Exhibit 10.1

STERLING FINANCIAL INVESTMENT GROUP                           RICARDO A. RIVAS
225 N.E. Mizner Boulevard, 4th Floor                         Managing Director
Boca Raton, FL  33432                              Investment Banking Division
Tel 305.728.1650
rrivas@mysterling.com


CONFIDENTIAL

May 3, 2004


Mr. Jerry Braun
President & CEO
New York Health Care, Inc.
1850 McDonald Avenue
Brooklyn, New York 11223

Dear Mr. Braun,

This  letter  confirms  our  agreement (the "Agreement") that Sterling Financial
Investment  Group, Inc. ("Sterling") will, except as otherwise set forth herein,
act  as  the exclusive placement agent to New York Health Care, Inc., ("NYHC" or
the  "Company")  as  provided  herein  in  connection  with  a  proposed private
placement  to  "accredited  investors"  as  such term is defined in Regulation D
under  the Securities Act of 1933, as amended (the "1933 Act"), of the Company's
Common  Stock  and  Warrants  to purchase Common Stock (the "Securities") as set
forth  in  the  attached  summary  of  Indicative  Terms and Conditions, the net
proceeds  of  which  shall  be  used  to  fund  the  capital requirements of The
BioBalance  Corporation,  a  wholly-owned  subsidiary  of  the  Company.
Notwithstanding  any  contrary provision herein, the Placement Agent will not be
entitled  to  any  fees,  other  compensation or expense allowance in respect of
Securities  sold  to  officers  and  directors  of  the  Company.

Based  on  our various discussions, we understand that the Company is seeking to
raise  up  to  $6  million through a private placement of Securities to fund its
operations  (the  "Placement"). It is expressly understood and acknowledged that
Sterling's  engagement  does  not  constitute  any  firm  commitment, express or
implied,  on  the part of Sterling or any of its affiliates to purchase or place
the  Securities  or  to provide any type of financing.  It is further understood
that  Sterling's  services  hereunder  shall  be subject to, among other things,
satisfactory  completion  of  due  diligence by Sterling, market conditions, the
absence  of  adverse  changes  to the Company's business or financial condition,
approval of Sterling's internal committee and any other conditions that Sterling
may  deem  appropriate  for  placements of such nature.  After the completion of
Sterling's  due  diligence  of  the  Company,  Sterling  reserves  the  right to
terminate  the  engagement. Sterling will not have the power or the authority to
bind  the  Company  to  any  sale  of  the  Securities.  This will not waive the
Company's  obligations  under  Schedule  I  of  this  Agreement  or  for  the
reimbursement  of  out  of  pocket  expenses  incurred  by  Sterling pursuant to
paragraph  4  below.

     1.   PLACEMENT  AGENT  SERVICES
          Sterling  will perform the following financial advisory and investment
          banking  services  as shall be reasonably necessary and appropriate in
          connection  with  the  Placement:

          a.   advise the Company as to the specific terms of the Securities and
               the  Placement;

          b.   review  the  business  and  operations  of  the  Company  and its
               historical  and  projected  financial  condition;

          c.   assist  the  Company and its counsel in the drafting, preparation
               and distribution of an offering memorandum (the "Memorandum") and
               other  related  documentation  (together with the Memorandum, the

<PAGE>
New York Health Care
May 3, 2004
Page 2


               "Offering  Materials") describing the Company, the Securities and
               the  terms  of  the  Placement;

          d.   develop  a  list  of  potential  purchasers  of  the  Securities;

          e.   assist  the  Company  in  identifying  and contacting prospective
               purchasers  of  the Securities, and consult with the Company from
               time  to  time  as  to  such  prospective  purchasers;

          f.   advise the Company as to the strategy and tactics of negotiations
               with  prospective  purchasers of the Securities and, if requested
               by  the  Company,  participate  in  such  negotiations;

          g.   advise  the  Company  as  to  the  timing  of  the Placement; and

          h.   render  such  other  financial  advisory  and  investment banking
               services  as  may  from time to time be agreed upon in writing by
               Sterling  and  the  Company.

     2.   TERM
          Sterling's engagement shall terminate four (4) months from the date of
          this  Agreement,  unless  extended  in  writing  by  Sterling  and the
          Company.  Either  Sterling or the Company may terminate this Agreement
          at any time on 10 days prior written notice. A "Residual Period" shall
          extend  for  six (6) months from the date of termination or expiration
          of  this  Agreement.  The  Company  reserves  the  right  to  utilize
          additional  placement agents if Sterling fails to raise gross proceeds
          of  $2,500,000  by  June  30,  2004  or  $4,000,000  by July 31, 2004,
          provided  however  that  said agents have been approved by Sterling, ,
          and that they work with Sterling through a "Selected Placement Agent's
          Agreement",  in  form  and  substance  reasonably  acceptable  to  the
          Company.  Approval  by  Sterling of said agents shall not unreasonably
          withheld  or  delayed.

          FEES
          The  Company  agrees  to pay Sterling as compensation for its services
          under  this  engagement  the  following  fees:

          RETAINER  FEE.  A  non-refundable cash Retainer Fee of US $35,000 (the
          "Retainer  Fee")  which  shall  be  payable  upon  execution  of  this
          Agreement.  The  Retainer  will  be  deducted  from any Placement Fee.

          PLACEMENT  FEE. A Placement Fee payable at each closing of a Placement
          equal  to  (i)  cash  in  an  amount equal to ten percent (10%) of the
          aggregate  gross  proceeds  from the Securities sold in the Placement,
          other  than  the proceeds of Securities sold to officers and directors
          of the Company, and (ii) warrants to purchase that number of shares of
          the  common stock of the Company (the "Common Stock") equal to fifteen
          percent  (15%)  of  the  number  of  shares of Common Stock (including
          warrants)  sold  in  the  Placement  (or if convertible Securities are
          sold,  then  equal to 15% of the number of shares of Common Stock into
          which  the  Securities shall be convertible), other than in respect of
          Securities  sold  to  officers  and  directors  of  the  Company. Such
          warrants  shall  have a five year term, an exercise price equal to the
          price  per  share  of the Securities sold in the Placement, or, in the
          case  of  convertible  securities,  the  conversion  price  of  said
          securities,  and  the  same  other  terms,  conditions,  rights  and
          preferences  as  the  Securities  sold  in  the  Placement.


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CONFIDENTIAL                         2                        STERLING FINANCIAL
                                                                INVESTMENT GROUP
<PAGE>
New York Health Care
May 3, 2004
Page 3


          The Company shall also pay Sterling a Placement Fee as described above
          on  all  Securities sold by the Company through a Placement during the
          Residual  Period  to  clients  Sterling  introduces  to  the  Company.

          UNACCOUNTABLE  EXPENSE  FEE. In addition to the above-referenced fees,
          the  Company  will  pay  an Unaccountable Expense Fee of three percent
          (3%)  of  the gross proceeds of the Securities sold at each closing to
          cover  expenses incurred by Sterling in connection with its engagement
          hereunder,  other than the proceeds of Securities sold to officers and
          directors  of  the  Company.

          A  Placement  may be consummated in one or a series of closings at the
          sole  discretion  of  the  Company.  The  Company acknowledges that at
          closing  of  the  Placement,  simultaneously  with  the receipt by the
          Company  of the gross proceeds of the Securities sold in the Placement
          at  closing, the Escrow Agent shall wire to Sterling (pursuant to wire
          transfer  instructions  to  be  given  by  Sterling) the cash pro rata
          portion  of  the  Placement  Fee  (calculated  on  the  gross proceeds
          received  at  such  closing).  In addition, the Company shall within a
          reasonable time after closing of the Placement, deliver the Securities
          to the investors in the Placement and deliver the Common Stock portion
          of  the  Placement  Fee  to Sterling (calculated on the gross proceeds
          received  at  closing).

     3.   OUTSIDE  LEGAL  COUNSEL  EXPENSES
          In  addition  to  the  fees described in paragraph 3, the Company will
          promptly reimburse Sterling's external legal counsel ("Adorno & Yoss")
          periodically  upon  request  for  all  reasonable expenses incurred in
          connection  with  this  engagement,  whether  or  not a transaction is
          consummated,  provided that, unless otherwise agreed by the Company in
          writing,  such  expenses  shall  not  exceed  $40,000.

     4.   INFORMATION
          The  Company  acknowledges  that  Sterling  will  be using information
          provided  by  others,  including,  without  limitation,  information
          provided  by  or  on behalf of the Company, and that Sterling does not
          assume  responsibility  for  and  may  rely,  without  independent
          verification,  on  the  accuracy  and  completeness  of  any  such
          information.

          The Company hereby warrants that the Memorandum and the other Offering
          Materials,  and  any  other information relating to the Company or the
          Placement, will not contain any untrue statement of a material fact or
          omit  to  state  any  material  fact  necessary to make the statements
          contained therein, in the light of circumstances under which they were
          made,  not misleading. The Company agrees to provide Sterling with (i)
          prompt notice of any material development affecting the Company or the
          occurrence  of  any  event  or  other change known to the Company that
          could  result  in  the  Memorandum  or  the  other  Offering Materials
          containing an untrue statement of a material fact or omitting to state
          any  material fact necessary to make the statements contained therein,
          in  the  light  of  the  circumstances under which they were made, not
          misleading, (ii) copies of any financial reports as soon as reasonably
          practicable  and  (iii) such other material information concerning the
          business  and  financial condition of the Company as Sterling may from
          time  to  time  reasonably  request.  Sterling  will have the right to
          approve  the  Memorandum  and  the  other Offering Materials and other
          written  communications  furnished  by  or on behalf of the Company in
          connection  with  the  Placement,  which  approval  shall  not  be
          unreasonably  withheld  or  delayed.


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CONFIDENTIAL                         3                        STERLING FINANCIAL
                                                                INVESTMENT GROUP
<PAGE>
New York Health Care
May 3, 2004
Page 4


     5.   COMPLIANCE WITH LAW
          The  Company has not taken, and will not take, any action, directly or
          indirectly,  that  may  cause  the Placement to fail to be entitled to
          exemption from registration under the U.S. federal securities laws, or
          applicable state securities or "blue sky" laws, or the applicable laws
          of  the  foreign  countries in which the Securities will be offered or
          sold.  The  Company  shall  be  responsible for any costs and expenses
          associated  with  filings,  applications  or  registrations  with  any
          governmental  or regulatory body, including, without limitation, those
          associated with any sales pursuant to Regulation D under the 1933 Act,
          "blue  sky"  laws,  and the laws of the foreign countries in which the
          Securities  will  be  offered  or sold. Sterling shall comply with all
          applicable  laws  in  connection  with the Placement. Sterling has not
          taken, and will not take, any action, directly or indirectly, that may
          cause  the  Placement  to  fail  to  be  entitled  to  exemption  from
          registration  under  the  U.S.  federal securities laws, or applicable
          state  securities  or  "blue  sky" laws, or the applicable laws of the
          foreign  countries  in  which  the Securities will be offered or sold.

     6.   COORDINATION
          The  Company  covenants  and agrees that it shall cooperate fully with
          Sterling,  make  available  to  Sterling  all  material  information
          concerning  the  Company  and  the  Placement that Sterling reasonably
          requests.  In  addition,  in  order  to  coordinate  most  effectively
          Sterling's  efforts  to  assist with the Placement, the Company agrees
          that  neither  it  nor  its  management  will  initiate, enter into or
          further  any  discussions with any third party regarding the Placement
          without the prior knowledge and consent of Sterling. In the event that
          the  Company  or  its  management  receives  an inquiry concerning the
          Placement, they will promptly inform Sterling of such inquiry in order
          that  Sterling  can assist the Company in any resulting discussions or
          negotiations.  The  Company also agrees that it will not publicize the
          Placement,  directly  or  indirectly, without prior written consent of
          Sterling,  which consent shall not be unreasonably withheld, except to
          the  extent  that  counsel  for  the  Company  determines  that public
          disclosure  of  the  Placement or any aspect thereof is required under
          applicable  federal  securities  laws.  Notwithstanding the foregoing,
          Sterling  acknowledges  and  agrees  that  it has only been engaged by
          Company  hereunder  in  connection  with  the  Placement  and that the
          Company  may engage other financial advisors and/or investment bankers
          in connection with (i) a private placement of the Company's securities
          to  institutional  investors,  except  the Placement, (ii) the merger,
          sale or joint venture of the Company with any third party or (iii) any
          other  transaction  except  the  Placement.

     7.   CLOSING  MATTERS
          On  the final closing date of the Placement, the Company will cause to
          be  delivered  to  Sterling  a  customary  and satisfactory opinion of
          counsel  addressed  to  the purchasers of the Securities and a copy of
          the  Company's  Certificate  of  Incorporation.

     8.   NO  THIRD  PARTY  BENEFICIARIES
          The Company acknowledges and agrees that Sterling has been retained to
          act as exclusive placement agent to the Company, and not as an advisor
          to  or agent of any other person, and that the Company's engagement of
          Sterling  is not intended to confer rights upon any person not a party
          to  this  Agreement (including shareholders, employees or creditors of
          the  Company)  as  against  Sterling  or  its  affiliates,  or  their
          respective  directors,  officers,  employees  or  agents.

     9.   INDEPENDENT  CONTRACTOR


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CONFIDENTIAL                         4                        STERLING FINANCIAL
                                                                INVESTMENT GROUP
<PAGE>
New York Health Care
May 3, 2004
Page 5


          Sterling  shall act as an independent contractor under this Agreement,
          and  any  duties arising out of its engagement shall be owed solely to
          the  Company.  It  is understood that Sterling's responsibility to the
          Company  is solely contractual in nature and Sterling does not owe the
          Company,  or  any  other party, any fiduciary duty as a result of this
          Agreement.  Sterling  acknowledges  that  Sterling has no authority to
          consummate  the  Placement or bind the Company in any way. In no event
          shall  any  investment  in  connection with the Placement be completed
          without  the  written  consent  of  the  Company.

     10.  DISCLOSURE
          The Company agrees that any information or advice rendered by Sterling
          or  its representatives in connection with the Agreement is solely for
          the  confidential use of the Company and, except as otherwise required
          by  applicable  law, regulation or legal process, the Company will not
          and  will  not  permit  any  third  party  to  disclose,  reproduce,
          disseminate, quote or otherwise refer to such advice or information in
          any  manner  without  Sterling's  prior written consent, which consent
          shall  not  be unreasonably withheld or delayed, other than to such of
          its employees and advisors as the Company reasonably determines have a
          need  to  know.

     11.  CONFIDENTIALITY
          Sterling  agrees that, except as otherwise required by law, regulation
          or  legal  process  (in which case Sterling shall, prior to disclosing
          any  confidential information, provide the Company with prompt written
          notice  that  it has received a request or that it intends to disclose
          such  information and a reasonable amount of time to apply to court of
          competent jurisdiction for a protective order, is case such request is
          made  pursuant to legal process), Sterling shall keep confidential all
          material  non-public  information  provided  to it by the Company, and
          shall  not  disclose  such  information to any third party without the
          Company's  prior  written consent, other than to such of its employees
          and  advisors  as  Sterling reasonably determines have a need to know,
          and  Sterling  shall  be  responsible that such employees and advisors
          maintain  the  confidentiality  of  such  information.  Additionally,
          Sterling agrees that it will not use any of the Company's confidential
          information  for  any  reason or purpose except in connection with its
          obligations  hereunder  as  a financial advisor in connection with the
          Placement.

     12.  STERLING  AFFILIATES
          Any  right  set  forth herein may be exercised, and any services to be
          provided by Sterling may be provided, by an affiliate of Sterling, but
          only after receipt of the Company's prior written approval and subject
          to  the  confidentiality  provisions and other terms set forth herein.
          The  Company  hereby  agrees  that if Sterling and/or any affiliate or
          employee  of  Sterling  purchases Securities for its own account, such
          purchase  will  not  constitute a conflict of interest for purposes of
          Sterling's  engagement  hereunder.

     13.  INDEMNIFICATION
          The  Company  and Sterling agree to the provisions with respect to the
          Company's  indemnity  of  Sterling  and  other  matters  set  forth in
          Schedule  I,  the  terms  of  which  are  incorporated herein in their
          entirety.

     14.  PUBLICITY
          The  Company  acknowledges  that  upon  completion  of  the Placement,
          Sterling  may,  at  its  own  expense,  place  an announcement in such
          newspapers and periodicals as it may choose, stating that Sterling has
          acted  as  exclusive placement agent to the Company in connection with
          such


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CONFIDENTIAL                         5                        STERLING FINANCIAL
                                                                INVESTMENT GROUP
<PAGE>
New York Health Care
May 3, 2004
Page 6


          Placement,  subject to prior review and approval by the Company of any
          such  advertisement  described  above,  which  approval  shall  not be
          unreasonably  withheld  or  delayed.

     15.  AMENDMENTS  AND  SUCCESSORS
          This  Agreement  may  not be waived, amended, modified or assigned, in
          any  way,  in whole or in part, including by operation of law, without
          the  prior  written consent of the Company and Sterling, any attempted
          assignment without such consent shall be null and void. The provisions
          of  this  Agreement  shall inure to the benefit of and be binding upon
          the  successors  and  assigns  of  the  Company  and  Sterling.

     16.  ENTIRE  AGREEMENT
          This  Agreement  constitutes the entire agreement between Sterling and
          the  Company,  and supersedes any prior agreements and understandings,
          with  respect  to  the  subject  matter  of  this  agreement.

     17.  NO  BROKERS
          The Company acknowledges and agrees that there are no brokers, agents,
          representatives or other parties that have an interest in compensation
          paid  or  payable  to  Sterling  hereunder.

     18.  TERMINATION  &  EXPIRATION
          Upon  termination  or expiration, this Agreement shall have no further
          force  or  effect, except that the provisions concerning the Company's
          obligations  to  Sterling  and  certain  related  persons  provided in
          Schedule I, the Company's obligation to pay Sterling fees and expenses
          as  described  in  this  Agreement,  the  status  of  Sterling  as  an
          independent  contractor,  obligations  regarding  compliance  with
          applicable  laws,  the  limitation  on  to whom Sterling shall owe any
          duties,  governing  law,  choice of forum, successors and assigns, and
          waiver  of  the  right  to  trial  by  jury  shall  survive  any  such
          termination  or  expiration  of  this  Agreement.

     19.  GOVERNING  LAW  AND  JURISDICTION
          This  letter and any claim or dispute of any kind or nature whatsoever
          arising  out  of or in any way relating to this Agreement, directly or
          indirectly (including any claim concerning advice provided pursuant to
          this Agreement), shall be governed by and construed in accordance with
          the  laws  of  the  State  of Florida. No such claim or dispute may be
          commenced,  presented  or  continued in any other court other than the
          courts of the State of Florida located in the City and County of Miami
          or  in  the  United  State District Court for the Southern District of
          Florida,  which  courts  shall  have  exclusive  jurisdiction over the
          adjudication  of such matters, and the Company and Sterling consent to
          the  jurisdiction  of  such courts and personal service. ANY RIGHTS TO
          TRIAL  BY  JURY WITH RESPECT TO ANY CLAIM OR PROCEEDING RELATED TO, OR
          ARISING OUT OF, THIS AGREEMENT ARE WAIVED BY STERLING AND THE COMPANY.


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CONFIDENTIAL                         6                        STERLING FINANCIAL
                                                                INVESTMENT GROUP
<PAGE>
New York Health Care
May 3, 2004
Page 7



We  are  pleased  to accept this engagement and look forward to working with you
and  the  Company.  Please confirm that the foregoing is in accordance with your
understanding  by  signing  and  returning  to us the enclosed duplicate of this
letter  on  or before 5:00 PM Eastern time, May 6th, 2004, which shall thereupon
constitute  a  binding  Agreement.

Very truly yours,

STERLING FINANCIAL INVESTMENT GROUP, INC.


By /s/ Ricardo Rivas
  --------------------------------
Ricardo Rivas
Head of Investment Banking


Agreed as of the date hereof



NEW YORK HEALTH CARE


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

Name Jacob Rosenberg
    ------------------------------------

Title COO/CFO
     -----------------------------------

Date May 6, 2004
    ------------------------------------



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CONFIDENTIAL                         7                        STERLING FINANCIAL
                                                                INVESTMENT GROUP
<PAGE>
New York Health Care
May 3, 2004
Page 8

                                   SCHEDULE I

                           INDEMNIFICATION PROVISIONS

The  Company agrees to indemnify and hold harmless Sterling, its affiliates, the
directors, officers and employees of Sterling and its affiliates, and each other
person  or  entity,  if  any,  controlling  Sterling  or  any  of its affiliates
(collectively,  "Indemnified Persons"), from and against, and the Company agrees
that  except  for  any  Losses  (as  defined herein) that are finally judicially
determined  to  have  resulted  from  the  bad faith or gross negligence of such
Indemnified  Person,  no  Indemnified  Person  shall  have  any liability to the
Company  or  its  owners, parents, affiliates, securityholders or creditors for,
any  losses,  claims,  damages,  liabilities  or  reasonable expenses (including
actions,  claims  or  proceedings  in  respect thereof (collectively, "Actions")
brought by or against any person, including stockholders of the Company, and the
cost  of  any  investigation  and  preparation  therefore  and  defense thereof)
(collectively,  "Losses")  (A)  related  to  or arising out of (i) the Company's
action  or  failure to act in connection with the Transaction or Sterling's Role
(as  determined  herein),  (ii)  any statements or omissions made in any written
disclosure or other written information or materials used in connection with the
transaction(s)  described  in  or contemplated by this letter (collectively, the
"Transactions")  or  the services, commitment or other obligations undertaken by
Sterling  in  this  letter agreement (collectively, "Sterling's Role"), or (iii)
the action or failure to act by an Indemnified Person with the Company's consent
or  in  reasonable  reliance  on  the  Company's action or failure to act or (B)
otherwise  related  to or arising out of the Transactions or Sterling's Role, or
any  other matter referred to in this letter agreement, except that the forgoing
shall  not apply to the Losses of an Indemnified Person that are determined by a
court  of  competent  jurisdiction  in a final judgment not subject to appeal to
have resulted from the bad faith or gross negligence of such Indemnified Person.
If  such  indemnification is judicially determined to be unavailable (other than
by reason of the bad faith or gross negligence of any such Indemnified Party) in
respect  of  any  such  Losses,  the  Company agrees to contribute to the Losses
involved  in  such proportion as is appropriate to reflect the relative benefits
received  by  the Company in the Transactions, on the one hand, and Sterling, on
the  other,  if such allocation is judicially determined by a court of competent
jurisdiction  in  a  final  judgment not subject to appeal to be unavailable, in
such  proportion  as  is appropriate to reflect not only such relative benefits,
but  also  other  equitable  consideration  such  as  the  relative fault of the
Company,  on  the  one  hand,  and  of  Sterling,  on  the  other  hand.

The  Company  will reimburse each Indemnified Person for all reasonable expenses
(including reasonable fees and disbursements of counsel) as they are incurred by
such  Indemnified  Person  in  connection  with  investigating, preparing for or
defending  any  Action  (or enforcing this letter agreement), in connection with
pending or threatened litigation in which any Indemnified Person is a party, and
whether  or  not such Action is brought by Sterling.  The Company agrees that it
will  not  settle  or  compromise or consent to the entry of any judgment in any
pending  or  threatened Action in respect of which indemnification may be sought
hereunder  (whether  or not an Indemnified Person is a party therein) unless the
Company  has given Sterling reasonable prior written notice thereof and obtained
an  unconditional  release of each Indemnified Person from all liability arising
therefrom.  No  Indemnified  Person  seeking  indemnification,  reimbursement or
contribution  hereunder  will, without the prior written consent of the Company,
settle,  compromise,  consent  to  the  entry  of  any  judgment in or otherwise
terminate  any  Action.

The  Company's  reimbursement,  indemnity and contribution obligations hereunder
shall  be  in  addition  to  any liability that it may otherwise have, and shall
inure  to  the  benefit of any successors, assigns, heirs and representatives of
any  Indemnified  Person.  Solely  for  the  purpose  of  enforcing  the  letter
agreement, the Company hereby consents to personal jurisdiction and venue in any
court  in  which  any  Action  is  brought.


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CONFIDENTIAL                         8                        STERLING FINANCIAL
                                                                INVESTMENT GROUP
<PAGE>
New York Health Care
May 3, 2004
Page 9


In  the  event that an arbitration is commenced against an Indemnified Person in
which  a  claim  is asserted that relates to or arises out of any of the matters
referred  to  in clause (A) or (B) of the first sentence of this Schedule I, the
Company agrees to arbitration of any claims Indemnified Persons may have against
the Company pursuant to this letter agreement under the same rules as, and under
the  auspices of the same organization as, the arbitration in which the claim is
asserted  against  the  Indemnified  Person.  The  Company acknowledges that, in
connection with Sterling's Role, Sterling is acting as an independent contractor
with  duties  owing  solely  to  the Company.  The provisions of this Schedule I
shall  survive  any  termination  of  the  letter agreement or completion of the
Transaction  or  Sterling's Role.  STERLING HEREBY AGREES AND THE COMPANY HEREBY
AGREES,  ON  ITS  OWN  BEHALF AND ON BEHALF OF ITS SECURITYHOLDERS, TO WAIVE ANY
RIGHT  TO  TRIAL  BY  JURY  WITH  RESPECT  TO ANY CLAIM, COUNTER-CLAIM OR ACTION
ARISING  OUT  OF  STERLING'S  ROLE  OR  THIS  LETTER  AGREEEMENT.




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CONFIDENTIAL                         9                        STERLING FINANCIAL
                                                                INVESTMENT GROUP
<PAGE>
                                                                    CONFIDENTIAL
                                                                     May 3, 2004


                           NEW YORK HEALTH CARE, INC.

                   SUMMARY OF INDICATIVE TERMS AND CONDITIONS
               $6,000,000 MAXIMUN/$2,500,000 MINIMUM OFFERING SIZE

    The issuance and sale of such securities is subject to, among other things,
       completion of due diligence to Sterling Financial Investment Group's'
    satisfaction and the preparation of definitive documentation to effect the
                                  Transaction.

ISSUER:                  New  York  Health  Care,  Inc.  (the  "Company").

PLACEMENT  AGENT:        Sterling  Financial  Investment  Group,  Inc.  (the
                         "Placement  Agent").  In exchange for its services, the
                         Placement Agent is entitled to receive a cash placement
                         fee  equal to 10% of total gross proceed raised in this
                         offering.

                         In  addition  to the above fee, the Company will pay an
                         Unaccountable cash Expense Fee of three percent (3%) of
                         the  gross  proceeds. In addition, the Company will pay
                         for  Sterling's  outside  legal  counsel  fee, provided
                         that,  unless  otherwise  agreed  by  the  Company  in
                         writing,  such  expenses  shall  not  exceed  $40,000.

                         The  Company  will  grant  to  the  Placement  Agent,
                         five-year  warrants  ("placement  Agent  Warrants")  to
                         purchase that number of shares of Common Stock equal to
                         15%  of  the shares of Common Stock issuable (including
                         warrants)  in  connection  to this Offering at the same
                         Exercise  Price  in  the  Offering.

                         The  Placement Agent will also receive a non-refundable
                         retained  fee of $35,000, which will be credited toward
                         the  first  cash  payment  of  the  placement  fees.

ISSUE:                   Common  Shares  (the "Common Stock" or the "Offering").
                         The  Common Stock is traded under the symbol "BBAL.PK."

AMOUNT  TO  BE  RAISED:  Up  to  $6,000,000.

ISSUE  PRICE:            The  purchase  price of the Common Stock and associated
                         Warrants will be equal to a 15% discount applied to the
                         average  of  the Volume Weighted Average Price ("VWAP")
                         of  the  Common Stock for the 20 trading days ending on
                         the  business  day prior to the Closing Date, but in no
                         case  will  be  less  than  $1.

CLOSING:                 The  Company  expects  to  accept subscriptions, in its
                         discretion,  on  an ongoing basis, subject to a minimum
                         Offering  size  of  $2,500,000  and  up to a maximum of
                         $6,000,000  in  gross Offering proceeds (without regard
                         to the Over-Subscription Allowance); provided, however,
                         that the Offering will terminate in all events no later
                         than  four  (4) months from the date of this Agreement,
                         unless extended in writing by Sterling and the Company.
                         Either  Sterling  or  the  Company  may  terminate this
                         Agreement  at any time on 10 days prior written notice.
                         A  "Residual  Period"  shall  extend for six (6) months
                         from  the  date  of  termination  or expiration of this
                         Agreement.


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SUITABILITY  STANDARDS:  The  Common  Shares  and  associated Warrants are being
                         offered  only  to "Accredited Investors," as defined in
                         Regulation  D under the Securities Act of 1933, and the
                         Placement  Agent (as defined below) and their immediate
                         family  members.

WARRANTS:                On  the  Closing  Date  the Holders will receive 5 year
                         warrants  to purchase that number of Common Stock equal
                         to  50%  of  the  Common Stock issued upon Closing. The
                         exercise  price  of  the  Warrants  will be 150% of the
                         Issue  Price  (the  "Exercise  Price").

REGISTRATION  RIGHTS:    The  Company  shall  file to register the Common Shares
                         and  Warrants  issued in each Closing under Form S-1 or
                         other appropriate Form within forty-five (45) days from
                         the final Closing. If the registration statement is not
                         filed  as  mentioned  or  declared effective within 180
                         days  following Closing, then cash delay payments equal
                         to 1.5% of the Offering proceeds per month shall apply.

OTHER  CONDITIONS:       The  Company  shall  execute a definitive agreement for
                         the divestiture of its home healthcare business subject
                         to  the  satisfaction  of certain conditions, including
                         shareholder  and  regulatory  approvals.

                         Appointment  of  a  new  Board  of  Directors, with the
                         exception  of the BioBalance President, upon closing of
                         the  sale  of  the  home  healthcare  business.

                         Execution of an employment agreement for the BioBalance
                         President

                         Other  conditions  that  might  arise  after completing
                         Sterling's  due  diligence


Any conflict between the provisions of this Summary of Indicative Terms and
Conditions and the letter agreement between the Placement Agent and the Company
to which it is attached, shall be governed by the terms of the letter agreement.


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