Exhibit 10.1


 


EXECUTION VERSION


 


AMENDMENT NO. 1 

TO SECOND AMENDED AND RESTATED GUARANTY


 


AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED
GUARANTY, dated as of October 24, 2005, (the “Amendment”) by and between
Merrill Lynch Mortgage Capital Inc. (the “Buyer”), and Affordable
Residential Communities, LP (the “Parent Guarantor”):


 


The
Parent Guarantor has made that certain Second Amended and Restated Guaranty,
dated as of April 6, 2005, in favor of the Buyer (the “Existing Guaranty”; as amended by this Amendment,
the “Guaranty”).  Capitalized terms used but not otherwise
defined herein shall have the meanings given to them in the Existing Guaranty.


 


The
Buyer and the Parent Guarantor have agreed, subject to the terms and conditions
of this Amendment, that the Existing Guaranty be amended to reflect certain
agreed upon revisions to the terms of the Existing Guaranty.


 


Accordingly, the Buyer and the Parent Guarantor hereby
agree, in consideration of the mutual premises and mutual obligations set forth
herein, that the Existing Guaranty is hereby amended as follows:


 


Section 1.                                            Covenants.
Section 11 of the Existing Guaranty is hereby amended by deleting subsection (c) in
its entirety and replacing it with the following:


 


“(c)  Maintenance of Tangible Net Worth.  As of the last day of each fiscal quarter,
the REIT shall maintain a Tangible Net Worth of not less than (i) $425,000,000,
on and after September 30, 2005 through and including December 31,
2006; (ii) $385,000,000, on and after January 1, 2007 through and including
December 31, 2007; and (iii) $355,000,000, on and after January 1,
2008 through and including September 30, 2008.”


 


Section 2.                                            Conditions
Precedent.  This Amendment shall
become effective on the date hereof (the “Amendment Effective Date”)
subject to the satisfaction of the following conditions precedent:


 


2.1                                 Delivered
Documents.  On the Amendment
Effective Date, the Buyer shall have received the following documents, each of
which shall be satisfactory to the Buyer in form and substance:


 


(a)                                  this
Amendment, executed and delivered by a duly authorized officer of each of the
Buyer and the Parent Guarantor; and


 


(b)                                 such
other documents as the Buyer or counsel to the Buyer may reasonably request.


 





















 


Section 3.                                            Limited
Effect. Except as expressly amended and modified by this Amendment, the
Existing Guaranty shall continue to be, and shall remain, in full force and
effect in accordance with its terms.


 


Section 4.                                            Counterparts.  This
Amendment may be executed in one or more counterparts and by different parties
hereto on separate counterparts, each of which, when so executed, shall
constitute one and the same agreement.


 


SECTION 5.                                  GOVERNING
LAW.  THIS AMENDMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.


 


Section 6.                                            Conflicts.  The parties hereto agree that in the event
there is any conflict between the terms of this Amendment, and the terms of the
Existing Guaranty, the provisions of this Amendment shall control.


 


[SIGNATURE PAGE FOLLOWS]


 





















 


IN WITNESS WHEREOF, the parties have caused their
names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.


 


 


	
  Buyer:

  	
  MERRILL LYNCH MORTGAGE

  CAPITAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/James B.
  Cason

  
	
   

  	
   

  	
  Name: James B. Cason

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Parent
  Guarantor:

  	
  AFFORDABLE RESIDENTIAL

  COMMUNITIES, LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Scott L.
  Gesell

  
	
   

  	
   

  	
  Name: Scott L. Gesell

  
	
   

  	
   

  	
  Title: Vice President