Case CSS Doc 53 Filed 03/10/14 Page 1 of 13 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

Transcription

1 Case CSS Doc 53 Filed 03/10/14 Page 1 of 13 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE x : In re: : Chapter 11 : : Case No (CSS) NOBLE LOGISTICS, INC., et al., 1 : : (Jointly Administered) : Debtors. : x Objection Deadline: March 24, 2014 at 4:00 p.m. Hearing Date: March 31, 2014 at 12:00 p.m. DEBTORS APPLICATION FOR ENTRY AN ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OF GULFSTAR GROUP, INC. AS INVESTMENT BANKER TO THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE Noble Logistics, Inc. and its debtor affiliates, as debtors and debtors in possession in the above-captioned Chapter 11 cases (collectively, the Debtors ), hereby submit this application (the Application ) for entry of an order, substantially in the form attached hereto as Exhibit A, pursuant to sections 327 and 328 of title 11 of the United States Code (the Bankruptcy Code ), Rules 2014 and 2016 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), and Rules and of the Local Rules for the United States Bankruptcy Court for the District of Delaware (the Local Rules ), for authority to employ and retain GulfStar Group, Inc. ( GulfStar ) as investment banker to the Debtors nunc pro tunc to the Petition Date (as defined below). In support of the Application, the Debtors refer to the Declaration of Bryan Frederickson in Support of the Debtors Application for Entry of an Order Authorizing the Employment and Retention of GulfStar Group, Inc. as Investment Banker to the Debtors Nunc 1 The Debtors in these Chapter 11 cases, together with the last four digits of each Debtor s federal tax identification number, are as follows: Noble Logistics, Inc. (4251); NLI Manager, Inc. (8282); Aspen Contracting SE, LLC (5776); Aspen Contracting NE, LLC (5896); Aspen Contracting Gulf Coast, LLC (6124); Aspen Contracting Midwest, LLC (6447); Aspen Contracting West, LLC (6563); Aspen Contracting California, LLC (6639); and Conifer Services CA, LLC (6675). The mailing address for the Debtors, solely for purposes of notices and communications, is Clay Road, Suite 100, Houston, Texas EAST\

2 Case CSS Doc 53 Filed 03/10/14 Page 2 of 13 Pro Tunc to the Petition Date (the Frederickson Declaration ), attached hereto as Exhibit B. In further support of the Application, the Debtors respectfully represent as follows: JURISDICTION 1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and This is a core proceeding within the meaning of 28 U.S.C. 157(b). Venue is proper in this district under 28 U.S.C and The statutory predicates for the relief requested herein are Bankruptcy Code sections 327 and 328, Bankruptcy Rules 2014 and 2016, and Local Rules and BACKGROUND 2. On February 28, 2014 (the Petition Date ), the Debtors commenced these cases by filing voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. No trustee, examiner or creditors committee has been appointed in these cases. 3. The Debtors continue in the possession of their property and continue to operate and manage their businesses as debtors in possession pursuant to Bankruptcy Code sections 1107(a) and The factual background relating to the Debtors, including their current and historical business operations and the events precipitating their Chapter 11 filings, are set forth in greater detail in the Declaration of John Hense in Support of Chapter 11 Petitions and First Day Motions [D.I. 15] (the First Day Declaration ), filed on the Petition Date and incorporated herein by reference. EAST\

3 Case CSS Doc 53 Filed 03/10/14 Page 3 of 13 RELIEF REQUESTED 5. By this Application, the Debtors seek entry of an order authorizing it, effective as of the Petition Date, to employ GulfStar as the Debtors investment bank in the Chapter 11 cases pursuant to sections 327 and 328 of the Bankruptcy Code, Bankruptcy Rules 2014(a) and 2016, Local Rules and , and the terms and conditions of the Engagement Agreement (as defined herein). BASIS FOR RELIEF I. GULFSTAR S QUALIFICATIONS 6. The Debtors seek to retain GulfStar as its investment bank because, among other things, GulfStar provides extensive experience in, and an excellent reputation for high-quality investment banking services to companies and large-scale projects in complex financing transactions. Founded in 1990 and headquartered at 700 Louisiana Street Suite 2800, Houston, Texas, 77002, GulfStar provides a broad range of corporate advisory services to clients, including, without limitation, the following: (a) merger and acquisition advisory services; (b) placements of capital for purposes of growth, acquisition and/or shareholder liquidity; and (c) restructuring and recapitalization advisory services to companies in financial distress. 7. GulfStar has served as the Debtors investment bank pursuant to an engagement agreement (the Engagement Agreement ) effective as of February 3, 2014 (a true and correct copy of the current Engagement Agreement is attached to the Frederickson Declaration as Exhibit 1). In that role, GulfStar has been closely involved in the operational, contractual, and financial developments of the Debtors and is familiar with virtually all aspects of the Debtors businesses and legal affairs and their restructuring and sale efforts. EAST\

4 Case CSS Doc 53 Filed 03/10/14 Page 4 of Since being retained, GulfStar has provided the Debtors with a wide array of financial services in connection with its business affairs, operations, turn-around strategy and implementation, and its restructuring and reorganization efforts, including preparing a confidential information memorandum describing the Debtors, their operations, financial condition and present situation; developing a list of prospective buyers to participate in the planned sale of the assets of the Debtors; preparing an anonymous executive summary of the Debtors for purposes of marketing to prospective buyers; contacting more than 100 potential buyers; executing confidentiality agreements with those buyers expressing interest; reviewing debtor in possession term sheets; and reviewing the asset purchase agreement from the potential auction stalking horse bidder. GulfStar s professionals have worked closely with the Debtors management and other professionals with regard to these matters and other matters, and, thus, GulfStar is well acquainted with the Debtors corporate history, management team, debt structure, and business operations. As a result, GulfStar has developed relevant experience and expertise regarding the Debtors that will assist it in providing effective and efficient services in the Chapter 11 cases. II. SERVICES TO BE PROVIDED 2 9. The Debtors and GulfStar negotiated the terms and conditions of the Engagement Agreement in good faith and at arms length, and such terms and conditions reflect the parties mutual agreement as to the substantial efforts that have been and will continue to be required in this engagement. Subject to further order of this Court and consistent with the Engagement Agreement, GulfStar will provide a broad range of necessary financial advisory services as 2 The summaries of the Engagement Agreement contained in this Application are provided for purposes of convenience only. In the event of any inconsistency between the summaries contained herein and the terms and provisions of the Engagement Agreement, the terms of the Engagement Agreement shall control. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Engagement Agreement. EAST\

5 Case CSS Doc 53 Filed 03/10/14 Page 5 of 13 GulfStar and the Debtors shall deem appropriate and feasible in order to advise the Debtors in the course of these Chapter 11 cases. In that regard, GulfStar has provided and will continue to provide the Debtors with the following services, among others: a) assist the Debtors management in the preparation of a descriptive confidential memorandum ( Confidential Memorandum ) describing the Debtors, their operations, historical performance, and future prospects; b) once the Confidential Memorandum has been reviewed and approved by the Debtors, contact potential buyers, investors and/or lenders approved by the Debtors; c) subsequent to the initial circulation of the Confidential Memorandum, solicit asset purchase agreements from interested buyers; d) assist in the due diligence process and advise the Debtors in negotiating the financial aspects of the transaction; and e) GulfStar will assist the Debtors and their counsel in negotiating a definitive agreement and related documents. 10. The Debtors require knowledgeable advisors to provide these essential professional services. GulfStar has substantial expertise and experience in handling the legal and business affairs of the Debtors and has stated its desire and willingness to act in the Chapter 11 cases and will provide the necessary services as investment for the Debtors. 11. The Debtors submit that GulfStar obtained valuable institutional knowledge of the Debtors businesses, financial affairs and creditors as a result of providing services to the Debtors before the Petition Date and that GulfStar is both well qualified and uniquely able to perform these services and assist the Debtors in these Chapter 11 cases. Moreover, the Debtors believe that GulfStar s services will assist the Debtors in a successful outcome of the Chapter 11 cases. For all of these reasons and others, the Debtors believe that GulfStar is both well qualified and uniquely able to represent the Debtors interests in the Chapter 11 cases. EAST\

6 Case CSS Doc 53 Filed 03/10/14 Page 6 of 13 III. PREPETITION PAYMENTS TO GULFSTAR 12. Since February 3, 2014, the effective date of the Engagement Agreement, the Debtors have employed GulfStar as their investment bank under the terms and conditions of the Engagement Agreement. Given the Debtors financial difficulties since the engagement, the vast majority of the services provided by GulfStar to the Debtors have related either to the Debtors prepetition reorganization and restructuring efforts or planning for the possibility of the Chapter 11 cases. 13. Prior to the Petition Date, the Debtors advanced the sum of $30,000 to GulfStar as an investment banking fee (the Investment Banking Fee ). The Investment Banking Fee is nonrefundable and is not to be applied to any success fee that the Debtors may pay to GulfStar. IV. GULFSTAR S FEES FOR SERVICES TO BE RENDERED IN CONNECTION WITH THE CHAPTER 11 CASES 14. Subject to Court approval, and in compliance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, the United States Trustee s Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses and any other applicable procedures and orders of this Court, the Debtors have agreed to compensate GulfStar in accordance with the terms and conditions of the Engagement Agreement. The Engagement Agreement provides in relevant part that upon consummation of a Transaction (as such term is defined in the Engagement Agreement), the Debtors will pay GulfStar a success fee (the Success Fee ) based on the aggregate amount of consideration paid by the buyer (including, without limitation, any existing lender of the Company) in the Transaction ( Consideration ) when adjusted to a 100%, debt-free value of the Debtors (the Enterprise Value ), even if less than 100% of the Debtors stocks or assets are included in the Transaction. The Success Fee shall be equal to (i) $300,000 plus (ii) three and one-half percent EAST\

7 Case CSS Doc 53 Filed 03/10/14 Page 7 of 13 (3.5%) of the Enterprise Value in excess of $19,000, See Engagement Agreement. The Debtors will reimburse GulfStar for its expenses incurred in performing the Services, including, but not limited to, electronic data room services, travel, hotel, communications, supplies, meals, promotional materials and printing expenses. See id. 15. In the event that Noble exits bankruptcy or otherwise reorganizes using a debt or equity financing or other solution that does not place an Enterprise Value on the Company, the Success Fee shall be equal to the greater of (i) $300,000 or (ii) two percent (2.0%) of any proceeds funded or committed. See id. 16. The Debtors believe that the fees and expenses that it seeks to pay GulfStar are comparable to, if not less than, compensation generally by other firms offering similar expertise and experience as GulfStar for comparable engagements, both in and out of bankruptcy. 17. In determining the level of compensation to be paid to GulfStar and its reasonableness, the Debtors compared GulfStar s original fee proposal to other proposals received by the Debtors in the investment bank selection process and found GulfStar s proposed fees to be reasonable and within the range of other comparable engagements. 18. Moreover, the fee and expense structure has been agreed upon by the parties in anticipation of the substantial commitment of professional time and effort required of GulfStar, and in light of the fact that such commitment may foreclosure other opportunities for GulfStar due to the uncertainty in the time required to be committed to these Chapter 11 cases. Additionally, the fee and expense structure was established to reflect the scope and difficulty of the assignments GulfStar expects to undertake and the potential for failure resulting from factors 3 The summaries of the Engagement Agreement contained in this Application are provided for purposes of convenience only. In the event of any inconsistency between the summaries contained herein and the terms and provisions of the Engagement Agreement, the terms of the Engagement Agreement shall control. Capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms in the Engagement Agreement. EAST\

8 Case CSS Doc 53 Filed 03/10/14 Page 8 of 13 outside of GulfStar s control. Thus, the Debtors maintain that GulfStar s fees and expenses are within or lower than comparable engagements. 19. GulfStar has advised the Debtors that it is not the general practice of a financial services firm to keep detailed time records similar to those customarily kept by attorneys. Investment bankers such as GulfStar do not charge for their services on an hourly basis. Instead, they customarily charge a monthly advisory fee plus an additional fee that is contingent upon the occurrence of a specified type of transaction. Here, however, GulfStar will not seek a monthly advisory fee, but will instead seek only the Success Fee. In order to demonstrate the services provided by GulfStar to the Debtors, each month GulfStar will file a schedule that identifies those professionals who have provided services on behalf of the Debtors and that provides a general description of the services performed by such professionals. GulfStar will also maintain detailed records of any actual and necessary costs and expenses incurred in connection with the services discussed above. GulfStar s application for compensation and expenses will be paid by the Debtors, pursuant to the terms of the Engagement Agreement upon approval by this Court. 20. In sum, in light of the foregoing and given the numerous issues that GulfStar may be required to address in the performance of its services hereunder, GulfStar s commitment to the variable level of time and effort necessary to address all such issues as they arise, and the market prices for GulfStar s services for engagements of this nature both out of court and in a Chapter 11 context, the Debtors believe that the fee and expense structure is market based and fair and reasonable under the standards set forth in section 328(a) of the Bankruptcy Code. 21. Accordingly, as more fully described below, the Debtors believe that this Court should approve GulfStar s retention subject to the standard of review set forth in section 328(a) EAST\

9 Case CSS Doc 53 Filed 03/10/14 Page 9 of 13 of the Bankruptcy Code and that GulfStar s compensation should not be subject to any additional standard of review under section 330 of the Bankruptcy Code. 22. GulfStar has not shared or agreed to share any of its compensation from the Debtors with any other person, other than as permitted by section 504 of the Bankruptcy Code. V. DEBTORS INDEMNIFICATION OBLIGATIONS TO GULFSTAR 23. As part of the overall compensation payable to GulfStar under the terms of the Engagement Agreement, and as more fully described therein, the Debtors have agreed to certain indemnification and contribution obligations as described in the Engagement Agreement (the Indemnification Obligations ). Such terms of the Engagement Agreement reflect qualifications and limitations on such terms that are customary in this jurisdiction, and are in substantially the same form as terms that were approved by courts in this District. See, e.g., In re United Artists Theatre Co., 315 F.3d 217 (3d Cir. 2003); In re Harry & David Holdings, Inc., No (MFW) (Bankr. D. Del. April 27, 2011); In re J.L. French Auto Castings, Inc., No (MFW) (Bankr. D. Del. Mar. 3, 2006). VI. GULFSTAR S DISINTERESTEDNESS 24. A list of interested parties, annexed to the Frederickson Declaration as Exhibit 2 (the Interested Parties ) was provided to GulfStar by the Debtors. To the best of the Debtors knowledge, information, and belief, other than in connection with the Chapter 11 case and the Engagement Agreement, GulfStar has no connection with the Debtors, their affiliates, officers, or directors. Additionally, GulfStar does not represent, and has not represented, any entity other than the Debtors in matters related to the Chapter 11 case. Moreover, GulfStar does not have any connection with, and has not represented in the past, the United States Trustee for the District of Delaware, or any person employed by the Office of the United States Trustee for the EAST\

10 Case CSS Doc 53 Filed 03/10/14 Page 10 of 13 District of Delaware. Finally, GulfStar does not have any connection with the Debtors creditors, any other party in interest, or their respective attorneys and accountants. 25. To check and clear conflicts, to make appropriate disclosure, and to prepare the De Angelis Declaration, GulfStar used a set of procedures that it has developed to ensure compliance with the requirements of the Bankruptcy Code and the Bankruptcy Rules regarding the retention of professionals in Chapter 11 cases. Although GulfStar is confident that its diligence has resulted, to the greatest extent possible, in the disclosure of all connections, despite its efforts GulfStar is unable to state with absolute certainty that every client representation or other connection has been disclosed. Moreover, GulfStar will conduct an ongoing review of its files to make supplemental disclosure and ensure that no potential conflicts or other potential disqualifying circumstances exist or arise. In this regard, if GulfStar discovers additional information that requires disclosure, GulfStar will file a supplemental disclosure with the Court. 26. Further, before the Petition Date, the Debtors paid GulfStar $30,000 as the Investment Banking Fee. The Debtors do not owe GulfStar any amount for any services performed or expenses incurred prior to the Petition Date. Accordingly, GulfStar is not a prepetition creditor of the Debtors. 27. Based upon the foregoing, to the best of the Debtors knowledge, information, and belief, GulfStar represents no interest adverse to the Debtors or their estates. Accordingly, the Debtors believe that GulfStar is a disinterested person pursuant to sections 101(14) and 1107 of the Bankruptcy Code and as required by section 327(a) of the Bankruptcy Code. APPLICABLE AUTHORITY 28. Section 327(a) of the Bankruptcy Code provides that a debtor in possession may, with the court s approval, employ professionals that do not hold or represent an interest adverse to the estate and that are disinterested persons, as defined by section 101(14) of the Bankruptcy EAST\

11 Case CSS Doc 53 Filed 03/10/14 Page 11 of 13 Code, to represent or assist the debtor in possession in carrying out its duties under the Bankruptcy Code. See 11 U.S.C. 101(14). Additionally, section 1107(b) of the Bankruptcy Code provides that a professional is not disqualified for employment by a Chapter 11 debtor in possession under section 327(a) of the Bankruptcy Code solely because of its employment by or representation of the debtor before the commencement of the case. See 11 U.S.C. 1107(b). 29. Specifically, the Debtors seek approval of the fee and expense structure and the Engagement Agreement pursuant to section 328(a) of the Bankruptcy Code, which provides, in relevant part, that the Debtors with the court s approval, may employ or authorize the employment of a professional person under section 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). Accordingly, section 328 of the Bankruptcy Code permits the compensation of professionals, including investment bankers, on flexible terms that reflect the nature of their services and market conditions. 30. The Debtors believe that the fee and expense structure set forth in the Engagement Agreement are reasonable terms and conditions of employment and should be approved under section 328(a) of the Bankruptcy Code. The fee and expense structure adequately reflects (a) the nature of the services to be provided by GulfStar and (b) the fee and expense structures and indemnification provisions typically utilized by GulfStar and other investment banks, which do not bill their time on an hourly basis and generally are compensated on a transactional basis. In particular, the Debtors believe the fee and expense structure creates a proper alignment of interest in the overall success of this Chapter 11 cases. EAST\

12 Case CSS Doc 53 Filed 03/10/14 Page 12 of Accordingly, the Debtors respectfully submit that the Court approve the Application permitting the retention of GulfStar as the Debtors investment bank during these Chapter 11 cases. NOTICE 32. Notice of this Motion shall be provided to (a) the Office of the United States Trustee for the District of Delaware, (b) each of the Debtors fifty largest unsecured creditors on a consolidated basis, (c) counsel to Gladstone Investment Corporation, a prepetition secured lender, (d) counsel to NDLI Acquisition, Inc., the Debtors DIP lender, (e) counsel to Presidential Financial Corp., the Debtors other prepetition secured lender, (f) the United States Attorney s Office for the District of Delaware, (g) the Attorneys General for all fifty states, and (h) the Internal Revenue Service. The Debtors submit that, under the circumstances, no other or further notice is required. No previous request for the relief sought herein has been made to this or any other court. NO PRIOR REQUEST 33. No prior request for the relief sought in this Motion has been made to this or any other court. WHEREFORE, the Debtors respectfully request that the Court grant the relief requested herein and such other and further relief as the Court may deem just and proper. Dated: March 10, 2014 Wilmington, Delaware DLA PIPER LLP (US) /s/ Gregg M. Galardi Gregg M. Galardi (DE ) 1201 N. Market Street, Suite 2100 Wilmington, DE Telephone: (302) Facsimile: (302) Gregg.galardi@dlapiper.com EAST\

13 Case CSS Doc 53 Filed 03/10/14 Page 13 of 13 -and- Emily A. Battersby (pro hac vice admission pending) 1251 Avenue of the Americas New York, New York Telephone: (212) Facsimile: (212) Proposed Attorneys for the Debtors and Debtors in Possession EAST\

14 Case CSS Doc 53-1 Filed 03/10/14 Page 1 of 5 EXHIBIT A (PROPOSED ORDER) EAST\

15 Case CSS Doc 53-1 Filed 03/10/14 Page 2 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE x : In re: : Chapter 11 : : Case No (CSS) NOBLE LOGISTICS, INC., et al., 1 : : (Jointly Administered) : Debtors. : x ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OF GULFSTAR GROUP, INC. AS INVESTMENT BANKER TO THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE Upon consideration of the application (the Application ) 2 of Noble Logistics, Inc. and its affiliated debtors as debtors in possession (the Debtors ) in the above-captioned Chapter 11 cases for entry of an order pursuant to sections 327 and 328 of title 11 of the United States Code (the Bankruptcy Code ), Rules 2014 and 2016 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), and Rules and of the Local Rules for the United States Bankruptcy Court for the District of Delaware (the Local Rules ), for authority to employ and retain GulfStar Group, Inc. ( GulfStar ) as investment banker to the Debtors nunc pro tunc to the Petition Date; and the Court having reviewed the Application, Frederickson Declaration, and First Day Declaration and having scheduled a hearing before the Court (the Hearing ); and the Court having found that it has jurisdiction to consider the Application; and it appearing that 1 The Debtors in these Chapter 11 cases, together with the last four digits of each Debtor s federal tax identification number, are as follows: Noble Logistics, Inc. (4251); NLI Manager, Inc. (8282); Aspen Contracting SE, LLC (5776); Aspen Contracting NE, LLC (5896); Aspen Contracting Gulf Coast, LLC (6124); Aspen Contracting Midwest, LLC (6447); Aspen Contracting West, LLC (6563); Aspen Contracting California, LLC (6639); and Conifer Services CA, LLC (6675). The mailing address for the Debtors, solely for purposes of notices and communications, is Clay Road, Suite 100, Houston, Texas Capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to them in the Application. EAST\

16 Case CSS Doc 53-1 Filed 03/10/14 Page 3 of 5 adequate notice has been given; and any objections to the Application having been overruled; and it appearing that GulfStar does not hold or represent an interest adverse to the Debtors estates, and is a disinterested person under section 101(14) of the Bankruptcy Code; and the Court finding that the employment of GulfStar is necessary and in the best interest of the Debtors and their estates and creditors; and after due deliberation and sufficient cause appearing therefor, IT IS HEREBY ORDERED: 1. The Application is GRANTED to the extent provided herein. 2. In accordance with sections 327(a) and 328(a) of the Bankruptcy Code, the Debtors are authorized to employ and to retain GulfStar as investment banker in accordance with the terms and conditions set forth in the Application and Engagement Agreement, as modified herein, effective nunc pro tunc to the Petition Date. 3. Such other services that the Debtors may request that GulfStar provide during the course of the Chapter 11 cases, and as agreed to by GulfStar, shall be subject to separate application and Order of this Court. 4. GulfStar shall be compensated for fees and reimbursed for out-of-pocket expenses in accordance with the terms of the Application and Engagement Agreement, as modified herein, and all fees and out-of-pocket expense reimbursements to be paid to GulfStar shall be subject to review pursuant only 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 with respect to review by the Office of the United States Trustee. 5. Notwithstanding anything to the contrary in the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and any orders of this Court or any guidelines regarding the submission and approval of fee applications, GulfStar and its professionals shall be required to file only a EAST\

17 Case CSS Doc 53-1 Filed 03/10/14 Page 4 of 5 schedule that identifies those professionals that have provided services on behalf of the Debtors and that provides a general description of the services performed by such professionals. 6. Notwithstanding anything to the contrary in the Application or Engagement Agreement, to the extent that GulfStar uses the services of independent contractors (the Contractors ) in the Chapter 11cases, GulfStar (a) shall pass-through the cost of such Contractors to the Debtors at the same rate that GulfStar pays the Contractors; (b) shall seek reimbursement for actual out-of-pocket expenses only; and (c) shall ensure that the Contractors are subject to the same conflict checks and disclosures as required of GulfStar by Bankruptcy Rule All requests by GulfStar for the payment of indemnification as set forth in the Application and Engagement Agreement shall be made by means of an application to the Court and shall be subject to review by the Court to ensure that payment of such indemnity conforms to the terms of the Application and Engagement Agreement and is reasonable under the circumstances of the litigation or settlement in respect of which indemnity is sought, provided however, that in no event shall GulfStar be indemnified in the case of its own bad-faith, selfdealing, breach of fiduciary duty (if any), gross negligence or willful misconduct. 8. The Debtors are authorized and empowered to take all actions necessary to implement the relief granted in this Order. 9. Notwithstanding anything to the contrary in the Application or Engagement Agreement, this Court shall retain jurisdiction with respect to all matters arising from or related to this Order. EAST\

18 Case CSS Doc 53-1 Filed 03/10/14 Page 5 of To the extent there is an inconsistency among this Order, the Application, or Engagement Agreement, the terms of this Order shall govern. Dated:, 2014 Wilmington, Delaware HONORABLE CHRISTOPHER S. SONTCHI UNITED STATES BANKRUPTCY JUDGE EAST\

19 Case CSS Doc 53-2 Filed 03/10/14 Page 1 of 38 EXHIBIT B (FREDERICKSON DECLARATION) EAST\

20 Case CSS Doc 53-2 Filed 03/10/14 Page 2 of 38 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE x : In re: : Chapter 11 : : Case No (CSS) NOBLE LOGISTICS, INC., et al., 6 : : (Jointly Administered) : Debtors. : x DECLARATION OF BRYAN FREDERICKSON IN SUPPORT OF DEBTORS APPLICATION FOR ENTRY AN ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OF GULFSTAR GROUP, INC. AS INVESTMENT BANKER TO THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE I, Bryan Frederickson, under penalty of perjury, declare as follows: 1. I am a Managing Director of GulfStar Group, Inc. ( GulfStar ), 7 an investment bank with its principal office located at 700 Louisiana Street Suite 3800, Houston, Texas, I am duly authorized to make this Declaration on behalf of GulfStar in support of the application (the Application ) of the above-captioned debtor (the Debtor ) for entry of an order authorizing the employment and retention of GulfStar as investment banker to the Debtors nunc pro tunc to the Petition Date, under the terms and conditions set forth in the Engagement Agreement. Except as otherwise noted, I have personal knowledge of the matters set forth herein. 6 The Debtors in these Chapter 11 cases, together with the last four digits of each Debtor s federal tax identification number, are as follows: Noble Logistics, Inc. (4251); NLI Manager, Inc. (8282); Aspen Contracting SE, LLC (5776); Aspen Contracting NE, LLC (5896); Aspen Contracting Gulf Coast, LLC (6124); Aspen Contracting Midwest, LLC (6447); Aspen Contracting West, LLC (6563); Aspen Contracting California, LLC (6639); and Conifer Services CA, LLC (6675). The mailing address for the Debtors, solely for purposes of notices and communications, is Clay Road, Suite 100, Houston, Texas All capitalized terms used but otherwise not defined herein shall have the meanings set forth in the Application. EAST\

21 Case CSS Doc 53-2 Filed 03/10/14 Page 3 of 38 GULFSTAR S QUALIFICATIONS 2. GulfStar and the professionals it has dedicated to advise the Debtors are well qualified to advise the Debtors in the matters for which GulfStar is proposed to be employed. Founded in 1990 and headquartered at 700 Louisiana Street Suite 3800, Houston, Texas, 77002, GulfStar provides a broad range of corporate advisory services to clients, including, without limitation, the following: (a) merger and acquisition advisory services; (b) placements of capital for purposes of growth, acquisition and/or shareholder liquidity; and (c) restructuring and recapitalization advisory services to companies in financial distress. 3. The GulfStar professionals dedicated to assisting the Debtors in these Chapter 11 cases have collectively spent nearly 40 years providing investment banking and corporate financial advisory services, including mergers and acquisitions, private capital placements, restructuring, principal debt and equity investing, senior lending, syndicated loan origination and financial auditing services. Mr. Frederickson has more than 19 years of experience, primarily working with middle market private companies such as the Debtors. He has executed numerous transactions involving companies in varying stages of operating and/or financial distress both within and outside of bankruptcy proceedings. Mr. Frederickson was awarded the 2013 M&A Advisor turnaround deal of the year for Industrial Services companies for his representation of EA Services, Inc. in its restructuring and subsequent sale to Team Industrial Services. The GulfStar professionals have expertise in providing restructuring advice, company valuation, business plan preparation and analysis, corporate finance and mergers and acquisitions services. Recent transactions involving asset sales managed within a bankruptcy proceeding include the sale of the assets of Demay International to Axon Energy Products and those of ISC Building Materials, Inc. to a group of private investors. EAST\

22 Case CSS Doc 53-2 Filed 03/10/14 Page 4 of GulfStar has served as the Debtors investment bank pursuant to an engagement agreement (the Engagement Agreement ) effective as of February 3, 2014 (a true and correct copy of the current Engagement Agreement is attached hereto as Exhibit 1). In that role, GulfStar has been closely involved in the operational, contractual, and financial developments of the Debtors and is familiar with virtually all aspects of the Debtors businesses and legal affairs and their restructuring and sale efforts. 5. Since being retained, GulfStar has provided the Debtors with a wide array of financial services in connection with its business affairs, operations, turn-around strategy and implementation, and its restructuring and reorganization efforts, including preparing a confidential information memorandum describing the Debtors, their operations, financial condition and present situation; developing a list of prospective buyers to participate in the planned sale of the assets of the Debtors; preparing an anonymous executive summary of the Debtors for purposes of marketing to prospective buyers; contacting more than 100 potential buyers; executing confidentiality agreements with those buyers expressing interest; reviewing Debtor in Possession term sheets; and reviewing the asset purchase agreement from the potential auction stalking horse bidder. GulfStar s professionals have worked closely with the Debtors management and other professionals with regard to these matters and other matters, and, thus, GulfStar is well-acquainted with the Debtors corporate history, debt structure, and business operations. As a result, GulfStar has developed relevant experience and expertise regarding the Debtors that will assist it in providing effective and efficient services in the Chapter 11 cases. EAST\

23 Case CSS Doc 53-2 Filed 03/10/14 Page 5 of 38 SERVICES TO BE PROVIDED 8 6. The Engagement Agreement governs the relationship between GulfStar and the Debtor. The terms and the conditions of the Engagement Agreement were negotiated between the Debtors and GulfStar, and they reflect the parties mutual agreement as to the substantial efforts that have been and will continue to be required for the Debtors success in these Chapter 11 cases. Subject to further order of this Court and consistent with the Engagement Agreement, GulfStar will provide a broad range of necessary financial advisory services as GulfStar and the Debtors shall deem appropriate and feasible in order to advise the Debtors in the course of these Chapter 11 cases. In that regard, GulfStar has provided and will continue to provide the Debtors with the following services, among others: a) assist the Debtors management in the preparation of a descriptive confidential memorandum ( Confidential Memorandum ) describing the Debtors, their operations, historical performance, and future prospects; b) once the Confidential Memorandum has been reviewed and approved in writing by the Debtors, contact potential buyers, investors and/or lenders approved by the Debtors; c) subsequent to the initial circulation of the Confidential Memorandum, solicit asset purchase agreements from interested buyers; d) assist in the due diligence process and advise the Debtors in negotiating the financial aspects of the transaction; e) assist the Debtors and their counsel in negotiating a definitive agreement and related documents. 7. The Debtors require knowledgeable advisors to provide these essential professional services. GulfStar has substantial expertise and experience in handling the legal and 8 The summaries of the Engagement Agreement contained in this declaration are provided for purposes of convenience only. In the event of any inconsistency between the summaries contained herein and the terms and provisions of the Engagement Agreement, the terms of the Engagement Agreement shall control. Capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms in the Engagement Agreement. EAST\

24 Case CSS Doc 53-2 Filed 03/10/14 Page 6 of 38 business affairs of the Debtors and has stated its desire and willingness to act in the Chapter 11 cases and will provide the necessary services as investment for the Debtors. 8. The Debtors submit that GulfStar obtained valuable institutional knowledge of the Debtors businesses, financial affairs and creditors as a result of providing services to the Debtors before the Petition Date and that GulfStar is both well qualified and uniquely able to perform these services and assist the Debtors in these Chapter 11 cases. Moreover, the Debtors believe that GulfStar s services will assist the Debtors in a successful outcome of the Chapter 11 cases. For all of these reasons and others, the Debtors believe that GulfStar is both well qualified and uniquely able to represent the Debtors interests in the Chapter 11 cases. PREPETITION PAYMENTS TO GULFSTAR 9. Since February 3, 2014, the effective date of the Engagement Agreement, the Debtors have employed GulfStar as their investment bank under the terms and conditions of the Engagement Agreement. Given the Debtors financial difficulties since the engagement, the vast majority of the services provided by GulfStar to the Debtors have related either to the Debtors prepetition reorganization and restructuring efforts or planning for the possibility of the Chapter 11 cases. 10. Prior to the Petition Date, the Debtors advanced the sum of $30,000 to GulfStar as an investment banking fee (the Investment Banking Fee ). The Investment Banking Fee is nonrefundable and is not to be applied to any success fee that the Debtors may pay to GulfStar. GULFSTAR S FEES FOR SERVICES TO BE RENDERED IN CONNECTION WITH THE CHAPTER 11 CASES 11. Subject to Court approval, and in compliance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, the United States Trustee s Guidelines for Reviewing Applications for Compensation and Reimbursement of EAST\

25 Case CSS Doc 53-2 Filed 03/10/14 Page 7 of 38 Expenses and any other applicable procedures and orders of this Court, the Debtors have agreed to compensate GulfStar in accordance with the terms and conditions of the Engagement Agreement. The Engagement Agreement provides in relevant part that upon consummation of a Transaction (as such term is defined in the Engagement Agreement), the Debtors will pay GulfStar a success fee (the Success Fee ) based on the aggregate amount of consideration paid by the buyer (including, without limitation, any existing lender of the Company) in the Transaction ( Consideration ) when adjusted to a 100%, debt-free value of the Debtors (the Enterprise Value ), even if less than 100% of the Debtors stocks or assets are included in the Transaction. The Success Fee shall be equal to (i) $300,000 plus (ii) three and one-half percent (3.5%) of the Enterprise Value in excess of $19,000, See Engagement Agreement. The Debtors will reimburse GulfStar for its expenses incurred in performing the Services, including, but not limited to, electronic data room services, travel, hotel, communications, supplies, meals, promotional materials and printing expenses. See id. 12. In the event that Noble exits bankruptcy or otherwise reorganizes using a debt or equity financing or other solution that does not place an Enterprise Value on the Company, the Success Fee shall be equal to the greater of (i) $300,000 or (ii) two percent (2.0%) of any proceeds funded or committed. See id. 13. The Debtors believe that the fees and expenses that it seeks to pay GulfStar are comparable to, if not less than, compensation generally by other firms offering similar expertise and experience as GulfStar for comparable engagements, both in and out of bankruptcy. 9 The summaries of the Engagement Agreement contained in this Application are provided for purposes of convenience only. In the event of any inconsistency between the summaries contained herein and the terms and provisions of the Engagement Agreement, the terms of the Engagement Agreement shall control. Capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms in the Engagement Agreement. EAST\

26 Case CSS Doc 53-2 Filed 03/10/14 Page 8 of In determining the level of compensation to be paid to GulfStar and its reasonableness, the Debtors compared GulfStar s original fee proposal to other proposals received by the Debtors in the investment bank selection process and found GulfStar s proposed fees to be reasonable and within the range of other comparable engagements. 15. Moreover, the fee and expense structure has been agreed upon by the parties in anticipation of the substantial commitment of professional time and effort required of GulfStar, and in light of the fact that such commitment may foreclosure other opportunities for GulfStar due to the uncertainty in the time required to be committed to these Chapter 11 cases. Additionally, the fee and expense structure was established to reflect the scope and difficulty of the assignments GulfStar expects to undertake and the potential for failure resulting from factors outside of GulfStar s control. Thus, the Debtors maintain that GulfStar s fees and expenses are within or lower than comparable engagements. 16. GulfStar has advised the Debtors that it is not the general practice of a financial services firm to keep detailed time records similar to those customarily kept by attorneys. Investment bankers such as GulfStar do not charge for their services on an hourly basis. Instead, they customarily charge a monthly advisory fee plus an additional fee that is contingent upon the occurrence of a specified type of transaction. Here, GulfStar will charge only the Success Fee and will not seek monthly advisory fees as set forth in the Engagement Agreement. In order to demonstrate the services provided by GulfStar to the Debtors, each month GulfStar will file a schedule that identifies those professionals who have provided services on behalf of the Debtors and that provides a general description of the services performed by such professionals. GulfStar will also maintain detailed records of any actual and necessary costs and expenses incurred in connection with the services discussed above. GulfStar s application for compensation and EAST\

27 Case CSS Doc 53-2 Filed 03/10/14 Page 9 of 38 expenses will be paid by the Debtors, pursuant to the terms of the Engagement Agreement upon approval by this Court. 17. GulfStar has not shared or agreed to share any of its compensation from the Debtors with any other person, other than as permitted by section 504 of the Bankruptcy Code. DEBTORS INDEMNIFICATION OBLIGATIONS TO GULFSTAR 18. As part of the overall compensation payable to GulfStar under the terms of the Engagement Agreement, the Debtors have agreed to certain indemnification and contribution obligations as described in the Engagement Agreement (the Indemnification Obligations ). The Indemnification Obligations reflected in the Engagement Agreement are customary and reasonable terms of consideration for financial advisors such as GulfStar for proceedings both out of court and in Chapter 11. The terms of the Engagement Agreement including the Indemnification Obligations were fully negotiated between the Debtors and GulfStar at arms length and GulfStar respectfully submit that the Indemnification Provisions are reasonable and in the best interests of the Debtors, their estates, and creditors. GULFSTAR S DISINTERESTEDNESS 19. A list of interested parties, annexed hereto as Exhibit 2 (the Interested Parties ) was provided to GulfStar by the Debtors. To the best of my knowledge and belief, insofar as I have been able to ascertain after reasonable inquiry, neither I, nor GulfStar, nor any of its professional employees has any connection with the Debtor, its creditors, the United States Trustee or any other Potential Parties in Interest in the Chapter 11 Case or their respective attorneys or accounts, except as set forth in Exhibit 4 and described herein. 20. To the best of my knowledge, information and belief, insofar as I have been able to ascertain after reasonable inquiry, GulfStar has not been retained to assist any entity or person other than the Debtors on matters relating to, or in direct connection with, these Chapter 11 EAST\

28 Case CSS Doc 53-2 Filed 03/10/14 Page 10 of 38 cases. If GulfStar s proposed retention by the Debtors is approved by this Court, GulfStar will not accept any engagement or perform any service for any entity or person other than the Debtors in these Chapter 11 cases. 21. I am not related or connected to and, to the best of my knowledge after reasonable inquiry, no other professional of GulfStar who will work on this engagement is related or connected to, any United States Bankruptcy Judge for the District of Delaware, the United States Trustee for the District of Delaware or any employee in the Office of the United States Trustee for the District of Delaware 22. To the best of my knowledge and belief, insofar as I have been able to ascertain after reasonable inquiry, none of the employees of GulfStar working on this engagement on the Debtorss behalf has had, or will have in the future, direct contact concerning the Chapter 11 cases with the Debtors creditors, other parties in interest, the United States Trustee or anyone employed in the Office of the United States Trustee other than in connection with performing financial advisory and investment banking services on behalf of the Debtor. 23. To the best of my knowledge, GulfStar has no agreement with any other entity to share with such entity any compensation received by GulfStar in connection with the Debtors bankruptcy cases. 24. Further, before the Petition Date, the Debtors paid GulfStar $30,000 as the Investment Banking Fee. The Debtors do not owe GulfStar any amount for any services performed or expenses incurred prior to the Petition Date. 25. Accordingly, except as otherwise set forth herein, and insofar as I have been able to determine after reasonable inquiry, none of GulfStar, I, nor any employee of GulfStar who will work on this engagement holds or represents any interest adverse to the Debtors or their EAST\

29 Case CSS Doc 53-2 Filed 03/10/14 Page 11 of 38 estates, and GulfStar is a disinterested person as that term is defined in section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy Code, in that GulfStar, its professionals and employees (a) are not creditors, equity security holders or insiders of the Debtors, (b) were not, within two years before the date of filing of the Debtors Chapter 11 petition, a director, officer or employee of the Debtors, and (c) do not have an interest materially adverse to the Debtors, their estates or any class of creditors or equity security holders by reason of any direct or indirect relationship to, connection with, or interest in the Debtor, or for any other reason. 26. If any new relevant facts or relationships are discovered or arise during the pendency of these Chapter 11 cases, GulfStar will use reasonable efforts to identify such further developments and will promptly file a supplemental affidavit as required by Bankruptcy Rules 2014 and Pursuant to 28 U.S.C. 1746, I declare under penalty of perjury that the foregoing is true and correct. Dated: March 10, 2014 Houston, Texas /s/ Bryan Frederickson Bryan Frederickson Managing Director of GulfStar Group, Inc. EAST\