Document:

AGREEMENT

      This Employment Agreement (the "Agreement") between New York Health Care,
Inc., a New York corporation (the "Company") and A. James Forbes, Jr. ("JF") as
of June 1, 2005 (the "Effective Date").

                               W I T N E S S E T H

            WHEREAS, the Company desires to employ JF, and JF desires to be
employed by the Company, upon the terms and subject to the conditions set forth
in this Agreement;

            NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1. TERMS

            1.1 Services The Company hereby employs JF on a part-time basis,
non-exclusive for and during the term specified in Section 1.3 hereof, subject
to the direction of the Chief Executive Officer (CEO) or Board of Directors
("board") of the Company on the terms and conditions set forth in this
Agreement. JF hereby accepts such employment under the terms and conditions set
forth in this Agreement.

            1.2 Duties JF shall assume the title Vice President of Finance and
Chief Financial Officer for the Company with duties as may be reasonably
assigned to him from time to time by the Company's CEO or board. JF agrees to
devote such part of his business time and services to the faithful performance
of the duties, responsibilities, and authorities which may be reasonably
assigned to him hereunder. It is understood that JF will not be providing his
services on a full-time basis and that he shall work on an as needed basis not
to exceed twenty (20) hours per week. Among other duties, JF will be responsible
to manage the financial reporting of the Company including the adherence to the
applicable requirements of the Sarbanes-Oxley Act of 2002.

            1.3 Term Unless sooner terminated as provided in Section 3 hereof,
this Agreement has become effective as of the date set forth above and shall
continue in force and effect until December 31, 2005.

            1.4 Compensation Subject to provisions of Section 3 hereof, the
Company shall pay JF compensation for services rendered by him under this
Agreement at the rate of $1,500 in U.S. dollars per full business day or $200
per hour if less than a full day.

            1.5 Expense Reimbursement The Company shall reimburse JF on a
monthly basis for all reasonable and necessary business and travel expenses and
other disbursements incurred by JF on behalf of the Company in the performance

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of his duties hereunder, upon presentation of an appropriate accounting or
documentation of such expenses. Expenses in excess of $1,000.00 in the aggregate
must be approved in advance by the Company's CEO or his delegate.

2. PROTECTIVE COVENANTS

      Because (i) JF will become fully familiar with all aspects of the
Company's business during the period of his employment by the Company pursuant
to this Agreement ; (ii) certain information of which JF will gain knowledge
during his employment with the Company is proprietary and confidential
information and which is of special and peculiar value to the Company; and (iii)
if any such proprietary and confidential information were imparted to or became
known by any persons, including JF, engaging in a business in competition with
that of the Company, hardship, loss and irreparable injury and damage could
result to the Company, the measurement of which would be difficult if not
impossible to ascertain, and it is necessary for the Company to protect its
business from such damage.

            2.1 Trade Secrets, Proprietary and Confidential Information JF
recognizes that this position with the Company is one of the highest trust and
confidence by reason of JF's access to and contact with confidential and
proprietary financial information of the Company. JF shall use his best efforts
and exercise utmost diligence to protect and safeguard the confidential or
proprietary information of the Company. .JF covenants that during the term of
this Agreement and for a period of two (2) years thereafter, JF will not
disclose disseminate or distribute to another, nor induce any other person to
disclose, disseminate, or distribute, any trade secret or proprietary or
confidential information of the Company, directly or indirectly, either JF's own
benefit or for the benefit or for the benefit of another, whether or not
acquired, learned, obtained or developed by JF, use or cause to be used, any
trade secret, proprietary or confidential information in any way except as is
required in the course of the services to the Company hereunder provided,
however, that JF understands that he shall be prohibited from misappropriating
any trade secret or proprietary of confidential information at any time during
or after the Term.

            For purposes of this section the term "trade secrets" or
"confidential or proprietary information" shall mean any and all information
(oral and written) relating to the Company or any of its affiliates, or any of
their respective activities, other than such information which (i) can be shown
by JF to be in the public domain (such information not being deemed to be in the
public domain merely because it is embraced by more general information which is
in the public domain) other than as the result of breach of the provisions of
this Section 2.1 or (ii) that JF is required to disclose under the directives of
any government agency, tribunal or authority having jurisdiction in the matter
or under subpoena or other process of law. . All confidential information
relating to the business of the Company, whether prepared by JF or otherwise
coming into his possession, shall remain the exclusive property of the Company
and shall not, except in the furtherance of the business of the Company, be
removed from the premises of the Company under any circumstances whatsoever the
prior written consent of the Company. Upon the termination of JF's employment

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with the Company for any reason whatsoever, all documents, records, notebooks,
equipment, price lists, specifications, programs, customer and prospective
customer lists, financial and medical information and other materials which
refer or relate to any aspect of the business of the Company which are in the
possession of JF, including all copies thereof, including, among other things,
all analyses or notes created by JF, shall be promptly returned to the Company.

            JF hereby agrees that he shall not, during the Term and for a period
of one (1) year thereafter, directly or indirectly, within any county (or
adjacent county) in any State within the United States or territory outside the
United States in which the Company is engaged in business during the period of
JF's employment or on the date of termination of JF's employment, engage, have
an interest in or render any services to any business (whether as owner,
manager, operator, licensor, licensee, lender, partner, stockholder, joint
venturer, employee, consultant or otherwise) competitive with the Company's
business activities. Notwithstanding the foregoing, nothing herein shall prevent
JF from owning stock in a publicly traded corporation whose activities compete
with those of the Company's, provided that such stock holdings are not greater
than two percent (2%) of such corporation.

            JF shall not, during the Term and for a period of one (1) year
thereafter, directly or indirectly, take any action which constitutes an
interference with or a disruption of any of the Company's business activities
including, without limitation, the solicitations of the Company's customers, or
persons listed on the personnel lists of the Company.

            For purposes of clarification, but not of limitation, JF hereby
acknowledges and agrees that the provisions of Section 2.1 above shall serve as
a prohibition against him from, during the period referred to therein, directly
or indirectly, hiring, offering to hire, enticing, soliciting or in any other
manner persuading or attempting to persuade any officer, employee, consultant,
agent, lessor, lessee, licensor, licensee or customer of the Company (but only
those suppliers existing during the time of the Executive's employment by the
Company, or at the termination of his employment), to discontinue or alter his,
her or its relationship with the Company.

            2.2 Indemnification Both Company and JF agree to indemnify and hold
harmless each other from all losses, claims, damages or liabilities which the
other party may suffer or incur rising out of the services to be performed by JF
pursuant to this Agreement excepting only the negligence, unlawful activity or
willful misconduct of the other party.

3. TERMINATION Notwithstanding any other provisions in this Agreement:

                  (a) Termination for Cause During the term of this Agreement,
the Company may terminate this Agreement and JF's employment with the Company
for Cause without and further liability hereunder to JF or his estate, except to
pay any accrued, but unpaid, compensation and reimbursable expenses incurred
prior to the termination of the Agreement. For purposes of this Agreement,
termination for Cause shall mean termination of JF upon written notification
limited, however, to one or more of the following reasons:

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                  (i) Fraud, misappropriation or embezzlement by JF in
connection with the Company; or

                  (ii) the failure by JF to perform his material obligations
under this Agreement after notice to JF of the particular details thereof and a
period of ten e (10) days to correct such failure, if any; or

                  (iii) the indictment, or a conviction of or a plea of "guilty"
or "no contest of JF to a felony or other crime involving moral turpitude or
dishonesty; or

                  (iv) a breach of Section 2 of this Agreement or violation of
the Company's code of conduct policy; or

                  (v) willfully damaging the Company's property; or

                  (vi) engaging in misconduct (including theft, fraud,
embezzlement, and securities law violations) which is injurious to the Company,
monetarily, or otherwise; or

                  (vii) if the Company is a reporting company under the federal
securities laws, the occurrence of an event that is reportable as to JF by the
Company in accordance with Item 401(f) of Regulation S-K under the Securities
Act of 1933.

            (b) Voluntary Termination During the term, the Company or JF may
terminate this Agreement upon thirty (30) days written notice, without further
liability to JF except to pay any accrued, but unpaid, compensation and
reimbursable expenses incurred by him hereunder prior to the termination date .

4. MISCELLANEOUS

            4.1 Notices All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be deemed to
have been delivered (i) on the date personally delivered; or (ii) two days after
the date deposited in a receptacle maintained by the United States Postal
Services for such purpose, addressed as set forth below; or (iii) one day after
properly sent by Federal Express, addressed as set forth below:

                                                If to JF:
                                                A. James Forbes, Jr.
                                                14 Miller Road
                                                Putnam Valley, NY 10579

                                                If to the Company:
                                                CEO
                                                New York Health Care, Inc.
                                                363 Seventh Avenue, 13th Floor
                                                New York, NY 10001

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Either party hereto may designate a different address by providing written
notice of such new address to other party hereto as provided above.

            4.2 Severability If any provision contained in this Agreement is
determined to be void, illegal or unenforceable, in whole or in part, then the
other provisions contained herein shall remain in full force and effect as if
the provision which was determined to be void, illegal, or unenforceable had not
been contained herein.

      t 12 4.3 Waiver, Modification and Integration The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach of any party. This instrument and
the documents referred to herein contain the entire agreement of the parties and
supersede any and all other agreements, either oral or in writing, between the
parties hereto with respect to services of JF to the Company and contain all of
the covenants and agreements between the parties with respect to such services
in any manner whatsoever. This Agreement may not be modified, altered or amended
except by written agreement of all parties hereto.

            4.4 Binding Effect This Agreement shall be binding and effective
upon the Company and its successors and permitted assigns, and upon JF, his
successor, heirs, representatives, and assigns, as the case may be.

            4.5 Governing Law This Agreement shall be governed by the laws of
the State of New York.

            4.6 Entire Agreement This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth.

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

Employee                                       New York Health Care, Inc.

By: /s/ A James Forbes, Jr.                    By: /s/ Dennis M. O' Donnell
    -------------------------                      ------------------------
    A. James Forbes, Jr.                           Dennis M. O'Donnell
                                                   CEO

                                       5STOCK OPTION AGREEMENT dated as of May 6, 2005 between New York Health Care,
Inc., a New York corporation (the "Company"), and Dennis M. O'Donnell
("Optionee").

                                     Recital

The Company desires to grant to Optionee an non-qualified Stock Option (the
"Option") to purchase 100,000 shares ("Option Shares") of the Company's common
stock, par value $.01 per share (the "Stock"), upon the terms provided for in
this Agreement.

Accordingly, in consideration of the mutual covenants hereinafter set forth and
for other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

      1. In recognition for Optionee's valuable service to the Company as its
Chief Executive Officer and President and Chief Executive Officer of its
subsidiary, the BioBalance Corporation, the Compensation Committee of the
Company's Board of Directors (the "Committee") has granted the Option to
Optionee, effective as of the date of this Agreement, to purchase at any time
commencing on the date of this Agreement, all or any of the Option Shares at an
exercise price of $0.80 per share. The Option is intended to be a non-qualified
stock option, i.e., the Option is not intended to be, nor is it, an incentive
stock option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").

      2. The Option and all rights of the Optionee hereunder shall terminate on
May 6, 2015 subject to earlier termination as provided in paragraph 5 hereof
(the "Expiration Date"). On or prior to the Expiration Date, the Option shall be
exercisable subject to the following terms:

            (a) Optionee may exercise the Option with respect to all or any part
of the Option Shares by giving the Company written notice of such exercise, as
provided in paragraph 4 hereof. Such notice shall specify the number of shares
as to which the Option is being exercised and shall be accompanied by payment in
full in cash of an amount equal to the exercise price per Option Share
multiplied by the number of Option Shares as to which the Option is being
exercised. Payment of the exercise price of such Option Shares may also be made
by the Company, at its option, retaining from the Option Shares to be delivered
upon exercise of the Option that number of Option Shares having a fair market
value on the date of exercise (a s determined by Board of Directors or
Committee) equal to the exercise price of the number of Option Shares as to
which the Optionee exercises the Option or, subject to the requirements of
Regulation T (as in effect from time to time) under the Securities Exchange Act
of 1934, as amended , by giving irrevocable instructions to a stockbroker to
promptly deliver to the Company full payment for the Option Shares with respect
to which the Option is exercised from the proceeds of the stockbroker's sale of
or loan against such Option Shares.

            (b) As soon as practicable after receipt of the notice of exercise
and payment of the exercise price for the number of Option Shares specified in
such notice of exercise, the Company shall deliver to the Optionee at the
principal office of the Company or at such other place as may be mutually

<PAGE>

acceptable to the Company and the Optionee, a certificate or certificates for
such shares; provided, however, that the time of such delivery may be postponed
by the Company for such period of time as the Company may require to comply with
any law or regulation applicable to the issuance or transfer of shares. If the
Optionee fails for any reason to accept delivery of all or any of the number of
Option Shares specified in such notice of exercise upon tender of delivery
thereof, his right to purchase such undelivered Option Shares may be terminated
by the Company by notice in writing to the Optionee and refund of any payment of
the exercise price.

            (c) Prior to or concurrently with delivery by the Company to the
Optionee of a certificate(s) representing such shares, the Optionee shall (i)
upon notification of the amount due, pay promptly any amount necessary to
satisfy applicable federal, state or local tax requirements, and (ii) if such
shares are not then registered under the Securities Act of 1933, sign and
deliver to the Company an investment letter confirming that such shares are
being purchased for investment and not with a view to the distribution thereof,
and the Optionee shall give such other assurances and take such other action as
the Company shall require to secure compliance with any federal or state
securities law applicable to the issuance of the Option Shares; provided that
the out-of-pocket expense of such compliance shall be borne by the Company,
other than fees of Optionee's counsel and advisors

      4. Any notice to the Company provided for in the Option shall be addressed
to the Company at its principal office, in care of its Secretary, with a
separate copy addressed to the Company's Chief Financial Officer, and any notice
to the Optionee shall be addressed to him at his address now on file with the
Company, or to such other address as either may last have designated to the
other by notice as provided herein. Any notice so addressed shall be deemed to
be given on the fourth business day after mailing, by registered or certified
mail, return receipt requested, at a post office or branch post office within
the United States.

      5. This Option shall terminate in the event of a termination of employment
or death of the Optionee as follows:

            (a) If the Optionee's employment with the Company is terminated
voluntarily by the Optionee, or for cause, then this Option shall expire
forthwith. Except as provided in Subsections (b) and (c) below, if such
employment shall terminate for any other reason, then the Option may be
exercised at any time within three months after such termination, subject to the
provisions of subparagraph (d) below.

            (b) If the Optionee dies while employed by the Company or within
three months after the termination of his employment other than voluntarily by
the Optionee or for cause, then and in that event the Option, subject to the
provisions of subparagraph (d) below, may be exercised by the estate of the
Optionee or by a person who acquired the right to exercise this Option by
bequest or inheritance or by reason of the death of the Optionee, at any time
within one year after such death.

            (c) If the Optionee ceases employment with the Company because of
permanent and total disability (within the meaning of Section 22(e)(3) of the
Code) while employed by the Company, then this Option, subject to the provisions

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of subparagraph (d) below, may be exercised at any time within one year after
such termination of employment due to disability.

            (d) This Option may not be exercised in the event of termination of
employment of the Optionee, except to the extent that the Optionee was entitled
to exercise this Option at the time of such termination or death, and in any
event may not be exercised after the expiration of this Option.

            (e) For the purposes of this paragraph, the employment relationship
of the Optionee with the Company will be treated as continuing intact while the
Optionee is on sick leave or other bona fide leave of absence, if such leave
does not exceed 90 days or, if longer, so long as the Optionee's right to
re-employment is guaranteed either by statute or by contract. A leave of absence
or an interruption in service authorized by the Board of Directors of the
Company shall not be deemed an interruption of employment.

      6. In the event of any change in the Company's Common Stock subject to the
Option, by reason of any stock dividend, split-up, merger, consolidation, or
exchange of shares, spin-off, liquidation or the like, such adjustment shall be
made in the number of shares subject to the option and the price per share as
the Committee or the Board of Directors shall, in its sole judgment, deem
appropriate to give proper effect to such event.

      7. The Option is not transferable and may not be exercised by any person
other than the Optionee, except by will or by the laws of descent and
distribution. Except for transfers resulting from the death of the Optionee or
exercises by the executor or administrator or other authorized representative of
the of the estate of the Optionee , in the event of any attempt by the Optionee
to transfer, assign, pledge, hypothecate or otherwise dispose of the Option or
of any right hereunder, or in the event of the levy of any attachment, execution
or similar process upon the rights or interest hereby conferred, the Company may
terminate the Option by notice to the Optionee and it shall thereupon become
null and void.

      8. In the event that any question or controversy shall arise with respect
to the nature, scope or extent of any one or more rights conferred by the
Option, or any provision of this Agreement, including whether and when a change
of control has occurred or is about to occur, the determination in good faith by
the Board of Directors of the Company (as constituted at the time of such
determination) of the rights of the Optionee shall be conclusive, final and
binding upon the Optionee and upon any other person who shall assert any right
pursuant to this Option.

      9. The Optionee shall have no rights of a stockholder with respect to the
shares covered by the Option until he or she becomes the holder of record of
such shares. All shares issued upon exercise of the Option shall be fully paid
and non-assessable.

      10. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and assigns.

      11. This Agreement shall governed by and construed in accordance with the
internal substantive law of the State of New York without giving effect to the
choice of law rules

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<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed as of the day and year first written above.

                                             NEW YORK HEALTH CARE, INC.

                                             By: /s/ Fred Nussbaum
                                             --------------------
                                             Its Chairman (Authorized Signatory)

                                             OPTIONEE:

                                                 /s/ Dennis M. O'Donnell
                                                 -----------------------

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                                SUBSCRIPTION FORM

                  (To Be Executed Only Upon Exercise of Option)

      The undersigned, holder of an option pursuant to the Incentive Stock
Option Agreement between New York Health Care, Inc. and ___________ dated as of
__________, 20__ (the "Agreement") hereby irrevocably exercises his option
thereunder to purchase the number of shares of common stock of New York Health
Care, Inc. specified below and herewith makes payment therefore, all at the
price and on the terms and conditions specified in the Agreement.

Dated:______, 20__

Number of Shares: _____

Exercise Price: $_____
                                     Signature of Optionee:____________________
                                     Name:       ______________________________
                                     Address:__________________________________
                       Social Security Number:_________________________________

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