EXHIBIT 10.4

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

         This EMPLOYMENT  AGREEMENT dated as of August 1, 2005 between  NATIONAL
HOME HEALTH CARE CORP.,  a Delaware  corporation  having an address at 700 White
Plains Road, Scarsdale,  New York 10583 (the "Company"),  and STEVEN FIALKOW, an
individual having an address at 700 White Plains Road, Scarsdale, New York 10583
("Employee").

                              W I T N E S S E T H :
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         WHEREAS,  the Company desires that Employee  continue to be employed by
it and continue to render services to it, and Employee is willing to continue to
be so employed and to continue to render such services to the Company,  all upon
the terms and subject to the conditions contained herein.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained  herein,  and other good and valuable  consideration,  the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

         1. Employment.  Subject to and upon the terms and conditions  contained
in this Agreement,  the Company hereby agrees to continue to employ Employee and
Employee  agrees to  continue in the employ of the  Company,  for the period set
forth in  Paragraph  2 hereof,  to  render  the  services  to the  Company,  its
affiliates and/or subsidiaries described in Paragraph 3 hereof.

         2. Term.  Employee's  term of  employment  under this  Agreement  shall
commence on the date hereof (the  "Commencement  Date") and shall continue for a
period through and including the fifth anniversary of the Commencement Date (the
"Employment  Term")  unless  extended  in  writing  by both  parties  or earlier
terminated pursuant to the terms and conditions set forth herein.

         3. Duties.  (a) Employee shall be employed as the Company's  President,
Chief Executive Officer and Secretary.  It is agreed that Employee shall perform
his  services in the  Company's  Scarsdale,  New York  facilities,  or any other
facilities mutually agreeable to the parties.  The rights and duties of Employee
shall not in any way be curtailed  by the Company  without his consent nor shall
he be deprived of the dignity ordinarily associated with his offices.

               (b)  Employee  agrees  to abide  by all  By-laws  and  applicable
policies of the Company  promulgated from time to time by the Board of Directors
of the  Company,  including  without  limitation  the  Business  Policies of the
Company annexed hereto as Annex A..



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<PAGE>

         4.  Exclusive  Services and Best Efforts.  Employee shall devote all of
his working time,  attention,  best efforts and ability during regular  business
hours exclusively to the service of the Company, its affiliates and subsidiaries
during the term of this Agreement.

         5.  Compensation.  As  compensation  for  his  services  and  covenants
hereunder, the Company shall pay Employee the following:

               (a) Base  Salary.  The Company  shall pay Employee a minimum base
salary  ("Salary")  of $525,000 per year.  The Salary shall be subject to review
and  adjustment on an annual basis;  provided,  however,  that in no event shall
Employee's Salary be adjusted below the Salary designated herein. The Salary for
Employee  shall be increased  annually by a percentage  increase in the Consumer
Price Index;  the first such  increase  shall be effective  retroactively  as of
August 1, 2005 whereupon the salary for Employee in effect on that date shall be
increased as of that date by a percentage  equal to the  percentage  increase in
the  Consumer  Price  Index from  January  1, 2005 to  December  31,  2005 which
increase  shall be paid to Employee on or about March 15, 2006 or as promptly as
practicable  thereafter);  and such increases shall also be given effect on each
August 1 that  occurs  after  August  1,  2005 with  respect  to the  percentage
increase in the  Consumer  Price  Index for the  12-month  period  ending on the
immediately  preceding January 1. As used in this Paragraph 5(a), Consumer Price
Index shall mean the  Consumer  Price Index for Urban Wage  Earners and Clerical
Workers  prepared by the Bureau of Labor  Statistics  of the U.S.  Department of
Labor, or, if that index is not then being published, the most nearly comparable
successor  index that the parties  may agree upon or, if they fail to agree,  an
index designated by Company's  independent  certified public  accountants.  If a
successor index is used, the Company's independent  registered public accounting
firm shall make such adjustments to the index as may be appropriate to carry out
the  intention  of this  paragraph  and their  determination  shall be final and
binding on the parties.

               (b) Bonus  Compensation.  The Company  shall pay Employee  annual
bonus compensation ("Bonus Compensation") equal to four percent of the amount by
which the income from  operations in any fiscal year during the Employment  Term
(determined  in  accordance   with  general   accepted   accounting   principles
consistently   applied  and  reported  on  the  Company's  audited  consolidated
statement of earnings for such fiscal year)  exceeds  $5,000,000.  The foregoing
Bonus  Compensation  shall be paid by the Company  within thirty (30) days after
completion of the audited  financial  results of the Company for the  applicable
fiscal year.

               (c) Options.  The Company may grant to Employee from time to time
options to purchase  shares of the Company's  common stock pursuant to the terms
of any of the  Company's  stock  option  plans  and  any  related  stock  option
agreement  required to be executed in connection  therewith.  Such options shall
have such terms and conditions as shall be determined by the Board of Directors.


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<PAGE>

               (d) Cap.  Notwithstanding  anything to the contrary  contained in
Paragraphs  5(a) and  5(b)  hereof,  the  maximum  aggregate  Salary  and  Bonus
Compensation  payable to Employee in respect of any fiscal year shall not exceed
$750,000.

         6. Business Expenses. Employee shall be reimbursed for, and entitled to
advances  (subject  to  repayment  to the  Company if not  actually  incurred by
Employee)  with respect to, those  business  expenses  incurred by him which are
reasonable and necessary for Employee to perform his duties under this Agreement
in accordance with policies established from time to time by the Company.

         7. Employee Benefits. (a) During the Employment Term, Employee shall be
entitled to such  insurance,  disability and health and medical  benefits and be
entitled to  participate in such  retirement  plans or programs as are generally
made available to executive  officers of the Company pursuant to the policies of
the  Company;  provided  that  Employee  shall be  required  to comply  with the
conditions  attendant  to  coverage  by such plans and shall  comply with and be
entitled to benefits  only in accordance  with the terms and  conditions of such
plans.  In  addition,  the  Company  shall  credit  Employee's  account  in  its
non-qualified deferred compensation plan (the "Deferred Compensation Plan") with
$12,000  no later  than  October  31st of each  year  during  the next six years
beginning  on November 1, 2005,  provided  that the  Employee is employed by the
Company  on such  October  31st.  If  Employee's  employment  with  the  Company
terminates  prior to October 31, 2011 for reasons other than Employee's death or
termination  without  Cause,  as of the  date  of such  termination,  Employee's
benefit  under  the  Deferred  Compensation  Plan and all  amounts  credited  to
Employee's  account  thereunder   (including  any  earnings  thereon)  shall  be
forfeited.  Employee  shall be  entitled to four weeks paid  vacation  each year
during the Employment Term at such times as does not, in the reasonable  opinion
of the Board of Directors,  interfere with Employee's  performance of his duties
hereunder.  Notwithstanding  anything  to the  contrary  contained  herein,  the
Company shall provide  Employee with life insurance in the amount of $1,000,000.
The Company may  withhold  from any  benefits  payable to Employee  all federal,
state,  local and other  taxes and  amounts as shall be  permitted  or  required
pursuant to law, rule or regulation.  In addition to the foregoing,  the Company
shall pay to Employee the full amount of Employee's  annual  contribution  under
the Company's Premium  Conversion Plan, payable in accordance with the Company's
normal payment practices.

               (b)  Employee  shall be  entitled  to receive the sum of $800 per
month as an automobile allowance provided at the expense of the Company from the
Commencement  Date and during the  Employment  Term,  which  allowance  shall be
exclusive  of  all  expenses  related  to  car-phone,   insurance,  repairs  and
maintenance for such automobile, which expenses also shall be the responsibility
of the  Company.  Employee  agrees not to lease any  automobile  covered by such
allowance for a term longer than three years. Notwithstanding the foregoing, the
Company may, at its option, elect to provide Employee an automobile of the make,
model and year  mutually  agreeable  to the Company and  Employee,  all costs of
which associated with insurance,  repairs,  maintenance and other expenses shall
be the responsibility of the Company, in


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<PAGE>

lieu of the above described automobile allowances, all as may be mutually agreed
between Employee and the Company.  Employee acknowledges that some or all of the
foregoing may be deemed compensation to him.

         8. Death and Disability. (a) The Employment Term shall terminate on the
date of  Employee's  death,  in  which  event  Employee's  Salary,  reimbursable
expenses and benefits  owing to Employee  through the date of  Employee's  death
shall be paid to his estate. Employee's estate will not be entitled to any other
compensation upon termination of this Agreement pursuant to this Paragraph 8(a).

               (b) If,  during the  Employment  Term,  in the  opinion of a duly
licensed  physician  selected  by  Employee  and  reasonably  acceptable  to the
Company,  Employee,  because of physical or mental illness or incapacity,  shall
become  substantially  unable to perform the duties and services required of him
under this Agreement for a period of twelve  consecutive months the Company may,
upon at least twenty (20) days' prior written notice given at any time after the
expiration  of such  twelve-month  period to Employee of its intention to do so,
terminate this  Agreement as of such date as may be set forth in the notice.  In
case of such  termination,  Employee  shall be  entitled  to receive his Salary,
reimbursable  expenses  and  benefits  owing  to  Employee  through  the date of
termination.  Employee  will not be  entitled  to any  other  compensation  upon
termination of this Agreement pursuant to this Paragraph 8(b).

         9.  Termination for Cause. (a) The Company may terminate the employment
of Employee  for Cause (as  hereinafter  defined).  Upon such  termination,  the
Company  shall be  released  from any and all  further  obligations  under  this
Agreement,  except that the  Company  shall be  obligated  to pay  Employee  his
Salary,  reimbursable expenses and benefits owing to Employee through the day on
which  Employee  is  terminated.  Employee  will not be  entitled  to any  other
compensation upon termination of this Agreement pursuant to this Paragraph 9(a).

               (b) As used herein,  the term "Cause" shall mean: (i) the willful
failure of Employee to perform his duties pursuant to Paragraph 3 hereof,  which
failure is not cured by Employee  within thirty days  following  written  notice
thereof from the Company;  (ii) any other  material  breach of this Agreement by
Employee,  including any of the material  representations  or warranties made by
Employee;  (iii)  any act,  or  failure  to act,  by  Employee  in bad  faith or
intentionally  to the detriment of the Company;  (iv) the commission by Employee
of an act involving  moral  turpitude,  dishonesty,  theft,  unethical  business
conduct, or any other conduct which significantly  impairs the reputation of, or
harms,   the   Company,   its   subsidiaries   or   affiliates;   or   (v)   any
misrepresentation,  concealment  or omission by Employee of any material fact in
seeking employment hereunder.

         10.  Termination  without  Cause  or for Good  Reason.  Notwithstanding
anything  to the  contrary  herein,  including  without  limitation  Paragraph 2
hereof,  the Company may terminate the employment of Employee  without Cause (as
defined in Paragraph  9(b) hereof)


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<PAGE>

and the Employee may  terminate his  employment  for Good Reason (as provided in
Paragraph  12(f)  hereof).  Upon  any such  termination,  the  Company  shall be
released from any and all further obligations under this Agreement,  except that
the Company shall be obligated to pay to the Employee as severance  compensation
his Salary,  reimbursable  expenses and benefits  owing to Employee  through the
earlier of the third anniversary of the day on which Employee's employment is so
terminated or the expiration of the Employment Term. Such severance compensation
shall be paid in equal  monthly  installments,  with the first such  installment
commencing  on the last  day of the  month in  which  Employee's  employment  so
terminates.  In  the  event  of any  breach  by the  Employee  of the  covenants
contained in Paragraph 12 hereof, the Company shall be released from any further
obligation to pay the severance compensation specified herein. Employee will not
be entitled to any other  compensation  upon termination of this Agreement under
this Paragraph 10.

         11.  Termination   Following  a  Change  in  Control.  If,  during  the
Employment Term and within one year following a Change in Control of the Company
(as defined below),  the employment of the Employee is terminated by the Company
without Cause or by the Employee for any reason,  the Company shall  immediately
pay to the Employee in a lump sum as severance  compensation  an amount equal to
2.99 times the sum of (a) his annual Salary and (b) the Bonus  Compensation paid
or payable to him for the most  recently  completed  fiscal year of the Company,
but in no event shall such  severance  compensation  exceed the amount  which is
deductible  by the Company in  accordance  with  Section  280(G) of the Internal
Revenue Code of 1986, as amended.  Such severance  compensation shall constitute
the sole amounts payable to the Employee upon such  termination,  except for any
unpaid salary, reimbursement expenses and benefits owing to Employee through the
date of  termination  and except for payments  under the  Deferred  Compensation
Plan.  The Company  hereby  agrees to obtain an agreement  from any successor to
assume and agree to honor and  perform  this  Agreement.  For  purposes  of this
Agreement, a "Change in Control" shall have occurred if:

               (a) any  "person",  as such  term is used in  Sections  13(d) and
14(d) of the Securities  Exchange Act of 1934, as amended (the  "Exchange  Act")
(other than the Company, any trustee or other fiduciary holding securities under
an employee  benefit  plan of the Company,  Frederick H. Fialkow or Dr.  Bernard
Levine or any of their  respective  immediate  family  members or affiliates (as
such  term is  defined  in Rule 405  under  the  Securities  Act of 1933) or any
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially  the same proportions as their ownership of stock of the Company),
is or  becomes  the  "beneficial  owner" (as  defined  in Rule  13d-3  under the
Exchange Act), directly or indirectly, of securities of the Company representing
30% or more of the  combined  voting  power of the  Company's  then  outstanding
securities;

               (b) during any period of not more than two consecutive years (not
including any period prior to the execution of this Agreement),  individuals who
at the  beginning  of such period  constitute  the Board,  and any new  director
(other than a director  designated by a person who has entered into an agreement
with the Company to effect a transaction  described in


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<PAGE>

clause  (a),  (c) or (d) of this  Paragraph)  whose  election  by the  Board  or
nomination for election by the Company's  shareholders was approved by a vote of
at least  two-thirds  of the  directors  then still in office  who  either  were
directors at the  beginning of the period or whose  election or  nomination  for
election was previously so approved, cease for any reason to constitute at least
a majority thereof;

               (c)  the   shareholders  of  the  Company  approve  a  merger  or
consolidation of the Company with any other corporation, other than (A) a merger
or  consolidation  which would  result in the voting  securities  of the Company
outstanding  immediately  prior  thereto  continuing  to  represent  (either  by
remaining  outstanding  or by being  converted  into  voting  securities  of the
surviving  entity)  more than 80% of the  combined  voting  power of the  voting
securities of the Company or such surviving entity outstanding immediately after
such  merger or  consolidation  or (B) a merger  or  consolidation  effected  to
implement a recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove  defined) acquires more than 30% of the combined voting
power of the Company's then outstanding securities; or

               (d) the  shareholders of the Company approve an agreement for the
sale or disposition by the Company of all or substantially  all of the Company's
assets.

         12.  Disclosure  of  Information  and  Restrictive  Covenant.  Employee
acknowledges that, by his employment,  he has been and will be in a confidential
relationship  with the Company and will have access to confidential  information
and trade secrets of the Company, its subsidiaries and affiliates.  Confidential
information  and  trade  secrets  include,  but are not  limited  to,  customer,
supplier  and client  lists,  price  lists,  marketing,  distribution  and sales
strategies and procedures,  operational and equipment techniques, business plans
and  systems,  quality  control  procedures  and systems,  special  projects and
technological research,  including projects, research and reports for any entity
or client or any  project,  research,  report  or the like  concerning  sales or
manufacturing  or new  technology,  employee  compensation  plans  and any other
information   relating  thereto,  and  any  other  records,   files,   drawings,
inventions,   discoveries,   applications,   processes,   data  and  information
concerning  the  business  of the  Company  which are not in the public  domain.
Employee agrees that in  consideration of the execution of this Agreement by the
Company:

               (a) Employee  will not,  during the term of this  Agreement or at
any time  thereafter,  use,  or disclose to any third  party,  trade  secrets or
confidential  information  of  the  Company,  including,  but  not  limited  to,
confidential  information or trade secrets belonging or relating to the Company,
its subsidiaries,  affiliates, customers and clients or proprietary processes or
procedures of the Company, its subsidiaries,  affiliates, customers and clients.
Proprietary processes and procedures shall include, but shall not be limited to,
all information  which is known or intended to be known only to employees of the
Company, its respective  subsidiaries and affiliates or others in a confidential
relationship  with the Company or its  respective  subsidiaries  and  affiliates
which relates to business matters.



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               (b) Employee will not, during the term of this Agreement and, for
a  period  of one  (1)  year  thereafter,  directly  or  indirectly,  under  any
circumstance  other than at the  direction  and for the benefit of the  Company,
engage in or participate in any business  activity,  including,  but not limited
to, acting as a director,  officer,  employee,  agent,  independent  contractor,
partner, consultant, licensor or licensee, franchisor or franchisee, proprietor,
syndicate  member,  shareholder  or creditor  or with a person  having any other
relationship  with any other  business,  company,  firm,  occupation or business
activity,  in any geographic  area within the United States that is, directly or
indirectly, competitive with any business conducted by the Company or any of its
subsidiaries  or  affiliates  during the term of this  Agreement or  thereafter.
Should Employee own 5% or less of the issued and  outstanding  shares of a class
of securities of a corporation  the securities of which are traded on a national
securities exchange or in the over-the-counter  market, such ownership shall not
cause Employee to be deemed a shareholder under this Paragraph 12(b).

               (c) Employee will not,  during the term of this Agreement and for
a period  of one (1) year  thereafter,  on his  behalf or on behalf of any other
business enterprise,  directly or indirectly,  under any circumstance other than
at the  direction  and for the  benefit  of the  Company,  solicit or induce any
creditor,  customer,  supplier, officer, employee or agent of the Company or any
of its  subsidiaries or affiliates to sever its  relationship  with or leave the
employ of any of such entities.

               (d) This  Paragraph 12 and  Paragraphs 13, 14 and 15 hereof shall
survive the expiration or termination of this Agreement for any reason.

               (e) It is expressly  agreed by Employee that the nature and scope
of each of the  provisions  set forth above in this  Paragraph 12 are reasonable
and  necessary.  If, for any reason,  any aspect of the above  provisions  as it
applies to Employee is  determined  by a court of competent  jurisdiction  to be
unreasonable  or  unenforceable,  the  provisions  shall only be modified to the
minimum extent required to make the provisions reasonable and/or enforceable, as
the case may be.  Employee  acknowledges  and agrees that his  services are of a
unique  character  and  expressly  grants  to the  Company  or  any  subsidiary,
successor or assignee of the Company,  the right to enforce the provisions above
through the use of all remedies  available at law or in equity,  including,  but
not limited to, injunctive relief.

               (f) The following  shall  constitute  Good Reason for termination
hereof by Employee, but shall not in any way be deemed to limit any other rights
or remedies of Employee hereunder:

                    (i) the  assignment to Employee of any duties  substantially
inconsistent  with the  duties  set  forth in  Paragraph  3 hereof  and with the
position  in  the  Company  that  Employee  held   immediately   prior  to  such
termination,  or a  significant  adverse  alteration  in


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the nature or status of Employee's  responsibilities  or the  conditions of such
employment from those in effect immediately prior to such termination;

                    (ii) a  reduction  by the  Company in  Employee's  Salary or
Bonus  Compensation  as in  effect  on the  date  hereof  or as the  same may be
increased from time to time;

                    (iii)  the  relocation  of the  Company's  offices  at which
Employee is  principally  employed  immediately  prior to such  termination to a
location  more  than 25 miles  from  such  location,  or the  Company  requiring
Employee to be based anywhere other than the Company's  offices at such location
except for required travel on the Company's business;

                    (iv) the  failure  by the  Company  to  continue  to provide
Employee with benefits  substantially similar to those enjoyed by Employee under
any of the Company's  life  insurance,  medical,  accident,  disability or other
employee  benefit or  compensation  plans in which  Employee  was  participating
immediately prior to such  termination,  the taking of any action by the Company
which would directly or indirectly  materially  reduce any of such benefits,  or
the failure by the Company to provide  Employee with the number of paid vacation
days to which  Employee is  entitled  on the basis of years of service  with the
Company in accordance with the Company's normal vacation policy in effect at the
time of such termination; or

                    (v) a breach by the  Company of any  material  provision  of
this Agreement not embraced in the foregoing clauses (i)-(iv).

         13.  Company  Property.  (a)  Any  patents,  inventions,   discoveries,
applications  or  processes,   designs,   devised,  planned,  applied,  created,
discovered or invented by Employee in the course of Employee's  employment under
this  Agreement  and  which  pertain  to  any  aspect  of the  Company's  or its
respective  subsidiaries' or affiliates' business shall be the sole and absolute
property of the Company,  and Employee  shall make prompt report  thereof to the
Company and  promptly  execute any and all  documents  reasonably  requested  to
assure the Company the full and complete ownership thereof.

               (b) All  records,  files,  lists,  including  computer  generated
lists,  drawings,  documents,  equipment  and  similar  items  relating  to  the
Company's  business  which  Employee  shall  prepare or receive from the Company
shall remain the Company's sole and exclusive property. Upon termination of this
Agreement,  Employee  shall  promptly  return to the Company all property of the
Company in his possession.  Employee further represents that he will not copy or
cause to be copied, print out or cause to be printed out any software, documents
or other  materials  originating  with or  belonging  to the  Company.  Employee
additionally  represents  that,  upon  termination  of his  employment  with the
Company,  he will not retain in his possession  any such software,  documents or
other materials.



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         14.  Remedy.  It is  mutually  understood  and agreed  that  Employee's
services are special,  unique,  unusual,  extraordinary  and of an  intellectual
character  giving them a peculiar value,  the loss of which cannot be reasonably
or adequately  compensated in damages in an action at law.  Accordingly,  in the
event of any breach of this  Agreement by Employee,  including,  but not limited
to, the breach of the non-disclosure,  non-solicitation  and non-compete clauses
under Paragraph 12 hereof,  the Company shall be entitled to equitable relief by
way of  injunction  or  otherwise  in  addition  to damages  the  Company may be
entitled to recover. In addition, the Company shall be entitled to reimbursement
from  Employee,  upon request,  of any and all  reasonable  attorneys'  fees and
expenses incurred by it in enforcing any term or provision of this Agreement.

         15.  Representations and Warranties of Employee. (a) In order to induce
the  Company  to enter  into this  Agreement,  Employee  hereby  represents  and
warrants to the Company as follows:  (i)  Employee  has the legal  capacity  and
unrestricted  right to execute and deliver this  Agreement and to perform all of
his obligations hereunder;  (ii) the execution and delivery of this Agreement by
Employee and the performance of his obligations hereunder will not violate or be
in conflict with any fiduciary or other duty, instrument,  agreement,  document,
arrangement or other  understanding  to which Employee is a party or by which he
is or may be  bound  or  subject;  and  (iii)  Employee  is not a  party  to any
instrument,  agreement,  document,  arrangement or other  understanding with any
person (other than the Company)  requiring or restricting  the use or disclosure
of any confidential  information or the provision of any employment,  consulting
or other services.

               (b) Employee  hereby  agrees to indemnify  and hold  harmless the
Company  from and  against  any and all  losses,  costs,  damages  and  expenses
(including,  without  limitation,  its reasonable  attorneys'  fees) incurred or
suffered  by the  Company  resulting  from any breach by  Employee of any of his
representations or warranties set forth in Paragraph 15(a) hereof.

         16. Notices.  All notices given hereunder shall be in writing and shall
be deemed  effectively  given when mailed,  if sent by  registered  or certified
mail, return receipt  requested,  addressed to Employee at his address set forth
on the first page of this  Agreement and to the Company at its address set forth
on the first page of this Agreement,  Attention:  Chairman of the Board,  with a
copy to Troutman Sanders LLP, The Chrysler  Building,  405 Lexington Avenue, New
York, New York 10174,  Attention:  Michael J. Shef,  Esq., or at such address as
such party  shall have  designated  by a notice  given in  accordance  with this
Paragraph 16, or when actually received by the party for whom intended,  if sent
by any other means.

         17.  Entire   Agreement.   This   Agreement   constitutes   the  entire
understanding  of the parties with respect to its subject  matter and no change,
alteration or  modification  hereof may be made except in writing  signed by the
parties  hereto.  Any  prior  or other  agreements,  promises,  negotiations  or
representations  not  expressly  set forth in this  Agreement are of no


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<PAGE>

force or effect.  In furtherance  and not in limitation of the  foregoing,  this
Agreement  supersedes any and all prior employment  agreements to which Employee
and the Company are parties,  including  the  Employment  Agreement  dated as of
November 1, 2001 between Employee and the Company, all of which prior agreements
are hereby terminated and of no force or effect.

         18.  Severability.   If  any  provision  of  this  Agreement  shall  be
unenforceable   under   any   applicable   law,   then    notwithstanding   such
unenforceability,  the remainder of this Agreement  shall continue in full force
and effect.

         19. Waivers, Modifications,  Etc. No amendment,  modification or waiver
of any provision of this Agreement  shall be effective  unless the same shall be
in writing  and signed by each of the  parties  hereto,  and then such waiver or
consent  shall be effective  only in the specific  instance and for the specific
purpose for which given.

         20. Assignment.  Neither this Agreement,  nor any of Employee's rights,
powers,  duties or  obligations  hereunder,  may be assigned by  Employee.  This
Agreement  shall be binding  upon and inure to the benefit of  Employee  and his
heirs and legal  representatives and the Company and its successors and assigns.
Successors of the Company shall include, without limitation,  any corporation or
corporations acquiring,  directly or indirectly, all or substantially all of the
assets of the  Company,  whether by merger,  consolidation,  purchase,  lease or
otherwise,  and such successor shall  thereafter be deemed "the Company" for the
purpose hereof.

         21.  Applicable  Law. This Agreement shall be deemed to have been made,
drafted,  negotiated and the transactions  contemplated  hereby  consummated and
fully  performed in the State of New York and shall be governed by and construed
in  accordance  with the laws of the  State of New York,  without  regard to the
conflicts of law rules thereof.  Nothing  contained in this  Agreement  shall be
construed  so as to require  the  commission  of any act  contrary  to law,  and
whenever  there is any conflict  between any provision of this Agreement and any
statute,  law,  ordinance,  order or  regulation,  contrary to which the parties
hereto have no legal right to contract,  the latter shall  prevail,  but in such
event any provision of this Agreement so affected shall be curtailed and limited
only to the extent necessary to bring it within the legal requirements.

         22.  Jurisdiction and Venue. It is hereby  irrevocably  agreed that all
disputes or  controversies  between the Company and Employee  arising out of, in
connection  with or  relating  to this  Agreement  shall be  exclusively  heard,
settled and determined by arbitration to be held in the City of New York, County
of New York, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect. The parties also agree that judgment may
be entered on the arbitrator's  award by any court having  jurisdiction  thereof
and the parties consent to the  jurisdiction of any court located in the City of
New York, County of New York, for this purpose.



                                     - 10 -
<PAGE>

         23. Full  Understanding.  Employee  represents and agrees that he fully
understands  his right to discuss all aspects of this Agreement with his private
attorney, that to the extent, if any that he desired, he availed himself of this
right, that he has carefully read and fully understands all of the provisions of
this  Agreement,  that he is  competent  to  execute  this  Agreement,  that his
agreement to execute this Agreement has not been obtained by any duress and that
he freely and voluntarily  enters into it, and that he has read this document in
its entirety and fully understands the meaning,  intent and consequences of this
document which is that it constitutes an agreement of employment.

         24.  Counterparts.  This  Agreement  may be  executed  in any number of
counterparts,  each of which shall be deemed an original  and all of which taken
together shall constitute one and the same agreement.

         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
date first above written.

                                            NATIONAL HOME HEALTH CARE CORP.


                                           By: /s/ Robert P. Heller
                                              ----------------------------------
                                              Name:  Robert P. Heller
                                              Title: VP of Finance/CFO

                                               /s/ Steven Fialkow
                                              ----------------------------------
                                                   STEVEN FIALKOW



                                     - 11 -
<PAGE>


                        ADDENDUM TO EMPLOYMENT AGREEMENT:
                        ---------------------------------

              Business Policies of National Home Health Care Corp.
              ----------------------------------------------------

         This addendum  supplements and is hereby incorporated into the terms of
the Employment Agreement to which this is attached. The Company has set forth in
this addendum basic  principles and standards of conduct that senior  management
of the Company are  expected to follow in all  respects.  Every  employee of the
Company has a personal  responsibility  to abide by each of the standards.  Each
person,  alone,  is  responsible  for his  actions.  No one will be permitted to
justify  an  illegal  act by  claiming  it was  ordered  by  someone  higher  in
management.  No one,  regardless  of level of position,  is ever  authorized  to
direct an employee to commit an illegal or unethical act.

         As a summary of basic  principles,  this  addendum does not include all
the rules and  regulations  that  apply to every  situation.  The  absence  of a
specific  practice  or  instruction  covering a  particular  situation  does not
relieve an employee from exercising the highest ethical standards  applicable to
the circumstances.  If an employee has questions as to what the proper course of
conduct should be in any given  situation,  consult the Chairman of the Board of
the Company and the Company's legal counsel.

         Violations of the guidelines set forth below can result in disciplinary
action, including dismissal, and possible criminal prosecution.

         Any reprisal  against an employee who is good faith reports a violation
or suspected violation of law or company policies is strictly forbidden.

         1. It is the  Company's  policy to comply fully with the law. We should
avoid even the  appearance of wrongdoing  and, at all times,  should conduct our
business according to the highest ethical standards.

         Since the Company is a home health care  company,  there are many state
and federal laws and regulations which affect and define the responsibilities of
each employee.  These laws and  regulations  must be adhered to at all times. If
there is ever any doubt on the part of an employee about the meaning of a law or
regulation  the employee must check with corporate  counsel or special  counsel.
The employee is responsible for designing,  implementing and monitoring  quality
control programs to assure that Company policies are being followed and that all
personnel are in compliance.  In connection with any compliance  program,  it is
vital that the employee be sure that no  falsification of records be allowed and
the employee must undertake to have programs  developed to assure that this does
not happen.



                                     - 12 -
<PAGE>

         2. The Company  shall not tolerate any unfair  competition.  Additional
guidelines relating to this general policy are:

            -        do not interfere  with contracts made between a prospective
                     customer and a competitor.

            -        never engage in commercial bribery.

            -        do not disparage a competitor's services.

            -        be accurate and truthful in all dealings with customers and
                     be  careful  not to  misrepresent  the state  and  qualify,
                     features or availability of our services.

         3. The  Company  awards  business  to  suppliers  solely on  merit.  No
employee should have any relationship, financial or otherwise, with any supplier
or  competitor  that might be  construed as a conflict of interest or that might
even appear to impair his or her independent  judgment on behalf of the Company.
Gifts,  loans or any other thing of significant  value should not be accepted or
solicited, even indirectly.

         4.  Each  employee's  primary  obligation  is  to  the  Company,   and,
therefore,  any form of outside  activity  must be kept  totally  separate  from
employment  with the  Company.  no outside  activity  should  involve the use of
Company assets, materials or facilities.

         5. No employee  may use his or her  position in the Company for outside
gain or benefit,  nor should any employee use property or other  confidential or
private confidential information in any outside activity.

         6. The law requires that the Company's books and records accurately and
fairly  reflect  transactions  in  reasonable  detail,  and that  the  Company's
internal accounting controls provide reasonable assurances that:

            -        transactions are carried out in an authorized matter.

            -        transactions  have been  reported  and  recorded  to permit
                     correct preparation of financial statements and to maintain
                     accurate  records  of  assets.   Access  to  assets  is  in
                     accordance with management's authorization.

            -        inventories   of   assets   are  taken   periodically   and
                     appropriate action is taken to correct discrepancies.

         7. Every  employee  who has control over  Company  funds is  personally
accountable for such funds. There are no exceptions to this rule.



                                     - 13 -
<PAGE>


         When spending  Company money or personal money that will be reimbursed,
or requesting  services that will cause Company money to be spent,  the employee
involved should make sure the Company received proper value in return and should
be sure the expenditure is for a legitimate business purpose.

         Anyone  responsible  for  the  handling  of  Company  revenue,  and the
associated records and materials, is accountable for their safe keeping.

         8. The Company categorically forbids the use of corporate funds for the
support of political parties or candidates. No employee is authorized to make or
approve such a contribution.

         9.  Company  business  records must always be prepared  accurately  and
reliably,  since they are of critical  importance to the  Company's  meeting its
financial, legal and management obligations.

         10.  Records  containing  personal  data on patients and the  Company's
employees are  confidential.  As such, they are to be carefully  safeguarded and
kept current and accurate. They should be disclosed only to authorized personnel
having a "need to know" or  pursuant  to lawful  processes.  Should you have any
questions  about  disclosure,  consult with the Company's  legal counsel  before
disclosing.

         11. When a dishonest  act by an  employee  is  discovered  it should be
reported immediately and directly to the Chairman of the Board of the Company.

         12. The Company  encourages  employees to  participate in its future by
investing in its  securities.  However,  in trading in Company  securities  each
employee should be aware that it is illegal (and may result in civil or criminal
penalties)  to buy or sell Company  securities  while in  possession of material
non-public information about the Company.

         Material   information   can  be   anything   that  could  have  actual
significance  in an investor's  decision such as acquisition  plans,  dividends,
earnings, new contracts, products, major regulatory, court or legislative events
and major  management  changes or other business plans.  Employees aware of such
information  prior to its  being  made  public  should  not buy or sell  Company
securities until the information has been made public.

         Employees  should not trade in the  securities of other  companies when
they know material non-public information about these companies which they learn
as part of their job. For example, an employee may learn that another company is
being considered for a major


                                     - 14 -
<PAGE>

contract or any other  information  which could have actual  significance  in an
investor's decision about the securities of the other company.

         Employees  should  keep any such  information  about the Company or any
other  company  secret  and use it only  for  Company  purposes,  because  it is
unlawful to "tip"  others who may buy or sell such  securities,  even though the
tipper does not.

         Some types of trading -- even if innocent -- could appear to the public
and to  public  officials  to be  based  on the  misuse  of  inside  information
concerning the Company.  To avoid even an appearance of  impropriety,  employees
are not to engage in short term speculation in company  securities (that is, the
purchase and sale on the open market within a six month  period).  Nor should an
employee  engage in any  transaction  when he stands to profit  due to the short
term savings in the value of the Company's  securities.  An example of this type
of trading includes "short sales" (selling borrowed  securities which the seller
hopes can be purchased at a lower price when they are due for delivery.






                                     - 15 -