Common use of Additional Entity Representations, Warranties and Covenants Clause in Contracts

Additional Entity Representations, Warranties and Covenants. (a) Borrower hereby represents with respect to each Other Senior Mezzanine Borrower and each Mortgage Loan Borrower and Maryland Owner that it: (i) is and always has been duly formed, validly existing, and in good standing in the state of its incorporation and in all other jurisdictions where it is qualified to do business except for anything which has been remedied prior to the date hereof and which did not and will not affect or impair, and has not at any time affected or impaired, Mortgage Loan Borrower’s or Maryland Owner’s right to own and/or operate the Properties, as the case may be, in any material respect; (ii) has no judgments or liens of any nature against it except for tax liens not yet due; (iii) is in compliance in all material respects with all laws, regulations, and orders applicable to it and, except as otherwise disclosed in this Agreement, has received all permits necessary for it to operate; (iv) is not involved in any dispute with any taxing authority except as disclosed on Schedule XII and except for any tax certiorari proceedings that would be permitted under Section 5.4(b); (v) has paid all taxes which it owes; (vi) (A) as to each Property Owner (other than any Maryland Owner or Maryland Borrower) has never owned any real property other than the Individual Property and personal property necessary or incidental to its ownership or operation of the Individual Property that it owns and has never engaged in any business other than the ownership and/or operation of the Individual Property that it owns (or as to Operating Lessee, that it operates pursuant to the applicable Operating Lease, (B) as to HH Gaithersburg LLC, has never owned any property other than the Maryland Property that it owns, its limited liability company interests in HH Gaithersburg Borrower LLC, and incidental personal property necessary or incidental to its ownership or operation of the foregoing and has never engaged in any business other than the ownership and/or operation of the Maryland Property that it owns and HH Gaithersburg Borrower LLC, (C) as to HH Gaithersburg Borrower LLC, had never owned any property other than incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents and has never engaged in any business other than entering into and performing its obligations under the Loan Documents, (D) as to HH Baltimore Holdings LLC and HH Annapolis Holding LLC, has never owned any property other than its limited liability company interests in HH Baltimore LLC and HH Annapolis LLC, respectively, and such incidental Personal Property as may be necessary for the ownership and operation of HH Baltimore LLC and HH Annapolis LLC, respectively, and has never engaged in any business other than the other than the ownership and operation of the limited liability company interests in HH Baltimore LLC and HH Annapolis LLC, respectively, and activities incidental thereto, (E) as to HH Baltimore LLC and HH Annapolis LLC, has never owned any property other than the Maryland Property that it owns and such incidental Personal Property as may be necessary for the ownership and operation of the Maryland Property that it owns and has never engaged in any business other than the ownership and/or operation of the Maryland Property that it owns, (F) as to each Operating Lessee, has never owned any property other than such property as may be necessary for the ownership or operating of the Individual Property that it leases and has never engaged in any business other than the operating and maintenance of the Individual Property that it leases, and (G) as to each SPE Component Entity, has never owned any property other than its ownership interest in its respective Borrower and personal property necessary or incidental to the ownership or operation of such Borrower and has never engaged in any business other than the ownership and/or operation of such Borrower); (vii) is not now, nor has ever been, party to any lawsuit, arbitration, summons, or legal proceeding that is still pending that, if adversely determined, would have a material adverse effect on any Mortgage Loan Borrower or Maryland Owner, or that resulted in a judgment against it that has not been paid in full or that was not fully covered by an applicable insurance policy; (viii) has no material contingent or actual obligations not related to the Mortgage Loan Property that it owns (or as to any Operating Lessee, that it operates pursuant to the applicable Operating Lease); (ix) has provided Lender with complete financial statements that reflect a fair and accurate view of the entity’s financial condition; and (x) has obtained a current Phase I environmental site assessment (“ESA) for each Individual Property prepared consistent with ASTM Practice E 1527 and the ESA has not identified any recognized environmental conditions that require further remediation that is not being remediated as set forth in the ESA or has not been remediated. (b) Borrower hereby represents with respect to each Other Senior Mezzanine Borrower, Mortgage Loan Borrower and Maryland Owner that, from the date of such entity’s formation to the date of this Agreement, such entity: (i) has not entered into any contract or agreement with any of its Affiliates, constituents, or owners, or any guarantors of any of its obligations or any Affiliate of any of the foregoing (individually, a “Related Party” and collectively, the “Related Parties”), except upon terms and conditions that were at the time entered into commercially reasonable and substantially similar to those available in an arm’s-length transaction with an unrelated party; (ii) has paid all of its debts and liabilities from its assets; (iii) has done or caused to be done all things necessary to observe all organizational formalities applicable to it and to preserve its existence; (iv) has maintained all of its books, records, financial statements and bank accounts separate from those of any other Person; (v) has not had its assets listed as assets on the financial statement of any other Person except the consolidated statements of Highland Hospitality Corporation and its subsidiaries in which no statement was made indicating that such entity was not a separate legal entity that maintained separate books and records; (vi) has filed its own tax returns (except to the extent that it has been a tax-disregarded entity not required to file tax returns under applicable law) and, if it is a corporation, has not filed a consolidated federal income tax return with any other Person; (vii) has been, and at all times has held itself out to the public as, a legal entity separate and distinct from any other Person (including any Affiliate or other Related Party); (viii) has corrected any known misunderstanding regarding its status as a separate entity; (ix) has conducted all of its business and held all of its assets in its own name; (x) has not identified itself or any of its affiliates as a division or part of the other; (xi) has maintained and utilized separate stationery, invoices and checks bearing its own name; (xii) has not commingled its assets with those of any other Person (other than any other Mortgage Loan Borrower or Maryland Owner) and has held all of its assets in its own name; (xiii) has not guaranteed or become obligated for the debts of any other Person; (xiv) has not held itself out as being responsible for the debts or obligations of any other Person; (xv) has allocated fairly and reasonably any overhead expenses that have been shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate or Related Party; (xvi) has not pledged its assets to secure the obligations of any other Person and no such pledge remains outstanding except in connection with the Loan; (xvii) has maintained adequate capital in light of its contemplated business operations; (xviii) has maintained a sufficient number of employees in light of its contemplated business operations and has paid the salaries of its own employees from its own funds; (xix) has not owned any subsidiary or any equity interest in any other entity; (xx) has not incurred any indebtedness that is still outstanding other than indebtedness that is permitted under the Loan Documents; (xxi) has not had any of its obligations guaranteed by an affiliate, except for guarantees that have been either released or discharged (or that will be discharged as a result of the closing of the Loan) or guarantees that are expressly contemplated by the Mortgage Loan Documents; (xxii) none of the current direct or indirect owners of equity interests in Mortgage Loan Borrower or Maryland Owner is affiliated with any of the former owners of equity interests in Mortgage Loan Borrower or Maryland Owner; and (xxiii) except for the Operating Lessee, none of the tenants holding leasehold interests with respect to any Individual Property are affiliated with Mortgage Loan Borrower or Maryland Owner.

Additional Entity Representations, Warranties and Covenants. (a) Borrower hereby represents with respect to each Other Senior Mezzanine Borrower and each Mortgage Loan Borrower and Maryland Owner that it: (i) is and always has been duly formed, validly existing, and in good standing in the state of its incorporation and in all other jurisdictions where it is qualified to do business except for anything which has been remedied prior to the date hereof and which did not and will not affect or impair, and has not at any time affected or impaired, Mortgage Loan Borrower’s or Maryland Owner’s right to own and/or operate the Properties, as the case may be, in any material respect; (ii) has no judgments or liens of any nature against it except for tax liens not yet due; (iii) is in compliance in all material respects with all laws, regulations, and orders applicable to it and, except as otherwise disclosed in this Agreement, has received all permits necessary for it to operate; (iv) is not involved in any dispute with any taxing authority except as disclosed on Schedule XII and except for any tax certiorari proceedings that would be permitted under Section 5.4(b); (v) has paid all taxes which it owes; (vi) (A) as to each Property Owner (other than any Maryland Owner or Maryland Borrower) has never owned any real property other than the Individual Property and personal property necessary or incidental to its ownership or operation of the Individual Property that it owns and has never engaged in any business other than the ownership and/or operation of the Individual Property that it owns (or as to Operating Lessee, that it operates pursuant to the applicable Operating Lease, (B) as to HH Gaithersburg LLC, has never owned any property other than the Maryland Property that it owns, its limited liability company interests in HH Gaithersburg Borrower LLC, and incidental personal property necessary or incidental to its ownership or operation of the foregoing and has never engaged in any business other than the ownership and/or operation of the Maryland Property that it owns and HH Gaithersburg Borrower LLC, (C) as to HH Gaithersburg Borrower LLC, had never owned any property other than incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents and has never engaged in any business other than entering into and performing its obligations under the Loan Documents, (D) as to HH Baltimore Holdings LLC and HH Annapolis Holding LLC, has never owned any property other than its limited liability company interests in HH Baltimore LLC and HH Annapolis LLC, respectively, and such incidental Personal Property as may be necessary for the ownership and operation of HH Baltimore LLC and HH Annapolis LLC, respectively, and has never engaged in any business other than the other than the ownership and operation of the limited liability company interests in HH Baltimore LLC and HH Annapolis LLC, respectively, and activities incidental thereto, (E) as to HH Baltimore LLC and HH Annapolis LLC, has never owned any property other than the Maryland Property that it owns and such incidental Personal Property as may be necessary for the ownership and operation of the Maryland Property that it owns and has never engaged in any business other than the ownership and/or operation of the Maryland Property that it owns, (F) as to each Operating Lessee, has never owned any property other than such property as may be necessary for the ownership or operating of the Individual Property that it leases and has never engaged in any business other than the operating and maintenance of the Individual Property that it leases, and (G) as to each SPE Component Entity, has never owned any property other than its ownership interest in its respective Borrower and personal property necessary or incidental to the ownership or operation of such Borrower and has never engaged in any business other than the ownership and/or operation of such Borrower); (vii) is not now, nor has ever been, party to any lawsuit, arbitration, summons, or legal proceeding that is still pending that, if adversely determined, would have a material adverse effect on any Mortgage Loan Borrower or Maryland Owner, or that resulted in a judgment against it that has not been paid in full or that was not fully covered by an applicable insurance policy; (viii) has no material contingent or actual obligations not related to the Mortgage Loan Property that it owns (or as to any Operating Lessee, that it operates pursuant to the applicable Operating Lease); (ix) has provided Lender with complete financial statements that reflect a fair and accurate view of the entity’s financial condition; and (x) has obtained a current Phase I environmental site assessment (“ESA) for each Individual Property prepared consistent with ASTM Practice E 1527 and the ESA has not identified any recognized environmental conditions that require further remediation that is not being remediated as set forth in the ESA or has not been remediated. (b) Borrower hereby represents with respect to each Other Senior Mezzanine Borrower, Mortgage Loan Borrower and Maryland Owner that, from the date of such entity’s formation to the date of this Agreement, such entity: (i) has not entered into any contract or agreement with any of its Affiliates, constituents, or owners, or any guarantors of any of its obligations or any Affiliate of any of the foregoing (individually, a “Related Party” and collectively, the “Related Parties”), except upon terms and conditions that were at the time entered into commercially reasonable and substantially similar to those available in an arm’s-length transaction with an unrelated party; (ii) has paid all of its debts and liabilities from its assets; (iii) has done or caused to be done all things necessary to observe all organizational formalities applicable to it and to preserve its existence; (iv) has maintained all of its books, records, financial statements and bank accounts separate from those of any other Person; (v) has not had its assets listed as assets on the financial statement of any other Person except the consolidated statements of Highland Hospitality Corporation and its subsidiaries in which no statement was made indicating that such entity was not a separate legal entity that maintained separate books and records; (vi) has filed its own tax returns (except to the extent that it has been a tax-disregarded entity not required to file tax returns under applicable law) and, if it is a corporation, has not filed a consolidated federal income tax return with any other Person; (vii) has been, and at all times has held itself out to the public as, a legal entity separate and distinct from any other Person (including any Affiliate or other Related Party); (viii) has corrected any known misunderstanding regarding its status as a separate entity; (ix) has conducted all of its business and held all of its assets in its own name; (x) has not identified itself or any of its affiliates as a division or part of the other; (xi) has maintained and utilized separate stationery, invoices and checks bearing its own name; (xii) has not commingled its assets with those of any other Person (other than any other Mortgage Loan Borrower or Maryland Owner) and has held all of its assets in its own name; (xiii) has not guaranteed or become obligated for the debts of any other Person; (xiv) has not held itself out as being responsible for the debts or obligations of any other Person; (xv) has allocated fairly and reasonably any overhead expenses that have been shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate or Related Party; (xvi) has not pledged its assets to secure the obligations of any other Person and no such pledge remains outstanding except in connection with the Loan; (xvii) has maintained adequate capital in light of its contemplated business operations; (xviii) has maintained a sufficient number of employees in light of its contemplated business operations and has paid the salaries of its own employees from its own funds; (xix) has not owned any subsidiary or any equity interest in any other entity; (xx) has not incurred any indebtedness that is still outstanding other than indebtedness that is permitted under the Loan Documents; (xxi) has not had any of its obligations guaranteed by an affiliate, except for guarantees that have been either released or discharged (or that will be discharged as a result of the closing of the Loan) or guarantees that are expressly contemplated by the Mortgage Loan Documents; (xxii) none of the current direct or indirect owners of equity interests in Mortgage Loan Borrower or Maryland Owner is affiliated with any of the former owners of equity interests in Mortgage Loan Borrower or Maryland Owner; and (xxiii) except for the Operating Lessee, none of the tenants holding leasehold interests with respect to any Individual Property are affiliated with Mortgage Loan Borrower or Maryland Owner.

Additional Entity Representations, Warranties and Covenants. (a) Borrower hereby represents with respect to each Other Senior Mezzanine Borrower and each Mortgage Loan Borrower and Maryland Owner that it: (i) is and always has been duly formed, validly existing, and in good standing in the state of its incorporation and in all other jurisdictions where it is qualified to do business except for anything which has been remedied prior to the date hereof and which did not and will not affect or impair, and has not at any time affected or impaired, Mortgage Loan Borrower’s or Maryland Owner’s right to own and/or operate the Properties, as the case may be, in any material respect; (ii) has no judgments or liens of any nature against it except for tax liens not yet due; (iii) is in compliance in all material respects with all laws, regulations, and orders applicable to it and, except as otherwise disclosed in this Agreement, has received all permits necessary for it to operate; (iv) is not involved in any dispute with any taxing authority except as disclosed on Schedule XII and except for any tax certiorari proceedings that would be permitted under Section 5.4(b); (v) has paid all taxes which it owes; (vi) (A) as to each Property Owner (other than any Maryland Owner or Maryland Borrower) has never owned any real property other than the Individual Property and personal property necessary or incidental to its ownership or operation of the Individual Property that it owns and has never engaged in any business other than the ownership and/or operation of the Individual Property that it owns (or as to Operating Lessee, that it operates pursuant to the applicable Operating Lease, (B) as to HH Gaithersburg LLC, has never owned any property other than the Maryland Property that it owns, its limited liability company interests in HH Gaithersburg Borrower LLC, and incidental personal property necessary or incidental to its ownership or operation of the foregoing and has never engaged in any business other than the ownership and/or operation of the Maryland Property that it owns and HH Gaithersburg Borrower LLC, (C) as to HH Gaithersburg Borrower LLC, had never owned any property other than incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents and has never engaged in any business other than entering into and performing its obligations under the Loan Documents, (D) as to HH Baltimore Holdings LLC and HH Annapolis Holding LLC, has never owned any property other than its limited liability company interests in HH Baltimore LLC and HH Annapolis LLC, respectively, and such incidental Personal Property as may be necessary for the ownership and operation of HH Baltimore LLC and HH Annapolis LLC, respectively, and has never engaged in any business other than the other than the ownership and operation of the limited liability company interests in HH Baltimore LLC and HH Annapolis LLC, respectively, and activities incidental thereto, (E) as to HH Baltimore LLC and HH Annapolis LLC, has never owned any property other than the Maryland Property that it owns and such incidental Personal Property as may be necessary for the ownership and operation of the Maryland Property that it owns and has never engaged in any business other than the ownership and/or operation of the Maryland Property that it owns, (F) as to each Operating Lessee, has never owned any property other than such property as may be necessary for the ownership or operating of the Individual Property that it leases and has never engaged in any business other than the operating and maintenance of the Individual Property that it leases, and (G) as to each SPE Component Entity, has never owned any property other than its ownership interest in its respective Borrower and personal property necessary or incidental to the ownership or operation of such Borrower and has never engaged in any business other than the ownership and/or operation of such Borrower); (vii) is not now, nor has ever been, party to any lawsuit, arbitration, summons, or legal proceeding that is still pending that, if adversely determined, would have a material adverse effect on any Mortgage Loan Borrower, Senior Mezzanine Borrower or Maryland Owner, or that resulted in a judgment against it that has not been paid in full or that was not fully covered by an applicable insurance policy; (viii) has no material contingent or actual obligations not related to the Mortgage Loan Property or Collateral that it owns (or as to any Operating Lessee, that it operates pursuant to the applicable Operating Lease); (ix) has provided Lender with complete financial statements that reflect a fair and accurate view of the entity’s financial condition; and (x) has obtained a current Phase I environmental site assessment (“ESA”) for each Individual Property prepared consistent with ASTM Practice E 1527 and the ESA has not identified any recognized environmental conditions that require further remediation that is not being remediated as set forth in the ESA or has not been remediated. (b) Borrower hereby represents with respect to each Other Senior Mezzanine Borrower, Mortgage Loan Borrower and Maryland Owner that, from the date of such entity’s formation to the date of this Agreement, such entity: (i) has not entered into any contract or agreement with any of its Affiliates, constituents, or owners, or any guarantors of any of its obligations or any Affiliate of any of the foregoing (individually, a “Related Party” and collectively, the “Related Parties”), except upon terms and conditions that were at the time entered into commercially reasonable and substantially similar to those available in an arm’s-length transaction with an unrelated party; (ii) has paid all of its debts and liabilities from its assets; (iii) has done or caused to be done all things necessary to observe all organizational formalities applicable to it and to preserve its existence; (iv) has maintained all of its books, records, financial statements and bank accounts separate from those of any other Person; (v) has not had its assets listed as assets on the financial statement of any other Person except the consolidated statements of Highland Hospitality Corporation and its subsidiaries in which no statement was made indicating that such entity was not a separate legal entity that maintained separate books and records; (vi) has filed its own tax returns (except to the extent that it has been a tax-disregarded entity not required to file tax returns under applicable law) and, if it is a corporation, has not filed a consolidated federal income tax return with any other Person; (vii) has been, and at all times has held itself out to the public as, a legal entity separate and distinct from any other Person (including any Affiliate or other Related Party); (viii) has corrected any known misunderstanding regarding its status as a separate entity; (ix) has conducted all of its business and held all of its assets in its own name; (x) has not identified itself or any of its affiliates as a division or part of the other; (xi) has maintained and utilized separate stationery, invoices and checks bearing its own name; (xii) has not commingled its assets with those of any other Person (other than any other Mortgage Loan Borrower, Senior Mezzanine Borrower or Maryland Owner) and has held all of its assets in its own name; (xiii) has not guaranteed or become obligated for the debts of any other Person; (xiv) has not held itself out as being responsible for the debts or obligations of any other Person; (xv) has allocated fairly and reasonably any overhead expenses that have been shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate or Related Party; (xvi) has not pledged its assets to secure the obligations of any other Person and no such pledge remains outstanding except in connection with the Loan; (xvii) has maintained adequate capital in light of its contemplated business operations; (xviii) has maintained a sufficient number of employees in light of its contemplated business operations and has paid the salaries of its own employees from its own funds; (xix) has not owned any subsidiary or any equity interest in any other entity; (xx) has not incurred any indebtedness that is still outstanding other than indebtedness that is permitted under the Loan Documents; (xxi) has not had any of its obligations guaranteed by an affiliate, except for guarantees that have been either released or discharged (or that will be discharged as a result of the closing of the Loan) or guarantees that are expressly contemplated by the Mortgage Loan Documents; (xxii) none of the current direct or indirect owners of equity interests in Mortgage Loan Borrower, Senior Mezzanine Borrower or Maryland Owner is affiliated with any of the former owners of equity interests in Mortgage Loan Borrower, Senior Mezzanine Borrower or Maryland Owner; and (xxiii) except for the Operating Lessee, none of the tenants holding leasehold interests with respect to any Individual Property are affiliated with Mortgage Loan Borrower, Senior Mezzanine Borrower or Maryland Owner.

Additional Entity Representations, Warranties and Covenants. (a) Each Borrower hereby represents with respect to each Other Senior Mezzanine Borrower Individual Owner, each Maryland Owner, each Operating Lessee and each Mortgage Loan Borrower and Maryland Owner SPE Component Entity that it: (i) is and always has been duly formed, validly existing, and in good standing in the state of its incorporation and in all other jurisdictions where it is qualified to do business except for anything which has been remedied prior to the date hereof and which did not and will not affect or impair, and has not at any time affected or impaired, Mortgage Loan Borrowersuch Individual Owner’s or Maryland Owner’s right to own and/or operate the Propertiesrelated Individual Property, as the case may be, in any material respect; (ii) has no judgments or liens of any nature against it except for tax liens not yet due; (iii) is in compliance in all material respects with all laws, regulations, and orders applicable to it and, except as otherwise disclosed in this Agreement, has received all permits necessary for it to operate; (iv) is not involved in any dispute with any taxing authority except as disclosed on Schedule XII XV and except for any tax certiorari proceedings that would be permitted under Section 5.4(b); (v) has paid all taxes which it owes; (vi) (A) as to each Property Individual Owner (other than any Maryland Owner or Maryland Borrower) has never owned any real property other than the an Individual Property and personal property necessary or incidental to its ownership or operation of the Individual Property that it owns and has never engaged in any business other than the ownership and/or operation of the Individual Property that it owns (or as to Operating Lessee, that it operates pursuant to the applicable Operating Lease, (Biii) as to HH Gaithersburg LLC, has never owned any property other than the Maryland Property that it owns, its limited liability company interests in HH Gaithersburg Borrower LLC, LLC and incidental personal property necessary or incidental to its ownership or operation of the foregoing and has never engaged in any business other than the ownership and/or operation of the Maryland Property that it owns and HH Gaithersburg Borrower LLC, (Civ) as to HH Gaithersburg Borrower LLC, had never owned any property other than incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents and has never engaged in any business other than entering into and performing its obligations under the Loan Documents, (Dv) as to HH Baltimore Holdings LLC and HH Annapolis Holding LLC, has never owned any property other than its limited liability company interests in HH Baltimore LLC and HH Annapolis LLC, respectively, and such incidental Personal Property as may be necessary for the ownership and operation of HH Baltimore LLC and HH Annapolis LLC, respectively, and has never engaged in any business other than the other than the ownership and operation of the limited liability company interests in HH Baltimore LLC and HH Annapolis LLC, respectively, and activities incidental thereto, (Evi) as to HH Baltimore LLC and HH Annapolis LLC, has never owned any property other than the Maryland Property that it owns and such incidental Personal Property as may be necessary for the ownership and operation of the Maryland Property that it owns and has never engaged in any business other than the ownership and/or operation of the Maryland Property that it owns, (Fvii) as to each Operating Lessee, has never owned any property other than such property as may be necessary for the ownership or operating of the Individual Property that it leases and has never engaged in any business other than the operating and maintenance of the Individual Property that it leases, leases and (Gviii) as to each SPE Component Entity, has never owned any property other than its ownership interest in its respective Borrower and personal property necessary or incidental to the ownership or operation of such Borrower and has never engaged in any business other than the ownership and/or operation of such Borrower); (vii) is not now, nor has ever been, party to any lawsuit, arbitration, summons, or legal proceeding that is still pending that, if adversely determined, would have a material adverse effect on any Mortgage Loan Borrower or such Individual Owner, Maryland Owner, Operating Lessee or SPE Component Entity, or that resulted in a judgment against it that has not been paid in full or that was not fully covered by an applicable insurance policy; (viii) has no material contingent or actual obligations not related to the Mortgage Loan Individual Property that it owns (or as to any Operating LesseeLessees, that it operates pursuant to the applicable an Operating Lease);; and (ix) has provided Lender with complete financial statements that reflect a fair and accurate view of the entity’s financial condition; and (x) has obtained a current Phase I environmental site assessment (“ESA) for each Individual Property prepared consistent with ASTM Practice E 1527 and the ESA has not identified any recognized environmental conditions that require further remediation that is not being remediated as set forth in the ESA or has not been remediated. (b) Each Borrower and Maryland Owner hereby represents with respect to each Other Senior Mezzanine BorrowerIndividual Owner, Mortgage Loan Borrower each Maryland Owner, each Operating Lessee and Maryland Owner each SPE Component that, from the date of such entity’s formation to the date of this Agreement, such entity: (i) has not entered into any contract or agreement with any of its Affiliates, constituents, or owners, or any guarantors of any of its obligations or any Affiliate of any of the foregoing (individually, a “Related Party” and collectively, the “Related Parties”), except upon terms and conditions that were at the time entered into commercially reasonable and substantially similar to those available in an arm’s-length transaction with an unrelated party; (ii) has paid all of its debts and liabilities from its assets; (iii) has done or caused to be done all things necessary to observe all organizational formalities applicable to it and to preserve its existence; (iv) has maintained all of its books, records, financial statements and bank accounts separate from those of any other Person; (v) has not had its assets listed as assets on the financial statement of any other Person except the consolidated statements of Highland Hospitality Corporation and its subsidiaries in which no statement was made indicating that such entity was not a separate legal entity that maintained separate books and recordsPerson; (vi) has filed its own tax returns (except to the extent that it has been a tax-disregarded entity not required to file tax returns under applicable law) and, if it is a corporation, has not filed a consolidated federal income tax return with any other Person; (vii) has been, and at all times has held itself out to the public as, a legal entity separate and distinct from any other Person (including any Affiliate or other Related Party); (viii) has corrected any known misunderstanding regarding its status as a separate entity; (ix) has conducted all of its business and held all of its assets in its own name; (x) has not identified itself or any of its affiliates as a division or part of the other; (xi) has maintained and utilized separate stationery, invoices and checks bearing its own name; (xii) has not commingled its assets with those of any other Person (other than any other Mortgage Loan Borrower or Maryland Individual Owner) and has held all of its assets in its own name; (xiii) has not guaranteed or become obligated for the debts of any other Person; (xiv) has not held itself out as being responsible for the debts or obligations of any other Person; (xv) has allocated fairly and reasonably any overhead expenses that have been shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate or Related Party; (xvi) has not pledged its assets to secure the obligations of any other Person and no such pledge remains outstanding except in connection with the LoanRestructuring; (xvii) has maintained adequate capital in light of its contemplated business operations; (xviii) has maintained a sufficient number of employees in light of its contemplated business operations and has paid the salaries of its own employees from its own funds; (xix) has not owned any subsidiary or any equity interest in any other entity, other than, (A) as to HH Annapolis Holding LLC, HH Gaithersburg LLC and HH Baltimore Holdings LLC, HH Annapolis LLC, HH Gaithersburg Borrower LLC and HH Baltimore LLC, respectively and (B) as to an SPE Component Entity, its interest in its respective Borrower; (xx) has not incurred any indebtedness that is still outstanding other than indebtedness that is permitted under the Loan Documents; (xxi) has not had any of its obligations guaranteed by an affiliate, except for guarantees that have been either released or discharged (or that will be discharged as a result of the closing of the LoanRestructuring) or guarantees that are expressly contemplated by the Mortgage Loan Documents; (xxii) none of the current direct or indirect owners of equity interests in Mortgage Loan Borrower or Maryland Owner is affiliated with any of the former owners of equity interests in Mortgage Loan Borrower or Maryland Owner; and (xxiii) except for the Operating LesseeLessees, none of the tenants holding leasehold interests with respect to any Individual Property are affiliated with Mortgage Loan Borrower or Maryland Owner.

Additional Entity Representations, Warranties and Covenants. (a) Borrower hereby represents with respect to each Other Senior Mezzanine 1 Borrower and each Mortgage Loan Borrower and Maryland Owner that it: (i) is and always has been duly formed, validly existing, and in good standing in the state of its incorporation and in all other jurisdictions where it is qualified to do business except for anything which has been remedied prior to the date hereof and which did not and will not affect or impair, and has not at any time affected or impaired, Mortgage Loan Borrower’s or Maryland Owner’s right to own and/or operate the Properties, as the case may be, in any material respect; (ii) has no judgments or liens of any nature against it except for tax liens not yet due; (iii) is in compliance in all material respects with all laws, regulations, and orders applicable to it and, except as otherwise disclosed in this Agreement, has received all permits necessary for it to operate; (iv) is not involved in any dispute with any taxing authority except as disclosed on Schedule XII and except for any tax certiorari proceedings that would be permitted under Section 5.4(b); (v) has paid all taxes which it owes; (vi) (A) as to each Property Owner (other than any Maryland Owner or Maryland Borrower) has never owned any real property other than the Individual Property and personal property necessary or incidental to its ownership or operation of the Individual Property that it owns and has never engaged in any business other than the ownership and/or operation of the Individual Property that it owns (or as to Operating Lessee, that it operates pursuant to the applicable Operating Lease, (B) as to HH Gaithersburg LLC, has never owned any property other than the Maryland Property that it owns, its limited liability company interests in HH Gaithersburg Borrower LLC, and incidental personal property necessary or incidental to its ownership or operation of the foregoing and has never engaged in any business other than the ownership and/or operation of the Maryland Property that it owns and HH Gaithersburg Borrower LLC, (C) as to HH Gaithersburg Borrower LLC, had never owned any property other than incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents and has never engaged in any business other than entering into and performing its obligations under the Loan Documents, (D) as to HH Baltimore Holdings LLC and HH Annapolis Holding LLC, has never owned any property other than its limited liability company interests in HH Baltimore LLC and HH Annapolis LLC, respectively, and such incidental Personal Property as may be necessary for the ownership and operation of HH Baltimore LLC and HH Annapolis LLC, respectively, and has never engaged in any business other than the other than the ownership and operation of the limited liability company interests in HH Baltimore LLC and HH Annapolis LLC, respectively, and activities incidental thereto, (E) as to HH Baltimore LLC and HH Annapolis LLC, has never owned any property other than the Maryland Property that it owns and such incidental Personal Property as may be necessary for the ownership and operation of the Maryland Property that it owns and has never engaged in any business other than the ownership and/or operation of the Maryland Property that it owns, (F) as to each Operating Lessee, has never owned any property other than such property as may be necessary for the ownership or operating of the Individual Property that it leases and has never engaged in any business other than the operating and maintenance of the Individual Property that it leases, and (G) as to each SPE Component Entity, has never owned any property other than its ownership interest in its respective Borrower and personal property necessary or incidental to the ownership or operation of such Borrower and has never engaged in any business other than the ownership and/or operation of such Borrower); (vii) is not now, nor has ever been, party to any lawsuit, arbitration, summons, or legal proceeding that is still pending that, if adversely determined, would have a material adverse effect on any Mortgage Loan Borrower or Maryland Owner, or that resulted in a judgment against it that has not been paid in full or that was not fully covered by an applicable insurance policy; (viii) has no material contingent or actual obligations not related to the Mortgage Loan Property that it owns (or as to any Operating Lessee, that it operates pursuant to the applicable Operating Lease); (ix) has provided Lender with complete financial statements that reflect a fair and accurate view of the entity’s financial condition; and (x) has obtained a current Phase I environmental site assessment (“ESA) for each Individual Property prepared consistent with ASTM Practice E 1527 and the ESA has not identified any recognized environmental conditions that require further remediation that is not being remediated as set forth in the ESA or has not been remediated. (b) Borrower hereby represents with respect to each Other Senior Mezzanine 1 Borrower, Mortgage Loan Borrower and Maryland Owner that, from the date of such entity’s formation to the date of this Agreement, such entity: (i) has not entered into any contract or agreement with any of its Affiliates, constituents, or owners, or any guarantors of any of its obligations or any Affiliate of any of the foregoing (individually, a “Related Party” and collectively, the “Related Parties”), except upon terms and conditions that were at the time entered into commercially reasonable and substantially similar to those available in an arm’s-length transaction with an unrelated party; (ii) has paid all of its debts and liabilities from its assets; (iii) has done or caused to be done all things necessary to observe all organizational formalities applicable to it and to preserve its existence; (iv) has maintained all of its books, records, financial statements and bank accounts separate from those of any other Person; (v) has not had its assets listed as assets on the financial statement of any other Person except the consolidated statements of Highland Hospitality Corporation and its subsidiaries in which no statement was made indicating that such entity was not a separate legal entity that maintained separate books and records; (vi) has filed its own tax returns (except to the extent that it has been a tax-disregarded entity not required to file tax returns under applicable law) and, if it is a corporation, has not filed a consolidated federal income tax return with any other Person; (vii) has been, and at all times has held itself out to the public as, a legal entity separate and distinct from any other Person (including any Affiliate or other Related Party); (viii) has corrected any known misunderstanding regarding its status as a separate entity; (ix) has conducted all of its business and held all of its assets in its own name; (x) has not identified itself or any of its affiliates as a division or part of the other; (xi) has maintained and utilized separate stationery, invoices and checks bearing its own name; (xii) has not commingled its assets with those of any other Person (other than any other Mortgage Loan Borrower or Maryland Owner) and has held all of its assets in its own name; (xiii) has not guaranteed or become obligated for the debts of any other Person; (xiv) has not held itself out as being responsible for the debts or obligations of any other Person; (xv) has allocated fairly and reasonably any overhead expenses that have been shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate or Related Party; (xvi) has not pledged its assets to secure the obligations of any other Person and no such pledge remains outstanding except in connection with the Loan; (xvii) has maintained adequate capital in light of its contemplated business operations; (xviii) has maintained a sufficient number of employees in light of its contemplated business operations and has paid the salaries of its own employees from its own funds; (xix) has not owned any subsidiary or any equity interest in any other entity; (xx) has not incurred any indebtedness that is still outstanding other than indebtedness that is permitted under the Loan Documents; (xxi) has not had any of its obligations guaranteed by an affiliate, except for guarantees that have been either released or discharged (or that will be discharged as a result of the closing of the Loan) or guarantees that are expressly contemplated by the Mortgage Loan Documents; (xxii) none of the current direct or indirect owners of equity interests in Mortgage Loan Borrower or Maryland Owner is affiliated with any of the former owners of equity interests in Mortgage Loan Borrower or Maryland Owner; and (xxiii) except for the Operating Lessee, none of the tenants holding leasehold interests with respect to any Individual Property are affiliated with Mortgage Loan Borrower or Maryland Owner.