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


                                       8 EAST PARKWAY, SCARSDALE, NEW YORK 10583



                               December 27, 1995



Mr. Robert E. Heller, Vice President &
Chief Financial Officer
National Home Health Care Corp.
700 White Plains Road, Suite 363
Scarsdale, New York  10583

Dear Bob:

This letter  confirms that The Bank of New York (the "Bank")  holds  available a
$2,000,000 secured advised line of credit to National Home Health Care Corp.

Advances  under the line of credit shall be payable on demand and bear  interest
at the rate per annum equal to the alternate base commercial lending rate of the
Bank as publicly  announced  to be in effect  from time to time (the  "Alternate
Base  Rate"),  such rate to change on the  effective  date of any  change in the
Alternate Base Rate.

           "Alternate Base Rate" shall mean, for any day, a rate per annum equal
           to the  higher of (i) the  Prime  Rate in effect on such and (ii) the
           Federal Funds Rate in effect on such day plus 1/2 of 1%.

           For purposes of this definition:

           "Prime Rate" shall mean,  for any day,  the  weighted  average of the
           rates on overnight  Federal  funds  transactions  with members of the
           Federal Reserve System arranged by Federal fund brokers, as published
           for  such  day (or if such day is not a  business  day,  for the next
           preceding  business day) by the Federal  Reserve Bank of New York, or
           if such rate is not so published for any day which is a business day,
           the average of quotations for such day on such transactions  received
           by the Bank from three Federal  funds brokers of recognized  standing
           selected by the Bank.

All advances and all principal  payments hereunder shall be endorsed by the Bank
on the sheet  attached to the  Promissory  Grid Note and shall be secured by all
assets of the borrower pursuant to


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12/27/95
Robert E. Heller
NHHCC


a security  agreement.  The borrower  authorizes  the Bank to accept  telephonic
instructions from a duly authorized representative of the borrower, as indicated
by the latest Corporate  Resolution on file with the Bank, to make an advance or
receive  a  repayment  hereunder  and to  endorse  the  sheet  attached  to this
Promissory Grid Note accordingly.  All advances made hereunder shall be credited
to the  Borrower's  deposit  account  referred to above,  which credits shall be
confirmed to the borrower by standard advice of credit. The borrower agrees that
the actual  crediting of the sum of money so borrowed to the borrower's  deposit
account shall constitute  conclusive evidence that the advance was made, and the
failure of the Bank to endorse the amount of any  advance on the sheet  attached
to this note or to forward to the  borrower an advice of credit shall not affect
the obligation of the borrower to repay such advance.

In  addition,  all  advances  under  the line of  credit  shall be  jointly  and
severally  guaranteed by Health  Acquisition  Corp.  and First Health,  Inc. and
Brevard  Medical  Center,  Inc. Each guarantee shall be secured by all assets of
the respective  guarantors pursuant to a security  agreement.  The form of note,
security  agreement  and  guarantee to be furnished to the Bank shall be in form
and substance acceptable to the Bank and its counsel.

Advances  under the line of credit are subject to the Bank's  satisfaction  with
(i) the  specific  purpose and  expected  time and source of  repayment  of each
advance,  and (ii)  the  Borrower's  and the  guarantors'  financial  condition,
business  prospects and  operations  at the time of each  advance.  As you know,
lines of credit may be cancelled by either  party at any time,  however,  unless
cancelled earlier, the line of credit shall be held available until December 31,
1996.

Additionally, all outstanding advances under the line of credit shall be reduced
to zero for a period of 30  consecutive  days  during  each  twelve  (12)  month
calendar period in which the line of credit is held available.

Very truly yours,

THE BANK OF NEW YORK


/s/ John Gusciora
----------------------------
Vice President

JG:bc


<PAGE>


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


                                       8 EAST PARKWAY, SCARSDALE, NEW YORK 10583



                                December 27, 1995



New England Home Care, Inc.
c/o National Home Health Care Corp.
700 White Plains Road, Suite 363
Scarsdale, New York 10583

           RE:        The  Bank  of New  York to New  England  Home  Care,  Inc.
                      $2,000,000.00 Secured Advised Line of Credit
                      ----------------------------------------------------------

Gentlemen:

           The Bank of New York (the "BANK") is pleased to advise you that it is
prepared to offer a secured  advised  line of credit (the "LINE") to New England
Home Care, Inc. (the "COMPANY")  pursuant to the terms and conditions herein set
forth.  Under the Line, the Bank will consider making loans (the "LOANS") to the
Company  of  which  the  aggregate  principal  amount  of  Loans at any one time
outstanding,  shall  not-exceed the lesser of the Borrowing Base (as hereinafter
defined) or $2,000,000.00. This Line means that the Bank will perform an ongoing
credit review to enable it to respond quickly to any request for Loans which the
Company may make.  The  issuance of this letter and the Line is not a commitment
and does not in any way obligate the Bank to make loans or grant any credit.

           Any Loan  extended  under the Line will be  subject  to the terms and
conditions herein contained and such additional terms and conditions as the Bank
may require at the time the  Company  requests a Loan and must be  evidenced  by
documents in form and substance satisfactory to the Bank.

           Prior  to the  making  of any Loan  hereunder,  the  Bank  must  have
received, at minimum, the following support, in form and content satisfactory to
the Bank,  which must remain in place as long as any Loan is outstanding and the
Company must be in compliance with the following terms and conditions:



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12/27/95
New England Home Care, Inc.

           1.         Security:

                      (i)  Receipt  by the Bank of a  perfected  first  priority
                      security  interest  in all of the  personal  property  and
                      assets of the  Company  and of  National  Home Health Care
                      Corp. and Nurse Care, Inc.;

                      (ii)  Receipt  by the  Bank  of  the  joint  and  several,
                      unconditional   corporate   guaranties   of  payment  (the
                      "Guaranties") of National Home Health Care Corp. and Nurse
                      Care, Inc. collectively the "Corporate Guarantors") of all
                      indebtedness and obligations of the Company to the Bank.

           2.         Financial  Statements.  To enable the Bank to carry out an
                      ongoing  financial  review,  the Company  must furnish the
                      following:

                      (i)  within 90 days after the end of each  fiscal  year of
                      the  Company  and the  Corporate  Guarantors,  an  audited
                      consolidated   and   internal   consolidating    financial
                      statement,   a  balance  sheet  of  the  Company  and  the
                      Corporate Guarantors as of the end of such fiscal year and
                      an  income  statement  and  statements  of cash  flows and
                      retained  earnings for such fiscal year, all in reasonable
                      detail and stating in comparative form the figures for the
                      corresponding  date and  period in the prior  fiscal  year
                      audited  by  independent   certified  public   accountants
                      selected by the Company and acceptable to the Bank;

                      (ii)  within 60 days after the end of each  quarter of the
                      Company  and  the  corporate   Guarantors,   an  unaudited
                      consolidated   and   internal   consolidating    financial
                      statement,   a  balance  sheet  of  the  Company  and  the
                      Corporate  Guarantors as of the end of such interim period
                      and an income  statement and  statements of cash flows and
                      retained   earnings  for  such  interim  period,   all  in
                      reasonable  detail  and  stating in  comparative  form the
                      figures for the corresponding date and period in the prior
                      interim  period audited by  independent  certified  public
                      accountants  selected by the Company and acceptable to the
                      Bank;

                      (iii)  no  later  than  the  5th day of  each  month  and,
                      together with any request for a Loan hereunder, a detailed
                      listing prepared by the Company of all accounts receivable
                      outstanding   with  a  summary  of  the  dates  due,   and
                      confirmation  of  the  value  of  inventory  held  by  the
                      Company;

                      (iv) no later than the 5th day of each month and  together
                      with any request for a Loan  hereunder,  a Borrowing  Base
                      certificate in the form attached hereto as Exhibit A;


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12/27/95
New England Home Care, Inc.


                      (v) promptly after the commencement thereof, notice of all
                      actions,  suits,  and  proceedings  before  any  court  or
                      governmental department, commission, board, bureau, agency
                      or  instrumentality,  domestic or foreign,  affecting  the
                      Company   or   Corporate   Guarantor   or  any  of   their
                      Subsidiaries which, if determined adversely to the Company
                      or any such  Corporate  Guarantor  or any such  Subsidiary
                      could  have a  material  adverse  effect on the  financial
                      condition,  properties,  or operations of the company, any
                      Corporate Guarantor or such Subsidiary;

                      (vi) prior to the payment thereof,  notice of any intended
                      payment of dividends to  shareholders  as permitted by the
                      provisions of this agreement;

                      (vii) such other  information  respecting the condition or
                      operations, financial or otherwise, of the Company and the
                      corporate  Guarantors  as the Bank  may from  time to time
                      reasonably request.

           3.         Loans. All Loans made under the Line shall be evidenced by
a credit  line grid note  prepared  by the Bank's  counsel  in form and  content
satisfactory to the Bank. The Bank shall have the right to make notations on the
note  evidencing  all loans and  prepayments  made under the Line and the Bank's
notations  shall be deemed correct absent  manifest  error.  Each Loan under the
Line shall be made subject to the terms and conditions  contained  herein to the
Company  in  increments  of not less than  $25,000.00  and upon at least one (1)
business day prior written notice to the Bank.

           4.         Interest  Rate and  Charges.  Interest  on the Loans  made
under this Line shall  accrue on each Loan from and  including  the date of each
advance to, but  excluding,  the date of repayment  in full of such  amount,  in
lawful money of the United States, and in immediately  available funds,  payable
on the first day of each calendar month,  at a floating  interest rate per annum
(the  "Floating  Rate") equal at all times to the Alternate  Base Rate.  For the
purposes of this letter, the term "Alternate Base Rate" shall mean, for any day,
a rate per annum equal to the higher of (i) the Prime Commercial Lending Rate of
the Bank as publicly  announced to be in effect from time to time,  such rate to
be adjusted  automatically,  without notice, on the effective date of any change
in such rate,  and (ii) the Federal Funds Rate in effect on such day plus 1/2 of
1%. For the purposes of this letter,  the term "Prime  Commercial  Lending Rate"
shall mean that rate of interest from time to time  announced by The Bank of New
York as its prime  commercial  lending  rate.  Any change in the  interest  rate
resulting  from a change in the Prime  commercial  Lending  Rate or the  Federal
Funds Rate shall be effective  at the  beginning of the day on which such change
in  the  Prime  Commercial  Lending  Rate  or the  Federal  Funds  Rate  becomes
effective.



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12/27/95
New England Home Care, Inc.

           The  principal  of any Loan,  if not paid down when due  (whether  at
stated  maturity,  by  acceleration  or otherwise)  shall bear interest from and
including  the date due to but excluding the date paid in full at the rate of 5%
plus the Floating Rate set forth above.

           The Bank  shall  have the right to impose a late  charge of 4% of any
installment  if any payment  under any Loan is received 15 days or more after it
is due.  No  acceleration  of the Loans will be required in order to impose this
rate.  This  rate  will be in  addition  to and not in  lieu of any  other  rate
imposition.

           5.         Prepayments.  Except for borrowings which exhaust the full
remaining amount of the Line, and prepayments  which result in the prepayment of
all loans  outstanding under the Line, each borrowing or prepayment of principal
under the Line shall be in an amount at least equal to  $25,000.00.  The Company
shall have the right to prepay the Loans and re-borrow  under the Line,  subject
to the  conditions  set forth herein,  at any time or from time to time prior to
the Expiration Date (as hereinafter defined).

           6.         Financial Covenants.

                      (i) The Company and the Corporate  Guarantors  agree that,
                      so long  as the  Line is in  effect  and any of the  Loans
                      remain   outstanding,   the  Company  and  the   Corporate
                      Guarantors,  on a  consolidated  basis,  will  maintain  a
                      Minimum Net Worth of  $1,000,000.  The term  "Minimum  Net
                      Worth"  shall mean the excess of Assets  over  Liabilities
                      which includes  common stock,  additional  paid in capital
                      and retained earnings.

                      (ii) The Company and the Corporate  Guarantors  shall not,
                      without  the  Bank's  prior  written   consent  incur  any
                      additional   indebtedness  with  any  other  institutional
                      lender.

           7.         Borrowing Base. The amount of Loans  outstanding under the
Line shall not exceed the Lesser of the Borrowing Base or  $2,000,000.00  at any
time. As used herein,  the term  "Borrowing  Base" shall mean (a) eighty percent
(80%) of the company's  Eligible Accounts  Receivable not more than 90 days past
due  from  time to time  outstanding  plus  (b)  fifty  (50%)  of the  Company's
Estimated Unbilled Accounts Receivable for the Company's previous month. For the
purposes of this letter,  the term  "Eligible  Accounts  Receivable"  shall mean
those  accounts  arising out of the sale or lease of goods or the  rendering  of
services  by the  Company  in the  ordinary  course of  business  to  persons or
entities  other than the Corporate  Guarantors or  subsidiaries  which have been
outstanding  for not more than 90 days from  invoice  date.  For the purposes of
this  letter,  the term  "Estimated  Unbilled  Accounts  Receivable"  shall mean
estimated unbilled accounts  receivable for the immediately  preceding month for
which the calculation of the Borrowing Base is being made. The Borrowing


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12/27/95
New England Home Care, Inc.

Base shall be calculated pursuant to the Borrowing Base Certificate set forth on
Exhibit A attached  hereto.  In the event  that the amount of Loans  outstanding
hereunder ever exceed the Borrowing  Base,  the Company  shall,  within five (5)
days of written notice thereof from the Bank,  prepay the  outstanding  Loans in
such an amount as would be necessary to bring the amount  outstanding  under the
Line in compliance with the terns and conditions hereof.

           8.         Expiration.   Notwithstanding  anything  to  the  contrary
contained  herein  provided,  the Line shall be reviewed by the Bank on December
31, 1996 (the "Expiration  Date").  At such time, the Bank shall have the right,
exercisable  in our sole  discretion,  to make no additional  advances under the
Line  and to  demand  immediate  payment  in full of the  outstanding  principal
balance of all Loans  advanced  hereunder,  together  with all accrued  interest
thereon.

           9.         Maturity.  In addition to the monthly payments of interest
hereinabove  set forth and the other  provisions  contained  herein  pursuant to
which the Bank shall have the right to  accelerate  repayment of the Loans,  the
outstanding principal balance of Loans under the Line and any accrued and unpaid
interest shall be due and payable, unless extended by the Bank in their sole and
absolute discretion, on the Expiration Date.

           10.        Defaults.  If (a)  there  shall  be any  material  adverse
change in the business or property of the Company or the  Corporate  Guarantors;
or (b) the Company or any of the  Corporate  Guarantors  shall  default under or
fail to comply with any of the terms and conditions  contained  herein or in any
note,  security  agreement,  guaranty or other  document  executed in connection
herewith  (the  "Facility  Documents");  or (c) an Event of Default  shall occur
under any other document or instrument  executed and delivered by the Company or
the  corporate  Guarantors  to the Bank in  connection  with  this or any  other
financing;  or (d) the Company's Medicare and/or Medicaid certification shall be
discontinued (all of the foregoing of which shall be collectively referred to as
an "Event of  Default")  then,  in such  event,  the Bank  shall have the right,
without notice and without regard to the other provisions  contained  herein, to
decline to make any other Loans  hereunder and to declare all Loans  outstanding
hereunder immediately due and payable.

           This  Line is issued  subject  to the  terms  and  conditions  herein
contained  and to the Bank, in its sole  discretion,  continuing to be satisfied
with  the  Company's  and the  Corporate  Guarantors'  financial  condition  and
economic prospects;  and the Company's and the Corporate Guarantors' maintenance
of a satisfactory relationship with the Bank.

           This letter is for the  Company's  information  only and is not to be
shown to or relied upon by third  parties.  This letter  constitutes  the entire
understanding  between  the Bank  and the  Company,  and  supersedes  all  prior
discussion.



<PAGE>


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12/27/95
New England Home Care, Inc.

           Please  acknowledge  your  understanding  of the above by signing and
returning the original copy of this letter.

                                             THE BANK OF NEW YORK


                                             By: /s/ John Gusciora
                                                ------------------------
                                                John Gusciora
                                                Vice President

JG:bc

ACKNOWLEDGED AND CONSENTED TO:

NEW ENGLAND HOME CARE, INC.


By: /s/ Thomas Smith, President
   -------------------------------


NATIONAL HOME HEALTH CARE CORP.


By: /s/ Robert P. Heller C.F.O.
   -------------------------------


NURSE CARE, INC.


By: /s/ Steven Fialkow
   -------------------------------


<PAGE>


Page -7-
                                    EXHIBIT A
                           BORROWING BASE CERTIFICATE

This  certificate is a part of and subject to the terms and conditions set forth
in a certain Line Letter dated December 27, 1995 (the "Letter"),  by and between
the  Bank of New  York  (the  "Bank")  and New  England  Home  Care,  Inc.  (the
"Company").

Terms used in this  certificate  shall have the same meaning as ascribed thereto
in the Letter.

The undersigned  officers of the Company certify that the information  furnished
herein as of  _________,  199__ as to  Eligible  Accounts  Receivable  and as of
_________,  199__  as to  Estimated  Unbilled  Accounts  Receivable  is true and
correct and that as of the date hereof no Event of Default, or event which after
notice or lapse of time or both  would be an Event of Default  exists  under the
Letter.

I.         Computation of Borrowing Base


           A. Eligible Accounts Receivable                       $______________
           B. 80% of Line A                                      $______________
           C. Value of Estimated Unbilled Accounts
              Receivable for the month of _________ (the
              month immediately preceding the month of
              this certificate)                                  $______________
           D. 50% of Line C                                      $______________
           E. Borrowing Base (Line B + Line D)                   $______________
                                              

II.        Aggregate principal balance of loans
           outstanding                                           $______________

III.       Commitment Available or Amount Due


           A. If line II is greater than line I(E), Amount Due.  $______________
              If line II is less than line IE, Amount Available


                                                 NEW ENGLAND HOME CARE, INC.


                                                 By:____________________________