SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


|X|     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

        For the quarterly period ended January 31, 1997

                                       OR
 _
|_|     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

        For the transition period from ______________ to ________________


                         Commission file number 0-12927

                         NATIONAL HOME HEALTH CARE CORP.
          ------------------------------------------------------------
             (Exact name of Registrant as Specified in Its Charter)

           Delaware                                      22-2981141
  --------------------------                     ------------------------------
(State or Other Jurisdiction of                (IRS Employer Identification No.)
 Incorporation or Organization)

                700 White Plains Road, Scarsdale, New York 10583
                ------------------------------------------------
             (Address of Principal Executive Offices with Zip Code)

         Registrant's Telephone Number Including Area Code: 914-722-9000

--------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year,if Changed Since Last Report.
 

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required by Section 12, 13 or 15(d) of the  Securities  Exchange Act of
1934 subsequent to the  distribution  of securities  under a plan confirmed by a
court. Yes _____ No____

APPLICABLE ONLY TO CORPORATE ISSUERS:

The  number  of  shares of common  stock  outstanding  as of March 14,  1997 was
5,095,321

                                       -1-

<PAGE>



                         NATIONAL HOME HEALTH CARE CORP.

                                    FORM 10-Q

                     FOR THE QUARTER ENDED JANUARY 31, 1997



PART I.        FINANCIAL INFORMATION                                       Page 


Item 1.        Financial Statements
          
               Consolidated Balance Sheets as of January 31, 1997
               and July 31, 1996 (unaudited)                               3-4

               Consolidated  Statements of Operations for the three 
               months ended January  31,  1997 and  January  31, 1996 
               and six  months  ended January 31, 1997 and January 
               31, 1996 (unaudited)                                           5

               Consolidated  Statements of Cash Flows for the six months 
               ended January 31, 1997 and January 31, 1996 (unaudited)        6

               Notes to Consolidated Financial Statements                     7

Item 2.        Management's Discussion and Analysis of Financial
               Condition and Results of Operations                         8-10


PART II.       OTHER INFORMATION

Item 6.        Exhibits and Reports on Form 8-K                           11-12
                                                                              
SIGNATURES                                                                   13

                                       -2-

<PAGE>



                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                    UNAUDITED



<TABLE>
<CAPTION>
                                                                January 31, 1997               July 31, 1996   
                                                                 --------------                      -------------

ASSETS

Current assets:
<S>                                                             <C>                              <C>         
      Cash and cash equivalents                                 $  9,616,000                     $  8,929,000
      Investments                                                    518,000                          528,000
      Accounts receivable-less allowance for doubtful
            accounts of $372,000 at January 31, 1997 and
            $414,000 at July 31, 1996                              8,234,000                        8,499,000
      Income taxes receivable                                        317,000                          203,000
      Prepaid expenses and other assets                              297,000                          218,000
      Deferred taxes                                                 248,000                          304,000
                                                                ------------                     ------------

            Total current assets                                  19,230,000                       18,681,000

Furniture, equipment and leasehold improvements, net                 352,000                          319,000
Excess of cost over fair value of net assets of
      businesses acquired, net                                     2,494,000                        2,557,000
Other intangible assets, net                                          97,000                          132,000
Deposits and other assets                                            110,000                          110,000
Investment in unconsolidated investee                              2,444,000                        2,622,000
                                                                  ----------                       ----------
            TOTAL                                                $24,727,000                      $24,421,000
                                                                  ==========                       ==========
           


 (Continued)


                                       -3-

<PAGE>



                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                    UNAUDITED



                                                                January 31, 1997                 July 31, 1996
                                                                ----------------                 -------------
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
      Accounts payable and accrued expenses                    $  1,003,000                     $  1,315,000
      Estimated third-party payor settlements                       725,000                        1,078,000
                                                                -----------                      -----------

            Total current liabilities                             1,728,000                        2,393,000

Deferred tax liability                                              464,000                          524,000
                                                                -----------                      -----------

            Total liabilities                                     2,192,000                        2,917,000

Stockholders' equity:
      Common stock, $.001 par value; authorized
            20,000,000 shares, issued 6,050,321 shares                6,000                            6,000
      Additional paid-in capital                                 17,660,000                       17,660,000
      Retained earnings                                           5,820,000                        4,789,000
                                                                -----------                      -----------
                                                                 23,486,000                       22,455,000

Less treasury stock (955,000 shares) at cost                       (951,000)                        (951,000)
                                                               ------------                      -----------

            Total stockholders' equity                           22,535,000                       21,504,000
                                                                 ----------                       ----------

                      TOTAL                                     $24,727,000                      $24,421,000
                                                                 ==========                       ==========




See accompanying notes to consolidated financial statements.

                                       -4-

<PAGE>



                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                    UNAUDITED



                                             For the three months ended                           For the six months ended
                                                     January 31,                                         January 31,
                                                    -------------                                       ------------
                                              1997                   1996                 1997                        1996
                                              ----                   ----                 ----                        ----

Net patient revenue                        $ 8,692,000            $ 9,965,000          $17,378,000                 $20,039,000
                                           -----------            -----------          -----------                 -----------

Operating expenses:
      Cost of revenue                        5,633,000              6,162,000           11,324,000                  12,709,000
      General and administrative             2,119,000              2,963,000            4,188,000                   5,655,000
      Amortization of intangibles               49,000                 73,000               97,000                     146,000
                                          ------------           ------------         ------------                ------------

            Total operating expenses         7,801,000              9,198,000           15,609,000                  18,510,000
                                            ----------             ----------           ----------                  ----------

Income from operations                         891,000                767,000            1,769,000                   1,529,000

Other income:
      Interest income                          103,000                 99,000              208,000                     203,000
      (Loss) from equity investee             (148,000)                                   (178,000)
                                           -----------           -------------           ----------

Income before taxes                            846,000                866,000            1,799,000                   1,732,000

Provision for income taxes                     353,000                395,000              768,000                     809,000
                                           -----------            -----------          -----------                 -----------

NET INCOME                                $    493,000           $    471,000          $ 1,031,000                $    923,000
                                           -----------            ===========           ==========                 ===========

Net income per share of
      common stock                     $          0.10        $          0.09      $          0.20             $          0.18
                                        ==============         ==============       ==============              ==============
                                             5,095,321              5,002,256            5,095,321                   5,001,708
Weighted average
      shares outstanding


See accompanying notes to consolidated financial statements.


                                       -5-

<PAGE>



                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS AND CASH FLOWS
                                    UNAUDITED


                                                                                           For the six months ended
                                                                                                 January 31,
                                                                                        ------------------------------------
                                                                                          1997                   1996
                                                                                          ----                   ----

Cash flows from operating activities:
      Net income                                                                       $1,031,000           $    923,000
      Adjustments to reconcile net income to net cash provided by
      operating activities:
            Depreciation and amortization                                                 151,000                247,000
            Loss from equity investee                                                     178,000                   ----
            Deferred tax                                                                   (4,000)                  ----
            Changes in operating assets and liabilities:
                  Decrease (increase) in accounts receivable                              265,000               (147,000)
                  (Increase) decrease in income taxes receivable                         (114,000)               287,000
                  (Increase) in prepaid expenses and other assets                         (79,000)              (115,000)
                  (Decrease) in accounts payable and accrued expenses                    (312,000)              (517,000)
                  (Decrease) increase in estimated third party payor
                  settlements                                                            (353,000)              (971,000)
                                                                                        ---------              ---------
                        Net cash provided by (used in) operating activities               763,000               (293,000)
                                                                                        ---------              ---------

Cash flows from investing activities:
      Proceeds of investments                                                              10,000                260,000
      Purchase of property, plant and equipment                                           (86,000)               (54,000)
      Purchase of Nurse Care, Inc., net of cash acquired                                     ----             (2,595,000)
                                                                                   --------------             ----------
                        Net cash (used in) investing activities                           (76,000)            (2,389,000)
                                                                                          -------             ----------

Cash flows from financing activities:
      Decrease in notes receivable                                                           ----                179,000
      Principal payments under capital lease obligations                                     ----                (14,000)
      Proceeds from exercise of stock options                                                ----                 15,000
                                                                                   --------------           ------------
                        Net cash provided by financing activities                            ----                180,000
                                                                                   --------------            -----------

NET INCREASE (DECREASE) IN CASH AND CASH
      EQUIVALENTS                                                                         687,000             (2,502,000)

Cash and cash equivalents-beginning of period                                           8,929,000              9,237,000
                                                                                        ---------              ---------

CASH AND CASH EQUIVALENTS-END OF PERIOD                                                $9,616,000             $6,735,000
                                                                                        =========              =========

Supplemental  disclosures of cash flow information:  Cash paid during the period
      for:
            Taxes                                                                     $   957,000            $   985,000
            Interest                                                                        1,000                 11,000


See accompanying notes to consolidated financial statements.

</TABLE>
                                       -6-

<PAGE>



                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - BASIS OF PRESENTATION

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared in accordance with generally accepted accounting  principles of interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of Management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been  included.  Operating  results  for the three and six month  periods  ended
January  31, 1997 are not  necessarily  indicative  of the  results  that may be
expected for the year ended July 31, 1997. For further information, refer to the
consolidated   financial  statements  and  footnotes  thereto  included  in  the
Company's annual report on Form 10-K for the year ended July 31, 1996.

NOTE 2 - INITIAL PUBLIC OFFERING OF SUNSTAR HEALTHCARE, INC.

     On May 21,  1996,  the initial  public  offering of common stock of SunStar
Healthcare, Inc. ("SunStar") was consummated. Prior to the offering, SunStar had
been  a  wholly-owned  subsidiary  of the  Company,  consisting  of its  Florida
outpatient medical center operations.  As a result of the offering,  the Company
currently owns 900,000 shares, or approximately 37.6% of SunStar. The Company is
accounting for its investment in SunStar using the equity method of accounting.



                                       -7-

<PAGE>



ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

Results of Operations and Effects of Inflation
----------------------------------------------

     For the three  months  ended  January 31,  1997,  net  patient  revenue was
$8,692,000  as compared to  $9,965,000  for the three months  ended  January 31,
1996.  This  decrease is primarily  attributable  to the absence of revenue from
outpatient  medical services during the recent period (as a result of the public
offering by SunStar in May 1996 and its resulting accounting treatment using the
equity  method) as compared with such revenue of  $1,264,000  during the earlier
period.  Revenue from home health care services decreased slightly to $8,692,000
for the three months ended January 31, 1997 from $8,701,000 for the three months
ended January 31, 1996.  Revenue from Health  Acquisition  Corp., the subsidiary
providing home health care services in the New York metropolitan area, decreased
$294,000 or 6% as a result of increased competition and price pressures from the
certified  home health care agencies  with which it contracts.  Revenue from New
England Home Care, Inc. and Nurse Care,  Inc., the  subsidiaries  providing home
health care services in Fairfield and New Haven Counties,  Connecticut increased
$285,000 or 8% as a result of additional market share penetration.

     Cost of revenue as a percentage of net patient revenue increased to 65% for
the three  months  ended  January 31, 1997 from 62% for the three  months  ended
January 31, 1996.  Cost of revenue  attributable  to home health care operations
for the three  months  ended  January 31, 1996 was 64%.  The increase in cost of
revenue  is  attributable  to  lower   reimbursement   rates  in  the  New  York
metropolitan area.

     General and administrative expenses as a percentage of revenue decreased to
24% for the three  months  ended  January 31, 1997 from 30% for the three months
ended January 31, 1996. This decrease is  attributable to improved  efficiencies
implemented  in the  operations  of New England Home Care,  Inc. and Nurse Care,
Inc.,  as well as the  elimination  of all general and  administrative  expenses
relating  to  outpatient  medical  services  as a result of the  SunStar  public
offering.

     Amortization of intangibles decreased to $49,000 for the three months ended
January 31, 1997 from $73,000 for the three  months ended  January 31, 1996 as a
result  of  certain  intangible  assets  from  prior  acquisitions  being  fully
amortized.

     The Company  recorded a loss from equity investee of $148,000  representing
its share of the SunStar net loss for the three months ended January 31, 1997.

     The Company's  effective tax rate  decreased to  approximately  42% for the
three months ended  January 31, 1997 from 46% for the three months ended January
31, 1996.  This  decrease is  attributable  to the Company  changing to combined
filing for state tax  purposes  and the  availability  of Work  Opportunity  Tax
Credits in the current fiscal year.


                                       -8-

<PAGE>



     As a result of the foregoing, net income for the three months ended January
31,  1997 was  $493,000,  or $.10 per  share,  as  compared  to a net  income of
$471,000, or $.09 per share, for the three months ended January 31, 1996.

     For the six  months  ended  January  31,  1997,  net  patient  revenue  was
$17,378,000  as compared to  $20,039,000  for the six months  ended  January 31,
1996.  This  decrease is primarily  attributable  to the absence of revenue from
outpatient  medical  services  during the six months  ended  January 31, 1997 as
compared with such  revenues of  $2,503,000  during the six months ended January
31,1 996.  Revenue from home health care services  decreased to $17,378,000  for
the six months ended January 31, 1997 from  $17,536,000 for the six months ended
January 31,  1996.  This  decrease of $158,000 or 1% is  explained  in the above
three month discussion.

     Cost of revenue as a percentage of net patient revenue increased to 65% for
the six months ended  January 31, 1997 from 63% for the six months ended January
31, 1996.  Cost of revenue  attributable  to home health care operations was 66%
for the six months  ended  January  31,  1996.  This  improvement  is  primarily
attributable  to  efficiencies  achieved in the  operations  of New England Home
Care, Inc. and Nurse Care, Inc. as compared with the comparable  period of 1996.
These two subsidiaries of the Company were acquired in August 1995.

     General and administrative expenses as a percentage of revenue decreased to
24% for the six months ended  January 31, 1997 from 28% for the six months ended
January 31, 1996.  General and  administrative  expenses relating to home health
care  operations  decreased  $332,000 or 8% from the previous six month  period.
This  decrease is  attributable  to improved  efficiencies  implemented  in home
health care operations in both Connecticut and New York.

     Amortization  of intangibles  decreased to $97,000 for the six months ended
January 31, 1997 from  $146,000 for the six months  ended  January 31, 1996 as a
result  of  certain  intangible  assets  from  prior  acquisitions  being  fully
amortized.

     The Company recorded a loss from equity investee of $178,000,  representing
its share of the SunStar net loss for the six months ended January 31, 1997.

     The Company's effective tax rate decreased to approximately 43% for the six
months  ended  January  31, 1997 from 47% for the six months  ended  January 31,
1996. This decrease is explained in the above three month discussion.

     As a result of the  foregoing,  net income for the six months ended January
31,  1997 was  $1,031,000  or $.20 per share as compared to $923,000 or $.18 per
share for the six months ended January 31, 1996

     The rate of  inflation  had no material  effect on  operations  for the six
months ended January 31, 1997.


                                       -9-

<PAGE>



Financial Condition and Capital Resources
-----------------------------------------

     Current  assets   increased  to   approximately   $19,230,000  and  current
liabilities  decreased to $1,728,000,  respectively,  at January 31, 1997. These
results  increased  working capital by $1,214,000  from  $16,288,000 at July 31,
1996 to  $17,502,000  at January 31, 1997 and the current ratio  increased  from
7.8x at July 31, 1996 to 11.1x at January 31, 1997. Cash and cash equivalents at
January 31, 1997 was $9,616,000 as compared with $8,929,000 at July 31, 1996.

     The Company provided net cash from operating activities of $763,000 for the
six months  ended  January 31,  1997 as  compared to net cash used in  operating
activities of $293,000 for the six months ended January 31, 1996.  This increase
is attributable to a smaller decrease in estimated third-party payor settlements
at January 31, 1997 as compared to January 31, 1996 as a result of  overpayments
received  from  Medicare  in 1996.  In  addition,  the Company had a decrease in
accounts  receivable  at January  31, 1997 as compared to an increase at January
31, 1996.  This result is due to a greater  amount of revenue being derived from
governmental  payors such as Medicare and Medicaid  Programs that  reimburse for
home health care  services on a more timely  basis than other  revenue  sources.
Historically,  the Company has financed its working capital  requirement through
cash flow from operating  activities.  Net cash used in investing activities for
the six months ended January 31, 1997 reflects the purchase of equipment, offset
by proceeds of investments.  For the six months ended January 31, 1996, net cash
used in investing  activities  consisted of the purchase of Nurse Care, Inc. and
the purchase of equipment, offset by proceeds of investments. For the six months
ended January 31, 1997, the Company had no financing cash flow  activities.  For
the six months ended January 31, 1996, the Company  realized cash from financing
activities  from  payments  received on notes  receivable  and proceeds from the
exercise of stock options, offset by payments under capital lease obligations.

     The Company believes that it has sufficient cash to fund its operations for
at least the ensuing  twelve  month  period.  The Company  also has  available a
$2,000,000  secured  offering  line of  credit  with  the Bank of New  York.  In
addition,  New England Home Care, Inc. has a secured advised line of credit with
the Bank of New York, the maximum amount of which shall not exceed the lesser of
eligible accounts receivable or $2,000,000. Both facilities are at the alternate
base  commercial  lending rate of the Bank and expire  January 30,  1998.  As of
January  31,  1997,  there were no  outstanding  balances  under  either line of
credit.  The Company also  believes that its current cash balances and available
credit will also allow it to continue  to make  acquisitions  in the home health
care field without affecting its liquidity needs.



                                      -10-

<PAGE>



PART II.  OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders.

     The annual meeting of  shareholders of the Company (the "Meeting") was held
on December 9, 1996. Proxies for the Meeting were solicited pursuant to Rule 14A
of  the  Securities  Exchange  Act  of  1934,  as  amended,  and  there  was  no
solicitation in opposition.

     At the Meeting, Frederick H. Fialkow, Bernard Levine, M.D., Steven Fialkow,
Ira  Greifer,  M.D. and Robert C. Pordy,  M.D.  were elected as directors of the
Company to serve until the Company's  next annual  meeting of  shareholders  and
until their respective successors are elected and qualified.  The votes for each
director is as follows:

                                                For               Withheld
       Frederick H. Fialkow                  3,941,828              100
       Bernard Levine, M.D.                  3,941,828              100
       Steven Fialkow                        3,941,828              100
       Ira Greifer, M.D.                     3,941,828              100
       Robert C. Pordy, M.D.                 3,941,828              100


Item 5.   Other Information - Acquisitions

     On December 26, 1996,  the Company  entered into an  agreement,  subject to
regulatory  approval,  to purchase  certain assets of C.J. Home Care Inc., d/b/a
Garden City Home Care, a New York State licensed home health care agency engaged
in providing  home heath aide services in Nassau County,  New York.  Garden City
Home Care has annual revenue of  approximately  $2,000,000.  The closing of this
transaction is expected to occur by the beginning of April of 1997.

     On February  19,  1997,  the Company  entered  into an agreement to acquire
certain  assets of two New York  licensed home health care agencies that provide
home health aide services in the New York metropolitan area. The consummation of
the  proposed  acquisition  is subject to  regulatory  and other  approvals  and
conditions.  The two companies have combined  annual  revenues of  approximately
$3,400,000. The acquisition is expected to be completed by July of 1997.


Item 6.  Exhibits and reports on Form 8-K

     (a)  Exhibits:

          10.1 Letter  Agreement  dated  February  20, 1997  providing a Secured
               Advised Line of Credit from The Bank of New York to National Home
               Health Care Corp.


                                      -11-

<PAGE>



          10.2 Letter  Agreement  dated  February  20, 1997  providing a Secured
               Advised  Line of Credit  from The Bank of New York to New England
               Home Care, Inc.

          10.3 Asset Purchase  Agreement  dated December 26, 1996 by and between
               Health Acquisition Corp. and C.J.  Home Care Inc.,  d/b/a
               Garden City Home Care.

          *10.4 Asset Purchase  Agreement  dated February  , 1997.              

          27   Financial Data Schedule.


     (b)  Reports on Form 8-K

          None 

*Confidential treatment has been requested for a portion of this Exhibit.

                                      -12-

<PAGE>



                                   SIGNATURES


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                          National Home Health Care Corp.



Date:  March 14, 1997                     /s/ Robert P. Heller
                                          --------------------
                                          Robert P. Heller
                                          Vice President of Finance,
                                          Chief Financial and Accounting Officer


                                      -13-

<PAGE>



                                                    Commission File No. 0-12927







                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    EXHIBITS

                                       to

                                    FORM 10-Q

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY
                          PERIOD ENDED JANUARY 31, 1997

                         NATIONAL HOME HEALTH CARE CORP.




                                      -14-

<PAGE>



Exhibit
Number            Document                                         Page Number
------            --------                                         -----------

10.1              Letter Agreement dated February 20, 1997
                  providing a Secured Advised Line of Credit from
                  The Bank of New York to National Home Health
                  Care Corp.

10.2              Letter Agreement dated February 20, 1997
                  providing a Secured Advised Line of Credit from
                  The Bank of New York to New England Home
                  Care, Inc.

10.3              Asset Purchase Agreement dated December 26,
                  1996 by and between Health Acquisition Corp. and
                  C.J. Home Care Inc., d/b/a Garden City
                  Home Care.

*10.4             Asset Purchase Agreement dated February ,
                  1997.
                                                     .

27                Financial Data Schedule.

* Confidential treatment has been requested for a portion of this Exhibit.




                                      -15-

<PAGE>



                                                                  Exhibit 10.1

                                                                             
<PAGE>



THE BANK OF NEW YORK
NEW YORK'S FIRST BANK-FOUNDED 1784 BY ALEXANDER HAMILTON


                                    8 EAST PARKWAY, SCARSDALE, NEW YORK 10583



February 20, 1997


Mr. Robert E. Heller, Vice President &
Chief Financial officer
National Home Health Care Corp.
700 White Plains Road, Suite 363
Scarsdale, New York 10583

Dear Bob:

This letter  confirms that The Bank of New York (the "Bank")  holds  available a
$2,000,000 secured advised line of credit to National Home Health Care Corp.

Advances  under the line of credit shall be payable on demand and bear  interest
at a rate per annum equal to the alternate base  commercial  lending rate of the
Bank as publicly  announced  to be in effect  from time to time (the  "Alternate
Base  Rate"),  such rate to change on the  effective  date of any  change in the
Alternate Base Rate.

          "Alternate  Base Rate" shall mean, for any day, a rate per annum equal
          to the higher of (i) the Prime Rate in effect on such day and (ii) the
          Federal Funds Rate in effect on such day plus 1/2 of 1%.

For purposes of this definition:

          "Prime  Rate" shall mean,  for any day,  the  weighted  average of the
          rates on  overnight  Federal  funds  transactions  with members of the
          Federal Reserve System arranged by Federal funds brokers, as published
          for  such  day (or if such  day is not a  business  day,  for the next
          preceding business day, the average of quotations for such day on such
          transactions  received by the Bank from three Federal funds brokers of
          recognized standing selected by the Bank.

All advances and all principal  payments hereunder shall be endorsed by the Bank
on the sheet  attached to the  Promissory  Grid Note and shall be secured by all
assets of the borrower pursuant to a security agreement. The borrower authorizes
the Bank to accept telephonic instructions from a duly authorized representative
of the borrower,  as indicated by the latest  Corporate  Resolution on file with
the Bank, to make an advance or receive a repayment hereunder and to endorse the
sheet

                           
<PAGE>



attached to this Promissory Grid Note  accordingly.  All advances made hereunder
shall be credited to the Borrower's  deposit  account  referred to above,  which
credits  shall be confirmed to the  borrower by standard  advice of credit.  The
borrower agrees that the actual crediting of the sum of money so borrowed to the
borrower's deposit account shall constitute conclusive evidence that the advance
was made,  and the  failure of the Bank to endorse  the amount of any advance on
the sheet  attached  to this note or to  forward  to the  borrower  an advice of
credit shall not affect the obligation of the borrower to repay such advance.

In  addition,  all  advances  under  the line of  credit  shall be  jointly  and
severally  guaranteed by Health  Acquisition  Corp., New England Home Care, Inc.
and Nurse  Care,  Inc.  Each  guarantee  shall be  secured  by all assets of the
respective  guarantors  pursuant  to a  security  agreement.  The  form of note,
security  agreement  and  guarantee to be furnished to the Bank shall be in form
and substance acceptable to the Bank and its counsel.

Advances  under the line of credit are subject to the Bank's  satisfaction  with
(i) the  specific  purpose and  expected  time and source of  repayment  of each
advance,  and (ii)  the  Borrower's  and the  guarantors'  financial  condition,
business  prospects and  operations  at the time of each  advance.  As you know,
lines of credit may be cancelled by either  party at any time,  however,  unless
cancelled earlier,  the line of credit shall be held available until January 30,
1998.

Additionally, all outstanding advances under the line of credit shall be reduced
to zero for a period of 30  consecutive  days  during  each  twelve  (12)  month
calendar period in which the line of credit is held available.


Very truly yours,

THE BANK OF NEW YORK

/s/ Richard J. Kolosky

Richard J. Kolosky
Vice President

                           
<PAGE>



                                                                   Exhibit 10.2

                           
<PAGE>



THE BANK OF NEW YORK
NEW YORK'S FIRST BANK-FOUNDED 1784 BY ALEXANDER HAMILTON

                                    8 EAST PARKWAY, SCARSDALE, NEW YORK 10583



February 20, 1997


Mr. Robert E. Heller, Vice President &
Chief Financial officer
New England Home Care, Inc.
700 White Plains Road, Suite 363
Scarsdale, New York 10583

Dear Bob:

This letter  confirms that The Bank of New York (the "Bank")  holds  available a
$2,000,000 secured advised line of credit to New England Home Care, Inc.

Advances  under the line of credit shall be payable on demand and bear  interest
at a rate per annum equal to the alternate base  commercial  lending rate of the
Bank as publicly  announced  to be in effect  from time to time (the  "Alternate
Base  Rate"),  such rate to change on the  effective  date of any  change in the
Alternate Base Rate.

               "Alternate  Base Rate" shall mean,  for any day, a rate per annum
               equal to the  higher of (i) the Prime  Rate in effect on such day
               and (ii) the Federal Funds Rate in effect on such day plus 1/2 of
               1%.

For purposes of this definition:

               "Prime Rate" shall mean, for any day, the weighted average of the
               rates on overnight Federal funds transactions with members of the
               Federal  Reserve  System  arranged by Federal funds  brokers,  as
               published for such day (or if such day is not a business day, for
               the next  preceding  business day, the average of quotations  for
               such day on such  transactions  received  by the Bank from  three
               Federal  funds  brokers of  recognized  standing  selected by the
               Bank.

All advances and all principal  payments hereunder shall be endorsed by the Bank
on the sheet  attached to the  Promissory  Grid Note and shall be secured by all
assets of the borrower pursuant to a security agreement. The borrower authorizes
the Bank to accept telephonic instructions from a

<PAGE>


Page 2
Robert E. Heller
NEHCI


duly  authorized  representative  of the  borrower,  as  indicated by the latest
Corporate  Resolution  on file with the Bank,  to make an  advance  or receive a
repayment  hereunder and to endorse the sheet attached to this  Promissory  Grid
Note  accordingly.  All  advances  made  hereunder  shall  be  credited  to  the
Borrower's  deposit account referred to above,  which credits shall be confirmed
to the  borrower  by standard  advice of credit.  The  borrower  agrees that the
actual  crediting  of the sum of money so  borrowed  to the  borrower's  deposit
account shall constitute  conclusive evidence that the advance was made, and the
failure of the Bank to endorse the amount of any  advance on the sheet  attached
to this note or to forward to the  borrower an advice of credit shall not affect
the obligation of the borrower to repay such advance.

In  addition,  all  advances  under  the line of  credit  shall be  jointly  and
severally  guaranteed by National Home Health Care,  Inc., Nurse Care, Inc., and
Health  Acquisition  Corp.  Each guarantee shall be secured by all assets of the
respective  guarantors  pursuant  to a  security  agreement.  The  form of note,
security  agreement  and  guarantee to be furnished to the Bank shall be in form
and substance acceptable to the Bank and its counsel.

Advances  under the line of credit are subject to the Bank's  satisfaction  with
(i) the  specific  purpose and  expected  time and source of  repayment  of each
advance,  and (ii)  the  Borrower's  and the  guarantors'  financial  condition,
business  prospects and  operations  at the time of each  advance.  As you know,
lines of credit may be cancelled by either  party at any time,  however,  unless
cancelled earlier,  the line of credit shall be held available until January 30,
1998.

Additionally, all outstanding advances under the line of credit shall be reduced
to zero for a period of 30  consecutive  days  during  each  twelve  (12)  month
calendar period in which the line of credit is held available.


Very truly yours,

THE BANK OF NEW YORK

/s/ Richard J. Kolosky

Richard J. Kolosky
Vice President

                                                                   Exhibit 10.3

                                    AGREEMENT


     AGREEMENT,  dated  this 24th day of  December,  1996 among C. J. Home Care,
Inc.,  d/b/a Garden City Home Care, a business  corporation  organized under the
laws of the State of New York,  having its  principal  place of  business at 246
Mineola Blvd.,  Mineola,  New York 11501 ("Seller");  Health  Acquisition Corp.,
d/b/a/ Allen Health Care, a business corporation organized under the laws of the
State of New York,  having its  principal  place of business at 175- 20 Hillside
Avenue,  Jamaica, New York 11432 ("Buyer");  Janet Reichler,  residing at 18-56A
Corporal Kennedy Street,  Bayside,  New York 11360  ("Reichler");  and Christina
Calleja,  residing  at  7  Oak  Point  Drive  West,  Bayville,  New  York  11709
("Calleja").

     WHEREAS,  the Seller is engaged in the  business of  providing  home health
care in the State of New York; and

     WHEREAS,  Seller  wishes to sell to Buyer and Buyer wishes to purchase from
Seller  certain   designated  assets  of  the  Seller,  not  comprising  all  or
substantially  all of the assets of Seller,  upon the  conditions  and terms set
forth in this Agreement;

     NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements herein set forth, the parties hereto agree as follows:


                                    ARTICLE I

     1.   Sale and Purchase of Included Assets.

                                        1

<PAGE>



          1.1. Included Assets Transferred.  Subject to the terms and conditions
     hereof, Seller shall sell, convey, transfer and deliver to Buyer, and Buyer
     shall  purchase  from Seller at the Closing,  hereinafter  defined,  all of
     Seller's  right,  title  and  interest  in  and  to  the  following  assets
     (collectively  "Included Assets"): (a) the fixed, tangible assets set forth
     on Schedule 1.1 (a) annexed hereto; (b) Seller's personnel files, addresses
     and  telephone  num bers;  (c)  patient  files of such  patients  of Seller
     ("Patients")  as elect to be  transferred  to Buyer on or about the Closing
     Date pursuant to the Discharge Plan annexed hereto as Exhibit 3.8;

                                        2

<PAGE>



            (d) all  trademarks,  trade names,  excluding  the name "Garden City
Home Care" and all derivatives thereof, and all similar property rights relating
in any way to the Seller's business; and

            (e) all trade secrets,  inventions,  processes,  procedures,  market
surveys  and  marketing  know-how  wherever  located  relating  to the  Seller's
business.

                        1.2.  Assets Excluded and Retained by Seller.  All of
the remaining assets of the Seller (collectively, the "Excluded Assets") are not
included  within the Included Assets and shall remain the property of the Seller
on and after the Closing Date, including the following:

            (a)         all machinery, equipment, furniture, fixtures,
furnishings, tools and similar property owned by the Seller,
including those set forth on Schedule 1.2;

            (b)         all supplies owned by Seller,  including those set
forth on Schedule 1.2;

            (c) Other than as  provided  in  Section  1.1,  all books,  records,
manuals  and other  materials  relating  to the  Seller's  business;  including,
without  limitation,  advertising  matter,  correspondence,  sales materials and
research and accounting records;

            (d)  Seller's cash, accounts receivable on invoices for
sales and services prior to the Closing Date,and notes receiv
able;

                        (e)  Other than as provided in Section 1.1, Seller's
financial records, cancelled checks, bank statements and tax re
turns;

            (f) any claims,  refunds,  rights,  choses in actions and litigation
and the proceeds  thereof by or against the Seller ir  respective of the date on
which any such claims and obligations may arise or accrue;

            (g)  Seller's corporate minute books and records,tax record
s, and general ledger or other books of original entry;

            (h) the rights of Seller under this agreement;

            (i) Seller's trade name, "Garden City Home Care," and all

derivatives thereof;

            (j) leases of real property and personal property;

            (k) Insurance policies, prepaid expenses and security
deposits;
            (l)  Seller's  Federal Tax Identification Number, Seller's
Department of Health License Number, and Seller's Medicaid
Provider Number.
                        1.3.  Retained Liabilities. Buyer shall not be deemed
to be a  successor  to  Seller  and  shall  not  assume or be bound by or become
obligated to pay any of the following  liabilities or obligations of Seller (the
"Retained Liabilities"):

            (a) liabilities for personal injuries, or property damage;

     (b) liabilities for claims brought by any employee of
Seller, or for any  compensation,  vacation pay, sick pay, bonus or any payments
due or accrued or contingently owed to any employee or former employee of Seller
up to the time of Closing;

            (c)  liabilities   for  claims  alleging   violation  of  applicable
environmental  laws to the extent such violations  occurred prior to the Closing
Date;

             (d) liabilities for payment of  any applicable federal,
state or local taxes, if any (including any interest or penalties
thereon);

            (e)  liabilities for any claim for  reimbursement  or recoup ment of
funds  previously  paid to Seller by any payor,  including  without  limitation,
Medicare, Medicaid, insurance companies, HMO's or other parties.

            (f) any liability or  obligation  arising out of a breach or default
by Seller under any contract or governmental permit or license,  attributable to
the period prior to the Closing Date;

            (g) any claims,  liabilities and obligations of any kind arising out
of,  or  resulting  from the  ownership  or use of the  Included  Assets  or the
operation of the business of Seller,  to the extent same are attributable to the
period prior to the Closing Date;

            (h)  any liability or obligation in respect of the Excluded
Assets.
                        1.4.  Exhaustive List of Included Assets.  The parties
acknowledge  that the  Included  Assets set forth in Section 1.1 and on Schedule
1.1 are intended to represent the only assets to be purchased hereunder and that
no other assets owned by Seller on the date hereof or at Closing are intended to
be nor shall they be deemed to be transferred hereunder.

                        1.5.  No Construal.  Neither this Agreement nor the
transactions  contemplated  hereby shall be construed to (i) create any interest
in this Agreement on the part of any creditor of the Seller,  or (ii) confer any
third  party  beneficiary  status on any  person or  entity  whatsoever.  Seller
represents  that Buyer  shall not be liable in any  respect to any third  party,
whether a creditor,  employee  or patient of the  Seller,  or to any other third
party in connection with this Agreement or the transactions contemplated hereby.

                                   ARTICLE II
                                   THE CLOSING

          2.1.  Place and  Date.  The  Closing  of the sale and pur chase of the
     Included Assets (the "Closing") shall take place at the offices of Seller's
     attorneys: Halpern & Pasternack, P.C., 100 Ring Road West, Garden City, New
     York 11530,  at 10:00  a.m.,  no later than thirty (30) days after the last
     required  consent is obtained  pursuant to Sections 6.1.4 and 6.1.5 hereof,
     or at such other time or place as agreed to by the parties. The date of the
     closing is herein referred to as the "Closing Date".

          2.2. Transfer of Included Assets. At the Closing, Seller shall deliver
     to Buyer bills of sale, assignments, en dorsements and other instruments as
     may be necessary in the  reasonable  opinion of Buyer to convey and vest in
     Buyer all right,  title and interest in and to all of the Included  Assets,
     free and clear of all liens and encumbrances.

          2.3.  Purchase Price and Payment of Purchase Price. The Purchase Price
     for the Included  Assets shall be Four Hundred Fifty  Thousand  ($450,000.)
     Dollars,  payable by Buyer as follows:  $ 50,000.  upon the signing of this
     Agreement  payable to "Halpern & Pasternack,  as attorneys",  to be held in
     escrow  pursuant to ARTICLE VIII hereof (the "Escrow  Deposit"),  $400,000.
     payable to Seller by certified or bank teller's check at the Closing.

          2.4.  Allocation.  The Purchase Price shall be allocated in accordance
     with  Schedule  2.4 annexed  hereto and made a part  hereof.  The Buyer and
     Seller agree that such  allocation  shall be conclusive and binding for all
     purposes,  and the  parties  each  agree to file all  income  or other  tax
     returns in a manner consistent with such allocation.

          2.5.  Additional Payments by Buyer. In addition to the Purchase Price,
     Buyer  shall  pay the sum of  $100,000.  to Janet  Reichler  and the sum of
     $100,000.  to Christina Calleja payable at the Closing,  and conditioned on
     the  occurrence  of the Closing,  by certified or bank  teller's  checks to
     their order, as consideration for the restrictive covenants to be delivered
     by them to Buyer pursuant to Section 6.1.6 hereof.

                                   ARTICLE III
                    REPRESENTATIONS AND WARRANTIES OF SELLER
            Seller hereby represents and warrants to Buyer as follows:

                        3.1.  Organization and Good Standing.   Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York with full corporate  power and authority to own and use
its properties and to transact its business as same is now being conducted.

                        3.2.  Authority; Binding Effect.  Seller has the
corporate power and authority to execute and deliver this Agreement,  to perform
its  obligations  hereunder  and to  consummate  the  transactions  contemplated
hereby.  Such execution,  delivery,  performance and consummation have been duly
authorized by all necessary action on the part of the Seller. This Agreement has
been duly executed and delivered by the Seller and constitutes
the valid and legally binding obligation of the Seller,  enforceable against the
Seller in  accordance  with its  terms,  subject  to the  effect of  bankruptcy,
insolvency,  reorganization  and other similar laws relating to or affecting the
rights  of  creditors  generally,  as well as  limitations  imposed  by  general
principles  of equity.  The  execution  and delivery of this  Agreement  and the
consummation of the transactions  contemplated  hereby will not conflict with or
result in any violation of or default under any provision of the  Certificate of
Incorporation of the Seller, or to Seller's knowledge, any mortgage,  indenture,
lease  or  other  agreement  or  instrument,   statute,  law,  ordinance,  rule,
regulation,  judgment,  order, decree, permit,  concession,  grant, franchise or
license.

                        3.3.  Tax Returns.  Seller has timely filed with the
appropriate federal,  state and local agencies,  all tax returns and tax reports
required by law to be filed by Seller,  (which  returns  and reports  were true,
correct and complete in all material  respects at the time of filing thereof and
were prepared in accordance with applicable laws and  regulations) and all taxes
due have been fully paid, or adequate reserves have been set up for the same and
are reflected on its financial statements (or such taxes shall be paid by Seller
if hereafter determined to be due and payable),  there are no unpaid taxes which
are or will become a lien or charge on any of the Included  Assets and there are
no known or proposed deficiency  assessments in respect of any federal, state or
local tax return  filed by Seller  which  might  adversely  affect the  Included
Assets.

                        3.4.  Title to the Included Assets.  Seller has good
and  marketable  title  to the  Included  Assets  free and  clear of any  liens,
mortgages, pledges,  encumbrances,  claims, and charges of any kind. No asset is
subject to any mortgage, pledge, lien, charge, security, interest,  encumbrance,
restriction,  lease, license, easement, liability or adverse claim of any nature
whatsoever.  The  officers,  directors and employees of Seller have no rights of
ownership, use, or any other rights with respect to any of the Included Assets.

                        3.5.  Litigation.  There is no suit, claim, action or
proceeding  now pending or, to the best knowledge of Seller,  threatened  before
any court,  administrative or regulatory body, or any governmental agency or any
grounds therefor which may re sult in any judgment,  order, decree, liability or
other determi nation which will, or could,  have a material  adverse effect upon
the  Included  Assets or the  consummation  of the  transactions  con  templated
hereby.  Seller is not subject to any  judgment,  order or decree  which has, or
reasonably could be expected to have, such effect.

                        3.6.  Bulk Sales.  The sale by the Seller of the In
cluded Assets in accordance with this Agreement does not consti tute a bulk sale
as such term is defined in the  applicable  bulk sales law and no  compliance is
required under Article 6 of the New York Uniform Commercial Code.

                        3.7.  Personnel.  None of the Seller's administrative
health care personnel has notified the Seller of his or her in

                                        3

<PAGE>


tention to terminate  his or her  relationship  with the Seller and commence any
such  relationship  with  another  entity;  provided  that Seller  shall have no
liability  whatsoever to any such personnel solely by reason of Buyer failing to
hire or retain such personnel. Seller further represents that Seller is

            (a)         not a party to any union, collective bargaining or any
similar agreement;

            (b)         not providing or obligated to provide any profit-
sharing, deferred compensation, bonus, savings, pension, retain
er, retirement, welfare or incentive plan or agreement; and

            (c)  not a party to any employment agreement.

                        3.8.  Cessation of Operations.  Seller is a home care
services  agency,  duly  licensed  under Article 36 of the New York State Public
Health Law. The Seller shall suspend all of its  operations,  lay off all of its
field  personnel,  cease  providing  any and all services to its  patients,  and
surrender  its home care license  under  Article 36 of the New York State Public
Health Law at or prior to the  Closing  Date,  pursuant  to the  Discharge  Plan
annexed hereto as Schedule 3.8.

                        3.9.  Compliance with Laws.  Seller possesses and is in
material  compliance  with all  permits,  licenses  and  governmental  approvals
required to operate its business as  presently  operated and to own the Included
Assets.

                        3.10.  Financial Information and Hours.  The financial
information and hours  information set forth in the second para graph of Section
6.1.3 is true and accurate.
                                   ARTICLE IV
                     REPRESENTATIONS AND WARRANTIES OF BUYER

            Buyer hereby represents and warrants to Seller as follows:

                        4.1.  Organization and Good Standing.  Buyer is a cor
poration duly organized, validly existing and in good standing under the laws of
the State of New York.

                        4.2.  Buyer is a duly licensed home care services agen
cy pursuant to Article 36 of the New York State Public Health
Law.

                        4.3.  Execution, Delivery and Performance of Agreement;
and Authority. The execution,  delivery and the performance by the Buyer of this
Agreement and the  consummation  of the transac tions  contemplated  hereby have
been authorized by all necessary corporate action.

                                    ARTICLE V
                            COVENANTS OF THE PARTIES

                        5.1.  Conduct of Business.  From the date hereof to the
Closing Date, except as otherwise consented to by Buyer in writing, Seller shall
conduct its  business  as  presently  conducted  and in the  ordinary  course of
business consistent with past practice; maintain all tangible Included Assets in
good operating condition and repair; perform in all material respects all of its
obligations under agreements, contracts and instruments relating to or affecting
the Included Assets;  comply in all material  respects with all statutes,  laws,
ordinances, rules, regulations,
judgments,  orders,  decrees,  permits, and governmental approvals applicable to
the Included  Assets;  use its best efforts to keep the Included  Assets intact;
and  promptly  advise  Buyer in writing of any  material  adverse  change in the
Included Assets.

                        5.2.  Access and Information.  Seller will permit Buy
er, and Buyer's  representatives or designees reasonable access to such records,
including but not limited to personnel  records,  of Seller at such times as may
be agreed by the  parties  and as may be  necessary  or  useful  with  regard to
matters which may affect the Included Assets subsequent to the Closing.

                        5.3.  Removal of Included Assets.  All expenses of re
moval of the Included  Assets from the Seller's  premises  following the Closing
shall be borne by the  Buyer;  provided  that the  Seller  shall use  reasonable
efforts to accommodate Buyer in the removal process.

                                   ARTICLE VI
                              CONDITIONS PRECEDENT

                        6.1.  Conditions to Obligations of Buyer.  The obliga
tions of Buyer to pay the  Purchase  Price to Seller  and to  satisfy  its other
obligations  hereunder shall be subject to the fulfill ment (or waiver by Buyer)
at or prior to Closing, of the following conditions,  which Seller agrees to use
its best efforts to cause to be fulfilled:

                        6.1.1  All representations and warranties of Seller
contained herein and in any schedules annexed hereto or document
delivered at the time of the execution and delivery hereof shall
be true and correct when made and at and as of the Closing Date and Seller shall
have  surrendered  its home care license  under Article 36 of the New York State
Public Health Law.

                        6.1.2  All covenants, agreements and obligations re
quired by the terms of this Agreement to be performed by Seller at or before the
Closing shall have been duly and properly per formed.

                        6.1.3  Since the date of this Agreement, there shall
not have  occurred  any material  change in any of the Included As sets.  Seller
shall  operate the  business to be operated in a man ner  consistent  with prior
practice  and  shall  use its best  efforts  to  maintain  the good  will of all
patients, employees and other persons with whom it has commercial dealings.

     It is  understood  and  agreed  that the  Buyer  has  relied  upon  certain
financial data contained in Seller's  accountants'  compilation report of income
and  earnings  for the year  1995,  to wit:  that  the  revenues  received  were
$1,999,548  and that the total cost of  services  provided  was  $1,457,683.  In
addition,  Buyer has relied upon Seller's representation that the total hours of
service  provided  to  Medicaid  patients  in the year  1995  was  approximately
109,000,  and the total hours of service  provided to non-Medicaid  patients for
that period was approximately  33,500 and that the billings reflect those hours.
It is further  understood  that  Buyer is  relying on the fact that the  service
hours to Medicaid and  non-Medicaid  patients as well as receipts,  expenses and
billings  for the current  year to the date of closing  will be  proportionately
comparable to 1995.  Seller shall permit Buyer to verify the foregoing  prior to
Closing.  In the event the service  hours and revenues for 1996 are more than 5%
lower, Buyer shall have the option to terminate this contract,  or to consummate
the transaction at such lower price as the parties may agree.

                        6.1.4  The New York State Public Health Council and the
New  York  State   Department  of  Health  shall  approve  of  the   transaction
contemplated herein.

                        6.1.5  The Nassau County Department of Social Services
shall approve of the transfer of its Medical Assistance patients from the Seller
to the Buyer, if required.

                        6.1.6  Seller and Seller's principals, Janet Reichler
and Christina Calleja,  shall have delivered  restrictive covenants to the Buyer
agreeing not to engage in the home care  business for a period of five (5) years
in an area comprising Nassau and Suf folk Counties and the greater New York City
metropolitan area,  including New York, New Jersey and Connecticut;  agreeing to
maintain  as  confidential  in all  respects  all  information  relating  to the
Included Assets and the transactions  contemplated  hereby,  and agreeing not to
solicit any patients or employees of Buyer,  all of the foregoing  agreements to
be in form reasonably satisfactory to Buyer.

                        6.2  Conditions to Obligations of Seller.  The obliga
tion of the Seller to deliver the bills of sale, assignments, en
dorsements and other instruments of transfer relating to the
Included  Assets shall be subject to the  fulfillment on or prior to the Closing
Date (or waiver by Seller),  of the  following con ditions which Buyer agrees to
use its best efforts to cause it to be fulfilled:

                        6.2.1  All representations and warranties of Buyer con
tained herein shall be true and correct when made and at and as
of the Closing Date.

                        6.2.2  All covenants, agreements and obligations re
quired by the terms of this  Agreement to be performed by Buyer at or before the
Closing shall have been duly and properly per formed.

                        6.2.3  Seller shall have paid or tendered the full
purchase price pursuant to Section 2.3 hereof.

                                   ARTICLE VII
                                 INDEMNIFICATION

                        7.1.  Indemnity.

                        7.1.1  Seller hereby agrees to indemnify, defend and
hold  harmless  Buyer and its parent  corporation  from and against all demands,
claims, actions or causes of action, assessments,  losses, damages, liabilities,
costs and  expenses,  including  with out  limitation,  interest,  penalties and
reasonable attorneys' fees and expenses (collectively, "Damages"), resulting to,
imposed upon or incurred by the Buyer by reason of or resulting from

            (a)  any breach of any of the representations and warranties
of the Seller set forth in this Agreement;

    (b)  any failure of the Seller to perform or observe any
covenant set forth in this Agreement;

   (c) any operations or business  conducted,  commitment made, service rendered
or  condition  existing or any action taken or omitted by or on behalf of Seller
prior to Closing; and

    (d)  any debts, obligations or taxes payable of the Seller.

                        7.1.2  Buyer hereby agrees to indemnify, defend and
hold harmless Seller from and against all damages  resulting to, imposed upon or
incurred by Seller, by reason of or resulting from:

            (a)  any breach of the representations and warranties of the
Buyer set forth in this Agreement;

            (b)  any failure of the Buyer to perform or observe any
covenant set forth in this Agreement;

            (c)  any debts, obligations or taxes payable of the Buyer;
and
            (d) any operations or business  conducted,  commitment made, service
rendered or condition existing or any action taken or omitted by or on behalf of
Buyer after the Closing;

                        7.1.3  The parties agree that the indemnification pro
vided for in  Sections  7.1 shall be  limited  to an  aggregate  amount of Fifty
Thousand ($50,000) and such indemnification  shall only apply to claims asserted
within 12 months of the Closing  Date.  The parties  further agree that no claim
shall be made  for  indemnification  until  the  aggregate  amount  exceeds  Two
Thousand Five Hundred ($2,500) Dollars.

                        7.2.  Remedies Cumulative.  Except as herein expressly
provided,  the  remedies  provided  herein  shall be  cumulative  and  shall not
preclude assertion by any party hereto of any other rights or the seeking of any
other  remedies,  including  without  limitation  breach of  contract  remedies,
against any other party hereto,  provided such remedies are consistent with this
Agreement.

                        7.3.  Conditions of Indemnification with Respect to
Third Party Claims.  The obligations and liabilities of the par
ties under this Article shall be subject to the following terms
and conditions:

                        7.3.1  Whenever a claim shall arise for indemnification
under this Article VII, the party entitled to indemnification  (the "Indemnified
Party")  shall  give 15 days  notice of any such  claim to the  party  from whom
indemnification  is sought ("the In  demnifying  Party"),  and the  Indemnifying
Party may  undertake  the defense  thereof by  representatives  chosen by it and
reasonably  acceptable to the Indemnified  Party. This Indemnified Party may, at
its own  expense,  participate  in any such  proceeding  with the counsel of its
choice,  and so long as the  Indemnifying  Party is in good faith defending such
claim or proceeding,  the Indemnified  Party shall not compromise or settle such
claim without the prior

written consent of the Indemnifying Party.
                        7.3.2  If the Indemnifying Party, within a reasonable
time after notice of any such claim, fails to defend, the Indem
nified Party may (upon further notice to the  Indemnifying  Party) undertake the
defense,  compromise  or  settlement  of such  claims  on  behalf of and for the
account and risk of the  Indemnifying  Party,  in such manner as the Indemnified
Party may deem appropriate,  including,  but not limited to, settling such claim
or litigation  (after giving  notice of the same to the  Indemnifying  Party) on
such terms as the Indemnified Party may deem  appropriate,  subject to the right
of the Indemnifying  Party to assume, at its expense,  the defense of such claim
at any  time  prior  to  settlement,  compromise  or  final  determination.  The
Indemnifying  Party shall pay the Indemnified  Party not more than 10 days after
demand, in accordance with the provisions of this Section 7.3.
                        7.3.3  Anything in this section 7.3 to the contrary
notwithstanding,
            (a) if in the written  opinion of counsel for the Indem nified Party
delivered to the  Indemnifying  Party there is a rea sonable  possibility that a
claim will materially and adversely affect the Indemnified Party other than as a
result of money dam ages or other money payments,  the  Indemnified  Party shall
have the right, at its own cost and expense,  to defend,  but not com promise or
settle the claim without the consent of the Indemnifying  Party, which shall not
be withheld unreasonably; and
            (b) the Indemnifying Party shall not, without the written consent of
the  Indemnified  Party,  which shall not be  unreasonably  withheld,  settle or
compromise  any claim or  consent  to the entry of any  judgment  which does not
include as an  unconditional  term  thereof  the giving by the  claimant  or the
plaintiff to the Indem

                                                                             4

<PAGE>


nified  Party a release  from all  liability  by the  Indemnified  Party and the
Indemnifying Party, in respect of such claim.
                        7.3.4  In any suit or proceeding which either party may
institute  pursuant to this  Article,  the other  party  hereby  agrees,  at the
expense of the  Indemnifying  Party (except as to those  expenses to be borne by
the Indemnified  Party pursuant to Section 7.3.3) to cooperate in all reasonable
respects and to testify or have its employees testify when reasonably  requested
and to make available relevant records, papers, information,  samples, specimens
and the like.
                                  ARTICLE VIII
                              ESCROW FOR INDEMNITY
                        8.1.  The Escrow Deposit of $50,000 deposited pursuant
to Section  2.3 hereof  shall be held in escrow by Seller's  attorneys  ("Escrow
Agent"), pursuant to the terms and conditions of this ARTICLE VIII.
                        8.1.1.  The Buyer shall make payment of the Escrow
Deposit to the Escrow Agent,  who agrees to hold the same in escrow  pursuant to
the terms hereof.  The Escrow  Deposit shall be deposited by the Escrow Agent in
an interest-bearing bank account. Interest shall be added to the Escrow Deposit.
                        8.1.2.  Buyer shall be entitled to the return of the
Escrow Deposit in the event that the conditions set forth in Section 6.1 are not
satisfied,  or in the  event  the  conditions  set  forth  in  Section  6.2  are
satisfied, and Buyer is ready, willing
and able to close and Seller  fails to close.  Seller  shall be  entitled to the
delivery  of the Escrow  Deposit in the event that the  conditions  set forth in
Section  6.2 are not  satisfied,  or in the  event the  conditions  set forth in
Section  6.1 are  satisfied  and Seller is ready,  willing and able to close but
Buyer fails to close. If the Seller shall be entitled to the Escrow Deposit,  or
any part  thereof,  the Escrow  Agent  shall pay over the Escrow  Deposit or the
appropriate part thereof, to the Seller. If a claim is asserted by Buyer against
Seller  under the  indemnification  set forth in Section  7.1,  and if Buyer has
served a demand  upon  Escrow  Agent for  payment  of such claim from the Escrow
Deposit,  Escrow Agent shall  release  such portion of the Escrow  Deposit as is
sufficient  to  satisfy  such claim  unless  Escrow  Agent  receives a Notice of
Objection as set forth in Section  8.1.4.  If the Buyer shall be entitled to the
return of the Escrow Deposit, or any part thereof,  and serves a demand therefor
on the  Escrow  Agent,  the Escrow  Agent  shall pay over such sum to the Buyer,
unless Escrow Agent  receives a Notice of Objection.  Nothing  contained  herein
shall  preclude  Seller or Escrow  Agent  from  satisfying  a claim for a lesser
amount than the sum demanded.
                        8.1.3.  Upon the occurrence of the Closing, the Escrow
Agent shall  continue to hold the $50,000  Down Payment in escrow for the period
of one year after the Closing to fund the indemni fications  pursuant to Section
7.1.1 hereof.
                        8.1.4.  Prior to effectuating any delivery of any part
of the Escrow  Deposit,  the Escrow  Agent  shall give  notice of such  proposed
delivery to both the Buyer and the Seller and to Buyer's  attorney,  and no such
delivery  shall be made if, within a period of ten days  following the date upon
which notice is effective (as set forth in Paragraph 8.1.10 hereof),  the Escrow
Agent shall have received a Notice of Objection from the Seller or the Buyer, as
the case may be, setting forth an objection to such  delivery.  The Escrow Agent
shall promptly deliver a copy of such Notice of Objection to the other party.
                        8.1.5.  If the Escrow Agent shall have received a
Notice of Objection as set forth in Section 8.1.4 hereof, or if any disagreement
or dispute  shall arise  between  the  parties re sulting in adverse  claims and
demands with respect to the Escrow Deposit, then the Escrow Agent shall continue
to hold the Escrow  Deposit  until the Escrow  Agent shall have  received  (i) a
written  instrument  signed by both the Seller and the Buyer  setting  forth the
joint  direction of such parties with respect to the Escrow  Deposit,  or (ii) a
certified  copy of a final and  non-appealable  judgment of a court of competent
jurisdiction  directing the disbursement of the Escrow Deposit. The Escrow Agent
shall also be entitled to deposit the Escrow Deposit with the clerk of the court
in which any litigation between the parties is pending, or with the clerk of any
appropriate court in Nassau County, New York.
                        8.1.6.  The Escrow Agent shall not be liable in any way
or to any person for its refusal to comply with adverse claims
and  demands  being  made upon it, and shall not be  responsible  for any act or
failure to act on its part,  nor shall it have any lia bility  under this Escrow
Agreement,  except in the case of willful malfeasance or gross negligence.  This
Escrow  Agreement  shall  terminate and the Escrow Agent shall be  automatically
released from all  responsibility and liability upon the Escrow Agent's delivery
or deposit of the  Escrow  Deposit to the  parties or to the clerk of a court in
accordance with the provisions of this ARTICLE VIII.
                        8.1.7.  The Escrow Agent or any member of its firm
shall be  permitted  to act as counsel for the Seller in any dispute or question
as to any matter arising out of this Agreement or the Escrow Deposit.
                        8.1.8.  The Escrow Agent may resign at any time and, in
such event,  shall  deliver  the Escrow  Deposit  pursuant to the joint  written
instructions   of  the  Seller  and  the  Buyer  or,  in  the  absence  of  such
instructions,  shall deposit the Escrow Deposit with the clerk of an appropriate
court in Nassau County, New York.
                        8.1.9.  The Escrow Agent shall be indemnified by the
Buyer and the Seller against any liabilities, damages, losses, costs or expenses
incurred by, or claims or charges  made  against,  the Escrow  Agent  (including
reasonable counsel fees,  disbursements and court costs) by reason of its acting
or failing to act in connection  with any of the matter  contemplated  by, or in
carrying out the terms of, this ARTICLE VIII, except as a
result of its willful malfeasance or gross negligence. In addition, in the event
the Escrow Agent is required to take any action or perform services beyond those
required  by  Sections  8.1.3 and 8.1.4  hereof,  the Escrow  Agent may charge a
reasonable fee for such  services,  which fee shall be paid equally by the Buyer
and the Seller.
                        8.1.10.  Any notice, demand or other  communication
pursuant to this  ARTICLE VIII shall be in writing and  delivered in  accordance
with the provisions of the  Agreement,  addressed to the Seller and the Buyer at
the  addresses  set forth above,  and to the Escrow Agent at 100 Ring Road West,
Suite 105,  Garden City,  New York 11530.  Notice  shall be deemed  effective as
provided in Section 10.10 hereof.
                        8.1.11.  On the first anniversary of the Closing, the
Escrow Agent shall release the balance of the escrow funds to the Seller. In the
event there is any  unresolved  claim  against  the Escrow  Deposit on the first
anniversary of the Closing, the Escrow Agent shall continue to hold funds in the
full  amount of such  claim(s)  until  such  claim is  resolved.  Upon such reso
lution,  the Escrow Agent shall  distribute the balance of the Escrow Deposit in
accordance with such resolution.
                                   ARTICLE IX
                              ADDITIONAL COVENANTS
                        9.1.  Further Assurances and Assertions.  The Seller
shall, from time to time, at the request of the Buyer execute and
deliver such further instruments of transfer and assignment and
take  such  other  action  as the Buyer  may  reasonably  request  and as may be
reasonably  necessary in order to vest in the Buyer title to all of the Included
Assets purchased.  Buyer shall pay any filing fees, recording charges,  transfer
taxes, etc. relating to such instruments.
                                    ARTICLE X
                                  MISCELLANEOUS
                        10.1.  Taxes.  Any federal, state or local sales or
other taxes, levies or assessments,  including any bulk sales taxes, incurred in
connection  with  this  Agreement  or  resulting  from the  consummation  of the
transactions  contemplated  hereby shall be the liability and responsibility of,
and shall be paid by Seller;  provided,  that Buyer  shall at the Closing pay to
Seller,  in addition to the Purchase  Price,  the New York State and local sales
tax, if any, on the portion of the  Purchase  Price  allocated  to the  Included
Assets set forth on Schedule 1.1 (a) annexed hereto.
                        10.2.  Termination.  This Agreement may be terminated
by Seller or Buyer, as applicable,  by delivering written notice to the other at
any time prior to the Closing Date upon the  occurrence  of any of the following
events:
            (a)  by mutual written consent of all the parties hereto; or
            (b)  by the Seller if any of the conditions provided in
Section  6.2  hereof  have not been met by the time  required  and have not been
waived by Seller;  provided that Seller shall have notified the Buyer in writing
of such failure and Buyer shall not have cured such failure within seven days of
such notice; or
            (c) by the Buyer if any of the conditions  provided in Sec tion 6.1.
hereof have not been met by the time required and have not been waived by Buyer;
provided  that Buyer shall have  notified  the Seller in writing of such failure
and Seller shall not have cured such failure within seven days of such notice.
                        10.3.  Liabilities.  In the event this Agreement is
terminated  pursuant to Section 10.2 above, the Escrow Deposit shall be returned
to Buyer, and no party hereto shall have any liability to any other party hereto
for  costs,  expenses,  damages,  loss  of  anticipated  profits  or  otherwise;
provided,  that if termination occurs because of any misrepresentation or breach
of warranty by a party hereto,  such  termination  shall not preclude any rights
which the other party hereto may have against such party for costs,  expenses or
damages on account of such party's misrepresentation or breach.
                        10.4.  Waivers and Amendments.
                        10.4.1  This Agreement may be amended, modified or sup
plemented  only by a written  instrument  executed  by the parties  hereto.  The
provisions  of this  Agreement  may be waived only by an  instrument  in writing
executed by the party  granting  the waiver.  No action  taken  pursuant to this
Agreement,  including without  limitation,  any investigation by or on behalf of
any  party,  shall be deemed to  constitute  a waiver by the party  taking  such
action of compliance with any  representation,  warranty,  covenant or agreement
contained herein. The waiver by any party
hereto of a breach of any  provision of this  Agreement  shall not operate or be
construed as a waiver of any other or subsequent breach.
                        10.4.2  No failure on the part of any party to exer
cise, and no delay in exercising,  any right,  power or remedy  hereunder  shall
operate as a waiver  thereof,  nor shall any single or partial  exercise of such
right,  power or remedy by such party  preclude  any other or  further  exercise
thereof  or the  exercise  of any other  right,  power or remedy.  All  remedies
hereunder are cumulative and are not exclusive of any other remedies provided by
law.
                        10.5.  Survival of Certain Provisions.  The provisions
of Article VII, Article VIII and the  representations,  warranties and covenants
contained in this Agreement shall survive Closing without limitation.
                        10.6.  Payment of Fees and Expenses.  Each party shall
pay and be responsible for all of its own fees and expenses of its counsel,  and
all other expenses incurred by it incident to the negotiations,  preparation and
execution  of  this  Agreement  and  the   consummation   of  the   transactions
contemplated herein.
                        10.7.  Entire Agreement.  This Agreement, and all
exhibits and schedules  referenced herein constitute the entire agreement of the
parties as to the subject  matter hereof,  and supersede all prior  discussions,
negotiations and agreements,

whether written or oral, between the parties with respect to the
subject matter of this Agreement, including but not limited to
the Letter of Intent dated April 30, 1996.  All  disclosures in any schedules to
this  Agreement are  incorporated  by reference  herein and in each of the other
schedules.
                        10.8.  Non-Assignability.  This Agreement and any
rights pursuant hereto shall not be assignable by the Buyer herein,  without the
written  consent of Seller,  and any purported  assignment by Buyer without said
consent, shall be null and void, and without force and effect.
                        10.9.  Severability.  A determination by any Court that
any portion of this Agreement is  unenforceable  or invalid shall not affect the
enforceability or validity of any of the remaining  portions of the Agreement or
of this Agreement as a whole.
                        10.10.  Notices.  All notices, requests, demands and
other  communications  which are  required or may be given under this  Agreement
shall be in writing  and shall be deemed to have been duly given or made:  if by
hand,   immediately  upon  delivery;  if  by  telex,   facsimile   transmission,
telecopier,  telegram or sim ilar electronic  device,  immediately upon sending,
providing it is sent on a business  day, but if not, then  immediately  upon the
beginning of the first business day after being sent; if by Fed eral Express, or
any other overnight delivery service,  on the first business day after dispatch;
and if by certified or regis tered mail,  return  receipt  requested,  three (3)
business days after delivery or immediately upon the return of the notice to the
sender marked  "refused," or "unclaimed." All notices,  requests and demands are
to be given or made to the parties at
the addresses hereinbefore set forth or such other address specified in a notice
given  pursuant  hereto,  and in addition to the  attorneys  for the  respective
parties as follows:
                        To the Seller:
                        Winifred Pasternack, Esq.
                        Halpern & Pasternack, P.C.
                        100 Ring Road West
                        Garden City, NY 11530

                        To the Buyer:

                        Gary Simon, Esq.
                        Parker, Chapin, Flattau & Klimpl, LLP
                        1211 Avenue of the Americas
                        New York, NY 10036

            Any party or the  Escrow  Agent may  change  its  address by no tice
given pursuant to this Section 10.10.

                        10.11.  Public Announcements.   The parties agree that
the terms of this Agreement are confidential  only,  unless other wise provided,
until this  Agreement is executed.  The parties  shall  jointly  prepare a press
release  to be used  for  the  first  public  announcement  of the  transaction.
Thereafter  each is enti tled to release  to the public any and all  information
regarding the terms of this  Agreement,  including  Buyer's filing of forms 8- K
and related  public  announcements  required by applicable  securities  laws and
regulations.
                        10.12.  Binding Effect.  This Agreement shall inure to
the benefit of and be binding upon the parties hereto, their
successors and permitted assigns.
                        10.13.  Governing Law.  This Agreement and the legal
relations between the parties hereto shall be construed, inter
preted and enforced,  both as to substance and remedies,  in accordance with the
laws of the State of New York,  applicable to contracts  made and to be enforced
in such State.
                        10.14.  Broker.  Buyer and Seller each represents and
warrants to the other that it has not dealt with any broker in  connection  with
this sale other than Lindenstadt Company of Newport Beach, California ("Broker")
and Seller shall pay Broker any commission earned by said Broker. The provisions
of this  paragraph  shall  survive  the  Closing and shall not be subject to the
indemnification limitation set forth in Section 7.1.3 hereof.
                        10.15.  No Further Negotiation.  Seller agrees that it
shall not enter into any  negotiation  with any third  party for the sale of its
assets from the date hereof unless this Agreement is terminated  pursuant to its
terms.
                        10.16.  Paragraph Headings.  The parties agree that the
paragraph and article  headings are inserted  only for ease of reference,  shall
not be  construed as part of this  Agreement,  and shall have no effect upon the
construction  or  interpretation  of any part hereof.  The parties further agree
that this Agreement has been jointly drafted and shall not be construed  against
either party.
                        10.17.  Counterparts.  This Agreement may be executed
in any number of  counterparts,  each of which shall be deemed an original,  but
all of which together shall constitute one and the same instrument.
                        IN WITNESS WHEREOF, the parties by and through their
duly  authorized  representatives  have duly executed this agree ment, as of the
first above written.

                                     C.J. HOME CARE, INC., Seller


                                     By:
                                                 Christina Calleja, President

                                                 Tax I.D. No. 11-2635994

ATTEST:



Janet Reichler, Secretary


                                         HEALTH ACQUISITION CORP., Buyer


                                         By:
                                                     Richard Garofalo, President

                                                     Tax I.D. No. 11-2311754

AGREED TO AS TO ss.6.1.6



Christina Calleja


AGREED TO AS TO ss.6.1.6


Janet Reichler

                                            AGREED TO AS TO ARTICLE VIII

                                            HALPERN & PASTERNACK, P.C.,
                                            Escrow Agent


                                            By:
                                                        Winifred Pasternack

bus.sal\garden.agm


                                        5

<PAGE>





                                  SCHEDULE 1.1

                         INCLUDED FIXED, TANGIBLE ASSETS



7  Four-drawer  file cabinets 1 large  four-drawer  file cabinet 4 desks 2 large
directors chairs 6 miscellaneous  chairs 1 large table 2 computer tables 1 table
on rollers 1 upstanding file cabinet with rollers 1 computer holder with rollers
18 video tapes for in-service training large clothes cabinet



                                        6

<PAGE>



                                  SCHEDULE 1.2
                                 ASSETS EXCLUDED
1  Photocopier  with table 1 fax machine  Computers  with  printers 4 artificial
plants radio with speakers clock microwave Television/video machine
Postage meter and postage entered thereon
Poland Spring Water cooler
Assorted office supplies


                                        7

<PAGE>




                                  SCHEDULE 2.4
                          ALLOCATION OF PURCHASE PRICE

EQUIPMENT INVENTORY SET FORTH ON SCHEDULE 1.1                    $ 10,000.00
EMPLOYEE FILES                                                 $100,000.00
CHARTS AND FILES OF PATIENTS                                     $ 50,000.00
GOOD WILL                                                       $290,000.00
                        TOTAL                                    $450,000.00


                                        8

<PAGE>



                                  SCHEDULE 3.8

                                 DISCHARGE PLAN

                              C. J. HOME CARE, INC.
                           D/B/A GARDEN CITY HOME CARE



             A  letter  will  be sent to  patients  of  Garden  City  Home  Care
informing them that the agency will be ceasing its operations. The patients will
be told that  arrangements  have been made to  continue  their care with  Health
Acquisition Corp.

            Patients  will be informed that in the event they wish to make other
arrangements,  they may do so. A list of other  licensed or certified  home care
agencies who are providers in Nassau County will accompany the letter.

            1. The records of Patients who elect Health Acquisition
Corp. will be transferred to Health Acquisition Corp.

                        a) Health Acquisition Corp. will commence service of
Patients, with the same personnel, if possible.

            2. For those  patients  who elect  other  providers,  the Nurse will
complete a  discharge  summary  and the  patient,  or a member of the  patient's
family, will be asked to sign it.

                        a) Garden City will send a copy of the discharge sum
mary to the patient's physician.

                        b) Garden City's Nurse will ascertain which agency the
patient is choosing.

                        c)  Garden City will notify the new provider and send a
copy of the discharge summary to the provider chosen by the pa
tient.

                        d)  Garden City will transfer the patient's records to
the new agency.


Dated:

                                             C. J. HOME CARE, INC.
                                     d/b/a Garden City Home Care

                                                  BY:
                                               Christina Calleja, President


                                        9

<PAGE>
                                                                   Exhibit 10.4

                                                                

                            ASSET PURCHASE AGREEMENT

     ASSET PURCHASE AGREEMENT dated this day of February, 1997, by and between

HOME HEALTH  AIDES,  INC.,  a New York  corporation,  with offices at 50 Clinton
Street,  Hempstead, New York 11550 ("Home Health") and H.H.A. AIDES, INC., a New
York corporation,  with offices located at 1787 Veterans Highway,  Islandia, New
York 11779 ("HHA") (Home Health and HHA are sometimes  referred to  individually
as "Seller" and collectively as "Sellers"); and

HEALTH  ACQUISITION  CORP.  D/B/A  ALLEN  HEALTH  CARE  SERVICES,   a  New  York
corporation,  with offices at 175-20 Hillside  Avenue,  Jamaica,  New York 11432
("Buyer").


                                    RECITALS

     A.  Sellers are engaged in the  business of  providing  home health care in
Nassau and Suffolk Counties in the State of New York.

     B. Sellers desire to sell and transfer to Buyer, and Buyer desires to
acquire from Sellers, certain of the assets of the Sellers' business, subject to
and upon the conditions and terms set forth in this Agreement.

     NOW,  THEREFORE,  in  consideration of the foregoing  recitals,  the mutual
representations,  warranties, covenants and agreements herein set forth, and for
other good and valuable consideration,  the receipt and sufficiency of which are
hereby

                                      - 1 -
                                            
<PAGE>



acknowledged, the parties hereto agree as follows:

                                      - 2 -
                                            
<PAGE>



                                    ARTICLE I
                                   DEFINITIONS

     1.1  Definitions:  For all purposes of this Agreement,  except as otherwise
expressly  provided,  (i) the terms defined in this Agreement include the plural
as well as the singular,

     (ii) all  accounting  terms not otherwise  defined herein have the meanings
assigned under generally accepted accounting principles,

     (iii)  all   references  in  this   Agreement  to  designated   "Articles,"
"Sections," "Subsections" and other subdivisions are to the designated Articles,
Sections, Subsections and other subdivisions of the body of this Agreement,

     (iv) all references in this  Agreement to "Exhibits" or "Schedules"  are to
the Exhibits and Schedules attached to this Agreement,

     (v) pronouns of either gender or neuter shall include, as appropriate,  the
other pronoun forms, and

     (vi) unless the context requires  otherwise,  the words "herein,"  "hereof"
and  "hereunder," and other words of similar import refer to this Agreement as a
whole  and  not  to  any  particular  Article,  Section,   Subsection  or  other
subdivision.  As  used  in  this  Agreement  and  the  Exhibits,  the  following
definitions shall apply:

                                      - 3 -
  
<PAGE>



     "Agreement"  means this Asset  Purchase  Agreement by and between Buyer and
Sellers,  as the same may be amended or supplemented in a writing signed by duly
authorized representatives of both parties, together with the Exhibits hereto.

     "Assumed  Liabilities"  mean  the  liabilities  or  obligations  of  Seller
relating to the  Business  that are  specifically  assumed by Buyer  pursuant to
Section 2.3.

     "Business" means the business of providing home health care in the Counties
of Nassau and Suffolk,  State of New York and the  incidents  of such  business,
including  income,  cash  flow,  operations,  condition  (financial  or  other),
anticipated revenues and prospects.

     "Buyer's  Escrow  Agent" means  Robinson Brog  Leinwand  Greene  Genovese &
Gluck, P.C.

     "Claim"  means a claim  of a Loss  arising  in  connection  with any of the
matters set forth in Section 10.2 or 10.3.

     "Closing"  means the  consummation  of the  purchase  and sale  transaction
contemplated by this Agreement and shall be deemed to have occurred effective as
of 12:01 a.m. on the Closing Date.

     "Closing Date" means the day on which the Closing actually occurs.

                                      - 4 -

<PAGE>



     "Closing Escrow Agreement" means the escrow agreement among Buyer,  Sellers
and Buyer's Escrow Agent in the form annexed hereto as Exhibit 3.1(b).

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Contract Escrow Agreement" means the escrow agreement among Buyer, Sellers
and Sellers' Escrow Agent in the form annexed hereto as Exhibit 3.1(a).

     "Contracts"  means the  contracts to which  either  Seller is a party or by
which it is bound as set forth on Schedule 2.1(a).

     "Deposit" means the payment made by Buyer pursuant to Section 3.1(a).

     "Discharge  Plan" means the plan to be submitted by Sellers to the New York
State Department of Health for the surrender of their licenses and the discharge
of their patients.

     "Encumbrance" means in respect of any property or right, any claim, charge,
covenant,  easement,  encumbrance,  security interest,  lien (tax or otherwise),
option,  pledge, right of another,  servitude,  or restriction (whether on sale,
transfer,   disposition   or   otherwise),   whether   imposed   by   agreement,
understanding, law, equity or otherwise.

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended.

     "Excluded Assets" means those assets of Seller referred to in Section 2.2.

     "Fixed Assets" means the fixed, tangible assets listed on Schedule 2.1(c).

                                      - 5 -

<PAGE>



     "Guaranty" means the Guaranty of * and * annexed hereto
as Exhibit 4.2(e).

     "Hours Measuring Period" means the four week period commencing on April 28,
1997 and ending on May 25, 1997,  provided the conditions to the  obligations of
Buyer have been  satisfied  and Sellers  have  notified  Buyer they are ready to
close on or before June 6, 1997, but if such  conditions have not been satisfied
or Sellers are not ready to close,  the Hours Measuring Period shall be the four
weeks immediately prior to the Closing Date.

     "Indemnifiable  Claim"  means  any Loss for or  against  which any party is
entitled to indemnification under this Agreement;  "Indemnified Party" means the
party entitled to indemnity hereunder;  and "Indemnifying Party" means the party
obligated  to  provide  indemnification  hereunder.  

     "Leases" means the lease agreements covering the leasehold interests at * ,
together  with all  amendments,  modifications,  alterations  and other  changes
thereto (each, individually referred to as a "Lease").

     "Loss" means any action, cost, damage,  disbursement,  expense,  liability,
loss,  deficiency,  obligation,  penalty,  fine, assessment or settlement of any
kind or nature, whether foreseeable or unforeseeable,  including but not limited
to,  interest or other carrying  costs,  penalties,  legal,  accounting or other
professional fees or expenses incurred

                                      - 6 -

<PAGE>



in the investigation,  collection,  prosecution or defense of claims, inquiries,
hearings  or other legal or  administrative  proceedings,  and  amounts  paid in
settlement,  that may be imposed on or  otherwise  incurred  or  suffered by the
specified person.

     "Order" means any decree,  injunction,  preliminary  injunction,  temporary
restraining order,  judgment,  order, ruling,  assessment or writ except for (i)
Permits issued to Sellers or statutes and regulations  applicable to the parties
in the  ordinary  course  of  business  and (ii)  the  assignment  of cases  and
directions and orders relating  thereto from Nassau or Suffolk County  officials
in the ordinary course of Sellers' business.

     "Past Practice"  means a lawful practice  followed or observed by Seller in
its operation of the Business during the twelve-month  period ended December 31,
1996.

     "Permit" means any license, permit, franchise, certificate of authority, or
order, or any waiver of the foregoing, required to be issued by any governmental
entity in connection with, and necessary to the operation of, the Business.

     "Plan" means any  "employee  welfare  benefit  plan" (as defined in Section
3(1) of ERISA) or any  "employee  pension  benefit  plan" (as defined in Section
3(2) of ERISA and not exempted  under  Section 4(b) or 201 of ERISA),  including
any "multi-employer pension plan" (as defined in Section 3(37) of ERISA).

     "Purchased Assets" means the assets of Seller described in Section 2.1.

     "Purchase Price" has the meaning set forth in Section 3.1.

     "Rate" means a uniform statewide PCA Level II Medicaid rate for home health
care  services  applicable  for the  year  1997,  if any,  or if in lieu of such
uniform


                                      - 7 -

<PAGE>



statewide  rate there are two separate  (but uniform  within each region)  rates
established  statewide,  one for the  so-called  "upstate" and the other for the
"downstate"  region,  the uniform  rate that is  applicable  to the  "downstate"
region.  Any rate for 1997 for home  health  care  services  other than the Rate
shall for purposes of this Agreement be defined as a "Nonuniform Rate".

     "Required Consents" means the consents,  waivers,  approvals,  licenses and
authorizations listed on Schedule 5.2.

     "Sellers' Escrow Agent" means Hoffinger Friedland Dobrish Bernfeld & Stern,
P.C.

     "Tax" means any foreign,  federal, state, county or local income, sales and
use, excise,  franchise,  real and personal property,  transfer,  gross receipt,
capital stock,  production,  business and  occupation,  disability,  employment,
payroll,  severance or  withholding  tax or charge  imposed by any  governmental
entity, any interest and penalties (civil or criminal) related thereto or to the
nonpayment  thereof,   and  any  Loss  in  connection  with  the  determination,
settlement or litigation of any Tax liability.


                                   ARTICLE II
                                 SALE OF ASSETS

     2.1 Purchased  Assets:  Subject to this  Agreement,  Sellers shall,  at the
Closing,  sell,  assign,  transfer  and  convey to Buyer,  and Buyer  shall then
purchase and acquire from Sellers,  all of Sellers' right, title and interest in
and to:

                                      - 8 -

<PAGE>



          (a) the  Contracts  and all  Sellers'  rights  and  interests  arising
     thereunder;

          (b) the Leases;

          (c) the Fixed Assets;

          (d) subject to regulatory approval(s),  if required, patient lists and
     patient  files of such patients as elect to be  transferred  to Buyer on or
     about the Closing Date pursuant to the Discharge Plan; and

          (e) employee lists and files, including names, addresses and telephone
     numbers.

     2.2 Excluded  Assets:  The Excluded  Assets shall be all of Sellers' assets
except  for those  included  within the  Purchased  Assets,  including,  without
limitation, the following Excluded Assets:

     (a) cash,  accounts  receivable on invoices for sales and services prior to
the Closing Date whether  invoiced before or after the Closing Date, and prepaid
expenses of Sellers;

     (b) rights of Sellers under this Agreement;

     (c) Sellers' cancelled checks, bank statements and tax returns;

     (d)  claims,  refunds,  rights,  choses in action  and  litigation  and the
proceeds thereof received or to be received by Sellers, irrespective of the date
on which any such claim, refund, or right may arise or accrue;

     (e) Sellers' corporate minute books and stock records, tax records, general
ledger and other books of original entry, and original payroll records;

                                      - 9 -

<PAGE>



     (f) all books,  records,  manuals and other materials  relating to Sellers'
business,  including,  without limitation,  advertising matter,  correspondence,
sales materials and research and accounting records;

     (g) Sellers' Federal Tax  Identification  Numbers,  Sellers'  Department of
Health License Number(s) and Sellers' Medicaid Provider Number(s);

     (h)  Sellers'  trade names  "H.H.A.",  "Home  Health"  and all  derivatives
thereof; and

     (i) the items of personal property listed on Schedule 2.2(i).

     2.3 Assumption of Certain Liabilities;  Excluded Liabilities:  Buyer shall,
at the Closing,  assume only those liabilities of Sellers that are expressly set
forth on Schedule  2.3,  provided  that with  respect to all leases,  contracts,
commitments,  licenses, agreements and arrangements assumed by Buyer pursuant to
this  Section 2.3,  all  obligations  of Sellers  arising  thereunder  and to be
performed  prior to the  Closing  Date shall not be  assumed  by Buyer.  Assumed
Liabilities  shall not include any other  liabilities  of Sellers of any kind or
nature,  whether absolute,  contingent,  accrued,  known or unknown, which shall
remain the liabilities of Sellers. Buyer shall not be obligated to engage any of
Sellers' employees after the Closing. Sellers shall at or before Closing pay its
employees all salary,  bonus,  vacation and sick pay, and other similar benefits
that may have accrued to such employees as of the Closing Date, no part of which
shall be assumed by Buyer;  and in the event Buyer shall  engage any of Sellers'
employees  after the  Closing,  Sellers  shall  have no  responsibility  for any
salary, bonus, vacation and sick

                                     - 10 -

<PAGE>



pay, and other similar  benefit Buyer may agree to pay such employees  after the
Closing (even if it purports to relate to a period prior to the Closing Date).

                                   ARTICLE III
                                 PURCHASE PRICE

     3.1 Purchase Price: The price for the Purchased Assets shall be One Million
One Hundred Fifty  Thousand  ($1,150,000)  Dollars (the "Purchase  Price").  The
Purchase Price shall be payable to Sellers as follows:

     (a) $50,000,  to Sellers'  Escrow Agent, by the delivery to Sellers' Escrow
Agent  concurrent with the execution  hereof of a check,  subject to collection,
payable to Sellers'  Escrow Agent in such amount,  to be held by Sellers' Escrow
Agent in accordance with the terms of the Contract Escrow Agreement;

     (b) $50,000,  to Buyer's  Escrow Agent,  by the delivery to Buyer's  Escrow
Agent at Closing of a certified  or bank  cashier's  check,  drawn on a New York
clearing  house member,  payable to Buyer's  Escrow Agent in such amount,  to be
held by Buyer's Escrow Agent until the first  anniversary of the Closing Date as
security  for the  obligations  of Sellers  pursuant  to Section  10.2 hereof in
accordance with the terms of the Closing Escrow Agreement; and

     (c) the  balance,  subject  to the  provisions  of  Section  3.3(a)(i),  by
delivery by Buyer to Sellers at Closing of a certified or bank cashier's check,

                                     - 11 -
                                                                               
<PAGE>



drawn on a New York clearing house member,  or, at the option of Buyer,  by wire
transfer  in such amount to an account  designated  by  Sellers.  As  additional
consideration, Buyer shall assume the Assumed Liabilities.

     3.2  Prorations:  At the Closing,  the parties shall apportion any rents or
other  charges  paid or payable  under the Leases for the  periods  prior to and
subsequent  to the  Closing  Date and  Buyer  shall  reimburse  Sellers  for any
security  deposits,  utility  deposits,  etc.  assigned  by  Sellers to Buyer in
connection with the Leases or other Purchased Assets.

     3.3  Adjustments:  The Purchase Price shall be subject to either or both of
the following adjustments:

     (a) If a Rate shall have been fixed and at an amount  less than  $11.82 per
hour,  the  Purchase  Price  shall  be  reduced  by One  Thousand  Five  Hundred
Thirty-One and 25/100  ($1,531.25)  Dollars for each one ($.01) cent the Rate is
fixed below $11.82 per hour.  For purposes of example only, if the Rate is fixed
at  $11.02,  the  Purchase  Price  shall be reduced  by One  Hundred  Twenty-Two
Thousand Five Hundred ($122,500) Dollars. In the event no Nonuniform Rate and no
Rate has been fixed prior to the Closing Date,  and all of the other  conditions
to Closing  have been  satisfied  or waived by the party  entitled to waive such
conditions,  the parties shall  nevertheless close pursuant to the terms of this
Agreement, as follows:

                                     - 12 -

<PAGE>



     (i) Buyer shall pay to Buyer's Escrow Agent the sum of $50,000  pursuant to
Section  3.1(b)  and shall pay to  Sellers'  Escrow  Agent  the  balance  of the
Purchase  Price (less (x) any credit for the Deposit [which shall continue to be
held by Sellers' Escrow Agent], (y) the sum of $250,000,  which shall be paid to
Sellers in the manner  provided in Section  3.1(c),  without  reference  to this
subparagraph,  and (z) any reduction  resulting from the  application of Section
3.3(b)  following),  to be held by Sellers'  Escrow Agent in accordance with the
terms of the Contract  Escrow  Agreement  until a Nonuniform  Rate or a Rate has
been fixed or as hereinafter provided.

     (ii) If (x) a  Nonuniform  Rate is fixed,  or a Rate is fixed at $11.82 per
hour or higher, the entire amount in escrow, together with the Deposit, shall be
paid to  Sellers  free of  escrow,  or (y) a Rate (if any) is fixed at less than
$11.82 per hour, Sellers' Escrow Agent shall pay to Buyer an amount equal to the
reduction in the Purchase  Price  calculated in accordance  with the formula set
forth  above and shall pay to  Sellers  the  balance  of the  amount in  escrow,
together with the Deposit.

     (iii)  Notwithstanding the foregoing,  if no Nonuniform Rate or no Rate has
been  fixed  prior to  December  31,  1997,  Seller's  Escrow  Agent  shall,  in
accordance with the terms of the Contract Escrow  Agreement,  pay to Sellers out
of the funds held in escrow an amount that,

                                     - 13 -

<PAGE>



when added to subparagraph  (i)(y), will cause Sellers to have received payments
on account of the Purchase  Price to which  Sellers  would be entitled  were the
Rate to be fixed at $10.22  per hour,  less the  $50,000  which has been paid to
Buyer's Escrow Agent pursuant to Section 3.1(b).  Further, if no Nonuniform Rate
or no Rate has been fixed prior to March 31, 1998,  Seller's Escrow Agent shall,
in accordance with the terms of the Contract Escrow Agreement, pay to Sellers on
account of the  Purchase  Price the  balance of the funds it is then  holding in
escrow.

     (iv) In the event that by virtue of the payments set forth in subparagraphs
(i) or (iii) of this Section 3.3(a),  Sellers shall receive a greater portion of
the Purchase  Price than they are found to be entitled to once the Rate has been
fixed,  Sellers shall promptly upon demand from Buyer pay to Buyer the amount of
any excess Purchase Price received by them. To secure such prompt payment,  Paul
Manson and Cora Baliff, the principals of Sellers,  shall at Closing execute and
deliver to Buyer the Guaranty.

     (b) If for the Hours Measuring Period, Sellers shall have averaged 4,795 or
more hours  serviced  per week in their  combined  operations,  calculated  in a
manner consistent with Sellers' usual practice,  but fewer than 5,100 hours, the
Purchase Price shall be reduced by Two Hundred  Ninety-Four and 12/100 ($294.12)
Dollars for each hour the average serviced hours are below 5,100. For

                                     - 14 -

<PAGE>



     purposes of example  only, if the average  serviced  hours during the Hours
Measuring Period is 4,962, the Purchase Price shall be reduced by Forty Thousand
Five  Hundred  Eighty-Eight  and 56/100  ($40,588.56)  Dollars.  For purposes of
calculating  serviced  hours  hereunder,  there shall be included  (x) any hours
serviced during the Hours Measuring Period by aides and field personnel employed
by Buyer  who were on the  date of this  Agreement  employed  by  either  of the
Sellers and (y) any hours serviced during the Hours Measuring Period (except for
hours already  credited  pursuant to clause (x) hereof) by any employee of Buyer
with respect to cases that were on the date of this Agreement cases of either of
the Sellers, except that no credit shall be given for cases of Sellers that were
removed from Sellers during the Hours Measuring  Period by the Nassau or Suffolk
Department  of  Social  Services  at the  patient's  request  or  otherwise  and
subsequently  offered  to  Buyer  in the  ordinary  rotation  of  cases  by such
departments.  In the event of a dispute  between  Buyer  and  Sellers  as to the
average  serviced  hours in the Hours  Measuring  Period,  such dispute shall be
submitted to Manzi Pino,  P.C., or such other accounting firm as may be mutually
agreeable to the parties, for resolution, the decision of which firm being final
and binding on the parties.

     3.4 Allocation of Purchase Price:  The Purchase Price shall be allocated by
the Buyer among the  Purchased  Assets in  accordance  with Schedule 3.4 annexed
hereto and made a part hereof. Such allocation shall be conclusive and binding

                                     - 15 -
                                                                               
<PAGE>



for all purposes and the parties shall file all income or other tax returns in a
manner consistent with such allocation.

                                   ARTICLE IV
                                     CLOSING

     4.1 Closing Date: The Closing under this Agreement  shall take place at the
offices of Robinson Brog Leinwand Greene Genovese & Gluck,  P.C., 1345 Avenue of
the Americas,  New York,  New York 10105,  at 10:00 A.M. not later than ten (10)
days after all Required Consents have been obtained in writing (or at such other
time or place as Buyer and Seller may mutually agree).  At the Closing,  Sellers
shall sell,  assign and transfer the Purchased  Assets to Buyer, and Buyer shall
pay the  Purchase  Price in  accordance  with Section 3.1 and assume the Assumed
Liabilities.

     4.2 Sellers Closing  Documents:  At the Closing,  Sellers shall execute and
deliver or cause to be executed  and  delivered to Buyer,  at Sellers'  cost and
expense, the following:

     (a) such bills of sale,  assignments  and other  instruments of transfer as
shall be  necessary  or required to sell,  assign and  transfer to Buyer all its
right, title and interest in and to the Purchased Assets;

     (b) a certificate of each Seller's  Secretary,  reasonably  satisfactory to
Buyer,  including a  certificate  of  incumbency  of all officers of each Seller
executing any

                                     - 16 -

<PAGE>



documents  pursuant  hereto  and  certifying  the  resolutions  adopted  by each
Seller's  directors and shareholders  approving the sale of the Business and the
Purchased Assets pursuant hereto;

          (c) the certificate referred to in Section 9.1(c);

          (d) the Escrow Agreement;

          (e) the Guaranty;

          (f) Assignment to Buyer of all right, title and interest of Sellers in
     and to all Leases included in the Purchased  Assets (subject to the receipt
     of the Required Consents of the landlords), assignment of security deposits
     made by Sellers  pursuant to any of the Leases,  and assignment to Buyer of
     Sellers'  rights to all  damages in respect  of  exercise  of the powers of
     eminent  domain  or  similar  power  whether  received  before or after the
     Closing;

          (g) New York State sales tax filings, if required;

          (h)  Certificate  of good  standing of each Seller from  Secretary  of
     State of the State of New York; and

          (i) Such other instruments of transfer,  agreements,  certificates and
     other documents as Buyer shall reasonably request.

     4.3 Buyer  Closing  Documents:  At the  Closing,  Buyer  shall  execute and
deliver to Seller or effect the following:

     (a) the checks or wire transfer as provided in Section 3.1 hereof;

                                     - 17 -

<PAGE>



          (b) A certificate of Buyer's  Secretary,  reasonably  satisfactory  to
     Sellers,  including a  certificate  of  incumbency of all officers of Buyer
     executing any documents  pursuant  hereto and  certifying  the  resolutions
     adopted by Buyer's  directors and share  holders  approving the purchase of
     the Purchased Assets pursuant hereto;

     (c) the Escrow Agreement;

     (d) the certificate referred to in Section 9.2(c);

     (e)  certificate  of good standing for Buyer from the Secretary of State of
the State of New York;

     (f) A check, subject to collection, payable to the New York State Sales Tax
Bureau in the amount of the state and/or local sales tax on the portion, if any,
of the Purchase  Price  allocated to Purchased  Assets that are subject to sales
tax; and

     (g) such other  agreements,  certificates  and  documents as Sellers  shall
reasonably request.

     4.4  Proceedings:  All  proceedings  taken and all  documents  executed and
delivered  by the parties on the Closing Date shall be deemed to have been taken
and executed  simultaneously,  and no  proceeding  shall be deemed taken nor any
document  executed  or  delivered  until  all  have  been  taken,  executed  and
delivered.




                                     - 18 -

<PAGE>



                                    ARTICLE V
                    REPRESENTATIONS AND WARRANTIES OF SELLERS

     Sellers,  jointly and severally,  represent and warrant to Buyer,  with the
understanding that Buyer is relying on these  representations  and warranties in
entering into this Agreement, as follows:

     5.1 Organization, Good Standing,  Capitalization and Ownership: Each of the
Sellers is a corporation  duly organized,  validly existing and in good standing
under the laws of the State of New York and has all  requisite  corporate  power
and authority to own,  operate and lease its properties and the Purchased Assets
and to carry on the  Business  as the same is now being  conducted.  Each of the
Sellers only conducts its Business within the State of New York.

     5.2 Authority  Relative to  Agreements,  etc.:  Each of the Sellers has the
requisite  corporate  power and  authority  to execute,  deliver and perform its
obligations  under this Agreement and each agreement,  document,  certificate or
instrument contemplated hereby. The execution,  delivery and performance by each
Seller of this  Agreement  and each such  agreement,  document,  certificate  or
instrument,  and the  consummation of the transactions  contemplated  hereby and
thereby,  have been duly  authorized by all necessary  action on the part of the
Board of Directors and  shareholders  of each Seller and except for the Required
Consents,  (i)  do  not  require  the  consent,  waiver,  approval,  license  or
authorization of any person, entity, or public authority, (ii)


                                     - 19 -

<PAGE>



do not violate, with or without the giving of notice and/or the passage of time,
any law,  rule,  or  regulation,  and (iii)  subject to Schedule  5.2,  will not
conflict  with or result  in a breach or  termination  of any  provision  of, or
constitute  a default  or give rise to a right of  termination  or  acceleration
under, or pursuant to any corporate charter,  by-law,  mortgage,  deed of trust,
indenture, written or oral, or agreement, written or oral, or instrument, or any
Order, law, rule,  regulation or any other restriction of any kind or character,
to which  each  Seller is a party or by which  it,  the  Business  or any of the
Purchased Assets may be bound, or result in the creation of any lien,  charge or
encumbrance  upon any of the  Purchased  Assets or the  Business in favor of any
third party.

     5.3  Effect  of  Agreement:  This  Agreement  has been  duly  executed  and
delivered by each Seller and constitutes,  and each other  agreement,  document,
certificate  or  instrument  contemplated  by this  Agreement  when executed and
delivered  hereunder shall constitute,  a legal, valid and binding obligation of
that Seller, enforceable against that Seller in accordance with its terms.

     5.4 Title to Assets: Subject to the Required Consents,  each of the Sellers
has  good,  valid and  marketable  title to its  properties  and  assets,  real,
personal  and  mixed,  that would be  included  in the  Purchased  Assets if the
Closing took place on the date hereof,  free and clear of all mortgages,  liens,
pledges,   security   interests,   charges,   claims,   restrictions  and  other
encumbrances and defects of title of any nature whatsoever.

                                     - 20 -

<PAGE>



     5.5  Contracts:  Except for the Contracts and Leases,  neither  Seller is a
party  to  or  bound  by  any  written  or  oral  contracts,  leases,  licenses,
agreements,  permits, plans,  commitments or binding arrangements relating to or
affecting  the  Business or the  Purchased  Assets  which would be binding  upon
Buyer. Subject to the Required Consents,  each of the Contracts is in full force
and effect and has not been  assigned  by  Sellers,  modified,  supplemented  or
amended, and neither Sellers nor, to Sellers' knowledge,  the other party to the
Contracts, are in default under any of the Contracts.

     5.6 No Material Adverse Change:  Except as set forth in Schedule 5.6, since
November 30, 1996, there has been no change in the business,  operations, assets
or condition,  financial or otherwise, of the Business from that in existence on
such date other than changes occurring in the ordinary course of business, which
changes have not, in the aggregate,  materially adversely affected,  and are not
expected to materially adversely affect, the Business,  and no employee or group
of  employees  have  terminated  or  noticed  termination  of their  employment,
voluntarily or involuntarily,  which termination(s)  would, except to the extent
such  employees  have been  engaged as  employees  by Buyer,  materially  reduce
Sellers'  workforce  or  result  in the  loss of a  material  part  of  Sellers'
Business.

     5.7 No  Outstanding  Decrees:  There are no Orders of any  federal,  state,
county,  municipal,  foreign or other  government  or of any court,  department,
commission,  board, bureau, agency or other instrumentality  thereof outstanding
against, or relating or

                                     - 21 -

<PAGE>



applicable  to either  Seller or to any of its assets,  properties or businesses
including the Purchased Assets and the Business.

     5.8 Compliance with Law;  Permits:  Sellers have not received notice of any
violation, nor to the best knowledge of Sellers are Sellers in violation of, any
law, statute,  ordinance,  rule, regulation,  order, judgment, writ, injunction,
decree, registration or permit of any foreign, federal, state, county, municipal
or other  government or of any court,  department,  commission,  board,  bureau,
agency or other instrumentality thereof, in each case limited to and relating to
or in connection with the Purchased Assets or the Business.

     5.9 Litigation and Claims: Except as set forth on Schedule 5.9, there is no
action, suit, legal or administrative proceeding, arbitration,  investigation or
other  proceeding or claim  pending or, to the knowledge of Sellers,  threatened
against,  or  affecting  Sellers or any part of the  Business  or the  Purchased
Assets that,  if adversely  determined,  might  reasonably be expected to have a
material  adverse  effect on the  Business,  the  Purchased  Assets (or the use,
operation  or value  thereof),  or  either  Seller's  ability  to  perform  this
Agreement or any aspect of the transactions contemplated by this Agreement .

     5.10 Labor Matters:

     (a)  Except  as set forth on  Schedule  5.10,  there  are no  unfair  labor
practice,  equal  employment  opportunity  or wage and hour  complaints  against
either Seller

                                     - 22 -

<PAGE>



pending or  threatened in writing  before any court,  arbitrator or the National
Labor  Relations Board or any other  governmental or regulatory  board or agency
performing functions relating to employee rights or benefits.  There is no labor
strike,  walkout,  dispute,   slowdown,   disturbance  or  stoppage  pending  or
threatened  against or involving  either Seller.  There is no pending or, to the
knowledge  of Sellers,  threatened  representation  question  or  organizational
activities concerning the employees of either Seller.

     (b) There is no collective bargaining agreement affecting Sellers and there
is no union representing the interests of any of the employees of either Seller.
Except as set forth on  Schedule  5.10,  there are no  pending  suits,  actions,
administrative proceedings, arbitration or other proceedings between Sellers and
any of their employees.  To the best of their knowledge,  except as set forth in
Schedule  5.10,  Sellers have  complied in all material  respects  with all laws
relating to the employment of labor,  including any provisions  thereof relating
to wages,  hours,  collective  bargaining and the payment of social security and
similar taxes,  and Sellers are not liable for any arrears of wages or any taxes
or penalties for failure to comply with any of the  foregoing.  5.11  Compliance
with ERISA;  Pension and  Benefit  Plans:  Neither  Seller  maintains,  or makes
contributions  to, or has in the past  maintained or made  contribution  to, any
Plan.

                                     - 23 -

<PAGE>



     5.12 Taxes:  Each Seller has duly and timely  (after  giving  effect to all
appropriate  extensions) filed or caused to be filed all federal, state, county,
municipal, foreign and other income, franchise, excise, sales, use, withholding,
unemployment and other tax returns and reports required to be filed by it. There
are no unpaid Taxes and there are no known or proposed deficiency assessments in
respect of any federal,  state,  county,  municipal or other tax return filed by
Sellers that might adversely  affect the Purchased  Assets or the Business.  All
monies  required to be  withheld by Sellers  from  employees  for income  taxes,
social  security  and  unemployment  insurance  taxes  have  been  collected  or
withheld,  and either paid to the respective  governmental agencies or set aside
in accounts for such purpose, or accrued, reserved against, and entered upon the
books of Sellers in the ordinary  course of the Business in accordance with Past
Practice.

     5.13  Insurance:  Set forth on Schedule  5.13 is a list of all  policies of
liability,  fire, workers' compensation,  and other forms of insurance
(including  self-insurance) owned or held by, or relating to, Sellers. There are
no pending  material  liability or casualty  claims by or against  Sellers,  the
Purchased Assets or the Business not covered under any such policy.  To the best
of Sellers'  knowledge,  they are not in default with  respect to any  provision
contained in any insurance  policy,  nor have Sellers  failed to give any notice
regarding or present any pending or threatened  claim under any insurance policy
in due and timely fashion.

                                     - 24 -

<PAGE>



     5.14 No Third Party Options:  There are no existing  options or rights held
by or in favor of any person or entity to acquire any of the Purchased Assets or
the Business or any interest therein.

     5.15  Books  of  Account:  The  books,  records  and  accounts  of  Sellers
maintained  with  respect to the  Business,  accurately  and fairly  reflect the
transactions, assets and liabilities of each Seller with respect to the Business
in all material respects.

     5.16  Condition  of  Tangible  Assets:  The Fixed  Assets are in  operating
condition and repair,  subject to normal wear, tear and maintenance,  are usable
in the regular and  ordinary  course of business  and conform to all  applicable
laws, rules and regulations relating to their construction, use and operation.

     5.17 Real Property:

     (a) All real property and  improvements  located on the premises  leased to
Sellers  and  included  in the Leases  are set forth on  Schedule  2.1(a).  With
respect to each rental  property leased to or occupied by Sellers and identified
on Schedule 2.1(a):

     (i) Sellers have, prior to execution of this Agreement,  delivered to Buyer
a true and complete copy of every Lease with respect to which either Seller is a
tenant, sublessor or subtenant; and

     (ii) each Lease is in full force and  effect and has not been  assigned  by
the Seller/Tenant,  modified, supplemented or amended, and neither Seller/Tenant
nor the landlord under any such lease is in default

                                     - 25 -

<PAGE>



under any of the Leases,  and no  circumstances  or state of facts  exists that,
with the giving of notice or passage of time, or both, would permit the landlord
under any Lease to terminate the Lease. (b) The water,  electric,  gas and sewer
utility  services  currently  available to Sellers under the Leases are adequate
for the present use of the Leases by Sellers in conducting the Business.

     (c)  Neither  Seller  has  received  a notice,  oral or  written,  from any
insurance  carrier of such Seller of fire  hazards  with respect to the premises
covered by the Leases.

     (d)  Neither  Seller  has  received  a notice,  oral or  written,  that any
governmental  body has  commenced  or intends to  exercise  the power of eminent
domain or a similar power with respect to all or any part of the property leased
to Sellers included in the Purchased Assets.

     (e) To the best of  Sellers'  knowledge,  the Leases and the  present  uses
thereof comply with the regulations of governmental  bodies having  jurisdiction
over the relevant  property,  and neither Seller has received a notice,  oral or
written,  from any governmental body that the Leases or any improvements erected
or situate on the leased  property,  or the uses  conducted  thereon or therein,
violate any regulations of any governmental  body having  jurisdiction  over the
Leases.

     (f) The  improvements  located on the premises subject to the Leases are in
good  condition  and  Sellers  have no  knowledge  that  such  premises  are not
structurally

                                     - 26 -

<PAGE>



sound or that the  mechanical  and  other  systems  located  therein  are not in
operating  condition or that any condition  exists requiring  material  repairs,
alterations or corrections.

     5.18  Employees:  There are, and at Closing there will be, no  liabilities,
claims or obligations to or by former or current employees of Sellers, including
without  limitation  any severance  obligations  and  liabilities  of Sellers in
connection with any retirement or pension  program,  any other employee  benefit
plans or collective  bargaining,  labor or employment agreement or other similar
arrangement or obligations in respect of employee or retiree health  benefits or
health care plans and insurance  that will become  liabilities or obligations of
Buyer after Closing; or any liability arising out of employment actions taken or
not taken by Sellers  prior to Closing,  including  but not limited to offers of
employment,  liability  under Title VII of the Civil Rights Act of 1964, the Age
Discrimination  in  Employment  Act,  any state  fair  employment  statute,  any
unemployment or workers'  compensation  statute,  or any statutory or common law
theory of liability for alleged wrongful termination,  failure to hire, promote,
transfer, or provide any other incident of employment.

     5.19  Regulatory  Audits:  Since January 1, 1992,  neither  Seller has been
compliance  audited or examined by any federal,  state,  local or private  payor
representatives, except for those examinations the reports of which Sellers have
previously delivered to Buyer for review.

                                     - 27 -

<PAGE>



     5.20 Disclosure:  To the best knowledge of Sellers, neither this Agreement,
nor any certificate, exhibit, schedule, list or other document or data furnished
or to be  furnished  to Buyer  by or on  behalf  of  Sellers  pursuant  to or in
connection  with the  negotiation,  execution and delivery of this Agreement and
transactions  contemplated by this Agreement contains or will contain any untrue
statement of any material  fact,  or omits or will omit to state a material fact
(i) necessary to make the statements  herein or therein not misleading,  or (ii)
necessary in order to provide Buyer with materially  accurate and  substantially
complete information with respect to the matters covered thereby.

                                   ARTICLE VI
                               REPRESENTATIONS AND
                               WARRANTIES OF BUYER

     Buyer hereby represents and warrants to Sellers as follows:

     6.1 Organization and Good Standing:  Buyer is a corporation duly organized,
validly  existing and in good standing  under the laws of the State of New York,
has all requisite  corporate power to own,  operate and lease its properties and
carry on its business as the same is now being conducted.

     6.2  Corporate  Authority:  Buyer  has all  requisite  corporate  power and
authority to execute,  deliver and perform its obligations under this Agreement,
and each

                                     - 28 -

<PAGE>



agreement,   document  or  instrument  required  to  be  delivered  hereby.  The
execution,  delivery and the  performance by Buyer of this  Agreement,  and each
such agreement, document or instrument, and the consummation of the transactions
contemplated  hereby and thereby,  have been authorized by all necessary  action
and except for the Required  Consents,  (i) do not require the consent,  waiver,
approval,  license or authorization of any person,  entity, or public authority,
(ii) do not violate,  with or without the giving of notice and/or the passage of
time,  any  provision of law,  and (iii) will not  conflict  with or result in a
breach or  termination of any provision of, or constitute a default or give rise
to a right of termination or acceleration under, any corporate charter,  by-law,
mortgage,  deed of trust,  indenture  or other  agreement or  instrument  or any
order,  judgment,  decree,  statute,  regulation or any other restriction of any
kind or  character,  to which  Buyer is a party or by which any of its assets or
properties  may be  bound,  or  result in the  creation  of any lien,  charge or
encumbrance upon any of the properties or assets of Buyer.

     6.3 Effect of Agreement,  etc.:  This  Agreement has been duly executed and
delivered by Buyer and constitutes, and each other document contemplated by this
Agreement when executed and delivered in accordance  with the provisions  hereof
shall constitute,  a legal, valid and binding  obligation of Buyer,  enforceable
against it in accordance with its terms.

     6.4 No  Outstanding  Decrees:  There are no Orders of any  federal,  state,
county,  municipal,  foreign or other  government  or of any court,  department,
commission,

                                     - 29 -

<PAGE>



board, bureau, agency or other  instrumentality  thereof outstanding against, or
relating or applicable to Buyer or to any of its assets, properties or business.

     6.5  Compliance  with Law;  Permits:  Buyer has not received  notice of any
violation, nor to the best knowledge of Buyer is Buyer in violation of, any law,
statute, ordinance, rule, regulation, order, judgment, writ, injunction, decree,
registration  or permit of any foreign,  federal,  state,  county,  municipal or
other government or of any court, department,  commission, board, bureau, agency
or other instrumentality  thereof, in each case limited to and relating to or in
connection with its assets, properties or business.

     6.6  Litigation   and  Claims:   There  is  no  action,   suit,   legal  or
administrative  proceeding,  arbitration,  investigation  or other proceeding or
claim pending or, to the knowledge of Buyer,  threatened  against,  or affecting
Buyer that,  if adversely  determined,  might  reasonably  be expected to have a
material  adverse  effect on Buyer's  ability to perform  this  Agreement or any
aspect of the transactions  contemplated by this Agreement.  6.7 Disclosure:  To
the best  knowledge  of Buyer,  neither  this  Agreement,  nor any  certificate,
exhibit,  schedule,  list or other document or data furnished or to be furnished
to  Sellers  by or on  behalf of Buyer  pursuant  to or in  connection  with the
negotiation,   execution  and  delivery  of  this  Agreement  and   transactions
contemplated by this Agreement  contains or will contain any untrue statement of
any material  fact, or omits or will omit to state a material fact (i) necessary
to make the statements herein or

                                     - 30 -

<PAGE>



therein not  misleading,  or (ii)  necessary  in order to provide  Sellers  with
materially accurate and substantially  complete  information with respect to the
matters covered thereby.


                                   ARTICLE VII
                               COVENANTS OF SELLER

     Seller covenants and agrees as follows:

     7.1 Actions  Pending the  Closing:  With  respect to the  operation  of the
Business and the ownership of the Purchased  Assets  between the signing of this
Agreement and until the Closing:

     (a) Each Seller shall keep its corporate franchise and all other franchises
and rights in full force and effect and shall not  acquire any stock or business
or assets of any other person, corporation or entity;

     (b) Each Seller shall use its best efforts to keep the Business  intact and
to preserve and maintain the  Purchased  Assets and preserve the goodwill of its
patients, suppliers, referral sources and third party payors;

     (c) Each Seller shall  conduct the Business  and use the  Purchased  Assets
only in the  ordinary  and usual  course  and in a manner  consistent  with Past
Practice;

                                     - 31 -
 
<PAGE>



     (d) Except to the extent  consistent  with prior  practice,  neither Seller
shall increase the  compensation  or rate of  compensation  payable to any field
personnel nor shall any bonus or other extraordinary compensation be paid to any
such person;

     (e) Sellers  shall not enter into,  create or assume any  indebtedness  for
borrowed money or create any lien, encumbrance, mortgage or security interest in
any of their  properties or assets,  or assume,  guaranty,  endorse or otherwise
become liable with respect to the obligations of any other person or entity;

     (f)  Sellers  shall  continue  to  maintain  in full  force and  effect all
policies of  insurance  described  on Schedule  5.13 or  comparable  replacement
insurance;

     (g) Sellers shall not amend or enter into any contract,  agreement,  lease,
plan or other  instrument  or commitment to which either Seller is a party which
would be binding on Buyer except in the  ordinary  course of the  Business,  and
Sellers shall not enter into any  long-term  commitment to purchase or lease any
capital assets which would be binding on Buyer;

     (h)  Neither  Seller  shall  enter into any  transaction  or take any other
action that, if effected or taken prior to the date hereof,  would  constitute a
breach of the representations, warranties or agreements set forth herein; and

     (i) If Sellers become aware of same, Sellers shall promptly notify Buyer of
the  existence of any  condition or event that would  constitute a breach of the
representations and warranties hereunder.

                                     - 32 -

<PAGE>



     7.2 Compliance with Conditions:  Sellers shall use their reasonable efforts
in good faith to cause the Closing to be consummated  and to cause the execution
and  delivery  of the  documents  referred to in Section 4.2 hereof and to bring
about the  satisfaction  of the conditions to the obligations of Buyer set forth
in  Section  9.1,  provided  that  Sellers  shall not be  required  to incur any
significant  or  extraordinary  expense or commence any  litigation  in order to
satisfy such conditions, it being specifically understood that Sellers shall not
be required  to make any  payments  to any  landlord  to obtain said  landlord's
consent to an assignment of lease.

     7.3 Access:  Buyer  acknowledges  that each Seller has caused its officers,
directors, employees and agents to give to Buyer and its officers, employees and
counsel  reasonable  access  to the  facilities,  assets,  properties,  books of
account,  leases,  agreements,  records and  personnel of the  Business,  and to
furnish  to Buyer or its  representatives  certain  information  concerning  the
Business as Buyer has requested in connection  with its due  diligence.  Pending
the Closing and  thereafter,  Sellers shall  continue to provide Buyer with such
information and data in Sellers' possession as Buyer may reasonably request.

     7.4 Cessation of Operations:  Commencing on the Closing Date, Sellers shall
suspend all of their business operations and shall diligently proceed to lay off
all of their field  personnel,  cease  providing  any and all  services to their
patients, and surrender

                                     - 33 -

<PAGE>



their home care  licenses  under  Article 36 of the New York State Public Health
Law pursuant to the Discharge Plan.

                                  ARTICLE VIII
                               COVENANTS OF BUYER

     Buyer covenants and agrees as follows:

     8.1 Compliance with Conditions:  Buyer shall use its reasonable  efforts in
good faith to cause the Closing to be consummated and to cause the execution and
delivery of the  documents  referred to in Section 4.3 hereof and to bring about
the  satisfaction  of the conditions of the  obligations of Sellers set forth in
Section 9.2,  provided that Buyer shall not be required to incur any significant
or  extraordinary  expense or commence any  litigation  in order to satisfy such
conditions, it being specifically understood that Buyer shall not be required to
make any  payments  to any  landlord  to obtain  said  landlord's  consent to an
assignment of lease.

     8.2 No  Solicitation:  During the period  between  the date  hereof and the
Closing,  Buyer shall not  initiate or seek  contact  with any of Sellers'  home
health care aides,  Sellers'  other  employees  or any patients (or their family
members)  serviced  by  Sellers;  nor  shall  Buyer  (i)  directly  solicit  for
employment  any of either  Seller's  officers,  directors,  employees or agents,
including  Sellers'  field  personnel or (ii) seek to obtain any of the patients
serviced by Sellers or their cases, in whole or in part. Notwithstanding the

                                     - 34 -

<PAGE>



foregoing, Buyer may during such period engage any personnel who are on the date
hereof employees of Sellers who may respond to Buyer's newspaper  advertisements
or who may  voluntarily  seek employment with Buyer and may accept patient cases
offered to it by the Department of Social Services or otherwise coming available
through the voluntary actions of the subject patient.

     8.3 Post-Closing Access: After the Closing, for a period of seven (7) years
from the Closing Date,  Buyer (and any  successors or assigns)  shall retain and
make available to Sellers for any lawful purpose,  upon reasonable notice and at
reasonable times,  those books and records of the Business  delivered by Sellers
to Buyer as provided  herein with respect to periods prior to the Closing and to
actions and events after the Closing to the extent they relate to periods  prior
to the  Closing,  provided  that such seven year period shall be extended for as
long as is reasonably  necessary to enable Sellers or their  representatives  to
conduct or maintain any actions or suits accruing on or before the Closing Date,
with respect to the specific categories of documents that Sellers notified Buyer
are germane to such actions or suits.

     8.4  Maintenance  of Records:  Buyer (and any  successors or assigns) shall
maintain in their current  condition all patient records delivered by Sellers to
Buyer for a period commencing on the Closing Date and continuing until the later
to occur of (i) seven (7) years  after the date of the last entry in the medical
record or (ii) one (1) year after any patient or former  patient who was a minor
on the Closing Date reaches his or

                                     - 35 -

<PAGE>



her majority,  or (iii) any time period  required by applicable law, or Federal,
state or local  agency  regulation,  provided  that  any  such  period  shall be
extended  for as long as is  reasonably  necessary  to enable  Sellers  or their
representatives  to conduct or  maintain  any  actions or suits  accruing  on or
before the Closing Date. If Buyer ceases to conduct  operations prior to the end
of such seven year  period,  Buyer  shall give  Sellers  sixty (60) days'  prior
written  notice and an  opportunity  to accept  from  Buyer a  transfer  of such
patient  records  from Buyer,  and if Sellers  elect not to accept such  patient
records,  Buyer's  obligations under this Section 8.3 shall cease. This covenant
shall be contained in any subsequent sale or transfer of the Business by Buyer.

                                   ARTICLE IX
                  CONDITIONS TO THE OBLIGATIONS OF THE PARTIES

     9.1  Conditions  to the  Obligations  of Buyer:  The  obligations  of Buyer
hereunder shall be subject,  to the extent not waived by Buyer, to the following
conditions:

     (a) The representations and warranties of Sellers set forth herein shall be
true and correct in all material  respects as of the date when made and shall be
deemed to be made again at and as of the time of the  Closing  and shall then be
true and correct,  provided,  however, that for purposes of this condition,  any
representation  or warranty  that is by its terms  limited to the  knowledge  of
Sellers shall not be deemed so limited.

                                     - 36 -

<PAGE>



     (b) Each  Seller  shall have  performed  and  complied  with all  covenants
required by this Agreement to be performed or complied with by it prior to or at
the Closing.

     (c) Each  Seller  shall  deliver  to Buyer a  certificate,  dated as of the
Closing Date, signed by the Chief Executive  Officer of such Seller,  certifying
to  the   fulfillment  as  to  such  Seller  of  the  conditions   specified  in
subparagraphs (a) and (b) hereof.

     (d) All corporate action required to be taken by Sellers in connection with
the  transactions  contemplated  by this  Agreement  shall have been taken,  all
documents  incident  thereto shall be reasonably  satisfactory  in substance and
form to Buyer,  and Buyer shall have received  such  originals or copies of such
documents as it may reasonably request.

     (e) No order of any court or  governmental  agency  shall be in effect that
restrains or prohibits the consummation of the transactions contemplated by this
Agreement,  or that would limit or adversely  affect the ability of Buyer to own
or control the Purchased  Assets or to operate the Business,  nor shall there be
pending or  threatened in writing any action or proceeding by or before any such
court or  governmental  agency seeking to prohibit or delay or  challenging  the
validity of this Agreement or the transactions contemplated by this Agreement.

     (f) No suit, action, investigation,  inquiry or proceeding by any person or
entity or by any governmental body or other legal or administrative  proceedings
shall

                                     - 37 -

<PAGE>



have been  instituted that questions the validity or legality of this Agreement,
the  consummation  of the  transactions  contemplated  hereby,  the  sale of the
Business  and the  Purchased  Assets  by the  Seller,  or the  operation  of the
Business by Buyer.

     (g) There  shall  have been no  material  adverse  change in the  nature of
Sellers'  Business or in the  workforce  of home health  aides  between the date
hereof and the Closing Date. Specifically,  but not by way of limitation of this
provision,  it shall be deemed a material change in Sellers' business if for the
four weeks  immediately  prior to the Closing Date,  Sellers have averaged fewer
than 4,795 serviced hours in their combined  operations,  calculated in a manner
consistent with Sellers' usual practice.

     (h) Buyer shall have received the consent of the landlord to the assignment
to Buyer of the Lease for the space  located at * together  with the  landlord's
estoppel  letter  concerning  Home Health,  or Sellers shall have waived Buyer's
obligations  to assume the Lease (in which  event Buyer shall not have the right
to occupy such premises).

     (i) Buyer shall have received the consent of the landlord to the assignment
to Buyer of the Lease for the space located at 1787 Veterans Highway,  Islandia,
New York together with the landlord's estoppel letter concerning HHA, or Sellers
shall have waived Buyer's  obligations to assume the Lease (in which event Buyer
shall not have the right to occupy such premises).

     (j) Sellers'  Closing  documents  described in Section 4.2 hereof in a form
reasonably satisfactory to Buyer shall have been executed and delivered.

                                     - 38 -

<PAGE>



     (k) Buyer shall have  received  all the Required  Consents  necessary to be
received by Buyer and Sellers shall concurrent with the Closing  surrender their
home care licenses under Article 36 of the New York State Public Health Law. All
parties  hereto  represent  each  knows of no reason why the  Required  Consents
should not be issued  and all  parties  shall  diligently  pursue  the  Required
Consents.  Each party  agrees to assist the other from time to time in complying
with reasonable  requests for such  information as may be required to obtain the
Required Consents.

     9.2  Conditions  to the  Obligations  of Sellers:  All the  obligations  of
Sellers hereunder shall be subject,  to the extent not waived by Sellers, to the
following conditions:

     (a) All representations and warranties of Buyer contained in this Agreement
shall be true and accurate in all material respects as of the date when made and
shall be deemed to be made again at and as of the Closing and shall then be true
and accurate in all material respects.

     (b) Buyer shall have performed and complied with all covenants  required by
this  Agreement  to be  performed  or  complied  with by it  prior  to or at the
Closing.

     (c) Buyer shall deliver to Sellers a  certificate,  dated as of the Closing
Date,  signed  by the  Chief  Executive  Officer  of  Buyer,  certifying  to the
fulfillment of the conditions specified in subparagraphs (a) and (b) hereof.

                                     - 39 -

<PAGE>



     (d) All corporate  action  required to be taken by Buyer in connection with
the  transactions  contemplated  by this  Agreement  shall have been taken,  all
documents  incident  thereto shall be reasonably  satisfactory  in substance and
form to Sellers,  and Sellers shall have  received  such  originals or copies of
such documents as they may reasonably request.

     (e) No order of any court or  governmental  agency  shall be in effect that
restrains or prohibits the consummation of the transactions contemplated by this
Agreement,  or that would limit or adversely  affect the ability of Buyer to own
or control the Purchased  Assets or to operate the Business,  nor shall there be
pending or  threatened in writing any action or proceeding by or before any such
court or  governmental  agency seeking to prohibit or delay or  challenging  the
validity of this Agreement or the transactions contemplated by this Agreement.

     (f) Buyer's  Closing  documents  described  in Section 4.3 hereof in a form
reasonably satisfactory to Sellers shall have been executed and delivered.

     (g) No suit, action, investigation,  inquiry or proceeding by any person or
entity or by any governmental body or other legal or administrative  proceedings
shall have been  instituted  that  questions  the  validity  or legality of this
Agreement,  the consummation of the  transactions  contemplated  hereby,  or the
operation of the Business by Buyer.

     (h) Sellers shall have received all the Required  Consents  necessary to be
received by Sellers.

                                     - 40 -

<PAGE>



                                    ARTICLE X
                         SURVIVAL OF REPRESENTATIONS AND
                      WARRANTIES; DAMAGES; INDEMNIFICATION

     10.1 General Survival: Notwithstanding any investigation or audit conducted
before or after the Closing Date,  each party shall be entitled to rely upon the
representations  and warranties in this Agreement to the extent  hereinafter set
forth. The parties hereto agree that the  representations  and warranties of the
parties  contained  in this  Agreement  shall  survive  for the  period  of time
represented by three months  following the  expiration of applicable  statute of
limitations to claims asserted by a party concerning such matters.

     10.2 Indemnification by Sellers:

          (a) Sellers  hereby,  jointly and  severally,  covenant and agree with
     Buyer that they shall  indemnify  Buyer and its  directors and officers and
     each of their successors and assigns, and the directors and officers of any
     such  successors and assigns,  and hold them harmless from,  against and in
     respect of any Indemnifiable Claims incurred by any of them arising out of:

               (i) the  operation of the Business  prior to the Closing Date and
          the liabilities of Sellers, whether accrued,  absolute,  contingent or
          otherwise, to the extent not included in the Assumed Liabilities;

                                     - 41 -

<PAGE>



               (ii) any breach of any of the  representations  and warranties of
          Sellers  that survive  Closing  pursuant to Section 10.1 to the extent
          and for the  period  of such  survival,  provided,  however,  that for
          purposes of this indemnity,  any representation or warranty that is by
          its terms  limited to the  knowledge of Sellers shall not be deemed so
          limited  and  provided  further,  that  Buyer  shall  be  entitled  to
          indemnity  under this  Section  10.2(a)(ii)  only if and to the extent
          that  Sellers'  breach of any  representation  or warranty  results in
          monetary damage to Buyer;

               (iii) Buyer's waiver of Sellers'  compliance  with any applicable
          Bulk Sales Law; and

               (iv)  any  action,  suit,  proceeding,   compromise,  settlement,
          assessment or judgment relating to any Indemnifiable Claim.

     (b) If, by reason of the assertion of an  Indemnifiable  Claim by any third
party,  a lien,  attachment,  garnishment or execution is placed upon any of the
property or assets of an Indemnified  Party,  Sellers shall furnish an indemnity
bond so as to obtain the prompt release of such lien, attachment, garnishment or
execution.  Buyer shall notify  Sellers of any  Indemnifiable  Claims,  promptly
after  Buyer  becomes  aware of any such  Claims.  If any Claims are  litigated,
arbitrated,  settled or reduced to final  judgment and Buyer is  reimbursed by a
third party for any costs  advanced by Seller  pursuant  to this  Section  10.2,
Buyer shall  return such sums to Sellers  together  with  interest to the extent
Buyer received interest on such sums.

                                     - 42 -
                                                                                
<PAGE>



     10.3 Indemnification by Buyer.

     (a) Buyer hereby  covenants and agrees with Sellers that it shall indemnify
Sellers and their respective directors and officers and each of their successors
and assigns and the directors and officers of any such  successors  and assigns,
and hold them harmless from,  against and in respect of any Indemnifiable  Claim
arising out of:

     (i) the operation of the Business on and following the Closing Date and the
liabilities of Buyer, whether accrued, absolute, contingent or otherwise;

     (ii) any breach of any of the  representations and warranties of Buyer that
survive  Closing  pursuant  to Section  10.1 to the extent and for the period of
such survival,  provided that a Seller shall be entitled to indemnity under this
Section  10.3(a)(ii)  only  if and to the  extent  that  Buyer's  breach  of any
representation or warranty results in monetary damage to that Seller;

     (iii) the breach or cancellation of any Contract or the payment, settlement
or other disposition of any of the Assumed Liabilities; and

     (iv) any action, suit, proceeding,  compromise,  settlement,  assessment or
judgment relating to any Indemnifiable Claim.

     (b) If, by reason of the assertion of an  Indemnifiable  Claim by any third
party,  a lien,  attachment,  garnishment or execution is placed upon any of the
property or assets of an  Indemnified  Party,  Buyer shall  furnish an indemnity
bond so as to obtain the prompt release of such lien, attachment, garnishment or
execution. Sellers shall notify

                                     - 43 -

<PAGE>



Buyer of any  Indemnifiable  Claims,  promptly after Sellers become aware of any
such Claims,  which could be made  pursuant to this Section  10.3. If any Claims
are  litigated,  arbitrated,  settled or reduced  to final  judgment  and either
Seller is reimbursed by a third party for any costs  advanced by Buyer  pursuant
to this Section 10.3,  such Seller shall return such sums to Buyer together with
interest to the extent such Seller received interest on such sums.

     10.4 Right to Defend,  Etc. If the facts  giving  rise to an  Indemnifiable
Claim pursuant to Section 10.2 or 10.3 involve any actual Claim or demand by any
third  party  against an  Indemnified  Party,  the  Indemnifying  Party shall be
entitled to notice of and be  entitled  (without  prejudice  to the right of any
Indemnified  Party to  participate  at its  expense  through  counsel of its own
choosing) to defend or prosecute  such Claim at its expense and through  counsel
of its own  choosing,  which counsel  shall be  reasonably  satisfactory  to the
Indemnified  Party,  if it gives written notice of its intention to do so to the
Indemnified  Party;  provided that if the defendants in any action shall include
both an Indemnified  Party and an Indemnifying  Party and the Indemnified  Party
shall have reasonably concluded, after consultation with the Indemnifying Party,
that  counsel  selected  by the  Indemnifying  Party has a conflict  of interest
because of the  availability  of different or additional  legal  defenses to the
Indemnified Party, the Indemnified Party shall have the right to select separate
counsel to  participate  in the  defense of such  action on its  behalf,  at the
expense of the Indemnifying  Party. All notices under this Section 10.4 shall be
given  prior to the time by which the  interests  of the party or  parties to be
notified will

                                     - 44 -

<PAGE>



be  materially  prejudiced  as a result of the  failure  to have  received  such
notice.  Such  Indemnified  Party shall  cooperate  fully in the defense of such
Claim and shall make available to the  Indemnifying  Party,  as the case may be,
all  pertinent  information  under its control  relating  thereto,  but shall be
entitled to be  reimbursed,  as provided in Section 10.2 or 10.3,  for all costs
and expenses incurred by it in connection therewith.

     10.5 Non-Waiver:  Failure of an Indemnified Party to give reasonably prompt
notice of any Claim or Claims  shall not release,  waive or otherwise  affect an
Indemnifying  Party's obligations with respect thereto except to the extent that
the Indemnifying  Party can demonstrate actual loss and prejudice as a result of
such  failure or that the  failure to give notice by the  Indemnified  Party was
intentional.

     10.6 Payment of Claim:  Upon the  determination of the liability of Sellers
or Buyer under  Section 10.2 or 10.3,  as the case may be, after  payment by the
Indemnified  Party  of,  or upon  entry  of  final  judgment  or  reaching  of a
settlement in respect of, an  Indemnifiable  Claim, or determination of the Loss
of Indemnified  Party of the Loss  occasioned by the breach of a  representation
and warranty by the  Indemnifying  Party, and notice thereof to the Indemnifying
Party,  the  Indemnifying  Party shall within  thirty (30) days after receipt of
such notice pay to the  Indemnified  Party the amount of the payment,  judgment,
settlement or Loss, as the case may be, or, if the Indemnified Party has not yet
paid the  Indemnifiable  Claim to any third party giving rise  thereto,  pay the
amount of the Indemnifiable Claim thus determined directly to such third party.

                                     - 45 -

<PAGE>



     10.7 Other Rights and Remedies Not Affected:  The indemnification rights of
the  parties  under this  Article X are  independent  of and in addition to such
rights and remedies as the parties may have at law or in equity or otherwise for
any misrepresentation, breach of warranty or failure to fulfill any agreement or
covenant hereunder on the part of any party hereto, including without limitation
the right to seek specific performance, rescission or restitution, none of which
rights or remedies  shall be affected or diminished  hereby;  and the Deposit is
not  intended  to be the full  measure of any  damages to which  Sellers  may be
entitled  in the event of a default by Buyer,  provided  that in the event Buyer
shall be held  liable to  Sellers  for  damages,  Buyer  shall  receive a credit
against such damages in the event the Deposit is paid to Sellers.

                                   ARTICLE XI
                            POST-CLOSING OBLIGATIONS

     11.1 Further  Assurances:  If, at any time after the Closing,  either party
shall  consider  or  be  advised  that  any  further  assignments,  conveyances,
certificates,  filings,  instruments  or  documents  or  any  other  things  are
necessary  or  desirable  to vest,  perfect  or  confirm  in Buyer  title to the
Purchased Assets, or to consummate any of the transactions  contemplated by this
Agreement,  the other party shall,  upon request and at the  requesting  party's
expense,  promptly  execute  and deliver  all such  proper  deeds,  assignments,
certificates, filings, instruments and documents and do all things reasonably

                                     - 46 -

<PAGE>



necessary and proper to vest, perfect or confirm title in Buyer and to otherwise
carry out the purposes of this Agreement.

     11.2  Transfer of Funds:  Buyer shall  promptly  transfer to Home Health or
HHA, as  appropriate,  any sums  received by Buyer after  Closing  (whether  the
result  of  inadvertent  or  erroneous   collections  of  accounts   receivable,
retroactive  increases  in  rates  payable  to  Sellers  prior  to  Closing,  or
otherwise) that are properly payable to the Sellers.

     11.3 Restrictive  Covenant: In further consideration of the Purchase Price,
after the Closing, * and *, the principals of Sellers, shall not

     (a) for five (5) years after the Closing Date,  directly or indirectly,  as
principal, agent, partner or consultant or in any other capacity, or through any
affiliated entity over which they have control or with which they are associated
in any way,  engage,  within the New York  State  counties  of New York,  Bronx,
Kings, Queens, Staten Island, Nassau, Suffolk,  Westchester,  Rockland, Duchess,
Putnam, Sullivan, Ulster and Orange, in any business or venture that offers home
health  care  services.  For  purposes  of this  paragraph,  direct or  indirect
ownership by * and * of  securities  in the aggregate not in
excess  of 2% of any  class of  securities  of a  public  company  shall  not be
considered competition with Buyer;

     (b) solicit for  themselves  or any person other than Buyer the business of
any person that is a referral source, customer, patient or client of Sellers, or
was Sellers' referral source, customer, patient or client within two years prior
to the Closing Date;

                                     - 47 -
                                                                           
<PAGE>



     (c) persuade or attempt to persuade  any  employee of either  Seller or any
individual who was Sellers'  employee  during the two years prior to the Closing
Date, to leave the employ of Buyer; or

     (d)  recognizing  that  Sellers'  information  regarding  the  property and
business  of  Sellers'  past  and  present  clients,  patients,   customers  and
contracting  parties  ("Confidential  Information")  are  valuable,  special and
unique  assets of  Sellers,  use for their own benefit or for the benefit of any
other employer or other person or disclose to any business,  firm,  corporation,
association,  venture  or other  entity or  person  for any  reason  or  purpose
whatsoever Sellers' Confidential Information or any part thereof.

     (e) * and *  acknowledge  and agree  that the  covenants  and  undertakings
contained in this Agreement relate to matters that are of a special,  unique and
extraordinary character and that a violation of any of the terms of this Section
11.2 will cause  irreparable  injury to Buyer and that the amount of such injury
will be  difficult,  if not  impossible,  to estimate or determine and cannot be
adequately  compensated by monetary  damages.  Therefore,  they agree that Buyer
shall be entitled,  in addition to all other rights and remedies available under
this  Agreement and  applicable  law, as a matter of course,  to an  injunction,
restraining  order or  other  equitable  relief  from  any  court  of  competent
jurisdiction,  restraining any violation or threatened  violation of any of such
terms by Paul  Manson and Cora  Baliff  and by such  other  persons as the court
shall order.



                                     - 48 -

<PAGE>



                                   ARTICLE XII
                                  MISCELLANEOUS

     12.1 Termination of Agreement:  This Agreement may be terminated by Sellers
(but only acting jointly) or Buyer by delivering  written notice to the other at
any time prior to the Closing Date:

     (a) by the mutual written consent of all the parties hereto; or

     (b) by  Sellers  if  there  has  been a  material  breach  by  Buyer of any
representation,  warranty,  covenant  or  agreement  contained  herein or if any
condition  contained  in  this  Agreement  that  must  be met by  Buyer  becomes
impossible to fulfill; or

     (c) by  Buyer if  there  has  been a  material  breach  by  Sellers  of any
representation,  warranty or  agreement  or if any  condition  contained in this
Agreement that must be met by Sellers becomes impossible to fulfill;

     (d) by either party if with  respect to items 1 through 4 of Schedule  5.2,
any of the  applicable  governmental  agencies  has  formally  rejected  Buyer's
application for a Required Consent; or

     (e) by either party if the Required  Consents  have not been received on or
before July 1, 1998.

     12.2  Termination  Liabilities:  In the event this  Agreement is terminated
pursuant to Section 12.1 above,  no party hereto shall have any liability to any
other party hereto for costs, expenses,  damages, loss of anticipated profits or
otherwise; provided,

                                     - 49 -

<PAGE>



that if  termination  occurs  because  of any  misrepresentation  or  breach  of
warranty  herein by a party  hereto,  such  termination  shall not  preclude any
rights  that the other  party  hereto  may have  against  such  party for costs,
expenses,  damages,  loss of anticipated profits or otherwise on account of such
party's misrepresentation or breach.

     12.3 Bulk Transfer Law: Buyer hereby waives  compliance by Sellers with the
provisions of any so-called bulk transfer law of any  jurisdiction in connection
with  the  sale of the  Purchased  Assets  to Buyer  hereunder.  Nothing  herein
contained  shall be deemed to imply that any of the parties  hereto asserts that
any so-called bulk transfer law in fact applies to the within transaction.

     12.4 Waivers and Amendments:

     (a) This  Agreement  may be  amended,  modified or  supplemented  only by a
written  instrument  executed  by the parties  hereto.  The  provisions  of this
Agreement may be waived only by an  instrument in writing  executed by the party
granting the waiver. The waiver by any party hereto of a breach of any provision
of this  Agreement  shall not operate or be construed as a further or continuing
waiver of such breach or as a waiver of any other or subsequent breach.

     (b) No  failure  on the  part of any  party  to  exercise,  and no delay in
exercising,  any  right,  power or remedy  hereunder  shall  operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such party preclude any other or further  exercise thereof or the exercise of
any other right, power or remedy.

                                     - 50 -

<PAGE>



All  remedies  hereunder  are  cumulative  and are not  exclusive  of any  other
remedies provided by law.

     12.5 Fees and  Expenses:  Except as  otherwise  expressly  provided in this
Agreement,  Buyer shall be responsible for all its fees and expenses incurred in
connection  with this  transaction,  and Seller shall be responsible for all its
fees and expenses incurred in connection with this  transaction.  Buyer shall at
the Closing pay to Sellers,  in  addition to the  Purchase  Price,  the New York
State and  applicable  local sales tax,  if any, on the portion of the  Purchase
Price allocated to the Fixed Assets.

     12.6  Attorneys'  Fees:  In the  event  of any  litigation  concerning  any
controversy,  claim or dispute  between the parties  hereto arising out of or in
relation to this Agreement,  or the breach hereof, or the interpretation hereof,
the  prevailing  party  shall be  entitled  to  recover  from the  losing  party
reasonable  attorneys'  fees, and costs and expenses  incurred therein or in the
enforcement  or  collection  of any  judgment  or award  rendered  therein.  The
"prevailing  party" means the party determined by the court or arbitration panel
to have  most  nearly  prevailed,  even if such  party  did not  prevail  in all
matters, and not necessarily the one in whose favor a judgment is rendered.

     12.7  Notices:  All  notices,  requests,  demands and other  communications
required  or which may be given  under this  Agreement  shall be in writing  and
shall be deemed to have been duly given or made:  if by hand,  immediately  upon
delivery; if by telecopier immediately upon sending,  provided it is sent during
business hours on a

                                     - 51 -

<PAGE>



business  day,  but if not,  then  immediately  upon the  beginning of the first
business day after being sent; if by Federal Express,  Express Mail or any other
overnight delivery service, on the first business day after timely dispatch; and
if mailed by  certified  mail,  return  receipt  requested,  two (2) days  after
receipt or the return of the notice to sender marked  "unclaimed".  All notices,
requests  and demands  are to be given or made to the  parties at the  following
addresses  (or to such other  address as either party may designate by notice in
accordance with the provisions of this paragraph):

If to *
If to *

If to Buyer:                175-20 Hillside Avenue
                            Jamaica, New York 11432
                            Attention:   Richard Garofalo, President
                            Telephone:   (718) 657-2966
                            Telecopier:  (718) 291-5987

With a copy to:             Robinson Brog Leinwand Greene Genovese & Gluck, P.C.
--------------
                            1345 Avenue of the Americas
                            New York, New York  10105
                            Attention:   Marshall J. Gluck, Esq.
                            Telephone:   (212) 586-4050
                            Telecopier:  (212) 956-2164



                                     - 52 -
                     
<PAGE>



     12.8 Entire Agreement: This Agreement and the schedules and exhibits hereto
set forth the entire agreement and understanding between the parties hereto with
respect to the  subject  matter  hereof and  supersede  any prior  negotiations,
agreements,  letters of  intent,  understandings  or  arrangements  between  the
parties hereto with respect to the subject matter hereof.

     12.9  Schedules:  Any information or data disclosed on any schedule to this
Agreement that is also relevant to any other schedule to this Agreement shall be
deemed to be included in such other schedule as if set forth therein in full.

     12.10 Binding Effect;  Benefits:  This Agreement shall inure to the benefit
of and be binding upon the parties  hereto and their  respective  successors and
assigns. Nothing in this Agreement,  expressed or implied, is intended to confer
on any person other than the parties hereto, or their respective  successors and
assigns, any rights, remedies,  obligations or liabilities under or by reason of
this Agreement.

     12.11  Non-Assignability:  This  Agreement  and any rights and  obligations
pursuant  hereto shall not be assignable  by any party hereto  without the prior
written consent of the other party.

     12.12 Brokers. The parties hereby represent to each other that no person or
entity has acted as investment  banker,  broker or finder  hereunder  except for
Stewart  Kramer  or his  business  entity,  for  whose  fees  Sellers  shall  be
responsible  and  except  for  Robert  Chestman,  for whose  fee Buyer  shall be
responsible. Sellers agree to

                                     - 53 -
     
<PAGE>



indemnify  and hold Buyer  harmless  from and against any and all  liability  to
which Buyer may be  subjected  by reason of the fees for  Stewart  Kramer or his
business  entity,  and by  reason of any other  investment  banker's,  broker's,
finder's or similar fee with respect to the  transactions  contemplated  by this
Agreement to the extent such fee is attributed to any action undertaken by or on
behalf of Sellers.  Buyer agrees to indemnify and hold harmless Sellers from and
against any and all liability to which Sellers may be subjected by reason of the
fee of Robert Chestman and by reason of any other investment banker's, broker's,
finder's or similar fee with respect to the  transactions  contemplated  by this
Agreement to the extent such fee is attributable to any action  undertaken by or
on behalf of Buyer or any of its subsidiaries or affiliates.

     12.13  Applicable  Law; Venue;  Jurisdiction:  This Agreement and the legal
relations  between the parties  hereto  shall be  governed by and  construed  in
accordance with the laws of the State of New York,  applicable to contracts made
and to be enforced in such state.  Sellers and Buyer each hereby  consent to the
personal  jurisdiction  of the  courts of the State of New York and the  federal
courts situated therein over any judicial proceeding under or that may otherwise
arise  out of this  Agreement  and  agree  not to  contest  venue  for any  such
proceeding  commenced  in the courts of the State of New York in New York County
or in the United States  District  Court for the Southern  District of New York.
Buyer hereby irrevocably appoints Robinson Brog Leinwand Greene Genovese & Gluck
P.C.  as agents for service of process  for any such  proceeding  and each agree
process for any such proceeding may be served by personally delivering a

                                     - 54 -
                  
<PAGE>



copy of the process to Robinson Brog Leinwand Greene Genovese & Gluck P.C., 1345
Avenue of the Americas, New York, New York 10105, Attention:  Marshall J. Gluck,
Esq. Sellers hereby irrevocably  appoint Hoffinger  Friedland Dobrish Bernfeld &
Stern,  P.C. as agent for service of process for any such  proceeding and agrees
process for any such proceeding may be served by personally delivering a copy of
the process to Hoffinger Friedland Dobrish Bernfeld & Stern, P.C., 110 East 59th
Street, New York, New York 10022, Attention: David B. Bernfeld, Esq.

     12.14 Public Announcements: The parties agree that public announce ments of
this transaction shall be made on the following schedule:

          (a)  Concurrent  with the  execution  hereof,  Buyer may issue a press
     release  containing the text set forth in Exhibit  12.14(a)  annexed hereto
     and made a part hereof.

          (b) On April 17, 1997,  provided  Buyer has  obtained  the  applicable
     approval of the New York State Hospital Review and Planning Council,  or as
     soon  thereafter  as such  approval has been  obtained by Buyer,  Buyer may
     issue a press  release  containing  the text set forth in Exhibit  12.14(b)
     annexed hereto and made a part hereof.

Thereafter,  each  party  is  entitled  to  release  to the  public  any and all
information  regarding the terms of this Agreement,  including Buyer's filing of
forms 8-K and related  public  announcements  pursuant to applicable  securities
laws and regulations.

     12.15 No Further Negotiation.  Sellers agree that they shall not enter into
any negotiation  with any third party for the sale of the Purchased  Assets from
the date hereof unless this Agreement is terminated pursuant to its terms.

     12.16 No Benefit to Others: The representations,  warranties, covenants and
agreements  contained in this  Agreement are for the sole benefit of the parties
hereto,  and their  successors  and assigns,  and they shall not be construed as
conferring any rights on any other persons.

     12.17 Section and Other Headings:  The section and other headings contained
in this  Agreement  are for  reference  purposes  only and shall not  affect the
meaning or interpretation of this Agreement.

     12.18  Counterparts:  This  Agreement  may be  executed  in any  number  of
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.


                                     - 55 -

<PAGE>


     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the date and year first above written. HOME HEALTH AIDES, INC.


                                      By:___________________________
                                         Name:          
                                         Office:         President

                                      H.H.A. AIDES, INC.


                                      By:_____________________________
                                         Name:           
                                         Office:         Vice President

                                      HEALTH ACQUISITION CORP.
                                      D/B/A ALLEN HEALTH CARE SERVICES


                                      By:___________________________
                                         Name:           Richard Garofalo
                                         Office:         President

WITH RESPECT TO
SECTIONS 3.3(a)(iv) AND 4.2(e) ONLY:




PAUL MANSON



CORA BALIFF

                                     - 56 -