/s/ J. D. NicholsJ.D. NicholsChairman of NTS Development Companyand Residential Management Company/s/ Brian F. Lavin Brian F. LavinPresident of NTS Development Companyand Residential Management Company

10172 Linn Station Road

Louisville, KY 40223

April 25, 2012

To the Audit Committee of the Board of Directors of NTS Mortgage Income Fund (the “Audit Committee”):

 

NTS Development Company and Residential Management Company (collectively referred to herein as “NTS”) agree to defer amounts owed to them by the NTS Mortgage Income Fund or its subsidiaries (the “Fund”) as of April 10, 2012, and to permit any such amounts to accrue through June 30, 2012, other than as permitted by cash flows of the Fund.  As of April 10, 2012, the Fund owed $8,575,150.76 to NTS and their affiliates.

 

NTS further agrees to advance to the Fund such monies as are reasonably necessary to cover any shortfalls for expenses incurred between April 10, 2012 and June 30, 2012, and for those expenses provided for in the Fund’s 2011-2012 Budget as approved by the Fund’s Board of Directors through June 30, 2012.  Unless NTS otherwise agrees, any such advances shall exclude any principal repayments on the mortgage note owed by the Fund to PNC Bank, National Association.

 

The terms of any deferrals or advances from NTS will be presented to the Audit Committee for prior approval and may be documented through a promissory note or notes from the Fund to NTS or their affiliates which shall mature on June 30, 2012.  Any amounts so deferred or advanced by NTS shall accrue interest at the same rate as the NTS cost of funds rate which is currently 5.34%.

 

NTS has the financial ability to allow such deferrals and advances and will provide evidence of such upon reasonable request of the Audit Committee.

 

 

	/s/ J. D. Nichols              J.D. Nichols Chairman of NTS Development Company and Residential Management Company
	/s/ Brian F. Lavin            Brian F. Lavin President of NTS Development Company and Residential Management Company