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                                                                   EXHIBIT 10.04


                                 AMENDMENT NO. 1
                             TO EMPLOYMENT AGREEMENT



         THIS AMENDMENT NO. 1 dated as of the 30th day of June, 1998 (this
"Amendment"), amends that certain Employment Agreement dated as of October 13,
1995 (the "Employment Agreement"), between Coram Healthcare Corporation, a
Delaware corporation (the "Company"), and Donald J. Amaral ("Executive"), and is
made and entered into with reference to the following facts (all capitalized
terms not otherwise defined herein have the respective meanings set forth in the
Employment Agreement):

         WHEREAS, the Company and Executive desire to extend the Employment
Period and to increase the Base Salary payable to Executive; and

         WHEREAS, the Company and Executive desire to amend the Employment
Agreement to provide for the payment of a success bonus upon the successful
consummation of a refinancing of the Company's outstanding subordinated debt or
an acquisition of the Company, all on the terms and conditions hereinafter set
forth; and

         WHEREAS, the Company and Executive desire to amend the Employment
Agreement to provide for the payment of an acquisition bonus upon the
consummation of certain transactions; and

         WHEREAS, the Company and Executive desire to amend the Covenant not to
Compete; and

         WHEREAS, the Company has determined to grant Executive options to
purchase an additional 300,000 shares of the Company's Common Stock.

         NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereby agree as follows:

1.       Amendments to Employment Agreement.

         1.1. The first sentence of paragraph 3(a) is hereby amended in its
entirety to read as follows:

                           (a) Executive's base salary (the "Base Salary") shall
                  initially be $600,000 per annum, shall be increased to
                  $650,000 per annum on and as of May 16, 1997, and shall be
                  payable in cash and in accordance with the Company's general
                  payroll practices.

         1.2. Paragraph 3(a) is hereby further amended by changing the date
"June 30" to "April 30" in both places where it appears.

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         1.3. The first grammatical paragraph of paragraph 3(c) is hereby
amended in its entirety to read as follows:

                           (c) Executive shall be granted options as of October
                  13, 1995 to purchase 2,200,000 shares of Common Stock of the
                  Company (the "Option Shares") at a price equal to the average
                  closing price of the Common Stock on the New York Stock
                  Exchange in the five days immediately preceding October 12,
                  1995. An aggregate of 1,400,000 of the Option Shares shall be
                  granted to Executive under the Company's 1994 Stock
                  Option/Stock Issuance Plan (the "Plan") and the remaining
                  800,000 Option Shares shall be granted to Executive outside of
                  the Plan. In addition, Executive shall be granted additional
                  options (the "Additional Options") as of June 2, 1997 to
                  purchase an additional 300,000 shares of the Company's Common
                  Stock (the "Additional Option Shares") at a price of $2.625
                  per share. The Additional Options shall be granted to
                  Executive under the Plan. The Options and the Additional
                  Options (collectively, the `Options") will vest if Executive
                  is then employed by the Company and become exercisable by
                  Executive as to 33-1/3% of each of the Option Shares and the
                  Additional Option Shares (collectively, the "Shares") covered
                  thereby respectively on each of the first, second and third
                  anniversaries of the respective grant dates thereof, and will
                  vest as to 100% of the Shares upon: (i) a Change in Control
                  (as defined below); (ii) any termination by the Company of
                  this Agreement other than a termination by the Company for
                  Cause (as defined below); (iii) any termination by Executive
                  pursuant to paragraph 5(a)(ii) hereof; or (iv) if the
                  Employment Period is terminated as a result of Executive's
                  death or permanent Disability (as defined below).

         1.4. Paragraph 3(c) is hereby further amended by deleting the entire
paragraph following the words "For purposes of this Agreement, a Change in
Control of the Company shall be deemed to have occurred if" and substituting the
following:

                           (i) any person or group (within the meaning of Rule
                  13d-5 of the SEC as in effect on the date hereof) other than
                  the Senior Subordinated Noteholders pursuant to the SEA (as
                  hereinafter defined) or a group composed principally thereof
                  shall own directly or indirectly, beneficially or of record,
                  shares representing 30% or more of the aggregate ordinary
                  voting power represented by the issued and outstanding capital
                  stock of the Company;

                           (ii) during any period of two consecutive years,
                  individuals who at the beginning of such period constituted
                  the Company's Board of Directors (together with any new
                  directors whose election to the Company's Board of Directors
                  or whose nomination for election to the Company's Board of
                  Directors by the Company's shareholders was approved by a vote
                  of at least two-thirds of the Company's directors then still
                  in office who either were directors at the beginning of such
                  period or whose election or nomination for election was
                  previously so approved) together with any individual serving
                  during such period as a member of the Company's Board of
                  Directors designated pursuant to the Security Exchange
                  Agreement dated May 6, 1998 (the "SEA") cease for any reason
                  to constitute a majority of the Company's directors then in
                  office;


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                           (iii) any change in control with respect to the
                  Company, Coram, Inc. or any subsidiary (or similar event,
                  however denominated) shall occur under and as defined in any
                  agreement in respect of indebtedness other than capital lease
                  obligations (as defined in the SEA) to which the Company,
                  Coram, Inc. or any subsidiary is party;

                           (iv) the Company shall cease to own and control
                  directly, of record and beneficially, 100% of each class of
                  outstanding capital stock of Coram, Inc. free and clear of all
                  liens, other than as a result of the exercise of the warrants
                  issued to the lenders under the Credit Agreement dated April
                  6, 1995; or

                           (v) Coram, Inc. shall cease to own and control
                  directly, of record and beneficially, 100% of each class of
                  outstanding capital stock of each of T2 Medical, Inc.,
                  Curaflex Health Services, Inc. and Coram Resource Network,
                  other than as a result of the exercise of the warrants issued
                  to the lenders under the Credit Agreement dated April 6, 1995.

         1.5. New paragraph 3(d) which reads as follows is hereby added:

                           (d) In addition to the Base Salary and any bonuses
                  payable to Executive, Executive shall be entitled to receive a
                  success bonus ("Success Bonus") of $1,000,000 upon the
                  consummation of a Refinancing (as hereinafter defined) of the
                  Company's outstanding subordinated debt originally payable to
                  an affiliate of Donaldson, Lufkin & Jenrette Securities
                  Corporation ("DLJ") pursuant to that certain Securities
                  Purchase Agreement dated as of April 6, 1995 among Coram,
                  Inc., as Issuer, Coram Funding, Inc., as Purchaser, and the
                  Company, as amended (the "DLJ Debt"). The Company shall pay
                  the Success Bonus to Executive in two equal $500,000
                  installments, the first of which shall be payable concurrently
                  with the consummation of the Refinancing and the second of
                  which shall be payable on the six month anniversary of
                  consummation; provided, however, that if prior to such six
                  month anniversary, this Agreement is terminated by the Company
                  for Cause (as defined below) or as a result of Executive's
                  resignation other than pursuant to Paragraph 5(a)(ii) hereof,
                  Executive shall not be entitled to receive the second
                  installment of the Success Bonus. The parties acknowledge that
                  the payment of a Success Bonus upon consummation of a
                  Refinancing is required by actions of the Board taken on
                  August 8, 1996 and October 18, 1996. For purposes of this
                  Agreement, the term "Refinancing" shall mean the replacement
                  of the DLJ Debt with new debt which has terms acceptable to
                  the Board. The SEA with the present holders of the DLJ Debt,
                  if consummated, shall constitute a Refinancing.


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         1.6. New paragraph 3(e) which reads as follows is hereby added:

                           (e) In addition to the Base Salary and any bonuses
                  payable to Executive hereunder, Executive shall be entitled to
                  receive an acquisition bonus ("Acquisition Bonus") of
                  $4,000,000 to be paid as provided below upon the consummation
                  of any transaction where the shareholders of the Company
                  approve a merger or consolidation which would result in the
                  holders of voting securities of the Company outstanding
                  immediately prior thereto failing to continue to represent
                  (either by remaining outstanding, or being converted into
                  voting securities of the surviving entity) at least 50% of the
                  combined voting power of the voting securities of the Company
                  or such surviving entity outstanding immediately after such
                  merger or consolidation, or an agreement for the sale or
                  disposition by the Company of all or substantially all of the
                  Company's assets, or any transaction having similar effect,
                  other than a liquidation of the Company (an "Acquisition").
                  The Company shall pay the Acquisition Bonus to Executive in
                  two equal $2,000,000 installments, the first of which shall be
                  payable concurrently with the consummation of the Acquisition
                  and the second of which shall be payable on the one year
                  anniversary of consummation; provided, however, that if prior
                  to such one year anniversary, this Agreement is terminated by
                  the Company for Cause (as defined below), or as a result of
                  Executive's resignation other than pursuant to Paragraph
                  5(a)(ii) hereof, Executive shall not be entitled to receive
                  the second installment of the Acquisition Bonus.

         1.7. Existing paragraphs 3(d) and 3(e) are hereby redesignated as
Sections 3(f) and 3(g), respectively.

         1.8. Paragraph 5(a) is hereby amended by deleting the words "the third
anniversary hereof" in the first line thereof and substituting the words "May
15, 2000" therefor.

         1.9. Paragraphs 7(c) and 7(d) are hereby amended by changing the
references to paragraph "8" therein to references to paragraph "7".

         1.10. The addresses for notices set forth in paragraph 10 hereof are 
hereby amended in their entirety to read as follows:


         Notices to Executive:
         ---------------------

                  Donald J. Amaral
                  844 Treemont Court
                  Nashville, TN  37220
                  Telephone:        (615) 383-4460
                  Fax:              (615) 269-3532


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         with a copy to:

                  Ervin, Cohen & Jessup
                  9401 Wilshire Boulevard
                  Suite 900
                  Beverly Hills, CA 90212
                  Attention:        John A. Meyers, Esq.
                  Telephone:        (310) 281-6373
                  Fax:              (310) 859-2325

         Notices to the Company:
         -----------------------

                  Coram Healthcare Corporation
                  1125 Seventeenth Street
                  Suite 1500
                  Denver, CO  80202
                  Attention: Paul J. Quiner, Esq.
                  Telephone:        (303) 292-4973
                  Fax:              (303) 298-0047

         with a copy to:

                  Paul, Hastings, Janofsky & Walker LLP
                  555 South Flower Street
                  Twenty-Third Floor
                  Los Angeles, CA  90071
                  Attention:  David L. Gersh, Esq.
                  Telephone:        (213) 683-6240
                  Fax:              (213) 627-0705

2. Notices. All notices, requests, demands and other communications under this
Amendment shall be in writing and shall be deemed to have been delivered and
received five business days after having been deposited in the United States
mail and enclosed in a certified or registered post-paid envelope; one business
day after having been sent by overnight courier; and when personally delivered
or sent by facsimile communications equipment of the sending party on a business
day, or otherwise on the next succeeding business day thereafter; and in each
case addressed to the respective party at its address set forth in the
Employment Agreement (as amended by Section 1.6 above) or to such other changed
addresses as the parties may have fixed by notice as provided therein.

3. Jurisdiction and Integration. This Amendment shall be governed by the
internal law, and not the laws of conflicts, of the State of Colorado. The
preceding choice of law provision shall apply to all claims, under any theory
whatsoever, arising out of the parties' relationship (as such relationship is
contemplated by, or related to, this Amendment or the Employment Agreement).
This Amendment, the Agreement, those documents expressly referred to herein or
in the Agreement and other documents of even date herewith or therewith embody
the complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
some way.


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4. Binding Agreement; Counterparts. This Amendment shall be binding upon the
parties hereto, their successors, assigns and legal representatives. This
Amendment may be executed in several counterparts, each of which is deemed to be
an original and all of which taken together constitute one and the same
agreement.

5. Full Force and Effect. Except as expressly amended by this Amendment, the
Employment Agreement shall continue in full force and effect in accordance with
the provisions thereof. As used in the Employment Agreement, "hereinafter,"
"hereto," "hereof," and other words of similar import shall, unless the context
otherwise requires, mean the Employment Agreement as amended by this Amendment.
In the event of any conflict or inconsistency between the terms and conditions
of the Employment Agreement and the terms and conditions of this Amendment, the
terms and conditions of this Amendment shall control.

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.

                                  THE COMPANY:

                                  CORAM HEALTHCARE CORPORATION


                                  By: \s\
                                         -------------------------------------


                                  EXECUTIVE


                                  \s\
                                     -----------------------------------------
                                  Donald J. Amaral



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