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:

US 50 Fund Limited ("the Company")
Level 35, The Vero Centre
48 Shortland Street
AUCKLAND

And each of the directors of the Company:

Brian Phillip Henry
Unit 2d
75 Anzac Avenue
AUCKLAND

Dennis Jay Gates
29 Kingsley Street
Cox Bay
AUCKLAND

Kevin James Gillespie
32 Shakespeare Rd
Milford
AUCKLAND

Background

1.

The Company has issued a combined registered prospectus and investment statement dated 19 July 2004 in relation to a current offer ("Offer") of perpetual preference shares in a fund called the US 50 Fund. There is no closing date for the Offer.

2.

The Company intends to invest the capital raised from the issue of the perpetual preference shares exclusively in a range of 50 US stocks chosen from the New York Stock Exchange, NASDAQ or American Stock Exchange.

3.

On 3 December 2004 the Commission decided to suspend the registration of the registered prospectus of the Company for a period of 14 days under section 44(1)(a) of the Securities Act 1978 ("the Act") after it formed the opinion that the prospectus:

(a)

does not comply with the Act and the Securities Regulations 1983 ("the Regulations"); and

(b)

omits a material particular.

4.

The Commission also made an order suspending the investment statement for the Offer for a period of 14 days under section 38F(1)(d) of the Act after it formed the opinion that the investment statement:

(a)

does not comply with the Act and the Regulations; and

(b)

is likely to deceive, mislead, or confuse with regard to particulars that are material to the offer of securities to which it relates.

5.

The Commission gave the Company notice of a meeting at which the Commission would consider whether or not to:

(a)

cancel the registration of the prospectus under section 44(1)(b) of the Act; and

(b)

make an order prohibiting the distribution of the investment statement under section 38F(1)(e) of the Act.

6.

The Commission formed the opinion that there were a number of breaches of provisions of the Act and the Regulations and that there were a number of minor inconsistencies between the registered prospectus and the investment statement.

7.

In respect of pricing, clause 1(4) of the First Schedule to the Regulations requires disclosure of "the price or other consideration to be paid or provided for the securities being offered". The Commission noted that the Company has a different interpretation of the meaning of clause 1(4). The Commission considers that clause 1(4) requires a figure to be set out as the price of the securities. This is evidenced by a number of exemptions granted by the Commission to allow open-priced offers of securities to be made. The Commission considers that without an exemption clause 1(4) requires that the exact price or other consideration be contained in the registered prospectus.

8.

In addition, the Commission formed the opinion that the registered prospectus omitted a material particular and that the investment statement was likely to deceive, mislead, or confuse with regard to particulars that are material to the offer of securities, namely sufficient information about the pricing mechanism for the perpetual preference shares. The pricing mechanism is important for the process of pricing the initial allotment of perpetual preference shares issued by the Company, and also to enable investors to make an informed investment decision.

9.

Clause 5 of Schedule 3D to the Regulations requires the investment statement to include information about payment for securities, under the heading "How much do I pay". Clause 5(3) provides for disclosure regarding open-priced offers of securities. This provision requires that where the money, or minimum or maximum sum of money payable by a subscriber to the issuer cannot, at the date of the investment statement, be expressed as a dollar amount, the investment statement must include a statement describing any procedure for calculating the amounts of that money.

10.

The Commission formed the opinion that the information provided on the pricing of the securities in the investment statement is likely to be confusing given the difficulty in applying the stated pricing model before the fund has commenced trading and the failure to disclose, particularly in the application form, the volume or value of underlying shares required to purchase any mini, midi, or maxi share.

11.

The Company and the directors have acknowledged the concerns the Commission has regarding the registered prospectus, the investment statement, and the advertising on the website. The Company wishes to remedy the situation and ensure that no similar events occur. The Company accepts that it is in breach of the Act and Regulations, in particular clause 1(4) of the First Schedule of the Regulations, and has offered the undertakings set out below. The Commission has agreed to accept these undertakings under section 69J of the Securities Act 1978.

Undertakings

12.

The Company and each of its directors will make no further use of, or distribute, the registered prospectus and the investment statement dated 19 July 2004. The Company will terminate the Offer by a formal amendment to the registered prospectus.

13.

The Company and each of its directors will ensure that any subscriptions received in relation to the registered prospectus and the investment statement dated 19 July 2004 after 3 December 2004 are immediately returned to the subscribers.

14.

The Company and each of its directors 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, or in accordance with any applicable exemption granted by the Commission.

15.

In this regard, the Company will register a new prospectus and prepare a new compliant investment statement for any further offer of perpetual preference shares.

16.

The Company will inform every existing shareholder in writing of the enforceable undertaking within 14 days of the date of this undertaking, and will give every existing shareholder the opportunity to withdraw his or her subscription money. The Company will also send each existing shareholder the new prospectus and investment statement as soon as the prospectus is registered.

Acknowledgements

17.

The Company 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.

18.

The Company 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.

19.

The Company 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 US 50 Fund Limited
by its duly authorised officer:

Brian Phillip Henry

Signed by the directors of US 50 Fund Limited:

Brian Phillip Henry

Dennis Jay Gates

Kevin James Gillespie

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

Liam Dillon Mason
General Counsel

Dated this 22nd day of December 2004

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