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Full title: Motion to Reject Lease or Executory Contract (Debtors' Motion, Pursuant to Bankruptcy Code Sections 365(b) and 554(a), Seeking Entry of Order (I) Authorizing Debtor Urban Commons Queensway, LLC to (A) Reject Certain Executory Contracts and Unexpired Leases and Subleases Nunc Pro Tunc to Surrender Date and (B) Abandon Any Remaining Personal Property Located at Leased Premises and (II) Granting Related Relief). Filed by EHT US1, Inc.. Hearing scheduled for 7/7/2021 at 10:00 AM at US Bankruptcy Court, 824 Market St., 5th Fl., Courtroom #6, Wilmington, Delaware. Objections due by 6/18/2021. (Attachments: # 1 Notice of Motion # 2 Exhibit A - Proposed Order # 3 Exhibit B - Kwon Declaration # 4 Exhibit C - Rejected Contracts) (Dean, G.) (Entered: 06/04/2021)

Document posted on Jun 3, 2021 in the bankruptcy, 17 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

The above-captioned debtors and debtors in possession (collectively, the “Debtors”), hereby submit this motion (the “Motion”) seeking entry of an order, substantially in the form attached as Exhibit A hereto (the “Proposed Order”), pursuant to section 105(a), 365(b), and 554(a) of title 11 of the United States Code (the “Bankruptcy Code”), (i) authorizing Debtor Urban Commons Queensway, LLC (the “Queen Mary Debtor”) to reject certain executory contracts and unexpired leases, as well as related sub-leases of non-residential real property, effective (as applicable) nunc pro tunc to the Surrender Date (as defined herein) and 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 Real Estate Investment Trust (7734); Eagle Hospitality Trust S1 Pte.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 (9915); 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).Instead, it is operated pursuant to a series of long-term ground leases with the City of Long Beach, California (the “City”), including: (i) 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, by and between the City and the Queen Mary Debtor, (the “Master Ground Lease”); (ii) that certain Lease, dated June 6, 1997, by and between the City and the Queen Mary Debtor (as successor in interest to Queen’s Seaport Development, Inc.), as amended by that certain letter to Landlord, dated October 28, 2007 (as amended and assigned, the “Special Events Lease”); and (iii) that certain Submerged Land and Water Area Lease (Harbor Department Document No.  “Pass-Through Rent” equal to all payments, rent or other compensation 4 received by the Queen Mary Debtor, as Tenant under the Catalina Channel Express Permit5 or any sublease, license, or similar agreement entered into by the Queen Mary Debtor, as Tenant with a sublessee for a portion of the property now subject to the Catalina Channel Express Permit;  “Percentage Rent” equal to the excess of (i) 10% of the sum of (A) the net site revenue for the applicable lease year, minus (B) the Priority Return for the applicable lease year, over (ii) the Minimum Rent for that lease year6; and  “Passenger Fee Rent” equal to: (A) For

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ---------------------------------------------------------------: Chapter 11 In re: : : Case No. 21-10036 (CSS) EHT US1, Inc., et al., : : (Jointly Administered) Debtors.1 : Hearing Date: July 7, 2021 at 10:00 a.m. (ET) : Obj. Deadline: June 18, 2021 at 4:00 p.m. (ET) -------------------------------------------------------------DEBTORS’ MOTION, PURSUANT TO BANKRUPTCY CODE SECTIONS 365(b) AND 554(a), SEEKING ENTRY OF ORDER (I) AUTHORIZING DEBTOR URBAN COMMONS QUEENSWAY, LLC TO (A) REJECT CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES AND SUBLEASES NUNC PRO TUNC TO SURRENDER DATE AND (B) ABANDON ANY REMAINING PERSONAL PROPERTY LOCATED AT LEASED PREMISES AND (II) GRANTING RELATED RELIEF The above-captioned debtors and debtors in possession (collectively, the “Debtors”), hereby submit this motion (the “Motion”) seeking entry of an order, substantially in the form attached as Exhibit A hereto (the “Proposed Order”), pursuant to section 105(a), 365(b), and 554(a) of title 11 of the United States Code (the “Bankruptcy Code”), (i) authorizing Debtor Urban Commons Queensway, LLC (the “Queen Mary Debtor”) to reject certain executory contracts and unexpired leases, as well as related sub-leases of non-residential real property, effective (as applicable) nunc pro tunc to the Surrender Date (as defined herein) and 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 Real Estate Investment Trust (7734); Eagle Hospitality Trust S1 Pte. Ltd. (7669); Eagle Hospitality Trust S2 Pte. Ltd. (7657); EHT Cayman Corp. Ltd. (7656); Sky Harbor Atlanta Northeast, LLC (6846); 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 (9915); 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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(ii) authorizing the Queen Mary Debtor, as debtor in possession, to abandon any remaining personal property located at the Leased Premises (as defined herein). In support of the Motion, the Debtors (i) submit the supporting declaration of Lawrence A. Kwon (the “Kwon Declaration”), attached as Exhibit B hereto, and (ii) respectfully state as follows: JURISDICTION, VENUE, AND STATUTORY BASES 1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2). In accordance with Rule 9013-1(f) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the “Local Rules”), the Debtors confirm their consent to the entry of a final order by the Court in connection with this Motion to the extent that it is later determined that the Court, absent consent of the parties, cannot enter final orders or judgments in connection herewith consistent with Article III of the United States Constitution. 2. Venue in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409. 3. The statutory bases for the relief requested herein are sections 365(a) and 554 of the Bankruptcy Code and Rules 6007 and 6007 of the Federal Rules of Bankruptcy Procedure. RELEVANT BACKGROUND 4. On January 18, 2021, each of the Debtors, with the exception of Eagle Hospitality Real Estate Investment Trust (“EH-REIT”), filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. On January 27, 2021, EH-REIT filed a petition for voluntary relief under chapter 11 of the Bankruptcy Code. The Debtors are authorized to continue operating their businesses as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.

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5. The Debtors’ chapter 11 cases are being jointly administered for procedural purposes only, pursuant to Bankruptcy Rule 1015(b), Local Rule 1015-1, the Order Directing Joint Administration of Related Chapter 11 Cases [Docket No. 58], and the Order Granting Debtors Motion for Entry of Order (I) Directing Joint Administration of Related Chapter 11 Cases, and (II) Granting Related Relief [Docket No. 115]. 6. On February 4, 2021, the Office of the United States Trustee for Region 3 (the “U.S. Trustee”) appointed an official committee of unsecured creditors pursuant to section 1102 of the Bankruptcy Code (the “Creditors’ Committee”).2 No trustee has been appointed in these chapter 11 cases. 7. A detailed description of the Debtors and their business is set forth in the Declaration of Alan Tantleff, Chief Restructuring Officer of Eagle Hospitality Group, in Support of Debtors’ Chapter 11 Petitions and First Day Motions [Docket No. 13] (the “First Day Declaration”), which is incorporated herein by reference.3 8. On April 9, 2021, the Court entered the Order (I) Fixing Deadline for Filing Proofs of Claim and (II) Approving Form and Manner of Notice Thereof [Docket No. 560] (the “Bar Date Order”), establishing July 15, 2021 as the General Bar Date (as defined therein). I. Queen Mary Long Beach 9. The Queen Mary Long Beach (also known as the RMS Queen Mary) is a retired ocean liner permanently docked in the Port of Long Beach and repurposed to serve as a hotel (the “QM Hotel”). 2 By notice dated February 18, 2021 the U.S. Trustee amended the membership of the Creditors’ Committee. See Docket No. 243. 3 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the First Day Declaration.

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a. QM Leases 10. As explained in the First Day Declaration, the QM Hotel is the only one of the Debtors’ Hotels that is not owned as a freehold asset. Instead, it is operated pursuant to a series of long-term ground leases with the City of Long Beach, California (the “City”), including: (i) 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, by and between the City and the Queen Mary Debtor, (the “Master Ground Lease”); (ii) that certain Lease, dated June 6, 1997, by and between the City and the Queen Mary Debtor (as successor in interest to Queen’s Seaport Development, Inc.), as amended by that certain letter to Landlord, dated October 28, 2007 (as amended and assigned, the “Special Events Lease”); and (iii) that certain Submerged Land and Water Area Lease (Harbor Department Document No. HD-6433), dated January 22, 2001, by and between the City and the Queen Mary Debtor (as successor-in-interest to Queen’s Seaport Development, Inc.) (as amended, modified, and assigned, the “Submerged Land Lease” and, together with the Master Ground Lease and the Special Events Lease, the “QM Leases”). 11. The approximate rent under each of the QM Leases, as well as the remaining terms, is as set out below:  Master Ground Lease o Remaining term: The term of the Master Ground Lease began on November 1, 2016. The term ends at midnight on the 66th anniversary of November 1, 2016. o Rent under the Master Ground Lease:  “Minimum Rent” of $300,000 per year, payable in 12 equal monthly installments;

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 “Pass-Through Rent” equal to all payments, rent or other compensation 4 received by the Queen Mary Debtor, as Tenant under the Catalina Channel Express Permit5 or any sublease, license, or similar agreement entered into by the Queen Mary Debtor, as Tenant with a sublessee for a portion of the property now subject to the Catalina Channel Express Permit;  “Percentage Rent” equal to the excess of (i) 10% of the sum of (A) the net site revenue for the applicable lease year, minus (B) the Priority Return for the applicable lease year, over (ii) the Minimum Rent for that lease year6; and  “Passenger Fee Rent” equal to: (A) For the first 5 years of the term of the Master Ground Lease, 100% of the passenger fees paid by the sublessee (i.e., Carnival) under the Carnival Terminal Sublease (as defined herein) (up to a maximum of $2.15M in any given year); (B) From lease year six to lease year fifteen of the Master Ground Lease, the Passenger Fee Rent is equal to 50% of the passenger fees paid by Carnival under the Carnival Terminal Sublease; provided, however, that the rent shall not be less than the Passenger Fee Rent Baseline7; and (C) For all subsequent years, an amount equal to the sum of the Passenger Fee Rent Baseline in effect for the prior lease year, plus an additional amount based on changes in the CPI.  Special Events Lease o Remaining Term: The term ends on July 31, 2066. o Rent: Nominal rent of $1 per year, plus payments of 50% of gross revenue that the Queen Mary Debtor, as Tenant, derives from subleases or permits issued for use of the on-site helipad and boat dock. 4 Other than payments from the permittee or any customer of the permittee for the right to park on the Leased Premises in connection with the Catalina Channel Express Permit. 5 As defined in the Master Ground Lease, the Catalina Channel Express Permit refers to that certain sublease agreement entered into on or about December 31, 2003, between QSDI and Catalina Channel Express, Inc., a California corporation, as amended by that certain amendment to sublease agreement dated February 8, 2005, as further amended by that certain amendment to sublease agreement dated January 1, 2006, as further amended by that certain amendment to sublease agreement dated October 25, 2006. 6 “Priority Return” means an amount equal to 9% multiplied by Tenant’s Eligible Basis, all as defined in the Master Ground Lease. 7 The “Passenger Fee Rent Baseline” is: (i) for lease years six through fifteen, $1.5M; (ii) for lease year sixteen, an amount equal to the sum of $2.15M, plus an additional amount based on changes in the CPI.

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 Submerged Land Lease o Remaining Term: The term ends on July 31, 2026. o Rent: Annual rent of $340,342, subject to increase every five years based on then-current rental rate for similar unimproved submerged land and water areas. i. Upcoming Payments 12. The Debtors have been paying base rent under the QM Leases since the Petition Date, and another $44,695.16 in base rent will be due on July 1, 2021, as will caretaker expenses of approximately $300,000 per month. On July 1, 2021, the Debtors will also incur additional expenses of approximately $1.3 million in hull and property insurance. b. Carnival Subleases8 13. The Queen Mary Debtor has entered into subleases for certain of the property leased to it under the QM Leases (such property the “Leased Premises”). Specifically, the Queen Mary Debtor, (as successor-in-interest to Queen’s Seaport Development, Inc.), is the lessor under (i) that certain Sublease Agreement—Terminal (Dome), dated January 5, 2000, with Carnival Corporation (“Carnival”) (as amended and assigned, the “Carnival Terminal Sublease”) and (ii) that certain Sublease Agreement - Garage, dated January 5, 2000, by and between GIBS, Inc. (an affiliate of Carnival) and Queensway (as successor-in-interest to Queen’s Seaport Development, Inc.), as amended by that certain First Amendment to Sublease – Garage, dated January 31, 2001 (as amended and assigned, the “Carnival Garage Sublease” and, together with the Carnival 8 In addition to the Carnival Subleases discussed herein, and as discussed in the First Day Declaration, prior to the Petition Date the Queen Mary Debtor had entered into subleases with EHT QMLB, LLC for the management and operation of the Queen Mary Hotel itself. Pursuant to order of this Court entered on March 15, 2021, that sublease was terminated by agreement of the parties, which termination was deemed to have occurred prior to the Petition Date. See Order Approving Stipulation (I) Partially Resolving Adversary Proceedings and (II) Establishing Scheduling Order [Docket No. 9 in Adv. Proc. No. 21-50073].

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Terminal Sublease, the “Carnival Subleases”) (the Carnival Subleases and the QM Leases collectively, the “Rejected Leases”). 14. The approximate rent under each of the Carnival Subleases, as well as the remaining terms, is as set out below:  Carnival Terminal Sublease o Remaining term: Initial term of 25 years with three 10-year options to extend. o Rent:  “Minimum Rent” of $900,000 per year, subject to periodic increases based on the CPI;  “Passenger Fees” equal to (A) $4.30 per passenger for passengers commencing and ending a cruise voyage at the Subleased Premises and (B) $2.15 per passenger for passengers in transit; and  “Percentage Rent” equal to 5% of gross receipts.  Carnival Garage Sublease o Remaining Term: Initial term of 25 years with three 10-year options to extend. o Rent:  quarterly rent of $93,750 plus 5% of gross receipts from the parking facility; and  Net Revenues derived from vehicles not attributable to cruise passenger of (A) 50% during the first 15 years of the lease and (B) 50% of (i) net income less (ii) $93,750 quarterly rent c. Other QM Contracts 15. In addition to the Rejected Leases, the Queen Mary Debtor is party to a number of executory contracts related to the ordinary operations of running a hotel and tourist attraction, including, without limitation, contracts for telephone and internet services, various food and beverage related contracts, and caretaker and management company contracts (all such contracts

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the “Rejected Hotel Related Agreements” and, together with the Rejected Leases, the “Rejected Contracts”). A schedule of the Rejected Contracts is attached as Exhibit C hereto. II. Sale Efforts 16. On March 24, 2021, the Court entered an order (the “Bidding Procedures Order”)9approving certain bidding procedures (the “Bidding Procedures”), including a May 14, 2021 bid deadline, for the sale of the Debtors’ assets, including the Queen Mary Debtor’s interests in the Rejected Leases.10 The Bidding Procedures Order also approved the Debtors’ designation of Madison Phoenix LLC as the Stalking Horse Bidder pursuant to the terms agreed to with the Debtors in the form of asset purchase agreement (the “Stalking Horse Agreement”) attached as Exhibit 4 to the Bidding Procedures Order. 17. The Stalking Horse Agreement provided that the QM Hotel would become an “Excluded Asset” if certain conditions—including the City’s consent to the assignment of the Rejected Leases—were not satisfied. The QM Hotel would also become an Excluded Asset if the Stalking Horse Bidder delivered to the Debtors a written notice that it had determined, in its sole discretion, that the “labor and pension structure related to the QM Hotel is not acceptable” to it.11 18. After entering into the Stalking Horse Agreement, the Debtors, together with Moelis, worked closely with the Stalking Horse Bidder to finalize the Stalking Horse Bidder’s due diligence process in an effort to realize any possible value from the QM Hotel, including numerous discussions with the Stalking Horse Bidder, the City (and its numerous officials and offices) and the unions in place at the QM Hotel. In addition, and as contemplated by the 9 See Docket No. 503. 10 A copy of the approved Bidding Procedures was attached as Exhibit 1 to the Bidding Procedures Order. 11 See Stalking Horse Agreement, §§ 2.1(e), (f).

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Bidding Procedures, the Debtors and Moelis continued to market the QM Hotel (either individually or as part of a group of assets) to other potential purchasers, and reached out to (or received unsolicited inquiries from) a total of 312 parties, including 58 parties Moelis contacted specifically regarding the QM Hotel. 19. On April 22, 2021, the Stalking Horse Bidder notified the Debtors that it had elected to remove the QM Hotel from the assets it was willing to purchase. Further, the May 14, 2021 bid deadline has now passed, and the Debtors did not receive any Qualified Bids for the QM Hotel.12 20. After the bid deadline, on May 21, 2021, the Debtors did receive the non-binding First QM Bid from CHG (each as defined in the Kwon Declaration).13 While CHG never responded to the Debtors’ request for additional information and identification of certain deficiencies with the First QM Bid, on June 1, 2021, CHG did submit the Second QM Bid (as defined in the Kwon Declaration).14 21. The Debtors have determined that neither of the QM Bids constitute a Qualified Bid under the Bidding Procedures Order for numerous reasons, including because they are likely to substantially increase the administrative expenses claims against the Queen Mary Debtor and 12 On April 9, 2021, in the midst of the Debtors’ marketing process, the City filed an objection to the Debtors’ proposed cure amount in connection with any assumption and assignment of the QM Leases, asserting that the QM Leases could not be assumed and assigned without satisfaction of at least $20 million in cure payments (and possibly much more), as well as cure of certain alleged non-monetary defaults. See Docket No. 566. The City also asserted that it had an absolute right as a matter of law to approve or disapprove any proposed assignee pursuant to section 365(c)(1) of the Bankruptcy Code and under applicable non-bankruptcy law. Id. Concurrently with its cure objection, the City also commenced an adversary proceeding against the Queen Mary Debtor seeking a declaratory judgment in connection with the alleged defaults identified in its cure objection, explaining that the purpose of the adversary proceeding was to provide a forum for the “significant discovery” the City expects will be necessary to determine the monetary value of the alleged defaults, “including third party discovery and expert witness designation and discovery.” See Adv. Case No. 21-50316, Docket No. 1, p. 2. It is impossible to know, precisely, what impact the City’s actions had on the market for the QM Hotel. 13 See Kwon Decl. ¶ 9. 14 See Kwon Decl. ¶¶ 10-11.

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because they are contingent on the occurrence of certain conditions, which the Debtors view as unlikely to occur.15 Critically, and demonstrating the contingent, non-binding and, ultimately, illusory nature of the QM Bids, none of the “offers” or other communications the Debtors have received from CHG have ever been accompanied by a draft asset purchase agreement that lays out CHG’s basic expectations of the terms and conditions for any proposed purchase, including contingencies, material representations, treatment of the Queen Mary Debtor’s employee obligations, and the terms and conditions of any deposit. III. Surrender of Leased Premises 22. The City, as landlord under the QM Leases, will be served with a copy of this Motion, and the Debtors seek to reject the QM Leases effective as of the date on which the Debtors return to the City the keys to the Leased Premises or notify the City in writing that it may rekey the Leased Premises, which date (the “Surrender Date”) shall be set forth in a written notice to the City or its counsel. RELIEF REQUESTED 23. By this Motion, the Debtors request entry of the Proposed Order (i) authorizing the Queen Mary Debtor’s rejection of the Rejected Contracts, effective as of the Surrender Date, (ii) authorizing the Queen Mary Debtor, as debtor-in-possession, to abandon any personal property (collectively, “Personal Property”) remaining at the Leased Premises after the Surrender Date (any such Personal Property, the “Remaining Property”), and (iii) granting related relief. 15 See Kwon Decl. ¶¶ 11-14.

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BASIS FOR RELIEF REQUESTED I. Court Should Approve Rejection of Rejected Contracts as Sound Exercise of Debtors’ Business Judgment 24. Section 365(a) of the Bankruptcy Code provides that, “subject to the court’s approval,” a debtor “may assume or reject any executory contract or unexpired lease.” As this Court has explained, “[c]ourts generally authorize debtors to assume or to reject executory contracts and unexpired leases where the debtors appropriately exercise their business judgment.” In re Extraction Oil & Gas, 622 B.R. 608, 614 (Bankr. D. Del. 2020) (internal citations omitted) (collecting cases). 25. The business judgment test requires only that the debtor demonstrate that either assumption or rejection of the executory contract or unexpired lease will benefit the debtor’s estate. N.L.R.B. v. Bildisco (In re Bildisco), 682 F.2d 72, 79 (3rd Cir. 1982) (“usual test for rejection of an executory contract is simply whether rejection would benefit the estate”) aff’d, 465 U.S. 513. Accordingly, “[c]ourts generally will not second-guess a debtor’s business judgment concerning the rejection of an executory contract or unexpired lease,” and a debtor’s decision in this regard “must be summarily affirmed unless it is the product of ‘bad faith, or whim or caprice.’” In re Extraction Oil & Gas, 622 B.R. at 615. 26. Rejection of the Rejected Contracts is a sound exercise of the Debtors’ business judgment. As described above, the Debtors have undertaken a thorough marketing process for the QM Hotel, and the only bidder that did make a viable offer ultimately retracted that offer (as it pertains to the QM Hotel). 27. Moreover, and as further described above, even if the City’s estimation of the cure costs are significantly overblown, assumption of the QM Leases will still impose significant cure costs. Assumption will also impose litigation costs in connection with the City’s adversary

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proceeding and related objection. Like cure costs, these litigation costs will be administrative expenses that will dilute, or eliminate, any recovery to other creditors. Indeed, merely by not rejecting the QM Leases, the Debtors continue to incur significant administrative expenses due to the obligations owed under the QM Leases. Finally, because (i) the QM Hotel is not currently operating, (ii) the Carnival Subleases do not generate revenue nearly sufficient to pay these administrative expenses, and (iii) there is no viable buyer for the QM Hotel, the only way to pay these administrative costs would be additional borrowings under the Debtors’ DIP facility—which would obligate all of the Debtors jointly and severally, not just the Queen Mary Debtor, to repay these amounts. 28. Rejection of the Carnival Subleases is also consistent with the sound exercise of the Debtors’ business judgment. The Debtors have determined that any amounts they receive under the Carnival Subleases is less than the amount the Debtors will owe under the QM Leases if not rejected—especially when considering any cure costs thereunder. Further, as noted above, a significant portion of the rent collected under the Carnival Subleases must be turned over to the City as rent under the QM Leases.16 29. Lastly, upon rejection of the Rejected Leases, the Queen Mary Debtor will no longer be in the business of operating or managing a hotel, and will derive no further benefit from the Rejected Hotel Related Agreements. 30. As such, the Rejected Contracts are not a source of value for, and their rejection will benefit, the Debtors and their estates. 16 Moreover, rejection of the QM Leases results, by definition, in rejection of the Carnival Subleases, as “when a lease is deemed rejected pursuant to § 364(d)(4), any subleases under that primary lease must also be deemed rejected since the sublessee’s rights in the property extinguish with those of the sublessor.” See Chatlos Sys., Inc. v. Kaplan, 147 B.R. 96 (D. Del. 1992), aff’d sub nom. In re TI Commc’ns, 998 F.2d 1005 (3d Cir. 1993); see also In re Great Atlantic & Pacific Tea Co., Inc., 544 B.R. 43, 53 (Bankr. S.D.N.Y. 2016) (“the requirement that the debtor surrender possession to its landlord is tantamount to termination as far as the subtenant’s rights as lessee under the sublease . . . are concerned”) (as modified).

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II. Court Should Approve Rejection of Rejected Contracts Nunc Pro Tunc to Surrender Date 31. The Surrender Date may occur after the filing of, but prior to a hearing considering, this Motion. In such circumstances, the Debtors respectfully request that the Court approve rejection of the Rejected Leases nunc pro tunc to the Surrender Date. 32. “Courts have held that bankruptcy courts may exercise their equitable powers in granting such a retroactive order when doing so promotes the purposes of Section 365(a)” of the Bankruptcy Code. In re Extraction Oil & Gas, 622 B.R. at 630 (as modified). Courts have further held that the retroactive rejection of executory contracts and unexpired leases may be approved ‘after balancing the equities’ of a case and concluding that such equities weigh in favor of the debtor.” Id. Courts “eschew any attempt to limits the factors a bankruptcy court may consider when balancing the equities in a particular case.” In re Rupari Holding Corp., No. 17-10793 (KJC), 2017 WL 5903498, at *6 (Bankr. D. Del. Nov. 28, 2017) (quoting In re At Home Corp., 392 F.3d 1064, 1075 (9th Cir. 2004)). 33. Here, the balance of equities justifies retroactive relief. Perhaps most importantly, the Debtors seek retroactive relief only to the Surrender Date. SeeIn re Chi-Chi’s, Inc., 305 B.R. 396, 399 (Bankr. D. Del. 2004) (declining to approve rejection as of the Petition date and ruling that the “more appropriate date is the day the Debtors surrendered the premises to the Landlords”); see generallyIn re TW, Inc., No. 03-10785 (MFW), 2004 WL 115521, at *2 (D. Del. Jan. 14, 2004) (affirming denial of retroactive relief where “the bankruptcy court placed emphasis on the fact that possession of the Premises was not properly surrendered and that fault, in this regard, indisputably rested with the debtor”). Indeed, courts in this district frequently approve a date of rejection retroactive to the date a debtor surrenders the leased premises to the landlord. See, e.g., In re Southcross Energy Partners, L.P., No. 19-10702 (MFW) (Bankr. D.

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Del. Oct. 17, 2019) [Docket No. 544] (authorizing rejection retroactive to surrender date); In re Sports Authority Holding, Inc., No. 16-10527 (MFW) (Bankr. D. Del. April 4, 2016) [Docket No. 996] (authorizing rejection retroactive to petition date where surrender notice was either on or prior to petition date and informed landlord of Debtors’ intent to reject leases effective as of the petition date); In re Chi-Chi’s, Inc., 305 B.R. 396, 399 (Bankr. D. Del. 2004) (granting retroactive relief to the date on which the debtors surrendered the premises to their landlords); In re Fleming Cos., Inc., 304 B.R. 85, 96 (Bankr. D. Del. 2003) (noting retroactive rejection was permitted to the date of the motion or the date the premises was surrendered); see generally In re Proteus Digital Health, Inc., No. 20-11580 (BLS) (Bankr. D. Del. Aug. 10, 2020) [Docket No. 192] (authorizing rejection as of surrender date). 34. Additionally, the “Debtors have sought the relief requested as soon as they determined that the rejection of the Rejected Leases was in the best interests of their estates,” In re Extraction Oil & Gas, 622 B.R. at 631, i.e., when it became apparent that there was no viable buyer for the QM Hotel. Further, the City’s litigation posture has almost certainly contributed to the lack of any binding offer for the QM Hotel, notwithstanding the interest generated by the Debtors’ marketing process. Seeid. at 631 (noting that “Rejection Counterparties have done nothing to mitigate their damages”). Finally, “[w]ithout a retroactive date of rejection, the Debtors could be forced to incur unnecessary administrative charges . . . that do not provide an equivalent benefit to the Debtors’ estates.” Id. III. Court Should Authorize Debtors to Abandon Remaining Property at Leased Premises 35. Section 554(a) of the Bankruptcy Code provides that ‘after notice and hearing, the trustee may abandon any property of the estate that is burdensome to the estate or that is of inconsequential value and benefit to the estate.” The “trustee’s power to abandon property is

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discretionary,” and [c]ourts defer to the trustee’s judgment.” In re Slack, 290 B.R. 282, 284 (Bankr. D.N.J. 2003), aff’d, 112 F. App’x 868 (3d Cir. 2004). Even if abandonment is opposed, the “court only needs to find the trustee made: 1) a business judgment; 2) in good faith; 3) upon some reasonable basis; and 4) within the trustee's scope of authority.” Id. 36. The Debtors have already removed most, if not all, of their Personal Property from the Leased Premises, and have—with the help of their onsite managers—determined that the costs associated with removing, storing, and liquidating any Remaining Property will likely approach or exceed the value of such assets. This is especially true because it would be impossible for the Debtors to both surrender the Leased Premises (thereby obtaining retroactive relief) and continue liquidating any Remaining Property after the Surrender Date. As such, the “costs” of liquidating any Remaining Property will include the administrative expenses incurred under the QM Leases after that date. Thus, the Debtors submit that abandonment of any Remaining Property at the Leased Premises is appropriate and in the best interests of the Debtors and their estates. RESERVATION OF RIGHTS 37. Nothing in this Motion is intended or shall be construed as (i) an admission as to the validity or amount of any claim against the Debtors; (ii) a waiver of the Debtors’ rights to dispute the amount of, basis for, or validity of any claim against the Debtors; (iii) a waiver of any claims or causes of action which may exist against any creditor or interest holder, or (iv) an assumption or rejection of any agreement contract or lease under section 365 of the Bankruptcy Code (other than the Rejected Contracts). The Debtors expressly reserve their rights to contest any claims related to the Rejected Contracts, and to assert any claims thereunder.

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NOTICE 38. The Debtors will provide notice of this Motion to: (a) the U.S. Trustee; (b) the Debtors’ secured lenders; (c) the United States Attorney’s Office for the District of Delaware; (d) counterparties to the Rejected Contracts; and (e) any other parties entitled to notice pursuant to Local Rules 2002-1(b) and 9013-1(m). The Debtors submit that, in light of the nature of the relief requested, no other or further notice need be given. NO PRIOR REQUEST 39. No previous request for the relief sought herein has been made by the Debtors to this Court or any other court. [Remainder of page intentionally left blank.]

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WHEREFORE, the Debtors respectfully request entry of the Proposed Order, substantially in the form attached hereto, granting the relief requested herein and such other relief as is just and proper. Dated: June 4, 2021 Wilmington, Delaware COLE SCHOTZ P.C. /s/ G. David Dean Seth Van Aalten (admitted pro hac vice) G. David Dean (No. 6403) Justin R. Alberto (No. 5126) 500 Delaware Avenue, Suite 1410 Wilmington, Delaware 19801 Telephone: (302) 652-3131 Facsimile: (302) 574-2103 Email: svanaalten@coleschotz.com ddean@coleschotz.com jalberto@coleschotz.com - and - PAUL HASTINGS LLP Luc A. Despins, Esq. (admitted pro hac vice) G. Alexander Bongartz, Esq. (admitted pro hac vice) 200 Park Avenue New York, New York 10166 Telephone: (212) 318-6000 Facsimile: (212) 319-4090 Email: lucdespins@paulhastings.com alexbongartz@paulhastings.com Counsel to Debtors and Debtors in Possession

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