Company: INTG
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006758
Chunk: 31

Company: INTERGROUP CORP
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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new maturity date or loan prepayment. Both forbearance agreements also contained customary and usual terms, events of default, transaction
fees, and representations and warranties and covenants for like transactions. On January 14, 2025, the mezzanine lender issued a Notice
of Default, stating that the forbearance had expired and that it, too, was entitled to exercise all available legal and contractual remedies.
However, on January 21, 2025, the Mezz Lender submitted a summary of terms and conditions describing the terms and conditions in which
the Mezz Lender would entertain a new mezzanine loan. Such terms and conditions were accepted by the Company but are subject to change
subject to satisfaction of due diligence, approval of investment committee by Mezz Lender and execution of loan agreements. The Company
is diligently working with Prime and Mezz Lender in order to complete the refinancing by March 2025 and while no absolute assurance can
be provided, the Company remains highly focused on finalizing the transaction.

Effective
May 11, 2017, InterGroup agreed to become an additional guarantor under the limited guaranty and an additional indemnitor under the environmental
indemnity for Justice Investors limited partnership’s $97,000,000 mortgage loan and the $20,000,000 mezzanine loan. Pursuant to
the agreement, InterGroup is required to maintain certain net worth and liquidity. As of December 31, 2023, InterGroup is in compliance
with both requirements. Operating has not been meeting certain of its loan covenants such as the Debt Service Coverage Ratio (“DSCR”)
which would trigger the creation of a lockbox by the Lender for all cash collected by the Hotel. However, such lockbox has been created
and utilized from the loan inception and will be in place up to loan maturity regardless of the DSCR.

In
order to refinance the Hotel’s aforementioned debt, in May 2024, the Company entered into a financing procurement agreement with
a global provider of financial advisory services to real estate owners. The Company will endeavor to refinance the aforementioned loans
prior to their new maturity.

Four
of the Portsmouth directors serve as directors of InterGroup. The Company’s Chief Operating Officer was elected President of Portsmouth
in May 2021. The Company’s director and Chairman of the Audit Committee, William J. Nance.

As
Chairman of the Executive Strategic Real Estate and Securities