<PAGE>




                              EMPLOYMENT AGREEMENT


         THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of October 13,
1999 by and between Eldertrust, a real estate investment trust, with its
principal place of business at 101 East State Street, Kennett Square, PA 19348
(the "Company"), and D. Lee McCreary, Jr. (the "Executive").

                                   WITNESSETH:

         The Company desires to continue to employ the Executive as an employee
of the Company, and the Executive desires to continue to provide services to the
Company, all upon the terms and conditions hereinafter set forth.

         NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, and intending to be legally bound hereby, the parties
hereto agree as follows: 1. Offer and Acceptance of Employment. The Company
hereby agrees to employ the Executive as the President and Chief Executive
Officer of the Company. The Executive accepts such employment and agrees to
perform the customary responsibilities of such position during the term of this
Agreement. The Executive will perform such other duties as may from time to time
be reasonably assigned to him by the Board of Trustees of the Company, provided
such duties are consistent with and do not interfere with the performance of the
duties described herein and are of a type customarily performed by persons of
similar titles with similar corporations. Nothing in this Agreement shall
preclude Executive from serving as a director, trustee, officer of, or partner
in, any other firm, trust, corporation or partnership or from pursuing personal
investments, as long as such activities do not interfere with Executive's
performance of his duties hereunder.

         2. Period of Employment.

         (a) Period of Employment. The period of the Executive's employment
under this Agreement shall commence on the date hereof and shall, unless sooner
terminated pursuant to Section 4, continue for a three year period ending on
October 13, 2002 (such period, as extended from time to time, herein referred to
as the "Term"). Subject to Section 2(b), and if the Term has not been terminated
pursuant to Section 4, on October 13, 2001 and on each October 13 thereafter the
Term shall be extended for an additional period of one year.

         (b) Termination of Automatic Extension by Notice. The Company (with the
affirmative vote of two-thirds of the entire membership of the





<PAGE>


Board of Trustees at a meeting of the Board of Trustees called and held for such
purpose) or the Executive may elect to terminate the automatic extension of the
Term set forth in Section 2(a) ("Automatic Extension") by giving written notice
of such election. Any notice given hereunder must be given not less than one
year prior to the end of the then current Term.

         3. Compensation and Benefits.

         (a) Base Salary. As long as Executive remains an employee of Company,
Executive will be paid a base salary which shall continue at the rate currently
in effect, subject to adjustment as hereinafter provided. The Compensation and
Share Option Committee of the Board of Trustees shall review Executive's base
salary on an annual basis and make recommendations with respect to increases in
base salary to the Board of Trustees. Any increase in base salary shall not
reduce or limit any other obligation of the Company hereunder. Executive's
annual base salary payable hereunder, as it may be increased from time to time
and without reduction for any amounts deferred as described below, is referred
to herein as "Base Salary." Effective July 29, 1999 the Executive's Base Salary
shall be $200,000. Executive's Base Salary, as in effect from time to time, may
not be reduced by the Company without Executive's consent, provided that the
Base Salary payable under this paragraph shall be reduced to the extent
Executive elects to defer or reduce such salary under the terms of any deferred
compensation or savings plan or other employee benefit arrangement maintained or
established by the Company. The Company shall pay Executive the portion of his
Base Salary not deferred in accordance with its customary periodic payroll
practices.

         (b) Incentive Compensation. Executive shall be eligible to receive
incentive compensation in the form of share options in amounts determined from
time to time by the Compensation and Share Option Committee of the Board of
Trustees.

         (c) Benefits, Perquisites and Expenses.

             (i) Benefits. During the Term, Executive shall be eligible to
participate in (1) each welfare benefit plan sponsored or maintained by the
Company, including, without limitation, each life, hospitalization, medical,
dental, health, accident or disability insurance or similar plan or program of
the Company, and (2) each pension, profit sharing, retirement, deferred
compensation or savings plan sponsored or maintained by the Company, in each
case, whether now existing or established hereafter, to the extent that
Executive is eligible to participate in any such plan under the generally
applicable provisions thereof. With respect to the pension or retirement
benefits payable to Executive, Executive's service credited for purposes of
determining Executive's benefits and vesting shall be determined in accordance
with the terms of the applicable plan or program. Nothing in this





                                       2



<PAGE>


Section 3(c), in and of itself, shall be construed to limit the ability of the
Company to amend or terminate any particular plan, program or arrangement.

             (ii) Vacation. During the Term, the Executive shall be entitled to
the number of paid vacation days in each calendar year determined by the Company
from time to time for its senior executive officers, but not less than four
weeks in any calendar year. The Executive shall also be entitled to all paid
holidays given by the Company to its senior officers. Vacation days which are
not used during any calendar year may not be accrued, nor shall Executive be
entitled to compensation for unused vacation days.

             (iii) Perquisites. During the Term, Executive shall be entitled to
receive such perquisites (e.g., fringe benefits) as are generally provided to
other senior officers of the Company in accordance with the then current
policies and practices of the Company.

             (iv) Business Expenses. During the Term, the Company shall pay or
reimburse Executive for all reasonable expenses incurred or paid by Executive in
the performance of Executive's duties hereunder, upon presentation of expense
statements or vouchers and such other information as the Company may reasonably
require and in accordance with the generally applicable policies and practices
of the Company.

         4. Employment Termination. The Term of employment under this Agreement
may be earlier terminated only as follows:

         (a) Cause. For purposes hereof, a termination by the Corporation for
"Cause" shall mean termination by action of at least two-thirds of the members
of the Board of Trustees of the Company at a meeting duly called and held upon
at least 15 days' prior written notice to Executive specifying the particulars
of the action or inaction alleged to constitute "Cause" (and at which meeting
Executive and his counsel were entitled to be present and given reasonable
opportunity to be heard) because of (i) Executive's conviction of any felony
(whether or not involving the Company or any of its subsidiaries) involving
moral turpitude which subjects, or if generally known, would subject, the
Company or any of its subsidiaries to public ridicule or embarrassment, (ii)
fraud or other willful misconduct by Executive in respect of his obligations
under this Agreement, or (iii) willful refusal or continuing failure to attempt,
without proper cause and, other than by reason of illness, to follow the lawful
directions of the Board of Trustees following thirty days' prior written notice
to Executive of his refusal to perform, or failure to attempt to perform such
duties and which during such thirty day period such refusal or failure to
attempt is not cured by the Executive. "Cause" shall not include a bona fide
disagreement over a corporate policy, so long as Executive does not willfully
violate on a continuing basis specific written directions from the Board of
Trustees, which directions are consistent with the provisions of this Agreement.
Action or inaction




                                       3

<PAGE>


by Executive shall not be considered "willful" unless done or omitted by him
intentionally and without his reasonable belief that his action or inaction was
in the best interests of the Company, and shall not include failure to act by
reason of total or partial incapacity due to physical or mental illness.

         (b) Without Cause. Notwithstanding anything to the contrary contained
in this Agreement, the Company (with the affirmative vote of two-thirds of the
entire membership of the Board of Trustees at a meeting of the Board of Trustees
called and held for the purpose) may, at any time after at least 90 days' prior
written notice in accordance with Section 4(e) hereof to the Executive,
terminate the Executive's employment hereunder without Cause.

         (c) Death or Disability. If Executive dies, his employment shall
terminate as of the date of death. If Executive develops a disability, the
Company may terminate Executive's employment hereunder. As used in this
Agreement, the term "disability" shall mean incapacity due to physical or mental
illness which has caused the Executive to be unable to substantially perform his
duties with the Company on a full time basis for (i) a period of twelve
consecutive months, or (ii) for shorter periods aggregating more than twelve
months in any twenty-four month period. During any period of Disability, the
Executive agrees to submit to reasonable medical examinations upon the
reasonable request, and at the expense, of the Company.

         (d) Good Reason. The Executive may terminate the Executive's employment
for Good Reason at any time during the term of this Agreement. For purposes of
this Agreement, "Good Reason" shall mean any of the following:

             (i) the assignment to the Executive by the Company of any duties
inconsistent with the Executive's status with the Company or a substantial
alteration in the nature or status of the Executive's responsibilities from
those in effect immediately prior to the date hereof, or a reduction in the
Executive's titles or offices as in effect immediately prior to the date hereof,
or any removal of the Executive from, or any failure to reelect the Executive
to, any of such positions, except in connection with the termination of his
employment for disability or cause or as a result of the Executive's death or by
the Executive other than for Good Reason, or the termination by the Company's
Board of Trustees of the Automatic Extension;

             (ii) a reduction by the Company in the Executive's Base Salary as
in effect on the date hereof or as the same may be increased from time to time
during the term of this Agreement;

             (iii) a relocation of the Executive's principal place of employment
or the relocation of the Company's principal office or corporate




                                       4

<PAGE>


headquarters to a location 35 miles or more from the Executive's current
principal place of employment.

             (iv) any "Change of Control" as set forth in Section 6 hereof;

             (v) any material failure by the Company to comply with any of the
provisions of this Agreement;

             (vi) any termination of the Executive's employment for reasons
other than death, disability or Cause or the termination by the Board of
Trustees of the Automatic Extension pursuant to Section 2(b) of this Agreement;

             (vii) the commencement of a proceeding or case, with or without the
application or consent of the Company or any of its subsidiaries, in any court
of competent jurisdiction, seeking (A) the liquidation, reorganization,
dissolution or winding-up of the Company or its subsidiaries, or the composition
or readjustment of the debts of the Company or its subsidiaries, (B) the
appointment of a trustee, receiver, custodian, liquidator or the like for the
Company or its subsidiaries or of all or any substantial part of their
respective assets, or (C) any similar relief in respect of the Company or its
subsidiaries under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts.

         (e) Notice of Termination. Any termination, except for death, pursuant
to this Section 4 shall be communicated by a Notice of Termination. For purposes
of this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate those specific termination provisions in this Agreement relied
upon and which sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated.

         (f) Date of Termination. "Date of Termination" shall mean (i) if this
Agreement is terminated by the Company for disability, 30 days after Notice of
Termination is given to the Executive (provided that the Executive shall not
have returned to the performance of the Executive's duties on a full-time basis
during such 30-day period), (ii) if Executive's employment is terminated due to
Executive's death, on the date of death; (iii) if the Executive's employment is
terminated for Good Reason as a result of a Change of Control, as set forth in
Section 6 hereof; or (iv) if the Executive's employment is terminated for any
other reason, the date specified in the Notice of Termination (which shall not
be less than 90 nor more than 180 days from the date such Notice of Termination
is given).

         (g) Transfer of Minority Interests. The Executive shall transfer all of
his direct or indirect interests in entities in which the Company has an




                                       5

<PAGE>


interest (which shall not for the purposes of this Section 4(g) be deemed to
include ET Capital Corp.) immediately upon termination of the Executive's
employment with the Company for any reason. Such transfer shall be in a manner
reasonably determined by the Board of Trustees and at fair market value, as
determined by the Board.

         5. Payments upon Termination.

         (a) Termination Due to Death or Disability. Upon the death or
Disability of the Executive (i) the Company shall pay to the Executive or his
estate (1) his full Base Salary and other accrued benefits earned up to the last
day of the month of the Executive's death or Disability, (2) all deferred
compensation of any kind, including, without limitation, any amounts earned
under any bonus plan, and (3) if any bonus, under any bonus plan, shall be
payable in respect of the year in which the Executive's death or Disability
occurs, such bonus(es) prorated up to the last day of the month of the
Executive's death or Disability and (ii) all restricted shares, dividend
equivalent rights, share option and performance share awards made to the
Executive shall automatically become fully vested as of the date of death or
Disability.

         (b) Termination for Cause. If the Executive's employment shall be
terminated for Cause, the Company shall pay the Executive: (i) his full Base
Salary through the Date of Termination (as defined in Section 4(f)) at the rate
in effect at the time Notice of Termination (as defined in Section 4(e)) is
given, and (ii) all deferred compensation of any kind. In addition, Executive
shall have the option to have assigned to him at no cost and with no
apportionment of prepaid premiums any assignable insurance policy owned by the
Company and relating specifically to Executive. The Company shall have no
further obligations to the Executive under this Agreement.

         (c) Termination by Executive for Good Reason or by the Company for
Reasons other than for Cause, Death or Disability.

             (i) In the event (1) the Company terminates the Term without Cause,
or (2) the Executive terminates the Term for Good Reason, then the Company shall
make a lump-sum payment to the Executive equal to (x) three (3) times the
Executive's average annual Base Salary for the last three years, or, if less,
over the expired term this Agreement, plus (y) the average annual value as of
the date of grant of the Executive's share options vesting in a fiscal year
(using a Black-Scholes valuation as reasonably determined by the Company), plus
(z) the value of the Executive's dividend equivalent rights credited to the
Executive's memo account in the fiscal year immediately preceding such
termination, provided that the value attributed to such share options and
dividend equivalent rights shall not exceed 50 percent (50%) of Executive's
average annual Base Salary for the three-year period preceding the termination
of the Term; and all share options, share awards and



                                       6

<PAGE>

similar equity rights, if any, shall vest and become exercisable immediately
prior to the termination of the Term and remain exercisable through their
original terms with all rights.

             (ii) Following termination of the Term for any reason, other than
for Cause or upon the death of the Executive, the Company shall also maintain in
full force and effect, for the continued benefit of the Executive for a period
equal to the greater of (x) the period of the Term otherwise remaining or (y)
two (2) years without giving effect to such termination, all employee benefit
plans and programs to which the Executive was entitled prior to the date of
termination (including, without limitation, the benefit plans and programs
provided for herein) if the Executive's continued participation is possible
under the general terms and provisions of such plans and programs. In the event
that the Executive's participation in any such plan or program is barred by the
terms thereof, the Company shall pay to the Executive an amount equal to the
annual contribution, payments, credits or allocations made by the Company to
him, to his account or on his behalf under such plans and programs from which
his continued participation is barred except that if the Executive's
participation in any health, medical, life insurance or disability plan or
program is barred, the Company shall obtain and pay for, on the Executive's
behalf, to the extent possible individual insurance plans, policies or programs
which provide to the Executive health, medical, life and disability insurance
coverage which is equivalent to the insurance coverage to which the Executive
was entitled prior to the date of termination.

         6. Change of Control.

         (a) Upon a Change of Control (as defined below), the Executive may
terminate the Term upon notice to the Company, effective as set forth in such
notice (i) for any reason or for no reason during the initial ninety (90) day
period following the date of such Change of Control, or (ii) at any time, within
twenty-four (24) months following the date of a Change of Control, if any other
event constituting Good Reason hereunder continues for more than ten (10) days
after the Executive delivers notice thereof to the Company. The failure of
Executive to exercise his rights hereunder following an event constituting a
Change of Control shall not preclude Executive from exercising such rights
following the occurrence of a subsequent Change of Control event, even if
related to a prior Change of Control Event.

         (b) For purposes of this Agreement, the term "Change of Control" shall
mean the happening of any of the following:

             (i) if any person ("Person") (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing fifty



                                       7

<PAGE>

percent (50%) or more of the combined voting power of the Company's then
outstanding securities;

             (ii) notwithstanding clauses (i) or (iv) of this Section 6, the
Company consummates a merger or consolidation of the Company with or into
another corporation or trust, the result of which is that the shareholders of
the Company at the time of the execution of the agreement to merge or
consolidate own less than eighty percent (80%) of the total equity of the entity
surviving or resulting from the merger or consolidation or of a entity owning,
directly or indirectly, one hundred percent (100%) of the total equity of such
surviving or resulting entity;

             (iii) the sale in one or a series of transactions of all or
substantially all of the assets of the Company;

             (iv) any Person has commenced a tender or exchange offer, or
entered into an agreement or received an option to acquire beneficial ownership
of fifty percent (50%) or more of the total number of voting shares of the
Company unless the Board of Trustees has made a determination that such action
does not constitute and will not constitute a change in the Persons in control
of the Company; or

             (v) there is a change of control in the Company of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act other than in circumstances
specifically covered by clauses (i) - (iv) above.

         7. Certain Tax Matters. Notwithstanding any other provision of this
Agreement or of any other agreement, contract, or understanding heretofore or
hereafter entered into by the Executive with Employer, except an agreement,
contract, or understanding hereafter entered into that expressly modifies or
excludes application of this paragraph (an "Other Agreement"), and
notwithstanding any formal or informal employment agreement or other arrangement
for the direct or indirect provision of compensation to the Executive (including
groups or classes of participants or beneficiaries of which the Executive is a
member), whether or not such compensation is deferred, is in cash, or is in the
form of a benefit to or for the Executive (a "Benefit Arrangement"), if the
Executive is a "disqualified individual," as defined in Section 280G(c) of the
Internal Revenue Code (the "Code"), any right to receive any payment or other
benefit under this Agreement shall not become exercisable or vested (i) to the
extent that such right to exercise, vesting, payment, or benefit, taking into
account all other rights, payments, or benefits to or for the Executive under
this Agreement, all Other Agreements, and all Benefit Arrangements, would cause
any payment or benefit to the Executive under this Agreement to be considered a
"parachute payment" within the meaning of Section 280G(b)(2) of the Code as then
in effect (a "Parachute Payment") and (ii) if, as a result of receiving a
Parachute Payment, the aggregate



                                       8


<PAGE>



after-tax amounts received by the Executive from the Employer under this
Agreement, all Other Agreements, and all Benefit Arrangements would be less than
the maximum after-tax amount that could be received by the Executive without
causing any such payment or benefit to be considered a Parachute Payment. In the
event that the receipt of any such right to exercise, vesting, payment, or
benefit under this Agreement, in conjunction with all other rights, payments, or
benefits to or for the Executive under any Other Agreement or any Benefit
Arrangement would cause the Executive to be considered to have received a
Parachute Payment under this Agreement that would have the effect of decreasing
the after-tax amount received by Executive as described in clause (ii) of the
preceding sentence, then the Executive shall have the right, in Executive's sole
discretion, to designate those rights, payments, or benefits under this
Agreement, any Other Agreements, and any Benefit Arrangements that should be
reduced or eliminated so as to avoid having the payment or benefit to Executive
under this Agreement be deemed to be a Parachute Payment. The Employer will take
the position for tax purposes that no payments made under this Agreement are
"parachute payments" within the meaning of Section 280G(b)(2) of the Code.

         8. Executive's Covenants.

         (a) Nondisclosure. At all times during and after the Term, Executive
shall keep confidential and shall not, except with the Company's express prior
written consent, or except in the proper course of his employment with the
Company, directly or indirectly, communicate, disclose, divulge, publish, or
otherwise express, to any Person, or use for his own benefit or the benefit of
any Person, any trade secrets, confidential or proprietary knowledge or
information, no matter when or how acquired concerning the conduct and details
of the Company's and its subsidiaries' business, including without limitation,
names of customers and suppliers, marketing methods, trade secrets, policies,
prospects and financial condition. For purposes of this Section 8, confidential
information shall not include any information which is now known by or readily
available to the general public or which becomes known by or readily available
to the general public other than as a result of any improper act or omission of
Executive.

         (b) Non-Competition. During the Term hereof and for a period of three
(3) years thereafter, Executive shall not, except with the Company's express
prior written consent, directly or indirectly, in any capacity, for the benefit
of any Person:

             (i) Solicit any Person who is or during such period becomes a
customer, supplier, employee, salesman, agent or representative of the Company
or any subsidiary, in any manner which interferes or might interfere with such
Person's relationship with the Company or any subsidiary, or in an effort to
obtain such Person as a customer, supplier, employee, salesman, agent, or
representative




                                       9


<PAGE>


of any business in competition with the Company or any subsidiary within 15
miles of any office or facility owned, leased or operated by the Company or any
subsidiary.

             (ii) Establish, engage, own, manage, operate, join or control, or
participate in the establishment, ownership (other than as the owner of less
than one percent of the stock of a corporation whose shares are publicly
traded), management, operation or control of, or be a director, officer,
employee, salesman, agent or representative of, or be a consultant to, any
Person in any business in competition with the Company or any subsidiary, at any
location within 15 miles of any office or facility owned, leased or operated by
the Company or any subsidiary, or act or conduct himself in any manner which he
would have reason to believe inimical or contrary to the best interests of the
Company or any subsidiary.

         (c) Enforcement. Executive acknowledges that any breach by him of any
of the covenants and agreements of this Section 8 ("Covenants") will result in
irreparable injury to the Company for which money damages could not adequately
compensate the Company, and therefore, in the event of any such breach, the
Company shall be entitled, in addition to all other rights and remedies which
the Company may have at law or in equity, to have an injunction issued by any
competent court enjoining and restraining Executive and/or all other Persons
involved therein from continuing such breach. The existence of any claim or
cause of action which Executive or any such other Person may have against the
Company shall not constitute a defense or bar to the enforcement of any of the
Covenants. If the Company is obliged to resort to litigation to enforce any of
the Covenants which has a fixed term, then such term shall be extended for a
period of time equal to the period during which a material breach of such
Covenant was occurring, beginning on the date of a final court order (without
further right of appeal)holding that such a material breach occurred, or, if
later, the last day of the original fixed term of such Covenant.

         (d) Consideration. Executive expressly acknowledges that the Covenants
are a material part of the consideration bargained for by the Company and,
without the agreement of Executive to be bound by the Covenants, the Company
would not have agreed to enter into this Agreement.




                                       10
<PAGE>

         (e) Scope. If any portion of any Covenant or its application is
construed to be invalid, illegal or unenforceable, then the other portions and
their application shall not be affected thereby and shall be enforceable without
regard thereto. If any of the Covenants is determined to be unenforceable
because of its scope, duration, geographical area or similar factor, then the
court making such determination shall have the power to reduce or limit such
scope, duration, area or other factor, and such Covenant shall then be
enforceable in its reduced or limited form.

         9. No Obligation to Mitigate Damages; No Effect on Other Contractual
Rights.

         (a) The Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of payment provided for under this
Agreement be reduced by any compensation earned by the Executive as the result
of employment by another employer after the Date of Termination, or otherwise.
The amounts payable to Executive under Section 5 hereof shall not be treated as
damages but as severance compensation to which, Executive is entitled by reason
of termination of his employment in the circumstances contemplated by this
Agreement.

         (b) The provisions of this Agreement, and any payment provided for
hereunder, shall not reduce any amounts otherwise payable, or in any way
diminish the Executive's existing rights, or rights which would accrue solely as
a result of the passage of time, under any benefit plan, employment agreement or
other contract, plan or arrangement.

         10. Miscellaneous.

         (a) Notices. All notices, requests, demands, consents or other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if and when (i) delivered
personally, (ii) mailed by first class certified mail, return receipt requested,
postage prepaid, or (iii) sent by a nationally recognized express courier
service, postage or delivery changes prepaid, with receipt, or (iv) delivered by
telecopy (with receipt, and with original delivered in accordance with any of
(i), (ii) or (iii) above) to the parties at their respective addresses stated
below or to such other addresses of which the parties may give notice in
accordance with this Section.

         If to the Company, to:

         ElderTrust
         101 East State Street, Suite 100
         Kennett Square, PA 19348
         Attention: Chairman

                                       11


<PAGE>


         If to Executive, to:

         D. Lee McCreary, Jr.
         1512 Broadrun Road
         Landenberg, PA  19350

         (b) Entire Understanding. This Agreement sets forth the entire
understanding between the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous, written, oral, expressed or implied,
communications, agreements and understandings with respect to the subject matter
hereof.

         (c) Modification. This Agreement shall not be amended, modified,
supplemented or terminated except in writing signed by both parties. No action
taken by the Company hereunder, including without limitation any waiver, consent
or approval, shall be effective unless approved by a majority of the Board of
Trustees.

         (d) Termination of Prior Employment Agreements. All prior employment
agreements between Executive and the Company and/or any of its affiliates (and
any of their predecessors) are hereby terminated as of the date hereof as fully
performed on both sides.

         (e) Assignability and Binding Effect. This Agreement shall inure to the
benefit of and shall be binding upon the Company and its successors and assigns
and upon Executive and his heirs, executors, and legal representatives. This
Agreement is a personal employment contract of the Company, being for the
personal services of Executive, and shall not be assignable by the Executive.

         (f) Severability. If any provision of this Agreement is construed to be
invalid, illegal or unenforceable, then the remaining provisions hereof shall
not be affected thereby and shall be enforceable without regard thereto.

         (g) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original
hereof, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one counterpart hereof.

         (h) Section Headings. Section and subsection headings in this Agreement
are inserted for convenience of reference only, and shall neither constitute a
part of this Agreement nor affect its construction, interpretation, meaning or
effect.



                                       12
<PAGE>

         (i) References. All words used in this Agreement shall be construed to
be of such number and gender as the context requires or permits.

         (j) Controlling Law. This Agreement is made under, and shall be
governed by, construed and enforced in accordance with, the substantive laws of
the State of Maryland applicable to agreements made and to be performed entirely
therein.

         (k) Settlement of Disputes. The Company and Executive agree that any
claim, dispute or controversy arising under or in connection with this
Agreement, or otherwise in connection with Executive's employment by the Company
(including, without limitation, any such claim, dispute or controversy arising
under any federal, state or local statute, regulation or ordinance or any of the
Company's employee benefit plans, policies or programs) shall be resolved solely
and exclusively by binding arbitration. The arbitration shall be held in the
city of Philadelphia, Pennsylvania (or at such other location as shall be
mutually agreed by the parties). The arbitration shall be conducted in
accordance with the Expedited Employment Arbitration Rules (the "Rules") of the
American Arbitration Association (the "AAA") in effect at the time of the
arbitration, except that the arbitrator shall be selected by alternatively
striking from a list of five arbitrators supplied by the AAA. All fees and
expenses of the arbitration, including a transcript if either requests, shall be
borne equally by the parties. If Executive prevails as to any material issue
presented to the arbitrator, the entire cost of such proceedings (including,
without limitation, Executive's reasonable attorneys fees) shall be borne by the
Company. If Executive does not prevail as to any material issue, each party will
pay for the fees and expenses of its own attorneys, experts, witnesses, and
preparation and presentation of proofs and post-hearing briefs (unless the party
prevails on a claim for which attorney's fees are recoverable under the Rules).
Any action to enforce or vacate the arbitrator's award shall be governed by the
Federal Arbitration Act, if applicable, and otherwise by applicable state law.
If either the Company or Executive pursues any claim, dispute or controversy
against the other in a proceeding other than the arbitration provided for
herein, the responding party shall be entitled to dismissal or injunctive relief
regarding such action and recovery of all costs, losses and attorney's fees
related to such action.

         (l) Approval and Authorizations. The execution and the implementation
of the terms and conditions of this Agreement have been fully authorized by the
Board of Trustees.

         (m) Indulgences, Etc. Neither the failure nor delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall the single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or any other right, remedy, power or privilege, nor shall
any waiver of any right,



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<PAGE>

remedy, power or privilege with respect to any occurrence be construed as a
waiver of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is signed
by the party asserted to have granted such waiver.

         (n) Legal Expenses. In the event that the Executive institutes any
legal action to enforce his rights under, or to recover damages for breach of
this Agreement, the Executive, if he is the prevailing party, shall be entitled
to recover from the Company any actual expenses for attorney's fees and
disbursements incurred by him.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above mentioned, under seal, intending to be legally bound
hereby.

                                       COMPANY:

Attest:


/s/ Kelly A. McAteer                   By: /s/ Michael Walker
------------------------------             -----------------------------
Assistant Secretary                    Its: Chairman
                                           -------------

Date of Execution:  3/31/00            Date of Execution:  3/31/00
                 -------------                           ------------



                                       EXECUTIVE:


                                       /s/ D. Lee McCreary, Jr.
                                       ---------------------------------
                                       D. Lee McCreary, Jr.
                                       Date of Execution:   3/31/00
                                                         -------------



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