Document:

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EXHIBIT 10.35

                           SECOND AMENDMENT TO SECOND
                      AMENDED AND RESTATED CREDIT AGREEMENT

            THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT is dated as of August 9, 2000 (this "Amendment"), and is among MHC
OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership ("Borrower"),
MANUFACTURED HOME COMMUNITIES, INC., a Maryland corporation (the "REIT"), each
of the undersigned "Lenders", WELLS FARGO BANK, NATIONAL ASSOCIATION, in its
capacity as "Agent", "Swingline Lender" and "Issuing Lender", BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, in its capacity as "Syndication Agent",
and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as "Documentation Agent".
Capitalized terms used herein and not defined herein shall have the meanings
ascribed to them in the Credit Agreement referenced below.

            WHEREAS, certain of the parties hereto have previously entered into
that certain Second Amended and Restated Credit Agreement dated as of April 28,
1998 (as heretofore amended, the "Credit Agreement");

            WHEREAS, the Credit Agreement has been previously amended by that
certain First Amendment to Second Amended and Restated Credit Agreement dated as
of December 18, 1998;

            WHEREAS, Commerzbank Aktiengesellschaft, New York Branch, has
succeeded to the rights and obligations of Commerzbank Aktiengesellschaft,
Chicago Branch under the Credit Agreement;

            WHEREAS, Morgan Guaranty Trust Company of New York ("Morgan") has
assigned to LaSalle Bank National Association ("LaSalle") a portion of its
Commitment in the amount of Eight Million Three Hundred Thirty Three Thousand
Three Hundred Thirty Three and 34/100 Dollars ($8,333,333.34), thereby
increasing the Commitment of LaSalle to Thirty Three Million Three Hundred
Thirty Three Thousand Three Hundred Thirty Three and 34/100 Dollars
($33,333,333.34);

            WHEREAS, the parties hereto desire to (i) reduce the amount of the
Facility from One Hundred Seventy Five Million Dollars ($175,000,000) to One
Hundred Fifty Million Dollars ($150,000,000), (ii) terminate the remaining
Commitment of Morgan, (iii) appoint LaSalle as the replacement Documentation
Agent, (iv) appoint Wells Fargo Bank, N.A. ("Wells Fargo") as "Sole Lead
Arranger" for the Facility, and (v) otherwise amend the Credit Agreement as
provided herein.
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            NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein contained, the parties hereto agree as follows:

            1. DEFINITIONS. Section 1.01 of the Credit Agreement is hereby
amended as follows:

                  a. APPLICABLE MARGIN. The last sentence of the definition of
      "Applicable Margin" is hereby deleted in its entirety.

                  b. DEBT SERVICE. The definition of "Debt Service" is hereby
      deleted in its entirety and replaced with the following language:

                  "Debt Service" means, for any period, Interest Expense for
            such period plus scheduled principal amortization (exclusive of
            Balloon Payments) for such period on all Indebtedness of the REIT,
            on a consolidated basis.

                  c. EBITDA. The definition of "EBITDA" is hereby amended to add
      the following language after clause (vi) thereof and before the period:

                  ", plus (or minus in the case of a loss) (vii) Borrower's
      Share of the net income (or loss) of each Investment Affiliate for such
      period calculated in conformity with GAAP before depreciation, minus (or
      plus in the case of a loss) (viii) Borrower's Share of the gains (or
      losses) from extraordinary or unusual items or asset sales or write-ups or
      forgiveness of indebtedness included in the calculation of the net income
      of each Investment Affiliate for such period."

                  d. FIRST EXTENDED MATURITY DATE. The following defined term is
      hereby added:

                  "First Extended Maturity Date" has the meaning set forth in
            Section 3.01.

                  e. GROSS ASSET VALUE. The parenthetical phrase in the
      definition of "Gross Asset Value" is hereby deleted and replaced with the
      following language: "(subject to the last sentence of Section 9.08)".

                  f. INITIAL MATURITY DATE. The following defined term is hereby
      added:

                  "Initial Maturity Date" means August 9, 2003.

                  g. INTEREST EXPENSE. The definition of "Interest Expense" is
      hereby deleted and replaced with the following language:

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                  "Interest Expense" means, for any period and without
            duplication, total interest expense, whether paid, accrued or
            capitalized (including the interest component of Capital Leases but
            excluding interest expense covered by an interest reserve
            established under a loan facility) of the REIT, on a consolidated
            basis and determined in accordance with GAAP.

                  h. LOANS. The definition of "Loans" is hereby deleted in its
      entirety and replaced with the following language:

                  "Loans" means the loans made pursuant to the Facility,
            including, without limitation, loans made pursuant to Section 2.01
            hereof, Swingline Loans and Loans made pursuant to Mandatory
            Borrowings.

                  i. MATURITY DATE. The definition of "Maturity Date" is hereby
      deleted in its entirety and replaced with the following language:

                  "Maturity Date" means the Initial Maturity Date as such date
            may be extended pursuant to Article III.

                  j. NET INCOME. The definition of "Net Income" is hereby
      amended to add the following language at the end thereof and before the
      period:

            "; provided, however, that Net Income shall not include the net
            income (or loss) of Investment Affiliates"

                  k. NET WORTH. The definition of "Net Worth" is hereby amended
      to delete the last sentence thereof in its entirety and to replace the
      reference to "September 30, 1996" with "March 31, 2000."

                  l. NON-MANUFACTURED HOME COMMUNITY PROPERTY. The definition of
      "Non-Manufactured Home Community Property" is hereby amended to delete the
      word "or" before clause (v) thereof and replace it with a comma, and to
      add the following language at the end thereof before the period: "or (vi)
      Taxable REIT Subsidiary Interests."

                  m. NON-RECOURSE INDEBTEDNESS. The definition of "Non-Recourse
      Indebtedness" is hereby deleted and replaced with the following:

                  "Non-Recourse Indebtedness" means any single loan with respect
            to which recourse for payment is limited to specific assets related
            to a particular Property or group of Properties encumbered by a Lien
            securing such Indebtedness, so long as the Adjusted Asset Value for
            such Property, or the total of the Adjusted Asset Values for such
            group of Properties, does not exceed One Hundred Million

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            Dollars ($100,000,000); provided, however, that personal recourse to
            the REIT, Borrower or any Subsidiary by a holder of any such loan
            for fraud, misrepresentation, misapplication of cash, waste,
            environmental claims and liabilities and other circumstances
            customarily excluded by institutional lenders from exculpation
            provisions and/or included in separate indemnification agreements in
            non-recourse financing of real estate shall not, by itself, prevent
            such loan from being characterized as Non-Recourse Indebtedness.

                  n. PRE-EXTENSION TERM LOAN. The definition of "Pre-Extension
      Term Loan" is hereby deleted in its entirety.

                  o. RECOURSE INDEBTEDNESS. The following defined term is hereby
      add:

                  "Recourse Indebtedness" means, with respect to any Person,
            Indebtedness which is not Non-Recourse Indebtedness.

                  p. REQUISITE LENDERS. The definition of "Requisite Lenders" is
      hereby deleted in its entirety and replaced with the following language:

                  "Requisite Lenders" means, collectively Lenders whose Pro Rata
            Shares, in the aggregate, are at least sixty-six and two-thirds
            percent (66 2/3%); provided, however, that, in determining such
            percentage at any given time, all then existing Defaulting Lenders
            will be disregarded and excluded and the Pro Rata Shares of Lenders
            shall be redetermined, for voting purposes only, to exclude the Pro
            Rata Shares of such Defaulting Lenders; and provided, further, that,
            so long as there are at least two (2) Lenders who are not Defaulting
            Lenders, the Requisite Lenders must be comprised of a minimum of two
            (2) Lenders; and provided, further, that for purposes of any
            amendment, modification or waiver of the requirements of Article IX,
            the Requisite Lenders must include Agent in its capacity as a Lender
            (provided Agent is not a Defaulting Lender)."

                  q. SECOND EXTENDED MATURITY DATE. The following defined term
      is hereby added:

                  "Second Extended Maturity Date" has the meaning set forth in
            Section 3.02.

                  r. SUPERMAJORITY LENDERS. The definition of "Supermajority
      Lenders" is hereby deleted in its entirety and replaced with the following
      language:

                  "Supermajority Lenders" means, collectively Lenders whose Pro
            Rata Shares, in the aggregate, are at least eight five percent
            (85%); provided, however,

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            that, in determining such percentage at any given time, all then
            existing Defaulting Lenders will be disregarded and excluded and the
            Pro Rata Shares of Lenders shall be redetermined, for voting
            purposes only, to exclude the Pro Rata Shares of such Defaulting
            Lenders; and provided, further, that, so long as there are at least
            two (2) Lenders who are not Defaulting Lenders, the Supermajority
            Lenders must be comprised of a minimum of two (2) Lenders; and
            provided, further, that for purposes of any amendment, modification
            or waiver of the requirements of Article IX, the Supermajority
            Lenders must include Agent in its capacity as a Lender (provided
            Agent is not a Defaulting Lender)."

                  s. TAXABLE REIT SUBSIDIARY INTERESTS. The following defined
      term is hereby added:

                  "Taxable REIT Subsidiary Interests" means equity interests in
            Subsidiaries not engaged in the development, ownership or operation
            of real estate and permitted to be held by Borrower and the REIT
            pursuant to Section 856(l) of the Internal Revenue Code (as amended
            from time to time) without violating the REIT's status as a real
            estate investment trust."

                  t. TOTAL LIABILITIES. The definition of "Total Liabilities" is
      hereby deleted in its entirety and replaced with the following language:

                  "Total Liabilities" means, without duplication, all
            Indebtedness of the REIT, on a consolidated basis, plus all other
            items which, in accordance with GAAP, would be included as
            liabilities on the liability side of the balance sheet of the REIT
            (including, without limitation, accounts payable incurred in the
            ordinary course of business), on a consolidated basis; provided,
            however, that "Total Liabilities" shall not include dividends
            declared by the REIT or Borrower which are permitted under Section
            8.01(d) but not yet paid.

                  u. WHOLLY-OWNED SUBSIDIARY. The following defined term is
      hereby added:

                  "Wholly-Owned Subsidiary" means any Subsidiary which is
            wholly-owned directly or indirectly by Borrower or the REIT.

            2. SWINGLINE LOANS. The last sentence of Section 2.10(b)(ii) of the
Credit Agreement is hereby deleted in its entirety and replaced with the
following: "Swingline Loans shall be available no more frequently than six (6)
times in any month."

            3. PRE-EXTENSION TERM LOAN. Section 2.11 of the Credit Agreement is
hereby deleted in its entirety.

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            4. EXTENSION OPTIONS. Sections 3.01 and 3.02 of the Credit Agreement
are hereby deleted in their entirety and replaced with the following language:

                  3.01. First Extension Option. At the written request of
      Borrower made at least thirty (30) days prior to the Initial Maturity
      Date, the Maturity Date shall be extended to the one-year anniversary of
      the Initial Maturity Date (the "First Extended Maturity Date") provided
      that the following conditions are satisfied:

                        (a) no Event of Default or Unmatured Event of Default
            shall have occurred and be continuing as of the Initial Maturity
            Date;

                        (b) all representations and warranties contained in this
            Agreement and the other Loan Documents shall be true and correct in
            all material respects as of the Initial Maturity Date except to the
            extent they related to a specific date;

                        (c) Agent shall have received Officer's Certificates of
            the REIT dated as of the Initial Maturity Date stating that the
            executive officer who is the signatory thereto, which officer shall
            be the chief executive officer or the chief financial officer of the
            REIT, has reviewed, or caused under his supervision to be reviewed,
            the terms of this Agreement and the other Loan Documents, and has
            made, or caused to be made under his supervision, a review in
            reasonable detail of the transactions and condition of Borrower, the
            REIT, the Subsidiaries, and the Agreement Parties, and that (A) such
            review has not disclosed the existence as of the date of such
            Officer's Certificate, and that the signers do not have knowledge of
            the existence as of the date of such Officer's Certificate, of any
            condition or event which constitutes an Event of Default or
            Unmatured Event of Default and (B) all representations and
            warranties contained in this Agreement and the other Loan Documents
            are true and correct in all material respects as of the date of such
            Officer's Certificate except to the extent they relate to a specific
            date; and

                        (d) on or before the Initial Maturity Date, Agent shall
            have received, on behalf of Agent and Lenders, an extension fee in
            the amount of one-fourth of one percent (0.25%) of the amount of the
            Facility.

                  3.02. Second Extension Option. At the written request of
      Borrower made at least thirty (30) days prior to the First Extended
      Maturity Date, the Maturity Date shall be further extended to the one-year
      anniversary of the First Extended Maturity Date (the "Second Extended
      Maturity Date") provided that the following conditions are satisfied:

                        (a)   no Event of Default or Unmatured Event of Default
            shall have occurred and be continuing as of the First Extended
            Maturity Date;

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                        (b) all representations and warranties contained in this
            Agreement and the other Loan Documents shall be true and correct in
            all material respects as of the First Extended Maturity Date except
            to the extent they related to a specific date;

                        (c) Agent shall have received Officer's Certificates of
            the REIT dated as of the First Extended Maturity Date stating that
            the executive officer who is the signatory thereto, which officer
            shall be the chief executive officer or the chief financial officer
            of the REIT, has reviewed, or caused under his supervision to be
            reviewed, the terms of this Agreement and the other Loan Documents,
            and has made, or caused to be made under his supervision, a review
            in reasonable detail of the transactions and condition of Borrower,
            the REIT, the Subsidiaries, and the Agreement Parties, and that (A)
            such review has not disclosed the existence as of the date of such
            Officer's Certificate, and that the signers do not have knowledge of
            the existence as of the date of such Officer's Certificate, of any
            condition or event which constitutes an Event of Default or
            Unmatured Event of Default and (B) all representations and
            warranties contained in this Agreement and the other Loan Documents
            are true and correct in all material respects as of the date of such
            Officer's Certificate except to the extent they relate to a specific
            date; and

                        (d) on or before the First Extended Maturity Date, Agent
            shall have received, on behalf of Agent and Lenders, an extension
            fee in the amount of thirty-five hundredths of one percent (0.35%)
            of the amount of the Facility.

            5. REPRESENTATIONS AND WARRANTIES. Subsections 5.01(x) and 5.02(t)
of the Credit Agreement are hereby deleted in their entirety.

            6. NEGATIVE COVENANTS. Article VIII of the Credit Agreement is
hereby amended as follows:

                  a. BORROWER'S COVENANT WITH RESPECT TO INDEBTEDNESS.
      Subsection 8.01(a) is hereby deleted in its entirety and replaced with the
      following language:

                        (a) Indebtedness. Borrower shall not, and shall not
            permit any of its Subsidiaries to, directly or indirectly create,
            incur, assume or otherwise become or remain directly or indirectly
            liable with respect to, any Indebtedness, except:

                        (i) the Obligations;

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                        (ii) trade debt incurred in the normal course of
                  business;

                        (iii) intercompany payables and receivables owing
                  between Subsidiaries in the nature of trade debt incurred in
                  the normal course of business;

                        (iv) Indebtedness which, after giving effect thereto,
                  may be incurred or may remain outstanding without giving rise
                  to an event of Default or Unmatured Event of Default under any
                  provision of Articles VIII and IX; provided, however, that (A)
                  Borrower shall not, and shall not permit any of its
                  Subsidiaries to, guarantee or otherwise become or remain
                  directly or indirectly liable with respect to the Indebtedness
                  of any Investment Affiliate, and (B) Borrower shall not permit
                  any Wholly-Owned Subsidiary to create, incur, assume or
                  otherwise become or remain directly or indirectly liable with
                  respect to, any Recourse Indebtedness in excess of Ten Million
                  Dollars ($10,000,000) per Wholly-Owned Subsidiary at any time
                  or Thirty Million Dollars ($30,000,000) in the aggregate for
                  all Wholly-Owned Subsidiaries at any time.

            b. BORROWER'S COVENANT WITH RESPECT TO LIENS. Clause (iii) of
      Subsection 8.01(b) is hereby deleted in its entirety and replaced with the
      following language:

                        (iii) Liens securing Indebtedness permitted to be
                  incurred and remain outstanding pursuant to Section
                  8.01(a)(iv).

            c. REIT'S COVENANT WITH RESPECT TO INDEBTEDNESS. Subsection 8.02(a)
      is hereby deleted in its entirety and replaced with the following
      language:

                        (a) Indebtedness. The REIT shall not, and shall not
            permit any of its Subsidiaries to, directly or indirectly create,
            incur, assume or otherwise become or remain directly or indirectly
            liable with respect to, any Indebtedness, except:

                        (i) the Obligations; and

                        (ii) Indebtedness which, after giving effect thereto,
            may be incurred or may remain outstanding without giving rise to an
            event of Default or Unmatured Event of Default under any provision
            of Articles VIII and IX; provided, however, that (A) the REIT shall
            not, and shall not permit any of its Subsidiaries to, guarantee or
            otherwise become or remain directly or indirectly liable with
            respect to the Indebtedness of any Investment Affiliate, and (B) the
            REIT shall not permit any Wholly-Owned Subsidiary to create, incur,
            assume or otherwise become or remain directly or indirectly liable
            with respect to, any

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            Recourse Indebtedness in excess of Ten Million Dollars ($10,000,000)
            per Wholly-Owned Subsidiary at any time or Thirty Million Dollars
            ($30,000,000) in the aggregate for all Wholly-Owned Subsidiaries at
            any time.

            7. FINANCIAL COVENANTS. Article IX of the Credit Agreement is hereby
amended as follows:

                  a. SECURED DEBT TO GROSS ASSET VALUE. The numerical reference
      in Section 9.02 to "0.40:1" is hereby deleted and replaced with the
      following: "0.50:1".

                  b. MINIMUM NET WORTH. Section 9.07 is hereby deleted in its
      entirety and replaced with the following language:

                  "9.07. Minimum Net Worth. Borrower will maintain a Net Worth
            of not less than Three Hundred Twenty Two Million Dollars
            ($322,000,000) plus ninety percent (90%) of all Net Offering
            Proceeds receiving by the REIT or Borrower after August 9, 2000."

                  c. PERMITTED HOLDINGS. Taxable REIT Subsidiary Interests are
      hereby added as a category of Permitted Holdings under Section 9.08 with a
      Maximum Percentage of Gross Asset Value of five percent (5%). The last
      sentence of Section 9.08 is hereby deleted in its entirety and replaced
      with the following language:

            "Gross Asset Value as it relates to the foregoing categories of
            Permitted Holdings shall be calculated as follows: (i) the Gross
            Asset Value attributable to any Non-Manufactured Home Community
            Property (other than cash or Cash Equivalents), any Manufactured
            Home Community Mortgage (other than mortgage indebtedness which is
            either eliminated in the consolidation of the REIT, Borrower and the
            Subsidiaries or accounted for as investment in real estate under
            GAAP) or any Manufactured Home Community Partnership Interest (other
            than a Controlled Partnership Interest) shall be calculated based
            upon its Adjusted Asset Value; (ii) the Gross Asset Value
            attributable to any Land or any Security issued by a real estate
            investment trust primarily engaged in the development, ownership and
            management of manufactured home communities shall be equal to the
            lesser of (A) the acquisition cost thereof or (B) the current market
            value thereof (such market value to be determined in a manner
            reasonably acceptable to Agent); (iii) the Gross Asset Value
            attributable to any Taxable REIT Subsidiary Interest shall be the
            acquisition or investment cost thereof; and (iv) the Gross Asset
            Value attributable to any Development Activity shall be determined
            in accordance with GAAP."

            8. AGENCY PROVISIONS. The second sentence of Section 11.08 of the
Credit Agreement is hereby deleted in its entirety and replaced with the
following language:

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            "The terms "Lenders", "Requisite Lenders", "Supermajority Lenders",
            or any similar terms may include Agent in its individual capacity as
            a Lender, one of the Requisite Lenders or one of the Supermajority
            Lenders, but Requisite Lenders and Supermajority Lenders shall not
            include Agent solely in its capacity as Agent."

            9. REDUCTION OF FACILITY; APPOINTMENT OF REPLACEMENT OF
            DOCUMENTATION AGENT AND SOLE LEAD ARRANGER

                  a. FACILITY REDUCTION. The amount of the Facility is hereby
      reduced from One Hundred Seventy-Five Million Dollars ($175,000,000) to
      One Hundred Fifty Million Dollars ($150,000,000).

                  b. TERMINATION OF MORGAN'S COMMITMENT. The Commitment of
      Morgan is hereby terminated, and Morgan hereby relinquishes its rights and
      is hereby released from its obligations under the Credit Agreement. Morgan
      shall return to Borrower its original Loan Note.

                  c. RESTATEMENTS OF COMMITMENTS. As of the date hereof, the
      Commitment and Pro Rata Share of each of the undersigned Lenders shall be
      as set out under such Lender's name on the counterpart signature pages
      attached to this Amendment. Borrower shall issue to LaSalle a replacement
      Loan Note in the face amount of its Commitment noted on its counterpart
      signature page attached hereto.

                  d. APPOINTMENT OF REPLACEMENT DOCUMENTATION AGENT. From and
      after the date hereof, LaSalle shall be the Documentation Agent for the
      Facility.

                  e. APPOINTMENT OF SOLE LEAD ARRANGER. From and after the date
      hereof, Wells Fargo shall be the "Sole Lead Arranger" for the Facility.
      The Sole Lead Arranger shall not be required to take any action or assume
      any liability except as may be required in its capacity as a Lender,
      Agent, Swingline Lender or Issuing Lender under the Credit Agreement. For
      purposes of the indemnifications set forth in the Credit Agreement, the
      term "Agent" shall be deemed to include the Sole Lead Arranger.

            10. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment
is subject to satisfaction of each of the following conditions precedent:

                  a. LEGAL OPINION. Borrower shall have delivered to Agent for
      the benefit of the Lenders a favorable opinion of counsel for Borrower and
      the REIT in form and substance reasonably satisfactory to Agent and its
      counsel;

                  b. EVIDENCE OF AUTHORITY. Borrower shall have delivered to
      Agent for the benefit of the Lenders such evidence as Agent shall
      reasonably require of the

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      existence, good standing and authority of Borrower and the REIT and the
      incumbency and authority of their respective signatories; and

                  c. EXTENSION FEES. Each Lender shall have received an
      extension fee in the amount set forth below its signature to this
      Amendment.

            11. CONSENT OF THE REIT AND REAFFIRMATION OF THE REIT GUARANTY. The
REIT hereby consents to the terms of this Amendment and agrees that the REIT
Guaranty remains valid and enforceable and that the REIT has no defenses or
offsets to enforcement against the REIT under the REIT Guaranty.

            12. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants as follows:

                  a. AUTHORITY OF BORROWER. Borrower has the requisite
      partnership power and authority to execute, deliver and perform this
      Amendment. The execution, delivery and performance thereof, and the
      consummation of the transactions contemplated hereby, have been duly
      approved by the general partner of Borrower, and no other partnership
      proceedings or authorizations on the part of Borrower or its general or
      limited partners are necessary to consummate such transactions. This
      Amendment has been duly executed and delivered by Borrower and constitutes
      its legal, valid and binding obligation, enforceable against it in
      accordance with its terms, subject to bankruptcy, insolvency and other
      laws affecting creditors' rights generally and general equitable
      principles.

                  b. AUTHORITY OF THE REIT. The REIT has the requisite corporate
      power and authority to execute, deliver and perform this Amendment. The
      execution, delivery and performance hereof, and the consummation of the
      transactions contemplated hereby, have been duly approved by the Board of
      Directors of the REIT, and no other corporate proceedings on the part of
      the REIT are necessary to consummate such transactions. This Amendment has
      been duly executed and delivered by the REIT and constitutes its legal,
      valid and binding obligation, enforceable against it in accordance with
      its terms, subject to bankruptcy, insolvency and other laws affecting
      creditors' rights generally and general equitable principles.

                  c. NO CONFLICT AS TO BORROWER. The execution, delivery and
      performance by Borrower of this Amendment, and each of the transactions
      contemplated hereby, do not and will not (i) conflict with or violate
      Borrower's limited partnership agreement or Certificate of Limited
      Partnership or other organizational documents, as the case may be, or the
      organizational documents of any Subsidiary of Borrower or (ii) conflict
      with, result in a breach of or constitute (with or without notice or lapse
      of time or both) a default under any Requirement of Law, Contractual
      Obligation or Court Order of or binding upon Borrower or any of its
      Subsidiaries, or require termination of any such Contractual Obligation,
      the consequences of which conflict or breach or default or

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      termination would have a Material Adverse Effect, or result in or require
      the creation or imposition of any Lien whatsoever upon any Property
      (except as contemplated herein).

                  d. NO CONFLICT AS TO THE REIT. The execution, delivery and
      performance by the REIT of this Amendment, and each of the transactions
      contemplated hereby, do not and will not (i) conflict with or violate its
      Articles or Certificate of Incorporation or by-laws, or other
      organizational documents, as the case may be, or the organizational
      documents of Borrower or any Subsidiary, (ii) conflict with, result in a
      breach of or constitute (with or without notice or lapse of time or both)
      a default under any Requirement of Law, Contractual Obligation or Court
      Order of the REIT, Borrower or any Subsidiary, or require termination of
      any such Contractual Obligation, the consequences of which conflict or
      breach or default or termination will have a Material Adverse Effect, or
      result in or require the creation or imposition of any Lien whatsoever
      upon any of its Property, or (iii) require any approval of the
      stockholders of the REIT.

                  e. CONSENTS AND AUTHORIZATIONS. Each of Borrower and the REIT
      has obtained all consents and authorizations required pursuant to its
      Contractual Obligations with any other Person, the failure of which to
      obtain would have a Material Adverse Effect, and has obtained all consents
      and authorizations of, and effected all notices to and filings with, any
      Governmental Authority necessary to allow Borrower or the REIT, as
      applicable, to lawfully execute, deliver and perform its obligations under
      this Amendment.

                  f. DATE DOWN OF REPRESENTATIONS AND WARRANTIES. All of the
      representations and warranties contained in the Credit Agreement and in
      the other Loan Documents are true and correct in all material respects on
      and as of the date hereof except to the extent such representation and
      warranty is made as of a specified date, in which case such representation
      and warranty is true and correct as of such specified date.

                  g. NO EVENT OF DEFAULT OR UNMATURED EVENT OF DEFAULT. No Event
      of Default or Unmatured Event of Default exists as of the date hereof.

                  h. NET WORTH. The Net Worth as of March 31, 2000 was Three
      Hundred Seventy Eight Million Eight Hundred Seventy Thousand Dollars
      ($378,870,000).

            13. EFFECT ON CREDIT AGREEMENT. The Credit Agreement and all other
Loan Documents (each as amended, supplemented or otherwise modified hereby)
shall remain in full force and effect and are hereby ratified and confirmed in
all respects. Except as expressly provided herein or pursuant hereto, the
execution, delivery, performance and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of Agent or any Lender under
the Loan Documents, nor constitute a waiver of any provisions of any of the Loan
Documents.

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            14.   MISCELLANEOUS

                  a. EXECUTION IN COUNTERPARTS. This Amendment may be executed
      in any number of counterparts, and each such counterpart, when so executed
      and delivered, shall be deemed to be an original and binding upon the
      party signing such counterpart; all such counterparts taken together shall
      constitute one and the same instrument.

                  b. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
      SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
      OF ILLINOIS.

                  c. HEADINGS. Section headings in this Amendment are
      included herein for convenience of reference only and shall not constitute
      a part of this Amendment for any other purpose.

                  d. ENTIRE AGREEMENT. This Amendment is the entire agreement
      among the parties with respect to the matters addressed herein, and may
      not be modified except by written modification signed by all parties
      hereto.

                  e. SUCCESSORS AND ASSIGNS. This Amendment shall be binding
      upon and inure to the benefit of the parties hereto and their respective
      heirs, successors, personal representatives and assigns (as permitted
      under the Credit Agreement).

                  f. EXPENSES. Pursuant to Section 12.01(a) of the Credit
      Agreement, Borrower hereby agrees to promptly pay all reasonable
      attorneys' fees and expenses or other costs or expenses incurred by Agent
      in connection with this Amendment and the transactions contemplated
      hereby.

                  g. CONSENT TO ASSIGNMENT. Agent and Borrower hereby consent to
      the Assignment, and Agent hereby waives the payment of any processing fee
      payable in connection therewith.

                            [SIGNATURE PAGES FOLLOW]

                                       13
<PAGE>   14
            IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date set forth above.

                              MHC OPERATING LIMITED PARTNERSHIP, an Illinois
                              limited partnership

                                    By:  MANUFACTURED HOME COMMUNITIES, INC., a
                                    Maryland corporation, as General Partner

                                    By: /s/ John M. Zoeller
                                        ----------------------------------------
                                    Name:  John M. Zoeller
                                    Title: Vice President

                              MANUFACTURED HOME COMMUNITIES, INC., a Maryland
                              corporation

                                    By: /s/ John M. Zoeller
                                        ----------------------------------------
                                    Name:  John M. Zoeller
                                    Title: Vice President

                                      S-1
<PAGE>   15
                              WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent,
                              Swingline Lender, Issuing Lender and a Lender

                                    By: /s/ Steven R. Lowery
                                        ----------------------------------------
                                    Name:  Steven R. Lowery
                                    Title: Vice President

                              Commitment:       $ 50,000,000.00
                              Extension Fee:    $    250,000.00
                              Pro Rata Share:          33.33334%

                                      S-2
<PAGE>   16
                              BANK OF AMERICA N.A., formerly known as BANK OF
                              AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
                              Syndication Agent and a Lender

                                    By: /s/ Megan McBride
                                       --------------------------------
                                    Name: Megan McBride
                                         ------------------------------
                                    Title: Principal
                                          -----------------------------

                              Commitment:       $33,333,333.33
                              Extension Fee:    $   150,000.00
                              Pro Rata Share:         22.22222%

                                      S-3
<PAGE>   17
                  COMMERZBANK AKTIENGESELLSCHAFT, Chicago Branch, as
                  a Lender

                       By:    /s/ Douglas P. Traynor   /s/ David Buettner
                          ------------------------------------------------------
                       Name:  Douglas P. Traynor       David Buettner
                       Title: Vice President           Assistant Vice President

                       Commitment:       $33,333,333.33
                       Extension Fee:    $   150,000.00
                       Pro Rata Share:         22.22222%

                                      S-4
<PAGE>   18
                              LASALLE BANK NATIONAL ASSOCIATION, as a Lender and
                              as Documentation Agent

                                    By: /s/ John C. Hein
                                        ----------------------------------------
                                    Name:  John C. Hein
                                    Title: SVP

                              Commitment:       $33,333,333.34
                              Extension Fee:    $   150,000.00
                              Pro Rata Share:         22.22222%

                                      S-5
<PAGE>   19
                              MORGAN GUARANTY TRUST COMPANY OF NEW YORK

                                    By: /s/ Robert Bottamedi
                                        ----------------------------------------
                                    Name:  Robert Bottamedi
                                    Title: Vice President

                              Commitment:             $0
                              Extension Fee:          $0

                                      S-6<PAGE>   1
EXHIBIT 10.36

                           FIRST AMENDMENT TO AMENDED
                          AND RESTATED CREDIT AGREEMENT

            THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT is
dated as of November 21, 2000 (this "Amendment"), and is among MHC OPERATING
LIMITED PARTNERSHIP, an Illinois limited partnership ("Borrower"), MANUFACTURED
HOME COMMUNITIES, INC., a Maryland corporation (the "REIT"), each of the
undersigned "Lenders", WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity
as "Agent", BANK OF AMERICA N.A., formerly known as BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, in its capacity as "Syndication Agent", and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as "Documentation Agent". Capitalized
terms used herein and not defined herein shall have the meanings ascribed to
them in the Credit Agreement referenced below.

            WHEREAS, the parties hereto have previously entered into that
certain Amended and Restated Credit Agreement dated as of April 28, 1998 (as
heretofore amended, the "Credit Agreement");

            WHEREAS, Commerzbank Aktiengesellschaft, New York Branch, has
succeeded to the rights and obligations of Commerzbank Aktiengesellschaft,
Chicago Branch under the Credit Agreement;

            WHEREAS, pursuant to Section 2.01(d) of the Credit Agreement, the
maturity of the Loan has been extended to April 3, 2002; and

            WHEREAS, the parties hereto desire to (i) appoint Wells Fargo Bank,
N.A. ("Wells Fargo") as "Sole Lead Arranger" for the Facility, and (ii)
otherwise amend the Credit Agreement as provided herein.

            NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein contained, the parties hereto agree as follows:

            1.    DEFINITIONS.  Section 1.01 of the Credit Agreement is
hereby amended as follows:

                  a. DEBT SERVICE. The definition of "Debt Service" is hereby
      deleted in its entirety and replaced with the following language:

                  "Debt Service" means, for any period, Interest Expense for
            such period plus scheduled principal amortization (exclusive of
            Balloon Payments) for such period on all Indebtedness of the REIT,
            on a consolidated basis.
<PAGE>   2
                  b. EBITDA. The definition of "EBITDA" is hereby amended to add
      the following language after clause (vi) thereof and before the period:

                  ", plus (or minus in the case of a loss) (vii) Borrower's
            Share of the net income (or loss) of each Investment Affiliate for
            such period calculated in conformity with GAAP before depreciation,
            minus (or plus in the case of a loss) (viii) Borrower's Share of the
            gains (or losses) from extraordinary or unusual items or asset sales
            or write-ups or forgiveness of indebtedness included in the
            calculation of the net income of each Investment Affiliate for such
            period."

                  c. GROSS ASSET VALUE. The parenthetical phrase in the
      definition of "Gross Asset Value" is hereby deleted and replaced with the
      following language: "(subject to the last sentence of Section 8.08)".

                  d. INTEREST EXPENSE. The definition of "Interest Expense" is
      hereby deleted and replaced with the following language:

                  "Interest Expense" means, for any period and without
            duplication, total interest expense, whether paid, accrued or
            capitalized (including the interest component of Capital Leases but
            excluding interest expense covered by an interest reserve
            established under a loan facility) of the REIT, on a consolidated
            basis and determined in accordance with GAAP.

                  e. NET INCOME. The definition of "Net Income" is hereby
      amended to add the following language at the end thereof and before the
      period:

                  "; provided, however, that Net Income shall not include the
            net income (or loss) of Investment Affiliates"

                  f. NET WORTH. The definition of "Net Worth" is hereby amended
      to delete the last sentence thereof in its entirety and to replace the
      reference to "September 30, 1996" with "March 31, 2000."

                  g. NON-MANUFACTURED HOME COMMUNITY PROPERTY. The definition of
      "Non-Manufactured Home Community Property" is hereby amended to delete the
      word "or" before clause (v) thereof and replace it with a comma, and to
      add the following language at the end thereof before the period: "or (vi)
      Taxable REIT Subsidiary Interests."

                  h. NON-RECOURSE INDEBTEDNESS. The definition of "Non-Recourse
      Indebtedness" is hereby deleted and replaced with the following:

                  "Non-Recourse Indebtedness" means any single loan with respect
            to which recourse for payment is limited to specific assets related
            to a particular Property or

                                       2
<PAGE>   3
            group of Properties encumbered by a Lien securing such Indebtedness,
            so long as the Adjusted Asset Value for such Property, or the total
            of the Adjusted Asset Values for such group of Properties, does not
            exceed One Hundred Million Dollars ($100,000,000); provided,
            however, that personal recourse to the REIT, Borrower or any
            Subsidiary by a holder of any such loan for fraud,
            misrepresentation, misapplication of cash, waste, environmental
            claims and liabilities and other circumstances customarily excluded
            by institutional lenders from exculpation provisions and/or included
            in separate indemnification agreements in non-recourse financing of
            real estate shall not, by itself, prevent such loan from being
            characterized as Non-Recourse Indebtedness.

                  i. RECOURSE INDEBTEDNESS. The following defined term is hereby
      added:

                  "Recourse Indebtedness" means, with respect to any Person,
            Indebtedness which is not Non-Recourse Indebtedness.

                  j. REQUISITE LENDERS. The definition of "Requisite Lenders" is
      hereby deleted in its entirety and replaced with the following language:

                  "Requisite Lenders" means, collectively Lenders whose Pro Rata
            Shares, in the aggregate, are at least sixty-six and two-thirds
            percent (66 2/3%); provided, however, that the Requisite Lenders
            must be comprised of a minimum of two (2) Lenders; and provided,
            further, that for purposes of any amendment, modification or waiver
            of the requirements of Article VIII, the Requisite Lenders must
            include Agent in its capacity as a Lender."

                  k. SUPERMAJORITY LENDERS. The definition of "Supermajority
      Lenders" is hereby deleted in its entirety and replaced with the following
      language:

                  "Supermajority Lenders" means, collectively Lenders whose Pro
            Rata Shares, in the aggregate, are at least eighty five percent
            (85%); provided, however, that the Supermajority Lenders must be
            comprised of a minimum of two (2) Lenders; and provided, further,
            that for purposes of any amendment, modification or waiver of the
            requirements of Article VIII, the Supermajority Lenders must include
            Agent in its capacity as a Lender."

                  l. TAXABLE REIT SUBSIDIARY INTERESTS. The following defined
      term is hereby added:

                  "Taxable REIT Subsidiary Interests" means equity interests in
            Subsidiaries not engaged in the development, ownership or operation
            of real estate and permitted to be held by Borrower and the REIT
            pursuant to Section 856(l) of the

                                       3
<PAGE>   4
            Internal Revenue Code (as amended from time to time) without
            violating the REIT's status as a real estate investment trust."

                  m. TOTAL LIABILITIES. The definition of "Total Liabilities" is
      hereby deleted in its entirety and replaced with the following language:

                  "Total Liabilities" means, without duplication, all
            Indebtedness of the REIT, on a consolidated basis, plus all other
            items which, in accordance with GAAP, would be included as
            liabilities on the liability side of the balance sheet of the REIT
            (including, without limitation, accounts payable incurred in the
            ordinary course of business), on a consolidated basis; provided,
            however, that "Total Liabilities" shall not include dividends
            declared by the REIT or Borrower which are permitted under Section
            7.01(d) but not yet paid.

                  n. WHOLLY-OWNED SUBSIDIARY. The following defined term is
      hereby added:

                  "Wholly-Owned Subsidiary" means any Subsidiary which is
            wholly-owned directly or indirectly by Borrower or the REIT.

            2. REPRESENTATIONS AND WARRANTIES. Subsections 4.01(w) and 4.02(t)
of the Credit Agreement are hereby deleted in their entirety.

            3. NEGATIVE COVENANTS. Article VII of the Credit Agreement is hereby
amended as follows:

                  a. BORROWER'S COVENANT WITH RESPECT TO INDEBTEDNESS.
      Subsection 7.01(a) is hereby deleted in its entirety and replaced with the
      following language:

                        (a) Indebtedness. Borrower shall not, and shall not
            permit any of its Subsidiaries to, directly or indirectly create,
            incur, assume or otherwise become or remain directly or indirectly
            liable with respect to, any Indebtedness, except:

                              (i)   the Obligations;

                              (ii)  trade debt incurred in the normal course
                  of business;

                              (iii) intercompany payables and receivables owing
                  between Subsidiaries in the nature of trade debt incurred in
                  the normal course of business;

                              (iv) Indebtedness which, after giving effect
                  thereto, may be incurred or may remain outstanding without
                  giving rise to an Event of

                                       4
<PAGE>   5
                  Default or Unmatured Event of Default under any provision of
                  Articles VII and VIII; provided, however, that (A) Borrower
                  shall not, and shall not permit any of its Subsidiaries to,
                  guarantee or otherwise become or remain directly or indirectly
                  liable with respect to the Indebtedness of any Investment
                  Affiliate, and (B) Borrower shall not permit any Wholly-Owned
                  Subsidiary to create, incur, assume or otherwise become or
                  remain directly or indirectly liable with respect to, any
                  Recourse Indebtedness in excess of Ten Million Dollars
                  ($10,000,000) per Wholly-Owned Subsidiary at any time or
                  Thirty Million Dollars ($30,000,000) in the aggregate for all
                  Wholly-Owned Subsidiaries at any time.

                  b. BORROWER'S COVENANT WITH RESPECT TO LIENS. Clause (ii) of
      Subsection 7.01(b) is hereby deleted in its entirety and replaced with the
      following language:

                              (ii) Liens securing Indebtedness permitted to be
                  incurred and remain outstanding pursuant to Section
                  7.01(a)(iv).

                  c. REIT'S COVENANT WITH RESPECT TO INDEBTEDNESS. Subsection
      7.02(a) is hereby deleted in its entirety and replaced with the following
      language:

                        (a) Indebtedness. The REIT shall not, and shall not
            permit any of its Subsidiaries to, directly or indirectly create,
            incur, assume or otherwise become or remain directly or indirectly
            liable with respect to, any Indebtedness, except:

                              (i) the Obligations; and

                              (ii) Indebtedness which, after giving effect
                  thereto, may be incurred or may remain outstanding without
                  giving rise to an Event of Default or Unmatured Event of
                  Default under any provision of Articles VII and VIII;
                  provided, however, that (A) the REIT shall not, and shall not
                  permit any of its Subsidiaries to, guarantee or otherwise
                  become or remain directly or indirectly liable with respect to
                  the Indebtedness of any Investment Affiliate, and (B) the REIT
                  shall not permit any Wholly-Owned Subsidiary to create, incur,
                  assume or otherwise become or remain directly or indirectly
                  liable with respect to, any Recourse Indebtedness in excess of
                  Ten Million Dollars ($10,000,000) per Wholly-Owned Subsidiary
                  at any time or Thirty Million Dollars ($30,000,000) in the
                  aggregate for all Wholly-Owned Subsidiaries at any time.

            4. FINANCIAL COVENANTS. Article VIII of the Credit Agreement is
hereby amended as follows:

                                       5
<PAGE>   6
                  a. SECURED DEBT TO GROSS ASSET VALUE. The numerical reference
      in Section 8.02 to "0.4:1" is hereby deleted and replaced with the
      following: "0.5:1".

                  b. MINIMUM NET WORTH. Section 8.07 is hereby deleted in its
      entirety and replaced with the following language:

                  "9.07. Minimum Net Worth. Borrower will maintain a Net Worth
            of not less than Three Hundred Twenty Two Million Dollars
            ($322,000,000) plus ninety percent (90%) of all Net Offering
            Proceeds received by the REIT or Borrower after August 9, 2000."

                  c. PERMITTED HOLDINGS. Taxable REIT Subsidiary Interests are
      hereby added as a category of Permitted Holdings under Section 8.08 with a
      Maximum Percentage of Gross Asset Value of five percent (5%). The last
      sentence of Section 8.08 is hereby deleted in its entirety and replaced
      with the following language:

                  "Gross Asset Value as it relates to the foregoing categories
            of Permitted Holdings shall be calculated as follows: (i) the Gross
            Asset Value attributable to any Non-Manufactured Home Community
            Property (other than cash or Cash Equivalents), any Manufactured
            Home Community Mortgage (other than mortgage indebtedness which is
            either eliminated in the consolidation of the REIT, Borrower and the
            Subsidiaries or accounted for as investment in real estate under
            GAAP) or any Manufactured Home Community Partnership Interest (other
            than a Controlled Partnership Interest) shall be calculated based
            upon its Adjusted Asset Value; (ii) the Gross Asset Value
            attributable to any Land or any Security issued by a real estate
            investment trust primarily engaged in the development, ownership and
            management of manufactured home communities shall be equal to the
            lesser of (A) the acquisition cost thereof or (B) the current market
            value thereof (such market value to be determined in a manner
            reasonably acceptable to Agent); (iii) the Gross Asset Value
            attributable to any Taxable REIT Subsidiary Interest shall be the
            acquisition or investment cost thereof; and (iv) the Gross Asset
            Value attributable to any Development Activity shall be determined
            in accordance with GAAP."

            5. AGENCY PROVISIONS. The second sentence of Section 10.08 of the
Credit Agreement is hereby deleted in its entirety and replaced with the
following language:

            "The terms "Lenders", "Requisite Lenders", "Supermajority Lenders",
            or any similar terms may include Agent in its individual capacity as
            a Lender, one of the Requisite Lenders or one of the Supermajority
            Lenders, but Requisite Lenders and Supermajority Lenders shall not
            include Agent solely in its capacity as Agent."

            6. APPOINTMENT OF SOLE LEAD ARRANGER. From and after the date
hereof, Wells Fargo shall be the "Sole Lead Arranger" for the Facility. The Sole
Lead Arranger shall not

                                       6
<PAGE>   7
be required to take any action or assume any liability except as may be required
in its capacity as a Lender or Agent under the Credit Agreement. For purposes of
the indemnifications set forth in the Credit Agreement, the term "Agent" shall
be deemed to include the Sole Lead Arranger.

            7. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment
is subject to satisfaction of each of the following conditions precedent:

                  a. LEGAL OPINION. Borrower shall have delivered to Agent for
      the benefit of the Lenders a favorable opinion of counsel for Borrower and
      the REIT in form and substance reasonably satisfactory to Agent and its
      counsel; and

                  b. EVIDENCE OF AUTHORITY. Borrower shall have delivered to
      Agent for the benefit of the Lenders such evidence as Agent shall
      reasonably require of the existence, good standing and authority of
      Borrower and the REIT and the incumbency and authority of their respective
      signatories.

            8. CONSENT OF THE REIT AND REAFFIRMATION OF THE REIT Guaranty. The
REIT hereby consents to the terms of this Amendment and agrees that the REIT
Guaranty remains valid and enforceable and that the REIT has no defenses or
offsets to enforcement against the REIT under the REIT Guaranty.

            9. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants as follows:

                  a. AUTHORITY OF BORROWER. Borrower has the requisite
      partnership power and authority to execute, deliver and perform this
      Amendment. The execution, delivery and performance thereof, and the
      consummation of the transactions contemplated hereby, have been duly
      approved by the general partner of Borrower, and no other partnership
      proceedings or authorizations on the part of Borrower or its general or
      limited partners are necessary to consummate such transactions. This
      Amendment has been duly executed and delivered by Borrower and constitutes
      its legal, valid and binding obligation, enforceable against it in
      accordance with its terms, subject to bankruptcy, insolvency and other
      laws affecting creditors' rights generally and general equitable
      principles.

                  b. AUTHORITY OF THE REIT. The REIT has the requisite corporate
      power and authority to execute, deliver and perform this Amendment. The
      execution, delivery and performance hereof, and the consummation of the
      transactions contemplated hereby, have been duly approved by the Board of
      Directors of the REIT, and no other corporate proceedings on the part of
      the REIT are necessary to consummate such transactions. This Amendment has
      been duly executed and delivered by the REIT and constitutes its legal,
      valid and binding obligation, enforceable against it in accordance with
      its terms, subject to bankruptcy, insolvency and other laws affecting
      creditors' rights generally and general equitable principles.

                                       7
<PAGE>   8
                  c. NO CONFLICT AS TO BORROWER. The execution, delivery and
      performance by Borrower of this Amendment, and each of the transactions
      contemplated hereby, do not and will not (i) conflict with or violate
      Borrower's limited partnership agreement or Certificate of Limited
      Partnership or other organizational documents, as the case may be, or the
      organizational documents of any Subsidiary of Borrower or (ii) conflict
      with, result in a breach of or constitute (with or without notice or lapse
      of time or both) a default under any Requirement of Law, Contractual
      Obligation or Court Order of or binding upon Borrower or any of its
      Subsidiaries, or require termination of any such Contractual Obligation,
      the consequences of which conflict or breach or default or termination
      would have a Material Adverse Effect, or result in or require the creation
      or imposition of any Lien whatsoever upon any Property (except as
      contemplated herein).

                  d. NO CONFLICT AS TO THE REIT. The execution, delivery and
      performance by the REIT of this Amendment, and each of the transactions
      contemplated hereby, do not and will not (i) conflict with or violate its
      Articles or Certificate of Incorporation or by-laws, or other
      organizational documents, as the case may be, or the organizational
      documents of Borrower or any Subsidiary, (ii) conflict with, result in a
      breach of or constitute (with or without notice or lapse of time or both)
      a default under any Requirement of Law, Contractual Obligation or Court
      Order of the REIT, Borrower or any Subsidiary, or require termination of
      any such Contractual Obligation, the consequences of which conflict or
      breach or default or termination will have a Material Adverse Effect, or
      result in or require the creation or imposition of any Lien whatsoever
      upon any of its Property, or (iii) require any approval of the
      stockholders of the REIT.

                  e. CONSENTS AND AUTHORIZATIONS. Each of Borrower and the REIT
      has obtained all consents and authorizations required pursuant to its
      Contractual Obligations with any other Person, the failure of which to
      obtain would have a Material Adverse Effect, and has obtained all consents
      and authorizations of, and effected all notices to and filings with, any
      Governmental Authority necessary to allow Borrower or the REIT, as
      applicable, to lawfully execute, deliver and perform its obligations under
      this Amendment.

                  f. DATE DOWN OF REPRESENTATIONS AND WARRANTIES. All of the
      representations and warranties contained in the Credit Agreement and in
      the other Loan Documents are true and correct in all material respects on
      and as of the date hereof except to the extent such representation and
      warranty is made as of a specified date, in which case such representation
      and warranty is true and correct as of such specified date.

                  g. NO EVENT OF DEFAULT OR UNMATURED EVENT OF DEFAULT. No Event
      of Default or Unmatured Event of Default exists as of the date hereof.

                  h. NET WORTH. The Net Worth as of March 31, 2000 was Three
      Hundred Seventy Eight Million Eight Hundred Seventy Thousand Dollars
      ($378,870,000).

                                       8
<PAGE>   9
            10. EFFECT ON CREDIT AGREEMENT. The Credit Agreement and all other
Loan Documents (each as amended, supplemented or otherwise modified hereby)
shall remain in full force and effect and are hereby ratified and confirmed in
all respects. Except as expressly provided herein or pursuant hereto, the
execution, delivery, performance and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of Agent or any Lender under
the Loan Documents, nor constitute a waiver of any provisions of any of the Loan
Documents.

            11. MISCELLANEOUS

                  a. EXECUTION IN COUNTERPARTS. This Amendment may be executed
      in any number of counterparts, and each such counterpart, when so executed
      and delivered, shall be deemed to be an original and binding upon the
      party signing such counterpart; all such counterparts taken together shall
      constitute one and the same instrument.

                  b. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
      SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
      OF ILLINOIS.

                  c. HEADINGS. Section headings in this Amendment are included
      herein for convenience of reference only and shall not constitute a part
      of this Amendment for any other purpose.

                  d. ENTIRE AGREEMENT. This Amendment is the entire agreement
      among the parties with respect to the matters addressed herein, and may
      not be modified except by written modification signed by all parties
      hereto.

                  e. SUCCESSORS AND ASSIGNS. This Amendment shall be binding
      upon and inure to the benefit of the parties hereto and their respective
      heirs, successors, personal representatives and assigns (as permitted
      under the Credit Agreement).

                  f. EXPENSES. Pursuant to Section 11.01(a) of the Credit
      Agreement, Borrower hereby agrees to promptly pay all reasonable
      attorneys' fees and expenses or other costs or expenses incurred by Agent
      in connection with this Amendment and the transactions contemplated
      hereby.

                            [SIGNATURE PAGES FOLLOW]

                                       9
<PAGE>   10
            IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date set forth above.

                              MHC OPERATING LIMITED PARTNERSHIP, an Illinois
                              limited partnership

                                    By:  MANUFACTURED HOME COMMUNITIES, INC.,
                                    a Maryland corporation, as General Partner

                                    By: /s/ John M. Zoeller
                                        ----------------------------------------
                                    Name:  John M. Zoeller
                                    Title: VP and Chief Financial Officer

                              MANUFACTURED HOME COMMUNITIES, INC., a Maryland
                              corporation

                                    By: /s/ John M. Zoeller
                                        ----------------------------------------
                                    Name:  John M. Zoeller
                                    Title: VP and Chief Financial Officer

                                      S-1
<PAGE>   11
                              WELLS FARGO BANK, NATIONAL ASSOCIATION, as
                              Agent, Sole Lead Arranger and a Lender

                                    By: /s/ Steven R. Lowery
                                        ----------------------------------------
                                    Name:  Steven R. Lowery
                                    Title: Vice President

                              Commitment:       $40,000,000.00
                              Pro Rata Share:   40%

                                      S-2
<PAGE>   12
                              BANK OF AMERICA N.A., formerly known as BANK OF
                              AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
                              as Syndication Agent and a Lender

                                    By: /s/ Megan McBride
                                        ----------------------------------------
                                    Name:  Megan McBride
                                    Title: Principal

                              Commitment:       $20,000,000.00
                              Pro Rata Share:   20%

                                      S-3
<PAGE>   13
                              COMMERZBANK AKTIENGESELLSCHAFT, New York
                              Branch, as a Lender

                                    By: /s/ Douglas P. Traynor
                                        ----------------------------------------
                                    Name:  Douglas P. Traynor
                                    Title: Vice President

                                    By: /s/ David Buettner
                                        ----------------------------------------
                                    Name:  David Buettner
                                    Title: Assistant Vice President

                              Commitment:       $20,000,000.00
                              Pro Rata Share:   20%

                                      S-4
<PAGE>   14
                              MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
                              Documentation Agent and a Lender

                                    By: /s/ Carl J. Mehldau, Jr.
                                        ----------------------------------------
                                    Name:  Carl J. Mehldau, Jr.
                                    Title: Associate

                              Commitment:             $20,000,000.00
                              Pro Rata Share:         20%

                                      S-5

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