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                                                                     EXHIBIT 4.2

                    REGISTRATION RIGHTS AND LOCK-UP AGREEMENT

      This REGISTRATION RIGHTS AND LOCK-UP AGREEMENT (this "Agreement"), dated
as of May 13, 2004, is by and between Manufactured Home Communities, Inc., a
Maryland corporation (the "Company"), MHC Operating Limited Partnership, an
Illinois limited partnership (the "Partnership"), and Monte Vista, LLC (the
"Investor"). For the purposes of this Agreement, the term Investor shall be
deemed to include any Holder.

                                    RECITALS

      A. Pursuant to that certain Subscription Agreement dated as of the date
hereof and executed by the Investor (the "Subscription Agreement"), Investor is
acquiring limited partnership interests in the Partnership known as, and
hereinafter referred to as, "OP Units", which are in turn exchangeable for
either common shares of the Company, par value $.01 per share (the "Common
Shares" or "Shares") or cash; and

      B. The Investor is willing to enter into the agreements contained herein
as a condition to the Partnership's issuance of the OP Units to Investor.

      THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

      1. Registration Rights.

            In connection with the issuance of Registrable Shares (as defined in
Section 10 below) of the Company upon exchange by Investor of the OP Units
pursuant to the terms of the Second Amended and Restated MHC Operating Limited
Partnership Agreement of Limited Partnership dated as of March 15, 1996 (as
amended from time to time in accordance thereof, the "OP Partnership
Agreement"), Investor shall be entitled to registration of the Registrable
Shares under the Securities Act of 1933, as amended (the "Securities Act"),
subject to the terms and conditions set forth herein (the "Registration
Rights").

            (a) Shelf Registration. Subject to Section 1(c) below, at any time
      after the date which is ninety days prior to the expiration of the Lock-up
      Period (as defined in Section 6 hereof), upon written request of the
      Investor (the "Demand Date"), the Company shall file with the Securities
      and Exchange Commission (the "SEC") a shelf registration statement
      ("Registration Statement") and related prospectus ("Prospectus") that
      comply in all material respects with applicable SEC rules providing for
      registration under the Securities Act of the total number of Registrable
      Shares that the Investor would own if it were to redeem all OP Units
      issuable to it (a "Shelf Registration"). The Company shall use its best
      efforts to cause the Registration Statement to be declared effective under
      the Securities Act not later than ninety (90) days after the Demand Date
      (including filing with the Commission a request for acceleration of
      effectiveness in accordance with Rule 461 promulgated under the Securities
      Act within five (5) business days of the date that the Company is notified
      (orally or in writing, whichever is earlier) by the Commission that a
      Registration Statement will not be "reviewed," or not be

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      subject to further review. The Company will use its best efforts to keep
      the Registration Statement continuously effective until the earlier of (i)
      the date when all Registrable Shares covered by the Registration Statement
      have been sold, or (ii) if the Investor has exchanged its OP Units for
      Shares or cash, the later of (A) the date on which the Investor has
      received registered Shares or cash in exchange for OP Units, and (B) the
      date on which the Investor consummates the sale of all unregistered Shares
      it received in exchange for OP Units or is eligible to sell its
      unregistered Shares pursuant to Rule 144(k). Such Registration Statement
      also shall cover, to the extent allowable under the Securities Act and the
      Rules promulgated thereunder (including Securities Act Rule 416), such
      indeterminate number of additional shares of Common Stock resulting from
      stock splits, stock dividends or similar transactions with respect to the
      Registrable Shares.

            (b) Shelf Registration Expenses All fees and expenses in connection
      with registering the Registrable Shares in a Shelf Registration,
      including, without limitation SEC filing fees, fees of legal counsel to
      the Company, fees of the Company's accountants and printing fees (the
      "Shelf Registration Expenses") will be borne by the Company.

            (c) Timing of Registrations. The Company shall be entitled to
      postpone the filing of a Registration Statement if the Company reasonably
      determines that such filing (y) would require disclosure of material
      information the Company has a bona fide business purpose for retaining as
      confidential or (z) have a material adverse effect on the Company or its
      shareholders in relation to any financing, acquisition, corporate
      reorganization or other material transaction contemplated by the Board of
      Directors of the Company, involving the Company or any of its Affiliates,
      in each case as determined by the Company in its reasonable judgment;
      provided that the Company may only postpone such filing or suspend the
      effectiveness of a Registration Statement for a period not to exceed
      thirty (30) consecutive days, provided that the Company may not postpone
      or suspend its obligations under this Section 1 for more than sixty (60)
      days in the aggregate during any twelve (12) month period. Upon receipt of
      any notice from the Company of the happening of any event during the
      period a Registration Statement is effective which is of a type specified
      in the preceding sentence or as a result of which the Registration
      Statement or related Prospectus contains any untrue statement of a
      material fact or omits to state any material fact required to be stated
      therein or necessary to make the statements therein, in light of the
      circumstances under which they were made (in the case of the Prospectus)
      not misleading, Investor agrees that it will immediately discontinue
      offers and sales of the Registrable Shares under the Registration
      Statement until the Investor receives copies of a supplemented or amended
      Prospectus that corrects the misstatement(s) or omission(s) referred to
      above and receives notice that any post-effective amendment has become
      effective. The Company agrees to promptly file with the SEC such
      supplemental or amended prospectus. If so directed by the Company, the
      Investor will deliver to the Company any copies of the Prospectus covering
      the Registrable Shares in their possession at the time of receipt of such
      notice.

      2. Piggyback Registrations.

            (a) Right to Piggyback. Following the Lock-up Period (as defined in
      Section 6 hereof) and until the second anniversary of the date of
      conversion of the OP

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      Units to Common Shares (but in no event later than the sixth anniversary
      of the date of this Agreement), if the Company proposes to register any of
      its securities under the Securities Act (other than pursuant to (i) a
      Shelf Registration (subject to the provisions of Section 1(a) hereof) or
      (ii) a registration on Form S-4 or any successor form) and the
      registration form to be used may be used for the registration of
      Registrable Shares, the Company will give prompt written notice to the
      Investor of its intention to effect such a registration (each a "Piggyback
      Notice") and, subject to subparagraph 2(c) below, the Company will include
      in such registration all Registrable Shares with respect to which the
      Company has received written requests for inclusion therein within ten
      (10) days after the date of sending the Piggyback Notice (a "Piggyback
      Registration"), unless the Company, in its reasonable discretion, deems
      that the inclusion of Registrable Shares would adversely interfere with
      such offering, affect the Company's securities in the public markets, or
      otherwise adversely affect the Company, provided that other similarly
      situated holders of Common Stock are similarly cut back. Nothing herein
      shall affect the right of the Company to withdraw any such registration,
      or the Investor to withdraw its shares in any such registration, in their
      sole discretion.

            (b) Piggyback Registration Expenses. The Company's expenses in
      connection with registering the Registrable Shares in a Piggyback
      Registration, including without limitation SEC filing fees, fees of legal
      counsel to the Company, fees of the Company's accountants and printing
      fees, will be paid by the Company ("Piggyback Expenses").

            (c) Priority on Primary Registrations. If a Piggyback Registration
      is a primary registration on behalf of the Company and the Company
      determines that, or in the case of an underwritten registration, the
      managing underwriters advise the Company in writing that in their opinion,
      the number of securities requested to be included in such registration
      exceeds the number which can be sold in an orderly manner within a price
      range acceptable to the Company, the Company will include in such
      registration (i) first, the securities the Company proposes to sell and
      (ii) second, the Registrable Shares requested to be included in such
      Registration and any other securities requested to be included in such
      registration, pro rata among the holders of Registrable Shares requesting
      such registration and the holders of such other securities on the basis of
      the number of Shares requested for inclusion in such registration by each
      such holder.

            (d) Priority on Secondary Registrations. If a Piggyback Registration
      is a secondary registration on behalf of holders of the Company's
      securities other than the holders of Registrable Shares, and the Company
      determines that, or in the case of an underwritten offering, the managing
      underwriters advise the Company in writing that in their opinion, the
      number of securities requested to be included in such registration exceeds
      the number which can be sold in an orderly manner in such offering within
      a price range acceptable to the holders initially requesting such
      registration, the Company will include in such registration the securities
      requested to be included therein by the holders requesting such
      registration and the Registrable Shares requested to be included in such
      registration, pro rata among the holders of securities requesting such
      registration on the basis of the number of Shares requested for inclusion
      in such registration by each such holder.

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            (e) Selection of Underwriters. In the case of an underwritten
      Piggyback Registration, the Company will have the right to select the
      investment banker(s) and manager(s) to administer the offering.

      3. Effectiveness. The registration rights granted by this Agreement shall
not be effective until ninety (90) days prior to the expiration of the Lock-up
Period; provided that the Investors may not use any Registration Statement or
Prospectus until the expiration of the Lock-up Period.

      4. Registration Procedures. Whenever the Investor has requested that any
Registrable Shares be registered pursuant to this Agreement, the Company will
use its best efforts to effect the registration and facilitate the sale and
distribution of all such Registrable Shares specified in such Registration
Request in accordance with the intended method of disposition thereof and
pursuant thereto the Company will as expeditiously as possible, but subject to
the provisions of this Agreement:

            (a) prepare and file with the SEC such amendments, post-effective
      amendments and supplements to such Registration Statement and the
      Prospectus used in connection therewith as may be necessary to keep such
      Registration Statement continuously effective for the period required by
      the intended method of disposition or to describe the terms of any
      offering made from an effective Registration Statement, and comply with
      the provisions of the Securities Act with respect to the disposition of
      all securities covered by such Registration Statement during such period
      in accordance with the intended methods of disposition by the Holders
      thereof set forth in such Registration Statement;

            (b) Notify Holders of Registrable Shares to be sold as promptly as
      possible (A) when a Prospectus or any Prospectus supplement or
      post-effective amendment to the Registration Statement is proposed to be
      filed (but in no event in the case of this subparagraph (A), less than
      three (3) Business Days prior to date of such filing); (B) when the SEC
      notifies the Company whether there will be a "review" of such Registration
      Statement and whenever the SEC comments in writing on such Registration
      Statement; and (C) with respect to the Registration Statement or any
      post-effective amendment, when the same has become effective, and after
      the effectiveness thereof: (i) of any request by the SEC or any other
      Federal or state governmental authority for amendments or supplements to
      the Registration Statement or Prospectus or for additional information;
      (ii) of the issuance by the SEC of any stop order suspending the
      effectiveness of the Registration Statement covering any or all of the
      Registrable Shares or the initiation of any proceedings for that purpose;
      (iii) of the receipt by the Company of any notification with respect to
      the suspension of the qualification or exemption from qualification of any
      of the Registrable Shares for sale in any jurisdiction, or the initiation
      or threatening of any proceeding for such purpose; and (iv) if the
      financial statements included in the Registration Statement become
      ineligible for inclusion therein or of the occurrence of any event that
      makes any statement made in the Registration Statement or Prospectus or
      any document incorporated or deemed to be incorporated therein by
      reference untrue in any material respect or that requires any revisions to
      the Registration Statement, Prospectus or other documents so that, in the
      case of the Registration

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      Statement or the Prospectus, as the case may be, it will not contain any
      untrue statement of a material fact or omit to state any material fact
      required to be stated therein or necessary to make the statements therein,
      in the light of the circumstances under which they were made, not
      misleading. Without limitation to any remedies to which the Holders may be
      entitled under this Agreement, if any of the events described in this
      Section 3(b) occur, the Company shall use its best efforts to respond to
      and correct the event.

            (c) furnish to each Holder of Registrable Shares such number of
      copies of such Registration Statement, each amendment, post-effective
      amendment and supplement thereto, the Prospectus included in such
      Registration Statement (including each preliminary Prospectus) and such
      other documents as such Holder may reasonably request in order to
      facilitate the disposition of the Registrable Shares owned by such Holder;
      the Company consents to the use of the Prospectus for such Registration
      Statement, including each preliminary Prospectus, by each such holder of
      Registrable Shares in connection with the offering and sale of the
      Registrable Shares covered by the Prospectus or the preliminary
      Prospectus;

            (d) use its best efforts to register or qualify such Registrable
      Shares under such other securities or blue sky laws of such jurisdictions
      as any Holder reasonably requests and do any and all other acts and things
      which may be reasonably necessary or advisable to enable such Holder to
      consummate the disposition in such jurisdictions of the Registrable Shares
      owned by such Holder (provided that the Company will not be required to
      (i) qualify generally to do business in any jurisdiction where it would
      not otherwise be required to qualify but for this subparagraph, (ii)
      subject itself to taxation in any such jurisdiction, (iii) consent to
      general service of process in any such jurisdiction (unless the Company is
      subject to service in such jurisdiction and except as may be required by
      the Securities Act), or (iv) qualify such Registrable Shares in a given
      jurisdiction where expressions of investment interest are not sufficient
      in such jurisdiction to reasonably justify the expense of qualification in
      that jurisdiction or where such qualification would require the Company to
      register as a broker or dealer in such jurisdiction);

            (e) notify each Holder of such Registrable Shares, at any time when
      a Prospectus relating thereto is required to be delivered under the
      Securities Act, of the happening of any event as a result of which the
      Prospectus included in such Registration Statement contains an untrue
      statement of a material fact or omits any material fact necessary to make
      the statements therein not misleading, and, at the request of any such
      Holder, the Company will promptly prepare and furnish such Holders a
      supplement or amendment to such Prospectus so that, as thereafter
      delivered to the purchasers of such Registrable Shares, such Prospectus
      will not contain an untrue statement of a material fact or omit to state
      any material fact necessary to make the statements therein not misleading;

            (f) cause all such Registrable Shares to be listed on each
      securities exchange on which similar securities issued by the Company are
      then listed and to be qualified for trading on each system on which
      similar securities issued by the Company are from time

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      to time qualified;

            (g) provide a transfer agent and registrar for all such Registrable
      Shares not later than the effective date of such Registration Statement
      and thereafter maintain such a transfer agent and registrar; and otherwise
      cooperate with the Holders and the managing underwriter to facilitate the
      timely preparation and delivery of certificates representing Registrable
      Shares to be sold and not bearing any restrictive legends, other than as
      provided in the Company's By-laws or Articles of Incorporation
      ("Charter"), and enable such Registrable Shares to be in such
      denominations and registered in such names as the Holder may reasonably
      request;

            (h) use its reasonable efforts to comply with all applicable rules
      and regulations of the SEC;

            (i) permit any Holder of Registrable Shares which Holder, in the
      Company's judgment, might be deemed to be an underwriter or a controlling
      person of the Company, to participate in the preparation of such
      registration or comparable statement and to require the insertion therein
      of material, furnished to the Company in writing, which in the reasonable
      judgment of such Holder and its counsel should be included;

            (j) in the event of the issuance of any stop order suspending the
      effectiveness of a Registration Statement, or of any order suspending or
      preventing the use of any related Prospectus or suspending the
      qualification of any Common Shares included in such Registration Statement
      for sale in any jurisdiction, the Company will use its reasonable best
      efforts promptly to obtain the withdrawal of such order; and

            (k) use its best efforts to cause the Registrable Shares covered by
      a Registration Statement to be registered with or approved by such other
      governmental agencies or authorities as may be necessary by virtue of the
      business and operations of the Company to enable holders that have
      delivered registration requests to the Company to consummate the
      disposition of such Registrable Shares.

The Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in paragraphs 4(e) or (j) hereof,
the Investor will forthwith discontinue disposition of Common Shares pursuant to
a Shelf or Piggyback Registration until receipt of the copies of an appropriate
supplement or amendment to the Prospectus under paragraph 4(e) or until the
withdrawal of such order under paragraph 4(j). If any such registration or
comparable statement refers to any Holder by name or otherwise as the Holder of
any securities of the Company and if, in such Holder's reasonable judgment, such
Holder is or might be deemed to be a controlling person of the Company, such
Holder shall have the right to require (i) the insertion therein of language, in
form and substance satisfactory to such Holder and presented to the Company in
writing, to the effect that the holding by such Holder of such securities is not
to be construed as a recommendation by such Holder of the investment quality of
the Company's securities covered thereby and that such holding does not imply
that such Holder will assist in meeting any future financial requirements of the
Company, or (ii) in the event that such reference to such Holder by name or
otherwise is not required by the Securities Act or any similar Federal statute
then in force, the deletion of the reference to such Holder; provided that

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with respect to this clause (ii) such Holder shall furnish to the Company an
opinion of counsel to such effect, which opinion and counsel shall be reasonably
satisfactory to the Company.

      5. Listing Requirement/Rule 144.

            (a) The Company hereby agrees to use its best efforts to cause all
      Registrable Shares to be listed on each securities exchange on which
      similar securities issued by the Company are listed and to be qualified
      for trading on each system on which similar securities issued by the
      Company are from time to time qualified.

            (b) As long as any Holder owns Registrable Shares, the Company
      covenants to timely file (or obtain extensions in respect thereof and file
      within the applicable grace period) all reports required to be filed by
      the Company after the date hereof pursuant to Section 13(a) or 15(d) of
      the Exchange Act. As long as any Holder owns Registrable Shares, if the
      Company is not required to file reports pursuant to Section 13(a) or 15(d)
      of the Exchange Act, it will prepare and furnish to the Holders and make
      publicly available in accordance with Rule 144(c) promulgated under the
      Securities Act annual and quarterly financial statements, together with a
      discussion and analysis of such financial statements in form and substance
      substantially similar to those that would otherwise be required to be
      included in reports required by Section 13(a) or 15(d) of the Exchange
      Act, as well as any other information required thereby, in the time period
      that such filings would have been required to have been made under the
      Exchange Act. The Company further covenants that it will take such further
      action as any Holder may reasonably request, all to the extent required
      from time to time to enable such Person to sell Registrable Shares without
      registration under the Securities Act within the limitation of the
      exemptions provided by Rule 144 promulgated under the Securities Act. Upon
      the request of any Holder, the Company shall deliver to such Holder a
      written certification of a duly authorized officer as to whether it has
      complied with such requirements.

      6. Restrictions on Transfer of Shareholder Shares.

            (a) Transfer of Shares. In addition to any restrictions which may be
      contained in the OP Partnership Agreement or in the Subscription Agreement
      executed by Investor, without the Company's prior written consent,
      Investor agrees that, except as set forth in Section 6(b) below, it will
      not, directly or indirectly, offer, sell, contract to sell or otherwise
      dispose of, or exchange (including without limitation an exchange of OP
      Units for Common Shares), or announce any offer, sale, contract of sale or
      other disposition or exchange ("Transfer"), any Common Shares, or any
      securities directly or indirectly convertible into or exchangeable for
      Common Shares, including, without limitation, OP Units (all of such
      securities being hereinafter referred to as "Restricted Securities"), for
      a period of twelve (12) months after the issuance of the OP Units to
      Investor (the "Lock-up Period"); provided, however, that notwithstanding
      anything in this Agreement or any other agreement to the contrary, no
      Holder shall be prevented from (and Holders shall be permitted to) making
      short sales or transactions to cover short sales, hedging transactions,
      put and call arrangements relating to the Common Shares or collar or other
      similar arrangements relating to the Common Shares. Investor agrees that
      it shall not voluntarily dissolve, liquidate, wind up its affairs or
      otherwise voluntarily distribute or Transfer its

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      assets to its constituent partners or stockholders for a period of twelve
      (12) months after the date of this Agreement, and nothing herein shall be
      construed as permitting any such dissolution, liquidation, winding up,
      distribution or Transfer.

            (b) Permitted Transfers. Except as provided in the last sentence of
      Section 6(a) hereof, the restrictions contained in this Section 6 will not
      apply with respect to any Transfer of the Restricted Securities by (A)
      operation of law or testamentary disposition, in each case to or for the
      benefit of Investor's parent(s), spouse or descendants, (B) the exchange
      of OP Units for shares of beneficial interest in the Company (as provided
      in the OP Partnership Agreement), and (C) any bona fide pledgee of OP
      Units, any transfer of such OP Units to the pledgee pursuant to
      foreclosure, transfer-in-lieu of foreclosure, or otherwise, and any
      subsequent transfer of such OP Units following or in connection with any
      such transfer to the pledgee or foreclosure or transfer-in-lieu thereof;
      provided that (i) with respect to a Transfer described in clause (A)
      above, the transferor provides an opinion of securities counsel acceptable
      to the Partnership (it being agreed that Bingham McCutchen LLP is
      acceptable) stating that such Transfer is permitted without registration
      under the Securities Act, (ii) the restrictions contained in this Section
      6 shall continue to be applicable to the Restricted Securities after any
      such Transfer, (iii) the transferees and pledgees of such Restricted
      Securities prior to any Transfer shall have agreed in writing to be bound
      by the restrictions on transfer contained in this Agreement affecting the
      Restricted Securities so transferred, and (iv) any Transfers will be
      subject to the restrictions on transfer contained in the Company's Charter
      (or the OP Partnership Agreement, if applicable).

      7. Indemnification.

            (a) The Company shall, notwithstanding any termination of this
      Agreement, indemnify and hold harmless each Holder, the officers,
      directors, agents, brokers (including brokers who offer and sell
      Registrable Shares as principal as a result of a pledge or any failure to
      perform under a margin call of Common Stock), investment advisors and
      employees of each of them, each Person who controls any such Holder
      (within the meaning of Section 15 of the Securities Act or Section 20 of
      the Exchange Act) and the officers, directors, agents and employees of
      each such controlling Person, to the fullest extent permitted by
      applicable law, from and against any and all losses, claims, damages,
      liabilities, costs (including, without limitation, costs of preparation
      and reasonable attorneys' fees) and expenses (collectively, "Losses"), as
      incurred, arising out of or relating to any untrue or alleged untrue
      statement of a material fact contained or incorporated by reference in the
      Registration Statement, any Prospectus or any form of prospectus or in any
      amendment or supplement thereto or in any preliminary prospectus, or
      arising out of or relating to any omission or alleged omission of a
      material fact required to be stated therein or necessary to make the
      statements therein (in the case of any Prospectus or form of prospectus or
      amendment or supplement thereto, in the light of the circumstances under
      which they were made) not misleading, except to the extent, but only to
      the extent, that such untrue statements or omissions are based solely upon
      information regarding such Holder furnished in writing to the Company by
      such Holder expressly for use therein, which information was reasonably
      relied on by the Company for use therein or to the extent that such
      information relates to (x) such Holder and was

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      reviewed and expressly approved in writing by such Holder expressly for
      use in the Registration Statement, such Prospectus or such form of
      prospectus or in any amendment or supplement thereto or (y) such Holder's
      proposed method of distribution of Registrable Securities as set forth in
      Exhibit A (or as such Holder otherwise informs the Company in writing);
      provided, however, that the indemnity agreement contained in this Section
      7(a) shall not apply to amounts paid in settlement of any Losses if such
      settlement is effected without the prior written consent of the Company,
      which consent shall not be unreasonably withheld, conditioned or delayed.
      The Company shall notify the Holders promptly of the institution, threat
      or assertion of any proceeding of which the Company is aware in connection
      with the transactions contemplated by this Agreement. Such indemnity shall
      remain in full force and effect regardless of any investigation made by or
      on behalf of an Indemnified Party (as defined in Section 7(c) to this
      Agreement) and shall survive the transfer of the Registrable Shares by the
      Holders.

            (b) In connection with any Registration Statement in which the
      Investor is participating, the Investor shall furnish to the Company in
      writing such information relating to such Holder as the Company reasonably
      requests for use in connection with any such Registration Statement or
      Prospectus and, to the extent permitted by law, will indemnify the
      Company, its officers, directors, stockholders, partners, employees and
      trustees and each Person who controls (within the meaning of the
      Securities Act) the Company against any losses, claims, damages,
      liabilities and expenses whatsoever, as incurred, including any of the
      foregoing, and fees and expenses of counsel incurred in investigating,
      preparing or defending against, or aggregate amounts paid in settlement of
      any litigation, action, investigation or proceeding by any governmental
      agency or body, commenced or threatened, in each case whether or not a
      party thereto, or any claim whatsoever based solely upon, caused by or
      arising solely out of any untrue or alleged untrue statement of material
      fact contained in the Registration Statement, Prospectus or preliminary
      Prospectus or any amendment thereof or supplement thereto or any omission
      or alleged omission of a material fact required to be stated therein or
      necessary to make the statements therein not misleading, but only to the
      extent that such untrue statement or omission is contained in any
      information so furnished in writing by such Holder specifically for
      inclusion in the Registration Statement or Prospectus and is reasonably
      relied upon in conformity with such written information; provided that the
      obligation to indemnify will be several and not joint and several with
      respect to each Holder.

            (c) Any Person entitled to indemnification under Section 7(a) or
      7(b) (an "Indemnified Party") will (i) give reasonably prompt written
      notice to the indemnifying party (the "Indemnifying Party") of any claim
      with respect to which it seeks indemnification and (ii) unless in such
      Indemnified Party's reasonable judgment a conflict of interest between
      such Indemnified and Indemnifying Parties may exist with respect to such
      claim, permit such Indemnifying Party to assume the defense of such claim
      with counsel reasonably satisfactory to the Indemnified Party. If such
      defense is assumed, the Indemnifying Party will not be subject to any
      liability for any settlement made by the Indemnified Party without its
      consent (but such consent will not be unreasonably withheld, conditioned
      or delayed). An Indemnifying Party who is not entitled to, or elects not
      to, assume the defense of a claim will not be obligated to pay the fees
      and expenses of more than one counsel for all parties indemnified by such

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      Indemnifying Party with respect to such claim, unless in the reasonable
      judgment of any Indemnified Party a conflict of interest may exist between
      such Indemnified Party and any other of such Indemnified Parties with
      respect to such claim.

            (d) The indemnification provided for under this Agreement will
      remain in full force and effect regardless of any investigation made by or
      on behalf of the Indemnified Party or any officer, director or controlling
      Person of such Indemnified Party and will survive the transfer of
      securities. If the indemnification provided for in Section 7(a) or 7(b) is
      unavailable to or insufficient to hold harmless an Indemnified Party in
      respect of any losses, claims, damages or liabilities (or actions in
      respect thereof) referred to therein, then each Indemnifying Party shall
      contribute to the amount paid or payable by such Indemnified Party as a
      result of such losses, claims, damages or liabilities (or actions in
      respect thereof) in such proportion as is appropriate to reflect the
      relative fault of the Indemnifying Party and the Indemnified Party in
      connection with the statements or omissions that resulted in such losses,
      claims, damages or liabilities (or actions in respect thereof), as well as
      any other relevant equitable considerations. The relative fault of such
      Indemnifying Party and Indemnified Party shall be determined by reference
      to, among other things, whether the untrue or alleged untrue statement of
      a material fact or omission or alleged omission to state a material fact
      relates to information supplied by such Indemnifying Party or by such
      Indemnified Party, and the parties' relative intent, knowledge, access to
      information and opportunity to correct or prevent such statement or
      omission. The parties hereto agree that it would not be just and equitable
      if contribution pursuant to this subsection (d) were determined by pro
      rata allocation or by any other method of allocation that does not take
      account of the equitable considerations referred to in this subsection
      (d). The amount paid or payable by an Indemnified Party as a result of the
      losses, claims, damages or liabilities (or actions in respect thereof)
      referred to above shall be deemed to include any legal or other fees or
      expenses reasonably incurred by such Indemnified Party in connection with
      investigating or defending any such action or claim. No person guilty of
      fraudulent misrepresentation (within the meaning of Section 11(f) of the
      Securities Act) shall be entitled to contribution from any person who was
      not guilty of such fraudulent misrepresentation. Notwithstanding any other
      provisions of this Section 7, in no event will any Holder be required to
      undertake liability to any person under this Section 7 for any amounts in
      excess of the dollar amount of the proceeds to be received by such Holder
      from the sale of such Holder's Registrable Shares (after deducting any
      fees, discounts and commissions applicable thereto) pursuant to any
      Registration Statement under which such Registrable Shares are to be
      registered under the Securities Act.

            (e) All reasonable fees and expenses of the Indemnified Party
      (including reasonable fees and expenses to the extent incurred in
      connection with investigating or preparing to defend such proceeding in a
      manner not inconsistent with this Section) shall be paid to the
      Indemnified Party, as incurred, within ten (10) business days of written
      notice thereof to the Indemnifying Party, which notice shall be delivered
      no more frequently than on a monthly basis (regardless of whether it is
      ultimately determined that an Indemnified Party is not entitled to
      indemnification hereunder; provided, that the Indemnifying Party may
      require such Indemnified Party to undertake to reimburse all

                                       10
<PAGE>

      such fees and expenses to the extent it is finally judicially determined
      that such Indemnified Party is not entitled to indemnification hereunder).

      8. Participation in Underwritten Registrations. No Person may participate
in any registration hereunder which is underwritten unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided that no
holder of Registrable Shares included in any underwritten registration shall be
required to make any representations or warranties to the Company or the
underwriters other than representations and warranties regarding such holder and
such holder's intended method of distribution.

      9. Reports and Information. The Company hereby agrees to provide to the
Investor, so long as they continue to hold Registrable Shares, copies of all
filings made by the Company to the SEC promptly after such filing. Subject to
applicable securities laws and the receipt of confidentiality undertakings, if
appropriate, the Company further agrees to provide to the Investor other
detailed information regarding the Company and its properties as is reasonably
requested by the Investors promptly following any such request.

      10. Definitions.

      "Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or under common control with
such Person.

      "Holder" means the holder or holders, as the case may be, from time to
time of Registrable Securities.

      "Person" means an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.

      "Registrable Shares" means (i) the Common Shares issued or issuable to the
Investor upon exchange of OP Units issued to Investor and (ii) any Common Shares
issued or issuable with respect to the Common Shares referred to in clause (i)
above by way of replacement, share dividend, share split or in connection with a
combination of Shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Registrable Shares, such securities will
cease to be Registrable Shares when they have been sold to the public pursuant
to an offering registered under the Securities Act or sold to the public in
compliance with Rule 144 under the Securities Act (or any similar rule then in
force). For purposes of this Agreement, a Person will be deemed to be a holder
of Registrable Shares whenever such Person has the right (or will have in the
future the right) to acquire directly or indirectly such Registrable Shares
(upon conversion or exercise in connection with a transfer of securities or
otherwise, but disregarding any restrictions or limitations upon the exercise of
such right), whether or not such acquisition has actually been effected. In that
regard, Holders of OP Units shall be entitled to exercise the rights granted
hereunder with respect to the registration of Registrable Shares without first
having to actually effect the exchange of OP Units for Common Shares and the

                                       11
<PAGE>

Holders of OP Units shall be entitled to make a request for registration under
Section 1 of this Agreement prior to the expiration of the Lock-up Period. NO
SUCH EXCHANGE OF OP UNITS FOR COMMON SHARES SHALL BE REQUIRED UNTIL THE
REGISTRATION OF REGISTRABLE SHARES FOR WHICH THE OP UNITS SHALL BE EXCHANGED
SHALL HAVE BEEN DECLARED OR ORDERED "EFFECTIVE" BY THE SEC AND THE HOLDER OF OP
UNITS SHALL HAVE ELECTED TO SELL SUCH COMMON SHARES PURSUANT TO SUCH
REGISTRATION.

      11. Miscellaneous.

            (a) Public Company. Nothing herein shall be deemed to create an
      obligation on the part of the Company to remain a reporting company under
      the provisions of the Securities Exchange Act of 1934, as amended, or
      limit the right of the Company to "go private" at any time during the term
      hereof.

            (b) Remedies. Any Person having rights under any provision of this
      Agreement will be entitled to enforce such rights specifically to recover
      damages caused by reason of any breach of any provision of this Agreement
      and to exercise all other rights granted by law. The parties hereto agree
      and acknowledge that money damages may not be an adequate remedy for any
      breach of the provisions of this Agreement and that any party may in its
      sole discretion apply to any court of law or equity of competent
      jurisdiction (without posting any bond or other security) for specific
      performance and for other injunctive relief in order to enforce or prevent
      violation of the provisions of this Agreement.

            (c) Amendments and Waivers. Except as otherwise provided herein, the
      provisions of this Agreement may be amended or waived only upon the prior
      written consent of the Company and holders of a majority of the then
      outstanding Registrable Shares.

            (d) Successors and Assigns. All covenants and agreements in this
      Agreement, including the right to have the Company register for resale the
      Registrable Shares, by or on behalf of any of the parties hereto will bind
      and inure to the benefit of the respective successors and assigns of the
      parties hereto whether so expressed or not, including any pledges of OP
      Units or Registrable Shares. In addition, whether or not any express
      assignment has been made, the provisions of this Agreement which are for
      the benefit of purchasers or holders of Registrable Shares are also for
      the benefit of, and enforceable by, any subsequent Holder of Registrable
      Shares, including any assigns pursuant to the OP Partnership Agreement and
      including any pledges of OP Units or Registrable Shares.

            (e) Severability. Whenever possible, each provision of this
      Agreement will be interpreted in such manner as to be effective and valid
      under applicable law, but if any provision of this Agreement is held to be
      prohibited by or invalid under applicable law, such provision will be
      ineffective only to the extent of such prohibition or invalidity, without
      invalidating the remainder of this Agreement.

            (f) Counterparts. This Agreement may be executed simultaneously in
      two or more counterparts, any one of which need not contain the signatures
      of more than one

                                       12
<PAGE>

      party, but all such counterparts taken together will constitute one and
      the same Agreement.

            (g) Descriptive Headings. The descriptive headings of this Agreement
      are inserted for convenience only and do not constitute a part of this
      Agreement.

            (h) Governing Law. The corporate laws of the State of Maryland will
      govern all questions concerning the relative rights of the Company or its
      shareholders and the laws of Illinois will govern all questions concerning
      the relative rights of holders of OP Units. All other questions concerning
      the construction, validity and interpretation of this Agreement will be
      governed by and construed in accordance with the domestic laws of the
      State of Illinois, without giving effect to any choice of law or conflict
      of law provision or rule (whether of the State of Illinois or any other
      jurisdiction) that would cause the application of the laws of any
      jurisdiction other than the State of Illinois.

            (i) Consent to Jurisdiction. The parties hereto agree that any
      action arising out of or relating to this Agreement, or concerning the
      interpretation or enforcement thereof, shall be brought only in the
      Circuit Court of Cook County, Illinois or in the Federal Courts for the
      Northern District of Illinois. The parties hereto consent to the venue and
      personal jurisdiction of those courts in any action brought pursuant to
      the provisions hereof. Each party hereto hereby waives any right they may
      have to transfer or change the venue of any litigation brought against it
      by another party hereto in connection with this Agreement in accordance
      with this Section 11(i) and each party hereto hereby waives any claim of
      forum non conveniens.

            (j) Waiver of Trial by Jury. Each party hereto knowingly,
      voluntarily and intentionally waives any rights that such party may have
      to a trial by jury in any litigation arising in any way in connection with
      this Agreement or any related agreement or instrument or any of the
      matters contemplated or described herein. Each party hereto acknowledges
      that this waiver is a material inducement for the other party to enter
      into this Agreement and undertake the obligations of such other party
      hereunder. Each party hereto further agrees and acknowledges that this
      waiver shall be effective as to each and every other agreement, document
      or instrument concerning such other party and relating to this Agreement
      or the matters contemplated or described herein).

            (k) Notices. All notices, demands or other communications to be
      given or delivered under or by reason of the provisions of this Agreement
      shall be in writing and shall be deemed to have been given when delivered
      personally to the recipient, sent to the recipient by reputable express
      courier service (charges prepaid) or mailed to the recipient by certified
      or registered mail, return receipt requested and postage prepaid. Such
      notices, demands and other communications will be sent to each Holder at
      the address indicated on the records of the Company and to the Company at
      the address indicated below:

                                       13
<PAGE>

                            c/o Ellen Kelleher
                            Executive Vice President and General Counsel
                            Two North Riverside Plaza
                            Suite 800
                            Chicago, Illinois  60606

      or to such other address or to the attention of such other person as the
      recipient party has specified by prior written notice to the sending
      party.

            (l) Entire Agreement. This Agreement, together with the various
      other instruments and agreements being executed concurrently herewith,
      represent the entire agreement of the parties with respect to the subject
      matter contained herein and supersede all prior agreements and
      understandings between the parties with respect to such subject matter.

            (m) Attorney Fees. In connection with any suit to enforce this
      Agreement, the reasonable fees and expenses of legal counsel to the
      prevailing party shall be paid by the losing party.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

                                       14
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth below the Company's signature.

                               MANUFACTURED HOME COMMUNITIES,
                               INC., a Maryland corporation

                               By:   /s/ David W. Fell
                                     --------------------------------
                               Name: David W. Fell
                               Its:  Vice President
                               Date: _____________________________

                               MHC OPERATING LIMITED PARTNERSHIP, an
                               Illinois limited partnership

                               By: MHC TRUST, a Maryland real estate
                               investment trust
                               Its: General Partner

                                     By:   /s/ David W. Fell
                                           --------------------------------
                                     Name: David W. Fell
                                     Its:  Vice President
                                     Date: _____________________________

                               INVESTOR:

                               MONTE VISTA, LLC, an Arizona limited liability
                               company

                               By:  Homefree Village Resorts, Inc.
                                    Manager of Monte Vista, LLC

                               By: /s/ Craig M. Bollman, Jr.
                                   ------------------------------------------
                               Name: Craig M. Bollman, Jr.
                               Title: President

                                       15
<PAGE>

                                    EXHIBIT A

                              PLAN OF DISTRIBUTION

      We are registering the shares of common stock on behalf of the selling
security holders. Sales of shares may be made by selling security holders,
including their respective donees, transferees, pledgees or other
successors-in-interest directly to purchasers or to or through underwriters,
broker-dealers or through agents. Sales may be made from time to time on the New
York Stock Exchange, any other exchange or market upon which our shares may
trade in the future, in the over-the-counter market or otherwise, at market
prices prevailing at the time of sale, at prices related to market prices, or at
negotiated or fixed prices. The shares may be sold by one or more of, or a
combination of, the following:

-     a block trade in which the broker-dealer so engaged will attempt to sell
      the shares as agent but may position and resell a portion of the block as
      principal to facilitate the transaction (including crosses in which the
      same broker acts as agent for both sides of the transaction);

-     purchases by a broker-dealer as principal and resale by such
      broker-dealer, including resales for its account, pursuant to this
      prospectus;

-     ordinary brokerage transactions and transactions in which the broker
      solicits purchases;

-     through options, swaps or derivatives;

-     in privately negotiated transactions;

-     in making short sales or in transactions to cover short sales; and

-     put or call option transactions relating to the shares.

      The selling security holders may effect these transactions by selling
shares directly to purchasers or to or through broker-dealers, which may act as
agents or principals. These broker-dealers may receive compensation in the form
of discounts, concessions or commissions from the selling security holders
and/or the purchasers of shares for whom such broker-dealers may act as agents
or to whom they sell as principals, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions). The
selling security holders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities.

      The selling security holders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with those
transactions, the broker-dealers or other financial institutions may engage in
short sales of the shares or of securities convertible into or exchangeable for
the shares in the course of hedging positions they assume with the selling
security holders. The selling security holders may also enter into options or
other transactions with broker-dealers or other financial institutions which
require the delivery of shares offered by this prospectus to those
broker-dealers or other financial institutions. The broker-dealer or other
financial institution may then resell the shares pursuant to this prospectus (as
amended or supplemented, if required by applicable law, to reflect those
transactions).

<PAGE>

      The selling security holders and any broker-dealers that act in connection
with the sale of shares may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act of 1933, and any commissions received by
broker-dealers or any profit on the resale of the shares sold by them while
acting as principals may be deemed to be underwriting discounts or commissions
under the Securities Act. The selling security holders may agree to indemnify
any agent, dealer or broker-dealer that participates in transactions involving
sales of the shares against liabilities, including liabilities arising under the
Securities Act. We have agreed to indemnify each of the selling security holders
and each selling security holder has agreed, severally and not jointly, to
indemnify us against some liabilities in connection with the offering of the
shares, including liabilities arising under the Securities Act.

      The selling security holders will be subject to the prospectus delivery
requirements of the Securities Act. We have informed the selling security
holders that the anti-manipulative provisions of Regulation M promulgated under
the Securities Exchange Act of 1934 may apply to their sales in the market.

      Selling security holders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of Rule 144.

      Upon being notified by a selling security holder that a material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, we will file a supplement to
this prospectus, if required pursuant to Rule 424(b) under the Securities Act,
disclosing:

-     the name of each such selling security holder and of the participating
      broker-dealer(s);

-     the number of shares involved;

-     the initial price at which the shares were sold;

-     the commissions paid or discounts or concessions allowed to the
      broker-dealer(s), where applicable;

-     that such broker-dealer(s) did not conduct any investigation to verify the
      information set out or incorporated by reference in this prospectus; and

-     other facts material to the transactions.

      In addition, if required under applicable law or the rules or regulations
of the Commission, we will file a supplement to this prospectus when a selling
security holder notifies us that a donee or pledgee intends to sell more than
500 shares of common stock.

      We are paying all expenses and fees customarily paid by the issuer in
connection with the registration of the shares. The selling security holders
will bear all brokerage or underwriting discounts or commissions paid to
broker-dealers in connection with the sale of the shares.

                                       17<PAGE>

                                                                     EXHIBIT 4.3

MHC Operating Limited Partnership
c/o Manufactured Home Communities, Inc.
Two North Riverside Plaza, Suite 800
Chicago, Illinois 60606

Ladies and Gentlemen:

      The undersigned is contributing property (the "Contributed Assets") to MHC
Operating Limited Partnership ("MHC"), a limited partnership formed under the
Illinois Revised Uniform Limited Partnership Act, of which MHC Trust, a Maryland
real estate investment trust, is the sole general partner (the "General
Partner"). MHC intends to operate in accordance with the Second Amended and
Restated Partnership Agreement dated as of March 15, 1996 (as amended from time
to time in accordance with the terms thereof, the "Partnership Agreement").

      The undersigned has been furnished certain publicly filed documents of the
General Partner (collectively, the "Information Statement"), which are being
provided in connection with the offering (the "Offering") of partnership
interests ("OP Units") in MHC. The OP Units are to be issued in exchange for the
contribution to MHC of the Contributed Assets.

                                   Section 1.

      1.1   Subscription. The undersigned hereby subscribes for OP Units as
indicated on the counterpart signature page hereof. In respect of this
subscription, the undersigned herewith delivers to MHC (i) two executed original
signature pages of this Subscription Agreement, and (ii) a fully completed
Investor Information Sheet, Account Information Sheet, and Accredited Investor
Questionnaire, attached as EXHIBITS A, B AND C, respectively.

      1.2   Acceptance or Rejection of Subscription. MHC reserves the right to
reject this subscription, in whole but not in part, in the sole discretion of
MHC, if MHC determines that the offer or sale of OP Units to the undersigned
will be made under circumstances that would cause the exemption referred to in
Section 2.1(c)(i) below to be lost. In the event such a determination is made,
the undersigned acknowledges and agrees that MHC may reject this subscription
even if it accepts other subscriptions by other investors. With respect to
persons being offered OP Units, if MHC rejects this subscription pursuant to
this Section 1.2, the undersigned understands and agrees that he will receive
cash in lieu of OP Units and neither the General Partner nor MHC shall have any
further obligation hereunder. Subject to the foregoing and compliance by the
undersigned with all of the terms and provisions hereof, this subscription will
be accepted by MHC if the "Closing" occurs under the Offering.

                                   Section 2.

      2.1   Investor Representations and Warranties. The undersigned hereby
acknowledges, represents and warrants to, and agrees with MHC as follows, which
acknowledgments will be true and correct as of the closing of the transaction
whereby MHC acquires the Contributed Assets (the "Closing Date"):

            (a)   Authorization. This Subscription Agreement constitutes a valid
and legally binding obligation on the part of the undersigned, enforceable in
accordance with its

                                      -1-
<PAGE>

terms except as affected by (i) bankruptcy law, and (ii) equitable principles.
The undersigned represents that he, she or it has full power and authority to
enter into this Subscription Agreement.

            (b)   Accredited Investor; No Advertisement or Solicitation.

                  (i) The undersigned is an "accredited investor" as that term
      is defined in Rule 501(a) of Regulation D promulgated under the Securities
      Act of 1933, as amended (the "Securities Act"), and further represents and
      warrants that the information provided by the undersigned in the
      Accredited Investor Questionnaire attached as Exhibit C is true and
      correct as of the date hereof.

                  (ii) The undersigned acknowledges that the offer and sale of
      the OP Units to him, her or it has not been accomplished by any form of
      general solicitation or general advertising, including, but not limited
      to, (i) any advertisement, article, notice or other communication
      published in any newspaper, magazine or similar media, or broadcast over
      television or radio and (ii) any seminar or meeting whose attendees have
      been invited by any general solicitation or general advertising.

            (c)   Restrictions on Transfer.

                  (i) The undersigned understands and acknowledges that the OP
      Units have not been registered under the Securities Act of 1933, as
      amended (the "Securities Act"), by reason of a specific exemption from the
      registration provisions thereof which exemption depends upon, among other
      things, the bona fide nature of the investment intent of the undersigned
      as expressed herein and the other representations of the undersigned set
      forth herein.

                  (ii) The undersigned understands and acknowledges that none of
      the OP Units or the securities into which OP Units may be exchanged have
      been registered under the Securities Act or registered or qualified under
      the securities laws of any state and none may be sold, transferred,
      assigned, pledged or hypothecated absent an effective registration thereof
      under such Securities Act or an opinion of counsel, which opinion is
      satisfactory in form and substance to MHC and its counsel, to the effect
      that such registration is not required under said Securities Act or such
      states or that such transaction complies with the rules promulgated by the
      Securities and Exchange Commission under said Securities Act or such
      states. The undersigned understands and acknowledges that he, she or it
      must bear the economic risks of this investment resulting from such
      limitations.

                  (iii) The undersigned understands and acknowledges that the
      sale, transfer or other disposition of the OP Units is further restricted
      by the provisions of this Agreement and the Partnership Agreement.

                  (iv) In accordance with the Partnership Agreement, OP Units
      may be exchanged for common shares of Manufactured Home Communities, Inc.,
      a Maryland corporation ("Parent"), $.01 par value per Share ("Common
      Shares"). Common Shares also will not have been registered under the
      Securities Act (unless the Parent elects to

                                      -2-
<PAGE>

      register the Common Shares) and the General Partner and Parent will also
      rely upon the representations of the undersigned as to investment intent
      and otherwise with respect to the issuance of any Common Shares. The
      restrictions referred to as being applicable to unregistered OP Units in
      paragraphs (a) through (c) of this Section 2 will also apply to any
      unregistered Common Shares.

                  (v) The undersigned is aware of the provisions of Rule 144
      promulgated under the Securities Act, pursuant to which the undersigned
      may be able to sell Common Shares, subject to certain exceptions, one year
      after they receive such Common Shares so long as certain current public
      information is available about the issuer, the sale is through a broker in
      an unsolicited "broker's transaction" and that the undersigned does not
      sell, in any three-month period, more than the greater of 1% of the
      outstanding Common Shares or the average weekly trading volume of Common
      Shares for the four-week period preceding the sale. The undersigned
      generally will be able to sell the Common Shares without regard to any
      volume or other limitations discussed above beginning two years after they
      receive the Common Shares, unless they are affiliates of the Company
      (i.e., a person controlling, controlled by or under common control with
      the Company). Affiliates of the Company will continue to be subject to the
      volume limitations on unregistered sales following the expiration of the
      two-year period. The one and two-year periods are measured from the date
      Common Shares are received, not from the date OP Units are received. The
      preceding description is a general summary of the restrictions of Rule
      144, and the undersigned should consult with his or her own legal advisor
      to ensure compliance with all of the requirements of applicable federal
      and state securities laws and regulations. In this connection, the
      undersigned understands Rule 144 may or may not be available for the
      resale of the OP Units and the undersigned should consult an attorney with
      regard to the availability of Rule 144. Common Shares are subject to the
      reporting requirements under the Securities Exchange Act of 1934 and upon
      notice of issuance have been listed for trading on the New York Stock
      Exchange. The undersigned further understands and acknowledges that, with
      respect to Common Shares, while the General Partner believes that the
      Parent satisfies the conditions of Rule 144 on the date it accepts this
      subscription, there can be no assurance that it will meet such conditions
      one year following the issuance of Common Shares (the first date when
      sales under this rule would be permitted). In the event not all of the
      requirements of Rule 144 are met, registration under the Securities Act or
      some other registration exemption will be required for any disposition of
      Common Shares. The undersigned understands that although Rule 144 is not
      exclusive, the Securities and Exchange Commission (the "Commission") has
      expressed its opinion that persons proposing to sell restricted securities
      received in an offering other than a registered offering or pursuant to
      Rule 144 will have a substantial burden of proof in establishing that an
      exemption from registration is available for such offers or sales that
      such persons and the brokers who participate in the transactions do so at
      their own risk.

            (d)   Disclosure of Information. The undersigned and/or the
undersigned's purchaser representative or personal advisor, as the case may be:

                  (i) has been furnished the Information Statement and any
      documents which may have been made available upon request, has carefully
      read the public

                                      -3-
<PAGE>

      documents constituting the Information Statement and understands and has
      evaluated the risks of an investment in the OP Units, and has relied
      solely (except as indicated in subsections (ii) and (iii) below) on the
      information contained in the public documents constituting the Information
      Statement;

                  (ii) has been provided an opportunity to obtain any additional
      information requested concerning the OP Units, MHC, the General Partner
      and Parent;

                  (iii) has been given the opportunity to ask questions of, and
      receive answers from, the General Partner and MHC concerning the terms and
      conditions of this subscription, the Partnership Agreement, and other
      matters pertaining to this investment, and has been given the opportunity
      to obtain such additional information necessary to verify the accuracy of
      the information contained in the public documents constituting the
      Information Statement or that which was otherwise provided in order for
      him, her or it to evaluate the merits and risks of an investment in MHC to
      the extent the General Partner or MHC possesses such information or can
      acquire it without unreasonable effort or expense, and has not been
      furnished any other offering literature or prospectus on which they are
      entitled to rely except as mentioned herein or in the public documents
      constituting the Information Statement; and

                  (iv) has determined that the OP Units are a suitable
      investment for him, her or it and that at this time he, she or it could
      bear the economic risk of the investment.

            (e)   Investment Experience. The undersigned represents that he, she
or it has such knowledge and experience in financial and business matters as to
be capable of evaluating alone, or together with his, her or its purchaser
representative or personal advisor, the merits and risks of an investment in the
OP Units and protecting his, her or its own interests in connection with the
investment and has obtained, in his, her or its judgment, alone, or together
with his, her or its purchaser representative or personal advisor sufficient
information from the General Partner or MHC to evaluate the merits and risks of
an investment in the OP Units. The undersigned has not utilized any person as
his, her or its purchaser representative or professional advisor in connection
with evaluating such risks and merits. The undersigned acknowledges that he, she
or it has the financial ability to bear the economic risk of his, her or its
investment in MHC (including his, her or its possible loss), has adequate means
for providing for his, her or its current needs and personal contingencies and
has no need for liquidity with respect to the investment in MHC. If other than
an individual, the undersigned also represents it has not been organized solely
for the purpose of acquiring the OP Units.

            (f)   Purchase Entirely for Own Account. This Subscription Agreement
is made with the undersigned solely in reliance upon his, her or its
representation to MHC, which by the undersigned's execution of this Subscription
Agreement he, she or it hereby confirms, that the OP Units to be received by the
undersigned will be acquired for investment for the undersigned's own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that he, she or it has no present intention of selling,
granting any participation in, or otherwise distributing the same. By executing
this Subscription Agreement, the undersigned further represents that he, she or
it does not have any contract,

                                      -4-
<PAGE>

undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
OP Units.

            (g)   Further Limitations on Disposition. Without in any way
limiting the representations set forth above, the undersigned further agrees not
to (a) make any disposition of all or any portion of the OP Units owned by the
undersigned, except for the exchange of OP Units for Common Shares:

                        (i) unless and until there is then in effect a
            registration statement under the Securities Act covering such
            proposed disposition and such disposition is made in accordance with
            such registration statement;

                        (ii) unless and until (A) the undersigned shall have
            notified MHC of the proposed disposition and shall have furnished
            MHC with a detailed statement of the circumstances surrounding the
            proposed disposition and (B) if requested by MHC, the undersigned
            shall have furnished MHC with an opinion of securities counsel,
            satisfactory to MHC and its counsel, that such disposition will not
            require registration of such securities under the Securities Act; or

            (b)   sell, transfer or otherwise dispose of any OP Units to any
person or entity whom the General Partner determines in its sole discretion, is
not an "accredited investor" within the meaning of Regulation D of the
Securities Act; or

            (c)   for a period of one (1) year from the date of this Agreement,
pledge, hypothecate or collectively assign to any other person or entity any of
the OP Units.

            (h)   Legends. To the extent applicable, any certificate issued in
respect of any OP Units or Common Shares issued in exchange for OP Units, shall
be endorsed with the legends substantially in the form set forth below, and the
undersigned covenants that, except to the extent such restrictions are waived by
MHC, the undersigned shall not transfer any OP Units or Common Shares received
in exchange therefor without complying with the restrictions on transfer
described in such legends:

                        (i) "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
            REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
            AMENDED, OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY
            STATES AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR
            HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
            OR AN OPINION OF COUNSEL, WHICH OPINION IS SATISFACTORY IN FORM AND
            SUBSTANCE TO THE PARTNERSHIP, AND ITS COUNSEL, TO THE EFFECT THAT
            SUCH REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR SUCH STATES OR
            THAT SUCH TRANSACTION COMPLIES WITH THE RULES PROMULGATED BY THE
            SECURITIES AND EXCHANGE COMMISSION UNDER SAID ACT OR SUCH STATES."

                                      -5-
<PAGE>

                        (ii) "THE SECURITIES HEREBY REPRESENTED ARE SUBJECT TO,
            AND MAY NOT BE TRANSFERRED WITHOUT COMPLYING WITH, CERTAIN
            RESTRICTIONS ON TRANSFER CONTAINED IN THE PARTNERSHIP AGREEMENT. A
            COPY OF SAID AGREEMENT MAY BE INSPECTED AT THE OFFICES OF THE
            PARTNERSHIP."

                        (iii) Any legend required by any applicable state
            securities law, or the several agreements for the acquisition of the
            Contributed Assets by MHC to be entered into between the General
            Partner, MHC, and the undersigned at or about the Closing Date.

            (i)   Investor Awareness. The undersigned acknowledges, agrees and
is aware that:

                  (i)   MHC's financial and operating history is limited to the
      period since March 3, 1993;

                  (ii)  no federal or state agency has passed upon the OP Units
      or the Common Shares or made any finding or determination as to the
      fairness of this investment;

                  (iii) there are substantial risks of loss of investment
      incidental to the purchase of the OP Units;

                  (iv)  the investment in MHC or the Common Shares is an
      illiquid investment and the undersigned must bear the economic risk of
      investment in the OP Units, or the Common Shares for an indefinite period
      of time;

                  (v)   this Agreement and the Partnership Agreement contain
      substantial restrictions on transferability of the OP Units and Common
      Shares;

                  (vi)  neither the General Partner, MHC, nor any of their
      affiliates or representatives has provided the undersigned with any
      investment, tax, legal, regulatory or accounting advice with respect to
      the investment in or ownership of OP Units or Common Shares; and

                  (vii) the representations, warranties, agreements,
      undertakings and acknowledgments made by the undersigned in this
      Subscription Agreement (including without limitation the exhibits thereto)
      are made with the intent that they be relied upon by MHC and the General
      Partner in determining the undersigned's suitability as a purchaser of the
      OP Units, and shall survive its admission as a limited partner in MHC. In
      addition, the undersigned undertakes to notify the General Partner
      immediately of any change in any representation, warranty or other
      information relating to the undersigned set forth herein.

                                      -6-
<PAGE>

                                   Section 3.

      3.1   Modification. Neither this Subscription Agreement nor any provisions
hereof shall be waived, modified, discharged or terminated except by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.

      3.2   Notices. All notices, payments, demands or other communications
given hereunder shall be deemed to have been duly given and received (i) upon
personal delivery or (ii) in the case of notices sent within, and for delivery
within, the United States, as of the date shown on the return receipt after
mailing by registered or certified mail, return receipt requested, postage
prepaid, or (iii) the second succeeding business day after deposit with Federal
Express or other equivalent air courier delivery service, unless the notice is
held or retained by the customs service, in which case the date shall be the
fifth succeeding business day after such deposit as follows:

                  If to the undersigned:

                           Charles H. Williams
                           2525 East Camelback Road
                           Suite 700
                           Phoenix, AZ 85016
                           Telephone: (602) 912-8952
                           Telecopy: (602) 912-8945

                  with a copy to:

                           Gallagher & Kennedy, P.A.
                           2575 East Camelback Road
                           Phoenix, Arizona 85016-9225
                           Telephone: (602) 530-8281
                           Telecopy: (602) 530-8500
                           Attention: Michael W. Murphy, Esq.

                  If to MHC:

                           MHC OPERATING LIMITED PARTNERSHIP
                           c/o Manufactured Home Communities, Inc.
                           Suite 800
                           Two North Riverside Plaza
                           Chicago, Illinois 60606
                           Telephone: (312) 279-1400
                           Telecopy: (312) 279-1715
                           Attention: General Counsel

                                      -7-
<PAGE>

                  With a copy to:

                           Katten Muchin Zavis Rosenman
                           525 West Monroe Street
                           Suite 1600
                           Chicago, IL 60661
                           Telephone: (312) 902-5532
                           Telecopy: (312) 577-8668
                           Attention: Daniel J. Perlman, Esq.

      3.3 Binding Effect. Except as otherwise provided herein, this Subscription
Agreement shall be binding upon and inure to the benefit of the parties and
their heirs, executors, administrators, successors, legal representatives and
permitted assigns. If the undersigned is more than one person, the obligation of
the undersigned shall be joint and several and the agreements, representations,
warranties and acknowledgments herein contained shall be deemed to be made by
and be binding upon each such person and his heirs, executors, administrators
and successors.

      3.4 Entire Agreement. This Subscription Agreement, that certain
Contribution Agreement between the undersigned and the Partnership dated as of
the date hereof (the "Contribution Agreement"), and the Partnership Agreement,
contain the entire agreement of the parties with respect to this subscription,
and there are no representations, covenants or other agreements except as stated
or referred to herein or therein.

      3.5 Assignability. This Subscription Agreement is not transferable or
assignable by the undersigned.

      3.6 Applicable Law. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois applicable to
contracts made and to be performed entirely within such State.

      3.7 Gender. All pronouns contained herein and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or plural, as
the identity of the parties hereto may require.

      3.8 Counterparts. This Subscription Agreement may be executed through the
use of separate signature pages or in counterparts, and each of such
counterparts shall, for all purposes, constitute one agreement binding on the
parties hereto, notwithstanding that the parties hereto are not signatories to
the same counterpart.

      3.9 Further Assurances. The undersigned will, from time to time, execute
and deliver to the General Partner or MHC all such other and further instruments
and documents and take or cause to be taken all such other and further action as
the General Partner or MHC may reasonably request in order to effect the
transactions contemplated by this Agreement.

                                      -8-
<PAGE>

                        MHC OPERATING LIMITED PARTNERSHIP

                             SUBSCRIPTION AGREEMENT
                           COUNTERPART SIGNATURE PAGE

      The undersigned, desiring to enter into this Subscription Agreement for
the subscription of the number of OP Units indicated below, hereby agrees to all
of the terms and provisions of this Subscription Agreement and agrees to be
bound by all such terms and provisions.

      The undersigned has executed this Subscription Agreement as of the ______
day of May, 2004.

With respect to OP Units:
Number of OP Units being Subscribed: 65,466 The Number of OP Units determined in
                                            accordance with the Contribution
                                            Agreement.

/s/ Charles H. Williams
------------------------------
Name: Charles H. Williams, Trustee of the Williams
Family Revocable Living
Trust dated May 19, 2003

Agreed and Accepted this ____ day of May, 2004.

MHC OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership

By:   MHC TRUST, a Maryland real estate
      investment trust, its General Partner

      By: /s/ David W. Fell
          ----------------------------
      Name: David W. Fell
      Title: Vice President

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