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                                                                    EXHIBIT 10.2


                            TAX ALLOCATION AGREEMENT

         THIS TAX ALLOCATION AGREEMENT (the "AGREEMENT") is made on October 20,
1999, by and among STAFF BUILDERS, INC., a Delaware corporation ("PARENT" and,
together with its subsidiaries existing immediately following the Distribution,
the "PARENT GROUP"), and TENDER LOVING CARE HEALTH CARE SERVICES, INC., a
Delaware corporation ("TLC" and, together with its subsidiaries existing
immediately following the Distribution, the "TLC GROUP").

         WHEREAS, on the date hereof, Parent and TLC have entered into the
Distribution Agreement (as defined below) providing for the distribution of all
of the TLC stock owned by Parent to Parent's shareholders in accordance with the
Distribution Agreement; and

         WHEREAS, Parent and TLC desire to set forth their agreement regarding
the allocation between the Parent Group and the TLC Group of all
responsibilities, liabilities and benefits affecting Taxes (as defined below)
paid or payable by either of them for all taxable periods.

         NOW, THEREFORE, in consideration of their mutual promises, the parties
hereby agree as follows:

DEFINITIONS.

Capitalized terms used herein and not otherwise defined shall have the meanings
given them in the Distribution Agreement. As used in this Agreement, the
following terms shall have the following meanings:

"Affiliate" of any person means any person, corporation, partnership or other
entity directly or indirectly controlling, controlled by or under common control
with such person.

"Code" means the Internal Revenue Code of 1986, as amended or, as the context
may require, the Internal Revenue Code applicable to the taxable year in
question.

"Distribution" has the meaning set forth in the Distribution Agreement.

"Distribution Agreement " means the Distribution Agreement dated the date hereof
between Parent and TLC providing for the Distribution.

"Distribution Date" has the meaning set forth in the Distribution Agreement.

"Final Determination" shall mean the final resolution of liability for any Tax
for a taxable period, (i) on Internal Revenue Service Form 870 or 870-AD (or any
successor forms thereto), on the



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date of acceptance by or on behalf of the taxpayer, or by comparable form under
the laws of other jurisdictions; except that a Form 870 or 870-AD or comparable
form that reserves (whether by its terms or by operation of law) the right of
the taxpayer to file a claim for refund and/or the right of the taxing authority
to assert a further deficiency shall not constitute a Final Determination; (ii)
by a decision, judgment, decree, or other order by a court of competent
jurisdiction, which has become final and unappealable; (iii) by a closing
agreement or accepted offer in compromise under Section 7121 or 7122 of the
Code, or comparable agreements under the laws of other jurisdictions; (iv) by
any allowance of a refund or credit in respect of an overpayment of Tax, but
only after the expiration of all periods during which such refund may be
recovered (including by way of offset) by the Tax imposing jurisdiction; or (v)
by any other final disposition, including by reason of the expiration of the
applicable statute of limitations or by mutual agreement of the parties.

"Post-Distribution Act" means any event or transaction (or the execution of an
agreement, letter of intent or option providing for a transaction) in which TLC
participates and in which any of the following occurs:

TLC transfers (whether or not in liquidation) a material portion of its assets
(other than a transfer of assets in the ordinary course of business) within one
year following the Distribution Date;

TLC merges with another corporation within one year following the Distribution
Date;

Within two years of following the Distribution Date TLC discontinues a material
portion of its historic business activities; or

Within one year following the Distribution Date TLC Common Stock distributed in
the Distribution is converted into (or redeemed or exchanged for) any other
stock, any security, any property or cash.

"Post-Distribution Taxes" means any and all liability for Taxes of the TLC Group
or the Parent Group, as appropriate, other than for Pre-Distribution Taxes.

"Pre-Distribution Taxes" means any and all Taxes of the Parent Group or the TLC
Group for all periods that ended on or prior to the Distribution Date. For
purposes of computing the amount of Pre-Distribution Taxes in the case of a Tax
period that begins before and ends after the Distribution Date, the amount of
Taxes considered to have accrued with respect to the portion of the Tax period
that ended on the Distribution Date shall be determined as follows:

In the case of any ad valorem, personal property and real property Taxes, an
amount of such Tax for the entire Tax period multiplied by a fraction the
numerator of which is the number of days in the portion of the Tax period ended
on the Distribution Date and the denominator of which is the number of days in
the entire Tax period;

In the case of any Tax other than ad valorem, personal property and real
property Taxes, the amount that would be payable if the relevant Tax period
ended on the Distribution Date; and


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In the case of any withholding Tax, the amount of Taxes required to be held
which relates to any payment by any member of the Parent Group or the TLC Group
on or before the Distribution Date.

         Any credits relating to a Tax period that begins before and ends after
the Distribution Date shall be taken into account as though the relevant Tax
period ended on the Distribution Date.

"Returns" means all returns, reports and information statements (including all
exhibits and schedules thereto) required to be filed with a Taxing Authority
with respect to any Taxes.

"Taxes" means any income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, ad valorem, franchise, profits, license, withholding,
payroll, employment, environmental excise, severance, stamp, transfer, recording
occupation, premium, property, value added, windfall profit tax, custom duty, or
other tax of any kind whatsoever, together with any interest and any penalty,
addition to tax or additional amount imposed by any governmental authority (a
"Taxing Authority") responsible for the imposition of any such tax (domestic or
foreign).

"TLC" has the meaning set forth in the preamble hereto.

"TLC Group" has the meaning set forth in the preamble hereto.

OPERATIVE PROVISIONS.

Parent shall indemnify TLC against and be responsible for all Post-Distribution
Taxes attributable to any member of the Parent Group and all Pre-Distribution
Taxes.

TLC shall indemnify Parent against and shall be responsible for all
Post-Distribution Taxes attributable to any member of the TLC Group.

With respect to the tax year of the Parent Consolidated Group that includes the
Distribution Date and the tax year of TLC that commences immediately following
the Distribution Date, the Parent Consolidated Group shall claim on its federal
income tax returns the benefit of (i) the graduated tax rates of Code Section
11, (ii) the $25,000 bracket amount in Code Section 38, (iii) the $40,000
exemption amount and the $150,000 bracket amount in Section 55, and (iv) the
$2,000,000 bracket amount in Section 59A and TLC shall claim none of such
benefits.

RETURNS; REFUNDS; CONTEST PROVISIONS.

Parent shall have the obligation and the sole right and full discretion to
control (i) the preparation of all Returns with respect to Pre-Distribution
Taxes and (ii) the defense, settlement or compromise of any audit, examination,
investigation suit, action or other proceeding relating to Pre-Distribution
Taxes. Parent shall not be entitled to all refunds of Pre-Distribution Taxes.
Notwithstanding the foregoing, in the event that Parent


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decides to abandon the defense of, or settle or compromise any claim relating to
any Pre-Distribution Taxes and such claim may have an effect on
Post-Distribution Taxes, Parent shall notify TLC of such decision and TLC shall
have ten days to notify Parent that it assumes all liability with respect to the
Pre-Distribution Taxes under dispute and wishes to assume the defense of such
audit or other proceedings at its own expense. In the event that Parent timely
receives such notice from TLC, it shall use all reasonable efforts to cooperate
so as to facilitate TLC's handling of such proceedings.

Except as otherwise provided for herein, TLC shall have the obligation and the
sole right and full discretion to control (i) the preparation of all Returns
with respect to Post-Distribution Taxes attributable to any member of the TLC
Group and (ii) the defense, settlement or compromise of any audit, examination,
investigation suit, action or other proceeding relating to Post-Distribution
Taxes attributable to any member of the TLC Group. TLC shall have the right to
all refunds of Pre-Distribution Taxes and Post-Distribution Taxes attributable
to any member of the TLC Group.

Except as otherwise provided for herein, Parent shall have the obligation and
the sole right and full discretion to control (i) the preparation of all Returns
with respect to Post-Distribution Taxes attributable to any member of the Parent
Group and (ii) the defense, settlement or compromise of any audit, examination,
investigation suit, action or other proceeding relating to Post-Distribution
Taxes attributable to any member of the Parent Group. Parent shall have the
right to all refunds of Post-Distribution Taxes attributable to any member of
the Parent Group.

WINDFALLS.

Parent shall promptly pay to TLC the amount of any incremental Tax savings
generated by (i) a deduction, credit or exclusion that (A) is actually realized
by the Parent Group with respect to Pre-Distribution Taxes and (B) relates to or
is based on an item that is the basis for a similar deduction, credit or
exclusion taken on a Return with respect to Post-Distribution Taxes of the TLC
Group that is denied, disallowed, forfeited, or accelerated until prior to the
Distribution Date or (ii) a reduction in the amount of any gross income or
revenue that (A) is actually realized by the Parent Group with respect to
Pre-Distribution Taxes and (B) relates to, or is based on, a similar item of
gross income or revenue that the TLC Group is required to include on a Return or
otherwise required to include in its computation of taxable income as a result
of an audit, other administrative proceeding or otherwise. Parent shall use
reasonable best efforts to realize any such incremental tax savings that may
potentially be available.

TLC shall promptly pay to Parent the amount of any incremental Tax savings
generated by (i) a deduction, credit or exclusion that (A) is actually realized
by the TLC Group with respect to its Post-Distribution Taxes and (B) relates to
or is based on an item that is the basis for a similar deduction, credit or
exclusion taken on a Return with respect to Pre-Distribution Taxes that is
denied, disallowed, forfeited, or deferred until after the Distribution Date or
(ii) a reduction in the amount of any gross income or revenue that (A) is
actually realized by the TLC Group with respect to Post-Distribution Taxes and
(B) relates to, or is based on, a similar item of gross income or revenue that
the Parent Group is required to


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include on a Return or otherwise required to include in its computation of
taxable income as a result of an audit, other administrative proceeding or
otherwise. TLC shall use reasonable best efforts to realize any such incremental
tax savings that may potentially be available.

AGENCY.

TLC irrevocably designates Parent (and shall cause each member of the TLC Group
to irrevocably designate Parent) as its agent and attorney in fact (and shall
execute any necessary powers of attorney) for the purpose of taking any and all
actions necessary or incidental to the filing of federal income tax Returns and
state unitary or combined Returns for (i) any period during which any member of
the TLC Group or any predecessor qualified to file a consolidated, combined,
unitary or similar Return with any member of the Parent Group and (ii) any
period ending on or before the Distribution Date. Parent shall keep TLC
reasonably informed of, and shall reasonably consult with TLC with respect to,
all actions to be taken on behalf of any member of the TLC Group. Parent and TLC
will each furnish the other any and all information which the other may
reasonably request in order to carry out the provisions of this Agreement to
determine the amount of any Tax liability.

CONSISTENT REPORTING.

With respect to all taxable periods ending on or prior to February 29, 2000 TLC,
each member of the TLC Group and any future Affiliates thereof shall file
federal income tax and state income tax Returns in a manner consistent with the
Returns filed (or to be filed) in respect to Pre-Distribution Taxes and in a
manner consistent with the form of the transactions contemplated by the
Distribution Agreement (the "Form") including that the Distribution qualifies
under Section 355 of the Code.

To the extent there is an inconsistency or an apparent inconsistency amongst the
Returns relating to Pre-Distribution Taxes (including after taking into account
Returns to be filed after the Distribution Date) and/or the form, TLC shall file
Returns with respect to Post-Distribution Taxes in the manner directed by
Parent.

Parent and TLC agree to contest any proposed adjustment by any Taxing Authority
that is, in the sole judgement of Parent, inconsistent with the provisions of
this Section 6.

COVENANTS OF TLC AND PARENT RELATING TO ACTIONS AFTER THE DISTRIBUTION DATE.

TLC shall, and shall cause each member of the TLC Group to refrain from
participating in any Post-Distribution Act without the prior written consent of
Parent.

TLC and Parent shall cooperate (and shall cause each of their Affiliates to
cooperate) fully at such time and to the extent reasonably requested by the
other party in connection with the preparation and filing of any Return or the
conduct of any audit, dispute, proceeding, suit or action in respect of Taxes or
other Tax matters. Such cooperation shall include, without limitation, (i) the
retention and provision on demand of books,

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records, documentation or other information relating to any Return until the
expiration of the applicable statute of limitation (giving effect to any
extension, waiver, or mitigation thereof) plus two years; (ii) the execution of
any document that may be necessary or reasonably helpful in connection with the
filing of any Return by any member of the Parent Group or the TLC Group or in
connection with any audit, examination, investigation, suit, action or other
proceeding; and (iii) the use of the parties' reasonable best efforts to obtain
any documentation from a governmental authority or a third party that may be
necessary or helpful in connection with the foregoing.

TLC and Parent shall cooperate (and shall cause each of their Affiliates to
cooperate) in causing the tax year end of TLC to be February 28th or February
29th as the case may be, effective for the year ended February 29, 2000 with
respect to any jurisdiction in which TLC is not included in a consolidated or
combined group Tax Return for a Tax period which will end on the Distribution
Date.

TLC REPRESENTATIONS. TLC hereby represents and warrants to the Parent and each
member of the Parent Group that the statements contained in this Section 8 are
true and correct in all material respects on the date hereof:

To the best of TLC's knowledge and belief, no part of its stock being
distributed in the Distribution will be received by a shareholder of Parent in
such shareholder's capacity as a creditor, employee or in any capacity other
than that of a shareholder of Parent.

To the best of TLC's knowledge and belief, shareholders of Parent owning stock
two years prior to the Distribution Date will continue to hold at least 50% of
the stock of TLC two years after the Distribution Date.

TLC has no plan or intention to liquidate, merge with another corporation or to
sell or otherwise dispose of its assets subsequent to the Distribution except in
the ordinary course of business.

To the best of TLC's knowledge and belief, no plan or intention exists by the
shareholders of Parent to sell, exchange, transfer by gift, or otherwise dispose
of any of their stock in Parent or TLC subsequent to the Distribution.

Following the Distribution, each of Parent and TLC will operate as independent
corporations except that certain administrative and other common activities of
the two corporations will be undertaken by common personnel in accordance with
the Ancillary Agreements. Payments made in connection with all continuing
transactions between, and services provided for, each of Parent and TLC will be
for fair market value based on terms and conditions arrived at by the parties
bargaining at arm's length.

TLC has no plan involving the issuance or transfer of equity interests in TLC
following the Distribution other than issuances to employees and consultants of
TLC upon the exercise of stock options or otherwise under its 1999 Stock Option
Plan.

TLC has no plan or intention for the transfer or cessation of a substantial
portion of the business of TLC or other substantial change in the business of
TLC following the Distribution.


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PARENT REPRESENTATIONS. Parent hereby represents and warrants to TLC and each
member of the TLC Group that the statements contained in this Section 9 are true
and correct in all material respects on the date hereof:

No part of the TLC stock being distributed in the Distribution will be received
by a shareholder of Parent in such shareholder's capacity as a creditor,
employee or in any capacity other than that of a shareholder of Parent.

To the best of Parent's knowledge and belief, shareholders of Parent owning
stock two years prior to the Distribution Date will continue to hold at least
50% of the stock of Parent two years after the Distribution Date.

Parent has no plan or intention to liquidate, merge with another corporation or
to sell or otherwise dispose of its assets subsequent to the Distribution except
in the ordinary course of business.

To the best of Parent's knowledge and belief, no plan or intention exists by the
shareholders of Parent to sell, exchange, transfer by gift, or otherwise dispose
of any of their stock in Parent or TLC subsequent to the Distribution.

Following the Distribution, each of Parent and TLC will operate as independent
corporations except that certain administrative and other common activities of
the two corporations will be undertaken by common personnel in accordance with
the Ancillary Agreements. Payments made in connection with all continuing
transactions between, and services provided for, each of Parent and TLC will be
for fair market value based on terms and conditions arrived at by the parties
bargaining at arm's length.

Parent has no plan or intention for the transfer or cessation of a substantial
portion of the business of Parent or other substantial change in the business of
Parent following the Distribution.

PAYMENTS. All payments to be made hereunder shall be made in immediately
available funds. Unless otherwise provided herein, any payment not made when due
hereunder shall bear interest from the due date at an annual rate equal to the
lowest prime rate as reported in the Wall Street Journal plus 2%, compounded and
adjusted monthly. For purposes of this Agreement, the following payments shall
be due at the following times:

Payments due under Section 2 hereof shall be paid within 10 days of the receipt
of notice from the party entitled to the payment indicating the occurrence of
the later of (i) a Final Determination relating to the item or items giving rise
to the Tax for which indemnification is made and (ii) actual payment of the Tax
giving rise to the claim for indemnification.

In the case of any refunds of Taxes received by a party other than the party
entitled to such refunds pursuant to Section 3 hereof, the recipient of the
refund shall pay the amount of such refund to the other party within five days
of the receipt of such refund.

Amounts payable pursuant to Section 4 hereof shall be paid within five days of
the later to occur of (i) a Final Determination relating to the Tax item that
gave rise to the windfall benefit and (ii) the actual receipt of the windfall
benefit.

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ARBITRATION.

Any dispute, controversy or claim arising out of or in connection with this
Agreement (including any questions of fraud or questions concerning the validity
and enforceability of this Agreement or any of the rights herein and therein
conveyed), shall be determined and settled by arbitration in New York, New York,
pursuant to the rules then in effect of the American Arbitration Association as
modified by this paragraph. Any award rendered shall be final and conclusive
upon the parties and a judgment thereon may be entered in any court having
competent jurisdiction. The party submitting such dispute shall give written
notice to that effect to the other party, stating the dispute to be arbitrated
and the name and address of a person designated to act as arbitrator on its
behalf. Within fifteen (15) days after such notice, the other party shall give
written notice to the first party stating the name and address of a person
designated to act as an arbitrator on its behalf. In the event that the second
party shall fail to notify the first party of its designation of an arbitrator
within the time specified, then the first party shall request the American
Arbitration Association to appoint a second arbitrator. The two arbitrators so
chosen shall meet within fifteen (15) days after the second arbitrator has been
appointed to appoint a third arbitrator. If the two arbitrators are unable to
agree on the appointment of a third arbitrator within such fifteen (15) day
period, either party may request the American Arbitration Association to appoint
a third arbitrator. Each arbitrator appointed hereunder shall be independent of
the parties and either party may disqualify an arbitrator who is or is
affiliated with a supplier, customer or competitor of either party without the
consent of the other party. Each arbitrator shall be reasonably knowledgeable
regarding the area or areas in dispute. The arbitrators shall follow substantive
rules of law and the Federal Rules of Evidence, require the parties to conduct
discovery pursuant to the rules then in effect under the Federal Rules of Civil
Procedure in an expeditious manner, cause testimony to be transcribed, and make
an award accompanied by findings of fact and a statement of reasons for the
decision. All costs and expenses, including attorney's fees, of all parties
incurred in any dispute which is determined and/or settled by arbitration
pursuant to this paragraph shall be borne by the party determined to be liable
in respect of such dispute; provided, however, that if complete liability is not
assessed against only one party, the parties shall share the total costs in
proportion to their respective amounts of liability so determined. Except where
clearly prevented by the area in dispute, both parties agree to continue
performing their respective obligations under this Agreement while the dispute
is being resolved. Each party, and the arbitrators, shall use their best
efforts, subject to reasonable prosecution of the arbitration, court order and
disclosure required under securities laws, to keep the subject matter of the
arbitration and confidential information of each party confidential, and the
arbitrators are authorized to impose such protective orders as they may deem
appropriate for such purpose.

COSTS AND EXPENSES.

Except as expressly set forth in this Agreement, each party shall bear its own
costs and expenses incurred pursuant to this Agreement regardless of the
beneficiary of the items or services relating to such costs and expenses.

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TERMINATION AND SURVIVAL.

Notwithstanding anything in this Agreement to the contrary, this Agreement shall
remain in effect and its provisions shall survive for the full period of all
applicable statutes of limitation relating to the assessment of Taxes (giving
effect to any extension, waiver or mitigation thereof) plus two years.

AMENDMENTS; LIMITATION ON WAIVERS.

Any provision of this Agreement may be amended if, and only if, such amendment
is in writing and signed by Parent and TLC.

The provisions of this Agreement may be waived only if the waiver is in writing
and signed by the party making the waiver. No delay or omission in exercising
any right under this Agreement will operate as a waiver of the right on any
further occasion. No waiver of any particular provision of the Agreement will be
treated as a waiver of any other provision, and no waiver of any rights will be
deemed a continuing waiver of the same right with respect to subsequent
occurrences that give rise to it. All rights given by this Agreement are
cumulative to other rights provided for in this Agreement and to any other
rights available under applicable law.

GOVERNING LAW AND INTERPRETATION.

This Agreement shall be governed by, interpreted and enforced in accordance with
the laws of the State of New York (regardless of the laws that might be
applicable under principles of conflict of law).

CONFIDENTIALITY.

Each party shall hold and shall cause its consultants and advisors to hold in
strict confidence, unless compelled to disclose by judicial or administrative
process or, in the opinion of its counsel, by other requirements of law, all
information (other than any such information relating solely to the business or
affairs of such party) concerning the other parties hereto furnished to it by
such other party or its representatives pursuant to this Agreement (except to
the extent that such information can be shown to have been (a) previously known
by the party to which it was furnished, (b) in the public domain through no
fault of such party, or (c) later lawfully acquired from other sources by the
party to which it was furnished), and each party shall not release or disclose
such information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors who shall be advised of the
provisions of this Section 16. Each party shall be deemed to have satisfied its
obligation to hold confidential information concerning or supplied by the other
party if it exercises the same care as it takes to preserve confidentiality for
its own similar information.


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COUNTERPARTS.

This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original, but all of which together shall constitute one and
the same instrument.

ASSIGNMENTS AND THIRD PARTY BENEFIT.

This Agreement and the terms and provisions hereof shall be binding upon and
shall inure to the benefit of, the parties and their respective successors and
assigns.

SEVERABILITY.

If any term, provision, condition or covenant of this Agreement, or the
application thereof to any party or circumstance shall be held by a court of
competent jurisdiction to be invalid, unenforceable or void, the remainder of
this instrument, or the application of such term, provision, condition or
covenant to persons or circumstances other than those as to whom or which it is
held invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.

MERGER OF PRIOR AGREEMENTS.

This Agreement contains all of the terms and provisions and constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior written, oral or implied understandings,
representations and agreements of the parties relating to the subject matter of
this Agreement. Without limiting the foregoing, the parties acknowledge and
agree that in the event of any conflict or inconsistency between the provisions
of this Agreement and the provisions of the Distribution Agreement, the
provisions of this Agreement shall control and to such extent shall be deemed to
supersede such conflicting provisions under the Distribution Agreement.

The parties acknowledge that pursuant hereto any and all existing tax allocation
agreements or arrangements binding or benefiting TLC shall be terminated as of
the close of business on the Distribution Date, and that after the Distribution
Date this Agreement shall constitute the sole tax allocation agreement among
Parent and TLC.

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

                                 STAFF BUILDERS, INC.




                                 By:     /s/ Stephen Savitsky
                                         --------------------------------------
                                 Title:  Chairman of the Board and
                                         --------------------------------------
                                         Chief Executive Officer
                                         --------------------------------------


                                 TENDER LOVING CARE HEALTH CARE SERVICES, INC.




                                 By:     /s/ Dale R. Clift
                                         --------------------------------------
                                 Title:  President, Chief Operating Officer
                                         --------------------------------------




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