FOR THE DISTRICT OF DELAWARE Allied Nevada …upshotservices.s3.amazonaws.com/files/d36220e2-8449-4990-b486-b8… · FOR THE DISTRICT OF DELAWARE ) Chapter 11 ... and divestitures;

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

) Chapter 11 In re: ) ) Case No. 15-10503 (MFW) Allied Nevada Gold Corp., et al.,1 ) ) Jointly Administered

) Debtors. ) Objection Deadline: April 8, 2015 at 4:00 p.m.

) (prevailing ET) ) Hearing Date: April 15, 2015 at 10:30 a.m. ) (prevailing ET)

DEBTORS’ APPLICATION FOR ENTRY OF AN

ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OF MOELIS & COMPANY LLC AS FINANCIAL

ADVISOR FOR THE DEBTORS AND DEBTORS IN POSSESSION, EFFECTIVE NUNC PRO TUNC TO THE PETITION DATE AND WAIVING

CERTAIN INFORMATION REQUIREMENTS IMPOSED BY LOCAL R ULE 2016-2

The above-captioned debtors and debtors in possession (collectively, the “Debtors”) file

this application (the “Application”) 2 for entry of an order, substantially in the form attached

hereto as Exhibit A , (a) authorizing the employment and retention of Moelis & Company LLC

(“Moelis”) as financial advisor for the Debtors, effective nunc pro tunc to the Petition Date (as

defined below), in accordance with the terms and conditions of that certain engagement letter,

dated as of January 26, 2015, and as supplemented on March 7, 2015 (the “Engagement

Letter”), annexed as Exhibit 1 to Exhibit A attached hereto, and (b) granting related relief. In

1 The Debtors in these cases, along with the last four digits of each Debtor’s federal tax identification number,

are: Allied Nevada Gold Corp. (7115); Allied Nevada Gold Holdings LLC (7115); Allied VGH Inc. (3601); Allied VNC Inc. (3291); ANG Central LLC (7115); ANG Cortez LLC (7115); ANG Eureka LLC (7115); ANG North LLC (7115); ANG Northeast LLC (7115); ANG Pony LLC (7115); Hasbrouck Production Company LLC (3601); Hycroft Resources & Development, Inc. (1989); Victory Exploration Inc. (8144); and Victory Gold Inc. (8139). The corporate headquarters for each of the above Debtors are located at, and the mailing address for each of the above Debtors, except Hycroft Resources & Development, Inc., is 9790 Gateway Drive, Suite 200, Reno, NV 89521. The mailing address for Hycroft Resources & Development, Inc. is P.O. Box 3030, Winnemucca, NV 89446.

2 Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Engagement Letter.

Case 15-10503-MFW Doc 119 Filed 03/25/15 Page 1 of 23

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support of this Application, the Debtors submit the Declaration of Barak Klein, a Managing

Director of Moelis (the “Klein Declaration”), attached hereto as Exhibit B and incorporated

herein by reference. In further support of this application, the Debtors respectfully state as

follows:

JURISDICTION

1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334, and the Amended Standing Order of Reference from the United States District Court for

the District of Delaware, dated as of February 29, 2012 (the “Amended Standing Order”). This

is a core proceeding pursuant to 28 U.S.C. § 157(b)(2), and the Court may enter a final order

consistent with Article III of the United States Constitution.

2. Venue in this Court is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

3. The statutory bases for the relief requested herein are sections 327(a) and 328(a)

of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy Code”),

Rule 2014(a) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and

Rules 2014-1 and 2016-2(h) of the Local Rules of Bankruptcy Practice and Procedure of the

United States Bankruptcy Court for the District of Delaware (the “Local Rules”).

BACKGROUND

A. General Background

4. On March 10, 2015 (the “Petition Date”), each of the Debtors filed a voluntary

petition for relief under chapter 11 of the Bankruptcy Code in this Court. The Debtors continue

to operate their business and manage their properties as debtors in possession pursuant to

Bankruptcy Code sections 1107(a) and 1108. On March 11, 2015, the Court entered an order

[Docket No. 53] authorizing the joint administration and procedural consolidation of these

chapter 11 cases pursuant to Bankruptcy Rule 1015(b). No request for the appointment of a


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trustee or examiner has been made in these chapter 11 cases. On March 19, 2015, the United

States Trustee for Region 3 appointed a statutory committee of unsecured creditors in these

chapter 11 cases pursuant to Bankruptcy Code section 1102 [Docket No. 95].

B. Moelis’ Qualifications

5. Moelis is an investment banking firm with its principal office located at 399 Park

Avenue, 5th Floor, New York, New York 10022. Moelis is a registered broker-dealer with the

United States Securities and Exchange Commission and is a member of the Financial Industry

Regulatory Authority. Moelis was founded in 2007 and is a wholly owned subsidiary of Moelis

& Company Group LP. Moelis & Company Group LP, together with its subsidiaries, has

approximately 500 employees based in 15 offices in North and South America, Europe, the

Middle East, Asia and Australia. Moelis & Company Group LP is a subsidiary of Moelis &

Company, a public company listed on the New York Stock Exchange.

6. Moelis provides a broad range of financial advisory services to its clients,

including: (a) general corporate finance; (b) mergers, acquisitions, and divestitures; (c) corporate

restructurings; (d) special committee assignments; and (e) capital raising. Moelis and its senior

professionals have extensive experience in the reorganization and restructuring of distressed

companies, both out-of-court and in chapter 11 cases. Moelis’ business reorganization

professionals have served as financial advisors in numerous cases, including: In re ITR

Concession Company LLC, No. 14-34284 (Bankr. N.D. Ill. Oct. 28, 2014); In re GSE

Environmental, Inc., No. 14-11126 (MFW) (Bankr. D. Del. May 30, 2014); In re MACH Gen,

LLC, No. 14-10461 (MFW) (Bankr. D. Del. Apr. 11, 2014); In re Sorenson Commc’ns, Inc.,

No. 14-10454 (BLS) (Bankr. D. Del. Mar. 25, 2014); In re Sbarro LLC, No. 14-10557 (MG)

(Bankr. D. Del. April 7, 2014); In re Cengage Learning, Inc., No. 13-44106 (ESS) (Bankr.

E.D.N.Y. Sept. 13, 2013); In re OSH 1 Liquidating Corp. f/k/a Orchard Supply Hardware Stores


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Corp., No. 13-11565 (CSS) (Bankr. D. Del. July 15, 2013); In re Revel AC, Inc., No. 13-16253

(JHW) (Bankr. D.N.J. Apr. 17, 2013); In re AMF Bowling Worldwide, Inc., No. 12-36495

(KRH) (Bankr. E.D. Va. Dec. 20, 2012); In re Residential Capital, LLC, No. 12-12020 (MG)

(Bankr. S.D.N.Y. Aug. 30, 2012); In re AMR Corp., No. 11-15463 (SHL) (Bankr. S.D.N.Y. Mar.

7, 2012); In re NewPage Corp., No. 11-12804 (KG) (Bankr. D. Del. Dec. 27, 2011); In re Gen.

Maritime Corp., No. 11-15285 (MG) (Bankr. S.D.N.Y. Dec. 15, 2011); In re Jackson Hewitt Tax

Serv., Inc., No. 11-11587 (MFW) (Bankr. D. Del. June 30, 2011); In re Appleseed’s Intermediate

Holdings LLC, No. 11-10160 (KG) (Bankr. D. Del. Feb. 23, 2011); In re Innkeepers USA Trust,

No. 10-13800 (SCC) (Bankr. S.D.N.Y. Aug. 12, 2010); In re Almatis B.V., No. 10-12308 (MG)

(Bankr. S.D.N.Y. June 9, 2010); In re Atrium Corp., No. 10-10150 (BLS) (Bankr. D. Del. Mar.

17, 2010); In re Int’l Aluminum Corp., No. 10-10003 (MFW) (Bankr. D. Del. Jan. 27, 2010); In

re Reader’s Digest Ass’n Inc., No. 09-23529 (RDD) (Bankr. S.D.N.Y. Aug. 24, 2009); In re NV

Broad. LLC, No. 09-12473 (KG) (Bankr. D. Del. Aug. 5, 2009); In re Fontainebleau Las Vegas

Holdings, LLC, No. 09-21481 (AJC) (Bankr. S.D. Fla. Nov. 25, 2009); In re ION Media

Networks Inc., No. 09-13125 (JMP) (Bankr. S.D.N.Y. July 13, 2009); In re JGW Holdco, LLC

f/k/a J.G. Wentworth LLC, No. 09-11731 (CSS) (Bankr. D. Del. June 16, 2009); In re Source

Interlink Cos., No. 09-11424 (KG) (Bankr. D. Del. May 21, 2009); In re Dayton Superior Corp.,

No. 09-11351 (BLS) (Bankr. D. Del. May 18, 2009); In re Idearc Inc., No. 09-31828 (BJH)

(Bankr. N.D. Tex. May 27, 2009); In re Muzak Holdings LLC, No. 09-10422 (KJC) (Bankr. D.

Del. Apr. 6, 2009); In re Chemtura Corp., No. 09-11233 (REG) (Bankr. S.D.N.Y. Mar. 18,

2009); In re Old AII, Inc. f/k/a Aleris Int’l Inc., No. 09-10478 (BLS) (Bankr. D. Del. Mar. 16,

2009); In re XMH Corp. f/k/a Hartmarx Corp., No. 09-02046 (BWB) (Bankr. N.D. Ill. Mar. 4,


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2009); In re Lyondell Chemical Co., No. 09-10023 (REG) (Bankr. S.D.N.Y. Jan. 6, 2009).3

7. The Debtors have selected Moelis as their financial advisor based upon, among

other things: (a) the Debtors’ need to retain a skilled financial advisory firm to provide advice

with respect to the Debtors’ complex restructuring activities; (b) Moelis’ extensive experience

and excellent reputation in providing financial advisory services in complex chapter 11 cases

such as these; and (c) Moelis’ extensive knowledge of the Debtors, as described below. In light

of the size and complexity of these chapter 11 cases, Moelis’ resources, capabilities, and

experience in advising the Debtors are crucial to the Debtors’ successful restructuring. An

experienced financial advisor such as Moelis fulfills a critical need that complements the

services provided by the Debtors’ other restructuring professionals. For these reasons, the

Debtors require the services of a capable and experienced financial advisor such as Moelis.

8. Moelis has been advising the Debtors on strategic and restructuring initiatives for

approximately two months. On January 26, 2015, Moelis and the Debtors entered into the

Engagement Letter whereby Moelis agreed to act as the Debtors’ exclusive financial advisor in

connection with a potential Restructuring or Capital Transaction (each as defined in the

Engagement Letter). On March 7, 2015, Moelis and the Debtors entered into a supplement to the

Engagement Letter whereby Moelis agreed to act as financial advisor to the Debtors in

connection with the sale, disposition or other transfer (regardless of form) involving certain non-

core assets of the Debtors.

9. Throughout Moelis’ engagement, Moelis has provided the following services,

among others, to the Debtors in connection with their restructuring efforts and will continue to

provide such services during these chapter 11 cases at the request of the Debtors:

3 Because of the voluminous nature of the orders cited herein, such orders are not attached to this Application.

Copies of these orders are available upon request of the Debtors’ proposed counsel.


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a. assisting the Debtors in reviewing and analyzing the Debtors’ results of operations, financial condition and business plan;

b. assisting the Debtors in reviewing and analyzing a potential Restructuring or Capital Transaction (or any combination thereof);

c. providing advice and testimony related to a potential In-Court Restructuring, including, without limitation, any Capital Transaction or Sale Transaction contemplated thereby;

d. assisting the Debtors in negotiating a Restructuring or Capital Transaction (or any combination thereof)

e. advising the Debtors on the terms of any debt, equity interests, equity-linked interests, hybrid capital, royalty, streaming or production-based financing transactions, options, warrants or other rights to acquire equity interests or other securities it offers in any potential Capital Transaction;

f. advising the Debtors on their preparation of information materials for a potential Capital Transaction (such materials prepared by the Debtors, the “Information Memo”);

g. assisting the Debtors in contacting potential lenders, investors or purchasers (the “Purchasers”) in a Restructuring or Capital Transaction (or any combination thereof), and meeting with and providing, on behalf of the Debtors, such prospective Purchasers with the Information Memo and such additional information about the Debtors’ assets, properties or business as may be appropriate and acceptable to the Debtors, subject to customary business confidentiality agreements;

h. assisting in the management of a due diligence process with respect to a potential Restructuring or Capital Transaction (or any combination thereof), including assisting in responding to applicable due diligence questions and requests;

i. assisting and advising the Debtors in the marketing and execution of a Sale Transaction and, if necessary, providing testimony in these chapter 11 cases regarding the Sale Transaction; and

j. providing such other financial advisory and investment banking services in connection with a Restructuring or Capital Transaction (or any combination thereof) as Moelis and the Debtors may mutually agree upon.

10. As a result of its work with the Debtors, Moelis has developed valuable

institutional knowledge regarding the Debtors’ business, financial affairs, operations, capital

structure, and other material information. Having worked with the Debtors’ management and


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their other advisors, Moelis has developed relevant experience and expertise regarding the

Debtors that will assist it in providing effective and efficient services in these chapter 11 cases.

Accordingly, the Debtors believe Moelis is well-qualified to represent them in a cost-effective,

efficient, and timely manner, and the Debtors submit that the employment and retention of

Moelis is in the best interests of the Debtors, their creditors, and all parties in interest.

C. Services Provided

11. As of January 26, 2015, Moelis commenced its engagement with the Debtors to

provide financial advice and services in connection with a potential Restructuring or Capital

Transaction. The terms and conditions of the Engagement Letter were the result of significant

discussions and negotiations between Moelis and the Debtors and reflect the parties’ mutual

agreement as to the substantial efforts that will be required in connection with this engagement.

Pursuant to the Engagement Letter, Moelis advised the Debtors in their negotiations with the

Debtors’ existing secured lenders and certain holders of the senior unsecured notes (the

“Consenting Noteholders”). These negotiations ultimately resulted in the execution of a

restructuring support agreement among the Debtors, the Consenting Noteholders and the secured

lenders (the “RSA”). Pursuant to the RSA, the Consenting Noteholders and certain of the

Debtors’ prepetition secured lenders party thereto agreed to support a plan of reorganization

proposed by the Debtors on the terms set forth in the restructuring term sheet attached to the

RSA. In addition, pursuant to the Engagement Letter, Moelis has advised the Debtors in

connection with the negotiation and documentation of the terms of the debtor in possession

facility provided by the Consenting Noteholders.

12. Subject to further order of the Court, and consistent with the Engagement Letter,

the Debtors propose to retain Moelis to continue rendering consulting and advisory services as


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outlined within the Engagement Letter and this Application. Many of these services began in

January 2015, and may continue throughout these chapter 11 cases.

13. If the Debtors request that Moelis perform services not contemplated by the

Engagement Letter, Moelis and the Debtors will agree, in writing, on the terms for such services

and seek the Court’s approval thereof.

D. Professional Compensation

14. Moelis’ decision to advise and assist the Debtors in connection with these

chapter 11 cases is subject to its ability to be retained in accordance with the terms of the

Engagement Letter pursuant to section 328(a), and not section 330, of the Bankruptcy Code.

15. As set forth more fully in the Engagement Letter, and subject thereto, Moelis will

be compensated as follows (the “Fee Structure”):

a. Monthly Fee: during the term of the agreement set forth in the Engagement Letter, a non-refundable cash fee of $150,000 per month (the “Monthly Fee”), payable in advance of each month. Whether or not a Restructuring or Capital Transaction occurs, Moelis shall earn and be paid the Monthly Fee every month during the term of the agreement. 50% of Monthly Fees in excess of $900,000 shall be credited (the “Monthly Fee Credit”), to the extent previously paid, against any In-Court Restructuring Fee, Out-of-Court Restructuring Fee and Capital Transaction Fee to be paid pursuant to the terms of the Engagement Letter, provided, that no such In-Court Restructuring Fee, Out-of-Court Restructuring Fee or Capital Transaction Fee shall be reduced below zero.

b. Restructuring Fee: at the closing of an In-Court Restructuring (i.e., on emergence), a fee (the “In-Court Restructuring Fee”) equal to $3,000,000;4

4 The Engagement Letter provides for an alternative fee at the closing of an Out-of-Court Restructuring (the

“Out-of-Court Restructuring Fee”) in an amount equal to (a) $2,500,000 in the event that holders of 50% of the face value of the Notes approve and consent to all aspects of the Out-of-Court Restructuring; (b) $3,000,000 in the event that holders of 66% of the face value of the Notes approve and consent to all aspects of the Out-of-Court Restructuring; or (c) $3,750,000 in the event that holders of 95% or more of the face value of the Notes approve and consent to all aspects of the Out-of-Court Restructuring; provided, that in the event that more than the specified percentage of Notes in the foregoing clauses (a) or (b) (but not (c)) approves and consents to all aspects of the Out-of Court Restructuring, then the Out-of-Court Restructuring Fee shall be increased in a linear fashion until the next percentage of Notes is reached. Since the Debtors are pursuing an In-Court Restructuring,


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c. Capital Transaction Fee: a non-refundable cash fee (the “Capital Transaction Fee”), equal to the sum of: (i) 1.5% of the aggregate gross amount or face value of debt obligations and other debt interests (including any convertible debt) Raised5 in the Capital Transaction, plus (ii) 3.75% of the aggregate gross amount or face value of new capital Raised in the Capital Transaction as equity, equity-linked interests, royalty financing, streaming financing, production-based financing, options, warrants or other rights to acquire equity interests; provided, that the 1.5% and 3.75% described in the foregoing clauses (i) and (ii), respectively, shall be reduced by 1/3rd for the calculation of the Capital Transaction Fee with respect to the aggregate gross amount or face value of debt obligations, other debt interests, or new capital (whether as equity, equity-linked interests, royalty financing, streaming financing, production-based financing, options, warrants, other rights to acquire equity interests or otherwise) provided by or Raised from any equity holders, lenders, debt holders, other security holders, or creditors of the Debtors or any subsidiary of the Debtors or any of their respective affiliates, subsidiaries, or affiliated funds (whether such entity or person is currently or at the time Raised is a holder or any of their respective affiliates, subsidiaries, or affiliated funds). Subject to the Fee Cap (as defined below) and the Monthly Fee Credit, the Debtors will pay a separate Capital Transaction Fee in respect of each Capital Transaction in the event that more than one Capital Transaction occurs.

d. Sale Transaction Fee: a non-refundable cash fee equal to $200,000 payable upon the closing of a Sale Transaction.

16. Notwithstanding anything to the contrary contained in the Engagement Letter, in

no event shall the total fees due pursuant to the Engagement Letter (excluding the Sale

Transaction Fee), exceed $4,500,000 (such amount, the “Fee Cap”). If any transaction involves

the Out-of-Court Restructuring Fee is not applicable with respect to any Restructuring implemented in these chapter 11 cases.

5 “Raised” means the amount of new funds committed to and available to the Debtors at the consummation of the Capital Transaction, whether or not the Debtors draw the full amount at such time and whether or not the Debtors apply such amounts to refinance any of its obligations; provided, that (x) any debt obligations, other debt interests, new capital (whether as equity, equity-linked interests, royalty financing, streaming financing, production-based financing, options, warrants, other rights to acquire equity interests or otherwise), or other take back paper that are issued in exchange for (y) any debt amounts, debt obligations, other debt interests, equity, other securities of the Debtors or any of their subsidiaries or any other claims against the Debtors or any of their subsidiaries existing at such time shall be excluded from the term Raised and in no event shall any such amounts be included in, or taken into account in, the calculation of the Capital Transaction Fee.


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both a Capital Transaction and a Restructuring, both (i) a Capital Transaction Fee and (ii) either

an In-Court Restructuring Fee or an Out-of-Court Restructuring Fee shall be payable subject to

the terms of the Engagement Letter, including the Fee Cap and the Monthly Fee Credit.

17. If, at any time before the expiration of twelve months following the expiration or

termination of Moelis’ engagement (except if Moelis unilaterally terminates the

Engagement Letter), the Debtors consummate any Restructuring or Capital Transaction(s) or

enter into an agreement regarding any Restructuring or Capital Transaction(s) or a Plan is filed

regarding any Restructuring, and such Restructuring is subsequently consummated, then the

Debtors shall pay Moelis the appropriate fee specified in the Engagement Letter immediately

upon the closing of each such transaction. If, at any time before the expiration of six months

following the termination of the Engagement Letter, the Debtors enter into an agreement that

subsequently results in a Sale Transaction, or consummates a Sale Transaction, then the Debtors

shall pay Moelis the Sale Transaction Fee in cash promptly upon the closing of the Sale

Transaction.

18. The Engagement Letter provides that in connection with a Restructuring or

Capital Transaction (or any combination thereof) intended to be consummated in connection

with a “pre-packaged” or “pre-arranged” chapter 11 plan or reorganization:6 (a) Moelis will

have earned 100% of (i) either any In-Court Restructuring Fee or Out-of-Court Restructuring Fee

and/or (ii) any Capital Transaction Fee applicable thereto (in each case, subject to the terms of

the Engagement Letter, including the Fee Cap and the Monthly Fee Credit) upon obtaining the

Required Approval and prior to the commencement of the chapter 11 cases; provided, that the

6 A “pre-packaged” or “pre-arranged” plan means any such plan with respect to which holders of at least one

class of claims representing at least 66.67% in dollar amount of the allowed claims in such class have provided written evidence (through a “lock-up agreement” or otherwise) of their intent to vote in favor of such plan (such vote, the “Required Approval”).


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Debtors will pay any such In-Court Restructuring Fee, Out-of-Court Restructuring Fee and/or

Capital Transaction Fee (in each case, subject to the terms of the Engagement Letter, including

the Fee Cap and the Monthly Fee Credit), solely upon the closing of the applicable Restructuring

or Capital Transaction (or any combination thereof) and not prior thereto.

19. In addition to any fees payable to Moelis, the Debtors will reimburse Moelis for

all of its reasonable, actual, documented out-of-pocket expenses as they are incurred in entering

into and performing services under the Engagement Letter, including the costs of Moelis’ outside

counsel (without the need for such legal counsel to be retained as a professional in these chapter

11 cases and without regard to whether such legal counsel’s services satisfy section 330(a)(3)(C)

of the Bankruptcy Code).

20. Moelis intends to apply for compensation for professional services rendered and

reimbursement of expenses incurred in connection with these chapter 11 cases, subject to the

Court’s approval and in compliance with applicable provisions of the Bankruptcy Code, the

Bankruptcy Rules, the Local Rules, the U.S. Trustee Guidelines, and any other applicable

procedures and orders of the Court, including any order approving this Application (to the extent

compliance is not waived) and consistent with the proposed compensation set forth in the

Engagement Letter.

21. Moelis will maintain records in support of any actual, necessary costs and

expenses incurred in connection with the rendering of its services in these chapter 11 cases.

However, because: (a) it is not the general practice of financial advisory firms such as Moelis to

keep detailed time records similar to those customarily kept by attorneys; (b) Moelis does not

ordinarily keep time records on a “project category” basis; and (c) Moelis’ compensation is

based on a fixed Monthly Fee and fixed transaction fees, the Debtors respectfully request that


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only Moelis’ restructuring professionals be required to maintain records (in summary format) of

the services rendered for the Debtors, including summary descriptions of those services, the

approximate time expended in providing those services (in hourly increments) and the identity of

the restructuring professionals who provided those services. Moelis will present such records to

the Court in its fee application(s). Moreover, the Debtors respectfully request that Moelis’

restructuring professionals not be required to keep time records on a “project category” basis,

that its non-restructuring professionals and personnel in administrative departments (including

legal) not be required to maintain any time records, and that it not be required to provide or

conform to any schedule of hourly rates. To the extent that Moelis would otherwise be required

to submit more detailed time records for its professionals by the Bankruptcy Code, the

Bankruptcy Rules, the Local Rules, the U.S. Trustee Guidelines, or other applicable procedures

and orders of the Court, the Debtors respectfully request that this Court waive such requirements.

22. The Debtors believe the Fee Structure is consistent with, and typical of,

compensation arrangements entered into by Moelis and other comparable firms in connection

with the rendering of similar services under similar circumstances, both in and out of bankruptcy

proceedings. The Debtors also believe that the Fee Structure reflects a balance between a fixed,

monthly fee, and a contingency amount, which is tied to the consummation and closing of the

transactions and services contemplated by the Debtors and Moelis in the Engagement Letter. In

determining the Fee Structure and the reasonableness of such compensation, the Debtors

compared Moelis’ fee proposal to comparable precedents. After such comparison, followed by

discussions and arm’s-length negotiations, the Debtors believe that the Fee Structure is in fact

reasonable, market-based and designed to compensate Moelis fairly for its work.


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23. Moelis’ strategic and financial expertise, as well as its capital markets knowledge,

financing skills, and restructuring capabilities, some or all of which has and will be required by

the Debtors during the term of Moelis’ engagement, were important factors to the Debtors in

determining the Fee Structure. The Debtors believe that the ultimate benefits of Moelis’ services

hereunder cannot be measured by reference to the number of hours to be expended by Moelis’

professionals in the performance of such services. The Debtors and Moelis agreed upon the

Fee Structure in anticipation that a substantial commitment of professional time and effort would

be required of Moelis and in light of the fact that (a) such commitment could have and may still

foreclose other opportunities for Moelis and (b) the actual time and commitment required of

Moelis and its professionals to perform the Restructuring Services may vary substantially from

week to week and month to month, creating “peak load” issues for Moelis.

24. Prior to the Petition Date, according to the Debtors’ books and records, the

Debtors paid Moelis $450,000.00 for fees and $46,522.46 for reimbursement of expenses

during the 90-day period before the Petition Date. As of the Petition Date, the Debtors do

not owe Moelis any fees for services performed or expenses incurred under the Engagement

Letter in excess of $20,000 (the “Retainer”), which Moelis is holding on account for

expenses incurred in connection with the Engagement Letter. Moelis will first apply the

Retainer to all prepetition invoices, and thereafter, will apply the remaining balance of the

Retainer as a credit towards postpetition fees and expenses until the Retainer is fully exhausted

before seeking further payment from the Debtors on account of any postpetition fees and

expenses.

E. Indemnification

25. As part of the overall compensation payable to Moelis under the terms of the

Engagement Letter, the Debtors have agreed to certain indemnification, contribution and


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reimbursement obligations, set forth in Annex A of the Engagement Letter

(the “Indemnification Agreement”). The Indemnification Agreement provides that the

Debtors will indemnify and hold harmless Moelis, its affiliates and their respective current

and former directors, officers, partners, managers, agents, representatives, or employees

(each, an “Indemnified Person,” and collectively, the “Indemnified Persons”) from and

against Losses incurred by an Indemnified Person in connection with Moelis’ engagement,

except for any Losses that are finally judicially determined by a court of competent

jurisdiction to have resulted primarily from the bad faith, willful misconduct or gross

negligence of such Indemnified Person.

26. The Engagement Letter’s indemnification and contribution provisions were

fully negotiated by the Debtors and Moelis at arm’s-length and in good faith and the Debtors

respectfully submit that these indemnification and contribution provisions of the Engagement

Letter are reasonable, subject to the modifications set forth in the proposed Order. The Debtors

believe that the indemnification provisions in the Engagement Letter are appropriate and

reasonable for financial advisory engagements both out of court and in chapter 11 cases, and

reflect the qualifications and limitations on indemnification provisions that are customary in

this district and other jurisdictions.

F. No Duplication of Services

27. The Debtors believe that the services provided by Moelis will complement, not

duplicate, the services that other professionals will be providing to the Debtors in these chapter

11 cases. Specifically, Moelis will carry out unique functions and will use reasonable efforts to

coordinate with the Debtors and their professionals retained in these chapter 11 cases to avoid

the unnecessary duplication of services.


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G. Moelis’ Disinterestedness

28. Moelis has reviewed the list of parties in interest provided by the Debtors. To the

best of the Debtors’ knowledge, information, and belief, and except to the extent disclosed herein

and in the Klein Declaration, Moelis: (a) is a “disinterested person” within the meaning of

section 101(14) of the Bankruptcy Code; (b) does not hold or represent an interest materially

adverse to the Debtors’ estates; and (c) has no connection to the Debtors, their creditors, or

related parties herein except as disclosed in the Klein Declaration.

29. Given the large number of parties in interest in these chapter 11 cases, despite the

efforts to identify and disclose Moelis’ relationships with parties in interest in these chapter 11

cases, Moelis is unable to state with certainty that every client relationship or other connection

has been disclosed in the Klein Declaration. Moelis will make continued inquiries following the

filing of the Application, on a periodic basis, with additional disclosures to this Court if

necessary or otherwise appropriate.

30. The Debtors are informed that Moelis will not share any compensation to be paid

by the Debtors, in connection with services to be performed after the Petition Date, with any

other person, other than principals and employees of Moelis, to the extent required by section

504 of the Bankruptcy Code.

RELIEF REQUESTED

31. By this Application, the Debtors seek entry of an order, substantially in the form

attached hereto as Exhibit A : (a) authorizing the employment and retention of Moelis as

financial advisor for the Debtors in accordance with the terms and conditions of the Engagement

Letter, effective nunc pro tunc to the Petition Date; (b) approving the terms of Moelis’

employment, including the proposed compensation arrangements and the indemnification

provisions set forth in the Engagement Letter, as modified pursuant to the Order, under section


16

328(a) of the Bankruptcy Code; (c) modifying the time keeping requirements of Local Rule

2016-2 and the guidelines (the “U.S. Trustee Guidelines”) established by the Office of the

United States Trustee for the District of Delaware (the “U.S. Trustee”) in connection with

Moelis’ proposed engagement; and (d) granting related relief.

SUPPORTING AUTHORITY

A. The Debtors Should be Permitted to Retain and Employ Moelis on the Terms in the Engagement Letter Pursuant to Sections 327 and 328 of the Bankruptcy Code

32. The Debtors seek approval of the retention and employment of Moelis pursuant to

sections 327(a), 328(a), and 1107(b) of the Bankruptcy Code. Section 328(a) provides, in

relevant part, that a debtor in possession, “with the court’s approval, may employ or authorize

the employment of a professional person under section 327 . . . on any reasonable terms and

conditions of employment, including on a retainer, on an hourly basis, on a fixed or percentage

fee basis, or on a contingent fee basis.” 11 U.S.C. § 328(a). Section 327(a) of the Bankruptcy

Code, in turn, authorizes a debtor in possession to employ professionals that “do not hold or

represent an interest adverse to the estate, and that are disinterested persons.” 11 U.S.C.

§ 327(a). Section 1107(b) of the Bankruptcy Code provides that “a person is not disqualified for

employment under section 327 of [the Bankruptcy Code] by a debtor in possession solely

because of such person’s employment by or representation of the debtor before the

commencement of the case.” 11 U.S.C. § 1107(b).

33. Section 328 of the Bankruptcy Code permits the compensation of professionals,

including financial advisors, on more flexible terms that reflect the nature of their services and

market conditions. As the U.S. Court of Appeals for the Fifth Circuit recognized in Donaldson

Lufkin & Jenrette Securities Corp. v. National Gypsum Co. (In re National Gypsum Co.),

123 F.3d 861 (5th Cir. 1997):


17

Prior to 1978 the most able professionals were often unwilling to work for bankruptcy estates where their compensation would be subject to the uncertainties of what a judge thought the work was worth after it had been done. That uncertainty continues under the present § 330 of the Bankruptcy Code, which provides that the court award to professional consultants “reasonable compensation” based on relevant factors of time and comparable costs, etc. Under present § 328 the professional may avoid that uncertainty by obtaining court approval of compensation agreed to with the trustee (or debtor or committee).

123 F.3d at 862 (footnote omitted).

34. Additionally, Bankruptcy Rule 2016 and Local Rule 2016-2 require retained

professionals to submit applications for payment of compensation in chapter 11 cases.

Local Rule 2016-2(d) also requires retained professionals to submit detailed time entries that set

forth, among other things, a detailed description of each activity performed, the amount of time

spent on the activity (in tenth of an hour increments), the subject matter of the activity and the

parties involved with the activity at issue. Local Rule 2016-2(h), however, allows a retained

professional to request a waiver of these requirements for cause shown.

35. The Court’s approval of the Debtors’ retention of Moelis in accordance with the

terms and conditions of the Engagement Letter is warranted. First, as discussed above and in the

Klein Declaration, Moelis satisfies the disinterestedness standard in section 327(a) of the

Bankruptcy Code.7 Engaged prepetition, Moelis advised the Debtors for a considerable period of

time prior to the commencement of these chapter 11 cases and has already committed a

7 Bankruptcy Rule 2014(a) requires that an application must be made for retention of professionals pursuant to

section 327 of Bankruptcy Code. Under Bankruptcy Rule 2014(a), such application shall: “state the specific facts showing the necessity for the employment, the name of the person to be employed, the reasons for the selection, the professional services to be rendered, any proposed arrangement for compensation, and, to the best of the applicant’s knowledge, all of the person’s connections with the debtor, creditors, any other party in interest, their respective attorneys and accountants, the United States trustee, or any person employed in the office of the United States trustee.” Additionally, the application “shall be accompanied by a verified statement of the person to be employed setting forth the person’s connections” to the parties in interest listed above. See Fed. R. Bankr. P. 2014. Here, Bankruptcy Rule 2014 is satisfied by the contents of this Application and the Klein Declaration attached hereto.


18

significant amount of time and effort with respect to the transactions contemplated by the RSA.

Moelis is needed postpetition to continue to assist with negotiations, as necessary, to provide

expert advice and testimony regarding financial matters related to the proposed transactions, and

to enable the Debtors to discharge their duties as debtors and debtors in possession. Moelis has

extensive experience and an excellent reputation in providing high-quality financial advisory

services to debtors and creditors in bankruptcy reorganizations, mergers and acquisitions, and

other restructurings. Moelis has become familiar with the Debtors’ business operations,

capital structure, financing documents, and other material information and is able to assist

the Debtors in their restructuring efforts. The Debtors believe that Moelis is well qualified

to provide its services to the Debtors in a cost-effective, efficient and timely manner.

Furthermore, as detailed above, Moelis does not hold or represent an interest adverse to the

estate and is disinterested.

36. In addition, the Debtors believe that the Fee Structure is market-based, fair, and

reasonable under the standards set forth in section 328(a) of the Bankruptcy Code. The

Fee Structure reflects Moelis’ commitment to the variable level of time and effort necessary to

perform the Restructuring Services, Moelis’ particular expertise, and the market prices for

Moelis’ services for engagements of this nature both out of court and in a chapter 11 context.

Indeed, the Debtors believe that the Fee Structure appropriately reflects: (a) the nature and scope

of services to be provided by Moelis; (b) Moelis’ substantial experience with respect to financial

advisory services; and (c) the fee structures typically utilized by Moelis and other leading

financial advisors who do not bill their clients on an hourly basis.


19

37. Also, notwithstanding the foregoing, under the Order, the U.S. Trustee retains all

rights to object to Moelis’ fee application (including expense reimbursement) pursuant to

section 330 of the Bankruptcy Code.

38. As set forth above, and notwithstanding approval of the Engagement Letter under

section 328 of the Bankruptcy Code, Moelis intends to apply for compensation for professional

services rendered and reimbursement of expenses incurred in connection with these chapter 11

cases, subject to the Court’s approval and in compliance with applicable provisions of the

Bankruptcy Code, the Bankruptcy Rules, the Local Rules, the U.S. Trustee Guidelines and any

other applicable procedures and orders of the Court, with certain limited modifications.

39. The Debtors request that the requirements of Local Rule 2016-2(d) and the

U.S. Trustee Guidelines be tailored to appropriately reflect Moelis’ engagement and its

compensation structure. Moelis has requested, pursuant to section 328(a) of the

Bankruptcy Code, payment of its fees on a fixed-rate and/or fixed-percentage basis.

Additionally, it is not the general practice of financial advisory firms to keep detailed time

records similar to those customarily kept by attorneys. As discussed above, however, Moelis’

restructuring personnel will keep summary time records in hourly increments describing their

daily activities and the identity of persons who performed such tasks. Apart from the time

recording practices described above, however, Moelis’ restructuring personnel do not maintain

their time records on a “project category” basis. As such, the Debtors request modification of the

requirements pursuant to Local Rule 2016-2(h).

40. Courts in this jurisdiction have approved relief similar to the relief requested in

this Application. See e.g., In re GSE Environmental, Inc., No. 14-11126 (MFW) (Bankr. D. Del.

May 30, 2014) (authorizing retention of Moelis as investment banker and financial advisor to the


20

debtors); In re MACH Gen, LLC, No. 14-10461 (MFW) (Bankr. D. Del. Apr. 11, 2014) (same);

In re Sorenson Commc’ns, Inc., No. 14-10454 (BLS) (Bankr. D. Del. Mar. 25, 2014) (same); In

re OSH 1 Liquidating Corp. f/k/a Orchard Supply Hardware Stores Corp., No. 13-11565 (CSS)

(Bankr. D. Del. July 15, 2013) (same); In re Appleseed’s Intermediate Holdings LLC, No. 11-

10160 (KG) (Bankr. D. Del. Feb. 23, 2011) (same); In re OTC Holdings Corp., No. 10-12636

(BLS) (Bankr. D. Del. Sept. 17, 2010) (same).

B. The Indemnification and Contribution Terms of the Engagement Letter are Appropriate

41. The indemnification and contribution provisions in the Engagement Letter, as

modified by the Order attached hereto, were fully negotiated between the Debtors and Moelis.

The Debtors and Moelis believe that the indemnification provisions in the Engagement Letter are

customary and reasonable for financial advisory engagements both out of court and in chapter 11

cases. The Debtors are seeking approval of the modified indemnification provisions consistent

with other orders of the Court where Moelis has been retained. See, e.g., In re GSE



No. 14-10454 (BLS) (Bankr. D. Del. Mar. 25, 2014); In re OSH 1 Liquidating Corp. f/k/a

Orchard Supply Hardware Stores Corp., No. 13-11565 (CSS) (Bankr. D. Del. July 15, 2013); In

re Appleseed’s Intermediate Holdings LLC, No. 11-10160 (KG) (Bankr. D. Del. Feb. 23, 2011);

In re Int’l Aluminum Corp., No. 10-10003 (MFW) (Bankr. D. Del. Jan. 27, 2010).

42. Accordingly, the Debtors respectfully submit that the terms of the modified

indemnification provisions are reasonable and customary and should be approved in these

chapter 11 cases.


21

43. The Debtors also believe that employment of Moelis effective nunc pro tunc to

the Petition Date is warranted under the circumstances of these chapter 11 cases. Moelis has

provided, and will continue to provide, valuable services to the Debtors regarding the

contemplated restructuring transactions. See, e.g., In re Arkansas Co., 798 F.2d 645, 648 (3d Cir.

1986) (“[T]he bankruptcy courts have the power to authorize retroactive employment of counsel

and other professionals under their broad equity power.” (collecting cases)); see also Del. Bankr.

L.R. 2014-1(b) (“If the retention motion is granted, the retention shall be effective as of the date

the motion was filed, unless the Court orders otherwise.”).

44. Courts routinely grant nunc pro tunc relief in this jurisdiction. See, e.g., In re

GSE Environmental, Inc., No. 14-11126 (MFW) (Bankr. D. Del. May 30, 2014) (granting nunc

pro tunc relief); In re MACH Gen, LLC, No. 14-10461 (MFW) (Bankr. D. Del. Apr. 11, 2014);

In re Sorenson Commc’ns, Inc., No. 14-10454 (BLS) (Bankr. D. Del. Mar. 25, 2014) (same); In

re Vertis Holdings, Inc., No. 12-12821 (CSS) (Bankr. D. Del. Nov. 20, 2012) (same); In re WP

Steel Venture LLC, No. 12-11661 (KJC) (Bankr. D. Del. Sept. 18, 2012) (same); In re Ritz

Camera & Image, L.L.C., No. 12-11868 (KG) (Bankr. D. Del. July 27, 2012) (same).

C. The Retention of Moelis is Critical to the Debtors’ Success

45. The Debtors submit that the retention of Moelis is in the best interests of all

parties in interest in these chapter 11 cases. Moelis is a preeminent investment banking and

financial advisory firm that is intimately familiar with the Debtors’ business. Denial of the relief

requested herein will deprive the Debtors of the assistance of uniquely qualified professionals

who have served them for approximately two months. Indeed, if the Debtors were forced to

engage a new financial advisor who lacks a thorough understanding of the Debtors’ business and

the initiatives that have been implemented over the course of Moelis’ extensive engagement,

such change would mandate the commitment of significant resources to educate a replacement.


22

As discussed above, based on services performed to date, Moelis has been integral to preparing

the Debtors for these chapter 11 cases.

46. Based on the foregoing, the Debtors submit that they have satisfied the

requirements of the Bankruptcy Code, the Bankruptcy Rules and the Local Rules to support

entry of an order authorizing the Debtors to retain and employ Moelis in these chapter 11 cases

on the terms described herein and in the Engagement Letter.

Notice

47. Notice of this Application has been provided to the following parties, or, in lieu

thereof, their counsel: (a) the Office of the United States Trustee for the District of Delaware;

(b) Arent Fox LLP, as proposed lead counsel, and Polsinelli PC, as proposed Delaware counsel,

to the Official Committee of Unsecured Creditors; (c) Stroock & Stroock & Lavan LLP, as lead

counsel, and Young Conaway Stargatt & Taylor, LLP, as Delaware counsel, to the DIP Agent,

DIP Lenders and Noteholder Ad Hoc Group; (d) Perkins Coie LLP, as lead counsel, and

Womble Carlyle Sandridge & Rice, LLP, as Delaware counsel, to the indenture trustee under

that certain Indenture, dated as of May 25, 2012; (e) Wachtell, Lipton, Rosen & Katz, as lead

counsel, and Morris, Nichols, Arsht & Tunnell LLP, as Delaware counsel, to the administrative

agent under the Third Amended and Restated Credit Agreement, dated as of May 8, 2014 (the

“Credit Agreement”); (f) Paul Hastings LLP, as counsel to the co-collateral agent under the

Credit Agreement; and (g) all parties that, as of the filing of this Application, have requested

notice in these chapter 11 cases pursuant to Bankruptcy Rule 2002. The Debtors submit that, in

light of the nature of the relief requested, no other or further notice need be given.

No Prior Request

48. No prior request for the relief sought in this Application has been made to this or

any other court.


23

WHEREFORE, the Debtors respectfully request entry of an order, substantially in the

form attached hereto as Exhibit A , (a) granting the relief requested herein, and (b) granting such

other relief as is just, proper, and equitable.

Reno, Nevada Date: March 25, 2015 /s/ Stephen M. Jones Stephen M. Jones

Executive Vice President, Secretary and Chief Financial Officer Allied Nevada Gold Corp.


1 145200.01601/100033277v.2


) Chapter 11 In re: ) ) Case No. 15-10503 (MFW) Allied Nevada Gold Corp., et al.,1 ) ) Jointly Administered

) Debtors. ) Objection Deadline: April 8, 2015 at 4:00 p.m.

) (prevailing ET)

) Hearing Date: April 15, 2015 at 10:30 a.m.

) (prevailing ET)

NOTICE OF DEBTORS’ APPLICATION FOR ENTRY

OF AN ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OF MOELIS & COMPANY LLC AS FINANCIAL


CERTAIN INFORMATION REQUIREMENTS IMPOSED BY LOCAL RULE 2016-2

PLEASE TAKE NOTICE that, on March 25, 2015, the above-captioned debtors and

debtors in possession (collectively, the “Debtors”) filed the Debtors’ Application for Entry of an

Order Authorizing the Employment and Retention of Moelis & Company LLC as Financial

Advisor for the Debtors and Debtors in Possession, Effective Nunc Pro Tunc to the Petition Date

and Waiving Certain Information Requirements Imposed by Local Rule 2016-2 (the

“Application”) with the United States Bankruptcy Court for the District of Delaware, 824 North



Case 15-10503-MFW Doc 119-1 Filed 03/25/15 Page 1 of 3

2 145200.01601/100033277v.2

Market Street, 3rd Floor, Wilmington, Delaware 19801 (the “Bankruptcy Court”).2 A copy of

the Application is attached hereto.

PLEASE TAKE FURTHER NOTICE that any responses or objections to the

Application must be filed in writing with the Bankruptcy Court, 824 N. Market Street, 3rd Floor,

Wilmington, Delaware 19801, and served on and received by the undersigned counsel on or

before April 8, 2015 at 4:00 p.m. (prevailing Eastern Time).

PLEASE TAKE FURTHER NOTICE that a hearing with respect to the Application

will be held on April 15, 2015 at 10:30 a.m. (prevailing Eastern Time) before the Honorable

Mary F. Walrath, United States Bankruptcy Judge, in the Bankruptcy Court, 824 N. Market

Street, 5th Floor, Courtroom #4, Wilmington, Delaware 19801.

IF YOU FAIL TO RESPOND TO THE APPLICATION IN ACCORDANCE

WITH THIS NOTICE, THE COURT MAY GRANT THE RELIEF REQUESTED IN

THE APPLICATION ON A FINAL BASIS WITHOUT FURTHER NOTICE OR

OPPORTUNITY FOR A HEARING.

[Remainder of page intentionally left blank]

2 Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Application.


3 145200.01601/100033277v.2

Wilmington, Delaware Date: March 25, 2015

BLANK ROME LLP

By: /s/ Stanley B. Tarr

Stanley B. Tarr (No. 5535) Bonnie Glantz Fatell (No. 3809) Michael D. DeBaecke (No. 3186) 1201 N. Market Street, Suite 800 Wilmington, Delaware 19801 Telephone: (302) 425-6400 Facsimile: (302) 425-6464 -and- AKIN GUMP STRAUSS HAUER & FELD LLP Ira S. Dizengoff (admitted pro hac vice) Philip C. Dublin (admitted pro hac vice) Alexis Freeman (admitted pro hac vice) Kristine G. Manoukian (No. 5509) One Bryant Park New York, New York 10036 Telephone: (212) 872-1000 Facsimile: (212) 872-1002 Proposed Co-Counsel to the Debtors and Debtors in Possession


EXHIBIT A

Proposed Order



) Chapter 11 In re: ) ) Case No. 15-10503 (MFW) Allied Nevada Gold Corp., et al.,1 ) ) Jointly Administered Debtors. ) ) Re: Docket No. ____

ORDER AUTHORIZING THE EMPLOYMENT AND

RETENTION OF MOELIS & COMPANY LLC AS FINANCIAL ADVISOR FOR THE DEBTORS AND DEBTORS IN POSSESSION,

EFFECTIVE NUNC PRO TUNC TO THE PETITION DATE AND WAIVING CERTAIN INFORMATION REQUIREMENTS IMPOSED BY LOCAL R ULE 2016-2

Upon the application (the “Application”) 2 of the above-captioned debtors and debtors in

possession (collectively, the “Debtors”) for employment and retention of Moelis & Company

LLC (“Moelis”) as financial advisor to the Debtors, effective nunc pro tunc to the Petition Date,

and requesting a waiver of the time keeping requirements of Local Rule 2016-2 and the U.S.

Trustee Guidelines, all as more fully described in the Application; and the Court being satisfied

that Moelis has the capability and experience to provide the services described in the

Application; and the Court being satisfied based on the representations made in the Application

and the Klein Declaration that (a) Moelis does not hold or represent an interest adverse to the

Debtors’ estates and (b) Moelis is a “disinterested person” as defined in section 101(14) of the

Bankruptcy Code as required by section 327(a) of the Bankruptcy Code, Bankruptcy Rule



2 Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Application.


2

2014(a) and Local Rule 2014-1; and the Court having jurisdiction to consider the Application

and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334 and the Amended

Standing Order; and consideration of the Application and the relief requested therein being a

core proceeding in accordance with 28 U.S.C. §§ 157(b)(2) on which the Court may enter a final

order consistent with Article III of the United States Constitution; and venue being proper in this

district pursuant to 28 U.S.C. §§ 1408 and 1409; and due and proper notice of the Application

being adequate and appropriate under the particular circumstances; and a hearing having been

held to consider the relief requested in the Application; and upon the Klein Declaration, the

record of the hearing, and all proceedings had before the Court; and the Court having found and

determined that the relief sought in the Application is in the best interests of the Debtors’ estates,

their creditors and other parties in interest, and that the legal and factual bases set forth in the

Application establish just cause for the relief granted herein; and after due deliberation and

sufficient cause appearing therefor, it is hereby ORDERED:

1. The Application is approved as set forth herein. All objections to the relief

requested in the Application, whether filed or not, are hereby overruled.

2. The Debtors are authorized to retain and employ Moelis as their financial advisor

in these chapter 11 cases, pursuant to the terms and conditions set forth in the Application and

the Engagement Letter, nunc pro tunc as of the Petition Date.

3. Except to the extent set forth herein, the Engagement Letter (together with all

annexes thereto), a copy of which is attached hereto as Exhibit 1 , including without limitation

the Fee Structure, is approved pursuant to sections 327(a) and 328(a) of the Bankruptcy Code,

and the Debtors are authorized and directed to perform their payment, reimbursement,

contribution and indemnification obligations and their non-monetary obligations in accordance


3

with the terms and conditions, and at the times specified, in the Engagement Letter. Subject to

paragraph six of this Order, all compensation, reimbursement of expenses, indemnification,

contribution and reimbursement to Moelis and any Indemnified Person (as defined in the

Engagement Letter) under the Engagement Letter shall be subject to review only pursuant to the

standards set forth in section 328(a) of the Bankruptcy Code, and shall not be subject to any

other standard of review including but not limited to that set forth in section 330 of the

Bankruptcy Code.

4. The Debtors are authorized to pay Moelis’ fees and to reimburse Moelis for its

reasonable, documented, out-of-pocket costs and expenses as provided in the Engagement Letter,

including but not limited to in-sourced document production costs, travel costs, meals, and the

reasonable, actual, documented, out-of-pocket costs fees, disbursements and other charges of

Moelis’ external legal counsel (without the need for such legal counsel to be retained as a

professional in these chapter 11 cases and without regard to whether such legal counsel’s

services satisfy section 330(a)(3)(C) of the Bankruptcy Code). In the event that Moelis seeks

reimbursement from the Debtors for attorneys’ fees and expenses pursuant to the Application

and the Engagement Letter, the invoices and supporting time records for the attorneys’ fees and

expenses shall be included in Moelis’ own applications, both interim and final, and these

invoices and time records shall be subject to the U.S. Trustee Guidelines and the approval of the

Bankruptcy Court pursuant to sections 330 and 331 of the Bankruptcy Code without regard to

whether such attorneys have been retained under section 327 of the Bankruptcy Code, and

without regard to whether such attorneys’ services satisfy section 330(a)(3)(C) of the Bankruptcy

Code.


4

5. Moelis shall file interim and final fee applications for the allowance of

compensation for services rendered and reimbursement of expenses incurred in accordance with

applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and any

applicable orders of the Court; provided, however, that the requirements of the Bankruptcy Code,

the Bankruptcy Rules, the U.S. Trustee Guidelines, and Local Rule 2016-2 and any other orders

and procedures of this Court are hereby modified such that Moelis’ restructuring professionals

shall be required only to keep summary time records in hourly increments, Moelis’ non-

restructuring professionals and personnel in administrative departments (including legal) shall

not be required to keep any time records, Moelis’ restructuring professionals shall not be

required to keep time records on a project category basis, and Moelis shall not be required to

provide or conform to any schedule of hourly rates.

6. Moelis shall be compensated in accordance with the terms of the Engagement Letter

and, in particular, all of Moelis’ fees and expenses in these chapter 11 cases are hereby approved

pursuant to section 328(a) of the Bankruptcy Code. Notwithstanding anything to the contrary

herein, the fees and expenses payable to Moelis pursuant to the Engagement Letter shall be

subject to review only pursuant to the standards set forth in section 328(a) of the Bankruptcy

Code and shall not be subject to the standard of review set forth in section 330 of the Bankruptcy

Code, except by the U.S. Trustee. This Order and the record relating to the Court’s consideration

of the Application shall not prejudice or otherwise affect the rights of the U.S. Trustee to

challenge the reasonableness of Moelis’ compensation and expense reimbursements under

sections 330 and 331 of the Bankruptcy Code; provided, however, that “reasonableness” shall be

evaluated by comparing (among other things) the fees payable in these cases to fees paid to

comparable financial advisory firms with similar experience and reputation offering comparable


5

services in other chapter 11 cases and shall not be evaluated primarily on an hourly or length-of-

case based criteria. Accordingly, nothing in this Order or the record shall constitute a finding of

fact or conclusion of law binding on the U.S. Trustee, on appeal or otherwise, with respect to the

reasonableness of Moelis’ compensation.

7. Moelis shall first apply the Retainer to all prepetition invoices, and thereafter,

Moelis shall apply the remaining balance of the Retainer as a credit towards postpetition fees and

expenses until the Retainer is fully exhausted before seeking further payment from the Debtors

on account of any postpetition fees and expenses

8. The indemnification, contribution, and reimbursement provisions included in

Annex A to the Engagement Letter are approved, subject during the pendency of these cases to

the following modifications:

a. Moelis shall not be entitled to indemnification, contribution, or reimbursement pursuant to the Engagement Letter, unless the indemnification, contribution, or reimbursement is approved by the Court.

b. Notwithstanding any provision of the Engagement Letter to the contrary, the Debtors shall have no obligation to indemnify any Indemnified Person (as defined in the Engagement Letter), or provide contribution or reimbursement to any Indemnified Person, for any claim or expense that is either: (i) judicially determined (the determination having become final) to have arisen from the Indemnified Person’s gross negligence, willful misconduct, bad faith, or self-dealing to which the Debtors have not consented; (ii) for a contractual dispute in which the Debtors allege breach of the Indemnified Person’s obligations to maintain the confidentiality of non-public information, unless the Court determines that indemnification, contribution, or reimbursement would be permissible pursuant to In re United Artists Theatre Co., 315 F.3d 217 (3d Cir. 2003); or (iii) settled without the Debtors’ consent prior to a judicial determination as to the Indemnified Person’s gross negligence, willful misconduct, bad faith, or unconsented self-dealing, but determined by this Court, after notice and a hearing, to be a claim or expense for which such Indemnified Person should not receive indemnity, contribution, or reimbursement under the terms of the Engagement Letter, as modified by this Order.

c. If, before the earlier of: (i) the entry of an order confirming a chapter 11 plan in these cases (that order having become a final order no longer


6

subject to appeal); and (ii) the entry of an order closing these chapter 11 cases, any Indemnified Person believes that it is entitled to the payment of any amounts by the Debtors on account of the Debtors’ indemnification, contribution, and/or reimbursement obligations under the Engagement Letter (as modified by this Order), including, without limitation, the advancement of defense costs, such Indemnified Person must file an application therefor in this Court, and the Debtors may not pay any such amounts to the Indemnified Person before the entry of an order by this Court approving the payment. This subparagraph (c) is intended only to specify the period of time under which the Court shall have jurisdiction over any request for fees and expenses for indemnification, contribution, and/or reimbursement by any Indemnified Persons, and not a provision limiting the duration of the Debtors’ obligation to indemnify, or make contributions or reimbursements to, the Indemnified Persons. All parties in interest shall retain the right to object to any demand by any Indemnified Person for indemnification, contribution, and/or reimbursement.

d. Any limitations on any amounts to be contributed by the parties to the Engagement Letter shall be eliminated. The Indemnified Persons shall retain any rights they may have to contribution at common law.

9. Notwithstanding the possible applicability of Bankruptcy Rules 6004(h), 7062, or

9014, the terms and conditions of this Order shall be immediately effective and enforceable upon

its entry.

10. To the extent that there may be any inconsistency between the terms of the

Application, the Engagement Letter, and this Order, the terms of this Order shall govern.

11. Notice of the Application satisfies the requirements of Bankruptcy Rule 6004(a).

12. The Debtors are authorized to take all actions necessary to effectuate the relief

granted in this Order in accordance with the Application.

13. This Court retains exclusive jurisdiction with respect to all matters arising from or

related to the implementation, interpretation, and enforcement of this Order.

Dated: __________, 2015 Wilmington, Delaware THE HONORABLE MARY F. WALRATH

UNITED STATES BANKRUPTCY JUDGE


EXHIBIT 1

Engagement Letter


MOE LIS ~COMPANY

CONFIDENTIAL

Allied Nevada Gold Corp. 9790 Gateway Drive Suite 200 Reno, NV, 89521

399 PARK AVENUE

STH FLOOR

NEW YORK, NY 10069

T 212.883.3800

F 212.880.4260

January 26, 2015

Attention: Stephen Jones, Executive Vice President and Chief Financial Officer

Dear Mr. Jones:

We are pleased to confirm that Allied Nevada Gold Corp. (the "Company" or "you") has engaged Moelis & Company LLC ("Moelis" or "we") to act as its financial advisor in connection with a proposed Restructuring (as defined below) and placement agent in connection with a proposed Capital Transaction (as defined below). You have informed us that you have also engaged one or more advisors to assist in connection with potential project financing capital transaction(s). For the avoidance of doubt, any project financing capital transaction completed by the Company with any of such advisors as placement agent will not constitute a "Capital Transaction" hereunder.

For purposes of this agreement, the following terms have the meanings ascribed to them below:

"Restructuring" means any restructuring, reorganization, rescheduling or recapitalization of all or any material portion of the liabilities of the Company or its subsidiaries (taken as a whole), however such result is achieved, including, without limitation, such a restructuring, reorganization, rescheduling or recapitalization through (a) a plan of reorganization or liquidation (a "Plan") confirmed in connection with a case (a "Bankruptcy Case" and, any such Restructuring confirmed in connection with a Bankruptcy Case, an "In-Court Restructuring") commenced by or against the Company or any of its subsidiaries under title II of the United States Code (the "Bankruptcy Code"); (b) an exchange offer or consent solicitation; (c) covenant relief; (d) a rescheduling of debt maturities; (e) a change in interest rates; (f) a settlement or forgiveness of debt; (g) a conversion of debt into equity; or (h) other amendments to the Company's debt instruments, or a sale or other transfer of all or a majority of the equity, assets or business of the Company.

"Capital Transaction" means a transaction in which the Company (or any of its subsidiaries or any entity fanned by the Company or its affiliates to acquire the business or assets of the Company) raises or issues any (a) secured or unsecured debt (including, without limitation, any convertible debt, asset-backed debt, or debtor-in-possession financing in connection with a Bankruptcy Case); (b) equity interests (including, without limitation, preferred stock or common stock) or equity-linked interests; (c) hybrid capital; (d) royalty, streaming or production-based financing transactions; or (e) options, warrants or other rights to acquire equity interests; provided, that such transaction must also (x) involve the raise of capital from (or the issuance of securities or loans to) the Company's bondholders, (y) be a debtor-in-possession financing transaction in connection with a Bankruptcy Case, or (z) be a transaction with respect to which

LOS ANGELES I NEW YORK I BOSTON


MOE LIB &;_COMPANY

the Company has requested in writing that Moelis act as a placement agent in connection therewith.

"Transaction" means either a Restructuring and/or a Capital Transaction, as the context requires.

"Notes" means those certain 8.75% Senior Unsecured Notes due June I, 2019 issued by the Company pursuant to that certain Indenture, dated as of May 25, 2012, by and between the Company, as issuer, and Computershare Trust Company of Canada, as trustee.

"Out-of-Court Restructuring" means a Restructuring other than an In-CoUI1 Restructuring.

I. As part of our engagement, we will, if appropriate and requested by the Company:

(a) assist the Company in reviewing and analyzing the Company's results of operations, financial condition and business plan;

(b) assist the Company in reviewing and analyzing a potential Restructuring or Capital Transaction (or any combination thereof);

(c) provide advice and testimony related to a potential In-Court Restructuring, including, without limitation, any Capital Transaction contemplated thereby;

(d) assist the Company in negotiating a Restructuring or Capital Transaction (or any combination thereof);

(e) advise the Company on the terms of any debt, equity interests, equity-linked interests, hybrid capital, royalty, streaming or production-based financing transactions, options, warrants or other rights to acquire equity interests or other securities it offers in any potential Capital Transaction;

(f) advise the Company on its preparation of information materials for a potential Capital Transaction (such materials prepared by the Company, the "Information Memo");

(g) assist the Company in contacting potential lenders, investors or purchasers ("Purchasers") in a Restructuring or Capital Transaction (or any combination thereof) that we and the Company agree are appropriate, and meet with and provide them with the Information Memo (or similar information and materials if a Restructuring) and such additional information about the Company's assets, properties or businesses that is acceptable to the Company, subject to customary business confidentiality agreements;

(h) assist in the management of a due diligence process with respect to a potential Restructuring or Capital Transaction (or any combination thereof), including assisting in responding to applicable due diligence questions and requests; and

(i) provide such other financial advisory and investment banking services in connection with a Restructuring or Capital Transaction (or any combination thereof) as Moelis and the Company may mutually agree upon.

Please note that Moe! is does not provide legal, tax, accounting or actuarial advice. This agreement is not a commitment, express or implied, on the part of Moelis to purchase or place, or on the part of the

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MOE LIS &:._OO¥PANY

Company to pursue or complete, a Capital Transaction or any other financing and it is acknowledged that Moelis' services will be made on a reasonable best efforts basis. Moelis' obligations under this agreement with respect to a Capital Transaction are subject to, among other things: (i) satisfactory completion of its due diligence review and (ii) satisfactory market conditions.

2. (a) As compensation for our services hereunder, the Company agrees to pay us the following nonrefundable cash fees:

Monthly Fee

(i) During the term of this agreement, a fee of $150,000 per month (the "Monthly Fee"), payable in advance of each month. The Company will pay the first Monthly Fee immediately upon the execution of this agreement, and all subsequent Monthly Fees prior to each monthly anniversary of the date of this agreement. 50% of the Monthly Fees in excess of $900,000 shall be credited (the "Monthly Fee Credit"), to the extent previously paid, against any In-Court Restructuring Fee (as defined below), Out-of-Court Restructuring Fee (as defined below), and Capital Transaction Fee (as defined below) to be paid pursuant to this agreement; provided, that no such In-Court Restructuring Fee, Out-of-Court Restructuring Fee, or Capital Transaction Fee shall be reduced below zero. Whether or not a Restructuring or Capital Transaction occurs, we shall earn and be paid the Monthly Fee every month during the term of this agreement.

Restructuring Fees

(ii) At the closing of an In-Court Restructuring (i.e., on emergence), a fee (the "In-Court Restructuring Fee") equal to $3,000,000.

(iii) At the closing of an Out-of-Court Restructuring, a fee (the "Out-of-Court Restructuring Fee") equal to:

(a) $2,500,000 in the event that holders of 50% of the face value of the Notes approve and consent to all aspects of the Out-of-Court Restructuring; or

(b) $3,000,000 in the event that holders of 66% of the face value of the Notes approve and consent to all aspects of the Out-of-Court Restructuring; or

(c) $3,750,000 in the event that holders of95% or more of the face value of the Notes approve and consent to all aspects of the Out-of-Court Restructuring;

provided, that in the event that more than the specified percentage of Notes in the foregoing clauses (a) or (b) (but not (c)) approves and consents to all aspects of the Outof Court Restructuring, then the Out-of-Court Restructuring Fee shall be increased in a linear fashion until the next percentage of Notes is reached. By way of example, if holders of 55% of the face value of the Notes approve and consent to all aspects of the Out-of-Court Restructuring, then the Out-of-Court Restructuring Fee shall equal $2,656,250; if holders of 75% of the face value of the Notes approve and consent to all aspects of the Out-of-Court Restructuring, then the Out-of-Court Restructuring Fee shall equal $3,232,758.62; if holders of 98% of the face value of the Notes approve and consent to all aspects of the Out-of-Court Restructuring, then the Out-of-Court

3


:MOE LIS &_COMPAKY

Restructuring Fee shall equal $3,750,000 as no increase occurs for percentages above 95%.

Notwithstanding the foregoing, if the Company pursues an Out-of-Court Restructuring pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the "Securities Act"), we will be deemed to have earned an Out-of-Court Restructuring Fee equal to $3,000,000 on the date that definitive offer documents for the exchange offer(s) under Section 3(a)(9) are first distributed to creditors whose claims would be affected thereby. Such fee is not dependent on the results of the offer. It is agreed and understood that in connection with any such Section 3(a)(9) exchange, Moe! is shall not (I) engage, directly or indirectly, in the solicitation of the exchange or any consent, or (2) make recommendations regarding the exchange to security holders or their advisors.

Capital Transaction Fee

(iv) At the closing of a Capital Transaction, a non-refundable cash fee (the "Capital Transaction Fee") equal to the sum of:

(a) 1.5% of the aggregate gross amount or face value of debt obligations and other debt interests (including any convertible debt) Raised (as defined below) in the Capital Transaction, plus

(b) 3.75% of the aggregate gross amount or face value of new capital Raised in the Capital Transaction as equity, equity-linked interests, royalty financing, streaming financing, production-based financing, options, warrants or other rights to acquire equity interests;

provided, that the 1.5% and 3.75% described in the foregoing clauses (a) and (b), respectively, shall be reduced by 1/3'd for the calculation of the Capital Transaction Fee with respect to the aggregate gross amount or face value of debt obligations, other debt interests, or new capital (whether as equity, equity-linked interests, royalty financing, streaming financing, production-based financing, options, warrants, other rights to acquire equity interests or otherwise) provided by or Raised from any equity holders, lenders, debt holders, other security holders, or creditors of the Company or any subsidiary of the Company or any of their respective affiliates, subsidiaries, or affiliated funds (whether such entity or person is currently or at the time Raised is a holder or any of their respective affiliates, subsidiaries, or affiliated funds).

Subject to the Fee Cap (as defined below) and the Monthly Fee Credit, the Company will pay a separate Capital Transaction Fee in respect of each Capital Transaction in the event that more than one Capital Transaction occurs. "Raised" means the amount of new funds committed to and available to the Company at the consummation of the Capital Transaction, whether or not the Company draws the full amount at such time and whether or not the Company applies such amounts to refinance any of its obligations; provided, that (x) any debt obligations, other debt interests, new capital (whether as equity, equity-linked interests, royalty financing, streaming financing, production-based financing, options, warrants, other rights to acquire equity interests or otherwise), or other take back paper that are issued in exchange for (y) any debt amounts, debt obligations, other debt interests, equity, other securities of the Company or any of its subsidiaries or any other claims against the Company or any of its subsidiaries existing at such time shall be

4


::M:OELIS &_COMPANY

excluded from the term Raised and in no event shall any such amounts be included in, or taken into account in, the calculation of the Capital Transaction Fee.

If a Transaction involves both a Capital Transaction and a Restructuring, both (i) a Capital Transaction Fee and (ii) either an In-Court Restructuring Fee or an Out-of Court Restructuring Fee shall be payable subject to the terms of this agreement, including the Fee Cap and the Monthly Fee Credit. In connection with a Restructuring or Capital Transaction (or any combination thereoi) intended to be consummated in connection with a "pre-packaged" or "prearranged" Plan, we will be deemed to have earned I 00% of (i) either any In-Court Restructuring Fee or Out-of-Court Restructuring Fee and/or (ii) any Capital Transaction Fee applicable thereto (in each case, subject to the terms of this agreement, including the Fee Cap and the Monthly Fee Credit) upon obtaining the Required Approval (as defined below) and prior to the commencement of the Bankruptcy Case; provided, that the Company will pay any such In-Court Restructuring Fee, Out-of-Court Restructuring Fee and/or Capital Transaction Fee (in each case, subject to the terms of this agreement, including the Fee Cap and the Monthly Fee Credit), solely upon the closing of the applicable Restructuring or Capital Transaction (or any combination thereoi) and not prior thereto. For purposes of this agreement, a "pre-packaged" or "pre-arranged" Plan means any Plan with respect to which holders of at least one class of claims representing at least 66.67% in dollar amount of the allowed claims in such class have provided written evidence (through a "lock-up agreement" or otherwise) of their intent to vote in favor of such Plan (such vote, the "Required Approval").

Fee Cap

(v) Notwithstanding anything to the contrary contained in this agreement, in no event shall the total fees due pursuant to this agreement, whether pursuant to this Section 2(a) or otherwise, exceed $4,500,000 (such amount, the "Fee Cap").

If, at any time prior to the end of the Tail Period (as defined below), (I) the Company consummates any Restructuring or (2) enters into an agreement or a Plan is filed regarding any Restructuring and any such Restructuring is subsequently consummated, then the Company (or its bankruptcy estates) shall pay us the appropriate In-Comt Restructuring Fee or Out-of-Court Restructuring Fee specified in Sections 2(a)(iii) or 2(a)(iv) above immediately upon the closing of each such a Restructuring (in each case, subject to the terms of this agreement, including the Fee Cap and the Monthly Fee Credit).

If at any time prior to the end of the Tail Period (!) the Company consummates a Capital Transaction(s) or (2) enters into an agreement regarding a Capital Transaction(s) (and such Capital Transaction is subsequently consummated), then the Company shall pay us the appropriate Capital Transaction Fee specified in Section 2(a)(iv) above immediately upon the closing of such Capital Transaction(s) (in each case, subject to the Fee Cap and the Monthly Fee Credit). The "Tail Period" shall end 12 months following the expiration or termination of this agreement; provided, that, if such termination is a unilateral termination by Moelis, then the "Tail Period" shall end on the date ofMoelis' termination. The Company agrees not to object to our request to the Bankruptcy Comt and any appellate court to allow such fees, in each case, to the extent such fees are owed pursuant to this agreement.

(b) Whether or not the Company consummates a Restructuring or Capital Transaction, the Company will reimburse us for all of our reasonable, actual documented out-of-pocket expenses as they are incurred in entering into and performing services pursuant to this agreement, including the reasonable, actual documented out-of-pocket costs of our legal counsel. We agree to provide the Company with

5


¥0E LIS l!t._C 0¥ PANY

reasonable support for our expenses at the Company's request or at the Bankruptcy Court's direction. Prior to commencing a Bankruptcy Case, the Company will reimburse all of our reasonable, actual documented out-of-pocket expenses that we incurred in entering into and performing services pursuant to this agreement up to such commencement.

(c) The Company's obligation to pay any fee, expense or indemnity set forth herein is not subject to any reduction by way of setoff, recoupment or counterclaim, in each case, other than the Monthly Fee Credit and as contemplated by Section 7; provided, that the fees hereunder may be subject to setoff, recoupment or counterclaim to the extent determined by a court of competent jurisdiction that Moelis was not entitled to indemnification due to Certain Losses (as defined in AnnexA).

(d) Moelis will make a substantial commitment of professional time and effort hereunder, which may foreclose other opportunities for us. Moreover, the actual time and effort required for the engagement may vary substantially from time to time. In light of the numerous issues that may arise in engagements such as this, Moe! is' commitment of the time and effort necessary to address the issues that may arise in this engagement, Moelis' expertise and capabilities that the Company will require in this engagement, and the market rate for professionals of Moelis' stature and reputation, the parties agree that the fee arrangement provided herein is just and reasonable, fairly compensates Moelis, and provides the requisite certainty to the Company.

3. If a Bankruptcy Case is commenced:

(a) The Company will use its commercially reasonable efforts to seek a final order of the Bankruptcy Court authorizing our employment as the Company's financial adviser under this agreement pursuant to, and subject to the standards of review set forth in, section 328(a) of the Bankruptcy Code (and not subject to the standards of review set forth in section 330 of the Bankruptcy Code), nunc Jli.Q tunc to the date of the filing of the Bankruptcy Case. The retention application and any order authorizing Moe! is' retention must be reasonably acceptable to Moelis. Prior to commencing a Bankruptcy Case, the Company will pay all amounts then earned and payable pursuant to this agreement.

(b) Moelis will have no obligation to provide services unless the Bankruptcy Court approves Moelis' retention in a final non-appealable order acceptable to Moelis under section 328(a) of the Bankruptcy Code within 60 days following the filing of a voluntary chapter II case or the entry of an order for relief in any involuntary chapter II case; provided, that, Moelis shall provide services to the Company during such 60 day period, as such period may be extended by Moelis in its reasonable discretion. If neither the Company nor Moelis obtains such an order within such 60-day period, or such order is later reversed, vacated, stayed or set aside for any reason, Moe! is may terminate this agreement, and the Company shall reimburse Moelis for all fees owing and expenses incurred pursuant to this agreement prior to the date of termination, subject to the requirements of the Bankruptcy Rules, and, notwithstanding anything to the contrary contained in this agreement, Moelis shall be entitled to a contingent claim with respect to any fees that become payable under the last two paragraphs of Section 2(a).

(c) The Company will use its commercially reasonable efforts to ensure that Moelis' postpetition compensation, expense reimbursements and payment received pursuant to the provisions of Annex A shall be entitled to priority as expenses of administration under sections 503(b)(l)(A) and 507(a)(2) of the Bankruptcy Code, and shall be entitled to the benefits of any "carve-outs" for professional fees and expenses in effect pursuant to one or more financing orders entered by the Bankruptcy Court. Following entry of an order authorizing our retention, the Company will assist Moelis

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MOE LIS ~CO>.<PANY

in filing and serving fee statements, interim fee applications, and a final fee application. The Company will support Moelis' fee applications that are consistent with this agreement in papers filed with the Bankruptcy Court and during any Bankruptcy Court hearing. The Company will pay promptly our fees and expenses, in each case, which are both (i) owed pursuant to this agreement and (ii) approved by the Bankruptcy Court in accordance with the applicable orders of the Bankruptcy Court.

(d) The Company will use its commercially reasonable efforts to ensure that, to the fullest extent permitted by law, any confirmed plan of reorganization or liquidation in the Bankruptcy Case contains typical and customary releases (both from the Company and from third parties) and exculpation provisions releasing, waiving, and forever discharging Moelis, its divisions, its affiliates, any person controlling Moelis or its affiliates, and their respective current and former directors, officers, partners, members, agents and employees from any claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action, and liabilities related to the Company or the engagement described in this agreement; provided, that no such releases or exculpation provisions shall release, waive or discharge Moelis from any liabilities and claims to the extent finally judicially determined to have resulted primarily from the bad faith, willful misconduct or gross negligence of Moe! is.

The terms of this Section 3 are solely for the benefit of Moe lis, and may be waived, in whole or in part, only by Moelis.

4.

(a) During the term of the engagement hereunder, the Company will furnish us with all information prepared by the Company, in its reasonable discretion, concerning the Company as we reasonably deem appropriate (collectively, the "Information") to execute this engagement and will provide us with access to the Company's officers, directors, employees, accountants, counsel and other representatives of the Company. To the best of the Company's knowledge, the Information will be true and correct in all material respects and will not contain any material misstatement of fact or omit to state any material fact necessary to make the statements contained therein not misleading. During the term of the engagement hereunder, the Company will advise us promptly of any material event or change in the business, affairs, condition (financial or otherwise) or prospects of the Company that occurs during the term of this agreement to the extent known by the Company. In performing our services hereunder, we will be entitled to use and rely upon the Information as well as publicly available information without independent verification. We are not required to conduct a physical inspection of any of the properties or assets, or to prepare or obtain any independent evaluation or appraisal of any of the assets or liabilities of the Company. We will be entitled to assume that financial forecasts and projections that the Company makes available to us have been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company as to the matters covered thereby.

(b) We will keep Information concerning the Company provided to us in connection with this agreement confidential pursuant to the Nondisclosure Agreement between the Company and Moelis, dated December 26, 2014, for the term thereof; provided we may provide such Information to prospective Transaction parties as contemplated by this agreement, in each case, subject to the written consent of the Company.

(c) The Company represents and warrants to Moe! is that the information (including the Information Memo) provided to any Purchaser or seller of a security by or on behalf of the Company in any Restructuring or Capital Transaction (or any combination thereof) by or on behalf of the Company, at the closing of each Restructuring or Capital Transaction, will not contain any untrue statement of a

7


¥0ELIS &..__COMPA!irY

material fact or omit to state any material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading. The Company authorizes Moelis to transmit the Information Memo to prospective Purchasers. The Information Memo shall be subject to Moelis' reasonable review and comment prior to distribution. The Company will provide Moelis for review with a copy of any other information the Company proposes to deliver to prospective counterparties and will coordinate with Moelis prior to delivering any such infonnation to prospective counterparties. The Company shall not transmit the Information Memo to prospective counterpm1ies without first consulting Moe! is.

(d) At the closing of a Capital Transaction in which the Company utilized the exemption under Section 4(a)(2) of the Securities Act for the issuance of securities in such Capital Transaction, the Company will represent and warrant to Moelis that the Company has not taken, and will not take, any action, directly or indirectly, so as to cause such Capital Transaction to fail to be entitled to such exemption under Section 4(a)(2) of the Securities Act.

(e) At the closing of a Capital Transaction, (i) the Company shall be deemed to make all the representations and warranties to Moe! is that the Company has made to the Purchasers in such Capital Transaction and (ii) the Company shall use commercially reasonable effort to deliver to Moelis from each Purchaser in such Capital Transaction for Moelis' express benefit a big boy representation in the form of Schedule 1 (provided that the foregoing will not be a closing condition to any such Capital Transaction).

(f) At the closing of a Capital Transaction, (i) the Company shall deliver to Moelis copies of any opinions of Company counsel to the effect that the Capital Transaction was exempt from registration under the Securities Act and that were delivered to the Purchasers in such Capital Transaction and (ii) the Company shall also deliver to Moelis copies of such agreements, opinions, certificates and other documents delivered at the closing of such Capital Transaction to the Purchasers as Moelis may reasonably request.

5. The Company will not disclose, summarize or refer to any of our advice or our valuation publicly or to any third party without our prior written consent, in each case, unless required by law, subpoena or court order. In the event disclosure is required by law, subpoena or court order, the Company will, to the extent permitted by law, provide us reasonable advance notice and permit us to comment on the form and content of the disclosure. We consent to the inclusion of a summary of our valuation in the disclosure statement for a Plan, if required to be included in such disclosure statement; provided, that Moelis and its counsel have approved any reference to or summary or description of the valuation in advance. We may, at our option and expense after announcement of any Restructuring or Capital Transaction (or any combination thereof), place announcements and advertisements or otherwise publicize such Transaction and our role in it (which may include the reproduction of the Company's logo and a hyperlink to the Company's website) on our website and in such financial and other newspapers and journals as we may choose, stating that we have acted as the financial advisor and capital markets advisor to the Company in connection with any Restructuring or Capital Transaction (or any combination thereof). If we request, the Company shall include a mutually acceptable reference to us in any public announcement of a Restructuring and Capital Transaction.

6. We are an independent contractor with the contractual obligations described herein owing solely to the Company. We expressly disclaim any fiduciary duty. Since we will be acting on the Company's behalf, the Company and we agree to the indemnity and other provisions set forth in the attached Annex A. The Company's obligations set forth therein are in addition to any rights that any Indemnified Person may have at common law or otherwise. Other than the Indemnified Persons, there are

8


:W:OELIS &.__COMPANY

no third party beneficiaries of this agreement. The Company hereby agrees to the acknowledgements and disclosures set forth in Annex B. The obligations hereunder of the entities comprising the Company shall be joint and several.

7. This engagement will continue until the earliest of (i) the effective date of a chapter II plan of reorganization or liquidation confirmed in the Bankruptcy Cases, (ii) the conversion of the Bankruptcy Cases to chapter 7 of the Bankruptcy Code, (iii) dismissal of the Bankruptcy Cases, and (iv) the consummation of the Restructuring or Capital Transaction (or any combination thereof). Either the Company or we may terminate our engagement (x) earlier, with or without cause, upon 15 days' prior written notice thereof to the other party or (y) earlier as provided elsewhere herein, and our engagement may be extended by mutual written agreement of the Company and us. In the event of any termination or expiration, (i) we will continue to be entitled to the fees and expenses that became payable hereunder prior to such termination or expiration; provided, that any In-Court Restructuring Fee, Out-of-Court Restructuring Fee, or Capital Transaction Fee deemed to have been earned shall be subject to offset against, and reduction for, the amount of any losses, claims, damages or liabilities that a court of competent jurisdiction finally determines primarily resulted from the bad faith, willful misconduct, or gross negligence of Moelis; and (ii) AnnexA, the last two paragraphs of Section 2(a), Section 3 (solely to the extent this agreement is terminated by the Company pursuant to the second sentence of this Section 7), Section 4(a) (solely with respect to any provision thereof that is not expressly limited to be applicable only during the term of the engagement hereunder), Section 4(b ), Section 4( e) (but only to the extent Moelis was involved in the Capital Transaction referred to in such Section 4(e)), Section 4(f), and Sections 5 through 9 shall remain in full force and effect after the completion, termination or expiration of this agreement.

8. Moe lis is an independent investment bank which is engaged in a range of investment banking activities. Certain affiliates of Moe lis are engaged in asset management and other activities for their own account and otherwise. Moelis and its affiliates may have interests that differ from the Company's interests. Moelis and its affiliates have no duty to disclose to the Company, or use for the Company's benefit, any information acquired in the course of providing services to any other party, engaging in any transaction or carrying on any other businesses. Moe! is' employees, officers, partners and affiliates may at any time own the Company's securities or those of any other entity involved in any transaction contemplated by this agreement. Moelis recognizes its obligations under applicable securities laws in connection with the purchase and sale of such securities and, in the event of a Bankruptcy Case, will comply in all respects with the applicable provisions of the Bankruptcy Code pertaining to Moelis' engagement.

9. This agreement and any dispute or claim arising out of this agreement shall be governed by and construed in accordance with the internal laws of the State of New York, and this agreement embodies the entire agreement and supersedes any prior written or oral agreement relating to the subject matter hereof, and may only be amended or waived in writing signed by both the Company and us. If any part of this agreement is judicially determined to be unenforceable, it shall be interpreted to the fullest extent enforceable so as to give the closest meaning to its intent, and the remainder of this agreement shall remain in full force and effect. Any proceeding arising out of this agreement shall be heard exclusively in a New York state or federal comt sitting in the city and county of New York, to whose jurisdiction and forum Moelis and the Company irrevocably submit; provided, that, in the event of a Bankruptcy Case, both Moelis and the Company consent to the jurisdiction of the Bankruptcy Comt with respect to all disputes arising out of this agreement. The Company and Moe lis also irrevocably consent to the service of process in any such proceeding by mail to the Company's and Moelis' respective addresses set forth above. This agreement may be executed in two or more counterparts, each of which shall be deemed an

9


:M()E L I & &__COMPANY

original, but all of which shall constitute one and the same agreement. This agreement shall be binding upon the Company and us and its and our respective successors and permitted assigns. WE AND THE COMPANY WAIVE ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY PROCEEDING ARISING OUT OF THIS AGREEMENT.

(Signature page follows)

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:W:C)ELIS &t._COMPANY

We are delighted to accept this engagement and look forward to working with the Company. Please sign and return the enclosed duplicate of this agreement. The individuals signing this agreement each represent that he or she is authorized to execute and deliver it on behalf of the entity whose name appears above his or her signature.

Agreed to as of the date first written above:

ALLJED NEVADA GOLD CORP.

Very truly yours,

MOELJS & COMPANY LLC

By: ~--~--~~-----------------Name: Barak Klein Title: Managing Director

By: _Name----""....::• ~t=...f-p n~Jone~s~~-~~-Title: Executive Vice Presfdent and Ch1efFmanc1al Officer

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MOE LIB .!i<._COYPANY

ANNEXA

In the event that Moelis & Company LLC or our affiliates or any of our or our affiliates' respective current directors, officers, partners, managers, agents, representatives or employees (including any person controlling us or any of our affiliates) (including any of the foregoing who qualify during the tenn of the engagement letter as such but who subsequently no longer so qualify) (collectively, "Indemnified Persons") becomes involved in any capacity in any actual or threatened action, claim, suit, investigation or proceeding (an "Action") arising out of, related to or in connection with Moe! is' engagement under this agreement or any of the transactions contemplated by this agreement, the Company will reimburse such Indemnified Person for its reasonable documented out-of-pocket costs and expenses (including its reasonable documented out-of-pocket counsel fees) of investigating, preparing for and responding to such Action or enforcing this agreement, as they are incurred; provided, that, to the extent it is subsequently finally judicially detennined by a court of competent jurisdiction that such costs and expenses were Certain Losses (as defined below), Moe! is shall repay such amount to the Company. The Company will also indemnify and hold harmless any Indemnified Person from and against, and the Company agrees that no Indemnified Person shall have any liability to the Company or its affiliates, or their respective owners, directors, officers, employees, security holders or creditors for, any losses, claims, damages or liabilities (collectively, "Losses") (A) related to or arising out of oral or written statements or omissions made or infonnation provided by the Company or its agents (including the Information Memo and any other information provided by or on behalf of the Company to any Purchaser or seller of a security in any transaction contemplated by the engagement) or (B) otherwise arising out of, related to or in connection with this agreement or our performance thereof, except that this clause (B) shall not apply to Losses that are finally judicially determined by a court of competent jurisdiction to have resulted primarily from the bad faith, willful misconduct, or gross negligence of such Indemnified Person (such Losses, "Certain Losses").

If such indemnification or limitation of liability are for any reason not available or insufficient to hold an Indemnified Person harmless, in each case, other than as a result of the exclusion for an Indemnified Person's bad faith, willful misconduct, or gross negligence, the Company agrees to contribute to the Losses in such proportion as is appropriate to reflect the relative benefits received (or anticipated to be received) by the Company, on the one hand, and by us, on the other hand, with respect to this agreement or, if such allocation is judicially determined to be unavailable and with respect to Certain Losses, in such proportion as is appropriate to reflect the relative benefits and relative fault of the Company, on the one hand, and of us, on the other hand, and any other equitable considerations; provided, that, to the extent permitted by applicable law, in no event shall the Indemnified Persons be responsible for amounts that exceed the fees actually received by us from the Company in connection with this agreement. Relative benefits to the Company, on the one hand, and us, on the other hand, with respect to this agreement shall be deemed to be in the same proportion as (i) the total value paid or proposed to be paid or received or proposed to be received by the Company or its security holders, as the case may be, pursuant to the Transaction(s), whether or not consummated, contemplated by this agreement bears to (ii) the fees actually received by us in connection with this agreement.

The Company will not without our prior written consent (not to be unreasonably withheld, conditioned, or delayed), settle, compromise, consent to the entry of any judgment in or otherwise seek to terminate (a "Settlement") any Action in respect of which indemnification is or may be sought hereunder (whether or not an Indemnified Person is a party thereto) unless such Settlement includes a release of each Indemnified Person from any Losses arising out of such Action. The Company will not permit any such Settlement to include a statement as to, or an admission of, fault or culpability by or on behalf of an Indemnified Person without such Indemnified Person's prior written consent. No Indemnified Person

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MOE LIS ~COMPANY

seeking indemnification, exculpation, reimbursement or contribution under this agreement will, without the Company's prior written consent (not to be unreasonably withheld, conditioned, or delayed), agree to the Settlement of any Action.

Prior to effecting any proposed sale, exchange, dividend or other distribution or liquidation of all or substantially all of its assets or any significant recapitalization or reclassification of its outstanding securities that does not explicitly or by operation of law provide for the assumption of the obligations of the Company set forth herein, the Company will notifY us in writing of its arrangements for the Company's obligations set forth herein to be assumed by another creditworthy party (for example through insurance, surety bonds or the creation of an escrow) upon terms and conditions reasonably satisfactory to the Company and us.

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¥()ELlS &t._OO¥PAliY

ANNEXB

FINRA Suitability. Pursuant to FINRA Rule 2111, the Company acknowledges that (i) the Company is capable of evaluating investment risks independently, both in general and with regard to transactions and investment strategies involving a security or securities and will exercise independent judgment in evaluating recommendations (if any) of Moelis and its associated persons, and (ii) the Company is an Institutional Account as defined in FINRA Rule 4512(c).

USA Patriot Act. Moelis is required to obtain, verifY, and record information that identifies the Company in a manner that satisfies the requirements of and in accordance with the USA Patriot Act.

Business Continuity. Moelis maintains a business continuity plan that is reviewed annually and is updated as necessary. Our disclosure statement is available on our website at www.moelis.com and a copy can be requested by contacting us at [email protected].

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MOE LIS <lt._COMPANY

Schedule 1

Big Boy Representation

The undersigned Purchaser represents and warrants that (i) the Purchaser is a sophisticated institutional accredited investor with extensive expertise and experience in financial and business matters and in evaluating private companies and purchasing and selling their securities; (ii) the Purchaser has conducted and relied upon its own due diligence investigation of the Company and its own in-depth analysis of the merits and risks of the Capital Transaction in making its investment decision and has not relied upon any information provided by Moelis or any investigation of the Company conducted by Moelis; and (iii) the Purchaser agrees that Moelis shall have no liability to the Purchaser in connection with its purchase of the Capital Transaction.

Sch-1




EXHIBIT B

Klein Declaration


IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWAR E

) In re: ) Chapter 11 ) ALLIED NEVADA GOLD CORP., et al.,1 ) Case No. 15-10503 (MFW) ) Debtors. ) Jointly Administered )

DECLARATION OF

BARAK KLEIN IN SUPPORT OF THE DEBTORS’ APPLICATION FOR ENTRY OF

AN ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OF MOELIS & COMPANY LLC AS FINANCIAL


CERTAIN INFORMATION REQUIREMENTS IMPOSED BY LOCAL R ULE 2016-2 I, Barak Klein, being duly sworn, state the following under penalty of perjury.

1. I am a Managing Director of Moelis & Company LLC (“Moelis”). I am duly

authorized to make this declaration (the “Declaration”) on behalf of Moelis and submit this

Declaration in accordance with sections 327(a) and 328(a) of title 11 of the United States Code,

11 U.S.C. §§ 101-1532 (the “Bankruptcy Code”) and Rules 2014(a) and 5002 of the

Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) in connection with the

application (the “Application”) of the above-captioned debtors (collectively, the “Debtors”),

seeking an order approving the retention of Moelis as financial advisor pursuant to sections

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification

number, are: Allied Nevada Gold Corp. (7115); Allied Nevada Gold Holdings LLC (7115); Allied VGH Inc. (3601); Allied VNC Inc. (3291); ANG Central LLC (7115); ANG Cortez LLC (7115); ANG Eureka LLC (7115); ANG North LLC (7115); ANG Northeast LLC (7115); ANG Pony LLC (7115); Hasbrouck Production Company LLC (3601); Hycroft Resources & Development, Inc. (1989); Victory Exploration Inc. (8144); and Victory Gold Inc. (8139). The corporate headquarters for each of the above Debtors are located at, and the mailing address for each of the above Debtors, except Hycroft Resources & Development, Inc., is 9790 Gateway Drive, Suite 200, Reno, NV 89521. The mailing address for Hycroft Resources & Development, Inc. is P.O. Box 3030, Winnemucca, NV 89446.


2

327(a) and 328(a) of the Bankruptcy Code and effective as of the Petition Date.2 Unless

otherwise stated in this Declaration, I have personal knowledge of the facts set forth herein and,

if called as a witness, I would testify thereto. To the extent that any information disclosed herein

requires subsequent amendment or modification upon Moelis’ completion of further analysis or

as additional creditor information becomes available to it, one or more supplemental declarations

will be submitted to the court reflecting the same.

Moelis’ Qualifications

2. I believe that Moelis and the professionals it employs are uniquely qualified to

advise the Debtors in the matters for which Moelis is proposed to be employed.

3. Moelis is an investment banking firm with its principal office located at 399 Park

Avenue, 5th Floor, New York, New York 10022. Moelis is a registered broker-dealer with the

United States Securities and Exchange Commission and is a member of the Financial Industry

Regulatory Authority. Moelis was founded in 2007 and is a wholly owned subsidiary of Moelis

& Company Group LP. Moelis & Company Group LP, together with its subsidiaries, has

approximately 500 employees based in 15 offices in North and South America, Europe, the

Middle East, Asia and Australia. Moelis & Company Group LP is a subsidiary of Moelis &

Company, a public company listed on the New York Stock Exchange.

4. Moelis provides a broad range of financial advisory services to its clients,

including: (a) general corporate finance; (b) mergers, acquisitions, and divestitures; (c) corporate

restructurings; (d) special committee assignments; and (e) capital raising. Moelis and its senior

professionals have extensive experience in the reorganization and restructuring of distressed

companies, both out-of-court and in chapter 11 cases. Moelis’ business reorganization

2 Capitalized terms used but otherwise not defined herein shall have the meanings ascribed to them in the

Application.


3

professionals have served as financial advisors in numerous cases, including: In re ITR

Concession Company LLC, No. 14-34284 (Bankr. N.D. Ill. Oct. 28, 2014); In re GSE



No. 14-10454 (BLS) (Bankr. D. Del. Mar. 25, 2014); In re Sbarro LLC, No. 14-10557 (MG)

(Bankr. D. Del. April 7, 2014); In re Cengage Learning, Inc., No. 13-44106 (ESS) (Bankr.

E.D.N.Y. Sept. 13, 2013); In re OSH 1 Liquidating Corp. f/k/a Orchard Supply Hardware Stores

Corp., No. 13-11565 (CSS) (Bankr. D. Del. July 15, 2013); In re Revel AC, Inc., No. 13-16253

(JHW) (Bankr. D.N.J. Apr. 17, 2013); In re AMF Bowling Worldwide, Inc., No. 12-36495

(KRH) (Bankr. E.D. Va. Dec. 20, 2012); In re Residential Capital, LLC, No. 12-12020 (MG)

(Bankr. S.D.N.Y. Aug. 30, 2012); In re AMR Corp., No. 11-15463 (SHL) (Bankr. S.D.N.Y. Mar.

7, 2012); In re NewPage Corp., No. 11-12804 (KG) (Bankr. D. Del. Dec. 27, 2011); In re Gen.

Maritime Corp., No. 11-15285 (MG) (Bankr. S.D.N.Y. Dec. 15, 2011); In re Jackson Hewitt Tax

Serv., Inc., No. 11-11587 (MFW) (Bankr. D. Del. June 30, 2011); In re Appleseed’s Intermediate

Holdings LLC, No. 11-10160 (KG) (Bankr. D. Del. Feb. 23, 2011); In re Innkeepers USA Trust,

No. 10-13800 (SCC) (Bankr. S.D.N.Y. Aug. 12, 2010); In re Almatis B.V., No. 10-12308 (MG)

(Bankr. S.D.N.Y. June 9, 2010); In re Atrium Corp., No. 10-10150 (BLS) (Bankr. D. Del. Mar.

17, 2010); In re Int’l Aluminum Corp., No. 10-10003 (MFW) (Bankr. D. Del. Jan. 27, 2010); In

re Reader’s Digest Ass’n Inc., No. 09-23529 (RDD) (Bankr. S.D.N.Y. Aug. 24, 2009); In re NV

Broad. LLC, No. 09-12473 (KG) (Bankr. D. Del. Aug. 5, 2009); In re Fontainebleau Las Vegas

Holdings, LLC, No. 09-21481 (AJC) (Bankr. S.D. Fla. Nov. 25, 2009); In re ION Media

Networks Inc., No. 09-13125 (JMP) (Bankr. S.D.N.Y. July 13, 2009); In re JGW Holdco, LLC

f/k/a J.G. Wentworth LLC, No. 09-11731 (CSS) (Bankr. D. Del. June 16, 2009); In re Source


4

Interlink Cos., No. 09-11424 (KG) (Bankr. D. Del. May 21, 2009); In re Dayton Superior Corp.,

No. 09-11351 (BLS) (Bankr. D. Del. May 18, 2009); In re Idearc Inc., No. 09-31828 (BJH)

(Bankr. N.D. Tex. May 27, 2009); In re Muzak Holdings LLC, No. 09-10422 (KJC) (Bankr. D.

Del. Apr. 6, 2009); In re Chemtura Corp., No. 09-11233 (REG) (Bankr. S.D.N.Y. Mar. 18,

2009); In re Old AII, Inc. f/k/a Aleris Int’l Inc., No. 09-10478 (BLS) (Bankr. D. Del. Mar. 16,

2009); In re XMH Corp. f/k/a Hartmarx Corp., No. 09-02046 (BWB) (Bankr. N.D. Ill. Mar. 4,

2009); In re Lyondell Chemical Co., No. 09-10023 (REG) (Bankr. S.D.N.Y. Jan. 6, 2009).3

5. The Debtors have selected Moelis as their financial advisor based upon, among

other things: (a) the Debtors’ need to retain a skilled financial advisory firm to provide advice

with respect to the Debtors’ complex restructuring activities; (b) Moelis’ extensive experience

and excellent reputation in providing financial advisory services in complex chapter 11 cases

such as these; and (c) Moelis’ extensive knowledge of the Debtors, as described below. In light

of the size and complexity of these chapter 11 cases, Moelis’ resources, capabilities, and

experience in advising the Debtors are crucial to the Debtors’ successful restructuring. An

experienced financial advisor such as Moelis fulfills a critical need that complements the

services offered by the Debtors’ other restructuring professionals. For these reasons, the Debtors

require the services of a capable and experienced financial advisor such as Moelis.

6. Moelis has been advising the Debtors on strategic and restructuring initiatives for

approximately two months. On January 26, 2015, Moelis and the Debtors entered into the

Engagement Letter whereby Moelis agreed to act as the Debtors’ exclusive financial advisor in

connection with a potential Restructuring or Capital Transaction (each as defined in the

Engagement Letter). On March 7, 2015, Moelis and the Debtors entered into a supplement to the

3 Because of the voluminous nature of the orders cited herein, such orders are not attached to this Application.

Copies of these orders are available upon request of the Debtors’ proposed counsel.


5

Engagement Letter whereby Moelis agreed to act as financial advisor to the Debtors in

connection with the sale, disposition or other transfer (regardless of form) involving certain non-

core assets of the Debtors.

7. Throughout Moelis’ engagement, Moelis has provided the following services,

among others, to the Debtors in connection with their restructuring efforts and will continue to

provide such services during these chapter 11 cases at the request of the Debtors:

a. assisting the Debtors in reviewing and analyzing the Debtors’ results of operations, financial condition and business plan;

b. assisting the Debtors in reviewing and analyzing a potential Restructuring or Capital Transaction (or any combination thereof);

c. providing advice and testimony related to a potential In-Court Restructuring, including, without limitation, any Capital Transaction or Sale Transaction contemplated thereby;

d. assisting the Debtors in negotiating a Restructuring or Capital Transaction (or any combination thereof)

e. advising the Debtors on the terms of any debt, equity interests, equity-linked interests, hybrid capital, royalty, streaming or production-based financing transactions, options, warrants or other rights to acquire equity interests or other securities it offers in any potential Capital Transaction;

f. advising the Debtors on their preparation of information materials for a potential Capital Transaction (such materials prepared by the Debtors, the “Information Memo”);

g. assisting the Debtors in contacting potential lenders, investors or purchasers (the “Purchasers”) in a Restructuring or Capital Transaction (or any combination thereof), and meeting with and providing, on behalf of the Debtors, such prospective Purchasers with the Information Memo and such additional information about the Debtors’ assets, properties or business as may be appropriate and acceptable to the Debtors, subject to customary business confidentiality agreements;

h. assisting in the management of a due diligence process with respect to a potential Restructuring or Capital Transaction (or any combination thereof), including assisting in responding to applicable due diligence questions and requests;


6

i. assisting and advising the Debtors in the marketing and execution of a Sale Transaction and, if necessary, providing testimony in these chapter 11 cases regarding the Sale Transaction; and

j. providing such other financial advisory and investment banking services in connection with a Restructuring or Capital Transaction (or any combination thereof) as Moelis and the Debtors may mutually agree upon.

8. As a result of its work with the Debtors, Moelis has developed valuable

institutional knowledge regarding the Debtors’ business, financial affairs, operations, capital

structure, and other material information. Having worked with the Debtors’ management and

their other advisors, Moelis has developed relevant experience and expertise regarding the

Debtors that will assist it in providing effective and efficient services in these chapter 11 cases.

Accordingly, I believe Moelis is well-qualified to represent them in a cost-effective, efficient,

and timely manner, and I submit that the employment and retention of Moelis is in the best

interests of the Debtors, their creditors, and all parties in interest.

Services Provided

9. As of January 26, 2015, Moelis commenced its engagement with the Debtors to

provide financial advice and services in connection with a potential Restructuring or Capital

Transaction. The terms and conditions of the Engagement Letter were the result of significant

discussions and negotiations between Moelis and the Debtors, and reflect the parties’ mutual

agreement as to the substantial efforts that will be required in connection with this engagement.

Pursuant to the Engagement Letter, Moelis advised the Debtors in their negotiations with the

Debtors’ existing secured lenders and certain holders of the senior unsecured notes (the

“Consenting Noteholders”). These negotiations ultimately resulted in the execution of a

restructuring support agreement among the Debtors, the Consenting Noteholders and the secured

lenders (the “RSA”). Pursuant to the RSA, the Consenting Noteholders and certain of the

Debtors’ prepetition secured lenders party thereto agreed to support a plan of reorganization


7

proposed by the Debtors on the terms set forth in the restructuring term sheet attached to the

RSA. In addition, pursuant to the Engagement Letter, Moelis has advised the Debtors in

connection with the negotiation and documentation of the terms of the debtor in possession

facility provided by the Consenting Noteholders.

10. Subject to further order of the Court, and consistent with the Engagement Letter,

the Debtors propose to retain Moelis to continue rendering consulting and advisory services as

outlined within the Engagement Letter and this Application. Many of these services began in

January 2015, and may continue throughout these chapter 11 cases.

11. If the Debtors request that Moelis perform services not contemplated by the

Engagement Letter, Moelis and the Debtors will agree, in writing, on the terms for such services

and seek the Court’s approval thereof.

Professional Compensation

12. Moelis’ decision to advise and assist the Debtors in connection with these

chapter 11 cases is subject to its ability to be retained in accordance with the terms of the

Engagement Letter pursuant to section 328(a), and not section 330, of the Bankruptcy Code.

13. Specifically, the Engagement Letter provides for the following Fee Structure:

a. Monthly Fee: during the term of the agreement set forth in the Engagement Letter, a non-refundable cash fee of $150,000 per month (the “Monthly Fee”), payable in advance of each month. Whether or not a Restructuring or Capital Transaction occurs, Moelis shall earn and be paid the Monthly Fee every month during the term of the agreement. 50% of Monthly Fees in excess of $900,000 shall be credited (the “Monthly Fee Credit”), to the extent previously paid, against any In-Court Restructuring Fee, Out-of-Court Restructuring Fee and Capital Transaction Fee to be paid pursuant to the terms of the Engagement Letter, provided, that no such In-Court Restructuring Fee, Out-of-Court Restructuring Fee or Capital Transaction Fee shall be reduced below zero.


8

b. Restructuring Fee: at the closing of an In-Court Restructuring (i.e., on emergence), a fee (the “In-Court Restructuring Fee”) equal to $3,000,000;4

c. Capital Transaction Fee: a non-refundable cash fee (the “Capital Transaction Fee”), equal to the sum of: (i) 1.5% of the aggregate gross amount or face value of debt obligations and other debt interests (including any convertible debt) Raised5 in the Capital Transaction, plus (ii) 3.75% of the aggregate gross amount or face value of new capital Raised in the Capital Transaction as equity, equity-linked interests, royalty financing, streaming financing, production-based financing, options, warrants or other rights to acquire equity interests; provided, that the 1.5% and 3.75% described in the foregoing clauses (i) and (ii), respectively, shall be reduced by 1/3rd for the calculation of the Capital Transaction Fee with respect to the aggregate gross amount or face value of debt obligations, other debt interests, or new capital (whether as equity, equity-linked interests, royalty financing, streaming financing, production-based financing, options, warrants, other rights to acquire equity interests or otherwise) provided by or Raised from any equity holders, lenders, debt holders, other security holders, or creditors of the Debtors or any subsidiary of the Debtors or any of their respective affiliates, subsidiaries, or affiliated funds (whether such entity or person is currently or at the time Raised is a holder or any of their respective affiliates, subsidiaries, or affiliated funds). Subject to the Fee Cap (as defined below) and the Monthly Fee Credit, the Debtors will pay a separate Capital Transaction

4 The Engagement Letter provides for an alternative fee at the closing of an Out-of-Court Restructuring (the

“Out-of-Court Restructuring Fee”) in an amount equal to (a) $2,500,000 in the event that holders of 50% of the face value of the Notes approve and consent to all aspects of the Out-of-Court Restructuring; (b) $3,000,000 in the event that holders of 66% of the face value of the Notes approve and consent to all aspects of the Out-of-Court Restructuring; or (c) $3,750,000 in the event that holders of 95% or more of the face value of the Notes approve and consent to all aspects of the Out-of-Court Restructuring; provided, that in the event that more than the specified percentage of Notes in the foregoing clauses (a) or (b) (but not (c)) approves and consents to all aspects of the Out-of Court Restructuring, then the Out-of-Court Restructuring Fee shall be increased in a linear fashion until the next percentage of Notes is reached. Since the Debtors are pursuing an In-Court Restructuring, the Out-of-Court Restructuring Fee is not applicable with respect to any Restructuring implemented in these chapter 11 cases.

5 “Raised” means the amount of new funds committed to and available to the Debtors at the consummation of the Capital Transaction, whether or not the Debtors draw the full amount at such time and whether or not the Debtors apply such amounts to refinance any of its obligations; provided, that (x) any debt obligations, other debt interests, new capital (whether as equity, equity-linked interests, royalty financing, streaming financing, production-based financing, options, warrants, other rights to acquire equity interests or otherwise), or other take back paper that are issued in exchange for (y) any debt amounts, debt obligations, other debt interests, equity, other securities of the Debtors or any of their subsidiaries or any other claims against the Debtors or any of their subsidiaries existing at such time shall be excluded from the term Raised and in no event shall any such amounts be included in, or taken into account in, the calculation of the Capital Transaction Fee.


9

Fee in respect of each Capital Transaction in the event that more than one Capital Transaction occurs.

d. Sale Transaction Fee: a non-refundable cash fee equal to $200,000 payable upon the closing of a Sale Transaction

14. Notwithstanding anything to the contrary contained in the Engagement Letter, in

no event shall the total fees due pursuant to the Engagement Letter (excluding the Sale

Transaction Fee), exceed $4,500,000 (such amount, the “Fee Cap”). If any transaction involves

both a Capital Transaction and a Restructuring, both (i) a Capital Transaction Fee and (ii) either

an In-Court Restructuring Fee or an Out-of-Court Restructuring Fee shall be payable subject to

the terms of the Engagement Letter, including the Fee Cap and the Monthly Fee Credit.

15. If, at any time before the expiration of twelve months following the expiration or

termination of Moelis’ engagement (except if Moelis unilaterally terminates the

Engagement Letter), the Debtors consummate any Restructuring or Capital Transaction(s) or

enter into an agreement regarding any Restructuring or Capital Transaction(s) or a Plan is filed

regarding any Restructuring, and such Restructuring is subsequently consummated, then the

Debtors shall pay Moelis the appropriate fee specified in the Engagement Letter immediately

upon the closing of each such transaction. If, at any time before the expiration of six months

following the termination of the Engagement Letter, the Debtors enter into an agreement that

subsequently results in a Sale Transaction, or consummates a Sale Transaction, then the Debtors

shall pay Moelis the Sale Transaction Fee in cash promptly upon the closing of the Sale

Transaction.

16. The Engagement Letter provides that in connection with a Restructuring or

Capital Transaction (or any combination thereof) intended to be consummated in connection


10

with a “pre-packaged” or “pre-arranged” chapter 11 plan or reorganization:6 (a) Moelis will have

earned 100% of (i) either any In-Court Restructuring Fee or Out-of-Court Restructuring Fee

and/or (ii) any Capital Transaction Fee applicable thereto (in each case, subject to the terms of

the Engagement Letter, including the Fee Cap and the Monthly Fee Credit) upon obtaining the

Required Approval and prior to the commencement of the chapter 11 cases; provided, that the

Debtors will pay any such In-Court Restructuring Fee, Out-of-Court Restructuring Fee and/or

Capital Transaction Fee (in each case, subject to the terms of the Engagement Letter, including

the Fee Cap and the Monthly Fee Credit), solely upon the closing of the applicable Restructuring

or Capital Transaction (or any combination thereof) and not prior thereto.

17. In addition to any fees payable to Moelis, the Debtors will reimburse Moelis for

all of its reasonable, actual, documented, out-of-pocket costs expenses as they are incurred in

entering into and performing services under the Engagement Letter, including the costs of

Moelis’ outside counsel (without the need for such legal counsel to be retained as a professional

in these chapter 11 cases and without regard to whether such legal counsel’s services satisfy

section 330(a)(3)(C) of the Bankruptcy Code).

18. Moelis intends to apply for compensation for professional services rendered and

reimbursement of expenses incurred in connection with these chapter 11 cases, subject to the

Court’s approval and in compliance with applicable provisions of the Bankruptcy Code, the

Bankruptcy Rules, the Local Rules, the U.S. Trustee Guidelines, and any other applicable

procedures and orders of the Court, including any order approving this Application (to the extent

6 A “pre-packaged” or “pre-arranged” plan means any such plan with respect to which holders of at least one

class of claims representing at least 66.67% in dollar amount of the allowed claims in such class have provided written evidence (through a “lock-up agreement” or otherwise) of their intent to vote in favor of such plan (such vote, the “Required Approval”).


11

compliance is not waived) and consistent with the proposed compensation set forth in the

Engagement Letter.

19. Moelis will maintain records in support of any actual, necessary costs and

expenses incurred in connection with the rendering of its services in these chapter 11 cases.

However, because (a) it is not the general practice of financial advisory firms such as Moelis to

keep detailed time records similar to those customarily kept by attorneys; (b) Moelis does not

ordinarily keep time records on a “project category” basis; and (c) Moelis’ compensation is

based on a fixed Monthly Fee and fixed transaction fees, Moelis respectfully requests that only

Moelis’ restructuring professionals be required to maintain records (in summary format) of the

services rendered for the Debtors, including summary descriptions of those services, the

approximate time expended in providing those services (in hourly increments) and the identity of

the restructuring professionals who provided those services. Moelis will present such records to

the Court in its fee application(s). Moreover, Moelis respectfully requests that Moelis’

restructuring professionals not be required to keep time records on a “project category” basis,

that its non-restructuring professionals and personnel in administrative departments (including

legal) not be required to maintain any time records, and that it not be required to provide or

conform to any schedule of hourly rates. To the extent that Moelis would otherwise be required

to submit more detailed time records for its professionals by the Bankruptcy Code, the

Bankruptcy Rules, the Local Rules, the U.S. Trustee Guidelines, or other applicable procedures,

and orders of the Court, Moelis respectfully requests that this Court waive such requirements.

20. I believe the Fee Structure is consistent with, and typical of, compensation

arrangements entered into by Moelis and other comparable firms in connection with the

rendering of similar services under similar circumstances, both in and out of bankruptcy


12

proceedings. I also believe that the Fee Structure reflects a balance between a fixed, monthly

fee, and a contingency amount, which is tied to the consummation and closing of the transactions

and services contemplated by the Debtors and Moelis in the Engagement Letter. After

discussions and arm’s-length negotiations with the Debtors, I believe that the Fee Structure is in

fact reasonable, market-based and designed to compensate Moelis fairly for its work.

21. I understand that Moelis’ strategic and financial expertise, as well as its capital

markets knowledge, financing skills, and restructuring capabilities, some or all of which has and

will be required by the Debtors during the term of Moelis’ engagement, were important factors to

the Debtors in determining the Fee Structure. I believe that the ultimate benefits of Moelis’

services hereunder cannot be measured by reference to the number of hours to be expended by

Moelis’ professionals in the performance of such services. The Debtors and Moelis agreed upon

the Fee Structure in anticipation that a substantial commitment of professional time and effort

would be required of Moelis and in light of the fact that (a) such commitment could have and

may still foreclose other opportunities for Moelis; and (b) the actual time and commitment

required of Moelis and its professionals to perform the Restructuring Services may vary

substantially from week to week and month to month, creating “peak load” issues for Moelis.

22. Prior to the Petition Date, according to the Debtors’ books and records, the

Debtors paid Moelis $450,000.00 for fees and $46,522.46 for reimbursement of expenses

during the 90-day period before the Petition Date. As of the Petition Date, the Debtors do

not owe Moelis any fees for services performed or expenses incurred under the Engagement

Letter in excess of $20,000 (the “Retainer”), which Moelis is holding on account for

expenses incurred in connection with the Engagement Letter. Moelis will first apply the

Retainer to all prepetition invoices, and thereafter, will apply the remaining balance of the


13

Retainer as a credit towards postpetition fees and expenses until the Retainer is fully exhausted

before seeking further payment from the Debtors on account of any postpetition fees and

expenses.

Indemnification

23. As part of the overall compensation payable to Moelis under the terms of the

Engagement Letter, the Debtors have agreed to certain indemnification, contribution and

reimbursement obligations, set forth in Annex A of the Engagement Letter

(the “Indemnification Agreement”). The Indemnification Agreement provides that the Debtors

will indemnify and hold harmless Moelis, its affiliates and their respective current and former

directors, officers, partners, managers, agents, representatives, or employees

(each, an “Indemnified Person,” and collectively, the “Indemnified Persons”) from and against

Losses incurred by an Indemnified in connection with Moelis’ engagement, except for any

Losses that are finally judicially determined by a court of competent jurisdiction to have resulted

primarily from the bad faith, willful misconduct or gross negligence of such Indemnified Person.

24. I believe that the Indemnification Provisions are customary and reasonable terms

of consideration for financial advisors such as Moelis in connection with in-court and

out-of-court restructuring activities. Moelis negotiated the Engagement Letter, including the

Indemnification Provisions, with the Debtors at arm’s-length.

No Duplication of Services

25. Moelis believes that the services it provides to the Debtors will not duplicate the

services that other professionals will be providing to the Debtors in these chapter 11 cases.

Specifically, Moelis will carry out unique functions and will use reasonable efforts to coordinate

with the Debtors and their professionals retained in these chapter 11 cases to avoid the

unnecessary duplication of services.


14

Moelis’ Disinterestedness

26. Moelis has undertaken to determine whether it has any conflicts or other

relationships that might cause it not to be eligible for employment by the Debtors in these cases.

Specifically, Moelis obtained from the Debtors the names of individuals and entities that may be

parties in interest in these cases. Moelis then (a) researched its internal records to determine

whether Moelis has any connections with the Debtors and the parties listed on Schedule 1

attached hereto (the “Potential Parties in Interest”); and (b) issued a general inquiry to certain of

its officers with respect to the Debtors and certain Potential Parties in Interest.

27. Based on the foregoing inquiry, other than in connection with this engagement

and as otherwise disclosed herein, Moelis has no relationships or connections with the Debtors of

which I am aware. In particular, to the best of my knowledge, information, and belief, neither I,

Moelis, nor any of its professionals:

a. is a creditor, equity security holder, or insider of the Debtors;

b. is or has been within two years before the Petition Date, a director, officer, or employee of the Debtors; or

c. has any interest materially adverse to the interests of the Debtors’ estates or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the Debtors, or for any other reason.

Accordingly, I believe Moelis is a “disinterested person” as that term is defined in

section 101(14) of the Bankruptcy Code and does not hold or represent an interest adverse to the

Debtors or their estates.

28. Neither I nor any of the Moelis professionals who will provide services for the

Debtors is related to any Judge of this Court, the U.S. Trustee, or Assistant U.S. Trustee for this

District, or the U.S. Trustee trial attorney assigned to these chapter 11 cases.


15

29. To the extent that I have been able to ascertain to date that Moelis has been

engaged within the last two years or is currently engaged by any of the Potential Parties in

Interest (or their affiliates, as the case may be) in matters unrelated to these cases, such facts are

disclosed on Schedule 2 attached hereto. Schedule 2 also sets forth certain other relationships

Moelis has with certain Potential Parties in Interest. In addition to the facts disclosed on

Schedule 2, Moelis may in the future be engaged by parties that are or may become parties in

interest in these cases. As these cases progress, new parties may become parties in interest in

these cases and similarly, Moelis may have been engaged, may currently be engaged and may in

the future be engaged by such new parties in interest in matters unrelated to these chapter 11

cases. Also, Moelis may have engaged or had mutual clients with, may have a current

engagement or have mutual clients with and may in the future engage or have mutual clients with

certain law firms, financial advisors, accounting firms, and other professionals that are Potential

Parties in Interest or may become parties in interest, all in matters unrelated to these cases. In

addition, Moelis may have also been engaged by, be currently engaged by, or in the future be

engaged by persons who are creditors or shareholders of, otherwise have a business relationship

with the Debtors, or who are competitors of or customers of the Debtors. Potential Parties in

Interest, persons that may become parties in interest in these cases, and persons that have

business relationships with the Debtors, are competitors of the Debtors or that are customers of

the Debtors, may be: (a) parties in interest in other bankruptcy cases where Moelis is acting as

financial advisor to the debtors or to other parties in interest; or (b) may be affiliates of or

creditors of persons who Moelis may have been engaged, is currently engaged or may in the

future be engaged by. In the ordinary course of its business, Moelis may also purchase services


16

or products from Potential Parties in Interest and other persons that are or may become parties in

interest in these chapter 11 cases.

30. Given the large number of parties in interest in these chapter 11 cases, despite the

efforts described above to identify and disclose Moelis’ relationships with parties in interest in

these chapter 11 cases, Moelis is unable to state with certainty that every client relationship or

other connection has been disclosed. In particular, among other things, Moelis may have

relationships with persons who are beneficial owners of parties in interest and persons whose

beneficial owners include parties in interest or persons who otherwise have relationships with

parties in interest. Moreover, Moelis’ employees may have relationships with Potential Parties

in Interest, persons that may become parties in interest in these cases, and/or persons that have

business relationships with the Debtors, are competitors of the Debtors or that are customers of

the Debtors. Continued inquiry will be made following the filing of the Application, on a

periodic basis, with additional disclosures to this Court if necessary or otherwise appropriate.

31. Moelis’ parent company, Moelis & Company Group LP is a subsidiary of Moelis

& Company, a public company listed on the NYSE. Moelis & Company is controlled by

Kenneth Moelis. Mr. Moelis also controls a separate private company Moelis Asset

Management LP (Moelis Asset Management). Moelis Asset Management is operated separately

from the public company Moelis & Company and its subsidiaries including Moelis. The

executive officers of Moelis & Company are different from the executive officers of Moelis

Asset Management.

32. Moelis Asset Management has a separate private equity business (“Moelis Capital

Partners”), which holds investment positions in various entities, some of which may be parties

in interest in these chapter 11 cases. To the best of my knowledge, Moelis Capital Partners does


17

not hold any investment positions that constitute a conflict of interest that would disqualify

Moelis from providing services described in the Engagement Letter. The Moelis professionals

providing services to the Debtors will not share confidential or otherwise non-public information

they receive in the course of this engagement with Moelis Capital Partners. Accordingly, I

believe that Moelis Capital Partners’ investment activities do not constitute a conflict of interest

that would disqualify Moelis from providing services described in the Engagement Letter.

33. Moelis Asset Management has a separate credit focused investment management

business (“Gracie Credit”). Gracie Credit is operated as a separate business from Moelis, and

Gracie Credit will continue to be operated in separate legal and operating entities from Moelis.

Gracie Credit employees will not work on these cases and Moelis employees working on these

cases will not have any involvement in Gracie Credit’s investment decisions. Moelis and Gracie

Credit maintain strict compliance information barriers between Moelis on the one hand and

Gracie Credit on the other hand to ensure that: (a) no Moelis employee will disclose any

non-public information concerning the Debtors or these cases to any Gracie Credit employee;

and (b) no Gracie Credit employee will disclose any non-public information concerning a Gracie

Credit position or Gracie Credit’s intention with respect to any consent, waiver, tender, or vote

decision to any Moelis employee. Moelis and Gracie Credit currently have separate offices with

access to the other’s offices physically restricted and use separate Internet email addresses

(@moelis.com and @graciecap.com, respectively). Gracie Credit may in the ordinary course

from time to time hold investment positions in the Debtors and parties in interest in these cases.

Based on the business separation and compliance information barriers referred to above, Gracie

Credit’s investment activities do not constitute a conflict of interest that would disqualify Moelis

from providing services described in the Engagement Letter.


18

34. Moelis Asset Management has a separate direct lending business, Freeport

Financial Group (“Freeport”). Freeport is operated as a separate business from Moelis, and

Freeport will continue to be operated in separate legal and operating entities from Moelis.

Freeport employees will not be working on these chapter 11 cases and Moelis employees

working on these chapter 11 cases will not have any involvement in Freeport’s investment

decisions. Moelis and Freeport maintain strict compliance information barriers between Moelis

on the one hand and Freeport on the other hand to ensure that: (a) no Moelis employee will

disclose any non-public information concerning the Debtors or these chapter 11 cases to any

Freeport employee and (b) no Freeport employee will disclose any non-public information

concerning a Freeport position or Freeport’s intention with respect to any consent, waiver,

tender, or vote decision to any Moelis employee. Moelis and Freeport currently have separate

offices with access to the other’s offices physically restricted and use separate Internet email

addresses (@moelis.com and @freeportfinancial.com, respectively). Freeport may in the

ordinary course from time to time hold investment positions in the Debtors and parties in interest

in these cases. Based on the business separation and compliance information barriers referred to

above, Freeport’s investment activities do not constitute a conflict of interest that would

disqualify Moelis from providing services described in the Engagement Letter.

35. Moelis Asset Management has a business of managing collateralized loan

obligations through a subsidiary Steele Creek Investment Management LLC (“Steele Creek”).

Steele Creek is operated as a separate business from Moelis, and Steele Creek will continue to be

operated in separate legal and operating entities from Moelis. Steele Creek employees will not

be working on these chapter 11 cases and Moelis employees working on these chapter 11 cases

will not have any involvement in Steele Creek’s investment decisions. Moelis and Steele Creek


19

maintain strict compliance information barriers between Moelis on the one hand and Steele

Creek on the other hand to ensure that: (a) no Moelis employee will disclose any non-public

information concerning the Debtors or these chapter 11 cases to any Steele Creek employee and

(b) no Steele Creek employee will disclose any non-public information concerning a Steele

Creek position or Steele Creek’s intention with respect to any consent, waiver, tender or vote

decision to any Moelis employee. Moelis and Steele Creek currently have separate offices.

Moelis and Steele Creek also currently use separate Internet email addresses (@moelis.com and

@freeportfinancial.com, respectively). Steele Creek may in the ordinary course from time to

time hold investment positions in the Debtors and parties in interest in these cases. Based on the

business separation and compliance information barriers referred to above, Steele Creek’s

investment activities do not constitute a conflict of interest that would disqualify Moelis from

providing services described in the Engagement Letter.

36. To the best of my knowledge, information, and belief, some of Moelis’ present

and future employees may have, or may in the future have, personal investments in funds, or

other investment vehicles, over whose investment decisions such employees have no input or

control. Such entities may have made, or may in the future make, investments in the claims or

securities of the Debtors, or those of their creditors, or other parties in interest in these chapter 11

cases.

37. Moelis will not share any compensation to be paid by the Debtors, in connection

with services to be performed after the Petition Date, with any other person, other than other

principals and employees of Moelis, to the extent required by section 504 of the Bankruptcy

Code. In the ordinary course of its business, Moelis regularly retains the services of senior

advisors with specific industry or other expertise to supplement the financial advisory services


20

offered by Moelis’ regular employees to Moelis’ clients. Upon Moelis’ engagement on a

particular assignment, one such senior advisor may be assigned to assist the other Moelis

professionals for such engagement. Such advisor acts under the management of the Moelis

Managing Director who retains the lead role and primary responsibility for such assignment.

The fees and expenses of such senior advisor are paid solely by Moelis. The Debtors submit that

such senior advisors are regular associates of Moelis within the meaning of section 504 of the

Bankruptcy Code.


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Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true

and correct.

Executed on March 25, 2015 By:

Barak Klein Managing Director Moelis & Company LLC


SCHEDULE 1

Potential Parties in Interest A. Murray Sinclair (Jr.) A. Murray Sinclair (Sr.) ACE American Insurance Company Al Park Petroleum, Inc. Allied Nevada (Cayman) Corp. Allied Nevada Delaware Holdings Inc. Allied Nevada Gold Corp. Allied Nevada Gold Holdings LLC Allied VGH Inc. Allied VNC Inc. American Guarantee & Liability Insurance

Company American International Group, Inc. ANG Central LLC ANG Cortez LLC ANG Eureka LLC ANG North LLC ANG Northeast LLC ANG Pony LLC Aon plc Aon Premium Finance, LLC Apex Bulk Commodities, Inc. Apex Logistics Aristeia Capital, LLC Arnold Machinery Company Ashland Chemicals AT&T Atlas Copco Banc of America Leasing & Capital LLC Berkley Regional Insurance Company Bertling Logistics LLC Black Rock Machine Services BlackRock Advisors, LLC BlackRock Institutional Trust Company,

N.A. Cameron A. Mingay Carl A. Pescio Cashman Equipment Company Cate Equipment Co. of Elko Caterpillar Financial Charter Internet CI Investments, Inc.

Clearstream Bank Coach USA Columbia Wanger Asset Management, LLC Computershare Trust Company of Canada Continental Casualty Company Cyanco Company LLC D&D Tire, Inc D. Bruce Sinclair Daniel B. Moore David C. Flint David L. Hill Deborah A. Lassiter Donald A. Harris Elko Inc. EP Minerals Euro Pacific Asset Management, LLC Euroclear Bank Federal Insurance Company First Southwest Company FLSmidth Salt Lake City, Inc. Garry Keizer Gary W. Banbury General Security Indemnity Co. of Arizona Globevest Capital, LTD Golden West Distribution Center Graham Capital Management, L.P. Graymont Capital Inc. Great Lakes Reinsurance (UK) Plc Guardian Capital, L.P. Hal D. Kirby Hasbrouck Production Company LLC Hat Creek Construction High Mark Construction, LLC High Sierra Communications Humboldt County Treasurer Hycroft Resources & Development, Inc. James M. Doyle John W. Ivany Johnson Matthey Gold & Silver Joseph B. Doherty Komatsu Equipment Komatsu Financial


2

Lexington Insurance Company Lloyd’s Syndicate No. 1414 Loomis Lord Abbett & Company, LLC Maga Trucking Mercury Waste Management Michael B. Richings Michael G. Moran Michael Murphy Monegy, Inc. Mudrick Capital National Bank of Canada National Union Fire Insurance Company of

Pittsburgh, Pa New Hampshire Ins. Co. Newport Global Advisors, L.P. NV Energy Pac Machine Co., Inc. PACGWL LLC Palletized Trucking Pershing Trading Company LP PLUMB LINE MECHANICAL Rahn & Bodmer Banquiers Rail Acres LLC Randy E. Buffington RBC Wealth Management Rebecca A. Rivenbark Redi Services Reese River Associates Rick H. Russell Robert G. Wardell Robert M. Buchan Scott A. Caldwell Scott L. Anderson Sentry Investments, Inc SIX SIS AG Societe Generale Sopus Products Sprott Asset Management, L.P. Stephen A. Lang Stephen M. Jones Steven E. Gill Swiss Re International SE Talamod Asset Management, LLC Team Silverado Enterprise Terry M. Palmer

The Bank of Nova Scotia The Insurance Company of the State of

Pennsylvania Theresa M. Thom Third Avenue Management, LLC US Zinc USAA Asset Management Company ValueWorks Capital Management, LLC Van Eck Associates Corporation Verizon Wireless Victory Exploration Inc. Victory Gold Inc. W. Durand Eppler Warren D. Woods Wells Fargo Bank, National Association Wesco - Explosives West Face Capital, Inc. Westchester Fire Insurance Company Western Line Builders, Inc. Whitebox Advisors, LLC XL Specialty Insurance Co Zurich American Ins. Co.


SCHEDULE 2

Relationships with Potential Parties in Interest • Moelis (and its financial advisory affiliates) has been engaged within the last two years or is

currently engaged by the following Potential Parties in Interest (or one or more of their affiliates, as the case may be) in matters unrelated to these chapter 11 cases (including where the Potential Party in Interest was only a member of an official or an ad hoc creditor committee or an equity committee): American International Group, Inc., Aristeia Capital, LLC, BlackRock Advisors, LLC, BlackRock Institutional Trust Company, N.A., Continental Casualty Company, Mudrick Capital Management, LP, RBC Wealth Management, Societe Generale, Third Avenue Management, LLC and Wells Fargo Bank, NA.

• A Potential Party in Interest has a confidential passive limited partnership interest of less than

1% in the parent of MCP (as defined below).

• A Potential Party in Interest has a confidential limited partnership interest in certain private equity funds for which the General Partner is Moelis Capital Partners (“MCP”). MCP is separately operated from Moelis but is under common control with Moelis’ parent.


Documents

FOR THE DISTRICT OF DELAWARE Allied Nevada …upshotservices.s3.amazonaws.com/files/d36220e2-8449-4990-b486-b8… · FOR THE DISTRICT OF DELAWARE ) Chapter 11 ... and divestitures;