Company: INTG
Filing Date: 2025-09-30
Form Type: 10-K
Source: 0001493152-25-016154
Chunk: 26

Company: INTERGROUP CORP
Filing Date: 2025-09-30
Form: 10-K
Item: Item 1
Chunk 26
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 in Operating. The lender agreed to waive
                                            a forbearance fee of $245,000 and default interest of approximately $1.17 million, for a
                                            total waiver of $1.416 million. The waived amounts were recorded as a gain on extinguishment
                                            of debt.

Portsmouth
continues to provide a limited guaranty in connection with both facilities. The Company is also subject to customary covenants, including
financial ratios and affirmative obligations.

D.
Related Party Guarantee – InterGroup

Under
the March 28, 2025 refinancing, all guaranties associated with the prior 2013 senior mortgage and 2019 mezzanine facilities were terminated.
The current senior mortgage and amended mezzanine facilities include customary limited non=recourse carve-out and performance undertakings
provided at the Portsmouth/Operating-entity level. InterGroup is not a guarantor of the March 28, 2025 senior mortgage loan or the amended
mezzanine loan.

E.
DSCR and Lockbox Arrangements

Operating
did not maintain compliance with the required Debt Service Coverage Ratio (“DSCR”) under the original December 2013 loan
and is subject to ongoing DSCR requirements under the refinanced loans. Under the March 28, 2025 refinancing, a Cash Management Agreement
with Prime Finance (“Lender”) and Wells Fargo Bank, N.A. (“Cash Management Bank”) requires that all Hotel cash
receipts be deposited into a lender-controlled account. This lockbox arrangement remains in effect until DSCR conditions are met for
two consecutive quarters. Funds are disbursed for approved operating expenses, debt service (including senior interest-only), and required
reserves (insurance, real estate taxes, and furniture, fixtures and equipment) in accordance with lender-approved budgets. Excess cash,
if any, is held in lender-controlled accounts for future interest-only payments to the Mezzanine lender, subject to certain conditions
under the loan agreements with both lenders (a “cash sweep” mechanism).

These
Hotel loan obligations reside at Portsmouth’s subsidiaries (Justice Operating Company, LLC and Justice Mezzanine Company, LLC)
and are non-recourse to InterGroup except to the limited extent of the guaranties described in Note 10.

15

Related
Party Financing

On
July 2, 2014, the Partnership secured an unsecured loan from InterGroup in the principal amount of $4,250,000, bearing a fixed annual
interest rate of