Copy of Enforceable Undertaking

View Enforceable Undertaking in PDF format.

This undertaking is offered to the Securities Commission for acceptance under section 69J of the Securities Act 1978 by:

Aquiline Holdings Limited ("the company")
C/- Ronald James Scott
136 Taradale Road
P O Box 3021
NAPIER

And the directors of the company

Ronald James Scott
8 George Street
NAPIER

Graham Mitchell Cowley
14 Coleman Terrace
NAPIER

David Blair Oldershaw
114 Nelson Crescent
NAPIER

James McCrea
27 Lake View Road
TAKAPUNA

Background

1.

The company is a registered company under the Companies Act 1993. The company has two classes of shares on issue. Ordinary shares, with full voting and distribution rights and redeemable preference shares. The company has previously issued converting preference shares, but none of these shares is currently outstanding.

2.

No prospectus has been registered in relation to the issue of these shares.

3.

The website of the company includes a section called "invest in AHL" which describes how it operates a "capital register" through which "qualifying parties" can register their interest in purchasing the company's shares.

4.

The website invites persons who consider themselves to be "qualifying parties" to contact the company. "Qualifying parties" are described in the website as those described in section 3(2)(a)(i), (ii) and (iii) of the Securities Act 1978, i.e., relatives or close business associates of the directors and/or senior managers of the company, persons whose principal business is the investment of money or who, in the course of and for the purposes of their business, habitually invest money, and any other person who in all the circumstances can be properly be regarded as having been selected otherwise than as a member of the public.

5.

Persons on the capital register are able to purchase newly issued ordinary shares or converting preference shares between ordinary share issues. The capital register also facilitates secondary market transactions by matching sellers with persons on the register.

6.

The Securities Act 1978 provides for certain situations which do not constitute an offer of securities to the public. Offers of securities made only to persons described in section 3(2)(a)(i), (ii) and (iii) of the Securities Act 1978 do not constitute an offer of securities to the public.

7.

The Commission has some concerns as to whether some of the company's shares may have been offered to members of the public for subscription in breach of the Securities Act 1978 and Securities Regulations 1983. None of the company's shareholders has raised any such concerns.

8.

The company believes that offers of shares to date have not constituted offers of securities to the public, as the offers were made to persons described in section 3(2)(a)(i), (ii) and (iii), and that it has at all times complied with the Securities Act 1978. However, the company acknowledges the Commission's concerns, and considers that it is in the best interests of both the company and its shareholders to remove any uncertainty as to the validity of the issue of its existing shares.

9.

Accordingly, the company is proposing to replace its existing shares with new shares issued as a result of an amalgamation. Following the amalgamation, all of the company's shares will be converted into shares issued by the amalgamated company, in the same number and class and with the same rights, as held prior to amalgamation.

10.

The company and the directors have informed all shareholders about the Commission's concerns regarding the validity of the share allotments. The investment statement and prospectus for the amalgamation contain statements that the amalgamation is occurring in order to remove any uncertainty which may exist regarding the validity of the issue of the company's shares, and contain information advising shareholders of their rights (1) in relation to the amalgamation proposal, and (2) if their shares have, in fact, not been validly issued.

11.

An amalgamation proposal has been sent to shareholders in accordance with section 221 of the Companies Act 1993, together with a statement setting out the minority buyout rights of shareholders under section 110 of the Companies Act 1993.

12.

At the request of the Commission, the company and each of the directors have offered the undertakings set out below. The Commission has agreed to accept these undertakings under section 69J of the Securities Act 1978.

Undertakings

13.

The company and the directors will not offer securities to the public for subscription, other than in an investment statement, registered prospectus, or authorised advertisement that complies with the Securities Act 1978 and the Securities Regulations 1983, or in accordance with any applicable exemption contained in the Securities Act 1978 or granted by the Commission.

14.

Prior to the issue of shares in the amalgamated company, the company and the directors undertake to offer any shareholder who was allotted shares in contravention of the Securities Act 1978 the opportunity to cancel their allotted shares and receive a refund of their subscription monies together with interest in terms of section 37 and 37A of the Securities Act 1978.

15.

If any such shareholder exercises his or her rights under sections 37 or 37A (as described in paragraph 14 above), then the company and the directors undertake to cancel the shares allotted to such shareholder and refund the shareholder's subscription monies together with interest within 15 working days of the closing date of the offer.

Acknowledgements

16.

The company and the directors acknowledge that the Commission:

(a)

may issue a media release referring to the undertaking and to the concerns of the Commission which led to the undertaking being executed;

(b)

may from time to time publicly refer to the undertaking; and

(c)

will make this undertaking available for public inspection.

17.

The company and the directors acknowledge that this undertaking does not derogate from the rights and remedies available to the Commission or to any other person or entity arising from the conduct described in the undertaking.

18.

The company and the directors acknowledge that the Commission's acceptance of an enforceable undertaking under section 69J of the Securities Act 1978 does not affect the Commission's power to investigate future conduct of any person, to take any action or exercise any power under the Securities Act 1978 or any other legislation, or to refer any matter for criminal prosecution or seek any civil penalty.

Signed for and on behalf of Aquiline Holdings Limited
by its duly authorised officer:

[David Blair Oldershaw]

Signed by Ronald James Scott:

[Ronald James Scott]

Signed by Graham Mitchell Cowley:

[Graham Mitchell Cowley]

Signed by David Blair Oldershaw:

[David Blair Oldershaw]

Signed by James McCrea:

[James McCrea]

Accepted by the Securities Commission
pursuant to section 69J of the Securities Act 1978
by its authorised delegate:

[Liam Mason]

[Dated this 12th March 2004.]

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