Document:

JERRY BRAUN
                                 JACOB ROSENBERG

                                                 March 24, 2005

New York Health Care, Inc.
NYHC Newco Paxxon, Inc.
1850 McDonald Avenue
Brooklyn, New York 11223

Gentlemen:

      On February 24, 2005 the undersigned Jerry Braun ("Braun") and Jacob
Rosenberg ("Rosenberg") entered into an agreement with you, a copy of which is
attached hereto as Exhibit A (the "Security Agreement"), pursuant to which,
among other things, you granted the undersigned Braun and Rosenberg a security
interest in all of the assets of your home health care business (the "Security
Interest") to secure certain obligations you may have to each of the undersigned
as a result of their resignations as executive officers and directors of New
York Health Care, Inc. (the Company") pursuant to either (i) the respective
employment agreements of Braun and Rosenberg with the Company (the "Employment
Agreements") or (ii) that certain Purchase Agreement, dated as of July 15, 2004,
by and among you and New York Health Care, LLC (the "Purchaser"), an entity
controlled by the undersigned (the "Purchase Agreement").

      You have requested that the undersigned Braun and Rosenberg terminate the
Security Interest and consent to a possible sale of the Company's home health
care business in the State of New Jersey to one or more third parties. The
undersigned believe that such requests are beneficial to the Company and its
stockholders and that as stockholders of the Company the udnersigned would
benefit from the requested changes in the Security Agreement and a sale of the
Company's home health care business in the State of New Jersey.

      For good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged by them, the undersigned, Braun and Rosenberg agree as
follows:

            1. The Security Interest is hereby terminated and the undersigned
Braun and Rosenberg agree to promptly take all actions necessary to terminate
the Security Interest, including, but not limited to, executing and filing UCC-3
or other termination statements and copyright mortgage releases, and executing
terminations of powers of attorney;

            2. Braun and Rosenberg hereby agree that (i) their prior agreements
to irrevocably resign and no longer serve as directors or executive officers of
the Company remain in full force and effect, and (ii) they shall not be entitled
to any consideration from the Company or any of its subsidiaries solely as a
result of the termination of the Security Interest, their consent to a sale of
the Company's home healthcare operations in the State of New Jersey, or their
other agreements set forth herein.

<PAGE>

            3. Braun and Rosenberg consent to a sale by the Company and/or it
subsidiary, NYHC Newco Paxxon, Inc. ("NYHC-NJ) of all or a portion of its home
health care operations in the State of New Jersey to one or more third parties
for aggregate consideration of at least $2.7 million (the "NJ Sale") and they
will promptly, and in any event no later than one business day from the date the
Company requests them to take such action, duly and promptly execute and deliver
or cause to be executed any instruments and take all actions and do all things
as may be necessary or proper, in the reasonable judgment of the Company or
NYHC-NJ, to consummate such sale, provided, however, that the execution by each
of Braun and Rosenberg of a non-competition agreement in favor of the purchaser
in connection with the NJ Sale shall be conditioned upon their being no material
changes to such agreement from the draft of such proposed agreement provided to
them by the Company on March 22, 2005. Braun and Rosenberg also acknowledge that
all or any of the monies from the NJ Sale may be used to fund the operations of
the Company's subsidiary, The BioBalance Corporation, and that the execution by
the Company of any documents relating to the NJ Sale or the consummation of the
NJ Sale shall not be deemed to be a breach of the Purchase Agreement or create
any payment or other obligations of the Company or any of its subsidiaries to
Braun or Rosenberg under the Security Agreement or any other agreement to which
the Company, its subsidiaries and Braun and Rosenberg are parties.

            4. Upon the request of the Company or NYHC-NJ Braun and Rosenberg
agree to duly and promptly execute and deliver, or cause to be duly executed and
delivered, such further instruments and do all things as may be necessary or
proper, in the reasonable judgment of the Company or NYHC-NJ, to carry out the
provisions and purposes of this agreement.

Except as set forth above all provisions of Security Agreement remain in full
force and effect.

                                                    Very truly yours,

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

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

ACKNOWLEDGED AND AGREED:

NEW YORK HEALTH CARE, INC.

By: /s/ Dennis M. O'Donnell
    ---------------------------------
    Name:  Dennis M. O'Donnell
    Title: CEO

NYHC NEWCO PAXXON, INC.

By: /s/ Jacob Rosenberg
    ---------------------------------
   Name:  Jacob Rosenberg
   Title: V.P.

                                     - 2 -

<PAGE>

                                                                       EXHIBIT A

                                    AGREEMENT

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

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

      2. Obligations upon Triggering Event.

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

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

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

                                     - 2 -
<PAGE>

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

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

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

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

      5. Remedies in Case of Event of Default.

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

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

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

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

                                     - 3 -
<PAGE>

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

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

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

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

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

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

                                     - 4 -
<PAGE>

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

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

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

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

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

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

                                     - 5 -
<PAGE>

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

                                       NEW YORK HEALTH CARE, INC.

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

                                       NYHC NEWCO PAXXON, INC.

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

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

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

                                     - 6 --------------------------------------------------------------------------------

                           NEW YORK HEALTH CARE, INC

                        WARRANT TO PURCHASE COMMON STOCK

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (I) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (II) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (III) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE

                            EXERCISABLE ON OR BEFORE
                   5:00 P M , NEW YORK TIME, FEBRUARY 24, 2010

No  W-                                                            ____ Warrants

                           NEW YORK HEALTH CARE, INC

                               REDEEMABLE WARRANT

      1  This warrant certificate (the "Warrant Certificate") certifies that [ ]
or registered assigns, is the registered holder of warrants to purchase, at any
time until 5:00 P M  New York City time on February 24, 2010 (the "Expiration
Date"), up to [ ] fully-paid and non-assessable shares, subject to adjustment in
accordance with Article 7 hereof (the "Warrant Shares"), of the common stock,
par value per $ 01 share (the "Common Shares"), of New York Health Care, Inc , a
New York corporation (the "Company"), subject to the terms and conditions set
forth herein  The warrants represented by this Warrant Certificate and any
warrants resulting from a transfer or subdivision of the warrants represented by
this Warrant Certificate shall sometimes hereinafter be referred to,
individually, as a "Warrant" and, collectively, as the "Warrants " This Warrant
Certificate is one of a series of Warrant Certificates being issued as part of a
private offering (the "Private Placement") pursuant to the Company's
Confidential Private Offering Memorandum, dated September 14, 2004, as amended
and supplemented by Supplements No  1 and 2 thereto

      2  Exercise of Warrants  Each Warrant is initially exercisable to purchase
one Warrant Share at an initial exercise price of $0 78 per Warrant Share,
subject to adjustment as set forth in Article 7 hereof, payable in cash or by
check to the order of the Company, or any combination of cash or check  Upon
surrender of this Warrant Certificate with the annexed Form of Election to
Purchase duly executed, together with payment of the Exercise Price (as
hereinafter defined) for the Warrant Shares purchased, at the Company's
principal offices (currently located at 1850 McDonald Avenue, Brooklyn, New York
11223) the registered holder hereof (the "Holder" or "Holders") shall be
entitled to receive a certificate or certificates for the Warrant Shares so
purchased  The purchase rights represented by this Warrant Certificate are
exercisable at the option of the Holder, in whole or in part (but not as to
fractional Common Shares)  In the case of the purchase of less than all the
Warrant Shares purchasable under this Warrant Certificate, the Company shall
cancel this Warrant Certificate upon its surrender and shall execute and deliver
a new Warrant Certificate of like tenor for the balance of the Warrant Shares
purchasable thereunder

      3  Issuance of Certificates  Upon the exercise of the Warrants and
compliance by the holder thereof with all applicable securities laws and the
conditions specified in the legend on the top of the first page of this Warrant,
certificates for the Warrant Shares purchased pursuant to such exercise shall be
issued without charge to the Holder, including, without limitation, any tax
which may be payable in respect of such issuance, and such certificates shall
(subject to the provisions of Article 4 hereof) be issued in the name of, or in
such names as may be directed by, the Holder thereof; provided, however, that
the Company shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of any such certificates
in a name other than that of the Holder and the Company shall not be required to
issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.

<PAGE>

      The Warrant Certificates and, upon exercise of the Warrants, the
certificates representing the Warrant Shares shall be executed on behalf of the
Company by the manual or facsimile signature of those officers required to sign
such certificates under applicable law

      All Warrant Certificates shall bear and, upon exercise of the Warrants, in
part or in whole, certificates representing the Warrant Shares shall bear a
legend substantially similar to the following:

      "The securities represented by this certificate and/or the securities
issuable upon exercise thereof have not been registered under the Securities Act
of 1933, as amended ("Act"), and may not be offered or sold except (i) pursuant
to an effective registration statement under the Act, (ii) to the extent
applicable, pursuant to Rule 144 under the Act (or any similar rule under such
Act relating to the disposition of securities), or (iii) upon the delivery by
the holder to the Company of an opinion of counsel, reasonably satisfactory to
counsel to the issuer, stating that an exemption from registration under such
Act is available "

      4  Restriction on Transfer of Warrants  The Holder of this Warrant
Certificate, by its acceptance, covenants and agrees that the Warrants and the
Warrant Shares issuable upon exercise of the Warrants are being acquired as an
investment and not with a view to the distribution thereof and acknowledges that
any transfer of this Warrant or exercise thereof can only be made after the
Holder has executed such documents as demonstrates to the Company that such
assignment or exercise is being made in compliance with applicable securities
laws

      5  Registration Rights  The Holder shall be entitled to all of the rights
and subject to all of the obligations set forth in the Subscription Agreement
between the Holder and the Company

      6  Price

      (a) Initial and Adjusted Exercise Price  The initial exercise price of
each Warrant shall be $0 78 per Warrant Share  The adjusted exercise price shall
be the price which shall result from time to time from any and all adjustments
of the initial exercise price in accordance with the provisions of Article 7
hereof

      (b) Exercise Price  The term "Exercise Price" herein shall mean the
initial exercise price or the adjusted exercise price, depending upon the
context

      7  Adjustments of Exercise Price, Redemption Target Price and Number of
Warrant Shares

      (a) Dividends and Distributions  In case the Company shall at any time
after the date hereof pay a dividend in Common Shares or make a distribution in
Common Shares, then upon such dividend or distribution, the Exercise Price and
the Redemption Target Price (as hereinafter defined)in effect immediately prior
to such dividend or distribution shall be reduced to a price determined by
dividing an amount equal to the total number of Common Shares outstanding
immediately prior to such dividend or distribution multiplied by the Exercise
Price or the Redemption Target Price, as the case may be, in effect immediately
prior to such dividend or distribution, by the total number of Common Shares
outstanding immediately after such issuance or sale  For purposes of any
computation to be made in accordance with the provisions of this Section 7 a,
the Common Shares issuable by way of dividend or distribution shall be deemed to
have been issued immediately after the opening of business on the date following
the date fixed for determination of stockholders entitled to receive such
dividend or distribution

      (b) Subdivision and Combination  In case the Company shall at any time
subdivide or combine the outstanding Common Shares, the Exercise Price and the
Redemption Target Price shall forthwith be proportionately decreased in the case
of subdivision or increased in the case of combination

<PAGE>

      (c) Adjustment in Number of Warrant Shares  Upon each adjustment of the
Exercise Price pursuant to the provisions of this Article 7, the number of
Warrant Shares issuable upon the exercise of each Warrant shall be adjusted to
the next highest full Common Share by multiplying a number equal to the Exercise
Price in effect immediately prior to such adjustment by the number of Warrant
Shares issuable upon exercise of the Warrants immediately prior to such
adjustment and dividing the product so obtained by the adjusted Exercise Price

      (d) Reclassification, Consolidation, Merger, etc  In case of any
reclassification or change of the outstanding Common Shares (other than a change
in nominal value to no nominal value, or from no nominal value to nominal value,
or as a result of a subdivision or combination), or in the case of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is the
surviving corporation and which does not result in any reclassification or
change of the outstanding Common Shares, except a change as a result of a
subdivision or combination of such shares or a change in nominal value, as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company as an entirety, the Holder shall thereafter have the
right to purchase the kind and number of shares of stock and other securities
and property receivable upon such reclassification, change, consolidation,
merger, sale or conveyance as if the Holder were the owner of the Warrant Shares
issuable upon exercise of the Warrants immediately prior to any such events at a
price equal to the product of (i) the number of Warrant Shares issuable upon
exercise of the Warrants and (ii) the Exercise Price in effect immediately prior
to the record date for such reclassification, change, consolidation, merger,
sale or conveyance as if such Holder had exercised the Warrants

      (e) Determination of Outstanding Shares  The number of Common Shares at
any one time outstanding shall include the aggregate number of shares issued or
issuable upon the exercise of outstanding options, rights and warrants and upon
the conversion or exchange of outstanding convertible or exchangeable
securities

      8  Exchange and Replacement of Warrant Certificates  This Warrant
Certificate is exchangeable without expense, upon the surrender hereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Warrant Shares in such denominations as
shall be designated by the Holder thereof at the time of such surrender

      Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of this Warrant
Certificate, if mutilated, the Company will make and deliver a new Warrant
Certificate of like tenor, in lieu thereof

      9  Elimination of Fractional Interests  The Company shall not be required
to issue certificates representing fractions of Common Shares and shall not be
required to issue scrip or pay cash in lieu of fractional interests, it being
the intent of the parties that all fractional interests shall be eliminated by
rounding any fraction up to the nearest whole number of Common Shares

      10  Reservation of Shares  The Company covenants and agrees that it will
at all times reserve and keep available out of its authorized share capital,
solely for the purpose of issuance upon the exercise of the Warrants, such
number of Common Shares as shall be equal to the number of Warrant Shares
issuable upon the exercise of the Warrants, for issuance upon such exercise, and
that, upon exercise of the Warrants and payment of the Exercise Price therefor,
all Warrant Shares issuable upon such exercise shall be duly and validly issued,
fully paid, nonassessable and not subject to the preemptive rights of any
shareholder

      11  Notices to Warrant Holders  Nothing contained in this Agreement shall
be construed as conferring upon the Holder or Holders the right to vote or to
consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having any
rights whatsoever as a stockholder of the Company  If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the following
events shall occur:

<PAGE>

      (a) the Company shall take a record of the holders of its Common Shares
for the purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of current or retained earnings, as indicated by the accounting
treatment of such dividend or distribution on the books of the Company; or

      (b) the Company shall offer to all the holders of its Common Shares any
additional Common Shares or other shares of capital stock of the Company or
securities convertible into or exchangeable for Common Shares or other shares of
capital stock of the Company, or any option, right or warrant to subscribe
therefor;

      (c) a dissolution, liquidation or winding up of the Company (other than in
connection with a consolidation or merger) or a sale of all or substantially all
of its property, assets and business as an entirety shall be proposed; or

      (d) the Company or an affiliate of the Company shall propose to issue any
rights to subscribe for Common Shares or any other securities of the Company or
of such affiliate to all the stockholders of the Company;

then, in any one or more of said events, the Company shall give written notice
of such event at least twenty (20) days prior to the date fixed as a record date
or the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, options or warrants, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale  Such
notice shall specify such record date or the date of closing the transfer books,
as the case may be  Failure to give such notice or any defect therein shall not
affect the validity of any action taken in connection with the declaration or
payment of any such dividend or distribution, or the issuance of any convertible
or exchangeable securities or subscription rights, options or warrants, or any
proposed dissolution, liquidation, winding up or sale

      12  Redemption of Warrants  The Warrants are redeemable by the Company, in
whole or in part, on not less than thirty (30) days' prior written notice (the
"Notice Period") at a price of $ 01 per Warrant at any time; provided that (i)
the average closing sale price (or the average of the closing bid and asked
prices for any trading day on which no sales occur) of the Common Stock for any
period of ten (10) consecutive trading days ending within 30 days prior to the
day on which the Company gives notice of redemption (the "Call Date") is greater
than $2 00 per share (subject to adjustment as provided in Article 6 hereof)(the
"Redemption Target Price") and (ii) the Warrant Shares are publicly tradable
during the entire Notice Period, pursuant to a registration statement filed with
and declared and remaining effective by, the Securities and Exchange Commission
under the Securities Act of 1933  Holders of the Warrants will have exercise
rights until the close of business on the date fixed for redemption

      13  Notices  All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
personally delivered, delivered by courier or sent by registered or certified
mail (return receipt requested, postage prepaid), facsimile transmission or
overnight courier:

      (a) If to a registered Holder of the Warrants, to the address of such
Holder as shown on the Warrant register of the Company; or

      (b) If to the Company, to the address set forth in Article 1 of this
Agreement or to such other address as the Company may designate by notice to the
Holders

      14  Successors  All the covenants and provisions of this Agreement by or
for the benefit of the Company and the Holders inure to the benefit of their
respective successors and assigns hereunder

      15  Governing Law

      (a) Choice of Law  This Warrant Certificate shall be deemed to have been
made and delivered in the State of New York and shall be governed as to
validity, interpretation, construction, effect and in all other respects by the
substantive laws of the State of New York, without giving effect to the choice
of laws rules thereof

<PAGE>

      (b) Jurisdiction and Service of Process  The Company and the Holder each
(a) agrees that any legal suit, action or proceeding arising out of or relating
to this Warrant Certificate, or any other agreement entered into between the
Company and the Holder pursuant to the Private Placement shall be instituted
exclusively in the New York State Supreme Court, County of New York or in the
United States District Court for the Southern District of New York, (b) waives
any objection which the Company or such Holder may have now or hereafter based
upon forum non conveniens or to the venue of any such suit, action or
proceeding, and (c) irrevocably consents to the jurisdiction of the New York
State Supreme Court, County of New York and the United States District Court for
the Southern District of New York in any such suit, action or proceeding  The
Company and the Holder each further agrees (a) to accept and acknowledge service
of any and all process which may be served in any such suit, action or
proceeding in the New York State Supreme Court, County of New York or in the
United States District Court for the Southern District of New York and (b) that
service of process upon the Company mailed by certified mail to it at its
address, or to the Holder at its address, shall be deemed in every respect
effective service of process upon the Company or the Holder, as the case may be,
in any suit, action or proceeding  FURTHER, BOTH THE COMPANY AND THE HOLDER
HEREBY WAIVE TRIAL BY JURY IN ANY ACTION TO ENFORCE THE TERMS OF THIS WARRANT
CERTIFICATE AND IN CONNECTION WITH ANY DEFENSE, COUNTERCLAIM OR CROSSCLAIM
ASSERTED IN ANY SUCH ACTION

<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, as of this day of ____________ 2005

                                            NEW YORK HEALTH CARE, INC

                                            By:
                                               --------------------------------
                                                Name:
                                                Title:

<PAGE>

                          FORM OF ELECTION TO PURCHASE

      The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ________ Warrant Shares and
herewith tenders in payment for such Warrant Shares cash or a check payable to
the order of ________________ in the amount of $_________, all in accordance
with the terms hereof The undersigned requests that a certificate for such
Warrant Shares be registered in the name of ______________________, whose
address is _____________________________________________________, and that such
certificate be delivered to __________________, whose address is
_________________-______ Unless noted to the contrary below, the undersigned
hereby represents to the Company that the undersigned is an "accredited
investor" within the meaning of Regulation D of the Securities Act of 1933

Dated:

                                             Signature:
                                                       ------------------------

                                             ----------------------------------
                                             (Signature must conform in all
                                             respects to name of holder as
                                             specified on the face of the
                                             Warrant Certificate )

                                             ----------------------------------

                                             ----------------------------------
                                             (Insert Social Security or Other
                                             Identifying Number of Holder)

<PAGE>

                               FORM OF ASSIGNMENT

             (To be executed by the registered holder if such holder
                  desires to transfer the Warrant Certificate )

      FOR VALUE RECEIVED __________________________ hereby sells, assigns and
transfers unto

---------------------------------------------
(Please print name and address of transferee)

this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________,
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution

Dated:                     Signature:
        --------------               ------------------------------------------
                                     (Signature must conform in all respects to
                                     name of holder as specified on the face of
                                     the Warrant Certificate)

----------------------------------------

----------------------------------------
(Insert Social Security or Other
Identifying Number of Assignee)

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