EXHIBIT 10(c)




                     SETTLEMENT AGREEMENT AND MUTUAL RELEASE


     This  SETTLEMENT  AGREEMENT  AND  MUTUAL  RELEASE of claims is made by U.S.
HomeCare   Corporation,   its  past,  present  and  future  partners,   parents,
subsidiaries,  related entities, predecessors,  successors, directors, officers,
agents,  employer sponsored employee benefit and welfare benefit plans, trustees
and   administrators   of  such  plans,   employees,   contractors  and  assigns
(hereinafter  "USHO") and G. Robert  O'Brien and his  predecessors,  successors,
agents,  heirs and assigns  (hereinafter  "Employee").  USHO and Employee  shall
hereafter collectively be referred to as the "Parties."


                              W I T N E S S E T H :

     WHEREAS,  G. Robert  O'Brien  has been an  employee of USHO  pursuant to an
employment agreement, dated August 10, 1994 (the "Employment Agreement");

     WHEREAS, pursuant to the Employment Agreement the Employee is entitled to a
severance package consisting of cash and other benefits; and

     WHEREAS,  the  Parties  wish to sever  their  relationship  and  settle any
outstanding  severance  obligations  and any and all  disputes  which  may exist
between them;

     NOW,  THEREFORE,  for and in  consideration  of the  representations  made,
actions and  agreements to be  undertaken,  and payments to be made as set forth
herein, the Parties agree to fully and forever release and discharge each other,
and  covenant not to sue or otherwise  institute or cause to be  instituted,  or
maintain any legal or administrative proceedings against each other with respect
to any matter, including but not limited to claims and causes of action relating
to Employee's  employment  with USHO and/or the  termination of his  employment,
including,  without  limitation,  any  rights  set  forth  in  Section  4 of the
Employment Agreement, provided, however, that nothing in this Agreement shall be
deemed to release USHO from any preexisting  obligation to indemnify Employee in
connection with his services as an officer and director of USHO.

     This SETTLEMENT  AGREEMENT AND MUTUAL RELEASE is made in  consideration  of
the following:

     A. Employee agrees that his employment  with USHO will terminate  effective
as of the date hereof (the "Termination  Date").  Employee will have no right to
employment with USHO after the date hereof.

<PAGE>

     B. Pursuant to Employee's  existing stock option  agreements  with USHO, an
aggregate of 500,000 shares of USHO's Common Stock are vested and exercisable by
Employee.  Pursuant to Section  3.03 of such option  agreements,  no  additional
portion of any such option shall vest,  but the vested  portion may be exercised
in whole or in part within three (3) months of the date hereof.

     C. Employee hereby resigns as Chief Executive  Officer and director of USHO
effective  November 4, 1996.  Employee hereby resigns as member of the Executive
Committee of USHO effective immediately.

     D. USHO shall pay Employee (i)  $87,5000,  to be paid $21,875 per month for
four months and (ii) $150,000,  to be paid $6,250 per month for the  twenty-four
months  following  the time  period of section (i) of this  Paragraph.  Payments
shall be made in arrears  every two weeks in  accordance  with  USHO's  standard
payroll  practices.  The  payments  made  pursuant  to  this  Paragraph  D  (the
"Payments")  are in addition to Employee's  salary through the date hereof.  The
Payments are made in consideration of the  representations  made and actions and
agreements to be undertaken  as set forth herein,  are not made in  compensation
for services as an employee of USHO, and are not intended to be subject to FICA,
Medicare, or other taxes or withholdings.

     E. In  consideration  of the payments made by USHO pursuant to Section C(i)
hereof, USHO agrees to engage Employee, and Employee accepts such engagement, as
a consultant  to USHO for a  four-month  period  commencing  on the date hereof,
pursuant to a consulting agreement in the form attached hereto as Exhibit A (the
"Consulting Agreement").

     F. USHO shall  grant to  Employee  on  November  15,  1996 a stock award of
85,000  shares of USHO Common Stock  pursuant to the terms of Article III of the
1995 Stock Option/Stock Issuance Plan.

     G. Employee shall retain  possession of the  automobile  provided to him by
USHO until December 13, 1996, on which date Employee shall relinquish all rights
to said  automobile  and  shall  make it  available  to  USHO at its  office  in
Hartford, Connecticut.

     H. Employee will remain eligible to participate in USHO's health insurance,
life insurance and disability  insurance programs for three months from the date
hereof (the "Benefit  Period")  unless and until  Employee  commences  full-time
employment with another employer.  Employee  understands that his entitlement to
any  benefit  continuation  following  the  end of the  Benefit  Period  will be
governed by COBRA and will be at Employee's expense.  Employee  understands that
his  vacation  accrual  will cease  effective on the date hereof and agrees that
accrued  vacation  pay, if any, is satisfied  by the  payments  made to Employee
pursuant to Paragraph D above. 


<PAGE>

     I. Employee  acknowledges  that the payments made hereunder are not part of
an exit incentive or other employment  termination program offered to a group or
class of employees.

     J. Employee  and USHO  represent  that  they are not  currently  involved,
directly or indirectly,  in any legal or administrative  proceedings against one
another, and have not engaged in any efforts,  plans or preparation to become so
involved in the future.

     K. The Parties  understand  and agree that they are waiving any rights that
they may have or now  have,  known or  unknown,  to pursue  any and all  claims,
charges,  complaints,  demands, actions, causes of action, suits, rights, debts,
sums of money, costs, accounts, reckonings,  covenants,  contracts,  agreements,
promises, doings, omissions, damages, executions, obligations,  liabilities, and
expenses  (including  attorneys' fees and costs), of every kind and nature which
he ever had or now has, known or unknown, against USHO, its officers, directors,
stockholders,  corporate affiliates,  agents and employees,  including,  but not
limited to, all claims arising out of his employment relationship with USHO, all
employment  discrimination  claims  under  Title VII of the Civil  Rights Act of
1964, 42 U.S.C.  ss.2000e et seq., the Age  Discrimination in Employment Act, 29
U.S.C. ss.621 et seq., and the Connecticut General Statutes, damages arising out
of all employment  discrimination  claims,  wrongful  discharge  claims or other
common law claims and damages.  Nothing in this SETTLEMENT  AGREEMENT AND MUTUAL
RELEASE,  however,  shall be construed as  releasing  USHO from its  obligations
under this  SETTLEMENT  AGREEMENT AND MUTUAL RELEASE and the exhibits hereto nor
shall  anything in this  SETTLEMENT  AGREEMENT  AND MUTUAL  RELEASE be deemed to
release USHO from any preexisting obligation to indemnify Employee in connection
with his services as an officer and director of USHO.

     L. In addition, and in further consideration of the foregoing,  the Parties
agree that nothing  contained in this  SETTLEMENT  AGREEMENT AND MUTUAL  RELEASE
shall  constitute  or be treated as an admission of liability or  wrongdoing  by
USHO or Employee.

     M. This  SETTLEMENT  AGREEMENT  AND  MUTUAL  RELEASE is deemed to have been
entered into in the State of Connecticut  and shall be construed and interpreted
in accordance with the laws of that state.

     N. In addition, and in further consideration of the foregoing, this release
extends  to claims  which the  Parties  do not know or suspect to exist in their
favor at the time of executing the mutual  release,  which if known by them must
have materially affected this settlement.

                                       3.

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     O. The  Parties  agree  that  they will not,  without  compulsion  of legal
process,  disclose to others the terms or amounts referred to in this SETTLEMENT
AGREEMENT AND MUTUAL RELEASE or the fact of the payment of said amounts,  except
that  they  may  disclose  them  to  their   attorneys,   accountants  or  other
professional advisors to whom the disclosure is necessary to effect the purposes
for which they have consulted such  professional  advisors.  The Parties further
agree that they will not defame or disparage each other.

     P. The Parties  understand that the covenants  contained in this SETTLEMENT
AGREEMENT  AND  MUTUAL  RELEASE,   including  the  covenants  of  nondisclosure,
non-defamation and non-disparagement, are material inducements for the making of
this agreement and that, in the event of a material  breach  hereof,  including,
without limitation,  the nonpayment of any amounts payable hereunder,  the other
party will be entitled  to pursue its legal and  equitable  remedies,  including
without limitation, the right to recover damages and seek injunctive relief. The
prevailing  party in any such action  shall be entitled to recover its costs and
reasonable  attorneys'  fees.  Furthermore,  in the event that Employee files or
commences  any legal action or  administrative  proceeding  against USHO for any
matter  other than  enforcement  of  Employee's  rights  under  this  SETTLEMENT
AGREEMENT AND MUTUAL RELEASE, the Consulting  Agreement,  or any indemnification
obligation not released  hereby,  USHO shall, in addition to any available legal
and  equitable  remedies,  not be obligated  to make any future  payments of any
amounts which would otherwise be due under Paragraph D.

     Q. The Parties  acknowledge and agree that no promises or repre  sentations
were made  which do not  appear  written in this  Agreement  and the  Consulting
Agreement and that this SETTLEMENT  AGREEMENT AND MUTUAL RELEASE,  including the
Consulting  Agreement,  contains  the entire  agreement of the Parties as to the
subject matter  hereof.  This  SETTLEMENT  AGREEMENT AND MUTUAL RELEASE shall be
construed to be fully enforceable. If for any reason any part of this SETTLEMENT
AGREEMENT  AND MUTUAL  RELEASE is determined  to be void or  unenforceable,  the
agreement and/or any remaining part hereof shall be construed  without reference
to  such  void  or  inapplicable  provisions  to  be an  enforceable  SETTLEMENT
AGREEMENT AND MUTUAL RELEASE between the Parties.

     R. The Parties acknowledge that they have read and understand the foregoing
SETTLEMENT  AGREEMENT AND MUTUAL RELEASE and that they sign it  voluntarily  and
without  coercion.  They further  acknowledge that they have been advised by and
been given the  opportunity  to consult  with an attorney of their own  choosing
concerning the waivers contained in this SETTLEMENT AGREEMENT AND MUTUAL RELEASE
and  that  the  waivers  made  herein  are  knowing,  conscious  and  with  full
appreciation  that such party is forever  foreclosed  from  pursuing  any of the
rights so waived. Employee further acknowledges that he has twenty-one (21) days
after receipt of this  SETTLEMENT  AGREEMENT AND 

                                       4.

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MUTUAL RELEASE to consider this  SETTLEMENT  AGREEMENT AND MUTUAL RELEASE and he
understands  that it will not become effective and may be revoked until seven 7)
days after it is  executed.  In order to revoke this  SEPARATION  AGREEMENT  AND
MUTUAL RELEASE,  Employee must deliver to USHO's Chairman, Jay C. Huffard, on or
before  seven (7) days after the  execution  of this  SEPARATION  AGREEMENT  AND
MUTUAL RELEASE,  a letter stating that he is revoking this SEPARATION  AGREEMENT
AND MUTUAL RELEASE.

Dated: October 14, 1996                   /s/ G. Robert O'Brien
                                   -------------------------------- 
                                          G. Robert O'Brien



Dated: October 14, 1996            U.S. HomeCare Corporation



                                   By:    Jay Huffard
                                      -----------------------------




                                       5.