REPUBLIC OF HONDURAS LOAN CONTRACT
WITH MARINE BANK AND TRUST COMPANY
Decrees Nos. 87 and 88
Dated February 27th, 1928
THIS AGREEMENT made and entered into by and between the Republic of Honduras, Central America, herein appearing through and represented by Julio Lozano H., its Minister of Finance, said Minister of Finance being herein represented by Vicente Williams, acting under and by virtue of a certain resolution dated February 9th, 1928, which is annexed to the original on file with the Marine Bank & Trust Company, (hereinafter sometimes called the “Republic”) and Marine Bank & Trust Company, a corporation organized under the laws of the State of Louisiana, herein appearing through L.M. Pool, its President, herein duly authorized by a resolution of its Board of Directors adopted at a meeting held January 26th, 1928, a certified copy whereof is annexed to the original on file with the Marine Bank & Trust Company, (hereinafter sometimes called the “Bank”).
1. The Republic hereby agrees to borrow from the Bank and the Bank hereby agrees to lend to the Republic, the sum of One Million, Five Hundred Thousand Dollars ($1,500,000.00) United States money. Said loan shall be evidenced by a promissory note of the Republic to Marine Bank & Trust Company, for the principal sum of One Million, Five Hundred Thousand Dollars ($1,500,000.00) signed by the Minister of Finance of the Republic, or any other person designated by him for the purpose, shall be dated as of the date of the loan, bear interest at the rate of seven percent (7%) per annum from date until paid on balance due, be payable at the principal office of the Bank, in the City of New Orleans, State of Louisiana, U.S.A., and mature in installments of Twenty-Five Thousand Dollars ($25,000.00) per month, the first installment being due on the fifth day of the month following the month on which the note is dated, and succeeding installments being due on the fifth day of each and every month thereafter. The monthly installments of Twenty-Five Thousand Dollars ($25,000.00), shall be respectively applied upon receipt first to interest and the balance to the reduction of the principal of the loan. The Bank may, if it desires to, request that more than one note be furnished to evidence such loan, in which event the monthly amount due on each note shall bear the same proportion to Twenty-Five Thousand Dollars ($25,000.00) that the principal amount of the note bears to One Million, Five Hundred Thousand Dollars ($1,500,000.00).
2. The loan to be made hereunder shall be a general obligation of the Republic. To secure its payment in principal and interest, the Republic hereby grants a first lien and privilege on the custom revenues of the ports of Puerto Cortes, Tela and Puerto Castilla, except that recognition is made of the requirements now existing under Article 1 of Decree 111, dated April 7, 1926, and of the provisions of Article 9 of Decree 2, dated October 5, 1927. If such custom revenues in any monthly period aggregate less than Twenty Five Thousand Dollars ($25,000), the amount necessary to complete the Twenty-Five Thousand Dollars payment due next after the end of such period shall be met out of the custom revenues of any and all ports in the Republic, but nothing herein contained shall be construed as affecting or impairing this loan as a general obligation of the Republic.
3. The Rebuplic agrees to procure and deliver to the Bank instruments signed by the Tela Railroad Company, Trujillo Railroad Company, Cuyamel Fruit Company and Standard Fruit and Steamship Company, its subsidiaries and affiliates, the Aguan Valley Co., Honduras Sugar & Distilling Company, Compañía Industrial Ceibeña respectively, in a form satisfactory to the Bank, wherein the respective signatories irrevocably agree, so long as the loan to be made hereunder is unpaid in whole or in part, to pay direct to the Bank at its principal office in New Orleans, LA, USA, in United States money, on or before the fifth day of each month, the amounts respectively due by them to the Republic for monthly liquidation, i.e. custom duties, taxes, etc. at the close of the preceding usual monthly settlement period up to the sums set opposite their respective names as follows: Tela Railroad Company, $7,500; Trujillo Railroad Company, $7,500; Cuyamel Fruit Company, $2,500; Standard Fruit & Steamship Company and subsidiaries, $7,500. All payments so made shall be credited upon receipt to the Twenty-Five Thousand Dollars monthly installment then or next due, and any deficit shall be made up by the Republic as provided in Paragraph 2 hereof.
4. When all the conditions herein provided to the making of such loan shall have been complied with, the Bank shall pay for the account of the Republic of Honduras, the existing obligation of the said Republic to the tela Railroad Company, Trujillo Railroad Company, Cuyamel Fruit Company, Standard Fruit and Steamship Company, Banco Atlántida, and Banco de Honduras, in an amount not to exceed the sum total of the loan. Such payments shall be made only on the order or orders of the Minister of Finance of the Republic, which order or orders shall state the amount to be paid to each corporation. If such order or orders do not provide for payment to such corporations of the full sum of the sum total of the loan, the excess shall be forthwith credited on the loan. The Bank shall be fully protected in making such payments on such order or orders and all such payments shall be deemed to be, and be integral parts of, the loan to the Republic to the same extent and with the same effect as if such payments had been made direct to the Republic.
5. The Republic of Honduras shall furnish the Bank with a specimen of the signature of the Minister of Finance, acting in this respect in its behalf, duly authenticated by the proper official of the Republic of Honduras, whose signature shall be duly authenticated by the Consul of the United States of America, at Tegucigalpa. The Bank shall be fully protected in taking any action authorized under this Agreement in reliance upon the verity of the signature of the Minister of Finance, acting in this respect in its behalf, duly authenticated by the proper official of the Republic of Honduras, whose signature shall be duly authenticated by the Consul of the United States of America, at Tegucigalpa. The Bank shall be fully protected in taking any action authorized under this agreement in reliance upon the verity of the signature of the Minister of Finance so authenticated, and any such signature shall be full authority to the Bank to take any such action.
6. The loan to be made hereunder and the interest to accrue thereon and the rights of the Bank, shall be and are hereby declared free from all taxation of every nature, sort or kind, direct or indirect, of the Republic or any Department, or other subdivision thereof, whether the same be called tax, duty, license, imposts, contribution, or any other name. In case any Municipality establishes a tax on capital or income, the tax as affects this contract will be paid by the Government.
7. In the event that at any time the Republic is in default in making the monthly payments, the Bank may at its option, declare the balance of the loan forthwith due, without demand for payment or notice of default.
8. The Republic may at any time prepay the balance due on the loan in full, or reduce the principal amount due by paying the balance or by paying the principal amount of the desired reduction, as the case may be, plus two percent (2%) of such payment as a premium, plus interest due to the date of such payment. If the Republic desires to make such payment or such reduction it shall as a condition precedent, give the Bank at least sixty days prior written notice of its intention so to do. No partial reduction of principal pursuant to this paragraph shall affect the obligation of the Government to pay Twenty-Five Thousand Dollars ($2,500) per month, pursuant to the provisions herein above set forth.
9. In the event the Republic fails to promptly pay the monthly installments herein agreed to be made when due as herein provided, the Republic shall pay as damages for such breach, one quarter of one percent monthly on the monthly installments then due, in addition to the interest at the rate of seven percent (7%) per annum thereon herein above provided for.
10. This agreement shall be executed in five originals, both in English and Spanish, all of which, however, shall be considered as one obligation and for the purpose of construing this Agreement, the construction placed upon the instrument in the English language shall prevail.
11. This Agreement shall become binding and enforceable only when the National Congress and President of the Republic of Honduras shall have legally approved and ratified the same; provided however, that evidence of such legal approval and ratification, satisfactory to counsel for the Bank, shall have been delivered to it, prior to May 1, 1928.
12. Wherever reference to dollars is made herein, it shall be construed to mean United States money.
13. The Bank will send to the Republic, a statement of the monthly movement of this loan account, and if same is not objected to within 60 days, it will be considered accepted by the Republic as correct.
Thus done and signed at New Orleans, LA, USA, on this 18th day of February, 1928, before me, George Janvier, a Notary Public, who personally came and appeared, the above named Vicente Williams and L.M. Pool, who signed the foregoing document before me in the presence of the two persons whose names are hereunto subscribed as such being persons over fourteen years of age, residing in this parish, competent witnesses and the said appearers thereupon declared and acknowledged unto me, in the presence of the said witnesses that they have signed and executed the said document as their own act and deed for the uses and purposes therein set forth.
IN WITNESSES WHEREOF the said appearers have signed these presents before me and in the presence of the said witnesses, and I have hereunto set my official hand and seal with said witnesses on the day and date above written. Vicente Williams, L.M. Pool, Witnesses: C. Les. Girault. Jessie Lannes. George Janvier. Seal. Sello. El infrascrito, Cónsul General de la Repúplica de Honduras. Certifica: que la firma que antecede que dice: George Janvier, Notary Public, es auténtica y es la misma que el firmante usa en todos sus actos oficiales como Notario Público de esta ciudad. En fe de lo cual firma y sella la presente enla ciudad de Nueva Orleans, Estado de Louisiana, Estado Unidos de América, a los dieciocho días del mes de febrero de mil novencientos vientiocho. Vicente Williams, Cónsul General – Sellos. 2º – Que el presente acuerdo se someta a la consideración del Congreso Nacional, en cumplimeinto de lo mandado en el artículo 2º del Decreto Legislativo No. 41 de 15 del corriente mes. Comuníquense. – Paz Barahona – El secretario de Estado en el Despacho de hacienda y Crédito Público, Julio Lozano H.