EXHIBIT 10.1


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




                                       8 EAST PARKWAY, SCARSDALE, NEW YORK 10583

December 27, 1995



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 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) by
                    the Federal Reserve bank of New York, or if such rate is not
                    so  published  foR any day  which  is a  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.




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Page 2
12/27/95
Robert E. Heller
NHHCC

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  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.  and First Health,  Inc. and
Brevard  Medical  Center,  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 December 31,
1996. 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,
Additionally, all

THE BANK OF NEW YORK

/S/ JOHN GUSCIORA
John Gusciora
Vice President