AGREEMENT

   This Agreement (this Agreement) is made as of October 24, 2003
(the Effective Date) by and between Michael R. Walker, an individual
residing at 228 North Garfield Road, Kennett Square, Pennsylvania
19348 (Walker) and ElderTrust, a Maryland real estate investment
trust, with a principal place of business at 2711 Centerville Road,
Suite 108, Wilmington, Delaware 19808 (the Company)

     WHEREAS, Walker and the Company desire to set forth the terms under
which the Company shall appoint Walker as its Executive Chairman of the
Board of Directors and Acting President, Chief Executive Officer, Chief
Financial Officer and Corporate Secretary, as set forth in this Agreement;

     NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and intending to be legally bound hereby, the parties hereto
agree as follows:

     1. Engagement.  The Company hereby appoints Walker as its Executive
Chairman of the Board of Directors and Acting President, Chief Executive
Officer, Chief Financial Officer and Corporate Secretary and Walker
hereby accepts such appointments by the Company, for the period and
upon the terms and conditions contained in this Agreement.

     2. Services.
        (a) Executive Chairman.  In his capacity as Executive Chairman
            of the Companys Board of Directors, Walker shall prepare
            agendas for, and Chair, the Companys Board of Directors
            Meetings and conduct such other activities as may reasonably
            be requested by the Companys Board of Directors consistent
            with such position.
        (b) Management Positions.  During the Term, in his capacity as
            Acting President, Chief Executive Officer, Chief Financial
            Officer and Corporate Secretary of the Company, Walker will
            diligently and competently perform the duties and
            responsibilities consistent with all such positions and in
            accordance with the Companies policies and authorities.
        (c) Time Devoted to Service.  During the term of this Agreement,
            Walker agrees to devote a reasonable amount of time to the
            Company to fulfill the duties reasonably requested of him
            by the Companys Board of Directors.  The Company
            acknowledges and agrees that, during the term of this
            Agreement, Walker shall be entitled to engage in other
            activities and hold positions and interests with other
            business.

     3. Term; Extension of Term; Termination.
        (a) The term of this Agreement shall extend from the Effective
            Date until December 31, 2004 (the Term), unless sooner
            terminated by the parties.  Notwithstanding the foregoing,
            the provisions of Sections 5, 6, 7, and 9 shall survive any
            termination of this Agreement.

     4. Compensation.  As compensation for Walker performing services for
        the Company, the Company shall:
        (a) issue 100,000 Share Options and Distribution Equivalent Rights
            with respect to 50,000 of the share options under the Companys
            2003 Share Option and Incentive Plan (the Plan) as follows:
            (i) 50,000 Share Options shall vest immediately and shall
                include  Distribution Equivalent Rights (as defined in
                the Plan); and
            (ii) 50,000 Share Options shall vest on the earlier to occur
                 of: (x) December 31, 2004; (y) the termination of Walker
                 as President and Chief Executive Officer by the Company,
                 for any reason and (z) a Change of Control (as defined
                 in the Plan).  For purposes of this Agreement,
                 termination shall be deemed to occur upon a material
                 change in Mr. Walkers responsibilities hereunder.
        (b) a one-time, conditional amount of One Hundred and Fifty
            Thousand Dollars ($150,000) which shall only be payable
            and paid upon the final closing of any strategic transaction
            of the Company entered into during the term of this Agreement
            as determined in the reasonable and good faith judgment of
            the Companys Board of Directors (a Strategic Transaction).
     5. Expenses. During the term of this Agreement, the Company shall
        provide Walker with an office and administrative support at its
        corporate headquarters location at 2711 Centerville Road, Suite
        108, Wilmington, DE.  In the event the Company no longer maintains
        its principal corporate headquarters location, with a comparable
        level of administrative support, within five miles of its present
        location, then the Company shall pay Walker, on the first day of
        each month, the amount of Ten Thousand Dollars ($10,000).  Further,
        the Company shall reimburse Walker for any reasonable, ordinary
        and necessary business expenses incurred by Walker in the
        performance by Walker of his duties hereunder upon receipt of
        vouchers therefore.
     6. Indemnification and Non-Competition Agreements.  The Company
        reaffirms its obligations to Walker under the terms of that
        certain Indemnification Agreement, dated effective as of January
        30, 1998 and reexecuted on October 7, 2003 (the Indemnification
        Agreement).  Walker reaffirms his obligations to the Company under
        the terms of that certain Non-Competition Agreement, made January
        30, 1998 (the Non-Competition Agreement).  The terms of the
        Indemnification Agreement and Non-Competition Agreement are
        incorporated herein and made part hereof.
     7. Confidential Information.
        (a) Confidentiality of Information Furnished to Walker.  Unless
            authorized or instructed in writing by the Company, Walker
            shall not, during or at any time after the Term of this
            Agreement, disclose to others, or use, or permit to be
            disclosed to others or used, any Confidential Information.
            As used herein, Confidential Information shall mean all data,
            reports, interpretations, forecasts and records and other
            documents and information, whether written or oral, that the


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            Company furnishes or otherwise discloses to Walker, whether
            furnished or otherwise disclosed before or after the date of
            this Agreement, regardless of whether it relates to the Company
            or another entity and regardless of the manner in which it is
            furnished, together with all analyses, compilations, studies
            or documents, records or data prepared by the Company or any
            of its representatives or by Walker, to the extent they
            contain or otherwise reflect such information and documents.
        (b) Requirement of Non-Disclosure.  Walker acknowledges (i) that
            the use, misappropriation or disclosure of the Confidential
            Information would constitute a breach of trust and would cause
            irreparable injury to the Company, (ii) that all such
            Confidential Information is the property of the Company and
            (iii) that it is essential to the protection of the Company
            that the Confidential Information be kept confidential and
            that the Confidential Information may not be disclosed by
            Walker, to others or used by Walker for his own advantage or
            the advantage of others. Walker further acknowledges that the
            provisions of this Section and the enforceability of such
            provisions against Walker are an essential element of this
            Agreement and that, absent such provisions and the
            enforceability thereof, the Company would not (i) engage
            Walker nor (ii) permit Walker access to and use of the
            Confidential Information. Walker further acknowledges that
            he is aware that the United States securities laws prohibit
            any person in possession of material non-public information
            concerning an issuer from purchasing or selling securities of
            such issuer or from communicating such information to any
            other person under circumstances in which it is reasonably
            foreseeable that such person is likely to purchase or sell
            securities.
        (c) Return of Information.  Upon expiration or termination of
            this Agreement, Walker agrees to return to the Company any
            and all documents or materials constituting or, directly or
            indirectly, relating to any Confidential Information.
     8. Representations.  Walker represents to the Company that (a) there
        are no restrictions, agreements or understandings whatsoever to
        which Walker is a party which would prevent or make unlawful his
        execution and delivery of this Agreement or his appointment
        hereunder, (b) his execution and delivery of this Agreement and
        his engagement hereunder does not constitute a breach of any
        contract, agreement or understanding, oral or written, to which
        he is a party or by which he is bound, and (c) he is free and
        able to execute and deliver this Agreement and to become an
        officer of the Company.
     9. Miscellaneous.
       (a) Controlling Law.  This Agreement, and all questions relating
           to its validity, interpretation, performance and enforcement,
           shall be governed by and construed in accordance with the laws
           of the Commonwealth of Pennsylvania.
       (b) Notices.  All notices, requests, demands and other
           communications required or permitted under this Agreement
           shall be in writing and shall be deemed to have been duly
           given, made and received when delivered in person against
           receipt, or when sent by United States registered or certified
           mail, return receipt requested, postage prepaid, addressed as
           set forth below:

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          (i) If to Walker:
                              228 North Garfield Street
                              Kennett Square, PA  19348

          (ii) If to the Company:
                              Little Falls Centre One
                              2711 Centerville Road, Suite 108
                              Wilmington, Delaware 19808
                              Attention: Board of Trustees

     Any party may alter the address to which communications or copies
are to be sent by giving notice of such change of address in conformity
with the provisions of this paragraph for the giving of notice.
     (c) Binding Nature of Agreement.  This Agreement shall be binding
         upon and inure to the benefit of the Company and Walker and
         their respective successors and permitted assigns.
     (d) Execution in Counterparts.  This Agreement may be executed in
         any number of counterparts, each of which shall be deemed to be
         an original as against any party who executes the same, and all
         of which shall constitute one and the same instrument.  This
         Agreement shall become binding when one or more counterparts
         hereof, individually or taken together, shall bear the
         signatures of each of the parties reflected hereon as the
         signatories.
     (e) Provisions Separable.  The provisions of this Agreement are
         independent of and separable from each other, and no provision
         shall be affected or rendered invalid or unenforceable by
         virtue of the fact that for any reason any other or others of
         them may be invalid or unenforceable in whole or in part.
     (f) Entire Agreement.  This Agreement contains the entire
         understanding between the parties hereto with respect to the
         subject matter hereof and supersedes all prior and
         contemporaneous agreements and understandings, inducements or
         conditions, express or implied, oral or written, except as
         herein contained.  This Agreement may not be modified or amended
         other than by an agreement in writing.
     (g) Section and Paragraph Headings.  The section and paragraph
         headings in this Agreement are for convenience only; they
         form no part of this Agreement and shall not affect its
         interpretation.

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered on the date first above-written.

                           /s/ Michael R. Walker
                           ____________________________________
                           Michael R. Walker


                           ELDERTRUST
                           By:  Rodman W. Moorhead, III
                               _______________________________
                           Name:  Rodman W. Moorhead, III
                           Title: Chairman of Compensation Committee
                           Attest:_____________________________


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