EMPLOYMENT AGREEMENT

This employment agreement ("Agreement") is made and entered into as of this
date by and between In-House Rehab Corporation., a Colorado corporation
("Corporation"), and David V. Hall ("Employee").

WHEREAS, Corporation and Employee desire that the term of this Agreement begin
on February 1, 1998 ("Effective Date").

WHEREAS, Corporation desires to employ Employee as President, and Chief
Executive Officer, and Employee is willing to accept such employment by
Corporation, on the terms and subject to the conditions set forth in this
Agreement.

NOW THEREFORE, IT IS AGREED AS FOLLOWS:

Section 1.  Duties.  During the term of this Agreement, Employee agrees to be
employed by and to serve Corporation as President and Chief Executive Officer,
and Corporation agrees to employ and retain Employee in such capacities.
Employee shall devote a substantial portion of his business time, energy, and
skill to the affairs of the Corporation as Employee shall report to the
Corporation's Board of Directors, and at all times during the term of this
Agreement shall have powers and duties at least commensurate with his position
as President, as such duties are outlined in Appendix A hereto.

Section 2.  Term of Employment.

2.1  Definitions.  For the purposes of this Agreement the following terms
shall have the following meanings:

     2.1.1  "Termination For Cause" shall mean termination by Corporation of
Employee's employment by Corporation by reason of Employee's willful
dishonesty towards, fraud upon, or deliberate injury or attempted injury to,
Corporation or by reason of Employee's willful material breach of this
Agreement which has resulted in material injury to Corporation, or continuance
of failure by the Employee to perform his duties in compliance with this
Agreement after written notice to the Employee by the Board of Directors
specifying such failure, provided that such "cause" shall have been found by a
majority vote of the members of the Board of Directors of the Corporation
other than Employee.

     2.1.2  "Termination Other Than For Cause" shall mean termination by
Corporation of Employee's employment by Corporation (other than in a
Termination for Cause) and shall include constructive termination of
Employee's employment by reason of material breach of this Agreement by
Corporation, such constructive termination to be effective upon notice from
Employee to Corporation of such constructive termination.

     2.1.3  Voluntary Termination" shall mean termination by Employee of
Employee's employment by Corporation other than (i) constructive termination
as described in subsection 2.1.2, (ii) "Termination Upon a Change in Control,"
and (iii) termination by reason of Employee's death or disability as described
in Sections 2.5 and 2.6.

     2.1.4  "Termination Upon a Change in Control" shall mean a termination of
Employee's employment with Corporation following a "Change in Control."

     2.1.5  "Change in Control" shall mean (i) the time that Corporation first
determines that any person and all other persons who constitute a group
(within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934
("Exchange Act")) have acquired direct or indirect beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of forty percent
(40%) or more of Corporation's outstanding securities.
<PAGE>
 
2.2  Initial Term.  The term of employment of Employee by Corporation shall be
for a period of three (3) years beginning with Effective Date, unless
terminated earlier pursuant to this Section.  This Agreement, and the three
(3) year term hereof shall be deemed to have been renewed the first day of
each month after the effective date.  At any time, Corporation and Employee
may by mutual written agreement extend or modify the term of Employee's
employment under the terms of this Agreement.

2.3  Termination For Cause.  Termination For Cause may be effected by
Corporation at any time during the term of this Agreement and shall be
effected by written notification to Employee.  Upon Termination For Cause,
Employee shall promptly be paid all accrued salary, bonus compensation to the
extent earned, vested deferred compensation (other than pension plan or profit
sharing plan benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of the Corporation in which Employee is a
participant to the full extent of Employee's rights under such plans, accrued
vacation pay and any appropriate business expenses incurred by Employee in
connection with his duties hereunder, all to the date of termination, but
Employee shall not be paid any other compensation or reimbursement of any
kind, including without limitation, severance compensation.

2.4  Termination Other Than For Cause.  Notwithstanding anything else in this
Agreement, Corporation may effect a Termination Other Than For Cause at any
time upon giving written notice to Employee of such termination.  Upon any
Termination Other Than For Cause, Employee shall promptly be paid all accrued
salary, bonus compensation to the extent earned, vested deferred compensation
(other than pension plan or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any plans of the
Corporation in which Employee is a participant to the full extent of
Employee's rights under such plans (including accelerated vesting, if any, of
awards granted to Employee under the Corporation's stock option plan), accrued
vacation pay and any appropriate business expenses incurred by Employee in
connection with his duties hereunder, all to the date of termination, and all
severance compensation provided in Section 4.2, but no other compensation or
reimbursement of any kind.

2.5  Termination by Reason of Disability.  If, during the term of this
Agreement, Employee, in the reasonable judgment of the Board of Directors of
Corporation, has failed to perform his duties under this Agreement on account
of illness or physical or mental incapacity, and such illness or incapacity
continues for a period of more than twelve (12) consecutive months,
Corporation shall have the right to terminate Employee's employment hereunder
by written notification to Employee and payment to Employee of all accrued
salary, bonus compensation to the extent earned, vested deferred compensation
(other than pension plan or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any plans of the
Corporation in which Employee is a participant to the full extent of
Employee's rights under such plans, accrued vacation pay and any appropriate
business expenses incurred by Employee in connection with his duties
hereunder, all to the date of termination, with the exception of medical and
dental benefits which shall continue through the expiration of this Agreement,
but Employee shall not be paid any other compensation or reimbursement of any
kind, including without limitation, severance compensation.

2.6  Death.  In the event of Employee's death during the term of this
Agreement, Employee's employment shall be deemed to have terminated as of the
last day of the month during which his death occurs and Corporation shall
promptly pay to his estate or such beneficiaries as Employee may from time to
time designate all accrued salary, bonus compensation to the extent earned,
vested deferred compensation (other than pension plan or profit sharing plan
benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of the Corporation in which Employee is a participant
to the full extent of Employee's rights under such plans, accrued vacation pay
and any appropriate business expenses incurred by Employee in connection with
his duties hereunder, all to the date of termination.  The Employee's estate
shall not be paid any other compensation, including without limitation,
severance compensation.
<PAGE>
2.7  Voluntary Termination.  In the event of a Voluntary Termination,
Corporation shall promptly pay all accrued salary, bonus compensation to the
extent earned, vested deferred compensation (other than pension plan or profit
sharing plan benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of the Corporation in which Employee is a
participant to the full extent of Employee's rights under such plans, accrued
vacation pay and any appropriate business expenses incurred by Employee in
connection with his duties hereunder, all to the date of termination, but no
other compensation or reimbursement of any kind, including without limitation,
severance compensation.

2.8  Termination Upon a Change in Control.  In the event of a Termination Upon
a Change in Control, Employee shall immediately be paid all accrued salary,
bonus compensation to the extent earned, vested deferred compensation (other
than pension plan or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any plans of the
Corporation in which Employee is a participant to the full extent of
Employee's rights under such plans (including accelerated vesting, if any, of
any awards granted to Employee under Corporation's Stock Option Plan), accrued
vacation pay and any appropriate business expenses incurred by Employee in
connection with his duties hereunder, all to the date of termination, and all
severance compensation provided in Section 4.1, but no other compensation or
reimbursement of any kind.

2.9  Notice of Termination.  Corporation may effect a termination of this
Agreement pursuant to the provisions of this Section upon giving thirty (30)
days' written notice to Employee of such termination.  Employee may effect a
termination of this Agreement pursuant to the provisions of this Section upon
giving thirty (30) days' written notice to Corporation of such termination.

Section 3.  Salary, Benefits and Bonus Compensation.

3.1  Base Salary.  As payment for the services to be rendered by Employee as
provided in Section 1 and subject to the terms and conditions of Section 2,
Corporation agrees to pay to Employee a "Base Salary" for the twelve (12)
calendar months beginning the Effective Date at the rate of $220,000.00 per
annum payable in twenty-six equal, bi-weekly installments of $8,461.54.
Employee's Base Salary shall be reviewed annually by the Compensation
Committee of the Board of Directors ("Compensation Committee"), and the Base
Salary for each year (or portion thereof) beginning February 1, 1999 shall be
determined by the Compensation Committee which shall authorize an increase in
Employee's Base Salary for such year in an amount which, at a minimum, shall
be equal to the cumulative cost-of-living increment on the Base Salary as
report in the "Consumer Price Index, All Items," published by the U.S.
Department of Labor (using February 1, 1998 as the base date for computation).

3.2  Bonuses.  Employee shall be eligible to receive a discretionary bonus for
each year (or portion thereof) during the term of this Agreement and any
extensions thereof, with the actual amount of any such bonus to be determined
in the sole discretion of the Board of Directors based upon its evaluation of
Employee's performance during such year.  All such bonuses shall be reviewed
annually by the Compensation Committee.

3.3  Additional Benefits.  During the term of this Agreement, Employee shall
be entitled to the following fringe benefits:

     3.3.1  Employee Benefits.  Employee shall be eligible to participate in
such of Corporation's benefits and deferred compensation plans as are now
generally available or later made generally available to executive officers of
the Corporation, including, without limitation, Corporation's Stock Option
Plan, profit sharing plans, annual physical examinations, dental and medical
plans, personal catastrophe and disability insurance, financial planning,
retirement plans and supplementary executive retirement plans, if any.  For
purposes of establishing the length of service under any benefit plans or
programs of Corporation, Employee's employment with the Corporation will be
deemed to have commenced on September 30, 1994.
<PAGE>
     3.3.2  Vacation.  Employee shall be entitled to two (2) weeks of vacation
during each year during the term of this Agreement and any extensions thereof,
prorated for partial years.

     3.3.3  Life Insurance.  For the term of this Agreement and any extensions
thereof, Corporation shall at its expense procure and keep in effect term life
insurance on the life of Employee payable to the Estate of the Employee the
minimum aggregate amount of Two Million ($2,000,000.00) dollars.

     3.3.4  Automobile Allowance.  For the term of this agreement and any
extensions thereof the corporation shall provide officer with an automobile
allowance of $1,000 per month.

     3.3.5  Reimbursement for Expenses.  During the term of this Agreement,
Corporation shall reimburse Employee for reasonable and properly documented
out-of-pocket business and/or entertainment expenses incurred by Employee in
connection with his duties under this Agreement.

Section 4.  Severance Compensation.

4.1  Severance Compensation in the Event of a Termination Upon a Change in
Control.  In the event Employee's employment is terminated in a Termination
Upon a Change in Control, Employee shall be paid as severance compensation his
Base Salary (at the rate payable at the time of such termination), for the
remaining portion of the Term of this Agreement.  Employee shall continue to
accrue retirement benefits and shall continue to enjoy any benefits under any
plans of the Corporation in which Employee is a participant to the full extent
of Employee's rights under such plans, including any perquisites provided
under this Agreement, though the remaining term of this Agreement.
Notwithstanding anything in this Section to the contrary, Employee may in
Employee's sole discretion, by delivery of a notice to Corporation within
thirty (30) days following a Termination Upon a Change in Control, elect to
receive from Compensation a lump sum severance payment by bank cashier's check
equal to the present value of the flow of cash payments that would otherwise
be paid to Employee pursuant to this Section.  Employee shall also be entitled
to an accelerated vesting of any awards granted to Employee under the
Corporation's Stock Option Plan to the extent provided in the stock option
agreement entered into at the time of grant.  Employee shall continue to
accrue retirement benefits and shall continue to enjoy any benefits under any
plans of the Corporation in which Employee is a participant to the full extent
of Employee's rights under such plans, including any perquisites provided
under this Agreement, though the remaining term of this Agreement; provided,
however, that the benefits under any such plans of the Corporation in which
Employee is a participant, including any such perquisites, shall cease upon
re-employment by a new employer.

     4.1.1  Purchase of Shares Held by Employee and Insurance Coverage.  In
the event Employee's employment is terminated in a Termination Upon a Change
in Control, the Corporation will also be required, at the sole option of the
Employee, to redeem a minimum of fifty percent (50%) of the Corporation stock,
or any stock dividends thereof, owned by the Employee as of the Effective
Date, that are owned by the employee at the date of severance.  The price to
be paid will be the market determined value at the close of business at the
date of severance.  If a public market has not been created, or is not in
existence at the time of severance, then the price to be paid shall be the
most recent share price obtained in any private offering of the Corporation
shares of common stock.  In the event Employee's employment is terminated in a
Termination Upon a Change in Control, the Corporation will also provide family
medical insurance consistent with coverages extended to other employees until
the Employee reaches the age of sixty five (65).  The requirement that the
Corporation purchase family medical insurance shall be excused during any
period of subsequent employment where the new employer provides equal or
better coverage.
<PAGE>
4.2  Severance Compensation in the Event of a Termination Other Than for
Cause.  In the event Employee's employment is terminated in a Termination
Other Than for Cause, Employee shall be paid as severance compensation his
Base Salary (at the rate payable at the time of such termination), for a
period equal to the remaining portion of the Term of this Agreement.
Employee may, in Employees sole discretion, by delivery of a notice to the
Corporation within thirty (30) days following a Termination Other Than for
Cause, elect to receive from Corporation a lump sum severance payment by
cashiers check equal to the present value of the flow of cash payments that
would otherwise be paid to Employee pursuant to this Section.  Employee shall
be entitled to an accelerated vesting of any awards granted to Employee under
Corporation's Stock Option Plan to the extent provided in the stock option
agreement entered into at the time of grant.

     4.2.1  Purchase of Shares Held by Employee and Insurance Coverage. In the
event Employee's employment is terminated in a Termination Other Than for
Cause, the Corporation will also be required, at the sole option of the
Employee, to redeem a minimum of fifty percent (50%) of the Corporation stock,
or any stock dividends thereof, owned by the Employee as of the Effective
Date, that are owned by the employee at the date of severance.  The price to
be paid will be the market determined value at the close of business at the
date of severance.  If a public market has not been created, or is not in
existence at the time of severance, then the price to be paid shall be the
most recent share price obtained in any private offering of the Corporation
shares of common stock.  In the event Employee's employment is terminated in a
Termination Other Than for Cause, the Corporation will also provide family
medical insurance consistent with coverages extended to other employees until
the Employee reaches the age of sixty five (65).  The requirement that the
Corporation purchase family medical insurance shall be excused during any
period of subsequent employment where the new employer provides equal or
better coverage.

4.3  No Severance Compensation Upon Other Termination.  In the event of a
Voluntary Termination, Termination For Cause, termination by reason of
Employee's disability pursuant to Section 2.6, Employee or his estate shall
not be paid any severance compensation.

Section 5.  Outside Activities of Employee.  Corporation acknowledges that
Employee has commitments and business activities not related to the
Corporation and that certain of these commitments and business affairs involve
activities in the long term care industry.  There shall be no restriction on
Employee's ability to fulfill such commitments or engage in such business
activities, provided that during the term of Employee's employment under this
Agreement or for a period of six months after the termination of such
employment (other than a Termination Other Than For Cause or a Termination
Upon Change in Control) Employee shall not divert away from the Corporation,
for officers personal benefit, or for the benefit of an organization in which
officer has a material financial interest, any opportunity, arising during
such period to pursue such opportunities personally unless the Board of
Directors of the corporation have determined not to pursue such opportunity.

Section 6.  Payment Obligations.  Corporation's obligation to pay Employee the
compensation and to make the arrangements provided herein shall be
unconditional, and Employee shall have no obligation whatsoever to mitigate
damages hereunder.  If litigation after a Change in Control shall be brought
to enforce or interpret any provision contained herein, Corporation, to the
extent permitted by applicable law and the Corporations' Articles of
Incorporation and Bylaws, hereby indemnifies Employee for Employee's
reasonable attorneys' fees and disbursements incurred in such litigation.

Section 7.  Confidentiality.  Employee agrees that all confidential and
proprietary information relating to the business of Corporation shall be kept
and treated as confidential both during and after the term of this Agreement,
except as may be permitted in writing by Corporation's Board of Directors or
as such information is within the public domain or comes within the public
domain without any breach of this Agreement.
<PAGE>
Section 8.  Withholdings.  All compensation and benefits to Employee hereunder
shall be reduced by all federal, state, local and other withholdings and
similar taxes and payments required by applicable law.

Section 9.  Indemnification.  In addition to any rights to indemnification to
which Employee is entitled to under the Corporation's Articles of
Incorporation and Bylaws, Corporation shall indemnify Employee at all times
during and after the term of this Agreement to the maximum extent permitted
under Washington Business Corporation Act or any successor provision thereof
and any other applicable state law, and shall pay Employee's expenses in
defending any civil or criminal action, suit, or proceeding in advance of the
final disposition of such action, suit or proceeding, to the maximum extent
permitted under such applicable state laws.

Section 10.  Notices.  Any notices permitted or required under this Agreement
shall be deemed given upon the date of personal delivery or forty-eight (48)
hours after deposit in the United States mail, postage fully prepaid, return
receipt requested, addressed to the Corporation at:

     325 West Main Street, Suite 1400 B
     Louisville, Kentucky 40202

addressed to the Employee at:

     1011 Alta Vista Drive
     Louisville, Ky. 40205

or at any other address as any party may, from time to time, designate by
notice given in compliance with this Section.

Section 11. Law Governing.  This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Kentucky.

Section 12. Titles and Captions.  All section titles or captions contained in
this Agreement are for convenience only and shall not be deemed part of the
context nor effect the interpretation of this Agreement.

Section 13. Entire Agreement.  This Agreement contains the entire
understanding between and among the parties and supersedes any prior
understandings and agreements among them respecting the subject matter of this
Agreement.

Section 14. Agreement Binding.  This Agreement shall be binding upon the
heirs, executors, administrators, successors and assigns of the parties
hereto.

Section 15. Attorney Fees.  In the event an arbitration, suit or action is
brought by any party under this Agreement to enforce any of its terms, or in
any appeal therefrom, it is agreed that the prevailing party shall be entitled
to reasonable attorneys fees to be fixed by the arbitrator, trial court,
and/or appellate court.

Section 16. Computation of Time.  In computing any period of time pursuant to
this Agreement, the day of the act, event or default from which the designated
period of time begins to run shall be included, unless it is a Saturday,
Sunday, or a legal holiday, in which event the period shall begin to run on
the next day which is not a Saturday, Sunday, or legal holiday, in which event
the period shall run until the end of the next day thereafter which is not a
Saturday, Sunday, or legal holiday.

Section 17. Pronouns and Plurals.  All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular, or
plural as the identity of the person or persons may require.

<PAGE>
Section 18. Arbitration.  If at any time during the term of this Agreement any
dispute, difference, or disagreement shall arise upon or in respect of the
Agreement, and the meaning and construction hereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed upon
by the parties, or if no single arbiter can be agreed upon, an arbiter or
arbiters shall be selected in accordance with the rules of the American
Arbitration Association and such dispute, difference, or disagreement shall be
settled by arbitration in accordance with the then prevailing commercial rules
of the American Arbitration Association, and judgment upon the award rendered
by the arbiter may be entered in any court having jurisdiction thereof.

Section 19. Presumption.  This Agreement or any section thereof shall not be
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.

Section 20. Further Action.  The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.

Section 21. Parties in Interest.  Nothing herein shall be construed to be to
the benefit of any third party, nor is it intended that any provision shall be
for the benefit of any third party.

Section 22. Savings Clause.  If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.

Section 23. Separate Counsel.  The parties acknowledge that the Corporation
has been represented in this transaction by the J. Bruce Miller Law Group,
that the Employee has not been represented in this transaction by the
Corporation's attorneys, and the Employee has been advised that it is
important for the Employee to seek separate legal advise and representation in
this matter.

Date: February 1, 1998

In-House Rehab Corporation
   a Colorado Corporation

By:/s/ /s/ Robert Babine                  /s/ David V. Hall
   Robert Babine, Authorized Director     David V. Hall, Individually