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Full title: Objection to (related document(s): 364 Notice (generic) filed by Debtor Studio Movie Grill Holdings, LLC)/Objection to Debtors' Proposed Assumption and Assignment of Unexpired Leases for Nonresidential Real Property filed by BRE RC Lincoln Square TX LP, Bayside SVTC, LLC. (Wilson, Sean)

Document posted on Jan 26, 2021 in the bankruptcy, 24 pages and 1 tables.

Bankrupt11 Summary (Automatically Generated)

LLC TO DEBTORS’ PROPOSED ASSUMPTION AND ASSIGNMENT OF UNEXPIRED LEASES FOR NONRESIDENTIAL REAL PROPERTY BRE RC Lincoln Square TX LP (the “LS Landlord”) and Bayside SVTC LLC (the “SV Landlord,” with the LS Landlord, collectively as the “Landlords”) submit this objection (the “Objection”) to the Debtors’ Amended Notice of Executory Contracts and Unexpired Leases 1 A complete list of the Debtors in these chapter 11 cases may be obtained on the website of the Debtors’ claims and noticing agent at https://www.donlinrecano.com/Clients/smgh/Index.On July 7, 2015, Lincoln Square RC RioCan LP, predecessor-in-interest to the LS Landlord, entered into a written lease (the “Lincoln Square Lease”) with debtor Movie Grill Concepts XXXI, LLC (the “Lincoln Square Debtor”) for approximately 45,000 square feet of retail space located at 452 Lincoln Square, Arlington, Texas (the “Lincoln Square Premises”) situated in the Lincoln Square Shopping Center to be used as a dine-in movie theater.If there has been a default in an executory contract or unexpired lease of the debtor, the trustee may not assume such contract or lease unless, at the time of assumption of such contract or lease, the trustee (A) cures, or provides adequate assurance that the trustee will promptly cure, such default…; (B) compensates, or provides adequate assurance that the trustee will promptly compensate, a party other than the debtor to such contract or lease for any actual pecuniary loss to such party resulting from such default; and (C) provides adequate assurance of future performance under such contract or lease.In the event of a reletting, Landlord may apply the rent therefrom first to the payment of Landlord's reasonable expenses, including, but not limited to, attorney fees incurred, expenses attributable to reletting, repairs, brokerage fees, subdividing, renovation or alteration of the Premises and then to the payment of Rents and other sums due from Tenant hereunder, and Tenant shall remain liable for any deficiency thereof. In computing damages or Rents, due under this Lease, the value of Percentage Rent for any period subsequent to the termination of this Lease or the termination of Tenant's right of possession thereof shall be included and shall be an amount per year equal to one-third (1/3) of the total Percentage Rent chargeable to Tenant for the last three (3) full Lease Years immediately preceding such termination, and if less than three (3) full Lease Years shall have elapsed, such value shall be an amount per Lease Year equal to the average yearly Percentage Rent theretofore chargeable to Tenant.

List of Tables

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KELLEY DRYE & WARREN LLP Sean T. Wilson (TX Bar No. 24077962) 515 Post Oak Blvd. Houston, TX 77027 Telephone: 212-808-7612 E-mail: swilson@kelleydrye.com -and- Robert L. LeHane (admitted pro hac vice) Eloy A. Peral (admitted pro hac vice) 101 Park Avenue New York, NY 10178 Telephone: 212-808-7800 Facsimile: 212-808-7897 E-mail: rlehane@kelleydrye.com eperal@kelleydrye.com Counsel to BRE RC Lincoln Square TX LP and Bayside SVTC LLC IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION __________________________________________ In re: ) Chapter 11 ) Studio Movie Grill Holdings, LLC, et al.,1 ) Case No. 20-32633-SGJ ) ) (Jointly Administered) Debtors. ) __________________________________________) OBJECTION OF BRE RC LINCOLN SQUARE TX LP AND BAYSIDE SVTC LLC TO DEBTORS’ PROPOSED ASSUMPTION AND ASSIGNMENT OF UNEXPIRED LEASES FOR NONRESIDENTIAL REAL PROPERTY BRE RC Lincoln Square TX LP (the “LS Landlord”) and Bayside SVTC LLC (the “SV Landlord,” with the LS Landlord, collectively as the “Landlords”) submit this objection (the “Objection”) to the Debtors’ Amended Notice of Executory Contracts and Unexpired Leases 1 A complete list of the Debtors in these chapter 11 cases may be obtained on the website of the Debtors’ claims and noticing agent at https://www.donlinrecano.com/Clients/smgh/Index.

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Which May Be Assumed and Assigned Pursuant to Section 365 of the Bankruptcy Code, In Connection With The Sale of Substantially All of the Debtors’ Assets and the Proposed Cure Amounts With Respect Thereto (the “Cure Notice”) [D.I. 364]. In support of the Objection, the Landlords respectfully state as follows: PRELIMINARY STATEMENT 1. The Landlords support the Debtors’ pursuit of an expeditious and value-maximizing process for the marketing and sale of the Debtors’ assets, including the Debtors’ interests in the Landlords’ leases. However, the Debtors must satisfy the full cure amounts due and owing under the leases, which includes more than $370,000 of unpaid post-petition rent. In addition, the Debtors must satisfy their burden to provide the heightened level of adequate assurance of future performance the Landlords are entitled to under the shopping center provisions in section 365 of the Bankruptcy Code. 2. In connection with the potential assumption and assignment of the leases, the Debtors or the proposed assignee must be required to (i) pay the cure amounts set forth below, including any pecuniary losses suffered by the Landlords, such as reasonable attorneys’ fees, and (ii) cure all defaults under the Leases, including Adjustment Amounts (as defined below) which have not yet been billed or become due under the Leases. 3. The Debtors or the proposed assignee must also (i) be required to comply with all contractual obligations to indemnify and hold the Landlords harmless with regard to events which occurred before assumption and assignment, but which were not known to the Landlords as of the date of the assumption and assignment, and (ii) as required by section 365(d)(3) of the Bankruptcy Code timely pay all rent and additional rent due under the lease until the leases are assumed, assumed and assigned, or rejected.

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4. The Debtors must also furnish the Landlords with sufficient adequate assurance information that will (a) enable the Landlords to determine if the proposed assignee would be a viable operator of the business, and (b) satisfy the Debtors’ burdens under sections 363 and 365 of the Bankruptcy Code. The Debtors have indisputably failed to provide any adequate assurance of future performance as they have not, in violation of their own bid procedures, sent the Landlord any information whatsoever about the proposed assignee(s) of the leases. 5. Accordingly, the proposed assumption and assignment of the Landlords’ leases cannot be approved unless the Debtors address the issues summarized above and detailed below. BACKGROUND The Leases 6. On July 7, 2015, Lincoln Square RC RioCan LP, predecessor-in-interest to the LS Landlord, entered into a written lease (the “Lincoln Square Lease”) with debtor Movie Grill Concepts XXXI, LLC (the “Lincoln Square Debtor”) for approximately 45,000 square feet of retail space located at 452 Lincoln Square, Arlington, Texas (the “Lincoln Square Premises”) situated in the Lincoln Square Shopping Center to be used as a dine-in movie theater. 7. Section 9.05(a) of the Lease entitled “Indemnification of Landlord,” states as follows in pertinent part: “Tenant hereby indemnifies, defends, and saves harmless the Landlord from and against any and all claims, actions, demands, suits, costs, damages, liabilities, losses, judgments, expenses, and fees (including reasonable attorneys’ fees) arising, or alleged to arise from or in connection with . . . (v) any breach or default in the performance of any obligation on Tenant's part to be performed under the terms of this Lease.” (the “Lincoln Square Fee Provision”). A copy of is provision is attached hereto as Exhibit A. 8. On August 29, 2013 W/A SVT Holdings VI LLC, predecessor-in-interest to the SV Landlord, entered into a written lease (the “Simi Valley Lease, with the Lincoln Square

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Lease, collectively as the “Leases”) with debtor Movie Grill Concepts XIX, LLC (the “Simi Valley Debtor”) for approximately 36,789 square feet of retail space located at 1555 Simi Town Center Way, Simi Valley, California (the “Simi Valley Premises, with the Lincoln Square Premises, collectively as the “Leased Premises”) situated in the Simi Valley Town Center to be used as a dine-in movie theater. 9. Section 23.2(h) of the Simi Valley Lease entitled “Landlord Remedies and Damages” provides as follows: In the event of a Default by Tenant, Tenant will be liable to Landlord for all court costs and reasonable attorney fees incurred by Landlord in enforcing its rights and remedies under this Lease, including, without limitation, all reasonable costs and fees incurred in connection with obtaining possession of the Premises or in the enforcement of any covenant, condition or agreement herein contained, whether through legal proceedings or otherwise and whether or not any such legal proceedings are prosecuted to a final judgment (the “Simi Valley Fee Provision,” with the Lincoln Square Fee Provision, collectively as the “Fee Provisions”). A copy of the Simi Valley Fee Provision is attached hereto as Exhibit B. 10. The obligations of the Simi Valley Debtor and the Lincoln Square Debtor under the Leases are guaranteed by debtor Studio Movie Grill Holdings, LLC (“SMG Holdings”). SMG Holdings owns directly or indirectly 100 percent of the membership interests in the Lincoln Square Debtor and the Simi Valley Debtor. 11. The Leased Premises are located in shopping centers as that term is used in section 365(b)(3) of the Bankruptcy Code. See In re Joshua Slocum, Ltd., 922 F.2d. 1081 (3d Cir. 1990). The Debtors’ Sales Process 12. On October 23, 2020 (the “Petition Date”), the Debtors each filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. § 101, et

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seq. (the “Bankruptcy Code”), thereby initiating the above-captioned bankruptcy cases (the “Chapter 11 Cases”). The Debtors continue to manage and operate their businesses as debtors-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code. 13. On November 16, 2020, the Office of the United States Trustee appointed an Official Committee of Unsecured Creditors (the “Creditors’ Committee”) pursuant to section 1102 of the Bankruptcy Code. No trustee or examiner has been requested or appointed in these Chapter 11 Cases. 14. On November 5, 2020, the Debtors filed a motion (“Bid Procedures Motion”) to establish, inter alia, bidding procedures (the “Bid Procedures”) for the sale of the Debtors’ assets, including their interests in unexpired leases and executory contracts; and (ii) procedures (the “Assumption and Assignment Procedures”) for the assumption and assignment of executory contracts and unexpired leases to the Prevailing Purchaser.2 On December 11, 2020, the Court entered an order (the “Bid Procedures Order”) approving the Bid Procedures and Assumption and Assignment Procedures, as modified by the Debtors to address the objections filed by the Landlord and other landlords and interested parties [D.I. 335]. 15. One of several revisions to the Bid Procedures made to resolve the LS Landlord’s limited objection to the Bid Procedures Motion was to require the Debtors to provide Adequate Assurance Information to the Lincoln Square Landlord and requesting landlords3 “within twenty-four (24) hours of the Debtors’ receipt thereof or as soon as practicable thereafter (but in no event later than two (2) business days before the Objection Deadline).” (Bid Proc. at 8.) On December 29, 2020, the Debtors filed a notice extending the entire timetable for its sales process, 2 Unless otherwise stated, all capitalized terms herein that are undefined shall have the same meaning as ascribed to them in the Bid Procedures. 3 Prior to the filing of this Objection, counsel for the SV Landlord submitted a written request to the Debtors’ counsel to receive Adequate Assurance Information.

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including extending the Objection Deadline to January 27, 2021 [D.I. 383]. In addition, on January 22, 2021 the Debtors filed a notice further extending the Bid Deadline to January 27, 2021. As of the date of this Objection, the Debtors have not provided the Landlords with any Adequate Assurance Information. 16. On December 21, 2020, the Debtors filed the Cure Notice asserting that $747,217.40 and $545,616.90. The Debtors’ alleged cure amounts are significantly understated. The correct cure amounts are set forth in ¶ 30 below. ARGUMENT I. THE DEBTORS HAVE FAILED TO PROVIDE EVIDENCE OF ADEQUATE ASSURANCE OF FUTURE PERFORMANCE UNDER THE LEASES (A) The Landlords Are Entitled to Specific Adequate Assurance Information to Evaluate Any Proposed Assignee 17. Section 365(f)(2) provides: The trustee may assign an executory contract or unexpired lease of the debtor only if (A) the trustee assumes such contract or lease in accordance with the provisions of this section; and (B) adequate assurance of future performance by the assignee of such contract or lease is provided, whether or not there has been a default in such contract or lease. 11 U.S.C. § 365(f)(2) (emphasis added). 18. Section 365(b)(1) of the Bankruptcy Code further provides: If there has been a default in an executory contract or unexpired lease of the debtor, the trustee may not assume such contract or lease unless, at the time of assumption of such contract or lease, the trustee (A) cures, or provides adequate assurance that the trustee will promptly cure, such default…; (B) compensates, or provides adequate assurance that the trustee will promptly compensate, a party other than the debtor to

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such contract or lease for any actual pecuniary loss to such party resulting from such default; and (C) provides adequate assurance of future performance under such contract or lease. 11 U.S.C. § 365(b)(1) (emphasis added). 19. In the case of a proposed assignment of a shopping center lease the Bankruptcy Code requires more than the basic adequate assurance of future performance under section 365(b)(1)(C). In re Sun TV and Appliances, Inc., 234 B.R. 356, 359 (Bankr. D. Del. 1999). In order to assume and assign shopping center leases, a debtor must satisfy the heightened requirements set forth in 11 U.S.C. § 365(B)(3)(A)-(D). See Joshua Slocum, 922 F.2d at 1086; see also L.R.S.C. Co. v. Rickel Home Centers, Inc. (In re Rickel Home Centers, Inc.), 209 F.3d 291, 299 (3d Cir. 2000). 20. In connection with a shopping center lease, adequate assurance of future performance includes adequate assurance (A) of the source of rent… due under such lease, and in the case of an assignment, that the financial condition and operating performance of the proposed assignee… shall be similar to the financial condition and operating performance of the debtor…as of the time the debtor became the lessee under the lease; (B) that any percentage rent due under such lease will not decline substantially; (C) that assumption or assignment of such lease is subject to all the provisions thereof, including (but not limited to) provisions such as a radius, location, use, or exclusivity provision…; and (D) that assumption or assignment of such lease will not disrupt any tenant mix or balance in such shopping center. 11 U.S.C. § 365(b)(3). 21. The debtor bears the burden of proving adequate assurance of future performance. In re Patriot Place, Ltd., 486 B.R. 773, 795 (W.D. Tex. 2013) (citing In re Texas Health

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Enterprises Inc., 72 F. App’x 122, 126 (5th Cir. 2003); In re M. Fine Lumber Co., Inc., 383 B.R. 565, 573 (Bankr. E.D.N.Y. 2008); In re F.W. Restaurant Assoc., Inc., 190 B.R. 143 (Bankr. D. Conn. 1995). Courts also require a specific factual showing through competent evidence to determine whether a debtor can satisfy Section 365(b)(3)’s heightened adequate assurance of future performance requirements. Matter of Haute Cuisine, Inc., 58 B.R. 390, 394 (Bankr. M.D. Fla. 1986). 22. The Debtors have failed to provide the Landlords with any Adequate Assurance Information despite the Bid Procedures requirement that they endeavor to do so within twenty-four (24) hours of the Debtors’ receipt thereof but in no event later than two (2) business days before the Objection Deadline. The proposed assumption and assignment of the Leases should not be approved until the Landlords have been provided with Adequate Assurance Information demonstrating the proposed assignee’s ability to satisfy its burden under section 365(b)(3) of the Bankruptcy Code with a reasonable time to evaluate the information as required by the Bid Procedures. (B) The Leases Must be Assumed and Assigned Cum Onere 23. Section 365(b)(3)(C) of the Bankruptcy Code provides that adequate assurance of future performance in a shopping center lease means that “assumption and assignment of such lease is subject to all the provisions thereof . . .”. 11 U.S.C. § 365(b)(3)(C). “Where the debtor assumes an executory contract, it must assume the entire contract, cum onere—the debtor accepts both the obligations and the benefits of the executory contract.” Century Indem. Co. v. NGC Settlement Trust (In re Nat’l Gypsum Co.), 208 F.3d 498, 506 (5th Cir. 2000) (citing N.L.R.B. v. Bildisco and Bildisco, 465 U.S. 513, 531 (1984)); see In re Senior Care Centers, LLC, 607 B.R. 580, 587 (Bankr. N.D. Tex. 2019) (Jernigan, J.) (“If a debtor chooses to assume an unexpired lease, it must assume the lease in its entirety”).

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24. Section 365 “balances the rights of the debtor against those of any party contracting with the debtor.” In re Pin Oaks Apartments, 7 B.R. 364, 367 (Bankr. S.D. Tex. 1980). The debtor is permitted “to assign a lease to a third party who becomes fully liable thereunder, notwithstanding any contrary contractual provisions which restrict, prohibit or condition any such assignment.” Id. In order “to correct any imbalance in favor of the debtor,” the Bankruptcy Code requires the curing of defaults, compensation for actual pecuniary losses caused by such defaults, adequate assurance of future performance under the lease, and assumption of the remaining lease provisions. Id. 25. The Debtors or the proposed assignee must provide adequate assurance that they will pay all year-end adjustments (the “Adjustment Amounts”), including, without limitation, adjustments for 2019, 2020, and 2021 which have not yet been billed or have not yet become due under the terms of the Leases. The Debtors or the proposed assignee must be responsible to satisfy the Adjustment Amounts, if any, when due in accordance with the terms of the Leases, regardless of whether such Adjustment Amounts were incurred before or after assumption and assignment of the Lease. 26. The Debtors or the proposed assignee must also be required to comply with all contractual obligations to indemnify and hold the Landlords harmless with regard to events which occurred before assumption and assignment but which were not known to the Landlords as of the date of the assumption and assignment. This includes, but is not limited to, (i) claims for personal injury that occurred at the Leased Premises, (ii) damage and destruction to the Leased Premises or property by the Debtors or their agents, and (iii) environmental damage or clean-up. To cure possible pre-assignment, non-monetary defaults and provide adequate assurance of future performance with respect to the indemnification obligations under the

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Leases, either (a) the proposed assignee must be required to assume all responsibility for any and all such claims, notwithstanding anything to the contrary contained in any court order, or (b) the Debtors must be required to demonstrate or obtain adequate insurance (by purchase of “tail” coverage or otherwise) in order to satisfy potential indemnification obligations based on events or occurrences that occurred prior to the effective date of an assignment. Such claims for indemnity could include claims for personal injury occurring at the Leased Premises where the Landlords are joined as a party to a lawsuit or for damage and destruction of property by the Debtors or their agents or employees. 27. Finally, if the Debtors assume and assign the Leases, the proposed assignee should be required to execute a short-form assumption and assignment agreement with the Landlords so that the Landlords will be in privity with their new tenant. II. THE DEBTORS’ PROPOSED CURE AMOUNTS ARE INCORRECT 28. “Under the Bankruptcy Code, a debtor normally has to ‘cure’ all defaults before it may assume a pre-petition executory contract.” Electric Reliability Council of Texas, Inc. v. Leo Leonard May (In re Texas Commercial Energy), 607 F.3d 153, 160 (5th Cir. 2010). A debtor may not assume an unexpired lease under which it is in default unless, inter alia, the debtor “cures, or provides adequate assurance that the trustee will promptly cure, such default . . . and pecuniary losses resulting from such default shall be compensated in accordance with the provisions of this paragraph.” 11 U.S.C. § 365(b)(1)(A). In addition, a debtor is required to “compensate[], or provide[] adequate assurance that [the debtor] will promptly compensate for any actual pecuniary loss to such party resulting from such default.” 11 U.S.C. § 365(b)(1)(B). “The purpose of the cure requirement is to restore the lessor/lessee relationship to the status it enjoyed prior to the default.” Senior Care Centers, 607 B.R. at 588.

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29. “[A]ttorneys’ fees incurred in attempting to collect sums due from debtors following default may be recovered as pecuniary loss under § 365(b)(1)(B) if such monies were expended as the result of a default under the contract or lease between the parties and are recoverable under the contract and applicable state law.” In re Senior Care Centers, 607 B.R. at 590 (quoting In re Shangra-La, Inc., 167 F.3d 843, 849 (4th Cir. 1999)). 30. The Landlords dispute the Debtors’ proposed cure amount set forth in the Cure Notice. The correct cure amount for the Leases are as follows:
Table 1 on page 11. Back to List of Tables
LANDLORD PRE-PETITION
CLAIM
UNPAID POST-
PETITION
ESTIMATE OF
ATTORNEYS’
FEES
INCURRED
THROUGH
1/25/2020
TOTAL
CURE
AMOUNT
Lincoln Square
Landlord
$793,614.80 $210,313.25 $56,392.00 $1,060,320.05
Simi Valley
Landlord
$502,225.90 $168,166.6 $500.00 $670,892.50
31. The Landlords incurred the above attorneys’ fees as a result of the Debtors’ default under the Lease. The Landlords are entitled to recover the full amount of their attorneys’ fees and costs under the broad and unambiguous Attorneys’ Fees Provision in the Leases. Accordingly, as part of their pecuniary losses, the Landlord are entitled to attorneys’ fees in connection with the Debtors’ obligation to cure all monetary defaults under the Leases. See Senior Care Centers, 607 B.R. at 593-96 (allowing landlords to recover more than $600,000 in attorneys’ fees as part of cure amounts); In re FFP Operating Partners, L.P., Case No. 03-90171-BJH, at *5 and note 4 (Bankr. June 16, 2004) [Docket No. 676] (Houser, J.) (stating that debtors were required to satisfy the landlord’s claim for indemnification of attorneys’ fees upon the debtor’s assumption of the lease). See also In re Am. the Beautiful Dreamer, Inc., No. 05-47435, 2006 WL 2038646, at *5 (Bankr. W.D. Wash. May 18, 2006).

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32. To the extent that rent, attorneys’ fees, interest, and/or other charges continue to accrue, and/or the Landlords suffer other pecuniary losses with respect to the Leases, the Landlords hereby reserve their right to amend their asserted cure amounts to reflect such additional amounts or to account for Adjustment Amounts. The Debtors and/or the proposed assignee must be responsible to satisfy the Adjustment Amounts, if any, when due in accordance with the terms of the Leases, regardless of when such Adjustment Amounts were incurred. 33. In addition, any assignee of the Leases must be required to comply with all contractual obligations to indemnify and hold the Landlords harmless with regard to events which may have occurred before assumption and assignment, but which were not known to the Landlords as of the date of the assumption and assignment, including, but not limited to, claims for personal injury that occurred at the Leased Premises, damage and destruction to the Leased Premises or property by the Debtors or their agents, and environmental damage or clean-up. IV. THE DEBTORS MUST BE RESPONSIBLE FOR TIMELY PAYMENT OF ALL POST-PETITION RENT AND ADDITIONAL RENT DUE UNDER THE LEASES UNTIL THEY ARE ASSUMED, ASSUMED AND ASSIGNED, OR REJECTED 34. Section 365(d)(3) of the Bankruptcy provides, in pertinent part: The [debtor] shall timely perform all of the obligations of the debtor, except those…arising from and after the order for relief under any unexpired lease of nonresidential real property, until such lease is assumed or rejected, notwithstanding section 503(b)(1) of [the Bankruptcy Code]. 11 U.S.C. § 365(d)(3). 35. The Landlords request that the assumption and assignment of the Leases be conditioned upon the Debtors’ timely performance of all obligations arising under the Leases before the Leases are assumed, assumed and assigned, or rejected pursuant to section 365(d)(3) of the Bankruptcy Code, including, without limitation, the full payment of rent on the first day of each month.

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V. DEMAND FOR SECURITY 36. Section 365(l) of the Bankruptcy provides, in pertinent part: If an unexpired lease under which the debtor is lessee is assigned pursuant to this section, the lessor of the property may require a deposit or other security for the performance of the debtor's obligations under the lease substantially the same as would have been required by the Landlords upon the initial leasing to a similar tenant. 11 U.S.C. § 365(l). 37. In the ordinary course of its business, the Landlords require security deposits, letters of credit, or guaranties when leasing (or assessing an assignment of a lease) to certain companies based on their financial information and history. As set forth above, the Leases are guaranteed by debtor SMG Holdings which owns 100 percent of the membership interests in the Lincoln Square Debtor and the Simi Valley Debtor. In connection with the proposed assumption and assignment of the Leases, the Landlords hereby demand such security in one of those forms as required by section 365(l) of the Bankruptcy Code. Until the exact financials of the proposed assignee are known to the Landlords, the Landlords reserve the right to specify the exact form and amount of such security. JOINDER IN OTHER OBJECTIONS 38. The Landlords hereby join in the objections filed by the Debtors’ other landlords and creditors to the extent that such objections are not inconsistent with the provisions hereof. RESERVATION OF RIGHTS 39. The Landlords reserve the right to amend and/or supplement this Objection on any basis, including, without limitation, by adding and supplementing objections to the Debtors’ proposed cure amounts and by adding or supplementing objections to the adequate assurance of future performance provided by any proposed assignee. In addition, the Landlords reserve the

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right to object to any proposed sale order for any Prevailing Purchaser once a final proposed sale order and asset purchase agreement are filed of record following the auction. WHEREFORE, Landlords respectfully request that the Court enter an order denying the proposed assumption and assignment of the Leases unless the Debtors and the Proposed Assignee provides adequate assurance of future performance and prompt cure of all defaults consistent with the Bankruptcy Code and this Objection; and for such other and further relief as may be just and proper under all of the circumstances Dated: January 27, 2021 /s/ Sean T. Wilson_________________ Sean T. Wilson (TX Bar No. 24077962) KELLEY DRYE & WARREN LLP 515 Post Oak Blvd. Houston, TX 77027 Telephone: 212-808-7612 E-mail: swilson@kelleydrye.com -and- Robert L. LeHane (admitted pro hac vice) Eloy A. Peral (admitted pro hac vice) 101 Park Avenue New York, NY 10178 Telephone: 212-808-7800 Facsimile: 212-808-7897 E-mail: rlehane@kelleydrye.com eperal@kelleydrye.com Counsel to BRE RC Lincoln Square TX LP and Bayside SVTC LLC

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CERTIFICATE OF SERVICE The undersigned hereby certifies that on January 27, 2021, a true and correct copy of the foregoing document was served via ECF notification on all parties entitled to ECF notification in this case. /s Eloy A. Peral__ Eloy A. Peral

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EXHIBIT A

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EXHIBIT B

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LEASE SIMI VALLEY TOWN CENTER Simi Valley, California W/A SVT HOLDINGS VI, L.L.C., a Delaware limited liability company, as "Landlord" and MOVIE GRILL CONCEPTS XIX, LLC, a Texas limited liability company, d/b/a Studio Movie Grill, as "Tenant" Unit No. Bl-100

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ARTICLE XXIII DEFAULT Section 23 .1. Tenant Default. This Lease is made upon the condition that Tenant punctually and faithfully perform all of the covenants and agreements to be performed by Tenant as herein set forth and the occurrence of any of the following shall constitute a breach of this Lease by Tenant (a "Default"): (a) Any item comprising Rents required to be paid by Tenant remaining in arrears and unpaid for ten (10) calendar days after receipt of written notice thereof from Landlord. (b) Subject to Section 365 of the Bankruptcy Reform Act of 1978, as amended, if there is a filing of a petition proposing the adjudication of Tenant or any Guarantor of Tenant's obligations hereunder as bankrupt and/or insolvent or if there is a reorganization of Tenant or Guarantor(s) (if any) or an arrangement by Tenant or Guarantor(s) (if any) with its creditors, whether pursuant to the Code or any similar federal or state proceeding, and such action is not dismissed within sixty (60) days after the date of filing. (c) Any sale of Tenant's interest in the Premises under an attachment, execution or similar legal process or pursuant to an unauthorized assignment of this Lease. (d) Any making by Tenant or Guarantor(s) (if any) of an assignment for the benefit of creditors. (e) Except as otherwise permitted under Sections 8.2 or 8.6 or Article XXI of this Lease and subject to strict compliance by Tenant of the terms and obligations of Section 8.6 of this Lease, if Tenant shall vacate or abandon the Premises or shall fail to operate its business on the Required Operating Days and during the Required Operating Hours, or fails to continuously occupy and conduct Tenant's business in the Premises. (f) Any failure by Tenant to remove or bond over any lien or notice of lien on account of an alleged debt of Tenant within the time period provided for in Section 15 .1. (g) With the exception of items (a) through (f) above, a failure by Tenant to observe or perform any other covenant, term, condition, provision, rule or regulation of this Lease on the part of Tenant to be kept or performed and such failure shall continue for a period of thirty (30) calendar days or more after written notice thereof given to Tenant by Landlord (excepting any such failure that cannot reasonably be cured within said thirty (30) calendar day period, provided that Tenant, within said thirty (30) calendar day period, has promptly commenced to proceed with diligence and in good faith to remedy such failure). Section 23.2. Landlord Remedies and Damages. (a) Upon the occurrence of an event of Default, Landlord shall have the following remedies in addition to all other rights and remedies provided by law or equity: 62

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(1) The rights and remedies provided by California Civil Code Section 1951.4 (Landlord may continue the lease in effect after Tenant's breach and abandonment and recover rent as it becomes due, if Tenant has right to sublet or assign, subject only to reasonable limitations). Acts of maintenance or preservation, efforts to relet the premises, or the appointment of a receiver upon Landlord's initiative to protect its iriterest under this Lease shall not constitute a termination of Tenant's right to possession; or (2) Landlord may terminate the Tenant's right to possession by giving Tenant thirty (30) days written notice of termination. Thirty (30) days after the giving of such notice, this Lease and all of Tenant's rights in the Premises shall terminate. Any termination under this paragraph shall not release Tenant from the payment of any sum then due Landlord or from any claim for damages or rent previously accrued or then accruing against Tenant. (b) Tenant hereby waives its right under California Code of Civil Procedure Section 1179. ( c) In the event this Lease is terminated as set forth in Section 23.2(a)(2) above, Landlord may recover from Tenant: (1) the worth at the time of award of the unpaid rent which had been earned at the time of termination; plus (2) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss for the same period that Tenant proves could have been reasonably avoided; plus (3) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss for the same period that Tenant proves could be reasonably avoided; plus (4) any other amount necessary to compensate Landlord for all detriment proximately caused by Tenant's failure to perform Tenant's obligations under this Lease, or which in the ordinary course of things would be likely to result therefrom. Notwithstanding anything in this Lease to the contrary, Landlord shall not be entitled to accelerate rent for a period of more than eighteen (18) months of Rent. The "worth at the time of award" of the amounts referred to in sub-subsections (1) and (2) of this subsection ( c) shall be computed by allowing interest at the rate of ten percent (10%) per annum. The "worth at the time of the award" of the amount referred to in sub-subsection (3) of this paragraph shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award plus one percent (1 % ). The term "time of award" as used in sub-subsections (1 ), (2) and (3) shall mean the date of entry of a judgment or award against Tenant in an action or proceeding arising out of Tenant's breach of this Lease. The term "rent" as used in this subsection ( c) shall include all sums required to be paid by Tenant to Landlord pursuant to the terms of this Lease. (d) Upon any termination of Tenant's possession of the Premises following an event of Default, Landlord may remove all Tenant's property from the Premises, and such property may be stored by Landlord in a public warehouse or elsewhere at the sole cost and for the account of Tenant. If Landlord does not elect to store any or all of Tenant's property left in the Premises, Landlord may consider such property to be abandoned by Tenant, and Landlord may thereupon dispose of such property in any manner deemed appropriate by Landlord. Any 63

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proceeds realized by Landlord on the disposal of any such property shall be applied first to offset all expenses of storage and sale, then credited against Tenant's outstanding obligations to Landlord under this Lease, and any balance remaining after satisfaction of all obligations of Tenant under this Lease shall be delivered to Tenant. (e) This Lease may be terminated by a judgment specifically providing for termination, or by Landlord's delivery to Tenant of written notice specifically terminating this Lease in accordance with Applicable Law. In no event shall any one or more of the following actions by Landlord alone, in the absence of a written election by Landlord to terminate this Lease, constitute a termination of this Lease or a waiver of Landlord's right to recover damages under this paragraph: (a) appointment of a receiver in order to protect Landlord's interest hereunder; (b) consent to any subletting of the Premises or assignment of this Lease by Tenant, whether pursuant to provisions hereof concerning subletting and assignment or otherwise; or (c) any other action by Landlord or Landlord's agents intended to mitigate the adverse effects of any breach of this Lease by Tenant, including without limitation any action taken to maintain and preserve the Premises or any action taken to relet the Premises or any portion thereof for the account of Tenant and in the name of Tenant. (f) In the event of a reletting, Landlord may apply the rent therefrom first to the payment of Landlord's reasonable expenses, including, but not limited to, attorney fees incurred, expenses attributable to reletting, repairs, brokerage fees, subdividing, renovation or alteration of the Premises and then to the payment of Rents and other sums due from Tenant hereunder, and Tenant shall remain liable for any deficiency thereof. (g) In computing damages or Rents, due under this Lease, the value of Percentage Rent for any period subsequent to the termination of this Lease or the termination of Tenant's right of possession thereof shall be included and shall be an amount per year equal to one-third (1/3) of the total Percentage Rent chargeable to Tenant for the last three (3) full Lease Years immediately preceding such termination, and if less than three (3) full Lease Years shall have elapsed, such value shall be an amount per Lease Year equal to the average yearly Percentage Rent theretofore chargeable to Tenant. (h) In the event of a Default by Tenant, Tenant will be liable to Landlord for all court costs and reasonable attorney fees incurred by Landlord in enforcing its rights and remedies under this Lease, including, without limitation, all reasonable costs and fees incurred in connection with obtaining possession of the Premises or in the enforcement of any covenant, condition or agreement herein contained, whether through legal proceedings or otherwise and whether or not any such legal proceedings are prosecuted to a final judgment. Section 23.3. Remedy for Failure to Operate. Recognizing the difficulty or impossibility of determining Landlord's damages for loss of Percentage Rent anticipated from Tenant and/or occupants of the Shopping Center or for loss of value of the Shopping Center because of diminished salability, mortgagability, adverse publicity or appearance which may result from any one or more of the events enumerated in Section 23.l above, Landlord and Tenant each covenants and agrees that in the event that Tenant, except as otherwise permitted under Sections 8.2 and/or 8.6 hereof, (i) vacates or abandons the Premises; or (ii) ceases to operate Tenant's business within the Premises in full compliance with the Permitted Use and business hours 64