Forgoing Vote to Amend the Constitution Opens Door to Constructive Dialogue to Reach Win-Win Resolution for the People of Honduras; and Could Eliminate Multi-Billion-Dollar Expropriation Liability

Honduras Próspera Reiterates Willingness to Resolve Dispute Amicably 

The official position taken by the executive branch of the Honduran Government is that the 2023 ordinary session of the National Congress ended on October 31, 2023. There was no prior vote on the ratification of the proposed repeal of Articles 294, 303 and 329 of the Constitution related to ZEDEs (the so-called “ZEDE Constitutional Provisions”). While political arguments continue, the decision to forgo a vote on the proposed repeal of the ZEDE Constitutional Provisions creates a window of opportunity for a win-win resolution.

Honduras currently faces a number of international arbitration claims. An amicable resolution of the case brought by Honduras Próspera Inc. (US-Delaware), the promoter and organizer of Próspera ZEDE, and its affiliates St. John’s Bay Development Company LLC (US-Delaware) and Próspera Arbitration Center LLC (US-Texas) (“Honduras Próspera”), could eliminate an expropriation liability for the Government of Honduras of up to $10.7 billion. It would also open the door to attracting billions of dollars in foreign direct investment to Honduras to generate hundreds of thousands of well-paying jobs and opportunities for Hondurans. This would empower the Republic of Honduras to win an increased market share of rapidly growing nearshoring opportunities.

National and international law recognize Honduras Próspera’s acquired rights. The impact of Honduras’ wrongful efforts to repeal the legal framework for ZEDEs without acknowledging the legal stability rights of existing ZEDEs led to an international arbitration commenced by Honduras Próspera. The arbitration is currently ongoing before the International Centre for Settlement of Investment Disputes (ICSID).

Honduras Próspera hereby reiterates its openness to exploring the possibility of an amicable resolution. It is prepared to discuss whether there may be a way to move forward that could be acceptable to the various stakeholders. It invites the Government of Honduras to confirm promptly whether it is interested in engaging in a productive dialogue. 

Upon confirmation from Honduras, and absent further measures against its investments or individuals affiliated with the Próspera project (be it from the administration or other segments of the Honduran Government), Honduras Próspera is prepared to instruct its legal team to work with Honduras’ representatives to put in place a framework to facilitate discussions in accordance with the appropriate conditions of formality and transparency. Honduras Próspera and its affiliates are ready, willing, and able to participate in good faith and we hope that Honduras will do the same.

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LEGAL DISCLAIMERS: THIS EMAIL IS NOT INTENDED TO CONSTITUTE A BINDING OFFER OF ANY KIND. THE UNDERLYING INVESTMENT OPPORTUNITY IS NOT, HAS NOT BEEN, AND WILL NOT BE A PUBLIC OFFERING OR A REGISTERED OFFERING IN ANY JURISDICTION; IT IS, HAS BEEN, AND WILL BE SOLELY A PRIVATE PLACEMENT IN THE UNITED STATES OF AMERICA PURSUANT TO SECTION 4(A)(2) OF THE U.S. SECURITIES ACT OF 1933. AS SUCH, THE INVESTMENT OPPORTUNITY HAS BEEN AND WILL BE DIRECTED TO AND IS INTENDED TO BE CONSIDERED ONLY BY INDIVIDUALS WHO WOULD QUALIFY AS “ACCREDITED INVESTORS” OR ENTITIES CONTROLLED BY INDIVIDUALS WHO WOULD BE DEEMED “ACCREDITED INVESTORS,” AS SUCH TERM IS DEFINED IN RULE 501 OF REGULATION D OF THE U.S. SECURITIES ACT OF 1933, AS AMENDED. THIS EMAIL CONTAINS “FORWARD-LOOKING STATEMENTS”, WHICH CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS “MAY”, “WILL”, “SEEK”, “SHOULD”, “EXPECT”, “ANTICIPATE”, “PROJECT”, “ESTIMATE”, “INTEND”, “CONTINUE” OR “BELIEVE” OR THE NEGATIVES THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY, OR BY SPECIFICATION OF ANTICIPATED REVENUES AND RATES OF RETURN. DUE TO THE VARIOUS RISKS AND UNCERTAINTIES, ACTUAL EVENTS OR RESULTS OR THE ACTUAL PERFORMANCE OF THE UNDERLYING INVESTMENT OPPORTUNITY MAY DIFFER MATERIALLY FROM THOSE REFLECTED OR CONTEMPLATED IN SUCH FORWARD-LOOKING STATEMENTS. HONDURAS PROSPERA INC. AND ITS AFFILIATES ARE NOT WARRANTING OR ASSURING ANYONE THAT THEY WILL BE ABLE TO SUCCESSFULLY IMPLEMENT ANY OF THEIR CURRENT PLANS, OR THAT ACTUAL FUTURE PLANS AND PERFORMANCE WILL FULFILL OR MATCH PRESENT EXPECTATIONS. YOU SHOULD NOT BASE ANY INVESTMENT DECISION IN RELIANCE UPON ANY STATEMENT CONTAINED IN THIS EMAIL.

Legal Stability Disclosure and Disclaimer. The Honduran National Congress purported to adopt certain Decrees (Nos. 32-2022 and 33-2022) to repeal the ZEDE constitutional amendments and organic law originally enacted in 2013 and 2014 respectively, with the ratification of the purported repeal of the ZEDE constitutional amendments scheduled for the 2023 session of the Honduran National Congress (the “Decrees”). The Decrees heighten risks of legal instability, adverse judicial or arbitration determinations, political instability, violence, property damage, expropriation, and treaty violations with respect to residences, business operations, regulatory and tax authority, contracts, and property ownership within Próspera ZEDE (the “Risks”). Honduras Próspera Inc., St. John’s Bay Development Company LLC, and Próspera Arbitration Center LLC (the “HPI & Affiliates”) have retained legal counsel to determine the most appropriate manner of responding to the Decrees and the Risks, which has included filing a Request for Arbitration with the International Centre for Settlement of Investment Disputes (“RFA”), among other measures. HPI & Affiliates have adopted the position that the Decrees cannot be lawfully applied to existing ZEDEs, such as Próspera ZEDE, under international and Honduran domestic law, through at least January 2064. However, various Honduran public officials and agencies have articulated or acted on the position that the Decrees apply to Próspera ZEDE. Such conduct has been alleged in the RFA to constitute illegal and expropriative conduct. Nevertheless, to the extent practicable, HPI & Affiliates intend to pursue the core vision of their respective business models in Próspera ZEDE as originally guaranteed under the ZEDE constitutional amendments and organic law. In so doing, HPI & Affiliates reserve the right to adopt a wide spectrum of risk mitigation countermeasures in their reasonable business judgment and without intended third party beneficiaries. There is no guarantee that any of these countermeasures will prove to be successful in substantially preserving the rights and privileges to which HPI & Affiliates are entitled, including the legal stability of Próspera ZEDE, or in materially mitigating the Risks. Accordingly, any continued reliance upon the legal stability, continued existence, and authority of Próspera ZEDE as contemplated in the ZEDE constitutional amendments and organic law entails the knowing and voluntary assumption of all risks of loss associated with, arising from, or related to the Risks and Decrees, excluding and without prejudice to any cause of action, claim or defense addressing, relating to, or arising from the Decrees or the Risks to the extent such remedy or defense is directed to the Government of the Republic of Honduras, its agencies, political subdivisions, and public officials, for enacting the Decrees or actualizing the Risks. Further, because of the Risks and the Decrees, the doctrines of force majeure, impossibility, and impracticability may excuse performance of otherwise binding obligations which are premised on the legal stability of Próspera ZEDE. Furthermore, HPI & Affiliates disclaim any and all responsibility or liability associated with, arising from, or relating to the Risks and the Decrees. Finally, relevant liability limits have been established by the Próspera Liability Shield Resolution, §5-1-183-0-0-0-1, et seq., approved (e)Resident Agreements of Coexistence, §5-1-180-0-0-0-1, and the Próspera Amended and Restated Charter, §1-1-36-0-0-0-0-1.01, et seq., all available at https://pzgps.hn/all-publications/. Independent legal counsel should be consulted in regard to the implications of this disclosure and disclaimer.