TERMINATION AGREEMENT AND RELEASE

      THIS TERMINATION AGREEMENT AND RELEASE ("Agreement"), dated the 27th day
of July, 2005, by and among New York Health Care, Inc., a New York corporation
(the "Company"), NYHC Newco Paxxon, Inc., a New York corporation ("NYHC-NJ"),
Jerry Braun ("Braun") and Jacob Rosenberg ("Rosenberg") and New York Health
Care, LLC (the "LLC").

      WHEREAS, each of Braun and Rosenberg have entered into employment
agreements with the Company, dated November 10, 1999, as amended on January 28,
2003 (collectively, the "Employment Agreements"), copies of which are attached
hereto as Exhibit A;

      WHEREAS, as of July 15, 2004 the parties hereto entered into a Purchase
Agreement pursuant to which the LLC would acquire from the Company certain
assets of the Company's home health care business (the "Purchase Agreement");

      WHEREAS, on February 24, 2005 the Company, NYHC-NJ, Braun and Rosenberg
entered into an agreement, a copy of which is attached hereto as Exhibit B (the
"Security Agreement"), pursuant to which the Company and NYHC-NJ granted Braun
and Rosenberg a security interest in all of the assets of the Company's home
health care business (the "Security Interest") and which also provided for the
Company and NYHC-NJ to deposit $3.55 million in an interest-bearing cash
collateral account (the "Collateral Account") in favor of Braun and Rosenberg
(the $3.55 million together with any additional monies deposited therein or any
interest earned thereon, the "Collateral Amount") (a) as security for the
obligations of the Company and NYHC-NJ to consummate the purchase/sale
contemplated by the Purchase Agreement, and (b) to secure certain obligations
the Company and/or NYHC-NJ may have to Braun and Rosenberg under the Employment
Agreements and the Security Agreement, which Security Agreement was modified by
a Termination Agreement dated March 24, 2005 pursuant to which the Security
Interest was terminated; and

      WHEREAS, each of the parties hereto wishes, and considers it be in its
best interests, to (i) terminate the Purchase Agreement and the obligations, if
any, of the parties thereto under the Purchase Agreement; (ii) terminate the
Security Agreement and the obligations of the parties thereto under the Security
Agreement; (iii) terminate the Employment Agreements and the obligations of the
parties thereto under the Employment Agreements other than the continued
obligations of Braun and Rosenberg under Sections 7 and 8(B) and (C) of their
respective Employment Agreements, as modified in Section 2 hereof; (iv) provide
for certain compensation to Braun and Rosenberg in consideration thereof; and
(v) agree to certain other arrangements as hereinafter more particularly set
forth, upon and subject to the terms hereinafter set forth;

      NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto hereby agree as follows:


<PAGE>

      1. Each of Braun and Rosenberg are hereby resigning all positions of
employment with the Company effective upon the close of business on the Employee
Irrevocability Date as defined in Section 26 of this Agreement (the "Resignation
Date"). Each of Braun and Rosenberg agree that in addition to resigning their
employment and any positions they each may hold with the Company they each also
resign, effective on the Resignation Date, from any other positions they each
may hold as an officer, director or employee or otherwise of any of the
Company's subsidiaries or divisions.

      2. The Employment Agreements are hereby terminated and of no further force
or effect except as to the obligations of Braun and Rosenberg under Sections 7
and 8(B) and (C) of the Employment Agreements, which obligations shall continue
and be binding upon each of Braun and Rosenberg after the date hereof for the
periods specified in the Employment Agreements. For purposes of the continued
obligations of Braun and Rosenberg under such Sections 7 and 8(B) and (C) of the
Employment Agreements they each acknowledge and agree that the reference to
Employer in such Sections 7 and 8(B) and (C) shall mean the Company, The
BioBalance Corporation and NYHC-NJ and the Company acknowledges and agrees that
nothing in Sections 8(B) or (C) of either of the Employment Agreements shall
preclude Braun or Rosenberg from rendering any services to or with any successor
owner of all or any portion of the New York health care business of Company and
NYHC-NJ.

      3. The Purchase Agreement is hereby terminated and of no further force or
effect.

      4. The Security Agreement is hereby terminated and of no further force or
effect.

      5. Any Collateral Account that was opened shall be promptly closed and
Braun and Rosenberg, at no expense to them, shall promptly (i) take all actions
reasonably requested by the Company to cause the Collateral Amount to be
transferred to a Company bank account pursuant to instructions to be provided to
them by the Company's Chief Executive Officer and (ii) furnish to the Company a
current bank statement setting forth the balance of the monies in the Collateral
Account immediately prior to the transfer of the Collateral Amount to the
Company.

      6. (a) Under the Company's regular policies, each of Braun and Rosenberg
will be eligible to continue their health insurance coverage, in accordance with
COBRA, for a minimum of eighteen (18) months from their respective Resignation
Dates. Each of Braun and Rosenberg will receive under separate cover more
detailed information regarding insurance benefits under COBRA. Nothing contained
in this Agreement is intended to impair any of these rights. Such health
insurance will be subject to whatever future changes or revisions are made to
the Company medical plan. The Company shall pay the premiums and costs of such
health insurance for the remaining portion of 2005, and Braun and Rosenberg
shall not required to pay to the Company any COBRA premium payment for the
remaining portion of calendar year 2005.

            (b) The 401K accounts of Braun and Rosenberg will be distributed
(i.e. rolled over) in accordance with the terms applicable to terminating
employees.


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<PAGE>

      7. In consideration for signing this Agreement, and in lieu of any
payments to which Braun, Rosenberg or the LLC might otherwise be entitled under
the Employment Agreements, the Purchase Agreement or the Security Agreement, the
Company will provide Braun and Rosenberg with the following payments and
benefits:

            a. in exchange for the agreements herein contained, the non-compete
agreements delivered by Braun and Rosenberg in connection with the sale of the
Company's and NYHC-NJ's New Jersey business to a third party and the continuance
of the non-compete agreements contained in Section 8 of the Employment
Agreements, the Company shall make to Braun a payment of $1,200,000.00 (the
"Braun Payment") and to Rosenberg a payment of $1,050,000.00 (the "Rosenberg
Payment"). On July 27, 2005, the Braun Payment and the Rosenberg Payment were
paid into the attorney escrow account of Blank Rome LLP and, provided neither
Braun nor Rosenberg revokes his resignation prior to the Employee Irrevocability
Date, but subject to no other conditions whatsoever, absent a court order
prohibiting the distribution of the Braun Payment to Braun or the Rosenberg
Payment to Rosenberg, (i) the Braun Payment shall be paid to Braun, by wire
transfer to the account designated in writing by Braun, on the Employee
Irrevocability Date, and (ii) the Rosenberg Payment shall be paid to Rosenberg,
by wire transfer to the account designated in writing by Rosenberg, on the
Employee Irrevocability Date. The Company shall not take or assist in, and shall
use its best efforts to ensure that none of the Company Parties takes or assists
in, any action that will or may prevent, delay or otherwise interfere with the
payment of the Braun Payment and the Rosenberg Payment in accordance with the
terms of this Section 7(a);

            b. with respect to the outstanding stock options to purchase common
stock of the Company (the "Common Stock") owned on the date hereof by Braun and
Rosenberg, and warrants to purchase Common Stock owned on the date hereof by
Braun and his wife and by Rosenberg's wife, all of which are listed on Schedule
A attached hereto and made a part hereof, all of such options and warrants are
deemed vested and shall continue to be exercisable, and shall expire at, the
applicable dates set forth in Schedule A, other than the following which are
surrendered as of the date hereof (the "Forfeited Options"): (i) options to
purchase an aggregate of 586,250 shares of Common Stock granted to Braun listed
under the heading "Surrendered" on Schedule A, and (ii) options to purchase an
aggregate of 523,750 shares of Common Stock granted to Rosenberg listed under
the heading "Surrendered" on Schedule A. Braun and Rosenberg each (i) agrees to
return to the Company the original of any option agreements for the Forfeited
Options in his possession unless such option agreements also cover stock options
that are not Forfeited Options, and (ii) represents and warrants to the Company
that he has not assigned or transferred to any third party title to or any
interest in the Forfeited Options. With respect to stock certificates for all
Common Stock of the Company owned by Braun and Rosenberg that bear a restrictive
legend under the Securities Act of 1933, as amended (the "Act"), upon the
expiration of three months following the Resignation Date the Company will
instruct the transfer agent for its Common Stock to remove the restrictive
legend provided that at that time Braun and Rosenberg represent to the Company
in writing with respect to any Common Stock acquired by Braun or Rosenberg that
are "restricted securities" within the meaning of Rule


                                      -3-
<PAGE>

144 promulgated under the Act, that they own and fully paid for such shares more
than two years prior to such date or, with respect to shares of Common Stock
that they received as a result of conversion of shares of the Company's Series A
Convertible Preferred Stock, that they paid for such shares of preferred stock
more than two years prior to such date, and that they further represent to the
Company in writing that they are not, and during the prior three months were
not, "affiliates" of the Company as such term is defined in Rule 144(a)(1)
promulgated under the Act.

            c. the Company shall pay Braun and Rosenberg by no later than the
Employee Irrevocability Date, upon receipt of reasonable documentary support,
(i) all accrued but unpaid compensation, (ii) the value of all accrued, but
unused, vacation, sick leave, personal leave and compensated absences provided
for in the Employment Agreements, and (iii) all unreimbursed travel and other
work-related expenses incurred by Braun and Rosenberg; provided that the maximum
amount payable to each of Braun and Rosenberg under clauses (i), (ii) and (iii)
shall not exceed Five Thousand Dollars ($5,000) in the aggregate (i.e. not more
than Ten Thousand Dollars ($10,000) in total);

            d. at no cost to Braun or Rosenberg, the Company hereby transfers
(i) to Braun title to the laptop and desktop computers (including all associated
equipment and cables) used by Braun, and to Rosenberg title to the laptop and
desktop computers (including all associated equipment and cables) used by
Rosenberg and prior to the Employee Irrevocability Date Braun and Rosenberg will
grant the Company access to the laptop and desktop computers and allow the
Company to access and copy all non-personal files and records maintained on the
computers; and

            e. at no cost to Braun or Rosenberg, the Company shall promptly
transfer ownership of the life insurance policies of Braun and Rosenberg in
accordance with the respective instructions of Braun and Rosenberg.

      8. Braun, Rosenberg and the LLC understand that the Company makes no
representation as to the income tax treatment of any payments hereunder and that
any and all payments (and all compensation, benefits and/or other payments
previously made to Braun and Rosenberg by the Company ) will be subject to such
tax treatment and to such deductions, if any, as may be required under
applicable tax laws.

      9. a. Each of the parties hereto agree that, except as required by
applicable law, neither it nor he nor any of its or his affiliates nor any of
the employees of any of the foregoing will disclose any information regarding
the existence or substance of this Agreement prior to the date upon which the
Braun Payment is made to Braun and the Rosenberg Payment is made to Rosenberg,
except that, notwithstanding the foregoing, Braun and Rosenberg shall be
entitled, prior to such date, to disclose, on a confidential basis, the
existence and substance of this Agreement to their spouses and children and to
inform employees of the Company of their respective resignations from the
Company.


                                      -4-
<PAGE>

            b. Braun and/or Rosenberg may refer potential employers to the Chief
Executive Officer of the Company, who shall respond promptly to inquiries about
Braun and Rosenberg. Unless otherwise agreed to by Braun and Rosenberg, the
Company shall not, and shall cause its affiliates and its and their respective
officers and senior executives not to, communicate to any prospective employer
or to any other person, orally or in writing or in any other manner, anything
with respect to Braun and/or Rosenberg's employment with the Company other than
verification of positions held, dates of employment and salaries. Without
limiting the foregoing, under no circumstances shall the Company or any of its
affiliates or any of its or their employees explicitly or implicitly disparage
the opportunities for re-employment by the Company of Braun or Rosenberg.

      10. Each of Braun and Rosenberg agrees to provide such assistance to the
Company and its subsidiaries with respect to the Company's ongoing business as
the Company shall reasonably request, which assistance shall include (i)
assisting in the transition of the Company's home health care operations to
either new management or new owners, (ii) assisting in preparation of quarterly
or annual financial statements of the Company and/or its subsidiaries for all
periods through and including the financial statements for the year ending
December 31, 2005, which assistance shall include, but not be limited to,
providing appropriate sub-certifications to the Company's Chief Executive and
Financial Officer in connection with such officers providing certifications in
the Form 10-Q's and Form 10-K covering the periods of such financial statements
(but in no case any period subsequent to the Resignation Date), and (iii)
assisting in any litigation involving the Company's business; provided that
nothing in the foregoing shall require Braun or Rosenberg to waive any rights or
privileges they may have in connection with or arising out of any such
litigation. In connection with any assistance provided pursuant to this Section
10 subsequent to the Employee Irrevocability Date, except assistance provided in
litigation involving the Company's business where the liability to the Company
is based upon Braun or Rosenberg's willful misconduct, or fraud or other
criminal conduct as officers, directors, employees or agents of the Company,
Braun and Rosenberg shall be reimbursed for their time as follows for any day or
part thereof in which they provide their assistance: Braun-$1,500;
Rosenberg-$1,200.

      11. It is expressly understood and agreed that this Agreement and the
effectuation of its terms do not constitute an admission or statement by the
Company that the Company or any of its subsidiaries has acted unlawfully or
wrongfully or is otherwise liable in any respect or an admission or statement by
Braun, Rosenberg or the LLC that any of them has acted unlawfully or wrongfully
or is otherwise liable in any respect, but is being entered into solely for the
purpose of amicably resolving all matters of any kind among the parties hereto.
It is further agreed that evidence of the circumstances surrounding the parties
entering into this Agreement, shall be inadmissible in any action or lawsuit of
any kind, except for an action for alleged breach of this Agreement.

      12. (a) The Company acknowledges and agrees that notwithstanding the
resignations of Braun and Rosenberg on the date hereof, the applicable
indemnification


                                      -5-
<PAGE>

provisions contained in the Company's Certificate of Incorporation (as such
indemnification provisions exist as of the date of this Agreement) and in the
New York Business Corporation Law shall continue to apply to the maximum extent
permitted by applicable law to the activities of Braun and Rosenberg as officers
or directors of the Company prior to the date hereof.

            (b) To the maximum extent permitted by applicable law, the Company
shall indemnify and hold harmless each of Braun and Rosenberg from and against
expenses (including reasonable attorneys' fees), losses, costs, damages,
judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with any and all threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Company) (i) by
reason of the fact that he is or was an employee or agent of the Company, or
(ii) in connection with or arising out of the Purchase Agreement, the Employment
Agreements or the Security Agreement, if he acted in good faith and for a
purpose he reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that he did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.

            (c) The Company shall indemnify and hold harmless Braun and
Rosenberg from and against expenses (including reasonable attorneys' fees),
losses, costs, damages, judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him/her in connection with any threatened,
pending or completed action, suit or proceeding, by or in the right of the
Company to procure a judgment in its favor (i) by reason of the fact that he is
or was an employee or agent of the Company, or (ii) in connection with or
arising out of the Purchase Agreement, the Employment Agreements or the Security
Agreement, if he acted in good faith and for a purpose he reasonably believed to
be in or not opposed to the best interests of the Company; and, with respect to
any criminal action or proceeding, had no reasonable cause to believe that his
conduct was unlawful, except that no such indemnification shall be made for
actions brought by or on behalf of the Company based on the conviction or
liability of the Company for (1) violations of federal or state securities laws,
(2) violations of federal, state or local lax laws, or (3) violations of other
applicable law where such conviction or liability arose as a result of the
willful misconduct, or fraud or other criminal conduct by Braun or Rosenberg, as
directors, officers, employees or agents of the Company. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that he did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.


                                      -6-
<PAGE>

            (d) Promptly after an indemnified party receives written notice of a
matter giving rise to indemnification rights under this Agreement (an
"Indemnification Matter"), the indemnified party shall give notice to the
indemnifying party of the nature of the Indemnification Matter and the amount
demanded or claimed in connection therewith, if any ("Indemnification Notice"),
together with copies of any such written documents. Failure of the indemnified
party to give the Indemnification Notice shall not affect rights to
indemnification hereunder, except to the extent that the indemnifying party
demonstrates actual damages caused by such failure.

            (e) If the Indemnification Matter is a third party claim, then, upon
receipt of the Indemnification Notice, the indemnifying party may elect to
compromise or defend, at its own expense and by its own counsel (subject to the
approval of indemnified party, which shall not be unreasonably withheld), any
such action, suit, or proceeding; provided, however, that the indemnifying party
may not compromise or settle any Indemnification Matter without the consent of
the indemnified party, which shall not be unreasonably withheld. If the
indemnifying party elects to compromise or defend such Indemnification Matter,
it shall within fifteen (15) days (or sooner, if the nature of the
Indemnification Matter so requires) notify the indemnified party of its intent
to do so and the indemnified party shall cooperate in the compromise of, or
defense against, such Indemnification Matter. If the indemnifying party elects
not to compromise or defend any Indemnification Matter, fails to notify the
indemnified party of its election as herein provided or contests its obligation
to indemnify, or fails to pursue such defense with diligence and in good faith,
the indemnified party may pay, compromise or defend such Indemnification Matter
without prejudice to any right it may have hereunder. In any event, each party
may participate, at its own expense, in the defense of any Indemnification
Matter in respect of which it may have an indemnification obligation or right
hereunder. In no event may an indemnified party settle or compromise any
Indemnification Matter without the prior consent of the indemnifying party,
which shall not be unreasonably withheld.

            (f) The Company shall maintain officers' and directors' liability
insurance for a continuous period of not less than three (3) years after the
date hereof, on forms and with conditions and exclusions that are materially
similar to the forms, conditions and exclusions of its existing officers' and
directors' liability insurance (except that such policies need not include an
extended reporting period) to the extent such forms, conditions and exclusions
continue to be available in the insurance industry.

      13. (a) To the maximum extent permitted by applicable law, each of Braun,
Rosenberg and the LLC knowingly and voluntarily release and forever discharge
the Company, and its current and former subsidiaries, affiliated and related
corporations and entities, their successors and assigns, and the current and
former directors, officers and/or employees of such corporations and entities,
and their affiliates, successors, assigns, heirs, executors and administrators
(referred to collectively hereafter throughout this Agreement as the "Company
Parties") from and against any and all claims, actions, demands, contracts and
causes of action, known and unknown, which they or their respective, officers,
directors, stockholders, heirs,


                                      -7-
<PAGE>

executors, administrators, successors and assigns (referred to collectively
hereafter throughout this Agreement as the "Employee Parties") now or may have
as of the date of execution of this Agreement against the Company Parties,
including in such release, without limitation, any alleged violation of:

      o     The National Labor Relations Act, as amended;

      o     Title VII of the Civil Rights Act of 1964, as amended;

      o     Sections 1981 through 1988 of Title 42 of the United States Code, as
            amended;

      o     The Civil Rights Act of 1991;

      o     The Age Discrimination in Employment Act of 1967, as amended;

      o     The Employee Retirement Income Security Act of 1974, as amended;

      o     The Immigration Reform Control Act, as amended;

      o     The Americans with Disabilities Act of 1990, as amended;

      o     The Fair Labor Standards Act, as amended;

      o     The Occupational Safety and Health Act, as amended;

      o     The Family and Medical Leave Act of 1993;

      o     The New York Human Rights Act, as amended;

      o     The New York Minimum Wage Law, as amended;

      o     Equal Pay Law for New York, as amended;

      o     any other federal, state or local civil or human rights law or any
            other local, state or federal law, regulation or ordinance;

      o     any public policy, contract, tort, or common law; or

      o     any allegation for costs, fees, or other expenses including
            attorneys' fees incurred in these matters.

      Notwithstanding anything in the foregoing to the contrary, this Section
13(a) shall not (i) release the Company or NYHC-NJ from any claims arising from
a breach of this Agreement, (ii) preclude Braun, Rosenberg and the LLC from
enforcing the terms of this Agreement and/or their rights hereunder and under
any plans or other agreements referenced herein, or release (iii) the


                                      -8-
<PAGE>

Company from any claims brought by any Employee Party in its or his status
solely as a stockholder and/or as a beneficiary of pension and/or employee
benefits plans.

            (b) To the maximum extent permitted by applicable law, the Company,
on behalf of itself and each of the Company Parties, knowingly and voluntarily
releases and forever discharges each of the Employee Parties from and against
any and all claims, actions, demands, contracts and causes of action, known and
unknown, which any of the Company Parties now or may have as of the date of
execution of this Agreement against the Employee Parties, including in such
release, without limitation, any alleged violation of:

      o     any local, state or federal law, regulation or ordinance;

      o     any public policy, contract, tort, or common law; or

      o     any allegation for costs, fees, or other expenses including
            attorneys' fees incurred in these matters.

      Notwithstanding anything in the foregoing to the contrary, this Section
13(b) shall not (i) release Braun, Rosenberg or the LLC from any claims arising
from a breach of this Agreement, (ii) preclude the Company or NYHC-NJ from
enforcing the terms of this Agreement and/or their rights hereunder and under
any plans or other agreements referenced herein, or (iii) release Braun or
Rosenberg to the extent that, as a result of willful misconduct, fraud or other
criminal conduct by Braun or Rosenberg as directors, officers or employees of
the Company, the Company is convicted or found liable for (1) violations of
federal or state securities laws, (2) violations of federal, state or local tax
laws, or (3) violations of other applicable law.

      14. (a) Each of Braun, Rosenberg and the LLC confirm and agree that they
have not filed or instituted, and will not file or institute, any claims,
charges, actions, complaints or any other proceedings against the Company
Parties before any court, administrative agency or any other forum based upon or
arising out of any claims, actions, demands, contracts and causes of action by
or in respect of the Employee Parties against the Company Parties except to the
extent that any such claim, charge, action, complaint or proceeding concerns an
allegation that the Company or NYHC-NJ failed to comply with any obligations
under this Agreement and/or their rights hereunder or under any plan or other
agreements referenced herein (i.e. 401K plans, stock option agreements and
benefit agreements), or to the extent that any such claim is brought by either
Braun or Rosenberg in his status solely as a stockholder of Company and/or
beneficiary of 401K and/or benefits plans. Except as aforesaid, in the event
that any such claim, charge, action, complaint or other proceeding is filed,
Braun, Rosenberg and the LLC shall not be entitled to recover any relief or
recovery therefrom, including costs and attorneys' fees.

            (b) The Company and NYHC-NJ confirm and agree that neither they nor
any of the Company Parties have filed or instituted, nor will they file or
institute, any claims, charges, actions, complaints or any other proceedings
against any of the Employee Parties before any court, administrative agency or
any other forum based upon or arising out of any claims,


                                      -9-
<PAGE>

actions, demands, contracts and causes of action by or in respect of the Company
Parties against the Employee Parties except to the extent that (i) any such
claim, charge, action, complaint or proceeding concerns an allegation that
Braun, Rosenberg or the LLC failed to comply with any obligations under this
Agreement and/or their rights hereunder, or (ii) as a result of wilful
misconduct, fraud or other criminal conduct by Braun or Rosenberg as directors,
officers or employees of the Company, the Company is convicted or found liable
for (1) violations of federal or state securities laws, (2) violations of
federal, state or local tax laws, or (3) violations of other applicable law.
Except as aforesaid, in the event that any such claim, charge, action, complaint
or other proceeding is filed, the Company and NYHC-NJ shall not be entitled to
recover any relief or recovery therefrom, including costs and attorneys' fees.

      15. (a) Each of Braun, Rosenberg and the LLC understands that if this
Agreement were not signed, they would have the right to voluntarily assist other
individuals or entities in bringing claims against the Company Parties. Each of
Braun, Rosenberg and the LLC hereby waive that right and agree that they will
not provide any such assistance other than assistance in an investigation or
proceeding conducted by a government agency or as required by law.

            (b) Each of the Company and NYHC-NJ understands that if this
Agreement were not signed, they would have the right to voluntarily assist other
individuals or entities in bringing claims against the Employee Parties. Each of
the Company and NYHC-NJ hereby waive that right and agree that neither they nor
any of the Company Parties will provide any such assistance other than
assistance in an investigation or proceeding conducted by a government agency or
as required by law.

      16. Each of Braun and Rosenberg agree to return to the Company on the
Resignation Date, their keys, identification and any other equipment (except as
set forth in 7(d)), data file (excluding personal files), documents or materials
belonging to the Company that they have in their possession.

      17. In the event that Braun, Rosenberg or the LLC breach this Agreement,
the Company will be entitled to recover any payment and/or other benefits paid
or payable under this Agreement and to obtain all other relief provided by law
or equity. In the event that the Company or NYHC-NJ breach this Agreement,
Braun, Rosenberg and the LLC will be entitled to obtain all relief provided by
law or equity. The prevailing party in any litigation resulting from any such
claim shall be entitled to recover reasonable attorneys' fees and expenses of
litigation from the losing party.

      18. Each of the Company and NYHC-NJ hereby represents and warrants to
Braun, Rosenberg and the LLC that:

            a. it has full power and authority and the legal right to execute
      and deliver, and to perform its obligations under, this Agreement, and has
      taken all necessary corporate action to authorize its execution, delivery
      and performance of this Agreement;


                                      -10-
<PAGE>

            b. this Agreement constitutes its legal, valid and binding
      obligation, enforceable in accordance with its terms, except as such
      enforcement may be limited by any bankruptcy, insolvency, reorganization,
      moratorium or similar laws relating to or affecting the rights of
      creditors generally or for reasons of public policy; and

            c. the individual executing and delivering this Agreement on its
      behalf has been authorized to do so.

      19. This Agreement shall be binding on the parties and their respective
heirs, successors and assigns. This Agreement may be executed in counterparts.

      20. This Agreement sets forth the entire agreement among the parties and
their affiliates with respect to the subject matter herein and therein and fully
supersedes any and all prior agreements or understandings between them pursuant
to such subject matters including the Employment Agreements, the Security
Agreement and the Purchase Agreement each of which, as noted above, is hereby
terminated and of no force and effect except, as noted above, that the
obligations under Sections 7 and 8(B) and (C) of the Employment Agreements, as
modified herein, shall continue to be binding upon Braun and Rosenberg for the
periods stated in the Employment Agreements. Each of Braun and Rosenberg and the
LLC acknowledge that all amounts given under this Agreement to Braun and
Rosenberg shall be in full satisfaction of any and all obligations of the
Company or any of its subsidiaries under the Employment Agreements, the Purchase
Agreement, or the Security Agreement. Each of Braun and Rosenberg also
acknowledge that this Agreement has no effect on the respective non-competition
and non-disclosure agreements entered into by each of them as of April 11, 2005
with Accredited Health Services, Inc.

      21. This Agreement may not be modified, altered or changed except upon
express written consent of the parties wherein specific reference is made to
this Agreement.

      22. If any provision of this Agreement should be held invalid or
unenforceable by operation of law or by any tribunal of competent jurisdiction,
or if compliance with or enforcement of any provision is restrained by such
tribunal, the application of any and all provisions other than those which have
been held invalid or unenforceable shall not be affected.

      23. This Agreement shall be governed and construed in accordance with the
laws of the State of New York (without reference to its rules as to conflicts of
laws). Any dispute arising hereunder shall be brought before a court of
competent jurisdiction in the City, County and State of New York.

      24. The parties agree to take all acts necessary and practicable to
implement the terms and conditions set forth or referenced in this Agreement.

      25. All notices provided for in this Agreement will be in writing, and
will be deemed to have been duly given when delivered personally to the party to
receive the same, when given


                                      -11-
<PAGE>

by telex, telegram or mailgram, or when mailed first class postage prepaid, by
registered or certified mail, return receipt requested, addressed to the party
to receive the same at his or its address set forth below, or such other address
as the party to receive the same will have specified by written notice given in
the manner provided for in this Section 25. All notices will be deemed to have
been given as of the date of personal delivery, transmittal or mailing thereof.


                                      -12-
<PAGE>

      To the Company and NYHC-NJ: New York Health Care, Inc

         C/o The BioBalance Corporation
         363 7th Avenue, 13th Floor
         New York, New York 10001

         Attention: Chief Executive Officer

      To Braun and the LLC:

         929 East 28th Street
          Brooklyn, New York 11210

      To Rosenberg :

         932 East 29th Street
         Brooklyn, New York 11210

      26. Each of Braun and Rosenberg may revoke this Agreement for a period of
seven (7) days following the day he executes this Agreement. Any revocation
within this period must be submitted, in writing, to Dennis M. O'Donnell, Chief
Executive Officer, and state, "I hereby revoke my acceptance of our Termination
Agreement and Release." The revocation must be personally delivered to Mr.
O'Donnell or his designee, or mailed to Mr. O'Donnell at The BioBalance
Corporation, 363 7th Avenue, 13th Floor, New York, New York 10001 and received
by Mr. O'Donnell within seven (7) days of execution of this Agreement.
Notwithstanding anything to the contrary set forth in this Agreement, this
Agreement shall not become effective or enforceable until the revocation period
has expired (the "Employee Irrevocability Date") and the Braun Payment has been
paid to Braun and the Rosenberg Payment has been paid to Rosenberg. If the last
day of the revocation period is a Saturday, Sunday or legal holiday in New York,
then the revocation period shall not expire until the next following day which
is not a Saturday, Sunday or legal holiday (or, if later until the Braun Payment
and Rosenberg Payment have been paid as aforesaid).

      BRAUN AND ROSENBERG EACH ACKNOWLEDGE THAT THEY HAVE BEEN ADVISED IN
WRITING THAT THEY HAVE TWENTY-ONE (21) DAYS TO CONSIDER THIS AGREEMENT AND TO
CONSULT WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT. BRAUN AND
ROSENBERG AGREE THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS
AGREEMENT DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE (21)
DAY CONSIDERATION PERIOD.


                                      -13-
<PAGE>

      HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULFILL THE PROMISES SET
FORTH HEREIN, AND TO RECEIVE THE SUMS, BENEFITS AND AGREEMENTS SET FORTH HEREIN,
EACH OF THE PARTIES FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTER
INTO THIS AGREEMENT INTENDING TO FOREVER WAIVE, SETTLE AND RELEASE ALL CLAIMS
THEY HAVE OR MIGHT HAVE AGAINST THE OTHER PARTIES HERETO AND THEIR RESPECTIVE
AFFILIATES EXCEPT AS OTHERWISE SET FORTH IN SECTION 13 OF THIS AGREEMENT.


                                      -14-
<PAGE>

      IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily execute
this Termination Agreement and Release as of the date set forth below:


Sworn to before me this
27 day of July 2005.


/s/ Lillian Schoeppler                   /s/ Jerry Braun
------------------------------           ------------------------------
Notary Public                            Jerry Braun
                                         Date: July 27, 2005



Sworn to before me this
27 day of July 2005.


/s/ Lillian Schoeppler                   /s/ Jacob Rosenberg
------------------------------           ------------------------------
Notary Public                            Jacob Rosenberg
                                         Date: July 27, 2005



Sworn to before me this                  New York Health Care, LLC
27 day of July 2005.

/s/ Lillian Schoeppler                   By: /s/ Jerry Braun
------------------------------           ------------------------------
Notary Public                            Name: Jerry Braun
                                         Title:
                                         Date: July 27, 2005

Sworn to before me this                  New York Health Care, Inc.
27 day of July 2005.


/s/ Michael Yastrab                      By: /s/ Dennis M. O'Donnell
------------------------------           ------------------------------
Notary Public                            Dennis M. O'Donnell, Chief Executive
                                         Officer
                                         Date: July 27, 2005


                                      -15-
<PAGE>

Sworn to before me this                  NYHC Newco Paxxon, Inc.
27 day of July 2005.


/s/ Lillian Schoeppler                   By: /s/ Jacob Rosenberg
------------------------------           ------------------------------
Notary Public                            Name: Jacob Rosenberg
                                         Title: Vice President
                                         Date: July 27, 2005


                                      -16-
<PAGE>

                                   Schedule A

                           Stock Options and Warrants

Braun

Retained                                       Surrendered
--------                                       -----------
                                   No. of                               No. of
                                   Shares                               Shares
Issue      Expiration             Subject       Issue     Expiration    Subject
Date       Date                 to Option        Date        Date      to Option
--------   ------------   ---------------      --------   ----------   ---------

06/02/98   06/01/08                36,667      03/26/96    03/25/06       62,500
12/31/98   12/22/08                23,333      01/02/01    01/01/06       23,750
11/12/99   11/11/09                33,333      02/24/05    02/23/15      500,000
07/10/00   07/09/10                66,667       Total                    586,250
01/02/01   01/01/06                42,917
01/02/01   01/01/11                66,667
03/07/03   90 days from           200,000
           resignation
09/26/03   90 days from            40,000
           resignation
01/28/04   90 days from           200,000
           resignation
02/24/05   02/24/10                64,516
                          (warrants owned
                             jointly with
                                  spouse)
Total                             774,100


                                      -17-
<PAGE>

Rosenberg

Retained                                       Surrendered
--------                                       -----------
                                   No. of                               Number
                                   Shares                              of Shares
Issue      Expiration             Subject       Issue     Expiration    Subject
Date       Date                 to Option        Date        Date      to Option
--------   ------------   ---------------      --------   ----------   ---------
06/02/98   06/01/08                36,667      01/02/01    01/01/06       23,750
12/31/98   12/22/08                23,333      02/24/05    02/23/15      500,000
11/12/99   11/11/09                33,333       Total                    523,750
07/10/00   07/09/10                66,667
01/02/01   01/01/06                42,917
01/02/01   01/01/11                66,667
03/07/03   90 days from           200,000
           resignation
09/26/03   90 days from            40,000
           resignation
01/28/04   90 days from           200,000
           resignation
02/24/05   02/24/10                60,484
                          (warrants owned
                               by spouse)
Total                             770,068


                                      -18-
<PAGE>

                                    Exhibit A


                              EMPLOYMENT AGREEMENT
                              --------------------


This  Agreement  made and entered into this 10th day of November,  1999,  by and
between New York Health Care, Inc., a New York  corporation,  with its principal
place of business at 1850 McDonald Avenue, Brooklyn, New York 11223 (hereinafter
"Employer"  or  the  "Company"),   and  Jacob  Rosenberg,  an  individual  whose
residential  address  is  at  932  East  29th  Street,   Brooklyn,   N.Y.  11210
(hereinafter "Employee" or "Executive").

WITNESSETH:

WHEREAS, Employer is engaged in the business of home health care;

WHEREAS,  Employee possesses skills,  knowledge,  abilities and experience which
Employer wishes to continue to avail itself of; and

WHEREAS, Employer wishes to continue the employment of Employee;

NOW, THEREFORE, in consideration of the mutual covenants as set forth herein;

THE PARTIES HERETO AGREE AS FOLLOWS:

1.   EMPLOYMENT.  Employer  hereby shall employ  Employee as the Vice President,
     Secretary  and Chief  Operating  Officer of the Company and to perform such
     additional  duties and  services  as may be  assigned  to him  pursuant  to
     Paragraph 3 hereof. Employee hereby accepts such employment, upon the terms
     and conditions hereinafter set forth.

2.   TERM. The term of employment of Employee shall be for five years commencing
     as of December 27, 1999,  and ending at the close of business  December 26,
     2004.

3.   DUTIES.

     (A)  Employee's duties shall include assisting the overseeing and directing
          of the  Company,  locating  and  developing  new  projects  and  other
          business opportunities for it and generally promoting and facilitating
          the Company's  business  objectives.  For purposes of this  paragraph,
          Employer's  subsidiaries,  if any,  are also  encompassed  in the term
          "Company".

     (B)  During  the  term of  this  Agreement,  Employee  shall  perform  such
          additional  services  as shall from time to time be assigned to him by
          the  Board of  Directors  and  which are  consistent  with the  duties
          reasonably  assigned  to  the  Vice  President,  Secretary  and  Chief
          Operating Officer of the type and size the Company.

     (C)  Employee  shall devote his business time and  attention,  energy,  and
          skill to the business of Employer.

4.   COMPENSATION.

(A)  Employer  shall pay Employee an annual salary of $186,340 (the "Annual Base
     Salary  Compensation") with an annual increase in Annual Base compensation,
     commencing on the  anniversary  date of this  Agreement  (the  "Anniversary
     Date")  and  continuing  on the  Anniversary  Date in each year  thereafter
     during the term of this Agreement,  equal to 10% of the prior year's Annual
     Base  Compensation,   payable  in  accordance  with  the  Company's  normal
     policies.

(B)  Employee  shall be granted  participation  in the  Company's  401(k)  Plan,
     Performance Incentive plan, stock options, insurance, or other plans of the
     Corporation  which are  currently  in effect as well as all other  benefits
     available to any other employee of the Company during the term hereof,

(C)  On an annual basis employee shall receive a portion of the 10% pretax Bonus
     Plan that the Company has in place for it's  executives.  Such amount shall
     be decided by the Compensation Committee.

(D)  Employer  shall  obtain and  thereafter  maintain  in effect at  Employer's
     expense the  insurance  coverage for the benefit of the employee and family
     which  include,  but not be  limited  to,  medical  and  dental  insurance.
     Employee  shall also  receive an annual  allowance  of $5,000  towards  the
     payment of premiums of life  insurance,  and  disability  insurance,  which
     insurance may be payable to such beneficiaries as the Employee may direct.

(E)  Employer  will  reimburse  Employee or cause him to be  reimbursed  for all
     ordinary and necessary  business  expenses incurred by him for or on behalf
     of Employer in the performance of his duties  hereunder.  For such purposes
     Employee  shall  submit to Employer  periodic  reports of such  expenses at
     least once in each calendar quarter.  Employee shall also receive a monthly
     allowance of $750 towards the lease cost of an automobile,  and the Company
     shall also pay for all maintenance,  repairs, insurance and all other costs
     and expenses thereof.

(F)  Employee shall receive annual vacation of four (4) weeks, holidays,  twelve
     (12) days sick leave,  and six (6) days personal leave in each year without
     reduction of his compensation or other benefits hereunder. If Employee does
     not use all of such paid  vacation  during such 12 month  period,  Employee
     shall be entitled to receive  payment at such time for any unused  vacation
     days for such  period.  The Company  shall pay  Employee at the rate of his
     then current  basic salary for any unused  vacation at the  termination  of
     this Agreement. Employee shall also be entitled to additional personal days
     for all  Jewish  holidays  on  which  work is  prohibited  in the  Orthodox
     tradition.

5.   CHANGE IN CONTROL

     (A)  In the event of a "change of control" of the Company. The Company will
          provide the following benefits to the employee:

          (i)  all outstanding  options granted to the Executive under the Stock
               Option  Plan will  automatically  become  immediately  vested and
               exercisable in full;

          (ii) the Executive will receive a lump-sum payment equal to 2.99 times
               the  average of that  executive's  base  salary and bonus for the
               previous five years;

          (iii)the  Company  will  pay the  cost to  transfer  ownership  to the
               Executive  of any  automobile  provided to the  Executive  by the
               Company or for which the Company pays or reimburses  the costs of
               leasing or other form of ownership; and

          (iv) to the  extent  that  any  such  payments  (alone  or with  other
               compensation  payable to the Executive,  are subject to an excise
               tax under  Section  4999 of the  Internal  Revenue  Code,  or any
               successor  provision,  the Company will make an  additional  cash
               payment to the Executive such that the  Executive's net after-tax
               compensation is not reduced by such excise tax. Any  compensation
               payable to Executive contingent on a change of control, and which
               qualifies  as a  "parachute  payment"  Under  Section 280G of the
               Internal Revenue Code shall be limited to the maximum amount that
               may  be  paid  to  that  Executive   without  any  part  of  such
               compensation  being deemed an "excess  parachute  payment"  under
               that section.

     (B)  For  purposes of this  paragraph  "change in  control"  shall mean the
          following:

          (i)  the Executive of a transaction or series of transactions in which
               persons or entities  other than the present  shareholders  of the
               Company acquire a majority in book value of the assets  currently
               owned  by  the  Company;  or a  majority  of  the  shares  of the
               Company's  voting  equity  stock;  or the  power to  designate  a
               majority  of the  Company's  Board  of  Directors;  or  otherwise
               acquire the  ability,  whether by  contract,  stock  ownership or
               otherwise, to control the management and policies of the Company;

          (ii) the signing of any agreement for the merger or  consolidation  of
               the Company  with another  corporation  or for the sale of all or
               substantially  all of the  assets  of the  Company;  followed  by
               termination of the Executive within twelve months.

          (iv) upon the  occurrence  of any  other  event or series of any other
               event or series of events  which,  in the opinion of the Board of
               Directors of the Company,  will, or is likely to, if carried out,
               result in a change of control of the Company.

6.   TERMINATION; RIGHTS OF TERMINATION.
     This Agreement may be terminated only as provided in this paragraph 6

     (A)  (i) A notice of  resignation  by  Executive  presented  to the Company
          other than as contemplated in paragraph 6(A) (iii);

          (ii) A notice by the Company to  Executive  of  termination  for cause
               ("Cause"), which means:

               (a)  Executive's   willful  and  continued   failure  to  perform
                    substantially  his  duties  (other  than  any  such  failure
                    resulting  from   Executive's   Disability  (as  hereinafter
                    defined)  or any such  failure  resulting  form  Executive's
                    termination  for Good  Reason (as  defined  below),  after a
                    written demand for  substantial  performance is delivered to
                    Executive  by the Board of  Directors  of the Company  which
                    specifically  identifies  the  manner  in which the Board of
                    Directors  believes  that  Executive  has not  performed his
                    duties and the failure of  Executive  to  reasonably  comply
                    with  such  demand  within  thirty  (30)  days of  notice to
                    Executive,  or (b) Executive's  willful  engagement in gross
                    misconduct  materially  and  demonstrably  injurious  to the
                    Company  which is not cured by Executive  within thirty (30)
                    days  of  notice  to   Executive.   For   purposes  of  this
                    subsection,  no act or  failure to act on  Executive's  part
                    shall be considered  "willful" unless it was not in the best
                    interest of and without a good faith  belief that his action
                    or omission  would be in the best  interest of the  Company.
                    Executive shall not be terminated for Cause unless and until
                    there  shall have been  delivered  to  Executive a copy of a
                    resolution duly adopted by the affirmative  vote or not less
                    than  two-thirds  of the entire  membership  of the Board of
                    Directors  of the  Company  finding  that in the good  faith
                    opinion of the Board of  Directors  Executive  was guilty of
                    conduct set forth in clauses (a) or (b) of this subparagraph
                    (ii) and specifying the particulars thereof in detail;

          (iii)(a) a notice by the Company to Executive of  termination  without
               cause,  (b) termination as a result of Executive's  death,  (c) a
               notice of termination  due to Disability  given by the Company to
               Executive  or by  Executive  to the  Company  or (d) a notice  of
               termination  by Executive to the Company (i) for Good Reason,  or
               (ii) due to the Company's  material breach of this Agreement that
               continues  during the  thirty  (30) days  after  Executive  gives
               written  notice  to the  Company  of such  breach,  which  notice
               specifically  identifies the manner which Executive believes that
               the Company breached this Agreement,

          (iv) If this Agreement is terminated pursuant to paragraph 6(A) (iii),
               the Company  shall be  obligated  to pay to Executive a severance
               payment  equal to three times the sum of the  Executive's  annual
               Base Salary in effect at the time of termination plus the highest
               annual  cash  bonus (if any)  paid by the  Company  to  Executive
               during the three-year  period  preceding the date of termination.
               Such  severance  payment  shall be payable in a lump sum  payment
               within  fifteen  (15)  days  of the  termination  of  Executive's
               employment.  In  addition,  for the  five-year  period  following
               Executive's  termination,  the  Company  shall  be  obligated  to
               continue to provide Executive with life,  health,  disability and
               accident  insurance  benefits  and all other  executive  benefits
               (including,   without   limitation,   retirement   benefits   and
               automobile and expense  allowances)  comparable to those provided
               to Executive prior to his termination. To the extent Executive is
               no  longer  lawfully  eligible  for  any  aforementioned  Benefit
               because he is no longer  employed  by the  Company,  the  Company
               shall  pay to  Executive  a lump  sum cash  payment  equal to the
               present  value of the benefits  that would have been  provided to
               Executive had his employment continued for such five-year period.

          (v)  For purposes of this Agreement,  the term "Disability" shall mean
               Executive's  inability to perform his material  duties under this
               Agreement because of any illness or physical or mental disability
               or other  incapacity  as  evidenced  by a written  statement of a
               physician  licensed  to  practice  medicine  in any  state in the
               United States  mutually  agreed upon by the Company and Executive
               which  disability or other  incapacity  continues for a period in
               excess  of  six  (6)   consecutive   months  in  any  consecutive
               twelve-month period.

          (vi) Upon termination of this Agreement for any reason whatsoever,  in
               addition to any other rights which  Executive may have hereunder,
               Executive shall be entitled to receive all of his Base Salary and
               a  pro-rated  portion  of his  minimum  annul  bonus  under  this
               Agreement to the date of termination and any unused paid vacation
               earned as determined pursuant to paragraph 4(e).

          (vii)In the event of  termination  of this  Agreement  for any  reason
               whatsoever,   all  rights  and  obligation  of  the  Company  and
               Executive  under this Agreement shall cease  immediately,  except
               for those which by terms  specifically apply to periods following
               the  termination  of this  Agreement  as arise by  reason of such
               termination,  and  thereafter  Executive  shall  have no right to
               receive any  compensation  hereunder  except,  under  appropriate
               circumstances,  as set forth in  paragraph  6(A)  (iii) and 6(vi)
               hereof.)

     (B)  For the purpose of this  paragraph 6, "Good  Reason"  means any of the
          following  events unless it occurs with the Executive's  express prior
          written  consent:  (i)  the  assignment  to  Executive  of any  duties
          inconsistent with, or a diminution of, Executive's  position,  duties,
          titles, offices,  responsibilities and status with the Company, or any
          removal of  Executive  or any failure to re-elect  Executive to any of
          such  positions,  (ii) a reduction  in  Executive's  Base Salary as in
          effect,  form time to time, or a failure to increase  Executive's Base
          Salary as provided in this  Agreement;  (iii)  except with  respect to
          changes  required  to  maintain  its  tax-qualified  status or changes
          generally  applicable to all employees of the Company,  any failure by
          the Company by the Company to continue in effect or make any provision
          for any  benefit,  stock  option,  annual  bonus or  contingent  loans
          arrangements,  or other  incentive  plan or arrangement of any type in
          which  Executive  is  participating  from time to time,  the taking of
          which action would adversely  affect  Executive's  participation in or
          materially reduce Executive's  benefits under any such benefit plan or
          arrangement  or  deprive  Executive  of any  material  fringe  benefit
          enjoyed  be  Executive  from time to time,  or the  failure to provide
          Executive  with  the  number  of paid  vacation  days to  which  he is
          entitled;  (v) a  relocation  of  the  Company's  principal  executive
          offices or  Executive's  relocation to any place more than one hundred
          (100) miles from the location at which Executive  performed his duties
          as of the date  hereof;  or (vi) any  failure by the Company to obtain
          the  assumption  of this  Agreement by any successor to or assignee or
          the Company.

     (C)  The Company will also  transfer  ownership  of exiting life  insurance
          policy and beneficiary as per employee's instructions. In addition the
          deferred  compensation  insurance  trust will become fully vested,  if
          applicable, for the Benefit of Employee.

7.   CONFIDENTIALITY:

     (A)  Employee  understands and acknowledges  that as a result of Employee's
          employment  with  Employer  and  involvement   with  the  business  of
          Employer,  he shall necessarily become informed of and have access to,
          confidential  information of Employer  including,  without limitation,
          inventions,  trade secrets,  technical information,  know-how,  plans,
          specifications,  identity of customers and identity of suppliers,  and
          that  such  information,  even  though  it  may  have  been  or may be
          developed or otherwise acquired by Employee, is the exclusive property
          of the  Employer  to be held by  Employee  in  trust  and  solely  for
          Employer's  benefit and Employee shall not at any time,  either during
          or subsequent to his employment hereunder,  reveal,  report,  publish,
          transfer or  otherwise  disclose to any person,  corporation  or other
          entity or use any of Employer's confidential information,  without its
          written consent of the Board of Directors, except for use on behalf of
          the  Company  in  connection  with its  business,  and except for such
          information  which legally and  legitimately  is or becomes of general
          public knowledge from authorized sources other than Employer.

     (B)  Upon the  termination of his employment  with Employer for any reason,
          Employee shall promptly deliver to it all drawings,  manuals, letters,
          notes, notebooks,  reports and copies thereof and all other materials,
          including,  without  limitation,  those  of a secret  or  confidential
          nature,  relating  to  Employer's  business  which  are in  Employee's
          possession  or control.  Employer  shall  reimburse  employee  for any
          packing or moving costs reasonably  incurred by him in connection with
          the foregoing delivery.

8.   NON-COMPETITION;  RESTRICTIVE  COVENANTS  AND  CONFIDENTIALITY;  INJUNCTIVE
     RELIEF:

     (A)  During  the  term of his  employment  with  Employer  pursuant  to his
          Agreement,  or any renewal  thereof,  Employee shall not,  directly or
          indirectly  whether  as  principal,   agent,  shareholder,   employee,
          officer, director,  consultant, joint- venturer, partner or otherwise,
          own, manage,  operate,  join, control or participate in the ownership,
          management,  operation  of,  render any services to or be connected in
          any manner with any business which is in direct competition with or is
          if the type or  character  of any  business  engaged in by Employer or
          which  offers,  sells or markets  products,  projects or services that
          directly  compete with products or services offered by Employer or any
          of its subsidiaries or affiliates,  irrespective of whether Employee's
          involvement  shall  be  as  an  office,  owner,   employee,   partner,
          joint-venturer,  consultant,  agent or other participant  provided and
          from making an investment  in any company the  securities of which are
          listed on a national  securities  exchange or  actively  traded in the
          over-the-counter  market, so long as such investment does not equal or
          exceed five percent (5%) of the total number of outstanding  shares of
          common stock of such company.

     (B)  For a period of one year after the  expiration or  termination  of his
          employment with Employer for any reason,  Employee shall not, directly
          or indirectly,  whether as principal,  agent,  shareholder,  employee,
          officer, director,  joint-venturer,  partner, consultant or otherwise,
          render any services to or with any company,  firm or individual  which
          competes in any way with Employer in a business actually engaged in or
          being actively  developed by it. Under this  Agreement,  Employer will
          have  deemed to have been  actively  developing  a business  if,  with
          regard to such proposed  business  activity,  there has been extensive
          discussion at Board of Director  meetings,  formal Board  resolutions,
          corporate expenditures in excess of $25,000,  preparation of marketing
          studies or comparable actions related thereto.

     (C)  For a period of two years  following the  expiration or termination of
          his  employment  with  Employer  for any reason,  Employee  shall not,
          directly or  indirectly,  whether as  principal,  agent,  shareholder,
          employee  officer,  director  joint-venturer,  partner,  consultant or
          otherwise,  solicit,  raid, entice or induce any person who is, or was
          at the time of such termination,  an Employee of Employer to terminate
          his or her  employment  with the  Employer  or become  employed by any
          other person,  firm or corporation,  and he will not approach any such
          employee for such purpose or authorize or knowingly approve the taking
          of such action by other  persons to become  employed in a business who
          or which are actively engage in a competitive business.

9.   ASSIGNABILITY AND BINDING EFFECT. The rights and obligations  arising under
     the  Agreement  shall inure to the benefit of and shall be binding upon the
     executors, administrators, successors and legal representatives of Employee
     and shall inure to the benefit of and be binding  upon  Employer,  upon its
     successors  and  assigns,  but  neither  this  Agreement  nor the  right or
     obligations of Employee hereunder may be assigned, pledged, hypothecated or
     otherwise  transferred  by Employee in whole or in part to another  person,
     firm or  corporation  nor may the  obligations  of  Employee  hereunder  be
     delegated.

10.  NOTICES. All notices,  requests, demands and other communications hereunder
     shall be in writing and shall be delivered personally or sent by registered
     or certified mail, prepaid and return receipt requested, to the other party
     hereto at his or its mailing  address as set forth at the beginning of this
     Agreement,  and in the case of  Employer  with  copies to William J. Davis,
     Esq.,  Scheichet & Davis,  P.C., 505 Park Avenue, New York, New York 10022.
     Either party may change the address to which such communications  hereunder
     shall be sent by sending notice of such change to the other party as herein
     provided.

11.  REPRESENTATIONS  BY EMPLOYER AND EMPLOYEE.  Employee hereby  represents and
     warrants  that  he is not a  party  to any  other  agreement,  contract  or
     understanding,  whether of employment or otherwise,  which would in any way
     restrict or prohibit him form  undertaking  or performing  employment  with
     Employer in accordance  with the terms and  conditions  of this  Agreement.
     Employer  hereby  represents  and  warrants  that this  Agreement  has been
     properly  authorized  by all necessary  corporate  action and, when and if,
     fully  executed,  will be  binding  and  enforceable  upon the  Company  in
     accordance  with  its  terms  except  for the  application  of the  laws of
     Insolvency  and  bankruptcy  as they may otherwise  affect such  Agreement.
     Employer further represents and warrants that no other contract, agreement,
     provision of its certificate of incorporation or bylaws,  debt obligations,
     law,  regulation  court or  administrative  order prevents it form entering
     into, or conflicts with, this Agreement.

12.  WAIVER.  The  waiver by either  party of any  breach  or  violation  of any
     provision of this  Agreement  shall not operate or be construed as a waiver
     of any subsequent breach or violation, whether singular in nature or not.

13.  PRIOR AGREEMENTS; COMPLETE UNDERSTANDING; AMENDMENT. This Agreement cancels
     and supersedes any and all prior  agreements  and  understandings,  in any,
     between the parties  hereto  regarding the services of Employee to Employer
     and constitutes the complete understanding between the parties with respect
     to the Employment of Employee  hereunder and no statement,  representation,
     warranty or covenant  has been made be either  party with  respect  thereto
     except as expressly set forth  herein.  Employee  acknowledges  that he has
     been afforded the right to review this  Agreement  with legal counsel prior
     to the execution of this  Agreement,  and that he has been encouraged to do
     so.  This  Agreement  shall not be altered,  modified or amended  except by
     written instrument signed by each of the parties hereto.

14.  HEADING.  The heading set forth in this Agreement are for convenience  only
     and shall not be  considered  as part of this  Agreement in any respect nor
     shall they. In any way affect the substance of any provisions  contained in
     this Agreement.

15.  COUNTERPARTS.  This Agreement may be executed in two or more  counterparts,
     each of which shall constitute but one and the same agreement.

16.  GOVERNING LAW. CONSTRUCTION WITH EXISTING LAW, SEVERABILITY. This Agreement
     shall be governed by, and enforced in accordance with, the internal laws of
     the State of New York. It is the  intention of the parties  hereto that all
     terms and conditions of this Agreement are in compliance  with the laws and
     regulations of the state of New York,  and nothing in this Agreement  shall
     be  construed  to be in  derogation  of the  laws,  rules  and  regulations
     thereof.  If for any reason any  provision  of this  Agreement  or any part
     hereof is invalid, unlawful or incapable of being enforced by reason of any
     rule of law, equity or public policy,  all conditions and provisions of the
     Agreement  which can be given  effect  without  such  invalid,  unlawful or
     unenforceable  provision  shall,  nevertheless,  remain  in full  force and
     effect,  and such  invalid,  unlawful  or  irrevocable  provision  shall be
     carried  out as nearly as  possible  according  to its  original  terms and
     intent, while eliminating such invalidity or non-enforceability.


     IN WITNESS  WHEREOF,  The  parties  hereto  have  executed  this  Agreement
     effective as of the day and year first above written.

     NEW YORK HEALTH CARE, INC.


     BY:  _________________________          BY:  _______________________
          TITLE:                                  JACOB  ROSENBERG

<PAGE>


                        AMENDMENT TO EMPLOYMENT AGREEMENT
                        ---------------------------------

     This  amendment  to  the  Employment Agreement is made and entered into the
28th  day of January 2003, by and between New York Health Care, Inc., a New York
corporation,  with  its  principal  place  of  business at 1850 McDonald Avenue,
Brooklyn,  New  York  11223 (hereinafter "Employer" or the "Company"), and Jacob
Rosenberg,  an individual whose residential address is at  932 East 29th Street,
Brooklyn,  NY  11210  (hereinafter  "Employee").

                              W I T N E S S E T H :

     WHEREAS,  the  Employer and Employee are parties to an employment agreement
between  them  dated  November  10,  1999  (the  "Employment  Agreement");

     WHEREAS,  the  Employer  and  Employee  have  mutually  agreed to amend the
Employment  Agreement  to  the  extent  provided  for  herein;

     NOW,  THEREFORE,  in  consideration  of  the  mutual covenants as set forth
herein,  and  other  good  and  valuable  consideration, the receipt of which is
hereby  acknowledged:

                      THE PARTIES HERETO AGREE AS FOLLOWS:

     1.     Paragraph  1 of the Employment Agreement is hereby amended by adding
the  following  sentence  at  the  end  of  the  paragraph:

     "In  addition,  it  is  agreed  that  the Employee is shall be elected as a
member  of  the  Board  of  Directors  of  the Employer for the full term of the
Employment  Agreement."

     2.     Paragraph 2 of the Employment Agreement is hereby amended to read as
follows:

     "2.  Term.  The  term  of  employment  of  the  Employee  pursuant  to  the
Employment  Agreement  shall be extended for an additional period of five years,
so  that the term of the Employment Agreement shall be for ten (10) years ending
at  the  close  of  business  December  26,  2009."


<PAGE>
     3.     Paragraph  5 of the Employment Agreement is hereby amended by adding
the  following  subparagraph  (B)(v):

          "(B)(v)  The  closing of the October 11, 2001 Stock for Stock Exchange
Agreement,  as  amended,  which  occurred  on January 2, 2003, is deemed to be a
change  of  control  of  the  Company."

     4.     Paragraph  6 of the Employment Agreement is hereby amended by adding
the  following  subparagraph  (C):

          "(C)  In  the event of termination of the service of the Employee as a
member  of  the Board of Directors of the Employer for any reason other than the
death of the Employee, the Employer shall, effective on the date of termination,
enter  into  a consulting agreement with the Employee, substantially in the form
filed  with  the  Securities  and  Exchange  Commission  as  an  Exhibit  to the
Employer's  Form  S-4 Registration Statement which was declared effective by the
SEC  on  November 1, 2002, whereby the Employee will provide consulting services
to  the Employer on an as-needed basis for a period of not less than five years,
and  as  compensation  for  those  services will be granted an option to acquire
500,000 shares of the Employer's common stock during a term of not less than ten
(10)  years  at  a  price per share equal to the closing price of the Employer's
common  stock  on  the  date of such termination, and the shares of common stock
underlying  the  option  shall  be promptly registered on SEC Form S-8 or on any
other  SEC form appropriate for such registration so that such shares shall have
been  fully  registered  no later than ninety (90) days after termination of the
Employment  Agreement."

     5.     Paragraph 10 of the Employment Agreement is hereby amended to change
the  address  for  copies  of notices to William J. Davis, Esq., to "Scheichet &
Davis,  P.C.,  800  Third  Avenue,  New  York,  New  York  10022."


<PAGE>
     6.     The  Employment  Agreement is hereby amended by adding the following
paragraph  18:

          "18.  Modifications  to Employment Agreement Authorized by Resolutions
of  the  Compensation  Committee  and  Board  of  Directors.  The  following
modifications  to  the  Employment  Agreement have been implemented prior to the
date  of  this amendment pursuant to resolutions approved by the New York Health
Care,  Inc.  Compensation  Committee  and  Board  of  Directors,  as  follows:

          (a)     Effective  January  1,  2002, the Employee will be entitled to
forty  eight  (48) days of compensated absences each year during the term of the
Employment  Agreement.

          (b)     In  lieu of the $5,000 annual allowance for insurance premiums
provided  in  paragraph  4(E)  of the Employment Agreement, the Employee will be
paid  a  $10,000  per  annum  expense  allowance."

     7.     All  Other  Provisions  Remain  Unchanged.  Except  as  specifically
provided for in this amendment to the Employment Agreement, all of the terms and
provisions  of  the  Employment  Agreement shall remain in full force and effect
without  modification.

          IN  WITNESS  WHEREOF,  the parties hereto have executed this Agreement
effective as of the day and year first above written.


                                          NEW  YORK  HEALTH  CARE,  INC.


                                   By:    /s/  Jerry  Braun
                                          ----------------------
                                          Jerry Braun, President


                                          EMPLOYEE:


                                          /s/  Jacob  Rosenberg
                                          ----------------------
                                          Jacob  Rosenberg

<PAGE>
                              EMPLOYMENT AGREEMENT
                              --------------------


This  Agreement  made  and  entered into this 10th day of November, 1999, by and
between  New  York Health Care, Inc., a New York corporation, with its principal
place of business at 1850 McDonald Avenue, Brooklyn, New York 11223 (hereinafter
"Employer"  or  the "Company"), and Jerry Braun, an individual whose residential
address  is  at  929  East  28th  Street, Brooklyn, New York 11210  (hereinafter
"Employee"  or  "Executive").

WITNESSETH:

WHEREAS,  Employer  is  engaged  in  the  business  of  home  health  care;

WHEREAS,  Employee  possesses  skills, knowledge, abilities and experience which
Employer  wishes  to  continue  to  avail  itself  of;  and

WHEREAS,  Employer  wishes  to  continue  the  employment  of  Employee;

NOW,  THEREFORE,  in  consideration of the mutual covenants as set forth herein;

THE  PARTIES  HERETO  AGREE  AS  FOLLOWS:

1.   EMPLOYMENT.  Employer  hereby shall employ  Employee as the  President  and
     Chief  Executive  Officer of the  Company  and to perform  such  additional
     duties and  services  as may be assigned  to him  pursuant  to  Paragraph 3
     hereof.  Employee  hereby  accepts  such  employment,  upon the  terms  and
     conditions hereinafter set forth.

2.   TERM. The term of employment of Employee shall be for five years commencing
     as of December 27, 1999,  and ending at the close of business  December 26,
     2004.

3.   DUTIES.

     (A)  Employee's duties shall include assisting the overseeing and directing
          of the  Company,  locating  and  developing  new  projects  and  other
          business opportunities for it and generally promoting and facilitating
          the Company's  business  objectives.  For purposes of this  paragraph,
          Employer's  subsidiaries,  if any,  are also  encompassed  in the term
          "Company".

     (B)  During  the  term of  this  Agreement,  Employee  shall  perform  such
          additional  services  as shall from time to time be assigned to him by
          the  Board of  Directors  and  which are  consistent  with the  duties
          reasonably  assigned to the President and Chief  Executive  Officer of
          the type and size of the Company.

     (C)  Employee  shall devote his  business  time and  attention,  energy and
          skill to the business of Employer.

4.   COMPENSATION.

(A)  Employer  shall pay Employee an annual salary of $232,925 (the "Annual Base
     Compensation")  with  an  annual  increase  in  Annual  Base  compensation,
     commencing  on  the  first   anniversary   date  of  this   Agreement  (the
     "Anniversary  Date") and  continuing on the  Anniversary  Date in each year
     thereafter  during  the term of this  Agreement,  equal to 10% of the prior
     year's Annual Base  Compensation,  payable in accordance with the Company's
     normal policies.

(B)  Employee  shall be granted  participation  in the  Company's  401(k)  Plan,
     Performance Incentive plan, stock options,  insurance or other plans of the
     Corporation  which are  currently  in effect as well as all other  benefits
     available to any other employee of the Company during the term hereof,

(C)  On an annual basis employee shall receive a portion of the 10% pretax Bonus
     Plan that the Company has in place for it's  executives.  Such amount shall
     be decided by the Compensation Committee.

(D)  Employer  shall  obtain and  thereafter  maintain  in effect at  Employer's
     expense the  insurance  coverage for the benefit of the employee and family
     which  include,  but not be  limited  to,  medical  and  dental  insurance.
     Employee  shall also  receive an annual  allowance  of $5,000  towards  the
     payment of premiums of life  insurance,  and  disability  insurance,  which
     insurance may be payable to such beneficiaries as the Employee may direct.

(E)  Employer  will  reimburse  Employee or cause him to be  reimbursed  for all
     ordinary and necessary  business  expenses incurred by him for or on behalf
     of Employer in the performance of his duties  hereunder.  For such purposes
     Employee  shall  submit to Employer  periodic  reports of such  expenses at
     least once in each calendar quarter.  Employee shall also receive a monthly
     allowance of $750 towards the lease cost of an Automobile,  and the Company
     shall also pay for all maintenance,  repairs, insurance and all other costs
     and expenses thereof.

(F)  Employee shall receive annual vacation of four (4) weeks, holidays,  twelve
     (12) days sick leave,  and six (6) days personal leave in each year without
     reduction of his compensation or other benefits hereunder. If Employee does
     not use all of such paid  vacation  during such 12 month  period,  Employee
     shall be entitled to receive  payment at such time for any unused  vacation
     days for such  period.  The Company  shall pay  Employee at the rate of his
     then current  basic salary for any unused  vacation at the  termination  of
     this Agreement. Employee shall also be entitled to additional personal days
     for all  Jewish  holidays  on  which  work is  prohibited  in the  Orthodox
     tradition.

5.   CHANGE IN CONTROL

     (A)  In the event of a "change of control" of the Company. The Company will
          provide the following benefits to the employee:

          (i)  all outstanding  options granted to the Executive under the Stock
               Option  Plan will  automatically  become  immediately  vested and
               exercisable in full;

          (ii) the executive will receive a lump-sum payment equal to 2.99 times
               the  average of that  Executive's  base  salary and bonus for the
               previous five years;

          (iii)the  Company  will  pay the  cost to  transfer  ownership  to the
               Executive  of any  automobile  provided to the  Executive  by the
               Company or for which the Company pays or reimburses  the costs of
               leasing or other form of ownership; and

          (iv) to the  extent  that  any  such  payments  (alone  or with  other
               compensation  payable to the Executive,  are subject to an excise
               tax under  Section  4999 of the  Internal  Revenue  Code,  or any
               successor  provision,  the Company will make an  additional  cash
               payment to the Executive such that the  executive's net after-tax
               compensation is not reduced by such excise tax. Any  compensation
               payable to Executive contingent on a change of control, and which
               qualifies  as a  "parachute  payment"  Under  Section 280G of the
               Internal Revenue Code shall be limited to the maximum amount that
               may be paid to  Executive  without any part of such  compensation
               being deemed an "excess parachute payment" under that section.

     (B)  For  purposes of this  paragraph  "change in  control"  shall mean the
          following:

          (i)  the Executive of a transaction or series of transactions in which
               persons or entities  other than the present  shareholders  of the
               Company acquire a majority in book value of the assets  currently
               owned  by  the  Company;  or a  majority  of  the  shares  of the
               Company's  voting  equity  stock;  or the  power to  designate  a
               majority  of the  Company's  Board  of  Directors;  or  otherwise
               acquire the  ability,  whether by  contract,  stock  ownership or
               otherwise, to control the management and policies of the Company;

          (ii) the signing of any agreement for the merger or  consolidation  of
               the Company  with another  corporation  or for the sale of all or
               substantially  all of the  assets  of the  Company;  followed  by
               termination of the Executive within twelve months.

          (iv) upon the  occurrence  of any  other  event or series of any other
               event or series of events  which,  in the opinion of the Board of
               Directors of the Company,  will, or is likely to, if carried out,
               result in a change of control of the Company.

6.   TERMINATION; RIGHTS OF TERMINATION.

     This Agreement may be terminated only as provided in this paragraph 6

     (A)  (i) A notice of  resignation  by  Executive  presented  to the Company
          other than as contemplated in paragraph 6(A) (iii).

          (ii) A notice by the Company to  Executive  of  termination  for cause
               ("Cause"), which means:

               (a)  Executive's   willful  and  continued   failure  to  perform
                    substantially  his  duties  (other  than  any  such  failure
                    resulting   from   Executive's   Disability  as  hereinafter
                    defined)  or any such  failure  resulting  form  Executive's
                    termination  for Good  Reason (as  defined  below),  after a
                    written demand for  substantial  performance is delivered to
                    Executive  by the Board of  Directors  of the Company  which
                    specifically  identifies  the  manner  in which the Board of
                    Directors  believes  that  Executive  has not  performed his
                    duties and the failure of  Executive  to  reasonably  comply
                    with  such  demand  within  thirty  (30)  days of  notice to
                    Executive,  or (b) Executive's  willful  engagement in gross
                    misconduct  materially  and  demonstrably  injurious  to the
                    Company  which is not cured by Executive  within thirty (30)
                    days  of  notice  to   Executive.   For   purposes  of  this
                    subsection,  no act or  failure to act on  Executive's  part
                    shall be considered  "willful" unless it was not in the best
                    interest of and without a good faith  belief that his action
                    or omission  would be in the best  interest of the  Company.
                    Executive shall not be terminated for Cause unless and until
                    there  shall have been  delivered  to  Executive a copy of a
                    resolution duly adopted by the affirmative  vote or not less
                    than  two-thirds  of the entire  membership  of the Board of
                    Directors  of the  Company  finding  that in the good  faith
                    opinion of the Board of  Directors  Executive  was guilty of
                    conduct set forth in clauses (a) or

               (b)  of  this   subparagraph   6(A)  (ii)  and   specifying   the
                    particulars thereof in detail;

          (iii)(a) a notice by the Company to Executive of  termination  without
               cause,  (b) termination as a result of Executive's  death,  (c) a
               notice of termination  due to Disability  given by the Company to
               Executive  or (d) a notice of  termination  by  Executive  to the
               Company  (i)  for  Good  Reason,  or  (ii)  due to the  Company's
               material  breach of this  Agreement  that  continues  during  the
               thirty  (30) days after  Executive  gives  written  notice to the
               Company of such breach, which notice specifically  identifies the
               manner in which Executive believes that the Company breached this
               Agreement,


          (iv) If this Agreement is terminated pursuant to paragraph 6(A) (iii),
               the Company  shall be  obligated  to pay to Executive a severance
               payment  equal to three times the sum of the  Executive's  annual
               Base Salary in effect at the time of termination plus the highest
               annual  cash  bonus (if any)  paid by the  Company  to  Executive
               during the three-year  period  preceding the date of termination.
               Such  severance  payment  shall be payable in a lump sum  payment
               within  fifteen  (15)  days  of the  termination  of  Executive's
               employment.  In  addition,  for the  five-year  period  following
               Executive's  termination,  the  Company  shall  be  obligated  to
               continue to provide Executive with life,  health,  disability and
               accident  insurance  benefits  and all other  executive  benefits
               (including,   without   limitation,   retirement   benefits   and
               automobile and expense  allowances)  comparable to those provided
               to Executive prior to his termination. To the extent Executive is
               no  longer  lawfully  eligible  for  any  aforementioned  Benefit
               because he is no longer  employed  by the  Company,  the  Company
               shall  pay to  Executive  a lump  sum cash  payment  equal to the
               present  value of the benefits  that would have been  provided to
               Executive had his employment continued for such five-year period.

          (v)  For purposes of this Agreement,  the term "Disability" shall mean
               Executive's  inability to perform his material  duties under this
               Agreement because of any illness or physical or mental disability
               or other  incapacity  as  evidenced  by a written  statement of a
               physician  licensed  to  practice  medicine  in any  state in the
               United States  mutually  agreed upon by the Company and Executive
               which  disability or other  incapacity  continues for a period in
               excess  of  six  (6)   consecutive   months  in  any  consecutive
               twelve-month period.

          (vi)Upon termination of this Agreement for any reason  whatsoever,  in
               addition to any other rights which  Executive may have hereunder,
               Executive shall be entitled to receive all of his Base Salary and
               a  pro-rated  portion  of his  minimum  annul  bonus  under  this
               Agreement to the date of termination and any unused paid vacation
               earned as determined pursuant to paragraph 4(e).

          (vii)In the event of  termination  of this  Agreement  for any  reason
               whatsoever,   all  rights  and  obligation  of  the  Company  and
               Executive  under this Agreement shall cease  immediately,  except
               for those which by terms  specifically apply to periods following
               the  termination  of this  Agreement  as arise by  reason of such
               termination,  and  thereafter  Executive  shall  have no right to
               receive any  compensation  hereunder  except,  under  appropriate
               circumstances,  as set forth in  paragraph  6(A)  (iii) and 6(vi)
               hereof.)

     (C)  For the purpose of this  paragraph 6, "Good  Reason"  means any of the
          following  events unless it occurs with the Executive's  express prior
          written  consent:  (i)  the  assignment  to  Executive  of any  duties
          inconsistent with, or a diminution of, Executive's  position,  duties,
          titles, offices,  responsibilities and status with the Company, or any
          removal of  Executive  or any failure to re-elect  Executive to any of
          such  positions,  (ii) a reduction  in  Executive's  Base Salary as in
          effect,  form time to time, or a failure to increase  Executive's Base
          Salary as provided in this  Agreement;  (iii)  except with  respect to
          changes  required  to  maintain  its  tax-qualified  status or changes
          generally  applicable to all employees of the Company,  any failure by
          the Company by the Company to continue in effect or make any provision
          for any  benefit,  stock  option,  annual  bonus or  contingent  loans
          arrangements,  or other  incentive  plan or arrangement of any type in
          which  Executive  is  participating  from time to time,  the taking of
          which action would adversely  affect  Executive's  participation in or
          materially reduce Executive's  benefits under any such benefit plan or
          arrangement  or  deprive  Executive  of any  material  fringe  benefit
          enjoyed  be  Executive  from time to time,  or the  failure to provide
          Executive  with  the  number  of paid  vacation  days to  which  he is
          entitled;  (v) a  relocation  of  the  Company's  principal  executive
          offices or  Executive's  relocation to any place more than one hundred
          (100) miles from the location at which Executive  performed his duties
          as of the date  hereof;  or (vi) any  failure by the Company to obtain
          the  assumption  of this  Agreement by any successor to or assignee or
          the Company.

     (C)  The Company will also  transfer  ownership  of exiting life  insurance
          policy and beneficiary as per employee's instructions. In addition the
          deferred  compensation  insurance  trust will become fully vested,  if
          applicable, for the Benefit of Employee.

7.     CONFIDENTIALITY:

     (A)  Employee  understands and acknowledges  that as a result of Employee's
          employment  with  Employer  and  involvement   with  the  business  of
          Employer,  he shall necessarily become informed of and have access to,
          confidential  information of Employer  including,  without limitation,
          inventions,  trade secrets,  technical information,  know-how,  plans,
          specifications,  identity of customers and identity of suppliers,  and
          that  such  information,  even  though  it  may  have  been  or may be
          developed or otherwise acquired by Employee, is the exclusive property
          of the  Employer  to be held by  Employee  in  trust  and  solely  for
          Employer's  benefit and Employee shall not at any time,  either during
          or subsequent to his employment hereunder,  reveal,  report,  publish,
          transfer or  otherwise  disclose to any person,  corporation  or other
          entity or use any of Employer's confidential information,  without its
          written consent of the Board of Directors, except for use on behalf of
          the  Company  in  connection  with its  business,  and except for such
          information  which legally and  legitimately  is or becomes of general
          public knowledge from authorized sources other than Employer.

     (B)  Upon the  termination of his employment  with Employer for any reason,
          Employee shall promptly deliver to it all drawings,  manuals, letters,
          notes, notebooks,  reports and copies thereof and all other materials,
          including,  without  limitation,  those  of a secret  or  confidential
          nature,  relating  to  Employer's  business  which  are in  Employee's
          possession  or control.  Employer  shall  reimburse  employee  for any
          packing or moving costs reasonably  incurred by him in connection with
          the foregoing delivery.

8.   NON-COMPETITION;  RESTRICTIVE  COVENANTS  AND  CONFIDENTIALITY;  INJUNCTIVE
     RELIEF:

     (A)  During  the  term of his  employment  with  Employer  pursuant  to his
          Agreement,  or any renewal  thereof,  Employee shall not,  directly or
          indirectly  whether  as  principal,   agent,  shareholder,   employee,
          officer, director,  consultant, joint- venturer, partner or otherwise,
          own, manage,  operate,  join, control or participate in the ownership,
          management,  operation  of,  render any services to or be connected in
          any manner with any business which is in direct competition with or is
          if the type or  character  of any  business  engaged in by Employer or
          which  offers,  sells or markets  products,  projects or services that
          directly  compete with products or services offered by Employer or any
          of its subsidiaries or affiliates,  irrespective of whether Employee's
          involvement  shall  be  as  an  office,  owner,   employee,   partner,
          joint-venturer,  consultant,  agent or other participant  provided and
          from making an investment  in any company the  securities of which are
          listed on a national  securities  exchange or  actively  traded in the
          over-the-counter  market, so long as such investment does not equal or
          exceed five percent (5%) of the total number of outstanding  shares of
          common stock of such company.

     (B)  For a period of one year after the  expiration or  termination  of his
          employment with Employer for any reason,  Employee shall not, directly
          or indirectly,  whether as principal,  agent,  shareholder,  employee,
          officer, director,  joint-venturer,  partner, consultant or otherwise,
          render any services to or with any company,  firm or individual  which
          competes in any way with Employer in a business actually engaged in or
          being actively  developed by it. Under this  Agreement,  Employer will
          have  deemed to have been  actively  developing  a business  if,  with
          regard to such proposed  business  activity,  there has been extensive
          discussion at Board of Director  meetings,  formal Board  resolutions,
          corporate expenditures in excess of $25,000,  preparation of marketing
          studies or comparable actions related thereto.

     (C)  For a period of two years  following the  expiration or termination of
          his  employment  with  Employer  for any reason,  Employee  shall not,
          directly or  indirectly,  whether as  principal,  agent,  shareholder,
          employee  officer,  director  joint-venturer,  partner,  consultant or
          otherwise,  solicit,  raid, entice or induce any person who is, or was
          at the time of such termination,  an Employee of Employer to terminate
          his or her  employment  with the  Employer  or become  employed by any
          other person,  firm or corporation,  and he will not approach any such
          employee for such purpose or authorize or knowingly approve the taking
          of such action by other  persons to become  employed in a business who
          or which are actively engage in a competitive business.

9.   ASSIGNABILITY AND BINDING EFFECT. The rights and obligations  arising under
     the  Agreement  shall inure to the benefit of and shall be binding upon the
     executors, administrators, successors and legal representatives of Employee
     and shall inure to the benefit of and be binding  upon  Employer,  upon its
     successors  and  assigns,  but  neither  this  Agreement  nor the  right or
     obligations of Employee hereunder may be assigned, pledged, hypothecated or
     otherwise  transferred  by Employee in whole or in part to another  person,
     firm or  corporation  nor may the  obligations  of  Employee  hereunder  be
     delegated.

10.  NOTICES. All notices,  requests, demands and other communications hereunder
     shall be in writing and shall be delivered personally or sent by registered
     or certified mail, prepaid and return receipt requested, to the other party
     hereto at his or its mailing  address as set forth at the beginning of this
     Agreement,  and in the case of  Employer  with  copies to William J. Davis,
     Esq.,  Scheichet & Davis,  P.C., 505 Park Avenue, New York, New York 10022.
     Either party may change the address to which such communications  hereunder
     shall be sent by sending notice of such change to the other party as herein
     provided.

11.  REPRESENTATIONS  BY EMPLOYER AND EMPLOYEE.  Employee hereby  represents and
     warrants  that  he is not a  party  to any  other  agreement,  contract  or
     understanding,  whether of employment or otherwise,  which would in any way
     restrict or prohibit him form  undertaking  or performing  employment  with
     Employer in accordance  with the terms and  conditions  of this  Agreement.
     Employer  hereby  represents  and  warrants  that this  Agreement  has been
     properly  authorized  by all necessary  corporate  action and, when and if,
     fully  executed,  will be  binding  and  enforceable  upon the  Company  in
     accordance  with  its  terms  except  for the  application  of the  laws of
     Insolvency  and  bankruptcy  as they may otherwise  affect such  Agreement.
     Employer further represents and warrants that no other contract, agreement,
     provision of its certificate of incorporation or bylaws,  debt obligations,
     law,  regulation  court or  administrative  order prevents it form entering
     into, or conflicts with, this Agreement.

12.  WAIVER.  The  waiver by either  party of any  breach  or  violation  of any
     provision of this  Agreement  shall not operate or be construed as a waiver
     of any subsequent breach or violation, whether singular in nature or not.

13.  PRIOR AGREEMENTS; COMPLETE UNDERSTANDING; AMENDMENT. This Agreement cancels
     and supersedes any and all prior  agreements  and  understandings,  in any,
     between the parties  hereto  regarding the services of Employee to Employer
     and constitutes the complete understanding between the parties with respect
     to the Employment of Employee  hereunder and no statement,  representation,
     warranty or covenant  has been made be either  party with  respect  thereto
     except as expressly set forth  herein.  Employee  acknowledges  that he has
     been afforded the right to review this  Agreement  with legal counsel prior
     to the execution of this  Agreement,  and that he has been encouraged to do
     so.  This  Agreement  shall not be altered,  modified or amended  except by
     written instrument signed by each of the parties hereto.

14.  HEADING.  The heading set forth in this Agreement are for convenience  only
     and shall not be  considered  as part of this  Agreement in any respect nor
     shall they. In any way affect the substance of any provisions  contained in
     this Agreement.

15.  COUNTERPARTS.  This Agreement may be executed in two or more  counterparts,
     each of which shall constitute but one and the same agreement.

16.  GOVERNING LAW. CONSTRUCTION WITH EXISTING LAW, SEVERABILITY. This Agreement
     shall be governed by, and enforced in accordance with, the internal laws of
     the State of New York. It is the  intention of the parties  hereto that all
     terms and conditions of this Agreement are in compliance  with the laws and
     regulations of the state of New York,  and nothing in this Agreement  shall
     be  construed  to be in  derogation  of the  laws,  rules  and  regulations
     thereof.  If for any reason any  provision  of this  Agreement  or any part
     hereof is invalid, unlawful or incapable of being enforced by reason of any
     rule of law, equity or public policy,  all conditions and provisions of the
     Agreement  which can be given  effect  without  such  invalid,  unlawful or
     unenforceable  provision  shall,  nevertheless,  remain  in full  force and
     effect,  and such  invalid,  unlawful  or  irrevocable  provision  shall be
     carried  out as nearly as  possible  according  to its  original  terms and
     intent, while eliminating such invalidity or non-enforceability.


     IN WITNESS  WHEREOF,  The  parties  hereto  have  executed  this  Agreement
     effective as of the day and year first above written.

     NEW YORK HEALTH CARE, INC.


     BY:  _________________________          BY:__________________________
      TITLE:                                       JERRY  BRAUN


<PAGE>

                        AMENDMENT TO EMPLOYMENT AGREEMENT
                        ---------------------------------

     This  amendment  to  the  Employment Agreement is made and entered into the
28th  day of January 2003, by and between New York Health Care, Inc., a New York
corporation,  with  its  principal  place  of  business at 1850 McDonald Avenue,
Brooklyn,  New  York  11223 (hereinafter "Employer" or the "Company"), and Jerry
Braun,  an  individual  whose  residential  address  is at 929 East 28th Street,
Brooklyn,  NY  11210  (hereinafter  "Employee").

                              W I T N E S S E T H :

     WHEREAS,  the  Employer and Employee are parties to an employment agreement
between them dated November 10, 1999 (the "Employment Agreement");

     WHEREAS,  the  Employer  and  Employee  have  mutually  agreed to amend the
Employment  Agreement  to  the  extent  provided  for  herein;

     NOW,  THEREFORE,  in  consideration  of  the  mutual covenants as set forth
herein,  and  other  good  and  valuable  consideration, the receipt of which is
hereby  acknowledged:

                      THE PARTIES HERETO AGREE AS FOLLOWS:

     1.     Paragraph  1 of the Employment Agreement is hereby amended by adding
the following sentence at the end of the paragraph:

     "In  addition,  it is agreed that the Employee shall be elected as a member
of  the  Board  of Directors of the Employer for the full term of the Employment
Agreement."

     2.     Paragraph 2 of the Employment Agreement is hereby amended to read as
follows:

     "2.  Term.   The  term  of  employment  of  the  Employee  pursuant  to the
Employment  Agreement  shall be extended for an additional period of five years,
so  that the term of the Employment Agreement shall be for ten (10) years ending
at the close of business December 26, 2009."


<PAGE>
     3.     Paragraph 5 of the  Employment Agreement is hereby amended by adding
the following subparagraph (B)(v):

          "(B)(v)  The  closing of the October 11, 2001 Stock for Stock Exchange
Agreement, as amended, which occurred on January 2, 2003, is deemed to be a
change of control of the Company."

     4.     Paragraph  6 of the Employment Agreement is hereby amended by adding
the following subparagraph (C):

          "(C)  In  the event of termination of the service of the Employee as a
member  of  the Board of Directors of the Employer for any reason other than the
death of the Employee, the Employer shall, effective on the date of termination,
enter  into  a consulting agreement with the Employee, substantially in the form
filed  with  the  Securities  and  Exchange  Commission  as  an  Exhibit  to the
Employer's  Form  S-4 Registration Statement which was declared effective by the
SEC  on  November 1, 2002, whereby the Employee will provide consulting services
to  the Employer on an as-needed basis for a period of not less than five years,
and  as  compensation  for  those  services will be granted an option to acquire
500,000 shares of the Employer's common stock during a term of not less than ten
(10)  years  at  a  price per share equal to the closing price of the Employer's
common  stock  on  the  date of such termination, and the shares of common stock
underlying  the  option  shall  be promptly registered on SEC Form S-8 or on any
other  SEC form appropriate for such registration so that such shares shall have
been  fully  registered  no later than ninety (90) days after termination of the
Employment  Agreement."

     5.     Paragraph 10 of the Employment Agreement is hereby amended to change
the  address  for  copies  of notices to William J. Davis, Esq., to "Scheichet &
Davis, P.C., 800 Third Avenue, New York, New York 10022."


                                        2
<PAGE>
     6.     The  Employment  Agreement is hereby amended by adding the following
paragraph 18:

          "18.  Modifications  to Employment Agreement Authorized by Resolutions
of  the  Compensation  Committee  and  Board  of  Directors.  The  following
modifications  to  the  Employment  Agreement have been implemented prior to the
date  of  this amendment pursuant to resolutions approved by the New York Health
Care,  Inc.  Compensation  Committee  and  Board  of  Directors,  as  follows:

          (a)  Effective January 1, 2002, the Employee will be entitled to forty
eight  (48)  days  of  compensated  absences  each  year  during the term of the
Employment  Agreement.

          (b)  In  lieu  of  the  $5,000 annual allowance for insurance premiums
provided  in  paragraph  4(E)  of the Employment Agreement, the Employee will be
paid  a  $10,000  per  annum  expense  allowance."

     7.     All  Other  Provisions  Remain  Unchanged.  Except  as  specifically
provided for in this amendment to the Employment Agreement, all of the terms and
provisions  of  the  Employment  Agreement shall remain in full force and effect
without  modification.

          IN  WITNESS  WHEREOF,  the parties hereto have executed this Agreement
effective as of the day and year first above written.


                                   NEW YORK HEALTH CARE, INC.


                            By:    /s/ Jacob Rosenberg
                                   -------------------------------
                                   Jacob Rosenberg, Vice President


                                   EMPLOYEE:


                                   /s/ Jerry Braun
                                   ------------------------
                                   Jerry Braun


                                        3

<PAGE>

                                    EXHIBIT B

                                    AGREEMENT

      AGREEMENT (this "Agreement"), dated the 24th day of February, 2005, by and
among New York Health Care, Inc., a New York corporation (the "Seller"), NYHC
Newco Paxxon, Inc., a New York corporation ("NYHC-NJ"), Jerry Braun ("Braun")
and Jacob Rosenberg ("Rosenberg" and, together with Braun, collectively, the
"Secured Party")). Capitalized terms used herein which are not otherwise defined
shall have the respective meanings ascribed thereto in the Purchase Agreement
(as defined below).

      WHEREAS, pursuant to that certain Purchase Agreement, dated as of July 15,
2004, by and among the Seller, NYHC-NJ and New York Health Care, LLC (the
"Purchaser"), an entity controlled by Braun and Rosenberg (the "Purchase
Agreement"), the Seller agreed, upon the fulfillment of certain conditions, to
sell its home health care business (the "Business") to the Purchaser;

      WHEREAS, as an inducement to allow the Seller to complete the private
placement contemplated by Section 2.02(h) of the Purchase Agreement (the
"Private Placement"), Braun and Rosenberg have agreed to resign from the Board
of Directors of the Seller and as executive officers of the Seller upon the
consummation of such private placement, notwithstanding the fact that those
actions would be considered resignation for good reason under Braun's and
Rosenberg's respective Employment Agreement and would obligate the Seller to
make certain payments under such Employment Agreements (the "Payments");

      WHEREAS, Braun and Rosenberg have agreed to defer receipt of the Payments
from the Seller and agree to forego such Payments in consideration of the
consummation of the sale of the Business by the Seller and NYHC-NJ to the
Purchaser under the Purchase Agreement;

      WHEREAS, the parties hereto desire to set forth the payments that would
payable by Seller and NYHC-NJ to Braun and Rosenberg under certain circumstances
relating to the Purchase Agreement and the Employment Agreements; and

      WHEREAS, as security for the obligations of the Seller and NYHC-NJ to
consummate the purchase of the Business under the Purchase Agreement (the
"Purchase") and the obligations of the Seller under the Employment Agreements
and this Agreement (the "Obligations"), the Seller and NYHC-NJ have agreed to
grant to the Secured Party a security interest in the Collateral (as defined
below);

      NOW, THEREFORE, in consideration of the benefits accruing to the Seller
and NYHC-NJ, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Seller and NYHC-NJ covenant
and agree with Braun and Rosenberg as follows:

      1. Definition of Triggering Event. For the purposes of this Agreement a
"Triggering Event" shall mean any of the following:


<PAGE>

            (a) the Seller or NYHC-NJ breaches the terms of the Purchase
Agreement and such breach is not cured within the time period provided for the
cure of such breach under the Purchase Agreement; provided, however, that for
purposes of this Section 1(a), it shall not be considered a breach of the
Purchase Agreement if (x) the Seller and NYHC-NJ sell their home health care
business in the state of New Jersey to an unaffiliated third party for a cash
purchase price of no less than $2.7 million (the "NJ Sale") and (y) the Purchase
Agreement is amended by the parties thereto to state that the Purchaser will
purchase the assets of the Seller's and NYHC-NJ's home health care business in
the state of New York in exchange for the assumption of liabilities and
contracts and extinguishment of any payment obligations of the Seller under the
Employment Agreement and that the purchase contemplated thereunder and the NJ
Sale shall take place simultaneously;

            (b) a change in the majority of the Board of Directors of the Seller
(other than as a result of (x) the resignations of Braun and Rosenberg, (y) a
reduction in the number of members of the Board of Directors of the Seller
resulting from death, disability or resignation of a member or (z) the addition
of any directors that have been expressly approved in writing by the Secured
Party);

            (c) any other event that would be considered a change in control or
would be considered "good reason" for the resignation of Braun or Rosenberg
under the Employment Agreements occurs after the date of this Agreement;
provided, however; that for purposes of this Section 1(c), the resignations of
Braun and Rosenberg in connection with the Private Placement shall not be
considered a Triggering Event; or

            (d) the Purchase Agreement is terminated or the transactions
contemplated thereby are not consummated before December 31, 2005, including,
without limitation, as a result of failure of Seller to receive approval of the
transaction from its shareholders; provided, however, that for purposes of this
Section 1(d), the termination of the Purchase Agreement or the failure to
consummate the transactions contemplated under the Purchase Agreement as a
result of a breach of the Purchase Agreement by, or a failure to act of, the
Purchaser or Braun or Rosenberg, shall not be considered a Triggering Event.

      2. Obligations upon Triggering Event.

            (a) Upon the occurrence of the Triggering Event set forth in Section
1(a) above, the Seller and NYHC-NJ shall promptly pay to Braun and Rosenberg the
aggregate amount due to them under the Employment Agreements in case of
resignation for "good reason" and shall pay to the Purchaser an aggregate of
$250,000 in liquidated damages with respect to such breach.

            (b) Upon the occurrence of the Triggering Event set forth in Section
1(b) above, the Seller and NYHC-NJ shall promptly pay to Braun and Rosenberg the
aggregate amount due to them upon a "change in control" and a "resignation for
good reason" under the Employment Agreements.

            (c) Upon the occurrence of the Triggering Event set forth in Section
1(c) above, the Seller and NYHC-NJ shall promptly pay to Braun and Rosenberg the
aggregate amount due to them under the Employment Agreements; provided, that if
Braun and Rosenberg receive payments pursuant to Section 2(b), they shall not be
entitled to payments under this Section 2(c).


                                     - 2 -
<PAGE>

            (d) Upon the occurrence of the Triggering Event set forth in Section
1(d) above, the Seller and NYHC-NJ shall promptly pay to Braun and Rosenberg the
aggregate amount due to them upon a "resignation for good reason" under the
Employment Agreements.

            (e) Upon receipt of the payments set forth in any of Sections
2(a)-(d), Braun and Rosenberg hereby agree that Seller and NYHC-NJ shall be
released from their obligations under the Purchase Agreement, the Employment
Agreements and this Agreement.

      3. Security Interest. The Seller and NYHC-NJ, as security for the
consummation of the Purchase and the due and punctual completion of payment of
the Obligations, hereby assign, grant, convey, pledge and set over to the Braun
and Rosenberg and grant to the Braun and Rosenberg a security interest in all of
the right, title and interest of the Seller and NYHC-NJ in the Collateral.

      4. Definition of Collateral. As used herein, the term "Collateral" shall
mean with respect to the Seller and NYHC-NJ, all amounts deposited in the
Collateral Account (as defined below) and all of the other assets of the
Business.

      5. Remedies in Case of Event of Default.

            (a) Subject to Section 5(d) below, if an Event of Default (as
defined below) shall have occurred and be continuing, the Secured Party shall be
entitled to exercise all of the rights, powers and remedies for the protection
and enforcement of its rights in respect of the Collateral at law or equity and,
in addition, the Secured Party may, without being required to give any notice,
except as herein provided or as may be required by mandatory provisions of law,
sell the Collateral, or any part thereof, at public or private sale, for cash,
upon credit or for future delivery, and at such price or prices as the Secured
Party may deem commercially reasonable. The Secured Party shall have the right
to take immediate possession of the Collateral. The Seller and NYHC-NJ hereby
expressly consent to such repossession of the Collateral and waive all rights to
demand any notice with respect thereto.

            (b) For purposes of this Agreement, an "Event of Default" shall mean
the occurrence of a Triggering Event.

            (c) Limitations on Rights in Collateral. The rights of the Secured
Party to take possession of or sell the Collateral pursuant to this Agreement
shall be limited to the Obligations set forth in Section 2 of this Agreement.

      6. Cash Collateral Account. The Seller and NYHC-NJ shall deposit an amount
equal to $3.55 million upon the execution of this agreement into an
interest-bearing cash collateral account at [Citibank, N.A.], in favor of the
Secured Party (together with any interest earned thereon, the "Collateral
Account"), pursuant to the terms of a Control Agreement in a form to be agreed
upon by the parties hereto which shall provide that the Seller shall not
withdraw such funds without the prior written consent of the Secured Party.


                                     - 3 -
<PAGE>

      7. Power of Attorney. Upon the occurrence and during the continuance of an
Event of Default, the Seller and NYHC-NJ hereby appoint Secured Party and any
designee of Secured Party as their attorney-in-fact, at Seller's own cost and
expense, to exercise at any time after the occurrence of an Event of Default all
or any of the powers, authorities, and discretions conferred on or reserved to
Secured Party by or pursuant to this Agreement or applicable law, and (without
prejudice to the generality of any of the foregoing) to seal and deliver or
otherwise perfect any deed, assurance, agreements, instrument or act as Secured
Party may deem proper in or for the purpose of exercising any of such powers,
authorities or discretions. The Seller and NYHC-NJ hereby ratify and confirm,
and hereby agree to ratify and confirm, whatever lawful acts Secured Party or
any of Secured Party's sub-agents or attorneys shall do or purport to do in the
exercise of the power of attorney granted to Secured Party pursuant to this
Agreement, which power of attorney, being given for consideration, is
irrevocable.

      8. Board of Directors. Notwithstanding anything to the contrary contained
herein or in any other agreement, Braun and Rosenberg hereby agree that they
will no longer serve as directors or executive officers of the Seller.

      9. Miscellaneous. This Agreement shall create a continuing security
interest in the Collateral and shall be binding upon the successors and assigns
of the Seller and NYHC-NJ and shall inure to the benefit of and be enforceable
by Secured Party and its permitted successors and assigns. The headings in this
Agreement are for purposes of reference only and shall not limit or define the
meaning hereof. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which shall constitute one
instrument. In the event that any provision of this Agreement shall prove to be
invalid or unenforceable, such provision shall be deemed to be severable from
the other provisions of this Agreement which shall remain binding on all parties
hereto. This Agreement contains the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements or
understandings among the parties related to such matters. This Agreement may be
amended or modified only by a writing signed by both parties hereto. This
Agreement is not assignable or transferable by either party.

      10. Financing Statements. The Seller and NYHC-NJ hereby authorize the
Secured Party to file any initial financing statements and any amendments
thereto or continuations thereof and to give any notices necessary or desirable
to perfect the security interest of the Secured Party in the Collateral, in all
cases without the signature of the Seller or NYHC-NJ or to execute such items as
attorney-in-fact for either of them.

      11. Further Assurances. Upon the request of the Secured Party, the Seller
and NYHC-NJ hereby agree to duly and promptly execute and deliver, or cause to
be duly executed and delivered, such further instruments as may be necessary or
proper, in the reasonable judgment of the Secured Party, to carry out the
provisions and purposes of this Agreement or to perfect and preserve the
security interest of the Secured Party hereunder, in the Collateral or any
portion thereof.


                                     - 4 -
<PAGE>

      12. Termination and Release. Upon such time, if any, as (a) the Purchase
shall be consummated or (b) the Seller or NYHC-NJ shall pay, satisfy or
otherwise discharge in full the Obligations, this Agreement shall be null and
void and the security interests granted hereunder shall terminate. Upon request
by the Seller and NYHC-NJ after such termination, the Secured Party will take
all reasonable action and do all things reasonably necessary, including
executing and filing termination statements and copyright mortgage releases, and
executing terminations of powers of attorney to terminate the security interest
granted to it hereunder.

      13. Payment of Costs; Interest. In the event of any breach of this
Agreement by the Seller or NYHC-NJ or any dispute relating to this Agreement,
the Seller shall pay all costs and expenses, including, but not limited to,
reasonable attorneys' fees, incurred by the Secured Parties in connection with
the resolution of such breach or dispute. In addition, in the event of any
breach or dispute, any interest that accrues on the funds in the Collateral
Account shall be paid to the Secured Party.

      14. Governing Law. This Agreement shall be construed in accordance with,
and governed by, the laws of the State of New York as applied to contracts made
and to be performed entirely in the State of New York, without regard to
principles of conflicts of law

      15. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, and all of which together shall constitute a
single agreement. This Agreement may be evidenced by facsimile signatures.

      16. Severability. In the event that any one or more of the immaterial
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable, the same shall not affect any other provision
of this Agreement, but this Agreement shall be construed in a manner which, as
nearly as possible, reflects the original intent of the parties.

      17. No Prejudice. This Agreement has been jointly prepared by the parties
hereto and the terms hereof shall not be construed in favor of or against any
party on account of its participation in such preparation.

      18. Amendment and Modification. This Agreement may be amended or modified
only by written agreement executed by each of the parties hereto.


                                     - 5 -
<PAGE>

      IN WITNESS WHEREOF, the Seller, NYHC-NJ, Braun and Rosenberg have caused
this Agreement to be executed as of the date first above written.

                                              NEW YORK HEALTH CARE, INC.


                                              By: /s/ Fred E. Nussbaum
                                                  ------------------------------
                                                  Name:  Fred E. Nussbaum
                                                  Title: Chairman of the Board

                                              NYHC NEWCO PAXXON, INC.


                                              By: /s/ Jacob Rosenberg
                                                  ------------------------------
                                                  Name:  Jacob Rosenberg
                                                  Title: Sec


                                                  /s/ Jerry Braun
                                                  ------------------------------
                                                  Jerry Braun


                                                  /s/ Jacob Rosenberg
                                                  ------------------------------
                                                  Jacob Rosenberg


                                     - 6 -