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Full title: Limited Objection - of the City of Long Beach to the Debtors' Motion for Order, Under Section 365(d)(4) of the Bankruptcy Code and Bankruptcy Rule 9006, Extending Time Within Which Debtors May Assume or Reject Unexpired Leases of Nonresidential Real Property (related document(s)701) Filed by City of Long Beach and the City of Long Beach, Harbor Department, acting by and through its Board of Harbor Commissioners (Attachments: # 1 Certificate of Service) (Busenkell, Michael) (Entered: 06/01/2021)

Document posted on May 31, 2021 in the bankruptcy, 16 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

1 The Debtors in these chapter 11 cases, along with the last four digits of each debtor’s tax identification number, as applicable, are as follows: EHT US1, Inc. (6703); 5151 Wiley Post Way, Salt Lake City, LLC (1455); ASAP Cayman Atlanta Hotel LLC (2088); ASAP Cayman Denver Tech LLC (7531); ASAP Cayman Salt Lake City Hotel LLC (7546); ASAP Salt Lake City Hotel, LLC (7146); Atlanta Hotel Holdings, LLC (6450); CI Hospitality Investment, LLC (7641); Eagle Hospitality Trust S1 Pte Ltd. (7669); Eagle Hospitality Trust S2 Pte Ltd. (7657); EHT Cayman Corp Ltd. (7656); Sky Harbor Atlanta Northeast, LLC (6450); Sky Harbor Denver Holdco, LLC (6650); Sky Harbor Denver Tech Center, LLC (8303); UCCONT1, LLC (0463); UCF 1, LLC (6406); UCRDH, LLC (2279); UCHIDH, LLC (6497); Urban Commons 4th Street A, LLC (1768); Urban Commons Anaheim HI, LLC (3292); Urban Commons Bayshore A, LLC (2422); Urban Commons Cordova A, LLC (4152); Urban Commons Danbury A, LLC (4388);Setting aside whether this Motion is necessary2, the City files this limited objection because the Debtor seeks an extension while not complying with its obligations under 11 U.S.C. § 365(d)(3), which requires the Debtor to timely perform its obligations under the Leases (defined below) prior to the time for assumption for rejection of such Leases.Among other things, the Debtor is not taking steps to remedy issues relating to maintaining the Queen Mary in the condition and repair required under the Leases or even paying post-petition taxes related to the Leases that are due and owing to Los Angeles County. Many of these issues are critical life safety and structural integrity issues that have not been addressed by the Debtor, yet worsen every month the Debtor fails to take steps to prevent further deterioration, among other things.The Debtor’s Failure to Comply with the Requirement to Make the Debtor’s Books and Records Available to the City for Audit and Inspection, and Having Not Provided Requested Documents in Relation to the Debtor’s Use of Funds for Historical Preservation and Capital Improvement Projects on the Queen Mary Additionally, despite numerous requests, the Debtor has not provided requested financial information, books and records to the City demonstrating that approximately $23 million in City funds from bond proceeds and tidelands trust funds provided to the Debtor to be used for Historical Preservation and Capital Improvement Projects (“HPCIP”) on the Queen Mary were properly used and accounted for by the Debtor.

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IN THE UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE In re: Chapter 11 EHT US1, INC., et al., Case No. 21-10036 (CSS) Debtors1. (Jointly Administered) Re: D.I. 701 LIMITED OBJECTION OF THE CITY OF LONG BEACH TO THE DEBTORS’ MOTION FOR ORDER, UNDER SECTION 365(d)(4) OF BANKRUPTCY CODE AND BANKRUPTCY RULE 9006, EXTENDING TIME WITHIN WHICH DEBTORS MAY ASSUME OR REJECT UNEXPIRED LEASES OF NONRESIDENTIAL REAL PROPERTY The City of Long Beach (the “City”) and the City of Long Beach, a municipal corporation acting by and through its Board of Harbor Commissioners (the “Port”) (the City and the Port are collectively referred to herein as the “City”), hereby file this limited objection to the Debtors’ Motion for Order, Under Section 365(d)(4) of Bankruptcy Code and Bankruptcy Rule 9006, Extending Time Within Which Debtors May Assume or Reject Unexpired Leases of Nonresidential Real Property (Docket No. 701) (the “Motion”). 1 The Debtors in these chapter 11 cases, along with the last four digits of each debtor’s tax identification number, as applicable, are as follows: EHT US1, Inc. (6703); 5151 Wiley Post Way, Salt Lake City, LLC (1455); ASAP Cayman Atlanta Hotel LLC (2088); ASAP Cayman Denver Tech LLC (7531); ASAP Cayman Salt Lake City Hotel LLC (7546); ASAP Salt Lake City Hotel, LLC (7146); Atlanta Hotel Holdings, LLC (6450); CI Hospitality Investment, LLC (7641); Eagle Hospitality Trust S1 Pte Ltd. (7669); Eagle Hospitality Trust S2 Pte Ltd. (7657); EHT Cayman Corp Ltd. (7656); Sky Harbor Atlanta Northeast, LLC (6450); Sky Harbor Denver Holdco, LLC (6650); Sky Harbor Denver Tech Center, LLC (8303); UCCONT1, LLC (0463); UCF 1, LLC (6406); UCRDH, LLC (2279); UCHIDH, LLC (6497); Urban Commons 4th Street A, LLC (1768); Urban Commons Anaheim HI, LLC (3292); Urban Commons Bayshore A, LLC (2422); Urban Commons Cordova A, LLC (4152); Urban Commons Danbury A, LLC (4388); Urban Commons Highway 111 A, LLC (4497); Urban Commons Queensway, LLC (6882); Urban Commons Riverside Blvd., A, LLC (4661); and USHIL Holdco Member, LLC (4796). The Debtors’ mailing address is 3 Times Square, 9th Floor New York, NY 10036 c/o Alan Tantleff (solely for purposes of notices and communications).

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I. INTRODUCTION By the Motion, Debtor Urban Commons Queensway, LLC dba Queen Mary (the “Debtor”) and its other related debtor entities (collectively, the “Debtors”) seek an extension of the deadline for the Debtor to assume or reject unexpired nonresidential leases for 90 days, through and including August 16, 2021. Setting aside whether this Motion is necessary2, the City files this limited objection because the Debtor seeks an extension while not complying with its obligations under 11 U.S.C. § 365(d)(3), which requires the Debtor to timely perform its obligations under the Leases (defined below) prior to the time for assumption for rejection of such Leases. Among other things, the Debtor is not taking steps to remedy issues relating to maintaining the Queen Mary in the condition and repair required under the Leases or even paying post-petition taxes related to the Leases that are due and owing to Los Angeles County. Although this is a limited objection because debtors are often granted further time to extend the time to assume or reject leases assuming they meet the ongoing requirements under the leases, the non-monetary defaults by the Debtor under the Leases are substantial and involve issues of fundamental importance such as the lives and safety of people on board the ship. They are not the type of issues where the Debtor’s interest in a longer time to market and sell the Leases can co-exist with the Debtor’s inability or unwillingness to comply with 11 U.S.C. § 365(d)(3). The repairs and replacements necessary for the Queen Mary, and which are required under the Leases, involve life safety, health and/or structural integrity issues, compliance with laws, or essential basic operations, yet have been ignored by the Debtor during the bankruptcy case.3 To the extent that the Debtor complies with its obligations under the Leases, then the City does not oppose an extension to assume or reject the Leases. However, the Debtor seeks to 2 The revisions to the Bankruptcy Code that were effective as of December 27, 2020 as part of the Consolidated Appropriations Act of 2021, Pub. L. 116-260 (the “CAA”), extended the deadline under section 365(d)(4) from 120 to 210 days (among other modifications). The City files this Limited Objection in the event the Debtor is required to obtain Court approval to extend its deadline to assume or reject leases past 120 days, notwithstanding the CAA. 3 See Declaration of Dr. Omar Jaradat filed in support of the City Objection to Assumption (Docket No. 696) (the “Jaradat Declaration”), ¶ 15.

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obtain the potential benefit to the estate of assuming, assigning and selling the Leases, while not complying with its statutory obligations under section 365(d)(3) and obligations as lessee, and thereby placing the Queen Mary, and the lives, health and safety of caretaker staff and visitors on the ship at risk. The Debtor failing to address watertight integrity issues on the Queen Mary take on added importance because the Debtor failing to address these issues could lead to a flood, capsizing of the ship and life safety and environmental problems. The concerns related to the lifeboats and other issues also could lead to life safety risks. While the Debtor may want more time to market and sell the Leases before deciding whether to assume or reject the Leases, it cannot do so in a way that fails to comply with the Leases and places the City’s asset and peoples’ lives and safety at risk. To the extent that the Debtor is not able to take immediate steps to remedy certain of the nonmonetary defaults, the Debtor has not even taken any steps that can be done immediately to ensure the lives and safety of people on board the ship and to avoid a potential environmental issue should the ship capsize due to inaction by the Debtor. The Debtor could immediately remove the lifeboats that are in danger of falling and that are impacting the integrity of the ship’s structure. The Debtor could also install an emergency bilge pump system, flood alarm system and replace the emergency generator so that there is a means to prevent flooding and capsizing of the ship. Even among those limited critical actions, the Debtor has taken no action. The City is the landlord under that certain Amended and Restated Lease and Operations Agreement of Queen Mary, Adjacent Lands and Improvements, Dome and Queen’s Marketplace dated November 1, 2016 (the “Lease”). The City is also the landlord under the Submerged Land and Water Area Lease (the “Submerged Land Lease”) and the Special Events Park Lease (the Lease, Submerged Land Lease and Special Events Park Lease are collectively referred to herein as the “Leases”). There are multiple subleases, and in some cases, sub-subleases and sub-sub-subleases related to the Leases. The Debtor is the tenant under the Leases, pursuant to which the Debtor leases the RMS Queen Mary (a retired British ocean liner that operated between the

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1930s and 1960s; it now operates as a hotel, museum and attraction and is one of the most iconic landmarks and attractions in the City), the water surrounding it within the enrockment, the land adjacent to the Queen Mary and improvements on that land, and certain additional water rights adjacent to the Queen Mary, collectively located at 1126 Queens Hwy, Long Beach, California 90802. Included within the premises leased by the City to the Debtor is land, submerged land and water used, through leases and subleases, to develop and operate a cruise ship docking area and terminal for Carnival Corporation. Significant post-petition defaults exist under the Leases that the Debtor has made no effort to address. Yet, the Debtor seeks more time to determine whether to assume or reject the Leases without taking any steps to comply with the obligations under the Leases or 11 U.S.C. § 365(d)(3). The City has notified the Debtor of defaults under the Lease in numerous correspondence, pleadings and supporting declarations. On March 4, 2021, the City, through its counsel, sent a detailed letter to the Debtor’s counsel providing notice of the Debtor’s defaults under the Leases.4 The City’s objection to the Debtor’s proposed cure (Docket No. 566) provided further detail regarding the defaults, discussed additional defaults, and stated that it should be treated as an amendment to the default letter sent on March 4, 2021.5 On May 6, 2021, the City sent a supplemental default letter6 (the default letters are collectively referred to as the “Letters”). The City then filed a limited objection to the assumption, assignment and sale of the Leases, noting additional issues and amounts as to the nonmonetary defaults (Docket No. 694). The City has not received a meaningful response from the Debtor as to most of the issues raised as to nonmonetary defaults. The City respectfully requests that the Court make any extension7 expressly subject to the Debtor timely performing under the Leases, as is required under 11 4 See Declaration of Johnny Vallejo filed in support of the City Objection to Assumption (Docket No. 699) (the “Vallejo Declaration”), ¶ 5 and Exhibit C thereto. 5 Docket No. 566 at p. 10 of 28, FN 22. 6 Vallejo Declaration, ¶ 7 and Exhibit E thereto. 7 See footnote 2 as to the CAA and the statutory, rather than requested, extension.

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U.S.C. § 365(d)(3). The condition is necessary because the Debtor is not complying with the statute while it considers whether to assume or reject the Leases. II. LIMITED OBJECTION The Debtor must timely perform the obligations under the Leases until they are assumed or rejected pursuant to 11 U.S.C. § 365(d)(3). See also, CenterPoint Props. v. Montgomery Ward Holding Corp. (In re Montgomery Ward Holding Corp.), 268 F.3d 205, 209-10 (3d Cir. 2001). This includes performance of both monetary and non-monetary obligations. The City has detailed the Debtor’s various defaults in pleadings filed with this Court, most recently in the City’s objection to the assumption, assignment and sale of the Leases (Docket No. 694) (the “City Objection to Assumption”). As set forth below, many such defaults occurred prepetition and are ongoing postpetition, and others began postpetition but still have not been resolved by the Debtor. Extensions of time for the Debtor to make decisions as to whether to assume or reject the Leases should not be permitted while the Debtor ignores its post-petition obligations under the Leases and 11 U.S.C. § 365(d)(3). A. Nonmonetary Defaults The Debtor’s nonmonetary defaults under the Lease include: (a) failure to maintain the Queen Mary and leased premises in first class condition and repair; (b) failure to comply with the requirement to make the Debtor’s books and records available to the City for audit and inspection (as they relate to the Debtor’s use of bond proceeds and tidelands trust funds for capital improvement projects on the Queen Mary); (c) gaps in insurance coverage and in naming the City as an additional insured and loss payee; (d) failing to indemnify, defend and hold the City harmless as to personal injury claims that allegedly occurred on the leased premises; and (e) failure to timely provide audited financial statements to the City, all as required under the Lease. Many of these issues are critical life safety and structural integrity issues that have not been addressed by the Debtor, yet worsen every month the Debtor fails to take steps to prevent further deterioration, among other things. The nonmonetary defaults are summarized below.

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1. The Debtor’s Failure to Maintain the Queen Mary and Leased Premises in First Class Condition and Repair, as Required in the Lease Section 7.2 of the Lease requires the Debtor to maintain the Leased Premises in first class condition and repair: Throughout the Term, Tenant shall, at Tenant's sole cost and expense, maintain or cause to be maintained the Leased Premises (including the Improvements) and the improvements now or hereafter located on the Leased Premises in first class condition and repair. Such improvements shall be maintained and operated in material compliance with all Governmental Restrictions and Tenant shall make or cause to be made whatever repairs and replacements are required by any Governmental Restrictions or this Lease.8 As discussed in the City’s prior pleadings filed with this Court in relation to a proposed cure of defaults, and in regard to proposed assumption, assignment and sale of the Leases, the Debtor is not meeting its obligations pursuant to Section 7.2 of the Lease. The issues related to the Queen Mary have been discussed during monthly meetings/calls between the City, the Debtor (or Queen Mary personnel) and an international maritime engineering firm, Moffatt & Nichol, over the past year tracking progress toward making repairs as issues that were deemed urgent in January 2017 (over four years ago).9 Each of the following were noted as urgent repairs in an inspection that took place during 2015-2016 and are contained in the Marine Survey of the Queen Mary dated January 17, 2017 prepared by Simpson Gumpertz & Heger Inc. (the “Marine Survey”), which was prepared during the Debtor’s operation of the ship in January 2017, over four years ago. Those issues noted as urgent in 2017 and with a time horizon deadline of five years, and which are more urgent now with the passage of time and as the five-year time horizon is ending at the beginning of 2022.10 Each of these items were also noted by the Historic Preservation and Capital Improvement Plan (“HPCIP”) project numbers in the Debtor’s spreadsheets tracking urgent repairs, which spreadsheets were circulated as part of the monthly meetings regarding the Queen Mary repairs. 8 Vallejo Declaration ¶ 4 and Exhibit A thereto. 9 See Jaradat Declaration, ¶ 7. 10 Jaradat Declaration ¶¶ 6-9.

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The issues include those related to life safety and health issues, structural integrity issues, basic functioning of the Queen Mary as an operating hotel and compliance with laws as follows:11 The Queen Mary Sideshell, Bridge Wings and Lifeboat Structural Issues.12 Urgent repairs are necessary for the Queen Mary’s side shell (shell plating on the side of the ship) and bridge wings (a narrow walkway that extends outward from the pilot’s house) due to significant structural concerns that are life safety issues. As part of the repairs, the lifeboats need to be removed and replaced. This is a critical life safety issue because the failure of the lifeboat support structure may cause injury or fatalities to guests, visitors or employees walking under the lifeboats and may cause further structural damage to ship sidewalls. The lifeboats need to be removed to lessen the weight and to avoid injuries or fatalities, and then the support structures need to be repaired or replaced. Underwater hull, exhibition hall, tank tops and watertight bulkhead doors.13 There are several categories of structural work needed to maintain the vessel’s hull integrity and watertight integrity. Elliott Bay Design Group (“EBDG”), a naval architecture and marine engineering firm retained by Moffatt & Nichol, identified hull integrity and watertight integrity urgent category work items that should be addressed immediately for safety from flooding in the next two years (to the extent that flooding occurred, EBDG’s inspection and report confirmed that the current status of bulkheads and lack of a functioning bilge pump system and flood alarm system could lead to flooding throughout the ship, potential capsizing of the ship and life safety and environmental issues to the extent that flooding occurred). 11 The following is a truncated explanation of the repair issues, which are more fully detailed in the relevant portions of the Jaradat Declaration as well as in the City Objection to Assumption. 12 Jaradat Declaration ¶ 11.a. 13 Jaradat Declaration ¶ 11.b.

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Relocate sewage and mechanical room.14 The sewage holding tanks are compromised and are not readily accessible per current health and safety and OSHA guidelines. This is a hull structural and watertight integrity issue. Bilge system repairs.15 New pumps, floats, pickups and control panels are required. This is a hull structural and watertight integrity issue. EBDG confirmed priority need for a working bilge system to be installed to deal with minor hull leakage or minor fire flow. This item should be addressed immediately for safety from flooding in the next two years. Sewer system repairs.16 Temporary sewage tanks have been installed until permanent units can be installed. The current piping system has leaks. This is a hull structural and watertight integrity issue. Storm drain system repairs.17 Multiple drains are plugged, covered and abandoned, creating in-wall leaks and pooling. This is a watertight integrity issue. Miscellaneous safety issues.18 Repairs to the various trip, slip and fall hazards are present. In addition to the urgent repairs noted above (which were also contained in the 2017 Marine Survey), additional urgent repairs are needed on the Queen Mary and wharf for the following issues related to life safety, public health, structural integrity issues, maintaining basic operations of the ship and/or compliance with applicable laws: Emergency generator.19 An emergency generator is necessary for the Queen Mary as a life safety system for public operations on the ship, but the current emergency generator is not functioning properly and needs to be replaced. Fire departments require an operating emergency generator as a life safety system. 14 Jaradat Declaration ¶ 11.c. 15 Jaradat Declaration ¶ 11.d. 16 Jaradat Declaration ¶ 11.e. 17 Jaradat Declaration ¶ 11.f. 18 Jaradat Declaration ¶ 11.g. 19 Jaradat Declaration ¶ 12.a.

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Boiler replacement.20 Working boilers are needed to provide heat and hot water throughout the hotel and for food services and the current boiler is not functioning properly and needs to be replaced. Without an operating boiler, the Queen Mary cannot operate as a hotel, conference space or have operating restaurants. Queen Mary Village demolition.21 The Queen Mary Village area (an area that was previously used for shops but now is abandoned) is in clear disrepair, creating numerous health and safety issues. Dome cleaning and caulking.22 Cleaning and maintenance of the geodesic dome used for loading for Carnival cruises is necessary given the significant dirt and debris on the dome. After cleaning, the dome needs to be re-caulked to prevent structural integrity issues. Given that the geodesic dome is used for cruise passenger loading, the structural integrity issues for the dome structure is important. ADA Compliance.23 The Queen Mary should be in full compliance with the Americans with Disabilities Act. There are several issues with ADA compliance that have not been completed on the Queen Mary. An additional issue noted in the EBDG report is that the condition of the handrails throughout the ship must be retrofitted to meet health and safety codes and standards if the ship is to be reopened to the public.24 The handrails have incurred significant corrosion and do not appear to be compliant with current standards.25 Each of the above-listed repairs and replacements have been listed as urgent or critical and involve life safety, health and/or structural integrity issues, compliance with laws, or 20 Jaradat Declaration ¶ 12.b. 21 Jaradat Declaration ¶ 12.c. 22 Jaradat Declaration ¶ 12.d. 23 Jaradat Declaration ¶ 12.e. 24 Jaradat Declaration ¶ 13. 25 Jaradat Declaration ¶ 13.

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essential basic operations, yet have gone unresolved by the Debtor.26 To the extent that the issues were not urgent or critical items related to those categories, they are not listed herein.27 The City has great concern that the Debtor will prolong its ability to assume or reject the Leases while also not working to address these issues, which will only worsen as time passes. The issues relating to watertight integrity issues on the Queen Mary take on added importance because the Debtor failing to address these issues could lead to a flood, capsizing of the ship and life safety and environmental issues. The issues related to the lifeboats and other issues also could lead to life safety issues. Given the Debtor’s failure to comply with section 365(d)(3), the City again notes the critical life-safety issues and the importance of requiring the Debtor to comply with its obligations. 2. The Debtor’s Failure to Comply with the Requirement to Make the Debtor’s Books and Records Available to the City for Audit and Inspection, and Having Not Provided Requested Documents in Relation to the Debtor’s Use of Funds for Historical Preservation and Capital Improvement Projects on the Queen Mary Additionally, despite numerous requests, the Debtor has not provided requested financial information, books and records to the City demonstrating that approximately $23 million in City funds from bond proceeds and tidelands trust funds provided to the Debtor to be used for Historical Preservation and Capital Improvement Projects (“HPCIP”) on the Queen Mary were properly used and accounted for by the Debtor. Section 4.3 of the Lease states that the Debtor shall maintain records including “all unbilled accounting documents, ledgers, bank deposit receipts, bank books, bank statements, federal, state and local tax returns, and other records 26 Jaradat Declaration ¶ 15. 27 Jaradat Declaration ¶ 15. In addition to all of the foregoing, some of the repairs to the Queen Mary undertaken by the Debtor appear to have been performed incorrectly or not pursuant to applicable standards, and will likely need to be fixed or re-done in the near term. The foregoing also does not include all necessary repairs, improvements or maintenance on the Queen Mary, including but not limited to all items listed in the Marine Survey (the items in the Marine Survey will need to be completed over time based on their relative urgency and as the condition of the items deteriorate given normal wear and given the impact of maritime conditions on the items), and does not include certain items listed on the Debtor’s urgent work list that were categorized as “mid-term” urgency or where further information may be needed. Id.

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reasonably necessary to verify the above matters for each calendar year.”28 Section 4.3 further states that the City shall have the right “to audit the Records; to cause an audit of the Records to be made; to make copies of any and all of the Records; to examine any or all Subleases; and to make copies of any or all Subleases.”29 The City has made requests for financial information and documents from the Debtor. The City provided funds for the Debtor to address critical and urgent repairs and upkeep projects on the Queen Mary as part of the HPCIP. However, despite repeated requests to the Debtor, the Debtor has not provided documents demonstrating that the amounts incurred and expended by the Debtor on the HPCIP projects using City funds were properly used and accounted for by the Debtor. Notwithstanding that the City has now been requesting documents as part of an audit and inspection of the Debtor’s records since early 2020, over a year now, the Debtor has still not provided certain basic documents requested, including the Debtor’s electronic check register, cash account detail, bank statements and cancelled checks, cashier’s checks, wire transfers or other payments paid to vendors and subcontractors relating to approximately $23 million funded by the City primarily through bond proceeds and tidelands trust funds.30 This is a continuing post-petition default under the Lease that continues to be ignored by the Debtor. To the extent that City funds were not properly used by the Debtor, additional amounts will be due and owing by the Debtor to the City. Since the Debtor has the ability to obtain the Debtor’s pre-petition and post-petition bank records (to the extent it does not have those records already), it is unclear as to why the Debtor is not willing to comply with this obligation under the Lease. 28 Vallejo Declaration ¶ 4 and Exhibit A thereto. 29 Vallejo Declaration ¶ 4 and Exhibit A thereto. 30 Vallejo Declaration ¶ 8.

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3. Potential Gaps in Insurance Coverage and in Naming the City as an Additional Insured and Loss Payee The requirements for insurance coverage are set forth in Section 12 of the Lease and the Debtor is required to procure and maintain the insurance for the duration of the Lease.31 As discussed in the Letters, the City noted potential gaps in insurance coverage and lack of insurance certificates provided showing that the City is named as an additional insured and loss payee as required under the Lease.32 Sections 12.7 and 12.9 of the Lease require that evidence of the insurance be provided to the City.33 The City has received certain insurance certificates and information from the Debtor’s counsel following the Letter, but has requested additional required information that has not yet been provided.34 The Debtor continues to fail in its obligations under section 365(d)(3) in this regard. 4. Non-compliance with the Requirement in the Lease for the Debtor to Indemnify, Defend and Hold the City Harmless as to Injuries to Persons that Allegedly Occurred on the Premises Subject to the Lease Section 12.1 of the Lease requires that the Debtor indemnify, defend and hold the City harmless from injuries, losses, claims, causes of action, demand or damages while on the Leased Premises.35 On January 28, 2021, counsel for the City sent a letter advising counsel for the Debtor that lawsuits and claims had been filed against the City relating to alleged injuries sustained while on the leased premises.36 The letter further advises the Debtor that it is “required to indemnify, defend and hold the City harmless as to pending claims and lawsuits against the City.” On February 9, 2021, counsel for the City sent a follow-up letter advising the Debtor’s counsel that new lawsuits had been filed against the City relating to alleged injuries sustained 31 Vallejo Declaration ¶ 4 and Exhibit A thereto. 32 Vallejo Declaration ¶ 5 and Exhibit C thereto. 33 Vallejo Declaration ¶ 4 and Exhibit A thereto. 34 Vallejo Declaration ¶ 8. 35 Vallejo Declaration ¶ 4 and Exhibit A thereto. 36 See Declaration of Corey R. Weber filed in support of City Objection to Assumption (Docket No. 695) (the “Weber Declaration”), ¶ 4.

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while on the Leased Premises.37 The letter states that “[t]he City is hereby tendering the matters to the Debtor, and requires that the Debtor indemnify, defend and hold the City harmless, as required under the Lease. As noted in my first letter, time is of the essence with regard to these claims. Please confirm that the Debtor is honoring its obligations under the Lease to indemnify, defend, and hold the City harmless regarding these lawsuits.” Counsel for the City sent a follow-up e-mail on February 17, 2021 “following up on my two letters to you regarding the City’s request for confirmation that Urban Commons is honoring its obligations under the lease to indemnify, defend and hold the City harmless regarding the lawsuits. Time is of the essence given that the claims are part of pending litigation.”38 Following the letters and e-mails, of the seven claims referenced in the letters, the City has only received a response as to one of the claims.39 On February 24, 2021, counsel for the City received an e-mail from Liberty Mutual Insurance regarding the tender of the lawsuit and claims by one plaintiff acknowledging receipt of the tender letter and requesting a copy of the Lease. Counsel for the City provided a copy of the Lease to Liberty Mutual Insurance the same day.40 There has been no substantive response regarding the remaining claims from the Debtor. The Debtor is failing to comply with its requirement to defend, indemnify and hold the City harmless as to the claims and lawsuits, as required under the Lease as well as section 365(d)(3). 5. The Debtor Has Not Complied with the Requirement to Timely Provide Audited Financial Statements to the City Schedule 1 to the Lease requires that the Debtor provide audited financial statements to the City within 90 days after the end of the Debtor’s fiscal year, which was on March 31, 2021.41 The deadline in the Lease for the Debtor to provide its calendar year 2020 audited financial 37 Weber Declaration ¶ 5. 38 Weber Declaration ¶ 6. 39 Weber Declaration ¶ 7. 40 Weber Declaration ¶ 7. 41 Vallejo Declaration ¶ 4 and Exhibit A thereto.

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statements to the City has passed and the City has not received the audited financial statements or any information or timeline as to when the audited financial statements will be provided.42 B. The Debtor’s Non-Payment of Post-Petition Possessory Interest Taxes Related to the Leases That Is Due and Owing to Los Angeles County The Debtor has not paid post-petition taxes due and owing to the Los Angeles County related to the Leases. On or about April 7, 2021, the Los Angeles County Treasurer and Tax Collector filed two proofs of claim in the Debtor’s bankruptcy case for possessory interest taxes and/or other taxes that are past due and owing by the Debtor, including amounts as to the post-petition period (Claim Nos. 121 and 12443). Claim 124 lists an amount due of $848,112.77. The attachment to Claim 124 lists taxes for the period of July 1, 2020 to June 30, 2021 and states that the first installment was paid but that the second installment of $848,112.77 is due. The second installment that has not been paid by the Debtor includes the post-petition period through June 30, 2021. Claim 121 lists an amount due of $5,202,168.39. The attachments to Claim 121 reference the periods of July 1, 2019 to July 30, 2020, July 1, 2020 to June 30, 2021, and include certificates of tax liens that appear to have been recorded and/or filed on September 18, 2020. Just as stated above as to utilities and rent, the tax payments that are for the post-petition period are administrative expenses that must be paid pursuant to 11 U.S.C. § 365(d)(3) regardless of whether the Leases are assumed or rejected by the Debtors. Based on the proofs of claim filed by Los Angeles County Treasurer and Tax Collector (Claim Nos. 121 and 124), the Debtor has not complied with Sections 10.1 or 10.3 of the Lease, which require taxes, assessments and other charges to be timely paid by the Debtor.44 The Debtor has ignored its obligation to timely pay post-petition taxes to Los Angeles County and is not meeting its obligations under 11 U.S.C. § 365(d)(3) or the Lease. 42 Vallejo Declaration ¶ 6. 43 Vallejo Declaration, ¶ 6 and Exhibit D thereto. 44 Vallejo Declaration, ¶ 6. See also, Vallejo Declaration, ¶ 4 and Exhibit A thereto.

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C. Post-Petition Monetary Defaults (Subject to COVID-19 Temporary Rent Abatement) Post-petition amounts currently due to the City (additional amounts are due for the pre-petition period) for rent and bounced checks (which checks were for pass-through rent) include 2021 base rent for January and February totaling $50,000. The City is in receipt of base rent payments for March and April 2021. In addition, base rent continues to accrue in the amount of $25,000 each month. Lease, Section 4.1.1. The rent that is due pursuant to the Leases has been subject to a temporary County of Los Angeles rent abatement due to the COVID-19 pandemic, but will become due and owing immediately following the termination of the temporary county rent abatement ordinances.45 In addition to the foregoing, the City’s records also reflect that the Debtor owes amounts to Long Beach utilities in the amount of $44,226.78 post-petition, neither of which has been brought current.46 The Lease requires that the Debtor indemnify, defend and hold the City harmless as to amounts due for utilities used, rendered or supplied to or on the premises subject to the Lease.47 The amounts that came due postpetition and remain unpaid are administrative expenses that must be paid pursuant to 11 U.S.C. § 365(d)(3) regardless of whether the Leases are assumed or rejected by the Debtors. See, e.g., In re Montgomery Ward Holding Corp., 268 F.3d 205, 211-212 (3rd Cir. 2001). Additional amounts will become due and owing to the City each month in addition to the above-listed amounts. III. RESERVATION OF RIGHTS The City reserves any and all rights under the Leases and applicable statutes and case law, including those set forth in the pending adversary proceeding (Adv. No. 21-50316-CSS), the City’s limited objection to bidding procedures (Docket No. 384), the City’s objection to proposed cure costs and adequate assurance (Docket No. 566), the City’s objection to the 45 Vallejo Declaration ¶ 10. 46 Vallejo Declaration ¶ 11. 47 Vallejo Declaration ¶ 11.

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assumption, assignment and sale of the Leases (Docket No. 694) and any potential motion, including but not limited to a potential motion for relief from the automatic stay, and no such rights or other rights of the City are waived as a result of the filing of this limited objection. IV. CONCLUSION The Debtor should not be permitted to obtain the potential benefit to the estate of assuming, assigning and selling the Leases, while not complying with its statutory obligations under section 365(d)(3) and obligations as lessee, and thereby placing the Queen Mary, and the lives, health and safety of caretaker staff and visitors on the ship at risk. Based on the foregoing, the City respectfully requests that the Court enter an order making any extension expressly subject to the Debtor timely performing under the Leases, as is required under 11 U.S.C. § 365(d)(3). Respectfully Submitted, Dated: June 1, 2021 GELLERT SCALI BUSENKELL & BROWN LLC Wilmington, Delaware By: /s/ Michael Busenkell Michael Busenkell (DE Bar ID# 3933) 1201 N. Orange Street, Suite 300 Wilmington, DE 19801 Telephone: (302) 425-5812 Facsimile: (302) 425-5814 Email: mbusenkell@gsbblaw.com -and- Corey R. Weber (admitted pro hac vice) Jessica L. Bagdanov (admitted pro hac vice) BRUTZKUS GUBNER 21650 Oxnard Street Woodland Hills, CA 91367 Telephone: (818) 827-9000 Facsimile: (818) 827-9099 E-mail: cweber@bg.law and jbagdanov@bg.law Counsel to the City of Long Beach and the City of Long Beach, a municipal corporation acting by and through its Board of Harbor Commissioners

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