I.   Introductory Provisions

Prudence is one of the eight standard characteristics required of a Trustee being practical, cautious, discrete, judicious and wise in the management of the affairs of the trust.

The word Prudence comes from the Latin prudens meaning "wisdom; foresight".

Under the character of Prudence, a Fiduciary is forbidden to act in any following manner:

(i) To engage in sharp business practices or in any manner that may place the assets of the Trust in jeopardy; or

(ii) To purchase any form of securities, derivatives or assets of a predominant speculative nature which could result in such assets possessing less than half their value or negative value; or

(iii) To consider a purchase or investment using more than one tenth of the value of the Trust without first conducting a thorough due diligence on the nature of the potential investment, the owners or managers and associated risk factors; or

(iv) To consolidate the assets of the Trust into one major type of investment only; or

(v) To engage in agreements of any kind where any rights of the Trust are effectively waived, surrendered, granted, given, donated, delivered, abrogated, abandoned or transferred to another party without any fair consideration and contrary to the intended Purpose of the Trust; or

(vi) To borrow money to an equivalent value of more than one third the total fair value or greater of the assets of the Trust, or at a rate of interest greater than the appreciation rate of general prices.

A Trustee that willfully and deliberately engages in a manner forbidden by the characteristic of Prudence is guilty of a major breach of trust.

A Trustee cannot hold such office in the absence of prudence or proof of engaging in a manner forbidden by the characteristic of Prudence.