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Full title: Declaration in Support // Declaration of Charles C. Reardon in Support of Confirmation of Chapter 11 Plan of Liquidation of Suitable Technologies, Inc. (related document(s)415) Filed by Suitable Technologies, Inc.. (Poppiti, Jr., Robert) (Entered: 06/16/2021)

Document posted on Jun 15, 2021 in the bankruptcy, 20 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

Pursuant to section 1123(a)(1) of the Bankruptcy Code, the DIP Claim, Administrative Claims, Professional Fee Claims, and Priority Tax Claims are not required to be designated into Classes. Claims Reserve and the Professional Fee Reserve, and the General Unsecured Claims Distribution Amount; (ii) absent the funding of the Additional Borrowing Amount and the funding of the Wind-Down Budget and the General Unsecured Claims Distribution Amount in accordance with the Plan Settlement, the Debtor would lack sufficient funds to develop and implement the Plan, or any other chapter 11 plan, and I believe that no distributions would be available for Holders of Allowed Secured Claims, Allowed Priority Tax Claims, Allowed Priority Claims, and Allowed General Unsecured Claims; (iii) the releases to be provided under the Plan Settlement and the contemplated dismissal of the Chancery Court Action are given in exchange for appropriate consideration, and vital to the Plan, as the Magicheart Parties would not have agreed to the settlement but for such releases and dismissal; (iv) the parties to the Plan Settlement are represented by counsel; (v) the Plan Settlement is the product of arm’s-length bargaining and good faith negotiations among sophisticated parties, including the Debtor’s independent director and me on behalf of the Debtor; and (vi) the Plan Settlement is otherwise in the best interests of the Debtor, the Estate, and Holders of Claims and Interests, and is fair, equitable, and reasonable under the facts and circumstances of the Chapter 11 Case.The Plan will result in Allowed Administrative Claims, Professional Fee Claims, Asgaard Capital Fee Claims, Priority Tax Claims, Secured Claims, and Priority Claims being paid in full, and Holders of Allowed General Unsecured Claims receiving a Distribution on account of their Allowed General Unsecured Claims, neither of which is likely, let alone guaranteed, to occur in any theoretical alternatives to the Plan.On the other hand, the Plan will result in Allowed Administrative Claims, Professional Fee Claims, Asgaard Capital Fee Claims, Priority Tax Claims, Secured Claims, and Priority Claims being paid in full, and Holders of Allowed General Unsecured Claims receiving a Distribution on account of their Allowed General Unsecured Claims, neither of which is likely, let alone guaranteed, to occur in any theoretical alternatives to the Plan, including converting the Chapter 11 Case to chapter 7. It is my understanding that the Plan meets the requirements of section 1129(a)(9) of the Bankruptcy Code with respect to the treatment of Administrative Claims, Professional Fee Claims, Priority Tax Claims, and Priority Claims.

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 SUITABLE TECHNOLOGIES, INC.,1 Case No. 20-10432 (CTG) Debtor. Ref. Docket No. 415 DECLARATION OF CHARLES C. REARDON IN SUPPORT OF CONFIRMATION OF THE CHAPTER 11 PLAN OF LIQUIDATION OF SUITABLE TECHNOLOGIES, INC. I, Charles C. Reardon, declare, under 28 U.S.C. § 1746, that the following is true to the best of my knowledge, information, and belief: 1. I am the Chief Restructuring Officer (the “CRO”) of the above-captioned debtor and debtor-in-possession (the “Debtor”). I am also a Senior Managing Director and the founder of Asgaard Capital LLC (“Asgaard”). I have served as CRO since January 17, 2020. Since being appointed as CRO, I have been principally responsible for commencing and overseeing the Debtor’s initiatives throughout the course of the Chapter 11 Case,2 including its asset sales and other liquidation and wind-down efforts, and negotiating and formulating the Chapter 11 Plan of Liquidation of Suitable Technologies, Inc. (together with the Plan Settlement, all other exhibits thereto, and as may be amended, modified or supplemented, the “Plan”), including the Plan Settlement embodied therein. 2. As a result of my tenure as CRO and, among other things, my review of various documents and my conversations with my Asgaard colleagues who have assisted me in the Chapter 11 Case, former employees of the Debtor, and the Debtor’s various professionals, I 1 The last four digits of the Debtor’s United States federal tax identification number are 7816. The Debtor’s mailing address is 921 East Charleston Road, Palo Alto, CA 94303. 2 All capitalized terms used but not defined herein shall have the meaning ascribed to them in the Plan (as defined below) and the Disclosure Statement, as applicable.

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am generally familiar with the Debtor’s business and affairs, financial condition, and books and records. I am also familiar with the Plan and the Disclosure Statement. I was intimately involved in developing the Plan and in the negotiations leading up to it among the Debtor and the Magicheart Parties. 3. Except as otherwise indicated herein, all facts set forth in this declaration (this “Declaration”) are based upon: (i) knowledge I have acquired from my communications with (a) certain former employees of the Debtor who have served as independent contractors for the Debtor at various points after my appointment as CRO, including during the Chapter 11 Case, (b) Asgaard colleagues who are assisting me in my role as CRO, and (c) professionals retained by the Debtor, including its bankruptcy counsel; (ii) my review of various relevant documents; and (iii) my opinions developed through my overall professional experience, personal knowledge of the Debtor, its business affairs and financial condition, and my review of various pleadings and other documents related to the Chancery Court Action. 4. I am authorized to submit this Declaration on behalf of the Debtor in support of confirmation of the Plan. If I were called upon to testify, I would testify competently to the facts set forth herein. Brief Background 5. On February 26, 2020, the Debtor commenced a voluntary case under chapter 11 of the Bankruptcy Code. The Debtor is authorized to manage its property as a debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. On March 24, 2020, the Office of the United States Trustee for the District of Delaware filed a statement [Docket No. 76] indicating that a committee of unsecured creditors had not been appointed in the Chapter 11 Case. No request has been made for the appointment of a trustee or an examiner.

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6. After a hearing held on May 11, 2021 (the “Disclosure Statement Hearing”), the Court entered the Disclosure Statement Order [Docket No. 415]: (i) approving the Disclosure Statement pursuant to section 1125 of the Bankruptcy Code; (ii) establishing certain procedures for the solicitation and tabulation of votes to accept or reject the Plan; and (iii) scheduling the Confirmation Hearing for June 18, 2021 at 10:00 a.m. (Eastern Time) and establishing certain other related deadlines. 7. On May 11, 2021, the Debtor filed and served a notice [Docket No. 416], which, among other things, provided notice that (i) the Voting Deadline of June 8, 2021 at 5:00 p.m. (Eastern Time) was established, (ii) the Confirmation Hearing was scheduled to commence on June 18, 2021 at 10:00 a.m. (Eastern Time), and (iii) the deadline to file and serve any objections to confirmation of the Plan was established as 4:00 p.m. (Eastern Time) on June 10, 2021. 8. On May 13, 2021, in accordance with the Disclosure Statement Order, the Debtor, through Donlin, Recano & Company, Inc. (“DRC”), commenced the solicitation of votes to accept or reject the Plan from the Holders of Claims in Class 3 (Prepetition Secured Promissory Notes Claim) and Class 4 (General Unsecured Claims). I am informed that DRC transmitted the Solicitation Packages in accordance with the provisions of the Disclosure Statement Order. 9. On June 1, 2021, the Debtor filed the Plan Supplement [Docket No. 429], which consists solely of the Plan Administrator Agreement. 10. Based on discussions with the Debtor’s bankruptcy counsel, I am informed and believe that the solicitation process undertaken by the Debtor and DRC was in accordance with all applicable rules and regulations governing the adequacy of the Disclosure Statement and the solicitation of votes to accept or reject the Plan, as well as the Disclosure Statement Order. I

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am informed and believe that such procedures also satisfy the requirements of sections 1125 and 1126 of the Bankruptcy Code and Bankruptcy Rules 3017 and 3018. 11. On June 16, 2021, the Declaration of John Burlacu of Donlin, Recano & Company, Inc. Regarding the Solicitation and Tabulation of Votes Cast on Chapter 11 Plan of Liquidation of Suitable Technologies, Inc. (the “Voting Report”) was filed. It is my understanding that the voting results are as follows:
Table 1 on page 4. Back to List of Tables
CLASS None None None None
Accept None None None
None AMOUNT
(% of Amount
Voted)
NUMBER
(% of Number
voted)
AMOUNT
(% of Amount
Voted)
NUMBER
(% of Number
Voted)
Class 3 – Prepetition
Secured Promissory
Notes Claim
$3,775,000
(100%)
1
(100%)
$0
(0%)
0
(0%)
Class 4 – General
Unsecured Claims
$89,241,715.44
(100%)
6
(100%)
$0
(0%)
0
(0%)
12. Therefore, the Impaired Classes entitled to vote on the Plan (Classes 3 and 4) (together, the “Voting Classes”) unanimously voted to accept the Plan. The Plan Satisfies All Requirements for Confirmation 13. Plan Negotiations and Formulation. Based on my interactions in connection with the Chapter 11 Case, I believe that the Plan is proposed following arm’s-length and good faith negotiations among the Debtor and the Magicheart Parties. As an initial matter, I believe that the Plan will complete the liquidation and wind-down of the Debtor’s Estate in a timely and efficient manner, and that the Plan Settlement, which serves as the backbone of the Plan, provides significant value to the Debtor and its Estate.

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14. I believe that the Plan Settlement is reasonable, designed to achieve a beneficial and efficient resolution of the Chapter 11 Case for Creditors, a sound exercise of the Debtor’s business judgment and in the best interest of the Estate. Among other things, the Plan Settlement favorably resolves the significant amount of Allowed Claims of the Magicheart Parties against the Estate, and provides the necessary funding—the Additional Borrowing Amount, the Wind-Down Budget Amount, and the General Unsecured Claims Distribution Amount—to develop and implement a chapter 11 plan, and provide Distributions to Holders of Allowed Claims as provided for in the Plan. Absent this funding, I believe that the Debtor would be unable to develop and implement a plan, and no distributions would be available for Holders of Allowed Secured Claims, Allowed Priority Tax Claims, Allowed Priority Claims, and Allowed General Unsecured Claims in connection with the Debtor’s bankruptcy case. 15. Section 1129(a) of the Bankruptcy Code. Based on my review of the Plan and my discussions with the Debtor’s bankruptcy counsel, it is my understanding that the Plan satisfies all applicable provisions of the Bankruptcy Code as required by section 1129(a)(1) of the Bankruptcy Code, and therefore is confirmable. 16. The Classification of Claims and Interests in the Plan Satisfies the Requirements of Section 1122 of the Bankruptcy Code. I am informed and believe that each Class of Claims and Interests contains only those Claims or Interests that are substantially similar to the other Claims or Interests in that Class. I also believe that the Plan’s classification scheme is not proposed to manipulate voting. Moreover, I am informed and believe that the Plan’s classification of Claims and Interests into the six (6) Classes therein satisfies the requirements of section 1122 of the Bankruptcy Code because the Claims and Interests in each Class differ from the Claims and Interests in each other Class in a legal or factual nature or based upon other appropriate criteria. I

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believe that valid business, factual, and legal reasons exist for separately classifying the various Classes of Claims and Interests under the Plan. 17. The Plan Satisfies the Requirements of Section 1123(a) of the Bankruptcy Code. I am informed and believe that the Plan complies with section 1123(a) of the Bankruptcy Code, which sets forth seven (7) requirements with which every plan under chapter 11 of the Bankruptcy Code must comply. See 11 U.S.C. § 1123(a). As demonstrated below, I am informed and believe the Plan complies with each such requirement: (a) Section 1123(a)(1). Article II of the Plan properly designates all Claims and Interests that require classification, as required by section 1123(a)(1) of the Bankruptcy Code. Pursuant to section 1123(a)(1) of the Bankruptcy Code, the DIP Claim, Administrative Claims, Professional Fee Claims, and Priority Tax Claims are not required to be designated into Classes. (b) Section 1123(a)(2). Article II of the Plan specifies each Class of Claims or Interests that is Unimpaired under the Plan. In particular, Article II of the Plan provides that Class 1 (Secured Claims) and Class 2 (Priority Claims) are Unimpaired. (c) Section 1123(a)(3). Article III of the Plan specifies the treatment of each Class of Claims and Interests that is Impaired. In particular, Article II of the Plan specifies the treatment of Classes 3 (Prepetition Secured Promissory Notes Claim), 4 (General Unsecured Claims), 5 (Subordinated Claims), and 6 (Interests). (d) Section 1123(a)(4). Article III of the Plan provides the same treatment for each Claim or Interest in a given Class unless the Holder of such Claim or Interest agrees to less favorable treatment. (e) Section 1123(a)(5). I believe that the Plan, including the Plan Settlement, and the Plan Supplement provide adequate and proper means for the implementation of the Plan, which I

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am advised is required by section 1123(a)(5) of the Bankruptcy Code. Among other things, the Plan provides for: (i) the appointment of the Plan Administrator; (ii) the various actions set forth in Article V of the Plan, including the dissolution of the Debtor as set forth therein; (iii) the making of Distributions; and (iv) the taking of all necessary and appropriate actions by the Debtor or the Post-Effective Date Debtor, as applicable, to effectuate the transactions under and in connection with the Plan, including the Plan Settlement. Accordingly, it is my understanding that the Plan satisfies the requirements set forth in section 1123(a)(5) of the Bankruptcy Code. (f) Section 1123(a)(6). The Plan does not provide for the issuance of any securities, and the Debtor is being dissolved after the Effective Date as provided for in the Plan. In light of this, section 1123(a)(6) of the Bankruptcy Code is not applicable. (g) Section 1123(a)(7). It is my understanding that the Plan satisfies the requirements set forth in 1123(a)(7) of the Bankruptcy Code. Section 5.2.1 of the Plan provides that, on the Effective Date, Ronald Barliant and I shall be terminated automatically as a director and the CRO, respectively, of the Debtor. I will initially serve as the Plan Administrator, and this was disclosed in the Plan and the Disclosure Statement, along with the fact that I am currently CRO. Accordingly, I believe the Plan’s provisions related to the selection of the Plan Administrator are consistent with the interests of Holders of Claims and Interests and with public policy, thereby satisfying section 1123(a)(7) of the Bankruptcy Code. 18. The Plan Complies With Section 1123(b) of the Bankruptcy Code. I have been advised that section 1123(b) of the Bankruptcy Code sets forth certain permissive provisions that may be incorporated into a chapter 11 plan and, as discussed in more detail below, I believe that each of the provisions of the Plan is consistent with section 1123(b).

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19. Section 1123(b)(1). I have been informed that, in accordance with section 1123(b)(1) of the Bankruptcy Code, the Plan impairs or leaves unimpaired, as the case may be, each Class of Claims and Interests. 20. Section 1123(b)(2). Article VI of the Plan provides that, subject to the occurrence of the Effective Date, all executory contracts and unexpired leases of the Debtor that have not been assumed, assumed and assigned, or rejected prior to the Effective Date, or that are not subject to a motion to assume or reject Filed before the Effective Date, shall be deemed rejected pursuant to the Confirmation Order, as of the Effective Date. I believe that, under the circumstances of the Chapter 11 Case, the Debtor has exercised sound business judgment in proposing a default rejection plan as it pertains to its executory contracts and unexpired leases. 21. Section 1123(b)(3). I have been informed that, in accordance with section 1123(b)(1) of the Bankruptcy Code, the Plan provides for the settlement of certain estate claims. In particular, the Plan Settlement, without which the Debtor would be unable to propose the Plan, represents a fair and reasonable resolution of any and all claims, causes of action and disputes between the Debtor and the Magicheart Parties. 22. Specifically, (i) the Plan Settlement provides significant value to the Debtor and its Estate, favorably resolves the significant amount of Allowed Claims of the Magicheart Parties, and enables the prompt and efficient wind-down of the Estate through the Plan, including the agreed-upon treatment of the DIP Claim, the Prepetition Promissory Notes Claim, and the Palo Alto Real Property Lease Claims, and the agreement of the Magicheart Parties to fund the Wind-Down Budget, including the Administrative, Priority and Secured Claims Reserve and the Professional Fee Reserve, and the General Unsecured Claims Distribution Amount; (ii) absent the funding of the Additional Borrowing Amount and the funding of the Wind-Down Budget and the

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General Unsecured Claims Distribution Amount in accordance with the Plan Settlement, the Debtor would lack sufficient funds to develop and implement the Plan, or any other chapter 11 plan, and I believe that no distributions would be available for Holders of Allowed Secured Claims, Allowed Priority Tax Claims, Allowed Priority Claims, and Allowed General Unsecured Claims; (iii) the releases to be provided under the Plan Settlement and the contemplated dismissal of the Chancery Court Action are given in exchange for appropriate consideration, and vital to the Plan, as the Magicheart Parties would not have agreed to the settlement but for such releases and dismissal; (iv) the parties to the Plan Settlement are represented by counsel; (v) the Plan Settlement is the product of arm’s-length bargaining and good faith negotiations among sophisticated parties, including the Debtor’s independent director and me on behalf of the Debtor; and (vi) the Plan Settlement is otherwise in the best interests of the Debtor, the Estate, and Holders of Claims and Interests, and is fair, equitable, and reasonable under the facts and circumstances of the Chapter 11 Case. 23. Ultimately, after carefully considering the Plan Settlement and the theoretical alternatives to the Plan, including formulation of an alternative plan of liquidation, or conversion of the Chapter 11 Case to chapter 7 of the Bankruptcy Code, I believe, in my business judgment, that the Plan is a superior alternative. The Plan will result in Allowed Administrative Claims, Professional Fee Claims, Asgaard Capital Fee Claims, Priority Tax Claims, Secured Claims, and Priority Claims being paid in full, and Holders of Allowed General Unsecured Claims receiving a Distribution on account of their Allowed General Unsecured Claims, neither of which is likely, let alone guaranteed, to occur in any theoretical alternatives to the Plan. I have carefully considered the releases to be provided under the Plan Settlement and the contemplated dismissal of the Chancery Court Action, and believe, in my business judgment, that such releases and

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dismissal are necessary and appropriate under the circumstances of the Chapter 11 Case and the Plan Settlement and given in exchange for appropriate consideration. 24. Debtor Release. Section 11.10(a) of the Plan provides for a release of certain claims, interests, obligations, rights, suits, damages, causes of action, remedies and liabilities held by the Debtor and the Estate against the Debtor Released Parties (the “Debtor Release”). I believe that this release is a necessary and integral component of the Plan; given in exchange for, and supported by, fair, sufficient, and adequate consideration provided by the parties receiving such releases; and a good faith settlement and compromise of the claims, interests, obligations, rights, suits, damages, causes of action, remedies, and liabilities released pursuant to it. The Debtor Release was instrumental in formulating the Plan, which is the result of arm’s-length and good faith negotiations among the Debtor and the Magicheart Parties. 25. In particular, the Magicheart Parties have been critical participants in this Chapter 11 Case, and are providing significant funding to ensure that this case can be wound down in a timely and efficient manner that—in my opinion—is in the best interests of the Debtor, its Estate and Creditors. Among other things, the Magicheart Parties have agreed in exchange for the Debtor Release to fund the Additional Borrowing Amount, the Wind-Down Budget Amount, including the Administrative, Priority and Secured Claims Reserve and Professional Fee Reserve, and the General Unsecured Claims Distribution Amount (which funding amounts total approximately $1.2 million in the aggregate). The Magicheart Parties have further agreed, except as otherwise set forth in the Plan, to forego Distributions on the DIP Claim, the Prepetition Promissory Notes Claim, and the Palo Alto Real Property Lease Claims (which total over $95 million in the aggregate). As I stated above, without the significant value that the Magicheart Parties are providing through the Plan Settlement, I believe that no Holders of Allowed Claims

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other than the Magicheart Parties would receive distributions in connection with the Debtor’s bankruptcy case. Moreover, many of the Debtor Released Parties have served the Debtor during at least a portion of the Chapter 11 Case, and I believe that they have worked to preserve and maximize the value of the Estate, including through the sale process in the Chapter 11 Case. 26. Based on my participation in Plan negotiations and my careful consideration of the information provided to me by the Debtor’s bankruptcy counsel, I believe that the Debtor Release is an essential component of the Plan, including the Plan Settlement, and constitutes a sound exercise of the Debtor’s business judgment. During the course of Plan Settlement negotiations, it was clear that the Debtor Release would be a necessary condition to implementing the Plan. Without the Debtor Release, the Debtor would have been unable to secure the significant value provided by the Plan Settlement, as the release was a material inducement for the Magicheart Parties to enter into the Plan Settlement. 27. Exculpation. Section 11.11 of the Plan provides for exculpation of the Exculpated Parties (all of which are Estate fiduciaries), except in cases involving actual fraud, willful misconduct or gross negligence by such parties as determined by a Final Order of the Bankruptcy Court (the “Exculpation”). Based upon my review of the Plan, my knowledge of the circumstances leading up to its development, and my discussions with the Debtor’s bankruptcy counsel, I believe that the Exculpation is proper and an inherent part of the Plan. I am unaware of any claims against any Exculpated Party that are covered by Section 11.11 of the Plan. Nonetheless, the Exculpation is important in that it removes the threat of certain litigation against the Exculpated Parties, who I believe played critical roles in, and made contributions to, the Chapter 11 Case, and that such contributions represent good and valuable consideration to the Debtor and its Estate.

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28. Injunction. Section 11.9 of the Plan enjoins all Persons and Entities, on and after the Effective Date, on account of any Claim or Interest, or on account of any claim, interest, obligation, right, suit, damages, cause of action, remedy, or liability released, dismissed, exculpated, settled, or waived under the Plan or the Confirmation Order, from taking certain actions (the “Plan Injunction”). It is my belief that the Plan Injunction is a necessary and critical component of the Plan, including the Plan Settlement, the Debtor Release, and the Exculpation, and ensures that I am able to effectuate the Plan, including the Distributions provided for therein. Absent the Plan Injunction, Holders of Claims and Interests could seek recourse against the Post-Effective Date Debtor and its Assets (including any Cash held by the Post-Effective Date Debtor on account of the Wind-Down Budget Amount and the General Unsecured Claims Distribution Amount) that is contrary to the treatment of Claims and Interests under the Plan, thereby jeopardizing Distributions under the Plan. Also, without the Plan Injunction, the Debtor would have been unable to reach the Plan Settlement. Finally, subsequent to the filing of the Plan and Disclosure Statement, as reflected on the record of the Disclosure Statement Hearing, the Debtor worked with counsel for Allison Huynh on certain revisions to Section 11.9 of the Plan to resolve Ms. Huynh’s informal response to the Plan and Disclosure Statement. 29. Section 1123(b)(5). It is my understanding that the Plan modifies or leaves unaffected, as the case may be, the rights of certain holders of Claims, as permitted by section 1123(b)(5) of the Bankruptcy Code. 30. Section 1123(b)(6). It is my understanding that, in accordance with section 1123(b)(6) of the Bankruptcy Code, a plan may include other appropriate provisions not inconsistent with the applicable provisions of the Bankruptcy Code. As discussed above, Article XI of the Plan contains certain release, exculpation, and injunctive provisions that are essential to

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implementation of the Plan and the Plan Settlement embodied therein. In addition, as discussed below, the Plan contains certain other provisions that are integral to the administration of the Chapter 11 Case and implementation of the Plan. I am informed that such provisions are consistent with the applicable provisions of the Bankruptcy Code. 31. The Debtor Has Complied with the Applicable Provisions of the Bankruptcy Code (Section 1129(a)(2)). Based on my review of the Plan and my discussions with the Debtor’s bankruptcy counsel, it is my understanding that the Debtor has complied with all solicitation and disclosure requirements set forth in the Bankruptcy Code, the Bankruptcy Rules, and the Disclosure Statement Order governing notice, disclosure, and solicitation in connection with the Plan and the Disclosure Statement. Accordingly, I believe the Debtor and its professional advisors have acted in good faith in connection with the solicitation and tabulation of Plan votes. 32. The Plan Has Been Proposed in Good Faith and Not by Any Means Forbidden by Law (Section 1129(a)(3)). The Plan was the product of good faith and arm’s-length negotiations between the Debtor and the Magicheart Parties. It is my belief that the Debtor has proposed the Plan in good faith with the legitimate and honest purpose of favorably resolving the significant amount of Allowed Claims of the Magicheart Parties, enabling the prompt and efficient wind-down of the Estate, and providing a distribution to Holders of Allowed Claims other than the Magicheart Parties, which distributions are not likely, let alone guaranteed, to occur in any theoretical alternatives to the Plan. I also believe that the unanimous acceptance of the Plan by Class 4 (General Unsecured Claims), determined without including any acceptance by any insider, including any of the Magicheart Parties, reflects the Plan’s fairness and the Debtor’s good faith efforts to achieve the objectives of chapter 11.

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33. The Plan Provides that Payments Made by the Debtor for Services or Costs and Expenses Are Subject to Approval (Section 1129(a)(4)). Based on my review of the Plan and my discussions with the Debtor’s bankruptcy counsel, it is my understanding that the Plan provides that all compensation requested by professionals pursuant to sections 330, 331 or 503(b) of the Bankruptcy Code must be approved by the Bankruptcy Court pursuant to final fee applications other than, for the avoidance of doubt, Asgaard Capital, which shall not be required to file a final request for payment of any post-petition claims for compensation or reimbursement of costs and expenses. Specifically, Section 11.2 of the Plan requires that all final requests for payment of Professional Fee Claims must be filed with the Bankruptcy Court and served upon all parties required to receive notice under the Plan within thirty (30) days after the Effective Date, and such Professional Fee Claims are payable only to the extent approved by the Bankruptcy Court. It is my understanding that the provisions of the Plan therefore comply with section 1129(a)(4) of the Bankruptcy Code. 34. The Debtor Has Disclosed All Necessary Information Regarding the Directors, Officers, and Insiders (Section 1129(a)(5)). Section 5.2.1 of the Plan provides that, on the Effective Date, Ronald Barliant and I shall be terminated automatically as a director and the CRO, respectively, of the Debtor. I will initially serve as the Plan Administrator, and this was disclosed in the Plan and the Disclosure Statement, along with the fact that I am currently CRO. I believe that my appointment as the Plan Administrator is consistent with the interests of the Debtor’s creditors and public policy because of, among other things, the significant institutional knowledge that I have obtained regarding the Debtor, its business affairs and the Chapter 11 Case as CRO. In light of this, it is my understanding that the requirements of section 1129(a)(5) of the Bankruptcy Code are satisfied.

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35. The Plan Does Not Contain Any Rate Changes Subject to the Jurisdiction of Any Governmental Regulatory Commission (Section 1129(a)(6)). The Plan does not provide for any rate changes by the Debtor or the Post-Effective Date Debtor, as applicable. I understand that section 1129(a)(6) of the Bankruptcy Code therefore does not apply to the Plan. 36. The Plan Is in the Best Interests of Creditors (Section 1129(a)(7)). I have been advised that the Bankruptcy Code requires that, with respect to each impaired Class of Claims and Interests, each holder of such Claim or Interest must either (i) accept the Plan or (ii) receive or retain property under the Plan that is not less than the amount that such holder would receive or retain in a chapter 7 liquidation. For the purposes of determining whether the Plan meets this requirement, the Debtor prepared the liquidation analysis attached as Exhibit B to the Disclosure Statement. It demonstrates that the Plan satisfies the requirements of section 1129(a)(7) of the Bankruptcy Code, as it indicates that all Holders of Allowed Claims will receive under the Plan not less than such Holders would receive if the Chapter 11 Case was converted to a chapter 7 case. 37. In addition, the Plan Settlement is contingent upon Confirmation and the occurrence of the Effective Date. Therefore, if the Chapter 11 Case was converted to chapter 7, the Plan Settlement and the significant funding provided thereunder would not be available to the Estate. Likewise, the DIP Claim and the Prepetition Secured Promissory Notes Claim are expected to be not less than approximately $6,500,000 (which does not include the Wind-Down Budget Amount) and $3,775,000, respectively, as of the Effective Date; and the Prepetition Unsecured Promissory Notes Claim and the Palo Alto Real Property General Unsecured Claim are not less than $85,057,221 and $3,418,862, respectively. None of these Allowed Claims of the Magicheart Parties are receiving a distribution under the Plan as a result of the Plan Settlement, provided that, in accordance with sections 3.1.1 and 12.1(c) of the Plan, any amounts funded to the Debtor or the

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Post-Effective Date Debtor, as applicable, under the DIP Credit Agreement or the Wind-Down Budget, that remain unused or otherwise available after the Plan Administrator has fully administered the Debtor’s affairs, the Plan and the Chapter 11 Case, shall be returned to Magicheart. 38. Without the Plan Settlement, as discussed more fully in the Disclosure Statement, these Allowed Claims would either eliminate altogether or significantly dilute any potential recoveries available to other Holders of Allowed Claims. On the other hand, the Plan will result in Allowed Administrative Claims, Professional Fee Claims, Asgaard Capital Fee Claims, Priority Tax Claims, Secured Claims, and Priority Claims being paid in full, and Holders of Allowed General Unsecured Claims receiving a Distribution on account of their Allowed General Unsecured Claims, neither of which is likely, let alone guaranteed, to occur in any theoretical alternatives to the Plan, including converting the Chapter 11 Case to chapter 7. As a result, I believe that the Plan is a superior alternative than converting the Chapter 11 Case to chapter 7 of the Bankruptcy Code (and any other theoretical alternative to the Plan), and will clearly provide each Holder of an Allowed General Unsecured Claim with a greater recovery than such Holder would receive upon conversion of the Chapter 11 Case to chapter 7. 39. In light of the foregoing, it is my belief that the Plan satisfies the requirements of section 1129(a)(7) of the Bankruptcy Code. 40. The Plan Has Been Accepted by Impaired Voting Classes (Section 1129(a)(8)). Based on my review of the Voting Report and my discussions with the Debtor’s bankruptcy counsel, I understand that the Voting Classes unanimously voted to accept the Plan pursuant to section 1126(c) of the Bankruptcy Code. As set forth in the Voting Declaration, Class 5 (Subordinated Claims) and Class 6 (Interests) did not vote, but are deemed to have rejected the

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Plan. Nonetheless, it is my understanding that Plan does not discriminate unfairly and is fair and equitable with respect to such Class of Interests. 41. The Plan Provides for Payment in Full of All Allowed Priority Claims (Section 1129(a)(9)). It is my understanding that the Plan meets the requirements of section 1129(a)(9) of the Bankruptcy Code with respect to the treatment of Administrative Claims, Professional Fee Claims, Priority Tax Claims, and Priority Claims. 42. At Least One Impaired, Non-Insider Class Has Accepted the Plan (Section 1129(a)(10)). Based on my discussions with the Debtor’s bankruptcy counsel, pursuant to section 1129(a)(10) of the Bankruptcy Code, it is my understanding that at least one impaired class of Claims must accept the Plan, excluding the votes of insiders. Class 4 (General Unsecured Claims) is an Impaired Class of Claims that voted to accept the Plan, determined without including any acceptance by any insider, including any of the Magicheart Parties. Accordingly, based on the foregoing, I believe that the Plan satisfies section 1129(a)(10) of the Bankruptcy Code. 43. The Plan Is Feasible (Section 1129(a)(11)). Based on my discussions with the Debtor’s bankruptcy counsel, it is my understanding that section 1129(a)(11) of the Bankruptcy Code permits a plan to be confirmed if it is feasible, i.e., it is not likely to be followed by liquidation or the need for further financial reorganization. I understand that, in the context of the Plan, the feasibility test requires that the Court determine whether the Plan may be implemented and has a reasonable likelihood of success. The Plan is a plan of liquidation and provides that the Debtor will be dissolved after the Effective Date. The Plan provides for the appointment of the Plan Administrator to, among other things, oversee the Distributions to Holders of Allowed Claims. Also, I believe that the funding of the Wind-Down Budget, including the Administrative, Priority and Secured Claims Reserve and Professional Fee Reserve, will be sufficient to allow the Post-

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Effective Date Debtor to make all payments required to be made under the Plan on account of anticipated Allowed Administrative, Professional Fee, Priority Tax, Secured and Priority Claims, and to otherwise administer the plan and wind-down the Estate. Accordingly, section 1129(a)(11) of the Bankruptcy Code has been satisfied. 44. All Statutory Fees Have or Will Be Paid (Section 1129(a)(12)). Section 11.3 of the Plan provides that all U.S. Trustee Fees payable prior to the Effective Date shall be paid on or before the Effective Date, and all U.S. Trustee Fees that arise after the Effective Date shall be paid by the Post-Effective Date Debtor and the Plan Administrator when due and payable. It is my understanding that the Plan therefore complies with section 1129(a)(12) of the Bankruptcy Code. 45. The Debtor Does Not Have Retiree Benefits Obligations (Section 1129(a)(13)). The Debtor has no obligation to provide for any “retiree benefits,” as such term is defined under section 1114 of the Bankruptcy Code. 46. Sections 1129(a)(14)-(a)(16) of the Bankruptcy Code Are Inapplicable. The Debtor (a) is not required to pay any domestic support obligations; (b) is not an individual; and (c) is not a nonprofit corporation or trust. 47. The Plan is Fair and Equitable With Respect to the Impaired Classes that Were Deemed to Reject the Plan (Section 1129(b)). As discussed above, I am informed that Classes 5 (Subordinated Claims) and 6 (Interests) were deemed to have rejected the Plan. However, it is my understanding that, pursuant to section 1129(b) of the Bankruptcy Code, a plan may be confirmed notwithstanding the rejection or deemed rejection by a class of claims or interests so long as the Plan satisfies all the requirements of section 1129(a) of the Bankruptcy Code, other than section 1129(a)(8), and the Plan does not discriminate unfairly and is fair and

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equitable with respect to each class of claims and interest that is impaired under the Plan and has not voted to the accept the Plan. 48. Based on my discussions with the Debtor’s bankruptcy counsel, it is my understanding and belief that the Plan satisfies the “fair and equitable” requirement, and that the Plan does not unfairly discriminate against any Class. All Classes of Claims are legally and factually distinct from other Claims and Interests in other Classes, and are properly classified in a separate Class. Additionally, no holders of Interests will receive or retain property under the Plan on account of such interest; and no holder of a Claim in a Class senior to Class 5 or Class 6 is receiving more than 100% recovery on account of its Claim or Interest. To the extent Classes of Claims senior in priority to Class 5 are Impaired (i.e., Classes 3 and 4), they accepted such treatment in their overwhelming support for the Plan and, in the case of the Magicheart Parties, in agreeing to the Plan Settlement and the treatment of their Allowed Claims provided for therein. 49. Accordingly, I believe that the Plan satisfies the requirements of sections 1129(b)(2)(B) and 1129(b)(2)(C) for Class 5 and Class 6 and, therefore, is fair and equitable with respect to such Classes. 50. The Plan Does Not Unfairly Discriminate With Respect to Any Class. (Section 1129(b)). Based on my discussions with the Debtor’s bankruptcy counsel, it is my understanding and belief that the Plan also does not unfairly discriminate with respect to any Impaired Class that rejected the Plan. Therefore, I believe that the cram down test of section 1129(b) is satisfied. 51. Only One Plan (Section 1129(c)). Other than the Plan, no other plan has been filed in the Chapter 11 Case, and neither the Debtor nor any other party are presently seeking

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confirmation of any other plan. It is my understanding that the Plan therefore complies with section 1129(c) of the Bankruptcy Code. 52. The Plan Is Not an Attempt to Avoid Tax Obligations (Section 1129(d)). The principal purpose of the Plan is not the avoidance of taxes or the avoidance of the application of the Securities Act, and no party in interest has filed an objection alleging otherwise. Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true and correct. Executed on June 16, 2021 /s/ Charles C. Reardon Charles C. Reardon Chief Restructuring Officer

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