NTS MORTGAGE INCOME FUND
EX-10.2
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<TYPE>EX-10.2
<SEQUENCE>2
<FILENAME>a08-2965_1ex10d2.htm
<DESCRIPTION>EX-10.2
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<p align="left" style="font-weight:bold;margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></p>

<p align="right" style="font-weight:bold;margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-variant:normal !important;">EXHIBIT 10.2</font></b></p>

<p align="left" style="font-weight:bold;margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-variant:normal !important;">GUARANTY
AGREEMENT</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">THIS GUARANTY AGREEMENT, (the &#147;Agreement&#148;) is
made as of March&nbsp;31, 1989 between NTS Mortgage Income Fund (the &#147;Fund&#148;)
and NTS Guaranty Corporation (the &#147;Guarantor&#148;).&#160;
All capitalized terms used herein shall have the meaning set forth in
the Fund&#146;s Registration Statement No.&nbsp;33-25217, as amended, filed with the
Securities and Exchange Commission on Form&nbsp;S-11.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-variant:normal !important;">WITNESSETH</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; WHEREAS, the Fund has filed the Registration Statement, covering its
shares of common stock, par value $0.001 per share, to be offered to the
public, and the Fund may thereafter sell additional securities or otherwise
raise additional capital; and</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; WHEREAS, the Fund intends to qualify as a &#147;real estate investment
trust,&#148; as defined in the Code, and to invest its funds in investments
permitted in the Prospectus and Sections 856-860 of the Code; and</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; WHEREAS, the Fund intends to make Mortgage Loans to, among others,
Affiliated Borrowers; and</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; WHEREAS, the Fund is willing to make such Mortgage Loans only on the
condition, among others that the Guarantor execute and deliver these Guatanties
described herein.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, it is agreed as follows:</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; A.&#160; <u>Escrow Guaranty.</u>&#160; The Guarantor has agreed to pay the Fund&#146;s
subscribers, directly or indirectly, the amount necessary to supplement the
cash generated by investing the Fund&#146;s Gross Proceeds in the escrow account or
in temporary investments so as to provide subscribers with a return on their
Original Capital Contributions equal to an 8.0% per annum, noncompounded, for
the period from the date the subscriber&#146;s proceeds were deposited in the escrow
account through the 89<sup>th</sup> day following the Initial Closing Date or,
if the Minimum Number of Shares are not sold through the date on which the
proceeds are released from the escrow account.&#160;
To the extent the Fund&#146;s investments yield more than such an 8.0% return
to the subscribers, the excess will be applied to amounts otherwise due under
the Cash Flow Guaranty.&#160; Any amount so
provided pursuant to the Escrow Guaranty will be repaid in the event funds are
available after satisfaction of the Cash Flow Guaranty and the requirements of
the Code relating to REIT qualification.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; B.&#160; <u>Cash Flow Guaranty.</u>&#160; The Guarantor will provide the Affiliated
Borrowers with funds sufficient to make any payments of Supplemental Interest
necessary to enable the Fund to make quarterly distributions to Stockholders
equal to an annual 12% noncompound return on their Original Capital
Contributions for the period beginning on the 90<sup>th</sup> day following the
Initial Closing Date and terminating upon the later of two years thereafter or
one year from the Offering Termination Date.&#160;
The Fund agrees that in the event the Guarantor pays any money pursuant
to the Cash Flow Guaranty, such amounts will be credited against 50% of the
amounts later due by the Affiliated Borrowers as Incentive or Gross Receipts
Interest, thereby reducing the amount of Incentive or Gross Receipts the Fund will
receive from Affiliated Borrowers in later years.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; C.&#160; <u>Junior Mortgage Loan
Guaranty.</u>&#160; The Guarantor hereby
unconditionally and irrevocably guarantees to the Fund, and its successors,
endorsees, transferees and assigns, that, in the event any Junior or Temporary
Mortgage Loan made to any Affiliated Borrower should become a Defaulted Junior
or Temporary Mortgage Loan (as defined below), the Guarantor will make payment
to the Fund of the Principal amount of the Junior or Temporary Mortgage Loan.&#160; The Guarantor&#146;s obligation hereunder is
limited to the Principal balance outstanding on the Junior or Temporary
Mortgage Loan and does not include the Interest Reserve.&#160; A &#147;Defaulted Mortgage Loan&#148; is a Junior or
Temporary Mortgage Loan on which an Affiliated Borrower has defaulted on the
repayment of Principal when due, or defaults on the payment of interest or
other payment which default gives rise to the acceleration of such Junior or
Temporary Mortgage Loan.&#160; The Guarantor
shall make payment on any such Defaulted Junior or Temporary Mortgage Loan
within ten days after written demand to do so by the Fund.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

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<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; D.&#160; <u>Purchase Price Guaranty</u>.&#160;&#160; The Guarantor has guaranteed that
Stockholders will receive during the life of the Fund aggregate distributions
from all sources in an amount at least equal to their Original Capital
Contributions without regard to the source of characterization of such cash
flow.&#160; Any amount due pursuant to the
Purchase Price Guaranty will be paid promptly after the complete dissolution
and liquidation of the Fund and the distribution of the proceeds from the sale
of its assets to Stockholders.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; E.&#160; <u>Limitation</u>.&#160; The Escrow Guaranty, the Cash Flow Guaranty,
the Junior Mortgage Loan Guaranty and the Purchase Price Guaranty are binding
on the Guarantor, but are limited to its assets.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; F.&#160; <u>Delegation</u>.&#160; The Guarantor shall have the right to
delegate and be released from its obligations under this Agreement; provided,
however:&#160; (i)&nbsp;that no delegation
shall be effective to release the Guarantor from its obligations hereunder
unless the delegate shall have a net worth at least equal to $10,000,000 and (ii)&nbsp;a
majority of the Independent Directors of the Fund shall consent to such
delegation and release.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; G.&#160; <u>Termination</u>.&#160;&#160; If the Advisory Agreement is terminated
without the consent of the Advisor, the obligations of the Guarantor under this
Agreement will immediately terminate, but will remain in effect with regard to
any Junior or Temporary Mortgage Loan having been made by the Fund to an
Affiliated Borrower as of the date of such termination.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; H.&#160; <u>Governing Law</u>.&#160; This instrument and the rights and
obligations of all parties hereunder shall be governed by and construed under
the substantive laws of the State of Kentucky, without regard to conflicts of law
or rules.</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.</font></p>

<p align="left" style="font-weight:bold;margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-variant:normal !important;">&nbsp;</font></b></p>

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  <p align="left" style="font-weight:bold;margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-variant:normal !important;">NTS
  GUARANTY CORPORATION</font></b></p>
  </td>
 </tr>
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  <p style="margin:0in 0in .0001pt;text-align:justify;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
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  <p style="margin:0in 0in .0001pt;text-align:justify;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="360" valign="top" style="padding:0in 0in 0in 0in;width:3.75in;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
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  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="397" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:297.7pt;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">/s/&nbsp;&nbsp;&nbsp; W.D.
  Parr</font></i></p>
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  <p style="margin:0in 0in .0001pt;text-align:justify;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
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  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">W.D. Parr</font></p>
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  <p style="margin:0in 0in .0001pt;text-align:justify;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
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  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Its:</font></p>
  </td>
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  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Executive Vice President</font></p>
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  <p style="margin:0in 0in .0001pt;text-align:justify;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
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  <td width="360" valign="top" style="padding:0in 0in 0in 0in;width:3.75in;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
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  <p align="left" style="font-weight:bold;margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-variant:normal !important;">NTS
  MORTGAGE INCOME FUND</font></b></p>
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  <p style="margin:0in 0in .0001pt;text-align:justify;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
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  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
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  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="397" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:297.7pt;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/&nbsp;&nbsp; <i>&nbsp;R.L. Good</i></font></p>
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  <p style="margin:0in 0in .0001pt;text-align:justify;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="397" colspan="2" valign="top" style="border:none;padding:0in 0in 0in 0in;width:297.7pt;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">R.L. Good</font></p>
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  <p style="margin:0in 0in .0001pt;text-align:justify;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="37" valign="top" style="padding:0in 0in 0in 0in;width:27.7pt;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Its:</font></p>
  </td>
  <td width="360" valign="top" style="padding:0in 0in 0in 0in;width:3.75in;">
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Executive Vice
  President</font></p>
  </td>
 </tr>
</table>

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