Copy of Enforceable Undertaking

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

Prudential Mortgage Limited
Level 1, 485 Papanui Road
PO Box 13961
Christchurch

And each of the directors of Prudential Mortgage Limited ("the directors"):

Background

1.

In October 2003, a newspaper published an advertisement relating to an offer of securities by Prudential Mortgage Limited, a company registered and carrying on business as a contributory mortgage broker. The advertisement offered interests in a contributory mortgage over property to be purchased by the Hosanna Dream Centre Trust.

2.

The advertisement was not an authorised advertisement as defined in section 38(c) of the Securities Act 1978 ("the Act") in that it stated the rate of interest that may be earned by holding securities and that "conditions apply" but did not state any minimum amount or amounts of the securities that would have to be held or any minimum period or periods during which the securities would have to be held in order to earn that rate, thereby breaching regulation 21(1) of the Securities Regulations 1983 ("the Regulations").

3.

The advertisement was not checked for compliance with the Act or Regulations. No certificate under regulation 17(1) of the Regulations was signed. Prudential Mortgage Limited has corresponded with the Commission about the breaches and acknowledges the Commission's concerns about the matter. Prudential Mortgage Limited amended subsequent advertisements in order to comply with the Regulations, and signed certificates under regulation 17(1) in respect of those advertisements.

4.

The Securities Act (Contributory Mortgage) Regulations 1988 ("the Contributory Mortgage Regulations") requires contributors to be provided with a document containing the information and other matters required by the Twelfth Schedule to those Regulations, including a valuation report that contains the matters referred to in the Third Schedule to those regulations. The valuation report prepared by the valuer, DTZ New Zealand Limited and provided to contributors by Prudential Mortgage Limited in respect of the contributory mortgage over property intended to be purchased by Hosanna Dream Centre Trust did not comply with clauses 2, 7 and 8 of the Third Schedule, as it contained no statement that the valuation report is made by the registered valuer as an independent registered valuer within the meaning of regulation 5 of the Contributory Mortgage Regulations, and no separate statements of the registered valuer's opinion as to the property's land value and value of improvements. Prudential Mortgage Limited and DTZ New Zealand Limited are in dispute over actual responsibility for those omissions.

5.

Prudential Mortgage Limited and the directors wish to remedy the situation and to ensure that future offers comply fully with securities laws. They have sent amended valuation reports to contributors and to other members of the public who received the documentation referred to in paragraph 4 above. Contributors were offered a refund of their subscription money, but Prudential Mortgage Limited has confirmed that the contributory mortgage for Hosanna Dream Centre Trust will in any event no longer be proceeding, so no subscribers' funds have been released. Prudential Mortgage Limited and 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

6.

Prudential Mortgage Limited will ensure that employees and external marketing advisers and agents who prepare advertising for Prudential Mortgage Limited are appropriately trained and aware of the requirements relating to advertisements for securities under the securities laws.

7.

Prudential Mortgage Limited and the directors will not distribute, or permit any person to distribute any advertisement containing or referring to an offer of securities to the public unless the advertisement has been prepared or reviewed by appropriate professional advisers.

8.

Without limiting paragraph 7 above, Prudential Mortgage Limited and the directors will take all reasonable steps to ensure that no agent distributes or permits the distribution of any advertisement other than one prepared or reviewed by Prudential Mortgage Limited and its professional advisers.

9.

Prudential Mortgage Limited and the directors will prepare a written compliance plan ("the Plan") to ensure that its advertising complies with the securities laws and ensure that Prudential Mortgage Limited employees are familiar with, and adhere to, the Plan.

10.

Prudential Mortgage Limited will provide a draft of the Plan to the Commission for its review within 2 weeks of the date of this undertaking.

11.

Prudential Mortgage Limited will arrange for the Plan to be updated annually and will ensure that its auditors report annually on Prudential Mortgage Limited's compliance with the Plan.

12.

The directors of Prudential Mortgage Limited will take all reasonable steps to ensure compliance with the applicable undertakings by Prudential Mortgage Limited, its directors, agents and employees.

Acknowledgements

13.

Prudential Mortgage Limited 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.

14.

Prudential Mortgage Limited 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.

15.

Prudential Mortgage Limited 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 Act or under any other legislation, or to refer any matter for criminal prosecution or seek any civil penalty.

Signed for and on behalf of Prudential Mortgage Limited
by its duly authorised officer:

[Thomas Alexander George Jones]

[Hayden George Jones]

Signed by the directors of Prudential Mortgage Limited:

[Thomas Alexander George Jones]
Director

[Hayden George Jones]
Director

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

[Liam Mason]

[Dated this 17th day of March 2004]

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