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                                                                 EXHIBIT 10.42


                                MASTER AGREEMENT

                                 EXECUTION SHEET


This Master Agreement ("Agreement") is made and entered into by and between
Aetna U.S. Healthcare, Inc., on behalf of itself and all of its applicable
Affiliates as defined herein ("Company"), and Coram Healthcare Corporation, on
behalf of itself and its applicable Affiliates as defined herein (hereinafter
"Network"). As used in this Agreement, "Company" and "Network" may refer
respectively from time to time to Aetna U.S. Healthcare Inc. and its affiliated
companies, collectively, and to Coram Healthcare Corporation and its affiliated
companies collectively. Company and Network are hereinafter sometimes referred
to as "Parties" and individually as a "Party".

The Effective Date of this Agreement shall be May 1, 1998 ("Effective Date").

Company and Network mutually desire to enter into an agreement whereby Company
and Network will provide access to and coordinate the provision of home health
care services to Members with the objective of delivering quality and
cost-effective home health care services.

The parties acknowledge and agree that certain state laws and regulations within
the Regions may require that certain obligations of the parties as contemplated
hereunder be carried out by duly licensed and/or authorized Affiliates(s) of the
Parties. To that end, the parties agree that they shall cause their respective
Affiliates(s) to execute the agreements attached hereto as Attachments D and M
(incorporated herein by reference) contemporaneously herewith, and shall ensure
compliance by their respective Affiliate(s) with the terms of such agreements,
as necessary to ensure the Parties' compliance with this Agreement.

This Agreement, together with all of its Attachments, Exhibits and Schedules, as
it and they may be amended from time to time as provided herein, constitutes the
complete and exclusive contract between the parties with respect to the subject
matter hereof and supersedes any and all prior contemporaneous oral or written
communications or proposals not expressly included herein. The Parties further
agree that, upon the Implementation Date hereof, the agreements between the
Parties or their respective Affiliates for the provision of the Home Health
Services to Network Members in the Regions shall be amended by the terms of this
Agreement which relate to the provision of Home Health Services by Network or
its Affiliates in the Region, and those provisions of such agreements not
otherwise in conflict with this Agreement shall remain in full force and effect
and are hereby ratified and affirmed. Provisions addressing the requirements in
the immediately preceding sentence shall be in accordance with the Network
Amendment in Attachment E-1 and the Three Party Agreement in Attachment E-2, as
the case may be.

In consideration of the mutual covenants and promises stated herein and other
good and valuable consideration, the parties hereby enter into this Agreement.
By executing this Agreement, the parties acknowledge and agree that they have
reviewed all of the terms and conditions of this Agreement and intend to be
legally bound by same.

COMPANY                                    NETWORK

By:                                        By:
    ---------------------------               ---------------------------   

Printed Name:                              Printed Name:
             ------------------                         -----------------
Title:                                     Title:
      -------------------------                  ------------------------
Date:                                      Date:
     --------------------------                 --------------------------     





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This Agreement is entered into by and between Company and the Network that has
signed the Execution Sheet attached hereto.

1.   NETWORK REQUIREMENTS AND REPRESENTATIONS

     A.  Network maintains and operates, or will, prior to the Implementation
         Date, maintain and operate one or more networks for the provision of
         the home health care services listed in Attachment A hereof ("Home
         Health Services") in each of the following states: New York,
         Connecticut, Rhode Island, Massachusetts, New Hampshire, Pennsylvania,
         New Jersey and Delaware, and such other states as may be agreed to by
         the Parties in writing and added as an addendum to this Agreement. The
         network in each of such states is hereinafter referred to as a "Home
         Health Network". Attached hereto as "Attachment B" is a list of
         Network's Network Providers in each of the foregoing states, organized
         by provider type, and showing the name, address and telephone number of
         each such Network Provider, and Company agrees that such Network
         Providers listed on such Attachment "B", as of the Effective Date, are
         deemed by Company to satisfy all Company participation criteria as
         Participating Providers. At all times during the term of this Agreement
         upon and after the Implementation Date, Network shall maintain such
         Home Health Networks. Network agrees, upon reasonable prior written
         notice, and so long as a provider meets Network's then current
         participation criteria (which criteria shall not be materially
         different from or inconsistent with then-current applicable Company
         participation criteria) and meets Company's participation criteria, and
         who accepts Network's then current fee schedule consistently applied,
         to add such additional providers as Network Providers to each Home
         Health Network as reasonably required by Company to meet the health
         care needs of Company Members in the Geographic Areas.

     B.  In order to provide services pursuant to this Agreement, Network
         Providers must have executed individual provider contracts and other
         appropriate agreements and instruments with both Company and Network
         for provision of services to Members and agreeing to the terms and
         conditions herein, in form and content as specified herein. Network
         shall require all Network Providers to provide Home Health Services to
         Network Members under each applicable Plan. The provision of Home
         Health Services by each Network Provider to Network Members shall be
         governed by the applicable Company provider agreement signed by such
         provider if and only to the extent any inconsistency arises between the
         applicable Company contract and any other document to which Network
         Provider may be a party, except as expressly provided for otherwise
         herein.

         All Network Providers will act as independent contractors of Company
         and all Network Associated Providers will act as independent
         contractors of Network in providing Home Health Services to Members.
         Except as otherwise set forth in this Agreement, Company shall not be
         liable to Network for any provider's failure to properly perform health
         care services or deliver supplies to any Member or fulfill his/her/its
         obligations under a Company provider contract or any other agreement to
         which such provider is a party.

         Notwithstanding anything contained hereinabove to the contrary, Network
         and Network Affiliated Providers make no representations or warranties,
         express or implied, as to the safety, fitness or fitness for a
         particular purpose of any item, supply or durable medical equipment
         furnished to a Member in connection with this Agreement. This provision
         shall not be construed to absolve or limit Network or Network
         Affiliated Providers' obligations to provide Home Health Services with
         at least the same degree of care and skill as customarily provided to
         patients who are not Members in accordance with generally accepted
         standards of practice applicable to similarly situated providers under
         the terms of this Agreement or the applicable Network Participating
         Provider Agreement or the applicable Company Participating Provider
         Agreement.

     C.  Network Provider Agreements. Network Providers shall be under agreement
         with Network and Company in order to provide services to Network
         Members hereunder. Such agreements, as between Network and Network
         Providers, shall be executed in the form and content attached hereto

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         as Attachment C, and Network represents and warrants that all Network
         Providers will have executed or will execute the form of agreement in
         Attachment C. Such Network Participation Agreements are hereby deemed
         acceptable to Company for purposes of meeting Network's obligations
         hereunder. Amendments to such Network Participation Agreements which
         would have a material impact on the provision of Home Health Services
         to Network Members by Network Providers under this Agreement, require
         the prior written approval of Company, not to be unreasonably withheld.
         Network shall contractually require Network Providers to comply with
         the applicable terms of this Agreement. Subject to the terms of the
         Three Party Agreement described in section 1.E below, Network agrees to
         enforce its Agreements with Network Providers as necessary to ensure
         compliance with the terms of this Agreement, including but not limited
         to the obligation that Network Providers provide the Home Health
         Services to Network Members in accordance with the applicable Plan. In
         order to remain Network Providers for the term of this Agreement,
         Network Providers must continue to meet the Company Participation
         Criteria set forth in the applicable Company Participating Provider
         Agreement attached hereto as Attachment D.

     D.  Company Provider Agreements. Network agrees to cause Network Affiliated
         Providers to execute a Company Participating Provider agreement and to
         contractually require Network Associated Providers to execute the
         applicable form of Company Participating Provider Agreement attached
         hereto as Attachment D, for each of the states referenced above.
         Agreements, as between Company and Network Providers shall be, for
         those Network Associated Providers already contracted with Company as
         of the Implementation Date, in approved Company provider contract forms
         provided that such forms of agreements shall not be materially
         inconsistent with the Attachment D. For all Network Affiliated
         Providers as of the Implementation Date and all Network Providers who
         are contracted by the Parties after the Implementation Date, as between
         Company and Network Providers, agreements shall be in the form and
         content in Attachment D hereof, with only those state-specific changes
         as may be required by the applicable regulatory authorities.
         Notwithstanding anything to the contrary herein, at Company's
         discretion, Company may amend such agreements upon written notice to
         Network Providers and Network only as required to comply with
         applicable law or regulation, or any order or directive of any
         governmental agency with appropriate jurisdiction. Except for a
         provider who is not a Participating Provider but whose participation is
         approved by the applicable Company regional medical director on a
         case-by-case basis as provided in this section 1.D, Company represents
         and warrants that all Network Providers added to Network after the
         Implementation Date will execute an agreement substantially in the form
         attached hereto in Attachment D, with only those state-specific changes
         as may be required by the applicable regulatory authorities, and
         Network Providers shall not provide Home Health Services to Members
         unless and until such Network Provider has executed and delivered to
         Company (and Company has accepted) the applicable attached Company
         participating Provider Agreement. The case-by-case approval by the
         applicable Company regional medical director in the immediately
         preceding sentence shall be given in those limited circumstances and
         only in those circumstances where no Network provider exists after
         Network has fulfilled its obligations hereunder, such approval not to
         be unreasonably withheld.

         Network shall recommend to Network Providers who have expressed the
         desire to participate under the terms of this Agreement, and who are
         not currently Company Participating Providers, to apply for
         participation with Company. Company agrees to accept for participation
         under this Agreement and to enter into a Company Participating Provider
         Agreement in the applicable form of Attachment D and Attachment E-2,
         any such Network Provider that meets Company's participation criteria
         and who agrees to be bound by the terms of this Agreement, provided
         that the participation of such providers under this Agreement does not,
         in Company's reasonable good faith determination, materially impair
         Company's business objectives in the Region(s) under this Agreement.

     E.  Three Party Agreements/Negative Amendments. For each Network Associated
         Provider not based in New York state, as of the Implementation Date,
         Network shall amend their Network Participation Agreements with such
         Network Associated Provider in the form and substance in Attachment E-1



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         hereto, which attachment, inter alia, provides that Network Associated
         Provider shall look solely to Network for any payment in respect of
         Home Health Services rendered to Network Members, Company shall be the
         third-party beneficiary of such amendment and that Company may directly
         enforce against such Network Associated Provider the Network Provider
         obligations created as a result of such amendment, without Company
         being subject to any defenses or claims such Network Associated
         Provider may raise or have against Network ("Network Amendment").
         Network represents and warrants that such Network Amendment is deemed
         approved by and legally enforceable against such Network Provider in
         accordance with the terms herein and in accordance with its terms,
         except as such Network Associated Provider provides effective notice to
         Network within 20 days of receiving such Network Amendment that such
         Network Associated Provider does not accept such Network Amendment.
         Such Network Associated Providers who provide such notice rejecting
         such Network Amendment shall, for the purposes of this Agreement, not
         be a Network Provider, unless such Network Associated Provider executes
         a Three Party Agreement (as defined below). Throughout the term of this
         Agreement, for Network Providers (including all New York state Network
         Providers as of the Implementation Date) who are added to a Home Health
         Network after the Implementation Date, such Network Provider, Network
         and Company shall execute an agreement in the form attached hereto as
         Attachment E-2 ("Three Party Agreement"). The Parties agree to execute,
         and to use their commercially reasonable best efforts to cause Network
         Providers and Company Participating Providers wishing to participate
         under this Agreement to execute, the Three Party Agreement attached
         hereto as Attachment E-2 . For the purposes of the immediately
         preceding sentence, Network shall be obligated, on or prior to the
         Implementation Date, to cause each Network Affiliated Provider to
         execute and deliver to Company the Three Party Agreement. Each of such
         Network Amendment and such Three Party Agreement shall resolve any
         differences between Company's Participating Provider Agreement and
         Network's Participating Provider Agreement, and shall set forth the
         terms and conditions pursuant to which Home Health Services shall be
         rendered to Network Members by each Network Provider who executes such
         Network Amendment or such Three Party Agreement. All revisions or
         amendments to any Network Amendment or Three Party Agreement require
         the mutual written consent of the Parties, not to be unreasonably
         withheld or delayed.

     F.  Legal Compliance and Representations. Network represents and warrants
         to Company that it has full right and authority to enter into this
         Agreement and the other collateral agreements contemplated by this
         Agreement (including the New York IPA Agreement as defined herein), and
         that neither the execution of such agreements nor the carrying out of
         their respective terms will contravene, violate or cause the breach of,
         any contract or agreement to which Network is a party or by which
         Network may be bound. Network further represents and warrants that, as
         of the Effective Date, its responses to Company's "Home Health Care
         Provider Profile Questionnaire", transmitted by Mr. Louis A. Zambelli,
         Jr. to Company on May 30, 1997, as amended in correspondence from
         Network to Company's National Ancillary Contract staff through the
         Effective Date, and all of same are true and correct in all material
         respects.

     G.  Provider Education. In cooperation with and with assistance from,
         Company, Network shall review, inform and educate Network Providers of
         all Company policies and procedures applicable under the terms of this
         Agreement.

     H.  Network Support. Network agrees to maintain such support staff,
         toll-free telephone lines and other operations reasonably necessary to
         fulfill Network's obligations under this Agreement.

     I.  Claims Processing and Payment. Effective as of the Implementation Date,
         and for so long as Company has paid Network the applicable Capitation
         Amount due and owed by Company to Network, and for so long as Network
         has not been notified of a breach of its obligations hereunder pursuant
         to Section 6.D hereof and such breach is continuing, Network agrees to
         provide Network Provider Claims Management Services (as defined herein
         and in Attachment F) for Home Health 



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         Services provided to Network Members, including claim processing and
         payment, and such other provider payment services as set forth in this
         section 1.I.

         (1)  "Claims Management" or "Claims Management Services" shall mean the
              process by which claims for payment are paid to Network Providers
              (but not non-Network Providers or non-Participating Providers) for
              Home Health Services provided to Network Members, including
              emergency and urgent services as defined by the Health Care
              Financing Administration, and records that are to be maintained of
              claims and payments for such services. Network shall provide
              Claims Management Services in accordance with Company standards,
              subject to Network's ability to cure pursuant to section 6.F
              hereof. Network represents, warrants and agrees that at all times
              its provision of Claims Management services meet or exceed (i) all
              Company standards, policies and procedures; (ii) all applicable
              state and federal statutes and regulations, including but not
              limited to, Medicare statues and regulations and all fiduciary
              obligations under ERISA; and (iii) the standards of any applicable
              accrediting organization, including, but not limited to, NCQA. In
              the event that Company or an accrediting organization's standards
              or any state or federal statutory or regulatory provisions are
              materially changed or revised, Network agrees, without limiting
              the Parties' rights and obligations pursuant to section 6.G
              hereof, to comply with or implement, as applicable, and to the
              reasonable good faith satisfaction of Company, any such change or
              revision within the earlier of sixty (60) calendar days of
              receiving notice of such change or within such time frame as may
              be required by the accrediting organization or applicable law or
              regulation. Company agrees to promptly notify Network of any and
              all such changes, whether through written communication or through
              the Operating Committee.

         (2)  Network shall allow Company to maintain oversight of the Claims
              Management services furnished by Network on behalf of Company.
              Such oversight shall at a minimum include permission for Company,
              Company's designated agents(s), federal, state and local
              governmental authorities having jurisdiction, and any applicable
              accrediting organization, to audit, during regular business hours
              upon at least ten (10) calendar days prior written notice, any and
              all documents and materials directly related to Claims Management
              Services rendered under this Agreement. In addition Company,
              Company's designated agent(s), federal, state and local
              governmental authorities having jurisdiction, and any applicable
              accrediting organization shall be permitted by Network to conduct
              a site visit and/or audit at any site where Network processes
              claims under the terms of this Agreement upon not less than ten
              (10) calendar days prior written notice, except as otherwise
              required under applicable law. Any such audit shall be at
              Company's expense (except for federal, state and local
              governmental authorities auditing Network not arising from this
              Agreement, in which case Company shall not share any expenses in
              connection with any such audit, and shall be reasonably permitted
              during the term of this Agreement and for a period of three (3)
              years thereafter; provided, however, that nothing in this section
              1.I(2) shall extend the audit rights under this Agreement of any
              such entity.

         (3)  Network shall provide, in a format acceptable to Company and so
              long as available under Network's then-current management
              information system without material upgrades to software or
              hardware, timely, accurate and appropriate data and information
              (including demographics) to enable Company to fulfill applicable
              accrediting organizations and state and federal regulatory filing
              requirements. If such information cannot be provided by Network to
              Company without such material upgrades to software or hardware,
              Network shall provide to Company, in a format available to it
              under its then-current system, the above information which
              satisfies Company's reporting requirements.

         (4)  Network agrees that in addition to its obligations to maintain
              "proprietary or confidential business information" as set forth in
              Section 7 herein, Network shall ensure that any Information
              related to a Member which discloses data by which individual
              patients can be identified is to be kept strictly confidential in
              accordance with all state and federal laws 



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              regarding, among other things, the confidentiality of patient
              records and shall not be released to any third party without the
              prior written permission of Company or pursuant to a court order,
              subpoena or appropriate request from any regulatory agency with
              jurisdiction. In the event of such a court order, subpoena or
              request from a regulatory agency, unless prohibited by law,
              Network will provide Company prior written notification prior to
              releasing such information or records so that Company may seek a
              protective order or other remedy at Company's expense.


2.   OTHER DUTIES OF NETWORK

     Network shall perform each of the following additional obligations:

     A.  Member Hold Harmless. If the applicable payor is an HMO, Network agrees
         that in no event, including but not limited to, non-payment by the HMO,
         insolvency of the HMO or breach of this Agreement, shall Network bill,
         charge, collect a deposit from, seek remuneration or reimbursement
         from, or have any recourse against, including without limitation, the
         institution of any action at law, a Member or persons (other than the
         HMO) acting on a Member's behalf for Covered Services or any other
         amounts owed Network Providers by HMO. This provision shall not
         prohibit the collection of deductibles, coinsurance or copayments from
         Network Members in accordance with the terms of the Member's Plan and
         applicable law. Network agrees that: (i) this provision shall survive
         termination of this Agreement regardless of the cause giving rise to
         termination and shall be construed for the benefit of Network Members,
         and (ii) this provision supersedes any oral or written agreement to the
         contrary now existing or hereafter entered into between Network and a
         Network Member or persons acting on a Network Member's behalf.


     B.  Network agrees to perform its duties and responsibilities under this
         Agreement in accordance with the Performance Standards of Attachment G
         hereof, and Network agrees that its failure to satisfy and comply with
         such Performance Standards in any Home Health Network may, at Company's
         discretion, result in the imposition of the financial assessments
         and/or taking other actions identified in Attachment G or possible
         termination and/or other actions authorized under this Agreement in
         accordance with Sections 6.D and 6.E hereof.

     C.  Limited Utilization Management and Case Management Services. Network
         shall perform, either directly, or through an Affiliate appropriately
         licensed and qualified (if required under applicable state law), and in
         accordance with Company's applicable rules, policies and procedures,
         the following case management and utilization management functions with
         respect to Home Health Services to Network Members: intake of all
         referrals for services under this Agreement; development, in
         conjunction with the Member's physician, of a plan of care; ongoing
         case management (including reauthorizations of care) to assure the
         appropriate level of care (as determined by the applicable Plan or the
         Plan's appropriate medical director) is being rendered; accepting
         referrals for Home Health Services provided to Network Members;
         coordinating the provision of Home Health Services provided to Network
         Members; and, authorizing and reauthorizing such services. Network
         shall make all initial determinations as to whether a Network Member is
         eligible to receive Home Health Services (based on eligibility data
         supplied by Company under the terms hereof), and as to whether a
         service/supply is a covered Home Health Service (based on benefit plan
         descriptions supplied by Company under the terms hereof). In the event
         Company authorizes the provision of services/supplies which are not
         covered Home Health Services under Attachment A, ("Extra-Contractual
         Services"), Company shall pay for such Extra-Contractual Services on a
         fee-for-service basis, and Network assumes no financial liability or
         risk whatsoever for payments to providers with respect to such
         Extra-Contractual Services. If, upon referral of a Network Member to
         Network or pursuant to a request for reauthorization for a Home Health
         Service to Network Members, Network patient care coordinators and/or
         management staff would



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         make a negative recommendation as to the medical necessity of a
         requested service and/or supply, or that a requested service/supply is
         not a Covered Home Health Service, or is a negative recommendation
         based on a Member's status as a Network Member (in the case of
         non-emergent, non-urgent services), Network shall defer all such
         recommendations to the applicable Company Medical Director who shall
         review and either affirm or reject such recommendation. Network shall
         not negatively recommend or delay the provision or arranging of
         emergent or urgent services to an individual (and it is represented by
         such individual or the referring source that such individual is a
         Member) solely on the basis that such individual is not a Network
         Member. Notwithstanding anything to the contrary herein, the Parties
         acknowledge that Company retains final authority for all medical
         necessity denials, interpretation of Plans, patient and disease
         management programs, member grievances and appeals and any other duties
         as mandated by applicable law and as expressly provided elsewhere
         herein.

     D.  Demonstrate the willingness to expand this Agreement to other
         Geographic Areas on the terms, or terms substantially similar to those,
         herein and such other reasonable terms as are mutually satisfactory to
         the Parties, and Network shall use reasonable efforts to assist Company
         in any Company expansion market in establishing a provider network for
         Home Health Services consistent with the terms of this Agreement and on
         such other commercially reasonable terms mutually acceptable to the
         Parties and negotiated in good faith.

     E.  Encounter Data. For those services performed by Network Providers for
         Network Members, Network shall provide Company with encounter data by
         type of Covered Service rendered to Network Members in the form and
         manner as reasonably specified by Company that Network can provide
         using its current systems and without incurring a significant financial
         cost or significant or material reprogramming. During the term of this
         agreement such encounter data shall be jointly owned by Network and
         Company, and upon expiration or termination of this agreement such
         encounter data shall be the property of Company; provided that Network
         and Company shall jointly own (during the term of this Agreement and
         thereafter) all reports, summaries analyses, trends and the like
         derived from such encounter data. Network agrees that Company and its
         Affiliates, shall, during Network's normal business hours and without
         unreasonably interfering with Network's customary business operations,
         have unlimited free and equal access: (1) to all data and information
         obtained, created, or collected by Network which specifically relates
         to Network Members and (2) to all data and information created by
         Network by which individual patients can be identified (each of (1) and
         (2) above is "Information"). Network shall not enter into any contract
         or arrangement whereby Company or it Affiliates do not have unlimited
         free and equal access, consistent with the terms of this section, to
         the Information in electronic or other form or would be required to pay
         any access, transaction or other fee to obtain such Information in
         electronic, written or other form. No Information shall be directly or
         indirectly provided by Network to any competitor of Company or
         competitor of Company's Affiliates. Network represents and warrants
         that Network will use (whether during or after the term of this
         Agreement) such Information solely for internal quality assessment
         purposes, including benchmarking, best practices, and clinical
         pathways. Network agrees not to use such Information in a manner
         competitive with Company's or its Affiliates' business. Notwithstanding
         the immediately preceding sentence, each of Network and Company shall
         bear fully its costs arising from its year 2000 reprogramming
         initiatives, if any. Network may share Company-specific data to a third
         party in connection with its performance of its obligations hereunder,
         so long as such third party signs a confidentially agreement in a form
         and content attached hereto as Attachment H prior to such disclosure.
         Nothing in this section is intended to prohibit Network's use of
         aggregate information that Network develops or maintains, provided,
         however, that Network may not disclose aggregate information derived
         from Information which: (a) may reveal or disclose proprietary
         information of Company as described in section 7 hereof; (b) reveals or
         readily identifies Company's utilization rates or other related data of
         Company ; or (c) personally identifies or reveals the identity of a
         Member or patient.

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     F.  Insurance. Network shall maintain comprehensive general liability
         insurance at minimum levels reasonably required from time to time by
         Company, but in no event less than One Million Dollars ($1,000,000) per
         claim and Three Million Dollars in the annual aggregate and director
         and officer liability coverage for Network's directors, officers,
         trustees and managers in the minimum amount of Five Million Dollars
         ($5,000,000). Certificates of insurance or copies of declaration pages
         relating to such policies shall be delivered to Company upon request.
         Network shall notify Company at least thirty (30) days in advance of
         any cancellation, limitation, or non-renewal of, or any material change
         to, said policies.


3.   DUTIES OF COMPANY

     Company shall use its commercially reasonable best efforts in performing
     each of the following obligations:

     A.  Patient Management. Except as provided in section 2.C to the contrary,
         patient management services, including but not limited to utilization
         review, case management, disease management, precertification, and the
         patient management obligations of this section 3.A imposed upon Company
         by this Agreement, or by federal and state statutes and regulations,
         which as between Company and governmental authorities with jurisdiction
         over such statutes and regulations, are non delegable. Utilization
         management personnel will be identified to Network and will work with
         utilization management staff on- and off-site, as reasonably necessary
         for Network to perform its obligations hereunder. New Disease
         Management programs, other than those identified in Attachment A as of
         the Effective Date, for which Network will be responsible for
         supporting and in respect of which Network will be providing or
         arranging support services, will be implemented under this Agreement
         sixty (60) days after written notice to Network by Company or sixty
         (60) days after communication of such new program by or through the
         Operating Committee. Prior to the sixty (60) day implementation period,
         the performance standards in respect of such new program will not apply
         to Network's performance of such new program.

     B.  Products/Publicity. Company shall have responsibility for and agrees to
         continually advertise and market the Plans during the term of this
         Agreement. Network and any Network Provider may not advertise, issue a
         press release or make any public statement about Company or this
         Agreement without Company's prior written approval, not to be
         unreasonably withheld; provided, however, Network and Network Providers
         may advertise themselves as participating Company Providers. Company
         shall not make any public disclosures of the names of Network Providers
         without Network's and such Network Provider's prior written consent,
         not to be unreasonably withheld; provided, however, that Company may
         freely and without Network's or Network Providers' consent, advertise
         Network's and Network Providers' participation hereunder and under
         Company Participating Provider agreements in Company's provider and
         similar directories and to other providers in connection with any
         service rendered to or required by Members.

     C.  Subcontractors. Company agrees that any of its subcontractors under
         this Agreement shall be bound to all of Company policies and procedures
         applicable to such subcontractor hereunder, under the terms of this
         Agreement, and Company shall require and ensure that such
         subcontractors comply with all of such policies and procedures in
         conformity with the terms hereof.

     D.  Member services, including enrollment, dedicated member services phone
         line, grievance processes and collection of premium and processing.

     E.  Provider and Network Support Services. Company agrees to provide
         provider services, a dedicated (i.e., for provider relations purposes)
         provider relations telephone line, and a Company Medical Director
         interface with Network. Company shall provide (including all costs to
         establish and maintain) Network with 24 hour a day, 365 days per year,
         access to a reasonably required number



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         of dedicated toll-free 800 telephone lines for purposes of verifying
         Member eligibility. Such dedicated toll-free 800 lines shall include a
         VRU system which is continually updated and which, at all times, will
         have real-time eligibility data on Members available to Network.
         Network shall be entitled to rely upon the accuracy of all eligibility
         information obtained via the 800 line VRU System, and Company may not
         retroactively deny payment for services (on the basis of ineligibility)
         for which Network has first obtained affirmative coverage status.
         Company shall, also provide Network, as soon as is practicable but no
         later than on the Implementation Date, and, after the Implementation
         Date, on or before the first day of each month thereafter during the
         term hereof, with magnetic tapes or cartridges or hard copy for any
         data elements not available until August 1, 1998 (in a format(s)
         compatible with the Network's hardware and software so long as
         available under Company's then-current management information system
         without material upgrades to software or hardware, and if such material
         upgrades would be required, Company shall provide Network with the
         following in a format and in the frequency then available) of current
         Network Member eligibility data, which will include, at a minimum: the
         Network Member's I.D. #, name, age, gender, Primary Care Physician's
         office #, and applicable copayments, coinsurance or deductible amounts
         and a benefit rider designation, if any. In addition, Company shall, on
         a monthly basis, deliver to Network a report that shows the provider
         numbers or the primary care physicians for the Members enrolled in the
         Company's HMO-based Plans serviced by an integrated delivery system.

     F.  Legal Compliance. Regulatory compliance and filings relating to
         Company's obligations with respect to its products and its provider
         contracts. Company represents and warrants that it and its Affiliates
         have full authority to enter into this Agreement and the collateral
         agreements required hereby (including the New York IPA Agreement), and
         that neither the execution nor the performance of their respective
         terms will contravene, violate or cause the breach of any contract or
         agreement to which Company is a party or to which it is bound which
         affect Company's obligations hereunder. Company further represents and
         warrants that the form of agreements in Attachments D and Attachment M
         are the most current (as of the Effective Date) versions of such
         agreements to have been approved by the New York Department of Health.

     G.  Underwriting services.

     H.  System support services, including appropriate data collection and
         reporting to regulatory agencies.

     I.  Quality assessment services, including provider credentialing and
         recruiting, accreditation, member satisfaction, surveys (related to
         primary care physicians, provider sanctioning, specialists and hospital
         services, other than such surveys which Network has agreed to perform
         in accordance with the terms hereof) and data collection, analysis and
         reporting.

     J.  Provider payment, including but not limited to, claims processing
         services for Home Health Services provided to non-Network Members, and
         provider payment, including but not limited to, claims processing
         services (but in no event limiting the financial responsibility of
         Network for Home Health Services) for Home Health Services rendered to
         Network Members on an out-of-network basis, either by non-Network
         Providers or by non-Participating Providers.

     K.  All other administrative and management services for the Plans.

     L.  Company shall provide Network with the reports in the formats and
         frequencies identified and reasonably requested by Network through the
         Operating Committee, so long as available under Company's then-current
         management information system without material upgrades to software or
         hardware, and if such material upgrades would be required, Company
         shall provide Network with such reports in a format and in the
         frequency then available.


                                      -9-
<PAGE>   10


     M.  Insurance. Company shall maintain comprehensive managed care,
         professional and general liability insurance or a program of
         self-insurance at minimum levels generally standard in the industry for
         a health maintenance organization of Company's size, but in no event
         less than Five Hundred Thousand Dollars ($500,000) per claim, and One
         Million Dollars ($1,000,000) and Five Million Dollars ($5,000,000),
         respectively, in the annual aggregate, and director and officer
         liability coverage (or a program of self-insurance) for Company's
         directors, officers, trustees and managers in the minimum amount of
         Five Million Dollars ($5,000,000). Certificates or memorandum copies
         evidencing such coverage or programs of self-insurance shall be
         delivered to Network upon its request. Company shall notify Network at
         least thirty (30) days in advance of any cancellation, limitation, or
         any material adverse change to, said policies, coverages or programs of
         self-insurance.

4.   PAYMENT ARRANGEMENTS

     A.  Network shall be compensated and shall be fully financially responsible
         in accordance with the provisions of Attachment A for the provision and
         for arranging the provision of all Home Health Services to Network
         Members by home health care providers on and effective the first day of
         July, 1998 ("Implementation Date") and (except as otherwise expressly
         provided herein) Network shall be paid by Company hereunder on the last
         day of each month thereafter (beginning August 31, 1998) for
         obligations to provide or arrange for the provision of Home Health
         Services during such month, provided, however, that the first
         Capitation Amount payment hereunder shall occur upon the Implementation
         Date subject to all the limitations and conditions hereof. Network
         agrees to accept the payments provided for in Attachment A as full and
         complete compensation for provision by Network and Network Providers
         and all other providers of Home Health Services to Network Members and
         other obligations under this Agreement, except as otherwise expressly
         provided herein. For the provision of any Home Health Services to
         Members who are not Network Members within such Geographic Area, each
         Participating Provider or Network Provider shall be paid in accordance
         with their individual provider contracts with Company.

         Notwithstanding the foregoing paragraph, if pursuant to the terms of
         section 5.A hereof, Network elects at any time to fund the Letters of
         Credit (and does so fund such Letters of Credit and provide same to
         Company no later than the fifth (5th) day of the then-current month, in
         the Fully-Funded amounts as provided in section 5.A, the Capitation
         Amounts hereunder shall be paid by Company to Network on a prospective
         basis, on or before the first day of each month, effective as of the
         first month immediately following the month in which the Letters of
         Credit are so increased.

     B.  From the Effective Date through the Implementation Date and for all
         Home Health Services with dates of service prior to the Implementation
         Date, each Company Participating Provider shall be paid by Company for
         the provision of any Home Health Services to Members in accordance with
         their individual provider contracts with Company; provided that with
         respect to those Home Health Services which are authorized prior to the
         Implementation Date and for which reimbursement is on a case rate, or
         episode of care (e.g., DME rental) basis, the amount of such
         reimbursement shall be allocated to the Parties on a prorated basis in
         a mutually acceptable manner to be agreed upon prior to the
         Implementation Date.

     C.  Network or Network Providers shall be entitled to collect and retain
         from Members the copayments or coinsurance permitted under the terms of
         the applicable Plan. Network agrees, and Network shall cause Network
         Affiliated Providers and shall contractually require Network Associated
         Providers to agree, to accept the payments provided for in the
         applicable Network Provider Agreement or in the individual
         Participating Provider agreements (as the case may be) as full and
         complete compensation for provision by Network Providers of Home Health
         Services, except for those charges permitted under the applicable Plan.
         At no time will Network or Network Providers seek compensation from
         Members for Home Health Services except for those charges authorized by
         the Plan.


                                      -10-
<PAGE>   11


5.   LETTER OF CREDIT; EXCESS LOSS INSURANCE.

     A.  Financial Reserves/Letter  of Credit.

         Subject to the terms of section 6.D, at all times during term of this
         Agreement, Network shall maintain a clean, irrevocable standby Letter
         of Credit (or multiple Letters of Credit as provided herein at
         Company's direction) in the amounts and according to the terms herein
         and in the form attached hereto as Attachment I , and from a bank
         acceptable to Company (the "Letter(s) of Credit").

         Company may draw upon the Letter(s) of Credit to pay any Network
         Providers or any other providers for Home Health Services provided to
         Network Members for which Network is financially responsible hereunder,
         if: the funds from Network's Capitation Amounts paid to Network are
         insufficient or unavailable to pay such providers, upon Company's
         reasonable determination after review of Network's Financial
         Statements; if Network has persistently engaged in a pattern of failure
         to pay Network Providers claims, when due, that are undisputed in good
         faith; or if Network becomes insolvent or for any reason ceases to
         conduct business. Company shall provide Network with contemporaneous
         notice of any draw on the Letter(s) of Credit, which notice shall
         include the reasons for the draw and the amounts drawn. To the extent
         that such amounts are drawn under the Letter(s) of Credit, in whole or
         in part, Network's financial obligations hereunder shall be deemed by
         Company to be reduced dollar-for-dollar in the amount(s) so drawn. In
         the event of any draw by Company upon the Letter(s) of Credit as
         provided herein, Company shall reconcile any payments made to Network
         Associated Providers for Home Health Services with the actual amounts
         of Network Associated Providers' clean, undisputed in good faith claims
         for payment for Home Health Services. To the extent that the amounts of
         such claims are exceeded by the amounts drawn by Company under the
         Letter(s) of Credit, at the time so drawn, Company shall credit Network
         with such amounts with respect to any then-outstanding or future
         financial liability of Network.

         The following Letter(s) of Credit shall be maintained by Network in
         accordance with the terms herein and according to the schedule and in
         the amounts immediately below ("Scheduled Amounts"):

<TABLE>
<CAPTION>

              Letter of Credit Amount       Obtained by                         Effective As of

              <S>                           <C>                                 <C>
              $3,000,000                    Effective Date                      ID
              $4,000,000                    Implementation Date ("ID")          ID
              $3,750,000                    ID + 52 days                        ID + 60 days
              $3,750,000                    ID + 82 days                        ID + 90 days

              $14,500,000 Total at 90 days after Implementation Date
</TABLE>


         Until such time as the Letter(s) of Credit is funded by Network in the
         amount of $14.5 million, Network shall submit to Company, no later than
         thirty-five (35) days after the close of the preceding month, Network's
         Balance Sheet, Income Statement and a summary report of cash flows
         prepared in accordance with GAAP, consistently applied ("Network's
         Financial Statements").

         At any time after the Implementation Date, Network may elect to
         increase the amount of the Letter(s) of Credit such that all aggregate
         amounts then so available to Company are equal to three-months
         then-current Capitation Amount ("Fully-Funded Amount"). In such event,
         the payment to Network of the Capitation Amount shall revert to a
         payment schedule whereby Company shall pay such Capitation Amount
         prospectively in accordance with Section 4 hereof.

                                      -11-
<PAGE>   12


         Network will present to Company the Letter(s) of Credit in the required
         formats and amounts three (3) days prior to Company's scheduled
         generation of the then-current month's Capitation Amount payment (which
         shall mean the generation by Company of Network's Capitation Amount
         payment by the 25th of each month, but shall not mean the due date of
         such payment by Company, which latter time is addressed in section 5
         hereof). In any given month, if by such time Network does not so
         present Company with the required Letter(s) of Credit, Company may, at
         Company's discretion, deduct from the Capitation Amount then due the
         amount necessary to cover the amounts of the then-required Letter(s) of
         Credit amount per the above schedule and as other amounts as required
         by this section 5.A. Company will release such funds to Network's
         designee immediately upon Company's receipt of the required Letter(s)
         of Credit.

         After the last Letter of Credit is delivered to Company in the
         Scheduled Amounts, such amounts shall be modified annually, as follows:
         The aggregate amount available to Company under the Letters of Credit
         shall be adjusted to an amount equal to the greater of: (a) that
         portion of the three-(3) months aggregate Capitation Amount that
         Network reasonably anticipates it is obligated to pay hereunder and
         under the Network Provider Agreements to Network Associated Providers
         over the subsequent three (3) month period; or (b) the amount that
         represents the total anticipated three-(3) months claims liability of
         Network for Home Health Services (based upon Network's then-current
         reference [fee] schedules) for Home Health Services rendered to Network
         Members by Network Associated Providers, all as reasonably projected by
         Network on an actuarially-sound basis and as demonstrated to Company's
         reasonable satisfaction using the prior twelve (12) months' (or such
         shorter period if this Agreement has been in effect for less than 12
         months) Home Health Services claims experience for such Network
         Associated Providers.

         In the event that the Letter(s) of Credit are delivered to Company in
         the Fully-Funded Amounts, such amounts shall be modified annually, as
         follows: The aggregate amount available to Company under the Letter(s)
         of Credit shall be adjusted to an amount equal to the greater of: (a)
         that portion of the three-(3) months aggregate Capitation Amount that
         Network reasonably anticipates it is obligated to pay hereunder and
         under the Network Provider Agreements to Network Providers over the
         subsequent three (3) month period; or (b) the amount that represents
         the total anticipated three-(3) months claims liability of Network for
         Home Health Services (based upon Network's then-current reference [fee]
         schedules) for Home Health Services rendered to Network Members by
         Network Providers, all as reasonably projected by Network on an
         actuarially-sound basis and as demonstrated to Company's reasonable
         satisfaction using the prior twelve (12) months' (or such shorter
         period if this Agreement has been in effect for less than 12 months)
         Home Health Services claims experience for such Network Providers.




                                      -12-
<PAGE>   13

         Nothing in this section 5.A shall be interpreted to restrict or limit
         Company from reasonably requiring additional increases in the Letter(s)
         of Credit amount(s) in the event that: (a) Network is not reimbursing
         Network Providers in accordance with this Agreement, and (b) Network is
         experiencing two or more consecutive quarterly deficit positions (based
         upon and defined as the amount of any then-current negative difference
         between Total Capitation Amounts paid by Company to Network and
         then-currently projected total costs in respect of the Home Health
         Services provided to Network Members by Network Associated Providers.

         Upon termination of this Agreement, Network shall maintain, subject to
         section 6.D hereof, the Letter(s) of Credit for a period of at least 13
         months after such termination. Company is hereby authorized by Network
         to draw upon the Letter of Credit on behalf of Network only under the
         circumstances described in this section 5.A. Network and Company shall
         execute all documents reasonably necessary to enable Company to perform
         such functions.

         In the event of Network's insolvency or if the Capitation Amounts then
         due to Network by Company are insufficient or unavailable to satisfy
         all Network Providers' valid, outstanding claims against Network for
         Home Health Services, Network agrees, for and on behalf of its Network
         Affiliated Providers, that such claims for payment shall be subordinate
         to such claims of Network Associated Providers for such services, but
         only to the extent that Network's available funds are insufficient or
         unavailable for Network to pay such claims of both Network Affiliated
         Providers and Network Associated Providers without any reduction,
         compromise or accord and satisfaction; and, to such extent, such
         Network Affiliated Providers' unsatisfied claims (or any unsatisfied
         portions thereof) against Network are hereby waived. Coram Healthcare
         Corporation ("Coram") shall cause each of its Affiliates providing
         services pursuant to this Agreement to delay or waive such Affiliates'
         rights to payment by Coram under each such Affiliate's Network Provider
         Agreement in accordance with the terms of this paragraph, and to cause
         such Affiliates to execute such documents and instruments Company deems
         necessary to enforce the designation of payment obligations of such
         Affiliates pursuant to the Three Party Agreement or Negative Amendment,
         as the case may be. Network and each of such Affiliates forever waive
         any claim, right or defense against Company to additional money or
         payments hereunder, except as is expressly provided in this Agreement.

     B.  Excess Loss. Network shall purchase an excess loss policy from an
         insurer reasonably acceptable to Company, effective upon the
         Implementation Date, which policy shall insure Network (and name
         Company as an additional insured) against the financial risk assumed by
         Network (less a risk corridor in a policy that is industry standard and
         as mutually acceptable to the Parties), for the provision, or the
         arranging for the provision, of Home Health Services in excess of the
         total PMPM Amount (as determined on an actuarially sound basis) for any
         calendar year. As an alternative to this Excess Loss policy, Network
         may deliver a policy or maintain adequate reserves designed to provide
         similar protection in form and substance reasonably acceptable to
         Company.

6.   TERM

     A.  This Agreement shall be effective for an initial term ("Initial Term")
         of five (5) years commencing on the Effective Date. Neither Party may
         terminate this Agreement without cause during the Initial Term, and
         this Agreement may only be otherwise terminated as set forth in this
         section 6. Thereafter, this Agreement shall renew automatically for
         one-year periods, unless terminated by either Party hereunder. Either
         Party may at its sole discretion and option terminate this Agreement at
         any time without cause by giving at least one hundred eighty (180) days
         written notice to the other Party; provided, however, that no such
         termination shall be effective during the Initial Term hereof. These
         provisions shall not be construed to terminate any rights of Network
         Providers to compensation by Network for Network Providers' services
         rendered to Network Members prior to termination, except as otherwise
         expressly provided in this Agreement.


                                      -13-
<PAGE>   14


     B.  Notwithstanding the foregoing, if any of the following events shall
         occur with respect to Network, Company shall have a right to terminate
         this Agreement immediately upon notice to Network:

         1.   The withdrawal, expiration or non-renewal of any state or local
              license, essential certificate, approval or authorization (or the
              imposition of any such license, essential certificate, approval or
              authorization which Network does not then possess) of Network
              which withdrawal, expiration or non-renewal or imposition
              materially adversely affects Network's ability to perform under
              the Agreement and which can not be resolved to the Parties' mutual
              satisfaction through restructuring the terms of this Agreement on
              substantially equivalent economic terms as if such withdrawal,
              expiration, non-renewal or imposition had not occurred.

         2.   The bankruptcy or receivership of Network, or an assignment by
              Network for the benefit of creditors.

         3.   The loss of or limitation of Network's general or professional
              liability insurance.

         4.   The debarment of Network from participation in any
              governmental-sponsored program.

         5.   The conviction of Network of any felony or crime of a moral
              turpitude.

         6.   The dissolution of Network.

         7.   The breach by Network of any of its representations set forth in
              section 1.F or the breach by Network of section 11 if there is no
              good faith dispute among the Parties that a breach of section 11
              has occurred, and if there is a good faith dispute among the
              Parties that a breach of section 11 has occurred, the dispute has
              remain unresolved for a period of ten (10) business days following
              Network's receipt of written notice describing such breach and
              after Company's documented good faith attempt to contact one of
              Network's representatives on the Operating Committee to resolve
              such dispute.

     Network shall provide immediate notice to Company of the occurrence of any
of the aforesaid events.


     C.  Notwithstanding section 6.A, if any of the following events shall occur
         with respect to Company, Network shall have a right to terminate this
         Agreement immediately upon notice to Company:

         1.   The breach by Company of any of its representations set forth in
              section 3.F;

         2.   The withdrawal, expiration or non-renewal of any state or local
              license, essential certificate, approval or authorization (or the
              imposition of any such license, essential certificate, approval or
              authorization which Company does not then possess) of Company
              which withdrawal, expiration or non-renewal or imposition
              materially adversely affects Company's ability to perform under
              the Agreement and which can not be resolved to the Parties' mutual
              satisfaction through restructuring the terms of this Agreement on
              substantially equivalent economic terms as if such withdrawal,
              expiration, non-renewal or imposition had not occurred;

         3.   The bankruptcy or receivership of Company, or an assignment by
              Company for the benefit of creditors;

         4.   The loss of or limitation of Company's general or professional
              liability insurance (such as a program of self-insurance);

         5.   The debarment of Company from participation in any governmental-
              sponsored program;

                                      -14-
<PAGE>   15


         6.   The conviction of Company of any felony that would materially
              effect or impair Company's obligations hereunder.

         7.   Except as related to section 5.A hereof, the failure by Company to
              make Capitation Amount payments when due to Network pursuant to
              section 5 and Attachment A hereof, and such failure has remained
              unresolved for a period of seven (7) business days following
              Company's receipt of written notice describing such failure and
              after Network's documented good faith attempt to contact a manager
              of Company's National Ancillary Contracts department to resolve
              such failure.

     D.  Termination By Company Upon Certain Other Events. Company may, at its
         discretion and without limiting any other remedy hereunder or at law or
         in equity, revoke the exclusivity service arrangement as to the
         Geographic Area in any Region in which any of the following may occur,
         or Company may terminate this Agreement, on ninety (90) days written
         notice in the event Network breaches any one or more of the following
         or if any of the following occurs, and (except as to (1) or (2) of this
         section 6.D), Network has failed to cure such breach or to resolve such
         occurrence to Company's reasonable satisfaction within such ninety (90)
         day period:

         1.   Member satisfaction levels among the Network Members within such
              Geographic Area have continually and materially deviated from the
              targets specified in Attachment G; or

         2.   Network has failed to maintain the Letter of Credit as required
              under section 5.A; or

         3.   Network has a provider network, at any time after the
              Implementation Date, within any given Geographic Area which is
              inadequate, in Company's reasonable determination, to provide all
              Home Health Services required under the applicable Plans to
              Network Members in any such Geographic Area.

         In addition, without limiting any other remedy or right under this
         Agreement or at law or in equity, in the event that Network has failed,
         either consistently or materially, to fulfill its obligations with
         respect to the Claims Management Services as provided in section 1.I
         hereof and the related procedures in Attachment F (or changes to such
         Attachment F of which Network has been given reasonable prior written
         notice), Company may after the Implementation Date, in its discretion
         and upon sixty (60) days prior written notice, terminate Network's
         performance under section 1.I with the remainder of this Agreement
         continuing in full force and effect with respect to all other terms and
         conditions in accordance with its terms. In the event that Company so
         terminates Network's performance under section 1.I hereof, the Parties
         shall meet and negotiate in good faith as to a mutually acceptable and
         reasonable reduction in the amount of the Letter(s) of Credit required
         to be maintained by Network pursuant to section 5.A above, which
         reduction shall be in proportion to the reduction in Company's legal
         exposure resulting from such termination of Network's performance under
         section 1.I hereof.

     E.  Termination by Company for Category I Material Events. In addition to
         any assessments under Attachment G upon the occurrence of any Category
         I Material Event (as defined in such Attachment G), Company may, at its
         discretion, in the applicable Geographic Area , take the following
         actions: (1) terminate the exclusivity arrangement; and/or (2) add
         another Home Health Services network or provider, notwithstanding the
         exclusivity arrangement herein.

     F.  Termination By Either Party for Breach of Material Obligation. This
         Agreement may be terminated by either Party in the event of a breach of
         a material term or material obligation of this Agreement by either
         Party, provided that the non-breaching Party has first given notice in
         writing and the breaching Party has not cured the alleged breach (or
         commenced actions to cure such breach) not later than sixty (60) days
         following such notice. For the purposes of this section 6.F, the
         obligations of Network under Sections 1.A, 1.B, 1.C, 1.E, 1.F, 1.I,
         1.H, 2.B, 2.C, 2.E and 2.F hereunder shall be 


                                      -15-
<PAGE>   16

         deemed to be material obligations of Network. The obligations of
         Company contained in Sections 3.A, 3.E, and 4.A hereof are deemed to be
         material obligations of Company. Such notice shall set forth the facts
         underlying the alleged breach. If such breach is cured (or such actions
         are commenced) within such 60 day period, then this Agreement shall
         continue in effect for its remaining term, subject to each provision of
         this Agreement. Neither the waiver by either of the Parties of a breach
         of or default under any of the provisions of this Agreement nor the
         failure of either of the Parties, on one or more occasions, to enforce
         any of the provisions of this Agreement, or to exercise any right or
         privilege hereunder, shall be construed as a waiver of any subsequent
         breach or default of a similar nature, or as a waiver of such rights or
         privileges hereunder.

     G.  Renegotiation/Termination Upon Certain Events and Related Disputes. In
         the event: (i) Company changes the Home Health Services applicable to
         its HMO-based Plans for which Network is obligated hereunder, and such
         changes have a material adverse financial consequence on Network (which
         consequence shall be demonstrable to Company's reasonable satisfaction)
         or there is a material financial benefit to Network as a result of such
         change (demonstrated to Network's reasonable satisfaction); or (ii)
         Company implements a change to any of its patient management policies
         and procedures applicable to Network under the terms hereof, and such
         change has a material adverse financial consequence on Network (which
         consequence shall be demonstrable to Company's reasonable satisfaction)
         or there is a material financial benefit to Network as a result of such
         change (demonstrated to Network's reasonable satisfaction); or (iii);
         independent of Company or Network efforts or actions, changes occur in
         the industry, including but not limited to regulatory changes
         (excluding licensure requirement changes), changes in technology,
         medicine or medical practices which materially change the course of
         home care services, thereby materially changing the use or cost of such
         services, therapies, treatments and there is a material financial
         benefit or detriment to either Party (demonstrated to the other Party's
         reasonable satisfaction); then the Parties shall negotiate in good
         faith for a period of forty-five (45) days as to whether to make an
         appropriate increase or decrease to the Capitation Amounts described in
         Attachment "A". If, by the end of such 45 day period the Parties are
         unable to agree on a mutually satisfactory adjustment to the Capitation
         Amount, then either Party shall request in writing (pursuant to the
         notice provisions herein) the President of each party to resolve the
         matter. If the President of each Party is unable to resolve such matter
         within thirty (30) days after the matter is referred to the Presidents,
         either Party may terminate this Agreement (but not before the process
         in this paragraph of this section 6.G.) upon one hundred-twenty (120)
         days prior written notice to the other Party. During the period
         described in this paragraph, each Party shall continue to perform each
         of its obligations under this Agreement in accordance with its terms,
         and neither party shall take any action or cause any action to be
         taken, or refrain from taking any action or from causing any action to
         be taken which has the effect of suspending or restricting the other
         Party's obligations under this Agreement, except as may be expressly
         provided otherwise in this Agreement. In no event shall Network delay,
         cease or discontinue the provision or arranging of Home Health Services
         to Network Members during any such period described in this paragraph
         or upon any other dispute among the Parties.

         During the period after Company's implementation of the proposed
         changes in section one of this section 6.G., and prior to the effective
         date of termination (or the date the parties agree to a new Capitation
         Amount, whichever shall first occur), the proposed changes, if related
         to a change in Home Health Services as provided in section 6.G(i)
         above, shall result in (and shall not exceed) payment by Company to
         Network on a fee-for-service basis at the then-current geographic
         market rate determined by Network Provider Agreements plus a network
         administration fee* until agreement on a new Capitation Amount or
         termination of this Agreement in accordance with this section 6.G. In
         the event that the Parties agree to a new Capitation Amount, the new
         Capitation Amount shall reflect, on a unit cost per patient per month
         basis, an amount which accurately reflects Network's incremental
         increase or decrease, as the case may be, of its administrative unit
         costs attributable to its management hereunder of such new Home Health
         Service (or change in same). In

         ----------------
         *Confidential Treatment Requested



                                      -16-
<PAGE>   17

         establishing such incremental increase or decrease of Network's
         incremental unit cost, per patient per month, to the extent that such
         incremental unit cost is greater than or less than the network
         administration fee paid to Network above, Company or Network,
         respectively, shall reimburse the other Party in the amount of such
         excess or shortfall, respectively. Network shall provide or arrange for
         the provision of such services to Network Members in accordance with
         the terms hereof. If there is no corresponding fee schedule amount of
         the service, Company shall develop a mutually acceptable,
         actuarially-based amount for the service. In the event the parties
         agree to an adjusted Capitation Amount within the initial 45 or 75 day
         period of this section 6.G., the new Capitation Amount shall apply
         effective, if in the case of 6.G(i), as of the first day of the month
         immediately following the month in which agreement on the new
         Capitation Amount is reached, and if in the case of section 6.G(ii) or
         6.G(iii), retroactively to the time when such 6.G(ii) or 6.G(iii)
         changes were implemented.

7.   CONFIDENTIALITY

     Company and Network agree that they shall treat the terms of this
     Agreement, and any correspondence, reconciliation or other communication
     relating to payment under this Agreement, as confidential information and
     shall not disclose the terms of this Agreement to any third party without
     the prior written consent of the other party, except as required by law.
     Neither Company nor Network shall disclose any proprietary or confidential
     business information to a third party, other than to Network Providers,
     Network's or Company's lenders as of the Effective Date or excess loss
     insurance providers. Any other disclosures of such information, other than
     to sources related to Network's financing (debt or equity) or legal
     disclosure requirements, each of which disclosures by Network requires
     Company's prior written consent, not to be unreasonably withheld or
     delayed), including but not limited to disclosures to any outside attorney,
     consultant or advisor representing the parties in connection with the
     negotiation of this Agreement (who shall agree to abide by this
     confidentiality provision), requires execution by such parties of the
     Confidentiality Agreement attached hereto as Attachment H, and the express
     written consent of the Party whose information is to be disclosed not be
     unreasonably withheld, qualified or delayed. For purposes of this
     Agreement, the term "proprietary or confidential business information" will
     include internal business practices and business records, including but not
     limited to, information concerning products, pricing, contracts, or
     business methods, in any form whatsoever, but not including information
     otherwise readily available to the public or information generally and
     reasonably understood by the parties to be non-confidential.

     Network agrees that in addition to its obligations to maintain "proprietary
     or confidential business information" as set forth in this Section 7,
     Network shall ensure that any information related to a Member under this
     Agreement which discloses data by which individual patients can be
     identified is to be kept strictly confidential in accordance with all state
     and federal laws regarding, among other things, the confidentiality of
     patient records, and shall not be released (except pursuant to a duly
     executed patient release, or pursuant to a court order, subpoena or
     appropriate request from any regulatory agency with competent
     jurisdiction). In the event of such a court order, subpoena or appropriate
     request from a regulatory agency, unless prohibited by law, Network will
     provide Company prior written notification prior to releasing such
     information or records so that Company may seek a protective order or other
     remedy at Company's expense.

     Company and Network agree that disclosure of information in violation of
     this Section would cause injury to the other not adequately compensable by
     money damages. Accordingly, in addition to, and not in limitation of its
     rights, either party shall be entitled to a permanent injunction in order
     to prevent or restrain any breach (by the other party or any person acting
     directly or indirectly for the other party) of such party's obligations set
     forth in this Section 7. Both Parties also agree to waive any right such
     Party may have to a jury trial concerning only the enforcement of the
     obligations set forth in this Section, but expressly reserve such right as
     to any other matter or dispute arising in connection with this Agreement.




                                      -17-
<PAGE>   18

8.   RESTRICTIVE COVENANTS

     A.  During the term of this Agreement and for a period of twelve (12)
         months following the termination of this Agreement, Network agrees that
         it and its Affiliates shall not directly or indirectly, enter into or
         engage in the ownership, management, operation, or control of, or act
         as a consultant or advisor to any existing or proposed entity operating
         or planning to operate a health maintenance organization, or other
         health insurance or benefits business (collectively, a "Health
         Insurer"). In the event Network hereafter acquires a provider group
         that owns a Health Insurer, Network agrees to make good faith efforts
         to structure such acquisition so as not to become an owner (directly or
         indirectly) of such Health Insurer prior to the consummation of such
         acquisition. Network agrees that it shall not during the term of this
         Agreement actively promote any health plan or insurer competitive with
         Company and further agrees that it shall not cooperate with or assist
         in any marketing or other activity that is intended to or is likely to
         have the effect of soliciting or recruiting members for any other
         health plan or insurer competitive with Company, except that Network
         may advertise that it is a participating provider in such plans. During
         the term of this Agreement and for a period of twelve (12) months
         following the termination of this Agreement, Network shall not,
         directly or indirectly, advise, counsel or solicit to any Network
         Associated Provider to terminate its provider agreement with Company in
         the Regions; provided, however, the foregoing provision, shall not be
         construed to limit or impair, in any manner whatsoever, Network's right
         to inform Network Providers of the opportunity to participate in
         arrangements negotiated by Network with other payors on such Provider's
         behalf.

         Notwithstanding the foregoing, this provision shall not be construed to
         prohibit or in any manner limit Network, at any time during or after
         the term hereof, from soliciting or entering into direct contracts with
         self-insured groups on a fee-for-service or other basis to provide or
         arrange for the provision of Home Health Services to the group's
         members/employees, so long as such groups are not then current
         customers of Company and so long as (during the term of this Agreement)
         Network provides Company thirty (30) days prior written notice of
         Network's intent to solicit such business (or such shorter notice if
         Network is required, due to no action or request on its part, to
         respond to such group in less than thirty days, in which case Network
         shall provide Company such notice as is reasonably practicable); and
         Network discusses with Company in good faith the feasibility of
         approaching such group on a joint Network/Company basis for the
         provision and administration of the delivery of such services. If, by
         the end of such thirty (30) day period (or such shorter period as may
         occur in the immediately preceding sentence), the Parties are unable to
         agree in good faith as to a mutually acceptable arrangement for the
         joint delivery and administration of such services to such group,
         Network shall thereafter be free to individually solicit and contract
         with such group. Notwithstanding anything to the contrary herein,
         Network shall not solicit Company's then-current customers or counsel
         or advise, directly or indirectly, Payors, Sponsors or other entities
         then under contract with Company to cancel, modify, or not renew said
         contracts.

     B.  Rights of First Offer/Refusal. In the event that, on or prior to the
         fifth anniversary of the Effective Date, Network (through its executive
         management or designee) enters into discussions with, or solicits
         offers, proposals, letters of interest or bids for (in whole or in
         part) or enters into any arrangement or transaction for the sale of all
         or substantially all of its assets or stock, or that involves
         substantially all the assets or stock or the business of Network,
         whether through an affiliation, joint venture, merger or consolidation,
         to or with a Company Competitor, Network shall give written
         notification to Company as soon as practicable but in any event, prior
         to the consummation of active discussions or negotiations, and prior to
         the execution of a letter of intent, or definitive agreement with
         respect to such arrangements or transactions, and Network shall solicit
         Company's offer, proposal, letter of interest or bid on the same terms
         and in the same manner as required of or by such other entities prior
         to Network entering into any definitive agreement with any such entity
         for such discussions, arrangements or transactions, and Company shall
         respond with its intentions, but is not so obligated, to Network's
         notice within fifteen (15) days of Company's receipt of same. In the
         event that Company does not so respond, Network's obligations hereunder


                                      -18-
<PAGE>   19

         as to the discussions, arrangements or transactions under consideration
         at the time Network's notice to Company was issued, shall be deemed
         fulfilled hereunder. In the event Network has complied with this
         section 8.B, this section 8.B. shall not be construed to require
         Network to enter into a definitive agreement with Company on the same
         or similar terms as such other entity.

      C.   Change in Control.

         (1)  Except as prohibited by law, during the term of this Agreement
              Network agrees that it shall use reasonable efforts to provide to
              Company prompt written notice before public announcement of any
              transaction that results in the change of control or ownership of
              Network or a sale of substantially all of Network's assets
              ("Change of Control Transaction") and in no event less than thirty
              (30) days prior to the consummation of such Change of Control
              Transaction. Network shall promptly notify Company upon such
              Change of Control Transaction.

              Company reserves the right to terminate this Agreement any time
              prior to the consummation of such Change in Control Transaction,
              or within ninety (90) days following the consummation of a Change
              of Control Transaction only if such Change of Control Transaction
              is likely to result in (i) Company being under contract to an
              entity that has been barred from participation in the Medicare
              Program; or (ii) Company being under contract with a Company
              Competitor

         (2)  Except as prohibited by law and except for possible transactions
              announced prior to the Effective Date, during the term of this
              Agreement Company agrees that it shall use reasonable efforts to
              provide to Network prompt written notice before public
              announcement of any transaction that results in the change of
              control or ownership of Company or a sale of substantially all of
              Company's assets ("Change of Control Transaction"), and in no
              event less than thirty (30) days prior to the consummation of such
              Change of Control Transaction. Network reserves the right to
              terminate this Agreement any time prior to or within ninety (90)
              days following the consummation of a Change of Control
              Transaction, only in the following circumstances: such Change of
              Control Transaction results or is likely to result in (i) Network
              being under contract to an entity that has been barred from
              participation in the Medicare Program; or (ii) Network being under
              contract with an entity competitive to Network's business
              (provided, however, that the activities permitted under section
              8.A hereof shall not be deemed to be Network's business for the
              purposes of this section 8.C(2)(ii).

9.   COOPERATION OF THE PARTIES/RELATIONSHIP OF THE PARTIES

     A.  Network and Company will maintain an effective liaison and close
         cooperation with each other to provide maximum benefits at reasonable
         costs to Members consistent with applicable standards of medical
         practice, provided that nothing in this section 9.A shall be construed
         to alter or amend Network's express rights or obligations herein.
         Network and Company will use their reasonable best commercial efforts
         to comply with each other's administrative policies and procedures,
         including those related to the delivery of medical services and will
         keep and make available (except to the extent prohibited by applicable
         law, rule or regulation), such medical, financial and other records as
         each Party requires to fulfill its obligations under this Agreement.


     B.  Company will provide copies of relevant Company policies and procedures
         and updates which are necessary for Network to perform its obligations
         hereunder, including, but not limited to, all applicable patient
         management and utilization management policies and procedures, benefit
         Plans, eligibility data and disease management programs. Subject to the
         terms of section 6.F., Network shall be bound only by those Company
         policies and procedures and updates of which Network has received a)
         not less than 30 days prior written notice or b) through direct
         communications from or by the Operations Committee.

                                      -19-
<PAGE>   20

     C.  Each Party will exchange such financial information, Member
         demographics, encounter and clinical data reasonably necessary for the
         other Party to perform its obligations under this Agreement. Such
         information will be exchanged electronically, to the extent feasible to
         both Parties.

     D.  Each Party will be given, by the other Party, the good faith
         opportunity to participate in the development of new clinical programs
         related, in either Party's reasonable determination, to the obligations
         of either Party.


     E.  Indemnification. Network agrees to indemnify and hold Company, its
         officers, employees and agents harmless from any claims, demands, loss,
         liability, damages, costs and expenses (including reasonable attorney's
         fees and including any sanctions, fines or fees from a regulatory
         agency as a result of Network's failure to fulfill its obligations
         under Sections 1.I and 2.C of this agreement) made or incurred by
         Company through no fault of Company in connection with any threatened
         or proposed action, suit, proceeding, demand, assessment or judgment
         arising from and directly attributable to the acts and omissions of
         Network in its performance of its obligations under Sections 1.I and
         2.C hereof. Company agrees promptly to notify Network in writing of any
         claim or the commencement of any action against Company that could give
         rise to a claim for indemnification by Company hereunder.

         In the event that litigation or a proceeding is commenced by any third
         party against Company and such litigation or proceeding gives rise to a
         claim for indemnification (under the terms of this Section 9.E) and
         counsel for Company reasonably - in the exercise of utmost good faith
         recommends the defense, settlement of or compromise with respect to
         such litigation or proceeding, Company shall have communicated such
         defense, settlement or compromise to Network and Network shall have the
         right to give its prior reasonable consent (such consent not to be
         unreasonably withheld, qualified or delayed) to such defense,
         settlement or compromise. In the event that Network does not consent to
         such defense, settlement or compromise, Network shall have the
         discretion - to be exercised in the utmost good faith - to defend,
         settle, compromise or otherwise direct such litigation or proceeding,
         including without limitation the right to assume the defense of
         Company. In the event that Network elects to direct, defend, settle or
         compromise such litigation or proceeding, the parties shall sever any
         then-existing joint defense arrangement and Network shall assume the
         direction, defense, settlement or compromise of such litigation or
         proceeding and, from such point forward, Network shall bear all
         expenses, costs and settlements, judgments or compromises related to
         the same of the assumed litigation or proceeding. Notwithstanding the
         foregoing, prior to any offer, settlement or compromise, relating to a
         matter for which Company may be liable and which is severable from
         Network's obligation to indemnify hereunder, Company shall have the
         right to give its prior reasonable consent (such consent not to be
         unreasonably withheld, qualified or delayed) to such offer, settlement
         or compromise.

         In the event that Company directs any such litigation or proceeding, or
         proposes an offer, settlement or compromise of the same, and such
         litigation or proceeding gives rise to a claim for indemnification
         under this Section 9.E, prior to communicating to or agreeing with such
         third party any offer, settlement or compromise, Company shall be
         obligated to obtain Network's prior reasonable consent (such consent
         not to be unreasonably withheld, qualified or delayed) to such offer,
         settlement or compromise.

         Notwithstanding anything to the contrary in this Section 9.E, in the
         event of a claim for indemnification under this Section 9.E, Network
         and the Company jointly and in good faith shall explore retaining
         common counsel to protect the interests of each of Company and Network,
         except in the case of a conflict between the Parties or if in the
         judgment of common counsel preservation of the attorney-client
         privilege is or likely would be jeopardized. In the event that common
         counsel is so retained, such common counsel shall defend the claim,
         action or proceeding pursuant to the joint, good faith instructions of
         Company and Network.


                                      -20-
<PAGE>   21


         Nothing in this Section 9.E is intended to limit or reduce, nor shall
         it have the effect of limiting or reducing, either Party's rights and
         remedies under this Agreement, at law or in equity.

         None of the provisions of this Agreement is intended to create, nor
         shall be deemed or construed to create, any relationship between the
         parties hereto other than that of independent entities contracting with
         each other hereunder solely for the purpose of effecting the provisions
         of this Agreement. Neither of the parties herein, nor any of their
         respective employees, shall be construed or represent themselves to be
         the agent, employee, servant, employer or representative of the other.
         This Agreement is not a joint venture between the parties.


10.  AGREEMENT ADMINISTRATION

     The parties shall designate Operating Committees to oversee the operation
     of this Agreement and the related provider contracts. The Operating
     Committees shall consist of equal numbers of representatives from each
     party. The Operating Committees shall meet , commencing on the
     Implementation Date, with the frequency described and shall consider those
     issues and items listed in Attachment J hereof.

11.  ASSIGNMENT

     This Agreement shall not be assignable or transferable, in whole or in
     part, by Network without the prior written consent of Company, its
     successors or assigns, which consent shall not be unreasonably withheld,
     qualified or delayed. For the purposes of this paragraph only, and
     disregarding any possible contrary construct or interpretation, an
     assignment or transfer by Network shall include, but not necessarily be
     limited to: (a) the sale or transfer of (i) capital stock or comparable
     equity interests of Network, (ii) controlling voting interests in Network,
     (b) operation of law in connection with a merger or consolidation of
     Network, (c) the sale of all or substantially all of the assets of Network,
     or (d) any other similar transaction or disposition by or involving
     Network. Nothing in this paragraph shall be construed to limit or prohibit
     any single transaction by Network involving its affiliates only, the sole
     result of which is an internal restructuring or recapitalization by
     Network.

     This Agreement may be assigned or transferred by Company to an Affiliate or
     to a successor in interest, regardless of the form of transaction, or
     pursuant to a transaction whereby Company or its Affiliates sell, are
     acquired by, or merge or consolidate with, another entity; provided,
     however, that if, as a result of such sale, merger or consolidation of an
     HMO Affiliate to or with a third-party successor in interest, Company will
     no longer operate any Plan for Network Members of such HMO Affiliate,
     Company shall provide Network with written notice of such sale, merger or
     consolidation of such an HMO Affiliate to such third-party successor in
     interest prior to the consummation of such sale, merger or consolidation,
     and Network shall, at its sole discretion, have the right to not have this
     Agreement apply with respect to such Plan.

12.  EXCLUSIVE RELATIONSHIP. During the term of this Agreement, the Parties
     shall have an exclusive relationship in the Regions for Network Members.
     Except as expressly provided otherwise in this Agreement and except with
     respect to those Members enrolled in Company's HMO-based Plans serviced by
     an IDS which is at risk for providing the Home Health Services, Members on
     the Aetna Health Plan of Southern New England license and subsequent
     Members acquired or encumbered by Company as a result of an acquisition,
     merger or other transaction closed after the Effective Date and imposing an
     obligation inconsistent with the Network Member arrangement under this
     Agreement, neither Company nor its Affiliates shall enter into any
     agreement, whether oral or in writing, directly or indirectly, for the
     provision of Home Health Services to Members in the Regions with any
     organization or provider other than by or through Network, except
     agreements, which as a result of acquisition merger or other transaction
     impose obligations inconsistent with this Agreement. The Parties understand
     and acknowledge that the immediately preceding sentence shall not be
     interpreted to prohibit or limit



                                      -21-
<PAGE>   22

     Company with respect to a potential acquisition by Company or Company's
     parent, of the health business of New York Life Inc., known as "NYLCare"
     and Network acknowledges that, to the extent that NYLCare members become
     Company Members, but such Members are subject to an obligation or
     encumbrance inconsistent with the exclusivity provisions of this Agreement,
     such Members may not (at Company's election) be considered Network Members
     for the purposes of this Agreement, and Network agrees that Company is
     under no obligation to deal exclusively with Network for such members,
     provided that, upon the expiration or other termination of such obligations
     or encumbrances during the term of this Agreement, such Members shall
     automatically be considered Network Members under the terms and conditions
     of this Agreement. Without limiting the foregoing and without limiting in
     any way the Performance Standard remedies if Home Health Services to
     Network Members are not available from Network Providers, Company may
     contract directly with an alternate provider of such services; provided
     that, Company gives Network sixty (60) days prior written notice of the
     need for such services and Network does not, within such time, recruit
     Network Provider(s) able to perform such services and who otherwise meet
     Company's applicable participation criteria set forth in Attachment D.
     Notwithstanding anything contained herein above to the contrary, Network
     acknowledges that Company has entered into at-risk arrangements with the
     hospital systems, providers and integrated delivery systems ("IDS")
     pursuant to which such systems/providers have agreed to assume all or part
     of the financial risk associated with the delivery of Home Health Services
     to Members in the Regions who have selected a primary care physician who is
     a member of such provider/systems as his/her primary care physician. The
     parties agree that such arrangements shall not be deemed a breach of this
     Section. In the event Company wishes to add additional at-risk groups
     during the term of this agreement, nothing in this Section 12 is intended
     to restrict Company's ability to do such; provided however, Company agrees:
     a) to provide Network upon the Effective Date with a listing of such IDS as
     of the Effective Date, b) to communicate to Network on an ongoing basis
     such listings of IDS as may be added throughout the term of this Agreement;
     c) to act in good faith as a liaison between Network and all existing and
     additional at-risk groups, and to use its best commercial efforts in
     assisting Network in developing a participation arrangement between such
     at-risk group(s) and Network consistent with the terms of this Agreement.
     All of the above communication and actions in the immediately preceding
     sentence shall occur and be conducted through the Operating Committee.

13.  SEVERABILITY

     Without limiting sections 6.B(1) and 6.C(2) hereof, if any part of this
     Agreement should be declared unenforceable or void, the remaining
     provisions herein shall continue to have full force and effect so long as
     the rights and obligations of the parties, including financial obligations,
     continue to be substantially consistent with the original terms of the
     Agreement; provided however, that if federal or state laws, rules or
     regulations prohibit payment to Network on the basis pursuant to Attachment
     A, payment shall be made by Company to Network on a fee-for-service basis
     according to the provisions in Attachment K hereof, on substantially
     equivalent economic terms as if such withdrawal, expiration, non-renewal or
     imposition had not occurred, within 30 days of Network's submission to
     Company of claims for Covered Home Health Services for payment after such
     federal or state laws, rules or regulations have gone into effect.

14.  ENTIRE AGREEMENT

     This Agreement (including all exhibits, Schedules and Attachments hereto,
     which are hereby incorporated by reference herein and all Company
     Participating Provider Agreements and all Network Provider agreements
     related to this Agreement) constitutes the entire understanding of the
     parties hereto and no changes, amendments, waivers or alterations shall be
     effective unless signed by both parties. In the event the terms and
     conditions of this Agreement are inconsistent with the terms and conditions
     of any Attachment and/or Schedule and or Provider Agreement hereto, the
     terms and conditions of this Agreement shall govern.


                                      -22-
<PAGE>   23

15.  NOTICES

     Any notice required to be given pursuant to the terms and provisions hereof
     shall be in writing and shall be effective when sent by certified or
     registered mail, or overnight or same-day courier to Network at:

                  Coram Healthcare Corporation
                  1125 17th Street, Suite 2100
                  Denver, CO  80202
                  Attention: Contracts and Pricing Department
                  With a copy to:  General Counsel

     and to Company at:

                  Aetna U.S. Healthcare
                  980 Jolly Road
                  Blue Bell, PA 19422
         Attention:  National Ancillary Contracting Department
         cc:  Chief Legal and Regulatory Officer



16.  AFFIRMATIVE ACTION

     Company is an Equal Opportunity Employer which maintains an Affirmative
     Action Program. The parties shall comply with Executive Order 11246, the
     Vietnam Era Veterans Readjustment Act of 1974, the Drug Free Workplace Act
     of 1988, the Vocational Rehabilitation Act and similar legislation in
     transactions relating to any government contract. Network further agrees to
     ensure that applicants are employed, and that employees are treated during
     employment, without regard to their race, color, religious creed, ancestry,
     national origin, sex, sexual orientation or disability.

17.  NON-DISCLOSURE

     The terms and conditions herein shall be treated by the parties as strictly
     confidential. Accordingly, the Parties agree not to disclose, directly or
     indirectly, this Agreement or the terms and conditions herein, including
     but not limited to all schedules and financial terms, to any third party,
     other than financing sources (debt or equity)except to carry out or enforce
     the terms and conditions of this Agreement. The Parties agree that the
     breach or prospective breach of this provision will cause irreparable harm
     for which money damages may not be adequate. The Parties therefore agree
     that in addition to any other remedies, the non-breaching party shall be
     entitled to injunctive or other equitable relief to restrain the breach
     hereof. This provision shall not apply to:

     A.  Disclosures required by law, provided such disclosure is limited to the
         extent required by law; or

     B.  disclosures to professionals, including but not limited to accountants
         and attorneys, retained by each party to carry out its ordinary
         business activities; or

     C.  information that is within the public domain and which each party
         learns of through the public domain at the time of disclosure, or was
         previously known to the disclosing party, or is or becomes publicly
         available without breach of this Agreement, or is received from a third
         party holding such information legally and having the legal right to
         disseminate it without breach of this Agreement by such disclosing
         party, or is disclosed by the disclosing party with the written
         approval of the other party.


                                      -23-
<PAGE>   24

18.  INDEPENDENT CONTRACTORS. None of the provisions of this Agreement is
     intended to create, nor shall be deemed or construed to create, any
     relationship between the parties hereto other than that of independent
     entities contracting with each other hereunder solely for the purpose of
     effecting the provisions of this Agreement. Neither of the parties herein,
     nor any of their respective employees, shall be construed or represent
     themselves to be the agent, employee, servant, employer or representative
     of the other. This Agreement is not a joint venture between the parties.

19.  GOVERNING LAW. This Agreement shall be governed by the laws of the State of
     Delaware.

20.  COMPLIANCE WITH LAW. The Parties agree to comply with all applicable
     federal and state laws and all other ordinances, regulations, orders and
     codes related to this Agreement and the services to be provided hereunder,
     including, but not limited to statutes and regulations related to fraud,
     abuse, discrimination, disabilities, confidentiality, self-referral, false
     claims and prohibition of kick backs.

21.  KEY PERSONNEL. Between the Effective Date and the Implementation Date,
     Network must receive Company's prior written consent, not to be
     unreasonably withheld, for replacements for the key Network staff who are
     dedicated to implementing this Agreement, as identified on the attached
     Attachment L.

22.  ADDITION OF AFFILIATES. Subject to the terms of section 6.G, in the event
     that Company wishes to add to its Affiliates under the terms of this
     Agreement, Company shall provide Network with reasonable prior written
     notice of the acquisition with respect to Network Members of any entity
     which will become an Affiliate of Company, together with any information
     necessary for Network to perform its obligations under this Agreement with
     respect to such Network Members. In the event that Company adds an
     Affiliate after the Implementation Date hereof, and Company can not
     implement the Capitation Amount payment arrangement under Attachment A
     hereunder with respect to such Affiliate, then until such time as Company
     can pay the Capitation Amounts under Attachment A with respect to such
     Affiliate, all the terms of this Agreement apply with respect to Home
     Health Services relating to such Affiliate, with the exception that payment
     to Network relating to such Affiliate shall be in accordance with
     Attachment K, on substantially equivalent economic terms as if such payment
     had been in accordance with Attachment A hereof.


23.  NEW YORK IPA AGREEMENT. The Parties acknowledge and agree that all payments
     due to Network pursuant to section 5 and Attachment A hereof with respect
     to Network's services and Home Health Services rendered to or for Network
     Members enrolled in Company's New York HMO Affiliate, shall be made by
     Company in accordance with the terms herein and shall be paid directly to
     Network's New York affiliate, Coram Independent Practice Association, Inc.,
     or its lawful designee ("IPA") (at the address specified in advance by
     Network to Company), in complete satisfaction of Company's payment
     obligations with respect to such Network Members hereunder. The parties
     acknowledge and agree that, notwithstanding anything to the contrary
     herein, or notwithstanding anything pursuant to the New York IPA Agreement
     in Attachment M between IPA and Company or by virtue of New York state law
     or regulation, the Parties shall be obligated under this Agreement as if
     such new York IPA Agreement did not exist. The Parties shall conform the
     form of agreement in Attachment M to be consistent with this Agreement in
     all material respects, to the extent that such modifications do not require
     filing such agreement with the New York Department of Health.

24.  SURVIVAL OF TERMS. Except as expressly provided otherwise herein, the
     rights and obligations in this Agreement shall survive termination or
     expiration of this Agreement.

25.  DEFINITIONS

     When used in this Agreement, all capitalized terms shall have the following
meanings:



                                      -24-
<PAGE>   25

     A.  Affiliate. means, when used with respect to Company or Network, any
         corporation, partnership or other legal entity directly or indirectly
         owned or controlled by, or which owns or controls, or which is under
         common ownership or control with Company or Network, as the case may
         be.

     B.  Company Competitor means, for the purposes of sections 8.B, 8.C(1) and
         8.C(2), and only for the purposes of sections 8.B, 8.C(1) and 8.C(2),
         an entity that operates a health maintenance organization or other
         entity engaged in the business of insurance or benefits management
         programs or services, except that such term for such sections does not
         refer to an entity whose primary business is the provision and/or the
         provision and arranging for the provision of health care services.

     C.  Geographic Area shall have the meaning ascribed to such term in the
         description of "Category II" of the Performance Standards hereof.

     D.  HMO Based Plans. means those Company underwritten health benefit Plans
         issued pursuant to Company's applicable state HMO license, which
         include the following: Company HMO, Medicare Risk and Point of Service
         (including but not limited to Company's "QPOS") products.

     E.  Home Health Network. means Network's network of home health providers
         organized to provide or arrange for the provision of Home Health
         Services to patients.

     F.  Home Health Services. Those Medically Necessary services which are to
         be provided to Network Members under the terms and conditions of the
         group master contract or insurance policy for the applicable Plan and
         which are listed on Attachment A. When used with respect to individuals
         not Network Members, such term is intended to describe those services
         described in Attachment A.

     G.  Medically Necessary Services shall be as defined in the group master
         contract or insurance policy for the applicable Plan.

     H.  Member. A person who is currently enrolled in a Plan.

     I.  NCQA. The National Committee for Quality Assurance, its successor or
         such other health care accrediting organization designated by Company
         and approved by Network in writing.

     J.  Network Affiliated Provider. A Home Health Services provider or
         facility employed or owned or controlled by the Network or other entity
         affiliated with the Network in the delivery of Home Health Services and
         who is also a Participating Provider. A list of these providers is
         provided in Attachment "B".

     K.  Network Associated Provider. A Home Health Services provider or
         facility involved in the delivery of Home Health Services which is
         under contract with Network to provide or arrange for the provision of
         Home Health Services and who is also a Participating Provider.

     L.  Network Member Shall mean those Members enrolled in Company's HMO-based
         Plans not serviced by an IDS which is at risk for providing the Home
         Health Services, and excluding those Members on the Aetna Health Plan
         of Southern New England license and subsequent Members acquired or
         encumbered by Company as a result of an acquisition, merger or other
         transaction imposing an obligation inconsistent with the Network Member
         arrangement under this Agreement, after the Effective Date.

     M.  Network Provider. A Network Affiliated Provider or a Network Associated
         Provider.

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<PAGE>   26


     N.  Participating Provider. Any Network Provider who has entered into and
         continues to have a current valid contract with Company to provide Home
         Health Services to Members. Such Providers may also be referred to
         herein as "Network Providers", as such term is defined herein.

     O.  "Payment Fund" means that fund, as described in Attachment A, for the
         purpose of providing Company a source (but not an exclusive source) for
         obtaining reimbursement for the Total Company Direct Payments.

     P.  Performance Standard or Performance Standards. Those standards
         identified in Attachment G hereof.

     Q.  Plan. Each health benefit plan offered, issued or administered by
         Company.

     R.  "PMPM" means per Member per month.

     S.  "PMPM Payment Rates" means the PMPM amounts specified in Attachment A
         and subject to adjustments or modifications as set forth in Attachment
         "A" in accordance with the terms of this Agreement.

     T.  Regions means Company's Northeast and Mid-Atlantic Regions, which
         include all of Company's existing and future service areas in the
         States of NY, NJ, PA, DE, CT, NH, MA and RI. Company's service areas in
         the Regions as of the Effective Date include the following:

                         NY:
                         NJ:
                         PA:
                         DE: [List of Applicable Counties appears in Exhibit 1]
                         CT:
                         NH:
                         MA:
                         RI:

     U.  "Total Company Direct Payments" means, with respect to each calendar
         year or partial calendar year hereunder and excluding the aggregate
         payments made or credited by Company to Network at the PMPM Payment
         Rates for the applicable period, the total payments made by Company to
         any and all providers in respect of Home Health Services furnished to
         Network Members after the Implementation Date for which Network is
         financially responsible under this Agreement.




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