HTML Document View

Full title: Amended disclosure statement filed by Debtor Studio Movie Grill Holdings, LLC (RE: related document(s)395 Disclosure statement). (Attachments: # 1 Exhibit A # 2 Exhibit B # 3 Exhibit C # 4 Exhibit D # 5 Schedule 1 - 13)(Wright, Frank)

Document posted on Feb 10, 2021 in the bankruptcy, 107 pages and 8 tables.

Bankrupt11 Summary (Automatically Generated)

In conformity with Revenue Procedure 94-45, all parties (including, without limitation, the Debtors, the GUC Trustee and GUC Trust Beneficiaries) will be required to treat the transfer of the GUC Trust Assets to the GUC Trust, for all purposes of the Internal Revenue Code, as (a) a transfer of the GUC Trust Assets (subject to any obligations relating to those assets) directly to the GUC Trust Beneficiaries (other than to the extent any GUC Trust Assets are allocable to Disputed Claims), followed by (b) the transfer by such beneficiaries to the GUC Trust of GUC Trust Assets in exchange for GUC Trust Interests. section 301.7701-4(d) and in compliance with Revenue Procedure 94-45, 1994-2 C.B. 684, and, thus, as a “grantor trust” within the meaning of sections 671 through 679 of the Internal Revenue Code to the applicable Holders of Claims, consistent with the terms of the Plan; (b) the sole purpose of the Agent Trust shall be the liquidation and distribution of the Agent Trust Assets in accordance with Treasury Regulation section 301.7701-4(d), including the resolution of applicable Claims in accordance with this Plan, with no objective to continue or engage in the conduct of a trade or business; (c) all parties (including, without limitation, the Debtors, the Reorganized Debtors, applicable Holders of Allowed Claims receiving Agent Trust Interests, and the Agent Trustee) shall report consistently with such treatment; (d) all parties (including the Debtors, the Reorganized Debtors, applicable Holders of Allowed Claims receiving Agent Trust Interests, and the Agent Trustee) shall report consistently with the valuation of the Agent Trust Assets transferred to the Agent Trust as determined by the Agent Trustee (or its designee); (e) the Agent Trustee shall be responsible for filing all applicable tax returns for the Agent Trust as a grantor trust pursuant to Treasury Regulation section 1.671-4(a); and (f) the Agent Trustee shall annually send to each holder of an Agent Trust Interest a separate statement regarding the receipts and expenditures of the Agent Trust as relevant for U.S. federal income tax purposes.“Allowed” means, with respect to any Claim or Interest, except as otherwise provided herein: (a) a Claim or Interest in a liquidated amount as to which no objection has been Filed prior to the applicable Claims Objection Deadline and that is evidenced by a Proof of Claim or Interest, as applicable, timely Filed by the applicable Bar Date or that is not required to be evidenced by a Filed Proof of Claim or Interest, as applicable, under the Plan, the Bankruptcy Code, or a Final Order; (b) a Claim or Interest that is scheduled by the Debtors as neither Disputed, contingent, nor unliquidated, and for which no Proof of Claim or Interest, as applicable, has been timely Filed in an unliquidated or a different amount; (c) a Claim or Interest that is upheld or otherwise Allowed: (i) pursuant to the Plan, including but not limited to the Prepetition L

Page 1

IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION IN RE: § CASE NO. 20-32633-SGJ § STUDIO MOVIE GRILL HOLDINGS, LLC, § Chapter 11 et al.,1 § DEBTOR. § Jointly Administered AMENDED JOINT DISCLOSURE STATEMENT FOR AMENDED JOINT PLAN OF REORGANIZATION FOR STUDIO MOVIE GRILL HOLDINGS, LLC AND JOINTLY ADMINISTERED DEBTORS FEBRUARY 11, 2021 FRANK J.WRIGHT JEFFERY M.VETETO JAY A.FERGUSON LAW OFFICES OF FRANK J.WRIGHT,PLLC 2323 Ross Ave. | Suite 730 Dallas, Texas 75201 Telephone: (214) 935.9100 Email: frank@fjwright.law Email: jeff@fjwright.law Email: jay@fjwright.law ATTORNEYS FOR DEBTORS AND DEBTORS-IN-POSSESSION 1 The Debtors in these Chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, include: Studio Movie Grill Holdings, LLC (6546); OHAM Holdings, LLC (0966); Movie Grill Concepts Trademark Holdings, LLC (3096); Movie Grill Concepts I, Ltd. (6645); Movie Grill Concepts III, Ltd. (2793); Movie Grill Concepts IV, Ltd. (1454); Movie Grill Concepts IX, LLC (3736); Movie Grill Concepts VI, Ltd. (6895); Movie Grill Concepts VII, LLC (2291); Movie Grill Concepts X, LLC (6906); Movie Grill Concepts XI, LLC (2837); Movie Grill Concepts XII, LLC (6040); Movie Grill Concepts XIII, LLC (5299); Movie Grill Concepts XIV, LLC (4709); Movie Grill Concepts XIX, LLC (9646); Movie Grill Concepts XL, LLC (4454); Movie Grill Concepts XLI, LLC (4624); Movie Grill Concepts XLII, LLC (2309); Movie Grill Concepts XLIII, LLC (9721); Movie Grill Concepts XLIV, LLC (8783); Movie Grill Concepts XLV, LLC (2570); Movie Grill Concepts XV, LLC (4939); Movie Grill Concepts XVI, LLC (1033); Movie Grill Concepts XVII, LLC (1733); Movie Grill Concepts XVIII, LLC (8322); Movie Grill Concepts XX, LLC (7300); Movie Grill Concepts XXI, LLC (1508); Movie Grill Concepts XXII, LLC (6748); Movie Grill Concepts XXIV, LLC (5114); Movie Grill Concepts XXIX, LLC (5857); Movie Grill Concepts XXV, LLC (4985); Movie Grill Concepts XXVI, LLC (5233); Movie Grill Concepts XXVII, LLC (4427); Movie Grill Concepts XXVIII, LLC (1554); Movie Grill Concepts XXX, LLC (1431); Movie Grill Concepts XXXI, LLC (3223); Movie Grill Concepts XXXII, LLC (0196); Movie Grill Concepts XXXIII, LLC (1505); Movie Grill Concepts XXXIV, LLC (9770); Movie Grill Concepts XXXIX, LLC (3605); Movie Grill Concepts XXXV, LLC (0571); Movie Grill Concepts XXXVI, LLC (6927); Movie Grill Concepts XXXVII, LLC (6401); Movie Grill Concepts XXXVIII, LLC (9657); Movie Grill Concepts XXIII, LLC (7893); Studio Club, LLC (3023); Studio Club IV, LLC (9440); Movie Grill Concepts XI, LLC (2837); Movie Grill Concepts XLI, LLC (4624); Movie Grill Concepts XLVI, LLC (2344); Movie Grill Concepts XLVII, LLC (5866); Movie Grill Concepts XLVIII, LLC (8601); Movie Grill Concepts XLIX, LLC (0537); Movie Grill Concepts L, LLC (5940); Movie Grill Concepts LI, LLC (7754); Movie Grill Concepts LII, LLC (8624); Movie Grill Concepts LIII, LLC (3066); Movie Grill Concepts LIV, LLC (2018); Movie Grill Concepts LV, LLC (4699); Movie Grill Partners 3, LLC (4200); Movie Grill Partners 4, LLC (1363); Movie Grill Partners 6, LLC (3334); and MGC Management I, LLC (3224).

Page 2

IMPORTANT INFORMATION ABOUT THIS DISCLOSURE STATEMENT The Debtors are providing the information in this document (the “Disclosure Statement”) to Holders of Claims and Interests for purposes of soliciting votes to accept or reject the Amended Joint Chapter 11 Plan of Reorganization of Studio Movie Grill Holdings, LLC and its debtor affiliates (the “Debtors”) (the “Plan”).2 Nothing in this Disclosure Statement may be relied upon or used by any Entity for any other purpose. Before deciding whether to vote for or against the Plan, each Holder entitled to vote should carefully consider all of the information in this Disclosure Statement, including the Risk Factors described in Article VIII herein. The Plan is supported by the Debtors and the Official Committee of Unsecured Creditors (the “Committee”). The Debtors urge Holders of Claims whose votes are being solicited to vote to accept the Plan. The Debtors urge each Holder of a Claim or Interest to consult with its own advisors with respect to any legal, financial, securities, tax, or business advice in reviewing this Disclosure Statement, the Plan, and the transactions contemplated thereby. Further, the Bankruptcy Court’s approval of the adequacy of the information contained in this Disclosure Statement does not constitute the Bankruptcy Court’s approval of the Plan. This Disclosure Statement contains, among other things, summaries of the Plan, certain statutory provisions, and certain anticipated events in the Debtors’ Chapter 11 Cases. Although the Debtors believe that these summaries are fair and accurate, these summaries are qualified in their entirety to the extent that they do not set forth the entire text of such documents or statutory provisions or every detail of such anticipated events. In the event of any inconsistency or discrepancy between a description in this Disclosure Statement and the terms and provisions of the Plan or any other documents incorporated herein by reference, the Plan or such other documents will govern for all purposes. Factual information contained in this Disclosure Statement has been provided by the Debtors’ management except where otherwise specifically noted. The Debtors do not represent or warrant that the information contained herein or attached hereto is without any material inaccuracy or omission. In preparing this Disclosure Statement, the Debtors relied on financial data derived from their books and records and on various assumptions regarding the Debtors’ business. While the Debtors believe that such financial information fairly reflects the financial condition of the Debtors as of the date hereof and that the assumptions regarding future events reflect reasonable business judgments, no representations or warranties are made as to the accuracy of the financial information contained herein or assumptions regarding the Debtors’ business or their future results or operations. The Debtors expressly caution readers not to place undue reliance on any forward-looking statements contained herein. The Debtors are making the statements and providing the financial information contained in this Disclosure Statement as of the date hereof, unless otherwise specifically 2 Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to them in Article I.A of the Plan.

Page 3

noted, and there is no assurance that the statements contained herein will be correct at any time after such date. Although the Debtors may subsequently update the information in this Disclosure Statement, the Debtors have no affirmative duty to do so, and expressly disclaim any duty to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise. Holders of Claims and Interests reviewing this Disclosure Statement should not infer that, at the time of their review, the facts set forth herein have not changed since this Disclosure Statement was Filed. Subject to the terms of the Plan, information contained herein is subject to completion, modification, or amendment. The Debtors reserve the right to File an amended or modified Plan and related Disclosure Statement from time to time, subject to the terms of the Plan. The Debtors have not authorized any Entity to give any information about or concerning the Plan other than that which is contained in this Disclosure Statement. The Debtors have not authorized any representations concerning the Debtors or the value of their property other than as set forth in this Disclosure Statement. This Disclosure Statement does not constitute, and may not be construed as, an admission of fact, liability, stipulation, or waiver. The Debtors, the Reorganized Debtors, the GUC Trustee, the Agent Trustee, or any other authorized party, as applicable, may seek to investigate, File, and prosecute Claims and may object to Claims after the Confirmation or Effective Date of the Plan irrespective of whether this Disclosure Statement identifies any such Claims or objections to Claims. If the Plan is confirmed by the Bankruptcy Court and the Effective Date occurs, all Holders of Claims and Interests (including those Holders of Claims and Interests who do not submit ballots to accept or reject the Plan, who vote to reject the Plan, or who are not entitled to vote on the Plan) will be bound by the terms of the Plan and the Restructuring Transactions contemplated thereby. The Confirmation and effectiveness of the Plan are subject to certain material conditions precedent described herein and set forth in Article IX of the Plan. There is no assurance that the Plan will be confirmed, or if confirmed, that the conditions required to be satisfied for the Plan to go effective will be satisfied (or waived). You are encouraged to read the Plan and this Disclosure Statement in its entirety, including Article VIII, entitled “RISK FACTORS,” before submitting your ballot to vote on the Plan. The Bankruptcy Court’s approval of this Disclosure Statement does not constitute a guarantee by the Bankruptcy Court of the accuracy or completeness of the information contained herein or an endorsement by the Bankruptcy Court of the merits of the Plan. The information contained in this Disclosure Statement is included for purposes of soliciting votes for, and Confirmation of, the Plan and may not be relied on for any other purpose. In the event of any inconsistency between this Disclosure Statement and the Plan, the relevant provisions of the Plan will govern.

Page 4

This Disclosure Statement has been prepared in accordance with Section 1125 of the Bankruptcy Code and Bankruptcy Rule 3016(b) and is not necessarily prepared in accordance with federal or state securities laws or other similar laws. This Disclosure Statement has not been approved or disapproved by the United States Securities and Exchange Commission (the “SEC”) or any similar federal, state, local, or foreign regulatory agency, nor has the SEC or any other agency passed upon the accuracy or adequacy of the statements contained in this Disclosure Statement. The Debtors have sought to ensure the accuracy of the financial information provided in this Disclosure Statement. Any such financial information provided or incorporated herein by reference has not been, and will not be, audited or reviewed by the Debtors’ independent auditors unless explicitly provided otherwise. Upon Confirmation of the Plan, certain of the securities described in this Disclosure Statement may be issued without registration under the Securities Act of 1933, 15 U.S.C. §§ 77a– 77aa, together with the rules and regulations promulgated thereunder (the “Securities Act”), or similar federal, state, local, or foreign laws, in reliance on the exemption set forth in section 1145 of the Bankruptcy Code. To the extent exemptions from registration under section 1145 of the Bankruptcy Code or applicable federal securities law do not apply, the Securities may not be offered or sold except pursuant to a valid exemption or upon registration under the Securities Act. The Debtors make statements in this Disclosure Statement that are considered forward-looking statements under federal securities laws. The Debtors consider all statements regarding anticipated or future matters, to be forward-looking statements. Forward-looking statements may include statements about the Debtors’:  business strategy;  acquisition or disposition of assets, including strategy, amount, timing, and ability to effectuate any such transaction;  financial strategy;  risks associated with the Chapter 11 process, including the Debtors’ ability to develop, confirm, and consummate a plan under Chapter 11 or an alternative restructuring transaction;  inability to maintain relationships with suppliers, customers, employees, and other third parties as a result of the Chapter 11 filing or other failure of such parties to comply with their contractual obligations;  failure to satisfy the Debtors’ short- or long-term liquidity needs, including their inability to generate sufficient Cash flow from operations or to obtain adequate financing to fund their capital expenditures and meet working capital needs and their ability to continue as a going concern;  legal proceedings and the effects thereof;  ability to operate their theaters due to COVID-19 restrictions;

Page 5

 capital expenditures;  economic and competitive advantages;  credit and capital market conditions;  regulatory changes;  lease operating expenses, general and administrative expenses and development costs;  future operating results, including results of acquired properties; and plan, objectives, expectations and intentions. Statements concerning these and other matters are not guarantees of the Debtors’ and the Reorganized Debtors’ future performance. There are risks, uncertainties, and other important factors that could cause the Debtors’ and the Reorganized Debtors’ actual performance or achievements to be different from those they may project, and the Debtors undertake no obligation to update the projections made herein. These risks, uncertainties, and factors may include: the Debtors’ ability to confirm and consummate the Plan; the potential adverse impact of the Chapter 11 Cases on the Debtors’ operations, management, and employees, and the risks associated with operating the Debtors’ business during the Chapter 11 Cases; customer responses to the Chapter 11 Cases; the Debtors’ ability to operate their theaters due to COVID-19 restrictions; the Debtors’ inability to discharge or settle Claims during the Chapter 11 Cases; the Debtors’ ability to access financing necessary to consummate the Plan; general economic, business, and market conditions; currency fluctuations; interest rate fluctuations; price increases; the Debtors’ ability to implement cost reduction initiatives in a timely manner; the Debtors’ ability to divest existing business; financial conditions of the Debtors’ customers; adverse tax changes; limited access to capital resources; changes in domestic and foreign laws and regulations; natural disasters; geopolitical instability; and the effects of governmental regulation on the Debtors’ business.

Page 6

EXHIBITS & SCHEDULES3 Exhibit A Plan of Reorganization Exhibit B Disclosure Statement Order Exhibit C Financial Projections Exhibit D Liquidation Analysis Schedule 1 Assets Schedule 2 Personal Property Taxes Schedule 3 Real Estate Taxes Schedule 4 Sales Taxes Schedule 5 Other Taxes Schedule 6 Secured Debt Schedule 7 Wage Claims Schedule 8 Other Priority Claims Schedule 9 Administrative & Professional Fee Claims Schedule 10 Other Administrative Claims Schedule 11 General Unsecured Claims Schedule 12 Lease Analysis Schedule 13 Personal Injury Litigation 3 While the Schedules attached hereto contain information regarding each Debtor, the inclusion of a Debtor in the Schedules does not mean that such Debtor will be subject to the treatment set forth in Article III of the Plan. Pursuant to the Plan, the Plan Supplement will identify any Debtors listed on the Schedule of Abandoned Debtors, the Schedule of Converted Cases, or the Schedule of Non-Applicable Debtors. Any such Debtor will be a Non-Reorganized Debtor under the Plan. Non-Reorganized Debtors will not be not subject to the treatment in Article III of the Plan.

Page 7

I. INTRODUCTION Studio Movie Grill Holdings, LLC and its affiliated debtors, as debtors and debtors in possession (collectively, the “Debtors”) submit this disclosure statement (this “Disclosure Statement”) pursuant to Section 1125 of the Bankruptcy Code to Holders of Claims against and Interests in the Debtors in connection with the solicitation of votes to accept or reject the Amended Joint Plan of Reorganization for Studio Movie Grill Holdings, LLC and Jointly Administered Debtors, (the “Plan”), filed on February 11, 20214. A copy of the Plan is attached hereto as Exhibit A and incorporated herein by reference. THE DEBTORS BELIEVE THAT THE TREATMENT OF CLAIMS AND INTERESTS UNDER, AND THE RESTRUCTURING TRANSACTIONS CONTEMPLATED BY, THE PLAN ARE FAIR AND EQUITABLE, MAXIMIZE THE VALUE OF THE DEBTORS’ ESTATES, AND PROVIDE THE BEST RECOVERY TO CLAIM HOLDERS. AT THIS TIME, THE DEBTORS BELIEVE THE PLAN IS THE BEST AVAILABLE ALTERNATIVE FOR COMPLETING THE CHAPTER 11 CASES IN A TIMELY MANNER AND STRONGLY RECOMMEND THAT YOU VOTE TO ACCEPT THE PLAN. II. PRELIMINARY STATEMENT The Debtors are in the dine-in movie theater business. In addition to their movie offerings, the Debtors’ theaters include a bar and lounge area, with direct to seat service for guests before and during their movies. On the Petition Date, the Debtors leased 33 dine-in movie theaters in numerous cities in 10 states, including Arizona, California, Florida, Georgia, Illinois, Indiana, North Carolina, Pennsylvania, Texas, and Virginia. The theaters operate under the brand name “Studio Movie Grill.” As of December 31, 2019, the Debtors, on a consolidated basis, had assets in the form of cash, accounts receivables, inventory, theater leases, equipment, furniture, and intangibles with a book value of approximately $233 million. Before the onset of the COVID-19 pandemic and nationwide shutdowns, the Debtors were generating positive cash flow. For example, in 2019, Studio Movie Grill Holdings, LLC had revenue of $251 million and EBITDA of $21 million. The COVID-19 pandemic and its progeny of state-mandated shutdowns made the Debtors’ financial situation extremely difficult. On March 16, 2020, the U.S. federal government issued guidelines to try to slow the spread of COVID-19, which included avoiding eating or drinking in restaurants and bars, and shopping trips or social visits. Within a week, the states in which the Debtors operate theaters began imposing “stay at home” or “lockdown” orders. These orders directed people to stay at home except for “essential” activities, but movie theaters are not deemed essential activities. As a result, the Debtors’ theaters were shut down for at least three (3) months, and a certain subset of theaters remains subject to these orders today. Specifically, the Debtors closed their theaters to protect the health and safety of their employees and customers. Throughout most of the summer of 2020, the Debtors did not show a single movie or sell any food or beverages in their theaters, and the Debtors were compelled to furlough all but approximately 850 of their approximately 7,000 employees. Over the course of the pandemic, certain of the “stay at home” orders have expired and many restrictions have been modified to allow most movie theaters to operate at partial capacity. On June 4 The summary of the Plan provided herein is qualified in its entirety by reference to the Plan. In the case of any inconsistency between this Disclosure Statement and the Plan, the Plan will govern.

Page 8

19, 2020, the Debtors resumed limited operations in three (3) theaters. Over time, the Debtors were able to open twenty-one (21) theaters, just prior to filing. After the Petition Date, new state mandates meant that four (4) theaters had to reclose. While the early-stage vaccination efforts provide hope, there is still significant uncertainty as to when theaters will be permitted to either reopen or open at full capacity, and whether (and when) people will begin to return to engaging in activities that involve being in public places and in close proximity with others, such as attending movies. Moreover, it is uncertain what impact the pandemic revelation of straight to streaming releases and simultaneous releases by major movie studios will have on theater attendance once all orders and restrictions are lifted. Through the Chapter 11 Cases, the Debtors have been engaged in: (i) identifying which theaters are not profitable, which ones are profitable, and which ones can be profitable; and (ii) renegotiating leases with landlords. To date, the Debtors have filed motions to reject twenty-four (24) lease locations. As of the filing of this Disclosure Statement, the Debtors have rejected fourteen (14) leases covering sixteen (16) theater locations. The Debtors have and continue to negotiate with all other landlords. These negotiations have been largely successful, as the Debtors have negotiated revised lease terms with many of their landlords that incorporate some form of percentage rent to weather the current depressed demand for theater experiences. The Debtors have also dedicated substantial efforts evaluating their options for a viable exit strategy. Those options include a sale of the Debtors’ assets and/or a plan of reorganization. Based on discussions their advisors, the Agent and its advisors, and with the Committee and its advisors, the Debtors determined that pursuing a simultaneous dual-track process to restructure their business via a section 363 marketing process and a recapitalization transaction equitizing plan process was the best way to maximize the value of the estates. To that end, the Debtors undertook to market a proposed sale of assets of the Debtors to potential buyers (including the DIP Lenders and Prepetition Lenders) and obtained approval of the Bid Procedures to create a fair and orderly process to solicit bids on the Debtors’ assets, while maintaining the flexibility to reorganize the Debtors. Debtors did solicit bids under the Bid Procedures; however, this sale process failed to yield any bids for the assets. III. OVERVIEW OF THE PLAN The Plan provides for either (a) an Asset Sale Restructuring to a Third-Party Purchaser or to an Agent Purchaser or (b) an Equitization Restructuring pursuant to which New Units in Reorganized SMG will be distributed pursuant to the Plan. If the Agent (or its designated Entity) is the prevailing purchaser of all or substantially all of the Debtors’ assets pursuant to the Bid Procedures, the Agent may exercise the Plan Toggle Right to implement such sale through a chapter 11 plan, including via an alternative transaction where the Prepetition Lenders and/or the DIP Lenders retain debt instruments and/or receive equity securities. The Plan sets forth the Restructuring Transactions to occur in the event of either an Asset Sale Restructuring or an Equitization Restructuring. A. Classification and Treatment of Claims and Interests The Plan constitutes a separate chapter 11 plan of reorganization for each Debtor with Claims against and Interests in each respective Debtor participating in the respective Subclass in such Class; provided, however, that notwithstanding anything to the contrary herein, Claims and Interests against Debtors that are identified on the Schedule of Abandoned Debtors, the Schedule of Converted Cases, or the Schedule of Non-Applicable Debtors shall not be subject to Article III of the Plan. Where there are no Subclasses listed, all Claims of such Class are being treated the same.

Page 9

To the extent that a Class contains Allowed Claims or Allowed Interests with respect to any Debtor, the treatment of Allowed Claims and Allowed Interests in such Class is specified below. Class 1 – Other Priority Claims. (a) Classification: Class 1 consists of Other Priority Claims. For purposes of classification and treatment under the Plan, all Other Priority Claims of all Debtors are being treated as one Class. (b) Treatment: Except to the extent that a Holder of an Allowed Other Priority Claim agrees to a less favorable treatment of its Allowed Claim acceptable to the Agent, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Other Priority Claim, each such Holder shall receive, at the option of the applicable Debtor(s) with the consent of the Agent, either: (i) payment in full in Cash; or (ii) other treatment rendering such Claim Unimpaired or otherwise permitted by the Bankruptcy Code. (c) Voting: Class 1 is Unimpaired under the Plan. Each Holder of a Class 1 Other Priority Claim is conclusively presumed to accept the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, Holders of Class 1 Other Priority Claims are not entitled to vote to accept or reject the Plan. Class 2 – Prepetition Lenders’ Claims. (a) Classification: Class 2 consists of the Prepetition Lenders’ Claims held by the Prepetition Lenders. For purposes of classification and treatment under the Plan, there shall be a separate Subclass for Class 2 for each Debtor. (b) Allowance: On the Effective Date, the Prepetition Lenders’ Claims shall be Allowed in the aggregate principal amount of at least $104,123,984.28, plusaccrued and unpaid interest on such principal amount through the Petition Date and any other amounts due and owing pursuant to, arising under or, relating to the Prepetition Loan Documents through and including the Effective Date, less any amount repaid or rolled up pursuant to the DIP Facility and the DIP Orders as of the Effective Date. (c) Treatment: On the Effective Date, each Holder of a Class 2 Claim shall receive: (i) if an Equitization Restructuring occurs, (a)(1) its Pro Rata share (i.e., the proportion that such Allowed Prepetition Lenders’ Claim bears to the aggregate amount of all Allowed Prepetition Lenders’ Claims participating in the Exit Facility Refinancing Loans (if any, and as determined by the Agent with, for the avoidance of doubt, the consent of Crestline) plus all Allowed DIP Claims (if any, and as determined by the Agent with, for the avoidance of doubt, the consent of Crestline) participating in the Exit Facility Refinancing Loans) of the Exit Facility Refinancing Loans on a dollar-for-dollar

Page 10

basis, and (2) thereafter, the applicable New Units designated to be distributed to such Holder as set forth below (which may be distributed to the GS Designees or the Crestline Designees as determined by such Holder); plus (b) its Pro Rata share of the Agent Panterra Assets; or (ii) if an Asset Sale Restructuring occurs, (a) all Cash of the Debtors (including, if the Asset Sale Restructuring is to a Third Party Purchaser, the Sale Proceeds) other than the GUC Trust Assets, and (b) its Pro Rata Share of the Agent Trust Assets and the Agent Trust Interests. If an Equitization Restructuring occurs, the distribution of New Units to the Holders of Class 2 Claims and DIP Facility Claims shall be as follows: (a) if to the GS Designees, (i) 63.94% of the Preferred Units and (ii) the GS Warrant; and (b) if to the Crestline Designees, (i) 36.06% of the Preferred Units and (ii) 100% of the Class A-1 Common Units. Notwithstanding the foregoing, the Agent, with the consent of Crestline, may at any time redetermine the allocation and type of New Units to be distributed the Holders of Class 2 Claims and DIP Facility Claims. If an Equitization Restructuring occurs, (a) all DIP Liens shall be retained by the DIP Agent and assigned to the Exit Agent and (b) any and all Liens securing the Prepetition Lenders’ Claim shall be retained by the Prepetition Agent and assigned to the Exit Agent to secure the obligations under the Exit Facility. If an Asset Sale Restructuring occurs, after the Effective Date, each of the DIP Liens and the Liens securing the Prepetition Lenders’ Claims shall remain in effect to the same extent and in the same priority such Liens exist on the Effective Date, and no such Lien shall be (or deemed to have been) waived, released, satisfied or discharged, in whole or in part. Beginning on the first calendar quarter following the Effective Date, and continuing on at least a quarterly basis thereafter (or such other time as agreed by the Agent and the GUC Trustee), the GUC Trustee shall pay the Pro Rata Share of Cash on hand resulting from the Agent Panterra Assets, if any: (i) in the event of an Asset Sale Restructuring, to the Agent Trustee or (ii) in the event of an Equitization Restructuring, to the Agent. Holders of Prepetition Lenders’ Claims expressly reserve the right to seek recovery against any Non-Reorganized Debtor on any grounds, including, without limitation, the entire unpaid cash amount of the Prepetition Lenders’ Claims. (d) Voting: Class 2 is Impaired under the Plan. Holders of Claims in Class 2 are entitled to vote to accept or reject the Plan.

Page 11

Class 3 – Secured Tax Claims. (a) Classification: Class 3 consists of Secured Tax Claims. For purposes of classification and treatment under the Plan, there shall be a separate Subclass for Class 3 for each Debtor. (b) Treatment: Except to the extent that the Holder of an Allowed Class 3 Secured Claim agrees to a less favorable treatment of its Allowed Class 3 Secured Claim acceptable to the Agent, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Class 3 Secured Claim, each such Holder shall receive payment in accordance with section 1129 of the Bankruptcy Code. (c) Voting: Class 3 is Impaired under the Plan. Holders of Claims in Class 3 are entitled to vote to accept or reject the Plan. Class 4 – Other Secured Claims. (a) Classification: Class 4 consists of Other Secured Claims. For purposes of classification and treatment under the Plan, there shall be a separate Subclass for each Debtor. (b) Treatment: Except to the extent that a Holder of an Allowed Class 4 Secured Claim agrees to a less favorable treatment of its Allowed 4 Claim acceptable to the Agent, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Class 4 Secured Claim, each such Holder shall receive, at the option of the applicable Debtor(s) with the consent of the Agent, either: (i) payment in full in Cash; (ii) the collateral securing any such Claim and payment of any interest required under section 506(b) of the Bankruptcy Code; (iii) Reinstatement of such Claim; or (iv) A new note with a principal amount equal to the amount of the Allowed Class 4 Claim with a term of five years, interest at the Plan Rate, payable monthly in equal payments of principal and interest, and secured by the same collateral that secured such Allowed Class 4 Claim. (c) Voting: Class 4 is Impaired under the Plan. Holders of Claims in Class 4 are entitled to vote to accept or reject the Plan. Class 5 – GUC (General Unsecured) Claims. (a) Classification: Class 5 consists of GUC Claims (which, for avoidance of doubt, do not include TowerBrook Claims or Convenience Class Claims). For purposes of classification and treatment under the Plan, there shall be a separate Subclass for each Debtor.

Page 12

(b) Treatment: Except to the extent that a Holder of an Allowed GUC Claim agrees to less favorable treatment of its Allowed Claim acceptable to the Agent, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed GUC Claim, each such Holder of an Allowed GUC Claim in Class 5 shall receive its Pro Rata share of the GUC Trust Interests. Each Holder of GUC Claims in an aggregate Allowed amount greater than $2,500.00 may irrevocably elect on its Ballot to have such Claim irrevocably reduced to $2,500.00 and treated as a Convenience Class Claim for the purposes of the Plan rather than as a GUC Claim. For avoidance of doubt, Holders of Prepetition Lenders’ Claims shall not be entitled to any recovery from the GUC Trust Interests or the GUC Trust Assets (solely excepting the Agent Panterra Assets). (c) Voting: Class 5 is Impaired under the Plan. Holders of Claims in Class 5 are entitled to vote to accept or reject the Plan. Class 6 – Convenience Class Claims. (a) Classification: Class 6 consists of Convenience Class Claims. For purposes of classification and treatment under the Plan, there shall be a separate Subclass for each Debtor. (b) Treatment: Except to the extent that a Holder of an Allowed Convenience Class Claim agrees to a less favorable treatment of its Allowed Claim acceptable to the Agent, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Convenience Class Claim, each such Holder shall receive within thirty (30) days after the date such Claim is Allowed payment in Cash in an amount equal to 10% of such Holder’s Allowed Convenience Class Claim, which shall be payable from the GUC Trust Reserve. (c) Voting: Class 6 is Impaired under the Plan. Holders of Claims in Class 6 are entitled to vote to accept or reject the Plan. Class 7 – Intercompany Claims. (a) Classification: Class 7 consists of all Intercompany Claims. For purposes of classification and treatment under the Plan, all Class 7 Claims of all Debtors are being treated as one Class. (b) Treatment: Intercompany Claims shall, at the Agent’s election, either be (i) Reinstated as of the Effective Date or (ii) canceled, discharged, released, and extinguished in full as of the Effective Date. (c) Voting: Class 7 is either Unimpaired, in which case the Holders of such Claims conclusively are presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code, or Impaired and not receiving any distribution under the Plan, in which case the Holders of such Claims are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, each Holder of a Class 7 Intercompany Claim is not entitled to vote to accept or reject the Plan.

Page 13

Class 8 – Subordinated Claims. (a) Classification: Class 8 consists of all Subordinated Claims. For purposes of classification and treatment under the Plan, all Class 8 Claims of all Debtors are being treated as one Class. (b) Treatment: Allowed Claims in Class 8 shall receive no payment under the Plan. (c) Voting: Class 8 is Impaired, and such Holders of Class 8 Claims are conclusively presumed to have rejected the Plan under section 1126(g) of the Bankruptcy Code. Class 9 – SMG Holdings Interests (a) Classification: Class 9 consists of any Interests in SMG Holdings. For purposes of classification and treatment under the Plan, all Class 9 Interests are being treated as one Class. (b) Treatment: On the Effective Date, all Interests in SMG Holdings shall be canceled, discharged, released, and extinguished in full as of the Effective Date. (c) Voting: Class 9 is Impaired, and the Holders of Class 9 Interests are conclusively presumed to have rejected the Plan under section 1126(g) of the Bankruptcy Code. Class 10 – Other Debtor Interests (a) Classification: Class 10 consists of Other Debtor Interests. For purposes of classification and treatment under the Plan, all Class 10 Interests are being treated as one Class. (b) Treatment: On the Effective Date, Interests in the Other Debtors shall, at the Agent’s election, either be (i) Reinstated as of the Effective Date or (ii) canceled, discharged, released, and extinguished in full as of the Effective Date. (c) Voting: Class 10 is either Unimpaired, in which case the Holders of such Interests conclusively are presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code, or Impaired and not receiving any distribution under the Plan, in which case the Holders of such Interests are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, each Holder of a Class 10 Interest is not entitled to vote to accept or reject the Plan. The Debtors are the proponents of the Plan within the meaning of section 1129 of the Bankruptcy Code.

Page 14

B. Means for Implementation of the Plan A. Restructuring Transactions. On the Effective Date, the Debtors or the Reorganized Debtors, as applicable, with the consent of the Agent, shall enter into any transaction and shall take any actions as may be necessary or appropriate to effectuate the Restructuring Transactions, including the Asset Sale Restructuring or the Equitization Restructuring, as applicable, and will take any actions as may be necessary or advisable to effect a corporate restructuring of their respective businesses in accordance with the terms of the Plan. The actions to implement the Restructuring Transactions may include, as applicable, and without limitation: (1) the execution and delivery of appropriate agreements or other documents of merger, amalgamation, consolidation, restructuring, conversion, disposition, transfer, arrangement, continuance, dissolution, sale, purchase, or liquidation containing terms that are consistent with the terms of the Plan and that satisfy the requirements of applicable law and any other terms to which the Agent may consent, including, if applicable, the formation of any entity or entities that will constitute, in whole or in part, the Reorganized Debtors; (2) the execution and delivery of appropriate instruments of transfer, assignment, assumption, or delegation of any asset, property, right, liability, debt, or obligation on terms consistent with the terms of the Plan and having other terms for which the Agent may consent, including the execution and delivery of the Agent Trust Agreement; (3) the execution of the GUC Trust Agreement; (4) the filing of appropriate certificates or articles of incorporation, formation, reincorporation, merger, consolidation, conversion, amalgamation, arrangement, continuance, dissolution, or other organizational documents pursuant to applicable state law; (5) the execution and delivery of the New Organizational Documents; (6) the issuance of the New Units as set forth in the Plan; and (7) all other actions that the Debtors with the Agent’s consent or the Reorganized Debtors, as applicable, determine to be necessary or advisable, including making filings or recordings that may be required by law in connection with the Plan. The Confirmation Order shall and shall be deemed to, pursuant to sections 363 and 1123 of the Bankruptcy Code, authorize, among other things, all actions as may be necessary or appropriate to effect any transaction described in, approved by, contemplated by, or necessary to effectuate the Plan, including the Restructuring Transactions. B. GUC Trust. 1. Creation and Governance of the GUC Trust The GUC Trust shall be established for the administration of the GUC Trust Assets as set forth in the Plan and GUC Trust Agreement. The GUC Trust shall be created whether an Equitization Restructuring occurs or an Asset Sale Restructuring occurs. The GUC Trust shall be established for the distribution of GUC Trust Assets, net of any GUC Trust Expenses, to Holders of Allowed GUC Claims and Allowed Convenience Class Claims as set forth in the Plan and for the reconciliation by the GUC Trustee of Claims and Interests. On the Effective Date, the Debtors, the Reorganized Debtors, and GUC Trustee, as applicable, shall be authorized to take all actions necessary to establish the GUC Trust in accordance with the Plan and the GUC Trust Agreement. Additionally, on the Effective Date, the Debtors shall transfer and shall be deemed to transfer to the GUC Trust all of their rights, title and interest in and to all of the GUC Trust Assets, and in accordance with section 1141 of the Bankruptcy Code, the GUC Trust Assets shall automatically vest in the GUC Trust free and clear of all Claims and Liens,

Page 15

and such transfer shall be exempt from any stamp, real estate transfer, mortgage reporting, sales, use, or other similar tax pursuant to section 1146(a) of the Bankruptcy Code. The GUC Trustee shall be the exclusive administrator of the GUC Trust Assets for purposes of 31 U.S.C. § 3713(b) and 26 U.S.C. § 6012(b)(3), as well as the representatives of the Estate of each of the Debtors appointed pursuant to section 1123(b)(3)(B) of the Bankruptcy Code, solely with respect to the GUC Trust Assets and for purposes of carrying out the GUC Trustee’s duties. The GUC Trust shall be administered by the GUC Trustee. The powers, rights, and responsibilities of the GUC Trustee shall include the authority and responsibility to, among other things, take the actions set forth in the Plan and shall be set forth in the GUC Trust Agreement. The GUC Trustee shall hold and distribute the GUC Trust Assets in accordance with the provisions of the Plan and the GUC Trust Agreement. After the Effective Date, the Debtors and the Reorganized Debtors, if applicable, shall have no interest in the GUC Trust Assets. 2. GUC Trustee and GUC Trust Agreement The GUC Trustee will, among other things, administer the GUC Trust Assets and will be the Estates’ representative with respect to the settlement, release, allowance, disallowance, or compromise of applicable GUC Claims or Convenience Class Claims subject to and in accordance with the Plan and the Bankruptcy Code. The GUC Trust Agreement generally will provide for, among other things: (a) the transfer of the GUC Trust Assets to the GUC Trust; (b) the payment of certain reasonable expenses of the GUC Trust from the GUC Trust Assets; and (c) distributions to GUC Trust Beneficiaries, as provided herein and in the GUC Trust Agreement. On and after the Effective Date, and subject to any consent provisions set forth in the GUC Trust Agreement or the Plan, the GUC Trustee shall be responsible for all decisions and duties with respect to the GUC Trust and the GUC Trust Assets, except as otherwise provided in the GUC Trust Agreement or the Plan. The GUC Trustee shall make distributions to GUC Trust Beneficiaries on account of GUC Trust Interests. 3. Tax Treatment In furtherance of the GUC Trust, (a) the GUC Trust is intended to qualify as a “liquidating trust” within the meaning of Treasury Regulation section 301.7701-4(d) and in compliance with Revenue Procedure 94-45, 1994-2 C.B. 684, and, thus, as a “grantor trust” within the meaning of sections 671 through 679 of the Internal Revenue Code to the applicable Holders of Claims, consistent with the terms of the Plan; (b) the sole purpose of the GUC Trust shall be the liquidation and distribution of the GUC Trust Assets in accordance with Treasury Regulation section 301.7701-4(d), including the resolution of applicable Claims in accordance with this Plan, with no objective to continue or engage in the conduct of a trade or business; (c) all parties (including, without limitation, the Debtors, the Reorganized Debtors, applicable Holders of Allowed Class 5 Claims receiving GUC Trust Interests, and the GUC Trustee) shall report consistently with such treatment; (d) all parties (including the Debtors, the Reorganized Debtors, applicable Holders of Allowed Class 5 Claims receiving GUC Trust Interests, and the GUC Trustee) shall report consistently with the valuation of the GUC Trust Assets transferred to the GUC Trust as determined by the GUC Trustee (or its designee); (e) the GUC Trustee shall be responsible for filing all applicable tax returns for the GUC Trust as a grantor trust pursuant to Treasury Regulation section 1.671-4(a); and (f) the GUC Trustee shall annually send to each holder of a GUC Trust Interest a separate statement regarding the receipts and expenditures of the GUC Trust as relevant for U.S. federal income tax purposes. In conformity with Revenue Procedure 94-45, all parties (including, without limitation, the Debtors, the GUC Trustee and GUC Trust Beneficiaries) will be required to treat the transfer of the GUC Trust Assets to the GUC Trust, for all purposes of the Internal Revenue Code, as (a) a transfer of the GUC Trust Assets (subject to any obligations relating to those assets) directly to the GUC Trust Beneficiaries

Page 16

(other than to the extent any GUC Trust Assets are allocable to Disputed Claims), followed by (b) the transfer by such beneficiaries to the GUC Trust of GUC Trust Assets in exchange for GUC Trust Interests. For all U.S. federal income tax purposes, all parties must treat the GUC Trust as a grantor trust of which holders of Allowed Class 5 Claims who become GUC Trust Beneficiaries (as determined for U.S. federal income tax purposes) are the owners and grantors. Subject to definitive guidance from the Internal Revenue Service or a court of competent jurisdiction to the contrary (including the receipt by the GUC Trustee of a private letter ruling if the GUC Trustee so requests one, or the receipt of an adverse determination by the Internal Revenue Service upon audit if not contested by the GUC Trustee), the GUC Trustee may timely elect to (a) treat any portion of the GUC Trust allocable to Disputed Claims as a “disputed ownership fund” governed by Treasury Regulation section 1.468B-9 (and make any appropriate elections), which “disputed ownership fund” will be taxable as a “qualified settlement fund” if such portion of the GUC Trust allocable to Disputed Claims consists of passive assets for tax purposes, and (b) to the extent permitted by applicable law, report consistently with the foregoing for state and local income tax purposes. If a “disputed ownership fund” election is made, all parties (including the Debtors, the Reorganized Debtors, applicable Holders of Allowed Class 5 Claims receiving GUC Trust Interests, and the GUC Trustee) shall report for United States federal, state, and local income tax purposes consistently with the foregoing. The GUC Trustee may request an expedited determination of taxes of the GUC Trust, including any reserve for Disputed Claims, under section 505(b) of the Bankruptcy Code for all tax returns filed for, or on behalf of, the GUC Trust for all taxable periods through the dissolution of the GUC Trust. 4. Non-Transferability of GUC Trust Interests Any and all GUC Trust Interests shall be non-transferable other than if transferred by will, intestate succession, or otherwise by operation of law. In addition, any and all GUC Trust Interests will not constitute “securities” and will not be registered pursuant to the Securities Act or any applicable state or local securities law. However, if it should be determined that any such GUC Trust Interests constitute “securities,” the exemption provisions of Section 1145 of the Bankruptcy Code will be satisfied and the offer, issuance and distribution under the Plan of the GUC Trust Interests will be exempt from registration under the Securities Act and all applicable state and local securities laws and regulations. 5. Dissolution of the GUC Trust The GUC Trustee and GUC Trust shall be discharged or dissolved, as the case may be, at such time as all distributions required to be made by the GUC Trustee under the Plan have been made. 6. Indemnification and Limitation of Liability The GUC Trustee and each of its respective accountants, agents, assigns, attorneys, bankers, consultants, directors, employees, executors, financial advisors, investment bankers, real estate brokers, transfer agents, independent contractors, managers, members, officers, partners, predecessors, principals, professional persons, representatives, affiliate, employer and successors (each solely in its capacity as such, a “GUC Indemnified Party”) shall be indemnified for, and defended and held harmless against, by the GUC Trust and solely from the GUC Trust Assets, any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost, or expense (including the reasonable fees and expenses of their respective professionals) actually incurred other than with respect to gross negligence, willful misconduct, or fraud on the part of the applicable GUC Indemnified Party (which gross negligence, willful misconduct, or fraud, if any, must be determined by a Final Order of a court of competent jurisdiction) for any action taken, suffered, or omitted to

Page 17

be taken by the GUC Indemnified Parties in connection with the acceptance, administration, exercise, and performance of their duties under the Plan or the GUC Trust Agreement, as applicable if the applicable GUC Indemnified Party acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interest of the GUC Trust or its beneficiaries. The amounts necessary for the indemnification provided in this section (including, but not limited to, any costs and expenses incurred in enforcing the right of indemnification in this section) shall be paid out of the GUC Trust Assets. The GUC Trustee shall not be personally liable for the payment of any GUC Trust expense or claim or other liability of the GUC Trust, and no person shall look to the GUC Trustee personally for the payment of any such expense or liability. The indemnification provided in this section shall survive the death, dissolution, incapacity, resignation or removal of the GUC Trustee, GUC Indemnified Party or the termination of the GUC Trust, and shall inure to the benefit of each GUC Indemnified Party’s heirs and assigns. 7. Preservation of Privilege The Debtors or Reorganized Debtors, as applicable, and the GUC Trust shall be deemed to be working in common interest whereby the Debtors will be able to share documents, information or communications (whether written or oral) relating to GUC Claims, subject to a common interest privilege. The GUC Trust shall seek to preserve and protect all applicable privileges attaching to any such documents, information, or communications. The GUC Trustee’s receipt of such documents, information or communications shall not constitute a waiver of any privilege. All privileges shall remain in the control of the Debtors or Reorganized Debtors, as applicable, and the Debtors or Reorganized Debtors, as applicable, retain the exclusive right to waive their own privileges. 8. Administration of the GUC Trust On and after the Effective Date, the GUC Trustee shall: (a) resolve Disputed Claims that are GUC Claims and Convenience Class Claims as expeditiously as possible, (b) make distributions on account of GUC Trust Interests as provided hereunder, (c) to the extent transferred to the GUC Trust, enforce and prosecute claims, interests, rights, and privileges under the Panterra Claims in an efficacious manner and only to the extent the benefits of such enforcement or prosecution are reasonably believed to outweigh the costs associated therewith, (d) file appropriate tax returns, and (e) administer the GUC Trust in an efficacious manner. The GUC Trustee shall liquidate the Agent Panterra Assets as expeditiously as reasonably possible and, subject to the consent of the Agent, make Cash distributions to the Agent, Reorganized SMG, holders of New Units, or holders of Agent Trust Interests (if applicable), as set forth in the Plan and the GUC Trust Agreement. The GUC Trust shall be deemed to be substituted as the party-in-lieu of the Debtors in all matters pertaining to the GUC Claims reconciliation process and the GUC Trust Assets, including (a) motions, contested matters, and adversary proceedings pending in the Bankruptcy Court and (b) all matters pending in any courts, tribunals, forums, or administrative proceedings outside of the Bankruptcy Court (including the Panterra Actions), in each case without the need or requirement for the GUC Trustee to file motions or substitutions of parties or counsel in each such matter. 9. GUC Trust Fees and Expenses From and after the Effective Date, the GUC Trustee, on behalf of the GUC Trust, shall, in the ordinary course of business and without the necessity of any approval by the Bankruptcy Court, pay using the GUC Trust Assets the reasonable expenses (including any taxes imposed on or payable by the GUC Trust or in respect of the GUC Trust Assets and professional fees) incurred by the GUC

Page 18

Trust and any professionals retained by the GUC Trust or the GUC Trustee and any additional amounts determined necessary by the GUC Trustee to adequately reserve for the operating expenses of the GUC Trust from the GUC Trust Assets. The GUC Trustee is authorized to allocate such expenses to, and pay them from, the GUC Trust Assets, as the GUC Trustee may determine in good faith is fair (such as based upon the GUC Trustee’s good faith determination of the nature or purpose of the fee or expense, the relative amount of GUC Claims, or such other matters as the GUC Trustee deems relevant) and in accordance with the GUC Trust Agreement. No GUC Trust Expenses shall be payable from the Agent Panterra Assets. C. The Equitization Restructuring If the Equitization Restructuring occurs, the following provisions shall govern. 1. Reorganized Debtors On the Effective Date, the Reorganized SMG Board shall be established, and each Reorganized Debtor shall adopt its New Organizational Documents. The Reorganized Debtors shall be authorized to adopt any other agreements, documents, and instruments and to take any other actions contemplated under the Plan as necessary to consummate the Plan, including any Restructuring Transactions. 2. Sources of Consideration for Plan Distributions (a) Exit Facility On the Effective Date, all of the Liens and security interests to be granted in accordance with the Exit Facility Loan Documents (a) shall be deemed to be granted, (b) shall be legal, binding, and enforceable Liens on, and security interests in, the collateral granted thereunder in accordance with the terms of the Exit Facility Loan Documents, (c) shall be deemed to be automatically perfected on the Effective Date, subject only to such Liens and security interests as may be permitted under the Exit Facility Loan Documents, and (d) shall not be subject to recharacterization or equitable subordination for any purposes whatsoever and shall not constitute preferential transfers or fraudulent conveyances under the Bankruptcy Code or any applicable non-bankruptcy law. The Reorganized Debtors and the Exit Agent and all other persons and entities granted such Liens and security interests shall be authorized to make all filings and recordings, and to obtain all governmental approvals and consents necessary to establish and perfect such Liens and security interests under the provisions of the applicable state, federal, or other law that would be applicable in the absence of the Plan and the Confirmation Order (it being understood that perfection shall occur automatically by virtue of the entry of the Confirmation Order and any such filings, recordings, approvals, and consents shall not be required), and will thereafter cooperate to make all other filings and recordings that otherwise would be necessary under applicable law to give notice of such Liens and security interests to third parties. On the Effective Date, the applicable Reorganized Debtors shall enter into the Exit Facility (and such other Reorganized Debtors may enter into the Exit Facility after the Effective Date as set forth in the Exit Facility Loan Documents and the Plan), the terms of which will be set forth in the Exit Facility Loan Documents. Confirmation of the Plan shall be deemed approval by the Bankruptcy Court of the Exit Facility, including the Exit Facility Loan Documents and all transactions contemplated thereby, and all actions to be taken, undertakings to be made, and obligations to be incurred by the Reorganized Debtors in connection therewith, including the payment of all fees,

Page 19

indemnities, expenses, and other payments provided for therein and authorization of the applicable Reorganized Debtors to enter into and execute the Exit Facility Loan Documents and such other documents as may be required to effectuate the treatment afforded by the Exit Facility. (b) New Units Reorganized SMG shall be authorized to issue New Units pursuant to the New Organizational Documents. On the Effective Date, the Debtors shall issue all securities, notes, instruments, certificates, and other documents required to be issued pursuant to the Plan. The New Units, as well as the terms, amount, structure, and allocation thereof, may be modified with the consent of the Agent (with, for the avoidance of doubt, the consent of Crestline) at any time prior to the Effective Date. All of the New Units issued pursuant to the Plan shall be duly authorized, validly issued, fully paid, and non-assessable. Each distribution and issuance of New Units shall be governed by the terms and conditions set forth in the Plan applicable to such distribution or issuance and by the terms and conditions of the instruments evidencing or relating to such distribution or issuance, which terms and conditions shall bind each Entity receiving such distribution or issuance. 3. Vesting of Assets in the Reorganized Debtors Except as otherwise provided in the Plan, the Confirmation Order, or any agreement, instrument, or other document incorporated herein, on the Effective Date, other than with respect to all Non-Vesting Assets, property of any Non-Reorganized Debtor, and the GUC Trust Assets, all property in each Estate, all Causes of Action (including the Retained Causes of Action), and any property acquired by any of the Debtors pursuant to the Plan shall vest in each applicable Reorganized Debtor or such other Entity as determined by the Agent, free and clear of all Liens, Claims, charges, Interests, or other encumbrances; provided, however, that (a) any and all DIP Liens shall be retained by the DIP Agent and assigned to the Exit Agent and (b) any and all Liens securing the Prepetition Lenders’ Claim shall be retained by the Prepetition Agent and assigned to the Exit Agent, in each case of (a) and (b) to secure any and all obligations of the Reorganized Debtors under the Exit Facility. Except as otherwise provided in the Plan, the Confirmation Order, or any agreement, instrument, or other document incorporated herein, on and after the Effective Date, each of the Reorganized Debtors may operate their business and may use, acquire, or dispose of property and compromise or settle any Claims, Interests, or Causes of Action without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules. Notwithstanding anything in the Plan to the contrary, at any time prior to the Effective Date, the Agent may elect for any Interest in any Debtor that will become a Reorganized Debtor to be issued and assigned to any Entity on the Effective Date, including without limitation any third party by filing a notice on the docket of the Bankruptcy Court. The Plan shall constitute a motion to abandon the Non-Vesting Assets. The Confirmation Order shall constitute (a) an authorization of the Bankruptcy Court to abandon the Non-Vesting Assets under section 554 of the Bankruptcy Code and (b) an order of abandonment of the Non-Vesting Assets as of the Effective Date. The Non-Vesting Assets shall not vest in any of the Reorganized Debtors, and the Reorganized Debtors shall have no ownership interest in the Non-Vesting Assets. 4. Corporate Action On the Effective Date, all actions contemplated under the Plan with respect to the Debtors and the Reorganized Debtors, as applicable, shall be deemed authorized and approved in all respects,

Page 20

including, as applicable: (1) implementation of the Restructuring Transactions; (2) formation by the Debtors or such other party as contemplated in the Plan, Plan Supplement, or Confirmation Order, of Reorganized SMG, and any transactions related thereto; (3) selection of, and the election or appointment (as applicable) of, the directors and officers for the Reorganized Debtors; (4) adoption of and entry into any employment agreements; (5) approval and adoption of (and, as applicable, the execution, delivery, and filing of) the New Organizational Documents; (6) issuance and distribution of New Units as set forth in the Plan; (7) execution of the GUC Trust Agreement and transfer of the GUC Trust Assets to the GUC Trust; (8) entry into the Exit Facility Loan Documents; (9) the rejection, assumption, or assumption and assignment, as applicable, of Executory Contracts and Unexpired Leases; (10) the establishment of the Reorganized SMG Board and the appointment of each manager thereof, and (11) all other actions contemplated under the Plan (whether to occur before, on, or after the Effective Date). All matters provided for herein involving the corporate structure of the Debtors or the Reorganized Debtors, as applicable, and any corporate action, authorization, or approval that would otherwise be required by the Debtors or the Reorganized Debtors, as applicable, in connection with the Plan shall be deemed to have occurred or to have been obtained and shall be in effect as of the Effective Date, without any requirement of further action, authorization, or approval by the Bankruptcy Court, security holders, directors, managers, or officers of the Debtors, the Reorganized Debtors, or any other person. On or before the Effective Date, the appropriate officers of the Debtors or the Reorganized Debtors, as applicable, shall be authorized and directed to issue, execute, and deliver the agreements, documents, securities, and instruments, and take such actions, contemplated under the Plan (or necessary or desirable to effect the transactions contemplated under the Plan) in the name of and on behalf of the Reorganized Debtors including, as applicable, the GUC Trust Agreement, the New Organizational Documents, the New Units, the Exit Facility, the Exit Facility Loan Documents, and any and all other agreements, documents, securities, and instruments relating to the foregoing, and all such documents shall be deemed ratified. The authorizations and approvals contemplated by this subsection shall be effective notwithstanding any requirements under non-bankruptcy law. 5. New Organizational Documents On or immediately prior to the Effective Date, the New Organizational Documents shall be amended in a manner acceptable to the Agent as may be necessary to effectuate the transactions contemplated by the Plan. On the Effective Date, to the extent provided in the Plan and/or Plan Supplement, each of the Reorganized Debtors will file its New Organizational Documents with the applicable secretaries of state and/or other applicable authorities in its respective state of incorporation or formation in accordance with the applicable laws of the respective state of incorporation or formation, to the extent required for such New Organizational Documents to become effective. Pursuant to and to the extent provided in section 1123(a)(6) of the Bankruptcy Code, the New Organizational Documents will prohibit the issuance of non-voting equity securities (other than with respect to the Preferred Units and the Class A-2 Common Units). After the Effective Date, the Reorganized Debtors may amend and restate their respective New Organizational Documents and other constituent documents as permitted by the laws of their respective state of incorporation and their respective New Organizational Documents and other constituent documents of the Reorganized Debtors.

Page 21

6. Directors and Officers of the Reorganized Debtors As of the Effective Date, the terms of the current members of the boards of directors or managers, as applicable, of each of the Debtors shall expire, and the initial Reorganized SMG Board and the boards of directors or managers of each of the other Reorganized Debtors will include those directors and officers set forth in the lists of directors and officers of the Reorganized Debtors included in the Plan Supplement. After the Effective Date, the officers of each of the Reorganized Debtors shall be appointed in accordance with the respective New Organizational Documents. Pursuant to section 1129(a)(5) of the Bankruptcy Code, the Debtors will disclose in the Plan Supplement the identity and affiliations of each person proposed to be an officer or to serve on the initial board of directors of any of the Reorganized Debtors. To the extent any such director or officer of the Reorganized Debtors is an “insider” under the Bankruptcy Code, the Debtors also will disclose the nature of any compensation to be paid to such director or officer. Each such director or officer shall serve from and after the Effective Date pursuant to the terms of the New Organizational Documents. 7. Effectuating Documents; Further Transactions On and after the Effective Date, the Debtors or the Reorganized Debtors, as applicable, and the officers, directors, agents and members thereof are authorized to and may issue, execute, deliver, file, or record such contracts, securities, instruments, releases, and other agreements or documents and take such actions as may be necessary or appropriate to effectuate, implement, and further evidence the terms and conditions of the Plan, without the need for any approvals, authorizations, notice, or consents, except for those expressly required pursuant to the Plan. 8. Management Incentive Plan The Reorganized SMG A&R LLCA shall provide for a Management Incentive Plan for the issuance of Class B Common Units to management and other service providers. The participants in the Management Incentive Plan, the timing and allocations of the awards to participants, and the other terms and conditions of such awards (including, but limited to, vesting, exercise prices, base values, hurdles, forfeiture, repurchase rights, and transferability) shall be set forth in the Reorganized SMG A&R LLCA and award agreements with participants, to the extent applicable. 9. Employee Matters Pursuant to section 1129(a)(13) of the Bankruptcy Code, from and after the Effective Date, all retiree benefits (as such term is defined in section 1114 of the Bankruptcy Code), if any, shall continue to be paid in accordance with applicable law. 10. Preservation of Causes of Action In accordance with section 1123(b) of the Bankruptcy Code, but subject to Article VIII hereof, the Reorganized Debtors or the GUC Trust, as applicable, shall retain and may enforce all rights to commence and pursue, as appropriate, any and all Causes of Action belonging to the Debtors or their Estates that vest in the Reorganized Debtors or are transferred and assigned to the GUC Trust pursuant to the Plan, as applicable, whether arising before or after the Petition Date, including, without limitation, any actions specifically enumerated in the Schedule of Retained Causes of Action, and the Reorganized Debtors’ and the GUC Trust’s rights to commence, prosecute, or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date, other

Page 22

than Causes of Action released by the Debtors pursuant to the releases and exculpations set forth in Article VIII of the Plan or otherwise under this Plan; provided, however, that notwithstanding anything to the contrary herein, on the Effective Date (a) all Causes of Action against the Schultz Parties of Debtors that become Reorganized Debtors shall vest in the Reorganized Debtors and (b) all Causes of Action against the Schultz Parties of Debtors that become Non-Reorganized Debtors shall be transferred and assigned to the Reorganized Debtors, unless each Schultz Party has, prior to the Effective Date, executed a release in form and substance acceptable to the Agent, including agreeing to become a “Releasing Party” under the Plan and to be subject to the release set forth in Article VIII.E of the Plan (unless waived by the Agent). The Reorganized Debtors and the GUC Trustee may pursue such Causes of Action, as appropriate, in accordance with the best interests of the Reorganized Debtors and the GUC Trust Beneficiaries. No Entity may rely on the absence of a specific reference in the Plan, the Plan Supplement, the Disclosure Statement, or the Schedule of Retained Causes of Action to any Cause of Action against it as any indication that the Reorganized Debtors or GUC Trustee will not pursue any and all available Causes of Action of the Debtors or the Estates against it. The Reorganized Debtors and the GUC Trustee, as applicable, expressly reserve all rights to prosecute any and all Causes of Action against any Entity, except as otherwise expressly provided in the Plan, including Article VIII of the Plan. Unless any Cause of Action of the Debtors or the Estates against an Entity is expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan or pursuant to a Final Order, the Reorganized Debtors and the GUC Trustee expressly reserve all such Causes of Action for later adjudication, and, therefore, no preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable, or otherwise), or laches, shall apply to such Causes of Action upon, after, or as a consequence of Confirmation or Consummation. The Reorganized Debtors and the GUC Trust, as applicable, reserve and shall retain such Causes of Action of the Debtors and their Estates notwithstanding the rejection or repudiation of any Executory Contract or Unexpired Lease during the Chapter 11 Cases or pursuant to the Plan. In accordance with section 1123(b)(3) of the Bankruptcy Code, any Cause of Action that a Debtor or its Estate may hold against any Entity shall vest in the Reorganized Debtors or the GUC Trust pursuant to the Plan, except as otherwise expressly provided in the Plan, including Article VIII of the Plan. The Reorganized Debtors and the GUC Trust shall retain and may exclusively enforce any and all such Causes of Action, and through their authorized agents or representatives shall have the exclusive right, authority, and discretion to determine and to initiate, file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment, any such Causes of Action (except as otherwise expressly provided in the Plan), or to decline to do any of the foregoing, without the consent or approval of any third party or any further notice to or action, order, or approval of the Bankruptcy Court. On the Effective Date, the Debtors and the Estates shall irrevocably waive and release all Released Avoidance Actions and Released Avoidance Actions shall not be Retained Causes of Action. 11. Non-Reorganized Debtors On the Effective Date, the Non-Vesting Assets (including Interests in Debtors identified on the Schedule of Abandoned Debtors) shall be abandoned pursuant to section 554 of the Bankruptcy Code.

Page 23

On the Effective Date, the Chapter 11 Cases of the Debtors identified on the Schedule of Converted Cases shall be converted to cases under chapter 7 of the Bankruptcy Code pursuant to section 1112(a) of the Bankruptcy Code without any further notice to or action, order, or approval of the Bankruptcy Court or any other Entity. The Confirmation Order shall provide that such Chapter 11 Cases shall be converted to cases under chapter 7 pursuant to section 1112(a) of the Bankruptcy Code. The treatment of Claims against and Interests in Debtors identified on the Schedule of Non-Applicable Debtors shall be subject to a separate plan or reorganization or liquidation acceptable to the Agent. Notwithstanding anything to the contrary herein, each Debtor identified on any Schedule of Non-Reorganized Debtors constitutes a “Releasing Party” under this Plan and Article VIII of the Plan shall apply to all such Debtors. 12. Cooperation of Reorganized Debtors In either an Equitization Restructuring or an Asset Sale Restructuring, the Reorganized Debtors shall reasonably cooperate with the GUC Trust and the GUC Trustee regarding information pertaining to the GUC Trust Assets; provided that the Reorganized Debtors shall have no obligation to incur out-of-pocket expenses in connection with such reasonable cooperation. 13. Administrative Consolidation for Procedural Purposes Only In either an Equitization Restructuring or an Asset Sale Restructuring , on the Effective Date, and solely for administrative purposes to facilitate distributions, each and every GUC Claim or Convenience Class Claim against a Debtor that is not listed on the Schedule of Abandoned Debtors, the Schedule of Non-Applicable Debtors, or the Schedule of Converted Cases shall (a) be deemed merged or treated as liabilities of the GUC Trust to the extent Allowed and (b) shall be treated as filed against the consolidated Debtors and shall be treated as one GUC Claim or one Convenience Class Claim, as applicable, as an obligation of the GUC Trust. Each and every GUC Claim or Convenience Class Claim against a Debtor that is not listed on the Schedule of Abandoned Debtors, the Schedule of Non-Applicable Debtors, or the Schedule of Converted Cases and which constitutes a guaranty by a Debtor of the obligations of any other Debtor shall be deemed eliminated and extinguished so that any such GUC Claim or Convenience Class Claim, as applicable, against any Debtor and any guarantee thereof executed by any other Debtor and any joint or several GUC Claim or Convenience Class Claim against any of the Debtors shall be deemed to be a single obligation of the GUC Trust. For the avoidance of doubt, for purposes of determining the availability of the right of setoff under section 553 of the Bankruptcy Code, the Debtors shall be treated as separate entities so that, subject to the other provisions of section 553 of the Bankruptcy Code, debts due to any of the Debtors may not be set off against the liabilities of any of the other Debtors. Such administrative consolidation is solely for the purpose of facilitating distributions to Holders of GUC Claims under this Plan and shall not affect the legal and corporate structures of the Reorganized Debtors. Moreover, such administrative consolidation shall not affect any subordination provisions set forth in any agreement relating to any GUC Claim or the ability of the GUC Trustee to seek to have any GUC Claim subordinated in accordance with any contractual rights or equitable principles.

Page 24

14. Leasehold Mortgages On the Effective Date, and effective as of the date of entry of the Final DIP Order, each Reorganized Debtor that is a lessee under an Unexpired Lease of nonresidential real property shall execute a leasehold mortgage with the Exit Agent, and, absent a timely objection and showing by the Confirmation Objection Deadline by the applicable lessor counterparty that such leasehold mortgage is expressly prohibited under such lease and cannot be cured or resolved by consent or other process under such lease, or would cause a default under the landlord’s financing agreement existing as of the date of entry of the Final DIP Order, each lessor counterparty to such Unexpired Lease of nonresidential real property shall be deemed to consent to the grant of such leasehold mortgage to the Exit Agent. D. The Asset Sale Restructuring If the Asset Sale Restructuring occurs, the following provisions shall govern. 1. Vesting of Assets in the GUC Trust On the Effective Date, the GUC Trust Assets shall vest in the GUC Trust free and clear of all Liens, Claims, charges, or other encumbrances. 2. Sources of Consideration for Plan Distributions Distributions under the Plan will be funded with Cash on hand on the Effective Date and the revenues and proceeds of all remaining assets of the Debtors recovered by the GUC Trust or Agent Trust, as applicable, including proceeds from all Causes of Action not settled, released, discharged, enjoined, or exculpated under the Plan or otherwise on or prior to the Effective Date. Notwithstanding anything to the contrary in the Plan or in the Asset Purchase Agreement, on the Effective Date, any Cause of Action not settled, released, discharged, enjoined, or exculpated under the Plan on or prior to the Effective Date shall vest in the Agent Trust (except the Panterra Claims, which shall vest in the GUC Trust); provided, however, that the Debtors and the Estates shall irrevocably waive and release all Released Avoidance Actions and Released Avoidance Actions shall not be Retained Causes of Action. 3. Dissolution and Governing Bodies of the Debtors As of the Effective Date, the Debtors’ board(s) of managers shall be dissolved without any further action required on the part of the Debtors or the Debtors’ officers, directors, managers, shareholders, members, or similar governing bodies, and any remaining officers, directors, managers, or managing members of any Debtor shall be dismissed without any further action required on the part of any such Debtor, the equity holders of the Debtors, the officers, directors, managers, or similar governing body, as applicable, of the Debtors, or the members of any Debtor. Subject in all respects to the terms of this Plan, the Debtors shall be dissolved as soon as practicable on or after the Effective Date, but in no event later than the closing of the Chapter 11 Cases. The filing by the Agent Trustee of any of the Debtors’ certificate of dissolution shall be authorized and approved in all respects without further action under applicable law, regulation, order,

Page 25

or rule, including any action by the equity holders, members, board of directors, managers, or board of managers or any of its affiliates. 4. Release of Liens Except as otherwise expressly provided herein or in the Confirmation Order, on the Effective Date, all Liens on any property of any Debtors shall automatically terminate, all property subject to such Liens shall be automatically released, and all guarantees of any Debtors shall be automatically discharged and released; provided that notwithstanding anything to the contrary set forth in this Plan, subject to the funding of the Professional Fee Escrow Account and except with respect to the GUC Trust Assets, (a) all Liens of the DIP Agent, the DIP Lenders, the Prepetition Agent, and the Prepetition Lenders, on any property of any Debtors shall remain valid, binding, and in full effect on and after the Effective Date, (b) all property of the Debtors (including any Sale Proceeds) shall remain subject to the Liens and Claims of the DIP Agent, the DIP Lenders, the Prepetition Agent, and the Prepetition Lenders, as such Liens and Claims exist on the Effective Date, and shall continue to secure all of the DIP Facility Claims and the Prepetition Lenders’ Claims, (c) all guarantees of any Debtors in favor of the DIP Agent, the DIP Lenders, the Prepetition Agent, and the Prepetition Lenders shall be reaffirmed and remain in full force and effect, and (d) the proceeds of sales of any collateral of the Debtors securing the DIP Facility Claims and the Prepetition Lenders’ Claims shall remain subject to the Liens and Claims of the DIP Agent, the DIP Lenders, the Prepetition Agent, and the Prepetition Lenders, as applicable, to the same extent as such Liens and Claims were enforceable against the Debtors and the Debtors’ assets on the Effective Date, in each case of (a)-(d) until the DIP Agent, the DIP Lenders, the Prepetition Agent, and the Prepetition Lenders are indefeasibly paid in full in Cash. 5. Corporate Action On the Effective Date, all actions contemplated under the Plan, regardless of whether taken before, on, or after the Effective Date, shall be deemed authorized and approved in all respects, including: (a) consummation of the Asset Sale; and (b) all other actions contemplated under the Plan (whether to occur before, on, or after the Effective Date). All matters provided for in the Plan or deemed necessary or desirable by the Debtors before, on, or after the Effective Date involving the corporate structure of the Debtors or the Reorganized Debtors, and any corporate action required by the Debtors or the Reorganized Debtors in connection with the Plan or corporate structure of the Debtors or Reorganized Debtors, shall be deemed to have occurred and shall be in effect on the Effective Date, without any requirement of further action by the security holders, directors, managers, or officers of the Debtors or the Reorganized Debtors. Before, on, or after the Effective Date, the appropriate officers of the Debtors or the Reorganized Debtors, as applicable, shall be authorized to issue, execute, and deliver the agreements, documents, securities, and instruments contemplated under the Plan (or necessary or desirable to effect the transactions contemplated under the Plan) in the name of and on behalf of the Reorganized Debtors. The authorizations and approvals contemplated by this subsection shall be effective notwithstanding any requirements under non-bankruptcy law. 6. Effectuating Documents; Further Transactions Prior to the Effective Date, the Debtors are, and on and after the Effective Date, the GUC Trustee and the Agent Trustee are, authorized to and may issue, execute, deliver, file, or record to the extent not inconsistent with any provision of this Plan such contracts, securities, instruments, releases,

Page 26

and other agreements or documents and take such actions as may be necessary or appropriate to effectuate, implement, and further evidence the terms and conditions of the Plan, without the need for any approvals, authorizations, notice, or consents, except for those expressly required pursuant to the Plan. 7. Preservation of Causes of Action Unless any Cause of Action against an Entity is expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan or a Final Order, in accordance with section 1123(b) of the Bankruptcy Code, the Debtors shall convey to the Agent Trust all rights to commence, prosecute, or settle, as appropriate, any and all Causes of Action other than the Panterra Claims, whether arising before or after the Petition Date, which shall vest in the Agent Trust pursuant to the terms of the Plan. The Agent Trustee may enforce all rights to commence, prosecute, or settle, as appropriate, any and all such Causes of Action, whether arising before or after the Petition Date, and the Agent Trustee’s rights to commence, prosecute, or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date. The Agent Trustee may, in its reasonable business judgment, pursue such Causes of Action and may retain and compensate professionals in the analysis or pursuit of such Causes of Action to the extent the Agent Trustee deems appropriate, including on a contingency fee basis. No Entity may rely on the absence of a specific reference in the Plan or the Disclosure Statement to any Cause of Action against them as any indication that the Debtors or the Agent Trustee will not pursue any and all available Causes of Action against them. The Debtors and the Agent Trustee expressly reserve all rights to prosecute any and all Causes of Action against any Entity, except as otherwise expressly provided in the Plan, including Article VIII of the Plan. Unless any Cause of Action against an Entity is expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan or a Final Order, the Agent Trustee expressly reserves all Causes of Action for later adjudication, and, therefore, no preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable, or otherwise), or laches, shall apply to such Causes of Action upon, after, or as a consequence of the Confirmation or Consummation. Subject to the consent of the Agent, the Agent Trustee may initiate, file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment any such Causes of Action, or to decline to do any of the foregoing, without the consent or approval of any other third party or any further notice to, or action, order, or approval of, the Bankruptcy Court. For avoidance of doubt, on the Effective Date, the Debtors and the Estates shall irrevocably waive and release all Released Avoidance Actions and Released Avoidance Actions shall not be Retained Causes of Action. 8. Agent Trust In the event an Asset Sale Restructuring occurs, the Agent Trust Assets will be transferred to the Agent Trust on the Effective Date. Except as otherwise provided in the Plan, the Confirmation Order, the Asset Purchase Agreement, or any agreement, instrument, or other document incorporated herein or therein, or any agreement, instrument, or other document incorporated in the Plan or the Plan Supplement, on the Effective Date, the Agent Trust Assets shall vest in the Agent Trust free and clear of all Liens, Claims, charges, or other encumbrances; provided that the Agent Trust Assets shall remain subject to the Liens

Page 27

and Claims of the DIP Agent and the Prepetition Agent, as applicable, to the same extent as such Liens and Claims were enforceable against the Debtors and the Debtors’ assets on the Effective Date until such DIP Facility Claims and Prepetition Lenders’ Claims are indefeasibly paid in full in Cash. The Agent Trust shall be established for the administration of the Agent Trust as set forth in the Plan and Agent Trust Agreement. On the Effective Date, the Debtors, the Agent, and the Agent Trustee, as applicable, shall be authorized to take all actions necessary to establish the Agent Trust in accordance with the Plan and the Agent Trust Agreement. Additionally, on the Effective Date, the Debtors shall transfer and shall be deemed to transfer to the Agent Trust all of their rights, title and interest in and to all of the Agent Trust Assets, and in accordance with section 1141 of the Bankruptcy Code, other than with respect to the Liens of the Agent, which shall encumber the Agent Trust Assets, the Agent Trust Assets shall automatically vest in the Agent Trust free and clear of all Claims and Liens, and such transfer shall be exempt from any stamp, real estate transfer, mortgage reporting, sales, use or other similar tax pursuant to section 1146(a) of the Bankruptcy Code. The Agent Trustee shall be the exclusive administrator of the Agent Trust Assets for purposes of 31 U.S.C. § 3713(b) and 26 U.S.C. § 6012(b)(3), as well as the representatives of the Estate of each of the Debtors appointed pursuant to section 1123(b)(3)(B) of the Bankruptcy Code, solely for purposes of carrying out the Agent Trustee’s duties. The Agent Trust shall be administered by the Agent Trustee. The powers, rights, and responsibilities of the Agent Trustee shall include the authority and responsibility to, among other things, take the actions set forth in the Plan and shall be set forth in the Agent Trust Agreement. The Agent Trustee shall hold and distribute the Agent Trust Assets in accordance with the provisions of the Plan and the Agent Trust Agreement. After the Effective Date, the Debtors and the Reorganized Debtors, if applicable, shall have no interest in the Agent Trust Assets. On and after the Effective Date, the Agent Trustee shall: (a) wind down the Debtors’ businesses and affairs as expeditiously as reasonably possible, (b) make distributions on account of Agent Trust Interests as provided hereunder, (c) enforce and prosecute claims, interests, rights, and privileges under the Causes of Action on the Schedule of Retained Causes of Action in an efficacious manner and only to the extent the benefits of such enforcement or prosecution are reasonably believed to outweigh the costs associated therewith, (d) file appropriate tax returns, and (e) administer the Plan in an efficacious manner. The Agent Trustee shall liquidate all Agent Trust Assets as expeditiously as reasonably possible and make Cash distributions to holders of Agent Trust Interests. The Agent Trust shall be deemed to be substituted as the party-in-lieu of the Debtors in all matters, including (a) motions, contested matters, and adversary proceedings pending in the Bankruptcy Court and (b) all matters pending in any courts, tribunals, forums, or administrative proceedings outside of the Bankruptcy Court, in each case without the need or requirement for the Agent Trustee to file motions or substitutions of parties or counsel in each such matter. 9. Agent Trustee and Agent Trust Agreement The Agent Trustee will, among other things, administer the Agent Trust Assets. The Agent Trust Agreement generally will provide for, among other things: (a) the transfer of the Agent Trust Assets to the Agent Trust; (b) the payment of certain reasonable expenses of the Agent Trust from the Agent Trust Assets; and (c) distributions to Agent Trust Beneficiaries, as provided herein and in the Agent Trust Agreement. On and after the Effective Date, and subject to any consent provisions set forth in the Agent Trust Agreement or the Plan, the Agent Trustee shall be responsible for all decisions and duties with respect to the Agent Trust and the Agent Trust Assets, except as otherwise

Page 28

provided in the Agent Trust Agreement or the Plan. The Agent Trustee shall make distributions to the Agent Trust Beneficiaries. 10. Tax Treatment Provided the Agent Trust is structured as a trust, (a) the Agent Trust is intended to qualify as a “liquidating trust” within the meaning of Treasury Regulation section 301.7701-4(d) and in compliance with Revenue Procedure 94-45, 1994-2 C.B. 684, and, thus, as a “grantor trust” within the meaning of sections 671 through 679 of the Internal Revenue Code to the applicable Holders of Claims, consistent with the terms of the Plan; (b) the sole purpose of the Agent Trust shall be the liquidation and distribution of the Agent Trust Assets in accordance with Treasury Regulation section 301.7701-4(d), including the resolution of applicable Claims in accordance with this Plan, with no objective to continue or engage in the conduct of a trade or business; (c) all parties (including, without limitation, the Debtors, the Reorganized Debtors, applicable Holders of Allowed Claims receiving Agent Trust Interests, and the Agent Trustee) shall report consistently with such treatment; (d) all parties (including the Debtors, the Reorganized Debtors, applicable Holders of Allowed Claims receiving Agent Trust Interests, and the Agent Trustee) shall report consistently with the valuation of the Agent Trust Assets transferred to the Agent Trust as determined by the Agent Trustee (or its designee); (e) the Agent Trustee shall be responsible for filing all applicable tax returns for the Agent Trust as a grantor trust pursuant to Treasury Regulation section 1.671-4(a); and (f) the Agent Trustee shall annually send to each holder of an Agent Trust Interest a separate statement regarding the receipts and expenditures of the Agent Trust as relevant for U.S. federal income tax purposes. In conformity with Revenue Procedure 94-45, all parties (including, without limitation, the Debtors, the Agent Trustee and the Agent Trust Beneficiaries) will be required to treat the transfer of the Agent Trust Assets to the Agent Trust, for all purposes of the Internal Revenue Code, as (a) a transfer of the Agent Trust Assets (subject to any obligations relating to those assets) directly to the Agent Trust Beneficiaries (other than to the extent any Agent Trust Assets are allocable to Disputed Claims), followed by (b) the transfer by such beneficiaries to the Agent Trust of Agent Trust Assets in exchange for Agent Trust Interests. For all U.S. federal income tax purposes, all parties must treat the Agent Trust as a grantor trust of which holders of Claims who become Agent Trust Beneficiaries (as determined for U.S. federal income tax purposes) are the owners and grantors. Subject to definitive guidance from the Internal Revenue Service or a court of competent jurisdiction to the contrary (including the receipt by the Agent Trustee of a private letter ruling if the Agent Trustee so requests one, or the receipt of an adverse determination by the Internal Revenue Service upon audit if not contested by the Agent Trustee), the Agent Trustee may timely elect to (a) treat any portion of the Agent Trust allocable to Disputed Claims as a “disputed ownership fund” governed by Treasury Regulation section 1.468B-9 (and make any appropriate elections), which “disputed ownership fund” will be taxable as a “qualified settlement fund” if such portion of the Agent Trust allocable to Disputed Claims consists of passive assets for tax purposes, and (b) to the extent permitted by applicable law, report consistently with the foregoing for state and local income tax purposes. If a “disputed ownership fund” election is made, all parties (including the Debtors, the Reorganized Debtors, applicable Holders of Allowed Claims receiving Agent Trust Interests, and the Agent Trustee) shall report for United States federal, state, and local income tax purposes consistently with the foregoing. The Agent Trustee may request an expedited determination of taxes of the Agent Trust, including any reserve for Disputed Claims, under section 505(b) of the Bankruptcy Code for all tax returns filed for, or on behalf of, the Agent Trust for all taxable periods through the dissolution of the Agent Trust. 11. Non-Transferability of Agent Trust Interests

Page 29

Any and all Agent Trust Interests shall be non-transferable other than if transferred by will, intestate succession, or otherwise by operation of law. In addition, any and all Agent Trust Interests will not constitute “securities” and will not be registered pursuant to the Securities Act or any applicable state or local securities law. However, if it should be determined that any such Agent Trust Interests constitute “securities,” the exemption provisions of Section 1145 of the Bankruptcy Code will be satisfied and the offer, issuance and distribution under the Plan of the Agent Trust Interests will be exempt from registration under the Securities Act and all applicable state and local securities laws and regulations. 12. Dissolution of the Agent Trust The Agent Trustee and Agent Trust shall be discharged or dissolved, as the case may be, at such time as all distributions required to be made by the Agent Trustee under the Plan have been made. 13. Indemnification and Limitation of Liability The Agent Trustee and each of its respective accountants, agents, assigns, attorneys, bankers, consultants, directors, employees, executors, financial advisors, investment bankers, real estate brokers, transfer agents, independent contractors, managers, members, officers, partners, predecessors, principals, professional persons, representatives, affiliate, employer and successors (each solely in its capacity as such, an “Agent Trustee Indemnified Party”) shall be indemnified for, and defended and held harmless against, by the Agent Trust and solely from the Agent Trust Assets, any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost, or expense (including the reasonable fees and expenses of their respective professionals) actually incurred other than with respect to gross negligence, willful misconduct, or fraud on the part of the applicable Agent Trustee Indemnified Party (which gross negligence, willful misconduct, or fraud, if any, must be determined by a Final Order of a court of competent jurisdiction) for any action taken, suffered, or omitted to be taken by the Agent Trustee Indemnified Parties in connection with the acceptance, administration, exercise, and performance of their duties under the Plan or the Agent Trust Agreement, as applicable if the applicable Agent Trustee Indemnified Party acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interest of the Agent Trust or its beneficiaries. The amounts necessary for the indemnification provided in this section (including, but not limited to, any costs and expenses incurred in enforcing the right of indemnification in this section) shall be paid out of the Agent Trust Assets. The Agent Trustee shall not be personally liable for the payment of any Agent Trust expense or claim or other liability of the Agent Trust, and no person shall look to the Agent Trustee personally for the payment of any such expense or liability. The indemnification provided in this section shall survive the death, dissolution, incapacity, resignation or removal of the Agent Trustee, Agent Trustee Indemnified Party or the termination of the Agent Trust, and shall inure to the benefit of each Agent Trustee Indemnified Party’s heirs and assigns. E. Settlement and Compromise. The Plan shall be deemed a motion to approve the good-faith compromise and settlement set forth in the Plan pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019, and in consideration for the classification, distributions, releases, and other benefits provided under the Plan, upon the Effective Date, the provisions of the Plan shall constitute a good-faith compromise and settlement of all Claims and Interests and controversies resolved pursuant to the Plan, including (a) to the extent not previously released, any challenge to the amount, validity, perfection, enforceability, priority, or extent of the DIP Facility Claims or the Prepetition Lenders’ Claims and (b) to the extent

Page 30

not previously released, any claim to avoid, subordinate, or disallow any DIP Facility Claims or Prepetition Lenders’ Claims, whether under any provision of chapter 5 of the Bankruptcy Code, on any equitable theory (including equitable subordination, equitable disallowance, or unjust enrichment) or otherwise. The Plan shall be deemed to be a motion to approve the good-faith compromise and settlement of all such Claims and Interests and controversies pursuant to Bankruptcy Rule 9019, and the entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval of the compromise, settlement, and releases set forth in the Plan, as well as a finding by the Bankruptcy Court that such settlement and compromise, and the releases and indemnities provided to effectuate such settlement and compromise, are fair, equitable, reasonable, and in the best interests of the Debtors, their Estates, and the Holders of Claims and Interests. The compromises, settlements, and releases described herein shall be deemed non-severable from each other and from all other terms of the Plan. In order to implement the good-faith compromise and settlement set forth herein, the Plan groups the Debtors together solely for the purpose of describing treatment of Claims and Interests under the Plan and confirmation of the Plan. The Plan applies to all of the Debtors. To the extent there are no Allowed Claims or Interests with respect to a particular Debtor, such Class is deemed to be omitted with respect to such Debtor. Except as otherwise provided herein, to the extent a Holder has a Claim that may be asserted against more than one Debtor, the vote of such Holder in connection with such Claims shall be counted as a vote of such Claim against each Debtor against which such Holder has a Claim. The grouping of the Debtors in this manner shall not affect any Debtor’s status as a separate legal Entity, change the organizational structure of the Debtors’ business enterprise, constitute a change of control of any Debtor for any purpose, cause a merger of consolidation of any legal Entities, or cause the transfer of any Assets, and, except as otherwise provided by or permitted under the Plan, all Debtors shall continue to exist as separate legal Entities. F. Settlement of Claims After the Effective Date. In accordance with the provisions of the Plan and except as otherwise set forth in the Plan, pursuant to Bankruptcy Rule 9019, without any further notice to or action, order, or approval of the Bankruptcy Court, after the Effective Date: (a) in the event of an Equitization Restructuring, (i) the Reorganized Debtors may compromise and settle Claims against, and Interests in, the Debtors and their Estates, and Causes of Action against other Entities (in each case other than with respect to GUC Claims, Convenience Class Claims, and the Panterra Claims), and (ii) the GUC Trustee may compromise and settle GUC Claims, Convenience Class Claims, and the Panterra Claims; and (b) in the event of an Asset Sale Restructuring, (i) the Agent Trustee may compromise and settle Claims against, and Interests in, the Debtors and their Estates, and Causes of Action against other Entities (in each case other than with respect to GUC Claims, Convenience Class Claims, and the Panterra Claims), and (ii) the GUC Trustee may compromise and settle GUC Claims, Convenience Class Claims, and the Panterra Claims. G. Cancellation of Certain Existing Securities. Except as otherwise provided in the Plan, and other than with respect to the DIP Facility Claims, the Prepetition Lenders’ Claims, the DIP Facility Documents, and the Prepetition Loan Documents, on and after the Effective Date, all notes, instruments, certificates, agreements, indentures, mortgages, security documents, and other documents evidencing any Claims against any of the Debtors, and any Interests in SMG Holdings shall be deemed canceled, surrendered, and discharged without any need for further action or approval of the Bankruptcy Court or any Holder or other person and the obligations of the Debtors or Reorganized Debtors, as applicable, thereunder or in any way related thereto shall be deemed satisfied in full and discharged, and the counterparties to

Page 31

any such documents or agreements shall be released from all duties thereunder; provided that notwithstanding Confirmation or Consummation, any such document or agreement that governs the rights of the Holder of a Claim shall continue in effect solely for purposes of: (a) allowing Holders to receive distributions under the Plan; (b) allowing creditors to enforce their rights, Claims, and interests vis-à-vis any parties other than the Debtors; and (c) preserving any rights of any creditors to enforce any obligations owed to each of them under the Plan, and to appear in the Chapter 11 Cases or in any proceeding in the Bankruptcy Court or any other court, including, but not limited, to enforce the respective obligations owed to such parties under the Plan. H. Section 1146 Exemption. Pursuant to, and to the fullest extent permitted by, section 1146(a) of the Bankruptcy Code, any transfers of property pursuant to, in contemplation of, or in connection with, the Plan, including: (a) the Restructuring Transactions; (b) the GUC Trust Agreement and, if applicable, the Agent Trust Agreement; (c) the transfer of property pursuant to an Asset Sale Restructuring, if applicable, (d) the issuance, reinstatement, distribution, transfer, or exchange of any debt, security, or other interest in the Debtors or the Reorganized Debtors, including the issuance of the New Units (including with regard to the Management Incentive Plan) pursuant to an Equitization Restructuring, if applicable, (e) the transfer, if any, of the Debtors’ assets to the Reorganized Debtors; (f) the making, assignment, recording, or surrender of any lease or sublease; (g) the grant of collateral as security for any or all of the Exit Facility, (h) the creation, modification, consolidation, termination, refinancing, delivery, and/or recording of any mortgage, deed of trust, or other security interest, or the securing of additional indebtedness by such other means, and (i) the making, delivery, or recording of any other instrument or transfer order, in furtherance of, or in connection with the Plan, including any deeds, bills of sale, or assignments executed in connection with any disposition or transfer of assets or transaction arising out of, contemplated under, or in any way related to the Plan, shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, stamp act, real estate transfer, mortgage recording tax, or other similar tax, and upon entry of the Confirmation Order, the appropriate state or local governmental officials or agents shall forgo the collection of any such tax or governmental assessment and accept for filing and recordation any of the foregoing instruments or other documents pursuant to such transfers or property without the payment of any such tax, recordation fee, or governmental assessment. All filing or recording officers (or any other person with authority over any of the foregoing), wherever located and by whomever appointed, shall comply with the requirements of section 1146(c) of the Bankruptcy Code, shall forego the collection of any such tax or governmental assessment, and shall accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment. I. Corporate Existence. Except as otherwise provided in the Plan or the Plan Supplement, each Debtor shall continue to exist after the Effective Date as a separate corporate Entity, limited liability company, partnership, or other form, as the case may be, with all the powers of a corporation, limited liability company, partnership, or other form, as the case may be, pursuant to the applicable law in the jurisdiction in which each applicable Debtor is incorporated or formed and pursuant to the respective certificate of incorporation and by-laws (or other formation documents) in effect before the Effective Date, except to the extent such certificate of incorporation and by-laws (or other formation documents) are amended under the Plan, the Plan Supplement, or otherwise, and to the extent such documents are amended, such documents are deemed to be amended pursuant to the Plan or Plan Supplement and require no further action or approval (other than any requisite filings required under applicable state or federal law).

Page 32

J. Restructuring Expenses. The Restructuring Expenses incurred, or estimated to be incurred, up to and including the Effective Date, shall be paid in full in Cash on the Effective Date (to the extent not previously paid during the course of the Chapter 11 Cases) without any requirement to file a fee application with the Bankruptcy Court, without the need for itemized time detail, or without any requirement for Bankruptcy Court review or approval. All Restructuring Expenses to be paid on the Effective Date shall be estimated prior to and as of the Effective Date and such estimates shall be delivered to the Debtors at least two (2) Business Days before the anticipated Effective Date; provided, however, that such estimates shall not be considered an admission or limitation with respect to such Restructuring Expenses. On the Effective Date or as soon as reasonably practicable thereafter, final invoices for all Restructuring Expenses incurred prior to and as of the Effective Date shall be submitted to the Debtors. In addition, the Debtors and the Reorganized Debtors (as applicable) shall continue to pay pre- and post-Effective Date, when due and payable in the ordinary course, Restructuring Expenses related to implementation, consummation, and defense of the Plan, whether incurred before, on, or after the Effective Date. K. Document Retention On and after the Effective Date, and in the event of an Asset Sale Restructuring after prior consultation with the GUC Trustee, the Reorganized Debtors may maintain or dispose of documents in accordance with their standard document retention policy, as may be altered, amended, modified, or supplemented by the Reorganized Debtors. L. Closing of Chapter 11 Cases If an Equitization Restructuring occurs, upon the occurrence of the Effective Date, the Reorganized Debtors shall be permitted to close all but one of their Chapter 11 Cases. The Reorganized Debtors may designate one Chapter 11 Case to remain open, and all contested matters and adversary proceedings relating to each of the Debtors subject to the treatment under the Plan, including objections to Claims, shall be administered and heard in such Chapter 11 Case; provided that for purposes of sections 546 and 550 of the Bankruptcy Code, the Chapter 11 Cases of the Debtors subject to the treatment under the Plan shall be deemed to remain open until such Chapter 11 Case has been closed. When all Disputed Claims have become Allowed or Disallowed and all remaining Cash has been distributed in accordance with the Plan, the GUC Trustee, with the consent of the Agent, shall seek authority from the Bankruptcy Court to close any Chapter 11 Case that remains open as of such time in accordance with the Bankruptcy Code and the Bankruptcy Rules. If an Asset Sale Restructuring occurs, upon the occurrence of the Effective Date, the Agent Trustee shall be permitted to close all but one of the Chapter 11 Cases of Debtors subject to treatment under the Plan. The Agent Trustee may designate one such Chapter 11 Case to remain open, and all contested matters and adversary proceedings relating to each of the Debtors subject to the treatment under the Plan, including objections to Claims, shall be administered and heard in such Chapter 11 Case; provided that for purposes of sections 546 and 550 of the Bankruptcy Code, the Chapter 11 Cases of the Debtors subject to the treatment under the Plan shall be deemed to remain open until such Chapter 11 Case has been closed. When all Disputed Claims have become Allowed or Disallowed and all remaining Cash has been distributed in accordance with the Plan, the GUC Trustee, with the consent of the Agent Trustee, shall seek authority from the Bankruptcy Court to close any Chapter 11 Case that remains open as of such time in accordance with the Bankruptcy Code and the Bankruptcy Rules.

Page 33

D. Releases The Plan contains certain customary debtor and third party releases (as described more fully in Article IV.U of this Disclosure Statement). “Releasing Parties”5 will be deemed to have consented to the release and discharge of all claims and Causes of Action against the Released Parties. By opting out of the Third Party Release, such Holder will also forgo the benefit of obtaining the releases set forth in Article VIII of the Plan if such party would otherwise be a Released Party. IV. QUESTIONS AND ANSWERS REGARDING THIS DISCLOSURE STATEMENT AND PLAN A. What is Chapter 11? Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. In addition to permitting debtor rehabilitation, chapter 11 promotes equality of treatment for creditors and similarly situated interest holders, subject to the priority of distributions prescribed by the Bankruptcy Code. The commencement of a chapter 11 case creates an estate that comprises all of the legal and equitable interests of the debtor as of the date the chapter 11 case is commenced. The Bankruptcy Code provides that the debtor may continue to operate its business and remain in possession of its property as a “debtor in possession.” Consummating a plan is the principal objective of a chapter 11 case. A bankruptcy court’s confirmation of a plan binds the debtor, any person acquiring property under the plan, any creditor or equity interest holder of the debtor, and any other entity as may be ordered by the bankruptcy court. Subject to certain limited exceptions, the order issued by a bankruptcy court confirming a plan provides for the treatment of the debtor’s liabilities in accordance with the terms of the confirmed plan. B. Why are the Debtors sending me this Disclosure Statement? The Debtors are seeking to obtain Bankruptcy Court approval of the Plan. Before soliciting votes on the Plan, Section 1125 of the Bankruptcy Code requires the Debtors to prepare a disclosure statement containing adequate information of a kind, and in sufficient detail, to enable a hypothetical 5 “Releasing Parties” means, collectively, and in each case only in its capacity as such: (a) each of the Debtors (including any Non-Reorganized Debtor); (b) the Reorganized Debtors; (c) the Debtor Related Persons; (d) the Committee; (e) the individual members of the Committee (both in their capacity as such and as individual creditors); (f) the GUC Trustee; (g) the GUC Trust; (h) the Agent Trustee; (i) the Agent Trust; (j) the Schultz Parties; and (k) all Holders of Claims or Interests who (1) are deemed to, or timely vote to accept the Plan, (2) abstain from voting to accept or reject the Plan and who do not make the Opt Out Election, (3) are not entitled to vote to accept or reject the Plan and who do not make the Opt Out Election, or (4) are deemed to, or timely vote to reject, the Plan and who do not make the Opt Out Election; and (l) with respect to each of the foregoing (a) through (k), such Entity and its current and former Affiliates, and such Entities’ and their current and former Affiliates’ Related Persons, each in their capacity as such; provided, that any Holder of a Claim or Interest that (x) validly makes the Opt Out Election or (y) Files an objection or otherwise objects to the releases in Article VIII of the Plan and such objection is not otherwise resolved shall not be a “Releasing Party”; provided, further, that notwithstanding the foregoing, the Schultz Parties and each of their Related Persons shall not constitute “Releasing Parties” unless each Schultz Party has, prior to the Effective Date, executed a release in form and substance acceptable to the Agent, including agreeing to become a “Releasing Party” under the Plan and to be subject to the release set forth in Article VIII.E of the Plan (unless waived by the Agent).

Page 34

reasonable investor to make an informed judgment regarding acceptance of the Plan and to share such disclosure statement with all Holders of Claims and Interests whose votes on the Plan are being solicited. This Disclosure Statement is being submitted in accordance with these requirements. C. Am I entitled to vote on the Plan? Your ability to vote on and your distribution under the Plan, if any, depends on what type of Claim or Interest you hold. Each category of Holders of Claims or Interests, as set forth in Article III of the Plan pursuant to Section 1122(a) of the Bankruptcy Code, is referred to as a “Class.” Each Class’s respective voting status is set forth below. Further, Claims and Interests against Debtors that are identified on the Schedule of Abandoned Debtors, the Schedule of Converted Cases, or the Schedule of Non-Applicable Debtors shall not be subject to the treatment under the Plan. The Plan constitutes a chapter 11 plan of reorganization for the Debtors, which shall include the classifications set forth below. Subject to Article III of the Plan, to the extent that a Class contains Claims or Interests only with respect to one or more particular Debtors, such Class applies solely to such Debtor.

Table 1 on page 34. Back to List of Tables

Class	Claims and Interests	Status	Voting Rights
Class 1	Other Priority Claims	Unimpaired	Not Entitled to Vote (Deemed to Accept)
Class 2	Prepetition Lenders’ Claims	Impaired	Entitled to Vote
Class 3	Secured Tax Claims	Impaired	Entitled to Vote
Class 4	Other Secured Claims	Impaired	Entitled to Vote
Class 5	General Unsecured Claims	Impaired	Entitled to Vote
Class 6	Convenience Class Claims	Impaired	Entitled to Vote
Class 7	Intercompany Claims	Either Unimpaired or Impaired	Not Entitled to Vote (Deemed to either Accept or Reject)
Class 8	Subordinated Claims	Impaired	Not Entitled to Vote (Deemed to Reject)
Class 9	SMG Holdings Interests	Impaired	Not Entitled to Vote (Deemed to Reject)
Class 10	Other Debtor Interests	Either Unimpaired or Impaired	Not Entitled to Vote (Deemed to either Accept or Reject)

Page 35

D. What will I receive from the Debtors if the Plan is consummated? The table below summarizes the treatment and anticipated recoveries on account of all classified Claims against and Interests in, the Debtors under of the Plan. Pursuant and subject to the Plan, the Debtors, the Reorganized Debtors, the Agent Trustee, and the GUC Trustee, as applicable, reserve the right to object to the amount or classification of any Claim under the Plan. A successful objection to a Claim may materially impact the recoveries projected below. THE PROJECTED RECOVERIES SET FORTH IN THE TABLE BELOW ARE ESTIMATES ONLY AND THEREFORE ARE SUBJECT TO CHANGE. FOR A COMPLETE DESCRIPTION OF THE DEBTORS’ CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS, REFERENCE SHOULD BE MADE TO THE ENTIRE PLAN.67 6 The recoveries set forth herein may change based upon changes in the amount of Claims that are “Allowed” as well as other factors related to the Debtors’ business operations and general economic conditions. “Allowed” means, with respect to any Claim or Interest, except as otherwise provided herein: (a) a Claim or Interest in a liquidated amount as to which no objection has been Filed prior to the applicable Claims Objection Deadline and that is evidenced by a Proof of Claim or Interest, as applicable, timely Filed by the applicable Bar Date or that is not required to be evidenced by a Filed Proof of Claim or Interest, as applicable, under the Plan, the Bankruptcy Code, or a Final Order; (b) a Claim or Interest that is scheduled by the Debtors as neither Disputed, contingent, nor unliquidated, and for which no Proof of Claim or Interest, as applicable, has been timely Filed in an unliquidated or a different amount; (c) a Claim or Interest that is upheld or otherwise Allowed: (i) pursuant to the Plan, including but not limited to the Prepetition Lenders’ Claims; (ii) in any stipulation that is approved by the Bankruptcy Court by a Final Order; (iii) pursuant to any contract, instrument, indenture, or other agreement entered into or assumed in connection herewith; (iv) by Final Order (including any such Claim to which the Debtors or GUC Trust had objected or which the Bankruptcy Court had Disallowed prior to such Final Order); or (v) in the judgment of the Debtors or the GUC Trustee, as applicable, prior to the expiration of the Claims Objection Deadline; provided that with respect to a Claim or Interest described in clauses (a) through (c) above, such Claim or Interest shall be considered Allowed only if and to the extent that with respect to such Claim or Interest no objection to the allowance thereof has been or, in the Debtors’, Reorganized Debtors’ reasonable good faith judgment, may be interposed within the applicable period of time fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules, or the Bankruptcy Court, or such an objection is so interposed and the Claim or Interest, as applicable, shall have been Allowed by a Final Order; provided, further, that no Claim of any Entity subject to section 502(d) of the Bankruptcy Code shall be deemed Allowed unless and until such Entity pays in full the amount that it owes such Debtor or Reorganized Debtor, as applicable. Any Claim that has been or is hereafter listed in the Schedules as contingent, unliquidated, or Disputed, and for which no Proof of Claim or Interest is or has been timely Filed, is not considered Allowed and shall be deemed expunged without further action by the Debtors and without further notice to any party or action, approval, or order of the Bankruptcy Court. For the avoidance of doubt, a Proof of Claim or Interest Filed after the Bar Date shall not be Allowed for any purposes whatsoever absent entry of a Final Order allowing such late-Filed Claim. “Allow,” “Allowing,” and “Allowance” shall have correlative meanings. 7 Pursuant to the Plan, the Plan Supplement will identify any Debtors listed on the Schedule of Abandoned Debtors, the Schedule of Converted Cases, or the Schedule of Non-Applicable Debtors. Any such Debtor will be a Non-Reorganized Debtor under the Plan. Non-Reorganized Debtors are not subject to the treatment in Article III of the Plan. Accordingly, the recoveries set forth herein may change based upon and the inclusion of a Debtor on any Schedule of Non-Reorganized Debtors.

Page 36

Table 1 on page 36. Back to List of Tables

Class	Classified Claims	Plan Treatment	Estimated Allowed Claims Under the Plan	Estimated % Recovery Under the Plan	Estimated % Recovery8 Under Chapter 7
1	Other Priority Claims	Except to the extent that a Holder of an Allowed Other Priority Claim agrees to a less favorable treatment of its Allowed Claim acceptable to the Agent, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Other Priority Claim, each such Holder shall receive, at the option of the applicable Debtor(s) with the consent of the Agent, either: (i) payment in full in Cash; or (ii) other treatment rendering such Claim Unimpaired or otherwise permitted by the Bankruptcy Code.	$0	100.0%	No recovery

8 Recoveries are based on the Liquidation Analysis attached hereto as Exhibit D.

Page 37

Table 1 on page 37. Back to List of Tables

Class	Classified Claims	Plan Treatment	Estimated Allowed Claims Under the Plan	Estimated % Recovery Under the Plan	Estimated % Recovery8 Under Chapter 7
2	Prepetition Lenders’ Claims	On the Effective Date, each Holder of a Class 2 Claim shall receive: if an Equitization Restructuring occurs, (a)(1) its Pro Rata share (i.e., the proportion that such Allowed Prepetition Lenders’ Claim bears to the aggregate amount of all Allowed Prepetition Lenders’ Claims participating in the Exit Facility Refinancing Loans (if any, and as determined by the Agent with, for the avoidance of doubt, the consent of Crestline) plus all Allowed DIP Claims (if any, and as determined by the Agent with, for the avoidance of doubt, the consent of Crestline) participating in the Exit Facility Refinancing Loans) of the Exit Facility Refinancing Loans on a dollar-for-dollar basis, and(2) thereafter, the applicable New Units designated to be distributed to such Holder as set forth below (which may be distributed to the GS Designees or the Crestline Designees as determined by such Holder); plus (b) its Pro Rata share of the Agent Panterra Assets; or if an Asset Sale Restructuring occurs, (a) all Cash of the Debtors (including, if the Asset Sale Restructuring is to a Third Party Purchaser, the Sale Proceeds) other than the GUC Trust Assets, and (b) its Pro Rata Share of the Agent Trust Assets and the Agent Trust Interests. If an Equitization Restructuring occurs, the distribution of New Units to the Holders of Class 2 Claims and DIP Facility Claims shall be as follows: (a) if to the GS Designees, (i) 63.94% of the Preferred Units and (ii) the GS Warrant; and (b) if to the Crestline Designees, (i) 36.06% of the Preferred Units and (ii) 100% of the Class A-1 Common Units. Notwithstanding the foregoing, the Agent, with the consent of Crestline, may at any time redetermine the allocation and type of New Units to be distributed the Holders of Class 2 Claims and DIP Facility Claims. If an Equitization Restructuring occurs, (a) all DIP Liens shall be retained by the DIP Agent and assigned to the Exit Agent and (b) any and all Liens securing the Prepetition Lenders’ Claim shall be retained by the Prepetition Agent and assigned to the Exit Agent to secure the obligations under the Exit Facility. If an Asset Sale Restructuring occurs, after the Effective Date, each of the DIP Liens and the Liens securing the Prepetition Lenders’ Claims shall remain in effect to the same extent and in the same priority such Liens exist on the Effective Date, and no such Lien shall be (or deemed to have been) waived, released, satisfied or discharged, in whole or in part. Beginning on the first calendar quarter following the Effective Date, and continuing on at least a quarterly basis thereafter (or such other time as agreed by the Agent and the GUC Trustee), the GUC Trustee shall pay the Pro Rata Share of Cash on hand resulting from the Agent Panterra Assets, if any: (i) in the event of an Asset Sale Restructuring, to the Agent Trustee or (ii) in the event of an Equitization Restructuring, to the Agent. Holders of Prepetition Lenders’ Claims expressly reserve the right to seek recovery against any Non-Reorganized Debtor on any grounds, including, without limitation, the entire unpaid cash amount of the Prepetition Lenders’ Claims.	At least $104,123,984.28 less any amount repaid or rolled up pursuant to the DIP Facility and the DIP Orders as of the Effective Date	TBD	No recovery9

Page 38

Table 1 on page 38. Back to List of Tables

Class	Classified Claims	Plan Treatment	Estimated Allowed Claims Under the Plan	Estimated % Recovery Under the Plan	Estimated % Recovery8 Under Chapter 7
3	Secured Tax Claims	Except to the extent that the Holder of an Allowed Class 3 Secured Claim agrees to a less favorable treatment of its Allowed Class 3 Secured Claim acceptable to the Agent, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Class 3 Secured Claim, each such Holder shall receive payment in accordance with section 1129 of the Bankruptcy Code.	$3,200,000	100%	No recovery
4	Other Secured Claims	Except to the extent that a Holder of an Allowed Class 4 Secured Claim agrees to a less favorable treatment of its Allowed 4 Claim acceptable to the Agent, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Class 4 Secured Claim, each such Holder shall receive, at the option of the applicable Debtor(s) with the consent of the Agent, either: (i) payment in full in Cash; (ii) collateral securing any such Claim and payment of any interest required under section 506(b) of the Bankruptcy Code; (iii) Reinstatement of such Claim; or (iv) A new note with a principal amount equal to the amount of the Allowed Class 4 Claim with a term of five years, interest at the Plan Rate, payable monthly in equal payments of principal and interest, and secured by the same collateral that secured such Allowed Class 4 Claim.	$2,200,000	100%	No recovery

9 In a liquidation scenario, Holders of Class 2 Prepetition Lenders’ Claims are not projected to receive a recovery on account of such Claims. In such scenario, Holders of DIP Facility Claims may receive a partial recovery on account of such DIP Facility Claims.

Page 39

Table 1 on page 39. Back to List of Tables

Class	Classified Claims	Plan Treatment	Estimated Allowed Claims Under the Plan	Estimated % Recovery Under the Plan	Estimated % Recovery8 Under Chapter 7
5	GUC (General Unsecured) Claims	Except to the extent that a Holder of an Allowed GUC Claim agrees to less favorable treatment of its Allowed Claim acceptable to the Agent, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed GUC Claim, each such Holder of an Allowed GUC Claim in Class 5 shall receive its Pro Rata share of the GUC Trust Interests. Each Holder of GUC Claims in an aggregate Allowed amount greater than $2,500.00 may irrevocably elect on its Ballot to have such Claim irrevocably reduced to $2,500.00 and treated as a Convenience Class Claim for the purposes of the Plan rather than as a GUC Claim. For avoidance of doubt, Holders of Prepetition Lenders’ Claims shall not be entitled to any recovery from the GUC Trust Interests or the GUC Trust Assets (solely excepting the Agent Panterra Assets).	$40-50 million10	0 – 14.6%11	No recovery
6	Convenience Class Claims	Except to the extent that a Holder of an Allowed Convenience Class Claim agrees to a less favorable treatment of its Allowed Claim acceptable to the Agent, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Convenience Class Claim, each such Holder shall receive within thirty (30) days after the date such Claim is Allowed payment in Cash in an amount equal to 10% of such Holder’s Allowed Convenience Class Claim, which shall be payable from the GUC Trust Reserve.	Unknown	10%	No Recovery
7	Intercompany Claims	Class 7 Intercompany Claims shall, at the Agent’s election, either be (i) Reinstated as of the Effective Date or (ii) canceled, discharged, released, and extinguished in full as of the Effective Date.	$518 million	0%	No recovery
8	Subordinated Claims	Allowed Claims in Class 8 shall receive no payment under the Plan.	n/a	n/a	n/a
9	SMG Holdings Interests	On the Effective Date, all Interests in SMG Holdings shall be canceled, discharged, released, and extinguished in full as of the Effective Date.	$0.0	0.0%	No recovery

10 The Debtors estimate that aggregate claims total for certain classes, including Class 5, will be substantially higher in a liquidation, as all unexpired leases and executory contracts would be rejected and treated within this class, as set forth in the Liquidation Analysis attached hereto as Exhibit D. 11 Article IV.R.1 of the Disclosure Statement contains a description of the assumptions reflected in the range of projections for Class 5 GUC Claims.

Page 40

Table 1 on page 40. Back to List of Tables

Class	Classified Claims	Plan Treatment	Estimated Allowed Claims Under the Plan	Estimated % Recovery Under the Plan	Estimated % Recovery8 Under Chapter 7
10	Other Debtor Interests	On the Effective Date, Interests in the Other Debtors shall, at the Agent’s election, either be (i) Reinstated as of the Effective Date or (ii) canceled, discharged, released, and extinguished in full as of the Effective Date.	$0.0	0.0%	No recovery

E. What will I receive under the Plan if I hold an Allowed Administrative Claim, Professional Fee Claim, Priority Tax Claim, or DIP Loan Claim? In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims, Priority Tax Claims, and DIP Facility Claims have not been classified and, thus, are excluded from the Classes of Claims and Interests. Notwithstanding anything to the contrary in the Plan, Claims and Interests against Debtors that are identified on the Schedule of Abandoned Debtors, the Schedule of Converted Cases, or the Schedule of Non-Applicable Debtors shall not be subject to Article II of the Plan and shall not be paid by the Reorganized Debtors. The Debtors estimate that Allowed Administrative Claims will total approximately $1.0 million (including $0.3 million for wages, $0.5 million for cost of goods sold and utilities and $0.2 million for estimated February 2021 sales taxes, all due in the normal course) excluding administrative rent that may be owed in respect of rejected leases (a potential liability that the Debtors estimate to be approximately $0.2 million). If an Equitization Restructuring or an Asset Sale Restructuring to an Agent Purchaser occurs, the Debtors shall pay the Cure Claims associated with each Assumed Executory Contract or Unexpired Lease. If an Asset Sale Restructuring to a Third Party Purchaser occurs, such Third Party Purchaser shall pay the Cure Claims associated with each Assumed Executory Contract or Unexpired Lease. The Debtors further estimate that there will be Allowed Other Priority Claims aggregating approximately $0. The Debtors’ estimates are the result of the Debtors’ and their advisors’ careful analysis of available information, including the Debtors’ books and records and an analysis of the validity of the Claims asserted against the Debtors. The actual amount of Allowed Administrative Claims and Other Priority Claims is subject to numerous contingencies. Nonetheless, the Debtors have determined that there will be sufficient value to satisfy Allowed Administrative Claims and Other Priority Claims in full or otherwise render such claims unimpaired under the Plan. 1. Administrative Claims (a) General Administrative Claims General Administrative Claims will be satisfied as set forth in Article II.A.1 of the Plan, as summarized herein. Except as otherwise provided for in the Plan, unless the Holder of an Allowed General Administrative Claim and the Debtors or the Reorganized Debtors, as applicable, agree to less favorable treatment acceptable to the Agent, each Holder of an Allowed General Administrative Claim (other than Holders of Claims for fees and expenses pursuant to section 1930 of chapter 123 of title 28 of the United States Code), will receive, in full satisfaction release, settlement, and discharge

Page 41

of such General Administrative Claim, Cash equal to the amount of such Allowed General Administrative Claim: (a) to the extent such Allowed General Administrative Claim is due and owing on the Effective Date, on the Distribution Date; (b) to the extent such Allowed General Administrative Claim is not due and owing on the Effective Date, (i) in accordance with the terms of any agreement between the Debtors and such Holder as of the Effective Date, or when such Claim becomes due and payable under applicable non-bankruptcy law, or (ii) in the ordinary course of business; or (c) to the extent the General Administrative Claim is not Allowed as of the Effective Date, sixty (60) days after the date on which an order allowing such General Administrative Claim becomes a Final Order, or as soon thereafter as reasonably practicable, in each case of (a) through (c) without any further action by the Holders of such Allowed General Administrative Claim, and without any further notice to or action, order, or approval of the Bankruptcy Court. Requests for allowance and payment of General Administrative Claims that were (a) not incurred in the ordinary course of the Debtors’ business and (b) are not subject to the Administrative Claims Bar Date Order must be Filed and served on the Debtors or the Reorganized Debtors, as applicable, no later than the Administrative Claims Bar Date pursuant to the procedures specified in the Confirmation Order and the notice of the Effective Date. Holders of General Administrative Claims that are (a) not subject to the Administrative Claims Bar Date Order and are required to File and serve a request for payment of such General Administrative Claims by the Administrative Claims Bar Date and do not File and serve such a request by the Administrative Claims Bar Date specified in the Confirmation Order or (b) are subject to the Administrative Claims Bar Date Order but did not timely File and serve such a request in accordance with the Administrative Claims Bar Date Order, shall be forever barred, estopped, and enjoined from asserting such General Administrative Claims against the Debtors or Reorganized Debtors, as applicable, or their respective property, and such General Administrative Claims shall be deemed forever discharged and released as of the Effective Date. Any requests for allowance and payment of General Administrative Claims that are not properly Filed and served by the Administrative Claims Bar Date (including those that are subject to the Administrative Claims Bar Date Order) shall not appear on the Claims Register and shall be Disallowed automatically without the need for further action by the Debtors or the Reorganized Debtors, as applicable, or further order of the Bankruptcy Court. To the extent Article II.A.1 of the Plan conflicts with Article XII.D of the Plan with respect to fees and expenses payable under section 1930(a) of the Judicial Code, including fees and expenses payable to the U.S. Trustee, Article XII.D of the Plan shall govern. Notwithstanding the foregoing, no request for payment of a General Administrative Claim need be Filed with respect to a General Administrative Claim previously Allowed by Final Order. The Reorganized Debtors, with the consent of the Agent, may settle General Administrative Claims without further Bankruptcy Court approval; provided, however, that the Reorganized Debtors shall provide notice prior to seeking the reclassification of any General Administrative Claim to a GUC Claim and the GUC Trustee shall have standing to object to such reclassification. The Reorganized Debtors may also choose to object to any Administrative Claim no later than sixty (60) days from the Administrative Claims Bar Date, subject to extensions by the Bankruptcy Court, agreement in writing of the parties, or on motion of a party in interest approved by the Bankruptcy Court. Unless the Debtors or Reorganized Debtors (or other party with standing), as applicable, object to a timely filed and properly served Administrative Claim, such Administrative Claim will be deemed Allowed in the amount requested. In the event that the Debtors or Reorganized Debtors, as applicable, object to an Administrative Claim, the parties may confer to try to reach a settlement and, failing that,

Page 42

the Bankruptcy Court will determine whether such Administrative Claim should be Allowed and, if so, in what amount. (b) Professional Fee Claims All final requests for compensation or reimbursement of Professional Fee Claims, including the Professional Fee Claims incurred during the period from the Petition Date through the Effective Date (other than substantial contribution claims under section 503(b)(4) of the Bankruptcy Code), must be Filed and served on the Reorganized Debtors and their counsel no later than forty-five (45) days after the Effective Date or as may otherwise be directed by the Bankruptcy Court. All such final requests will be subject to approval by the Bankruptcy Court after notice to other parties on the regular service list and a hearing in accordance with the procedures established by the Bankruptcy Code and prior orders of the Bankruptcy Court in the Chapter 11 Cases, including the Interim Compensation Order, and once approved by the Bankruptcy Court, shall be paid as soon as reasonably practicable from the Professional Fee Escrow Account up to the full Allowed amount. Objections to applications of Professionals or other entities for compensation or reimbursement of expenses must be filed and served on the Reorganized Debtors and their counsel and the requesting Professional or other entity by no later than twenty-one (21) days (or such longer period as may be established by order of the Bankruptcy Court or by agreement of the objecting party, the applicable Professional, and the Reorganized Debtors) after the date on which the applicable application for compensation or reimbursement was served. Upon the Effective Date, any requirement that Professionals comply with sections 327 through 331 and 1103 of the Bankruptcy Code in seeking retention or compensation for services rendered after such date shall terminate, and the Reorganized Debtors may employ and pay any Professional in the ordinary course of business without any further notice to or action, order, or approval of the Bankruptcy Court. (c) Professional Fee Escrow Account. Prior to the Effective Date, the Debtors shall establish the Professional Fee Escrow Account which shall be funded on the Effective Date with Cash equal to the Professional Fee Reserve Amount. The Professional Fee Escrow Account shall be maintained in trust solely for the Professionals. Such funds shall not be considered property of the Estates of the Debtors or the Reorganized Debtors, as applicable. The amount of Professional Fee Claims owing to the Professionals shall be paid in Cash to such Professionals by the Reorganized Debtors from the Professional Fee Escrow Account as soon as reasonably practicable after such Professional Fee Claims are Allowed by a Final Order. When all such Allowed amounts owing to Professionals have been paid in full, any remaining amount in the Professional Fee Escrow Account shall promptly be delivered to the Reorganized Debtors without any further action or order of the Bankruptcy Court. (d) Professional Fee Reserve Amount. Professionals shall estimate their unpaid Professional Fee Claims and other unpaid fees and expenses incurred in rendering services to the Debtors before and as of the Confirmation Date and shall deliver such estimate to the Debtors no later than five business days before the Effective Date; provided that such estimate shall not be deemed to limit the amount of the fees and expenses that are the subject of the Professional’s final request for payment of Filed Professional Fee Claims. If a Professional does not provide such an estimate, the Debtors may estimate the unpaid and unbilled

Page 43

fees and expenses of such Professional. The aggregate amount for all Professionals estimated pursuant to this section shall comprise the Professional Fee Reserve Amount. 2. Priority Tax Claims The Debtors estimate that Allowed Priority Tax Claims will total approximately $4.1 million. Priority Tax Claims will be satisfied as set forth in Article II.B of the Plan and summarized herein. Except to the extent that a Holder of an Allowed Priority Tax Claim and the Debtors or the Reorganized Debtors, as applicable, agree to less favorable treatment acceptable to the Agent, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Priority Tax Claim, each Holder of an Allowed Priority Tax Claim shall receive, at the option of the Reorganized Debtors with the consent of the Agent: (a) payment in full of such Allowed Priority Tax Claim on the Distribution Date or (b) treatment in accordance with the provisions of sections 1129(a)(9)(C) or 1129(a)(9)(D) of the Bankruptcy Code, as the case may be, and, for the avoidance of doubt, Holders of Allowed Priority Tax Claims will receive interest on such Allowed Priority Tax Claims after the Effective Date in accordance with sections 511 and 1129(a)(9)(C) of the Bankruptcy Code. 3. DIP Facility Claims All DIP Facility Claims shall be deemed to be Allowed Secured Claims and Allowed superpriority Administrative Claims in the full amount due and owing under the DIP Facility Loan Documents and the DIP Orders as of the Effective Date. If an Equitization Restructuring occurs, on the Effective Date, except to the extent that a Holder of an Allowed DIP Facility Claim agrees to a less favorable treatment, each Holder thereof shall receive: a. Its Pro Rata share (i.e., the proportion that such Allowed DIP Claim bears to the aggregate amount of all Allowed DIP Claims participating in the Exit Facility Refinancing Loans (if any, and as determined by the Agent with, for the avoidance of doubt, the consent of Crestline) plus all Allowed Prepetition Lenders’ Claims (if any, and as determined by the Agent with, for the avoidance of doubt, the consent of Crestline) participating in the Exit Facility Refinancing Loans) of the Exit Facility Refinancing Loans on a dollar-for-dollar basis; plus b. Thereafter, the applicable New Units designated to be distributed to such Holder (as more fully set forth in Article III.B – Class 2 of the Plan). If an Equitization Restructuring occurs, the Agent (with, for the avoidance of doubt, the consent of Crestline) may at any time prior to the Effective Date determine the amount of Allowed DIP Facility Claims and Allowed Prepetition Lenders’ Claims that shall be refinanced with Exit Facility Refinancing Loans; provided, however, that (a) the allocation of any Allowed DIP Facility Claim to be refinanced with Exit Facility Refinancing Loans shall be Pro Rata with all Allowed DIP Facility Claims, and (b) the allocation of any Allowed Prepetition Lenders’ Claim to be refinanced with Exit Facility Refinancing Loans shall be Pro Rata with all Allowed Prepetition Lenders’ Claims. If an Asset Sale Restructuring occurs, on the Effective Date, except to the extent that a Holder of an Allowed DIP Facility Claim agrees to a less favorable treatment, each Holder thereof shall receive indefeasible payment in full in Cash.

Page 44

Subject to the provisions of Article III.B Class 2 of the Plan, unless and until Holders of Allowed DIP Facility Claims receive (a) in an Equitization Restructuring, their Pro Rata share of the Exit Facility Refinancing Loans (if any) and their applicable share of the New Units, or (b) in an Asset Sale Restructuring, indefeasible payment in full in Cash (or such other treatment consented to by such Holder), then notwithstanding entry of the Confirmation Order and anything to the contrary in this Plan or the Confirmation Order, (1) none of the DIP Facility Claims shall be discharged, satisfied or released or otherwise affected in whole or in part, and each of the DIP Facility Claims shall remain outstanding, (2) none of the DIP Liens shall be (or deemed to have been) waived, released, satisfied or discharged, in whole or in part, and (3) none of the DIP Facility Loan Documents shall be (or deemed to have been) terminated, discharged, satisfied or released or otherwise affected in whole or in part, and each such DIP Facility Loan Document shall remain in effect. Holders of DIP Facility Claims expressly reserve the right to seek recovery against any Non-Reorganized Debtor on any grounds, including, without limitation, the entire unpaid cash amount of the DIP Facility Claims. 4. Statutory Fees On or before the Effective Date, the Debtors who will be Reorganized Debtors shall have paid in full in Cash all fees due and payable pursuant to section 1930 of Title 28 of the United States Code. On and after the Effective Date, the payment of such fees shall be made in accordance with Article X.D. of the Plan. F. What happens to my recovery if the Plan is not confirmed or does not go effective? In the event that the Plan is not confirmed or does not go effective, there is no assurance that the Debtors will be able to reorganize their business. It is possible that any alternative may provide Holders of Claims and Interests with less than they would have received pursuant to the Plan. For a more detailed description of the consequences of an extended chapter 11 case, or of a liquidation scenario, see Article X.B of this Disclosure Statement, entitled “Best Interests of Creditors/Liquidation Analysis” and the Liquidation Analysis attached hereto as Exhibit D. G. What are the sources of Cash and other consideration required to fund the Plan? The Debtors will fund distributions under the Plan with, as applicable: (1) Cash on hand; (2) future revenue; (3) Sale Proceeds; and/or (4) the Exit Facility, as applicable. H. Are there any regulatory approvals required to consummate the Plan? No. There are no known regulatory approvals that are required to consummate the Plan. I. Are there risks to owning the New Units upon emergence from Chapter 11? Yes. See Article VIII of this Disclosure Statement, entitled “RISK FACTORS.”

Page 45

J. Is there potential litigation related to the Plan? Parties in interest may object to the approval of this Disclosure Statement and may object to Confirmation of the Plan as well, which objections potentially could give rise to litigation. See Article VIII.C.5 of this Disclosure Statement, entitled “The Reorganized Debtors May Be Adversely Affected by Potential Litigation, Including Litigation Arising Out of the Chapter 11 Cases.” In the event that it becomes necessary to confirm the Plan over the objection of certain Classes, the Debtors may seek confirmation of the Plan notwithstanding the dissent of such objecting Classes. The Bankruptcy Court may confirm the Plan pursuant to the “cramdown” provisions of the Bankruptcy Code, which allow the Bankruptcy Court to confirm a plan that has been rejected by an impaired Class if it determines that the Plan satisfies section 1129(b) of the Bankruptcy Code. See Article VIII.A.4 of this Disclosure Statement entitled “The Debtors May Not Be Able to Secure Confirmation of the Plan.” Subject to the terms of the Plan, the Reorganized Debtors, the GUC Trustee, and/or the Agent Trustee (if applicable) will have power and authority to investigate, prosecute, settle, release or otherwise liquidate, compromise, or resolve the Causes of Action. K. Will any party have significant influence over the corporate governance and operations of the Debtors following consummation of the Plan? If an Equitization Restructuring occurs, the Reorganized SMG Board shall be established as of the Effective Date. The composition of the Reorganized SMG Board and the identities of the directors and/or managers of the Reorganized SMG Board will be set forth in the Reorganized SMG A&R LLCA and disclosed in the Plan Supplement. As of the Effective Date, the terms of the current members of the boards of directors or managers, as applicable, of each of the Debtors shall expire, and the initial Reorganized SMG Board and the boards of directors or managers of each of the other Reorganized Debtors will include those directors and officers set forth in the lists of directors and officers of the Reorganized Debtors included in the Plan Supplement. After the Effective Date, the officers of each of the Reorganized Debtors shall be appointed in accordance with the respective New Organizational Documents. Pursuant to section 1129(a)(5) of the Bankruptcy Code, the Debtors will disclose in the Plan Supplement the identity and affiliations of each person proposed to be an officer or to serve on the initial board of directors of any of the Reorganized Debtors. To the extent any such director or officer of the Reorganized Debtors is an “insider” under the Bankruptcy Code, the Debtors also will disclose the nature of any compensation to be paid to such director or officer. Each such director or officer shall serve from and after the Effective Date pursuant to the terms of the New Organizational Documents. L. What is the Management Incentive Plan and how will it affect the distribution I receive under the Plan? The Reorganized SMG A&R LLCA will contain a Management Incentive Plan pursuant to which management and key employees will receive a percentage of equity in Reorganized SMG, comprised of Class B Common Units. The participants in the Management Incentive Plan, the timing and allocations of the awards to participants, and the other terms and conditions of such awards (including, but limited to, vesting, exercise prices, base values, hurdles, forfeiture, repurchase rights, and transferability) shall be determined by the Reorganized SMG Board.

Page 46

M. Will operation of the Debtors’ theaters be affected by the Plan? The Debtors believe the Plan provides the best alternative for the Debtors to reorganize and operate their theaters. The Plan provides for the treatment of all Claims against the Debtors’ estates and the assumption and rejection of certain Unexpired Leases and Executory Contracts. The Debtors believe the Plan will enable them to successfully restructure their financial obligations and will permit the Debtors to operate their theaters subject to Unexpired Leases identified on the Assumed Executory Contract and Unexpired Lease List in substantially the same manner as they did prior to the Petition Date, subject to applicable continuation of any COVID-19 laws and regulations. N. What will happen to Executory Contracts and Unexpired Leases under the Plan? On the Effective Date, except as otherwise provided in the Plan, (a) all Executory Contracts and Unexpired Leases of the Debtors listed on the Assumed Executory Contract and Unexpired Lease List and (b) all other Unexpired Leases of the Debtors, are deemed to be Assumed Executory Contracts or Unexpired Leases, in accordance with the provisions and requirements of sections 365 and 1123 of the Bankruptcy Code, other than those Executory Contracts or Unexpired Leases that: (a) previously were assumed, assumed and assigned, or rejected by the Debtors; (b) are identified on the Rejected Executory Contract and Unexpired Lease List; or (c) are the subject of a motion to reject Executory Contracts or Unexpired Leases that is pending on the Confirmation Date. Entry of the Confirmation Order by the Bankruptcy Court shall constitute a court order approving the assumptions, assumptions and assignments, or rejections of the Executory Contracts or Unexpired Leases, as applicable, as set forth in the Plan, the Rejected Executory Contract and Unexpired Lease List, or the Assumed Executory Contract and Unexpired Lease List pursuant to sections 365(a) and 1123 of the Bankruptcy Code. Any motions to assume Executory Contracts or Unexpired Leases pending on the Effective Date shall be subject to approval by the Bankruptcy Court on or after the Effective Date by a Final Order. Each Executory Contract and Unexpired Lease assumed pursuant to Article V.A of the Plan or by any order of the Bankruptcy Court, and which has not been assigned to a third party before the Effective Date, shall revest in and be fully enforceable by the Reorganized Debtors in accordance with its terms (including as may be amended or modified prior to the Effective Date by agreement with the applicable counterparty and acceptable to the Agent), except as such terms are modified by the Plan or any order of the Bankruptcy Court authorizing and providing for its assumption or rejection under applicable federal law. Notwithstanding anything to the contrary in the Plan, the Debtors or the Reorganized Debtors, as applicable, reserve the right, subject to the consent of the Agent, to alter, amend, modify, or supplement the Rejected Executory Contract and Unexpired Lease List and the Assumed Executory Contract and Unexpired Lease List at any time through and including the Confirmation Date. The Reorganized Debtors may assume any Executory Contract that is not listed on the Assumed Executory Contract and Unexpired Lease List at any time up to and including the Confirmation Date, and any such Executory Contract that is not assumed by such time shall be deemed rejected. Unless otherwise provided by a Final Order of the Bankruptcy Court, all Proofs of Claim with respect to Claims arising from the rejection of Executory Contracts or Unexpired Leases, pursuant to the Plan or the Confirmation Order, if any, must be Filed within thirty (30) days after the later of: (a) the Effective Date; and (b) the date of such rejection as established by a Final Order or pursuant to the Plan if later than the Effective Date. Any Claims arising from the rejection of an Executory Contract or Unexpired Lease not Filed within such time will be automatically Disallowed, forever barred from assertion, and shall not be enforceable against the Debtors, Reorganized Debtors, the

Page 47

Estates, the GUC Trust, the Agent Trust (if applicable), or their property without the need for any objection by the Debtors or the Reorganized Debtors or further notice to, or action, order, or approval of the Bankruptcy Court or any other Entity, and any Claim arising out of the rejection of the Executory Contract or Unexpired Lease shall be deemed fully satisfied, released, and discharged, notwithstanding anything in the Schedules or a Proof of Claim to the contrary. All Allowed Claims arising from the rejection of the Debtors’ Executory Contracts or Unexpired Leases shall be classified as GUC Claims and shall be treated in accordance with the Plan, unless a different security or priority is otherwise asserted in such Proof of Claim and Allowed in accordance with Article VII of the Plan. Any Cure Claims under each Assumed Executory Contract or Unexpired Lease shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment of the default amount in Cash on the Effective Date, or as soon as reasonably practicable thereafter, subject to the limitation described below, or on such other terms as the Debtors or Reorganized Debtors (as applicable) (with the consent of the Agent) and the other parties to such Executory Contracts or Unexpired Leases, and if applicable, the Purchaser, may otherwise agree. If an Equitization Restructuring or an Asset Sale Restructuring to an Agent Purchaser occurs, the Debtors shall pay the Cure Claims associated with each Assumed Executory Contract or Unexpired Lease. If an Asset Sale Restructuring to a Third Party Purchaser occurs, such Third Party Purchaser shall pay the Cure Claims associated with each Assumed Executory Contract or Unexpired Lease. In the event of a dispute regarding (a) the amount of any Cure Claim, (b) the ability of the Reorganized Debtors or any assignee to provide “adequate assurance of future performance” (within the meaning of section 365 of the Bankruptcy Code) under the Executory Contract or Unexpired Lease to be assumed, or (c) any other matter pertaining to assumption, payment of the Cure Claims required by section 365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final Order resolving the dispute and approving the assumption. Any objection by a counterparty of an Executory Contract or Unexpired Lease to a proposed assumption (including, for purposes of the Plan, assumption and assignment) of an Executory Contract or Unexpired Lease or the related Cure Claims (including as set forth on the Assumed Executory Contract or Unexpired Lease List) must be Filed, served, and actually received by the Debtors in accordance with the Disclosure Statement Order or other applicable Final Order of the Bankruptcy Court. Any counterparty to an Executory Contract or Unexpired Lease that fails to object timely to the proposed assumption or Cure Claim will be deemed to have consented to such assumption and the proposed Cure Claim. For the avoidance of doubt, to the extent an Executory Contract or Unexpired Lease proposed to be assumed is not listed as having a related Cure Claim, any counterparty to such Executory Contract or Unexpired Lease that fails to object timely to the proposed assumption will be deemed to have consented to such assumption and deemed to release any Claim or Cause of Action for any monetary defaults, including any Cure Claim, under such Executory Contract or Unexpired Lease. For the avoidance of doubt, the Debtors or the Reorganized Debtors, as applicable, may, with the consent of the Agent, add any Executory Contract or Unexpired Lease initially proposed to be assumed to the Rejected Executory Contracts and Unexpired Lease List prior to the Effective Date for any reason, including if the Bankruptcy Court determines that the Allowed Cure Claim with respect to any Executory Contract or Unexpired Lease is greater than the amount set forth in the applicable cure notice, Assumed Executory Contract and Unexpired Lease List, or the Plan, in which case such Executory Contract or Unexpired Lease shall be deemed rejected as the Effective Date; provided, however, that for the avoidance of doubt, the Debtors or the Reorganized Debtors, as applicable, may not add any Executory Contract or Unexpired Lease initially proposed to be assumed to the Rejected Executory Contract and Unexpired Lease List after the Effective Date.

Page 48

Assumption or assumption and assignment of any Executory Contract or Unexpired Lease pursuant to the Plan or otherwise and full satisfaction of any applicable Cure Claim shall result in the full release and satisfaction of any Claims, Cure Claims, or defaults, whether monetary or nonmonetary, including defaults of provisions restricting the change in control or ownership interest composition or other bankruptcy-related defaults, arising under any Assumed Executory Contract or Unexpired Lease at any time before the effective date of assumption. Any Proofs of Claim Filed with respect to an Assumed Executory Contract or Unexpired Lease shall be deemed Disallowed and expunged as of the Effective Date, without further notice to or action, order, or approval of the Bankruptcy Court. Rejection of any Executory Contract or Unexpired Lease pursuant to the Plan or otherwise shall not constitute a termination of preexisting obligations owed by the Executory Contract or Unexpired Lease counterparty or counterparties to the Debtors or the Reorganized Debtors, as applicable, under such Executory Contracts or Unexpired Leases. Notwithstanding anything to the contrary in the Plan, Article V of the Plan shall not apply to Claims against Debtors that are identified on the Schedule of Abandoned Debtors, the Schedule of Converted Cases, or the Schedule of Non-Applicable Debtors. O. What will happen to Insurance Policies under the Plan? As set forth in Article V.E of the Plan, each of the Debtors’ Insurance Policies and any agreements, documents, or instruments relating thereto, are treated as Executory Contracts under the Plan. Unless otherwise provided in the Plan, and in the event of an Equitization Restructuring, on the Effective Date, (a) the Debtors shall be deemed to have assumed all insurance policies and any agreements, documents, and instruments relating to coverage of all insured Claims and (b) such insurance policies and any agreements, documents, or instruments relating thereto shall revest in the Reorganized Debtors. P. Are the Debtors assuming any indemnification obligations for their current officers and directors under the Plan? No. Q. How will the preservation of the Causes of Action impact my recovery under the Plan? The Plan provides for the retention of all Causes of Action other than those that are expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan or pursuant to a Final Order. The Schedule of Retained Causes of Action shall be set forth in the Plan Supplement, in accordance with the Plan. The Schedule of Retained Causes of Action shall specify which Causes of Action shall be retained by the Reorganized Debtors. Any proceeds from the Retained Causes of Action will be retained by the Reorganized Debtors, the GUC Trust, and/or Agent Trust, as applicable. The Panterra Claims will be transferred and assigned to the GUC Trust. The GUC Trust Assets include 100% of net proceeds of the Panterra Claims recovered by the GUC Trust up to $4,000,000.00 and 50% of net proceeds of the Panterra Claims recovered by the GUC Trust in excess of $4,000,000.00. For a more detailed description of the Panterra Claims, see Article VII.G.a.3.

Page 49

If an Equitization Restructuring occurs: As set forth in Article IV.C.10 of the Plan, in accordance with section 1123(b) of the Bankruptcy Code, but subject to Article VIII of the Plan, the Reorganized Debtors or the GUC Trust, as applicable, shall retain and may enforce all rights to commence and pursue, as appropriate, any and all Causes of Action belonging to the Debtors or their Estates that vest in the Reorganized Debtors or the GUC Trust pursuant to the Plan, as applicable, whether arising before or after the Petition Date, including, without limitation, any actions specifically enumerated in the Schedule of Retained Causes of Action, and the Reorganized Debtors’ and the GUC Trust’s rights to commence, prosecute, or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date, other than Causes of Action released by the Debtors pursuant to the releases and exculpations set forth in Article VIII of the Plan or otherwise under this Plan; provided, however, that notwithstanding anything to the contrary herein, on the Effective Date (a) all Causes of Action against the Schultz Parties of Debtors that become Reorganized Debtors shall vest in the Reorganized Debtors and (b) all Causes of Action against the Schultz Parties of Debtors that become Non-Reorganized Debtors shall be transferred and assigned to the Reorganized Debtors, unless each Schultz Party has, prior to the Effective Date, executed a release in form and substance acceptable to the Agent, including agreeing to become a “Releasing Party” under the Plan and to be subject to the release set forth in Article VIII.E of the Plan (unless waived by the Agent). The Reorganized Debtors and the GUC Trustee may pursue such Causes of Action, as appropriate, in accordance with the best interests of the Reorganized Debtors and the GUC Trust Beneficiaries. No Entity may rely on the absence of a specific reference in the Plan, the Plan Supplement, the Disclosure Statement, or the Schedule of Retained Causes of Action to any Cause of Action against it as any indication that the Reorganized Debtors or GUC Trustee will not pursue any and all available Causes of Action of the Debtors or the Estates against it. The Reorganized Debtors and the GUC Trustee, as applicable, expressly reserve all rights to prosecute any and all Causes of Action against any Entity, except as otherwise expressly provided in the Plan, including Article VIII of the Plan. Unless any Cause of Action of the Debtors or the Estates against an Entity is expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan or pursuant to a Final Order, the Reorganized Debtors and the GUC Trustee expressly reserve all such Causes of Action for later adjudication, and, therefore, no preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable, or otherwise), or laches, shall apply to such Causes of Action upon, after, or as a consequence of Confirmation or Consummation. The Reorganized Debtors and the GUC Trust, as applicable, reserve and shall retain such Causes of Action of the Debtors and their Estates notwithstanding the rejection or repudiation of any Executory Contract or Unexpired Lease during the Chapter 11 Cases or pursuant to the Plan. In accordance with section 1123(b)(3) of the Bankruptcy Code, any Cause of Action that a Debtor or its Estate may hold against any Entity shall vest in the Reorganized Debtors or the GUC Trust pursuant to the Plan, except as otherwise expressly provided in the Plan, including Article VIII of the Plan. The Reorganized Debtors and the GUC Trust shall retain and may exclusively enforce any and all such Causes of Action, and through their authorized agents or representatives shall have the exclusive right, authority, and discretion to determine and to initiate, file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment, any such Causes of Action (except

Page 50

as otherwise expressly provided in the Plan), or to decline to do any of the foregoing, without the consent or approval of any third party or any further notice to or action, order, or approval of the Bankruptcy Court. On the Effective Date, the Debtors and the Estates shall irrevocably waive and release all Released Avoidance Actions and Released Avoidance Actions shall not be Retained Causes of Action. If an Asset Sale Restructuring occurs: Unless any Cause of Action against an Entity is expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan or a Final Order, in accordance with section 1123(b) of the Bankruptcy Code, the Debtors shall convey to the Agent Trust all rights to commence, prosecute, or settle, as appropriate, any and all Causes of Action other than the Panterra Claims, whether arising before or after the Petition Date, which shall vest in the Agent Trust pursuant to the terms of the Plan. The Agent Trustee may enforce all rights to commence, prosecute, or settle, as appropriate, any and all such Causes of Action, whether arising before or after the Petition Date, and the Agent Trustee’s rights to commence, prosecute, or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date. The Agent Trustee may, in its reasonable business judgment, pursue such Causes of Action and may retain and compensate professionals in the analysis or pursuit of such Causes of Action to the extent the Agent Trustee deems appropriate, including on a contingency fee basis. No Entity may rely on the absence of a specific reference in the Plan or the Disclosure Statement to any Cause of Action against them as any indication that the Debtors or the Agent Trustee will not pursue any and all available Causes of Action against them. The Debtors and the Agent Trustee expressly reserve all rights to prosecute any and all Causes of Action against any Entity, except as otherwise expressly provided in the Plan, including Article VIII of the Plan. Unless any Cause of Action against an Entity is expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan or a Final Order, the Agent Trustee expressly reserves all Causes of Action for later adjudication, and, therefore, no preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable, or otherwise), or laches, shall apply to such Causes of Action upon, after, or as a consequence of the Confirmation or Consummation. Subject to the consent of the Agent, the Agent Trustee may initiate, file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment any such Causes of Action, or to decline to do any of the foregoing, without the consent or approval of any other third party or any further notice to, or action, order, or approval of, the Bankruptcy Court. For avoidance of doubt, on the Effective Date, the Debtors and the Estates shall irrevocably waive and release all Released Avoidance Actions and Released Avoidance Actions shall not be Retained Causes of Action. 1. What Causes of Action are not being preserved? Any and all claims and Causes of Action that the Debtors could assert against any Released Party are being released pursuant to the Plan and shall not be preserved for prosecution.

Page 51

R. What might affect the recovery to Holders of Allowed GUC Claims? Except to the extent that a Holder of an Allowed GUC Claim agrees to less favorable treatment of its Allowed Claim acceptable to the Agent, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed GUC Claim, each such Holder of an Allowed GUC Claim in Class 5 shall receive its Pro Rata share of the GUC Trust Interests. Each Holder of GUC Claims in an aggregate Allowed amount greater than $2,500.00 may irrevocably elect on its Ballot to have such Claim irrevocably reduced to $2,500.00 and treated as a Convenience Class Claim for the purposes of the Plan rather than as a GUC Claim.12 For avoidance of doubt, Holders of Prepetition Lenders’ Claims shall not be entitled to any recovery from the GUC Trust Interests or the GUC Trust Assets (solely excepting the Agent Panterra Assets). 1. What is the estimated range of recovery for holders of Allowed GUC Claims? As stated in the summary chart above, the Debtors’ good faith estimate of the range of recovery for Allowed GUC Claims is between 0% and 14.6%. Allowed GUC Claims will share in recovery provided to the GUC Trust, which consists of (i) the GUC Trust Reserve ($1.0 million) net of GUC Trust Expenses and the Cash required to satisfy all Allowed Convenience Class Claims, and (ii) certain recoveries from the Panterra Actions, as explained in further detail below. Further, the Debtors’ good faith estimate of the likely final amount of Allowed GUC Claims, as discussed below, is between $40 million and $50 million. In a downside scenario, assuming the GUC Trustee is unsuccessful in pursuing the Panterra Actions and exhausts the GUC Trust Reserve in the administration of the GUC Trust (including such expenses incurred in paying Allowed Convenience Class Claims, pursuing the Panterra Actions, and claims administration) there will be no funds available for distribution to Holders of Allowed GUC Claims. In an upside scenario, the aggregate amount of Allowed GUC Claims would be approximately $40 million, the low end of the Debtors’ estimate. In such a scenario, the GUC Trust would prevail in its pursuit of the Panterra Claims which, assuming GUC Trust Expenses (including such expenses incurred in pursuing the Panterra Claims, payment of Allowed Convenience Class Claims, and costs associated with claims administration) total $750,000, the total amount of Cash available for distribution to Holders of Allowed GUC Claims is approximately $5.85 million. Thus, the approximate expected recovery in such a scenario to Holders of Allowed GUC Claims is approximately 14.6%. 2. How will the final amount of Allowed GUC Claims affect the recovery of Holders of Allowed GUC Claims under the Plan? The Debtors estimate the amount of Allowed GUC Claims against all Debtors will be approximately $40 million to $50 million, inclusive of Claims arising from the Debtors’ rejection of Executory Contracts and Unexpired Leases, as discussed below. The estimate of Allowed GUC Claims is the result of the Debtors’ and their advisors’ careful analysis of available information, including the Debtors’ books and records and an analysis of the validity of the GUC Claims asserted against the Debtors. As part of their analysis, the Debtors and their advisors determined that certain of the GUC Claims that have been asserted should not be Allowed GUC Claims for various reasons, including that such GUC Claims have been satisfied during these Chapter 11 Cases, are duplicative, or are not properly asserted against the applicable Debtor, among others. 12 For avoidance of doubt, the amount of Allowed GUC Claims for determination of whether a Holder’s Claim(s) is less than $2,500.00 such that it will be treated as a Convenience Class Claim is measured in the aggregate across all Debtors.

Page 52

The Debtors’ estimate of Allowed GUC Claims, and the corresponding ranges of potential recoveries resulting therefrom, depends on a number of contingencies, including, among others: (a) the determination to be made by the Debtors regarding the assumption and rejection of Executory Contracts and Unexpired Leases; (b) the amount of Claims from the rejection of such Executory Contracts and Unexpired Leases; (c) the amount of Claims Filed by Governmental Units; (d) Claims arising from litigation against the Debtors; and (e) the Claims reconciliation process. Although the estimate of Allowed GUC Claims is the result of the Debtors’ and their advisors’ careful evaluation of available information, the ultimate amount of Allowed GUC Claims may be higher or lower than the Debtors’ estimate provided herein, which difference could be material. 3. How will Claims asserted with respect to rejection damages affect the recovery of Holders of Allowed GUC Claims under the Plan? The Debtors currently estimate that Claims arising from the Debtors’ rejection of Executory Contracts and Unexpired Leases total approximately $25 to 35 million in the aggregate. This estimate takes into account large claims that are subject to potential settlement. If the settlements are not approved by the Bankruptcy Court, the actual amount of Claims arising from rejection of Executory Contracts and Unexpired Leases could be materially greater than the Debtors’ estimates. All Allowed Claims arising from the rejection of the Debtors’ Executory Contracts or Unexpired Leases shall be classified as GUC Claims against the applicable Debtor and shall be treated in accordance with the Plan, unless a different security or priority is otherwise asserted in such Proof of Claim and Allowed in accordance with Article VII of the Plan. Accordingly, to the extent that the actual amount of GUC Claims on account of rejection damages Claims changes, the value of recoveries to Holders of Claims in Class 5 could change as well, and such changes could be material. Similarly, as set forth in the Liquidation Analysis, if the Plan is not confirmed and the Debtors’ estates are liquidated, the Debtors anticipate that the amount of rejection damages claims would increase significantly as all unexpired leases and executory contracts would be rejected. 4. How will the resolution of the Panterra Actions affect the recovery of Holders of Allowed GUC Claims under the Plan? As explained in further detail in section VII.G.3 below, the Panterra Actions are being transferred and assigned to the GUC Trust for the benefit of Holders of Allowed GUC Claims. In the Panterra Actions, the Debtors assert Causes of Action that may be worth up to $7.2 million. As provided in the Plan, the GUC Trust will receive the first $4.0 million of net proceeds of the Panterra Actions and 50% of any recovery above $4.0 million. Accordingly, the likely maximum amount available to Holders of Allowed GUC Claims attributable to the Panterra Claims is $5.6 million. However, as explained in further detail in section VII.G.3 below, the extent to which the GUC Trust will be able to obtain a recovery in the Panterra Actions is uncertain and dependent upon a variety of factors. Further, although vigorously disputed, a third party asserts a right to any proceeds from the Panterra Actions. Accordingly, the Panterra Actions’ value to Holders of Allowed GUC Claims is unknown. 5. How will the resolution of certain contingent, unliquidated, and disputed litigation Claims affect the recovery of Holders of Allowed GUC Claims under the Plan? The Debtors’ estimates of Allowed GUC Claims are based on reasonable estimates of certain contingent, unliquidated, and disputed litigation Claims known to the Debtors as of the date hereof, which generally are considered unsecured Claims. The actual amount of Allowed GUC Claims could

Page 53

range based on certain contingent, unliquidated, and disputed litigation Claims, some of which were known to the Debtors as of the date hereof, which generally are considered unsecured Claims. As of the Petition Date, the Debtors were parties to certain litigation matters that arose in the ordinary course of operating their business and could become parties to additional litigation in the future as a result of conduct that occurred prior to the Petition Date. Certain of these litigation matters are set forth more fully in Section VII of this Disclosure Statement. Although the Debtors have disputed, are disputing, or will dispute in the future the amounts asserted by such litigation counterparties, to the extent these parties are ultimately entitled to a higher amount than is reflected in the amounts estimated by the Debtors herein, the value of recoveries to Holders of Claims in Class 5 could change as well, and such changes could be material. S. If the Plan provides that I get a distribution, do I get it upon Confirmation, when the Plan goes effective, or on the Distribution Dates? What is meant by “Confirmation,” “Effective Date,” and “Consummation?” “Confirmation” of the Plan refers to approval of the Plan by the Bankruptcy Court. Confirmation of the Plan does not guarantee that you will receive the distribution indicated under the Plan. After Confirmation of the Plan by the Bankruptcy Court, there are conditions that need to be satisfied or waived so that the Plan can go effective. See Article X of this Disclosure Statement, entitled “Confirmation of the Plan” for a discussion of the conditions precedent to consummation and effectiveness of the Plan. Unless otherwise provided in the Plan, on the Distribution Date (or if a Claim is not an Allowed Claim on the Distribution Date, on the date that such Claim or Interest becomes an Allowed Claim, or as soon as reasonably practicable thereafter), each Holder of an Allowed Claim shall receive the full amount of the distributions that the Plan provides for such Allowed Claim in accordance with its priority and Allowed amount. Other than with respect to the DIP Facility Claims, the DIP Facility Loan Documents, the DIP Agent, the DIP Lenders, the Prepetition Lenders’ Claims, the Prepetition Loan Documents, the Prepetition Agent, and the Prepetition Lenders, no interest shall accrue on any Claims from and after the Effective Date. No Holder of a Claim shall recover more than 100 percent of the Allowed amount of such Claim. If and to the extent that there are Disputed Claims, distributions on account of any such Disputed Claims shall be made pursuant to the provisions set forth in Article VII of the Plan. To the extent any distributions made in accordance with the Plan are subject to disgorgement to the Reorganized Debtors or the GUC Trustee, as applicable, the Reorganized Debtors or the GUC Trustee, as applicable, shall effectuate the distribution of such disgorged distribution to the Holders of Allowed Claims entitled to such distributions in accordance with the Plan as soon as reasonably practicable. For the avoidance of doubt, to the extent disgorgement of a distribution made to a Holder of a Claim pursuant to the Plan is required, such Holder shall be required to disgorge any distribution but shall not be required to remit interest on such distribution. T. What happens to contingent, unliquidated, and disputed Claims under the Plan? As set forth in more detail in Article VII of the Plan, after the Effective Date, (a) if an Equitization Restructuring occurs, the Reorganized Debtors, subject to the consent of the Agent, shall have the sole authority to File, withdraw, or litigate to judgment, objections to all Claims other than GUC Claims, Convenience Class Claims, and the Panterra Claims, and the GUC Trustee shall have

Page 54

the sole authority to File, withdraw, or litigate to judgment, objections to all GUC Claims, Convenience Class Claims, and the Panterra Claims; and (b) if an Asset Sale Restructuring occurs, the Agent Trust, subject to the consent of the Agent, shall have the sole authority to File, withdraw, or litigate to judgment, objections to all Claims other than GUC Claims, Convenience Class Claims, and the Panterra Claims, and the GUC Trustee shall have the sole authority to File, withdraw, or litigate to judgment, objections to all GUC Claims, Convenience Class Claims, and the Panterra Claims. The applicable Reorganized Debtor(s), and the GUC Trustee, shall have the authority to settle or compromise any applicable Disputed Claim without any further notice to or action, order, or approval by the Bankruptcy Court; and the applicable Reorganized Debtor(s) and/or the GUC Trustee shall have the authority to administer and adjust the Claims Register to reflect any such settlements or compromises without any further notice to or action, order, or approval by the Bankruptcy Court. Before or after the Effective Date, the Debtors, the Reorganized Debtors, or the GUC Trustee, as applicable, may (but are not required to) at any time request that the Bankruptcy Court estimate any Disputed Claim that is contingent or unliquidated pursuant to section 502(c) of the Bankruptcy Code for any reason, regardless of whether any party previously has objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court shall retain jurisdiction under 28 U.S.C. § 1334 to estimate any such Claim, including during the litigation of any objection to any Claim or during the appeal relating to such objection. Notwithstanding any provision to the contrary in the Plan, a Claim that has been Disallowed or expunged from the Claims Register, but that either is subject to appeal or has not been the subject of a Final Order, shall be deemed to be estimated at zero dollars, unless otherwise ordered by the Bankruptcy Court. In the event that the Bankruptcy Court estimates any contingent or unliquidated Claim, that estimated amount shall constitute a maximum limitation on such Claim for all purposes under the Plan (including for purposes of distributions), and the relevant Reorganized Debtor or GUC Trustee may elect to pursue any supplemental proceedings to object to any ultimate distribution on such Claim. On or after the Effective Date, the Debtors, the Reorganized Debtors, and the GUC Trustee, as applicable, may establish one or more reserves for Claims that are contingent or have not yet been Allowed, in an amount or amounts as reasonably determined by the applicable Debtors, Reorganized Debtors, or, the GUC Trustee, as applicable, consistent with the Proof of Claim Filed by the applicable Holder of such Disputed Claim. U. Will there be releases and exculpation granted to parties in interest as part of the Plan? Yes, to effectuate the settlements reached with these parties, the Plan includes releases by the Debtors (the “Debtors’ Releases”) and the Third Party Release, an exculpation provision, and an injunction provision. The Plan provides for releases by the Debtors of (a) the Agent Released Parties, (b) the Debtor Related Persons serving in such capacity as of the Effective Date; (c) the Committee and its members; (d) the Schultz Parties; and (e) with respect to each of the foregoing (a) through (d), such Entity and its Related Persons; provided, that, for avoidance of doubt, any Holder of a Claim or Interest that timely votes to reject the Plan, timely objects to Confirmation of the Plan, or validly opts out of the Third Party Release by making the Opt Out Election, shall not be a “Released Party”; provided, further, that Panterra shall not be a “Released Party”; provided, further, that notwithstanding the foregoing, the Schultz Parties shall not be “Released Parties” until they become Releasing Parties in accordance with the Plan.

Page 55

Pursuant to the Third Party Release, the Releasing Parties provide a release in favor of the Released Parties. Importantly, each Holder of a Claim or Interest who either (a) votes in favor of the Plan or (b) is not entitled to vote, abstains from voting, or votes against the Plan and does not opt out of the Third Party Release on a timely submitted Ballot, will be deemed to have expressly, unconditionally, generally, individually, and collectively released and discharged all Claims and Causes of Action against the Released Parties. In addition, the Plan provides for the exculpation of: (a) the Debtors; (b) the Reorganized Debtors; (c) the DIP Agent; (d) the DIP Lenders; (e) the Prepetition Agent; (f) the Prepetition Lenders; (g) the Agent Purchaser, if any; (h) the Debtor Related Persons; (i) the Committee and its members; (j) with respect to each of the foregoing (a) through (i), such Entity and its current and former Affiliates; and (k) with respect to each of the foregoing (b) through (j), such Entity and its Related Persons. The Debtors’ Releases, the Third Party Release, and the exculpation provisions included in the Plan comply with the Bankruptcy Code and prevailing law because, among other reasons, they are the product of extensive good faith, arm’s-length negotiations and were material inducements for the contributions provided by the Released Parties. These provisions were an integral part of the Debtors’ overall restructuring efforts and were an essential element of the negotiations among the Debtors, the Committee and creditors and an integral part of the Plan. In addition, the Released Parties and the Exculpated Parties have made substantial and valuable contributions to the Debtors’ restructuring that will maximize and preserve the going-concern value of the Debtors for the benefit of all parties in interest. Accordingly, each of the Released Parties and the Exculpated Parties warrants the benefit of the release and exculpation provisions. 1. Releases by the Debtors The Debtors’ Releases are fair and equitable, in the best interest of the Debtors’ Estates, and well within the Debtors’ business judgment. First, the Debtors undertook to investigate potential Estate claims and Causes of Action. The Debtors believe that the potential proceeds of Estate claims and Causes of Action being released under the Plan would not be significant in light of the complex and time consuming litigation that would accompany prosecution thereof and, accordingly, that the settlements embodied in the Plan and the corresponding releases are fair based on the value to the Debtors’ Estates and their creditors in light of the cost of developing and prosecuting such Causes of Action. The Debtors’ Releases appropriately offer protection to parties that meaningfully participated in the Debtors’ restructuring process, including the DIP Agent, the DIP Lenders, the Prepetition Agent, the Prepetition Lenders, and the Committee. Specifically, these parties have agreed to support the Plan and provide mutual releases to the Released Parties, paving the way to the Debtors’ exit from these Chapter 11 Cases. Second, to the extent the Released Parties have indemnification rights against the Debtors under applicable agreements for, among other things, all losses, damages, claims, liabilities, or expenses, including defense costs, for claims subject to the release provisions of the Plan, these claims could directly affect the Debtors’ Estates. Moreover, there is no question that the Debtor Related Persons have provided (and continue to provide) valuable consideration to the Debtors, as they commit substantial time and effort to the Debtors’ Estates and restructuring efforts throughout this chapter 11 process.

Page 56

Third, the Debtors’ Releases were vigorously negotiated at arms-length by sophisticated entities that were represented by able counsel and financial advisors and were a necessary and integral element of consideration that these parties required before agreeing to provide the consideration contemplated by the settlements. Accordingly, the Debtors submit that the Debtors’ Releases are consistent with applicable law, represent a valid settlement and release of claims the Debtors may have against the Released Parties pursuant to Section 1123(b)(3)(A) of the Bankruptcy Code, are a valid exercise of the Debtors’ business judgment, and are in the best interests of their Estates. Article VIII.C provides as follows with respect to the Debtors’ Releases: Pursuant to section 1123(b) of the Bankruptcy Code, for good and valuable consideration, on and after the Effective Date, each Released Party is deemed released and discharged by the Debtors, the Reorganized Debtors, and their Estates, from any and all claims and Causes of Action whether known or unknown, including any derivative claims, asserted on behalf of the Debtors, that the Debtors, the Reorganized Debtors, or their Estates would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the Holder of any Claim or Interest, based on or relating to, or in any manner arising from, in whole or in part, the Debtors (including the day-to-day management of the Debtors, any decisions made or not made by the Debtors’ board members, and/or the ownership or operation of the Debtors), the Reorganized Debtors (including the formation thereof, if applicable), the Debtors’ prepetition activities (including any intercompany transactions), the DIP Order (and any payments or transfers in connection therewith), the New Organizational Documents, the Exit Facility, any preference or avoidance claims pursuant to sections 544, 547, 548, or 549 of the Bankruptcy Code, the settlements and/or treatment of Claims and Interests contemplated by the Plan, or any Restructuring Transaction, contract, instrument, release, or other agreement or document (including the reliance by any Released Party on the Plan or the Confirmation Order) created or entered into in connection with the Disclosure Statement, the Plan, the Asset Sale Restructuring, the Chapter 11 Cases, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance or distribution of Securities pursuant to the Plan (if any), or the distribution of property under the Plan, or any other related agreement, or upon any other act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date related or relating to the foregoing. Notwithstanding anything to the contrary in the foregoing, the releases set forth above do not release any post-Effective Date obligations of any party or Entity under the Plan, any Restructuring Transaction, or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan (including the Exit Facility Loan Documents). Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, pursuant to Bankruptcy Rule 9019, of the releases described herein, which includes by reference each of the related provisions and definitions contained in the Plan, and further, shall constitute the Bankruptcy Court’s finding that the releases described herein are: (1) in exchange for the good and valuable consideration provided by or on behalf of the Released Parties; (2) a good faith settlement and compromise of the Claims and Interests released herein; (3) in the best interests of the Debtors and all Holders of Claims and Interests; (4) fair, equitable, and reasonable; (5) given and made after due notice and opportunity for hearing; and (6) a bar to any of the Debtors, the Reorganized Debtors, or the Debtors’ Estates asserting any claim or Cause of Action released pursuant to the releases described herein or asserting

Page 57

(directly or indirectly) or trading any claim or Cause of Action released pursuant to the releases described herein against any Released Party at any time. Notwithstanding anything to the contrary in the foregoing, the releases set forth in this Article VIII.C: (i) do not release any post-Effective Date obligations of any party or Entity under the Plan, any Restructuring Transaction, or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan; (ii) do not release any claims related to any act or omission that constitutes actual fraud or willful misconduct, but in all respects such Entities shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities pursuant to the Plan; and (iii) do not release any Panterra Claims. 2. Third Party Release Similarly, the Third Party Release is integral to the Plan and is a condition of the settlements embodied therein. The provisions of the Plan were heavily negotiated by sophisticated parties, represented by competent counsel. The Third Party Release (together with the Debtors’ Releases) are key components of the Debtors’ restructuring and a key inducement to bring stakeholder groups to the bargaining table. Put simply, the Released Parties were unwilling to provide value to the Debtors’ Estates without assurances that they would not be subject to post-emergence litigation or other disputes related to the restructuring. The Third Party Release therefore not only benefits the non-Debtor Released Parties, but also the Debtors’ post-emergence enterprise as a whole. Importantly, the Third Party Release is consensual because it provides Holders of Claims and Interests (other than those Holders who vote to accept the Plan) with the option to opt out of the Third Party Release by checking a box on the Ballot or Opt Out Form provided by the Debtors. Each of the Disclosure Statement, Ballots, and notices of non-voting status state in bold-faced, conspicuous text that Holders of Claims and Interests that do not opt out of the Third Party Release will be bound thereby. Accordingly, upon electing to opt out, such Holders of Claims or Interests do not grant the Third Party Release and no longer have a basis to argue their rights are affected thereby. At the same time, by electing to opt out, such Holders of Claims are excluded from being a Released Party, and also do not receive the benefits of being a Released Party. The Third Party Release complies with applicable law: First, the Third Party Release is sufficiently specific to put the Releasing Parties on notice of the released claims. Second, the Third Party Release is integral to the Plan and the settlement and compromise therein. The provisions of the Plan were heavily negotiated by sophisticated parties, represented by competent counsel, for which the Third Party Release was a material inducement. Third, as described more fully above, each of the Released Parties under the Third Party Release provided consideration (and are also Releasing Parties themselves, thereby making the release mutual). Ultimately, the restructuring contemplated by the Plan operates to maximize the Debtors’ fresh start by minimizing the possibility of distracting post-emergence litigation or costs associated with the continuation of disputes related to the Debtors’ restructuring, and would not be possible absent the support of the Released Parties. Article VIII.D provides as follows with respect to the Third Party Release: As of the Effective Date, except to enforce distributions under the Plan, each Releasing Party is deemed to have released and discharged each Released Party from any and all claims and Causes of Action, whether known or unknown, including any derivative claims, asserted

Page 58

on behalf of the Debtors, that such Entity would have been legally entitled to assert (whether individually or collectively), based on or relating to, or in any manner arising from, in whole or in part, the Debtors (including the day-to-day management of the Debtors, any decisions made or not made by the Debtors’ board members, and/or the ownership or operation of the Debtors), Reorganized SMG and the other Reorganized Debtors (including the formation thereof), the Debtors’ prepetition operations and activities, the New Organizational Documents, the DIP Order (and any payments or transfers in connection therewith), the Exit Facility, the Asset Sale Restructuring, the settlements contemplated by the Plan, or any Restructuring Transaction, contract, instrument, release, or other agreement or document (including the reliance by any Released Party on the Plan or the Confirmation Order) created or entered into in connection with the Disclosure Statement, the Plan, the Chapter 11 Cases, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the administration and implementation of the Plan, including the issuance or distribution of Securities pursuant to the Plan (if any), or the distribution of property under the Plan, or any other related agreement, or upon any other act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date related or relating to the foregoing. Notwithstanding anything to the contrary in the foregoing, the releases set forth above do not release any post-Effective Date obligations of any party or Entity under the Plan, any Restructuring Transaction, or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan (including the Exit Facility Loan Documents). If the Schultz Parties constitute “Releasing Parties” under the Plan, on the Effective Date, the Schultz Parties shall be deemed to release and waive in writing any and all claims to all proceeds or refunds of any insurance policy of the Debtors or the Estates and admit that the whole life insurance policies issued by Northwestern Mutual ended 1656 and 8018 and all proceeds thereto and refunds thereof constitute property of the Debtors and the Estates. In order to avoid being deemed a Releasing Party and/or a Released Party, as applicable, and thereby granting and receiving the releases set forth in Article VIII of the Plan, a creditor casting a Ballot for acceptance or rejection of the Plan must indicate its intent to make the Opt Out Election by checking the “OPT OUT” box on its Ballot. Except as otherwise set forth herein, a party that is entitled to vote on the Plan and who votes to accept the Plan will be deemed to be a Releasing Party notwithstanding the making of an Opt Out Election. Parties that are not entitled to vote may make the Opt Out Election by submission of an Opt Out Form in advance of the deadline for voting on the Plan, provided that any such Holder of a Claim or Interest that makes the Opt Out Election shall not be a Released Party. Creditors and other parties in interest who fail to take such action shall be deemed to have consented to the Third Party Release contained in Article VIII.D of the Plan. Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, pursuant to Bankruptcy Rule 9019, of the releases described herein, which includes by reference each of the related provisions and definitions contained herein, and, further, shall constitute the Bankruptcy Court’s finding that each release described herein is: (1) consensual; (2) essential to the Confirmation of the Plan; (3) given in exchange for the good and valuable consideration provided by the Released Parties; (4) a good faith settlement and compromise as set forth in the Plan; (5) in the best interests of the Debtors and their Estates; (5) fair, equitable, and reasonable; (6) given and made after due notice and opportunity for hearing; and (7) a bar to any of the Releasing Parties asserting any claim or Cause of Action released pursuant to the releases described herein.

Page 59

Notwithstanding anything to the contrary in the foregoing, the Releases set forth in this Article VIII.D (i) do not release any post-Effective Date obligations of any party or Entity under the Plan, any Restructuring Transaction, or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan and (ii) do not release any claims related to any act or omission that constitutes actual fraud or willful misconduct but in all respects such Entities shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities pursuant to the Plan. 3. Mutual Releases by Agent Released Parties and Schultz Parties The Plan also contains a mutual release between the Agent Released Parties and the Schultz Parties. Article VIII.E provides as follows with respect to such release: Notwithstanding anything to the contrary herein, it shall be a condition to the effectiveness of this Article VIII.E that each Schultz Party has, prior to the Effective Date, executed a release in form and substance acceptable to the Agent, including agreeing to become a “Releasing Party” under the Plan and to be subject to the release set forth in Article VIII.E of the Plan (unless waived by the Agent), and this Article VIII.E shall have no force or effect unless such condition is satisfied or waived by the Agent prior to the Effective Date. Subject to the satisfaction or waiver of the conditions set forth above, as of the Effective Date, except to enforce distributions under the Plan, (a) each Agent Released Party is deemed to have released and discharged each Schultz Party, and (b) each Schultz Party is deemed to have released and discharged each Agent Released Party, from any and all claims and Causes of Action, whether known or unknown, including any derivative claims, asserted on behalf of the Debtors, that such Entity would have been legally entitled to assert (whether individually or collectively), based on or relating to, or in any manner arising from, in whole or in part, the Debtors (including the day-to-day management of the Debtors, any decisions made or not made by the Debtors’ board members, and/or the ownership or operation of the Debtors), Reorganized SMG and the other Reorganized Debtors (including the formation thereof), the Debtors’ prepetition operations and activities, the New Organizational Documents, the DIP Order (and any payments or transfers in connection therewith), the Exit Facility, the Asset Sale Restructuring, the settlements contemplated by the Plan, or any Restructuring Transaction, contract, instrument, release, or other agreement or document (including the reliance by any Agent Released Party or Schultz Party on the Plan or the Confirmation Order) created or entered into in connection with the Disclosure Statement, the Plan, the Chapter 11 Cases, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the administration and implementation of the Plan, including the issuance or distribution of Securities pursuant to the Plan (if any), or the distribution of property under the Plan, or any other related agreement, or upon any other act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date related or relating to the foregoing. Notwithstanding anything to the contrary in the foregoing, the releases set forth above do not release any post-Effective Date obligations of any party or Entity under the Plan, any Restructuring Transaction, or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan (including the Exit Facility Loan Documents). If the Schultz Parties constitute “Releasing Parties” under the Plan, on the Effective Date, the Schultz Parties shall be deemed to release and waive in writing any and all claims to all proceeds or refunds of any insurance policy of the Debtors or the Estates and admit that the whole life insurance policies issued by Northwestern Mutual

Page 60

ended 1656 and 8018 and all proceeds thereto and refunds thereof constitute property of the Debtors and the Estates. Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, pursuant to Bankruptcy Rule 9019, of the releases described herein, which includes by reference each of the related provisions and definitions contained herein, and, further, shall constitute the Bankruptcy Court’s finding that each release described herein is: (1) consensual; (2) essential to the Confirmation of the Plan; (3) given in exchange for the good and valuable consideration provided by the Agent Released Parties and the Schultz Parties; (4) a good faith settlement and compromise as set forth in the Plan; (5) in the best interests of the Debtors and their Estates; (5) fair, equitable, and reasonable; (6) given and made after due notice and opportunity for hearing; and (7) a bar to any of the Agent Released Parties or the Schultz Parties asserting any claim or Cause of Action released pursuant to the releases described herein. 4. Release of Liens. Except as otherwise specifically provided in the Plan or in any contract, instrument, release, or other agreement or document created pursuant to the Plan, on the Effective Date, and except with regard to Secured Claims that the Debtors, with the Agent’s consent, elect to Reinstate in accordance with Article III.B of the Plan, all mortgages, deeds of trust, Liens, pledges, or other security interests against any property of the Estates shall be fully released and discharged, and all of the right, title, and interest of any Holder of such mortgages, deeds of trust, Liens, pledges, or other security interests shall revert to the Reorganized Debtors and their successors and assigns (including Reorganized SMG if applicable), in each case, without any further approval or order of the Bankruptcy Court and without any action or Filing being required to be made by the Debtors or the Reorganized Debtors, as applicable. The Reorganized Debtors are authorized to execute any document or make any filing necessary to further document the release of any lien, security interest or similar encumbrance. 5. Exculpation. Except as otherwise specifically provided in the Plan, no Exculpated Party shall have or incur liability for, and each Exculpated Party is hereby released and exculpated from, any Cause of Action for any claim related to any act or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, the formulation, preparation, dissemination, negotiation, or Filing of the Disclosure Statement, the Plan, or any Restructuring Transaction, contract, instrument, release, or other agreement or document (including the reliance by any Exculpated Party on the Plan or the Confirmation Order) created or entered into in connection with the Disclosure Statement, the Plan, the Asset Sale Restructuring, the Filing of the Chapter 11 Cases, the negotiation, terms, or execution of any settlement agreements effectuated pursuant to Federal Rule of Bankruptcy Procedure 9019 in the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance of Securities pursuant to the Plan (if any), or the distribution of property under the Plan, or any other related agreement in connection with the Plan, except for claims related to any act or omission that is determined in a final order to have constituted actual fraud, willful misconduct, or gross negligence. The Exculpated Parties have, and upon completion of the Plan shall be deemed to have, participated in good faith and in compliance with the applicable laws with regard to the solicitation of, and distribution of, consideration pursuant to the Plan and, therefore, are not, and on account of such distributions shall not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the Plan. Notwithstanding anything to the contrary in the foregoing, the exculpation set forth above does not

Page 61

release any post-Effective Date obligations of any party or Entity under the Plan, any Restructuring Transaction, or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan (including the Exit Facility Loan Documents). 6. Injunction. Except as otherwise expressly provided in the Plan or for obligations issued or required to be paid pursuant to the Plan or the Confirmation Order, all Entities that have held, hold, or may hold Claims, Interests, Liens or Causes of Action that have been released pursuant to Article VIII.B, Article VIII.C, Article VIII.D, or Article VIII.E of the Plan (if applicable), or are discharged pursuant to Article VIII.A of the Plan, or are subject to exculpation pursuant to Article VIII.F of the Plan, are permanently enjoined, from and after the Effective Date, from taking any of the following actions against, as applicable, the Debtors, the Reorganized Debtors, the GUC Trust, the Agent Trust (if applicable), the GUC Trust Assets, the Agent Trust Assets (if applicable), the GUC Trustee, the Agent Trustee (if applicable), or the Released Parties: (1) commencing or continuing in any manner any action or other proceeding of any kind on account of or in connection with or with respect to any such Claims, Interests, Liens or Causes of Action; (2) enforcing, attaching, collecting, or recovering by any manner or means any judgment, award, decree, or order against such Entities on account of or in connection with or with respect to any such Claims, Interests, Liens or Causes of Action; (3) creating, perfecting, or enforcing any Lien or encumbrance of any kind against such Entities or the property or the estates of such Entities on account of or in connection with or with respect to any such Claims, Interests, Liens or Causes of Action; (4) asserting any right of setoff, subrogation, or recoupment of any kind against any obligation due from such Entities or against the property of such Entities on account of or in connection with or with respect to any such Claims, Interests, Liens or Causes of Action unless such Entity has timely asserted such setoff right in a document Filed with the Bankruptcy Court explicitly preserving such setoff, and notwithstanding an indication of a claim or interest or otherwise that such Entity asserts, has, or intends to preserve any right of setoff pursuant to applicable law or otherwise; (5) asserting any claim relating to or arising from the Asset Sale Restructuring; and (6) commencing or continuing in any manner any action or other proceeding of any kind on account of or in connection with or with respect to any such Claims, Interests, Liens or Causes of Action released or settled pursuant to the Plan. V. What impact does the Bar Date have on my Claim? On or about November 13, 2020, the Debtors Filed their Schedules with the Bankruptcy Court pursuant to Section 521 of the Bankruptcy Code. The Bankruptcy Code allows a bankruptcy court to fix the time within which proofs of claim must be Filed in a chapter 11 case. The Bar Date by which Proofs of Claims and Interests must be Filed in these Chapter 11 Cases, established pursuant to the 341 Notice, is February 21, 2021, except with respect to Proofs of Claims filed by Governmental Units and certain other exceptions set forth in the 341 Notice, the Administrative Claims Bar Date Order, the DIP Order, and/or other orders of the Court. The deadline for filing claims by Governmental Units (the “Governmental Bar Date”) is May 22, 2021. Except as otherwise provided in the Administrative Claims Bar Date Order or such other order of the Court, the Interim Administrative Claims Bar Date is February 15, 2021 for Administrative Claims arising or incurred on or before January 31, 2021. In accordance with Bankruptcy Rule 3003(c)(2), if any person or Entity that is required, but fails, to File a Proof of Claim on or before the Bar Date, except in the case of certain exceptions

Page 62

explicitly set forth in the 341 Notice or by further order of the Bankruptcy Court, such person or Entity will be: (1) barred from asserting such Claims against the Debtors in these Chapter 11 Cases; (2) precluded from voting on any plans of reorganization Filed in these Chapter 11 Cases; and (3) precluded from receiving distributions from the Debtors on account of such Claims in these Chapter 11 Cases. Notwithstanding the foregoing, a Holder of a Claim shall be able to assert, vote upon, and receive distributions under the Plan, or any other plan of reorganization or liquidation in the Chapter 11 Cases, to the extent, and in such amount, as any undisputed, non-contingent, and liquidated Claims identified in the Schedules on behalf of such Claim Holder. As described in this Disclosure Statement, the distribution you receive on account of your Claim (if any) may depend, in part, on the amount of Claims for which Proofs of Claim were Filed on or before the Claims Bar Date. W. What is the effect of the Plan on the Debtors’ ongoing business? If an Equitization Restructuring occurs, the Debtors will reorganize under chapter 11 of the Bankruptcy Code. Following Confirmation, the Plan will be consummated on the Effective Date, which is a date selected by the Debtors that is the first business day after which all conditions to Consummation have been satisfied or waived. See Article IX of the Plan. On or after the Effective Date and unless otherwise provided in the Plan, the Reorganized Debtors may operate their business and, except as otherwise provided by the Plan, may use, acquire, or dispose of property and compromise or settle any Claims, Interests, or Causes of Action without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules. On and after the Effective Date, the Reorganized Debtors may maintain or dispose of documents in accordance with their standard document retention policy, as may be altered, amended, modified, or supplemented by the Reorganized Debtors. Additionally, upon the Effective Date, all actions contemplated by the Plan will be deemed authorized and approved. X. Who do I contact if I have additional questions with respect to this Disclosure Statement or the Plan? If you have any questions regarding this Disclosure Statement or the Plan, please contact: By regular mail, hand delivery, or overnight mail: Law Offices of Frank J. Wright 2323 Ross Avenue, Suite 730 Dallas, Texas 75201 By electronic mail: frank@fjwright.law and jeff@fjwright.law with a reference to “SMG Plan Voting” in the subject line By telephone: (214) 935-9100 Copies of the Plan, this Disclosure Statement, and any other publicly Filed documents in the Chapter 11 Cases are available upon written request to the Noticing Agent at the address above or by downloading the documents from the website of the Debtors’ Noticing Agent at

Page 63

https://www.donlinrecano.org/Clients/smgh/Index (free of charge) or the Bankruptcy Court’s website at https://www.txnb.uscourts.gov/ (for a fee). Y. What is the deadline to vote on the Plan? The deadline by which Holders of Claims may vote to accept or reject the Plan (the “Voting Deadline”) is [•],2021 at 4:00 p.m. (prevailing Central Time). Z. How do I vote for or against the Plan? Holders of Claims that are entitled to vote on the Plan can vote in one of two ways, either by mailing in the Ballot provided with a Solicitation Package or online, through a web portal maintained by the Debtors’ claims agent. Detailed instructions regarding how to vote on the Plan are contained on the Ballots distributed to Holders of Claims that are entitled to vote on the Plan. For a vote to be counted, Ballots must be completed, signed, returned as directed, and actually received by [•], 2021 at 4:00 p.m. (prevailing Central Time), the Voting Deadline. See Article IX of this Disclosure Statement, entitled “SOLICITATION AND VOTING PROCEDURES.” AA. Why is the Bankruptcy Court holding a Confirmation Hearing? Section 1128(a) of the Bankruptcy Code requires the Bankruptcy Court to hold a hearing on Confirmation of the Plan and recognizes that any party in interest may object to Confirmation of the Plan. BB. When is the Confirmation Hearing set to occur? The Bankruptcy Court has scheduled the Confirmation Hearing for [•], 2021 at [•] a.m. (prevailing Central Time). The Confirmation Hearing may be adjourned from time to time without further notice. Objections to Confirmation of the Plan must be Filed and served on the Debtors, and certain other parties, by no later than [•], 2021 at [•] a.m. (prevailing Central Time) in accordance with the notice of the Disclosure Statement Order attached hereto as Exhibit B and incorporated herein by reference. CC. What is the purpose of the Confirmation Hearing? The confirmation of a plan of reorganization by a bankruptcy court binds the debtor, any issuer of securities under a plan of reorganization, any person acquiring property under a plan of reorganization, any creditor or equity interest holder of a debtor, and any other person or entity as may be ordered by the bankruptcy court in accordance with the applicable provisions of the Bankruptcy Code. Subject to certain limited exceptions, the order issued by the bankruptcy court confirming a plan of reorganization discharges a debtor from any debt that arose before the confirmation of such plan of reorganization and provides for the treatment of such debt in accordance with the terms of the confirmed plan of reorganization. DD. Do the Debtors recommend voting in favor of the Plan? Yes. The Debtors believe the Plan provides for a larger distribution to the Debtors’ creditors than would otherwise result from any other available alternative. The Debtors believe the Plan will result in meaningful recoveries for creditors and enables them to emerge from chapter 11

Page 64

expeditiously, is in the best interest of all Holders of Claims, and that any other alternatives (to the extent they exist) fail to realize or recognize the value inherent under the Plan. EE. Who supports the Plan? The Debtors and the Committee support the Plan. V. THE DEBTORS’ CORPORATE HISTORY, STRUCTURE, AND BUSINESS OVERVIEW A. The Debtors’ Business The Debtors are engaged in the dine-in movie theater business. In addition to its movie offerings, SMG’s theaters include a bar and lounge area, with direct to seat service for guests before and during their movies. Specifically, on the Petition Date, SMG leased 33 movie theaters in 10 states, including Arizona, California, Florida, Georgia, Illinois, Indiana, North Carolina, Pennsylvania, Texas, and Virginia. All theaters operate under the brand name “Studio Movie Grill.” SMG was conceived in 1993 to modernize the traditional movie-going experience through its combination of first-run movies, alternate, and family programming together with full-service, in theater dining from an extensive American grill menu and full-service bar. SMG strives for an immersive movie-going experience with its custom luxury recliners, laser projection, studio extreme large format auditoriums, and advanced sound system. Service buttons are located at every seat, enabling servers to know instantly when guests need to place an order or request assistance. Servers then deliver food and drinks to guests’ seats anytime during the show. In 2018, SMG was the fastest growing company-owned theater chain and had built the largest hospitality-centric platform in the exhibition industry. SMG swiftly grew from a single location to 353 screens across 10 states. SMG was named to Inc. Magazine’s List of “Fastest Growing Private Companies” three years in a row, placed 11th in Box Office Magazine’s Giants of the Industry and, in 2019, 50 films put SMG in the Top 10 at the Box Office with key titles grossing as high as #5 in box office receipts. In June 2018, SMG introduced its unique loyalty program, SMG Access, which allows loyal guests to earn rewards, and allows them to join SMG in offering movies and meals to underserved community members. To date, this program has earned over 40,000 movies and meals. Prior to the rapid national spread of the novel coronavirus commonly known as COVID-19, SMG had over twenty-five (25) years of year-to-year growth. As a result of the national pandemic, state, and local governments imposed restrictions on the social, dining, and theater operations regular and necessary to the SMG business. Following the Center for Disease Control COVID-19 guidelines and in compliance with the localized restrictions, SMG shut down all of its theaters for a period of 3 months. During the shutdown, SMG sought out creative ways to attempt to generate revenue, including an attempt to provide carry-out dining services. Beginning on June 19, 2020, SMG, again operating in accordance with CDC guidelines and lifted restrictions, began reopening locations with limited capacity. That being said, demand and supply of films remains limited. Again, SMG has sought creative ways to generate additional revenue within the confines of the CDC guidelines, including open sales to individuals and group to rent out an entire auditorium for a screening or special event. Since mid-March 2020, COVID-19 has resulted in significant adverse business effects on SMG, its operations, and the entire movie industry. Through its Chapter 11 Cases,

Page 65

SMG is but the next in a line of movie theater chains and other in-person entertainment businesses seeking bankruptcy relief. At present, 18 theaters are open at a limited capacity. It remains unknown how long the COVID-19 pandemic will persist and how long the market effects will continue thereafter. SMG anticipates that demand for its services will remain very tenuous until theaters are able to return to full capacity and major motion pictures resume being released for first-run theater showings. SMG has made, and continues to make, necessary adjustments to its operations in light of the resulting declines in revenue. SMG has sought to reduce operating expenses, lease expenses, and sought a variety of creative solutions to provide interim cash flow, including offering private theater rentals to the public. SMG files these Chapter 11 Cases as part of its ongoing efforts, in order to preserve the value of its assets for the benefit of all stakeholders, including employees, creditors, and equity. Through the Chapter 11 process, SMG seeks to (i) further increase the profitability of each theater; and (ii) renegotiate lease with landlord and certain business contracts. SMG seeks to use these mechanisms, in conjunction with a restructuring of other debt, to overcome this temporary downturn in the film industry and maximize future profitability. Through the Chapter 11 proceeding, SMG has been (i) identifying which theaters are not profitable, which ones are profitable and which ones can be profitable; and (ii) seeking to renegotiate leases with landlords and business contracts with vendors and, in turn, rebalance what has become economically untenable for companies in the movie theater industry. B. Corporate Structure, Assets and Operations The Debtors’ holding company is OHAM Holdings, LLC (“OHAM”), a Texas limited liability company that was incorporated in March 2019. The membership equity of OHAM is owned as of the Petition Date as follows:

Table 1 on page 65. Back to List of Tables

MEMBER	OWNED PERCENTAGE
Brian Schultz	77.5%
Virginia Schultz	1.0%
Theodore Croft	1.0%
SMG Team Equity Holdings, LLC	7.0%
TSO SMG Warrant Investment Aggregator	13.185%
Michael Lambert Trust	0.0315%

Studio Movie Grill Holdings, LLC, a Texas limited liability company, was incorporated in 2011. The membership equity of Studio Movie Holdings, LLC, is owned in totality (100%) by OHAM. All other Debtors are owned in totality either directly or indirectly by Studio Movie Grill Holdings, LLC. Accordingly, Brian Schultz and TSO SMG Warrant Investment Aggregator are the only persons that directly or indirectly own 10% or more of any class of OHAM’s equity interests. As detailed above, OHAM owns 100% of Studio Movie Grill Holdings, LLC’s equity interests and Studio Movie Grill Holdings, LLC owns 100% of all the other Debtors’ equity interests. Movie Grill Concepts Trademark Holdings, LLC, a Texas limited liability company, is the Debtor entity that employs home office, salaried field, and management personnel and is responsible for payroll, benefits (such as insurance) and employee-related obligations (such as payroll tax). Theater

Page 66

level personnel are employed by the theater legal entity. MGC Management I, LLC, a Texas limited liability company, owns the 1% general partner stake in Movie Grill Concepts I, Ltd., a Texas limited partnership and Plano Theater location, which owns 100% of Studio Club, LLC. Studio Club, LLC was originally setup to hold the liquor license of Movie Grill Concepts I, Ltd. Movie Grill Partners 3, LLC , a Texas limited liability company, owns the 1% general partner stake in Movie Grill Concepts III, Ltd., a Texas limited partnership and Arlington theater location. Movie Grill Partners 4, LLC , a Texas limited liability company, owns the 1% general partner stake in Movie Grill Concepts IV, Ltd., a Texas limited partnership and Copperfield theater location, which owns 100% of Studio Club 4, LLC. Studio Club 4, LLC was originally setup to hold the liquor license of Movie Grill Concepts IV, Ltd. Movie Grill Partners 6, LLC , a Texas limited liability company, owns the 1% general partner stake in Movie Grill Concepts VI, Ltd., a Texas limited partnership and City Centre theater location. All other theater level entities are owned 100% by Studio Movie Grill Holdings, LLC. The Debtor’s assets primarily consist of real property leases, FF&E, intangible property and other assets compromising the Debtors’ business operations all as further detailed on Schedules 1 and 12. Figure 1 below depicts the corporate structure of OHAM Holdings and its subsidiaries.

Page 67

C. Prepetition Capital Structure The following table depicts the Debtors’ prepetition capital structure:

Table 1 on page 67. Back to List of Tables

Debt	Approx. Principal and Accrued Interest Outstanding as of Petition Date (USD)
Prepetition Lenders’ Claims	$104.1 million (excluding interest)
TowerBrook Subordinated Debt	$83.5 million
General Unsecured Claims (GUC)	$65 to $80 million
Intercompany Claims	$63.5 million
Total Debt	$318.2 to 333.2 million

The Debtors’ Claims are set forth in more detail below and on Schedules 2-11 attached hereto. 1. Prepetition Credit Facility The Debtors are party to a Credit and Guaranty Agreement, dated March 29, 2019 with Goldman Sachs Specialty Lending Group, L.P. as the administrative agent and collateral agent, Goldman Sachs Bank USA, as a lender, Crestline Specialty Lending II, L.P., as a lender, and American National Insurance Company, as a lender (collectively, the “Prepetition Lenders”) (as amended prior to giving effect to the DIP Facility, the “Prepetition Credit Agreement,” and such facility, the “Prepetition Credit Facility”). The Prepetition Credit Facility includes all OHAM subsidiaries (other than Studio Club, LLC and Studio Club 4, LLC) as Borrowers and OHAM as a Guarantor (each as defined in the Prepetition Credit Agreement) for the entirety of the Obligations (as defined in the Prepetition Credit Agreement). The amount of principal owed by OHAM and such subsidiaries in respect of the Prepetition Lenders’ Claim, as of the Petition Date, was not less than $104,123,984.28 plus accrued and unpaid interest on such principal amount through the Petition Date and any other amounts due and owing pursuant to, arising under or, relating to the Prepetition Loan Documents through and including the Effective Date. The Prepetition Lenders’ Claims are deemed allowed in this aggregate amount under the Plan. The treatment of the Prepetition Lenders’ Claims under the Plan represents a good faith, arm’s length compromise and settlement between such Holders and the Debtors of all potential Claims and Causes of Action, in order to facilitate consummation of the Plan. 2. TowerBrook Subordinated Debt OHAM is party to a Securities Purchase Agreement, dated March 29, 2019 with TSO SMG Note Investment Aggregator L.P. and Michael Lambert Trust u/d/t 3/1/93 as the Note Purchaser totaling USD $75.0 million. As of the Petition Date, including accrued paid-in-kind interest, the outstanding balance was $83,481,999.21.

Page 68

3. GUC Claims As of the Petition Date, the Debtors estimated they had approximately $42 million in principal and accrued interest outstanding in respect of GUC Claims. The Debtors anticipate additional amounts of GUC Claims may result from the rejection of various leases and executory contracts in these Chapter 11 Cases, with such additional GUC Claims estimated to be not less than $25-35 million. The sum of these two estimates is $67-77 million inclusive of “Litigation Claims” relating to the employment, construction, vendors, and intellectual property. The Debtors currently estimate that the range of possible GUC Claims, including lease and executory contract rejection damages claims, will total $40 to 80 million. The treatment of the Claims of the Holders of the GUC Claims under the Plan represents a good faith, arm’s length compromise and settlement between such Holders and the Debtors of all potential claims and causes of action, in order to facilitate consummation of the Plan. 4. Intercompany Claims As of the Petition Date, Intercompany Claims totaled approximately $563 million. Intercompany Claims consist of accounting transfers between the Debtors. At the consolidating level, the intercompany assets and liabilities net to $0. Under the Plan, Holders of Intercompany Claims will receive no distribution. The treatment of the Claims of the Holders of the Intercompany Claims under the Plan represents a good faith, arm’s length compromise and settlement between such Holders and the Debtors of all potential claims and causes of action, in order to facilitate consummation of the Plan. 5. Interests in OHAM Holdings, LLC As of the Petition Date, the Interests in OHAM were held by Brian Shultz (77.5%), Virginia Schultz (1.0%), Theodore Croft (1.0%), SMG Team Equity Holding, LLC (7.0%), TSO SMG Warrant Investment Aggregator (13.185%), and Michael Lambert Trust (0.315%). The Interests in OHAM are not publicly traded. Under the Plan, Holders of Interests will receive no distribution. The treatment of the Claims of the Holders of the Interests under the Plan represents a good faith, arm’s length compromise and settlement between such Holders and the Debtors of all potential claims and causes of action, in order to facilitate consummation of the Plan. 6. Interests in Studio Movie Grill Holdings, LLC As of the Petition Date, the interests in Studio Movie Grill Holdings, LLC were wholly owned by OHAM. These Interests are not publicly traded. VI. EVENTS LEADING TO THE CHAPTER 11 FILINGS A. Adverse Market Conditions and Liquidity Constraints The difficulties faced by the Debtors are consistent with those faced industry-wide. As described herein, government stay at home orders related to the COVID-19 pandemic forced the Debtors – and all movie theater operators – to close their theaters in March 2020. While the Debtors have now opened a portion of their theaters, due to COVID-19, the Debtors have generally had access to limited new, first-run movies to show in their theaters, as the movie studios have released few new first-run movies.

Page 69

B. Proactive Approach to Addressing Liquidity Constraints Since the Petition Date, the Debtors have been evaluating and re-evaluating all aspects of their business to improve efficiency and reduce costs. Most notably, the greatest impact (other than the rent reductions from the lease renegotiations) include optimizing the man-hours needed to operate each theater, and reducing the supplies and service expenses at each location. As a result of this ongoing analysis, the Debtors have implemented a number of initiatives designed to further this strategy. In addition, the Debtors are implementing the following initiatives: • Key Employee Incentive Plan targeted to, among other things, provide bonuses dependent on the success of this bankruptcy case. • Consolidating vendors – Several small providers of supplies and services are being consolidated, in order to reduce expenses in these categories • Offering To Go Food – SMG implemented takeout food options including curbside pickup and partnered with GrubHub to offer food delivery. • Private screening and alternative events – In order to generate additional revenue, SMG offers consumers the option to rent theater space for private screenings of first run and classic movies. Additionally, they have offered live sports and E-Sports watch parties, Zoom business meetings, and other group meetings. The Debtors believe these efforts will improve efficiency and increase profits. VII. MATERIAL DEVELOPMENTS AND ANTICIPATED EVENTS OF THE CHAPTER 11 CASES A. First Day Relief On the Petition Date, the Debtors Filed several motions (the “First Day Motions”) designed to facilitate the administration of the Chapter 11 Cases and minimize disruption to the Debtors’ operations following the commencement of the Chapter 11 Cases. On October 27, 2020, the Bankruptcy Court entered orders approving the Debtors’ motion for joint administration (ECF No. 48) and motion to pay pre-petition wages & benefits (ECF No. 50). On October 29, 2020, the Bankruptcy Court entered orders approving (i) a motion seeking approval of proposed adequate assurance of payment for future utility services and procedures for resolving adequate assurance requests (ECF No. 81), (ii) a motion to honor customer programs (ECF No. 84), (iii) a motion to continue all insurance policies and agreements (ECF No. 85), (iv) a motion to grant complex chapter 11 treatment (ECF No. 94), and (v) a motion authorizing Debtor's to pay all or a portion of the prepetition claims of certain critical vendors (ECF No. 97). On October 30, 2020, the Bankruptcy Court entered an order approving the Debtors’ motion seeking authorization to pay pre-petition sales taxes, franchise taxes and similar taxes and fees (ECF No. 103). On November 5, 2020, the Bankruptcy Court entered an order approving a motion for extension of time for the Debtors to file their schedules of assets and liabilities and statements of financial affairs (ECF No. 130).

Page 70

The First Day Motions, and all orders for relief granted in the Chapter 11 Cases, can be viewed free of charge at the website maintained by the Noticing Agent at https://www.donlinrecano.com/Clients/smgh/Index B. Additional Chapter 11 Relief During the initial stage of the Chapter 11 Cases, the Debtors also filed the following motions: 1. DIP Motions On October 26, 2020, the Debtors filed the Debtors’ Emergency Motion for Entry of Interim and Final Orders Pursuant to 11 U.S.C. §§ 105, 361, 362, 363, and 364 (I) Authorizing Debtors to (A) Use Cash Collateral on a Limited Basis and (B) Obtain Postpetition Financing on a Secured, Superpriority Basis, (II) Granting Adequate Protection, (III) Scheduling a Final Hearing, and (IV) Granting Related Relief (ECF No. 15), requesting authority to borrow, inter alia, up to $22,800,000 in new money commitments from the DIP Lenders. This motion was approved on an interim basis by order dated October 27, 2020 (ECF No. 52) and on a final basis by order dated December 1, 2020 (ECF No. 280). 2. Cash Management Motion On October 23, 2020, the Debtors Filed the Debtors’ Motion to maintain bank accounts. / Debtors Emergency Motion Pursuant to Sections 105, 345, 364, 363, 503, 1107 and 1108, Authorizing (i) Maintenance of Existing Bank Accounts; (ii) Continuance of Existing Cash Management System, Bank Accounts and Checks and Related Forms; (iii) Continued Performance of Intercompany Transactions; (iv) Limited Waiver of Section 345(b) Deposit and Investment Requirements; and (v) Granting Related Relief (ECF No. 5) (the “Cash Management Motion”). On October 29, 2020, the Court entered an order approving the Cash Management Motion (ECF. No 96). (a) Lease Rejection Motions The Debtors also Filed several other motions on the Petition Date seeking relief to facilitate their operation in the ordinary course, including:  First Lease Rejection Motion: On October 23, 2020, the Debtors filed a motion seeking to reject seven unexpired leases of real property (ECF No. 33). On October 30, 2020, the Bankruptcy Court entered an order approving the motion (ECF No. 101).  Second Lease Rejection Motion: On October 23, 2020, the Debtors filed a second motion seeking to reject unexpired leases of real property as to fifteen locations (ECF No. 17). On December 11, 2020, the Bankruptcy Court entered an order approving two of the unexpired leases of real property (ECF No. 333). On January 22, 2021, the Bankruptcy Court entered an order approving rejection of one more unexpired lease of real property (ECF No. 537). On January 27, 2021, the Bankruptcy Court entered an order approving rejection of four more unexpired leases of real property, covering six locations (ECF No. 552).

Page 71

 Third Lease Rejection Motion: On February 5, 2021, the Debtors filed a third motion seeking to reject one more unexpired lease of real property (ECF No. 602). (b) Motion to Defer Rent On October 23, 2020, the Debtors filed the Motion for Entry of an Order (I) Suspending and Extending Time for Performance of Obligations Arising Under Unexpired Real Property Leases; (II) Establishing Temporary Case Administration Procedures; and (III) Granting Related Relief (ECF No. 11) (the “Rent Deferral Motion”). In the Rent Deferral Motion, the Debtors’ posited that their obligation to pay rent under seventeen unexpired leases of real property during the first sixty days of the Chapter 11 Cases should be deferred for “cause” due to the COVID-19 restrictions implemented by various state issued stay at home orders. The Debtors further asserted that the stay at home orders effected a taking of their property, and therefore needed additional liquidity by deferring the payments until the 61st day. The Rent Deferral Motion was opposed by a number of landlords. The Debtors have negotiated agreements with numerous landlords to resolve these disputes, and remain in discussions with several landlords. On November 30, 2020, the Bankruptcy Court entered an order approving the deferral of rent payment until December 22, 2020 (See ECF No. 249). C. Other Procedural and Administrative Motions The Debtors also Filed several other motions to further facilitate the smooth and efficient administration of the Chapter 11 Cases and reduce the administrative burdens associated therewith, including:  Claims Agent Application. The Amended Application to Employ Donlin, Recano & Company, Inc. to Serve as Noticing, Balloting and Administrative Agent / Claims Agent (ECF No. 90) (the “Claims Agent Application”), Filed on October 29, 2020, seeking authorization to employ Donlin, Recano & Company to act as the Noticing, Balloting and Administrative Agent for the Debtors. On December 10, 2020, the Bankruptcy Court entered an order approving the Claims Agent Application on a final basis (ECF No. 330).  Utilities Motion. The Debtors’ Emergency Motion for Interim and Final Orders Providing Adequate Assurance of Utility Payments (the “Utilities Motion”) (ECF No. 8) was filed on October 23, 2020. On November 24, 2020, 2020, the Bankruptcy Court entered an order approving the Utilities Motion (ECF No. 235).  Key Employee Incentive Plan. The Debtors’ Motion Pursuant to 11 U.S.C. §§ 363 and 503 (I) Authorizing the Debtors to Implement a Key Employee Incentive Plan and (II) Granting Related Relief .(the “KEIP Motion”) was filed on November 17, 2020 (ECF No. 194). On December 11, 2020, the Bankruptcy Court entered an order approving the KEIP Motion (ECF No. 331).

Page 72

D. Retention of Professionals The Debtors Filed applications for, and the Bankruptcy Court entered orders approving, the retention of various professionals to assist the Debtors in carrying out their duties as debtors in possession and to represent their interests in the Chapter 11 Cases:  Law Offices of Frank J Wright, as counsel to the Debtors (ECF No. 327);  CR3 Partners, LLC, as Chief Restructuring Officer and additional personnel (ECF No. 328);  Donlin, Recano & Company, as notice and balloting agent (ECF No.330);  Keen-Summit Capital Partners, as lease restructuring advisors;  EFA Partners, LLC, as financial advisor to the Debtors (ECF No.326); and  Blackbox Management Group, LLC, as Management Consultant to the debtors (ECF No. 325). E. Appointment of Official Creditors’ Committee; Retention of Committee Professionals On November 16, 2020, the U.S. Trustee Filed the Appointment of the Official Unsecured Creditors Committee (ECF No. 173), notifying parties in interest that the U.S. Trustee had appointed the Committee in the Chapter 11 Cases. The following creditors were appointed as Committee members: 1. Michael Esqueda 4212 Lightning Court Bakersfield, CA 93312 661-496-4151 Michaelesqueda94@gmail.com 2. Segars Group LLC Attn: Barry D. Segars, President 14355 Providence Road Milton, GA 30004 770-757-7279 678-624-7708-fax bsegars@segarsgroup.com 3. Bwana Theater Partners, LLC Attn: Lauren Goldstein, Co-Managing Member 6632 Telegraph Road, #193 Bloomfield Hills, MI 48301 248-885-8480 248-630-2637-fax laurenfgoldstein@me.com

Page 73

4. Spirit Realty, L.P. Attn: Daniel Rosenberg, Sr. Vice President 2727 North Harwood Street, Ste. 300 Dallas, TX 75201 972-476-1958 drosenberg@spiritrealty.com 5. Performance Food Group, Inc. d/b/a Vistar Corporation Attn: Bradley Boe, Director of Credit 188 Inverness Drive West, 7th Floor Englewood, CO 80112 303-662-7121 303-898-8137-cell Brad.boe@pfgc.com The Committee has retained Pachulski Stang Ziehl & Jones LLP (“Pachulski”) and Norton Rose Fulbright US LLP (“Norton”) as its legal counsel, and Dundon Advisers LLC. (“Dundon”) as its financial advisor. Applications to retain Pachulski (ECF No. 336), Norton (ECF No. 337), and Dundon were filed on December 11, 2020, and orders approving their retention were filed on January 11, 2021 (ECF Nos. 425, 426, 427). F. Rejection and Assumption of Executory Contracts and Unexpired Leases Prior to the Petition Date and in the ordinary course of business, the Debtors entered into certain Executory Contracts and Unexpired Leases. The Debtors, with the assistance of their advisors, reviewed the Executory Contracts and Unexpired Leases to identify contracts and leases to either assume or reject pursuant to sections 365 or 1123 of the Bankruptcy Code. As set forth above in Section II.B.3, the Debtors have concluded that certain Unexpired Leases were uneconomic, and have rejected or moved to reject such Unexpired Leases. The Debtors filed on December 14, 2020, the Notice of Executory Contracts and Unexpired Leases That May Be Assumed and Assigned in Connection with the Sale of the Debtors' Assets and the Proposed Cure Cost with Respect Thereto (ECF No. 347), filed on December 21, 2020 the Amended Notice of Executory Contracts and Unexpired Leases That May Be Assumed and Assigned in Connection with the Sale of the Debtors' Assets and the Proposed Cure Cost with Respect Thereto (ECF No. 364), and filed on January 26, 2021 the Supplement to Amended Notice of Executory Contracts and Unexpired Leases That May Be Assumed and Assigned in Connection with the Sale of the Debtors' Assets and the Proposed Cure Cost with Respect Thereto (ECF No. 545) (collectively, the “Assumption Notices”), respectively, putting creditors on notice of the executory contracts and unexpired leases that might be assumed and assigned in a sale or plan process, the proposed cure amount for each such contract or lease, and the steps a counterparty may take to protect its interests in respect of such contract or lease, including in respect of the proposed cure amount. Pursuant to the Plan, the Debtors will be filing a Plan Supplement containing the Assumed Executory Contract and Unexpired Lease List and Rejected Executory Contract and Unexpired Lease List. Any objection to such lists will be subject to the Confirmation Objection Deadline. Any Executory Contracts or Unexpired Leases not addressed during the Chapter 11 Cases will

Page 74

be treated in accordance with Article V of the Plan, as summarized in Article IV.N of this Disclosure Statement. G. Other Litigation Matters 1. Prepetition Litigation In the ordinary course of business, the Debtors are parties to a number of lawsuits, legal proceedings, collection proceedings, and claims arising out of their business operations, including the personal injury litigation listed in Schedule 13 and:  Michael Esqueda Employment Litigation. Scheduled to combine actions with Burns and mediate, now postponed to March 2021.  Latoya Burns Employment Litigation. Scheduled to combine actions with Esqueda and mediate, now postponed to March 2021.  Ricky Cabral Employment Litigation.  Kevin Patrick Employment Litigation.  Dashawna Tate Employment Litigation.  Abigail Putman Employment Litigation.  Kamat Damani Employment Litigation.  Rachel Artman Employment Litigation.  Craig Cheesman Employment Litigation.  Omar Oliver Employment Litigation.  Panterra Construction Litigation and Disgorgement. Failure to pay for certain change orders submitted after the construction of the job was completed and counter claim for disgorgement. See subsection (a) below titled “Description of Panterra Construction Litigation and Disgorgement” for a more detailed description.  CM Corp and Sub Contractor Construction Litigation. General contractor and certain sub-contractors filed lawsuits based on unpaid construction work at the Citrus Heights development.  EMJ Construction and Sub Contractor Construction Litigation. General contractor and certain sub-contractors filed lawsuits based on unpaid construction work at the Prosperity Village development.

Page 75

 Graycor Construction Company, Inc. and Sub Contractor Construction Litigation. General contractor and certain sub-contractors filed lawsuits based on unpaid construction work at the Willow Grove development location.  Segars Group, LLC and Sub Contractor Construction Litigation. General contractor and certain sub-contractors filed lawsuits based on unpaid construction work at the Northpoint development location.  Spirit (Spirit Master Funding X, LLC (CA lease) and Spirit Realty, L.P. (Marietta lease) Litigation. Filed lawsuits based on breach of contract for on unpaid rent at three southern California locations and Marietta, GA locations.  WG Park-Anchor B Limited Partnership (PREIT) Litigation. Filed lawsuits based on breach of contract for unpaid rent at Willow Grove development location.  Veritex Community Bank Litigation. Filed lawsuits based on breach of contract for unpaid lease on equipment.  AT&T Litigation. AT&T and SMG entered into a contract for certain network services (MPLS). AT&T never provided the services. (a) Description of Panterra Construction Litigation and Disgorgement Movie Grill Concepts XX, LLC (“Movie Grill”), a Debtor and an affiliate of SMG Holdings, is a party to a lease in Bakersfield, California.Movie Grill got into a dispute with its contractor Panterra Development Ltd, LLP (“Panterra Ltd.”) over a guaranteed maximum price construction contract (“Agreement”) for the improvement of real property at 2733 Calloway Drive, in Bakersfield, California owned by Movie Grill’s landlord, Rosedale Bakersfield Retail VI, LLC (“Rosedale”), and leased to Movie Grill for a dine-in movie theatre for a fifteen year term. Three months after the theatre opened, in mid-July 2018, with no warning and without prior approval, and after the guaranteed maximum contract price of $6.5 million dollars had already been far exceeded, Panterra, Ltd hit Movie Grill with change orders totaling more than $2,208,997.16. Movie Grill determined that all the excessive charges were due to gross mismanagement by Panterra Ltd., –and in one case outright fraud—and exercised its contractual right to reject them. Panterra Ltd. was accordingly required to absorb these cost overages under the Agreement. In response, despite extensive efforts by Movie Grill to reach a compromise, Panterra Ltd. recorded a mechanic’s lien in the sum of $3.3 million dollars. On top of not being entitled contractually to any further payments, Panterra Ltd. is fatally unlicensed as a California building contractor. Instead, the Panterra group erroneously got a license in the name of its General Partner, Panterra, GP, Inc. License sharing between related or even controlled entities is prohibited under California law. Without a license, Panterra Ltd. is barred from contracting,

Page 76

recording a mechanic’s lien, foreclosing on the lien, and further must disgorge all payments made to it. The amount to be disgorged is $7.2 million dollars. Even if Panterra Ltd. had a license, Panterra Ltd. recorded its mechanic’s lien too late, and admittedly failed to give preliminary notice to the construction lender. These defects were also fatal. On October 18, 2018, Panterra, GP, Inc. filed suit against Movie Grill and Rosedale to foreclose on its defective lien and for breach of contract. The case as originally styled is Panterra Development Ltd, LLP v Movie Grill Concepts XX, LLC et al, Kern County Superior Court, Case No. BCV-18-102668 (the “Panterra Litigation”). Movie Grill cross-complained for disgorgement of the $7.2 million dollars. On February 11, 2019, the court heard Movie Grill’s demurrer (motion to dismiss) based on Panterra, GP, Inc.’s lack of standing to sue in place of Panterra Ltd. The court ruled in favor of Movie Grill by sustaining the demurrer. Consistent with the law, the court gave Panterra GP, Inc. a chance to amend. Panterra GP, Inc. tried to do so by filing a Second Amended Complaint. On May 15, 2019, the Court heard Movie Grill’s demurrer to the Second Amended Complaint. Again, the court sustained the demurrer in Movie Grill’s favor. In July 2019, upon Movie Grill’s demand, Panterra Ltd. released the mechanic’s lien and waived any right to appeal. The court gave Panterra GP, Inc. a third and final chance allowed under California law to amend to try and state a claim. It filed a Third Amended Complaint. Movie Grill demurred again. On October 11, 2019, the Court sustained the demurrer without leave to amend. Panterra GP, Inc.’s suit for $2.6 million dollars against Movie Grill was thrown out. This left only Movie Grill’s complaint for disgorgement of $7.2 million dollars against Panterra, Ltd. On December 9, 2019, Panterra GP, Inc. filed a writ petition with the court of appeals asking it to reinstate the Third Amended Complaint. The Court of Appeal asked for briefing in April 2020. All briefs have been filed. Under the law and facts, Movie Grill believes the court of appeals should deny the writ. Meanwhile, Movie Grill filed a separate summary judgment on its disgorgement claims. A hearing was held on June 15, 2020, but the court continued the hearing to allow the court of appeals to rule. A trial was set for October 13, 2020 but that date was taken off -calendar for the same reason. The consolidated Movie Grill bankruptcy proceeding on October 16, 2020 stayed the case further. Relief from stay allowing Movie Grill to proceed with all components of the case is expected in February 2021. Rosedale has asserted informally that if Panterra, Ltd. is required to disgorge funds as a result of its failure to be licensed, that it would be entitled to a portion of the recovery since Rosedale funded much of the improvements pursuant to and as required by the tenant allowance substantial obligation contained in the lease with Movie Grill. Movie Grill bargained for that tenant allowance and the funding by Rosedale for its account was required under the lease, and Movie Grill believes that any recovery in the Panterra Litigation is entirely the property of Movie Grill. Rosedale has never asserted a claim against Panterra Ltd. even though Rosedale was named as a defendant in Panterra. Ltd.’s lawsuit; only Movie Grill asserted a counterclaimed for disgorgement. The extent to which the GUC Trust will be able to obtain a recovery in the Panterra Lawsuit is uncertain and dependent upon a variety of factors. Moreover, there is a risk that Rosedale may be

Page 77

determined to be entitled to participate in the recovery although this is vigorously disputed. Accordingly, the value of the Debtors’ claims in the Panterra Litigation is unknown. 2. Automatic Stay Motions With certain exceptions, the Filing of the Chapter 11 Cases operates as a stay with respect to the commencement or continuation of litigation against the Debtors that was or could have been commenced before the commencement of the Chapter 11 Cases. In addition, the Debtors’ liability with respect to litigation stayed by the commencement of the Chapter 11 Cases generally is subject to discharge, settlement, and release upon confirmation of a plan under chapter 11, with certain exceptions. Therefore, certain litigation Claims against the Debtors may be subject to discharge in connection with the Chapter 11 Cases. Following commencement of the Chapter 11 Cases, certain litigation counterparties and other parties have Filed, or may File in the future, requests to modify or lift the automatic stay to continue pursuing prepetition litigation against the Debtors or the Debtors’ counterparties or to effectuate certain contractual rights. The Debtors will evaluate all requests for relief from the automatic stay on a case-by-case basis and object or resolve on a consensual basis, as appropriate. As of the filing of this Disclosure Statement, the following automatic stay motions have been filed:  RPT Realty, LP (ECF No. 351) – resolved by agreed order (ECF No. 536).  Vicki L. Uloth (ECF No. 381) – relief granted per court order (ECF No. 599).  INORCA SAS (ECF No. 491) – withdrawn by movant (ECF No. 574).  Craig Cheesman (ECF No. 549) – pending.  Amanda Digby (ECF No. 585) – pending. In addition, certain parties may attempt to take actions in violation of the automatic stay. The Debtors will evaluate all such actions on a case-by-case basis and object or resolve on a consensual basis, as appropriate. H. Postpetition Restructuring and Sale Process Following the Petition Date, the Debtors continued to engage with their stakeholders, including the Committee, the DIP Lenders, the Prepetition Lenders, their landlords, and their other prepetition unsecured creditors, to develop a go-forward path based on a reorganization of their business under a chapter 11 plan. (a) Marketing Process The Debtors engaged in a dual-track restructuring, pursuant to which they conducted a robust marketing process for some or all of their assets while engaging in negotiations with creditors to reorganize their business under a chapter 11 plan. In early November 2020, EFA Partners, the Debtors’ financial advisor, sent compiled an initial list of potential buyers.

Page 78

EFA Partners sent teasers to potential strategic buyers in the theater industry, strategic, non-theater buyers, and potential financial buyers. Via email and during phone calls, EFA Partners described the opportunity including renegotiated leases significantly lowering operating expense profile, the key selling points of the Debtors’ food and beverage program, and the relatively low upfront capital outlay for buyers as a Stalking Horse Bidder (as defined below). EFA Partners prepared and populated an online data room with relevant materials on the Debtors’ business. The data room provides potential purchasers with information regarding the Debtors’ business, operations and assets. Each of the bidders that has executed an NDA has entered the data room and accessed the Debtors’ company information. EFA Partners had calls with additional potential buyers and sent each of them a teaser and NDA. Each week in November and December, EFA Partners solicited responses by email and by phone from bidders that did not respond to initial emails and phone calls. In furtherance of the sale process, on November 5, 2020, the Debtors Filed the DEBTORS’ MOTION FOR (I) ENTRY OF AN ORDER APPROVING (A) BID PROCEDURES; (B) THE FORM AND MANNER OF NOTICE; (C) THE PROCEDURES FOR DETERMINING CURE AMOUNTS FOR EXECUTORY CONTRACTS AND UNEXPIRED LEASES; AND (II) ENTRY OF AN ORDER APPROVING (A) THE SALE OF SUBSTANTIALLY ALL OF THE DEBTORS’ ASSETS FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND INTERESTS; AND (B) THE ASSUMPTION AND ASSIGNMENT OF CERTAIN CONTRACTS AND UNEXPIRED LEASES (the “Bid Procedures Motion”) (ECF No. 133). The Bid Procedures Motion sought (i) entry of an order in the form of Exhibit A thereto (the “Bidding Procedures Order”) (a) approving the proposed bidding procedures attached as Annex 1 to the Bidding Procedures Order (the “Bidding Procedures”) by which the Debtors would solicit and select the highest or otherwise best offer for the sale of substantially all or any portion or combination of their assets, including new equity in Holdings issued pursuant to a plan of reorganization (the “Assets”) through one or more sales of the Assets (each, a “Transaction”); (b) establishing procedures for the assumption and assignment of executory contracts and unexpired leases, including notice of proposed cure amounts (the “Assumption and Assignment Procedures”); (c) approving the form and manner of notice of the Auction (defined below) and sale hearing (the “Sale Notice”) and Assumption and Assignment Procedures (the “Assumption Notice”), (d) approving the procedures governing the Debtors’ selection of one or more stalking horse bidders (each, a “Stalking Horse Bidder”), if any, and the provision of Bid Protections (defined therein) to such Stalking Horse Bidder(s), if necessary; and (e) scheduling (1) a date for an auction if the Debtors receive one or more timely and acceptable Qualified Bids (defined below) (the “Auction”) and (2) a final hearing (the “Sale Hearing”) to approve one or more Transactions, as necessary, and (f) granting related relief. The Bid Procedures Motion was approved at a hearing on December 8, 2020, and the Bid Procedures Order was entered on December 11, 2020 (ECF No. 335). On December 29, 2020, the Debtors filed the Notice of Extension of (I) Milestones Pursuant to Final Order (I) Authorizing Debtors to (A) Use Cash Collateral on a Limited Basis and (B) Obtain Postpetition Financing on a Secured, Superpriority Basis, (II) Granting Adequate Protection, and (III) Granting Related Relief and (II) Certain Deadlines Under Bid Procedures and Bid Procedures Order (ECF No. 383), extending deadlines for the sale procedures and plan. On January 22, 2021, the Debtors filed the Notice of Second Extension of (I) Certain Milestones Pursuant to Final Order (I) Authorizing Debtors to (A) Use Cash Collateral on a Limited Basis and (B) Obtain Postpetition

Page 79

Financing on a Secured, Superpriority Basis, (II) Granting Adequate Protection, and (III) Granting Related Relief and (II) Certain Deadlines Under Bid Procedures and Bid Procedures Order (ECF No. 535), extending the deadline for bids. On January 28, 2021, the Debtors filed the Notice of Agent’s Exercise of Plan Toggle Right and Adjournment of Sale Hearing Pursuant to Bid Procedures Order (ECF No. 557), therein announcing that the Debtors did not receive any qualifying bids by the deadline and that the Agent had exercised the Plan Toggle Right, thereby adjourning the sale hearing. (b) Negotiations with Creditors In parallel with their marketing process, the Debtors continued to engage with all key stakeholders regarding the terms of a consensual plan of reorganization in the event the Debtors were unable or elect not to sell substantially all of their assets, or pursue the Plan as proposed. To that end, the Debtors facilitated extensive formal and informal discussions with their landlords and certain trade creditors. The Debtors continue to engage in negotiations and discussions with their creditors. I. Expected Timetable of the Chapter 11 Cases The Debtors expect they will emerge from chapter 11 under the Plan by the end of March 2021. No assurances can be made, however, that the Bankruptcy Court will enter various orders on the timetable anticipated by the Debtors. VIII. RISK FACTORS Holders of Claims should read and consider carefully the risk factors set forth below before voting to accept or reject the Plan. Although there are many risk factors discussed below, these factors should not be regarded as constituting the only risks present in connection with the Debtors’ business or the Plan and its implementation. A. Bankruptcy Law Considerations The occurrence or non-occurrence of any or all of the following contingencies, and any others, could affect distributions available to Holders of Allowed Claims under the Plan but will not necessarily affect the validity of the vote of the Impaired Classes to accept or reject the Plan or necessarily require a re-solicitation of the votes of Holders of Claims in such Impaired Classes. (a) Parties in Interest May Object to the Plan’s Classification of Claims and Interests Section 1122 of the Bankruptcy Code provides that a plan may place a claim or an equity interest in a particular class only if such claim or equity interest is substantially similar to the other claims or equity interests in such class. The Debtors believe that the classification of the Claims and Interests under the Plan complies with the requirements set forth in the Bankruptcy Code because the Debtors created Classes of Claims and Interests each encompassing Claims or Interests, as applicable, that are substantially similar to the other Claims or Interests, as applicable, in each such Class. Nevertheless, there can be no assurance that the Bankruptcy Court will reach the same conclusion.

Page 80

(b) The Conditions Precedent to the Effective Date of the Plan May Not Occur As more fully set forth in Article IX of the Plan, the Confirmation Date and the Effective Date of the Plan are subject to a number of conditions precedent. If such conditions precedent are not met or waived, the Confirmation Date or the Effective Date will not take place. (c) The Debtors May Fail to Satisfy Vote Requirements If votes are received in number and amount sufficient to enable the Bankruptcy Court to confirm the Plan, the Debtors intend to seek, as promptly as practicable thereafter, Confirmation of the Plan. In the event that sufficient votes are not received, the Debtors may seek to confirm an alternative chapter 11 plan or proceed with a sale of all or substantially all of the Debtors’ assets pursuant to section 363 of the Bankruptcy Code. There can be no assurance that the terms of any such alternative chapter 11 plan or sale pursuant to section 363 of the Bankruptcy Code would be similar or as favorable to the Holders of Allowed Claims as those proposed in the Plan. (d) The Debtors May Not Be Able to Secure Confirmation of the Plan There can be no assurance that the requisite acceptances to confirm the Plan will be received. Even if the requisite acceptances are received, there can be no assurance that the Bankruptcy Court will confirm the Plan. A non-accepting Holder of an Allowed Claim might challenge either the adequacy of this Disclosure Statement or whether the balloting procedures and voting results satisfy the requirements of the Bankruptcy Code or Bankruptcy Rules. Even if the Bankruptcy Court determines that this Disclosure Statement, the balloting procedures, and the voting results are appropriate, the Bankruptcy Court could still decline to confirm the Plan if it finds that any of the statutory requirements for Confirmation are not met. If a chapter 11 plan of reorganization is not confirmed by the Bankruptcy Court, it is unclear whether the Debtors will be able to reorganize their business and what, if anything, Holders of Allowed Claims against them would ultimately receive on account of such Allowed Claims. Section 1129 of the Bankruptcy Code sets forth the requirements for confirmation of a chapter 11 plan, and requires, among other things, a finding by the Bankruptcy Court that: (a) such plan “does not unfairly discriminate” and is “fair and equitable” with respect to any non-accepting classes; (b) confirmation of such plan is not likely to be followed by a liquidation or a need for further financial reorganization unless such liquidation or reorganization is contemplated by the plan; and (c) the value of distributions to non-accepting Holders of claims and equity interests within a particular class under such plan will not be less than the value of distributions such Holders would receive if the Debtors were liquidated under chapter 7 of the Bankruptcy Code. Confirmation of the Plan is also subject to certain conditions as described in Article IX of the Plan. If the Plan is not confirmed, it is unclear what distributions, if any, Holders of Allowed Claims will receive on account of such Allowed Claims. Subject to the limitations contained in the Plan, and on prior notice to and with the consent of the Agent, the Debtors reserve the right to modify the terms and conditions of the Plan as necessary for Confirmation. Any such modifications could result in less favorable treatment of any non- accepting Class, as well as any Class junior to such non-accepting Class, than the treatment currently provided in the Plan. Such a less favorable treatment could include a distribution of property with a

Page 81

lesser value than currently provided in the Plan or no distribution whatsoever under the Plan. (e) Nonconsensual Confirmation In the event that any impaired class of claims or interests does not accept a chapter 11 plan, a bankruptcy court may nevertheless confirm a plan at the proponents’ request if at least one impaired class (as defined under section 1124 of the Bankruptcy Code) has accepted the plan (with such acceptance being determined without including the vote of any “insider” in such class), and, as to each impaired class that has not accepted the plan, the bankruptcy court determines that the plan “does not discriminate unfairly” and is “fair and equitable” with respect to the dissenting impaired class(es). The Debtors believe that the Plan satisfies these requirements, and the Debtors may request such nonconsensual Confirmation in accordance with subsection 1129(b) of the Bankruptcy Code. Nevertheless, there can be no assurance that the Bankruptcy Court will reach this conclusion. In addition, the pursuit of nonconsensual Confirmation or Consummation of the Plan may result in, among other things, increased expenses relating to professional compensation. (f) The Chapter 11 Cases May Be Converted to Cases under Chapter 7 of the Bankruptcy Code If the Bankruptcy Court finds that it would be in the best interest of creditors and/or the debtor in a chapter 11 case, the Bankruptcy Court may convert a chapter 11 bankruptcy case to a case under chapter 7 of the Bankruptcy Code. In such event, a chapter 7 trustee would be appointed or elected to liquidate the debtor’s assets for distribution in accordance with the priorities established by the Bankruptcy Code. The Debtors believe that liquidation under chapter 7 would result in significantly smaller distributions being made to creditors than those provided for in a chapter 11 plan because of (a) the likelihood that the assets would have to be sold or otherwise disposed of in a disorderly fashion over a short period of time rather than reorganizing or selling in a controlled manner affecting the business as a going concern, (b) additional administrative expenses involved in the appointment of a chapter 7 trustee, and (c) additional expenses and Claims, some of which would be entitled to priority, that would be generated during the liquidation, including Claims resulting from the rejection of Unexpired Leases and Executory Contracts. (g) The Debtors May Object to the Amount or Classification of a Claim Except as otherwise provided in the Plan, the Debtors reserve the right to object to the amount or classification of any Claim under the Plan. The estimates set forth in this Disclosure Statement cannot be relied upon by any Holder of a Claim, as the Debtors may seek to investigate, File, and prosecute Claims and may object to Claims after the Confirmation or Effective Date of the Plan irrespective of whether this Disclosure Statement identifies any such Claims or objections to Claims such Claim is subject to an objection. Any Holder of a Claim thus may not receive its expected share of the estimated distributions described in this Disclosure Statement. (h) Contingencies Could Affect Votes of Impaired Classes to Accept or Reject the Plan The distributions available to Holders of Allowed Claims under the Plan can be affected by a variety of contingencies, including, without limitation, whether the Bankruptcy Court orders certain Allowed Claims to be subordinated to other Allowed Claims. The occurrence of any and all such

Page 82

contingencies, which could affect distributions available to Holders of Allowed Claims under the Plan, will not affect the validity of the vote taken by the Impaired Classes to accept or reject the Plan or require any sort of revote by the Impaired Classes. The estimated Claims and creditor recoveries set forth in this Disclosure Statement are based on various assumptions, and the actual Allowed amounts of Claims may significantly differ from the estimates. Should one or more of the underlying assumptions ultimately prove to be incorrect, the actual Allowed amounts of Claims may vary from the estimated Claims contained in this Disclosure Statement. Moreover, the Debtors cannot determine with any certainty at this time, the number or amount of Claims that ultimately will be Allowed. Such differences may materially and adversely affect, among other things, the percentage recoveries to Holders of Allowed Claims under the Plan. (i) Releases, Injunctions, and Exculpations Provisions May Not Be Approved Article VIII of the Plan provides for certain releases, injunctions, and exculpations, including a release of liens and third party releases that may otherwise be asserted against the Debtors, the Reorganized Debtors, or the Released Parties. The releases, injunctions, and exculpations provided in the Plan are subject to objection by parties in interest and may not be approved. (j) Risk of Non-Occurrence of the Effective Date Although the Debtors believe that the Effective Date may occur quickly after the Confirmation Date, there can be no assurance as to such timing or as to whether the Effective Date will, in fact, occur. If the Effective Date does not occur, the Plan shall be null and void in all respects and nothing contained in the Plan or this Disclosure Statement shall: (a) constitute a waiver or release of any Claims by or Claims against or Interests in the Debtors; (b) prejudice in any manner the rights of the Debtors, any Holder of a Claim or Interest, or any other Entity; (c) constitute an admission, acknowledgment, offer, or undertaking by the Debtors, any Holders of Claims or Interests, or any other Entity in any respect; or (d) be used by the Debtors or any Entity as evidence (or otherwise) in any litigation, including with regard to the strengths or weaknesses of any of the parties’ positions, arguments, or claims. (k) Risk of Loss of Exclusive Right to Propose a Plan At the outset of the Chapter 11 Cases, the Bankruptcy Code provides the Debtors with the exclusive right to propose a plan and prohibits creditors and others from proposing a plan. If the Bankruptcy Court terminates that right, however, or the exclusivity period expires, there could be a material adverse effect on the Debtors’ ability to achieve confirmation of the Plan in order to achieve the Debtors’ stated goals. (l) Continued Risk upon Confirmation Even if the Plan is consummated, the Reorganized Debtors will continue to face a number of risks, including certain risks that are beyond their control, such as further deterioration or other changes in economic conditions, changes in the movie theater industry, potential revaluing of their assets due to chapter 11 proceedings, changes in consumer demand for in-theater movie viewing, and increasing expenses. Some of these concerns and effects typically become more acute when a case under the Bankruptcy Code continues for a protracted period without indication of how or when the

Page 83

case may be completed. As a result of these risks and others, there is no guarantee that a chapter 11 plan of reorganization reflecting the Plan will achieve the Debtors’ stated goals. Further, even if the Debtors’ debts are reduced and/or discharged through the Plan, the Reorganized Debtors may need to raise additional funds through public or private debt or equity financing or other various means to fund the Debtors’ business after the completion of the proceedings related to the Chapter 11 Cases. Adequate funds may not be available when needed or may not be available on favorable terms. B. Risks Related to the Debtors’ Operations During and After These Chapter 11 Cases The Debtors face substantial risks for the duration of the Chapter 11 Cases, which may impact their business while in Chapter 11 and afterwards. The Debtors, with the assistance of their advisors, have considered these risks in formulating the Plan. 1. The Debtors Will Be Subject to the Risks and Uncertainties Associated with the Chapter 11 Cases During the duration of the Chapter 11 Cases, the Debtors’ ability to operate, develop, and execute a business plan, and continue as a going concern, will be subject to the risks and uncertainties associated with bankruptcy. These risks include the following: (a) ability to develop, confirm, and consummate the Restructuring Transactions (including the corporate transactions necessary or desirable to implement the Plan); (b) ability to obtain Bankruptcy Court approval with respect to motions Filed in the Chapter 11 Cases from time to time; (c) ability to maintain relationships with suppliers, service providers, customers, employees, and certain other third parties; (d) ability to maintain contracts that are critical to the Debtors’ operations and potential for a loss of, or a disruption in the materials or services received from suppliers, contractors or service providers with whom the Debtors have commercial relationships; (e) ability of third parties to seek and obtain Court approval to terminate contracts and other agreements with the Debtors; (f) ability of third parties to seek and obtain Court approval to terminate or shorten the exclusive period for the Debtors to propose and confirm a chapter 11 plan, to appoint a chapter 11 trustee, or to convert the Chapter 11 Cases to chapter 7 proceedings; and (g) the actions and decisions of the Debtors’ creditors and other third parties who have interests in the Chapter 11 Cases that may be inconsistent with the Debtors’ business plan. These risks and uncertainties could affect the Debtors’ business and operations in various ways. For example, negative events associated with the Chapter 11 Cases could adversely affect the Debtors’ relationships with suppliers, service providers, customers, employees, and other third parties, which in turn could adversely affect the Debtors’ operations and financial condition. Also, the Debtors will need the prior approval of the Bankruptcy Court for transactions outside the ordinary course of business, which may limit the Debtors’ ability to respond timely to certain events or take advantage of certain opportunities. Because of the risks and uncertainties associated with the Chapter 11 Cases, the Debtors cannot accurately predict or quantify the ultimate impact of events that occur during the Chapter 11 Cases that may be inconsistent with the Debtors’ business plan.

Page 84

2. Operating in Bankruptcy for a Long Period of Time May Harm the Debtors’ Business A long period of operations under Bankruptcy Court protection could have a material adverse effect on the Debtors’ business, financial condition, results of operations, and liquidity. So long as the proceedings related to the Chapter 11 Cases continue, senior management will be required to spend a significant amount of time and effort dealing with the reorganization instead of focusing exclusively on business operations. A prolonged period of operating under Bankruptcy Court protection also may make it more difficult to retain management and other key personnel necessary to the success and growth of the Debtors’ business. In addition, the longer the proceedings related to the Chapter 11 Cases continue, the more likely it is that suppliers will lose confidence in the Debtors’ ability to reorganize their business successfully and will seek to limit their relationship with the Debtors. So long as the proceedings related to the Chapter 11 Cases continue, the Debtors will be required to incur substantial costs for professional fees and other expenses associated with the administration of the Chapter 11 Cases. Further, the Debtors may experience significant costs and delays due to litigation during the Chapter 11 Cases. The DIP Loan may not be sufficient to support day-to-day operations in the event of a prolonged restructuring process and the Debtors may be required to seek additional debtor in possession financing to fund operations. It is uncertain whether the Debtors will be unable to secure additional funding. If the Debtors are unable to obtain such financing on favorable terms or at all, chances of successfully reorganizing the Debtors’ business may be seriously jeopardized, the likelihood that the Debtors instead will be required to liquidate their assets may be enhanced, and, as a result, any claims and securities in the Debtors could become further devalued or become worthless. Further, the Debtors cannot predict the ultimate settlement terms for the liabilities that will be subject to a plan of reorganization. Even after a plan of reorganization is approved and implemented, the Reorganized Debtors’ operating results may be adversely affected by the possible reluctance of prospective lenders and other counterparties to do business with a company that recently emerged from bankruptcy protection. 3. Financial Results May Be Volatile and May Not Reflect Historical Trends, Which May Reduce Amounts Payable to Unsecured Creditors During the Chapter 11 Cases, the Debtors expect that their financial results will continue to be volatile as operation of their theaters will be subject to ongoing changes in government regulations, including stay at home orders. As a result, the Debtors’ historical financial performance likely will not be indicative of their financial performance after the Petition Date. As a result, the estimates are inherently imprecise evaluations of theater attendance and future net revenues. In addition, if the Debtors emerge from chapter 11, the amounts reported in subsequent consolidated financial statements may materially change relative to historical consolidated financial statements, including as a result of revisions to the Debtors’ operating plans pursuant to a plan of reorganization. The Debtors also may be required to adopt fresh start accounting, in which case their assets and liabilities will be recorded at fair value as of the fresh start reporting date, which may differ materially from the recorded values of assets and liabilities on the Debtors’ consolidated balance sheets. The Debtors’ financial results after the application of fresh start accounting also may be different from historical trends.

Page 85

4. The Debtors’ Operations May Be Restricted By the Availability of DIP Financing The Debtors’ principal sources of liquidity historically have been internally generated Cash flows from operations, borrowings under certain credit agreements, dispositions of non-strategic assets, and intercompany loans. During the pendency of the Chapter 11 Cases, the Debtors’ liquidity depends mainly on Cash generated from operating activities and available funds under the DIP Loan. The Debtors’ future ability to operate their theaters is uncertain and will be affected by the levels of Cash flow from operations, development activities, and other events or circumstances beyond the Debtors’ control. If market or other economic conditions deteriorate, the Debtors’ ability to continue to operate may be impaired. 5. Uncertainty Concerning the Debtors’ Ability to Re-Open Their Theaters Profitably, Due to Stay at Home Orders and the Unavailability of New Films The Debtors’ post-confirmation operations are subject to uncertainty, due to various state issued stay at home orders and the potential unavailability of new films to show in their theaters. The stay at home orders may preclude the Debtors from operating their theaters at a capacity sufficient to generate profits, and the unavailability of new, first-run films may similarly impact attendance and revenues. C. Risks Related to Recoveries Provided Under the Plan Certain risks may affect the recoveries provided under the Plan. 1. Timing and Amount of Distributions Various factors will impact the amount of recoveries that Holders of Allowed Claims receive, including, without limitation, the degree to which objections to Claims are successful. Further, due to the nature of litigation, it may take years to fully adjudicate, decide, or resolve objections to Claims. As a result, Holders of Allowed Claims may not receive final distributions in accordance to the Plan for a prolonged period of time following the Effective Date. 2. The Debtors May Not Be Able to Achieve their Projected Financial Results The Debtors may not be able to achieve their projected financial results. The Financial Projections set forth in this Disclosure Statement represent the Debtors’ management team’s best estimate of the Debtors’ future financial performance, which is necessarily based on certain assumptions regarding the anticipated future performance of the Debtors’ operations, as well as the United States and world economies in general, and the industry segments in which the Debtors operate in particular. While the Debtors believe that the financial projections contained in this Disclosure Statement are reasonable, there can be no assurance that they will be realized. If the Debtors do not achieve their projected financial results, the value of the New Units will be negatively affected. The Reorganized Debtors may lack sufficient liquidity to continue operating as planned after the Effective Date. Moreover, the financial condition and results of operations of the

Page 86

Reorganized Debtors from and after the Effective Date may not be comparable to the financial condition or results of operations reflected in the Debtors’ historical financial statements. 3. Certain Tax Implications of the Plan Consummation of the Plan may result in significant tax implications for the Debtors and Holders of Claims. Holders of Allowed Claims should carefully review Article XII of this Disclosure Statement, entitled “CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN,” to determine how the tax implications of the Plan and the Chapter 11 Cases may adversely affect the Reorganized Debtors and Holders of Claims. 4. The Reorganized Debtors May Not Be Able to Operate Profitably The Reorganized Debtors’ ability to operate profitably and generate sufficient cash flow to sustain their business remain subject to prevailing economic, industry, and competitive conditions and to certain financial, business, legislative, regulatory, and other factors beyond the Reorganized Debtors’ control. 5. The Reorganized Debtors May Be Adversely Affected by Potential Litigation, Including Litigation Arising Out of the Chapter 11 Cases or by the Resolution of Pending Litigation Unrelated to the Chapter 11 Proceedings The Reorganized Debtors may become parties to litigation or litigation in which the Debtors are already a party may not be resolved in the Reorganized Debtors’ favor. In general, litigation can be expensive and time consuming to bring or defend against. Such litigation could result in settlements or damages that could significantly affect the Reorganized Debtors’ financial results. It is also possible that certain parties will commence litigation with respect to the treatment of their Claims under the Plan. It is not possible to predict the potential litigation that the Reorganized Debtors may become party to, nor the final resolution of any litigation. The impact of any such litigation on the Reorganized Debtors’ business and financial stability, however, could be material. 6. Certain Claims May Not Be Discharged and Could Have a Material Adverse Effect on the Reorganized Debtors’ Financial Condition and Results of Operations The Bankruptcy Code provides that the confirmation of a plan of reorganization discharges a debtor from substantially all debts arising prior to confirmation. With few exceptions, all Claims that arise prior to the Debtors’ Filing of their Petitions or before confirmation of the Plan (a) would be subject to compromise and/or treatment under the Plan and/or (b) would be discharged in accordance with the terms of the Plan. However, the Debtors may assume certain prepetition agreements that include certain indemnification obligations. As such, the Reorganized Debtors may retain liabilities under such agreements that may be material. Further, any Claims not ultimately discharged through the Plan could be asserted against the Reorganized Debtors and may have an adverse effect on the Reorganized Debtors’ financial condition and results of operations on a post-reorganization basis. 7. The Result of the Panterra Actions are Uncertain

Page 87

As discussed in section VII.G.3, the Panterra Actions are being transferred and assigned to the GUC Trust for the benefit of Holders of Allowed GUC Claims. In the Panterra Actions, the Debtors assert Causes of Action that may be worth up to $7.2 million. As provided in the Plan, the GUC Trust will receive the first $4.0 million of net proceeds of the Panterra Actions and 50% of any recovery above $4.0 million. Accordingly, the likely maximum amount available to Holders of Allowed GUC Claims attributable to the Panterra Claims is $5.6 million. However, as explained in further detail in section VII.G.3, the extent to which the GUC Trust will be able to obtain a recovery in the Panterra Actions is uncertain and dependent upon a variety of factors. Further, although vigorously disputed, a third party asserts a right to any proceeds from the Panterra Actions. Accordingly, the Panterra Actions’ value to Holders of Allowed GUC Claims is unknown. IX. SOLICITATION AND VOTING PROCEDURES This Disclosure Statement, which is accompanied by a Ballot or Ballots to be used for voting on the Plan, is being distributed to the Holders of Claims in those Classes that are entitled to vote to accept or reject the Plan. The procedures and instructions for voting and related deadlines will be set forth in the Disclosure Statement Order, form of which is attached hereto as Exhibit B. The Disclosure Statement Order is incorporated herein by reference and should be read in conjunction with this Disclosure Statement and in formulating a decision to vote to accept or reject the Plan. THE DISCUSSION OF THE SOLICITATION AND VOTING PROCESS SET FORTH IN THIS DISCLOSURE STATEMENT IS ONLY A SUMMARY. PLEASE REFER TO THE DISCLOSURE STATEMENT ORDER ATTACHED HERETO FOR A MORE COMPREHENSIVE DESCRIPTION OF THE SOLICITATION AND VOTING PROCESS. A. Holders of Claims Entitled to Vote on the Plan Under the provisions of the Bankruptcy Code, not all Holders of Claims against a debtor are entitled to vote on a chapter 11 plan. The table in Article IV.C of this Disclosure Statement, entitled “Am I entitled to vote on the Plan?,” provides a summary of the status and voting rights of each Class (and, therefore, of each Holder within such Class absent an objection to the Holder’s Claim) under the Plan. As shown in the table, the Debtors are soliciting votes to accept or reject the Plan only from Holders of Claims in Classes 2, 3, 4, 5 and 6 (collectively, the “Voting Classes”). The Holders of Claims in the Voting Classes are Impaired under the Plan and may, in certain circumstances, receive a distribution under the Plan. Accordingly, Holders of Claims in the Voting Classes have the right to vote to accept or reject the Plan. The Debtors are not soliciting votes from Holders of Claims and Interests in Classes 1, 7, 8, 9 and 10. Additionally, the Disclosure Statement Order provides that certain Holders of Claims in the Voting Classes, such as those Holders whose Claims have been disallowed, are not entitled to vote to accept or reject the Plan. B. Voting Record Date

Page 88

The Voting Record Date is [•]. The Voting Record Date is the date on which it will be determined which Holders of Claims in the Voting Classes are entitled to vote to accept or reject the Plan and whether Claims have been properly assigned or transferred under Bankruptcy Rule 3001(e) such that an assignee or transferee, as applicable, can vote to accept or reject the Plan as the Holder of a Claim. C. Voting on the Plan The Voting Deadline is [•], at 4:00 p.m. (prevailing Central Time). In order to be counted as votes to accept or reject the Plan, Ballots must be returned as directed and received by the Voting Deadline. Ballots can be returned in one of two ways. First, a Ballot can be completed and sent to the Debtors’ claims agent, Donlin Recano & Co. (“DRC”) at: Donlin, Recano & Company, Inc. Re: Studio Movie Grill Holdings, LLC, et al. 6201 15th Avenue Brooklyn, NY 11219 Ballots can also be submitted electronically through DRC’s website at https://www.donlinrecano.com/Clients/smgh/Index. Please carefully review the Disclosure Statement Order (and attachments) for more information on how to cast a Ballot. D. Ballots Not Counted [No Ballot will be counted toward Confirmation if, among other things: (1) it is illegible or contains insufficient information to permit the identification of the Holder of the Claim; (2) it was transmitted by facsimile, email, or other electronic means other than as specifically set forth in the ballots; (3) it was cast by an Entity that is not entitled to vote on the Plan; (4) it was cast for a Claim listed in the Debtors’ Schedules as contingent, unliquidated, or disputed for which the applicable Claims Bar Date has passed and no Proof of Claim was timely Filed; (5) it was cast for a Claim that is subject to an objection pending as of the date that is fourteen (14) days before the Voting Deadline (unless temporarily allowed in accordance with the Disclosure Statement Order); (6) it was sent to the Debtors, the Debtors’ agents/representatives (other than the Noticing Agent), an administrative agent, an indenture trustee, or the Debtors’ financial or legal advisors instead of the Noticing Agent; (7) it is unsigned; or (8) it is not clearly marked to either accept or reject the Plan or it is marked both to accept and reject the Plan. Please refer to the Disclosure Statement Order (and attachments) for additional requirements with respect to voting to accept or reject the Plan.]

Page 89

IF YOU HAVE ANY QUESTIONS ABOUT THE SOLICITATION OR VOTING PROCESS, PLEASE EMAIL FRANK J. WRIGHT (FRANK@FJWRIGHT.LAW) AND JEFFERY M. VETETO (JEFF@FJWRIGHT.LAW) AND REFERENCE “Studio Movie Grill” IN THE SUBJECT LINE OR CALL THE PHONE NUMBER LISTED ON YOUR BALLOT. ANY BALLOT RECEIVED AFTER THE VOTING DEADLINE OR OTHERWISE NOT IN COMPLIANCE WITH THE DISCLOSURE STATEMENT ORDER WILL NOT BE COUNTED. X. CONFIRMATION OF THE PLAN A. Requirements for Confirmation of the Plan Among the requirements for Confirmation of the Plan pursuant to section 1129 of the Bankruptcy Code are: (1) the Plan is accepted by all Impaired Classes of Claims or Interests, or if rejected by an Impaired Class, the Plan “does not discriminate unfairly” and is “fair and equitable” as to the rejecting Impaired Class; (2) the Plan is feasible; and (3) the Plan is in the “best interests” of Holders of Claims and Interests. At the Confirmation Hearing, the Bankruptcy Court will determine whether the Plan satisfies all of the requirements of section 1129 of the Bankruptcy Code. The Debtors believe that: (1) the Plan satisfies, or will satisfy, all of the necessary statutory requirements of chapter 11; (2) the Debtors have complied, or will have complied, with all of the necessary requirements of chapter 11; and (3) the Plan has been proposed in good faith. If any Parties intend to seek discovery in connection with Confirmation of the Plan, such Parties are encouraged to seek such discovery as soon as possible, because there is no guarantee that there will be sufficient funds to finance the Chapter 11 Cases if the Confirmation Hearing is delayed due to protracted Plan discovery. B. Best Interests of Creditors/Liquidation Analysis Often called the “best interests” test, section 1129(a)(7) of the Bankruptcy Code requires that a bankruptcy court find, as a condition to confirmation, that a chapter 11 plan provides, with respect to each impaired class, that each Holder of a claim or an equity interest in such impaired class either (1) has accepted the plan or (2) will receive or retain under the plan property of a value that is not less than the amount that the non-accepting Holder would receive or retain if the Debtors liquidated under chapter 7. Attached hereto as Exhibit D and incorporated herein by reference is a liquidation analysis (the “Liquidation Analysis”) prepared by the Debtors. As reflected in the Liquidation Analysis, the Debtors believe that liquidation of the Debtors’ business under chapter 7 of the Bankruptcy Code would result in substantial diminution in the value to be realized by Holders of Claims as compared to distributions contemplated under the Plan. Consequently, the Debtors and their management believe that Confirmation of the Plan will provide a substantially greater return to Holders of Claims than would a liquidation under chapter 7 of the Bankruptcy Code.

Page 90

If the Plan is not confirmed, and the Debtors fail to propose and confirm an alternative plan of reorganization, the Debtors’ business may be liquidated pursuant to the provisions of a chapter 11 liquidating plan. In liquidations under chapter 11, the Debtors’ assets could be sold in an orderly fashion over a more extended period of time than in a liquidation under chapter 7. Thus, a chapter 11 liquidation may result in larger recoveries than a chapter 7 liquidation, but the delay in distributions could result in lower present values received and higher administrative costs. Any distribution to Holders of Claims under a chapter 11 liquidation plan would most likely be substantially delayed. Most importantly, the Debtors believe that any distributions to creditors in a chapter 11 liquidation scenario would fail to capture the significant going concern value of their business, which is reflected in the New Units to be distributed under the Plan. Accordingly, the Debtors believe that a chapter 11 liquidation would not result in distributions as favorable as those under the Plan. C. Feasibility Section 1129(a)(11) of the Bankruptcy Code requires that confirmation of a plan of reorganization is not likely to be followed by the liquidation, or the need for further financial reorganization of the debtor, or any successor to the debtor (unless such liquidation or reorganization is proposed in such plan of reorganization). To determine whether the Plan meets this feasibility requirement, the Debtors, with the assistance of William Snyder, its Chief Restructuring Officer, have analyzed their ability to meet their respective obligations under the Plan. As part of this analysis, the Debtors prepared forecasted, post reorganized financial projections (the “Financial Projections”) for the annual periods ending December 31, 2021 (fiscal year 2021) through December 31, 2023 (fiscal year 2023) (the “Projection Period”). The Financial Projections were prepared based on a number of assumptions made by the Debtors’ management team as to the future performance of the Reorganized Debtors, and reflect management’s judgement and expectations regarding its future operations and financial position. The Financial Projections are based on an assumption that the Plan is consummated on or around [●], 2021; to the extent that the Effective Date occurs before or after such date, recoveries on account of Allowed Claims could be impacted. Creditors and other interested parties should review Article VIII of this Disclosure Statement, entitled “RISK FACTORS” for a discussion of certain factors that may affect the future financial performance of the Reorganized Debtors. The Financial Projections are attached hereto as Exhibit C and incorporated herein by reference. Based upon the Financial Projections, the Debtors believe that they will be a viable operation following the Chapter 11 Cases and that the Plan will meet the feasibility requirements of the Bankruptcy Code. D. Acceptance by Impaired Classes The Bankruptcy Code requires, as a condition to confirmation, except as described in the following section, that each class of claims or equity interests impaired under a plan, accepts the plan. A class that is not “impaired” under a plan is deemed to have accepted the plan and, therefore, solicitation of votes with respect to such a class is not required. Section 1126(c) of the Bankruptcy Code defines acceptance of a plan by a class of impaired claims as acceptance by Holders of at least two-thirds in a dollar amount and more than one-half in a

Page 91

number of allowed claims in that class, counting only those claims that have actually voted to accept or to reject the plan. Thus, a class of claims will have voted to accept the plan only if two-thirds in amount and a majority in number actually cast their ballots in favor of acceptance. E. Confirmation without Acceptance by All Impaired Classes Section 1129(b) of the Bankruptcy Code allows a bankruptcy court to confirm a plan even if all impaired classes have not accepted it; provided that the plan has been accepted by at least one impaired class. Pursuant to section 1129(b) of the Bankruptcy Code, notwithstanding an impaired class’s rejection or deemed rejection of the plan, the plan will be confirmed, at the plan proponent’s request, in a procedure commonly known as a “cramdown” so long as the plan does not “discriminate unfairly” and is “fair and equitable” with respect to each class of claims or equity interests that is impaired under, and has not accepted, the plan. If any Impaired Class rejects the Plan, the Debtors reserve the right to seek to confirm the Plan utilizing the “cramdown” provision of section 1129(b) of the Bankruptcy Code. To the extent that any Impaired Class rejects the Plan or is deemed to have rejected the Plan, the Debtors will request Confirmation of the Plan, as it may be modified from time to time, under section 1129(b) of the Bankruptcy Code. Subject to the limitations contained in the Plan, and on prior notice to and with the consent of the Agent, the Debtors reserve the right to alter, amend, modify, revoke, or withdraw the Plan or any Plan Supplement document, including the right to amend or modify the Plan or any Plan Supplement document to satisfy the requirements of section 1129(b) of the Bankruptcy Code. 1. No Unfair Discrimination The “unfair discrimination” test applies to classes of claims or interests that are of equal priority and are receiving different treatment under a plan. The test does not require that the treatment be the same or equivalent, but that treatment be “fair.” In general, bankruptcy courts consider whether a plan discriminates unfairly in its treatment of classes of claims of equal rank (e.g., classes of the same legal character). Bankruptcy courts will take into account a number of factors in determining whether a plan discriminates unfairly. A plan could treat two classes of unsecured creditors differently without unfairly discriminating against either class. 2. Fair and Equitable Test The “fair and equitable” test applies to classes of different priority and status (e.g., secured versus unsecured) and includes the general requirement that no class of claims receive more than 100 percent of the amount of the allowed claims in the class. As to the dissenting class, the test sets different standards depending upon the type of claims or equity interests in the class. The Debtors submit that if the Debtors “cramdown” the Plan pursuant to section 1129(b) of the Bankruptcy Code, the Plan is structured so that it does not “discriminate unfairly” and satisfies the “fair and equitable” requirement. With respect to the unfair discrimination requirement, all Classes under the Plan are provided treatment that is substantially equivalent to the treatment that is provided to other Classes that have equal rank. With respect to the fair and equitable requirement, no Class under the Plan will receive more than 100 percent of the amount of Allowed Claims in that Class. The Debtors believe that the Plan and the treatment of all Classes of Claims and Interests under the Plan satisfy the foregoing requirements for nonconsensual Confirmation of the Plan.

Page 92

F. The Plan Supplement The Debtors will File certain documents that provide additional details regarding implementation of the Plan in the Plan Supplement, which will be Filed with the Bankruptcy Court. The Plan Supplement will include documents in accordance with the Disclosure Statement Order. The Debtors may amend the documents contained in, and exhibits to, the Plan Supplement through the Effective Date. Copies of the Plan Supplement documents will be available on the website of the Debtors’ Notice and Claims Agent at https://www.donlinrecano.com/Clients/smgh/Index or the Bankruptcy Court’s website at https://ecf.txnb.uscourts.gov/ (for a fee). XI. CERTAIN SECURITIES LAW MATTERS A. New Units As discussed herein, the Plan provides for the Reorganized Debtors to distribute the New Units to the DIP Lenders and/or the Prepetition Lenders. The New Units may be “securities,” as defined in Section 2(a)(1) of the Securities Act, section 101 of the Bankruptcy Code, and applicable state securities laws. The Class B Common Units issued pursuant to the Management Incentive Plan, if applicable, will be issued pursuant to a registration statement or another available exemption from registration under the Securities Act and other applicable law. B. Issuance and Resale of New Units under the Plan 1. Private Placement Exemptions The offering, issuance, and distribution of the New Units shall be exempt from, among other things, the registration requirements of section 5 of the Securities Act and any other applicable law requiring registration prior to the offering, issuance, distribution, or sale of Securities in accordance with, and pursuant to, section 1145 of the Bankruptcy Code. Such New Units will be freely tradable in the United States by the recipients thereof, subject to the provisions of section 1145(b)(1) of the Bankruptcy Code relating to the definition of an underwriter in section 1145(b) of the Bankruptcy Code, and compliance with applicable securities laws and any rules and regulations of the United States Securities and Exchange Commission, if any, applicable at the time of any future transfer of such Securities or instruments and subject to any restrictions in the New Organizational Documents. RECIPIENTS OF NEW UNITS ARE ADVISED TO CONSULT WITH THEIR OWN LEGAL ADVISORS AS TO THE AVAILABILITY OF ANY EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE BLUE SKY LAW. 2. Resale of New Units; Definition of Underwriter Section 1145(b)(1) of the Bankruptcy Code defines an “underwriter” as one who, except with respect to “ordinary trading transactions” of an Entity that is not an “issuer”: (a) purchases a claim against, interest in, or claim for an administrative expense in the case concerning, the debtor, if such purchase is with a view to distribution of any security received or to be received in exchange for such

Page 93

claim or interest; (b) offers to sell securities offered or sold under a plan for the Holders of such securities; (c) offers to buy securities offered or sold under a plan from the Holders of such securities, if such offer to buy is (i) with a view to distribution of such securities and (ii) under an agreement made in connection with the plan, with the consummation of the plan, or with the offer or sale of securities under the plan; or (d) is an issuer of the securities within the meaning of section 2(a)(11) of the Securities Act. In addition, a Person who receives a fee in exchange for purchasing an issuer’s securities could also be considered an underwriter within the meaning of section 2(a)(11) of the Securities Act. The definition of an “issuer” for purposes of whether a Person is an underwriter under section 1145(b)(1)(D) of the Bankruptcy Code, by reference to section 2(a)(11) of the Securities Act, includes as “statutory underwriters” all persons who, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with, an issuer of securities. The reference to “issuer,” as used in the definition of “underwriter” contained in section 2(a)(11) of the Securities Act, is intended to cover “Controlling Persons” of the issuer of the securities. “Control,” as defined in Rule 405 of the Securities Act, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. Accordingly, an officer or director of a reorganized debtor or its successor under a plan of reorganization may be deemed to be a “Controlling Person” of the debtor or successor, particularly if the management position or directorship is coupled with ownership of a significant percentage of the reorganized debtor’s or its successor’s voting securities. While there is no precise definition of a “controlling” stockholder, the legislative history of section 1145 of the Bankruptcy Code suggests that a creditor who owns ten percent or more of a class of securities of a reorganized debtor may be presumed to be a “Controlling Person” and, therefore, an underwriter. Resales of New Units by Entities deemed to be “underwriters” (which definition includes “Controlling Persons”) are not exempted by section 1145 of the Bankruptcy Code from registration under the Securities Act or other applicable law. Under certain circumstances, Holders of New Units who are deemed to be “underwriters” may be entitled to resell their New Units pursuant to the limited safe harbor resale provisions of Rule 144 of the Securities Act. Generally, Rule 144 of the Securities Act would permit the public sale of securities received by such Person if the required holding period has been met and, under certain circumstances, current information regarding the issuer is publicly available and volume limitations, manner of sale requirements and certain other conditions are met. Whether any particular Person would be deemed to be an “underwriter” (including whether the Person is a “Controlling Person”) with respect to the New Units would depend upon various facts and circumstances applicable to that Person. Given the complex nature of the question of whether a particular person may be an underwriter and other issues arising under applicable securities laws, accordingly, the Debtors express no view as to whether any Person would be deemed an “underwriter” with respect to the New Units and, in turn, whether any Person may freely resell New Units. The Debtors recommend that potential recipients of New Units consult their own counsel concerning their ability to freely trade such securities without compliance with the federal law and any applicable state Blue Sky Law. 3. New Units / Management Incentive Plan The Reorganized SMG A&R LLCA shall provide for a Management Incentive Plan for the issuance of Class B Common Units to management and other service providers. The participants in

Page 94

the Management Incentive Plan, the timing and allocations of the awards to participants, and the other terms and conditions of such awards (including, but limited to, vesting, exercise prices, base values, hurdles, forfeiture, repurchase rights, and transferability) shall be set forth in the Reorganized SMG A&R LLCA and award agreements with participants, to the extent applicable. XII. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN A. Introduction The following discussion summarizes certain U.S. federal income tax consequences of the implementation of the Plan to the Debtors, the Reorganized Debtors, and U.S. Holders (as defined below) of Claims entitled to vote on the Plan (i.e., U.S. Holders of Allowed Class 2, Class 3, Class 4, Class 5 Claims, and Class 6 Claims). This summary is provided for informational purposes only and is based on the Internal Revenue Code of 1986, as amended (the “Tax Code”), the U.S. Treasury Regulations promulgated thereunder (the “Treasury Regulations”), judicial decisions and published administrative rulings, and pronouncements of the Internal Revenue Service (the “IRS”), all as in effect on the date hereof (collectively, “Applicable Tax Law”). Changes in the rules or new interpretations of the rules may have retroactive effect and could significantly affect the U.S. federal income tax consequences described below. The Debtors have not requested, and will not request, any ruling or determination from the IRS or any other taxing authority with respect to the tax consequences discussed herein, and the discussion below is not binding upon the IRS or the courts. No assurance can be given that the IRS would not assert, or that a court would not sustain, a different position than any position discussed herein. This discussion only addresses U.S. federal income tax consequences to U.S. Holders and does not address any other U.S. federal tax consequences (such as estate and gift tax consequences) of the Plan, any foreign, state, or local tax consequences of the Plan, nor does it purport to address all aspects of U.S. federal income taxation that may be relevant to a U.S. Holder in light of its individual circumstances or to a U.S. Holder that may be subject to special tax rules (such as persons who are related to the Debtors within the meaning of the Tax Code, persons liable for alternative minimum tax, foreign taxpayers, broker-dealers, banks, mutual funds, insurance companies, financial institutions, regulated investment companies, tax exempt organizations, pass-through entities, beneficial owners of pass-through entities, subchapter S corporations, persons who hold Claims or who will hold the New Units as part of a straddle, hedge, conversion transaction, or other integrated investment and persons using a mark-to-market method of accounting). Further, this summary assumes that a U.S. Holder of a Claim holds only Claims in a single Class and holds a Claim only as a “capital asset” (within the meaning of section 1221 of the Tax Code) and this summary does not address the tax consequences of any U.S. Holder of a Claim owning the Agent Panterra Assets acquired pursuant to the Equitization Restructuring or any assets acquired pursuant to the exercise of a Credit Bid Right. This summary assumes that the various debt and other arrangements to which any of the Debtors or Reorganized Debtors are or will be party will be respected for U.S. federal income tax purposes in accordance with their form. This summary also assumes that the Agent Trust and GUC Trust will qualify as liquidating trusts for U.S. federal income tax purposes. For purposes of this discussion, a “U.S. Holder” is a Holder of a Claim that is: (1) an individual citizen or resident of the United States for U.S. federal income tax purposes; (2) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized under

Page 95

the laws of the United States, any state thereof or the District of Columbia; (3) an estate the income of which is subject to U.S. federal income taxation regardless of the source of such income; or (4) a trust (A) if a court within the United States is able to exercise primary jurisdiction over the trust’s administration and one or more United States persons have authority to control all substantial decisions of the trust or (B) that has a valid election in effect under applicable Treasury Regulations to be treated as a United States person. If a partnership (or other entity treated as a partnership or other pass-through entity for U.S. federal income tax purposes) is a Holder of a Claim, the tax treatment of a partner (or other beneficial owner) generally will depend upon the status of such partner (or other beneficial owner) and the activities of the partnership (or other pass-through entity). Partners (or other beneficial owners) of partnerships (or other pass-through entities) that are Holders of Claims should consult their respective tax advisors regarding the U.S. federal income tax consequences of the Plan. ACCORDINGLY, THE FOLLOWING SUMMARY OF CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING AND ADVICE BASED UPON THE INDIVIDUAL CIRCUMSTANCES PERTAINING TO EACH U.S. HOLDER OF AN ALLOWED CLAIM. ALL U.S. HOLDERS OF ALLOWED CLAIMS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE FEDERAL, STATE, LOCAL, AND NON-U.S. INCOME, ESTATE, AND OTHER TAX CONSEQUENCES OF THE PLAN. B. Certain U.S. Federal Income Tax Consequences to the Debtors and the Reorganized Debtors Each Debtor is treated as a partnership or disregarded entity for U.S. federal income tax purposes. Because the Debtors (other than OHAM) are treated as disregarded entities of OHAM, and OHAM is treated as a partnership for U.S. federal income tax purposes, the Debtors are not generally themselves subject to U.S. federal income taxation. Instead, each Holder of Interests in OHAM is generally required to report on its U.S. federal income tax return, and pay tax in respect of, its distributive share of each item of income, gain, loss, deduction and credit of the Debtors. Accordingly, the U.S. federal income tax consequences of consummating the Plan will generally not be borne by the Debtors, but instead borne by the Holders of Interests in OHAM. The tax consequences of the implementation of the Plan to the Debtors, Reorganized Debtors, and U.S. Holders of certain Allowed Claims differ depending on whether the Debtors pursue (a) an Equitization Restructuring structured as an exchange of certain Allowed Class 2 Claims for (1) all or a portion of the Exit Facility and New Units and (2) the Agent Panterra Assets or (b) an Asset Sale Restructuring. It has not yet been determined whether the parties will pursue the Equitization Restructuring or the Asset Sale Restructuring. i. Taxable Exchange If the Equitization Restructuring occurs, the Debtors plan to take the position that for U.S. federal income tax purposes, (1) the Debtors will be treated as transferring the assets of Reorganized SMG (including the Agent Panterra Assets), subject to liabilities of Reorganized SMG that survive the Restructuring Transactions, to the Holders of Allowed Class 2 Claims in a fully taxable sale or

Page 96

exchange for full satisfaction of the Allowed Class 2 Claims, (2) such Holders will be deemed to have acquired the assets of Reorganized SMG, subject to such liabilities, and (3) such Holders will then be treated as contributing such assets (which may include the Agent Panterra Assets) to Reorganized SMG in exchange for New Units and the Exit Facility. If the Asset Sale Restructuring occurs, the Debtors would transfer all or substantially all of their assets (including the Agent Trust Assets) in a transaction that would generally be treated as a fully taxable sale or exchange of assets for U.S. federal income tax purposes. For purposes of the Allowed Class 3, Class 4, Class 5, and Class 6 Claims (except to the extent that there is a Reinstatement of such Allowed Claim pursuant to the Plan), the Debtors plan to take the position that for U.S. federal income tax purposes, such U.S. Holders, in exchange for full and final satisfaction, settlement, release and discharge of such Claim, shall receive the distribution set forth in the Plan, in a fully taxable sale or exchange (including the applicable portion of the GUC Trust Assets for the Allowed Class 5 Claims). With respect to the taxable exchanges referenced above, OHAM is expected to recognize gain or loss with respect to the Debtors’ assets transferred in an amount equal to the difference between the value of the consideration OHAM would receive in an arm’s length transaction (which generally is equal to the fair market value of the assets deemed transferred by OHAM) and the aggregate adjusted tax basis in such assets. Any such gain or loss would be allocated to the Holders of Interests in OHAM. There is no assurance that the IRS would not take a position contrary to those described above. Accordingly, Holders of Interests in OHAM and Holders of Allowed Claims should consult their own tax advisors regarding the possible tax treatment of the transactions contemplated by the Plan (including any limitations that may be imposed by the tax law based on a Holder’s individual circumstances). ii. Cancellation of Debt and Reduction of Tax Attributes The Debtors generally will realize and recognize cancellation of indebtedness income (“CODI”), for U.S. federal income tax purposes, upon satisfaction of its outstanding indebtedness for total consideration less than the amount of such indebtedness. The amount of CODI, in general, is the excess of (1) the adjusted issue price of the indebtedness satisfied, over (2) the sum of (i) the amount of Cash paid, and (ii) the fair market value of any other consideration given in satisfaction of such indebtedness at the time of the exchange (including any assets of the Debtors transferred to the Holders of Claims pursuant to the exercise of a Credit Bid Right). As described above, because the Debtors are all treated as either partnerships or disregarded entities for U.S. federal income tax purposes, such CODI, if any, and any other income recognized by the Debtors upon implementation of the Plan are expected to be allocated to Holders of Interests in OHAM. Certain statutory or judicial exceptions potentially can apply to limit the amount of CODI required to be included in income by the Holders of Interests in OHAM, depending on their circumstances. In particular, exceptions are available that would allow CODI to be excluded from gross income if the CODI is taken into account by a taxpayer that is insolvent (but only to the extent

Page 97

of insolvency) or in bankruptcy. These exceptions apply at the “partner” level and thus depend on whether the partner, i.e., the Holder of Interests in OHAM to whom the CODI is allocated, is itself insolvent or in bankruptcy. Whether the Debtors are insolvent or in bankruptcy is not relevant for this purpose. To the extent any amount of CODI is excludable by a Holder of Interests in OHAM by reason of the insolvency or bankruptcy exception, the Holder of Interests in OHAM generally would be required to reduce certain tax attributes (such as net operating losses, tax credits, adjusted tax basis in assets and passive losses) after the determination of its tax liability for the taxable year (including, as described above, the amount of gain or loss recognized by OHAM and allocated to the Holders of Interests in OHAM with respect to a transaction treated as sale of assets). Alternatively, a Holder of Interests in OHAM could elect first to reduce the adjusted tax basis of its depreciable assets pursuant to section 108(b)(5) of the Tax Code. As a result of the Restructuring Transactions, the Debtors expect to realize CODI. The exact amount of any CODI that will be realized by the Debtors will not be determinable until, at the earliest, the consummation of the Plan. Because the Plan provides that certain Claim Holders will receive non-Cash consideration, the amount of CODI, and accordingly the amount of tax attributes required to be reduced, will depend, in part, on the fair market value of the non-Cash consideration received, which is not known at this time. C. Certain U.S. Federal Income Tax Consequences to Certain U.S. Holders of Allowed Claims The following discussion assumes that the Debtors will undertake the Restructuring Transactions currently contemplated by the Plan. There is substantial uncertainty regarding the consideration that a U.S. Holder will receive in respect of its Allowed Claim. Pursuant to the Plan, such consideration will depend upon, among other things, the resolution of Claim objections, which resolution cannot be predicted. U.S. Holders should consult their own tax advisors regarding the potential tax consequences of the Plan. As a result of the foregoing, the following discussion is general in nature. i. U.S. Federal Income Tax Consequences to U.S. Holders of Allowed Class 2 Claims (a) Equitization Restructuring As discussed above, if the Equitization Restructuring occurs, the Debtors expect to take the position that, for U.S. federal income tax purposes, (a) the Holders of Allowed Class 2 Claims exchanged such Allowed Class 2 Claims for the assets of the Reorganized SMG (including the Agent Panterra Assets), subject to the liabilities of Reorganized SMG that survive the Restructuring Transactions, and (b) the Holders of the Allowed Class 2 Claims contributed such assets (which may include the Agent Panterra Assets), subject to such liabilities, to Reorganized SMG in exchange for New Units and the Exit Facility. Subject to the rules regarding accrued but unpaid interest, each U.S. Holder of such Claim should recognize gain or loss equal to the difference between (i) the sum of (a) the amount of Cash received, and (b) the fair market value of the assets of the Debtors (including the Agent Panterra Assets), subject to the Debtors’ liabilities that survive the Restructuring Transactions, received pursuant to the Equitization Restructuring and (ii) such U.S. Holder’s adjusted tax basis, if any, in such Class 2 Claim.

Page 98

The character of such gain or loss as capital or ordinary will be determined by a number of factors, including the tax status of the U.S. Holder, the rules regarding accrued but unpaid interest and market discount (as discussed below in XII.C.iv – “Accrued Interest” and Section XII.C.v – “Market Discount”), whether the Allowed Class 2 Claim constitutes a capital asset in the hands of the U.S. Holder, and whether and to what extent the U.S. Holder has previously claimed a bad debt deduction with respect to its Class 2 Claim. If recognized gain or loss is capital in nature, it generally will be long-term capital gain or loss if the U.S. Holder held its Allowed Class 2 Claim for more than one year at the time of the exchange. Subject to the rules regarding accrued but unpaid interest, a U.S. Holder’s tax basis in (i) the New Units received should equal the fair market value of such consideration as of the date such assets are deemed distributed to the U.S. Holder and (ii) the Exit Facility should equal the issue price of such Exit Facility (as discussed below in Section XII.C.ii – “Issue Price”). A U.S. Holder’s holding period for the New Units and the Exit Facility received should begin on the day following the Effective Date. (b) Asset Sale Restructuring If the Asset Sale Restructuring occurs, the Debtors expect to take the position that, for U.S. federal income tax purposes, the Holders of Allowed Class 2 Claims exchanged their Allowed Class 2 Claims for Cash, Sale Proceeds, Agent Trust Assets, and if applicable, assets of the Debtors acquired pursuant to the exercise of a Credit Bid Right, in a fully taxable sale or exchange. Such a U.S. Holder is expected to recognize gain or loss equal to the difference between (i) the sum of (a) any Cash (including Sales Proceeds) received in the Asset Sale Restructuring, (b) if applicable, the fair market value of any assets of the Debtors acquired pursuant to the exercise of a Credit Bid Right in the Asset Sale Restructuring and (c) the fair market value of any Agent Trust Assets received pursuant to the Asset Sale Restructuring and (ii) such U.S. Holder’s adjusted tax basis in its Allowed Class 2 Claims (other than any adjusted tax basis attributable to accrued but unpaid interest). Whether such gain or loss is capital or ordinary in character will be determined by a number of factors, including the tax status of the U.S. Holder, the nature of the Allowed Class 2 Claim in such U.S. Holder’s hands, whether such Claim was purchased at a discount (as discussed below in Section XII.C.v – “Market Discount”), whether there is any accrued but unpaid interest on such Claim and whether and to what extent the U.S. Holder previously has claimed a bad debt deduction with respect to such Claim. A U.S. Holder of Allowed Class 2 Claims is expected to recognize interest income to the extent of any consideration allocable to accrued but unpaid interest not previously included in income. See Section XII.C.iv – “Accrued Interest,” below. A U.S. Holder’s initial tax basis in the non-Cash consideration received pursuant to the Asset Sale Restructuring is expected to be equal to its fair market value. A U.S. Holder’s holding period for the non-Cash consideration received pursuant to the Asset Sale Restructuring generally begins on the day following the Effective Date. As described in Section III.B.D.8, the Holders of the Allowed Class 2 Claims are treated for U.S. federal income tax purposes as receiving the Agent Trust Assets from the Debtors in exchange for a portion of their Allowed Class 2 Claims, and simultaneously transferring such Agent Trust Assets to the Agent Trust in exchange for the Agent Trust Interests. A U.S. Holder’s tax basis of such Agent Trust Interests should equal the fair market value of the Agent Trusts Interests (the “Agent Trust Interest Asset Value”). The Agent Trust Interest Asset Value will be determined by the Agent Trustee as the trustee of the Agent Trust, and all parties must utilize and report consistently with the Agent Trust Interest Asset Value for U.S. federal and applicable state and local income tax purposes. A U.S. Holder’s holding period for the Agent Trust Interests should begin on the day following the date it

Page 99

receives such Agent Trust Interests. As described below in Section XII.E.i, the Holders of the Agent Trust Interests should generally recognize their allocable share of income, gain, loss, deductions and credits recognized by the Agent Trust on an annual basis. ii. Issue Price The issue price of the Exit Facility Loan would be determined based on whether the Exit Facility Loan is considered to be publicly traded under the applicable provisions of the Tax Code and Treasury Regulations. A debt instrument is not treated as publicly traded if the stated principal amount of the issue that includes the debt instrument does not exceed $100 million (the “Small Issue Exception”). The Exit Facility Loan will have a stated principal amount of less than $100 million and, therefore, the Debtors believe that the Exit Facility Loan should not be considered to be publicly traded based on the Small Issue Exception. The Debtors expect that the issue price of the Exit Facility Loan generally should equal their stated principal amount (because the interest rate on the debt instrument is expected to exceed the applicable federal rate published by the IRS). iii. U.S. Federal Income Tax Consequences to U.S. Holders of Allowed Class 3, Class 4, Class 5, and Class 6 Claims Pursuant to the Plan, except to the extent that a U.S. Holder of an Allowed Class 3, Class 4, Class 5, or Class 6 Claim agrees to a less favorable treatment in exchange for full and final satisfaction, settlement, release and discharge of such Allowed Claim, the U.S. Holder of such Allowed Claim shall receive the distribution set forth in the Plan. (a) Taxable Sale or Exchange To the extent that such U.S. Holder receives in respect of its Allowed Claim only Cash, GUC Trust Interests (in the case of Allowed Class 5 Claims) and/or “other property,” such U.S. Holder of such Claim will be treated as exchanging such Allowed Claim for the consideration received by such U.S. Holder pursuant to the Plan in a taxable exchange for U.S. federal income tax purposes. Accordingly, subject to the rules regarding accrued but unpaid interest, each Holder of such Allowed Claim should recognize gain or loss equal to the difference between (1) the sum of (x) the amount of Cash received (y) the fair market value of any GUC Trust Assets received and (z) the fair market value of the non-Cash consideration received and (2) such U.S. Holder’s adjusted basis, if any, in such Claim. Whether such gain or loss is capital or ordinary in character will be determined by a number of factors, including the tax status of the U.S. Holder, the nature of the Allowed Claim in such U.S. Holder’s hands, whether such Claim was purchased at a discount (as discussed below in Section XII.C.v – “Market Discount”), whether there is any accrued but unpaid interest on such Claim and whether and to what extent the U.S. Holder previously has claimed a bad debt deduction with respect to such Claim. A U.S. Holder of Allowed Claims is expected to recognize interest income to the extent of any consideration allocable to accrued but unpaid interest not previously included in income. See Section XII.C.iv – “Accrued Interest,” below. A U.S. Holder’s initial tax basis in the non-Cash consideration received is generally expected to be equal to its fair market value. A U.S. Holder’s holding period for the non-Cash consideration received is generally expected to begin on the day following the receipt of such consideration. The above discussion assumes that the distribution under the Plan is treated, for U.S. federal

Page 100

income tax purposes, as a direct distribution from the Debtors to the relevant U.S. Holders of Claims. It is possible that the IRS could apply a different characterization, in which case the treatment described above could vary. As described in Section III.B.B.3, the Holders of the Allowed Class 5 Claims are treated for U.S. federal income tax purposes as receiving the GUC Trust Assets from the Debtors in exchange for a portion of their Allowed Class 5 Claims, and simultaneously transferring such GUC Trust Assets to the GUC Trust in exchange for the GUC Trust Interests. A U.S. Holder’s tax basis of such GUC Trust Interests should equal the fair market value of the GUC Trust Assets as of the date such GUC Trust Assets are deemed distributed to the U.S. Holder (the “GUC Trust Interest Asset Value”). The GUC Trust Interest Asset Value will be determined by the GUC Trustee as the trustee of the GUC Trust, and all parties must utilize and report consistently with the GUC Trust Interest Asset Value for U.S. federal and applicable state and local income tax purposes. A U.S. Holder’s holding period for the GUC Trust Interests should begin on the day following the date it receives such GUC Trust Interests. As described below in Section XII.E.i, the Holders of the GUC Trust Interests should generally recognize their allocable share of income, gain, loss, deductions and credits recognized by the GUC Trust on an annual basis. To the extent a U.S. Holder receives a Reinstatement of its Claim pursuant to the Plan, the tax treatment of such Reinstatement will depend on a number of factors, including the specific circumstances regarding such Reinstatement. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE RECOGNITION OF GAIN OR LOSS, FOR FEDERAL INCOME TAX PURPOSES, ON THE SATISFACTION OF THEIR CLAIMS, INCLUDING WITH RESPECT TO THE RESTATEMENT OF THEIR CLAIMS. iv. Accrued Interest To the extent that any amount received by a U.S. Holder of an Allowed Claim is attributable to accrued but unpaid interest on the debt instruments constituting the surrendered Claim, the receipt of such amount should be taxable to the U.S. Holder as ordinary interest income (to the extent not already taken into income by the U.S. Holder). Conversely, a U.S. Holder of a Claim may be able to recognize a deductible loss (or, possibly, a write off against a reserve for worthless debts) to the extent that any accrued interest previously was included in the U.S. Holder’s gross income but was not paid in full by the Debtors. Such loss may be ordinary, but the tax law is unclear on this point. If the fair market value of the consideration is not sufficient to fully satisfy all principal and interest on Allowed Claims, the extent to which such consideration will be attributable to accrued but unpaid interest is unclear. Under the Plan, the aggregate consideration to be distributed to Holders of Allowed Claims in each Class will be allocated first to the principal amount of Allowed Claims, with any excess allocated to unpaid interest that accrued on these Claims, if any. Certain legislative history indicates that an allocation of consideration as between principal and interest provided in a chapter 11 plan of reorganization is binding for U.S. federal income tax purposes,and certain case law generally indicates that a final payment on a distressed debt instrument that is insufficient to repay outstanding principal and interest will be allocated to principal, rather than interest, while certain Treasury Regulations treat payments as allocated first to any accrued but unpaid interest. The IRS could take

Page 101

the position that the consideration received by the Holder should be allocated in some way other than as provided in the Plan. U.S. Holders of Claims should consult their own tax advisors regarding the proper allocation of the consideration received by them under the Plan. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE ALLOCATION OF CONSIDERATION RECEIVED IN SATISFACTION OF THEIR CLAIMS AND THE U.S. FEDERAL INCOME TAX TREATMENT OF ACCRUED BUT UNPAID INTEREST. v. Market Discount Under the “market discount” provisions of the Tax Code, some or all of any gain realized by a U.S. Holder of an Allowed Claim who exchanges such Claim for an amount on the Effective Date may be treated as ordinary income (instead of capital gain), to the extent of the amount of “market discount” on the debt instruments constituting the exchanged Claim. In general, a debt instrument is considered to have been acquired with “market discount” if it is acquired other than on original issue and if its Holder’s adjusted tax basis in the debt instrument is less than (a) the sum of all remaining payments to be made on the debt instrument, excluding “qualified stated interest” or (b) in the case of a debt instrument issued with original issue discount, its adjusted issue price, by at least a de minimis amount (equal to 0.25 percent of the sum of all remaining payments to be made on the debt instrument, excluding qualified stated interest, multiplied by the number of remaining whole years to maturity). Any gain recognized by a U.S. Holder on the taxable disposition of an Allowed Claim (determined as described above) that was acquired with market discount should be treated as ordinary income to the extent of the market discount that accrued thereon while such Claim was considered to be held by the U.S. Holder (unless the U.S. Holder elected to include market discount in income as it accrued). To the extent that the Allowed Claims that were acquired with market discount are exchanged in a tax-free transaction for other property, any market discount that accrued on the Allowed Claims (i.e., up to the time of the exchange) but was not recognized by the U.S. Holder is carried over to the property received therefor and any gain recognized on the subsequent sale, exchange, redemption, or other disposition of the property is treated as ordinary income to the extent of the accrued, but not recognized, market discount. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE APPLICATION OF THE MARKET DISCOUNT RULES TO THEIR CLAIMS. vi. Distributions, Sales, Exchanges or Other Taxable Dispositions of New Units in Reorganized SMG that constitute partnership interests for U.S. federal income tax purposes If Reorganized SMG is treated as a partnership for U.S. federal income tax purposes, Holders of New Units in Reorganized SMG will be treated as partners in a partnership. In general, a partner in a partnership is not taxed on distributions of cash or property, but rather, on allocations of taxable income or gain earned by the partnership each year, whether or not cash is distributed. A partner in Reorganized SMG could receive allocations of taxable income without any cash distributions to pay the tax. However, distributions are taxable if such distributions exceed the partner’s outside tax basis

Page 102

in his, her or its partnership interest. Upon a sale, exchange or other disposition of a partnership interest, special rules apply that may recharacterize all or a portion of the gain as ordinary income rather than capital gain. Deductions and losses may be subject to special limitations, including the “at-risk” rules, “passive activity loss” disallowance rules, which apply at the partner level, and business interest expense deduction limitations that apply at the partnership level. The deduction of capital losses may be subject to further limitations. U.S. HOLDERS OF NEW UNITS IN REORGANIZED SMG SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF HOLDING AND DISPOSING OF THEIR NEW UNITS IN REORGANIZED SMG. D. Information Reporting and Backup Withholding Under the Tax Code, interest and other reportable payments may, under certain circumstances, be subject to backup withholding. Backup withholding may apply to payments made pursuant to the Plan, unless the Holder provides to the applicable withholding agent its taxpayer identification number, certified under penalties of perjury, as well as certain other information or otherwise establish an exemption from backup withholding. Backup withholding is not an additional tax. Amounts withheld under the backup withholding rules may be credited against a Holder’s U.S. federal income tax liability, and a Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing an appropriate claim for refund with the IRS. In addition, from an information reporting perspective, the Treasury Regulations generally require disclosure by a taxpayer on its U.S. federal income tax return of certain types of transactions in which the taxpayer participated, including, among other types of transactions, certain transactions that result in the taxpayer’s claiming a loss in excess of specified thresholds. Holders should consult their own tax advisors regarding these regulations and whether the transactions contemplated by the Plan would be subject to these regulations and require disclosure on the Holders’ tax returns. E. Certain U.S. Federal Income Tax Consequences Relating to the Trusts i. Allocation of Income and Loss and Disposition of Trust Assets Except as described in Section XII.E.iii with respect to Disputed Claims, each U.S. Holder of an Agent Trust Interest or a GUC Trust Interest (each, a “Trust Interest”) must report on its U.S. federal income tax return its allocable share of income, gain, loss, deduction and credit recognized by the Agent Trust or the GUC Trust (each, a “Trust”). Deductions attributable to activities and administrative expenses of the applicable Trust may be subject to limitation in the hands of the U.S. Holders of the applicable Trust Interests. Except as described in Section XII.E.iii with respect to Disputed Claims, upon the sale or other disposition of an Agent Trust Asset or a GUC Trust Asset (each, a “Trust Asset”), each U.S. Holder of an applicable Trust Interest must report on its U.S. federal income tax return its share of any income, gain, loss, deduction and credit. The character of any such income, gain, loss or deduction to any such U.S. Holder will be determined as if such U.S. Holder itself had directly sold or otherwise disposed of such Trust Asset. The character of items of income, gain, loss or deduction to any holder of a Trust Interest, and the ability of such U.S. Holder to benefit from any deductions, losses or credits, will depend on the particular circumstances and/or status of any such U.S. Holder.

Page 103

As noted above, except as described in Section XII.E.iii with respect to Disputed Claims, each U.S. Holder of a Trust Interest has an obligation to report its share of the Trust’s tax items (including gain on the sale or other disposition of a Trust Asset). Accordingly, U.S. Holders of a Trust Interest may incur a tax liability as a result of owning a beneficial interest in a Trust, regardless of whether a Trust distributes Cash or other Trust Assets. Although each of the Agent Trust Agreement and GUC Trust Agreement provide that it will make Cash distributions of net income and net proceeds at least annually, due to each Trust’s requirements to satisfy certain liabilities, and due to possible differences in the timing of income on, and the receipt of Cash from, applicable Trust Assets, a U.S. Holder of an applicable Trust Interest may, in certain years, be required to report and pay tax on a greater amount of income than the amount of Cash received from the applicable Trust by such U.S. Holder in such year. ii. Tax Compliance of Trust Except as described in Section XII.E.iii with respect to Disputed Claims, a Trust will file annual information tax returns with the IRS as a grantor trust pursuant to Treasury Regulations section 1.671-4(a) that will include information concerning certain items relating to the holding or disposition (or deemed disposition) of the applicable Trust Assets (e.g., income, gain, loss, deduction and credit). Each U.S. Holder of a Trust Interest will receive a copy of the information returns and must report on its U.S. federal income tax return its share of all such items. The information provided by a Trust will pertain to the U.S. Holders of Trust Interests who received such Trust Interests in connection with the Plan. iii. Disputed Claims Reserves Subject to definitive guidance from the IRS or a court of competent jurisdiction to the contrary, or the receipt of a determination by the IRS, the applicable Trustee intends to (i) treat Trust Assets reserved for Holders of Disputed Claims as one or more Disputed Claims reserves held in a “disputed ownership fund” governed by Treasury regulation section 1.468B-9 (which will be taxable as a “qualified settlement fund” if all assets of the disputed reserve are passive assets for tax purposes), and (ii) to the extent permitted by applicable law, report consistently with the foregoing for state and local income tax purposes. All parties (including, without limitation, the Debtors, the Reorganized Debtors (if applicable), the Agent Trustee or the GUC Trustee, as applicable (each, a “Trustee”), and the Holders of Disputed Claims) will be required to report for tax purposes consistently with such treatment. Accordingly, each Disputed Claims reserve will be a separate taxable entity for U.S. federal income tax purposes, and all interest and earnings of a Disputed Claims reserve will be taxable to such entity. Under such treatment, a separate U.S. federal income tax return will be filed with the IRS for each Disputed Claims reserve, and each Disputed Claims reserve will be subject to tax annually on a separate entity basis. A Trustee will be responsible for payment of any taxes imposed on each Disputed Claims reserve. Accordingly, distributions from each Disputed Claims reserve will be net of any taxes relating to the retention, disposition and distribution of assets in such Disputed Claims reserve. In the event, and to the extent, any Cash of each Disputed Claims reserve is insufficient to pay the portion of any such taxes attributable to the taxable income arising from the assets of such Disputed Claims reserve (including any income that may arise upon the distribution of the assets in such Disputed Claims reserve), assets of each Disputed Claims reserve may be sold to pay such taxes.

Page 104

THE FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN ARE COMPLEX. THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO A PARTICULAR U.S. HOLDER IN LIGHT OF SUCH HOLDER’S CIRCUMSTANCES AND INCOME TAX SITUATION. ALL U.S. HOLDERS OF CLAIMS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE TRANSACTIONS CONTEMPLATED BY THE PLAN, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, OR FOREIGN TAX LAWS, AND OF ANY CHANGE IN APPLICABLE TAX LAWS. XIII. RECOMMENDATION In the opinion of the Debtors, the Plan is preferable to all other available alternatives and provides for a larger distribution to the Debtors’ creditors than would otherwise result in any other scenario. Accordingly, the Debtors recommend that Holders of Claims entitled to vote on the Plan vote to accept the Plan and support Confirmation of the Plan. Submitted on this 11th day of February, 2021. STUDIO MOVIE GRILL HOLDINGS, LLC MOVIE GRILL CONCEPTS XXXV, LLC OHAM HOLDINGS, LLC MOVIE GRILL CONCEPTS XXXVI, LLC MOVIE GRILL CONCEPTS VII, LLC MOVIE GRILL CONCEPTS XXXVII, LLC MOVIE GRILL CONCEPTS IX, LLC MOVIE GRILL CONCEPTS XXXVIII, LLC MOVIE GRILL CONCEPTS X, LLC MOVIE GRILL CONCEPTS XXXIX, LLC MOVIE GRILL CONCEPTS XI, LLC MOVIE GRILL CONCEPTS XL, LLC MOVIE GRILL CONCEPTS XII, LLC MOVIE GRILL CONCEPTS XLI, LLC MOVIE GRILL CONCEPTS XIII, LLC MOVIE GRILL CONCEPTS XLII, LLC MOVIE GRILL CONCEPTS XIV, LLC MOVIE GRILL CONCEPTS XLIII, LLC MOVIE GRILL CONCEPTS XV, LLC MOVIE GRILL CONCEPTS XLIV, LLC MOVIE GRILL CONCEPTS XVI, LLC MOVIE GRILL CONCEPTS XLV, LLC MOVIE GRILL CONCEPTS XVII, LLC MOVIE GRILL CONCEPTS XLVI, LLC MOVIE GRILL CONCEPTS XVIII, LLC MOVIE GRILL CONCEPTS XLVII, LLC MOVIE GRILL CONCEPTS XIX, LLC MOVIE GRILL CONCEPTS XLVIII, LLC MOVIE GRILL CONCEPTS XX, LLC MOVIE GRILL CONCEPTS XLIX, LLC MOVIE GRILL CONCEPTS XXI, LLC MOVIE GRILL CONCEPTS L, LLC MOVIE GRILL CONCEPTS XXII, LLC MOVIE GRILL CONCEPTS LI, LLC MOVIE GRILL CONCEPTS XXIII, LLC MOVIE GRILL CONCEPTS LII, LLC MOVIE GRILL CONCEPTS XXIV, LLC MOVIE GRILL CONCEPTS LIII, LLC MOVIE GRILL CONCEPTS XXV, LLC MOVIE GRILL CONCEPTS LIV, LLC MOVIE GRILL CONCEPTS XXVI, LLC MOVIE GRILL CONCEPTS LV, LLC MOVIE GRILL CONCEPTS XXVII, LLC MOVIE GRILL CONCEPTS TRADEMARK MOVIE GRILL CONCEPTS XXVIII, LLC HOLDINGS, LLC MOVIE GRILL CONCEPTS XXIX, LLC MOVIE GRILL PARTNERS 3, LLC MOVIE GRILL CONCEPTS XXX, LLC MOVIE GRILL PARTNERS 4, LLC MOVIE GRILL CONCEPTS XXXI, LLC MOVIE GRILL PARTNERS 6, LLC MOVIE GRILL CONCEPTS XXXII, LLC MGC MANAGEMENT I, LLC

Page 105

MOVIE GRILL CONCEPTS XXXIII, LLC MOVIE GRILL CONCEPTS XXXIV, LLC By: /s/ William Snyder____________________ By: /s/ William Snyder____________________ Name: William Snyder Name: William Snyder Title: CRO Title: CRO

Page 106

MOVIE GRILL CONCEPTS I, LTD. By: MGC MANAGEMENT I, LLC, its general partner By: /s/ William Snyder____________________ Name: William Snyder Title: CRO MOVIE GRILL CONCEPTS III, LTD. By: Movie Grill Partners 3, LLC, its general partner By: /s/ William Snyder____________________ Name: William Snyder Title: CRO MOVIE GRILL CONCEPTS IV, LTD. By: Movie Grill Partners 4, LLC, its general partner By: /s/ William Snyder____________________ Name: William Snyder Title: CRO MOVIE GRILL CONCEPTS VI, LTD. By: Movie Grill Partners 6, LLC, its general partner By: /s/ William Snyder____________________ Name: William Snyder Title: CRO

Page 107

STUDIO CLUB, LLC By: /s/ William Snyder____________________ Name: William Snyder Title: CRO STUDIO CLUB 4, LLC By: /s/ William Snyder____________________ Name: William Snyder Title: CRO LAW OFFICES OF FRANK J. WRIGHT, PLLC By: /s/ Frank J. Wright Frank J. Wright Texas Bar No. 22028800 Jeffery M. Veteto Texas Bar No. 24098548 Jay A. Ferguson Texas Bar No. 24094648 2323 Ross Avenue Suite 730 Dallas, Texas 75201 Telephone: (214) 935-9100 Emails: frank@fjwright.law jeff@fjwright.law jay@fjwright.law COUNSEL TO DEBTORS AND DEBTORS-IN-POSSESSION

Share unique URL to selection: