EXHIBIT 10.6

                         EXECUTIVE EMPLOYMENT AGREEMENT
                                     BETWEEN
                        DIVERSIFIED SENIOR SERVICES, INC.
                                       AND
                                BERNARD P. GAWLEY

                        EFFECTIVE AS OF FEBRUARY 16, 1998



THIS AGREEMENT, made and entered into as of the 16th day of February, 1998, by
and between DIVERSIFIED SENIOR SERVICES, INC., a North Carolina corporation
("Company") and BERNARD P. GAWLEY, a resident of the State of New York
("Executive").

                              W I T N E S S E T H:

The parties, for and in consideration of the mutual and reciprocal covenants and
agreements contained in this Agreement, do contract and agree as follows:



                                    ARTICLE I
                             PURPOSE AND EMPLOYMENT

The purpose of this Agreement is to define the relationship between the Company,
as an employer, and Executive, as an employee. By the execution of this
Agreement, the Company employs Executive and Executive accepts employment by the
Company.



                                   ARTICLE II
                                   DEFINITIONS

The following terms (in alphabetical order) shall have the meanings set forth
opposite such terms for purposes of this Agreement:

2.01      AGREEMENT: means this Executive Employment Agreement between
          Diversified Senior Services, Inc. and Bernard P. Gawley, effective as
          of February 16, 1998, and as may be amended from time to time.

2.02      BASE COMPENSATION: means the annual salary amount payable to Executive
          by the Company pursuant to Section 4.01, as such amount may be
          adjusted from time to time.

2.03      BOARD: means the Board of Directors of the Company.

2.04      CEO: means the Chief Executive Officer of the Company.

2.05      CODE: means the Internal Revenue Code of 1986, as amended from time to
          time.

2.06      COMMITTEE: means the Compensation Committee of the Board of Directors
          of Diversified Senior Services, Inc. or any successor committee of the
          Board which deals with compensation.

2.07      COMPANY: means Diversified Senior Services, Inc., a North Carolina
          corporation.

2.08      EFFECTIVE DATE: means February 16, 1998.

2.09      EXCESS PARACHUTE PAYMENTS: means "excess parachute payments" as that
          term is defined under Code Section 280G(b).

2.10      EXECUTIVE: means Bernard P. Gawley, a New York resident, Social
          Security number ###-##-####.

2.11      FUNDAMENTAL CHANGE: means any of the following events:

          (a)  the sale by the Company of substantially all of its assets to a
               single purchaser or a group of associated or affiliated
               purchasers who are not affiliated with the Company;

          (b)  the sale, exchange or other disposition, in one transaction to an
               entity or entities not affiliated with the Company, of more than
               fifty percent (50%) of the outstanding capital stock of the
               Company other than a sale, exchange or disposition of the capital
               stock of the Company resulting from a public or private offering
               of capital stock or other security convertible into capital stock
               of the Company which offering is sponsored or initiated by the
               Company and approved by the Board;

          (c)  the merger or consolidation of the Company in a transaction in
               which the stockholders of the Company receive less than fifty
               percent (50%) of the outstanding voting stock of the new or
               continuing entity;

          (d)  a change in control of the Board as constituted as of the
               Effective Date.

2.12      NORMAL RETIREMENT: means retirement by Executive from employment with
          the Company after the date he attains age seventy-five (75) or such
          earlier age as requested by Executive and approved by the Committee.

2.13      SEVERANCE EVENTS: means a termination without cause by the Company at
          any time in accordance with Section 3.04(a) of the Executive's
          employment with the Company or, upon the occurrence of a Fundamental
          Change and within three (3) months before or eighteen (18) months
          after such Fundamental Change:

          (a)  a meaningful reduction in Executive's title, duties or
               responsibilities by the Company;

          (b)  a greater than ten percent (10%) reduction of Executive's Base
               Compensation by the Company; or

          (c)  a Company-required relocation of Executive's workplace beyond a
               30-mile radius from either the Company's principal office in
               Winston-Salem, North Carolina or Executive's then current
               principal residence.

2.14      TOTAL DISABILITY: means a physical or mental condition arising after
          Executive commences employment with the Company which totally and
          permanently prevents him from performing his usual and customary
          duties as an employee of the Company. Executive will be deemed to have
          suffered a Total Disability when he:

          (a)  has been declared legally incompetent by a final decree of a
               court of competent jurisdiction (the date of such decree being
               deemed to be the date on which the disability occurred);

          (b)  receives disability insurance benefits for a period of six (6)
               consecutive months from any disability income insurance policy
               maintained by the Company; or

          (c)  has become permanently disabled, which shall be deemed to exist
               upon a determination by the Board:

               (1)  that Executive has become physically or mentally
                    incapacitated or disabled; and

               (2)  that such incapacity or disability has continued for a
                    period of six (6) consecutive months or for shorter periods
                    aggregating nine (9) months during any consecutive fifteen
                    (15) month period.



                                   ARTICLE III
                                TERMS AND DUTIES

3.01      TERM. The term of this Agreement shall be for two (2) years from the
          Effective Date and shall be extended a day for each day Executive is
          employed by the Company on or before his seventy-third (73rd)
          birthday, so that the Agreement shall always be effective for a term
          ending with the date of the earlier of Executive's seventy-fifth
          (75th) birthday or two (2) years from his most recent date of
          employment with the Company.

3.02      DUTIES. Executive shall serve as the President and Chief Operating
          Officer of DSS Funding, Inc., a wholly owned subsidiary of the
          Company, or in such other position of the same or greater stature as
          the Company may direct or desire, subject at all times to the control
          of the CEO. Executive shall perform such other or additional duties as
          shall reasonably be assigned to him from time to time by the CEO,
          which duties shall be those customarily performed by a corporate
          officer having executive responsibilities of the position in which he
          is employed under this Agreement and in a business similar to the
          Company. During the term of this Agreement, Executive also agrees to
          serve, if elected, as an officer and director of any subsidiary or
          affiliate of the Company and to provide services to other entities as
          directed by the CEO.

3.03      EXTENT OF SERVICES. Executive shall use his best efforts to devote his
          entire business time, attention, skills, abilities and energies to
          promote the business and best interest of this Company, and will
          perform such duties as are assigned to him by the CEO, in accordance
          with and pursuant to all of the terms and conditions contained in this
          Agreement, and shall, during the term of this Agreement, be engaged in
          any other business activity only if reasonably approved by the CEO,
          regardless of whether such activity is pursued for gain, profit, or
          other pecuniary advantage; provided, however, this Section 3.03 shall
          not prevent Executive from investing his assets in such form or manner
          as will not require any services by Executive in the operation of the
          affairs of the companies in which such investments are made. Executive
          shall serve in such other executive capacity or capacities as may be
          specified from time to time by the CEO.

          Anything contained in this paragraph 3.03 notwithstanding, Executive
          shall be allowed to provide consulting services to PW Funding located
          in Mineola, NY, through approximately the end of February 1998 in
          return for the provision by PW Funding of office and secretarial
          support during the month of February. During this period, the
          Executive shall nevertheless allocate the majority of his time to
          activities pertaining to the Company's business. Thereafter, Executive
          may work or provide services and receive compensation on his own time
          without being considered in violation of the provisions of this
          Article III for the provision of services on project loans associates
          with Woodview Associates located in East Haven, Connecticut; The
          Gateway Apartments located in Council Bluffs, Iowa and the Northern
          Manhattan Nursing Home located in New York City, New York.

3.04      TERMINATION OF EMPLOYMENT.

          (A)  WITHOUT CAUSE. Either party may terminate this Agreement without
               cause at any time, including the occurrence of a Fundamental
               Change, upon thirty (30) days written notice to the other party.
               Upon such termination by the Company, the Company shall be
               obligated to continue to pay Executive the Base Compensation
               amount due Executive under Section 4.01 and all accrued incentive
               compensation through the date of termination, plus any other
               compensation due him under Article V. Upon such termination by
               Executive for any reason other than Normal Retirement, the
               Company shall be obligated to pay Executive only the Base
               Compensation amount due Executive under Section 4.01 plus all
               accrued incentive compensation through the date of termination.
               Upon such termination by Executive upon his Normal Retirement,
               the Company shall be obligated to pay Executive only the Base
               Compensation amount due Executive under Section 4.01 for the
               three (3) months following the date of termination.

          (B)  WITH CAUSE. The Company may terminate this Agreement with cause
               at any time immediately upon delivery of written notice to
               Executive. Upon such termination, the Company shall be obligated
               to continue to pay Executive only the Base Compensation amount
               due Executive under Section 4.01 for thirty (30) days following
               the date of the delivery of the notice of termination, which date
               shall be for all purposes of this Agreement, the date of
               termination of his employment.

               Executive's employment shall be considered terminated with cause
               if terminated for (1) any act of fraud, misappropriation,
               embezzlement or similar act involving malfeasance or moral
               turpitude; (2) conviction of a felony of a heinous nature; (3)
               material failure to perform the services and duties described
               herein (except in the case of death or disability), material
               violation of any Agreement provisions, or material breach of any
               fiduciary duty to the Company, if the material failure, violation
               or breach unreasonably continues after written notice of the
               breach or violation is given to the Executive by the Company; (4)
               gross misconduct, misfeasance or malfeasance in connection with
               his employment under this Agreement, which shall include, but not
               be limited to, excessive absences from work, failure to follow
               reasonable directives from the CEO, neglect of duty, negligence,
               disloyalty, directly or indirectly accepting or soliciting any
               business of the type conducted by the Company during the term of
               this Agreement in direct competition with the Company, without
               prior authorization of the Board, dishonesty, intemperance,
               immorality, disobedience of the Company's rules, disrespect,
               unnecessarily endangering, damaging or destroying life or
               property, or similar conduct injurious to the Company; (5)
               failure of DSS Funding to achieve break even operations by the
               end of its twelfth full month of operations; or (6) other
               behavior which adversely reflects on the reputation of the
               Company such as substance abuse, public intoxication, etc.

               Whether cause for such termination exists shall be determined by
               the CEO. If on or before the date of such determination by the
               CEO, the individual who, as of the Effective Date, is CEO has
               retired, become disabled or died, the Committee shall make such
               determination and the Committee's determination of cause shall be
               subject to arbitration as described in Article VII.

          (C)  TOTAL DISABILITY. Upon the Total Disability of Executive during
               the term of this Agreement, this Agreement shall terminate
               immediately and the Company shall be obligated to continue to pay
               Executive only the Base Compensation amount due Executive under
               Section 4.01 for the three (3) months following the date of
               termination.

               In determining Total Disability under Section 2.14 for purposes
               of this Section 3.04(c), the Board shall rely upon the written
               opinion of the physician regularly attending Executive in
               determining whether a disability is deemed to exist. If the Board
               disagrees with the opinion of such physician, the Board may
               choose a second physician, and the two (2) physicians shall
               choose a third physician, and the written opinion of a majority
               of the three (3) physicians shall be conclusive as to Executive's
               disability. The date of any written opinion conclusively finding
               Executive to be disabled is the date on which the disability will
               be deemed to have occurred. The expenses associated with the
               utilization of any physician other than the physician regularly
               attending Executive shall be borne by the Company. Executive
               hereby consents to any required medical examination and agrees to
               furnish any medical examination and agrees to furnish any medical
               information requested by the Company and to waive any applicable
               physician/patient privilege that may arise because of such
               determination.

          (D)  DEATH. Upon the death of Executive during the term of this
               Agreement, this Agreement shall terminate immediately and
               Executive's estate shall be entitled to receive the Base
               Compensation amount due Executive under Section 4.01 for the
               three (3) months following the Executive's date of death.

          (E)  EARLY RETIREMENT. The Company currently does not have an early
               retirement policy and, therefore, the Executive shall not obtain
               any rights to early retirement under this Agreement.


                                   ARTICLE IV
              BASE COMPENSATION, BONUSES, BENEFITS AND PERQUISITES

4.01      BASE COMPENSATION AND BONUSES. For all the services to be rendered by
          Executive pursuant to his Agreement, the Company shall pay Executive a
          Base Compensation as set forth on the "Schedule of Compensation"
          attached to this Agreement as Exhibit A and made a part hereof by this
          reference. Said Compensation shall be payable in accordance with the
          Company's regular payroll procedures. In the event Executive receives
          any periodic payments representing lost compensation under any health,
          disability, accident and/or salary continuation insurance policy, the
          premiums for which have been paid by the Company, the amount of salary
          that Executive would be entitled to receive from the Company shall not
          be decreased by the amount of such payments. Executive shall also be
          entitled to any cash bonuses as may be granted by the Company from
          time to time with regard to his services as an employee of the
          Company. The Company and Executive from time to time by mutual
          agreement may reflect increases in Executive's Base Compensation by
          entering any such increase upon Exhibit A. If an increase is entered
          on Exhibit A and duly signed by the Company and Executive, such entry
          shall constitute an amendment to this Agreement as of the effective
          date of such entry designated in such Exhibit A and shall supersede
          the Base Compensation provided for in this Section 4.01 or any other
          increase or increases previously made in Exhibit A. In the event that
          the Company requests and Executive agrees to the deferral of part or
          all of Executive's Base Compensation, Executive shall be entitled to
          repayment of such base amount, plus an additional amount as shall be
          provided in detail on the "Schedule for Repayment and Computation of
          Deferred Compensation" attached to this Agreement as Exhibit B and
          made a part of this Agreement by this reference. At the time of any
          entry on Exhibit B, such entry shall be duly signed by the Company and
          Executive and such entry shall constitute an amendment to this
          Agreement as of the effective date of such entry designed in such
          Exhibit B.

4.02      EXPENSE REIMBURSEMENT. Executive shall be entitled to reimbursement
          for all reasonable travel and other business expenses incurred by him
          in the performance of services under this Agreement. All expenses
          described under this Section 4.02 shall be reimbursed by the Company
          upon presentation of expense statements or vouchers and such other
          supporting information as the Company may reasonably request.

4.03      EMPLOYEE BENEFITS AND PERQUISITES. Based on his years of service, his
          compensation (but only to the extent provided under Section 4.01 and
          as permitted to be taken into account under the Code) and his position
          with the Company, Executive shall be entitled to participate in the
          major medical, hospitalization, life insurance, vacation, sick leave
          or disability, pension or retirement, profit-sharing, stock-based
          incentive and other fringe benefit plans which are generally provided
          by the Company to its similarly situated employees and the Company
          agrees to provide such basic benefits. Further, for each Year of the
          term of this Agreement, in the discretion of the Board, the Company
          shall provide and Executive receive any and all working facilities,
          perquisites and incentives, and such other benefits to the extent they
          are generally provided and continue to be provided by the Company to
          its other similarly situated executives during the Year. For purposes
          of identifying the benefits and perquisites contemplated by this
          Section 4.03, except as prohibited or found to be discriminatory under
          current provisions of the Employee Retirement Income Security Act of
          1974 or applicable North Carolina law,



                                    ARTICLE V
                                  SEVERANCE PAY

5.01      ELIGIBILITY.

          (a)  In addition to any amounts due under Section 3.04 of this
               Agreement or any other benefit or incentive plan of the Company,
               executive shall receive a lump sum compensatory payment from the
               Company as determined in Section 5.02, if during the term of this
               Agreement a Severance Event occurs. In no event shall the
               Severance Pay amount determined under Section 5.02 be reduced by
               the amount of any payments or benefits due under any other plan
               or program outside of this Article V, unless specifically taken
               into account in Section 5.02(a).

          (b)  Executive shall not be entitled to any Severance Pay amount under
               this Article V, if Executive's employment with the Company is
               terminated with cause under Section 3.04(b) or as a result of his
               Normal Retirement, death, Total Disability, or voluntary
               termination by him of this Agreement under Section 3.04(a).

5.02      PAYMENT AMOUNT AND TIMING.

          (A)  AMOUNT. The Company shall pay to Executive an amount referred to
               in this Article V as "Severance Pay." Subject to adjustment as
               provided in Section 5.03(b), the Severance Pay to be received by
               the Executive shall be an amount equal to the following, less one
               dollar ($1.00): (a) three (3) times the Executive's average Base
               Compensation received for the immediately preceding five (5)
               fiscal years; or, (b) if Executive has been employed by the
               Company for less than five (5) years, then the annualized average
               of any Base Compensation received during such period. This
               provision is intended to comply with the definitions set forth in
               Code Sections 280G(b)(3) and (d)(1) and (2). For purposes of this
               Agreement, the term "Severance Pay Cap" shall mean the maximum
               amount which may be paid to Executive without constituting an
               Excess Parachute Payment. The value of any non-cash benefit of
               any deferred cash payments shall be determined by the Company in
               accordance with the principles of Code Section 280G(d)(3) and
               (4). The Company reserves the right, after consultation with its
               chosen tax counsel, to make a reasonable determination of the
               Severance Pay Cap under Code Section 280G. It is the intention of
               the parties to this Agreement that Executive's Severance Pay
               shall not exceed an amount which is deductible in full by the
               Company when paid, except as permitted under Section 5.02(c).

          (B)  TIMING. The Company shall pay the Severance Pay amount determined
               under this Section 5.02 in a single lump sum to Executive not
               later than thirty (30) days after the Severance Event occurs.

5.03      REIMBURSEMENT FOR EXCISE TAX AND ADDED INCOME TAX.

          (a)  The Severance Pay provided under Section 5.02 is not intended to
               be treated as an Excess Parachute Payment. The Company shall take
               such actions as may be available and practical, and Executive
               shall cooperate with any such actions, to provide clear and
               convincing evidence to the Internal Revenue Service and/or the
               State of North Carolina that any such payments were not
               contingent upon a change in Company ownership and otherwise were
               not Excess Parachute Payments.

          (b)  If, despite the efforts of the Company and Executive, the
               Internal Revenue Service successfully treats all or any portion
               of those payments as Excess Parachute Payments, the Company shall
               protect Executive from depletion of the amount of such payments
               by reimbursing him for the effects of any additional federal or
               State of New York income or excise taxes payable as a result of
               such payments, including any reimbursement under this Section
               5.03. Such reimbursement shall be made to Executive by the
               Company as an annual payment for each affected taxable year of
               Executive, in addition to any payments due under Section 5.01, in
               an amount equal to the amount of any Section 5.01 payments
               treated by the Internal Revenue Service as Excess Parachute
               Payments for such taxable year multiplied by a fraction with (1)
               as the numerator and (2) as the denominator, where

               (1)  is the combined excise tax rate applicable to such Excess
                    Parachute Payments under Code Section 4999 and any similar
                    State of New York excise tax rate, and

               (2)  is the difference of 1.0 minus both (A) the combined federal
                    excise tax rate applicable to such Excess Parachute Payments
                    under Code Section 4999 and any similar State of New York
                    excise tax rate, and (B) the combined marginal federal and
                    State of New York income tax rate applicable to the
                    additional payment provided under this Section 5.03(b) for
                    the taxable year of Executive for which such payment is
                    considered to be taxable income.



                                   ARTICLE VI
                 INFORMATION, DOCUMENT AND EMPLOYEE SOLICITATION

6.01      CONFIDENTIAL INFORMATION AND DISCOVERIES. Executive agrees that all
          information of a technical or business nature such as know-how, trade
          secrets, secret business information, plans, data processes,
          techniques, etc., except such information and skills generally known
          in the Company's trade and business, information made public by the
          Company or generally of a public nature, and knowledge of Executive
          not constituting a trade secret ("Confidential Information"), acquired
          by Executive in the course of his employment by the Company, is a
          valuable business property right of the Company. Executive agrees,
          that such Confidential Information, whether in written, verbal or
          model form, shall not be disclosed to anyone outside the employment of
          the Company without the express written authorization of the Company.
          Confidential Information shall include, without limitation, vendor
          lists and records, customer lists, business policies, business
          methods, financial information and any other similar material of any
          kind relating to the business of the Company. In the event of an
          actual or threatened breach of this provision, the Company shall be
          entitled to an injunction restraining Executive from such action, and
          the Company shall not be prohibited in obtaining such equitable relief
          or from pursuing any other available remedies for such breach or
          threatened breach, including recovery of damages from Executive.

6.02      RETURN OF DOCUMENTS. Upon the termination of this Agreement, Executive
          shall forthwith return and deliver to the Company and shall not retain
          any original or copies of any books, papers, price lists or vendor
          contracts, bids or customer lists, files, books of account, notebooks
          and other documents and data relating to the performance of services
          rendered by Executive hereunder, all of which materials are hereby
          agreed to be the property of the Company.

6.03      SOLICITATION OF EMPLOYEES. Executive agrees that for a period of
          eighteen (18) months following the termination of Executive's
          employment with the Company, Executive shall not directly or
          indirectly, personally or with any other employees, agents or
          otherwise, on behalf of himself or any other person, firm or
          corporation, solicit or cause any person under his control to solicit
          any employee of the Company, or any employee of any Company subsidiary
          to affiliate to terminate his or her employment with the Company or
          such subsidiary or affiliate. In the event of an actual or threatened
          breach of this provision, the Company shall be entitled to an
          injunction restraining Executive from such action, and the Company
          shall not be prohibited in obtaining such equitable relief or from
          pursing any other available remedies for such breach of threatened
          breach including recovery of damages from Executive.

6.04      PROJECT FINANCINGS. Anything contained in this Article VI
          notwithstanding, Executive shall be allowed to continue to provide
          financing related services to proposed project loans originated by him
          where such project loans do not involve the company as project sponsor
          or developer or where the Company gives express permission for the
          Executive to continue to provide such financing services as were
          contemplated to be provided by the Executive while employed by the
          Company; provided, however, that 50% of the origination fees
          associated with any proposed project commenced prior to the
          termination of Executive employment will be paid to the Company at
          closing of the proposed financing.



                                   ARTICLE VII
                                   ARBITRATION

Any claim, dispute or controversy arising out of or relating to this Agreement,
the parties relationship under this Agreement or the breach of this Agreement
shall be determined by a single arbitrator pursuant to the applicable rules of
practice and procedures of either the Private Adjudication Center, Inc., an
affiliate of the Duke University School of Law, or of the American Arbitration
Association, as such rules shall be in effect at the time the demand for
arbitration is filed, at the Company's sole election. The parties hereby agree
that the arbitration proceeding shall be private and confidential and shall not
be published in any form or manner. The location of the arbitration shall be at
the Private Adjudication Center's facilities at the Duke Law School, Durham,
North Carolina in the event that the Company elects to apply the rules of
practice and procedure of the Center or shall be in Winston-Salem, North
Carolina in the event the Company elects to apply the rules of the American
Arbitration Association. The decision of the arbitrator shall be final and
binding Judgment to enforce the decision or award of the arbitrator may be
entered in any court having jurisdiction and the parties hereby agree not to
object to the jurisdiction of the North Carolina General Court of Justice for
such purpose. Nothing contained herein shall in any way deprive the Company of
its claim to obtain an injunction or other equitable relief arising out of
Executive's breach of the provisions of Articles IV and VII. In the event of the
termination of Executive's employment, Executive's sole remedy shall be
arbitration as herein provide. The parties agree that no punitive damages shall
be awarded pursuant to any claim brought hereunder.

The parties agree that service of process relating to any arbitration proceeding
shall be made by certified mail. In any judicial proceeding to enforce this
agreement to arbitrate, the only issues to be determined shall be the existence
of the agreement to arbitrate and the failure of one party to comply with that
agreement, and those issues shall be determined summarily by the court without a
jury. All other issues shall be decided by the arbitrator, whose decision
therein shall be final and binding. There may be no appeal of an order
compelling arbitration except as part of an appeal concerning confirmation of
the decision of the arbitrator.



                                  ARTICLE VIII
                                  MISCELLANEOUS

8.01      PLACE OF EXECUTIVE'S RESIDENCE. The Company shall not require
          Executive to relocate his place of residence, principal or otherwise,
          except upon Executive's consent. If Executive consents to any change
          of residence, the Company shall pay all reasonable relocation
          expenses.

8.02      RESIGNATION UPON TERMINATION. In the event of termination of this
          Agreement other than by death, Executive shall, and shall be deemed to
          have, resigned from all positions held with the Company, including
          without limitation, any position as a director, officer, agent,
          trustee or consultant of the Company or any affiliate of the Company
          effective the date of termination of employment.

8.03      ENFORCEMENT. Both parties recognize that the services to be rendered
          under this Agreement by Executive are special, unique and of
          extraordinary character and that in the event of the breach by
          Executive of any of the terms and conditions of this Agreement to be
          performed by him, then the Company shall be entitled, if it so elects,
          to institute and prosecute proceedings in any court of competent
          jurisdiction, either at law or in equity, to obtain damages for any
          breach hereof, or to enjoin Executive from performing acts prohibited
          hereby, but nothing herein contained shall be construed to prevent
          such other remedy in the courts as the Company may elect to invoke.

8.04      WAIVER OF BREACH. The waiver by a party hereto of a breach of any
          provision of this Agreement by the other party hereto shall not
          operate or be construed as a waiver of any subsequent breach by such
          party.

8.05      SELF-INTEREST. Executive shall not vote or decide upon any matter
          related directly or indirectly to him or any right of his to claim any
          benefit under the Agreement.

8.06      NOTICES. Any notice required or permitted to be given under this
          Agreement shall be sufficient if in writing and if sent by registered
          or certified mail to executive or the Company at the address set forth
          below their signatures at the end of this Agreement or to such other
          address as they shall notify each other in writing.

8.07      WITHHOLDING OF TAXES. The Company may withhold from any benefits
          payable under this Agreements all federal, state and other taxes as
          shall be required pursuant to any law or governmental regulation or
          ruling.

8.08      TAX EFFECTS. The Company makes no warranties or representations with
          regard to the tax effects or results of this Agreement. Executive
          shall be deemed to have relied upon his own tax advisors with regard
          to such effects.

8.09      ADMINISTRATION. This Agreement shall be administered, with the advice
          and consent of the Committee, by the CEO. All reasonable
          determinations and interpretations of the Code and this Agreement made
          by the Company or its chosen tax counsel, shall be binding and
          conclusive on all parties to this Agreement.

8.10      BURDEN AND BENEFIT. This Agreement shall be binding upon and inure to
          the benefit of the Company and its successors and assigns and
          Executive and his personal representatives, heirs, legatees and
          beneficiaries, but shall not be assignable by Executive.

8.11      CONSTRUCTION. This Agreement shall be construed in accordance with the
          laws of the State of North Carolina in every respect, including
          without limitation, validity. interpretation and performance. Words
          used in this Agreement, other than as specifically defined in Article
          II, have the meaning their context dictates. If, however, a situation
          arises in which an undefined word in this Agreement has a different
          meaning in legal usage than that in common use, and its is unclear to
          the parties which usage is proper under the circumstances, the
          ambiguity shall be resolved by the Committee in favor of the meaning
          in common usage. Headings and sub-headings have been added only for
          convenience of reference and shall have no substantive effect.
          References to the masculine gender shall include the feminine and the
          singular the plural whenever appropriate.

8.12      ENTIRE AGREEMENT. This Agreement supersedes all prior discussions and
          agreements by and between the Company, or any of its officers,
          directors employees, or agents, and Executive with respect to all
          matters relating to the employment by Company of Executive and all
          other matters contained in this Agreement constitute the sole and
          entire Agreement with respect to such employment. Any representation,
          inducement, promise or agreement, whether oral or written, between the
          Company, or any of its officers, directors employees, or agents, an
          Executive which is not embodied in this Agreement shall be of no force
          and effect and Executive represents and warrants that he has not
          executed this Agreement in reliance upon any such representation or
          promise.

8.13      IMPLIED TERMS. The terms, conditions, obligations and duties expressed
          in this Agreement are in addition to any duties and obligations
          implied in law to an employment relationship except where any
          expressed condition is contrary to the implied condition and in which
          case, the express condition will apply and control.

8.14      AUTHORITY. All of the provisions of this Agreement required to be
          approved by the Committee have been so approved and authorized. Any
          other action to be taken by the Company under the terms of this
          Agreement shall be by the affirmative vote of a majority of those
          members of the Committee.

8.15      AMENDMENT. This Agreement may be amended as provided in Section 4.01
          or at any other time by the written mutual agreement of Executive and
          the Company executed in a form similar to that of this original
          Agreement.

8.16      SEVERABILITY. If any term, covenant or condition of this Agreement or
          its application to any person or circumstance shall to any extent be
          found to be invalid or unenforceable by a court of competent
          jurisdiction, the remainder of this Agreement or the application of
          such term, covenant or condition to persons or under conditions other
          than those for which it is held invalid or unenforceable, shall not be
          affected by such holding and each such remaining portion of this
          Agreement shall be valid and be enforced to the fullest extent
          permitted by law.

8.17      COUNTERPARTS. This Agreement may be executed in one or more
          counterparts, each of which shall be deemed to be an original, but all
          of which together shall constitute one agreement.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer and Executive has signed this Agreement as of the day
and year first above written.


                                COMPANY:

                                DIVERSIFIED SENIOR SERVICES, INC.

                                By: /s/ SUSAN L. CHRISTIANSEN
                                   -----------------------------------
                                   Susan L. Christiansen

                                EXECUTIVE:

                                /s/ BERNARD P. GAWLEY  (SEAL)
                                ----------------------------------
                                Bernard P. Gawley


<PAGE>
                                    EXHIBIT A



                            SCHEDULE OF COMPENSATION



The undersigned hereby agree that the Base Compensation due Executive under
Section 4.01 of the attached Agreement shall be $100,000 payable in accordance
with the Company's regular payroll procedures beginning with the effective date
of this Agreement, and for each successive year thereafter during the remaining
term of the Agreement, unless and until further changed by mutual agreement as
provided in Section 4.01.

This the 16th day of February, 1998.



                                    COMPANY:


                                    DIVERSIFIED SENIOR SERVICES, INC.


                                    By: /s/ SUSAN L. CHRISTIANSEN
                                        ---------------------------------
                                        Susan L. Christiansen




                                    EXECUTIVE:



                                    /s/ BERNARD P. GAWLEY  (SEAL)
                                    ----------------------------------
                                    Bernard P. Gawley



<PAGE>

                                    EXHIBIT B



                             SCHEDULE FOR REPAYMENT
                    AND COMPUTATION OF DEFERRED COMPENSATION



                                      NONE