AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT
                 ----------------------------------------------

THIS AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT (the "Amendment") is made as
of this 29th day of November, 2004, by and between/among "Borrower" (as defined
below) and "Lender" (as defined below).


                                    RECITALS
                                    --------

A.   As  used herein, the term "Borrower" shall mean the following collectively:
New York Health Care, Inc., a New York corporation ("New York Health Care"); and
NYHC Newco Paxxon, Inc., a New York corporation.

B.   As  used  herein,  the  term "Lender" shall  mean  GE HFS Holdings, Inc., a
Delaware corporation, f/k/a Heller Healthcare Finance, Inc.

C.   One or more of the entities designated above as "Borrower" are the existing
borrowers  under  a certain Loan and Security Agreement dated as of November 28,
2000,  by  and  between such existing borrowers and Lender (as the same may have
been  amended, restated or modified from time to time, including by that certain
Amendment  No. 1 to Loan and Security Agreement and Consent and Waiver, dated as
of  November  26,  2002,  by  and  among  Borrower  and Lender, and that certain
Amendment  No. 2 to Loan and Security Agreement and Consent and Waiver, dated as
of  March  29,  2004,  by  and among Borrower and Lender, and as the same may be
amended  by  this  Amendment,  the  "Loan Agreement"). All capitalized terms not
otherwise  defined  herein  shall  have  the  meanings  given  them  in the Loan
Agreement.

D.   Borrower  and  Lender  desire  hereby  to:
     -    extend  the  Term of the Loan Agreement to November 29, 2005, and make
     conforming amendments to the Loan Agreement; and
     -    amend  the  Loan  Agreement  as  hereinafter  provided.

NOW,  THEREFORE, in consideration of the premises set forth above, the terms and
conditions  contained  in  this  Amendment,  and  other  good  and  valuable
consideration,  the  receipt  and  sufficiency of which are hereby acknowledged,
Lender  and  Borrower  have  agreed  to  the  following  amendments  to the Loan
Agreement:

1.   Recitals.  The foregoing recitals, including all terms defined therein, are
     --------
incorporated herein and made a part hereof.

2.   Extension  of  Term. The Term of the Loan is extended to November 29, 2005,
     -------------------
and  the  Loan  shall  mature  as  of  November  29, 2005. In furtherance of the
foregoing,  Section  2.8(a) of the Loan Agreement is hereby amended and restated
to  read  as  follows:

     "2.8(a) Subject to Lender's right to cease making Revolving Credit Loans to
     Borrower  upon  or  after  any Event of Default, this Agreement shall be in
     effect  for  a  period  through  and  including  November  29, 2005, unless
     terminated  as  provided  in  this  Section  2.8  (the  'Term')."

3.   Loan Agreement Fees. Section 2.4(c) of the Loan Agreement is hereby deleted
     -------------------
in  its  entirety,  and  in  its  place  there is hereby inserted the following:

     "2.4(c).  For  so  long as the Loan is available to Borrower from and after
     November  29,  2004, Borrower unconditionally shall pay to Lender an annual
     usage  fee (the "Usage Fee") equal to (i) one half of one percent (0.5%) of
     the  average  amount  by  which the Maximum Loan Amount exceeds the average
     amount  of  the outstanding principal balance of the Revolving Credit Loans
     during  the  preceding  year  (or  portion  thereof,  if  this Agreement is
     terminated  prior  to  the  completion  of a full year for purposes of such
     calculation)  minus  (ii)  the amount of interest paid by the Borrower with
     respect to outstanding Revolving Credit Loans during the preceding year (or
     portion thereof, if this Agreement is terminated prior to the completion of
     a  full year for purposes of such calculation); provided that if the amount
     described  in the foregoing clause (ii) exceeds the amount described in the
     foregoing  clause  (i),  the  Usage  Fee  shall  be  equal


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     to zero dollars ($0). The Usage Fee shall be payable annually in arrears on
     November  29,  2005 or, if this Agreement is terminated prior to such date,
     the  effective  date  of  such  termination."

4.   Amendment  Fees.  In consideration of Lender's execution of this Amendment,
     ---------------
Borrower  agrees  to  pay  a fee of $5,000, which fee shall be deemed earned and
payable  on  the  date  of  execution  of  this Amendment and shall constitute a
portion  of  the  Obligations.

5.   Updated  Schedules. As a condition precedent to Lender's agreement to enter
     ------------------
into  this  Agreement, and in order for this Agreement to be effective, Borrower
shall  revise,  update and deliver to Lender all Schedules to the Loan Agreement
to  update  all  information  as  necessary  to  make  the  Schedules previously
delivered  correct. Borrower hereby represents and warrants that the information
set  forth  on the attached Schedules is true and correct as of the date of this
Agreement.  The  attached  Schedules  are  hereby  incorporated  into  the  Loan
Agreement  as  if  originally  set  forth  therein.

6.   Miscellaneous.
       -----------

     (a)  Further  Documentation.  In  the  event  any  further documentation or
          ----------------------
information  is deemed necessary or appropriate by Lender in the exercise of its
rights  under  the  Loan  Documents  or  to  correct patent mistakes in the Loan
Documents,  Borrower  shall  provide,  or  cause  to be provided, to Lender such
documentation  or information. Borrower shall execute and deliver to Lender such
documentation,  including  but  not  limited  to,  any  amendments, corrections,
deletions or additions to the Loan Documents as is required by Lender; provided,
however,  that Borrower shall not be required to do anything that has the effect
of  changing  the  essential  economic  terms  of the loan set forth in the Loan
Documents.

     (b)  References.  Upon  the effectiveness of this Amendment, each reference
          ----------
in  the  Loan  Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words  of  similar import shall mean and be a reference to the Loan Agreement as
amended  by  this  Amendment.

     (c)  Affirmation. Except as specifically amended above, the Loan Agreement,
          -----------
and  all  other  Loan  Documents  (and  all  covenants,  terms,  conditions  and
agreements  therein),  shall  remain  in  full  force and effect, and are hereby
ratified  and  confirmed  in  all  respects  by Borrower. Borrower covenants and
agrees  to  comply  with  all of the terms, covenants and conditions of the Loan
Agreement,  as  amended  hereby,  notwithstanding  any  prior course of conduct,
waivers,  releases  or  other  actions or inactions on Lender's part which might
otherwise  constitute or be construed as a waiver of or amendment to such terms,
covenants  and  conditions.

     (d)  No Waiver. The execution, delivery and effectiveness of this Amendment
          ---------
shall  not,  except as expressly provided in this Amendment, operate as a waiver
of  any  right,  power  or  remedy  of  Lender,  nor  constitute a waiver of any
provision  of  the  Loan  Agreement,  the Loan Documents or any other documents,
instruments  and  agreements executed or delivered in connection with any of the
foregoing.  Nothing  herein is intended or shall be construed as a waiver of any
existing  defaults  or  Events of Default under the Loan Agreement or other Loan
Documents  or any of Lender's rights and remedies in respect of such defaults or
Events  of  Default.

     (e)  No Novation. This Amendment (together with any other document executed
          -----------
in  connection  herewith) is not intended to be, nor shall it be construed as, a
novation  of  the  Loan  Agreement.

     (f)  Governing  Law.  This  Amendment shall be governed by and construed in
          --------------
accordance  with  the  laws  of  the  State  of  Maryland, without regard to any
otherwise  applicable  conflicts  of  law  principles.

     (g)  Headings.  Section  headings  in  this  Amendment  are  included  for
          --------
convenience  of reference only and shall not constitute a part of this Amendment
for  any  other  purpose.

     (h)  Counterparts. This Amendment may be executed in counterparts, and both
          ------------
counterparts  taken  together  shall  be  deemed  to constitute one and the same
instrument.


                                        2
<PAGE>
IN  WITNESS  WHEREOF,  intending  to  be  legally bound, and intending that this
instrument constitute an instrument executed under seal, the parties have caused
this Amendment to be executed as of the date first written above.

                                    LENDER:

                                    GE HFS HOLDINGS, INC.
                                    F/K/A HELLER HEALTHCARE FINANCE, INC.
                                    a Delaware corporation


                                    By: /s/ R. Hanes Whiteley
                                        ---------------------
                                    Name: R. Hanes Whiteley
                                    Title: Vice President

                                    BORROWER:

                                    NEW YORK HEALTH CARE, INC.
                                    a New York corporation


                                    By: /.s/ Jacob Rosenberg for Corp.
                                       -------------------------------
                                    Name: Jacob Rosenberg
                                    Title:  C.O.O.

                                    NYHC NEWCO PAXXON, INC.
                                    a New York corporation


                                    By: /s/ Jacob Rosenberg for Corp.
                                       ------------------------------
                                    Name: Jacob Rosenberg
                                    Title:  C.O.O.


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