<PAGE>

                         REGISTRATION RIGHTS AGREEMENT


                  THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
made and entered into as of January 30, 1998 by and between ElderTrust, a
Maryland real estate investment trust (the "Company"), and the holders of
Units listed on Schedule A hereto (each, individually, a "Holder," and,
collectively, the "Holders").

                  WHEREAS, on the date hereof, the Holders are receiving Class
A units of limited partnership interest ("Units") in the ElderTrust Operating,
Limited Partnership, a Delaware limited partnership (the "Operating
Partnership");

                  WHEREAS, in connection therewith, the Company has agreed to
grant to the Holders the Registration Rights (as defined in Section 1 hereof);

                  NOW, THEREFORE, the parties hereto, in consideration of the
foregoing, the mutual covenants and agreements hereinafter set forth, and
other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, hereby agree as follows:

Section 1.        Registration Rights

                  If a Holder receives common shares of beneficial interest
("Common Shares") of the Company upon redemption of Units (the "Redemption
Shares") pursuant to the terms of the First Amended and Restated Agreement of
Limited Partnership of the Operating Partnership (the "Operating Partnership
Agreement"), then unless such Redemption Shares are issued to such Holder
pursuant to an Issuer Registration Statement as provided in Section 2 below,
Holder shall be entitled to offer for sale pursuant to a Registration
Statement (as defined in Section 3 hereof) the Redemption Shares at any time
after the date which is 14 months following the date of the closing of the
Company's initial public offering of Common Shares (the "Effective Date"),
subject to the terms and conditions set forth in Section 3 hereof (the
"Registration Rights").

Section 2.        Issuer Registration Statement

                  Anything contained herein to the contrary notwithstanding,
in the event that Redemption Shares are issued by the Company to a Holder
pursuant to an effective registration statement (an "Issuer Registration
Statement") filed with the Securities and Exchange Commission (the "SEC"), the
Company shall be deemed to have satisfied all of its registration obligations
under this Agreement.

Section 3.        Demand Registration Rights

                  3.1(a) Registration Procedure. Unless such Redemption Shares
are issued pursuant to an Issuer Registration Statement as provided in Section
2 hereof, then subject to Sections 3.1(c) and 3.2 hereof, if any Holder
desires to exercise its Registration Rights with respect to any Redemption
Shares issued to such Holder, the Holder shall deliver to the Company a

<PAGE>

written notice (a "Registration Notice") informing the Company of such
exercise and specifying the number of shares to be offered by such Holder
(such shares to be offered being referred to herein as the "Registrable
Securities"). Such notice may be given at any time on or after the later of
(i) the Effective Date or (ii) the date a notice of redemption is delivered by
the Holder to the Operating Partnership pursuant to the Operating Partnership
Agreement, but must be given at least fifteen (15) business days prior to the
consummation of any sale of Registrable Securities. Upon receipt of the
Registration Notice, the Company, if it has not already caused the Registrable
Securities to be included as part of an existing shelf registration statement
and related prospectus (the "Shelf Registration Statement") that the Company
then has on file with the SEC (in which event the Company shall be deemed to
have satisfied its registration obligation under this Section 3), will cause
to be filed with the SEC as soon as reasonably practicable after receiving
such Registration Notice a new registration statement and related prospectus
(a "New Registration Statement") that complies as to form in all material
respects with applicable SEC rules providing for the sale by the Holder of the
Registrable Securities, and agrees (subject to Section 3.2 hereof) to use its
best efforts to cause such New Registration Statement to be declared effective
by the SEC as soon as practicable. (As used herein, "Registration Statement"
and "Prospectus" refer to the Shelf Registration Statement and related
prospectus (including any preliminary prospectus) or the New Registration
Statement and related prospectus (including any preliminary prospectus),
whichever is utilized by the Company to satisfy each Holder's Registration
Rights pursuant to this Section 3, including in each case any documents
incorporated therein by reference.) Each Holder agrees to provide in a timely
manner information regarding the proposed distribution by such Holder of the
Registrable Securities and such other information reasonably requested by the
Company in connection with the preparation of and for inclusion in the
Registration Statement. The Company agrees (subject to Section 3.2 hereof) to
use its best efforts to keep the Registration Statement effective (including
the preparation and filing of any amendments and supplements thereto necessary
for that purpose) until the earlier of (i) the date on which the applicable
Holder or Holders consummate the sale of all of the Registrable Securities
registered under the Registration Statement or (ii) the date on which all of
the Registrable Securities are eligible for sale pursuant to Rule 144(k) (or
any successor provision) or in a single transaction pursuant to Rule 144(e)
(or any successor provision) under the Securities Act of 1933, as amended (the
"Securities Act"). The Company agrees to provide to each Holder a reasonable
number of copies of the final Prospectus and any amendments or supplements
thereto relating to Registrable Securities held by such Holder.
Notwithstanding the foregoing, the Company may at any time, in its sole
discretion and prior to receiving any Redemption Notice from any Holder,
include all of the Redemption Shares or any portion thereof in any Shelf
Registration Statement. In connection with any Registration Statement utilized
by the Company to satisfy any Holder's Registration Rights pursuant to this
Section 3, each Holder agrees that it will respond within three (3) Business
Days to any request by the Company to provide or verify information regarding
such Holder or such Holder's Registrable Securities as may be required to be
included in such Registration Statement pursuant to the rules and regulations
of the SEC.

                  3.1(b) Offers and Sales. All offers and sales by a Holder
pursuant to a Registration Statement referred to in this Section 3 shall be
completed within the period during which such Registration Statement is
required to remain effective pursuant to Section 3.1(a), and upon expiration


                                      2
<PAGE>

of such period no Holder will offer or sell any Registrable Securities
pursuant to such Registration Statement. If directed by the Company, a Holder
will return all undistributed copies of any Prospectus in its possession upon
the expiration of such period.

                  3.1(c) Limitations on Registration Rights. Each exercise of
the Registration Right shall be effected with respect to a minimum of the
lesser of (i) Ten Thousand (10,000) Common Shares or (ii) the total number of
Redemption Shares held by the exercising Holder at such time plus the number
of Redemption Shares that may be issued to such Holder upon redemption of
Units by such Holder; provided, however, that, with respect to a Holder which
is an entity, such a Holder may exercise the Registration Right for less than
Ten Thousand (10,000) Common Shares without regard to whether or not such
Holder is exercising the Registration Right for all of the Redemption Shares
held by such Holder as long as such Holder is exercising the Registration
Right on behalf of one or more of its direct equity owners (e.g.,
shareholders, partners or members) or beneficiaries in respect of one hundred
percent (100%) of such equity owners' interest in such Holder. The right of
any Holder to deliver a Registration Notice commences upon the later of (i)
the Effective Date or (ii) the date such Holder is permitted to redeem Units
pursuant to the Operating Partnership Agreement. The right of a Holder to
deliver a Registration Notice shall expire on the date on which all of the
Redemption Shares held by such Holder or issuable upon redemption of Units
held by such Holder are eligible for sale pursuant to Rule 144(k) (or any
successor provision) or in a single transaction pursuant to Rule 144(e) (or
any successor provision) under the Securities Act. The Registration Rights
granted pursuant to this Section 3.1 may not be exercised in connection with
any underwritten public offering by the Company or by any Holder without the
prior written consent of the Company.

                  3.2 Suspension of Offering. Upon any notice by the Company,
either before or after a Holder has delivered a Registration Notice, that a
negotiation or consummation of a transaction by the Company or its
subsidiaries is pending or an event has occurred, which negotiation,
consummation or event would require additional disclosure by the Company in
the Registration Statement of material information which the Company has a
bona fide business purpose for keeping confidential and the nondisclosure of
which in the Registration Statement might cause the Registration Statement to
fail to comply with applicable disclosure requirements (a "Materiality
Notice"), such Holder agrees that it will immediately discontinue offers and
sales of the Registrable Securities under the Registration Statement until
Holder receives copies of a supplemented or amended Prospectus that corrects
the misstatement(s) or omission(s) referred to above and receives notice that
any post-effective amendment has become effective; provided, that the Company
may delay, suspend or withdraw the Registration Statement for such reason for
no more than sixty (60) days after delivery of the Materiality Notice at any
one time. If so directed by the Company, such Holder will deliver to the
Company all copies of the Prospectus covering the Registrable Securities
current at the time of receipt of any Materiality Notice.

                  3.3 Qualification. The Company agrees to use its best
efforts to register or qualify the Registrable Securities by the time the
applicable Registration Statement is declared effective by the SEC under all
applicable state securities or "blue sky" laws of such jurisdictions as the
applicable Holder shall reasonably request in writing, to keep each such
registration or qualification effective during the period such Registration


                                      3
<PAGE>

Statement is required to be kept effective or during the period offers or
sales are being made by such Holder after delivery of a Registration Notice to
the Company, whichever is shorter, and to do any and all other acts and things
which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in each such jurisdiction of the Registrable
Securities owned by such Holder; provided, however, that the Company shall not
be required to (x) qualify generally to do business in any jurisdiction or to
register as a broker or dealer in such jurisdiction where it would not
otherwise be required to qualify but for this Section 3.3, (y) subject itself
to taxation in any such jurisdiction or (z) submit to the general service of
process in any such jurisdiction.


                  3.4 Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Holder and each person, if any, who controls
any Holder within the meaning of Section 15 of the Securities Act or Section
20 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
follows:

                                    (i) against any and all loss, liability,
                           claim, damage and expense whatsoever, as incurred,
                           arising out of or based upon any untrue statement
                           or alleged untrue statement of a material fact
                           contained in any Registration Statement (or any
                           amendment thereto) pursuant to which the
                           Registrable Securities were registered under the
                           Securities Act, including all documents
                           incorporated therein by reference, or the omission
                           or alleged omission therefrom of a material fact
                           required to be stated therein or necessary to make
                           the statements therein not misleading or arising
                           out of or based upon any untrue statement or
                           alleged untrue statement of a material fact
                           contained in any Prospectus (or any amendment or
                           supplement thereto), including all documents
                           incorporated therein by reference, or the omission
                           or alleged omission therefrom of a material fact
                           necessary in order to make the statements therein,
                           in the light of the circumstances under which they
                           were made, not misleading;

                                    (ii) against any and all loss, liability,
                           claim, damage and expense whatsoever, as incurred,
                           to the extent of the aggregate amount paid in
                           settlement of any litigation, or investigation or
                           proceeding by any governmental agency or body,
                           commenced or threatened, or of any claim whatsoever
                           based upon any such untrue statement or omission,
                           or any such alleged untrue statement or omission,
                           if such settlement is effected with the written
                           consent of the Company; and

                                    (iii) against any and all expense
                           whatsoever, as incurred (including reasonable fees
                           and disbursements of counsel), reasonably incurred
                           in investigating, preparing or defending against
                           any litigation, or investigation or proceeding by
                           any governmental agency or body, commenced or
                           threatened, in each case whether or not a party, or
                           any claim whatsoever based upon any such untrue


                                      4
<PAGE>

                           statement or omission, or any such alleged untrue
                           statement or omission, to the extent that any such
                           expense is not paid under subparagraph (i) or (ii)
                           above;

provided, however, that the indemnity provided pursuant to this Section 3.4
does not apply to any Holder with respect to any loss, liability, claim,
damage or expense to the extent arising out of (A) any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by such Holder
expressly for use in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto), or (B) such Holder's
failure to deliver an amended or supplemental Prospectus if such loss,
liability, claim, damage or expense would not have arisen had such delivery
occurred.

                  3.5 Indemnification by Each Holder. Each Holder (and each
permitted assignee of a Holder, on a several basis) agrees to indemnify and
hold harmless the Company, and each of its trustees and officers (including
each trustee and officer of the Company who signed a Registration Statement),
and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, as
follows:

                           (i) against any and all loss, liability, claim,
                  damage and expense whatsoever, as incurred, arising out of
                  or based upon any untrue statement or alleged untrue
                  statement of a material fact contained in any Registration
                  Statement (or any amendment thereto) pursuant to which the
                  Registrable Securities were registered under the Securities
                  Act, including all documents incorporated therein by
                  reference, or the omission or alleged omission therefrom of
                  a material fact required to be stated therein or necessary
                  to make the statements therein not misleading or arising out
                  of or based upon any untrue statement or alleged untrue
                  statement of a material fact contained in any Prospectus (or
                  any amendment or supplement thereto), including all
                  documents incorporated therein by reference, or the omission
                  or alleged omission therefrom of a material fact necessary
                  in order to make the statements therein, in the light of the
                  circumstances under which they were made, not misleading;

                           (ii) against any and all loss, liability, claim,
                  damage and expense whatsoever, as incurred, to the extent of
                  the aggregate amount paid in settlement of any litigation,
                  or investigation or proceeding by any governmental agency or
                  body, commenced or threatened, or of any claim whatsoever
                  based upon any such untrue statement or omission, or any
                  such alleged untrue statement or omission, if such
                  settlement is effected with the written consent of such
                  Holder; and

                           (iii) against any and all expense whatsoever, as
                  incurred (including reasonable fees and disbursements of
                  counsel), reasonably incurred in investigating, preparing or
                  defending against any litigation, or investigation or
                  proceeding by any governmental agency or body, commenced or
                  threatened, in each case whether or not a party, or any
                  claim whatsoever based upon any such untrue statement or


                                      5
<PAGE>

                  omission, or any such alleged untrue statement or omission,
                  to the extent that any such expense is not paid under
                  subparagraph (i) or (ii) above;

provided, however, that the indemnity provided pursuant to this Section 3.5
shall only apply with respect to any loss, liability, claim, damage or expense
to the extent arising out of (A) any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
written information furnished to the Company by such Holder expressly for use
in the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto) or (B) such Holder's failure to deliver
an amended or supplemental Prospectus if such loss, liability, claim, damage
or expense would not have arisen had such delivery occurred. Notwithstanding
the provisions of this Section 3.5, a Holder and any permitted assignee shall
not be required to indemnify the Company, its officers, trustees or control
persons with respect to any amount in excess of the amount of the total
proceeds to such Holder or such permitted assignee, as the case may be, from
sales of the Registrable Securities of such Holder under the Registration
Statement, and no Holder shall be liable under this Section 3.5 for any
statements or omissions of any other Holder.

                  3.6 Conduct of Indemnification Proceedings. The indemnified
party hereunder shall give reasonably prompt notice to the indemnifying party
of any action, suit, proceeding or investigation or written threat thereof (a
"Proceeding") commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify the indemnifying party (i) shall not
relieve it from any liability which it may have under the indemnity agreement
provided in Section 3.4 or 3.5 above, unless and to the extent it did not
otherwise learn of such Proceeding and the lack of notice by the indemnified
party results in the forfeiture by the indemnifying party of substantial
rights and defenses, and (ii) shall not, in any event, relieve the
indemnifying party from any obligations to the indemnified party other than
the indemnification obligation provided under Section 3.4 or 3.5 above. If the
indemnifying party so elects within a reasonable time after receipt of such
notice, the indemnifying party may assume the defense of such Proceeding at
such indemnifying party's own expense with counsel chosen by the indemnifying
party and approved by the indemnified party, which approval shall not be
unreasonably withheld; provided, however, that the indemnifying party will not
settle any such Proceeding without the written consent of the indemnified
party unless, as a condition to such settlement, the indemnifying party
secures the unconditional release of the indemnified party; and provided
further, that if the indemnified party reasonably determines that a conflict
of interest exists where it is advisable for the indemnified party to be
represented by separate counsel or that, upon advice of counsel, there may be
legal defenses available to it which are different from or in addition to
those available to the indemnifying party, then the indemnifying party shall
not be entitled to assume such defense and the indemnified party shall be
entitled to separate counsel at the indemnifying party's expense. If the
indemnifying party is not entitled to assume the defense of such Proceeding as
a result of the second proviso to the preceding sentence, the indemnifying
party's counsel shall be entitled to conduct the indemnifying party's defense
and counsel for the indemnified party shall be entitled to conduct the defense
of the indemnified party, it being understood that both such counsel will
cooperate with each other to conduct the defense of such Proceeding as
efficiently as possible. If the indemnifying party is not so entitled to
assume the defense of such Proceeding or does not assume such defense, after


                                      6
<PAGE>

having received the notice referred to in the first sentence of this
paragraph, the indemnifying party will pay the reasonable fees and expenses of
counsel for the indemnified party. In such event, however, the indemnifying
party will not be liable for any settlement effected without the written
consent of the indemnifying party. If an indemnifying party is entitled to
assume, and assumes, the defense of such Proceeding in accordance with this
paragraph, the indemnifying party shall not be liable for any fees and
expenses of counsel for the indemnified party incurred thereafter in
connection with such Proceeding.

                  3.7 Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Sections 3.4 and 3.5 above is for any reason held to be unenforceable by the
indemnified party although applicable in accordance with its terms, the
Company and the relevant Holder shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement incurred by the Company and such Holder, (i) in such
proportion as is appropriate to reflect the relative fault of the Company on
the one hand and such Holder on the other, in connection with the statements
or omissions which resulted in such losses, claims, damages, liabilities or
expenses, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative fault of but also the relative benefits to the Company
on the one hand and such Holder on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits to the indemnifying party and
indemnified party shall be determined by reference to, among other things, the
total proceeds received by the indemnifying party and indemnified party in
connection with the offering to which such losses, claims, damages,
liabilities or expenses relate. The relative fault of the indemnifying party
and indemnified party shall be determined by reference to, among other things,
whether the action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, the
indemnifying party or the indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action.

                  The parties hereto agree that it would not be just or
equitable if contribution pursuant to this Section 3.7 were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 3.7, a
Holder shall not be required to contribute any amount in excess of the amount
of the total proceeds to such Holder from sales of the Registrable Securities
of such Holder under the Registration Statement.

                  Notwithstanding the foregoing, no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 3.7,
each person, if any, who controls a Holder within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Holder, and each trustee of the Company, each
officer of the Company who signed a Registration Statement and each person, if


                                      7
<PAGE>

any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company.

Section 4.        Expenses

                  The Company shall pay all expenses incident to the
performance by it of its registration obligations under Sections 2 and 3,
including (i) all stock exchange, SEC and state securities registration,
listing and filing fees, (ii) all expenses incurred in connection with the
preparation, printing and distributing of the Registration Statement and
Prospectus and (iii) fees and disbursements of counsel for the Company and of
the independent public accountants of the Company. Each Holder shall be
responsible for the payment of (i) any brokerage and sales commissions, (ii)
fees and disbursements of such Holder's counsel, accountants and other
advisors and (iii) any transfer taxes relating to the sale or disposition of
the Registrable Securities by such Holder pursuant to Section 3 or otherwise.

Section 5.        Rule 144 Compliance

                  The Company covenants that it will use its best efforts to
file in a timely manner the reports required to be filed by the Company under
the Securities Act and the Exchange Act so as to enable each Holder to sell
Registrable Securities pursuant to Rule 144 under the Securities Act. In
connection with any sale, transfer or other disposition by a Holder of any
Registrable Securities pursuant to Rule 144 under the Securities Act, the
Company shall cooperate with the Holder to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold
and not bearing any Securities Act legend, and to enable certificates for such
Registrable Securities to be for such number of shares and registered in such
names as such Holder may reasonably request at least ten (10) business days
prior to any sale of Registrable Securities hereunder.

Section 6.        Miscellaneous

                  6.1 Integration; Amendment. This Agreement constitutes the
entire agreement among the parties hereto with respect to the matters set
forth herein and supersedes and renders of no force and effect all prior oral
or written agreements, commitments and understandings among the parties with
respect to the matters set forth herein. Except as otherwise expressly
provided in this Agreement, no amendment, modification or discharge of this
Agreement shall be valid or binding unless set forth in writing and duly
executed by the Company and each Holder against whom such amendment,
modification or discharge is sought to be enforced.

                  6.2 Waivers. No waiver by a party hereto shall be effective
unless made in a written instrument duly executed by the party against whom
such waiver is sought to be enforced, and only to the extent set forth in such
instrument. Neither the waiver by any of the parties hereto of a breach or a
default under any of the provisions of this Agreement, nor the failure of any
of the parties, on one or more occasions, to enforce any of the provisions of
this Agreement or to exercise any right or privilege hereunder shall
thereafter be construed as a waiver of any subsequent breach or default of a
similar nature, or as a waiver of any such provisions, rights or privileges
hereunder.

                                      8
<PAGE>

                  6.3 Assignment; Successors and Assigns. This Agreement and
the rights granted hereunder may not be assigned by any Holder without the
written consent of the Company; provided, however, that any Holder may assign
its rights and obligations hereunder, in whole or in part, following at least
ten (10) days prior written notice to the Company, (i) to such Holder's direct
equity owners (e.g., shareholders, partners or members) or beneficiaries in
connection a distribution of such Holder's Units to its direct equity owners
or beneficiaries and (ii) to a permitted transferee in connection with a
transfer of the Units in accordance with the terms of the Operating
Partnership Agreement, if, in the case of either (i) or (ii) above, such
persons agree in writing to be bound by all of the provisions hereof.

                  6.4 Burden and Benefit. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
executors, personal and legal representatives, successors and, subject to
Section 6.3 above, assigns.

                  6.5 Notices. All notices called for under this Agreement
shall be in writing and shall be given by hand delivery, registered first
class mail, telecopier or any courier guaranteeing overnight delivery, and
shall be addressed (return receipt requested), postage prepaid, (i) if to the
Company, at its address appearing on the signature page hereto, or (ii) if to
a Holder, to the addresses set forth opposite its name in Schedule A hereto,
or to any other address or addressee as any party entitled to receive notice
under this Agreement shall designate, from time to time, to others in the
manner provided in this Section 6.5 for the service of notices. All such
notices shall be deemed to have been given: at the time delivered by hand, if
personally delivered; three (3) business days after being deposited in the
mail, if mailed; when receipt is acknowledged, if telecopied; or at the time
delivered, if delivered by a courier guaranteeing overnight delivery.

                  6.6 Specific Performance. The parties hereto acknowledge
that the obligations undertaken by them hereunder are unique and that there
would be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to
any other remedy to which it may be entitled at law or in equity, shall be
entitled to (i) compel specific performance of the obligations, covenants and
agreements of any other party under this Agreement in accordance with the
terms and conditions of this Agreement and (ii) obtain preliminary injunctive
relief to secure specific performance and to prevent a breach or contemplated
breach of this Agreement in any court of the United States or any State
thereof having jurisdiction.

                  6.7 Governing Law. This Agreement, the rights and
obligations of the parties hereto, and any claims or disputes relating
thereto, shall be governed by and construed in accordance with the laws of the
State of Maryland, but not including the choice of law rules thereof.

                  6.8 Headings. Section and subsection headings contained in
this Agreement are inserted for convenience of reference only, shall not be
deemed to be a part of this Agreement for any purpose, and shall not in any
way define or affect the meaning, construction or scope of any of the
provisions hereof.

                                      9
<PAGE>

                  6.9 Pronouns. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, neuter, singular or plural, as
the identity of the person or entity may require.

                  6.10 Execution in Counterparts. To facilitate execution,
this Agreement may be executed in as many counterparts as may be required. It
shall not be necessary that the signature of or on behalf of each party
appears on each counterpart, but it shall be sufficient that the signature of
or on behalf of each party appears on one or more of the counterparts. All
counterparts shall collectively constitute a single agreement. It shall not be
necessary in any proof of this Agreement to produce or account for more than a
number of counterparts containing the respective signatures of or on behalf of
all of the parties.

                  6.11 Severability. If fulfillment of any provision of this
Agreement, at the time such fulfillment shall be due, shall transcend the
limit of validity prescribed by law, then the obligation to be fulfilled shall
be reduced to the limit of such validity; and if any clause or provision
contained in this Agreement operates or would operate to invalidate this
Agreement, in whole or in part, then such clause or provision only shall be
held ineffective, as though not herein contained, and the remainder of this
Agreement shall remain operative and in full force and effect.

                                      10
<PAGE>


                  IN WITNESS WHEREOF,  each of the parties hereto has caused
this Agreement to be duly executed on its behalf as of the date first
hereinabove set forth.


                                   COMPANY:

Address:                           ElderTrust
415 McFarlan Road
Suite 202
Kennett Square, PA 19348
                                   By:        /s/ D. Lee McCreary, Jr.
                                   ---------------------------------------
                                   Name:      D. Lee McCreary, Jr.
                                   ---------------------------------------
                                   Title:     Vice President and Secretary
                                   ---------------------------------------


                                   HOLDERS:

                                              /s/ D. Lee McCreary, Jr.
                                   ---------------------------------------
                                   D. Lee McCreary, Jr.


                                   MGI Limited Partnership

                                   By:        MGI, Inc.

                                              By: /s/ Michael R. Walker
                                              ----------------------------
                                                  Michael R. Walker
                                                  President


                                              /s/ Edward B. Romanov, Jr.
                                   ---------------------------------------
                                   Edward B. Romanov, Jr.


                                   Thomas W. Balderston
                                   Gregory H. Doyle
                                   Richard R. Howard
                                   Senior LifeChoice Corp.
                                   Michael R. Walker
                                   Joseph A. Williamson

                                   By:        /s/ Edward B. Romanov, Jr.
                                              ----------------------------
                                              Edward B. Romanov, Jr.
                                              Attorney-in-Fact



                                      11
<PAGE>


                                  SCHEDULE A
                                  -----------
                                    HOLDERS

Thomas W. Balderston
Gregory H. Doyle
Richard R. Howard
D. Lee McCreary, Jr.
MGI Limited Partnership
Edward B. Romanov, Jr.
Senior LifeChoice Corp.
Michael R. Walker
Joseph A. Williamson