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                                  ELDERTRUST
                                  ----------

                   ARTICLES OF AMENDMENT AND RESTATEMENT OF

                             DECLARATION OF TRUST

                  FIRST: ElderTrust, a Maryland real estate investment trust
(the "Trust") under Title 8 of the Corporations and Associations Article of
the Annotated Code of Maryland ("Title 8"), desires to amend and restate its
Declaration of Trust as currently in effect (as so amended and restated, and
as the same may be amended hereafter, the "Declaration of Trust").

                 SECOND: The following provisions are all the provisions of
this Declaration of Trust currently in effect and as hereinafter amended:

                                   ARTICLE I

                                   FORMATION

                  The Trust is a real estate investment trust within the
meaning of Title 8. The Trust shall not be deemed to be a general partnership,
limited partnership, joint venture, joint stock company or, except as provided
in Section 13.4 hereof, a corporation (but nothing herein shall preclude the
Trust from being treated for tax purposes as an association under the Internal
Revenue Code of 1986, as amended (the "Code")).

                                  ARTICLE II

                                     NAME

                  The name of the Trust is:  ElderTrust.

                  So far as may be practicable, the business of the Trust
shall be conducted and transacted under that name, which name (and the word
"Trust" wherever used in this Declaration of Trust, except where the context
otherwise requires) shall refer to the Trustees (as hereinafter defined)
collectively but not individually or personally and shall not refer to the
Shareholders (as hereinafter defined) or to any officers, employees or agents
of the Trust or of such Trustees.

                  Under circumstances in which the Board of Trustees of the
Trust (the "Board of Trustees" or "Board") determines that the use of the name
of the Trust is not practicable, the Trust may use any other designation or
name for the Trust.



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                                  ARTICLE III

                              PURPOSES AND POWERS

                  Section 3.1 Purposes. The purposes for which the Trust is
formed are to invest in and to acquire, hold, finance, manage, administer,
control and dispose of property, including, without limitation or obligation,
engaging in business as a real estate investment trust under the Code.

                  Section 3.2 Powers. The Trust shall have all of the powers
granted to real estate investment trusts pursuant to Title 8 or any successor
statute and shall have all other and further powers set forth in this
Declaration of Trust which are not inconsistent with law and are appropriate
to promote and attain the purposes set forth in this Declaration of Trust.

                  Section 3.3 Investment Policy. The fundamental investment
policy of the Trust is to make investments in such a manner as to comply with
the provisions of the Code applicable to real estate investment trusts and
with the requirements of Title 8, with respect to the composition of the
Trust's investments and the derivation of its income. Subject to Section
5.2(u) hereof, the Trustees will use their best efforts to carry out this
fundamental investment policy and to conduct the affairs of the Trust in such
a manner as to continue to qualify the Trust for the tax treatment provided
for real estate investment trusts in the Code; provided, however, no Trustee,
officer, employee or agent of the Trust shall be liable for any act or
omission resulting in the loss of tax benefits under the Code, except to the
extent provided in Section 9.2 hereof. The Trustees may change from time to
time by resolution or in the bylaws of the Trust (the "Bylaws"), such
investment policies as they determine to be in the best interests of the
Trust, including prohibitions or restrictions upon certain types of
investments.

                                  ARTICLE IV

                                RESIDENT AGENT

                  The name of the resident agent of the Trust in the State of
Maryland is The Corporation Trust Incorporated, 300 E. Lombard St., Baltimore,
MD 21202. Said resident agent is a Maryland corporation. The Trust may have such
offices or places of business within or outside the State of Maryland as the
Board of Trustees may from time to time determine.



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                                   ARTICLE V

                               BOARD OF TRUSTEES

                  Section 5.1 Powers. Subject to any express limitations
contained in this Declaration of Trust or in the Bylaws, (a) the business and
affairs of the Trust shall be managed under the direction of the Board of
Trustees and (b) the Board shall have full, exclusive and absolute power,
control and authority over any and all property of the Trust. The Board may
take any action as in its sole judgment and discretion is necessary or
appropriate to conduct the business and affairs of the Trust. This Declaration
of Trust shall be construed with a presumption in favor of the grant of power
and authority to the Board. Any construction of this Declaration of Trust or
determination made in good faith by the Board concerning its powers and
authority hereunder shall be conclusive. The enumeration and definition of
particular powers of the Trustees included in this Declaration of Trust or in
the Bylaws shall in no way be limited or restricted by reference to or
inference from the terms of this or any other provision of this Declaration of
Trust or the Bylaws or construed or deemed by inference or otherwise in any
manner to exclude or limit the powers conferred upon the Board or the Trustees
under the general laws of the State of Maryland as now or hereafter in force
or any other applicable laws.

                  Section 5.2 Specific Powers and Authority. Subject only to
the express limitations herein, and in addition to all other powers and
authority conferred by this Declaration of Trust or by law, the Trustees,
without any vote, action or consent by the Shareholders, shall have and may
exercise, at any time or times, in the name of the Trust or on its behalf the
following powers and authorities:

                  (a) Investments. Subject to Section 9.4 hereof, to invest
in, purchase or otherwise acquire and to hold real, personal or mixed,
tangible or intangible, property of any kind wherever located, or rights or
interests therein or in connection therewith, all without regard to whether
such property, interests or rights are authorized by law for the investment of
funds held by trustees or other fiduciaries, or whether obligations the Trust
acquires have a term greater or lesser than the term of office of the Trustees
or the possible termination of the Trust, for such consideration as the
Trustees may deem proper (including cash, property of any kind or securities
of the Trust); provided, however, that the Trustees shall take such actions as
they deem necessary and desirable to comply with any requirements of Title 8
relating to the types of assets held by the Trust.

                  (b) Sale, Disposition and Use of Property. Subject to
Sections 3.3 and 9.4 and Article XI hereof: (i) to sell, rent, lease, hire,
exchange, release, partition, assign, mortgage, grant security interests in,
encumber, negotiate, dedicate, grant easements in and options with respect to,
convey, transfer (including transfers to entities wholly or partially owned by
the Trust or the Trustees) or otherwise dispose of any or all of the property
of the Trust by deeds (including deeds in lieu of foreclosure with or without
consideration), trust deeds, assignments, bills of sale, transfers, leases,
mortgages, financing statements, security agreements and other instruments for
any of such purposes executed and delivered for and on behalf of the Trust or
the Trustees by one or more of the Trustees or by a duly authorized officer,
employee, agent or nominee of the Trust, on such terms as they deem
appropriate; (ii) to give consents and make contracts relating to the property
of the Trust and its use or other property or matters; (iii) to develop,
improve, manage, use, alter or otherwise deal with the property of the Trust;
and (iv) to rent, lease or hire from others property of any kind; provided,
however, that the Trust may not use or apply land for any purposes not
permitted by applicable law.



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                  (c) Financings. To borrow or in any other manner raise money
for the purposes and on the terms they determine, and to evidence the same by
issuance of securities of the Trust, which may have such provisions as the
Trustees determine; to reacquire such securities of the Trust; to enter into
other contracts or obligations on behalf of the Trust; to guarantee, indemnify
or act as surety with respect to payment or performance of obligations of any
person; to mortgage, pledge, assign, grant security interests in or otherwise
encumber the property of the Trust to secure any such securities of the Trust,
contracts or obligations (including guarantees, indemnifications and
suretyships); and to renew, modify, release, compromise, extend, consolidate
or cancel, in whole or in part, any obligation to or of the Trust or
participate in any reorganization of obligors to the Trust.

                  (d) Loans. Subject to the provisions of Section 9.4 hereof,
to lend money or other property of the Trust on such terms, for such purposes
and to such persons as they may determine.

                  (e) Issuance of Securities. Subject to the provisions of
Article VI hereof: (i) to create and authorize and direct the issuance (on
either a pro rata or a non-pro rata basis) by the Trust, in Shares (as
hereinafter defined), units or amounts of one or more types, series or
classes, of securities of the Trust, which may have such voting rights,
dividend or interest rates, preferences, subordinations, conversion or
redemption prices or rights, maturity dates, distribution, exchange, or
liquidation rights or other rights as the Trustees may determine, without vote
of or other action by the Shareholders, to such persons for such
consideration, at such time or times and in such manner and on such terms as
the Trustees determine; (ii) to list or to designate for listing or quotation
any of the securities of the Trust on any national securities exchange or
automated inter-dealer quotation system; and (iii) to purchase or otherwise
acquire, hold, cancel, reissue, sell and transfer any securities of the Trust.

                  (f) Expenses and Taxes. To pay any charges, expenses or
liabilities necessary or desirable, in the sole discretion of the Trustees,
for carrying out the purposes of this Declaration of Trust and conducting the
business of the Trust, including compensation or fees to Trustees, officers,
employees and agents of the Trust, and to persons contracting with the Trust,
and any taxes, levies, charges and assessments of any kind imposed upon or
chargeable against the Trust, the property of the Trust or the Trustees in
connection therewith; and to prepare and file any tax returns, reports or
other documents and take any other appropriate action relating to the payment
of any such charges, expenses or liabilities.



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                  (g) Collection and Enforcement. To collect, sue for and
receive money or other property due to the Trust; to consent to extensions of
the time for payment, or to the renewal, of any securities or obligations; to
engage or to intervene in, prosecute, defend, compound, enforce, compromise,
release, abandon or adjust any actions, suits, proceedings, disputes, claims,
demands, security interests or things relating to the Trust, the property of
the Trust or the Trust's affairs; to exercise any rights and enter into any
agreements and take any other action necessary or desirable in connection with
the foregoing.

                  (h) Deposits. To deposit funds or securities constituting
part of the property of the Trust in banks, trust companies, savings and loan
associations, financial institutions and other depositories, whether or not
such deposits will draw interest, subject to withdrawal on such terms and in
such manner as the Trustees determine.

                  (i) Allocation; Accounts. To determine whether moneys,
profits or other assets of the Trust shall be charged or credited to, or
allocated between, income and capital, including whether or not to amortize
any premium or discount and to determine in what manner any expenses or
disbursements are to be borne as between income and capital (regardless of how
such items would normally or otherwise be charged to or allocated between
income and capital without such determination); to treat any dividend or other
distribution on any investment as, or apportion it between, income and
capital; in their discretion to provide reserves for depreciation,
amortization, obsolescence or other purposes in respect of any property of the
Trust in such amounts and by such methods as they determine; to determine what
constitutes net earnings, profits or surplus; to determine the method or form
in which the accounts and records of the Trust shall be maintained; and to
allocate to the Shareholders' equity account less than all of the
consideration paid for Shares and to allocate the balance to paid-in capital
or capital surplus.

                  (j) Valuation of Property. To determine the value of all or
any part of the property of the Trust and of any services, securities,
property or other consideration to be furnished to or acquired by the Trust,
and to revalue all or any part of the property of the Trust, all in accordance
with such appraisals or other information as are reasonable, in their sole
judgment.

                  (k) Ownership and Voting Powers. To exercise all of the
rights, powers, options and privileges pertaining to the ownership of any
mortgages, securities, real estate and other property of the Trust to the same
extent that an individual owner might, including, without limitation, to vote
or give any consent, request or notice or waive any notice, either in person
or by proxy or power of attorney, which proxies and powers of attorney may be
for any general or special meetings or action, and may include the exercise of
discretionary powers.



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                  (l) Officers; Delegation of Powers. To elect, appoint or
employ such officers for the Trust and such committees of the Board of
Trustees with such powers and duties as the Trustees may determine or the
Bylaws provide; to engage, employ or contract with and pay compensation to any
person (including, subject to Section 9.4 hereof, any Trustee and any person
who is an affiliate of any Trustee) as agent, representative, advisor, member
of an advisory board, employee or independent contractor (including advisers,
consultants, transfer agents, registrars, underwriters, accountants,
attorneys-at-law, real estate agents, property and other managers, appraisers,
brokers, architects, engineers, construction managers, general contractors or
otherwise) in one or more capacities, to perform such services on such terms
as the Trustees may determine; and to delegate to one or more Trustees,
officers or other persons engaged or employed as aforesaid, or to committees
of Trustees, the performance of acts or other things (including granting of
consents), the making of decisions and the execution of such deeds, contracts
or other instruments, in the name of the Trust or the Trustees, or as their
attorneys or otherwise, as the Trustees may determine.

                  (m) Associations. Subject to Section 9.4 hereof, to cause
the Trust to enter into joint ventures, general or limited partnerships,
participation or agency arrangements or any other lawful combinations,
relationships or associations of any kind.

                  (n) Reorganization; Merger, Consolidation or Sale of Trust
Property. Subject to Article XI hereof: (i) to cause to be organized or assist
in organizing any person under the laws of any jurisdiction to acquire all or
any part of the property of the Trust, carry on any business in which the
Trust shall have an interest or otherwise exercise the powers the Trustees
deem necessary, useful or desirable to carry on the business of the Trust or
to carry out the provisions of this Declaration of Trust; (ii) to merge or
consolidate the Trust with any person; (iii) to sell, rent, lease, hire,
convey, negotiate, assign, exchange or transfer all or any part of the
property of the Trust to or with any person in exchange for securities of such
person or otherwise; and (iv) to lend money to, subscribe for and purchase the
securities of, and enter into any contracts with, any person in which the
Trust holds, or is about to acquire, securities or any other interests.

                  (o) Insurance. To purchase and pay for out of property of
the Trust insurance policies insuring the Trust and the property of the Trust
against any and all risks, and insuring the Shareholders, Trustees, officers,
employees and agents of the Trust individually against all claims and
liabilities of every nature arising by reason of holding or having held any
such status, office or position or by reason of any action alleged to have
been taken or omitted (including those alleged to constitute misconduct, gross
negligence, reckless disregard of duty or bad faith) by any such person in
such capacity, whether or not the Trust would have the power to indemnify such
person against such claim or liability.



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                  (p) Executive Compensation, Pension and Other Plans. To
adopt and implement executive compensation, pension, profit sharing, share
option, share bonus, share purchase, share appreciation rights, restricted
share, savings, thrift, retirement, incentive or benefit plans, trusts or
provisions, applicable to any or all Trustees, officers, employees or agents
of the Trust, or to other persons who have benefited the Trust, all on such
terms and for such purposes as the Trustees may determine.

                  (q) Distributions. To declare and pay dividends or other
distributions to Shareholders, subject to the provisions of Section 6.5
hereof.

                  (r) Indemnification. In addition to the indemnification
provided for in Section 9.3 hereof, to indemnify any person, including any
independent contractor, with whom the Trust has dealings.

                  (s) Charitable Contributions. To make donations for the
public welfare or for community, charitable, religious, educational,
scientific, civic or similar purposes, regardless of any direct benefit to the
Trust.

                  (t) Discontinue Operations; Bankruptcy. To discontinue the
operations of the Trust (subject to Section 12.2 hereof); to petition or apply
for relief under any provision of federal or state bankruptcy, insolvency or
reorganization laws or similar laws for the relief of debtors; to permit any
property of the Trust to be foreclosed upon without raising any legal or
equitable defenses that may be available to the Trust or the Trustees or
otherwise defending or responding to such foreclosure; to confess judgment
against the Trust; or to take such other action with respect to indebtedness
or other obligations of the Trustees, in such capacity, the property of the
Trust or the Trust as the Trustees in their discretion may determine.

                  (u) Termination of Status. To terminate the status of the
Trust as a real estate investment trust under the Code; provided, however,
that the Board of Trustees shall take no action to terminate the Trust's
status as a real estate investment trust under the Code until such time as (i)
the Board of Trustees adopts a resolution recommending that the Trust
terminate its status as a real estate investment trust under the Code, (ii)
the Board of Trustees presents the resolution at an annual or special meeting
of the Shareholders and (iii) such resolution is approved by the holders of a
majority of the issued and outstanding Common Shares (as hereinafter defined).

                  (v) Fiscal Year. Subject to the Code, to adopt, and from
time to time change, a fiscal year for the Trust.

                  (w) Seal. To adopt and use a seal, but the use of a seal
shall not be required for the execution of instruments or obligations of the
Trust.



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                  (x) Bylaws. To adopt, implement and from time to time alter,
amend or repeal Bylaws relating to the business and organization of the Trust
which are not inconsistent with the provisions of this Declaration of Trust.

                  (y) Accounts and Books. To determine from time to time
whether and to what extent, and at what times and places, and under what
conditions and regulations, the accounts and books of the Trust, or any of
them, shall be open to the inspection of Shareholders.

                  (z) Voting Trust. To participate in, and accept securities
issued under or subject to, any voting trust.

                  (aa) Proxies. To solicit proxies of the Shareholders at the
expense of the Trust.

                  (bb) Ownership Limits. To determine that it is no longer in
the best interests of the Trust to attempt to, or continue to, qualify as a
real estate investment trust under the Code or that compliance with any
restriction or limitations on ownership and transfers of Shares set forth in
Article VII hereof is no longer required for the Trust to qualify as a real
estate investment trust under the Code.

                  (cc) Further Powers. To do all other acts and things and
execute and deliver all instruments incident to the foregoing powers, and to
exercise all powers which they deem necessary, useful or desirable to carry on
the business of the Trust or to carry out the provisions of this Declaration
of Trust, even if such powers are not specifically provided hereby.

                  Section 5.3 Determination of Best Interest of Trust. In
determining what is in the best interest of the Trust, a Trustee shall
consider the interests of the Shareholders of the Trust and, in his sole and
absolute discretion, may consider (a) the interests of the Trust's employees,
suppliers, creditors and customers, (b) the economy of the nation, (c)
community and societal interests and (d) the long-term as well as short-term
interests of the Trust and its Shareholders, including the possibility that
these interests may be best served by the continued independence of the Trust.

                  Section 5.4 Number and Classification. The number of
Trustees (the "Trustees") shall initially be two (2), which number (i) shall
automatically be increased to five (5) effective immediately following the
closing of the Trust's initial public offering and (ii) may be thereafter
increased or decreased from time to time in accordance with the Bylaws of the
Trust; provided, however, that, effective immediately following the closing of
the Trust's initial public offering, the total number of Trustees shall not be
fewer than three (3) and not more than nine (9). Notwithstanding the
foregoing, if for any reason any or all of the Trustees cease to be Trustees,
such event shall not terminate the Trust or affect this Declaration of Trust
or the powers of any remaining Trustees. The names and addresses of the
initial two (2) Trustees are:

      Name                               Address
      ----                               -------
      Michael R. Walker                  c/o Genesis Health Ventures, Inc.
                                         148 West State Street
                                         Kennett Square, Pennsylvania  19348

      Edward B. Romanov, Jr.             c/o ElderTrust
                                         415 McFarlan Road, Suite 202
                                         Kennett Square, Pennsylvania  19348

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                  Effective immediately following the closing of the Trust's
initial public offering, the number of Trustees shall automatically be
increased to five (5), whereupon the Trustees, including the initial Trustees,
shall be divided into three classes as nearly equal in number as possible and
initially consisting of one, two and two members, respectively, with the term
of office of one class expiring each year. One class of Trustees, consisting
initially of one member, shall hold office initially for a term expiring at
the annual meeting of Shareholders in 1999; another class, consisting
initially of two members, shall hold office initially for a term expiring at
the annual meeting of Shareholders in 2000; and the third class, consisting
initially of two members, shall hold office initially for a term expiring at
the annual meeting of Shareholders in 2001. The Board of Trustees, by
resolution, shall designate the Trustees who will serve in each class.

                  The Trustees may fill any vacancy, whether resulting from an
increase in the number of Trustees or otherwise, on the Board of Trustees.
Beginning with the annual meeting of Shareholders in 1999 and at each
succeeding annual meeting of Shareholders, the successor or successors to the
class of Trustees whose term expires at such meeting shall be elected to hold
office for a term expiring at the third succeeding annual meeting of
Shareholders. Trustees shall hold office until their successors are duly
elected and qualify. Election of Trustees by Shareholders shall require the
vote and be in accordance with the procedures set forth in the Bylaws.

                  It shall not be necessary to list in this Declaration of
Trust the names and addresses of any Trustees hereafter elected.

                  Section 5.5 Resignation, Removal or Death. Any Trustee may
resign by written notice to the Board, effective upon execution and delivery
to the Trust of such written notice or upon any future date specified in the
notice. Subject to the rights of holders of one or more classes or series of
Preferred Shares, as hereinafter defined, to elect one or more Trustees, a
Trustee may be removed at any time, only with cause, at a meeting of the
Shareholders, by the affirmative vote of the holders of a majority of the
Shares then outstanding and entitled to vote for the election of Trustees.
Upon the resignation or removal of any Trustee, or his otherwise ceasing to be
a Trustee, he shall automatically cease to have any right, title or interest
in and to the property of the Trust and shall execute and deliver such
documents as the remaining Trustees require for the conveyance of any property
of the Trust held in his name, and shall account to the remaining Trustees as
they require for all property which he holds as Trustee. Upon the incapacity
or death of any Trustee, his legal representative shall perform the acts
described in the foregoing sentence.



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                  Section 5.6 Title to Property of the Trust. Legal title to
all property of the Trust shall be vested in the Trustees, but they may cause
legal title to any property of the Trust to be held by or in the name of any
Trustee, or the Trust, or any other person as nominee. The right, title and
interest of the Trustees in and to the property of the Trust shall
automatically vest in successor and additional Trustees upon their
qualification and acceptance of election or appointment as Trustees, and they
shall thereupon have all the rights and obligations of Trustees, whether or
not conveyancing documents have been executed and delivered pursuant to
Section 5.5 hereof or otherwise. Written evidence of the qualification and
acceptance of election or appointment of successor and additional Trustees may
be filed with the records of the Trust and in such other offices, agencies or
places as the Trustees may deem necessary or desirable.

                                  ARTICLE VI

                         SHARES OF BENEFICIAL INTEREST

                  Section 6.1 Authorized Shares. The Trust shall have the
authority to issue a total of 120 million shares of beneficial interest
("Shares"), of which 100 million shall be common shares of beneficial
interest, $.01 par value per share ("Common Shares"), and 20 million shall be
preferred shares of beneficial interest, $.01 par value per share ("Preferred
Shares"). The Board of Trustees, with the approval of the holders of record of
outstanding Shares (the "Shareholders") by a majority of the votes entitled to
be cast at a meeting of Shareholders duly called and at which a quorum is
present, may amend this Declaration of Trust from time to time to increase or
decrease the aggregate number of Shares or the number of Shares of any class
that the Trust has authority to issue. This Amendment and Restatement is not
increasing or decreasing the aggregate par value.

                  Section 6.2 Common Shares. Subject to the provisions of
Article VII, each Common Share shall entitle the holder thereof to one vote on
each matter upon which holders of Common Shares are entitled to vote, and all
Common Shares shall have equal dividend, distribution, liquidation and other
rights, and shall have no preference, cumulative, preemptive, appraisal,
conversion or exchange rights.

                  Section 6.3 Preferred Shares. The Board of Trustees may
classify any unissued Preferred Shares, and may reclassify any previously
classified but unissued Preferred Shares of any series from time to time, in
one or more series of Preferred Shares. Prior to issuance of classified or
reclassified Preferred Shares of any series, the Board of Trustees by
resolution shall (a) designate that series to distinguish it from all other
series of Preferred Shares; (b) specify the number of Preferred Shares to be
included in the series; (c) set, subject to the provisions of Article VII and
subject to the express terms of any series of Preferred Shares outstanding at
the time, the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends or other distributions,
qualifications and terms and conditions of redemption for each series; and (d)
cause the Trust to file Articles Supplementary with the State Department of
Assessments and Taxation of Maryland (the "SDAT"). Any of the terms of any
series of Preferred Shares set pursuant to clause (c) of this Section 6.3 may
be made dependent upon facts ascertainable outside this Declaration of Trust
(including, without limitation, the occurrence of any event or a determination
or action by the Trust or any other person or body) and may vary among holders
thereof, provided that the manner in which such facts or variations shall
operate upon the terms of such series of Shares is clearly and expressly set
forth in the Articles Supplementary filed with the SDAT.



<PAGE>

                  Section 6.4 Authorization by Board of Share Issuance. The
Board of Trustees may authorize the issuance from time to time of Shares of
any class or series, whether now or hereafter authorized, or securities or
rights convertible into Shares of any class or series, whether now or
hereafter authorized, for such consideration (whether in cash, property, past
or future services, obligation for future payment or otherwise) as the Board
of Trustees may deem advisable (or without consideration in the case of a
Share split or Share dividend), subject to such restrictions or limitations,
if any, as may be set forth in this Declaration of Trust or the Bylaws.

                  Section 6.5 Dividends and Distributions. The Board of
Trustees may from time to time authorize, declare and pay to Shareholders such
dividends or distributions, in cash, property or other assets of the Trust or
in securities of the Trust or from any other source as the Board of Trustees
in its discretion shall determine. The Board of Trustees shall endeavor to
declare and pay such dividends and distributions as shall be necessary for the
Trust to qualify as a real estate investment trust under the Code; provided,
however, that Shareholders shall have no right to any dividend or distribution
unless and until authorized and declared by the Board. The exercise of the
powers and rights of the Board of Trustees pursuant to this Section 6.5 shall
be subject to the provisions of any class or series of Shares at the time
outstanding. The receipt by any person in whose name any Shares are registered
on the records of the Trust or by his duly authorized agent shall be a
sufficient discharge for all dividends or distributions payable or deliverable
in respect of such Shares and from all liability to see to the application
thereof. Unless the status of the Trust as a real estate investment trust
under the Code has been terminated pursuant to Section 5.2(u) hereof, no
determination shall be made by the Board of Trustees nor shall any transaction
be entered into by the Trust which would cause any Shares or other beneficial
interest in the Trust not to constitute "transferable shares" or "transferable
certificates of beneficial interest" under Section 856(a)(2) of the Code or
which would cause any distribution to constitute a preferential dividend as
described in Section 562(c) of the Code.

                  Section 6.6 General Nature of Shares. All Shares shall be
personal property entitling the Shareholders only to those rights provided in
this Declaration of Trust. The Shareholders shall have no interest in the
property of the Trust and shall have no right to compel any partition,
division, dividend or distribution of the Trust or of the property of the
Trust. The death of a Shareholder shall not terminate the Trust or give his
legal representative any rights against other Shareholders, the Trustees or
the property of the Trust, except the right, exercised in accordance with
applicable provisions of the Bylaws, to receive a new certificate for Shares
in exchange for the certificate held by the deceased Shareholder. The Trust is
entitled to treat as Shareholders only those persons in whose names Shares are
registered as holders of Shares on the beneficial interest ledger of the
Trust.

                  Section 6.7 Fractional Shares. The Trust may, without the
consent or approval of any Shareholders, issue fractional Shares, eliminate a
fraction of a Share by rounding up or down to a full Share, arrange for the
disposition of a fraction of a Share by the person entitled to it, or pay cash
for the fair value of a fraction of a Share.

                  Section 6.8 Declaration and Bylaws. All Shareholders are
subject to the provisions of this Declaration of Trust and the Bylaws.



<PAGE>

                                  ARTICLE VII

                RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES

                  Section 7.1 Definitions. For the purpose of this Article
VII, the following terms shall have the following meanings:

                  Beneficial Ownership. The term "Beneficial Ownership" shall
mean ownership of Shares by a Person, whether the interest in Shares is held
directly or indirectly (including by a nominee), and shall include interests
that would be treated as owned through the application of Section 544 of the
Code, as modified by Section 856(h)(1)(B) of the Code. The terms "Beneficial
Owner," "Beneficially Own," "Beneficially Owns," "Beneficially Owning" and
"Beneficially Owned" shall have the correlative meanings.

                  Benefit Plan  Investor. The term "Benefit Plan Investor"
shall have the meaning  provided in 29 C.F.R. ss. 2510.3-101(f)(2), or any
successor regulation thereto.

                  Business Day. The term "Business Day" shall mean any day,
other than a Saturday or Sunday, that is neither a legal holiday nor a day on
which banking institutions in New York, New York are authorized or required by
law, regulation or executive order to close.

                  Charitable Beneficiary. The term "Charitable Beneficiary"
shall mean one or more beneficiaries of the Charitable Trust as determined
pursuant to Section 7.3.7, provided that each such organization must be
described in Sections 501(c)(3), 170(b)(1)(A) (other than clause (vii) or
(viii) thereof) and 170(c)(2) of the Code.

                  Charitable Trust. The term "Charitable Trust" shall mean any
trust provided for in Section 7.2.1(b)(i) and Section 7.3.1.

                  Charitable Trustee. The term "Charitable Trustee" shall mean
the Person unaffiliated with the Trust and a Prohibited Owner, that is
appointed by the Trust to serve as trustee of the Charitable Trust.

                  Closing Price. The "Closing Price" on any date shall mean
the last sale price for such Shares, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, for such Shares, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the NYSE or, if such Shares are not listed or admitted
to trading on the NYSE, as reported on the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which such Shares are listed or admitted to trading or,
if such Shares are not listed or admitted to trading on any national
securities exchange, the last quoted price, or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter market, as
reported by the NASDAQ Stock Market or, if such system is no longer in use,
the principal other automated inter-dealer quotation system that may then be
in use or, if such Shares are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional market
maker making a market in such Shares selected by the Board of Trustees or, in
the event that no trading price is available for such Shares, the fair market
value of Shares, as determined in good faith by the Board of Trustees.



<PAGE>

                  Constructive Ownership. The term "Constructive Ownership"
shall mean ownership of Shares by a Person, whether the interest in Shares is
held directly or indirectly (including by a nominee), and shall include
interests that would be treated as owned through the application of Section
318(a) of the Code, as modified by Section 856(d)(5) of the Code. The terms
"Constructive Owner," "Constructively Own," "Constructively Owns,"
"Constructively Owning" and "Constructively Owned" shall have the correlative
meanings.

                  Effective Date. The term "Effective Date" shall mean the date
of the closing of the initial public offering of Common Shares.

                  ERISA Investor. The term "ERISA Investor" shall mean any
holder of Shares that is (i) an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
(ii) a plan as defined in Section 4975(e) of the Code (any such employee
benefit plan or plan described in clause (i) or this clause (ii) being
referred to herein as a "Plan"), (iii) a trust which was established pursuant
to a Plan, or a nominee for such trust or Plan, or (iv) an entity whose
underlying assets include assets of a Plan by reason of such Plan's investment
in such entity.

                  Excepted Holder. The term "Excepted Holder" shall mean a
Shareholder of the Trust for whom an Excepted Holder Limit is created by the
Board of Trustees pursuant to Section 7.2.7.

                  Excepted Holder Limit. The term "Excepted Holder Limit"
shall mean, provided that the affected Excepted Holder agrees to comply with
the requirements established by the Board of Trustees pursuant to Section
7.2.7, and subject to adjustment pursuant to Section 7.2.8, the percentage
limit established by the Board of Trustees pursuant to Section 7.2.7.

                  Excluded Holder. The term "Excluded Holder" shall mean Edward
B. Romanov, Jr. and any other Person who is or would be either a Beneficial
Owner or a Constructive Owner of either Common Shares or Preferred Shares as a
result of the Beneficial Ownership or Constructive Ownership of either Common
Shares or Preferred Shares by Edward B. Romanov, Jr. or whose ownership would
cause Edward B. Romanov, Jr. to be a Beneficial Owner or Constructive Owner of
such Shares.

                  Excluded Holder Limit. The term "Excluded Holder Limit"
shall mean (i) with respect to the Common Shares, 15.0% (in value or number of
Shares, whichever is more restrictive) of the outstanding Common Shares of the
Trust; and (ii) with respect to any class or series of Preferred Shares, 9.9%
(in value or number of Shares, whichever is more restrictive) of the
outstanding Shares of such class or series of Preferred Shares of the Trust.

                  Initial Date. The term "Initial Date" shall mean
September 23, 1997.

                  Initial Shareholder. The term Initial Shareholder shall mean
D. Lee McCreary, Jr.

                  Market Price. The term "Market Price" on any date shall
mean, with respect to any class or series of outstanding Shares, the Closing
Price for such Shares on such date.

                  NYSE.  The term "NYSE" shall mean the New York Stock Exchange,
Inc.

<PAGE>

                  Ownership Limit. The term "Ownership Limit" shall mean (i)
with respect to the Common Shares, 8.6% (in value or number of Shares,
whichever is more restrictive) of the outstanding Common Shares of the Trust;
and (ii) with respect to any class or series of Preferred Shares, 9.9% (in
value or number of Shares, whichever is more restrictive) of the outstanding
Shares of such class or series of Preferred Shares of the Trust.

                  Person. The term "Person" shall mean an individual,
corporation, partnership, estate, trust (including a trust qualified under
Sections 401(a) or 501(c)(17) of the Code), a portion of a trust permanently
set aside for or to be used exclusively for the purposes described in Section
642(c) of the Code, association, private foundation within the meaning of
Section 509(a) of the Code, joint stock company or other entity and also
includes a group as that term is used for purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended.

                  Prohibited Owner. The term "Prohibited Owner" shall mean,
with respect to any purported Transfer, any Person who, but for the provisions
of Section 7.2.1, would Beneficially Own or Constructively Own Shares, and if
appropriate in the context, shall also mean any Person who would have been the
record owner of Shares that the Prohibited Owner would have so owned.

                  Publicly Offered Securities. The term "Publicly Offered
Securities" shall have the meaning provided in 29 C.F.R. ss. 2510.3-101(b)(2),
or any successor regulation thereto.

                  REIT. The term "REIT" shall mean a real estate investment
trust within the meaning of Section 856 of the Code.

                  Restriction Termination Date. The term "Restriction
Termination Date" shall mean the first day after the Initial Date on which the
Board of Trustees determines that it is no longer in the best interests of the
Trust to attempt to, or continue to, qualify as a REIT or that compliance with
the restrictions and limitations on Beneficial Ownership, Constructive
Ownership and Transfers of Shares set forth herein is no longer required in
order for the Trust to qualify as a REIT.



<PAGE>

                  Transfer. The term "Transfer" shall mean any issuance, sale,
transfer, gift, assignment, devise or other disposition, as well as any other
event that causes any Person to acquire Beneficial Ownership or Constructive
Ownership, or any agreement to take any such actions or cause any such events,
of Shares or the right to vote or receive dividends on Shares, including (a) a
change in the capital structure of the Trust, (b) a change in the relationship
between two or more Persons which causes a change in ownership of Shares by
application of Section 544 of the Code, as modified by Section 856(h), (c) the
granting or exercise of any option or warrant (or any disposition of any
option or warrant), pledge, security interest, or similar right to acquire
Shares, (d) any disposition of any securities or rights convertible into or
exchangeable for Shares or any interest in Shares or any exercise of any such
conversion or exchange right and (e) Transfers of interests in other entities
that result in changes in Beneficial Ownership or Constructive Ownership of
Shares; in each case, whether voluntary or involuntary, whether owned of
record, Constructively Owned or Beneficially Owned and whether by operation of
law or otherwise. (For purposes of this Article VII, the right of a limited
partner in ElderTrust Operating Limited Partnership, a Delaware limited
partnership, to require the partnership to redeem such limited partner's units
of partnership interest pursuant to Section 8.6 of the Agreement of Limited
Partnership of ElderTrust Operating Limited Partnership shall not be
considered to be an option or similar right to acquire Shares of the Trust.)
The terms "Transferring" and "Transferred" shall have the correlative
meanings.

             Section 7.2 Restrictions on Ownership and Transfer of Shares.

                           Section 7.2.1 Ownership Limitations. From the Initial
Date and prior to the Restriction Termination Date:

                                    (a) Basic Restrictions.

                                            (i) (1) No Person,  other than an
Excepted  Holder,  an Excluded Holder or the Initial Shareholder, shall
Beneficially Own or Constructively Own Shares in excess of the Ownership Limit,
(2) no Excepted Holder shall Beneficially Own or Constructively Own Shares in
excess of the Excepted Holder Limit for such Excepted Holder, (3) no Excluded
Holder shall Beneficially Own or Constructively Own Shares in excess of the
Excluded Holder Limit and (4) the Initial Shareholder shall not Beneficially Own
or Constructively Own shares in excess of the Ownership Limit on any date after
the Effective Date.

                                            (ii) No Person shall Beneficially
Own or Constructively Own Shares to the extent that (1) such Beneficial
Ownership of Shares would result in the Trust being "closely held" within the
meaning of Section 856(h) of the Code (without regard to whether the ownership
interest is held during the last half of a taxable year) or (2) such Beneficial
Ownership or Constructive Ownership of Shares would result in the Trust
otherwise failing to qualify as a REIT (including, but not limited to, ownership
that would result in the Trust actually owning or Constructively Owning an
interest in a tenant that is described in Section 856(d)(2)(B) of the Code if
the income derived by the Trust from such tenant would cause the Trust to fail
to satisfy any of the gross income requirements of Section 856(c) of the Code).



<PAGE>

                                            (iii) No Person shall Transfer any
Shares if, as a result of the Transfer, the Shares would be Beneficially Owned
by less than 100 Persons (determined without reference to the rules of
attribution under Section 544 of the Code). Notwithstanding any other provisions
contained herein (but subject to Section 7.5), any Transfer of Shares (whether
or not such Transfer is the result of a transaction entered into through the
facilities of the NYSE or any other national securities exchange or automated
inter-dealer quotation system) that, if effective, would result in Shares being
Beneficially Owned by less than 100 Persons (determined under the principles of
Section 856(a)(5) of the Code) shall be void ab initio, and the intended
transferee shall acquire no rights in such Shares.

                                     (b) Transfer in Trust. If any Transfer of
Shares (whether or not such Transfer is the result of a transaction entered
into through the facilities of the NYSE or any other national securities
exchange or automated inter-dealer quotation system) occurs which, if
effective, would result in any Person Beneficially Owning or Constructively
Owning Shares in violation of Section 7.2.1(a)(i) or (ii), then:

                                             (i) that number of Shares the
Beneficial Ownership or Constructive Ownership of which otherwise would cause
such Person to violate Section 7.2.1(a)(i) or (ii) (rounded to the nearest
whole share) shall be automatically transferred to a Charitable Trust for the
benefit of a Charitable Beneficiary, as described in Section 7.3, effective as
of the close of business on the Business Day prior to the date of such
Transfer, and such Person shall acquire no rights in such Shares; or

                                             (ii) subject to Section 7.5, if
the transfer to the Charitable Trust described in clause (i) of this sentence
would not be effective for any reason to prevent the violation of Section
7.2.1(a)(i) or (ii), then the Transfer of that number of Shares that otherwise
would cause any Person to violate Section 7.2.1(a)(i) or (ii) shall be void ab
initio, and the intended transferee shall acquire no rights in such Shares.

                  Section 7.2.2 Remedies for Breach. Subject to Section 7.5,
if the Board of Trustees or any duly authorized committee thereof shall at any
time determine in good faith that a Transfer or other event has taken place
that results in a violation of Section 7.2.1 or that a Person intends to
acquire or has attempted to acquire Beneficial Ownership or Constructive
Ownership of any Shares in violation of Section 7.2.1 (whether or not such
violation is intended), the Board of Trustees or a committee thereof shall
take such action as it deems advisable to refuse to give effect to or to
prevent such Transfer or other event, including, without limitation, causing
the Trust to redeem Shares, refusing to give effect to such Transfer on the
books of the Trust or instituting proceedings to enjoin such Transfer or other
event; provided, however, that any Transfer or attempted Transfer or other
event in violation of Section 7.2.1 shall automatically result in the transfer
to the Charitable Trust described above, and, where applicable, such Transfer
(or other event) shall be void ab initio as provided above irrespective of any
action (or non-action) by the Board of Trustees or a committee thereof.



<PAGE>

                  Section 7.2.3 Notice of Restricted Transfer. Any Person who
acquires or attempts or intends to acquire Beneficial Ownership or
Constructive Ownership of Shares that will or may violate Section 7.2.1(a), or
any Person who would have owned Shares that resulted in a transfer to the
Charitable Trust pursuant to the provisions of Section 7.2.1(b), shall
immediately give written notice to the Trust of such event, or in the case of
such a proposed or attempted transaction, give at least 15 days prior written
notice, and shall provide to the Trust such other information as the Trust may
request in order to determine the effect, if any, of such acquisition or
ownership on the Trust's status as a REIT.

                  Section 7.2.4 Owners Required To Provide Information. From
the Initial Date and prior to the Restriction Termination Date:

                                     (a) every owner of more than five percent
(or such lower percentage as required by the Code or the regulations
promulgated thereunder) of the outstanding Shares, within 30 days after the
end of each taxable year, shall give written notice to the Trust stating the
name and address of such owner, the number of Shares Beneficially Owned and a
description of the manner in which such Shares are held; provided that a
Shareholder of record who holds outstanding Shares as nominee for another
Person, which other Person is required to include in gross income the
dividends received on such Shares (an "Actual Owner"), shall give written
notice to the Trust stating the name and address of such Actual Owner and the
number of Shares of such Actual Owner with respect to which the Shareholder of
record is nominee. Each owner shall provide to the Trust such additional
information as the Trust may request in order to determine the effect, if any,
of such Beneficial Ownership on the Trust's status as a REIT and to ensure
compliance with the Ownership Limit.

                                     (b) each Person who is a Beneficial Owner
or Constructive Owner of Shares and each Person (including the Shareholders of
record) who is holding Shares for a Beneficial Owner or Constructive Owner
shall provide to the Trust such information as the Trust may request, in good
faith, in order to determine the Trust's status as a REIT and to comply with
requirements of any taxing authority or governmental authority or to determine
such compliance.

                            Section 7.2.5 Remedies Not Limited. Subject to
Section 5.2(u) and Section 7.5, nothing contained in this Section 7.2 shall
limit the authority of the Board of Trustees to take such other action as it
deems necessary or advisable to protect the Trust and the interests of its
Shareholders in preserving the Trust's status as a REIT.

                            Section 7.2.6 Ambiguity. In the case of an
ambiguity in the application of any of the provisions of this Section 7.2,
Section 7.3 or any definition contained in Section 7.1, the Board of Trustees
shall have the power to determine the application of the provisions of this
Section 7.2 or Section 7.3 with respect to any situation based on the facts
known to it. If this Section 7.2 or Section 7.3 requires an action by the
Board of Trustees and this Declaration of Trust fails to provide specific
guidance with respect to such action, the Board of Trustees shall have the
power to determine the action to be taken so long as such action is not
contrary to the provisions of this Section 7.2 or Sections 7.1 or 7.3.



<PAGE>

                           Section 7.2.7 Exceptions.

                                     (a) The Board, in its sole and absolute
discretion, may grant to any Person who makes a request therefor an exception
to the Ownership Limit or the Excluded Holder Limit with respect to the
ownership of any series or class of Preferred Shares, subject to the following
conditions and limitations: (A) the Board shall have determined that (x)
assuming such Person would Beneficially Own or Constructively Own the maximum
amount of Common Shares and Preferred Shares permitted as a result of the
exception to be granted and (y) assuming that all other Persons who would be
treated as "individuals" for purposes of Section 542(a)(2) of the Code
(determined taking into account Section 856(h)(3)(A) of the Code) would
Beneficially Own or Constructively Own the maximum amount of Common Shares and
Preferred Shares permitted under this Article VII (taking into account any
exception, waiver, or exemption granted under this Section 7.2.7 to (or with
respect to) such Persons), the Trust would not be "closely held" within the
meaning of Section 856(h) of the Code (assuming that the ownership of Shares
is determined during the second half of a taxable year) and would not
otherwise fail to qualify as a REIT; and (B) such Person provides to the Board
such representations and undertakings, if any, as the Board may, in its sole
and absolute discretion, determine to be necessary in order for it to make the
determination that the conditions set forth in clause (A) above of this
Section 7.2.7(a) have been or will continue to be satisfied (including,
without limitation, an agreement as to a reduced Ownership Limit, Excepted
Holder Limit or Excluded Holder Limit for such Person with respect to the
Beneficial Ownership or Constructive Ownership of one or more other classes of
Shares not subject to the exception), and such Person agrees that any
violation of such representations and undertakings or any attempted violation
thereof will result in the application of the remedies set forth in Section
7.2 with respect to Shares held in excess of the Ownership Limit, the Excepted
Holder Limit or the Excluded Holder Limit (as may be applicable) with respect
to such Person (determined without regard to the exception granted such Person
under this subparagraph (a)). If a member of the Board requests that the Board
grant an exception pursuant to this subparagraph (a) with respect to such
member or with respect to any other Person if such Board member would be
considered to be the Beneficial Owner or Constructive Owner of Shares owned by
such Person, such member of the Board shall not participate in the decision of
the Board as to whether to grant any such exception.



<PAGE>

                                     (b) In addition to exceptions permitted
under subparagraph (a) above, the Board in its sole and absolute discretion,
may grant to any Person who makes a request therefor an exception from the
Ownership Limit if: (i) such Person submits to the Board information
satisfactory to the Board, in its reasonable discretion, demonstrating that
such Person is not an individual for purposes of Section 542(a)(2) of the Code
(determined taking into account Section 856(h)(3)(A) of the Code); (ii) such
Person submits to the Board information satisfactory to the Board, in its
reasonable discretion, demonstrating that no Person who is an individual for
purposes of Section 542(a)(2) of the Code (determined taking into account
Section 856(h)(3)(A) of the Code) would be considered to Beneficially Own
Shares in excess of the Ownership Limit by reason of the Excepted Holder's
ownership of Shares in excess of the Ownership Limit pursuant to the exception
granted under this subparagraph (b); (iii) such Person submits to the Board
information satisfactory to the Board, in its reasonable discretion,
demonstrating that clause (2) of subparagraph (a)(ii) of Section 7.2.1 will
not be violated by reason of the Excepted Holder's ownership of Shares in
excess of the Ownership Limit pursuant to the exception granted under this
subparagraph (b); and (iv) such Person provides to the Board such
representations and undertakings, if any, as the Board may, in its reasonable
discretion, require to ensure that the conditions in clauses (i), (ii) and
(iii) hereof are satisfied and will continue to be satisfied throughout the
period during which such Person owns Shares in excess of the Ownership Limit
pursuant to any exception thereto granted under this subparagraph (b), and
such Person agrees that any violation of such representations and undertakings
or any attempted violation thereof will result in the application of the
remedies set forth in Section 7.2 with respect to Shares held in excess of the
Ownership Limit with respect to such Person (determined without regard to the
exception granted such Person under this subparagraph (b)).

                                     (c) Prior to granting any exception or
exemption pursuant to subparagraph (a) or (b), the Board must receive a ruling
from the Internal Revenue Service or advice of counsel, in either case in form
and substance satisfactory to the Board, in its sole and absolute discretion,
as it may deem necessary or advisable in order to determine or ensure the
Trust's status as a REIT.

                                     (d) Subject to Section 7.2.1(a)(ii), an
underwriter that participates in a public offering or a private placement of
Shares (or securities convertible into or exchangeable for Shares) may
Beneficially Own or Constructively Own Shares (or securities convertible into
or exchangeable for Shares) in excess of the Ownership Limit, but only to the
extent necessary to facilitate such public offering or private placement; and,
provided, that the ownership of Shares by such underwriter would not result in
the Trust being "closely held" within the meaning of Section 856(h) of the
Code, or otherwise result in the Trust's failing to qualify as a REIT. In this
regard, at no time may either (x) an underwriter or (y) any Person who would
Constructively Own Shares owned by an underwriter Constructively Own,
concurrently, 10% or more of the outstanding securities of any class or series
of (i) the Trust and any tenant or lessee of the Trust (which, as of the
Effective Date, includes, but is not limited to, Genesis Health Ventures,
Inc., Crozer-Genesis ElderCare Limited Partnership, Senior LifeChoice, LLC and
the Age Institute of Florida or subsidiaries of any of the above), and (ii)
the Trust and any Person that would be considered to Constructively Own or
Beneficially Own 10% or more of any tenant or lessee of the Trust (which, as
of the Effective Date, includes, but is not limited to, Genesis Health
Ventures, Inc.).



<PAGE>

                                     (e) The Board of Trustees may only reduce
the Excepted Holder Limit for an Excepted Holder: (1) with the written consent
of such Excepted Holder at any time; or (2) pursuant to the terms and
conditions of the agreements and undertakings entered into with such Excepted
Holder in connection with the establishment of the Excepted Holder Limit for
that Excepted Holder. No Excepted Holder Limit shall be reduced to a
percentage that is less than the Ownership Limit.

                            Section 7.2.8 Increase in Ownership Limit. The
Board of Trustees may from time to time increase the Ownership Limit, subject
to the limitations provided in this Section 7.2.8.

                                     (a) The Ownership Limit may not be
increased if, after giving effect to such increase, five Persons who are
considered individuals pursuant to Section 542 of the Code, as modified by
Section 856(h)(3) of the Code (taking into account all of the Excepted Holders
and Excluded Holders), could Beneficially Own, in the aggregate, more than
49.5% of the value of the outstanding Shares.

                                     (b) Prior to the modification of the
Ownership Limit pursuant to this Section 7.2.8, the Board may require such
opinions of counsel, affidavits, undertakings or agreements as it may deem
necessary or advisable in order to determine or ensure the Trust's status as a
REIT if the modification in the Ownership Limit were to be made.


                            Section 7.2.9 Legend. Each certificate for Shares
shall bear substantially the following legend:

                  The Shares represented by this certificate are subject to
                  restrictions on Beneficial and Constructive Ownership and
                  Transfer for the purpose of the Trust's maintenance of its
                  status as a real estate investment trust (a "REIT") under
                  the Internal Revenue Code of 1986, as amended (the "Code").
                  Subject to certain further restrictions and except as
                  expressly provided in the Trust's Declaration of Trust, (i)
                  no Person may Beneficially Own or Constructively Own Common
                  Shares of the Trust in excess of 8.6 percent (in value or
                  number of Shares) of the outstanding Common Shares of the
                  Trust unless such Person is an Excepted Holder or Excluded
                  Holder (in which case the Excepted Holder Limit or Excluded
                  Holder Limit, as applicable, shall apply); (ii) with respect
                  to any class or series of Preferred Shares, no Person may
                  Beneficially Own or Constructively Own more than 9.9 percent
                  (in value or number of Shares) of the outstanding Shares of
                  such class or series of Preferred Shares of the Trust,
                  unless such Person is an Excepted Holder (in which case the
                  Excepted Holder Limit shall be applicable); (iii) no Person
                  may Beneficially Own or Constructively Own Shares that would
                  result in the Trust being "closely held" under Section
                  856(h) of the Code or otherwise cause the Trust to fail to
                  qualify as a REIT; and (iv) no Person may Transfer Shares if
                  such Transfer would result in Shares of the Trust being
                  owned by fewer than 100 Persons. Any Person who Beneficially
                  Owns or Constructively Owns or attempts to Beneficially Own
                  or Constructively Own Shares which cause or will cause a
                  Person to Beneficially Own or Constructively Own Shares in
                  excess or in violation of the above limitations must
                  immediately notify the Trust. If any of the restrictions on
                  transfer or ownership are violated, the Shares represented
                  hereby will be automatically transferred to a Charitable
                  Trustee of a Charitable Trust for the benefit of one or more
                  Charitable Beneficiaries. In addition, upon the occurrence
                  of certain events, attempted Transfers in violation of the
                  restrictions described above may be void ab initio. A Person
                  who attempts to Beneficially Own or Constructively Own
                  Shares in violation of the ownership limitations described
                  above shall have no claim, cause of action, or any recourse
                  whatsoever against a transferor of such Shares. Unless
                  otherwise defined herein, all capitalized terms in this
                  legend have the meanings defined in the Trust's Declaration
                  of Trust, as the same may be amended from time to time, a
                  copy of which, including the restrictions on transfer and
                  ownership, will be furnished to each holder of Shares of the
                  Trust on request and without charge.

<PAGE>

                            Instead of the foregoing legend, the certificate
may state that the Trust will furnish a full statement about certain
restrictions on transferability to a Shareholder on request and without
charge.

                  Section 7.3 Transfer of Shares in Trust.

                            Section 7.3.1 Ownership in Trust. Upon any
purported Transfer or other event described in Section 7.2.1(b) that would
result in a transfer of Shares to a Charitable Trust, such Shares shall be
deemed to have been transferred to the Charitable Trustee as trustee of a
Charitable Trust for the exclusive benefit of one or more Charitable
Beneficiaries. Such transfer to the Charitable Trustee shall be deemed to be
effective as of the close of business on the Business Day prior to the
purported Transfer or other event that results in the transfer to the
Charitable Trust pursuant to Section 7.2.1(b). The Charitable Trustee shall be
appointed by the Trust and shall be a Person unaffiliated with the Trust and
any Prohibited Owner. Each Charitable Beneficiary shall be designated by the
Trust as provided in Section 7.3.7.

                            Section 7.3.2 Status of Shares Held by the
Charitable Trustee. Shares held by the Charitable Trustee shall be issued and
outstanding Shares of the Company. The Prohibited Owner shall have no rights
in the Shares held by the Charitable Trustee. The Prohibited Owner shall not
benefit economically from ownership of any Shares held in trust by the
Charitable Trustee, shall have no rights to dividends or other distributions
and shall not possess any rights to vote or other rights attributable to the
Shares held in the Charitable Trust. The Prohibited Owner shall have no claim,
cause of action, or any other recourse whatsoever against the purported
transferor of such Shares.

                            Section 7.3.3 Dividend and Voting Rights. The
Charitable Trustee shall have all voting rights and rights to dividends or
other distributions with respect to Shares held in the Charitable Trust, which
rights shall be exercised for the exclusive benefit of the Charitable
Beneficiary. Any dividend or other distribution paid prior to the discovery by
the Trust that Shares have been transferred to the Charitable Trustee shall be
paid by the recipient thereof with respect to such Shares to the Charitable
Trustee upon demand and any dividend or other distribution authorized but
unpaid shall be paid when due to the Charitable Trustee. Any dividends or
distributions so paid over to the Charitable Trustee shall be held in trust
for the Charitable Beneficiary. The Prohibited Owner shall have no voting
rights with respect to Shares held in the Charitable Trust and, subject to
Maryland law, effective as of the date that Shares have been transferred to
the Charitable Trustee, the Charitable Trustee shall have the authority (at
the Charitable Trustee's sole discretion) (i) to rescind as void any vote cast
by a Prohibited Owner prior to the discovery by the Trust that Shares have
been transferred to the Charitable Trustee and (ii) to recast such vote in
accordance with the desires of the Charitable Trustee acting for the benefit
of the Charitable Beneficiary; provided, however, that if the Trust has
already taken irreversible action, then the Charitable Trustee shall not have
the power to rescind and recast such vote. Notwithstanding the provisions of
this Article VII, until the Trust has received notification that Shares have
been transferred into a Charitable Trust, the Trust shall be entitled to rely
on its share transfer and other Shareholder records for purposes of preparing
lists of Shareholders entitled to vote at meetings, determining the validity
and authority of proxies and otherwise conducting votes of Shareholders.



<PAGE>

                            Section 7.3.4 Rights Upon Liquidation. Upon any
voluntary or involuntary liquidation, dissolution or winding up of or any
distribution of the assets of the Trust, the Charitable Trustee shall be
entitled to receive, ratably with each other holder of Shares of the class or
series of Shares that is held in the Charitable Trust, that portion of the
assets of the Trust available for distribution to the holders of such class or
series (determined based upon the ratio that the number of Shares or such
class or series of Shares held by the Charitable Trustee bears to the total
number of Shares of such class or series of Shares then outstanding). The
Charitable Trustee shall distribute any such assets received in respect of the
Shares held in the Charitable Trust in any liquidation, dissolution or winding
up of, or distribution of the assets of the Trust, in accordance with Section
7.3.5.

                            Section 7.3.5 Sale of Shares by Charitable
Trustee. Within 20 days of receiving notice from the Trust that Shares have
been transferred to the Charitable Trust, the Charitable Trustee of the
Charitable Trust shall sell the Shares held in the Charitable Trust to a
person, designated by the Charitable Trustee, whose ownership of the Shares
will not violate the ownership limitations set forth in Section 7.2.1(a). Upon
such sale, the interest of the Charitable Beneficiary in the Shares sold shall
terminate and the Charitable Trustee shall distribute the net proceeds of the
sale to the Prohibited Owner and to the Charitable Beneficiary as provided in
this Section 7.3.5. The Prohibited Owner shall receive the lesser of (1) the
price paid by the Prohibited Owner for the Shares or, if the Prohibited Owner
did not give value for the Shares in connection with the event causing the
Shares to be held in the Charitable Trust (e.g., in the case of a gift, devise
or other such transaction), the Market Price of the Shares on the day of the
event causing the Shares to be held in the Charitable Trust and (2) the price
per share received by the Charitable Trustee from the sale or other
disposition of the Shares held in the Charitable Trust. Any net sales proceeds
in excess of the amount payable to the Prohibited Owner shall be immediately
paid to the Charitable Beneficiary. If, prior to the discovery by the Trust
that Shares have been transferred to the Charitable Trustee, such Shares are
sold by a Prohibited Owner, then (i) such Shares shall be deemed to have been
sold on behalf of the Charitable Trust and (ii) to the extent that the
Prohibited Owner received an amount for such Shares that exceeds the amount
that such Prohibited Owner was entitled to receive pursuant to this Section
7.3.5, such excess shall be paid to the Charitable Trustee upon demand.

                            Section 7.3.6 Purchase Right in Shares Transferred
to the Charitable Trustee. Shares transferred to the Charitable Trustee shall
be deemed to have been offered for sale to the Trust, or its designee, at a
price per share equal to the lesser of (i) the price per share in the
transaction that resulted in such transfer to the Charitable Trust (or, in the
case of a devise or gift, the Market Price at the time of such devise or gift)
and (ii) the Market Price on the date the Trust, or its designee, accepts such
offer. The Trust shall have the right to accept such offer until the
Charitable Trustee has sold the Shares held in the Charitable Trust pursuant
to Section 7.3.5. Upon such a sale to the Trust, the interest of the
Charitable Beneficiary in the Shares sold shall terminate and the Charitable
Trustee shall distribute the net proceeds of the sale to the Prohibited Owner.



<PAGE>

                            Section 7.3.7 Designation of Charitable
Beneficiaries. By written notice to the Charitable Trustee, the Trust shall
designate one or more nonprofit organizations to be the Charitable Beneficiary
of the interest in the Charitable Trust such that (i) Shares held in the
Charitable Trust would not violate the restrictions set forth in Section
7.2.1(a) in the hands of such Charitable Beneficiary and (ii) each such
organization must be described in Sections 501(c)(3), 170(b)(1)(A) or
170(c)(2) of the Code.

                  Section 7.4. Restrictions on Ownership and Transfer of Shares
                               by Benefit Plans.

                            Section 7.4.1 Ownership Limitations.
Notwithstanding any other provisions herein, if and to the extent that any
Shares do not constitute Publicly Offered Securities, then Benefit Plan
Investors may not, on any date, hold, individually or in the aggregate, 25
percent or more of the value of such class of Shares. For purposes of
determining whether Benefit Plan Investors hold, individually or in the
aggregate, 25 percent or more of the value of such class of Shares, the value
of Shares of such class held by any Trustee or officer of the Trust, or any
other Person who has discretionary authority or control with respect to the
assets of the Trust, or any Person who provides investment advice for a fee to
the Trust in connection with its assets, shall be disregarded.

                            Section 7.4.2 Remedies for Violations by Benefit
Plan Investors. If the Board of Trustees or any duly authorized committee
thereof shall at any time determine in good faith that (i) a Transfer or other
event has taken place that results in a violation of Section 7.4.1 or will
otherwise result in the underlying assets and property of the Trust becoming
assets of any ERISA Investor or (ii) that a Person intends to acquire or has
attempted to acquire or hold Shares in a manner that will result in a
violation of Section 7.4.1 or will otherwise result in the underlying assets
and property of the Trust becoming assets of any ERISA Investor, the Board of
Trustees or a committee thereof shall take such action as it deems advisable
to mitigate, prevent or cure the consequences that might result to the Trust
from such Transfer or other event, including without limitation, refusing to
give effect to or preventing such Transfer or event through redemption of such
Shares or refusal to give effect to the Transfer or event on the books of the
Trust, or instituting proceedings to enjoin such Transfer or other event.

                            Section 7.4.3 Information on Benefit Plan Status.
Any Person who acquires or attempts or intends to acquire or hold Shares shall
provide to the Trust such information as the Trust may request in order to
determine whether such acquisition or holding has or will result in a
violation of Section 7.4.1 or otherwise result in the underlying assets and
property of the Trust becoming assets of any ERISA Investor, including the
name and address of any Person for whom a nominee holds Shares and whether the
underlying assets of such Person include assets of any Benefit Plan Investor.



<PAGE>

                  Section 7.5 NYSE Transactions. Nothing in this Article VII
shall preclude the settlement of any transaction entered into through the
facilities of the NYSE or any other national securities exchange or automated
inter-dealer quotation system; provided, that the fact that the settlement of
any transaction takes place shall not negate the effect of any other provision
of this Article VII and any transferee in such a transaction shall be subject
to all of the provisions and limitations set forth in this Article VII.

                  Section 7.6 Enforcement. The Trust is authorized
specifically to seek equitable relief, including injunctive relief, to enforce
the provisions of this Article VII.

                  Section 7.7 Non-Waiver. No delay or failure on the part of
the Trust or the Board of Trustees in exercising any right hereunder shall
operate as a waiver of any right of the Trust or the Board of Trustees, as the
case may be, except to the extent specifically waived in writing.

                                 ARTICLE VIII

                                 SHAREHOLDERS

                  Section 8.1 Meetings. There shall be an annual meeting of
the Shareholders, to be held on proper notice at such time (after the delivery
of the annual report as provided in the Bylaws) and convenient location as
shall be determined by or in the manner prescribed in the Bylaws, for the
election of the Trustees, if required, and for the transaction of any other
business within the powers of the Trust. Except as otherwise provided in this
Declaration of Trust, special meetings of Shareholders may be called in the
manner provided in the Bylaws. If there are no Trustees, the officers of the
Trust shall promptly call a special meeting of the Shareholders entitled to
vote for the election of successor Trustees. Any meeting may be adjourned and
reconvened as the Trustees determine or as provided in the Bylaws.

                  Section 8.2 Voting Rights. Subject to the provisions of any
class or series of Shares then outstanding, the Shareholders shall be entitled
to vote only on the following matters: (a) election of Trustees as provided in
Section 5.4 and the removal of Trustees as provided in Section 5.5; (b)
amendment of this Declaration of Trust as provided in Article X; (c)
termination of the Trust as provided in Section 12.2; (d) reorganization,
merger or consolidation of the Trust, or the sale or disposition of
substantially all of the property of the Trust, as provided in Article XI; (e)
such other matters with respect to which the Board of Trustees has adopted a
resolution declaring that a proposed action is advisable and directing that
the matter be submitted to the Shareholders for approval or ratification
(including, without limitation, a resolution recommending the termination of
the Trust's status as a real estate investment trust under the Code pursuant
to Section 5.2(u) hereof); and (f) such other matters as may be properly
brought before a meeting by a Shareholder pursuant to the Bylaws. Except with
respect to the foregoing matters, no action taken by the Shareholders at any
meeting shall in any way bind the Board of Trustees.



<PAGE>

                  Section 8.3 Preemptive and Appraisal Rights. Except as may
be provided by the Board of Trustees in setting the terms of classified or
reclassified Preferred Shares pursuant to Section 6.3, no holder of Shares
shall, as such holder, (a) have any preemptive right to purchase or subscribe
for any additional Shares of the Trust or any other security of the Trust
which it may issue or sell or (b) except as expressly required by Title 8,
have any right to require the Trust to pay him the fair value of his Shares in
an appraisal or similar proceeding.

                  Section 8.4 Extraordinary Actions. Except as otherwise
specifically provided in this Declaration of Trust (including without
limitation, in those provisions relating to election and removal of Trustees
and changes in the number of authorized Shares), notwithstanding any provision
of law permitting or requiring any action to be taken or authorized by the
affirmative vote of the holders of a greater number of votes, any such action
shall be effective and valid if taken or authorized by the affirmative vote of
not less than sixty-six and two-thirds percent (66 2/3%) of all the votes
entitled to be cast on the matter.

                  Section 8.5 Action By Shareholders without a Meeting.
Subject to Title 8 and any other applicable provisions of law, the Bylaws may
provide that any action required or permitted to be taken at a meeting of the
Shareholders may be taken without a meeting by the written consent of all
Shareholders entitled to vote on such matter; provided, that all Shareholders
entitled to notice of any such meeting but not entitled to vote on such matter
shall have made a written waiver of any right to dissent to such action taken
without a meeting.

                                  ARTICLE IX

     LIABILITY LIMITATION, INDEMNIFICATION AND TRANSACTIONS WITH THE TRUST

                  Section 9.1 Limitation of Shareholders' Liability. No
Shareholder shall be liable for any debt, claim, demand, judgment or
obligation of any kind of, against or with respect to the Trust by reason of
his being a Shareholder, nor shall any Shareholders be subject to any personal
liability whatsoever, in tort, contract or otherwise, to any person in
connection with the property or the affairs of the Trust by reason of his
being a Shareholder.



<PAGE>

                  Section 9.2 Limitation of Trustee and Officer Liability. To
the maximum extent that Maryland law in effect from time to time permits
limitation of the liability of trustees and officers of a real estate
investment trust, no Trustee or officer of the Trust shall be liable to the
Trust or to any Shareholders for money damages. Neither the amendment nor
repeal of this Section 9.2, nor the adoption or amendment of any other
provision of this Declaration of Trust inconsistent with this Section 9.2,
shall apply to or affect in any respect the applicability of the preceding
sentence with respect to any act or failure to act which occurred prior to
such amendment, repeal or adoption. In the absence of any Maryland statute
limiting the liability of trustees and officers of a Maryland real estate
investment trust for money damages in a suit by or on behalf of the Trust or
by any Shareholders, no Trustee or officer of the Trust shall be liable to the
Trust or to any Shareholders for money damages except to the extent that (a)
the Trustee or officer actually received an improper benefit or profit in
money, property or services, for the amount of the benefit or profit in money,
property or services actually received, or (b) a judgment or other final
adjudication adverse to the Trustee or officer is entered in a proceeding
based on a finding in the proceeding that the Trustee's or officer's action or
failure to act was material to the cause of action adjudicated in the
proceeding and was committed in bad faith or was the result of active and
deliberate dishonesty.

                  Section 9.3 Indemnification. The Trust shall have the power,
to the maximum extent permitted by Maryland law in effect from time to time,
to obligate itself to indemnify, and to pay or reimburse reasonable expenses
in advance of final disposition of a proceeding to, (a) any individual who is
a present or former Shareholder, Trustee or officer of the Trust or (b) any
individual who, while a Trustee of the Trust and at the request of the Trust,
serves or has served as a director, officer, partner, trustee, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or any other enterprise from and against any claim or liability
to which such person may become subject or which such person may incur by
reason of his status as a present or former Shareholder, Trustee or officer of
the Trust. The Trust shall have the power, with the approval of its Board of
Trustees, to provide such indemnification and advancement of expenses to a
person who served a predecessor of the Trust in any of the capacities
described in (a) or (b) above and to any employee or agent of the Trust or a
predecessor of the Trust.

                  Section 9.4 Transactions Between the Trust and its Trustees,
Officers, Employees and Agents. Subject to any express restrictions in this
Declaration of Trust or adopted by the Trustees in the Bylaws or by
resolution, the Trust may enter into any contract or transaction of any kind
with any person, including any Trustee, officer, employee or agent of the
Trust or any person affiliated with a Trustee, officer, employee or agent of
the Trust, whether or not any of them has a financial interest in such
transaction.



<PAGE>

                  Section 9.5 Express Exculpatory Clauses in Instruments. The
Board of Trustees shall cause to be inserted in every written agreement,
undertaking or obligation made or issued on behalf of the Trust, an
appropriate provision to the effect that neither the Shareholders nor the
Trustees, officers, employees or agents of the Trust shall be liable under any
written instrument creating an obligation of the Trust, and all persons shall
look solely to the property of the Trust for the payment of any claim under or
for the performance of that instrument. The omission of the foregoing
exculpatory language from any instrument shall not affect the validity or
enforceability of such instrument and shall not render any Shareholder,
Trustee, officer, employee or agent liable thereunder to any third party nor
shall the Trustees or any officer, employee or agent of the Trust be liable to
anyone for such omission.

                                   ARTICLE X

                                  AMENDMENTS

                  Section 10.1 General. The Trust reserves the right from time
to time to make any amendment to this Declaration of Trust, now or hereafter
authorized by law, including any amendment altering the terms or contract
rights, as expressly set forth in this Declaration of Trust, of any Shares.
All rights and powers conferred by this Declaration of Trust on Shareholders,
Trustees and officers are granted subject to this reservation. Articles of
Amendment to this Declaration of Trust (a) shall be signed and acknowledged by
at least a majority of the Trustees, or an officer duly authorized by at least
a majority of the Trustees, (b) shall be filed for record as provided in
Section 13.5 and (c) shall become effective as of the later of the time the
SDAT accepts the Articles of Amendment for record or the time established in
the Articles of Amendment, not to exceed 30 days after the Articles of
Amendment are accepted for record. All references to this Declaration of Trust
shall include all amendments thereto.

                  Section 10.2 By Trustees. The Trustees may amend this
Declaration of Trust from time to time, in the manner provided by Title 8,
without any action by the Shareholders, to qualify as a real estate investment
trust under the Code or under Title 8.

                  Section 10.3 By Shareholders. Except as otherwise provided
in this Declaration of Trust, any amendment to this Declaration of Trust shall
be valid only if proposed in a resolution adopted by the Board of Trustees,
which resolution shall set forth the proposed amendment and declare that it is
advisable, and approved at an annual or special meeting of Shareholders by the
affirmative vote of not less than two-thirds of all the votes entitled to be
cast on the matter.



<PAGE>

                                  ARTICLE XI

        REORGANIZATION; MERGER, CONSOLIDATION OR SALE OF TRUST PROPERTY

                  Section 11.1 Reorganization. Subject to the provisions of
any class or series of Shares at the time outstanding, the Trustees shall have
the power (i) to cause the organization of a corporation, association, trust
or other organization to take over the property of the Trust and carry on the
affairs of the Trust, or (ii) merge the Trust into, or sell, convey and
transfer the property of the Trust to, any such corporation, association,
trust or organization in exchange for securities thereof or beneficial
interests therein, and the assumption by the transferee of the liabilities of
the Trust, and upon the occurrence of (i) or (ii) above terminate the Trust
and deliver such securities or beneficial interests ratably among the
Shareholders according to the respective rights of the class or series of
Shares held by them; provided, however, that any such action shall have been
approved, at a meeting of the Shareholders called for that purpose, by the
affirmative vote of the holders of not less than two-thirds of the Shares then
outstanding and entitled to vote thereon.

                  Section 11.2 Merger, Consolidation or Sale of Property of
the Trust. Subject to the provisions of any class or series of Shares at the
time outstanding, the Trustees shall have the power to (a) merge into another
entity, (b) consolidate the Trust with one or more other entities into a new
entity or (c) sell, lease, exchange or otherwise transfer or dispose of all or
substantially all of the property of the Trust. Any such action must be
approved by the Board of Trustees and, after notice to all Shareholders
entitled to vote on the matter, by the affirmative vote of not less than
two-thirds of all the votes entitled to be cast on the matter.

                                  ARTICLE XII

                       DURATION AND TERMINATION OF TRUST

                  Section 12.1 Duration. The Trust shall continue perpetually
unless terminated pursuant to Section 12.2 or pursuant to any applicable
provision of Title 8.

                  Section 12.2  Termination.

                                     (a) Subject to the provisions of any
class or series of Shares at the time outstanding, the Trust may be terminated
at any meeting of Shareholders, by the affirmative vote of two-thirds of all
the votes entitled to be cast on the matter. Upon the termination of the
Trust:

                                             (i) The Trust shall carry on no
business except for the purpose of winding up its affairs.



<PAGE>

                                             (ii) The Trustees shall proceed
to wind up the affairs of the Trust and all of the powers of the Trustees
under this Declaration of Trust shall continue, including the powers to
fulfill or discharge the Trust's contracts, collect its assets, sell, convey,
assign, exchange, transfer or otherwise dispose of all or any part of the
remaining property of the Trust to one or more persons at public or private
sale for consideration which may consist in whole or in part of cash,
securities or other property of any kind, discharge or pay its liabilities and
do all other acts appropriate to liquidate its business.

                                             (iii) After paying or adequately
providing for the payment of all liabilities, and upon receipt of such
releases, indemnities and agreements as they deem necessary for their
protection, the Trustees may distribute the remaining property of the Trust
among the Shareholders so that after payment in full or the setting apart for
payment of such preferential amounts, if any, to which the holders of any
Shares at the time outstanding shall be entitled, the remaining property of
the Trust shall, subject to any participating or similar rights of Shares at
the time outstanding, be distributed ratably among the holders of Common
Shares at the time outstanding.

                                     (b) After termination of the Trust, the
liquidation of its business and the distribution to the Shareholders as herein
provided, a majority of the Trustees shall execute and file with the Trust's
records a document certifying that the Trust has been duly terminated, and the
Trustees shall be discharged from all liabilities and duties hereunder, and
the rights and interests of all Shareholders shall cease.

                                 ARTICLE XIII

                                 MISCELLANEOUS

                  Section 13.1 Governing Law. This Declaration of Trust is
executed by the undersigned Trustees and delivered in the State of Maryland
with reference to the laws thereof, and the rights of all parties and the
validity, construction and effect of every provision hereof shall be subject
to and construed according to the laws of the State of Maryland without regard
to conflicts of laws provisions thereof.

                  Section 13.2 Reliance by Third Parties. Any certificate
shall be final and conclusive as to any person dealing with the Trust if
executed by the Secretary or an Assistant Secretary of the Trust or a Trustee,
and if certifying to: (a) the number or identity of Trustees, officers of the
Trust or Shareholders; (b) the due authorization of the execution of any
document; (c) the action or vote taken, and the existence of a quorum, at a
meeting of the Board of Trustees or Shareholders; (d) a copy of this
Declaration of Trust or of the Bylaws as a true and complete copy as then in
force; (e) an amendment to this Declaration of Trust; (f) the termination of
the Trust; or (g) the existence of any fact or relating to the affairs of the
Trust. No purchaser, lender, transfer agent or other person shall be bound to
make any inquiry concerning the validity of any transaction purporting to be
made by the Trust on its behalf or by any officer, employee or agent of the
Trust.



<PAGE>

                  Section 13.3  Severability.

                            (a) The provisions of this Declaration of Trust
are severable, and if the Board of Trustees shall determine, with the advice
of counsel, that any one or more of such provisions (the "Conflicting
Provisions") are in conflict with the Code, Title 8 or other applicable
federal or state laws, the Conflicting Provisions, to the extent of the
conflict, shall be deemed never to have constituted a part of this Declaration
of Trust, even without any amendment of this Declaration of Trust pursuant to
Article X and without affecting or impairing any of the remaining provisions
of this Declaration of Trust or rendering invalid or improper any action taken
or omitted prior to such determination. No Trustee shall be liable for making
or failing to make such a determination.

                            (b) If any provision of this Declaration of Trust
shall be held invalid or unenforceable in any jurisdiction, such holding shall
apply only to the extent of any such invalidity or unenforceability and shall
not in any manner affect, impair or render invalid or unenforceable such
provision in any other jurisdiction or any other provision of this Declaration
of Trust in any jurisdiction.

                  Section 13.4 Construction. In this Declaration of Trust,
unless the context otherwise requires, words used in the singular or in the
plural include both the plural and singular and words denoting any gender
include all genders. The title and headings of different parts are inserted
for convenience and shall not affect the meaning, construction or effect of
this Declaration of Trust. In defining or interpreting the powers and duties
of the Trust and its Trustees and officers, reference may be made by the
Trustees or officers, to the extent appropriate and not inconsistent with the
Code or Title 8, to Titles 1 through 3 of the Corporations and Associations
Article of the Annotated Code of Maryland.

                  Section 13.5 Recordation. This Declaration of Trust and any
Articles of Amendment hereto shall be filed for record with the SDAT and may
also be filed or recorded in such other places as the Trustees deem
appropriate, but failure to file for record this Declaration of Trust or any
Articles of Amendment hereto in any office other than in the State of Maryland
shall not affect or impair the validity or effectiveness of this Declaration
of Trust or any amendment hereto. A restated Declaration of Trust shall, upon
filing, be conclusive evidence of all amendments contained therein and may
thereafter be referred to in lieu of the original Declaration of Trust and the
various Articles of Amendments thereto.

                  THIRD: The amendment to and restatement of the Declaration
of Trust of the Trust as hereinabove set forth has been duly approved and
advised by the Board of Trustees by majority vote thereof and approved by the
sole shareholder of the Trust as required by law.



<PAGE>

                  FOURTH: The current address of the principal office of the
Trust is 415 McFarlan Road, Suite 202, Kennett Square, Pennsylvania 19348.

                  FIFTH: The name and address of the Trust's current resident
agent is as set forth in Article IV of the foregoing amendment and restatement
of the Declaration of Trust of the Trust.

                  SIXTH: The number of trustees of the Trust and the names of
those currently in office are as set forth in Article V of the foregoing
amendment and restatement of the Declaration of Trust of the Trust.



<PAGE>


                           IN WITNESS WHEREOF, these Articles of Amendment
and Restatement of Declaration of Trust have been signed on this 27th day of
January, 1998 by all of the Trustees of the Trust, each of whom acknowledges,
that this document is his free act and deed, and that to the best of his
knowledge, information, and belief, the matters and facts set forth herein are
true in all material respects and that the statement is made under the
penalties for perjury.



/s/ Michael R. Walker
_________________________
Michael R. Walker



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