion are necessarily based upon market, economic and other conditions, as they existed on, and could be evaluated as of, June 14, 2007. Accordingly, although subsequent developments may affect its opinion, Capitalink has not assumed any obligation to update, review or reaffirm its opinion.

In connection with rendering its opinion, Capitalink performed certain financial, comparative and other analyses as summarized below. Each of the analyses conducted by Capitalink was carried out to provide a different perspective on the merger, and to enhance the total mix of information available. Capitalink did not form a conclusion as to whether any individual analysis, considered in isolation, supported or failed to support an opinion as to the fairness, from a financial point of view, of the merger consideration to our stockholders other than Parent. Further, the summary of Capitalink’s analyses described below is not a complete description of the analyses underlying Capitalink’s opinion. The preparation of a fairness opinion is a complex process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, Capitalink made qualitative judgments as to the relevance of each analysis and factors that it considered. In addition, Capitalink may have given various analyses more or less weight than other analyses, and may have deemed various assumptions more or less probable than other assumptions, so that the range of valuations resulting from any particular analysis described above should not be taken to be Capitalink’s view of the value of our assets. The estimates contained in Capitalink’s analyses and the ranges of valuations resulting from any particular analysis are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than suggested by such analyses. In addition, analyses relating to the value of businesses or assets neither purports to be appraisals nor do they necessarily reflect the prices at which businesses or assets may actually be sold. Accordingly, Capitalink’s analyses and estimates are inherently subject to substantial uncertainty. Capitalink believes that its analyses must be considered as a whole and that selecting portions of its analyses or the factors it considered, without considering all analyses and factors collectively, could create an incomplete and misleading view of the process underlying the analyses performed by Capitalink in connection with the preparation of its opinion.

The summaries of the financial reviews and analyses include information presented in tabular format. In order to fully understand Capitalink’s financial reviews and analyses, the tables must be read together with the accompanying text of each summary. The tables alone do not constitute a complete description of the financial analyses, including the methodologies and assumptions underlying the analyses, and if viewed in isolation could create a misleading or incomplete view of the financial analyses performed by Capitalink.

The analyses performed were prepared solely as part of Capitalink’s analysis of the fairness, from a financial point of view, of the merger consideration to our stockholders other than Parent, and were provided to our Finance Committee of the Board of Directors in connection with the delivery of Capitalink’s opinion. The opinion of Capitalink was just one of the many factors taken into account by our Finance Committee in making its determination to approve the Merger Agreement and the merger, including those described elsewhere in this proxy statement.

Stock Performance Review

Capitalink reviewed the daily closing market price and trading volume of our common stock for the twelve month period ended May 14, 2007 (the date prior to the announcement of the transaction). Capitalink noted the following that over the last twelve months, our closing stock price ranged from $0.95 and $1.40, and has experienced limited liquidity with a mean and median trading volume of 2,567 and 500 shares traded each day, respectively.

Valuation Overview

Capitalink generated an indicated valuation range for our company based on a discounted cash flow analysis, a comparable company analysis and a comparable transaction analysis each as more fully discussed below. Capitalink weighted the three approaches equally and arrived at an indicated equity value per share range of approximately $1.60 and approximately $2.37. Capitalink noted that the merger consideration per share of $1.96 is around the mid-point of the indicated equity value range.

Discounted Cash Flow Analysis

A discounted cash flow analysis estimates value based upon a company’s projected future free cash flow discounted at a rate reflecting risks inherent in its business and capital structure. Unlevered free cash flow represents the amount of cash generated and available for principal, interest and dividend payments after providing for ongoing business operations.

While the discounted cash flow analysis is the most scientific of the methodologies used, it is dependent on projections and is further dependent on numerous industry-specific and macroeconomic factors.

In calculating our projected free cash flows, Capitalink also removed the estimated portion of the periodic pension expense that specifically relates to the “Catching Up” of our PBO estimate or unfunded pension liability. This adjustment ensures the analysis correctly accounts for the unfunded pension liability only once (i.e., Capitalink included this liability as part of net debt).

Capitalink utilized the forecasts provided by our management, which project gradual future growth in revenues from FY2006 to FY2011 from approximately $96.9 million to $127.9 million, respectively. This represents a compound average growth rate (or “CAGR”) of approximately 5.7% over the period. The projections provided by our management assume the Company continues operating under its current structure and does not include any benefits or costs related to any closure of any existing UK manufacturing facilities and the further outsourcing of such production to Asia or other low-cost manufacturing countries.

In order to arrive at a present value, Capitalink utilized discount rates ranging from 20.0% to 21.0%. This was based on an estimated weighted average cost of capital of 20.7% (based on our estimated weighted average cost of debt of 6.5% and a 24.7% estimated cost of equity). The cost of equity calculation was derived utilizing the Ibbotson build up method utilizing appropriate equity risk, industry risk and size premiums and a company specific risk factor, reflecting the risk associated with achieving the projected sales growth and profit margins given our poor performance in FY2006.

Capitalink presented a range of terminal values at the end of the forecast period by applying a range of long term perpetual growth rates between 2.0% and 4.0%. Capitalink assumed that by 2011, our EBITDA growth would reach a stable leveling line with long term rates of inflation.

Capitalink calculated a range of indicated enterprise values and then deducted net debt of approximately $22.1 million (which includes the estimated PBO of approximately $41.9 (₤21.3) million, or approximately $29.4 million after tax, less approximately $7.2 million in available cash). Capitalink utilized the estimated PBO after tax given that the pension obligation is tax deductible. Capitalink then derived a per share range of equity values of between $1.80 and $2.60 (by dividing by approximately 5.74 million shares outstanding). For purposes of Capitalink’s analyses, “enterprise value” means equity value plus all interest-bearing debt (including unfunded pension liabilities, after tax) less cash.

Comparable Company Analysis

A selected comparable company analysis reviews the trading multiples of publicly traded companies that are similar to us with respect to our business and revenue model, operating sector, size and target customer base.

Capitalink identified the following seven companies:



Danaher Corp.



Black & Decker Corp.



Stanley Works



Snap-On, Inc.



Fiskars Oyj



LS Starrett Co.



Leeport Holdings Ltd.

Most of the comparable companies are substantially larger than us both in terms of revenue and enterprise value, with latest twelve months, or LTM revenue ranging from approximately $112.7 million to approximately $10.0 billion, compared with our LTM revenue of approximately $100.5 million. Based on publicly available information as of June 11, 2007, the enterprise value for the comparable companies ranged from approximately $46.8 million to approximately $26.1 billion, compared with our enterprise value of approximately $35.2 million.

Capitalink noted that all of the comparable companies are more profitable than us, with EBITDA margins ranging from approximately 6.4% to approximately 22.9%, compared with our negative EBITDA margin of approximately -1.9%. For purposes of Capitalink’s analyses, “EBITDA” means earnings before interest, taxes, depreciation and amortization, as adjusted for add-backs for non-cash stock compensation expenses and one-time charges.

Capitalink also noted that based on the total debt outstanding (including estimated PBO), we are significantly more leveraged than all of the comparable companies with approximately 80.0% debt to total invested capital ratio (compared with a mean of 19.5% for the comparable companies).

Multiples utilizing enterprise value were used in the analyses. For comparison purposes, all operating profits including EBITDA were normalized to exclude unusual and extraordinary expenses and income. Capitalink also calculated and utilized EBITDAP in their analysis which is equal to EBITDA plus periodic pension expenses.

Capitalink generated a number of multiples worth noting with respect to the comparable companies:



Enterprise Value Multiple of	Mean	Median	High	Low
LTM revenue	1.39x	1.42x	2.61x	0.41x
LTM EBITDA	9.2x	9.3x	13.8x	6.0x
LTM EBITDAP	9.0x	9.1x	13.5x	6.1x
2007 EBITDA	9.7x	9.8x	13.2x	4.3x

Capitalink also reviewed the historical multiples generated for the comparable companies, and noted that the mean enterprise value to LTM EBITDA multiple over the last ten years was 9.3x.

Capitalink selected an appropriate multiple range for us by examining the range indicated by the comparable companies and taking into account certain company-specific factors including, but not limited to, our lower EBITDA margins, lower historical revenue growth, significant risks related to the pension liabilities and smaller size. Based on these company-specific factors, Capitalink expects our valuation multiples to be significantly below the mean of the comparables companies.

Based on the above factors, Capitalink applied the following multiples to the respective statistics:



Multiples of 0.30x to 0.35x LTM revenue



Multiples of 5.0x to 6.0x LTM EBITDAP



Multiples of 8.0x to 9.0x Average EBITDA (2002 – 2006)

and calculated a range of enterprise values for us by weighting the above indications equally and then deducted net debt of approximately $22.1 million to derive a per share range of equity values of between $1.40 and $2.30 (based on approximately 5.74 million shares outstanding).

None of the comparable companies have characteristics identical to us. An analysis of publicly traded comparable companies is not mathematical; rather it involves complex consideration and judgments concerning differences in financial and operating characteristics of the comparable companies and other factors that could affect the public trading of the comparable companies.

Comparable Transaction Analysis

A comparable transaction analysis involves a review of merger, acquisition and asset purchase transactions involving target companies that are in related industries to us. The comparable transaction analysis generally provides the widest range of value due to the varying importance of an acquisition to a buyer (i.e., a strategic buyer willing to pay more than a financial buyer) in addition to the potential differences in the transaction process (i.e., competitiveness among potential buyers).

Information is typically not disclosed for transactions involving a private seller, even when the buyer is a public company, unless the acquisition is deemed to be “material” for the acquirer. As a result, the selected comparable transaction analysis is limited to transactions involving the acquisition of a public company, or substantially all of its assets, or the acquisition of a large private company, or substantially all of its assets, by a public company.

Capitalink located fifteen comparable transactions. The transactions were selected based on the following criteria: (i) announced since January 2003, (ii) included target companies involved in the development, manufacture and marketing of various hand tools and are classified under the SIC code 3423 (Hand and Edge Tools, NEC); and (iii) for which detailed financial information was available. Capitalink noted that they did not find any 13e-3 transactions that also met the criteria presented above.



Target	Acquiror
Lamitec Tools AB	Swedish Saw Blades Holding AB
Techtronic Industries Co. Ltd.	Platinum Securities Company Ltd
Gardena Holding AG	Husqvarna AB
Southern Saw Holdings, Inc.	Kasco Corp.
Easy Gardener Products Ltd.	Bayside Capital, Inc.
Acorn Products, Inc.	Ames True Temper Inc.
Spear & Jackson, Inc.	United Pacific Industries Ltd.
Horizon Distributors, Inc.	SCP Pool Corp.
Hayter, Ltd	Toro Co.
Pentair Tools Group	Black & Decker Corp.
Simplicty Manufacturing, Inc.	Briggs & Stratton Corp.
Ames True Temper, Inc.	Castle Harlan Partners
Global Garden Products Sweden	ABN AMRO Capital Benelux
SPS Technologies, LLC	Precision Castparts Corp.
Neelco Industries	Undisclosed Acquirer

Based on the information disclosed with respect to the targets in the each of the comparable transactions, Capitalink calculated and compared the enterprise values as a multiple of LTM revenue and LTM EBITDA.

Capitalink noted the following with respect to the multiples generated:



Multiple of enterprise value to	Mean	Median	High	Low
LTM revenue	0.84x	0.72x	1.73x	0.32x
LTM EBITDA	8.7x	9.5x	12.1x	4.8x

Capitalink expects S&J to be valued below the mean of the comparable transactions multiples due to our negative EBITDA margin, significant risks related to the pension liabilities, and smaller size.

Based on the above factors, Capitalink applied the following multiples to the respective statistics:



Multiples of 0.32x to 0.35x LTM revenue, and



Multiples of 8.5x to 9.5x Average EBITDA (2002-2006),

calculated a range of enterprise values for us by weighting the above indications equally and then deducted net debt of approximately $22.1 million to derive a per share range of equity values of between $1.60 and $2.20 (based on approximately 5.74 million shares outstanding).

None of the target companies in the comparable transactions have characteristics identical to us. Accordingly, an analysis of comparable business combinations is not mathematical; rather it involves complex considerations and judgments concerning differences in financial and operating characteristics of the target companies in the comparable transactions and other factors that could affect the respective acquisition values.

Premiums Paid Analysis

The premiums paid analysis involves the examination of the acquisition premiums derived in transactions where a minority interest of a public company was acquired by a controlling stockholder and the comparison of the observed premiums to the premium implied by the merger consideration per share. Capitalink reviewed the one-day, five-day and 30-day premiums for all minority interest transactions where:



The transaction was announced on or after January 2003;



The transaction value is between $10.0 million and $100.0 million;



The acquiring party previously had more than 50% shareholding in the target company; and



The target company is based in the United States or the United Kingdom.

Capitalink reviewed 27 transactions that met these criteria and calculated the mean and median of the acquisition premiums. They were 21.0% and 18.6%, for the one-day premium, 21.3% and 17.5%, for the five-day premium, and 33.0% and 21.2% for the 30-day premium.

Capitalink used the analysis to determine a range of implied indicated values for our common stock based on the range of minority interest acquisition premiums. Capitalink selected the total mean and median for all of the periods, and applied them to our one day, five day and thirty day stock price, prior to the announcement of the merger on May 14, 2007. Based on these premiums, Capitalink determined a range of indicated value for our common stock of between $1.28 and $1.34.

None of the target companies in the acquisition premiums analysis have characteristics identical to us. Accordingly, an analysis of comparable business combinations is not mathematical; rather it involves complex considerations and judgments concerning differences in financial and operating characteristics of the target companies in the acquisition premiums analysis and other factors that could affect the respective acquisition values.

Based on the information and analyses set forth above, Capitalink delivered its written opinion to our Finance Committee of the Board of Directors, which stated that, as of June 14, 2007, based upon and subject to the assumptions made, matters considered, and limitations on its review as set forth in the opinion, the merger consideration is fair, from a financial point of view, to our stockholders other than Parent. Capitalink is an investment banking firm that, as part of its investment banking business, regularly is engaged in the evaluation of businesses and their securities in connection with mergers, acquisitions, corporate restructurings, private placements, and for other purposes. We determined to use the services of Capitalink because it is a recognized investment banking firm that has substantial experience in similar matters. Capitalink has received a fee in connection with the preparation and issuance of its opinion and will be reimbursed for its reasonable out-of-pocket expenses, including attorneys’ fees. In addition, we have agreed to indemnify Capitalink for certain liabilities that may arise out of the rendering of its opinion. Further, Capitalink has not previously provided, nor are there any pending agreements to provide, any other services to S&J or UPI. In addition, we has agreed to indemnify Capitalink for certain liabilities that may arise out of the rendering this opinion.

In the ordinary course of business, Capitalink’s affiliate Ladenburg, certain of Ladenburg’s affiliates, as well as investment funds in which they may have financial interests, may acquire, hold or sell, long or short positions, or trade or otherwise effect transactions, in debt, equity, and other securities and financial instruments (including bank loans and other obligations) of, or investments in, us, any other party that may be involved in the transaction and their respective affiliates.

General. While the foregoing summary describes the analyses and examinations that Capitalink deemed material in arriving at its opinion, the summary does not purport to be a comprehensive description of all analyses and examinations actually conducted by Capitalink in connection with its review of the merger and the preparation of its opinion. The preparation of a fairness opinion is a complex process and necessarily is not susceptible to partial analysis or summary description. Selecting portions of the analyses and of the factors considered by Capitalink, without considering all analyses and factors, would create an incomplete view of the process underlying the analyses set forth in the opinion of Capitalink delivered to the Finance Committee on June 14, 2007. In addition, the preparation of a fairness opinion does not involve a mathematical evaluation or weighing of the results of the individual analyses performed, but requires Capitalink to exercise its professional judgment, based on its experience and expertise in considering a wide variety of analyses taken as a whole. Each of the analyses conducted by Capitalink with its review of the merger and the preparation of its opinion was carried out in order to provide a different perspective on the transaction and to add to the total mix of information available. In preparing its opinion, Capitalink may have given some analyses more or less weight than other analyses, and may have deemed various assumptions more or less probable than other assumptions. Accordingly, the ranges of valuations resulting from any particular analysis described above should not be taken to be Capitalink’s view of the actual value of S&J. To the contrary, Capitalink has expressed no opinion on the actual value of S&J, and its opinion extends only to its belief that the cash consideration is fair, from a financial point of view, to the stockholders other than Parent.

In performing its analyses, Capitalink made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of S&J and Capitalink. The analyses performed by Capitalink are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those suggested by such analyses. The analyses do not purport to be an appraisal or to reflect the prices at which S&J might actually be sold or the prices at which any of its securities may trade at any time in the future. Accordingly, actual results of these analyses are subject to substantial uncertainty and could vary significantly from those set forth in such projections.

As described above, the opinion of Capitalink delivered to the Finance Committee on June 14, 2007 and the accompanying presentation to the Finance Committee summarized above were among the many factors taken into consideration by the Finance Committee in making its determination to adopt the Merger Agreement and the merger, and to recommend the merger to the stockholders for their adoption. Capitalink does not, however, make any recommendation to the stockholders (or to any other person or entity) as to whether such stockholders should vote for or against the merger.

Capitalink was selected by the Finance Committee to render a fairness opinion in connection with the transaction because of Capitalink’s reputation and expertise as an investment banking firm. Capitalink, as part of its investment banking business, is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, underwritings of equities, private placements and valuations for estate, corporate and other purposes. In the ordinary course of its business, Capitalink may actively trade our securities for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short term position in such securities.

Pursuant to the engagement letter with Capitalink, we agreed to pay Capitalink: $62,500.

In addition to any fees for professional services, we have agreed to reimburse Capitalink, upon request, for certain reasonable out-of-pocket expenses incurred in connection with Capitalink’s carrying out the terms of the engagement letter. We also agreed to indemnify Capitalink, to the fullest extent permitted by law or equity, against claims related to (i) the use of information provided to Capitalink by S&J, its agents, representatives and advisors, (ii) any of the services rendered pursuant to the engagement letter or (iii) matters which are the subject of, or arise out of, the engagement of Capitalink contemplated by the engagement letter, including liabilities under the federal securities laws. Except for the fees set forth above, neither S&J nor any of its affiliates has paid any fee to Capitalink nor engaged Capitalink in any material relationship.

The Finance Committee did not impose any restrictions or limitations upon Capitalink with respect to the investigations made or the procedures that Capitalink followed in rendering its opinion.

The foregoing summary does not purport to be a complete description of the analyses performed by Capitalink or the terms of its engagement by the Finance Committee. The foregoing summary of the analyses performed by Capitalink is qualified in its entirety by reference to the opinion of Capitalink attached as Exhibit B to this proxy statement.

Purpose and Structure of the Merger

For S&J, the purpose of the merger is to allow our stockholders to realize the value of their investment in S&J in cash at a price that represents a premium over the market price of our common stock before the public announcement of the Merger Agreement and to take S&J private by purchasing all of the outstanding shares of capital stock. For the Parent, the purpose of the merger is also to allow it to acquire complete ownership of S&J and to increase the amount of S&J it currently owns. Moreover, our Board of Directors believes that, because of the limited liquidity of the shares of our common stock and the undervaluation of the common stock in the public market, S&J has not been able to fully realize the benefits of public company status. At the same time, the public company status has imposed substantial costs and a number of limitations on S&J and our management in conducting our operations. Accordingly, one of the purposes of the merger is to afford greater operating flexibility, allowing management to concentrate on long-term growth and to reduce its attention to the quarter-to-quarter performance often emphasized by the public markets. Further, the merger is intended to enable us to use in our operations those funds that would otherwise be expended in complying with requirements applicable to public companies.

The transaction has been structured as a cash merger. Parent acknowledges that the structure of the merger was mutually determined and was designed to, among other things, allow for a direct and negotiated agreement with S&J by way of the Finance Committee, rather than by way of a tender offer or other direct-to-stockholders structure.

S&J’s purpose in submitting the merger to the vote of its stockholders with a favorable recommendation at this time is to allow the stockholders other than the Parent an opportunity to receive a cash payment at a fair price and provide a prompt and orderly transfer of ownership of S&J to the Parent and provide the stockholders (other than the Parent) with cash for all of their shares of our common stock. As noted above, S&J for a significant period of time unsuccessfully had been exploring strategic alternatives with its investment advisors engaged specifically for that purpose. Parent did not select the timing of the merger based on any material non-public information.

Effects of the Merger

Upon completion of the merger, S&J will have been merged into Newco, a privately held corporation owned by the Parent. After the merger, Parent may offer equity interests in UPI to senior officers of the surviving corporation although the amount and nature of such interest has not yet been determined.

As a result of the merger, Newco, as the surviving corporation, will be a privately held corporation, and there will be no public market for our common stock. After the merger, the shares of our common stock will cease to be traded on the Pink Sheets in the over the counter market, and price quotations of sales of shares of our common stock in the public market will no longer be available. In addition, registration of our common stock under the Exchange Act will be terminated. This termination will make most provisions of the Exchange Act, such as the short-swing profit recovery provisions of Section 16(b) and the requirement of furnishing a proxy or information statement in connection with stockholders’ meetings, no longer applicable. After the effective time of the merger, Newco will no longer be required to file periodic reports with the Securities and Exchange Commission.

At the effective time of the merger, the directors of Newco will become the directors of the surviving corporation and the current management of S&J is expected, in general, to remain the management of the surviving corporation. At the effective time of the merger, Newco’s articles of incorporation and bylaws will become surviving corporations articles of incorporation and the bylaws.

It is expected that, following completion of the merger, the operations of S&J will be conducted substantially as they are currently being conducted. S&J and the Parent do not have any present plans or proposals that relate to or would result in an extraordinary corporate transaction following completion of the merger involving

S&J’s corporate structure, business or management, such as a merger, reorganization, liquidation, relocation of any operations or sale or transfer of a material amount of assets. However, S&J and the Parent will continue to evaluate S&J’s business and operations after the merger and may develop new plans and proposals that S&J and the Parent consider to be in the best interests of S&J and its then current stockholders. Because S&J has experienced net losses in recent years, the Parent may indirectly benefit to the extent the Company’s operating loss carry forwards can be utilized by the surviving corporation in the future. The operating loss carry forwards cannot be passed from the Company to the Parent for direct use by the Parent. The Company's gross deferred tax assets in respect of tax loss carry forwards and other tax credits relate to operating loss carry forwards in the Company's UK, US French and Australian companies totaling approximately $9.4 million and to other UK tax credits of approximately $15.5 million. The Company's net operating losses arising in the UK, France and Australia can be carried forward without time expiration while the US tax losses expire at various dates between 2017 and 2020. A recent history of operating losses and other factors has precluded the Company from demonstrating that it is more likely than not that the benefits of these domestic and foreign operating loss carry forwards and other tax credits will be realized. Accordingly, at September 30, 2006, a valuation allowance of $24.9 million has been recorded against these losses.

The following table sets forth for Parent and each Management Stockholder their interest in our net book value and net income based upon the percentage of their beneficial ownership of our capital stock as of March 31, 2007.



	Ownership Percent	Net Book Value(1)	Net Income(2)
United Pacific Industries Limited	61.78%	$13,825,746	($4,002,726)
William Fletcher, CEO of Spear & Jackson UK	0	N.A.	N.A.
Patrick J. Dyson, Chairman, CFO, Secretary, and Director	0	N.A.	N.A.
Lewis Hon Ching Ho, Director and Chief Administrative Officer	0	N.A.	N.A.
Dr. Preston Jones, Director of S&J	0	N.A.	N.A.

———————

(1) Based on S&J’s stockholders’ equity as of March 31, 2007 (unaudited).

(2) Based on S&J’s net income for the fiscal year ended September 30, 2006.

Risks that the Merger Will Not Be Completed

Completion of the merger is subject to various risks, including, but not limited to, the following:



that S&J, Parent or Newco will not have performed in all material respects their obligations contained in the Merger Agreement before the effective time of the merger;



that the representations and warranties made by S&J, Parent or Newco in the Merger Agreement will not be true and correct at the closing date of the merger;



that there may be new litigation that could prevent the merger, cause the merger to be rescinded following completion of the merger or that could have a material adverse effect on S&J.

As a result of various risks to the completion of the merger, there can be no assurance that the merger will be completed even if the requisite stockholder approval is obtained. It is expected that, if our stockholders do not adopt and approve the Merger Agreement or if the merger is not completed for any other reason, the current management of S&J, under the direction of our Board of Directors, will continue to manage S&J as an ongoing business.

Interests of the Parent in the Merger

In considering the recommendations of our Board of Directors, our stockholders should be aware that Parent has interests different from our stockholders generally. As a result of the potential conflict of interest, our Board of Directors appointed the Finance Committee, consisting of one independent director who is not an officer or employee of S&J and who has no financial interest in the merger. The Finance Committee was empowered to evaluate, negotiate and recommend the Merger Agreement and to evaluate whether the merger is in the best interests of our stockholders other than Parent. The Finance Committee was aware of these differing interests and considered them, among other matters, in evaluating and negotiating the Merger Agreement and the merger and in recommending to our Board of Directors that the Merger Agreement and the merger be adopted and approved.

Interests of Our Directors and Executive Officers in the Merger

In considering the recommendation of our Board of Directors with respect to the merger, you should be aware that some of our directors and executive officers have interests in the merger that are different from, or in addition to, the interests of our stockholders generally. These interests may present them with actual or potential conflicts of interest, and these interests, to the extent material, are described below. Our Board of Directors was aware of these interests and considered them, among other matters, in approving the Merger Agreement and the merger.

Change in Control Protection Agreements

Patrick J. Dyson has an employment agreement which provides that in the event of termination of employment other than for cause, Mr. Dyson would be entitled to severance pay equal to twelve months of his current base salary and other benefits.

Indemnification

Article VIII of our amended and restated by-laws includes provisions for indemnification of our officers and directors to the extent permitted by the Nevada Revised Statutes.

S&J and Dr. J. Preston Jones entered into an Indemnification Agreement in June 2007, pursuant to which S&J agreed to indemnify Dr. Jones in his role as a director of S&J to the fullest extent permitted by Nevada law, including, but not limited to, indemnification in third party proceedings, indemnification in derivative actions, indemnification for expenses as a witness, contribution where indemnification is unavailable, and advancement of expenses.

Section 78.7502 of the Nevada Revised Statutes authorizes a corporation to indemnify its directors, officers, employees or agents in non-derivative suits if such party acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Section 78.7502 further provides that indemnification shall be provided if the party in question is successful on the merits or otherwise.

The Merger Agreement provides that the surviving corporation will continue to honor all indemnification obligations in force as of the date of the Merger Agreement and will not amend, repeal or otherwise modify those obligations in a way that would adversely affect the rights of the individuals who are covered by the indemnification obligations.

Positions with the S&J Post Closing

Although there can be no assurances, it is expected that, in general, our current management will remain management of S&J following completion of the merger on the same terms as their current employment. Our current executive officers are expected to remain officers of the S&J following completion of the merger.

Compensation of the Sole Member of the Finance Committee

The sole member of the Finance Committee receives US $30,000 per annum with respect to his service on our Board of Directors and the Finance Committee, and will receive an additional US $30,000 upon completion of his duties as an independent director.

Continuing Equity Interests of the Parent

The Parent will own 100% of the equity interests in the surviving corporation.

Merger Financing

It is estimated that approximately $5 million will be required by Parent to complete the merger and pay related fees and expenses. This sum will be paid directly from acquisition financing and existing capital of Parent. The source of the acquisition financing is Orix Asia Limited, a restricted license bank in Hong Kong.The parties have entered into a definitive loan agreement dated August 22, 2007, for approximately US $5 million. The borrower under the loan agreement is Pantene, with UPI and its wholly owned subsidiaries Pantene Industrial Co. Ltd and Pin Xin International Ltd. serving as guarantors. The maximum term of the loan facility is 36 months. The interest rate is 4.75% per annum, with principal and interest payable monthly during the term. The borrower's obligations under the facility are secured by a security interest in certain equipment with a value of at least HK$10 million. The loan agreement provides for the following material conditions to funding: (i) joint and several corporate guarantees being given by UPI and its wholly owned subsidiaries Pantene Industrial Co. Ltd and Pin Xin International Ltd; (ii) the creation of a security interest in equipment valued at HK$10 million to secure the loan; (iii) insurance coverage on the equipment that is serving as collateral; (iv) an undertaking by Mr. Brian Beazer, the Chairman of UPI, not to dispose of or reduce his shareholding in UPI during the term of the loan; (v) due notice of drawdown being given; (vi) all relevant organizational documents and resolutions of Pantene and the corporate guarantors being provided to Orix; and (vii) there being no material adverse change in the business, financial condition, operations or prospects of Pantene or the other corporate guarantors. No alternative financing arrangements or alternative financing plans have been made in the event the loan facility described herein is not available as anticipated. Parent does not have any specific plans or arrangements in place to finance or repay the loan, but anticipates repaying the loan from working capital.

S&J estimates it will incur approximately $275,000 in fees and expenses to complete the merger which will be funded out of working capital. See “Estimated Fees and Expenses of the Merger.”

Estimated Fees and Expenses of the Merger

Whether or not the merger is completed, in general, all fees and expenses incurred in connection with the merger will be paid by the party incurring those fees and expenses.

S&J’s fees and expenses of the merger are estimated to be as follows:



Description	Amount
Filing Fees (SEC)	$459.77
Capitalink Fees	$62,500
Legal Fees and expenses	$150,000
Accounting fees and expenses	$35,000
Printing and mailing costs	$25,000
Miscellaneous	$2,040.23
Total	$275,000

These expenses will not reduce the merger consideration to be received by our stockholders.

Federal Income Tax Considerations

Upon completion of the merger, each of the outstanding shares of our common stock (other than those held by the Parent and other than shares as to which dissenter’s rights are properly exercised) will be converted into the right to receive merger consideration of $1.96 in cash, without interest.

The following discussion is a summary of the principal United States federal income tax consequences of the merger to stockholders whose shares are surrendered pursuant to the merger (including any cash amounts received by dissenting stockholders pursuant to the exercise of dissenter’s rights). The discussion applies only to stockholders in whose hands shares of our capital stock are capital assets, and may not apply to shares of our capital stock received pursuant to the exercise of employee stock options or otherwise as compensation, or to stockholders who are not citizens or residents of the United States.

The United States federal income tax consequences set forth below are based upon present law. Because individual circumstances may differ, each stockholder is urged to consult their own tax advisor to determine the applicability of the rules discussed below to them and the particular tax effects of the merger, including the application and effect of state, local and other tax laws.

The receipt of cash pursuant to the merger (including any cash amounts received by dissenting stockholders pursuant to the exercise of dissenter’s rights) will be a taxable transaction for federal income tax purposes under the Internal Revenue Code of 1986, as amended, and also may be a taxable transaction under applicable state, local and other income tax laws. In general, for federal income tax purposes, a stockholder will recognize gain or loss equal to the difference between the cash received by the stockholder pursuant to the merger and the stockholder’s adjusted tax basis in the shares of our capital stock surrendered in the merger. Such gain or loss will be capital gain or loss and will be long term gain or loss if, on the effective date of the merger, the shares of our capital stock were held for more than one year. There are limitations on the deductibility of capital losses.

Payments in connection with the merger may be subject to “backup withholding” at a 28% rate. Backup withholding generally applies if the stockholder fails to furnish such stockholder’s social security number or other taxpayer identification number, or furnishes an incorrect taxpayer identification number. Backup withholding is not an additional tax but merely an advance payment, which may be refunded to the extent it results in an overpayment of tax. Certain persons generally are exempt from backup withholding, including corporations and financial institutions. Certain penalties apply for failure to furnish correct information and for failure to include the reportable payments in income. Stockholders should consult with their own tax advisors as to the qualifications for exemption from withholding and procedures for obtaining such exemption.

Neither Parent nor Newco will recognize gain or loss for United States federal tax purposes as a result of the merger.

Anticipated Accounting Treatment of Merger

It is expected that the merger will be treated as a recapitalization for accounting purposes. A recapitalization would not effect any change in the accounting basis of the assets or liabilities presented in the stand-alone financial statements of the operating entity, and the consideration paid for the shares would be accounted for as a reduction in equity.

Certain Regulatory Matters

S&J, Newco and the Parent do not believe that any governmental filings are required with respect to the merger other than (a) the filing of the articles of merger with the Secretary of State of the State of Nevada, and (b) filings with the Securities and Exchange Commission. S&J, Parent, and Newco do not believe that they are required to make a filing with the Department of Justice and the Federal Trade Commission pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. UPI has certain disclosure obligations under the rules of the Hong Kong Stock Exchange and, in seeking the approval of its stockholders for the Merger, may require clearance of a circular to stockholders from the Hong Kong Stock Exchange.

Dissenter’s Rights

General. Under Sections 92A.300 to 92A.500 of the Nevada Revised Statutes, referred to as the “NRS,” any holder of common stock who does not wish to accept merger consideration of $1.96 per share in cash for the holder’s shares of common stock may exercise dissenter’s rights under the NRS and elect to have the fair value of the holder’s shares of common stock on the date of the merger (exclusive of any element of value arising from the accomplishment or expectation of the merger) judicially determined by a Nevada court and paid to the holder in cash, together with a fair rate of interest, if any is due, provided that the holder timely complies with the provisions of Sections 92A.300 to 92A.480 of the NRS.

The following discussion is not a complete statement of the law pertaining to dissenter’s rights under the NRS, and is qualified in its entirety by the full text of Sections 92A.300 to 92A.500 of the NRS, as it then exists, which provisions are provided in their entirety as Exhibit C to this proxy statement. All references in the NRS and in this summary to a “stockholder” are to the record holder of the shares of common stock as to which dissenter’s rights are asserted. A person having a beneficial interest in shares of capital stock held of record in the name of another person, such as a broker or nominee, who elects to seek appraisal rights, must act promptly to cause the record holder to follow the steps summarized below properly and in a timely manner to perfect their dissenter’s rights.

Under Section 92A.410(1), where a proposed merger is to be submitted for adoption and approval at a meeting of stockholders, as in the case of the special meeting contemplated in this situation, the subject corporation, must notify each of its stockholders entitled to dissenter’s rights that dissenter’s rights are applicable and include in that notice a copy of Sections 92A.300 to 92A.500 of the NRS as it then exists. This proxy statement constitutes that notice to the holders of common stock, and the applicable statutory provisions of the NRS are attached to this proxy statement as Exhibit C. Any stockholder who wishes to exercise dissenter’s rights or who wishes to preserve that right should review carefully the following discussion and Exhibit C to this proxy statement. Moreover, because of the complexity of the procedures for exercising the right to seek appraisal of the common stock, we believe that stockholders who consider exercising such dissenter’s rights should seek the advice of counsel, which counsel or other appraisal services will not be compensated for those services by S&J. Failure to comply with the procedures specified in Sections 92A.300 to 92A.500 in a timely and proper manner may result in the loss of dissenter’s rights and payment of the merger consideration of $1.96 per share in cash.

Filing Written Objection. Any stockholder who wishes to assert dissenter’s rights under Sections 92A.300 to 92A.500 of the NRS must satisfy each of the following conditions:



as more fully described below, before the vote on the Merger Agreement and the merger at the special meeting, the holder must deliver to Spear & Jackson, Inc., 12012 Southshore Boulevard, Suite 103, Wellington, Florida 33414, Attn: Patrick J. Dyson, Chairman and Chief Financial Officer, written notice of the holder’s intent to demand payment for the holder’s shares if the merger is completed; and



the holder must either not vote on the Merger Agreement and merger proposal, or must vote the holder’s shares “AGAINST” the Merger Agreement and the merger either by proxy or in person pursuant to Section 92A.420 of the NRS. A vote "FOR" the Merger Agreement or the merger will constitute a waiver of appraisal rights.

The written notice of the holder’s intent to demand payment for the holder’s shares must be in addition to and separate from any proxy or vote. Neither voting (in person, by proxy, via the Internet, or by phone) against, abstaining from voting, or failing to vote on the Merger Agreement or the merger will constitute a written notice of intent to demand payment within the meaning of Section 92A.420.

Notice by Newco. Within 10 days after the effective time of the completion of the merger, Newco, as the entity surviving the merger of S&J into Newco, must send a written dissenter’s notice to all stockholders who (1) sent written notice of the holder’s intent to demand payment for the holder’s shares if the merger is completed in

accordance with Section 92A.420 and (2) have not voted to approve and adopt, nor consented to, the Merger Agreement or the merger and are otherwise eligible for appraisal rights.

The dissenter’s notice will specify where holders should send their demand for payment, and where and when holders must deposit their stock certificates, if any. The dissenter’s notice will also inform holders of shares not represented by certificates of the extent to which the transfer of their shares will be restricted after their demand for payment is received. The dissenter’s notice will also include a form for demanding payment that references the date the merger was first publicly announced. The holder asserting dissenter’s rights must certify on this form whether or not the holder acquired beneficial ownership of the shares before the date the merger was first publicly announced. The dissenter’s notice will also set a date by when Newco must receive the demand for payment, which may not be less than 30 days or more than 60 days after the date the dissenter’s notice is delivered. Along with the dissenter’s notice, Newco will provide holders the current version of Sections 92A.300 through 92A.500 of the NRS.

If, after receiving a dissenter’s notice, the holder still wishes to proceed to exercise dissenter’s rights, the holder must timely demand payment, certify whether the holder acquired beneficial ownership of the shares before the date set forth in the dissenter’s notice, and deposit the holder’s certificates, if any, in accordance with the terms of the dissenter’s notice. Failure to demand payment timely and property or failure to deposit certificates as described in the dissenter’s notice may, at the discretion of Newco, terminate the holder’s right to receive payment pursuant to the Nevada dissenter’s rights statute. The holder’s rights as a stockholder, except as otherwise stated by the NRS, will continue until those rights are cancelled or modified by the completion of the merger.

Payment for shares. Within 30 days after the holder’s properly executed demand for payment, the holder will receive what Newco has determined to be the fair value of the holder’s S&J shares, plus accrued interest (computed from the effective date of the merger until the date of payment). The payment will be accompanied by S&J’s balance sheet as of the end of a fiscal year not more than 16 months before the date of payment, an income statement for that year, a statement of changes in the stockholders’ equity for that year, and the latest available interim financial statement(s), if any. Newco will also include an explanation of how it estimated the fair value of the shares and how the accrued interest was calculated, along with information regarding the holder’s right to challenge the fair value determined by Newco. A copy of the current version of Sections 92A.300 to 92A.500 of the NRS will also be included.

Newco may elect to withhold payment from the holder of any dissenting shares if the holder became the beneficial owner of the shares on or after the date set forth in the dissenter’s notice as the date of the first public announcement of the merger. If Newco withholds payment, after the merger, Newco will estimate the fair value of the shares, plus accrued interest, and offer to pay this amount to the holder as full satisfaction of the holder’s demand of payment. The offer will contain a statement of Newco’s determination of the fair value for S&J shares, an explanation of how the accrued interest was calculated, and a statement of dissenter’s right to demand payment under Section 92A.480 of the NRS.

Determination of fair value. If the holder believes that the amount Newco paid in exchange for the holder’s dissenting shares is less than the fair value of the holder’s shares, or that the interest is not correctly determined, the holder may demand payment of the difference between the holder’s estimate and Newco’s estimate of S&J’s fair value per share. The holder must make such demand in writing and within 30 days after Newco has made or offered payment for the holder’s shares.

If there is still disagreement about the fair market value, Newco, within 60 days after the Company receives the holder’s demand, will petition the District Court of the appropriate county within Nevada to determine the fair value of the S&J shares and the accrued interest offered and paid. If Newco does not commence such legal action within the 60-day period, Newco will be required to pay each dissenting holder whose demand remains unsettled the amount demanded.

All dissenters whose demands remain unsettled will be made parties to the proceeding, and are entitled to seek a judgment for either (a) the amount, if any, of the fair value of the holder’s shares, plus interest, in excess of the amount Newco paid; or (b) the fair value, plus accrued interest, of the holder’s after-acquired shares for which Newco withheld payment, plus accrued interest, pursuant to Section 92A.470 of the NRS.

Newco will pay the costs and expenses of the court proceeding unless the court finds the dissenters acted arbitrarily, vexatiously, or in bad faith, in which case the costs will be equitably distributed as and against Newco and the dissenters and not necessarily in equal manner. Attorney’s fees will be divided as the court considers equitable.

Stockholders should be aware that the fair value of their shares as determined in a legal proceeding in accordance with Section 92A.490 of the NRS could be more than, the same as or less than the cash consideration of $1.96 per share of common stock the holder would receive under the Merger Agreement.

Any stockholder wishing to exercise dissenter’s rights is urged to consult legal counsel before attempting to exercise dissenter’s rights. Failure to comply strictly with all of the procedures set forth in Sections 92A.300 to 92A.480 of the Nevada Revised Statutes may result in the loss of a stockholder’s statutory dissenter’s rights.

SPEAR & JACKSON, INC. HISTORICAL FINANCIAL DATA

Our selected historical financial data presented below as of and for the years ended September 30, 2006, 2005, 2004, 2003, and 2002 are derived from our audited consolidated financial statements. The following selected historical financial data should be read in conjunction with our most recent Annual Report on Form 10-K which is attached as Exhibit D.



	For the 9 Months Ended June 30, 2007		For the Fiscal Years Ended September 30
	(UNAUDITED)	2006	2005	2004	2003	2002
	US$’000 (Except earnings (loss) per share)	US$’000 (Except earnings (loss) per share)	US$’000 (Except earnings (loss) per share)	US$’000 (Except earnings (loss) per share)	US$’000 (Except earnings (loss) per share)	US$’000 (Except earnings (loss) per share)

Income Statement Data
Total revenues	82,715	96,993	100,698	99,485	90,124	87,886
Costs and expenses	(54,191)	(67,896)	(67,463)	(67,574)	(61,838)	(61,954)
Other operating expenses
Including Selling, General and administrative expenses and
Depreciation	(29,980)	(36,078)	(31,405)	(29,753)	(21,909)	(27,250)
Exceptional items	192	(692)	2,168	-	-	-
Total costs and expenses	(82,979)	(104,666)	(96,700)	(97,327)	(83,747)	(89,204)
Operating income	(1,264)	(7,673)	3,998	2,158	6,377	(1,318)
Interest expense, net	18	27	47	(300)	(237)	(234)
Other income, net	272	247	157	184	136	138
Taxation:	(136)	973	(468)	(1,205)	(1,497)	(948)
Income (loss) from continuing operations	(1,110)	(6,426)	3,734	837	4,779	(2,362)
Income (loss) from discontinued operations	—	(53)	(639)	(401)	(163)	(1,150)
Net income (loss)	(1,110)	(6,479)	3,095	436	4,616	(3,512)
Income (loss) available to common shareholders	(1,110)	(6,479)	3,095	436	4,616	(3,512)
Basic and diluted earnings (loss) per share:
Continuing Operations	(0.19)	(1.12)	0.42	0.07	0.40	(0.58)
Discontinued Operations	—	(0.01)	(0.02)	(0.03)	(0.01)	(0.28)
Total basic and diluted earnings (loss) per share	(0.19)	(1.13)	0.35	0.04	0.39	(0.86)



	For the 9 Months Ended June 30, 2007		For the Fiscal Years Ended September 30
	(UNAUDITED)	2006	2005	2004	2003	2002
	US$’000 (Except earnings (loss) per share)	US$’000 (Except earnings (loss) per share)	US$’000 (Except earnings (loss) per share)	US$’000 (Except earnings (loss) per share)	US$’000 (Except earnings (loss) per share)	US$’000 (Except earnings (loss) per share)

Balance Sheet Items
Total Assets	93,252	83,260	83,090	85,756	79,600	73,920
Long Term Obligations	(48,104)	(41,264)	(36,703)	(34,717)	(27,049)	(21,419)
Total Liabilities	(70,254)	(61,419)	(56,887)	56,317	(47,748)	(44,616)

MARKET AND MARKET PRICE

Market Information

Our common stock is traded publicly on the Pink Sheets in the over the counter market. The table below represents the quarterly high and low bid and asked prices for our common stock for our last three fiscal years and the first three quarters of our current fiscal year. The prices listed in this table reflect quotations without adjustment for retail mark-up, mark-down or commission, and may not represent actual transactions.



	High Closing Price	Low Closing Price

Fiscal Year Ending 9/30/2007
Third Quarter	$1.91	$1.02
Second Quarter First Quarter	$1.25 $1.17	$1.05 $.095
Fiscal Year Ended 9/30/2006
Fourth Quarter	$1.35	$1.02
Third Quarter	$1.62	$1.10
Second Quarter	$1.75	$1.00
First Quarter	$1.20	$0.95
Fiscal Year Ended 9/30/2005
Fourth Quarter	$1.53	$1.05
Third Quarter	$1.85	$1.15
Second Quarter	$1.90	$1.15
First Quarter	$1.40	$0.68
Fiscal Year Ended 9/30/2004
Fourth Quarter	$1.64	$1.05
Third Quarter	$3.10	$1.15
Second Quarter	$5.45	$2.62
First Quarter	$5.45	$3.50

On May 14, 2007, the last full trading day before the public announcement of UPI’s initial offer of $1.483 per share, the closing sale price of our common stock as reported on the Pink Sheets of the over the counter market was $1.02 per share. On June 22, 2007, the last full trading day before the public announcement of the signing of the Merger Agreement, the closing sale price of our common stock was $1.47 per share. On September 20, 2007, the

last practicable trading day for which information was available prior to the date of the first mailing of this proxy statement, the closing price per share of our common stock as reported on the Pink Sheets of the over the counter market was $1.92. Stockholders should obtain a current market quotation for our common stock before making any decision with respect to the merger.

Number of Stockholders

As of September 10, 2007, there were 5,735,561 outstanding shares of our common stock, 17 record holders of our common stock, and approximately 683 beneficial owners of our common stock.

Dividends

We have never paid cash dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future. If the merger is not completed, we intend to retain most of our future earnings to finance future growth.

THE SPECIAL MEETING

General

This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by our Board of Directors for use at the special meeting of stockholders to be held at 200 East Las Olas Boulevard, Suite 1700, Fort Lauderdale, Florida 33301, on October 18, 2007, beginning at 10:00 a.m. local time, and at any adjournments or postponements thereof. This proxy statement is accompanied by a form of proxy for use at the special meeting.

This proxy statement and the accompanying form of proxy are being mailed to stockholders on or about September 26, 2007.

Matters to be Considered at the Special Meeting

At the special meeting, the stockholders will be asked to consider and vote upon the following proposals:



to adopt and approve the Merger Agreement pursuant to which S&J will be merged with and into Newco with Newco being the surviving corporation,.



if there are not sufficient votes at the time of the special meeting to approve the Merger Agreement, the stockholders will be asked to consider and vote upon a proposal to adjourn the special meeting to permit further solicitation of proxies.

If the requisite votes in favor of the proposal to adopt and approve the Merger Agreement are obtained and certain other conditions are satisfied or, where permissible, waived, S&J will be merged with and into Newco with Newco being the surviving corporation. At the effective time of the merger, each share of our common stock outstanding immediately prior to the filing of a articles of merger with the Secretary of State of the State of Nevada will be converted into the right to receive merger consideration of $1.96 in cash, without interest, except for:



shares of our common stock held by Parent;



shares for which dissenter’s rights have been properly perfected under Sections 92A.300 through 92A.500 of the Nevada Revised Statutes, which will be entitled to receive the consideration provided for by the Nevada Revised Statutes; and



shares held by S&J in treasury at the effective time of the merger, which will be canceled without payment.

Like all other S&J stockholders, members of management and our Board of Directors will be entitled to receive the merger consideration for each of his or her shares of our common stock held, if any, at the time of the merger.

S&J does not expect a vote to be taken at the special meeting on any matter other than the proposal to adopt and approve the Merger Agreement and if necessary, the adjournment. However, if any other matters are properly presented at the special meeting for consideration, the holders of the proxies will have discretion to vote on these matters in accordance with their best judgment.

Record Date and Voting Information

Only holders of record of our common stock at the close of business on September 10, 2007 will be entitled to notice of and to vote at the special meeting. At the close of business on July 5, 2007, there were outstanding and entitled to vote an aggregate of 5,735,561 shares of our common stock. Each share of our common stock is entitled to one vote. A list of our stockholders will be available for review at our executive offices during regular business hours for a period of 10 days before the special meeting. Each holder of record of our common stock on the record date will be entitled to one vote for each share held.

All votes will be tabulated by the inspector of elections appointed for the special meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes. Brokers who hold shares in street name for clients typically have the authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, absent specific instructions from the beneficial owner of the shares, brokers are not allowed to exercise their voting discretion with respect to the adoption and approval of non-routine matters, such as the Merger Agreement. Proxies submitted without a vote by the brokers on these matters are referred to as “broker non-votes.” Abstentions and broker non-votes are counted for purposes of determining whether a quorum exists at the special meeting.

The affirmative vote of a majority of our outstanding shares of common stock entitled to vote at the special meeting is required to adopt and approve the Merger Agreement. Each outstanding share of our common stock will be entitled to one vote. The shares of our common stock held by the Parent constituted 61.78% of the aggregate number of outstanding shares of our common stock on the record date, and, therefore, Parent has sufficient votes to adopt and approve the Merger Agreement and the merger. While we anticipate that Parent will vote in favor of the Merger Agreement, Parent does not have a contractual obligation and is not otherwise required to vote in favor of the Merger Agreement. The adoption and approval of the Merger Agreement does not require the approval of the holders of a majority of the shares held by our nonaffiliated stockholders.

Abstentions and broker non-vote will have the same effect as a vote AGAINST adoption and approval of the Merger Agreement in the determination of whether a majority of our stockholder approve the Merger Agreement and will have no effect on a motion to adjourn or postpone the special meeting.

With the exception of broker non-votes, the treatment of which is discussed above, each share of our common stock represented by a proxy properly executed and received by S&J in time to be voted at the special meeting and not revoked will be voted in accordance with the instructions indicated on such proxy and, if no instructions are indicated, will be voted “FOR” the proposal to adopt and approve the Merger Agreement and, to the extent necessary be voted “FOR” a motion to adjourn or postpone the special meeting to another time and/or place for the purpose of soliciting additional proxies or otherwise. Any proxy which specifically abstains from voting, will not be voted in favor of the Merger Agreement or any such adjournment or postponement.

Quorum

The presence, in person or by proxy, of the holders of a majority of the aggregate outstanding shares of our common stock entitled to vote at the special meeting is necessary to constitute a quorum for the transaction of business at the special meeting. Abstentions and broker non-votes are counted for purposes of determining whether a quorum exists at the special meeting.

Proxies; Revocation

Any person giving a proxy pursuant to this solicitation has the power to revoke it at any time before it is voted. It may be revoked by filing with our Secretary at our executive offices located at 12012 Southshore Boulevard, Suite 103, Wellington, Florida 33414, a written notice of revocation or a duly executed proxy bearing a later date, or it may be revoked by attending the special meeting and voting in person. Attendance at the special meeting will not, by itself, revoke a proxy. Furthermore, if a stockholder’s shares are held of record by a broker, bank or other nominee and the stockholder wishes to vote at the meeting, the stockholder must obtain a proxy from the record holder.

Expenses of Proxy Solicitation

We will bear the entire cost of solicitation of proxies, including preparation, assembly, printing and mailing of this proxy statement, the proxy and any additional information furnished to stockholders. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding in their names shares of common stock beneficially owned by others for forwarding to these beneficial owners. We may reimburse persons representing beneficial owners of common stock for their costs of forwarding solicitation materials to such beneficial owners. Original solicitation of proxies by mail may be supplemented by telephone, telegram or personal solicitation by directors, officers or other regular employees of S&J. No additional compensation will be paid to directors, officers or other regular employees for their services.

Dissenter’s Rights

Stockholders who do not vote in favor of adoption and approval of the Merger Agreement, and who otherwise comply with the applicable statutory procedures of the Nevada Revised Statutes summarized above in this proxy statement, will be entitled to seek appraisal of the value of their capital stock as set forth in Sections 92A.300 through 92A.500 of the Nevada Revised Statutes. See “Special Factors - Dissenter’s Rights.”

Please do not send in stock certificates at this time. In the event the merger is completed, the surviving corporation will distribute instructions regarding the procedures for exchanging our stock certificates for the cash payment.

PARTIES TO THE MERGER AGREEMENT

Spear & Jackson, Inc.

12012 Southshore Boulevard, Suite 103,

Wellington, Florida 33414

(561) 793-7233

Spear & Jackson, Inc. (“S&J”), through its principal operating entities, 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. A more detailed description of our business is contained in our most recent Annual Report on Form 10-K, which is attached as Exhibit D. See also “Where Stockholders Can Find More Information.” Information about certain of our directors and executive officers is set forth in Exhibit D to this proxy statement.

United Pacific Industries Limited

Suite 27-05/06, 27/F.,

Vicwood Plaza

199 Des Voeux Road Central

Hong Kong

Tel: (852) 2802-9988

United Pacific Industries Limited (“UPI” and together with Pantene the “Parent”) is a Bermuda corporation. The principal business of UPI, through its operating subsidiaries other than S&J, is the manufacture and sale of power supply products and electronic components.

Pantene Global Holdings Limited

Suite 27-05/06, 27/F.,

Vicwood Plaza

199 Des Voeux Road Central

Hong Kong

Tel: (852) 2802-9988

Pantene Global Holdings Limited (“Pantene” and together with UPI the “Parent”) is a Hong Kong corporation and wholly owned subsidiary of UPI. The principal business of Pantene is investment holding. Pantene is the registered owner of approximately 61.78% of the outstanding common stock of S&J and 100% of the outstanding common stock of Newco.

Pantene Global Acquisition Corp.

Suite 27-05/06, 27/F.,

Vicwood Plaza

199 Des Voeux Road Central

Hong Kong

Tel: (852) 2802-9988

Pantene Global Acquisition Corp. (“Newco”) is a newly organized Nevada corporation formed and currently wholly owned by Pantene. Immediately following the merger, Newco, as the surviving corporation, will be owned by Pantene. Newco was formed solely for the purpose of engaging in the transactions contemplated by the Merger Agreement.

Related Parties

THE MERGER AGREEMENT

The description of the Merger Agreement contained in this proxy statement describes the material terms of the Merger Agreement. A complete copy of the Merger Agreement, without exhibits, appears in Exhibit A to this proxy statement. You are urged to read the entire Merger Agreement as it is the legal document that governs the merger.

The Merger

The Merger Agreement provides that, subject to the conditions summarized below, Newco will merge with and into S&J. Upon completion of the merger, S&J will cease to exist and Newco will continue as the surviving corporation.

Newco is a Nevada corporation that was created solely for the purposes of the merger.

Effective Time of Merger

The merger will become effective upon the filing of articles of merger with the Secretary of State of the State of Nevada in accordance with the Nevada Revised Statutes or at such later time as is specified in the articles of merger. This time is referred to as the “effective time.” The filing is expected to occur as soon as practicable after adoption and approval of the Merger Agreement by our stockholders at the special meeting and satisfaction or waiver of the other conditions to the merger set forth in the Merger Agreement.

Articles of Incorporation, Bylaws and Directors and Officers the Surviving Corporation

When the merger is completed:



the articles of incorporation of Newco as in effect immediately prior to the effective time will be the articles of incorporation of the surviving corporation;



the bylaws of Newco in effect immediately prior to the effective time will be the bylaws of the surviving corporation;



the directors of Newco immediately prior to the effective time will become the directors of the surviving corporation; and



the officers of Newco immediately prior to the effective time will become officers of the surviving corporation.

Conversion of Capital Stock

At the effective time of the merger, each share of our common stock that is outstanding immediately prior to the filing of articles of merger with the Secretary of State of the State of Nevada will be converted into the right to receive merger consideration of $1.96 in cash, without interest, except for:



shares of our common stock held by Parent;



shares for which Dissenter’s rights have been perfected properly under Sections 92A.300 to 92A.500 of the Nevada Revised Statutes will be entitled to receive the consideration provided for by the Nevada Revised Statutes; and



shares held by S&J in treasury at the effective time of the merger will be canceled without payment.

At the effective time, each outstanding share of capital stock of Newco will remain unchanged.

Payment For Shares

Prior to or simultaneous with the effective time, Parent or Newco will deposit with the paying agent appointed by Parent sufficient funds to pay the merger consideration. Promptly after the effective time, the surviving corporation, will cause to be mailed to each record holder of shares of our common stock immediately prior to the effective time a letter of transmittal and instructions to effect the surrender of their certificate(s) in exchange for payment of the merger consideration. Stockholders should not forward stock certificates to the paying agent until they have received the letter of transmittal.

Each stockholder will be entitled to receive the merger consideration only upon surrender to the paying agent of a share certificate, together with such letter of transmittal, duly completed in accordance with the instructions thereto. If payment of the merger consideration is to be made to a person whose name is other than that of the person in whose name the share certificate is registered, it will be a condition of payment that (a) the share certificate so surrendered be properly endorsed or otherwise in proper form for transfer and (b) the person requesting such exchange pay any transfer or other taxes that may be required to the satisfaction of the paying agent. No interest will be paid or accrued upon the surrender of the share certificates for the benefit of holders of the share certificates on any merger consideration.

Twelve months following the effective time, Parent will cause the paying agent to deliver to Parent or Newco, as the surviving corporation, all cash and documents in its possession, which have been deposited with the paying agent and which have not been disbursed to holders of share certificates. Thereafter, holders of certificates representing shares of our capital stock outstanding before the effective time will surrender their certificates to the surviving corporation, and will be entitled to look only to Parent and the surviving corporation, for payment of any claims for merger consideration to which they may be entitled. S&J, Parent, Newco and the paying agent will not be liable to any person in respect of any merger consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

Transfer of Shares

At the effective time, our stock transfer books will be closed and there will be no further transfers on our records or our transfer agent’s records of certificates representing shares of our capital stock outstanding before the effective time and any such certificates presented to the surviving corporation for transfer will be canceled. From and after the effective time, the holders of share certificates representing shares of our capital stock before the effective time will cease to have any rights with respect to these shares except as otherwise provided for in the Merger Agreement or by applicable law. All merger consideration paid upon the surrender for exchange of those share certificates in accordance with the terms of the Merger Agreement will be deemed to have been issued and paid in full satisfaction of all rights pertaining to the share certificates.

S&J Stockholder Approval

We have agreed to use our reasonable efforts to solicit proxies in favor of the adoption and approval of the Merger Agreement, provided that the Finance Committee and our Board of Directors may each withdraw or modify its respective recommendation relating to the Merger Agreement and the merger if the Finance Committee or our Board of Directors determines in good faith after consultation with its legal advisor that the merger is no longer in the best interests of our stockholders and that such withdrawal or modification is, therefore, advisable in order to satisfy its fiduciary duties to our stockholders.

Indemnification

The Merger Agreement provides that Parent and Newco will, for a period of two years after the effective time of the merger, to the fullest extent permissible under applicable law, continue to honor all our indemnification obligations to our present and former directors, officers, employees and agents against losses in connection with certain claims arising out of, relating to or in connection with any action or omission occurring or alleged to occur on or prior to the effective time of the merger.

Representations and Warranties

The Merger Agreement contains various customary representations and warranties of S&J (which will not survive completion of the merger) relating to, among other things:



our due incorporation, valid existence and good standing;



our corporate power and authority to carry on our business;



our articles of incorporation and bylaws;



authorization, execution, delivery and enforceability of the Merger Agreement and approval of the Merger Agreement by the holders of a majority of the outstanding shares of our capital stock;



the absence of consents, approvals, authorizations or permits of governmental authorities, except those specified in the Merger Agreement, required for S&J to complete the merger;



the absence of any conflicts between the Merger Agreement and our articles of incorporation, as amended, and amended and restated bylaws, and charter or bylaws of any of our subsidiaries, and any applicable laws;



our capitalization;



due incorporation, valid existence and good standing of each of our subsidiaries;



the accuracy of our filings with the Securities and Exchange Commission;



the adequacy and accuracy of our financial statements;



the absence of material liabilities or obligations, except as disclosed in our reports filed with the Securities and Exchange Commission and certain liabilities or obligations specified in the Merger Agreement;



our material compliance with applicable laws and court orders;



the absence of any action, claim, suit, investigation or proceeding actually pending or threatened against us or our subsidiaries that if adversely determined, would, individually or in the aggregate, be reasonably expected to have a material adverse effect on our business or operations, except for those disclosed in our reports filed with the Securities and Exchange Commission;



brokers’, finders’ and investment bankers’ fees;



receipt of Capitalink fairness opinion;



the adequacy and accuracy of tax filings and timeliness of tax payments;



certain matters relating to employees and employee benefit plans;



certain matters relating to leases and real property;



certain matters related to material contracts;



the inapplicability of Nevada anti-takeover laws; and



the adequacy of S&J’s permits.

The Merger Agreement contains various customary representations and warranties of Parent and Newco (which will not survive completion of the merger) relating to, among other things:



the due formation, valid existence and good standing of Parent and due incorporation, valid existence and good standing of Newco;



the authorization, execution, delivery and enforceability of the Merger Agreement;



the absence of consents, approvals, authorization or permits of governmental authorities, except those specified in the Merger Agreement, required for Parent or Newco to complete the merger;



the absence of any conflicts between the Merger Agreement and Parent’s or Newco’s articles of incorporation or bylaws, any applicable law or other contracts or documents;



the accuracy of information concerning information provided by Parent or Newco in connection with this proxy statement;



the accuracy of the information concerning Parent and Newco in this proxy statement; and



brokers’, finders’ and investment bankers’ fees.

All representations and warranties are subject to various qualifications and limitations.

Covenants

We gave an undertaking in the Merger Agreement not to solicit, encourage or facilitate any Acquisition Proposal (as defined in the Merger Agreement), but we may furnish information, or enter into discussions and negotiations with, any person in response to an unsolicited, bona fide written proposal that constitutes or has a reasonable likelihood of resulting in a “Superior Offer.” This is defined to mean an unsolicited bona fide written Acquisition Proposal that our Board of Directors or Finance Committee determines, by resolution duly adopted, in its good faith reasonable judgment, and after consulting with its independent financial advisor, and after taking into account the likelihood and anticipated timing of consummation of such offer, which provides the following: (a) a tender for all, and not less than all, of the minority shares of common stock of the Company, (b) commencement of the tender to occur within fourteen (14) days of the date of the Superior Offer, (c) reasonable and customary closing conditions and no additional material conditions, (d) a financing commitment from a recognized national financing institution, and (e) the potential bidder has been informed and acknowledges that, in accordance with the UK Pensions Act of 2004 (as may be amended from time to time), in certain circumstances, an owner of shares in the Company that exceeds a threshold of 29.9% of the issued and outstanding shares, may be required to make contributions to reduce the underfunded pension liability of certain of the Company’s UK subsidiaries. The exception for a "Superior Offer" does not extend to transactions other than an unsolicited tender offer for all, and not less than all, of the minority stockholders' interests in the Company.

Conduct of Business Pending the Merger

We are subject to restrictions on our conduct and operations until the merger is completed. In the Merger Agreement, we have agreed that, prior to the effective time, we will operate our business only in the ordinary course consistent with past practice and use our commercially reasonable efforts to preserve intact our business organizations and relationships with third parties and to keep available the services of our present officers and employees.

Access to Information

We have agreed to give to Parent, its counsel, financial advisors, auditors and other authorized representatives reasonable access upon prior notice to our offices, properties, books and records and those of our subsidiaries, and to furnish to Parent, its counsel, financial advisors, auditors and other authorized representatives such financial and operating data and other information as such Persons may reasonably request.

Conditions to the Merger

Conditions to Each Party’s Obligation. The obligations of S&J, Parent and Newco to complete the merger are subject to the satisfaction or waiver on or prior to the effective time of the following conditions:



the merger shall have been adopted and approved by the holders of a majority of our outstanding shares of common stock;



the merger shall have been approved by a majority vote of UPI’s stockholders;



obtaining any required consents; and



the absence of any law or regulation or any judgment, injunction, order or decree prohibiting the consummation of the merger.

Conditions to Parent and Newco’s Obligation. The obligations of each of Parent and Newco to complete the merger are subject to the satisfaction, or waiver by Parent and Newco, on or prior to the effective time, of the following conditions:



We shall have performed in all material respects all of our obligations required by the Merger Agreement and we must have delivered a certificate signed by an executive officer of S&J to such effect;



Our representations and warranties shall be true and correct, except where the failure, individually or in the aggregate, has not had, and would not reasonably be expected to have, material adverse effect; and



the absence of any action or proceeding (a) seeking to restrain or prohibit Parent’s ownership or operation of all of all or a material portion of our business or (b) that is reasonably likely to have a material adverse effect on S&J;

Conditions to Our Obligation. Our obligation to effect the merger is subject to the satisfaction, or waiver by us, on or prior to the effective time, of the following conditions:



Each of Parent and Newco must have performed in all material respects all obligations under the Merger Agreement required to be performed at or prior to the effective time and we must have received a certificate signed by an executive officer of Parent to such effect;



The representations and warranties of Parent and Newco shall be true and correct, except where the failure, individually or in the aggregate, has not had, and would not reasonably be expected to have, material adverse effect;



no claim, action, suit, proceeding or investigation shall have been instituted or threatened pursuant to which an unfavorable judgment, order, decree, stipulation or injunction sought would reasonably be expected to (1) prevent any of the material transactions contemplated by the Merger Agreement, or (2) cause any of the material transactions contemplated by the Merger Agreement to be rescinded following the consummation of the transactions;



the fairness opinion of Capitalink shall not have been withdrawn or modified in any material respect.

Termination of the Merger Agreement

S&J, Parent and Newco may agree by mutual written consent to terminate the Merger Agreement at any time before the effective time. In addition, Parent or S&J may terminate the Merger Agreement if:



the merger is not completed on or before December 31, 2007;



a court of competent jurisdiction or other governmental body has issued a final and nonappealable order permanently restraining, enjoining or otherwise prohibiting the consummation of the merger;



any law or regulation, or a claim, action, suit or investigation is threatened or instituted which could reasonably be expected to prevent or rescind the merger;



if a condition to closing of the other party have been rendered impossible to satisfy in a timely manner and is not waived by the party entitled to the benefit thereof;



the merger shall not have been adopted and approved by the stockholders of S&J and UPI.

Parent may terminate the merge agreement if:



We breach any of our representations, warranties or covenants as set forth in the Merger Agreement, such that our representations, warranties and agreements are not met and such condition is incapable of being satisfied by the earlier of 30 written days of notice thereof or December 31, 2007; or



(a) At any time prior to our special meeting we withdraw or modify in a manner adverse to Parent the recommendation of our Board of Directors for the approval of the Merger Agreement and the merger; (b) we fail to include in this proxy statement the recommendation of our Board of Directors; (c) at any time prior to our special meeting our Board of Directors shall approve or publicly endorse or recommend any other acquisition proposal; (d) at any time prior to our special meeting we enter into any letter of intent, acquisition agreement or similar agreement accepting any other acquisition proposal; or (e) at any time prior to our special meeting certain tender or exchange offers relating to our securities shall have been commenced and we fail to timely communicate our recommendation to reject such tender or exchange offer.

We may terminate the Merger Agreement if:



Parent or Newco breaches any of its representations, warranties or covenants as set forth in the Merger Agreement, such that the representations, warranties and agreements of Parent and Newco are not met and such condition is incapable of being satisfied by the earlier of 30 written days of notice thereof or December 31, 2007; or



our Board of Directors has withdrawn its recommendation for the approval of the Merger Agreement and the merger.

However, in the Merger Agreement, we undertook that our Board of Directors will not withdraw or modify its recommendation for the approval of the Merger Agreement and the merger in a manner adverse to Parent, and no resolution will be adopted by our Board or the Finance Committee to withdraw or modify such Board recommendation, unless our Board of Directors or Finance Committee determines in good faith, after taking into account the advice of S&J’s outside legal counsel, that the failure to make such disclosure would be inconsistent with its fiduciary duties or is required by any legal requirement. We also qualified that nothing in the Merger Agreement shall preclude S&J, our Board of Directors or the Finance Committee from complying with Rules 14d-9

and 14e-2(a) or Item 1012(a) of Regulation M-A under the Exchange Act with regard to an Acquisition Proposal as defined in the Merger Agreement.

Generally, if the Merger Agreement is terminated, there will be no liability on the part of S&J, Parent or Newco or any of their affiliates, directors, officers, employers or stockholders, with the exception of the expense reimbursement/breakup fee provisions described below under “Expense Reimbursement.” However, no party will be relieved from liability for willful breaches of the Merger Agreement.

Expense Reimbursement

All fees and expenses incurred in connection with the Merger Agreement and the transactions contemplated by the Merger Agreement will be paid by the party incurring the expenses, whether or not the merger is completed, provided, however, in the event of a termination as a result of the withdrawal by our Board of Directors of its approval of the Merger as a result of the receipt of a superior offer, the person or group of persons making the superior offer will pay the Parent and Newco all reasonable costs and expenses incurred in connection with the Merger Agreement and the transactions set forth therein up to $850,000 plus a breakup fee of $125,000, and in all other cases where our Board withdraws its recommendation, the Company will reimburse the Parent and Newco all reasonable costs and expenses incurred in connection with the Merger Agreement and the transactions set forth therein up to $850,000 plus a breakup fee of $125,000.

Amendments; Extensions; Waivers

Any provision of the Merger Agreement may be amended or waived prior to the effective time if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to the Merger Agreement or, in the case of a waiver, by each party against whom the waiver is to be effective, provided that, no amendment or waiver by us shall be effective unless first approved in writing by the Finance Committee and provided, further, that after the adoption of the Merger Agreement by our stockholders or the UPI stockholders, no amendment shall be made which pursuant to applicable law requires the further approval of our stockholders or the UPI stockholders.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE MERGER AGREEMENT.

PROPOSAL TWO

ADJOURNMENT OF THE

SPECIAL MEETING

If at the special meeting the number of shares of capital stock voting in favor of the adoption of the Merger Agreement is insufficient to approve the merger under Nevada law, our management intends to move to adjourn the special meeting in order to enable our management to solicit additional proxies in favor of the proposal. In that event, we will ask our stockholders to vote upon the adjournment proposal, but not upon the merger proposal.

In the adjournment proposal, we are asking our stockholders to authorize the holder of any proxy solicited by our Board of Directors to vote in favor of granting management the discretionary authority to adjourn the special meeting, and any later adjournments of those meetings, to enable our management to solicit additional proxies in favor of the merger proposal.

If our stockholders approve the adjournment proposal, management could adjourn the meeting and any adjourned session of the meeting and use the additional time to solicit additional proxies in favor of the merger, including the solicitation of proxies from stockholders that have previously voted against the relevant proposal. Among other things, approval of the adjournment proposals could mean that, even though we have received proxies representing a sufficient number of votes against the merger proposal to defeat it, our management could adjourn the special meeting without a vote on the proposal and seek during that period to convince the holders of those shares to change their votes to votes in favor of the proposal.

Our Board of Directors believes that if the number of shares of our common stock voting in favor of the adoption of the merger proposal is insufficient to approve the proposal, it is in the best interests of the our stockholders to enable the our Board of Directors, for a limited period of time, to continue to seek to obtain a sufficient number of additional votes in favor of the proposal to approve it.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT OUR STOCKHOLDERS VOTE FOR THE PROPOSAL TO GRANT OUR MANAGEMENT THE DISCRETIONARY AUTHORITY TO ADJOURN THE SPECIAL MEETING.

STOCK PURCHASE INFORMATION

Purchases by S&J

We have not engaged in any purchase transactions with respect to S&J capital stock.

Purchases by the Parent

On March 23, 2006, UPI entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Jacuzzi Brands, Inc., a Delaware corporation (“Jacuzzi”) and USI American Holdings, Inc., a Delaware corporation (“USI American” and, together with Jacuzzi, the “Seller”) to acquire the 3,543,281 shares of Common Stock of S&J (the “Shares”) owned by the Seller. The Stock Purchase Agreement was amended by Amendment No. 1 to the Stock Purchase Agreement, dated as of May 4, 2006, and was further amended by Amendment No. 2 to the Stock Purchase Agreement, dated as of July 10, 2006. Pursuant to an Assignment Agreement, dated as of July 28, 2006, UPI assigned its rights and obligations under the Purchase Agreement to its wholly-owned subsidiary Pantene. The transaction closed on July 28, 2006 and Pantene acquired the Shares on that date. The total cash consideration paid by the Parent was US $4,960,593.40 ($1.40 per share). Of the total cash consideration, approximately US $3,858,322 was obtained by UPI through bank borrowings from HSBC (Hong Kong) on normal commercial terms, with the balance coming from internal resources.

Purchases by Newco

Neither Newco nor any of its directors or executive officers, has engaged in any transaction with respect to our common stock.

Recent Transactions

Except for the transactions set forth above, there have been no transactions in our capital stock effected during the last 60 days by us, any of our directors or executive officers, Parent, or Newco.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of our common stock as of July 5, 2007 by (i) each person who is known by us to own beneficially more than five percent of the outstanding shares of capital stock, and (ii) each of the named executive officers. Except where otherwise indicated, this information is based upon information provided to us by the named person.



Name and Address	Number of Shares Beneficially Owned (1)(2)	Percentage of Outstanding Shares

United Pacific Industries Limited (3)	3,543,281	61.78%
Loeb Loeb Arbitrage Fund (4)	385,601	6.7%
William Fletcher (5)	—	—
Patrick J. Dyson (6)	—	—
Lewis Hon Ching Ho (7)	—	—
Dr. Preston Jones (8)	—	—
Officers and Directors as a Group	—	—

———————

(1)

Unless otherwise indicated in other footnotes, to the knowledge of S&J, all persons listed have sole voting and investment power with respect to shares of common stock, except to the extent shared with spouses under applicable law.

(2)

In computing the number of shares beneficially owned and the percentage of ownership of that person, shares of common stock subject to options or warrants exercisable within 60 days after the date of the information in the table are deemed outstanding. However, such shares are not deemed outstanding for the purpose of computing percentage ownership of any other person.

(3)

UPI is controlled by Brian C. Beazer, who holds 24.56% of UPI's outstanding shares, and David H. Clarke, who holds 22.88% of UPI's outstanding shares. Voting and investment control of the shares held by UPI is held by UPI's Board of Directors.

(4)

239,969 shares are held directly by Loeb Arbitrage Fund, and the remaining shares are held in the following amounts by the following affiliates of Loeb Arbitrage Fund: Loeb Partners Corporation (23,399), Loeb Offshore Fund Limited (58,355), Loeb Arbitrage B Fund LP (49,090), and Loeb Offshore B Fund Ltd. (14,788). Gideon J. King, the president of the general partner of Loeb Arbitrage Fund, holds investment and voting control over the shares of Loeb Arbitrage Fund.

(5)

William Fletcher is our Chief Executive Officer.

(6)

Patrick J. Dyson is our Chairman, Chief Financial Officer, Secretary, and a director.

(7)

Lewis Hon Ching Ho is our Chief Administrative Officer and a director.

(8)

Dr. Preston Jones is an independent director.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our financial statements as of September 30, 2006 and for each of the years in the three-year period ended September, 2006, have been audited by Chantrey Vellacott DFK LLP, our independent registered public accounting firm, as stated in their report included in our Annual Report on Form 10-K for the year ended September 30, 2006. Representatives of Chantrey Vellacott DFK LLP are expected to be available at the special meeting to respond to appropriate questions of stockholders and to make a statement if they desire to do so.

FUTURE STOCKHOLDER PROPOSALS

If the merger is completed, there will be no public participation in any future meetings of stockholders of S&J. However, if the merger is not completed, S&J stockholders will continue to be entitled to attend and participate in S&J stockholders’ meetings. If the merger is not completed, S&J will inform its stockholders, by press release or other means determined reasonable by S&J, of the date by which stockholder proposals must be received by S&J for inclusion in the proxy materials relating to the annual meeting, which proposals must comply with the rules and regulations of the Commission then in effect.

WHERE STOCKHOLDERS CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. In addition, because the merger is a “going private” transaction, we have filed a Rule 13e-3 Transaction Statement on Schedule 13E-3 with respect to the merger. The Schedule 13E-3, the exhibits to the Schedule 13E-3 and such reports, proxy statements and other information contain additional information about S&J. Amendments to the Schedule 13E-3 will be filed to incorporate by reference any Exchange Act documents filed after the date of the proxy statement and before the date of the stockholder meeting, as well as to reflect any other material changes to the information contained in the Schedule 13E-3.

Our stockholders may read and copy the Schedule 13E-3 and any reports, statements or other information filed by S&J at the Commission’s public reference room at 100 F Street, N.E., Washington, DC 20549. Please call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Our filings with the Commission are also available to the public from commercial document retrieval services and at the website maintained by the Commission located at: “http://www.sec.gov.”

The proxy statement does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is not lawful to make any offer or solicitation in such jurisdiction. The delivery of this proxy statement should not create an implication that there has been no change in our affairs since the date of this proxy statement or that the information herein is correct as of any later date.

Stockholders should not rely on information other than that contained in this proxy statement. We have not authorized anyone to provide information that is different from that contained in this proxy statement. This proxy statement is dated September 21, 2007. No assumption should be made that the information contained in this proxy statement is accurate as of any date other than such date, and the mailing of this proxy statement will not create any implication to the contrary.

EXHIBIT A

AGREEMENT AND PLAN OF MERGER

among:

UNITED PACIFIC INDUSTRIES LIMITED,

a Bermuda corporation;

PANTENE GLOBAL HOLDINGS LIMITED,

a Hong Kong corporation;

PANTENE GLOBAL ACQUISITION CORP.,

a Nevada corporation; and

SPEAR & JACKSON, INC.,

a Nevada corporation

Dated as of June 22, 2007

A-1

TABLE OF CONTENTS



		Page
SECTION 1.	DESCRIPTION OF TRANSACTION	A-6

1.1	Merger of the Company into the Merger Sub	A-6

1.2	Effects of the Merger	A-6

1.3	Closing; Effective Time	A-6

1.4	Articles of Incorporation and Bylaws; Directors and Officers	A-7

1.5	Conversion of Shares	A-7

1.6	Payment Fund	A-8

1.7	Payment Procedures	A-8

1.8	Termination of Payment Fund	A-8

1.9	Closing of the Company’s Transfer Books	A-8

1.10	Lost Certificates	A-9

1.11	No Liability	A-9

1.12	Withholding Rights	A-9

1.13	Further Action	A-9

SECTION 2.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	A-9

2.1	Subsidiaries; Due Organization	A-9

2.2	Capitalization, Etc.	A-10

2.3	SEC Filings; Financial Statements	A-10

2.4	Absence of Changes	A-11

2.5	Title to Assets	A-12

2.6	Real Property; Leasehold	A-12

2.7	Contracts	A-12

2.8	Compliance with Legal Requirements	A-13

2.9	Governmental Authorizations	A-14

2.10	Tax Matters	A-14

2.11	Employee and Labor Matters; Benefit Plans	A-14

A-2



2.12	Transactions with Affiliates		A-15

2.13	Legal Proceedings		A-15

2.14	Authority		A-15

2.15	Non-Contravention; Consents		A-15

2.16	Information Supplied		A-16

2.17	Fairness Opinion		A-16

2.18	Financial Advisor	A-16

2.19	State Takeover Statutes	A-16

SECTION 3.	REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB	A-16

3.1	Due Organization	A-17

3.2	Compliance with Legal Requirements	A-17

3.3	Legal Proceedings	A-17

3.4	Authority	A-17

3.5	Non-Contravention; Consents	A-17

3.6	Information Supplied	A-18

3.7	Broker Fees	A-18

3.8	No Prior Merger Sub Operations	A-18

SECTION 4.	CERTAIN COVENANTS OF THE PARTIES	A-19

4.1	Access and Investigation	A-19

4.2	Operations Prior to Closing	A-19

4.3	No Solicitation; Superior Offer	A-21

SECTION 5.	ADDITIONAL COVENANTS OF THE PARTIES	A-21

5.1	Company Proxy Statement	A-21

5.2	Company Stockholders’ Meeting	A-23

5.3	UPI Required Filings; Shareholder Approval	A-24

5.4	Employee Benefits	A-24

5.5	Indemnification of Officers and Directors	A-24

5.6	Regulatory Approvals and Related Matters	A-25

A-3



5.7		Confidentiality; Disclosure		A-26

5.8		Performance of Obligations by Parent and Merger Sub		A-26

SECTION 6.		CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB		A-26

6.1		Accuracy of Company Representations		A-26

6.2		Performance of Covenants		A-26

	6.3		Company Stockholder Approval		A-26

	6.4		Company Officers’ Certificate		A-26

	6.5		UPI Stockholder Approval		A-26

	6.6		Other Governmental Approvals		A-26

	6.7		No Restraints		A-27

	6.8		No Company Material Adverse Effect		A-27

	SECTION 7.		CONDITIONS PRECEDENT TO OBLIGATION OF THE COMPANY		A-27

	7.1		Accuracy of Parent and Merger Sub Representations		A-27

	7.2		Performance of Covenants		A-27

	7.3		Company Stockholder Approval		A-27

	7.4		Parent Officer’s Certificate		A-27

	7.5		UPI Stockholder Approval		A-27

	7.6		Other Governmental Approvals		A-27

	7.7		No Restraints		A-27

	SECTION 8.		TERMINATION		A-27

	8.1		Termination		A-27

	8.2		Effect of Termination		A-28

	8.3		Expenses		A-28

	SECTION 9.		MISCELLANEOUS PROVISIONS		A-28

	9.1		Amendment		A-28

	9.2		Extension; Waiver		A-29

	9.3		No Survival of Representations and Warranties		A-29

	9.4		Entire Agreement; Counterparts; Exchanges by Facsimile or Electronic Delivery		A-29

A-4



9.5	Applicable Law; Jurisdiction; Waiver of Jury Trial	A-29

9.6	Attorneys’ Fees	A-29

9.7	Assignability; No Third Party Rights	A-30

9.8	Notices	A-30

9.9	Severability	A-31

9.10	Construction	A-31

A-5

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (“Agreement”) is made and entered into as of June 22, 2007, by and among: UNITED PACIFIC INDUSTRIES LIMITED, a Bermuda corporation (“UPI”); PANTENE GLOBAL HOLDINGS LIMITED, a Hong Kong corporation and wholly-owned subsidiary of UPI (“Pantene” and collectively with UPI, the “Parent”), PANTENE GLOBAL ACQUISITION CORP., a Nevada corporation and a wholly-owned subsidiary of Pantene (“Merger Sub”); and SPEAR & JACKSON, INC., a Nevada corporation and a 61.78% owned subsidiary of Pantene (the “Company”). Certain capitalized terms used in this Agreement are defined in Exhibit A.

RECITALS

Parent, Merger Sub and the Company intend to effect a merger of the Company with and into the Merger Sub on the terms and subject to the conditions set forth in this Agreement (the “Merger”) with the Merger Sub continuing as the surviving entity and a wholly-owned subsidiary of Pantene, and the Company ceasing to exist.

The board of directors of the Company has established a special committee of independent director (the “Independent Committee”) to, among other things, consider and evaluate the fairness to the Company and its stockholders (other than Parent and its respective Affiliates) of the Merger and to report its recommendation concerning the Merger to the full board of directors of the Company.

The Independent Committee of the board of directors of the Company has recommended and the board of directors of the Company has unanimously approved this Agreement and the Merger and has deemed the Merger to be advisable and fair to, and in the best interests of the Company and its stockholders.

The respective boards of directors of Parent and Merger Sub have approved this Agreement and the Merger and has deemed the Merger to be advisable and in the best interests of the corporations.

The board of directors of the Company and the Independent Committee have received the written opinion of Capitalink, L.C. (“Capitalink”) that the Cash Consideration (as defined in Section 1.5(iii)) per share to be paid in the Merger in respect of each share held by the Company stockholders (other than shares held by Pantene) is fair, from a financial point of view, to such stockholders, and the Independent Committee has unanimously recommended that the board of directors of the Company approve and authorize this Agreement and the transactions contemplated hereby.

AGREEMENT

The parties to this Agreement, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement, and intending to be legally bound, agree as follows:

Section 1.

DESCRIPTION OF TRANSACTION

1.1

Merger of the Company into Merger Sub. Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time (as defined in Section 1.3), the Company shall be merged with and into the Merger Sub. By virtue of the Merger, at the Effective Time, the separate existence of the Company shall cease and the Merger Sub shall continue as the surviving corporation in the Merger (the “Surviving Corporation”).

1.2

Effects of the Merger. The Merger shall have the effects set forth in this Agreement and in the applicable provisions of the Nevada Revised Statutes (“NRS”).

1.3

Closing; Effective Time. The consummation of the Merger (the “Closing”) shall take place at the offices of Schneider Weinberger & Beilly LLC, on a date to be mutually agreed upon by Parent and the Company, which shall be no later than the second business day after the last of the conditions set forth in Sections 6 and 7 (other than conditions that by their terms are to be satisfied on the Closing Date) are satisfied or waived unless this Agreement is terminated as set forth in Section 8. The date on which the Closing actually takes place is referred to as the “Closing Date.” Subject to the provisions of this Agreement, articles of merger that satisfies the applicable

A-6

requirements of the NRS shall be duly executed by the Company and concurrently with or as soon as practicable following the Closing shall be filed on the Closing Date with the Secretary of State of the State of Nevada. The Merger shall become effective at the time of the filing of such articles of merger with the Secretary of State of the State of Nevada (the time as of which the Merger becomes effective being referred to as the “Effective Time”).

1.4

Articles of Incorporation and Bylaws; Directors and Officers. At the Effective Time:

(a)

except as provided in Section 5.5(a), the articles of incorporation of Merger Sub, as in effect immediately prior to the Effective Time, shall be the articles of incorporation of the Surviving Corporation until amended in accordance with applicable Legal Requirements (as hereinafter defined);

(b)

except as provided in Section 5.5(a), the bylaws of the Merger Sub, as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Corporation until amended in accordance with applicable Legal Requirements;

(c)

the directors and officers of the Surviving Corporation immediately after the Effective Time shall be the respective individuals who are directors and officers of Merger Sub immediately prior to the Effective Time.

1.5

Conversion of Shares.

(a)

At the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Merger Sub, the Company or any stockholder of the Company:

(i)

any shares of Company Common Stock held directly or indirectly by Parent, Merger Sub or any other wholly-owned Subsidiary of Parent immediately prior to the Effective Time, and any Company Common Stock held in treasury, shall be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor;

(ii)

except as provided in clause “(i)” above, each share of Company Common Stock outstanding immediately prior to the Effective Time (excluding any Dissenting Shares) shall be converted into the right to receive US$1.96 in cash, without interest (the “Cash Consideration”);

(iii)

each share of the common stock, $.001 par value per share, of Merger Sub outstanding immediately prior to the Effective Time shall remain as one issued and outstanding share of common stock of the Surviving Corporation.

(b)

Notwithstanding anything contained herein to the contrary, any Dissenting Shares shall not be converted into the right to receive the Cash Consideration, but shall instead be converted into the right to receive such consideration as may be determined to be due with respect to any such Dissenting Shares pursuant to the provisions of Sections 92A.300 to 92A.500 of the NRS. Each holder of Dissenting Shares who, pursuant to the provisions of Sections 92A.300 to 92A.500 of the NRS, becomes entitled to payment thereunder for such shares shall receive payment therefor or payment may be withheld in accordance with Sections 92A.300 to 92A.500 of the NRS. If, after the Effective Time, any Dissenting Shares shall waive, withdraw or lose their status as Dissenting Shares, then, subject to the provisions of Sections 92A.300 to 92A.500 of the NRS, any such shares shall immediately be converted into the right to receive the Cash Consideration in respect of such shares as if such shares had never been Dissenting Shares, and Parent shall deliver to the holder thereof, as promptly as reasonably practicable following the satisfaction of the applicable conditions set forth in Section 1.7, the Cash Consideration to which such holder would be entitled in respect thereof as if such shares had never been Dissenting Shares (and all such cash shall be deemed for all purposes of this Agreement to have become deliverable to such holder pursuant to Section 1.5(a)). The Company shall give Parent (i) prompt notice of any demands for appraisal received by the Company, withdrawals of such demands, and any other instruments served pursuant to the applicable provisions of the NRS and received by the Company, and (ii) the right to participate in all negotiations and proceedings with respect to demands for appraisal under the applicable provisions of the NRS. The Company shall not, except with the prior written consent of Parent (which consent shall not be unreasonably withheld) or as otherwise required

A-7

under the applicable provisions of the NRS, voluntarily make any payment or offer to make any payment with respect to, or settle or offer to settle, any claim or demand in respect of any Dissenting Shares.

1.6

Payment Fund. On or prior to the Closing Date, Parent shall select a reputable bank or trust company reasonably acceptable to the Company (the “Paying Agent”) to act as paying agent hereunder for the purpose of distributing the Cash Consideration. At or prior to the Effective Time, Parent shall deposit with the Paying Agent, in trust for the benefit of the holders of shares of Company Common Stock outstanding immediately prior to the Effective Time, cash in an aggregate amount equal to the product of the Cash Consideration and the number of shares of Company Common Stock issued and outstanding immediately prior to the Effective Time but excluding shares held directly or indirectly by Parent (the “Payment Fund”). The Payment Fund will be invested by the Paying Agent in money market funds that invest solely in direct obligations of the United States government, the Paying Agent’s FDIC insured money market account or similar investments (it being understood that any and all interest or income earned on funds made available to the Paying Agent pursuant to this Agreement shall be remitted to Parent).

1.7

Payment Procedures.

(a)

As soon as practicable after the Effective Time (but in no event later than five (5) days following the Effective Time), Parent shall cause the Paying Agent to mail to each holder of record of a certificate or certificates which immediately prior to the Effective Time represented outstanding shares of Company Common Stock (the “Certificates”): (i) a letter of transmittal as reasonably agreed by the parties prior to Closing which shall specify that delivery shall be effective, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Paying Agent, and which letter shall be in customary form and have such other provisions as Parent and the Company shall reasonably agree prior to the Effective Time, and (ii) instructions for effecting the surrender of such Certificates in exchange for the Cash Consideration. Upon surrender of a Certificate to the Paying Agent (or receipt of an “agent’s message by the Paying Agent (or any other evidence of transfer that the Paying Agent may reasonably request) in the case of the transfer of Company Common Stock held in book-entry form) together with such letter of transmittal, duly executed and completed in accordance with the instructions thereto, the holder of such Certificate shall be entitled to receive in exchange therefor the applicable Cash Consideration, without interest, and the Certificate so surrendered shall forthwith be cancelled. Until surrendered as contemplated by this Section 1.7, each Certificate (other than Certificates representing Dissenting Shares) shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the amount of cash, without interest, equal to the Cash Consideration.

(b)

No interest will be paid or will accrue on any Cash Consideration. In the event of a transfer of ownership of Company Common Stock which is not registered in the transfer records of the Company, the applicable Cash Consideration shall be payable to such transferee if the Certificate representing such Company Common Stock is presented to the Paying Agent, accompanied by all documents reasonably required to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid.

1.8

Termination of Payment Fund. Any portion of the Payment Fund that remains undistributed to the holders of shares of Company Common Stock on the first anniversary of the Effective Time shall be delivered to Parent, and any holders of shares of Company Common Stock who have not theretofore been paid the Cash Consideration payable to such holder under this Section 1 shall thereafter look only to Parent for the Cash Consideration with respect to the shares of Company Common Stock formerly represented thereby to which such holders are entitled pursuant to this Section 1 and Parent shall, upon the request of any such former stockholder promptly pay to such former stockholder of the Company the Cash Consideration to which he, she or it is entitled. Any such portion of the Payment Fund remaining unclaimed by holders of shares of Company Common Stock on the date that is three years after the Effective Time (or such earlier date immediately prior to such time as such amounts would otherwise escheat to or become property of any Governmental Body pursuant to applicable Legal Requirements) shall, to the extent permitted by applicable Legal Requirements, become the property of Parent free and clear of any claims or interest of any Person previously entitled thereto.

1.9

Closing of the Company’s Transfer Books. At the Effective Time: (a) all shares of Company Common Stock outstanding immediately prior to the Effective Time including Treasury stock shall automatically be canceled and retired and shall cease to exist (in exchange for the right to receive the Cash Consideration, without interest,

A-8

except that shares held directly or indirectly by Parent shall not be entitled to such right), and all holders of certificates representing shares of Company Common Stock that were outstanding immediately prior to the Effective Time shall cease to have any rights as stockholders of the Company; and (b) the stock transfer books of the Company shall be closed with respect to all shares of Company Common Stock outstanding immediately prior to the Effective Time. No further transfer of any such shares of Company Common Stock shall be made on such stock transfer books after the Effective Time.

1.10

Lost Certificates. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if reasonably required by Parent, the posting by such person of a bond in a reasonable amount and for a reasonable period of time as indemnity against any claim that may be made against Parent or the Surviving Corporation with respect to such Certificate, the Paying Agent will deliver in exchange for such lost, stolen or destroyed Certificate the applicable Cash Consideration, without interest, with respect to the shares of Company Common Stock formerly represented thereby.

1.11

No Liability. None of Parent, Merger Sub, the Company, the Surviving Corporation or the Paying Agent shall be liable to any Person in respect of any Cash Consideration from the Payment Fund delivered to a public official pursuant to and in full compliance with any applicable abandoned property, escheat or similar Legal Requirement.

1.12

Withholding Rights. Each of the Surviving Corporation, Parent and the Paying Agent shall be entitled to deduct and withhold from the Cash Consideration otherwise payable pursuant to this Agreement to any holder of shares of Company Common Stock such amounts as it is legally required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code, as amended (the “Code”), the rules and regulations promulgated thereunder or any applicable Legal Requirement. To the extent that amounts are so withheld by the Surviving Corporation, Parent or the Paying Agent, as the case may be, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Common Stock in respect to which such deduction and withholding was made by the Surviving Corporation, Parent or the Paying Agent, as the case may be.

1.13

Further Action. If, at any time after the Effective Time, any further action is determined by Parent or the Surviving Corporation to be necessary to carry out the purposes of this Agreement or to vest the Surviving Corporation with full right, title and possession of and to all rights and property of Merger Sub and the Company, the officers and directors of the Surviving Corporation and Parent shall be fully authorized (in the name of Merger Sub, in the name of the Company and otherwise) to take such action.

Section 2.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent and Merger Sub as follows, subject to any exception or disclosure set forth in any part or subpart of the Company Disclosure Schedule:

2.1

Subsidiaries; Due Organization.

(a)

Part 2.1(a) of the Company Disclosure Schedule identifies each Subsidiary of the Company and indicates its jurisdiction of organization. Neither the Company nor any of the Entities identified in Part 2.1(a) of the Company Disclosure Schedule owns any capital stock of, or any equity interest of any nature in, any other Entity, other than the Entities identified in Part 2.1(a) of the Company Disclosure Schedule. The Company has not agreed and is not obligated to make, nor or is it bound by any Contract under which it may become obligated to make, any future investment in or capital contribution to any other Entity. All of the outstanding shares of capital stock or other equity interests of each Subsidiary of the Company are owned by the Company, free and clear of all Encumbrances.

(b)

The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, each Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the jurisdictions set forth in Part 2.1(a) of the Company Disclosure Schedule and the Company and each Subsidiary has all necessary corporate power and authority: (i) to conduct its business in the manner in which its business is currently being conducted; (ii) to own or lease and use its assets in the manner in which its assets are

A-9

currently owned or leased and used; and (iii) to perform its obligations under all Company Contracts by which it is bound that are material to the Company and its Subsidiaries taken as a whole. The Company has made available to Parent complete and correct copies of the articles of incorporation and bylaws of the Company and each of its Subsidiaries.

(c)

The Company (in jurisdictions that recognize the following concepts) is qualified to do business as a foreign corporation, and is in good standing, under the laws of such jurisdictions where the nature of its business requires such qualification, except as would not reasonably be expected to have a Company Material Adverse Effect.

2.2

Capitalization, Etc.

(a)

The authorized capital stock of the Company consists of 25,000,000 shares of Company Common Stock, of which 5,735,561 shares were issued and outstanding as of June22, 2007. The Company holds 6,275,561shares of its capital stock in its treasury. There are no outstanding stock appreciation rights, equity equivalents or phantom stock with respect to the capital stock of the Company.

(b)

All of the outstanding shares of Company Common Stock have been duly authorized and validly issued, and are fully paid and nonassessable. None of the outstanding shares of Company Common Stock is entitled or subject to any preemptive right, right of participation, right of maintenance or any similar right. None of the outstanding shares of Company Common Stock is subject to any right of first refusal in favor of the Company. Except as set forth in Part 2.2(b) of the Company Disclosure Schedule, there is no significant Company Contract currently in effect relating to the voting or registration of, or restricting any Person from purchasing, selling, pledging or otherwise disposing of (or granting any option or similar right with respect to), any shares of Company Common Stock. Except as set forth in Part 2.2(b) of the Company Disclosure Schedule, the Company is not under any obligation, nor is it bound by any significant Company Contract to repurchase, redeem or otherwise acquire any outstanding shares of Company Common Stock or other securities. There are no securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which any of them is bound obligating the Company or any of its Subsidiaries to issue, deliver or sell or create, or cause to be issued, delivered or sold or created, additional shares of capital stock or other voting or equity securities or interests of the Company or of any Subsidiary or obligating the Company or any Subsidiary to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking or relating to the voting of capital stock or equity securities or interests of the Company or any Subsidiary.

2.3

SEC Filings; Financial Statements.

(a)

Except as disclosed in the Company SEC Documents (as defined herein) or on Schedule to Section 2.3(a) of the Company Disclosure Schedule, as of the time it was filed with or furnished to the SEC: (i) each registration statement, proxy statement, report, schedule, form, certification and other document filed by the Company with, or furnished by the Company with or to, the SEC since October 1, 2004, including all amendments thereto (collectively, the “Company SEC Documents”), complied as to form, and all documents filed by the Company with, or furnished by the Company with or to, the SEC between the date of this Agreement and the date of Closing (the “Interim SEC Documents”) will comply as to form, in all material respects with the applicable requirements of the Securities Act or the Exchange Act (as the case may be); and (ii) none of the Company SEC Documents contained or, in the case of the Interim SEC Documents, will contain any untrue statement of a material fact or omitted or, in the case of the Interim SEC Documents, will omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading, except to the extent corrected: (A) in the case of Company SEC Documents filed or furnished on or prior to the date of this Agreement that were amended or superseded on or prior to the date of this Agreement, by the filing or furnishing of the applicable amending or superseding Company SEC Document; and (B) in the case of Interim SEC Documents that are amended or superseded prior to the Closing Date, by the filing or furnishing of the applicable amending or superseding Interim SEC Document. Notwithstanding the foregoing, the Company makes no representation or warranty with respect to any information supplied by Parent or Merger Sub for inclusion in any Interim SEC Document. All statements, reports, schedules, forms, certifications and other documents required to have been filed by the Company with or to the SEC since October 1, 2004 have been so filed.

A-10

(b)

The financial statements (including any related notes) contained or incorporated by reference in the Company SEC Documents: (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto; (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements or, in the case of unaudited financial statements, as permitted by Form 10-Q, Form 8-K or any successor form under the Exchange Act, and except that the unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end adjustments), and (iii) fairly presented in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates thereof and the consolidated results of operations and cash flows of the Company and its Subsidiaries for the periods covered thereby.

(c)

Except for those liabilities that are reflected or reserved on the Company Unaudited Balance Sheet (as defined in Section 2.5 of this Agreement) (including any notes thereto) and for liabilities incurred in the ordinary course of business consistent with past practice since March 31, 2007, neither the Company nor any of its Subsidiaries has incurred any liability of any nature whatsoever (whether absolute, accrued or contingent and whether due or to become due) that has had or is reasonably likely to have, either individually or in the aggregate, a Company Material Adverse Effect.

2.4

Absence of Changes. Except as set forth on Part 2.4 of the Company Disclosure Schedule or the Company SEC Documents, since March 31, 2007, the Company and its Subsidiaries have conducted their respective businesses in all material respects in the ordinary course consistent with past practice, and, without limiting the generality of the foregoing:

(a)

there has not been any Company Material Adverse Effect;

(b)

neither the Company nor any of its Subsidiaries has: (i) declared, accrued, set aside or paid any dividend or made any other distribution in respect of any shares of capital stock, other than dividends by a wholly-owned Subsidiary of the Company; or (ii) repurchased, redeemed or otherwise reacquired any shares of its capital stock or other securities;

(c)

there has been no amendment to the articles of incorporation or bylaws of the Company or any Subsidiary of the Company;

(d)

neither the Company nor any of its Subsidiaries has written off as uncollectible, or established any extraordinary reserve with respect to, any material account receivable or other material indebtedness;

(e)

neither the Company nor any of its Subsidiaries has made any pledge of any of its material assets or permitted any of its material assets to become subject to any Encumbrances

(f)

neither the Company nor any of its Subsidiaries has lent money to any Person in excess of $10,000 in the aggregate or incurred, guaranteed, assumed or otherwise became responsible for any indebtedness in excess of $100,000 in the aggregate;

(g)

neither the Company nor any of its Subsidiaries has changed any of its methods of accounting or accounting practices in any material respect, except as required by concurrent changes in GAAP or SEC rules and regulations;

(h)

neither the Company nor any of its Subsidiaries has (i) made or changed any material Tax election, (ii) entered into any settlement or compromise of any material Tax liability or (iii) surrendered any right to claim a material Tax refund;

(i)

neither the Company nor any of its Subsidiaries has prepared or filed any Tax Return inconsistent with past practice or, on any such Tax Return, taken any position, made any election, or adopted any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;

A-11

(j)

neither the Company nor any of its Subsidiaries has settled or compromised any pending or threatened suit, action, claim, arbitration, mediation, inquiry, Legal Proceeding or investigation of or against the Company or any Subsidiary of the Company, unless in connection with such settlements or compromises (A) there was no finding or admission of any violation of any Legal Requirement or the rights of any Person and (B) the sole relief provided was monetary damages not in excess of $100,000 in the aggregate; and

(k)

neither the Company nor any of its Subsidiaries has agreed or committed to take any of the actions referred to in clauses “(b)” through “(j)” above.

2.5

Title to Assets. The Company owns, and has good and valid title to, all material assets purported to be owned by it, including all material assets reflected on the balance sheet of the Company as of March 31, 2007 contained in the Company SEC Documents (the “Company Unaudited Balance Sheet”) (except for assets sold or otherwise disposed of since the date of the Company Unaudited Balance Sheet). Except as would not be material to the Company and the Subsidiaries as a whole, all of said assets are owned by the Company free and clear of any Encumbrances, except for liens described in Part 2.5 of the Company Disclosure Schedule. The Company or its Subsidiaries are the lessees of, and hold valid leasehold interests in, all material assets purported to have been leased by them, including all material assets reflected as leased on the Company Unaudited Balance Sheet. Except as would not be material to the Company and the Subsidiaries as a whole, the assets owned or leased by the Company or its Subsidiaries constitute all the assets used in the business of the Company and its Subsidiaries (including all books, records, computers and computer programs and data processing systems) and are in good condition (subject to normal wear and tear and immaterial impairments of value and damage).

2.6

Real Property; Leasehold

Except as contained in the Company SEC Documents, neither the Company nor any of its Subsidiaries own any real property. Except as would not be material to the Company and the Subsidiaries as a whole, the Company SEC Documents sets forth an accurate and complete list of each lease pursuant to which any real property is being leased to the Company or any of its Subsidiaries. (All real property leased to the Company or any of its Subsidiaries is referred to as the “Leased Real Property”).

2.7

Contracts.

(a)

Subsections (i) through (v) of Part 2.7 of the Company Disclosure Schedule identify each Company Contract that constitutes a Company Significant Contract as of the date of this Agreement. For purposes of this Agreement, each of the following shall be deemed to constitute a “Company Significant Contract”:

(i)

any Contract constituting a Company Employment Agreement pursuant to which the Company or any of its Subsidiaries is or may become obligated to make any severance, termination, bonus or similar payment in excess of $50,000 to any Company Associate (except as may be required by applicable Legal Requirements and other than payments constituting base salary or commissions paid in the ordinary course of business);

(ii)

any Contract involving the payment of royalties or other amounts calculated based upon the revenues, income or similar measures of results of the Company or any of its Subsidiaries or based upon income, revenues, unit sales or similar measures of results related to any product or service of the Company or any of its Subsidiaries which, in any case, is reasonably likely to involve payments of more than $50,000 during the 12-month period commencing on the date of this Agreement;

(iii)

any Contract granting to any Person a right of first refusal or right of first offer on the sale of any part of the business of the Company or any of its Subsidiaries or imposing any restriction on the right or ability of the Company or any Affiliate to: (A) engage in any type or line of business or compete with any other Person; (B) acquire any product or other asset or any services from any other Person; (C) develop, sell, supply, distribute, offer, support or service any product or any technology or other asset to or for any other Person; or (D) transact business with any other Person;

(iv)

any Contract relating to any currency hedging;

A-12

(v)

any Contract constituting or relating to a Government Contract or Government Bid that contemplates or involves the payment or delivery of cash or other consideration in an amount or having a value in excess of $50,000 in the aggregate, or contemplates or involves the performance of services having a value in excess of $50,000 in the aggregate; and

The Company has delivered or made available to Parent an accurate and complete copy of each Company Contract that constitutes a Company Significant Contract.

(b)

Each Company Significant Contract is (1) to the knowledge of the Company, a valid and binding obligation of the other parties thereto and (2) in full force and effect in all material respects.

(c)

Except as set forth in Part 2.7(c) of the Company Disclosure Schedule: (i) the Company has not materially violated or materially breached, or committed any default under, any Company Significant Contract; (ii) to the knowledge of the Company, no other Person has materially violated or materially breached, or committed any default under, any Company Significant Contract; (iii) to the knowledge of the Company, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) would reasonably be expected to: (A) result in a material violation or material breach of any Company Significant Contract; (B) give any Person the right to declare a default under any Company Significant Contract; (C) give any Person the right to receive or require a rebate, chargeback, penalty or any additional material rights under any Company Significant Contract; (D) give any Person the right to accelerate the maturity or performance of any Company Significant Contract; or (E) give any Person the right to cancel, terminate or modify in any material respect any Company Significant Contract; and (iv) since December 31, 2006, the Company has not received any written notice regarding any actual or possible material violation or material breach of, or default under, any Company Significant Contract.

2.8

Compliance with Legal Requirements.

(a)

Except as would not reasonably be expected to result in a Company Material Adverse Effect, the Company is in compliance in all material respects with all applicable Legal Requirements. Except as contained in the Company SEC Documents, since October 1, 2004, the Company has not received any written notice from any Governmental Body or other Person regarding any actual or possible violation in any material respect of, or failure to comply in any material respect with, any Legal Requirement.

(b)

The Company is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act.

(c)

The Company has designed and implemented disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to provide reasonable assurance that material information relating to the Company, including its consolidated Subsidiaries, is made known to the chief executive officer and the chief financial officer of the Company by others within those entities.

(d)

The Company has disclosed, based on its most recent evaluation prior to the date hereof, to the Company’s auditors (i) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect in any material respect the Company’s ability to record, process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

(e)

To the knowledge of the Company, since the filing of its Annual Report on Form 10-K for the year ended September 30, 2006 through the date hereof, the Company has not identified any material weaknesses in the design or operation of internal control over financial reporting.

(f)

There are no outstanding loans made by the Company or any of its Subsidiaries to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of the Company in material violation of the Sarbanes-Oxley Act.

A-13

2.9

Governmental Authorizations. The Company holds all material Governmental Authorizations necessary to enable the Company to conduct its business substantially in the manner in which its business is currently being conducted. All such Governmental Authorizations are valid and in full force and effect, except as would not be materially adverse to the Company and its Subsidiaries taken as a whole. Since October 1, 2004, the Company has not received any written notice from any Governmental Body regarding: (i) any actual or possible violation of or failure to comply with any term or requirement of any material Governmental Authorization; or (ii) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any material Governmental Authorization. To the knowledge of the Company, no event has occurred or condition or state of facts exists which constitutes or, after notice or lapse of time or both, would constitute a breach or default under any such Governmental Authorization that would affect in any material respect the ability of the Company to conduct business as currently conducted.

2.10

Tax Matters.

(a)

Each of the material Tax Returns required to be filed by or on behalf of the Company or any Subsidiary of the Company with any Governmental Body prior to the date of this Agreement: (i) has been filed on or before the applicable due date (including any extensions of such due date); (ii) has been prepared in all material respects in compliance with all applicable Legal Requirements and (iii) when filed, was complete and accurate in all material respects and disclosed all Taxes required to be paid by the Company or any Subsidiary of the Company for the periods covered thereby. All material Taxes (whether or not shown on any Tax Return) owed by the Company or any Subsidiary of the Company have been timely paid or provided for.

(b)

The Company Unaudited Balance Sheet accrues all liabilities for all material Taxes of the Company or any Subsidiary of the Company with respect to all periods through the date thereof in accordance with GAAP, and no liabilities for material Taxes have been incurred since the date of the Company Unaudited Balance Sheet other than in the operation of the business of the Company or such Subsidiary in the ordinary course of business. The Company has established, in the ordinary course of business and consistent with its past practices, reserves adequate for the payment of all material Taxes of the Company or any Subsidiary of the Company since the date of the Company Unaudited Balance Sheet.

(c)

To the knowledge of the Company, no material Tax Return of the Company or any Subsidiary of the Company is currently subject to an audit by any Governmental Body. No extension or waiver of the limitation period applicable to any material Tax Return of the Company or any Subsidiary of the Company has been granted by the Company or any Subsidiary of the Company, and no such extension or waiver has been requested from the Company or any subsidiary of the Company.

2.11

Employee and Labor Matters; Benefit Plans

(a)

To the knowledge of the Company, no Company officer or director is a party to or is bound by any noncompetition agreement or other Contract (with any Person) that may have a material effect on the business or operations of the Company.

(b)

Except as provided in the Company SEC Documents, as of the date of this Agreement, the Company is not a party to, nor does it have a duty to bargain for, any collective bargaining agreement or other Contract with a labor organization representing any Company Employee, and there are no labor organizations representing, purporting to represent or, to the knowledge of the Company, seeking to represent any Company Employee. There is not now pending, and, to the knowledge of the Company, no Person has threatened in writing to commence, any strike, slowdown, work stoppage, lockout, job action, picketing, labor dispute, question regarding representation or union organizing activity or any similar activity. There is no material claim or grievance pending or, to the knowledge of the Company, threatened in writing relating to any employment Contract, wages and hours, plant closing notification, labor dispute, immigration or discrimination matters involving any Company Associate, including charges of unfair labor practices or harassment complaints.

(c)

The Company has delivered or made available to Parent accurate and complete copies of, as of the date of this Agreement: (i) documents setting forth the material terms of each Company Employee Plan, including all amendments thereto and all related trust documents; (ii) the most recent annual report, if any, required under

A-14

applicable Legal Requirements in connection with each Company Employee Plan; (iii) all administrative service agreements and group insurance contracts; and (vi) all material correspondence since October 1, 2004 to or from any Governmental Body relating to any Company Employee Plan.

(d)

Except as contained in the Company SEC Documents, each of the Company and Company Affiliates has performed all obligations required to be performed by it under each Company Employee Plan, except as would not reasonably be expected to result in a Company Material Adverse Effect. Each Company Employee Plan can be amended, terminated or otherwise discontinued after the Closing in accordance with its terms, without material liability to Parent, the Company or any Company Affiliate (other than any liability for ordinary administration expenses).

2.12

Transactions with Affiliates. Except as set forth in the Company SEC Documents, as of the date of this Agreement, there are no transactions, agreements, arrangements or understandings between (i) the Company or any of its Subsidiaries, on the one hand, and (ii) any Affiliate of the Company or Company Associate (other than any of its Subsidiaries), on the other hand, of the type that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act.

2.13

Legal Proceedings. Except as set forth in the Company SEC Documents filed prior to the date hereof, there is no pending Legal Proceeding to which the Company or its Subsidiaries is a party or, to the knowledge of the Company, to which any other Person is a party, and (ii) to the knowledge of the Company, no Governmental Body or other Person has threatened in writing to commence any Legal Proceeding to which the Company or its Subsidiaries is a party or was so threatened to become a party or, to the knowledge of the Company, to which any other Person is a party or was so threatened to become a party, in each case (1) that would reasonably be expected to have a Company Material Adverse Effect or (2) that challenges, or that seeks to prevent, delay, make illegal or otherwise materially interfere with, the Merger.

2.14

Authority. The Company has the corporate right, power and authority to enter into and to perform and, subject to obtaining the affirmative vote of the holders of a majority of the voting power of the shares of Company Common Stock outstanding on the record date for the Company Stockholders’ Meeting, consummate its obligations under this Agreement. The board of directors of the Company, based on the recommendation of the Independent Committee (at a meeting duly called and held or acting by unanimous written consent), as of the date of this Agreement has: (a) determined that the Merger is advisable and fair to, and in the best interests of, the Company and its stockholders other than Parent and its respective Affiliates and Associates; (b) authorized, approved and adopted the execution, delivery and performance of this Agreement by the Company and approved the Merger; and (c) recommended the approval of this Agreement by the holders of Company Common Stock and directed that this Agreement and the Merger be submitted for consideration by the Company’s stockholders at the Company Stockholders’ Meeting, which recommendation, as of the date hereof, has not been rescinded, modified or withdrawn in any way.

2.15

Non-Contravention; Consents. Assuming compliance with the applicable provisions of the Securities Act, the Exchange Act, the NRS, state securities or “blue sky” laws, except as set forth in Part 2.15 of the Company Disclosure Schedule, neither (1) the execution and delivery of this Agreement by the Company, nor (2) the consummation of the Merger or any of the other Contemplated Transactions, will or would reasonably be expected to, directly or indirectly (with or without notice or lapse of time):

(a)

contravene, conflict with or result in a violation of any of the provisions of the articles of incorporation or bylaws of the Company;

(b)

contravene, conflict with or result in a violation of, any Legal Requirement or any Order to which the Company or any of its material assets is subject;

(c)

contravene, conflict with or result in a material violation, a material breach or a default of, or forfeiture of any rights under, any of the terms or requirements of any Governmental Authorization that is held by the Company or that otherwise relates to the business of the Company as currently conducted;

A-15

(d)

contravene, conflict with or result in a violation or breach of in any material respect, or result in a default under, any provision of any Company Significant Contract, or give any Person the right to: (i) declare a default or exercise any remedy under any such Company Significant Contract; (ii) a rebate, chargeback, penalty or change in delivery schedule under any such Company Significant Contract; (iii) accelerate the maturity or performance of any such Company Significant Contract; or (iv) cancel, terminate or modify any right, benefit, obligation or other term of such Company Significant Contract; or

(e)

result in the imposition or creation of any Encumbrance upon or with respect to any asset owned or used by the Company,

except, in the case of clauses “(b),” “(c)” and “(e)” of this sentence, as would not reasonably be expected to have a Company Material Adverse Effect. Except: (A) as may be required by the Securities Act, the Exchange Act, and the NRS and (B) as would not reasonably be expected to have a Company Material Adverse Effect, the Company was not, is not and will not be required to make any filing with or give any notice to, or to obtain any Consent from, any Person in connection with: (1) the execution, delivery or performance of this Agreement; or (2) the consummation of the Merger or any of the other Contemplated Transactions.

2.16

Information Supplied. The preliminary and definitive proxy statements to be filed by the Company with the SEC (including information incorporated by reference therein) (collectively, the “Proxy Statement”) shall not, on each relevant filing date, on the date of mailing to the Company’s stockholders and at the time of the Company Stockholders’ Meeting, and any other filings, schedules or materials required under the Exchange Act to be filed with the SEC in connection with obtaining the Required Company Stockholder Vote (as defined in Section 6.3) (each such filing, a “Required Filing”) shall not, as of the date thereof, the date of any amendment or supplement thereto and at the time of the Company Stockholder Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not false or misleading; or, in the case of the Proxy Statement, omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of proxies for the Company Stockholders’ Meeting which has become false or misleading. The Proxy Statement and any Required Filings will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder. If at any time prior to the Effective Time any event relating to the Company or any of its Affiliates should be discovered by the Company which is required to be set forth in a supplement to the Proxy Statement or an amendment or supplement to any Required Filing, the Company shall promptly inform Parent. Notwithstanding the foregoing, the Company makes no representation or warranty with respect to any information supplied by Parent or Merger Sub for inclusion in the Proxy Statement or any Required Filing.

2.17

Fairness Opinion. Prior to the execution of this Agreement, the Company received an opinion from Capitalink, L.C., financial advisor to the Company, to the effect that, as of June 14, 2007 and based upon and subject to the matters set forth therein, the Cash Consideration is fair, from a financial point of view, to the stockholders of the Company, other than the Parent. The Company shall deliver an executed copy of such opinion to Parent promptly following execution of this Agreement.

2.18

Financial Advisor. Except for Capitalink, the fees and expenses of which will be paid by the Company, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Merger or any of the other Contemplated Transactions based upon arrangements made by or on behalf of the Company.

2.19

State Takeover Statutes. No “fair price,” “moratorium,” “control share acquisition” or other similar antitakeover statute or regulation enacted under state or federal laws in the United States applicable to the Company is applicable to the transactions contemplated by this Agreement.

Section 3.

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

Parent and Merger Sub represent and warrant to the Company as follows, subject to: (a) the exceptions and disclosures set forth in the part or subpart of the Parent Disclosure Schedule corresponding to the particular Section or subsection in this Section 3 in which such representation and warranty appears; (b) any exceptions or

A-16

disclosures cross-referenced to another part or subpart of the Parent Disclosure Schedule; and (c) any exception or disclosure set forth in any other part or subpart of the Parent Disclosure Schedule to the extent it is reasonably apparent that such exception or disclosure qualifies such other representation or warranty:

3.1

Due Organization.

(a)

UPI is a corporation duly organized, validly existing and in good standing under the laws of Bermuda, Pantene is a corporation duly organized, validly existing and in good standing under the laws of Hong Kong, and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of Nevada, and each of UPI, Pantene and Merger Sub have all necessary power and authority: (i) to conduct their businesses in the manner in which their businesses are currently being conducted; (ii) to own or lease and use their assets in the manner in which their assets are currently owned or leased and used; and (iii) to perform their obligations under all Contracts by which they are bound that are material to Parent and its Subsidiaries taken as a whole.

(b)

Each of UPI, Pantene and Merger Sub (in jurisdictions that recognize the following concepts) is qualified to do business as a foreign corporation, and is in good standing, under the laws of such jurisdictions where the nature of its business requires such qualification, except as would not reasonably be expected to have a Parent Material Adverse Effect.

3.2

Compliance with Legal Requirements. Each of Parent and Merger Sub are in compliance with all applicable Legal Requirements, except as would not reasonably be expected to affect its ability to consummate the Merger or any of the other transactions contemplated by this Agreement. Neither Parent nor Merger Sub has received any written notice from any Governmental Body or other Person regarding any actual or possible violation in any material respect of, or failure to comply in any material respect with, any Legal Requirement that may have the effect of preventing, delaying, making illegal or otherwise interfering with, the Merger.

3.3

Legal Proceedings. There is no pending Legal Proceeding against Parent or any of its Subsidiaries and, to the knowledge of Parent, no Governmental Body or other Person has threatened in writing to commence any Legal Proceeding against Parent or any of its Subsidiaries, that challenges, or that seeks to prevent, delay, make illegal or otherwise interfere with, the Merger.

3.4

Authority. Each of Parent and Merger Sub has the corporate right, power and authority to enter into and to perform and consummate its obligations under this Agreement. The board of directors of Parent (at a meeting duly called and held or by unanimous written consent) as of the date of this Agreement has: (a) determined that the Merger is advisable and in the best interests of Parent; and (b) subject to shareholders’ approval, authorized and approved the execution, delivery and performance of this Agreement by Parent and approved the Merger. The board of directors of Merger Sub (by unanimous written consent) has: (i) determined that the Merger is advisable and fair to, and in the best interests of, Merger Sub and its stockholder; (ii) authorized and approved the execution, delivery and performance of this Agreement by Merger Sub and approved the Merger. Pantene, as sole stockholder of Merger Sub, has approved this Agreement. UPI, as the sole stockholder of Pantene is required to obtain stockholder approval to approve this Agreement and the Merger and intends to recommend the adoption of this Agreement by the holders of its ordinary shares and will direct that this Agreement and the Merger be submitted for consideration by UPI’s stockholders at a UPI Stockholders’ Meeting. Except as otherwise disclosed, the execution, delivery and performance of this Agreement by each of Parent and Merger Sub and the consummation by each of Parent and Merger Sub of the Merger and the other transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of each of Parent and Merger Sub.

3.5

Non-Contravention; Consents. Assuming compliance with the applicable provisions of the Securities Act, the Exchange Act,, state securities or “blue sky” laws, and the Stock Exchange of Hong Kong Stock Limited (“SEHK”), neither (1) the execution and delivery of this Agreement by Parent and Merger Sub, nor (2) the consummation of the Merger or any of the Contemplated Transactions, will or would reasonably be expected to, directly or indirectly (with or without notice or lapse of time):

(a)

contravene, conflict with or result in a violation of any of the provisions of the articles of incorporation or bylaws of Parent or Merger Sub;

A-17

(b)

contravene, conflict with or result in a violation of any Legal Requirement or any Order to which Parent or Merger Sub, or any of their material assets, is subject; or

(c)

contravene, conflict with or result in a violation or breach of, or result in a default under, any provision of any material Contract of Parent, or give any Person the right to: (i) declare a default or exercise any remedy under any such Contract; (ii) a rebate, chargeback, penalty or change in delivery schedule under any such Contract; (iii) accelerate the maturity or performance of any such Contract; or (iv) cancel, terminate or modify any right, benefit, obligation or other term of such Contract;

except, in the case of clauses “(b)” and “(c)” of this sentence, as would not reasonably be expected to have a Parent Material Adverse Effect. Except: (A) as may be required by the Securities Act, the Exchange Act, and the SEHK; and (B) as would not reasonably be expected to have a Parent Material Adverse Effect, neither Parent nor Merger Sub was, is or will be required to make any filing with or give any notice to, or to obtain any Consent from, any Person in connection with: (1) the execution, delivery or performance of this Agreement; or (2) the consummation of the Merger or any of the Contemplated Transactions.

3.6

Information Supplied.

(a)

The materials (as defined herein) to be filed by the Parent with the SEHK (including information incorporated by reference therein) (collectively, the “SEHK Materials”) shall not, on the filing date, on the date of mailing to the UPI stockholders and at the time of the UPI Stockholders’ Meeting, and any other filings, schedules or materials required under the SEHK rules to be filed with the SEHK in connection with obtaining the Required UPI Stockholder Vote shall not, as of the date thereof, the date of any amendment or supplement thereto and at the time of the UPI Stockholder Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not false or misleading; or, omit to state any material fact necessary to correct any statement in any earlier communication for the UPI Stockholders’ Meeting which has become false or misleading. The SEHK Materials will comply as to form in all material respects with the provisions of the rules and regulations of the SEHK. If at any time prior to the Effective Time any event relating to the Parent or any of its Affiliates should be discovered by the Parent which is required to be set forth in a supplement to the SEHK Materials or an amendment or supplement thereto, the Parent shall promptly inform the Company. Notwithstanding the foregoing, the Parent makes no representation or warranty with respect to any information supplied by the Company for inclusion in the SEHK Materials.

(b)

The information supplied by Parent for inclusion in the Proxy Statement and any Required Filing shall not (i) in the case of the Proxy Statement, on each relevant filing date, on the date of mailing to the Company’s stockholders and at the time of the Company Stockholders’ Meeting, or (ii) in the case of any Required Filing, as of the date thereof, the date of any amendment or supplement thereto and at the time of the Company Stockholder Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not false or misleading, or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of proxies for the Company Stockholders’ Meeting which has become false or misleading. If at any time prior to the Effective Time, any event relating to Parent or any of its Affiliates should be discovered by Parent which is required to be set forth in a supplement to the Proxy Statement or an amendment or supplement to any Required Filing. Parent shall promptly inform the Company. Notwithstanding the foregoing, Parent makes no representation or warranty with respect to any information supplied by the Company that is contained in the Proxy Statement or any Required Filing.

3.7

Broker Fees. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Merger or any of the other Contemplated Transactions based upon arrangements made by or on behalf of Parent.

3. 8

No Prior Merger Sub Operations. Merger Sub was formed solely for the purpose of effecting the Merger and has not engaged in any business activities or conducted any operations other than in connection with the transactions contemplated hereby.

A-18

Section 4.

CERTAIN COVENANTS OF THE PARTIES

4.1

Access and Investigation. During the period commencing on the date of this Agreement and ending as of the earlier of the Effective Time or the termination of this Agreement (the “Pre-Closing Period”), the Company shall (and shall cause its Subsidiaries to): (a) provide Parent and Parent’s Representatives with reasonable access during normal business hours, upon reasonable notice to the Company, to the Company’s and its Subsidiaries’ personnel and assets and to all existing books, records, Tax Returns, work papers and other documents and information relating to the Company or its Subsidiaries; and (b) provide or make available to Parent and Parent’s Representatives such copies of the existing books, records, Tax Returns, work papers and other documents and information relating to the Company or its Subsidiaries as Parent may reasonably request. Without limiting the generality of any of the foregoing, during the Pre-Closing Period, the Company and Parent shall promptly provide the other party with copies of any notice, report or other document filed with or sent to any Governmental Body on behalf of the Company, Parent or Merger Sub, as applicable, in connection with the Merger or any of the other Contemplated Transactions. The foregoing shall not require the Company to permit any inspection, or to disclose any information, that in the reasonable judgment of the Company could reasonably be expected to result in (i) the disclosure of any trade secrets of third parties or the violation of any obligations of the Company with respect to confidentiality if the Company shall have used reasonable efforts to obtain the consent of such third party to such inspection or disclosure, (ii) the waiver of any applicable attorney-client privilege so long as the Company has taken reasonable steps to permit inspection of or to disclose information described in this clause (ii) on a basis that does not compromise the Company’s privilege with respect thereto or (iii) the violation of any applicable Legal Requirement. The parties shall seek in good faith appropriate substitute disclosure arrangements under circumstances in which the immediately preceding sentence applies.

4.2

Operations Prior to Closing.

(a)

Except as set forth in Part 4.2(a) of the Company Disclosure Schedule or as expressly contemplated or permitted by this Agreement, during the Pre-Closing Period, the Company shall, in all material respects, conduct its business and operations in the ordinary course and in accordance with past practices and the Company shall use its commercially reasonable efforts to preserve substantially intact the business organization of the Company and its Subsidiaries and maintain its existing relationships and goodwill with material customers, suppliers, distributors, creditors, lessors, lessees, employees and business associates.

(b)

Without limiting the generality of the foregoing clause (a), except as set forth in Part 4.2(b) of the Company Disclosure Schedule or as expressly contemplated or permitted by this Agreement, during the Pre-Closing Period, the Company shall not, and shall not permit any Subsidiary to (without the prior written consent of Parent, which consent shall not be unreasonably withheld):

(i)

(A) declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, except for dividends by a wholly-owned Subsidiary of the Company, or (B) repurchase, redeem or otherwise reacquire any shares of capital stock or other securities;

(ii)

sell, issue, grant, pledge or otherwise encumber or authorize the sale, issuance, grant, pledge or encumbrance of: (A) any capital stock or other security; (B) any option, call, warrant or right to acquire any capital stock or other security; or (C) any instrument convertible into or exercisable or exchangeable for any capital stock or other security;

(iii)

amend or permit the adoption of any amendment to its articles of incorporation or bylaws of the Company or any Subsidiary of the Company;

(iv)

adjust, split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;

(v)

authorize or make any commitment with respect to any capital expenditure (except that the Company may authorize or make a commitment with respect to any capital expenditures that, in the aggregate, do not exceed $100,000 between the date hereof and December 31, 2007;

A-19

(vi)

other than in the ordinary course of business and consistent with past practices, amend, terminate (other than expiration in accordance with its terms) or waive any material right or remedy under, any Company Significant Contract;

(vii)

other than the renewal or extension of any such contract on substantially similar terms, enter into any contract that would have been a Company Significant Contract pursuant to Section 2.7(a);

(viii)

acquire, lease or license any right or other asset from any other Person (except as permitted under clause (v) above) or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for any right or asset: (A) acquired, leased, licensed or disposed of by the Company in the ordinary course of business and consistent with past practices and not in an aggregate amount of more than $50,000; or (B) that is not material to the business of the Company);

(ix)

acquire (including by merger, consolidation, acquisition of stock or assets or any other business combination) any business or any corporation, partnership, association or other business organization or division thereof that is material to the Company;

(x)

make any pledge of any of its material assets or permit any of its material assets to become subject to any Encumbrances;

(xi)

lend money to any Person (other than (1) routine travel and business expense advances and sales commissions draws made to Company Employees in the ordinary course of business and (2) routine deferred collections of withholding taxes from employees who are not executive officers of the Company (as defined in Rule 3b-7 under the Exchange Act) in connection with the vesting of restricted shares issued under the Company Option Plans), or incur, guarantee assume or otherwise become responsible for any indebtedness in excess of $50,000 in the aggregate;

(xii)

except as expressly contemplated by Section 4.2(b)(xiii), establish, adopt, enter into or amend any Company Employee Plan or Company Employee Agreement, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any Company Employees (except that the Company: (A) may provide routine, reasonable salary increases to Company Employees who are not executive officers of the Company (as defined in Rule 3b-7 under the Exchange Act) in the ordinary course of business and in accordance with past practices in connection with the Company’s customary employee review process; (B) may amend the Company Employee Plans to the extent required by applicable Legal Requirements; (C) may make customary bonus payments and profit sharing payments consistent with past practices in accordance with bonus and profit sharing plans existing on the date of this Agreement and (D) may make stay bonus payments to any employee not listed on Part 4.2(b)(xii) of the Company Disclosure Schedule so long as such payments are not in excess of $15,000 to any individual employee;

(xiii)

hire any employee (A) with an annual base salary in excess of $50,000 or (B) at the level of executive vice president or above or appoint any non-executive director with annual director’s fees in excess of $75,000;

(xiv)

other than in the ordinary course of business and consistent with past practices or as required by concurrent changes in GAAP or SEC rules and regulations, change any of its methods of accounting or accounting practices in any material respect;

(xv)

(A) make or change any material Tax election, (B) enter into any settlement or compromise of any material Tax liability or (C) surrender any right to claim a material Tax refund;

(xvi)

prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;

A-20

(xvii)

except in connection with the derivative action Hapka v. Crowley, et al. Case No: CA005068, filed on June 1, 2004 in the Circuit Court for Palm Beach County, Florida, settle or compromise any pending or threatened suit, action, claim, arbitration, mediation, inquiry, Legal Proceeding or investigation of or against the Company or any Subsidiary of the Company, unless in connection with such settlements or compromises (A) there is no finding or admission of any violation of any Legal Requirement or the rights of any Person and (B) the sole relief provided is monetary damages not in excess of $50,000 in the aggregate;

(xviii)

enter into any material Contract that requires the consent or approval of any Person to consummate the Contemplated Transactions;

(xix)

enter into a new, or amend in any material respect any existing, transaction, agreement, arrangement or understanding between (A) the Company or any Subsidiary of the Company, on the one hand, and (B) any Affiliate or Associate of the Company (other than any Subsidiary of the Company), on the other hand; or

(xx)

agree or commit to take any of the actions described in clauses ”(i)” through “(xx)” of this Section 4.2(b). If the Company desires to take an action that requires the prior written consent of Parent pursuant to this Section 4.2(b), which consent shall not be unreasonably withheld, the Company shall deliver to Parent a written request for such written consent. Parent shall use commercially reasonable efforts to approve or deny the Company’s request as soon as reasonably practicable, and in any event within two business days after Parent has received the Company’s request. If the Company receives no such consent or denial within two business days after Parent has received the Company’s request, Parent shall be deemed to have granted its consent to the action set forth in such request.

During the Pre-Closing Period, the Company shall promptly notify Parent in writing after learning of any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Section 6 impossible or unlikely or that would reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any material Legal Proceeding or material claim threatened in writing, commenced or asserted against or with respect to the Company. No notification given to Parent pursuant to this Section 4.2(c) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement.

(d)

During the Pre-Closing Period, Parent shall promptly notify the Company in writing of any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Section 7 impossible or unlikely or that would reasonably be expected to have a Parent Material Adverse Effect. Without limiting the generality of the foregoing, Parent shall promptly advise the Company in writing of any material Legal Proceeding or material claim threatened in writing, commenced or asserted against or with respect to Parent relating to the Merger or the other Contemplated Transactions. No notification given to the Company pursuant to this Section 4.2(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of Parent contained in this Agreement.

4.3

No Solicitation; Superior Offer.

(a)

During the Pre-Closing Period, the Company shall not, and the Company shall use its reasonable best efforts to cause its Representatives not to, directly or indirectly other than as set forth below:

(i)

solicit, initiate or knowingly encourage, induce or facilitate the making, submission or announcement of any Acquisition Proposal; or

(ii)

enter into any Contract contemplating or providing for any Acquisition Transaction unless it is anticipated that such Contract will provide a Superior Offer, as defined in Section 4(c) herein;

provided, however, that prior to the Company Stockholders’ Meeting, the Company may furnish information (including non-public information) regarding the Company to, or enter into discussions and negotiations with, any Person in response to an unsolicited, bona fide written proposal, and made after the date hereof that constitutes, or has a reasonable likelihood of resulting in, a Superior Offer, as defined in Section 4(c) herein, if: (A) neither the Company nor any Representative of the Company shall have breached any of the other provisions set forth in this

A-21

Section 4.3; (B) the board of directors of the Company concludes in good faith, after having consulted with outside legal counsel, that such action is necessary for the Board of Directors to comply with its fiduciary duty under applicable law; and (C) prior to furnishing any information regarding the Company to any such Person, such Person has entered into a confidentiality agreement with the Company. At least two business days prior to furnishing any such information to, or entering into discussions or negotiations with, such Person, the Company shall (A) give Parent written notice of the identity of such Person and of the Company’s intention to furnish information to, or enter into discussions or negotiations with, such Person and (B) furnish such information to Parent (to the extent such information has not been previously furnished by the Company to Parent). The Company agrees that neither it nor its Subsidiaries will enter into any confidentiality agreement with any Person subsequent to the date hereof that prohibits the Company from providing such information to Parent.

(b)

The Company shall promptly (and in no event later than 24 hours after receipt of any proposal) advise (orally and in writing) Parent of any proposal or inquiry that would reasonably be expected to lead to the making of a Superior Offer (including the identity of the Person making or submitting such proposal, and the material terms thereof) that is made or submitted by any Person during the Pre-Closing Period. The Company shall keep Parent reasonably informed on a prompt basis with respect to: (i) the status of any proposal; and (ii) the status and terms of any material modification thereto.

(c)

“Superior Offer” shall mean an unsolicited bona fide written Acquisition Proposal by any other Person(s) that the Company’s board of directors and/or the Independent Committee determines, by resolution duly adopted, in its good faith reasonable judgment, and after consulting with its independent financial advisor, and after taking into account the likelihood and anticipated timing of consummation of any Superior Offer, which provides the following: (a) a tender for all, and not less than all, of the minority shares of common stock of the Company, (b) commencement of the tender to occur within fourteen (14) days of the date of the Superior Offer, (c) reasonable and customary closing conditions and no additional material conditions, (d) a financing commitment from a recognized national financing institution, and (e) the potential bidder has been informed and acknowledges that, in accordance with the UK Pensions Act of 2004 (as may be amended from time to time), in certain circumstances, an owner of shares in the Company that exceeds a threshold of 29.9% of the issued and outstanding shares, may be required to make contributions to reduce the underfunded pension liability of certain of the Company’s UK subsidiaries.

Section 5.

ADDITIONAL COVENANTS OF THE PARTIES

5.1

Company Proxy Statement; Required Filing.

(a)

Promptly after the date of this Agreement, the Company shall prepare (with the assistance of Parent) and cause to be filed with the SEC (i) preliminary proxy materials to obtain the Required Company Stockholder Vote and (ii) any Required Filings. Promptly following the later of (i) receipt and resolution of SEC comments on the preliminary proxy materials and any Required Filing or (ii) the expiration of the 10-day waiting period provided in Rule 14a-6(a) promulgated under the Exchange Act, the Company shall file definitive proxy materials with the SEC and cause the Proxy Statement to be mailed to its stockholders. Parent and the Company will cooperate with each other in the preparation of the Proxy Statement and any Required Filing and, prior to filing the Proxy Statement or any Required Filing, the Company shall provide Parent with reasonable opportunity to review and comment on each such filing in advance.

(b)

The Company will notify Parent promptly of the receipt of any comments from the SEC or its staff (or of notice of the SEC’s intent to review the Proxy Statement or any Required Filing) and of any request by the SEC or its staff or any other government officials for amendments or supplements to the Proxy Statement or any Required Filing or any other filing or for additional/supplemental information, and will promptly supply Parent with copies of all correspondence between the Company or any of its Representatives, on the one hand, and the SEC, or its staff or any other government officials, on the other hand, with respect to the Proxy Statement, any Required Filing or other filing. Parent and the Company will cooperate with each other in the preparation of any written response and the Company shall provide Parent with reasonable opportunity to review and comment on any written response in advance. Whenever any event occurs that is required to be set forth in an amendment or supplement to the Proxy Statement, any Required Filing or any other filing, the Company shall promptly inform Parent of such occurrence, cooperate with Parent in the preparation of any such amendment or supplement, provide Parent with

A-22

reasonable opportunity to review and comment on any such amendment or supplement in advance, and shall cooperate in filing with the SEC or its staff or any other government officials, and/or, to the extent required, mailing to the stockholders of the Company, such amendment or supplement.

5.2

Company Stockholders’ Meeting.

(a)

As promptly as practicable after the Proxy Statement is cleared by the SEC for mailing to the Company’s stockholders, the Company shall take all action necessary under all applicable Legal Requirements to duly call, give notice of and hold a meeting of the holders of Company Common Stock to vote on the adoption of this Agreement by the Required Company Stockholder Vote (the “Company Stockholders’ Meeting”). The Company shall ensure that all proxies solicited in connection with the Company Stockholders’ Meeting are solicited in compliance with all applicable Legal Requirements.

(b)

Subject to Section 5.2(c): (i) the Proxy Statement shall include a statement to the effect that the board of directors of the Company, based in part upon the recommendation of the Independent Committee, recommends that the Company’s stockholders vote to adopt this Agreement at the Company Stockholders’ Meeting (the recommendation of the Company’s board of directors, based in part upon the recommendation of the Independent Committee, that the Company’s stockholders vote to adopt this Agreement being referred to as the “Company Board Recommendation”); and (ii) except as provided below, the Company Board Recommendation shall not be withdrawn or modified in a manner adverse to Parent, and no resolution by the board of directors of the Company or the Independent Committee to withdraw the Company Board Recommendation or modify the Company Board Recommendation in a manner adverse to Parent shall be adopted. Notwithstanding anything to the contrary herein: (A) nothing in this Agreement shall preclude the Company from making any public disclosure of any material facts, if: the Company’s board of directors or Independent Committee determines in good faith, after taking into account the advice of the Company’s outside legal counsel, that the failure to make such disclosure would be inconsistent with its fiduciary duties or is required by any Legal Requirement; and (B) nothing in this Agreement shall preclude the Company, the Company’s board of directors or the Independent Committee from complying with Rules 14d-9 and 14e-2(a) or Item 1012(a) of Regulation M-A under the Exchange Act with regard to an Acquisition Proposal).

(c)

Notwithstanding anything to the contrary contained in this Agreement, at any time prior to the adoption of this Agreement by the Required Company Stockholder Vote, the Company Board Recommendation may be withdrawn, or modified in a manner adverse to Parent, pursuant to applicable provisions of the NRS, if the Company’s board of directors or the Independent Committee, after consulting with outside legal counsel representing the Company, determines in good faith that the failure to withdraw or modify the Company prior board Recommendation would be inconsistent with its fiduciary duties under applicable Legal Requirements. The Company shall notify Parent promptly (but in no event later than 24 hours after such withdrawal or modification) of any withdrawal of or modification to the Company Board Recommendation.

(d)

the Company’s obligation to duly call, give notice of and hold the Company Stockholders’ Meeting in accordance with Section 5.2(a) shall not remain in effect in the event of any withdrawal or modification of the Company Board Recommendation.

(e)

In the event that this Agreement is terminated by the Company pursuant to Section 8.1(i) and Section 5.2(c) by reason (A) of the Company after the date of this Agreement having received a Superior Offer, the Company will cause the Person or “group” of Persons making the Superior Offer to pay to the Parent, Pantene and Merger Sub within 30 days of termination of this Agreement, all documented, reasonable costs and expenses up to $850,000 in the aggregate incurred by the Company, Parent, Pantene and Merger Sub in connection with this Agreement and the transactions contemplated hereby, plus a breakup fee of $125,000 to Parent, or (B) for any other reason after the date of this Agreement, the Company will pay all documented, reasonable costs and expenses up to $850,000 in the aggregate incurred by Parent, Pantene and Merger Sub in connection with this Agreement and the transactions contemplated hereby, plus a breakup fee of $125,000 to Parent.

A-23

5.3

UPI Required Filing; Stockholder Meeting.

(a)

Promptly after the date of this Agreement, UPI and Pantene shall prepare (with the assistance of the Company) and, subject to and promptly after the date this Agreement has been duly adopted by the Required Company Stockholder’s Vote (as defined herein), cause to be filed the SEHK Materials to obtain the Required UPI Stockholder Vote (as defined herein) and cause such SEHK Materials to be mailed to the UPI stockholders. Parent and the Company will cooperate with each other in the preparation of the SEHK Materials and, prior to filing the SEHK Materials, the Parent and UPI shall provide Company with reasonable opportunity to review and comment on each such filing in advance.

(b)

As promptly as practicable after the SEHK Materials are cleared by the SEHK for mailing to the UPI stockholders, UPI shall take all action necessary under all applicable Legal Requirements to duly call, give notice of and hold a meeting of the holders of Common Stock of UPI to vote on the adoption of this Agreement by the Required UPI Stockholder Vote (the “UPI Stockholders’ Meeting”).

5.4

Employee Benefits.

(a)

Parent agrees that all employees of the Company or its Subsidiaries who continue employment with the Surviving Corporation or any Subsidiary of the Surviving Corporation after the Effective Time (“Continuing Employees”) will continue to participate in, such Company Employee Plans, if any, as are continued by the Company or any of its Subsidiaries following the Closing Date (for the purposes of this Section 5.4 only, the “Specified Benefit Plans”).

(b)

Nothing in this Section 5.4 or elsewhere in this Agreement shall be construed to create a right in any Company Employee to employment with Parent, the Surviving Corporation, Subsidiary of the Surviving Corporation or any other Subsidiary of Parent. Except for Indemnified Persons (as defined in Section 5.5(a)) to the extent of their respective rights pursuant to Section 5.5, no Company Employee, and no Continuing Employee, shall be deemed to be a third party beneficiary of this Agreement.

5.5

Indemnification of Officers and Directors.

(a)

After the Effective Time for a period of two years from the Effective Time, each of Parent and the Surviving Corporation shall, to the fullest extent permitted under applicable law, indemnify and hold harmless, each present and former director, officer, employee and agent of the Company or any of its subsidiaries (each, together with such person’s heirs, executors or administrators, an “Indemnified Person”) against any costs or expenses (including attorneys’ fees), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of, relating to or in connection with any action or omission occurring or alleged to occur on or prior to the Effective Time (including, without limitation, acts or omissions in connection with such persons serving as an officer, director or other fiduciary in any entity if such service was at the request or for the benefit of the Company) or the Merger, or the Contemplated Transaction, or the other transactions contemplated by this Agreement or arising out of or pertaining to the transactions contemplated by this Agreement to the extent that any such Indemnified Person is indemnified by the Company pursuant to the Company’s articles of incorporation and bylaws as in effect on the date hereof, any other indemnification arrangement as in effect on the date hereof or under the NRS. Parent shall assume, be jointly and severally liable for, and honor, guaranty and stand surety for, and shall cause the Surviving Corporation to honor, in accordance with their respective terms each of the covenants contained in this Section 5.5. Parent agrees not to amend the articles of incorporation or bylaws of Merger Sub to diminish the indemnity. Nothing herein limits the rights of any indemnified person or party pursuant to any applicable law, contract, articles of incorporation, bylaws, or otherwise including without limitation for any periods after two years from the Effective Date.

(b)

Parent shall pay, or upon the reasonable request of any indemnified person, advance all reasonable expenses, including reasonable attorneys’ fees, that may be incurred by any Indemnified Person in enforcing the indemnity and other obligations provided in this Section 5.5.

A-24

(c)

This Section 5.5 is intended to be for the benefit of, and shall be enforceable by, the Indemnified Persons, their heirs and personal representatives and shall be binding on Parent, the Surviving Corporation and its respective successors and assigns, and may not be amended, altered or repealed in a manner that could reasonably be expected to be adverse to the Indemnified Persons after the Effective Time without the prior written consent of the affected Indemnified Person (provided that such amendment, alteration or repeal prior to the Effective Time shall be governed by Section 9.1). In the event that Parent, the Surviving Corporation or any of its respective successors or assigns: (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity in such consolidation or merger; or (ii) transfers all or substantially all its properties and assets to any person, then, and in each case, proper provision shall be made so that the successors and assigns of Parent or the Surviving Corporation, as the case may be, honor the indemnification obligations set forth in this Section 5.5.

5.6

Regulatory Approvals and Related Matters.

(a)

In addition to and without limitation on the other provisions of this Section 5.6, each party shall use reasonable best efforts to prepare and file, as promptly as practicable after the date of this Agreement, all necessary notices, reports and other documents required to be filed by such party with any Governmental Body with respect to the Merger and the Contemplated Transactions.

(b)

Parent, Merger Sub and the Company each shall promptly supply the other party with any information that may be required in order to effectuate any filings or applications pursuant to Section 5.6(a). Except where prohibited by applicable Legal Requirements, each of the Company and Parent shall consult with the other party prior to taking a position with respect to any such filing, shall permit the other to review and discuss in advance, and consider in good faith the views of the other in connection with, any analyses, appearances, presentations, memoranda, briefs, white papers, arguments, opinions and proposals before making or submitting any of the foregoing to any Governmental Body by or on behalf of any party hereto in connection with any investigations or proceedings in connection with this Agreement or the Contemplated Transactions, coordinate with the other in preparing and exchanging such information and promptly provide the other (and its counsel) with copies of all filings, presentations or submissions (and a summary of any oral presentations) made by such party with any Governmental Body in connection with this Agreement or the Contemplated Transactions; provided that with respect to any such filing, presentation or submission, each of Parent and the Company need not supply the other (or its counsel) with copies (or, in case of oral presentations, a summary) to the extent that any Legal Requirement applicable to such party requires such party or its Subsidiaries to restrict or prohibit access to any such properties or information or to the extent required by any existing confidentiality or non-disclosure agreement.

(c)

Each party will notify the other promptly upon the receipt of: (i) any comments from any officials of any Governmental Body in connection with any filings made pursuant hereto, and (ii) any request by any officials of any Governmental Body for amendments or supplements to any filings made pursuant to, or information provided to comply in all material respects with, any applicable Legal Requirements. Whenever any event occurs that is required to be set forth in an amendment or supplement to any filing made pursuant to Section 5.6(a), each party will promptly inform the other of such occurrence and cooperate in filing with the applicable Governmental Body such amendment or supplement.

(d)

Parent and the Company shall use reasonable best efforts to take, or cause to be taken, all actions necessary, proper or advisable to consummate the Merger and, without limiting the generality of the foregoing, each party to this Agreement: (i) shall prepare and make all filings (if any) and give all notices (if any) required to be made and given by such party in connection with the Merger and the Contemplated Transactions; and (ii) shall use reasonable best efforts to obtain each Consent (if any) required to be obtained (pursuant to any applicable Legal Requirement or Contract, or otherwise) by such party in connection with the Merger or any of the Contemplated Transactions, including, but not limited to, (A) entering into negotiations with any applicable Governmental Body; and (B) providing information required by law or governmental regulation; provided, however, that nothing in this Agreement shall require, or be construed to require, Parent to (1) proffer to, or agree to, sell or hold separate and agree to sell, before or after the Effective Time, any assets, businesses or interest in any assets or businesses of Parent, the Company or any of their respective Affiliates (or to consent to any sale, or agreement to sell, by the Company of any of its assets or businesses) or (2) agree to any changes or restriction in the operations of any such assets or businesses that, in the case of clause (2), would have a Parent Material Adverse Effect as defined in subsection (a) of the term “Parent Material Adverse Effect.”

A-25

5.7

Confidentiality; Disclosure.

(a)

Parent and Merger Sub will hold and will cause their Representatives to hold in confidence, all documents and information furnished in connection with this Agreement. Other than documents or information (i) available to the public, (ii) which are or become known by Parent or Merger Sub from a source other than Parent or Merger Sub, as the case may be, other than by a breach of a confidentiality obligation owed to Parent or Merger Sub, respectively, or (iii) required by law to be disclosed.

(b)

The initial press release issued by Parent and the Company concerning this Agreement and the Contemplated Transactions shall be a joint press release and thereafter Parent and the Company shall consult with each other before issuing any press release or otherwise making any public statement regarding the Merger or the Contemplated Transactions, except as may be required by applicable Legal Requirements. Notwithstanding anything to the contrary contained in this Section 5.7, the obligations of Parent and the Company set forth in this Section 5.7 shall not apply with respect to any public statement pursuant to Section 5.2(b) or relating to the withdrawal or modification of the Company Board Recommendation pursuant to Section 5.2(c).

5.8

Performance of Obligations by Parent and Merger Sub. Pantene, as the sole stockholder of Merger Sub, shall, subject to its shareholders’ approval, adopt this Agreement and approve the Merger and shall cause Merger Sub to perform each of its obligations under this Agreement.

Section 6.

CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB

The obligations of Parent and Merger Sub to cause the Merger to be effected and otherwise cause the transactions contemplated by this Agreement to be consummated are subject to the satisfaction, at or prior to the Closing, of each of the following conditions:

6.1

Accuracy of Company Representations. The representations and warranties of the Company set forth in Section 2 of this Agreement other than those listed in the immediately preceding sentence shall be true and correct, on the date hereof and as of the Closing Date as though made on and as of the Closing Date (except to the extent any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Company Material Adverse Effect.

6.2

Performance of Covenants. All of the covenants and obligations in this Agreement that the Company is required to comply with or to perform at or prior to the Closing shall have been complied with and performed in all material respects.

6.3

Company Stockholder Approval. This Agreement shall have been duly adopted by the holders of a majority of the voting power of the shares of Company Common Stock outstanding on the record date for the Company Stockholders’ Meeting (the votes required being referred to herein as the “Required Company Stockholder Vote”).

6.4

Company Officers’ Certificate. Parent shall have received a certificate executed by the Principal Executive Officer and Chief Financial Officer of the Company, in their capacities as such, confirming that the conditions set forth in Sections 6.1 (Accuracy of Company Representations), 6.2 (Performance of Covenants) and 6.3 (Company Stockholder Approval) have been satisfied.

6.5

UPI Stockholder Approval. . This Agreement shall have been duly approved by the holders of a majority of the voting power of the ordinary shares of UPI outstanding on the record date for the Stockholders’ Meeting of (the “Required UPI Stockholder Vote”).

6.6

Other Governmental Approvals. Any Governmental Authorization or other Consent required to be obtained with respect to the Merger under any material Antitrust Law set forth on Part 6.6 of the Company Disclosure Schedule shall have been obtained and shall remain in full force and effect.

A-26

6.7

No Restraints. No temporary restraining order, preliminary or permanent injunction or other Order preventing the consummation of the Merger shall have been issued by any court of competent jurisdiction or other Governmental Body and remain in effect, and there shall not be any Legal Requirement enacted or deemed applicable to the Merger that makes consummation of the Merger illegal.

6.8

No Company Material Adverse Effect. Since the date of this Agreement, no Effect shall have occurred that, individually or when together with all other Effects, has had or would reasonably be expected to have a Company Material Adverse Effect.

Section

CONDITIONS PRECEDENT TO OBLIGATION OF THE COMPANY

The obligation of the Company to effect the Merger and otherwise consummate the transactions contemplated by this Agreement is subject to the satisfaction, at or prior to the Closing, of the following conditions:

7.1

Accuracy of Parent and Merger Sub Representations. The representations and warranties of Parent and Merger Sub set forth in Section 3 of this Agreement shall be true and correct on the date hereof and as of the Closing Date as though made on and as of the Closing Date (except to the extent any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Parent Material Adverse Effect.

7.2

Performance of Covenants. All of the covenants and obligations in this Agreement that Parent and Merger Sub are required to comply with or to perform at or prior to the Closing shall have been complied with and performed in all material respects.

7.3

Company Stockholder Approval. This Agreement shall have been duly adopted by the Required Company Stockholder Vote.

7.4

Parent Officer’s Certificate. The Company shall have received a certificate executed by an executive officer of Parent, in his or her capacity as such, confirming that the conditions set forth in Sections 7.1 (Accuracy of Parent and Merger Sub Representations), 7.2 (Performance of Covenants), and 7.5 (UPI Stockholder Approval) have been satisfied.

7.5

UPI Stockholder Approval. This Agreement shall have been duly approved by the Required UPI Stockholder Vote.

7.6

Other Governmental Approvals. Any Governmental Authorization or other Consent required to be obtained with respect to the Merger under any material Antitrust Law set forth on Part 7.6 of the Company Disclosure Schedule shall have been obtained and shall remain in full force and effect.

7.7

No Restraints. No temporary restraining order, preliminary or permanent injunction or other Order against the Company preventing the consummation of the Merger by the Company shall have been issued by any court of competent jurisdiction or other Governmental Body and remain in effect, and there shall not be any Legal Requirement enacted or deemed applicable to the Merger that makes consummation of the Merger illegal.

7.8

Fairness Opinion. The Fairness Opinion of Capitalink has not been withdrawn or modified in any material respect.

Section

TERMINATION

8.1

Termination. This Agreement may be terminated prior to the Effective Time:

(a)

by mutual written consent of Parent and the Company, duly authorized by the board of directors of Parent and the Company’s board of directors (with the approval of the Independent Committee);

A-27

(b)

by either Parent or the Company (with the approval of the Independent Committee) if the Merger shall not have been consummated by December 31, 2007 or any other date that Parent and the Company may agree upon in writing (the “End Date”);

(c)

by either Parent or the Company (with the approval of the Independent Committee) if a court of competent jurisdiction or other Governmental Body shall have issued a final and nonappealable Order permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger;

(d)

by either Parent or the Company (with the approval of the Independent Committee) if: (i) this Agreement shall not have been adopted at the Company Stockholders’ Meeting (and shall not have been adopted at any adjournment or postponement thereof) by the Required Company Stockholder Vote or (ii) this Agreement shall not have been adopted at the UPI Stockholders’ Meeting (and shall not have been adopted at any adjournment or postponement thereof);

(e)

by Parent if a Company Triggering Event shall have occurred;

(f)

by Parent upon a breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement such that, if such breach were occurring or continuing on the Closing Date, the conditions set forth in Section 6.1 or Section 6.2 would not be satisfied and which breach cannot be or has not been cured prior to the earlier to occur of (i) 30 days following written notice thereof to the breaching party or (ii) the End Date; or

(g)

by the Company upon a breach of any representation, warranty, covenant or agreement on the part of Parent or Merger Sub set forth in this Agreement such that, if such breach were occurring or continuing on the Closing Date, the conditions set forth in Section 7.1 or Section 7.2 would not be satisfied and which breach cannot be or has not been cured prior to the earlier to occur of (i) 30 days following written notice thereof to the breaching party or (ii) the End Date;

(h)

by either Parent or the Company (with the approval of the Independent Committee) if any of the conditions set forth in Sections 6 or 7 have been rendered impossible to satisfy in a timely manner and is not waived by the party entitled to the benefit thereof; or

(i)

by the Company if its board of directors has withdrawn its recommendation pursuant to Section 5.2(c).

8.2

Effect of Termination. In the event of the termination of this Agreement as provided in Section 8.1, this Agreement shall be of no further force or effect and there shall be no liability or obligation on the part of the Company, Parent or Merger Sub or their respective officers or directors; provided, however, that: (i) Section 5.7(a), this Section 8.2, Section 8.3, and Section 9 shall survive the termination of this Agreement and shall remain in full force and effect and (ii) the termination of this Agreement shall not relieve any party from any liability for any willful or intentional breach of any covenant, obligation, representation or warranty contained in this Agreement.

8.3

Expenses. Except as provided herein, all fees and expenses incurred in connection with this Agreement and the Contemplated Transactions shall be paid (or caused to be paid) by the party incurring such expenses, whether or not the Merger is consummated.

Section 9.

MISCELLANEOUS PROVISIONS

9.1

Amendment. This Agreement may be amended with the approval of the Company’s board of directors (with the approval of the Independent Committee) and the board of directors of Parent at any time (whether before or after the adoption of this Agreement by the Company’s stockholders or the UPI stockholders); provided, however, that after any such adoption of this Agreement by the Company’s stockholders or the UPI stockholders, no amendment shall be made which pursuant to applicable Legal Requirements requires further approval of the stockholders of the Company without the further approval of the Company Required Stockholder Vote, or requires further approval of the stockholders of UPI. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

A-28

9.2

Extension; Waiver.

(a)

Subject to Sections 9.2(b) and 9.2(c), at any time prior to the Effective Time, Parent and Merger Sub on the one hand and the Company (with the approval of the Independent Committee) on the other hand may: (i) extend the time for the performance of any of the obligations or other acts of the other party; (ii) waive any inaccuracy in or breach of any representation, warranty, covenant or obligation of the other party in this Agreement or in any document delivered pursuant to this Agreement; and (iii) waive compliance with any covenant, obligation or condition for the benefit of such party contained in this Agreement. The agreement of Parent to any extension or waiver shall be deemed to be the agreement of Merger Sub to such extension or waiver.

(b)

No failure on the part of any party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy.

(c)

No party shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.

9.3

No Survival of Representations and Warranties. None of the representations and warranties contained in this Agreement or in any certificate delivered pursuant to this Agreement shall survive the Merger.

9.4

Entire Agreement; Counterparts; Exchanges by Facsimile or Electronic Delivery. This Agreement and the other agreements, exhibits and disclosure schedules referred to herein constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, among or between any of the parties with respect to the subject matter hereof and thereof. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. The exchange of a fully executed Agreement (in counterparts or otherwise) by facsimile or by electronic delivery in .pdf format shall be sufficient to bind the parties to the terms and conditions of this Agreement.

9.5

Applicable Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Nevada regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. In any action between any of the parties arising out of or relating to this Agreement or any of the Contemplated Transactions, each of the parties irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of the State of Nevada, County of Clark. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO IT THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.5.

9.6

Attorneys’ Fees. In any action at law or suit in equity to enforce this Agreement or the rights of any of the parties hereunder, the prevailing party in such action or suit shall be entitled to receive its reasonable and documented attorneys’ fees and all other reasonable costs and expenses incurred in such action or suit.

A-29

9.7

Assignability; No Third Party Rights. Neither this Agreement nor any party’s rights or obligations hereunder may be assigned or delegated by such party without the prior written consent of the other parties, and any attempted assignment or delegation of this Agreement or any of such rights or obligations by any party without the prior written consent of the other parties shall be void and of no effect, except that this Agreement and Parent’s and Merger Sub’s rights (but not its obligations) hereunder may be assigned by Parent or Merger Sub to an Affiliate, to a lender or financial institution as collateral for indebtedness or, after the Closing, Parent’s and Merger Sub’s rights and obligations hereunder may be assigned by Parent or Merger Sub in connection with a merger, consolidation or sale of all or substantially all of the assets of Parent or the Surviving Corporation and its Subsidiaries; provided, however, that no such assignment shall relieve the assigning party of its obligations hereunder. Subject to the immediately preceding sentence, this Agreement shall be binding upon, and shall be enforceable by and inure solely to the benefit of, the parties hereto and their respective successors and assigns. Except as specifically provided in Section 5.5, nothing in this Agreement, express or implied, is intended to or shall confer upon any Person (other than the parties hereto) any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

9.8

Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given or made as follows: (a) if sent by registered or certified mail in the United States return receipt requested, upon receipt; (b) if sent designated for overnight delivery by nationally recognized overnight air courier (such as DHL or Federal Express), two business days after mailing; (c) if sent by facsimile transmission before 5:00 p.m., when transmitted and receipt is confirmed; (d) if sent by facsimile transmission after 5:00 p.m. and receipt is confirmed, on the following business day; and (e) if otherwise actually personally delivered, when delivered, provided that such notices, requests, demands and other communications are delivered to the address set forth below, or to such other address as any party shall provide by like notice to the other parties to this Agreement:

if to Parent or Merger Sub:

United Pacific Industries Limited

Suite 27-05/06, 27/F.,

Vicwood Plaza

199 Des Voeux Road Central

Hong Kong

Attn: The Chairman

Fax: (852) 2802 9163

With a copy to:

Schneider Weinberger & Beilly LLP

2200 Corporate Blvd. N.W., Suite 210

Boca Raton, FL 33431

Attn: James Schneider

Fax: (561) 362-9612

if to the Company:

Spear & Jackson, Inc.

12012 Southshore Boulevard

Suite 103

Wellington, Florida 33414

Attn: The Chairman

Fax: (561) 793-7966

A-30

with a copy to:

(i) The Chairman of the Board

Atlas Way, Atlas North

Sheffield S4 7QQ

United Kingdom

(ii) Arnstein & Lehr LLP

200 East Las Olas Blvd., Suite 1700

Ft. Lauderdale, Florida 33301

Attn: Joel Mayersohn

Fax: 954.713.7700

9.9

Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions of this Agreement or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If a final judgment of a court of competent jurisdiction declares that any term or provision of this Agreement is invalid or unenforceable, the parties hereto agree that the court making such determination shall have the power to limit such term or provision, to delete specific words or phrases or to replace such term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be valid and enforceable as so modified. In the event such court does not exercise the power granted to it in the prior sentence, the parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term or provision.

9.10

Construction.

(a)

For purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter genders; and the neuter gender shall include masculine and feminine genders.

(b)

The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement.

(c)

As used in this Agreement, the words “include” and “including,” and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words “without limitation.”

(d)

Except as otherwise indicated, all references in this Agreement to “Sections,” “Exhibits” and “Schedules” are intended to refer to Sections of this Agreement and Exhibits or Schedules to this Agreement.

(e)

The bold-faced headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.

(f)

For purposes of Section 8, references to the failure of a party to perform its covenants or obligations in this Agreement shall, in the case of Parent, include the failure of Merger Sub to perform its covenants or obligations in this Agreement.

[Remainder of page intentionally left blank]

A-31

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

UNITED PACIFIC INDUSTRIES LIMITED, a Bermuda corporation

By: __________________________________

PANTENE GLOBAL HOLDINGS LIMITED, a Hong Kong corporation

By: ___________________________________

PANTENE GLOBAL ACQUISITION CORP., a Nevada corporation

By: _________________________________

SPEAR & JACKSON, INC.,

a Nevada corporation

By: __________________________________

A-32

EXHIBIT A

CERTAIN DEFINITIONS

For purposes of the Agreement (including this Exhibit A):

Acquisition Proposal. “Acquisition Proposal” shall mean any offer or proposal (other than an offer or proposal made or submitted by Parent) contemplating or otherwise relating to any Acquisition Transaction.

Acquisition Transaction. “Acquisition Transaction” shall mean any transaction or series of related transactions (other than: (1) the Contemplated Transactions and (2) any transaction in furtherance of the consummation of the Contemplated Transactions with the express consent of Parent) involving:

(a)

any merger, exchange, consolidation, business combination, issuance of securities, acquisition of securities, reorganization, recapitalization, takeover offer, tender offer, exchange offer or other similar transaction: (i) in which the Company is a constituent corporation; (ii) in which a Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) of Persons directly or indirectly acquires or would acquire beneficial or record ownership of securities representing more than 20% of the outstanding voting securities of the Company or of any new series or new class of capital stock that would be entitled to a class or series vote with respect to the Merger; or (iii) in which the Company issues securities representing more than 20% of the outstanding voting securities of the Company or of any new series or new class of capital stock that would be entitled to a class or series vote with respect to the Merger;

(b)

any sale, lease, exchange, transfer, license, acquisition or disposition of any business or businesses or assets that constitute or account for 20% or more of the consolidated net revenues, consolidated net income or consolidated assets of the Company and its Subsidiaries taken as a whole; or

(c)

any liquidation or dissolution of the Company.

Agreement. “Agreement” shall mean the Agreement and Plan of Merger to which this Exhibit A is attached, as it may be amended from time to time.

Affiliate. “Affiliate” shall have the meaning ascribed to such term under Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

Associate. “Associate” means, with respect to any specified Person, (1) any corporation or organization of which such Person is an officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities, (2) any trust or other estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity, and (3) any relative or spouse of such Person, or any relative of such spouse.

Closing Date.

“Closing Date” has the meaning as defined in Section 1.3.

Code. “Code” shall mean the United States Internal Revenue Code of 1986, as amended.

Company Affiliate. “Company Affiliate” shall mean any Person under common control with the Company within the meaning of Section 414(b), Section 414(c), Section 414(m) or Section 414(o) of the Code, and the regulations issued thereunder.

Company Associate. “Company Associate” shall mean any current officer, director, or other employee, of the Company or any Company Affiliate.

Company Common Stock. “Company Common Stock” shall mean the Common Stock, $0.001 par value per share, of the Company.

A-33

Company Contract. “Company Contract” shall mean any Contract to which any of the Company or any of its Subsidiaries is a party or otherwise bound.

Company Disclosure Schedule. “Company Disclosure Schedule” shall mean the Company Disclosure Schedule and exhibits thereto that has been delivered by the Company to Parent upon the execution of the Agreement.

Company Employee. “Company Employee” shall mean any current director, officer or employee of the Company or any of its Subsidiaries.

Company Employee Agreement. “Company Employee Agreement” shall mean any employment, severance, retention, transaction bonus, change in control, material consulting, or other similar Contract between: (a) the Company or any of its Subsidiaries or any Company Affiliate; and (b) any Company Associate, other than any such Contract that is terminable “at will” (or following a notice period imposed by applicable law) without any obligation on the part of the Company or any of its Subsidiaries or any Company Affiliate to make any severance, termination, change in control or similar payment or to provide any benefit, other than severance payments required to be made by the Company or any of its Subsidiaries pursuant to the Company’s standard severance policies or under applicable foreign law.

Company Employee Plan. “Company Employee Plan” shall mean any material plan, program, policy, practice or Contract providing for compensation, severance, termination pay, deferred compensation, performance awards, stock or stock-related awards, fringe benefits, retirement benefits or other benefits or remuneration of any kind, whether or not in writing that is maintained or contributed to, or required to be maintained or contributed to, by the Company or any Company Affiliate for the benefit of any Company Associate; provided, however, that a Company Employee Agreement shall not be considered a Company Employee Plan.

Company Group. “Company Group” shall mean any “affiliated group” (as defined in Section 1504(a) of the Code without regard to the limitations contained in Section 1504(b) of the Code) that, at any time on or before the Closing Date, includes or has included the Company or any Subsidiary or any predecessor of or successor to the Company or any Subsidiary (or another such predecessor or successor), or any other group of corporations that, at any time on or before the Closing Date, files or has filed Tax Returns on a combined, consolidated or unitary basis with the Company or any Subsidiary or any predecessor of or successor to the Company or any Subsidiary (or another such predecessor or successor).

Company Material Adverse Effect. “Company Material Adverse Effect” shall mean any adverse event, condition, effect, change, event, development or circumstance (each, an “Effect”) that, individually or when considered together with all other Effects, would reasonably be expected to have a material adverse effect on: (a) the business, condition (financial or otherwise) or results of operations of the Company and its Subsidiaries taken as a whole; provided, however, that, in no event shall any of the following, alone or in combination, be deemed to constitute, nor shall any of the following be taken into account in determining whether there has occurred, a Company Material Adverse Effect: (i) effects resulting from conditions generally affecting the industries in which the Company or its customers participate or the U.S. or global economy or capital markets as a whole, to the extent that such conditions do not have a disproportionate impact on the Company and its Subsidiaries taken as a whole; (ii) changes in the trading price or trading volume of Company Common Stock; (iii) effects resulting from the announcement (or pre-announcement disclosure), or pendency of the Merger and the Contemplated Transactions (including any cancellation of or delays in customer orders, any reduction in sales, any disruption in distributor, reseller, supplier, partner or similar relationships or any loss of employees); (iv) any failure by the Company to meet internal projections or forecasts or third party revenue or earnings predictions for any period ending (or for which revenues or earnings are released) on or after the date of this Agreement, in and of themselves (it being understood that the Effects giving rise or contributing to the failure to meet such projections, forecasts or predictions may be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect), (v) stockholder class action or derivative litigation, or similar claims or actions, arising from allegations of breach of fiduciary duty relating to the Company entering into this Agreement or disclosure violations in the securities filings made in connection with the Merger; (vi) effects resulting from compliance with the terms of, or the taking of any action required by, this Agreement, including actions taken pursuant to Section 5.6; (vii) changes in applicable Legal Requirements or GAAP; or (viii) effects resulting directly from the items set forth

A-34

on Part A of the Company Disclosure Schedule or (b) the ability of the Company to consummate the Merger prior to the Initial End Date or, if applicable, the Extended End Date.

Company Product. “Company Product” shall mean any product or service developed, manufactured, marketed, distributed, provided, leased, licensed or sold, directly or indirectly, by or on behalf of the Company that is material to the business of the Company as currently conducted, and accounted for at least 5% of Company’s revenues for the fiscal year ending September 30, 2006.

Company SEC Documents. “Company SEC Documents” bears the meaning as defined in Section 2.3(a).

Company Triggering Event. A “Company Triggering Event” shall be deemed to have occurred if: (a) at any time prior to the Company Stockholder Vote, the Company’s board of directors shall have withdrawn or shall have modified in a manner adverse to Parent the Company Board Recommendation; (b) the Company shall have failed to include in the Proxy Statement the Company Board Recommendation; (c) at any time prior to the Company Stockholder Vote, the Company’s board of directors shall have approved or publicly endorsed or recommended any Acquisition Proposal; (d) at any time prior to the Company Stockholder Vote, the Company shall have entered into any letter of intent, acquisition agreement or similar agreement accepting an Acquisition Proposal; or (e) at any time prior to the Company Stockholder Vote, a tender or exchange offer relating to securities of the Company shall have been commenced by a Person unaffiliated with Parent and the Company shall not have sent to its stockholders, within 10 business days after the commencement of such tender or exchange offer, a statement disclosing that the Company recommends rejection of such tender or exchange offer.

Consent. “Consent” shall mean any approval, consent, ratification, permission, waiver or authorization (including any Governmental Authorization).

Contemplated Transactions. “Contemplated Transactions” shall mean the Merger and the other transactions contemplated by the Agreement.

Contract. “Contract” shall mean any currently effective and legally binding written agreement, contract, subcontract, lease, instrument, note, option, warranty, purchase order, license, sublicense, commitment or undertaking.

Dissenting Shares. “Dissenting Shares” shall mean any shares of Company Common Stock that are issued and outstanding immediately prior to the Effective Time and in respect of which appraisal rights shall have been properly perfected in accordance with the NRS in connection with the Merger and shall not have been effectively withdrawn or otherwise lost.

Effective Time.

“Effective Time” has the meaning as defined in Section 1.3.

Encumbrance. “Encumbrance” shall mean any lien, pledge, charge, mortgage, easement, encroachment, imperfection of title, title exception, title defect, right of possession, lease, security interest, encumbrance, adverse claim, interference or restriction on transfer (except for restrictions arising under applicable securities laws) except for: (i) liens or other imperfections of title that would not be reasonably likely to, individually or in the aggregate, materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the Company; (ii) liens and encumbrances for Taxes, assessments or other government charges not yet due or which are being contested in good faith; (iii) zoning, building or other similar government restrictions; (iv) easements, covenants, rights of way or other similar restrictions with respect to real property; (v) vendor’s liens not exceeding the unpaid purchase price of the encumbered asset; (vi) pledges or deposits to secure obligations under workers’ compensation laws or similar legislation or to secure public or statutory obligations; (vii) non-exclusive licenses entered into in the ordinary course of business and (viii) liens securing indebtedness that are reflected on the Company Unaudited Balance Sheet.

Entity. “Entity” shall mean any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any company

A-35

limited by shares, limited liability company or joint stock company), firm, society or other enterprise, association, organization or entity.

Exchange Act. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

Expenses. “Expenses” shall mean documented and reasonable out-of-pocket fees and expenses incurred or paid by or on behalf of Parent in connection with the Merger or related to the authorization, preparation, negotiation, execution and performance of this Agreement and the Contemplated Transactions, including all documented and reasonable fees and expenses of law firms, commercial banks, investment banking firms, financing sources, accountants, experts and consultants to Parent.

GAAP. “GAAP” shall mean generally accepted accounting principles in the United States.

Government Bid. “Government Bid” shall mean any quotation, bid or proposal submitted to any Governmental Body or any proposed prime contractor or higher-tier subcontractor of any Governmental Body.

Government Contract. “Government Contract” shall mean any prime contract, subcontract, letter contract, purchase order or delivery order executed or submitted to or on behalf of any Governmental Body or any prime contractor or higher-tier subcontractor, or under which any Governmental Body or any such prime contractor or subcontractor otherwise has or may acquire any right or interest.

Governmental Authorization. “Governmental Authorization” shall mean any permit, license, certificate, franchise, permission, variance, clearance, registration, qualification or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement.

Governmental Body. “Governmental Body” shall mean any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental division, department, agency, commission, instrumentality, official, ministry, fund, foundation, center, organization, unit, body or Entity and any court or other tribunal); or (d) self-regulatory organization.

Know-How. “Know-How” shall mean algorithms, apparatus, databases, data collections, diagrams, designs, formulae, inventions (whether or not patentable), know-how, methods, processes, proprietary information, protocols, schematics, specifications, software, software code (in any form, including source code and executable or object code), techniques, user interfaces, URLs, web sites and other forms of technology (whether or not embodied in any tangible form and including all tangible embodiments of the foregoing, such as instruction manuals, laboratory notebooks, prototypes, samples, studies and summaries).

Knowledge. “knowledge” shall mean, with respect to any party as to any particular matter, the actual knowledge, after reasonable investigation, of the executive officers of such party regarding such matter.

Legal Proceeding. “Legal Proceeding” shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, inquiry, audit, examination or investigation commenced, brought, conducted or heard by or before, or otherwise involving, any court or other Governmental Body or any arbitrator or arbitration panel.

Legal Requirement. “Legal Requirement” shall mean any federal, state, local, municipal, foreign or other law, statute, constitution, ordinance, code, edict, decree, rule or regulation issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body (or under the authority of the NASD or The NASDAQ Stock Market).

Order. “Order” shall mean any order, writ, injunction, judgment or decree.

Parent Disclosure Schedule. “Parent Disclosure Schedule” shall mean the Parent Disclosure Schedule that has been delivered by Parent to the Company on the date of the Agreement.

A-36

Parent Material Adverse Effect. “Parent Material Adverse Effect” shall mean any Effect that, individually or when considered together with all other Effects, is or would reasonably be expected to have a material adverse effect on: (a) the business, properties, condition (financial or otherwise) or results of operations of Parent and its Subsidiaries taken as a whole or (b) the ability of Parent to timely consummate the Merger.

Person. “Person” shall mean any individual, Entity or Governmental Body.

Representatives. “Representatives” shall mean directors, officers, agents, attorneys, accountants, advisors, financing sources and representatives.

Required Company Stockholder Vote. “Required Company Stockholder Vote” has the meaning as defined in Section 6.3.

Required UPI Stockholder Vote. “Required UPI Stockholder Vote” has the meaning as defined in Section 6.5.

Sarbanes-Oxley Act. “Sarbanes-Oxley Act” shall mean the Sarbanes-Oxley Act of 2002, as it may be amended from time to time.

SEC. “SEC” shall mean the United States Securities and Exchange Commission.

Securities Act. “Securities Act” shall mean the Securities Act of 1933, as amended.

Subsidiary. An Entity shall be deemed to be a “Subsidiary” of another Person if such Person (a) directly or indirectly owns or purports to own, beneficially or of record: (i) an amount of voting securities of or other interests in such Entity that is sufficient to enable such Person to elect at least a majority of the members of such Entity’s board of directors or other governing body or (ii) at least 50% of the outstanding equity, voting or financial interests in such Entity; or (b) is a general partner of the Entity.

Tax. “Tax” shall mean any federal, state, local, or foreign tax (including any income, franchise, capital gains, gross receipts, value-added, surtax, estimated, unemployment, national health insurance, excise, ad valorem, transfer, stamp, sales, use, property, custom duty, withholding or payroll tax), including any penalty, interest or addition thereto), imposed by or under the authority of any Governmental Body.

Tax Return. “Tax Return” shall mean any return (including any information return), report, statement, declaration or other document (including any schedule or attachment thereto, and including any amendment thereof) required to be filed with any Governmental Body with respect to Taxes.

A-37

EXHIBIT B



	Capitalink, L.C.
4400 Biscayne Blvd. 14th Floor Miami, Florida 33137 Phone 305-446-2026 Fax 305-446-2926 www.capitalinklc.com

June 14, 2007

The Finance Committee of

the Board of Directors

Spear & Jackson, Inc.

12012 South Shore Blvd.

Suite 103

Wellington, FL 33414

Gentlemen:

We have been advised that, pursuant to the Agreement, draft dated May 9, 2007, and certain verbal agreements between Spear & Jackson, Inc. (the “Company”) and United Pacific Industries Limited, the Company’s majority shareholder (“UPI”) (the “Merger Agreement”), that UPI will acquire, for $1.96 per share in cash (the “Merger Consideration”), the remaining outstanding shares of common stock of the Company that UPI does not presently own from the holders of such shares (the “Non-UPI Shareholders”) (the “Merger”). The terms and conditions of the Merger are more specifically set forth in the Merger Agreement.

We have been retained to render an opinion as to whether, on the date of such opinion, the Merger Consideration is fair, from a financial point of view, to the Non-UPI Shareholders.

We have not been requested to opine as to, and our opinion does not in any manner address, the relative merits of the Merger as compared to any alternative business strategy that might exist for the Company, the decision of whether the Company should complete the Merger, and other alternatives to the Merger that might exist for the Company. The financial terms and other terms of the Merger were determined pursuant to negotiations between the Company, UPI and each of their respective advisors, and not pursuant to our recommendations.

In arriving at our opinion, we took into account an assessment of general economic, market and financial conditions as well as our experience in connection with similar transactions and securities valuations generally and, among other things:



Reviewed the Merger Agreement.



Reviewed publicly available financial information and other data with respect to the Company that we deemed relevant, including the Annual Report on Form 10-K for the year ended September 30, 2006, the Quarterly Report on Form 10-Q for the six months ended March 31, 2007, and the Current Reports on Form 8-K filed January 26, 2007, February 9, 2007, February 21, 2007, April 25, 2007, May 15, 2007 and June 12, 2007.

Member NASD|SIPC

Mergers & Acquisitions | Fairness Opinions & Valuations | Restructuring | Capital Raising | Financial Advisory

B-1

The Finance Committee of

the Board of Directors

Spear & Jackson, Inc.

June 14, 2007

Page 2



Reviewed non-public information and other data with respect to Company, including, financial projections for the five years ending September 30, 2011 (the “Projections”), management estimates of the current projected benefit obligations in excess of plan assets (the “PBO Estimate”) and other internal financial information and management reports.



Considered the historical financial results and present financial condition of the Company.



Reviewed and compared the trading of, and the trading market for the Company’s common stock, the Comparable Companies (as hereinafter defined), and two general market indices



Reviewed and analyzed the Company’s projected unlevered free cash flows and prepared a discounted cash flow analysis.



Reviewed and analyzed certain financial characteristics of publicly-traded companies that were deemed by us to have characteristics comparable to the Company (the “Comparable Companies”).



Reviewed and analyzed certain financial characteristics of target companies in transactions where such target company was deemed by us to have characteristics comparable to that of the Company.



Reviewed and analyzed the premiums paid in certain other transactions.



Reviewed and discussed with representatives of the Company management and their advisors certain financial and operating information furnished by them, including the Projections, the PBO Estimate and other analyses with respect to the Company’s business, operations and obligations.



Performed such other analyses and examinations as were deemed appropriate.

In arriving at our opinion we have relied upon and assumed the accuracy and completeness of all of the financial and other information that was used by us without assuming any responsibility for any independent verification of any such information and we have further relied upon the assurances of the Company and UPI management that they were not aware of any facts or circumstances that would make any such information inaccurate or misleading. With respect to the financial information, Projections and the PBO Estimate utilized, we assumed that such information has been reasonably prepared on a basis reflecting the best currently available estimates and judgments, and that such information provides a reasonable basis upon which we could make our analysis and form an opinion. We have not evaluated the solvency or fair value of the Company under any foreign, state or federal laws relating to bankruptcy, insolvency or similar matters. We have not made a physical inspection of the properties and facilities of the Company and have not made or obtained any evaluations or appraisals of the Company’s assets and liabilities (contingent or otherwise). In addition, we have not attempted to confirm whether the Company has good title to its assets.

We assumed that the Merger will be consummated in a manner that complies in all respects with the applicable provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all other applicable foreign, federal and state statutes, rules and regulations. We assumed that the Merger will be consummated substantially in accordance with the terms set forth in the Merger Agreement, without any further amendments thereto, and without waiver by the Company of any of the conditions to any obligations or in the alternative that any such amendments, revisions or waivers thereto will not be detrimental to the Company or its shareholders in any material respect.

Our analysis and opinion are necessarily based upon market, economic and other conditions, as they exist on, and could be evaluated as of, June 14, 2007. Accordingly, although subsequent developments may affect our opinion, we do not assume any obligation to update, review or reaffirm our opinion.

Our opinion is for the use and benefit of the Finance Committee of the Board of Directors of the Company in connection with its consideration of the Merger and is not intended to be and does not constitute an opinion or recommendation to any shareholder of the Company as to how such shareholder should vote with respect to the Merger. We do not express any opinion as to the underlying valuation or future performance of the Company, or the price at which the Company’s securities might trade at any time in the future.

B-2

The Finance Committee of

the Board of Directors

Spear & Jackson, Inc.

June 14, 2007

Page 3

Based upon and subject to the foregoing, it is our opinion that, as of the date of this letter, the Merger Consideration is fair, from a financial point of view, to the Non-UPI Shareholders.

In connection with our services, we have previously received a retainer and will receive the balance of our fee when we notify the Company that we are prepared to deliver the opinion. Our fee for providing the fairness opinion is not contingent on the completion of the Merger. Neither Capitalink nor its principals beneficially own any interest in the Company or UPI. Further, Capitalink has not provided any other services to the Company or UPI in the past. In addition, the Company has agreed to indemnify us for certain liabilities that may arise out of the rendering this opinion.

In the ordinary course of business, Capitalink’s affiliate Ladenburg Thalmann & Co. Inc. (“Ladenburg”), certain of Ladenburg’s affiliates, as well as investment funds in which they may have financial interests, may acquire, hold or sell, long or short positions, or trade or otherwise effect transactions, in debt, equity, and other securities and financial instruments (including bank loans and other obligations) of, or investments in, the Company, any other party that may be involved in the Merger and their respective affiliates.

Our opinion is for the use and benefit of the Finance Committee of the Board of Directors of the Company and is rendered in connection with its consideration of the Merger and may not be used by the Company for any other purpose or reproduced, disseminated, quoted or referred to by the Company at any time, in any manner or for any purpose, without our prior written consent, except that this opinion may be reproduced in full in, and references to the opinion and to us and our relationship with the Company may be included in filings made by the Company with the Securities and Exchange Commission, if required by Securities and Exchange Commission rules, and in any proxy statement or similar disclosure document disseminated to shareholders if required by the Securities and Exchange Commission rules.

Very truly yours,

/s/ Capitalink, L.C.

Capitalink, L.C.

B-3

EXHIBIT C

Sections 92A.300 through 92A.500 of the Nevada Revised Statutes

Nevada Revised Statutes § 92A.300 to § 92A.500

NRS 92A.300. Definitions. As used in NRS 92A.300 to 92A.500, inclusive, unless the context otherwise requires, the words and terms defined in NRS 92A.305 to 92A.335, inclusive, have the meanings ascribed to them in those sections.

NRS 92A.305. “Beneficial stockholder” defined. “Beneficial stockholder” means a person who is a beneficial owner of shares held in a voting trust or by a nominee as the stockholder of record.

NRS 92A.310. “Corporate action” defined. “Corporate action” means the action of a domestic corporation.

NRS 92A.315. “Dissenter” defined. “Dissenter” means a stockholder who is entitled to dissent from a domestic corporation’s action under NRS 92A.380 and who exercises that right when and in the manner required by NRS 92A.400 to 92A.480, inclusive.

NRS 92A.320. “Fair value” defined. “Fair value,” with respect to a dissenter’s shares, means the value of the shares immediately before the effectuation of the corporate action to which he objects, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable.

NRS 92A.325. “Stockholder” defined. “Stockholder” means a stockholder of record or a beneficial stockholder of a domestic corporation.

NRS 92A.330. “Stockholder of record” defined. “Stockholder of record” means the person in whose name shares are registered in the records of a domestic corporation or the beneficial owner of shares to the extent of the rights granted by a nominee’s certificate on file with the domestic corporation.

NRS 92A.335. “Subject corporation” defined. “Subject corporation” means the domestic corporation which is the issuer of the shares held by a dissenter before the corporate action creating the dissenter’s rights becomes effective or the surviving or acquiring entity of that issuer after the corporate action becomes effective.

NRS 92A.340. Computation of interest. Interest payable pursuant to NRS 92A.300 to 92A.500, inclusive, must be computed from the effective date of the action until the date of payment, at the average rate currently paid by the entity on its principal bank loans or, if it has no bank loans, at a rate that is fair and equitable under all of the circumstances.

NRS 92A.350. Rights of dissenting partner of domestic limited partnership. A partnership agreement of a domestic limited partnership or, unless otherwise provided in the partnership agreement, an agreement of merger or exchange, may provide that contractual rights with respect to the partnership interest of a dissenting general or limited partner of a domestic limited partnership are available for any class or group of partnership interests in connection with any merger or exchange in which the domestic limited partnership is a constituent entity.

NRS 92A.360. Rights of dissenting member of domestic limited-liability company. The articles of organization or operating agreement of a domestic limited-liability company or, unless otherwise provided in the articles of organization or operating agreement, an agreement of merger or exchange, may provide that contractual rights with respect to the interest of a dissenting member are available in connection with any merger or exchange in which the domestic limited-liability company is a constituent entity.

C-1

NRS 92A.370. Rights of dissenting member of domestic nonprofit corporation.

Except as otherwise provided in subsection 2 and unless otherwise provided in the articles or bylaws, any member of any constituent domestic nonprofit corporation who voted against the merger may, without prior notice, but within 30 days after the effective date of the merger, resign from membership and is thereby excused from all contractual obligations to the constituent or surviving corporations which did not occur before his resignation and is thereby entitled to those rights, if any, which would have existed if there had been no merger and the membership had been terminated or the member had been expelled.
Unless otherwise provided in its articles of incorporation or bylaws, no member of a domestic nonprofit corporation, including, but not limited to, a cooperative corporation, which supplies services described in chapter 704 of NRS to its members only, and no person who is a member of a domestic nonprofit corporation as a condition of or by reason of the ownership of an interest in real property, may resign and dissent pursuant to subsection 1.

NRS 92A.380. Right of stockholder to dissent from certain corporate actions and to obtain payment for shares.

Except as otherwise provided in NRS 92A.370; and 92A.390, any stockholder is entitled to dissent from, and obtain payment of the fair value of his shares in the event of any of the following corporate actions:

(a) Consummation of a conversion or plan of merger to which the domestic corporation is a constituent entity:

(1) If approval by the stockholders is required for the conversion or merger by NRS 92A.120 to 92A.160, inclusive, or the articles of incorporation, regardless of whether the stockholder is entitled to vote on the conversion or plan of merger; or

(2) If the domestic corporation is a subsidiary and is merged with its parent pursuant to NRS 92A.180.

(b) Consummation of a plan of exchange to which the domestic corporation is a constituent entity as the corporation whose subject owner’s interests will be acquired, if his shares are to be acquired in the plan of exchange.

(c) Any corporate action taken pursuant to a vote of the stockholders to the extent that the articles of incorporation, bylaws or a resolution of the board of directors provides that voting or nonvoting stockholders are entitled to dissent and obtain payment for their shares.

(d) Any corporate action not described in paragraph (a), (b) or (c) that will result in the stockholder receiving money or scrip instead of fractional shares.

A stockholder who is entitled to dissent and obtain payment pursuant to NRS 92A.300 to 92A.500, inclusive, may not challenge the corporate action creating his entitlement unless the action is unlawful or fraudulent with respect to him or the domestic corporation.

NRS 92A.390. Limitations on right of dissent: Stockholders of certain classes or series; action of stockholders not required for plan of merger.

There is no right of dissent with respect to a plan of merger or exchange in favor of stockholders of any class or series which, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting at which the plan of merger or exchange is to be acted on, were either listed on a national securities exchange, included in the national market system by the National Association of Securities Dealers, Inc., or held by at least 2,000 stockholders of record, unless:

(a) The articles of incorporation of the corporation issuing the shares provide otherwise; or

C-2

(b) The holders of the class or series are required under the plan of merger or exchange to accept for the shares anything except:

(1) Cash, owner’s interests or owner’s interests and cash in lieu of fractional owner’s interests of:

(I) The surviving or acquiring entity; or

(II) Any other entity which, at the effective date of the plan of merger or exchange, were either listed on a national securities exchange, included in the national market system by the National Association of Securities Dealers, Inc., or held of record by a least 2,000 holders of owner’s interests of record; or

(2) A combination of cash and owner’s interests of the kind described in sub-subparagraphs (I) and (II) of subparagraph (1) of paragraph (b).

There is no right of dissent for any holders of stock of the surviving domestic corporation if the plan of merger does not require action of the stockholders of the surviving domestic corporation under NRS 92A.130.

NRS 92A.400. Limitations on right of dissent: Assertion as to portions only to shares registered to stockholder; assertion by beneficial stockholder.

A stockholder of record may assert dissenter’s rights as to fewer than all of the shares registered in his name only if he dissents with respect to all shares beneficially owned by any one person and notifies the subject corporation in writing of the name and address of each person on whose behalf he asserts dissenter’s rights. The rights of a partial dissenter under this subsection are determined as if the shares as to which he dissents and his other shares were registered in the names of different stockholders.
A beneficial stockholder may assert dissenter’s rights as to shares held on his behalf only if:

(a) He submits to the subject corporation the written consent of the stockholder of record to the dissent not later than the time the beneficial stockholder asserts dissenter’s rights; and

(b) He does so with respect to all shares of which he is the beneficial stockholder or over which he has power to direct the vote.

NRS 92A.410. Notification of stockholders regarding right of dissent.

If a proposed corporate action creating dissenters’ rights is submitted to a vote at a stockholders’ meeting, the notice of the meeting must state that stockholders are or may be entitled to assert dissenters’ rights under NRS 92A.300 to 92A.500, inclusive, and be accompanied by a copy of those sections.
If the corporate action creating dissenters’ rights is taken by written consent of the stockholders or without a vote of the stockholders, the domestic corporation shall notify in writing all stockholders entitled to assert dissenters’ rights that the action was taken and send them the dissenter’s notice described in NRS 92A.430.

NRS 92A.420. Prerequisites to demand for payment for shares.

If a proposed corporate action creating dissenters’ rights is submitted to a vote at a stockholders’ meeting, a stockholder who wishes to assert dissenter’s rights:

(a) Must deliver to the subject corporation, before the vote is taken, written notice of his intent to demand payment for his shares if the proposed action is effectuated; and

(b) Must not vote his shares in favor of the proposed action.

C-3

If a proposed corporate action creating dissenters’ rights is taken by written consent of the stockholders, a stockholder who wishes to assert dissenters’ rights must not consent to or approve the proposed corporate action.
A stockholder who does not satisfy the requirements of subsection 1 or 2 and NRS 92A.400 is not entitled to payment for his shares under this chapter.

NRS 92A.430. Dissenter’s notice: Delivery to stockholders entitled to assert rights; contents.

The subject corporation shall deliver a written dissenter’s notice to all stockholders entitled to assert dissenters’ rights.
The dissenter’s notice must be sent no later than 10 days after the effectuation of the corporate action, and must:

(a) State where the demand for payment must be sent and where and when certificates, if any, for shares must be deposited;

(b) Inform the holders of shares not represented by certificates to what extent the transfer of the shares will be restricted after the demand for payment is received;

(c) Supply a form for demanding payment that includes the date of the first announcement to the news media or to the stockholders of the terms of the proposed action and requires that the person asserting dissenter’s rights certify whether or not he acquired beneficial ownership of the shares before that date;

(d) Set a date by which the subject corporation must receive the demand for payment, which may not be less than 30 nor more than 60 days after the date the notice is delivered; and

(e) Be accompanied by a copy of NRS 92A.300 to 92A.500, inclusive.

NRS 92A.440. Demand for payment and deposit of certificates; retention of rights of stockholder.

A stockholder to whom a dissenter’s notice is sent must:

(a) Demand payment;

(b) Certify whether he or the beneficial owner on whose behalf he is dissenting, as the case may be, acquired beneficial ownership of the shares before the date required to be set forth in the dissenter’s notice for this certification; and

The stockholder who demands payment and deposits his certificates, if any, before the proposed corporate action is taken retains all other rights of a stockholder until those rights are cancelled or modified by the taking of the proposed corporate action.
The stockholder who does not demand payment or deposit his certificates where required, each by the date set forth in the dissenter’s notice, is not entitled to payment for his shares under this chapter.

NRS 92A.450. Uncertificated shares: Authority to restrict transfer after demand for payment; retention of rights of stockholder.

The subject corporation may restrict the transfer of shares not represented by a certificate from the date the demand for their payment is received.

C-4

The person for whom dissenter’s rights are asserted as to shares not represented by a certificate retains all other rights of a stockholder until those rights are canceled or modified by the taking of the proposed corporate action.

NRS 92A.460. Payment for shares: General requirements.

Except as otherwise provided in NRS 92A.470, within 30 days after receipt of a demand for payment, the subject corporation shall pay each dissenter who complied with NRS 92A.440 the amount the subject corporation estimates to be the fair value of his shares, plus accrued interest. The obligation of the subject corporation under this subsection may be enforced by the district court:

(a) Of the county where the corporation’s registered office is located; or

(b) At the election of any dissenter residing or having its registered office in this state, of the county where the dissenter resides or has its registered office. The court shall dispose of the complaint promptly.

The payment must be accompanied by:

(a) The subject corporation’s balance sheet as of the end of a fiscal year ending not more than 16 months before the date of payment, a statement of income for that year, a statement of changes in the stockholders’ equity for that year and the latest available interim financial statements, if any;

(b) A statement of the subject corporation’s estimate of the fair value of the shares;

(d) A statement of the dissenter’s rights to demand payment under NRS 92A.480; and

(e) A copy of NRS 92A.300 to 92A.500, inclusive.

NRS 92A.470. Payment for shares: Shares acquired on or after date of dissenter’s notice.

A subject corporation may elect to withhold payment from a dissenter unless he was the beneficial owner of the shares before the date set forth in the dissenter’s notice as the date of the first announcement to the news media or to the stockholders of the terms of the proposed action.
To the extent the subject corporation elects to withhold payment, after taking the proposed action, it shall estimate the fair value of the shares, plus accrued interest, and shall offer to pay this amount to each dissenter who agrees to accept it in full satisfaction of his demand. The subject corporation shall send with its offer a statement of its estimate of the fair value of the shares, an explanation of how the interest was calculated, and a statement of the dissenters’ right to demand payment pursuant to NRS 92A.480.

NRS 92A.480. Dissenter’s estimate of fair value: Notification of subject corporation; demand for payment of estimate.

A dissenter may notify the subject corporation in writing of his own estimate of the fair value of his shares and the amount of interest due, and demand payment of his estimate, less any payment pursuant to NRS 92A.460, or reject the offer pursuant to NRS 92A.470 and demand payment of the fair value of his shares and interest due, if he believes that the amount paid pursuant to NRS 92A.460 or offered pursuant to NRS 92A.470 is less than the fair value of his shares or that the interest due is incorrectly calculated.
A dissenter waives his right to demand payment pursuant to this section unless he notifies the subject corporation of his demand in writing within 30 days after the subject corporation made or offered payment for his shares.

C-5

NRS 92A.490. Legal proceeding to determine fair value: Duties of subject corporation; powers of court; rights of dissenter.

If a demand for payment remains unsettled, the subject corporation shall commence a proceeding within 60 days after receiving the demand and petition the court to determine the fair value of the shares and accrued interest. If the subject corporation does not commence the proceeding within the 60-day period, it shall pay each dissenter whose demand remains unsettled the amount demanded.
A subject corporation shall commence the proceeding in the district court of the county where its registered office is located. If the subject corporation is a foreign entity without a resident agent in the state, it shall commence the proceeding in the county where the registered office of the domestic corporation merged with or whose shares were acquired by the foreign entity was located.
The subject corporation shall make all dissenters, whether or not residents of Nevada, whose demands remain unsettled, parties to the proceeding as in an action against their shares. All parties must be served with a copy of the petition. Nonresidents may be served by registered or certified mail or by publication as provided by law.
The jurisdiction of the court in which the proceeding is commenced under subsection 2 is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. The appraisers have the powers described in the order appointing them, or any amendment thereto. The dissenters are entitled to the same discovery rights as parties in other civil proceedings.
Each dissenter who is made a party to the proceeding is entitled to a judgment:

(a) For the amount, if any, by which the court finds the fair value of his shares, plus interest, exceeds the amount paid by the subject corporation; or

(b) For the fair value, plus accrued interest, of his after-acquired shares for which the subject corporation elected to withhold payment pursuant to NRS 92A.470.

NRS 92A.500. Legal proceeding to determine fair value: Assessment of costs and fees.

The court in a proceeding to determine fair value shall determine all of the costs of the proceeding, including the reasonable compensation and expenses of any appraisers appointed by the court. The court shall assess the costs against the subject corporation, except that the court may assess costs against all or some of the dissenters, in amounts the court finds equitable, to the extent the court finds the dissenters acted arbitrarily, vexatiously or not in good faith in demanding payment.
The court may also assess the fees and expenses of the counsel and experts for the respective parties, in amounts the court finds equitable:

(a) Against the subject corporation and in favor of all dissenters if the court finds the subject corporation did not substantially comply with the requirements of NRS 92A.300 to 92A.500, inclusive; or

(b) Against either the subject corporation or a dissenter in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously or not in good faith with respect to the rights provided by NRS 92A.300 to 92A.500, inclusive.

If the court finds that the services of counsel for any dissenter were of substantial benefit to other dissenters similarly situated, and that the fees for those services should not be assessed against the subject corporation, the court may award to those counsel reasonable fees to be paid out of the amounts awarded to the dissenters who were benefited.
In a proceeding commenced pursuant to NRS 92A.460, the court may assess the costs against the subject corporation, except that the court may assess costs against all or some of the dissenters who are parties to the

C-6

proceeding, in amounts the court finds equitable, to the extent the court finds that such parties did not act in good faith in instituting the proceeding.

This section does not preclude any party in a proceeding commenced pursuant to NRS 92A.460; or 92A.490 from applying the provisions of N.R.C.P. 68 or NRS 17.115.

C-7

EXHIBIT D

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(MARK ONE)

[X] Annual Report Pursuant To Section 13 or 15(d) of The Securities Exchange

Act of 1934

For the fiscal year ended September 30, 2006

[ ] Transition Report Pursuant to Section 13 or 15(d) of The Securities

Exchange Act of 1934

For the transition period from N/A to N/A

COMMISSION FILE NUMBER: 0-32013

SPEAR & JACKSON, INC.

---------------------

(Exact name of registrant as specified in its charter)

Nevada 91-2037081

------ ----------

(State or other jurisdiction) (I.R.S. Employer

of incorporation or organization Identification No.)

12012 Southshore Boulevard, Suite 103, Wellington, Florida 33414

----------------------------------------------------------------

(Address of principal executive offices, including Zip Code)

(561) 793 7233

--------------

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Exchange Act: NONE.

Securities registered pursuant to Section 12(g) of the Exchange Act:

COMMON STOCK, PAR VALUE $0.001 PER SHARE.

(TITLE OF CLASS)

Indicate by check mark whether the registrant (1) has filed all reports required

to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during

the past 12 months (or for such shorter period that the registrant was required

to file such reports), and (2) has been subject to such filing requirements for

the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is a well-known seasoned user (as

defined in Rule 405 of the Securities Act). Yes [ ] No [X]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405

of Regulation S-K is not contained herein, and will not be contained, to the

best of registrant's knowledge, in definitive proxy or information statements

incorporated by reference in Part III of this Form 10-K or any amendment to this

Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an

accelerated filer, or a non-accelerated filer. See definition of "accelerated

filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check

one):

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X]

Indicate by check mark whether the registrant is a shell company (as defined in

Rule 12b-2 of the Exchange Act), Yes [ ] No [X]

The aggregate market value of the registrant's common stock (which is the only

common equity of the registrant, voting or non-voting) held by non-affiliates

computed by reference to the closing price of a share of the common stock as

reported in the "Pink Sheets" of the Over The Counter market on March 30, 2006

was $3,617,262.

The number of shares of registrant's common stock outstanding as of January 15,

2007 was 5,735,561.

D-1

TABLE OF CONTENTS

PAGE

----

PART I

ITEM 1 BUSINESS ........................................................ 3

ITEM 1A RISK ANALYSIS ................................................... 17

ITEM 2 PROPERTIES ...................................................... 22

ITEM 3 LEGAL PROCEEDINGS ............................................... 23

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ............. 25

PART II

ITEM 5 MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ............... 26

ITEM 6 SELECTED CONSOLIDATED FINANCIAL DATA ............................ 27

ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS ....................................... 28

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ...... 66

ITEM 8 CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ........ 68

ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

AND FINANCIAL DISCLOSURE ........................................ 69

ITEM 9A CONTROLS AND PROCEDURES ......................................... 69

ITEM 9B OTHER INFORMATION ............................................... 70

PART III

ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT .................. 70

ITEM 11 EXECUTIVE COMPENSATION .......................................... 72

ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS ................................. 73

ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS .................. 77

ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES .......................... 78

PART IV

ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K . 78

SIGNATURES ................................................................. 80

D-2

PART I

ITEM 1. BUSINESS

CORPORATE ORGANISATION

Spear & Jackson, Inc. ("Spear & Jackson", the "Company" or "we") currently

conducts its business operations through its wholly owned subsidiaries, Spear &

Jackson plc and Bowers Group plc, and, until September 30, 2003, Mega Tools Ltd

and Mega Tools USA, Inc. A brief summary of our corporate organizational history

is as follows:

Incorporation of Megapro Tools, Inc.

The Company was incorporated under the name Megapro Tools, Inc., on December 17,

1998 under the laws of the State of Nevada. The Company was inactive until the

acquisition of Mega Tools Ltd and Mega Tools USA, Inc., by means of a reverse

acquisition, on September 30, 1999.

Incorporation of Mega Tools Ltd and Mega Tools USA, Inc.

Mega Tools Ltd was incorporated in British Columbia, Canada, on January 7, 1994.

Mega Tools USA Inc. was incorporated under the laws of the State of Washington

on April 18, 1994. Prior to the acquisition by Megapro Tools, Inc., Mega Tools

USA Inc. was operated as a subsidiary of Mega Tools Ltd.

The acquisition of Mega Tools Ltd and Mega Tools USA, Inc. by Megapro Tools,

Inc.

On September 30, 1999 Mega Tools Ltd was acquired from Mrs. Maria Morgan,

Envision Worldwide Products Ltd, Mr. Robert Jeffrey, Mr. Lex Hoos and Mr. Eric

Paakspuu in exchange for the issue of 6,200,000 restricted shares in the common

stock of Megapro Tools, Inc. These shares were valued at $275 for accounting

purposes, representing the total paid-in-capital of the Mega Tools Ltd shares

acquired. Mega Tools USA, Inc. was acquired from Mega Tools Ltd in exchange for

the payment of $340,000 which was satisfied by the issuance of a promissory note

to Mega Tools Ltd. The acquisition of Mega Tools USA, Inc. was completed

immediately prior to the acquisition of Mega Tools Ltd. Megapro Tools, Inc. had

no business assets prior to the acquisition of the two companies.

Prior to the acquisition of Mega Tools Ltd and Mega Tools USA, Inc., each of

Mrs. Maria Morgan, Mr. Robert Jeffery, Mr. Lex Hoos and Mr. Eric Paakspuu were

shareholders of Mega Tools Ltd. Neither Mrs. Maria Morgan, Mr. Robert Jeffery,

Mr. Lex Hoos nor Mr. Eric Paakspuu was a director or officer of Mega Tools Ltd

or Mega Tools USA and neither individual had any management role with Mega Tools

Ltd or Mega Tools USA, either before or after the acquisition. Envision

Worldwide Products Ltd owned 24.8% of the shares of Mega Tools Ltd prior to the

acquisition of this interest by Megapro Tools, Inc.

The former stockholders of Mega Tools Ltd acquired a proportionate interest in

Megapro Tools, Inc. upon completion of the acquisition of Mega Tools Ltd and

Mega Tools USA. Mr. Neil Morgan, husband of Mrs. Maria Morgan, was sole promoter

upon inception. Other than the issue of stock to Mrs. Maria Morgan upon the

acquisition of Mega Tools Ltd, Mr. Morgan did not enter into any agreement with

the Company in which he was to receive from or to provide to the company

anything of value. Mr. Neil Morgan was the legal and beneficial owner of the

interest in Mega Tools Ltd held by Mrs. Maria Morgan. Mrs. Morgan acquired the

interest previously held by Mr. Morgan on April 16, 1999. Prior to the

acquisition of Mega Tools Ltd and Mega Tools USA, Mr. Neil Morgan was the

president and chief executive officer of Megapro Tools, Inc. and each of Mega

Tools Ltd and Mega Tools USA. Mr. Morgan continued as president and CEO of

Megapro Tools, Inc. upon completion of this acquisition.

Acquisition of Spear & Jackson plc and Bowers Group plc by Megapro Tools, Inc.

On August 23, 2002, USI Mayfair Limited, a corporation organized under the laws

of England and a wholly owned subsidiary of USI Global Corp., Megapro Tools,

Inc. ("Megapro") and S and J Acquisitions Corp. (a company incorporated on

August 22, 2002 under the laws of the State of Florida and a wholly owned

subsidiary of Megapro Tools, Inc.) executed a Stock Purchase Agreement to

acquire all of the issued and outstanding shares of Spear & Jackson plc and its

affiliate, Bowers Group plc, owned by USI Mayfair Limited. The purchase price

comprised 3,543,281 shares of common stock of Megapro and promissory notes in

the principal amount of L150,000 pounds sterling ($232,860) ("the Transaction").

The Transaction closed on September 6, 2002.

D-3

Concurrently with the closing of the Transaction, and as a condition precedent

thereto, Megapro closed a Private Placement pursuant to which it agreed to issue

6,005,561 shares of the common stock of Megapro to PNC Tool Holdings, LLC, a

Nevada limited liability company ("PNC"), in consideration for $2,000,000 (the

"Private Placement"). Mr. Dennis Crowley ("Crowley"), who became CEO of the

company, was the sole owner of PNC.

In connection with the closing of the Transaction, certain principal

shareholders of Megapro, including Envision Worldwide Products, Ltd, Neil Morgan

and Maria Morgan contributed an aggregate of 4,742,820 shares of their common

stock of Megapro to the capital of Megapro, and agreed to a two-year lock-up

with respect to their remaining 192,480 shares of common stock of Megapro. The

stockholders did not receive any consideration in connection with their

contribution of shares. As a result of the closing of the Transaction and the

Private Placement, and upon the effectuation of all post closing matters,

Megapro had 12,011,122 shares of common stock outstanding, 6,005,561 shares of

which were beneficially owned by PNC. The shares issued to PNC was subject to

the terms of a Stockholder's Agreement and a Registration Rights Agreement.

In the Stockholders' Agreement dated as of September 6, 2002 by and among

Megapro Tools, Inc., USI Mayfair Limited, PNC and Crowley (the "Stockholders")

it was agreed that, other than certain "unrestricted transfers", the parties

involved would not transfer any Company securities for the two years beginning

on September 6, 2002. On September 6, 2002, under an unrestricted transfer

relating to the transfer of stock from a permitted affiliate, USI Mayfair

Limited, transferred all of the Company securities owned by it, along with all

of its rights under the Stockholders' Agreement, to USI Global Corp.

Since the date of the Transaction, the Company has not issued any shares of its

stock except under a limited number of options and has not engaged in any

financing using its stock.

Change of Name to Spear & Jackson, Inc.

On October 1, 2002, the Board of Directors unanimously executed a written

consent authorizing and recommending that the stockholders approve a proposal to

effect the change of name to Spear & Jackson, Inc. On October 2, 2002, company

stockholders holding a majority of the voting power of the Company executed a

written consent authorizing and approving the proposal to effect the name

change.

The Board believed that the new name, Spear & Jackson, Inc., would reflect the

change in business and would promote public recognition and more accurately

reflect the Company's intended business focus.

On November 7, 2002, the name of the Company was changed from Megapro Tools,

Inc. to Spear & Jackson, Inc. through the filing of a Certificate of Amendment

to the Company's Articles of Incorporation with the Secretary of State of the

State of Nevada.

Recent Regulatory Matters and Acquisition of Minority Interest by United Pacific

Industries Limited from Jacuzzi Brands, Inc.

On April 15, 2004, the US Securities and Exchange Commission filed suit in the

U.S. District Court for the Southern District of Florida against the Company and

Mr. Dennis Crowley, its then current Chief Executive Officer/Chairman, among

others, alleging violations of the federal securities laws. Specifically with

regard to the Company, the SEC alleged that the Company violated the SEC's

registration, anti-fraud and reporting provisions. These allegations arise from

the alleged failure of Mr. Crowley to accurately report his ownership of the

Company's stock, and his alleged manipulation of the price of the Company's

stock through dissemination of false information, allowing him to profit from

sales of stock through nominee accounts. On May 10, 2004, the Company consented

to the entry of a preliminary injunction, without admitting or denying the

allegations of the SEC complaint. The SEC is continuing its investigation into

pension issues. The Company is offering its full cooperation.

As a further measure, the Court appointed a Corporate Monitor to oversee the

Company's operations. In addition to Mr. Crowley consenting to a preliminary

injunction the Court's order also temporarily barred Mr. Crowley from service as

an officer or director of a public company, and prohibited him from voting or

disposing of Company stock.

D-4

Following Mr. Crowley's suspension the Board appointed Mr. J.R. Harrington, a

member of its Board of Directors, to serve as the Company's interim Chairman.

Mr. William Fletcher, a fellow member of the Company's Board of Directors, who,

until October 27, 2004, was the Company's Chief Financial Officer, and who is a

director of Spear & Jackson plc, based in Sheffield, was elected to serve as

acting Chief Executive Officer.

Following extensive settlement negotiations with the SEC and Mr. Crowley, the

Company reached a resolution with both parties. On September 28, 2004, Mr.

Crowley signed a Consent to Final Judgment of Permanent Judgment with the SEC,

without admitting or denying the allegations included in the complaint, which

required a disgorgement and payment of civil penalties by Mr. Crowley consisting

of a disgorgement payment of $3,765,777 plus prejudgment interest in the amount

of $304,014, as well as payment of a civil penalty in the amount of $2,000,000.

In May 2005, the SEC applied to the Court for the appointment of an

administrator for the distribution of these funds as well as funds collected

from co-defendants International Media Solutions, Inc., Yolanda Velazquez and

Kermit Silva who are not affiliated with the Company, to the victims of their

actions, pursuant to the Fair Funds provisions of the Sarbanes-Oxley Act of

2002.

On November 18, 2004, the Company signed a Consent to Final Judgment of

Permanent Injunction with the SEC pursuant to which the Company, without

admitting or denying the allegations included in the Complaint filed by the

Commission, consented to a permanent injunction from violation of various

sections and rules under the Securities Act of 1933 and the Securities Exchange

Act of 1934. No disgorgement or civil penalties were sought from, or ordered to

be paid by, the Company.

Additionally, the Company entered into a Stock Purchase Agreement with PNC Tool

Holdings LLC ("PNC") and Mr. Crowley, the sole member of PNC. Under the Stock

Purchase Agreement, the Company acquired, for $100, and other good and valuable

consideration, 6,005,561 common shares of the Company held by PNC, which

represented approximately 51.1% of the outstanding common shares of the Company

at December 31, 2004, and which constituted 100% of the common stock held by

such entity. The parties also executed general releases in favor of each other

subject to the fulfillment of the conditions of the Stock Purchase Agreement.

The Stock Purchase Agreement was effected on April 8, 2005, following formal

approval by the SEC on February 10, 2005 and, on February 15, 2005 by the U.S.

District Court for the Southern District of Florida of the settlement of the

litigation captioned SEC v. Dennis Crowley, Spear & Jackson, Inc., International

Media Solutions, Inc., Yolanda Velazquez and Kermit Silva (Case No:

04-80354-civ-Middlebrooks). The Stock Purchase Agreement was further conditioned

on, among other things, the disgorgement and civil penalty funds being paid by

Mr. Crowley. These monies have now been received and are being administered for

the benefit of the victims of the alleged fraud by a court appointed

administrator pursuant to the Fair Funds provision of the Sarbanes-Oxley Act of

2002.

With the return of the Spear & Jackson shares to the Company by PNC, the

stockholders of the Company had their percentage stock interest increase

correspondingly. Jacuzzi Brands, Inc. ("Jacuzzi"), which at this time was a

beneficial owner of 3,543,281 shares of common stock, had its interest in the

Company increased to approximately 61.8% of the outstanding common stock.

On April 11, 2005, Jacuzzi agreed to the termination of a previous letter

agreement dated September 6, 2002, which supplemented the Stockholders'

Agreement of the same date. The letter agreement required Jacuzzi to vote a

substantial portion of its voting stock in the Company in proportion to the vote

of other stockholders of the Company. At the time the letter was executed,

Jacuzzi was a principal, but a minority shareholder of the Company. As explained

above, with the return to the capital of the Company of the majority shareholder

interest previously held by PNC, Jacuzzi now holds a majority capital stock

interest in the Company, and the continuation of the letter agreement was no

longer considered necessary for the fulfillment of its original intent. Jacuzzi

also provided a general release to the Company and its affiliates excepting

Dennis Crowley and his spouse.

D-5

Disposal of Majority Interest by Jacuzzi to United Pacific Industries Limited

On April 21, 2005, Jacuzzi adopted a plan of disposition of its interest in the

Company's common stock. On March 23, 2006, Jacuzzi and its subsidiary

undertaking, USI American Holdings, Inc. ("USI" and, together with Jacuzzi, "the

Seller") entered into a Stock Purchase Agreement (the "Stock Purchase Agreement"

with United Pacific Industries Limited ("UPI"), a Bermuda Corporation, whose

shares are traded on the Hong Kong Exchange, to sell its entire holding of

3,543,281 shares of the common stock ("the Shares") of Spear & Jackson, Inc. to

UPI for $1.40 per share for an aggregate purchase price of $4,960,593.

The representations, warranties and covenants made by Jacuzzi and UPI are

typical for this type of transaction, and include a covenant that restricts

Jacuzzi from soliciting or negotiating with a third party between the signing

date of the Stock Purchase Agreement and the closing date of the transaction.

Jacuzzi has also agreed that, in connection with the closing of the transaction,

it will, among other things, cause UPI's designees and one designee of Jacuzzi

to be elected to the Board of Directors of Spear & Jackson, Inc. and will use

commercially reasonable best efforts so that such UPI designees are in

sufficient numbers to give UPI a majority of the Board of Directors of the Spear

& Jackson, Inc. UPI has also agreed that neither it nor any of its affiliates

will purchase any additional Common Stock during the period from the signing

date of the Stock Purchase Agreement through one year following the closing at a

price less than $1.40 per share.

The purchase of the Shares by UPI contemplated by the Stock Purchase Agreement

was subject to the satisfaction of a number of closing conditions, including

approval by UPI's shareholders and the United Kingdom Pensions Regulator, and

receipt of certain other regulatory approvals as well as other customary closing

conditions. A copy of the Stock Purchase Agreement is on file with the SEC in

connection with the filing by Jacuzzi of a Schedule 13D/A on March 27, 2006.

The Seller and UPI entered into Amendment No. 1 dated as of May 4, 2006

("Amendment No. 1 to the Stock Purchase Agreement") to extend the date by which

the Seller and UPI were required to lodge the clearance application with the UK

Pensions Regulator. The Seller and UPI subsequently received a comfort letter

dated July 5, 2006 issued by the UK Pensions Regulator (the "Comfort Letter").

The Seller and UPI have agreed to waive the condition contained in the Stock

Purchase Agreement for a clearance from the UK Pensions Regulator and to accept

the Comfort Letter in satisfaction of that condition.

The trustees of Spear & Jackson, Inc.'s UK Pension Plan confirmed by a letter

dated July 6, 2006 their acceptance of the UK Pensions Regulator's

determination. The Seller and UPI then entered into Amendment No. 2 dated as of

July 10, 2006 ("Amendment No. 2 to the Stock Purchase Agreement") to waive their

respective requirements for a clearance from the UK Pensions Regulator and to

accept in its place the Comfort Letter which states the UK Pensions Regulator is

of the view, based on the information supplied to him in connection with the

clearance application, that the change of control as a result of the sale by the

Seller of all of its shares of Spear & Jackson, Inc. to UPI is not detrimental

to the UK pension plan and the UK Pensions Regulator believes that a clearance

is not necessary for the transaction.

In addition, pursuant to Amendment No. 2 to the Stock Purchase Agreement, UPI

agreed, subject to the Closing having occurred, to indemnify the Seller and JBI

Holdings Limited (the "Jacuzzi Indemnified Parties") should the UK Pensions

Regulator, regardless of the Comfort Letter, require any of the Jacuzzi

Indemnified Parties to make a contribution or provide financial support in

relation to the potential pension plan liabilities of SJI or its subsidiaries.

In addition, UPI has also agreed that for a period of 12-months from the Closing

Date, UPI will not, and will use its best efforts to ensure that neither Spear &

Jackson, Inc. nor any of its subsidiaries will, take any action or omit to take

any action that causes the UK Pensions Regulator, as a result of such action or

omission, to issue a contribution notice against the Jacuzzi Indemnified Parties

in relation to any UK pension plan in which Spear & Jackson, Inc. or any

subsidiary of Spear & Jackson, Inc. is an employer. Further, UPI agreed that for

a period of 12-months from the Closing Date, that it will not (and will use its

best efforts to ensure that neither Spear & Jackson, Inc. nor any subsidiary of

Spear & Jackson, Inc. will) engage in any action or inaction which in relation

to any such UK pension plan would fall within the UK Pension Regulation

clearance guidance note dated April 2005 as a 'Type A' event unless UPI procures

that clearance is issued by the UK Pensions Regulator in relation to such event

in terms which confirm that no Jacuzzi Indemnified Party shall be linked to a

financial support direction or contribution notice in respect of such event.

D-6

Closing occurred on July 28, 2006.

On June 22, 2006, Jacuzzi and UPI filed a preliminary Form 14C with the SEC

announcing notice of change in control and of a majority of directors pursuant

to section 14(f) of the Securities Exchange Act of 1934 and Rule 14f-1

thereunder. The 14C indicated that three new directors would be designated by

and elected to the Board of directors by UPI, to serve until the Company's next

annual meeting. The 14C became effective on August 7, 2006, and the three new

directors replaced the incumbent directors on about August 27, 2006. In the

interim, the Board by resolution, appointed the three new directors--Lewis Hon

Ching Ho, Andy Yan Wai Poon and Maria Yuen Man Lam--to the Board effective on

August 9, 2006.

As previously reported by the Company, on July 28, 2006, Jacuzzi Brands, Inc.

together with USI American Holdings, Inc., completed the sale of their shares of

common stock of Spear & Jackson (representing a majority interest) to United

Pacific Industries Limited, which shares are held by United Pacific Industries

Limited's wholly-owned subsidiary Pantene Global Holdings Limited (collectively,

"UPI"). On August 7, 2006, the Company filed with the Securities and Exchange

Commission, and mailed to the Company's stockholders, an Information Statement

pursuant to Sections 14(c) and 14(f) of the Securities Exchange Act of 1934, as

amended, disclosing the intention of UPI to execute a written consent, as

majority stockholder, electing to the Board of Directors the following UPI

nominees: Lewis Hon Ching Ho; Andy Yan Wai Poon; and Maria Yuen Man Lam. On

August 9, 2006, the Board of Directors expanded the Board of Directors from

three members to six members and elected as additional directors Messrs. Ho and

Poon and Ms. Lam. Information concerning the backgrounds of the new Directors is

included in the Information Statement under the heading "Information Regarding

the Executive Officers and New Directors".

The Board of Directors elected the new Directors as a means to facilitate the

transition from the prior Board of Directors to the new Board of Directors.

Messrs. Harrington, Fletcher and Dinerman retired as Directors on or about

August 27, 2006. No new officers have been elected as yet by the Company.

Although Soneet Kapila has continued to serve as Corporate Monitor for the

Company, on January 10, 2007 he applied to the Court to terminate the role of

Corporate Monitor having determined that his function was no longer necessary.

The Court has not yet ruled on this application.

Brian C. Beazer, the Chairman of UPI, is a director of Jacuzzi and holds

approximately 24.56% of the shares of UPI. David H. Clarke, who, until his

retirement in September 2006, was the Chairman and Chief Executive Officer of

Jacuzzi, is a director of UPI and holds approximately 22.88% of the shares of

UPI. Mr. Clarke also holds approximately 28,350 shares of common stock of Spear

& Jackson, Inc., representing approximately 0.49% of the shares of Spear &

Jackson, Inc. but the shares of Spear & Jackson, Inc. owned by Mr. Clarke are

not being purchased at the time of the sale of the Shares by the Seller to UPI.

Further Changes to Corporate Organization

During the year ended September 30, 2005 the Company set up a new sales and

distribution facility, CV Instruments BV, in Maastricht, Holland. This new

facility specializes in the distribution of portable hardness testing equipment

manufactured in China and the sale of general engineers hand tools.

Additionally, an allied manufacturing, quality control and distribution centre,

Bowers Eclipse Equipment Shanghai Co. Limited, was established in Shanghai,

China and it is expected to become fully operational as a distribution and

manufacturing operation during the second quarter of fiscal 2007.

Exit from Screwdriver and Thread Gauge Measuring Operations

With effect from September 30, 2003 the Company exited its screwdriver

operations following the disposition of the trade and assets of Mega Tools Ltd

and Mega Tools USA, Inc.

The disposition of the trade and assets of the screwdriver division was

undertaken by Neil Morgan who was then heading up the division. The Company

believed that no specific authorization was afforded to Mr. Morgan to undertake

that disposition. The disposition proceeds were in the form of $284,000 of loan

notes and other receivables and the discharge of a loan of $100,000 owed by the

Company to the managing director of the screwdriver division. Full provision was

made in the Company's Financial Statements against the recoverability of these

disposition proceeds. It was subsequently agreed with Megapro that it would pay

Canadian $ 53,900 (approximately $41,000) in settlement of those debts and these

were paid in monthly installments of Canadian $5,000 (approximately $3,800).

D-7

During the fourth quarter of fiscal 2005, the Company began marketing for sale

certain assets associated with its UK thread gauge measuring business. On

February 28, 2006, the Company concluded the sale of these assets for a nominal

consideration. The assets sold comprised plant and equipment, inventories and

goodwill. The acquirer paid L1 sterling and assumed certain liabilities in

respect of the leased premises from which the trade operates. The carrying

values of the assets relating to this operation have been written down to

estimated fair value and the net operations, cash flows and assets have been

presented as "Discontinued Operations" in accordance with Statement of Financial

Accounting Standards ("SFAS") 144.

Recent Litigation Developments

Subsequent to the SEC action a number of class action lawsuits were initiated in

the U.S. District Court for the Southern District of Florida by Company

stockholders against the Company, Sherb & Co. LLP, the Company's former

independent auditor, and certain of the Company's directors and officers,

including Mr. Crowley, the Company's former Chief Executive Officer/Chairman,

and Mr. Fletcher, the Company's former CFO and former acting Chief Executive

Officer. These suits alleged essentially the same claims as the SEC suit

discussed above.

These various class action suits were subsequently consolidated. Thereafter, the

defendants filed certain Motions to Dismiss with regard to the Complaint and on

October 19, 2005, the U.S. District Court for the Southern District of Florida

in Re Spear & Jackson Securities Litigation entered its Order regarding these

Motions. The Order denied the Company's motion as well as that of Mr. Crowley,

the former Chief Executive Officer of Spear & Jackson. The Court granted the

Motion to Dismiss on behalf of Mr. Fletcher, the Company's interim Chief

Executive Officer, and also granted the Motion to Dismiss on behalf of the

Company's former independent auditor, Sherb & Co., LLP. The class plaintiff

subsequently filed an appeal regarding the trial court's decision to dismiss the

case against Sherb & Co., LLP, which appeal is presently pending. No appeal was

filed with respect to the decision to dismiss the case against Mr. Fletcher.

On July 7, 2006 the Company, Dennis Crowley and the Class Plaintiff reached a

Memorandum of Understanding ("MOU"), which confirmed that the plaintiffs, the

Company and Crowley in the class action had reached an agreement in principle

for the settlement of this litigation, subject to Court approval. According to

the terms of the MOU, the Company deposited the sum of $650,000 into a Qualified

Settlement Fund, disbursement pending approval of the Court. Subsequent to this,

Sherb & Co. also agreed to the terms of the Settlement agreeing to contribute an

additional $125,000.

On November 9, 2006, the Stipulation of Settlement was filed with the Court for

preliminary approval. Assuming that the preliminary approval is granted, the

next step will be to notice the Class of the settlement and to set the approval

process for final hearing and final approval before the Court. The matter will

not be finally settled until the Court issues a final judgment approving the

settlement.

Following the execution of the MOU, the lead plaintiffs commenced discovery

procedures to confirm the fairness and reasonableness of the Settlement. The

plaintiffs retain the right to terminate the Settlement if such discovery

reveals that the Settlement is not fair, reasonable and adequate. Subject to

these discovery procedures confirming the adequacy of the Settlement, all

parties have agreed to use their best efforts to finalize an appropriate

Stipulation of Settlement and any other relevant documentation necessary to

obtain approval by the Court of the settlement of this action.

If the Settlement outlined in the MOU is not approved by the Court or, if

subsequently terminated, the terms of the above Settlement will be without

prejudice, any settlement amounts already paid will be returned and parties will

revert to their litigation positions immediately prior to the MOU.

D-8

Should the class action settlement be approved, to facilitate the distribution

of the funds from the class suit to the class shareholders and keep

administrative costs to a minimum, the SEC Claim's Administrator applied to the

Court on January 9, 2007 for permission to combine the class action funds with

the funds derived in the SEC litigation, and allow for the SEC's Claim's

Administrator to disburse the collective funds.

On September 6, 2005, the Company was served with a Shareholder Derivative

Complaint filed on June 1, 2005 in the Circuit Court for Palm Beach County,

Florida (Case No. CA005068). The suit named the Company as nominal defendant.

Also named as defendants were, former directors Robert Dinerman, William

Fletcher and John Harrington, in addition to Dennis Crowley and the Company's

prior independent auditors, Sherb & Co. LLP.. The suit contains essentially the

same factual allegations as the SEC suit, which was filed in April 2004 in the

U. S. District Court for the Southern District of Florida, and the series of

class actions claims initiated in the U.S. District Court, but additionally

alleges state law claims of breaches of fiduciary duty, abuse of control, gross

mismanagement, waste of corporate assets, unjust enrichment and lack of

reasonable care by various or all the defendants.

Due to ongoing settlement discussions with the plaintiff's attorney, the Company

had not responded to the Complaint. In August 2006 the Company entered into a

settlement agreement with the plaintiff by agreeing to accept certain changes to

its corporate governance procedures and the payment of up to $75,000 in legal

fees. The settlement was filed with the Court in early November 2006, and if

approved by the Court, will result in a dismissal of the suit and release the

Company and the former director defendants, Messrs Robert Dinerman, William

Fletcher and John Harrington. A Preliminary Approval hearing is scheduled on

February 4,2007. Dennis Crowley and Sherb & Co.continue as defendants in this

suit.

SUMMARY OF PRINCIPAL OPERATIONS

Spear & Jackson, Inc., through its principal operating entities, as disclosed in

note 1 to the financial statements, 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. These products are manufactured and distributed under

various 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

Until the disposition of the screwdriver division in September 2003, the Company

also manufactured and sold a range of patented multi-bit screwdrivers under the

"Megapro" brand name. The Company also manufactured and sold a rage of thread

gauge measuring equipment under the "Coventry Gauge" logo until the sale of the

principal business assets of that operation in February 2006.

The Company's four principal business units and their product offerings can be

summarized as:

1) NEILL TOOLS, consisting of Spear & Jackson Garden Tools and Neill Tools,

manufactures, among other products, hand hacksaws, hacksaw blades, hacksaw

frames, builder's tools and wood saws, all non-powered. In addition, Neill

Tools has supplemented its UK manufactured products with factored products

and bought in components from Far Eastern and Indian suppliers. Neill Tools

product offering now includes a full range of hand power tools and, from

January 1, 2005, Spear & Jackson Garden Tools' range has been supplemented

by a portfolio of electric powered garden tools.

D-9

2) ECLIPSE MAGNETICS' key products are permanent magnets (cast alloy),

magnetic tools, machine tools, magnetic chucks and turnkey magnetic

systems. Products range from very simple low-cost items to technically

complex high value added systems. In addition, Eclipse Magnetics engages in

the trading of other magnetic material, sourced from the Far East, both to

end-customers as well as parts to UK manufacturers. Eclipse is also

involved in applied magnetics and supplies many areas of manufacturing with

products such as separators, conveyors, lifting equipment and material

handling solutions.

3) The Company's metrology division comprises:

MOORE & WRIGHT which manufactures a wide variety of products. The core

product ranges principally include low technology measuring tools and hand

held gauges for checking the threads, diameters and tapers of machined

components. This division has supplemented its manufactured products with a

range of factored items.

BOWERS METROLOGY, which is a manufacturer of high specification metrology

instruments including precision, bore gauges, which measure the diameter of

machined components. In addition to the core range of bore gauges, the

Company also manufactures universal gauges and hardness testing equipment.

In December 2004, the division secured the European distributorship rights

for a range of premier portable hardness testers sourced from China. This

distribution operation is operated through a specifically formed Dutch

subsidiary company, CV Instruments Europe BV, based in Maastricht, Holland.

An allied manufacturing, quality control and distribution centre, Bowers

Eclipse Shanghai Equipment Limited, was established in Shanghai, China,

during the year ended September 30, 2005.

4) ROBERT SORBY is a manufacturer of hand held wood working tools and

complementary products. The products are handcrafted with strong aesthetic

appeal.

In addition, Spear & Jackson, Inc. has subsidiary companies in France (Spear &

Jackson France SA) and Australasia (Spear & Jackson (Australia) Pty Limited and

Spear & Jackson (New Zealand) Limited) which act as distributors for Spear &

Jackson and Bowers manufactured products and complementary products sourced from

third party suppliers.

BUSINESS SEGMENTS

The Company's continuing operations can be analyzed into three business

segments, hand and garden tools, magnetic products and metrology tools.

The following table sets forth external sales by segment as a percentage of

total sales:

Business segment % of Total Sales

---------------- ---------------------

2006 2005 2004

Hand and garden tools ... 71.33 72.65 75.57

Magnetic products ....... 11.20 10.48 9.24

Metrology tools ......... 17.47 16.87 15.19

For further detailed financial information by reportable segment including

sales, profit and loss, and total asset information see Note 18 in the "Notes to

the Consolidated Financial Statements" included within this Annual Report on

Form 10-K. Also included within Note 18 is a detailed geographical analysis

including sales, profit and loss, and total asset information.

RESEARCH AND DEVELOPMENT

The Company invests in the development of new products and manufacturing

processes. Direct costs associated with new tooling for products are

capitalized, where material. All other costs, including salaries and wages of

employees involved in research and development projects, are expensed as

incurred.

D-10

SEASONALITY

Garden tool sales are seasonal by nature. Sales of such products typically peak

in the second and early part of the third quarter of the Company's financial

year when northern hemisphere customers increase order levels in anticipation of

the start of the spring gardening season. Garden product sales are lowest in the

first quarter of the financial year and the Company attempts to mitigate the

adverse impact of this by introducing various incentives to encourage customers

to place orders early.

STRATEGY

We currently sell our products to industrial, commercial and retail markets

throughout the world, with a significant concentration in the United Kingdom,

European Union, Australia, New Zealand and the Far East.

These markets chiefly comprise:

The non-powered hand tool industry in which the Company has hand tool,

engineers' hand tool and garden tool business interests. These products are

typically sold in industrial catalogs, hardware stores, garden centers and

multiple retailers. This industry is highly mature with clearly defined

traditional brand names being joined by a broad base of "house brands" typically

supplied from third world manufacturers.

The magnetic industry. This can be split into magnet manufacturers and magnetic

integrators. The magnet users and integrators utilize the magnetic materials to

produce products such as security sensors, electrical windows and magnetic

filters and lifters.

The metrology industry, which can be split into two main market segments: (i)

low tolerance tools such as tape measures, rulers and protractors and (ii)

surface roughness measuring equipment and laser measuring instruments, etc.,

used in the exact measurement of technologically precise machined components.

The Company's Bowers Metrology Group presently operates in the latter market

segment on a worldwide basis.

The hobbyist and professional wood turning industry. This industry is relatively

small and caters to individuals who have reasonable disposable income, often

retirees, or who are professional wood turners producing craft products.

Our strategy is to maintain and develop the revenues of our businesses through

such methods as:

* Maintaining and heightening the profile of our existing quality brand

names. Such activity will comprise trade, general and TV advertising,

extensive promotional work at trade shows, the development of corporate web

sites, etc.

* Continuous product improvement and innovation.

* Increasing market share by offering highly competitive product offerings.

* The launch of new and innovative product and product ranges.

* Improving manufacturing efficiencies and continually reviewing other cost

saving measures.

PRODUCTS AND SERVICES

The Company offers a comprehensive range of tools and equipment ranging from

hacksaw blades to pliers, from secateurs to digging forks and from a simple red

magnet to a computer controlled materials handling system.

With regard to the products supplied by the company, those classes of similar

products which accounted for 10% of more of total consolidated revenue in the

last 4 years were as follows:

D-11

Product Type % of Total Revenue

------------ -----------------------------------

2006 2005 2004 2003

Industrial Cutting Tools

(hacksaws, hacksaw blades, small saws,

saw frames, woodsaws and holesaws) .... 19.23 18.63 19.87 15.84

Garden, Digging and Cutting Tools

(manual and powered) .................. 26.59 28.44 31.48 26.68

Electrical tools including power tools

and compressors........................ N/A N/A N/A 11.97

Magnetic products....................... 10.90 10.69 N/A N/A

Metrology products including gauges,

micrometers and precision tools........ 17.50 17.26 15.28 14.46

The company's product offerings comprise both own-manufactured items and

products sourced from third party suppliers. Products manufactured by the

company broadly comprise:

(a) Hand & Garden Tools Division

Industrial tools comprising:

- Hacksaw Blades

- Small Saws and Woodsaws

- Saw Frames

- Holesaws

- Nutspinners and Riveters

- Builders' Tools

An extensive range of garden tools comprising spades, forks, shovels,

cultivators and other agricultural and contractor's tools was manufactured at

the Company's UK plant in Wednesbury until the closure of that facility in

November 2006. After that date comparable products have been sourced from

overseas.

(b) Metrology Division

- Gauges

- Squares and Rules

- Calipers and Dividers

- Micrometers

- Hardness Testing Equipment

- Popular and Industrial Magnets

- Chucks

- Magnetic Tools

- Lifters and Separators

- Workholding and Handling Systems

Of the total sales revenues arising in the year ended September 30, 2006, 43.6%

of the revenues were attributable to the sale of non-manufactured, factored

products sourced from external suppliers. The percentage of total revenues

generated in the year ended September 30, 2005 and September 30, 2004 which

related to such factored items were 40.6% and 37% respectively.

D-12

The Company's principal manufacturing sites can be summarized as:

Number of

Name/Location Products Manufactured Employees

------------- --------------------- ---------

A. UK:

Neill Tools Hand tools 164

Atlas Site, Sheffield

Robert Sorby Woodturning tools 31

Sheffield

Bowers Metrology Precision measuring tools 66

Bradford

Up to the date of their closure in November and December 2006, the Company also

manufactured a range of garden tools at its UK plant in Wednesbury and a range

of magnetic products at its premises in Vulcan Road, Sheffield, England.

B. France:

Spear & Jackson Assembly of garden tools 28

France

We maintain strict internal quality controls to monitor the standard of

production at the various facilities. In addition, the quality of externally

sourced finished products is checked by frequent tests and certification.

The raw materials utilized in our manufacturing processes typically comprise

steel (hot rolled, cold rolled, bright drawn, high speed, stainless) and other

alloys and castings, wood and plastics, paint and other coating materials,

packaging, bought in component parts and various abrasives, lubricants, tooling

and adhesives which are used in the manufacturing processes.

The Company regards these raw materials to be generally available and not

subject to restricted provision. Accordingly, the Company believes that there

are alternate sources for each category of raw materials that could be secured

without significant delay, if necessary.

WORKING CAPITAL

The Company principally builds inventory to known or anticipated customer

demand. In addition to normal safety stock levels, certain additional inventory

levels may be maintained for products with long purchase and manufacturing lead

times or prior to manufacturing suspensions or cessations. The Company believes

that it is important to carry adequate inventory levels of raw materials and

component parts to avoid production and delivery delays that detract from its

sales effort.

Sales of the Company's garden product ranges are lowest in the first quarter of

the financial year. The Company attempts to mitigate the adverse impact of this

by introducing various incentives, including extended payment terms, to

encourage customers to place orders early.

TOTAL BACKLOG ORDERS

As at November 24, 2006 there were $6.2 million backlog orders (November 25,

2005, $5.8 million). Given the nature of the business, the portion of these

orders which will not be fulfilled within the current year will be immaterial.

NEW PRODUCTS

The Company's policy is to support its core product offering with a pipeline of

new products and range extensions. In the 12 months to September 2006 new

product range launches and other significant product related business

developments have included:

D-13

NEILL TOOLS

* Neill Tools successfully tendered to supply S&J branded woodsaws to a large

UK builders' merchant, with deliveries commencing in February 2006.

* An exclusive supply agreement with a large UK catalog house was also

negotiated to supply a range of garden power tools during February and

March 2006.

ECLIPSE

New products introduced during the year include:

* "Micromag" filtration device

* PLC controlled auto shuttle separator

* Circular magnet sieve

* Hydraulic oil filter and domestic boiler filter

* Thin plate lifter and private label simple filter

BOWERS

* The division successfully launched the Bowers Xtreme waterproof 3-point

gauge in the US.

* The new "Snapmatic" range of high precision snap gauges was launched at the

biennial MACH tradeshow in May 2006. The first major shipments were

fulfilled in quarter 4 of fiscal 2006.

SPEAR & JACKSON FRANCE

* Spear & Jackson France has extended its product offerings to include a

specialized bonsai range. Certain existing product lines, including

thermometers, children's tools and S&J garden tools have also been revised.

ROBERT SORBY

* Robert Sorby completed the development of the e-commerce site for its

retail store in order to add sales revenues at no extra cost.

AUSTRALASIA

* In Australia and New Zealand new and extended ranges under the S&J brand

across garden digging, cutting, hand saw, masonry and air tool categories

have been introduced.

CUSTOMERS

The Company has a broad customer base with no single customer accounting for

greater than 10% or greater of total sales.

MARKETING AND DISTRIBUTION

Our products are distributed in the United Kingdom, European Union, Australasia,

North and South America, Asia and the Far East.

They are sold through various distribution channels supported by in-house sales

professionals. Products are handled by mass merchants, independent sales agents,

engineering distributors, as well as sales direct to retailer and end users.

Specific marketing policies and distribution routes are adopted by the

divisions, reflecting either the value of the product being marketed or its

complexity. For the high volume, low unit value products such as garden tools,

hand tools and certain magnetic and metrology tools, the normal course of

distribution is via the merchandiser or industrial tool distributors. For low

volume, high unit value products, such as magnetic systems and precision

laboratory based measuring machines, the normal route would be direct to the end

user.

The garden and hand tools are primarily sold through three main channels,

retail, wholesale and industrial. The metrology and magnetics divisions sell

through industrial product distributors and directly to end-users. The hobby

products are sold by hobby retailers and in their speciality catalogs.

D-14

BRANDS

A significant part of the Company's operation is branding and brands strategy.

Spear & Jackson has held leading brand names in its core business since 1760.

Neill Tools is one of the largest British based manufacturers of hand tools with

leading brand names such as Neill Tools, Eclipse, Elliott Lucas and Spear &

Jackson. In the metrology division, the Moore & Wright brand has been recognized

for over 100 years for its traditional craftsmanship while the Bowers name has

been at the forefront of international precision measuring equipment for over 50

years. Eclipse Magnetics is a recognized brand name in the UK manufacturing

industry because of its long history of supplying quality magnetic tools. Robert

Sorby is a recognized specialist in marketing its wood turning tools.

COMPETITION AND COMPETITIVE CONDITIONS

Each of the Company's divisions operates in mature sectors and under extremely

competitive market conditions. This situation has been increasingly exacerbated

by the influx of low-cost Far Eastern and third world imports ensuring that

outstanding brand recognition and superior quality and performance are of

paramount importance.

The major competition for our hand and garden tools comes not only from the

low-cost Far Eastern imitations but also many established companies such as

Stanley in hand tools and Fiskars in garden cutting tools, while Ames/True

Temper possesses a significant share of the North American lawn and garden tools

market. The trend towards cheap Far Eastern products, the shift in customer

profile in the United Kingdom from specialized tool distributors to large DIY,

or 'one-stop shops' and, in the past, brand equity dilution due to lower levels

of marketing and advertising, has placed significant pressures upon the

maintenance of market share. Likewise, in our French distribution outlet, the

ability to compete effectively with suppliers from the Far East is problematic

and there have also been significant inroads made by cheaper, lower quality

Eastern European products.

Although certain of our competitors are substantially larger than us and have

greater financial resources, we believe that we compete favorably with other

hand and garden tools companies because of the quality of our products, their

pricing and imaginative design, our ability to introduce niche products which

are clearly differentiated from competitor offerings and the level of our

customer support. Our reputation, customer service and unique brand offerings

enable us to build and maintain customer loyalty.

In our New Zealand and Australian distribution units, while price pressure has

been exerted through the increasing availability of tools manufactured from

within the Pacific Rim, the divisions are well placed to develop their position

as recognized and respected tool distributors marketing lines from manufacturers

all over the world who do not have, or do not wish to have their own presence in

either New Zealand or Australia.

With regard to our metrology operation, Bowers is a relatively small player

compared to its major competitors such as Mitutoyo, and, as such, is less able

to offer a complete product range. In addition, its traditionally heavy reliance

on the North American economy, the threat offered by low price Chinese imports

and the decline in availability of high-skilled engineers in the United Kingdom,

has directed the company's product ranges towards the "high technology" market

segment. Patented digital technology has staved off domination from Chinese

manufacturers while in certain areas, such as bore gauging, the complexity and

quality of the design has meant that Chinese competition has been insignificant.

Indeed Bowers is recognized as a global leader in the precision bore gauge

market.

Eclipse Magnetics mirrors a similar picture with a great deal of competition

coming from Europe and the Far East. The launch of quality, high-standard

products at competitive prices is anticipated to maintain and increase the

Eclipse Magnetics market share.

Although one of the smaller divisions within the group, Robert Sorby is a world

leader in turning tools, competing with the likes of Henry Taylor and Pfeil. It

is a premier manufacturer of high specification tools within the niche

woodworking tools market and seeks to differentiate itself from the large number

of manufacturers producing DIY type woodworking tools through quality, design

and brand.

D-15

EMPLOYEES

The number of persons employed by the Company and its wholly owned subsidiaries

at September 30, 2006, 2005 and 2004 were 589, 710 and 755 respectively. 173 of

the Company's employees are subject to union agreements. Our Company's union

contracts with Neill Tools at the Company's Atlas site fall due for negotiation

in June 2007 and the agreements with the Bowers workforce at Bradford in the UK

fall due for renegotiation in July 2007. The Company believes its relationship

with employees is good.

CAPITAL EXPENDITURE

Capital expenditure in the years ended September 30, 2006, 2005 and 2004 was

$1.6 million, $1.4 million and $7.2 million respectively. Capital expenditure in

the year ended September 30, 2006 related to $1.0 million regarding the updating

of manufacturing plant and equipment and the further automation of the Company's

manufacturing facilities. The remaining $0.6 million was incurred in the part

replacement of the UK and New Zealand motor vehicle fleet. Capital expenditure

in the forthcoming financial year is expected to be approximately $2.25 million

and will be used to replace key elements of the Company's computer hardware at

its Sheffield headquarters and to improve the Company's existing facilities,

expand its manufacturing capabilities and increase productivity.

INTELLECTUAL PROPERTY

Our ability to compete effectively depends in part on the protection of our

license patents, designs and trademarks, which are used in the design, marketing

and sales of our many products. We can provide no assurance to investors that

the patents and trademark licensed by us will not be challenged, invalidated, or

circumvented by other manufacturers.

The Company has approval for 6 patents. The filing dates for these patents range

between June 1999 and January 2004 and the expiration dates will, therefore,

normally occur 20 years after these original dates of application. These patents

are registered in Great Britain, Canada, and Taiwan and relate to tools produced

by the Company and to specific mechanisms utilized in certain products

manufactured by the Company.

In addition, the Company has 373 trademarks and 42 designs registered throughout

the world. The renewal dates for the trademarks range from February 2007 to

August 2021. The registered designs fall due for renewal between June 2007 and

September 2010.

The designs to which the Company currently maintains rights comprise 8

registered designs issued by the United States, 1 registered design issued by

Canada, 21 registered designs issued by Great Britain, 6 registered designs

issued by Taiwan, 3 registered designs issued by France, 1 registered design

issued by New Zealand, 1 registered design issued by Australia, and 1 registered

design issued by India. The registered designs relate to certain tools

manufactured by the Company.

INFORMATION AVAILABLE ON SPEAR & JACKSON WEBSITE

We make available on our website our annual report on Form 10-K, quarterly

reports on Form 10-Q, current reports on Form 8-K and amendments to these

reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities

and Exchange Act of 1934, as amended, as soon as reasonably practicable after we

electronically file such material with, or furnish it to, the SEC. The Company's

internet address is http://www.spear-and-jackson.com.

These documents are also available in print to any shareholder who requests by

sending a letter addressed to the Secretary of the Company.

D-16

ITEM 1A. RISK ANALYSIS

Historically, Spear & Jackson, Inc. ("Spear & Jackson", "the Company", "we") has

achieved growth by the development of new products, strategic acquisitions and

expansion of the Company's sales organization. There can be no assurance that

the Company will be able to continue to develop new products, effect corporate

acquisitions or expand sales to sustain rates of revenue growth and

profitability in future periods. Any future success that the Company may achieve

will depend upon many factors including factors which may be beyond the control

of the Company or which cannot be predicted at this time.

Although we believe that our expectations are based on reasonable assumptions

within the bounds of our knowledge of our business and operations, actual

results may differ materially from our expectations. Uncertainties and factors

which could cause actual results or events to differ materially from those set

forth or implied include, without limitation:

THE COMPANY IS SUBJECT TO A NUMBER OF SIGNIFICANT RISKS THAT MIGHT CAUSE THE

COMPANY'S ACTUAL SALES TO VARY MATERIALLY FROM ITS FORECASTS, TARGETS, OR

PROJECTIONS, INCLUDING:

- achieving planned revenue and profit growth in each of the Company's

business units;

- changes in customer requirements and in the volume of sales to principal

customers; renewal of material contracts in the Company's business units

consistent with past experience;

- the timing of orders and shipments;

- emergence of new competitors or consolidation of existing competitors;

- continued absence of consolidation among key customers;

- Industry demand fluctuations.

Our expectations for both short- and long-term future net revenues are based on

our own estimates of future demand. Orders from our principal customers are

ultimately based on demand from end-users and such prospective end-user demand

can be difficult to measure. Low end-user demand would negatively affect orders

we receive from distributors and other principal customers and this would mean

that our revenues in any fiscal period could be adversely impacted. If our

estimates of sales are not accurate and we experience unforeseen variability in

our revenues and operating results, we may be unable to adjust our expense

levels accordingly and our profit margins will be adversely affected.

A number of our products are sold through distributors and large retailers. No

assurances can be given that any or all such distributors or retailers will

continue their relationship with us. Distributors and other significant retail

customers cannot easily be replaced and the loss of revenues and our inability

to reduce expenses to compensate for the loss of revenues could adversely affect

our net revenues and profit margins.

With the growing trend toward retail trade consolidation, especially in the

developed US, European and Australasian markets, certain of our product groups

are sold to key retailers whose bargaining strength is growing. Accordingly, we

face greater pressure from such significant retail trade customers to provide

more favorable trade terms with, accordingly, the risk of margin dilution. We

can also be negatively affected by changes in the policies of our material

retail trade customers, particularly with regard to the reduction of trade

inventory levels, access to shelf space, and other conditions.

The market for certain of the Company's products is subject to economic

conditions affecting the industrial manufacturing sector, including the level of

capital spending by industrial companies and the general movement of

manufacturing to low cost foreign countries where the Company may not have a

competitive market presence. Accordingly, economic weakness in the industrial

manufacturing sector may result in decreased demand for certain of the Company's

products, which will impact negatively on the Company's trading performance.

Economic weakness in the consumer market will also have a detrimental effect on

the Company's profitability. In the event that demand for any of the Company's

products declines significantly, the Company could be required to recognize

certain costs as well as asset impairment charges on long-lived assets related

to those products.

D-17

RISKS ASSOCIATED WITH THE SUCCESSFUL AND TIMELY INTEGRATION OF ANY SIGNIFICANT

BUSINESSES ACQUIRED BY THE COMPANY AND REALIZATION OF ANTICIPATED SYNERGIES:

The Company has made, and in the future may make, acquisitions of, or

significant investments in, businesses with complementary or aligned products

and services or in new start up businesses. Acquisitions involve numerous risks,

including but not limited to: (1) diversion of management's attention from other

operational matters; (2) inability to complete acquisitions along anticipated

timescales, or at all; (3) lack of success in realizing anticipated synergies

from acquisitions and investments (4) weaknesses in acquired company's internal

controls; (5) worse-than-expected performance of the acquired company or its

product offerings; (6) unknown, underestimated and/or undisclosed commitments or

liabilities; (7) failure to integrate and retain key employees; and (8)

unsuccessful integration of operations. The Company's inability to effectively

manage these risks could materially and adversely affect the Company's business,

financial condition and results of operations.

RISKS ASSOCIATED WITH MAJORITY STOCKHOLDER

As detailed in the footnotes to the consolidated financial statements, on July

28, 2006, the Company's majority stockholder, Jacuzzi Brands, Inc. ("Jacuzzi"),

completed the sale of its 61.8% stockholding in Spear & Jackson, Inc. to United

Pacific Industries Limited, a Bermuda corporation, and its wholly-owned

subsidiary Pantene Global Holdings Limited (collectively, "UPI"). This change in

ownership and control of the Company may have a significant impact on its future

strategy, the way that it conducts its operations and the size and composition

of its earnings and net assets, since UPI can influence substantially all

matters requiring stockholder approval by simple majority in excess of 50%,

including the election of directors, the approval of significant corporate

transactions, such as acquisitions, the ability to block an unsolicited tender

offer and any other matter requiring a vote of shareholders.

Additionally, based on its majority ownership, UPI is in position to complete a

merger or other transaction involving the Company, subject to compliance with

applicable regulatory requirements, which could result in the elimination of

minority stockholders. UPI paid Jacuzzi $1.40 per share for its shares of common

stock of the Company. UPI has agreed that for a one-year period following the

closing of its acquisition of the majority interest in the Company, should UPI

or any of its affiliates acquire any additional shares of the Company, the

purchase price per share will not be less than $1.40. However, UPI is under no

obligation to acquire any additional shares of the Company.

RISKS CONCERNING THE CONTINUING AVAILABILITY OF APPROPRIATE RAW MATERIALS AND

FACTORED PRODUCTS:

The Company's business units source raw materials, component parts and factored

goods from a wide range of domestic and foreign suppliers. If the business units

experience difficulties in obtaining sufficient supplies of such items as a

result of component prices becoming unreasonable, interruptions in supply due to

natural disaster, economic or political difficulties, changes in regulatory

requirements and tariffs, quarantines or other restrictions, the Company would

experience resultant delays in the shipping of its products to customers which

would have a negative impact on our revenues.

RISKS CONCERNING THE MAINTAINING AND IMPROVEMENT OF CURRENT PRODUCT MIX:

If we fail to appropriately manage our cost structure to reallocate resources to

areas that will provide the best long-term benefits to our customers and

shareholders, our reporting results will be adversely affected. For instance, we

may experience unfavorable shifts in product mix or reductions in demand for a

product or products that could dilute margins or limit our ability to spread

manufacturing costs over normal levels of sales volume.

RISKS RELATING TO INCREASING PRICE, PRODUCTS AND SERVICES COMPETITION:

The markets for our products are characterized by intense competition and

pricing pressures. We compete with businesses having substantially greater

financial, research and development, manufacturing, marketing, and other

resources. If we are not able to continually design, manufacture, and

successfully introduce new or enhanced products or services that are comparable

or superior to those provided by our competitors and at comparable or better

prices, we could experience pricing pressures and reduced sales, profit margins,

profits, and market share, each of which could have a materially adverse effect

on the Company's sales and margins.

D-18

RISKS IN CONNECTION WITH CHANGES IN COMPANY INVENTORY LEVELS:

Our inventory is subject to risks of changes in market demand for particular

products. Our inability to obtain critical parts and supplies or any resulting

excess and/or obsolete inventory could have an adverse impact on our results of

operations.

RISKS CONCERNING THE TIMELY IMPLEMENTATION OF THE COMPANY'S RESTRUCTURING

PROGRAMS AND FINANCIAL PLANS:

The Company continues to evaluate plans to consolidate and reorganize some of

its manufacturing and distribution operations. There can be no assurance that

the Company will be successful in these efforts or that any consolidation or

reorganization will result in revenue increases or cost savings to the Company.

The implementation of these reorganization measures may disrupt the Company's

manufacturing and distribution activities, could adversely affect operations,

and could result in asset impairment charges and other costs that will be

recognized if and as these reorganization or restructuring plans are implemented

or the related obligations are incurred.

RISKS INHERENT IN OUR DEPENDENCE ON INTERNATIONAL SALES AND FOREIGN OPERATIONS:

Our principal business locations are situated in the UK, France, the

Netherlands, Australasia and China and we generate sales from many areas of the

world involving transactions denominated in a variety of currencies. The Company

is subject to currency exchange rate risk to the extent that its costs are

denominated in currencies other than those in which its revenues are derived. In

addition, since our financial statements are denominated in U.S. dollars,

changes in currency exchange rates between the U.S. dollar and other currencies

have had, and will continue to have, an impact on our earnings and net assets.

Accordingly, we cannot be certain that currency exchange rate fluctuations will

not adversely affect our future results of operations and financial condition.

As explained above, a significant proportion of sales are made by our

businesses, particularly those in the UK, into foreign export markets. We

anticipate that the portion of our total revenue from international sales will

continue to increase as we further enhance our focus on developing new products,

establishing new business partners and strengthening our presence in key growth

areas. These overseas interests will therefore be subject to various financial

and operating risks that arise from conducting business internationally,

including:

- unexpected changes in, or the imposition of, additional legislative or

regulatory requirements in the various geographical regions where the Company

operates ;

- fluctuating exchange rates;

- tariffs and other barriers;

- difficulties in staffing and managing foreign sales operations;

- import and export restrictions;

- greater difficulties in accounts receivable collection and longer payment

cycles;

- potentially adverse tax consequences;

- potential hostilities and changes in diplomatic and trade relationships.

RISKS CONCERNING THE CONTINUING DEVELOPMENT AND MAINTENANCE OF APPROPRIATE

BUSINESS CONTINUITY PLANS FOR THE COMPANY'S PROCESSING SYSTEMS:

Our results could be adversely affected if we are unable to implement

improvements in our reporting systems without significant interruptions in our

accounting, order entry, billing, manufacturing and other customer support IT

functions.

Additionally, should employee time and advisory costs to be incurred in respect

of compliance with Section 404 of the Sarbanes-Oxley Act 2002 be higher than

management's expectations, this may also have a negative impact on Company

earnings.

D-19

RISKS IN CONNECTION WITH ATTRACTING AND RETAINING QUALIFIED KEY EMPLOYEES:

The success of the Company's efforts to grow its business depends on the

contributions and abilities of key executive and operating officers and other

personnel. The Company must therefore continue to recruit, retain and motivate

management and operating personnel sufficient to maintain its current business

and support its projected growth. A shortage of these key employees might

jeopardize the Company's ability to meet its growth targets.

RISKS RELATING TO MATERIAL BREACHES OF SECURITY OF ANY OF THE COMPANY'S SYSTEMS:

The Company's management is responsible for establishing and maintaining

adequate internal control over financial reporting. Internal control over

financial reporting is a process to provide reasonable assurance regarding the

reliability of financial reporting for external purposes in accordance with

accounting principles generally accepted in the United States of America.

Internal control over financial reporting includes: maintaining records that in

reasonable detail accurately and fairly reflect the Company's transactions;

providing reasonable assurance that transactions are recorded as necessary for

preparation of the financial statements; providing reasonable assurance that

receipts and expenditures of the Company's assets are made in accordance with

management authorization; and providing reasonable assurance that unauthorized

acquisition, use or disposition of the Company assets that could have a material

effect on the financial statements would be prevented or detected on a timely

basis. Because of its inherent limitations, internal control over financial

reporting is not intended to provide absolute assurance that a misstatement of

the Company's financial statements would be prevented or detected. Any failure

to maintain an effective system of internal control over financial reporting

could limit the Company's ability to report its financial results accurately and

timely or to detect and prevent fraud.

RISKS CONCERNING SIGNIFICANT INCREASES IN THE COST OF PROVIDING PENSION BENEFITS

TO EMPLOYEES AND RETIREES:

The Company has a defined benefit pension plan ("The Pension Plan", "The Plan")

covering certain of its UK employees, former employees and retirees. The Pension

Plan assets are invested primarily in equity securities and fixed-income

government and corporate securities. At present, the Pension Plan has pension

liabilities that exceed its assets. Under applicable law, we are required to

make cash contributions to an under funded pension plan to the extent necessary

to comply with minimum funding requirements imposed by regulatory demands. The

amount of such cash contributions is based on an actuarial valuation of the

Plan.

A number of statistical and other factors which attempt to anticipate future

events are used by the actuaries in calculating the expense and liability

related to the plan. These factors include assumptions about the discount rate,

expected return on plan assets and rate of future compensation increases as

determined by us, within certain guidelines, and in conjunction with our

actuarial consultants and auditors. Our actuarial consultants also use

subjective factors such as withdrawal and mortality rates to estimate the

expense and liability related to these plans. The actuarial assumptions used by

us may differ significantly, either favorably or unfavorably, from actual

results due to changing market and economic conditions, higher or lower

withdrawal rates or longer or shorter life spans of participants.

The funding status of the Plan can therefore alter as a result of changes in the

actuarial assumptions used, changes in market conditions and a number of other

factors. We cannot provide assurance that the value of the Pension Plan assets,

or the investment returns on those Plan assets, will continue to be sufficient

in the future. It is therefore possible that we may be required to make

significant additional cash contributions to the Plan which would reduce the

cash available for other business requirements, or that we will have to

recognize a significant pension liability adjustment which would decrease the

net assets of the Company.

RISKS RELATED TO RAW MATERIAL AND ENERGY COSTS:

The prices of many of the Company's raw materials vary with market conditions.

In addition, the price of many of the Company's finished goods that are sourced

from overseas' suppliers are impacted by changes in currency rates, freight

costs and raw materials at the point of production.

D-20

We purchase the majority of our raw materials for our products on the open

market and we also rely on third parties for the sourcing of certain finished

goods and component parts and assemblies. Accordingly, our cost of products may

be affected by changes in the market price of raw materials, sourced components

or finished goods.

Gas, electricity and other utility prices have become increasingly volatile in

the UK, where we have a significant manufacturing presence. This situation has

been exacerbated by price increases for certain of our raw materials,

particularly steel, cobalt and plastics. We do not generally engage in commodity

hedging transactions for raw materials.

Significant increases in the prices of raw materials, sourced components,

finished goods or other commodities could require us to increase the prices of

our products, which may reduce consumer demand for our products or make us more

susceptible to competition. The Company's ability to pass these increases on to

its customers varies depending on the product line, rate and magnitude of any

increase. There may be periods of time during which increases in these costs

cannot be recovered and our profitability will be adversely affected.

RISKS ASSOCIATED WITH FOREIGN SUPPLIERS:

We purchase a growing portion of our products from foreign suppliers based in

India and the Far East. In line with the those risks, outlined above, associated

with our foreign operations and international selling, our use of foreign

suppliers also causes increased risk to our business due to:

- increases in transportation costs;

- new or increased import duties;

- transportation delays;

- foreign work stoppages;

- potential war, terrorism and political unrest;

- exchange rate fluctuations that could increase the cost of foreign

manufactured goods.

RISKS CONCERNING THE CONTINUED AVAILABILITY OF FINANCING, AND FINANCIAL

RESOURCES ON THE TERMS REQUIRED TO SUPPORT THE COMPANY'S FUTURE BUSINESS

STRATEGIES:

We believe that our existing balances of cash, cash equivalents, our cash flow

from operations, and the existing credit facilities negotiated for the Company's

UK and other operations will be sufficient to meet our cash needs for working

capital and capital expenditures for at least the next 12 months. We may,

however, require additional financing to fund our operations in the future.

Although we expect existing debt financing arrangements and cash flows generated

from operating activities to be sufficient to fund operations at the current and

projected levels in the future, there is no assurance that our operating plan

will be achieved. We may need to take actions to reduce costs and to seek

alternative financing arrangements.

RISKS RELATING TO THE OUTCOME OF PENDING AND FUTURE LITIGATION AND GOVERNMENTAL

OR REGULATORY PROCEEDINGS:

As discussed in the footnotes to the consolidated financial statements, we are,

and have been, involved in various pending litigation matters arising out of

main and Derivative Class Action claims and also from the ordinary routine

conduct of our business, including, from time to time, litigation relating to

such items as commercial transactions, contracts, and environmental matters. The

final outcome of such matters cannot always be determined with certainty and

such actions may therefore have a material adverse effect on the Company's

financial position and its results of operations or cash flows.

D-21

RISKS ASSOCIATED WITH OUR ACCOUNTING POLICIES AND ESTIMATES THAT MAY HAVE A

MATERIAL EFFECT ON THE COMPANY'S FINANCIAL RESULTS:

Significant accounting policies and estimates have material effects on our

calculations and estimations of amounts in our financial statements. Our

operating results and balance sheets may be adversely affected either to the

extent that actual results prove to be adversely different from previous

accounting estimates or to the extent that accounting estimates are revised

adversely. We base our critical accounting policies, including our policies

regarding revenue recognition, reserves for returns, rebates, and bad debts,

deferred tax asset recognition, pension plan assumptions and inventory

valuation, on various estimates and subjective judgments that we may make from

time to time. The judgments made can significantly affect net income and our

balance sheets. Our judgments, estimates and assumptions are subject to change

at any time. In addition, our accounting policies may change at any time as a

result of changes in GAAP as it applies to us or changes in other circumstances

affecting us. Changes in accounting policy have affected and could further

affect, in each case materially and adversely, our results of operations or

financial position.

RISK FACTORS THAT MAY NEGATIVELY IMPACT OUR STOCK PRICE:

Our revenues and operating results may vary significantly from quarter to

quarter due to a number of factors particular to the Company, its industry and

the markets in which it operates. Not all of these factors are in our control.

These factors may include: sales falling below anticipated levels because of the

timing of orders or weakening demand; adverse sales mixes; regional economic and

governmental conditions; raw material price volatility; profit volatility

arising from the seasonality of the garden product trade and benefits from

restructuring initiatives falling below forecast. Such factors may therefore

cause our operating results for future periods to be below the expectations of

management and the Company's advisers and this may cause a decline in the price

of our common stock.

There has been no material change in our risk factors from those described on

pages 12 to 16 in our Form 10-K for the fiscal year ended September 30, 2005.

ITEM 2. PROPERTIES

Our principal executive office is located at 12012 Southshore Boulevard, Suite

103, Wellington, Florida 33414. Previously the principal executive office was

located at South Lasalle Street, Suite 201, Chicago, Illinois 60605.

We currently operate from five sites in the United Kingdom one site in France,

the Netherlands, New Zealand and China, and two sites in Australia. Four of such

locations are plant facilities and the remainder are office distribution

facilities. Four of the locations are owned and the remaining seven are occupied

under leases of varying lengths.

The UK owned locations comprise:

* Neill Tools and Eclipse Magnetics, Atlas site, Sheffield, England

* Robert Sorby site, Sheffield, England

* Bowers Metrology site, Bradford, England

The French manufacturing and distribution facility is located in St Chamond.

D-22

The leasehold sites and their respective lease periods, date of expiry of lease

and annual lease rentals are as follows:

Annual Lease

Rental

Occupier/Location Lease Period Expiry of Lease $'000

Robert Sorby, Doncaster

England 10 years May 2009 22

Bowers Metrology, Hampshire

England 10 years August 2012 140

AUSTRALIA

Victoria Building

Dandenong South

Australia 12 years December 2014 198

Welshpool, Australia 2 years April 2007 30

NEW ZEALAND

Avondale

Auckland, New Zealand 3 years April 2008 53

THE NETHERLANDS

Maastricht

The Netherlands 6 years March 2011 40

CHINA

Min Hang District

Shanghai, China 5 years May 2010 64

The square footage of the above properties ranges from 3,000 to 240,000 square

feet.

We consider all of our properties as suitable and adequate to carry on our

business. We also believe that we maintain sufficient insurance coverage on all

of our real and personal property.

In addition to the above, until December 2006, Eclipse Magnetics occupied leased

premises in Sheffield, England. These premises have now been vacated but Eclipse

Magnetics still remains responsible for the lease. The lease period is 25 years,

expires in June 2011 and the annual lease rental is $342,000.

We do not lease or own any other real property.

ITEM 3. LEGAL PROCEEDINGS.