EXHIBIT 10.1

                      [LETTERHEAD OF THE BANK OF NEW YORK]

February 20, 1999

Mr. Robert P. 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.
(the "Borrower").

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  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 a 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

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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 Accredited  Health  Services,  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 31,
2000.

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.

Sincerely,

THE BANK OF NEW YORK

/s/ Vito Caraccio

Vito Caraccio
Assistant Vice President