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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:

Momentum Magazine Group Limited (the "issuer")
Unit G/20 Cain Road
Penrose
Auckland

And the directors of the issuer

D B Hows
Unit G, 20 Cain Road
Penrose
Auckland

T D Lawrence
30 Riverstone Road
Te Atatu
Auckland

L Blincoe
93 Hastings Road
Mairangi Bay
Auckland

Background

1.: The issuer was incorporated on 27 August 2004 to acquire the businesses and assets of 2 companies, Kiwi Property Investor Magazine Limited ("KPI") and ESPY Magazine Limited ("ESPY"). The issuer undertook an offer of shares to the public to finance the development of its business ("Offer").
2.: The Offer was made in a prospectus registered on 15 October 2004, and an investment statement dated 18 October 2004. The issuer was offering up to 2.5 million ordinary shares to be issued at $1 each, and (in the event of over-subscription) up to a further 1.25 million shares in the issuer held by KPI and 300,000 held by ESPY.
3.: The public offer was promoted by internet and email advertising, road shows, and teleconferences for prospective investors.
4.: On 2 November 2004 the Commission decided to prohibit distribution of advertisements for the offer after it formed the opinion that certain advertisements for the offer were likely to mislead investors and did not comply with the securities legislation.
5.: On the same date the Commission gave the issuer notice of a meeting at which the Commission intended to consider whether to prohibit distribution of the investment statement under section 38F of the Securities Act 1978. The Commission formed the opinion that the investment statement for the offer did not comply with the securities legislation and was likely to mislead, deceive, or confuse prospective investors concerning the investment.
6.: The share offer closed on 5 November 2004, and was undersubscribed. The directors of the issuer decided not to extend the offer period. As the offer did not proceed the meeting referred to above did not take place.
7.: As the Offer has closed, all subscription monies received to date have been refunded in full to subscribers, with interest, in accordance with the Securities Act 1978, and the share registrar for the Offer has been instructed to immediately return any further subscriptions to the subscribers.
8.: The directors of the issuer, as at the date on which the prospectus was registered, were the signatories set out below, together with Mr B D Sugars. Mr B D Sugars resigned as a director of the issuer on 9 November 2004.
9.: The issuer and its directors acknowledge the concerns the Commission holds regarding the advertising, prospectus and investment statement and for the share offer and have offered the undertakings set out below. The Commission has agreed to accept these undertakings under section 69J of the Securities Act 1978.

Undertakings

Investment Statement

10.: The issuer will make no further use of the investment statement dated 18 October 2004.
11.: The issuer will not further distribute the registered prospectus dated 15 October 2004.
12.: The issuer and each director will ensure that any subscriptions received after the date of this undertaking are immediately returned to the subscribers.
13.: The issuer and each director will not offer further 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.

Acknowledgements

14.

The issuer and each of its 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.

15.

The issuer and each of its 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.

16.

The issuer and each of its 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 Momentum Magazine Group Limited
by its duly authorised officer:
D B Hows
Director

Signed by T D Lawrence

Signed by L Blincoe

Accepted by the Securities Commission
pursuant to section 69J of the Securities Act 1978
by its authorised delegate:
Kathryn Ann Rogers
Associate Counsel
3 December 2004

[Dated this 30^th day of November 2004.]