R2005-86 AUTHORIZING LIMITED GUARANTY

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LIMITED GUARANTY THIS LIMITED GUARANTY, given this�U day o , 2005, by City of Decatur (hereinafter "Guarantor") to Decatur Housing Au ty (hereinafter designated as "Lender"). WITNESSES THAT: Guazantor, Lender and East Lake Management & Development Corp. ("Develoner") are parties to that one certain Phase II and Phase III Development Agreement da.ted , 2005 (the "Develonment At�reement"). Pursuant to the terms of the Development Agreement, Guarantor agreed to grant a limited guaranty of up to $250,000 for each of the Phase II Infiastructure Predevelopment Loan and the Phase III Infrastructure Predevelopment Loan (both as defined in the Development Agreement), with any guaranty payments to be paid only from certain sources of funds received by Guarantor. In addition, Lender is advancing funds to Developer to pay Thirteen Thousand Dollazs ($13,000.00) of estimated costs for the insta.11ation of taps into the water and sewer mains to allow service to residential units to be built on lots bounded by Clinton Street, Condit Street, Grand Avenue, and the railroad tracks within the Phase II area of Wabash Crossing. ("Tan Costs"), and Lender has requested Guarantor to guazantee repayment of such Tap Costs actually advanced by Lender and approved by Guarantor. In consideration of the benefits to be derived by Guazantor as a result of the Development Agreement and the Tap Costs and in satisfaction of its obligations thereunder, Guarantor agrees as follows: 1. Guarantor does hereby guarantee Lender, subject to the terms and conditions hereof, (i) payment of the outstanding balance of any Phase II Infrastructure Predevelopment Loan, when and as the same sha.11 become due, provided such Phase II Infrastructure Predevelopment Loan does not exceed Two Hundred Fifty Thousand Dollars ($250,000.00); (ii) payment of the outstanding balance of any Phase III Infrastructure Predevelopment Loan as sha11 be advanced provided such Phase III Infrastructure Predevelopment Loan does not exceed Two Hundred Fifty Thousand Dollars ($250,000.00) and (iii) repayment of the Tap Costs, (collectively, the "Guaranteed Obligations"). The above guaranty shall constitute a guaranty of payment only. Guarantor's obligations hereunder are conditioned upon the occurrence of each of the following conditions: (i) Developer complying with the provisions of Section 2.2.2 & Section 2.3.2. of the Development Agreement regarding City approval and the draw process for the Phase II Infrastructure Predevelopment Loan or Phase III Infiastructure Predevelopment Loan, respectively; (ii) the HOPE VI Financing (as defined in the Development Agreement) for the Phase II or Phase III Infiastructure Component as applicable does not close (each, a "HOPE YI ClosinQ"); (iii) Lender has not received the work product corresponding to the Phase II or Phase III Infrastructure Predevelopment Loan as applicable; (iv) Lender is not in default under the Development Agreement; and (v) Developer has failed to pay the Guaranteed Obligations when due. 2. This Guaranty shall commence on execution and delivery of the Development Agreement and continue until the earliest to occur of (i) the Phase II Infrastructure Predevelopment Loan, Phase III Infrastructure Predevelopment Loan, and the Tap Costs are repaid in full, (ii)the HOPE VI Closing for Phase II and Phase III Infrastructure Components (as {DOOG4860.DOC/6 Limited Guaranty 198 017901}