Case KG Doc 510 Filed 11/25/15 Page 1 of 3

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1 Case KG Doc 510 Filed 11/25/15 Page 1 of 3 IN THE UNITF,D STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE, 1n re: Chapter 11 Case Nn (KG) ULTiJRA (LA) rnc., et al.,~ Jointly Administered Debtors. ~ Related Docket No. 476 CERTIFICATION OF COUNSEL REGARDING nrder APPROVING STIPULATION RESOLVING CLAIM OF ~'V~LLS FARGO BANK, N.A. The undersigned hereby certifies that: 1. Prior to the Petition Date, Wells Fargo issued an Irrevocable Standby Letter of Credit dated December 19, 2013 (the "Letter of Credit") at the request of Debtor Ultura (LA) Inc. ("Ultura LA") for the benefit of Ironshore Indemnity, Inc. ("Ironshore"). Ironshore issued a performance bond to Hall County (the "Hall County Bond") on behalf of Ultura LA in connection with a certain project. The purpose of the Letter of Credit was to secure Ultura LA's obligations under the Hall County Boyd, to the extent any claims we~ e made against the Hail County Bond, up to $250, In connection with the Letter of Credit, Ultura LA entered into (i) a Business Lending Confirmation Letter, (ii) Business Lending Disclosure, and (iii) Standby Letter of Credit Agreement (collectively, the "Agreements") 3. T'o secure the obligations.under the Letter of Credit, Ultura LA granted Wells Fargo a first priority security interest in a cash collateral account (the "Collateral Account"), which was funded by IJltura, Inc. (the "Ultura Parent"), Ultura LA's non-debtor parent company. ~ The debtors in these cases, along with the last four digits of each debtor's federal tax identification numbef s are: Ultw a (LA) Inc. (9624) and ijltura (Oceanside) Inc. (6429). 'The mailing address for each of the debtors is: 3605 Long Beach Blvd., Suite 201, Long Beach, CA 908Q7. DOCS DF

2 Case KG Doc 510 Filed 11/25/15 Page 2 of 3 4. On October 1, 2015, Lexon Surety Group, on behalf of Ironshore, (a) sent a letter to Wells Fargo providing a certification that the Hall County Bond is still outstanding and liability was incurred, and (b) presented a sight draft for payment to Ironshore in the amount of $14, Wells Fargo promptly remitted the funds to Ironshore but has not yet reimbursed itself from the Collateral Account. 5. On December 4, 2014, the Court entered the OrdeN (1) Fixing Bar Date for the Filing of PNoofs of Claim, Including Clar.'ms Arising Under Section 503(b)9) of Che I3ank~^uptcy Code, (2) Designating Form and Marrnes~ of Notice 'lheneof,~ and (3) Granting Related Relief [Docket No. 2l0] (the "Bar Date Order"). Pursuant to the Bar Date Order, the Court fixed January 15, 2015 as the bar date for, among other things, claims arising prior to the Petition Date. 6. On March 2, 2015, Wells Fargo filed a proof of claim (the "Claim No. 85") against Ultura LA. Claim No. 85 asserts a secured claim in the amount of $250, with respect to Wells Fargo's potential obligations under the Agreements. 7. On October 13, 2015, the Debtors filed the Seventh (Non-Substantive) Motion of the Debtors,foN an ONder Expunging Ce~^Cain ClainZs (the "Motion")[Docket No. 476]. The Motion sought to expunge Claim No. 85 as improperly asserted against the Debtors' estates. 8. The attached Stipulation Resolving Claim of Wells Fargo Bank, N.A. (the "Stipulation") embodies the agreement reached between the parties. The Official Committee of Unsecured Creditors has approved, and is a signatory to, the Stipulation. 9. Attached hereto is a proposed form of order (the "Proposed Order") which approves the Stipulation. The Stipulation is attached as Exhibit 1 to the Proposed Order. DOCS DE

3 Case KG Doc 510 Filed 11/25/15 Page 3 of The parties to the Stipulation respectfully request the entry of the ~'roposed Order at the Court's earliest convenience. Counsel is available should the Court have any questions or concerns with the foregoing statements. llated: November 25, 2015 PACHULSKI STANG ZIEHL &JONES LLP /s/james ~. O'Neill Jeffrey N. Pomerantz (LA Bar No ) Debra I. Grassgreen (CA Bar No ) James E. O'Neill (Bar No. 4042) Joshua M. Tried (CA Bar No ) 919 North Market street, 17`x, Floor P.O. Box 8705 Wilmington, DE (Courier 19801) Telephone: (302) Facsimile: (302) F-mail: jpomerantz@pszjlaw.com dgrassgreen@pszj law.com joneill@pszjlaw.com jfi~ied@pszjlaw.com Counsel to the Debtors and llebtors in Possession DOCS DF:

4 Case KG Doc Filed 11/25/15 Page 1 of 10 EXHIBIT A Proposed Order DOCS DF., J

5 Case KG Doc Filed 11/25/15 Page 2 of 10 IN THE UNIT~ll STATES BANKRUPTCY COURT FOR THE DISTRICT OI' DELAWARE In re: UL,TURA (LA) INC., et~ al.,~ Debtors. Chapter ll Case No. ] (KG) Jointly Administered Related Docket Nos. 476 and ORDER APPROVING STIPULATION RESOLVING CLAIM OF WELLS FORGO BANK, N.A. Upon the Ce~tz~ccrtr.'on of Counsel Regarding the Stipulation Resolving Claim of Wells Fargo Bank, N.A. [Docket No. ]; the Court finding that (a) the Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334, (b) this is a core proceeding pursuant to 28 U.S.C. 157(b)(2), and (c) that there is just cause for the relief granted herein; IT IS HEREBY ~RDERF.D THAT: The stipulation in the form attached hereto as Exhibit 1 is hereby approved. 2. This Court shall r~tair, jurisdiction to hear and determine all matters arising from the implementation of this Order. Dated: November, 2015 "I,he I-Ionorable Kevin Gross United States Bankruptcy Court ~ The debtors in these cases, along with the last four digits of each debtor's federal tax identification numbers are: Ultw a (LA) Inc. (9624) and Ultura (Oceanside) Tne. (6429). The mailing address for each of the debtors is: 3605 Long Beach Blvd., Suite 201, Long Beach, CA

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7 Case KG Doc Filed 11/25/15 Page 4 of 10 IN THE UNITED STATES BANKRUPTCY COURT FUR THE DISTRICT OF DELAWARE In re: Chapter 11 ijltijra (I.,A) INC., et al.,~ Debtors. Case No (KU) Jointly Administered Related Docket No. 476 STIPULATION RESOLVING CLAIM OF ~J~LLS FARGO BANK, N.A. This Stipulation (the "Stipulation") is entered into by and among the above-captioned debtors (the "Debtors"), Ultura, Inc, (the "Ultura Parent"), the Official Committee of Unsecured Creditors (the "Committee"), and Wells Fargo Bank, N.A. ("Wells Faro" and collectively with the Debtors, Ultura Parent, and the Committee, the "Parties") T7 Ti' ~'' TT A 7 C A. The Bankruptcy Cases 1. On October 20, 2014 (the "Petition Date"), the Debtors each filed a petition for relief under chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") 2. On October 31, 2014, the United States Trustee appointed an Official Committee of ilnsecured Creditors (the "Committee"). No trustee or examiner has been appointed in the Debtors' chapter 11 cases. 3. The Debtors have continued in the possession of their property and have c<mtinued to operate and manage their business as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. ~ The debtors in these cases, along with the last four digits of each debtor's federal tax identification numbers are: Ultura (LA) ]nc. (9624) and i11tm a (Oceanside) Tne. (6429), The mailing add7~ess for each of the debtors is: 3605 Long Beach Blvd., Suite 201, Long Beach, CA

8 Case KG Doc Filed 11/25/15 Page 5 of 10 B. The Wells Faro Letter of Credit 4. Prior to the Petition Date, Wells Fargo issued an INrevocable Standby I,etteN of C~ediC dated December 19, 2013 (the "Letter of CrediY') at the request of debtor Ultura (I,A) Inc. ("Ultura LA") for the benefit of Ironshore Indemnity, Inc. ("Ironshore"). Ironshore issued a performance bond to Hall County (the "Hall County Bond") nn behalf of Ultura LA in connection with a certain project. The purpose of the Letter of Credit was to secure Ultura LA's obligations under the Hall County Bond, to the extent any claims were made against the Hall County Bond. 5. In connection with the Letter of Credit, Ultura LA and Wells Targo entered into the following agreements: a. Business I.~ending Confirmation Letter dated December 4, 2013; b. Business Lending Disclosure dated February 18, 2013; and c. Standby Letter of Credit Agreement dated December 4, 2014 (collectively, the "A~reements"). 6. The Letter of Credit was issued in the amount of $250,000. Pursuant to the Agreements, Wells Fargo required Ultura LA to establish a collateral account in the amount of $250, The Debtors and Ultura Parent represent that Ultura Parent directly funded the required collateral account in the amount of $250,000, although Ultura LA established the collateral account described as "Collateral Certificate of Deposit account no xxxxxx0947 in the amount of $250,000.00" (the "Collateral Account") 8. To secure the obligations under the Letter of Credit, Ultura LA granted Wells Fargo a first priority security interest in the Collateral Account. 1n addition, the parties agreed that immediately upon the payment of a draw under the Letter of Credit, Wells Fargo was 2

9 Case KG Doc Filed 11/25/15 Page 6 of 10 authorized to debit the Collateral Account as may be necessary to pay all principal, interest, and any other sums then due to Wells Fargo. C. 'The Letter of Credit Dra~~v 9. On October 1, 201.5, Lexon Surety Group, on behalf of Ironshore, (a) sent a letter to Wells. Fargo providing a certification that the Hall County Bond is still outstanding and liability was incurred, and (b) presented a sight draft for payment to Ironshore in the amount of $14, (the "Dra~~c~n Amount"). Wells F~'argo promptly remitted the funds to Ironshore but has not yet reimbursed itself from the Collateral Account. 10. Wells Fargo seeks to reimburse itself from the Collateral Account for the amount paid to Ironshore as well as its fees and costs in maintaining the Collateral Account and Letter of Credit. 11. Ironshore has exercised its draw rights and the Letter of Credit is no longer necessary. In addition, the better of Credit is scheduled to expire in December 2015 upon its own terms. D. The Wells Faro Claim 12. On December 4, 2U 14, the Court entered the Order (1) Fixing Bar Date foy~ the Filing of Proofs of Claim, Including Claims Arising Under Section 503(b)9) of the Bankruptcy Code, (2) Desr.'gnaling Form and Manner of Notice TheNeof, cznd (3) Granting Related Relief [Docket No. 210] (the "Bar Date Order"). Pursuant to the Bar Date Order, the Court fixed January I5, 2015 as the bar date for, among other things, claims arising prior to the Petition Date. ~?

10 Case KG Doc Filed 11/25/15 Page 7 of On March 2, 2015, Wells Fargo filed a proof of claim (the "Claim No. 85") against Ultura LA. Claim No. 85 asserts a secured claim in the amount of $250,000 with respect to Wells Fargo's potential obligations under the Agreements. 14. On October 13, 2015, the Debtors filed the Seventh (Non-Substcr~rtive) Motion of the Debto~^s,for an OrdeN Expungr.'ng Certain Claims (the "Motion") [Docket No 476]. The Motion sought to expunge Claim No. 85 as improperly asserted against the Debtors' estates. AURL:I+~MI;N`i' NOW9 T~~E~2~I'O12I:9 I'T IS I~EI2I;BX ST'Il'i1LAT~D in consideration of the mutual promises contained in this Stipulation, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and the Parties intending to be legally bound by this Stipulation, the Parties hereby agree as follows: A. Cffective Date. This Stipulation shall be effective on the date approved by the Court (the "Effective Date") B. belief from Automatic Slay. Tv the extent applicable, the automatic stay in the above-captioned cases is modified to allow Wells Fargo to (a) exercise its rights of reimbursement for (i) the Drawn Amount; and (ii) any and all interest, fees,. costs, and expenses, including reasonable attorneys' fees, incurred in connection with the Letter of Credit, not to exceed $15, subject to the terms of this Stipulation; (b) cancel the Letter of Credit, and after remitting any excess funds after application of its security interests and the rights of setoff set forth herein, to close out the Collateral Account. C. Rights of Setoff. Wells Fargo is entitled to exercise its security interests and rights of setoff with respect to the Collateral Account. L~

11 Case KG Doc Filed 11/25/15 Page 8 of 10 D. Acknowledgement of Security Interest. The parties agree that Wells Fargo has a first priority perfected security interest in the Collateral Account. E. Funds Remitted to Ultura Parent. After exercising its security interests and right of setoff as set forth herein, Wells Fargo shall promptly remit, but in no event later than fourteen (14) days after the Effective Date, any remaining funds in the Collateral Account to Ultura Parent via wire transfer to: Bank Name: City National Bank Bank Address: 2011 Paloanar Airport Rd., Suite 100 Carlsbad, LA SWIFT Lode: CINAUS6L Routing: Acct Number: Account Name: Sepro Membranes, Inc. (dba Nanostone Water) F. Claim No. 85. Upon the Effective Date, Claim No. 85 shall be deemed disallowed and expunged in its entirety, and no distribution shall be made thereon. G. This Stipulation is subject to Court approval. The Debtors shall take all action necessary to obfain Court approval, including but not limited to any additional notice oe filiylgs required by the Bankruptcy Code. H. Attorneys' Fees. With the exception of paragraph B above, each party shall be responsible for its respective costs and expenses (including, without limitation, attorneys' fees) incurred by it in negotiating, dt~afting and executing this Stipulation and shall not be responsible for the payment of any such fees or costs incurred by any other party hereto. I. Successors and Assigns. This Stipulation shall be binding upon (a) the Debtors and any trustee or examiner that may be appointed in these chapter 11 cases, or their respective successors and assigns; (b) Wells Fargo, its successors and assigns; (c) the trustee in the event 5

12 Case KG Doc Filed 11/25/15 Page 9 of 10 that these cases are converted to ones under chapter 7 of the Bankruptcy Code; (d) Ultura Parent, and (e) the Committee, all creditol s, and other parties in interest in these cases. J. Authorizations. Each Party represents and warrants to each other Party that it is authorized to execute this Stipulation; that it has full power and authority to enter into this Stipulation and effectuate the matters provided hereunder and that this Stipulation is duly executed and delivered by it and constitutes its valid, binding Stipulation in accordance with its terms. Wells Fargo further represents that it has not transferred any claim (or.any portion thereof that is the subject of this Stipulation. In addition, the person who executes and delivers this Stipulation by or on behalf of each respective party represents and warrants that he or she has been duly authorized and empowered to execute and deliver this Stipulation nn behalf of such party. K. Entire Agreement. This Stipulation contains the entire agreement among the Patties relating to the subject matter hereof and can be amended or otherwise modified only by a signed writing executed by the Parties. L. Counterparts. This Stipulation may be executed in multiple counterparts, any of which may be transmitted by electronic ( ) transmission, and each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and it shall constitute sufficient proof of this Stipulation to present any copy, copies, or facsimiles signed by the Parties hereto to be charged. M. Governing Law. This Stipulation shall be governed by the laws of the State of Delaware and the Bankruptcy Code. N. Jurisdiction. The Court retains jurisdiction with respect to all matters arising from or related to the implementation, interpretation, and enforcement of this Stipulation. D

13 Case KG Doc Filed 11/25/15 Page 10 of 10 of November 25, 2015, IN WITNESS VVHEI2~OF, the Parties hereto have executed this Stipulation as PACHULSKI STAND ZIEHL &JONES LLP /s/james E. O'Neill James E. O'Neill (DE Bar No. 4042) 919 North Market Street, 17th Ploor P.O. Box 8705 Wilmington, DE Telephone: (302) Facsimile: (302) 'oneill ~~ s-r_.'law.com Counsel to the Debtor^.s PATTER ~NI}ERSON & CORROON LLP /s/etta R. Mayers Jeremy W. Ryan (D~ Bar No. 4057) Etta R. Mayers (DE Bar No. 4164) 1313 North Market Street, Sixth Floor P.O. Box 951 Wilmington, DE ] Telephone: (302) and- MCCARTER & ENULISI3, LLP /s/ Katharine L. MaveN Katharine L. Mayer (DE Sar No. 3758) Renaissance Centre 405 N. King Street, 8th Floor Wilmington, DE Telephone: (302) Facsimile: (302) kmaver(a~mccarter. com Counsel to Wells FaNgo STINSON LEONARD STREET, LLP /s/ Thomas J. SaleNno Thomas J. Salerno Anthony P. Cali 1850 North Central Ave., Suite 2100 Phoenix, A Telephone: (602) thornas.salerno~cr~,stinson.coin Counsel to Ullura Parent SILLS CUMMIS &GROSS, P.C. George R. Hirsch Andrew H. Sherman One Riverfront Plaza Newark, NJ Telephone: (973) Counsel to the CoTnryaittee 7