EMPLOYMENT AGREEMENT

		The Employment Agreement ("Agreement"), dated as of
October 1, 1999, is made by and between Maxicare Health Plans,
Inc., a Delaware corporation (the "Company"), and Patricia
Fitzpatrick, an individual ("Employee").

RECITALS

This Agreement is made in consideration of Employee's desire to
enter the employ or continue in the employ of the Company, and the
Company desires that employee be so employed.
		1.	Definitions.   As used in this Agreement, the
following capitalized terms shall have the following meanings,
unless otherwise expressly provided or unless the context
otherwise requires:
			(a)	"Board of Directors" means the Board of
Directors of the Company.
			(b)	"Cause" means, as used with respect to the
involuntary termination of Employee:
				(i)	Any breach by Employee of this Agreement;
				(ii)	The material or continuous failure of
Employee to perform  her job duties to the Company's satisfaction,
whether by reason of her inability, refusal or otherwise;
				(iii)	Employee's willfully causing the
Company, whether by action or inaction, to violate any state or
federal law, rule or regulation;
				(iv)	The engaging by Employee in misconduct or
inaction detrimental to the Company's business or reputation
and/or which exposes the Company to liability based upon the
inaction or action(s) of Employee;
				(v)	The conviction of Employee for a felony
or of a crime involving moral turpitude;
				(vi)	Any act of dishonesty, misconduct,
disloyalty, fraud, insubordination or misappropriation of
confidential information in connection with Employee's employment
with the Company or the satisfaction of her obligations hereunder;
or
<PAGE>
				(vii)	Any breach or violation of the
Company's Policies and Procedures Manual (the "Policies Manual")
as in effect from time to time which would warrant termination
pursuant to the terms of such Policies Manual.
			(c)	"Incapacity" means the absence of the Employee
from her employment or the inability of Employee to perform her
essential job duties with reasonable accommodations on a full-time
basis by reason of mental or physical illness, disability or
incapacity for a period of thirty (30) consecutive days.
		2.	Employment, Services and Duties.   The Company
hereby employs Employee as Treasurer, or such title designation as
the Company,  acting through the Company's Chief Executive
Officer,  or the Company's Chief Operating Officer  may from time
to time direct (collectively, the "Supervisor").  Employee shall
report to and be supervised by the Supervisor or such other person
as the Supervisor may designate  and shall have such duties and
responsibilities as the Supervisor may designate.
		3.	Acceptance of Employment.   Employee hereby accepts
employment and agrees to devote her full time with the Company's
business and shall not be involved in any activities whatsoever
which interfere with Employee's: (1) employment with the Company;
(2) satisfaction of Employee's obligations on behalf of the
Company pursuant to the terms of this Agreement; or (3) activities
on behalf of the Company in the discharge of her duties during the
Company's business hours.
		4.	Obligation to Other Employers.   Employee
represents that her employment with the Company does not conflict
with any obligations he may have with former employers or any
other persons or entities.  Employee specifically represents that
he has not brought to the Company (and will not bring to the
Company) any materials or documents of a former employer, or any
confidential information or property of a former employer.

		5.	Compensation.   As compensation for all services to
be rendered by Employee hereunder, the Company shall pay to
Employee a base salary at the rate of $134,500.00 per annum
through December 31, 1999,  with such increases as may be
determined from time to time by the Supervisor in her sole
discretion and, if applicable, subject to the approval of the
Board of Directors for the period January 1, 2000 through December
31, 2000 (the "Base Salary").  Said Base Salary shall be payable
in bi-weekly  installments or in such other installments as the
Company may from time to time pay other similarly situated
employees.
<PAGE>
		6.	Benefits.   In addition to the compensation
provided for in Section 5 of this Agreement, Employee shall have
the right to participate in any profit-sharing, pension, life,
health and accident insurance, or other employee benefits
presently adopted or which hereafter may be adopted by the Company
in a manner comparable to those offered or available to other
employees of the Company who are similarly situated where such
plans or programs are available to all such similarly situated
employees pursuant to their terms.  Nothing contained herein,
shall require that the Company's Board of Directors designate the
Employee as a participant in any new plan or program where the
Board, in its sole discretion, chooses to designate participants
or qualifications for any new or additional program.  Except as
set forth above, the Company reserves the right to add, terminate
and/or amend any existing plans, policies, programs and/or
arrangements during the term of this Agreement without any
obligation to the Employee hereunder.
		Employee shall also be entitled to twenty (20) days
annual vacation time, during which time her compensation will be
paid in full.  Unused vacation days at the end of any pay
period(s) may be carried over to subsequent pay period(s),
provided that the cumulative number of vacation days accruing from
and after the date of this Agreement carried over into any
subsequent pay period shall not exceed twenty  (20) days.
Employee shall not accrue additional vacation days during any pay
period once the total number of accumulated vacation days equals
twenty (20) days.  However, solely in the event Employee, pursuant
to the Company policy, has accrued in excess of twenty (20)
vacation days prior to the date of this Agreement ("Excess
Vacation Days"), Employee shall be entitled to carry over up to,
but not in excess of, such  amount of Excess Vacation Days from
pay period to any subsequent pay period.  Notwithstanding the
foregoing, Employee shall not be entitled to, nor shall accrue any
new vacation days during any pay period in which Employee has
Excess Vacation Days.  In the event Employee reduces the amount of
Excess Vacation Days in any year through the utilization of more
than twenty (20) vacation days in such year, Employee shall not be
entitled to the restoration of such Excess Vacations Days through
the utilization of less than twenty (20) vacation days in any
subsequent year and pay period.  Employee shall under no
circumstances be entitled to cash in lieu of vacations days,
except in the event of Employee's termination of employment with
the Company.
		7.	Expenses.   The Company shall reimburse Employee
for all reasonable travel, hotel, entertainment and other expenses
incurred by Employee in the discharge of Employee's duties
hereunder, in accordance with Company policy regarding same, only
after receipt from Employee of vouchers, receipts or other
reasonable substantiation of such expenses acceptable to the
Company.
<PAGE>
		8.	Term of Employment.   The term of this Agreement
and Employee's employment shall be for a period of fifteen months,
commencing on October 1, 1999 and terminating on December 31, 2000
(the "Expiration Date") unless otherwise extended or sooner
terminated as provided for in this Agreement.  Employee's
employment with the Company pursuant to this Agreement shall
terminate prior to the Expiration Date upon the occurrence of any
of the following events:
			(a)	The death of Employee;
			(b)	Employee voluntarily leaves the employ of the
Company;
			(c)	The Incapacity of Employee;
			(d)	The Company terminates this Agreement for
Cause;
			(e)	The Company terminates this Agreement for any
reason other than set forth in Sections 8(a), 8(c) or 8(d) hereof;
or
			(f)	The appointment of a trustee for the Company
for the purpose of liquidating and winding up the Company pursuant
to Chapter 7 of the Federal Bankruptcy Code.
		9.	Compensation Upon Termination.   In the event this
Agreement is terminated pursuant to Section 8, the Company shall
pay to Employee her then current Base Salary, prorated through the
Employee's last day of employment with the Company (the
"Termination Date") and solely those additional bonuses that had
been declared or fully earned by Employee prior to such
termination, but had not yet been  received ("Earned Bonuses"),
and any accrued vacation through the Termination Date pursuant to
Section 6 (the "Termination Pay").  Except as set forth below, all
employment compensation and benefits shall cease as of the
Termination Date.  In addition to the foregoing:
			(a)	In the event that such termination arises
under Section 8(a), Employee's estate shall be entitled to receive
severance compensation equal to such amount of Employee's then
current Base Salary as would have been over an additional thirty
(30) day period;
<PAGE>
			(b)	Employee recognizes that this Agreement and
Employee's employment with the Company may be terminated at any
time by the Company prior to the Expiration Date "without cause"
and nothing contained herein shall require that the Company
continue to employ the Employee until the Expiration Date;
notwithstanding the foregoing, if prior to the Expiration Date of
this Agreement or prior to its termination pursuant to Sections
8(a) - 8(d) or 8(f) hereof or this, this Agreement is terminated
pursuant to Section 8(e) above, the Employee shall: (y) receive
the greater of either: (i) her then current Base Salary through
the Expiration Date of the Agreement or (ii) six  (6) months Base
Salary when such payments would have otherwise been paid had
Employee's employment with the Company continued (the "Severance
Salary"); and (z) be entitled to continue to receive through the
Expiration Date solely the health, dental, disability and life
insurance benefits that Employee was receiving or participating in
pursuant to Section 6 immediately prior to such termination, as
though such termination had not occurred.  If the Company is
unable to continue such benefits, the Company shall obtain or
reimburse Employee for all costs actually incurred by the Employee
to obtain substantially equivalent benefits (the "Severance
Benefits").  The Severance Benefits shall be provided to Employee
as and when such amounts or benefits would have been paid to
Employee had such termination not occurred until the first to
occur of: (1) the Expiration Date, (2) Employee's Death, or (3)
until such time as Employee obtains other employment which offers
any of such benefits to its employees of similar stature with the
Employee.  In the event any comparable benefit obtained or
available to the Employee in her new employment is less than such
Severance Benefits being provided pursuant to this Section 9, the
Company will provide for or pay the monetary costs of obtaining
such additional benefits necessary to provide substantially
similar overall benefits.  The Severance Salary and the Severance
Benefits are hereinafter collectively referred to as the
"Severance Compensation".

THE SEVERANCE COMPENSATION IN THIS SUBSECTION 9(b) SHALL BE PAID
OR MADE AVAILABLE TO EMPLOYEE AS LIQUIDATED DAMAGES FOR ALL CLAIMS
EMPLOYEE WOULD HAVE WITH RESPECT TO: (i) THE TERMINATION OF THIS
AGREEMENT OR THE TERMINATION OF EMPLOYEE'S EMPLOYMENT UPON THE
EXPIRATION OF THIS AGREEMENT; (ii) ANY COMPENSATION OR BENEFITS
DUE EMPLOYEE FROM THE COMPANY PURSUANT TO THIS AGREEMENT AND (iii)
THE INJURY TO EMPLOYEE'S REPUTATION AS A RESULT OF ANY TERMINATION
OF THIS AGREEMENT OR TERMINATION OF EMPLOYMENT UPON THE EXPIRATION
OF THIS AGREEMENT.  IN CONNECTION THEREWITH, THE PARTIES AGREE
THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO FIX THE
ACTUAL AMOUNT OF SUCH DAMAGES AND CLAIMS DUE EMPLOYEE WITH RESPECT
THERETO AND THAT SUCH SEVERANCE COMPENSATION AND/OR TERMINATION
PAY SHALL CONSTITUTE A REALISTIC AND REASONABLE VALUATION OF THE
DAMAGES WITH RESPECT TO EMPLOYEE'S CLAIMS.
<PAGE>
		(c)	Except as otherwise provided in Section 9(a) or (b)
above, all other compensation and benefits enjoyed by or due to
Employee as part of Employee's employment with Employer shall
cease as of the Termination Date; including but not limited to any
rights to office or parking space, vacation or sick pay, use of
telephones, Xeroxing or Facsimile equipment, secretarial
assistance, any unpaid bonus (other than Earned Bonuses), all
benefits and/or rights pursuant to Section 6 above and the right
to receive grants of any stock options which have not previously
been granted to employee or, except as expressly provided in any
applicable stock option agreement or plan, vesting in any stock
options previously granted to Employee which have not vested as of
the Termination Date.
		(d)	In the event Employee does not receive, on or
before the Expiration Date, an offer for a new employment
agreement but nevertheless continues as an employee of the Company
after the Expiration Date, Employee shall be thereafter deemed to
be an "at will employee" who may be terminated by the Company at
any time.  In the event Employee's employment with the Company is
terminated while Employee is an "at will employee", Employee shall
be entitled to only those severance benefits, if any, which are in
accordance with the Company's then existing Policies Manual or
other written personnel policies.  Employee acknowledges and
understands that in such event, Employee will no longer be
entitled to the Severance Compensation set forth herein.
		(e)	All payments of Severance Compensation shall be
made when such payments would have been made had this Agreement
not been terminated and all Severance Benefits, Severance Salary
and Termination Pay shall be paid or provided subject to the usual
withholdings, including state and federal taxes.

10.	Covenant Not to Compete.
			(a)	Employee covenants and agrees that, during
Employee's employment with the Company pursuant to this Agreement,
Employee will not, directly or indirectly, own, manage, operate,
join, control or become employed by, or render any services  of
any advisory nature or otherwise, or participate in the ownership,
management, operation or control of, any business which competes
with the business of the Company or any of its affiliates.
			(b)	Notwithstanding the foregoing, Employee shall
not be prevented from investing her assets in such form or manner
as will not require any services on the part of Employee in the
operation of the affairs of a company in which investments are
made, provided such company is not engaged in a business
competitive to the Company, or if it is in competition with the
Company, provided its stock is publicly traded and Employee owns
less than one percent (1%) of the outstanding stock of that
company.
<PAGE>
11.  	Trade Secrets.   The  parties  acknowledge
and agree that the identity of
Company's customers and information which Company has acquire or
may acquire concerning those customers, their service and
product requirements, financial information, pricing
information, costs and personnel required for performance of
such services are valuable trade secrets.  In addition, the
parties agree that information concerning Company that
reasonably relates to the business of Company and which has not
been publicly released by duly authorized representatives of
Company, including but not limited to marketing and sales plans,
proposals, financial information, costs, pricing information and
formulae, is also a valuable trade secret.
12.	Confidentiality.   Employee covenants and agrees
that he will not at any
time during or after the termination of her employment by the
Company, without the Company's expressed written consent,
reveal, divulge or make known to any person, firm or corporation
any information, knowledge or data of a proprietary nature
relating to the business of the Company or any of its affiliates
which is not or has not become generally known or public.
Employee shall hold, in a fiduciary capacity, for the benefit of
the Company, all information, knowledge or data of a proprietary
nature, trade secret or confidential information with respect to
the Company which was disclosed to Employee as a result of or in
connection with Employee's employment with the Company,
including but not limited to information with respect to product
lines, provider and employer group contracts or arrangements,
software utilized or developed by or for the Company, financial
information, marketing information, pricing information, costs
and the personnel required for performance of service, marketing
and sales plans, overhead costs, medical loss ratios, claims
processing, customer services and underwriting information, or
any other confidential information concerning Company that
reasonably relates to the business of Company and which has not
been publicly released by duly authorized representatives of
Company (collectively "Proprietary Information").  Employee
recognizes and acknowledges that all such Proprietary
Information is a valuable and unique asset of the Company, and
accordingly he will not discuss or divulge any such Proprietary
Information to any person, firm, partnership, corporation or
organization other than to the Company, its affiliates,
designees, assignees or successors or except as may otherwise be
required by the law, as ordered by a court or other governmental
body of competent jurisdiction, or in connection with the
business and affairs of the Company.
<PAGE>
		13.  Acquisition Through Employment.  In accordance
with applicable law, everything which Employee acquires by
virtue of Employee's employment, including without limitation,
property, inventions, copyrights,  patents, documents or
writings, except Employee's compensation, belongs to Company.
Employee agrees that following the termination of employment,
Employee will return to Company all property of Company,
including without limitation thereto, the original and all
copies of any documents which relate to or were prepared in the
course of Employee's employment, including without limitation
thereto, contracts, proposals or any information concerning the
identity of customers, services provided by Company and the
pricing of such services.


		14.	Equitable Remedies.   In the event of a breach or
threatened breach by Employee of any of her obligations under
Sections 10 through 13 of this Agreement, Employee acknowledges
that the Company may not have an adequate remedy at law and
therefore it is mutually agreed between Employee and the Company
that, in addition to any other remedies  at law or in equity
which the Company may have, the Company shall be entitled to
seek in a court of law and/or equity a temporary and/or
permanent injunction restraining Employee from any continuing
violation or breach of this Agreement.
		15.	Miscellaneous.
			(a)	This Agreement shall be binding upon and
inure to the benefit of the Company and any successor of the
Company.  Except as set forth in Section 8(f) above, this
Agreement shall not be terminated by the voluntary or
involuntary dissolution of the Company or by any merger,
reorganization or other transaction in which the Company is not
the surviving or resulting corporation or upon any transfer of
all or substantially all of the assets of the Company in the
event of any such merger, or transfer of assets.  The provisions
of this Agreement shall be binding upon and shall inure to the
benefit of the surviving business entity or the business entity
to which such assets shall be transferred in the same manner and
to the same extent that the Company would be required to perform
it if no such transaction had taken place.
				Neither this Agreement nor any rights
arising hereunder may be assigned or pledged by Employee.
<PAGE>
			(b)	Except as otherwise provided by law or
elsewhere herein, in the event of an act of force majeure, as
hereinafter defined, during the term hereof which event
continues for a period of no less than fifteen (15) days, the
Company shall be entitled to suspend this Agreement for the
duration of such event of force majeure.  In such event, during
the duration of the event of force majeure the Company shall be
relieved of its obligations to the Employee pursuant to Sections
5 and 6; except for the continuation of any health, life or
disability insurance coverage.  For the purposes hereof, "force
majeure" shall be defined as the occurrence of one or more of
the following events:
				(i)	any act commonly understood to be of
force majeure which materially and adversely affects the
Company's business and operations, including but not limited to,
the Company having sustained a material loss, whether or not
insured, by reason of fire, earthquake, flood, epidemic,
explosion, accident, calamity or other act of God;
				(ii)	any strike or labor dispute or court or
government action, order or decree;

				(iii)	a banking moratorium having been
declared by federal or state authorities;
				(iv)  	An outbreak of major armed
conflict, blockade, embargo, or  other international hostilities
or restraints or orders of civic, civil defense, or military
authorities or other national or international calamity having
occurred;
				(v)	any act of public enemy, riot or civil
disturbance or threat thereof; or
				(vi)	a pending or threatened legal or
governmental proceeding or action relating generally to the
Company's business, or a notification having been received by
the Company of the threat of any such proceeding or action,
which could materially adversely affect the Company.
			(c)	Except as expressly provided herein, this
Agreement contains the entire understanding between the parties
with respect to the subject matter hereof, and may not be
modified, altered or amended except by an instrument in writing
signed by the parties hereto.  This Agreement supersedes all
prior agreements of the parties with respect to the subject
matter hereof.
			(d)	This Agreement shall be construed in
accordance with the laws of the State of California applicable
to agreements wholly made and to be performed entirely within
such state and without regard to the conflict of law principles
thereof.
<PAGE>
			(e)	Nothing in this Agreement is intended to
require or shall be construed as requiring the Company to do or
fail to do any act in violation of applicable law.  The
Company's inability pursuant to court order to perform its
obligations under this Agreement shall not constitute a breach
of this Agreement.  If any provision of this Agreement is
invalid or unenforceable, the remainder of this Agreement shall
nevertheless remain in full force and effect.  If any provision
is held invalid or unenforceable with respect to particular
circumstances, it shall, nevertheless, remain in full force and
effect in all other circumstances.
			(f)	With the exception of the Company's right to
enforce the provisions found in Sections 10 through 13 of this
Agreement pursuant to Section 14 hereof, any and all disputes
arising from Employee's employment with or termination from the
Company including but not limited to any claim for unlawful
retaliation, wrongful termination of employment, violation of
public policy or unlawful discrimination or harassment because
of race, color, sex, national origin, religion, age, physical or
mental disability or condition, marital status, sexual
orientation or other legally protected characteristic shall be
resolved by final and binding arbitration before a single
arbitrator.  EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THE
PARTIES AGREE THAT IF A DISPUTE OR CLAIM OF ANY KIND ARISES
BETWEEN THEM, THEY AGREE TO WAIVE ANY RIGHTS EACH MAY HAVE TO A
JURY OR COURT TRIAL.
		Any party hereto electing to commence an action shall
give written notice to the other parties hereto of such
election.  The arbitrator shall be limited to an award of
monetary damages and shall conduct the arbitration in accordance
with the California Rules of Evidence.  The dispute shall be
settled by arbitration to take place in Los Angeles County,
California, in accordance with the then rules of the American
Arbitration Association or its successor.  The award of such
arbitrator may be confirmed or enforced in any court of
competent jurisdiction.  The costs and expenses of the
arbitrator including the attorney's fees and costs of each of
the parties, shall be apportioned between the parties by such
arbitrator based upon such arbitrator's determination of the
merits of their respective positions.  Nothing contained in this
Section shall in any way be construed to modify, expand or
otherwise alter the rights and obligations of the Company and
Employee contained elsewhere in this Agreement.
			(g)	Any notice to the Company required or
permitted hereunder shall be given in writing to the Company,
either personally, by messenger, courier or otherwise, telex,
telecopier or, if by mail, by registered or certified mail,
return receipt requested, postage prepaid, duly addressed to the
Secretary of the Company at its then principal place of
business.
<PAGE>
Any such notice to Employee shall be given to the Employee in a
like manner, and if mailed
shall be addressed to Employee at Employee's home address then
shown in the files of the Company.  For the purpose of
determining compliance with any time limit herein, a notice
shall be deemed given on the fifth day following the postmarked
date, if mailed, or the date of delivery if delivered
personally, by telex or telecopier.
			(h)	Employee acknowledges that: (i) he has been
advised by the Company that this Agreement affects her legal
rights and to seek the advice of her legal counsel prior to
executing it and (ii) has had the opportunity to consult with
her own legal counsel in connection with the negotiations of the
terms of this Agreement, her rights with respect hereto and the
execution hereof.
			(i)	A waiver by either party of any term or
condition of this Agreement or any breach thereof, in any one
instance, shall not be deemed or construed to be a waiver of
such term or condition or of any subsequent breach thereof.
			(j)	The section and subsection headings
contained in this Agreement are solely for convenience and shall
not be considered in its interpretation.
			(k)	This Agreement may be executed in one or
more counterparts, each of which shall constitute an original.



		IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first written above.
					COMPANY:
						MAXICARE HEALTH PLANS, INC.
						a Delaware corporation

						By:
	___________________________________
							Paul R. Dupee, Jr.
							Chairman of the Board and
							Chief Executive Officer




	By:____________________________________
							Alan D. Bloom, Secretary


					EMPLOYEE:


						By:
	___________________________________
							Patricia Fitzpatrick