EMAIL DETAILS

Yes, I think it is a good idea to wait for the meeting. These are my initial thoughts regarding the Loan Guarantee program:

1) Certainly the Loan guarantee program is interesting for any company such as Ormazabal that is about to enter into the US market, however I have several concerns regarding the initial costs for applying for it and the so early deadline to present phase 1 documents.
A) Costs: you have an intitial application fee of 125.000 usd no refundable + a 0,5% - 1% facility fee of the guarantee obligation ( more or less 200.000 usd if the amount applied is 20 mill usd + 25000 usd to 150000 usd ( depending of the project, lets say 50.000 usd / year plus a independent consultant fee of 250.000 usd. If you add all the costs we should be talking about of a total application cost of 500.000 usd to 725.000 usd. If we divide this amounts into the 20 mill usd ormazabal project and taking into consideration that it might take at least 3 years to return it back, we would be having an anual percentage cost of between 0.8% to 1,20%. You would have to add to this cost the loan interest rate plus all the administratives cost and monthly reports needed to proof to the DOE the day to day activity for the Loan program requirments.
Taking into consideration all this facts, my conclusion is that this program is made for bigger projects than the one that Ormazabal is planing to invest.

B) there is several information needed to apply for the loan that Ormazabal does not have it yet such as manufacturing site, environmental impact, OMB application and off take agreements. So I think it is going to be very difficult to keep with the dead line squedule.

I don't know if it would be possible, but I have been thinking that perhaps the State's business development department has an specific office that helps the companies that are interesting in establishing their manufacturing facilities in the state ( NY, Iowa, Texas, Delaware, Oregon ) to make the application for the LGP. I think that any state would be more than happy to offer this kind of services to get money into the state through private projects with the purpose of getting new jobs in to their economy. That would certainly put more pressure to obtain better conditions for the Loan and also you would be having a lot of very high quality support in terms of paper work
Since Devon and Yvan are meeting with Sam next tuesday, I think it would be a good moment to ask him if NY state would be helpful in this issue.

But as Michael said, lets wait for the meeting with Steeve Spiner to see what are his suggestions.

Please fill free to add some more thoughts

Best. Abel


Enviado desde mi BlackBerry® de Vodafone

________________________________
From: Michael Muldoon <mmuldoon@rosemontseneca.com>
Date: Thu, 19 Aug 2010 17:26:49 -0400
To: Abel Navarro Homet<abel@transatlanticeg.com>; Hunter Biden<hbiden@rosemontseneca.com>; Devon Archer<darcher@rosemontcapital.com>; EricSchwerin<eschwerin@senecaga.com>; Lorenzo Roccia<lorenzo@transatlanticeg.com>; Pio Mortera Nales<pio@transatlanticeg.com>
Subject: RE: USA - DOE "1705" Loan Guarantee Program first read

Evening Guys,

I began to research the 1703 / 1705 sections of the Loan Guarantee Program and included a brief (and cribbed) overview of each in the attached document. I think it would be more beneficial to get feedback from Yvan on his discussion with Steve Spinner (at DOE) before spending time digging through the federal register (given Yvan’s expertise on Ormazabal and Steve Spinner’s on the DOE programs). That way we’ll have a clear understanding of the synergies and can assist Yvan in preparing the appropriate documentation.

Let me know what you guys think of that approach.

Best,

Mike

Mike Muldoon
Rosemont Seneca Partners, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
mmuldoon@rosemontseneca.com<eschwerin@obblaw.com>
P Consider the environment before printing this email.

From: Abel Navarro Homet [mailto:abel@transatlanticeg.com<mailto:abel@transatlanticeg.com>]
Sent: Thursday, August 19, 2010 2:27 AM
To: 'Mike Muldoon'; Hunter Biden; Devon Archer; Eric Schwerin; Lorenzo Roccia; Pio Mortera Nales
Subject: RV: USA - DOE "1705" Loan Guarantee Program first read

Hi Mike

I am here with Hunter and we were discussing that it would be good to take a look to this program for Ormazabal. I am going to go through it this morning and get some idea of what it would be interesting for the company. The dead line application form is on august 31st so we don't have much time. Hunter would like you to take a look at it and have a small report done before the end of the week. I also will be sending my ideas to all you guys. Thanks. Regards

Abel

Enviado desde mi BlackBerry® de Vodafone

________________________________
From: Yvan Giroud <ygi@ormazabal.com<mailto:ygi@ormazabal.com>>
Date: Tue, 17 Aug 2010 19:06:46 -0400
To: Lorenzo Roccia<lorenzo@transatlanticeg.com<mailto:lorenzo@transatlanticeg.com>>; Roberto Fernández Medrano<rfm@ormazabal.com<mailto:rfm@ormazabal.com>>
Cc: Abel Navarro Homet<abel@transatlanticeg.com<mailto:abel@transatlanticeg.com>>; ebm@uniblok.com<mailto:ebm@uniblok.com><ebm@uniblok.com<mailto:ebm@uniblok.com>>; Pio Mortera Nales<pio@transatlanticeg.com<mailto:pio@transatlanticeg.com>>; ReidFitzgerald<reid@transatlanticeg.com<mailto:reid@transatlanticeg.com>>
Subject: USA - DOE "1705" Loan Guarantee Program first read

Lorenzo, Roberto,

I had a first look at part I of the DOE Loan Guarantee Program online application (https://www.doeloan.com/doe/common/Applicant/Applicant.aspx) to prepare my call to Steven Spinner of DOE.

We may consider apply under section 1703 – Manufacturing Systems and Components Projects. The program would guarantee 80% of aggregate principals and interests.

Preliminary application (“Part I”) is due by August 31, 2010. Equity requirement is at least 20% of total project cost. There is also a requirement to pay prevailing wage rates as per the Davis-Bacon Act, http://www.wdol.gov/, ($32 + $12 fringe benefits hourly rate in Iowa). I have not found any MWBE consideration or personal guaranty requirement.

Fees are as follows:

- $125k application fee (25% with part I application and 75% with part II)

- 0.5% facilitation fee (25% at signing, 75% at closing)

- $50k to $150k maintenance fee (yearly)

Application requirements the following elements:

1. Credit rating of the project (S&P, Moody’s or Fitch)

2. Latitude / Longitude of the manufacturing site

3. Off-take agreements (pre-arranged orders or sales)

4. Revenue projection

5. Environmental Impact Assessment

6. Project sponsor’s right to the Intellectual Property (in this case Orma-Transatlantic Inc.)

7. Job creation estimate

8. Technical & project descriptions

9. Summary business and financial plans

10. OMB Application (not sure what it is)

I plan to call Steve Spinner tomorrow to explore further those 10 items and determine whether they are mandatory for the initial August 31 deadline and how critical they are to a successful application.

Best regards,

Yvan


Yvan
T +1 203 983 8176
C +1 203 339 1548

___________________________________________________________________________

Este mensaje se dirige exclusivamente a su destinatario y puede contener información privilegiada o confidencial. Si no es vd. el destinatario indicado, queda notificado de que la utilización, divulgación y/o copia sin autorización está prohibida en virtud de la legislación vigente. Si ha recibido este mensaje por error, le rogamos que nos lo comunique inmediatamente por esta misma vía y proceda a su destrucción.

This message is intended exclusively for its addressee and may contain information that is CONFIDENTIAL and protected by professional privilege. If you are not the intended recipient you are hereby notified that any dissemination, copy or disclosure of this communication is strictly prohibited by law. If this message has been received in error, please immediately notify us via e-mail and delete it.
__________________________________________________________________________