Regulation on Administration of Resources from

The purpose of this regulation is to regulate the provisions of Articles 2 and 3 of Legislative Decree No. 158-2008 dated October 9, 2008, which comprises the use of the following resources:

• a)

  Those arising from the Credit Line valued at Thirty Million United States Dollars (US$ 30,000,000.00), which in concessional terms shall be granted by the National Bank of Economic and Social Development of Venezuela (BANDES) to the State of Honduras through the State Secretariat of Finance (SEFIN), through BANADESA to support credit programs at low interest rates for micro, small and medium-sized farmers.

• b)

  Those originating from the issuance of sovereign bonds that the State of Honduras shall make through SEFIN for an amount of One Hundred Million United States Dollars (US$100,000,000.00), to be acquired by the Government of the Bolivarian Republic of Venezuela, on concessional terms, which shall be allocated to support housing programs for the low-income population and credit to the informal sector of the economy.

• c)

  One Hundred (100) tractors of the brand "VENIRAN TRACTOR", with all their accessories, donated to the State of Honduras by the Republic of Venezuela, which shall be distributed equitably through the different Peasant Confederations.

For the correct, transparent and efficient administration of the resources indicated in subparagraphs a) and b) in the preceding article and in compliance with the provisions of Decree No. 158-2008, SEFIN shall constitute in the Central Bank of Honduras (BCH) a trust, which shall be named "Trust for Financial Support to the Housing and Informal Economy Sectors" with SEFIN holding the status of SETTLOR and BENEFICIARY and BCH that of TRUSTEE; such relationship to be formalized through a trust agreement to be executed between both State institutions, in which all matters relating to its constitution, powers and other conditions necessary for the operation of the trust shall be established.

While the resources indicated in subsections a) and b) of the preceding Article 1 are at the disposal of the TRUSTEE, the TRUSTEE shall invest them under the same conditions of profitability and security in which the State's international reserves are invested. The disinvestment of the resources shall be made in accordance with the amounts and dates of the transfers that the Technical Committee approves in favor of the entity channeling the resources. The income obtained from the investments and financial assets managed by the TRUSTEE, deducted the costs incurred by the management of the investments, shall become part of the trust assets. CHAPTER II ADMINISTRATION OF CREDIT LINE RESOURCES Article 4.- TRANSFER OF RESOURCES. The BCH in its capacity as TRUSTEE, once it has received from SEFIN the resources disbursed by BANDES, shall proceed to transfer them to BANADESA in accordance with the instructions it receives from SEFIN in its capacity as SETTLOR and the conditions established in the Loan Agreement to be executed between SEFIN and BANADESA. CHAPTER III ADMINISTRATION OF SOVEREIGN BOND ISSUANCE RESOURCES Article 5.- ADMINISTRATION AND CHANNELING OF RESOURCES. The financial resources from the issuance of Sovereign Bonds to be carried out by SEFIN based on Agreement No. 026 dated January 13, 2009, for an amount equivalent to One Hundred Million United States Dollars (US$100,000,000.00), shall be transferred by SEFIN to BCH, so that in its capacity as TRUSTEE, it shall manage the trust resources and make the fund transfers in accordance with the terms and conditions of the Trust Agreement and the instructions agreed by the Technical Committee of the Trust. The channeling of the resources of the Trust for Financial Support to the Housing and Informal Economy Sectors to finance the productive activities foreseen in subsection b) of Article 1 of this Regulation, the Trustee shall do so through the Honduran Bank for Production and Housing (BANHPROVI), a specialized second-floor development institution of the State, which shall grant the financing to intermediaries and participating institutions, to finance the "Ramón Villeda Morales" Social Housing Program, subject to the credit policies established by the Technical Committee for this purpose, observing at all times reasonable parameters of return of the invested resources from the Trust's assets, and in accordance with the framework agreement for the administration of Trust resources that BANHPROVI shall execute with the TRUSTEE. Intermediaries may not channel these resources with their related parties. Without prejudice to what is indicated in this Article, the investment of Trust resources shall be distributed in the proportions determined by the Technical Committee, taking into account the demand and the social and economic impact in the target sectors to be financed by the Trust. Article 6.- FORMALIZATION, DISBURSEMENTS AND FINANCIAL CONDITIONS. The resource transfers that the TRUSTEE shall make in compliance with the preceding article shall be covered by a Resource Administration Agreement that it shall execute with BANHPROVI, which shall previously be approved by the Technical Committee; and the disbursements shall be made in accordance with the procedure and financial conditions stipulated in said Agreement and, as the case may be, those expressly indicated by the Technical Committee and subsequently ratified in writing to the Trustee by the Settlor. CHAPTER IV TECHNICAL COMMITTEE OF THE TRUST Article 7.- CREATION. For effective and transparent administration of the trust resources, a Technical Committee of the Trust for Financial Support to the Housing and Informal Economy Sectors is hereby created, whose powers and responsibilities shall be set forth in the Trust Agreement to be executed between the State Secretariat of Finance in its capacity as Settlor and the Central Bank of Honduras in its capacity as Trustee. Article 8.- COMPOSITION OF THE COMMITTEE. For the purpose of achieving adequate coordination in the development and execution of the Government's public policies, particularly in the housing area, the Technical Committee of the Trust for Financial Support to the Housing and Informal Economy Sectors shall be composed as follows:

• 1)

  The head of the State Secretariat in the Office of Finance, who shall preside over it and as alternate the Undersecretary of Credit and Public Investment;

• 2)

  The head of the State Secretariat in the Office of the Presidency and as alternate the Undersecretary whom the Presidency designates, and;

• 3)

  The head of the Ministry without Portfolio for Housing, and as alternate the Vice-Minister or official whom the Minister designates. Each principal member and their respective alternate in the exercise of their functions within the Technical Committee shall have voice and vote. The Trustee's delegate shall perform the function of Secretary of the Committee, who shall participate with voice but without vote. The Committee's decisions shall be adopted by unanimity and the President of BANHPROVI or the official designated by the President shall attend its meetings as an invited guest. FINAL CHAPTER ALLOCATION OF TRACTORS Article 9.- PROCEDURE AND BENEFICIARIES. Based on the provisions of Article 3 of Decree No. 158-2008, the tractors of the brand "VENIRAN TRACTOR", with all their accessories donated to the State of Honduras and indicated in subparagraph c) of Article 1 of this Regulation, shall be transferred to the Project "Centers for Peasant Agricultural Mechanization" (CEMAC) dependent on the State Secretariat of Agriculture and Livestock, so that they are in turn allocated in an equitable manner for the provision of service to the Peasant Confederations throughout the country. In order to make viable the operation of the Project indicated in the preceding paragraph, from the resources foreseen in subsection b) of Article 1 of this Regulation, the sum of Twenty-Five Million Lempiras (L. 25,000,000.00) shall be allocated to the financing of the productive cycles of agricultural producers through the Peasant Confederations that are members of the Project "Centers for Peasant Agricultural Mechanization" (CEMAC) and beneficiaries of the donation of 100 "Veniran Tractor" tractors in accordance with the Executive Decree that shall be approved for that purpose, resources that shall be channeled by BANADESA prior to their transfer by BANHPROVI, observing the conditions that shall be defined for this purpose in the resource administration agreement executed between it and the Trustee. The loans that BANADESA grants in accordance with the provisions of this Article may be guaranteed with mortgages, pledges on machinery and equipment and standing crop. Article 10.- This Executive Agreement shall enter into force on the date of its publication in the Official Gazette "La Gaceta". Given in the city of Tegucigalpa, municipality of the Central District, on the 02nd day of the month of October 2009. COMMUNICATED ROBERTO MICHELETTI BAÍN PRESIDENT OF THE REPUBLIC GABRIELA NÚÑEZ DE REYES STATE SECRETARY IN THE OFFICE OF FINANCE JOSÉ ALFREDO SAAVEDRA PAZ PRESIDENT OSCAR RAMÓN NÁJERA RAMÓN VELÁSQUEZ NÁZAR JOSÉ TORIBIO AGUILERA JUAN ÁNGEL RIVERA TÁBORA