EXHIBIT 10.2




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




                                       8 EAST PARKWAY, SCARSDALE, NEW YORK 10583

                                                               December 27, 1995



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

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

Gentlemen:

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

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

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

1.   Security:

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

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

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

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

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

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

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

     e.        promptly  after  the commencement thereof, notice of all actions,
          suits,  and proceedings  before any court or governmental  department,
          commission,  board,  bureau,  agency or  instrumentality,  domestic or
          foreign,  affecting the Company or Corporate Guarantor or any of their
          Subsidiaries which, if determined adversely to the Company or any such
          Corporate Guarantor or any such Subsidiary could have a material

                                                                       

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 New England Home Care, Inc.

          adverse effect on the financial condition,  properties,  or operations
          of the Company, any Corporate Guarantor or such Subsidiary;

     f.        prior to the  payment  thereof,  notice of any  intended  payment
          of dividends to  shareholders  as permitted by the  provisions of this
          agreement;

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

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


4.        INTEREST RATE AND CHARGES.  Interest on the Loans made under this Line
     shall accrue on each Loan from and  including  the date of each advance to,
     but  excluding,  the date of repayment  in full of such  amount,  in lawful
     money of the United States, and in immediately  available funds, payable on
     the first day of each calendar month, at a floating interest rate per annum
     (the  "Floating  Rate") equal at all times to the Alternate  Base Rate. For
     the purposes of this letter, the term "Alternate Base Rate" shall mean, for
     any day, a rate per annum  equal to the higher of (i) the Prime  Commercial
     Lending Rate of the Bank as publicly announced to be in effect from time to
     time,  such  rate to be  adjusted  automatically,  without  notice,  on the
     effective  date of any change in such rate, and (ii) the Federal Funds Rate
     in effect on such day  plus1/2of  1%. For the purposes of this letter,  the
     term "Prime Commercial  Lending Rate" shall mean that rate of interest from
     time to time  announced  by The  Bank of New York as its  prime  commercial
     lending rate.  Any change in the interest rate  resulting  from a change in
     the Prime  Commercial  Lending  Rate or the  Federal  Funds  Rate  shall be
     effective  at the  beginning  of the day on which such  change in the Prime
     Commercial Lending Rate or the Federal Funds Rate becomes effective.

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


                                 

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New England Home Care, Inc.

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

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

6.        FINANCIAL COVENANTS.

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

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

7.        BORROWING  BASE. The amount of Loans outstanding  under the Line shall
     not exceed the Lesser of the Borrowing Base or  $2,000,000.00  at any time.
     As used herein,  the term  "Borrowing  Base" shall mean (a) eighty  percent
     (80%) of the Company's  Eligible Accounts  Receivable not more than 90 days
     past  due  from  time to time  outstanding  plus  (b)  fifty  (50%)  of the
     Company's Estimated Unbilled Accounts Receivable for the Company's previous
     month.  For the  purposes  of this  letter,  the  term  "Eligible  Accounts
     Receivable"  shall mean those accounts  arising out of the sale or lease of
     goods or the rendering of services by the Company in the ordinary course of
     business  to persons or entities  other than the  Corporate  Guarantors  or
     subsidiaries  which  have been  outstanding  for not more than 90 days from
     invoice  date.  For the  purposes  of this,  letter,  the  term  "Estimated
     Unbilled  Accounts  Receivable"  shall  mean  estimated  unbilled  accounts
     receivable for the immediately preceding month for which the calculation of
     the Borrowing  Base is being made.  The Borrowing  Base shall be calculated
     pursuant to the Borrowing Base  Certificate set forth on Exhibit A attached
     hereto.  In the event that the amount of Loans  outstanding  hereunder ever
     exceed the  Borrowing  Base,  the  Company  shall,  within five (5) days of
     written notice thereof from the
                                                            

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     Bank,  prepay the outstanding Loans in such an amount as would be necessary
     to bring the amount outstanding under the Line in compliance with the terms
     and conditions hereof.

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

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

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

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

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


 

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


                                                 THE BANK OF NEW YORK



                                                 By: /S/ JOHN GUSCIORA
                                                    ----------------------------
                                                          John Gusciora
                                                          Vice President

ACKNOWLEDGED AND CONSENTED TO:

NEW ENGLAND HOME CARE, INC.



By:/s/ THOMAS SMITH, PRESIDENT
   -------------------------------

NATIONAL HOME HEALTH CARE CORP.

By:/s/ ROGER P. HELLER, C.F.O.
   -------------------------------

NURSE CARE, INC.

By:/s/ STEVEN FALCON
   -------------------------------
                                                                 

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                                    EXHIBIT A
                                    ---------
                           BORROWING BASE CERTIFICATE
                           --------------------------


THIS  CERTIFICATE IS A PART OF AND SUBJECT TO THE TERMS AND CONDITIONS SET FORTH
IN A CERTAIN LINE LETTER DATED DECEMBER 27, 1995 (THE "LETTER"),  BY AND BETWEEN
THE  BANK OF NEW  YORK  (THE  "BANK")  AND NEW  ENGLAND  HOME  CARE,  INC.  (THE
"COMPANY").

TERMS USED IN THIS  CERTIFICATE  SHALL HAVE THE SAME MEANING AS ASCRIBED THERETO
IN THE LETTER.

THE UNDERSIGNED  OFFICERS OF THE COMPANY CERTIFY THAT THE INFORMATION  FURNISHED
HEREIN  AS OF  ______________________________,  199__  AS TO  ELIGIBLE  ACCOUNTS
RECEIVABLE AND AS OF _______, 199__ AS TO ESTIMATED UNBILLED ACCOUNTS RECEIVABLE
IS TRUE AND CORRECT AND THAT AS OF THE DATE HEREOF NO EVENT OF DEFAULT, OR EVENT
WHICH AFTER NOTICE OR LAPSE OF TIME OR BOTH WOULD BE AN EVENT OF DEFAULT  EXISTS
UNDER THE LETTER.

I.         COMPUTATION OF BORROWING BASE

           A.        ELIGIBLE ACCOUNTS RECEIVABLE               $_____________
           B.        80% OF LINE A                              $_____________
           C.        VALUE OF ESTIMATED UNBILLED
                     ACCOUNTS RECEIVABLE FOR THE MONTH
                     OF _______________ (THE MONTH
                     IMMEDIATELY PRECEDING THE MONTH OF
                     THIS CERTIFICATE)                          $_____________
           D.        50% OF LINE C                              $_____________
           E.        BORROWING BASE (LINE B +
                     LINE D)                                    $_____________

II.        AGGREGATE PRINCIPAL BALANCE OF
           LOANS OUTSTANDING                                    $_____________

III.       COMMITMENT AVAILABLE OR AMOUNT DUE

           A.        IF LINE II IS GREATER THAN
                     LINE I(E), AMOUNT DUE.  IF
                     LINE II IS LESS THAN LINE
                     IE, AMOUNT AVAILABLE                        $____________


                               NEW ENGLAND HOME CARE, INC.

                               By:_______________________________