EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT is made and entered into as of the 1st day of
August 1997, by and between NEWCARE HOSPITAL CORPORATION, a Georgia
Corporation,
hereinafter sometimes referred to as "EMPLOYER" and Arthur M. Doloresco
hereinafter sometimes referred to as "EMPLOYEE".

     WHEREAS, the EMPLOYER has offered and the EMPLOYEE has accepted
employment
upon certain terms and conditions; and

     WHEREAS, the parties desire to reduce the employment agreement in
writing;

     NOW, THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS:

                             W I T N E S S E T H :

                                  ARTICLE I.
                               DUTIES AND TERM

     FOR AND IN CONSIDERATION of Ten ($10.00) Dollars, and other good and
valuable considerations exchanged between the parties, receipt of which is 
hereby
acknowledged, 

     The EMPLOYER does hereby employ the EMPLOYEE for a term of three (3)
years
to commence on the first day of August 1997 (the "Expected Term"),unless
sooner
terminated as provided hereinafter below.

     THE EMPLOYEE shall serve in a capacity with the EMPLOYER as President.
The
EMPLOYEE shall devote his full time, undivided attention and full business
efforts to his duties as an employee of the Corporation which shall include
but
are not limited to the following:

     (a) Hire, train and employ all employees under him as may be required on
behalf of the Corporation for the Corporation to conduct its business in an
orderly fashion; 

     (b) Maintain fiscal responsibility by keeping or causing to be kept all
necessary financial books and records of the EMPLOYER in a customary and
orderly
fashion;

     (c) Report to the EMPLOYER's Board as from time to time shall be directed
to the EMPLOYEE;

     (d) Perform his duties in a professional manner and in the best interest
of the EMPLOYER.

     (e) Refrain from engaging in other business enterprises either directly
or
indirectly during this Agreement without the express prior written approval of
EMPLOYER; provided, however, nothing herein shall prohibit or limit EMPLOYEE 
from
holding non-controlling interests in publically-traded entities.

                                   ARTICLE II.
                             COMPENSATION AND BENEFITS

     The EMPLOYER shall reimburse EMPLOYEE for all reasonable expenses
incurred
by EMPLOYEE in his performance hereunder and pay to the EMPLOYEE an annual 
salary
of Three Hundred Twenty-Five Thousand and 00/100 Dollars ($325,000) beginning
August 1, 1997, Three Hundred Fifty Thousand and 00/100 Dollars ($350,000)
beginning August 1, 1998 and Three Hundred Seventy-Five Thousand and 00/100
Dollars ($375,000) beginning August 1, 1999, payable no less frequently than
monthly and otherwise in accordance with normal payroll procedures. In
addition,
EMPLOYEE shall be entitled to receive an annual bonus based on the following
schedule, determined by reference to Applicable Periods (each such Applicable
Period consisting of a full calendar year or so much of a calendar year as
coincides with the term hereof) and appropriately prorated in the case of an
Applicable Period which consists of less than a full calendar year: $200,000
in
any Applicable Period in which EBITDAR exceeds 20% of the net revenue of the
EMPLOYER; $275,000 in any Applicable Period in which EBITDAR exceeds 25% of
the
net revenue of the EMPLOYER; or $350,000 in any Applicable Period in which
EBITDAR exceeds 30% of the net revenue of the EMPLOYER.

     The EMPLOYER shall provide health and dental insurance (Family Coverage)
to the EMPLOYEE upon the standard group policy of the EMPLOYER or NewCare
Health
Corporation ("NWCA"), for each benefit whichever is more favorable for
beneficiaries. The EMPLOYEE shall receive three (3) weeks paid vacation and 5
days paid sick leave each year of the Agreement. The EMPLOYER shall provide
EMPLOYEE $1,000,000 term life insurance during the term of this Agreement.
EMPLOYEE shall be entitled to participate in all stock purchase plans and
401(k)
plans otherwise available to senior executives of the EMPLOYER or NWCA, for
each
benefit whichever is more favorable for beneficiaries.

     The EMPLOYER shall promptly reimburse EMPLOYEE for all reasonable moving
expenses associated with relocating from Houston, Texas to Atlanta, Georgia
(including the transport of two motor vehicles and reasonable transportation,
lodging and meal expense for EMPLOYEE and EMPLOYEE's spouse associated with
locating a residence in Atlanta), provided, however, such amounts shall be
promptly returned to EMPLOYER in the event this agreement is terminated on or
before July 31, 1998 by EMPLOYER for cause as hereinafter defined or by
EMPLOYEE
other than for cause. On or before August 15, 1997 EMPLOYER shall purchase
from
EMPLOYEE (or cause to be purchased from EMPLOYEE) EMPLOYEE's existing
residence
in Houston, Texas (the "Existing Residence") for the price paid by EMPLOYEE
(the
"Purchase Price") for such residence (such price being approximately
$542,000),
and EMPLOYER shall also pay EMPLOYEE an additional amount (the "Gross-up 
Amount")
equal to the sum of all income taxes payable by EMPLOYEE related to (i) the
difference between the Purchase Price and the fair market value of the
Existing
Residence and (ii) the Gross-up Amount; provided, however, that in the event
EMPLOYEE sells the Existing Residence prior to the purchase by EMPLOYER (and
if
EMPLOYEE has obtained EMPLOYER's consent if the purchase price is less than
the
Purchase Price), EMPLOYER shall pay EMPLOYEE the difference, if any, between
the
Purchase Price and the purchase price paid by the third party of the Existing
Residence and an additional amount (the "Third Party Gross-up Amount") equal
to
the sum of all income taxes payable by EMPLOYEE related to (y) the difference
between the Purchase Price and the purchase price paid by the third party and 
(z)
the Third Party Gross-up Amount. If this Agreement is terminated on or before
July 31, 1998 by EMPLOYER for cause or notice is given by EMPLOYEE to EMPLOYER
on or before July 31, 1998 that EMPLOYEE intends to terminate this Agreement
other than for cause, EMPLOYEE shall promptly pay EMPLOYER all amounts paid by
EMPLOYER to EMPLOYEE pursuant to the preceding sentence less amounts received
by
EMPLOYER upon the sale of the Existing Residence by EMPLOYER.

     As additional compensation, EMPLOYEE shall receive, within 5 days
following
execution hereof by the later signing party, 5 shares of the existing capital
stock of the EMPLOYER (without preemptive rights), subject to and legended to
describe the vesting schedule described below. EMPLOYER hereby represents and
warrants that (x) EMPLOYER's authorized capital stock currently consists of 
1,000
shares of common stock and (y) except for the 5 shares to be issued to
EMPLOYEE
hereunder and 95 shares issued and/or to be issued to NWCA or its designees
and/or Dan Carter or his designees ("Carter"), there is no present intention,
plan or agreement for the issuance of any shares of EMPLOYER's stock;
provided,
however, EMPLOYER and EMPLOYEE acknowledge and agree that nothing herein shall
prohibit or limit EMPLOYER's right to issue additional capital stock of
EMPLOYER
or to otherwise alter the capital structure of EMPLOYER. EMPLOYEE hereby
acknowledges and agrees that he has and shall have no interest in any of the
95
shares issued or to be issued to NWCA and/or Carter, whether or not any such
shares are in fact issued to Carter. EMPLOYER and EMPLOYEE agree that the
aggregate fair market value of the shares to be issued to EMPLOYEE hereunder,
determined without taking into account (and therefore without reduction for)
the
vesting schedule with respect to such shares, is Fifty Dollars ($50.00). The
shares os stock to be issued to EMPLOYEE shall vest as follows if EMPLOYEE is
still employed by EMPLOYER: 1 share on July 31, 1998; 1 share on July 31,
1999;
1 share on July 31, 2000; 1 share on July 31, 2001; and 1 share on July 31, 
2002;
provided, however, in the event this Agreement is not renewed or extended
beyond
July 31, 2000, but EMPLOYEE remained employed until that date, the remaining 3
shares (including the 1 share which would vest on July 31, 2000 described
above)
shall vest on July 31, 2000; further provided, however, that the entire 5
shares
shall immediately vest (i) in the event of termination of this Agreement by
EMPLOYER other than for cause or by EMPLOYEE for cause or (ii) in the event of
a business combination of EMPLOYER (merger, sale, etc.) in which (y) EMPLOYER
is
not the surviving entity or (z) the current Board of Directors of EMPLOYER (or
their designees) does not control the Board of Directors of the surviving
entity
(where, for this purpose the phrase "surviving entity" means the entity,
which,
after the subject transaction, owns all or substantially all of the assets
formerly owned by EMPLOYER and conducts all or substantially all of the
business
formerly conducted by EMPLOYER). EMPLOYER and EMPLOYEE acknowledge that,
contemporaneously herewith, NWCA will grant to EMPLOYEE under NWCA's stock 
option
plan an option to purchase 50,000 shares of common stock at the closing price
on
the date hereof, exercisable for a period of five years so long as EMPLOYEE
remains employed by EMPLOYER, all as more particularly described in the form
of
option agreement attached hereto as Exhibit "A"

                                   ARTICLE III.
                               RESTRICTIVE COVENANTS

     The EMPLOYEE further covenants and agrees that he will not, during the
term
of this Agreement and if this agreement is terminated (i) by EMPLOYER for
cause
or (ii) by EMPLOYEE other than for cause, for a period of two (2) years
immediately following the termination of this Agreement, engage or be employed
by a business entity which engages in competition with the primary business of
the EMPLOYER. For purposes of this Agreement, the primary business of the
EMPLOYER is the operation and management of hospital facilities. This 
restrictive
covenant shall apply in (and only in) a geographic area within twenty-five
(25)
miles of each city or cities in which the EMPLOYER or any of its subsidiaries
operates a hospital at the time of termination of this Agreement. This
restrictive covenant is applicable to employment or service directly or
indirectly by the EMPLOYEE through consultation, advice or other indirect 
methods
of competition. The EMPLOYEE is further restricted upon expiration of the term
of this Agreement or upon termination of this Agreement by EMPLOYER for cause
or
by EMPLOYEE other than for cause from the employment of or offer of employment
to any other employees of EMPLOYER or its subsidiaries or from engaging in 
business in partnership or joint ownership of another business entity with any
other employee of EMPLOYER or its subsidiaries for a period of twelve (12) 
months
after such expiration or termination of this Agreement.

     The EMPLOYEE agrees that during the course of his employment, he will
acquire information and knowledge respecting the confidential affairs of the
EMPLOYER in various phases of its business. Accordingly, the EMPLOYEE agrees 
that
he shall not, at any time, use for himself or disclose to any other person not
employed by EMPLOYER or its subsidiaries, any such knowledge or information
heretofore acquired or acquired during the term of this Agreement. He further
agrees that all memorandums, notes, records, papers and other documents and
all
copies thereof relating to EMPLOYER's operation or business, some of which may
be prepared by him, and all other objects associated therewith and in any way
obtained by him, shall be EMPLOYER's property. This shall include, but is not
limited to, documents and objects, concerning any process, system, approach,
technique, consultation or advice to clients, business techniques and other 
trade
secrets. At the conclusion of this Agreement, whether voluntarily or
involuntarily, the EMPLOYEE shall deliver all such documents and objects that 
may
be in his possession to EMPLOYER, together with his written certification of
compliance. 

     The parties further agree that should the EMPLOYEE violate the terms of
this restrictive covenant, EMPLOYER shall be entitled to not only monetary
damages as may be assessed by a Court of competent jurisdiction, but in 
addition, extraordinary injunctive relief to prohibit continued violation of 
these restrictive covenants.

                                   ARTICLE IV.
                                   TERMINATION

     4.1 Termination by EMPLOYER for cause. EMPLOYER reserves the right to
terminate this Agreement at any time for any of the following reasons: 

     (1) EMPLOYEE shall fail to perform or comply with any term or condition
of
this Agreement and such failure continues for a period of (10) days (or such
longer period as is reasonable in the circumstances, but in any event 
terminating at the earliest moment that EMPLOYEE is no longer prosecuting 
such cure with reasonable diligence) following EMPLOYEE's receipt of a notice
from EMPLOYER which describes such failure in reasonable detail; 

     (2) EMPLOYEE commits any offense involving moral turpitude which would
offend public decency or morality, or causes EMPLOYEE or EMPLOYER public 
ridicule or scorn; 

     (3) EMPLOYEE knowingly violates any federal, state or local laws or
ordinances for which EMPLOYER might become liable. Termination for cause for
any
of the above described reasons shall be immediately effective upon notice from
the EMPLOYER to the EMPLOYEE.

     In the event of termination for cause by EMPLOYER, compensation and any
and
all benefits to which EMPLOYEE is entitled, unless otherwise provided by law,
shall cease at midnight on the date of notice of termination and EMPLOYEE
shall
have five (5) days within which to exercise any stock options previously
granted
to EMPLOYEE hereunder. For all purposes of this Agreement, termination of this
Agreement shall be considered termination "by EMPLOYER for cause" if and only
if
such termination is pursuant to this section 4.1.

     4.2 Termination by EMPLOYER Other Than for Cause. EMPLOYER reserves the
right to terminate this Agreement other than for cause at any time upon notice
to EMPLOYEE, upon which termination, however, EMPLOYER shall pay severance
equal
to the lesser of (i) twelve (12) month's salary or (ii) the amount equal to
the
sum of the salary to be paid during the remaining term of this Agreement and
the
amount which would be payable (absent renewal or extension hereof) upon
expiration of this Agreement pursuant to section 4.5 of this Agreement. For
all
purposes of this Agreement, termination of this Agreement shall be considered
termination "by EMPLOYER other than for cause" if and only if such termination
is pursuant to this section 4.2.

     4.3 Termination by EMPLOYEE for Cause. EMPLOYEE reserves the right to
terminate this Agreement at any time for any of the following reasons:

     (1) EMPLOYER shall fail to perform or comply with any term or condition
of
this Agreement and such failure continues for a period of thirty (30) days (or
such longer period as is reasonable in the circumstances, but in any event
terminating at the earliest moment that EMPLOYER is no longer prosecuting such
cure with reasonable diligence) following EMPLOYER's receipt of a notice from
EMPLOYEE which describes such failure in reasonable detail; or 

     (2) EMPLOYER directs EMPLOYEE to take action (or to refrain from taking
action) which action (or refraining from action) is reasonably believed by
EMPLOYEE to constitute a violation of federal state or local laws or
ordinances
or professional or ethical or moral standards, in any case if (and only if)
EMPLOYER fails to withdraw such direction within a reasonable time after being
notified by EMPLOYEE of EMPLOYEE's such belief and EMPLOYEE'S intent to 
terminate this Agreement: if EMPLOYER fails to withdraw such direction.

     Termination for cause for any of the above described reasons shall be
immediately effective upon notice from EMPLOYEE to EMPLOYER. In the event of
termination for cause by EMPLOYEE, EMPLOYEE shall be entitled to compensation
 and
all benefits applicable through the date of termination, together with
severance
equal to the lesser of (i) twelve ( 12) month's salary or (ii) the amount
equal
to the sum of the salary to be paid during the remaining term of this
Agreement
and the amount which would be payable (absent renewal or extension hereof)
upon
expiration of this Agreement pursuant to section 4.5 of this Agreement. For
all
purposes of this Agreement, termination of this Agreement shall be considered
termination "by EMPLOYEE for cause" if and only if such termination is
pursuant
to this section 4.3.

     4.4 Termination by EMPLOYEE Other Than for Cause. EMPLOYEE reserves the
right to terminate this Agreement other than for cause on at least twelve (12)
month's notice; provided, however, EMPLOYEE's vesting of additional capital 
stock pursuant to Article 2 shall terminate immediately (not at the time of 
termination of employment) and EMPLOYER shall have the option to thereafter 
terminate EMPLOYEE at any time upon notice to EMPLOYEE and pay EMPLOYEE 
severance equal to twelve (12) month's salary less (i) all amounts paid by 
EMPLOYER to EMPLOYEE after the date of notice of termination from EMPLOYEE 
to EMPLOYER and (ii) any amounts to be paid by EMPLOYEE to EMPLOYER pursuant 
to Article 2 of this Agreement. For all purposes of this Agreement. 
Termination of this Agreement shall be considered termination "by EMPLOYEE 
other than for cause" if and only if such termination is pursuant to this 
section 4.4. 

     4.5 Expiration. Not less than 180 days prior to the end of the Expected
Term, EMPLOYER and EMPLOYEE agree to negotiate in good faith to renew or
extend
the term of this Agreement. In the event EMPLOYER and EMPLOYEE have not agreed
to renew or extend the term of this Agreement on or before 90 days prior to
the 
end of the Expected Term, EMPLOYEE shall be permitted to spend reasonable
portions of each business day to seek other employment; provided, however,
EMPLOYEE shall be required to perform the duties required of EMPLOYEE
hereunder.
Upon termination of EMPLOYER's employment of EMPLOYEE as a result of the
expiration of the Expected Term (and not as a result of the application of any
previous section in this Article IV), EMPLOYEE shall be entitled to continue
to
receive compensation and all benefits applicable through the last day of the
Expected Term, as well as continuation of EMPLOYEE's base salary only for the
shorter of (i) six (6) months or (ii) until such time as EMPLOYEE is otherwise
employed; provided, however, EMPLOYER shall continue to pay EMPLOYEE the
difference, if any, between EMPLOYEE's base salary at the time of expiration
of
the Expected Term and EMPLOYEE's bona fide salary with his new employer until 
the
expiration of the six (6) month period after the end of the Expected Term.

                                   ARTICLE V.
                                 MISCELLANEOUS

     This Agreement shall be governed by and construed in accordance with the
laws of the State of Georgia. Should any particular provision or paragraph or
article of this Agreement be determined by a Court of competent jurisdiction
to
be illegal, then the remaining provisions shall be severable and legally 
binding.

     This Agreement shall inure to and be binding upon the Executors,
Administrators, and personal representatives of the EMPLOYEE and the
EMPLOYER'S
assigns or successors in interest.  Should it become necessary to enforce any
of
the terms, provisions or obligations in this Agreement by litigation, the
non-prevailing party shall pay the other party's reasonable attorney fees
actually incurred in such litigation. 

     All notices and other communications hereunder shall be effective if and
only if in writing and delivered personally, sent by Federal Express or
similar
nationally recognized carrier, or mailed by registered or certified mail
(return
receipt requested), charges, or postage prepaid, to the addressee at the
addressee's address most recently supplied by the addressee to the sender by
effective notice hereunder (or, prior to such notice, at the address for the
addressee set forth below): 

     (a) if to EMPLOYER, to

          NewCare Hospital Corporation
          6000 Lake Forrest Drive, Suite 200
          Atlanta, Georgia 30328
          Attn:     General Counsel

     (b) if to EMPLOYEE, to

          Arthur M. Doloresco
          c/o Michael G. Wasserman
          Holt Ney 2,atcoff & Wasserman, LLP
          100 Galleria Parkway, Suite 600
          Atlanta, Georgia 30339

Unless otherwise provided herein, written notices so delivered, sent or mailed
shall be effective on the earlier of (x) actual delivery or (y) as applicable,
either (i) the first business day following the date of deposit with a 
qualified
courier service or (ii) the third business day following the date of deposit 
with
the United States Postal Service. Any refusal to accept delivery of any such
communication shall be considered successful delivery and receipt thereof.

     The parties acknowledge that EMPLOYEE is obliged to provide at least
thirty
(30) days' notice to his present employer of termination of such~ employment.
To
the extent that such obligation delays EMPLOYEE from commencing employment
hereunder on August 1, 1997, such delay shall be excused, but in no event
beyond
the sooner of (i) the fortieth (40th) day following execution hereof by the 
later
signing party or (ii) the tenth (10th) day following release of EMPLOYEE by
EMPLOYEE's current employer (and EMPLOYEE shall be entitled to no compensation
or benefits for the period between August 1, 1997 and the date of his actual
commencement of employment hereunder.

     IN WITNESS WHEREOF, the parties have executed this Agreement on this 17th
day of July 1997.

EMPLOYER:

NEWCARE HOSPITAL CORPORATION

By:/s/ Chris Brogdon
Its:  President

EMPLOYEE:

/s/ Arthur M. Doloresco

NEWCARE HEALTH CORPORATION, as parent of EMPLOYER hereby guarantees the
performance of the obligations of EMPLOYER hereunder 

NEWCARE HEALTH CORPORATION

By: /s/ Chris Brogdon
Its: Chairman