<PAGE>

                                                                    EXHIBIT 10.1

         Amended and Restated Plan Funding and Settlement Agreement dated as of
April 15, 2004 ("Amended Agreement"), among Arlin M. Adams, in his capacity as
chapter 11 trustee ("Trustee") of Coram Healthcare Corporation ("CHC") and
Coram, Inc. ("Coram" and together with CHC, the "Debtors"), and not
individually, Cerberus Partners, L.P. ("Cerberus"), Wells Fargo Foothill, Inc.,
formerly known as Foothill Capital Corporation, and Foothill Income Trust
(collectively, "Foothill"), and Goldman Sachs Credit Partners L.P. ("GSCP" and
together with Cerberus and Foothill, the "Noteholders").

                                    Recitals:

         A.       CHC and Coram each commenced a voluntary case under chapter 11
of title 11 U.S.C. Sections 101 et sec. ("Bankruptcy Code") on August 8, 2000 in
the United States Bankruptcy Court for the District of Delaware ("Bankruptcy
Court") at Case Nos. 00-3299 (MFW) and 00-3300 (MFW) respectively, which cases
are being jointly administered; and

         B.       The Debtors filed their first joint plan of reorganization
("First Plan") on August 8, 2000, together with a disclosure statement in
respect of the First Plan and, on December 21, 2000, the Bankruptcy Court denied
confirmation of the First Plan; and

         C.       The Debtors' second joint plan of reorganization was dated and
filed with the Bankruptcy Court on July 31, 2001 ("Second Plan"), and
confirmation of the Second Plan was denied pursuant to a written opinion issued
by the Bankruptcy Court on December 21, 2001; and

         D.       Thereafter, based upon two motions for the appointment of a
chapter 11 trustee for the Debtors made by Foothill and Goldman Sachs, and the
United States

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Trustee, the Bankruptcy Court approved the appointment of Arlin M. Adams as
chapter 11 trustee for the Debtors on March 7, 2002; and

         E.       The Committee of Equity Security Holders of CHC ("Equity
Committee") has asserted that the Trustee should commence an action against
Daniel Crowley, former Chief Executive Officer of the Debtors, present and
former members of the board of directors of CHC, the Noteholders and other
persons ("Prospective Defendants") and has furnished to the Trustee a draft
complaint ("Draft Complaint") alleging, among other things, causes of action for
avoidance of preferential transfers under Section 547(b) of the Bankruptcy Code,
the alleged breach of fiduciary duties, the duties of due care, fraud and under
the Federal RICO statute; and

         F.       The Trustee reviewed the Draft Complaint, conducted such
investigations of the allegations of the Draft Complaint and consulted such
experts as he deemed appropriate and consistent with his fiduciary duties, and
invited each Prospective Defendant to submit a written response to the Draft
Complaint. The Noteholders submitted their respective responses to the Draft
Complaint and to the Trustee's factual inquiries, denying that there is any
liability on their part whatsoever; disputing practically every material fact
alleged therein, including every assertion of damage to the Debtors; and
asserting that all of their conduct was intended to and did confer a benefit on
the Debtors. Thereafter, the Trustee and his counsel met and/or discussed the
responses with the Equity Committee and the Prospective Defendants; and

         G.       After consideration of the foregoing and after consulting such
experts and counsel as he deemed appropriate, the Trustee concluded that the
best interests of the Debtors and their estates, creditors, shareholders and
other parties in interest, including

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the patients served by the Debtors and the employees of the Debtors would best
be served by the Trustee's proposal of a plan of reorganization incorporating
the agreements with the Noteholders set forth in that certain Plan Funding and
Settlement Agreement with the Noteholders dated as of May 2, 2003 (the "Original
Agreement") and other related settlements; and

         H.       Contemporaneously with the execution and delivery of the
Original Agreement by the parties thereto, the Trustee filed a Joint Plan of
Reorganization of the Debtors pursuant to Chapter 11 of the Bankruptcy Code ("
Original Plan"). Thereafter, the Trustee filed with the Bankruptcy Court the
"Chapter 11 Trustee's Amended Joint Plan of Reorganization" dated June 17, 2003
("Trustee's Plan"), to which the Noteholders consented. Subsequently, on
September 8, 2003, the Trustee filed with the Bankruptcy Court the "Modification
to the Chapter 11 Trustee's Amended Joint Plan of Reorganization" dated June 17,
2003 ("Modification"), to which the Noteholders also consented. The Original
Plan, the Trustee's Plan and the Modification are all filed of record in the
Bankruptcy Court and are incorporated herein by reference; and

         I.       The Trustee and the Noteholders have negotiated a further
amendment to the Trustee's Plan, as modified by the Modification, and an
amendment to the Original Agreement; and

         J.       The Trustee and the Noteholders desire to amend, restate and
replace the Original Agreement in its entirety in order to reflect additional
concessions being made by the Noteholders at the Trustee's request, as described
below.

         NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the parties hereto, intending to be legally bound,
agree as follows.

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         1.       Plan of Reorganization

                  The Trustee agrees to continue to propose the Trustee's Plan,
as modified by the Modification and as amended by the "Second Amendment to
Chapter 11 Trustee's Amended Joint Plan of Reorganization" dated April __, 2004,
a copy of which is annexed hereto as Exhibit A (the Trustee's Plan, as modified
by the Modification and by the Second Amendment, the "Trustee's Amended Plan").
The Trustee agrees that the Trustee's Amended Plan will not be materially
altered or amended without the prior written consent of the Noteholders, unless
such modification or amendment does not adversely affect the business of the
Debtors or the Noteholders or the Noteholders' economic interests in Coram, as
contemplated in the Trustee's Amended Plan and as they will exist on and after
the Effective Date (as defined in the Trustee's Plan) of the Trustee's Amended
Plan ("Reorganized Coram").

         2.       Plan Funding

                  In order to enable the Trustee to propose and confirm the
Trustee's Amended Plan, and to provide the financial wherewithal to consummate
such Plan, the Noteholders agree to provide Reorganized Coram and the estate of
CHC with funding on (but not before) the Effective Date in the aggregate sum of
Fifty-Six Million Dollars ($56,000,000), made up of the following:

                  (a)      The Noteholders shall provide the Trustee with cash
in the amount equal to the difference between $56 million and the Deferred Tax
Claims (as defined below) on and as of the Effective Date of the Trustee's
Amended Plan (which amount is estimated to be $40 million); and

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                  (b)      The Noteholders shall assume on the Effective Date
and pay the Deferred Tax Claim directly to the IRS when due, thereby relieving
Reorganized Coram and its subsidiaries from any obligation whatsoever to pay
such Deferred Tax Claim. The consideration to the Noteholders for the cash
payment described in subsection (a) of this Section 2 and the agreement to
assume and pay the Deferred Tax Claim described in Subsection (b) hereof, shall
be the shares of new preferred stock of Reorganized Coram that are to be issued
pursuant to the Trustee's Amended Plan and that are described on the Certificate
of Designation that is annexed hereto as Exhibit B. The proceeds of the cash
contribution described in subsection 2(a) hereof, together with the Debtor's net
cash on hand and cash equivalents held by or for the Debtors as of the Effective
Date of the Trustee's Amended Plan ("Plan Funding Cash"), shall be used for the
following purposes: (i) for the payment in full of all allowed (A) Pre-Effective
Date administrative expense claims; (B) claims entitled to priority under
section 507 of the Bankruptcy Code other than the Deferred Tax Claim, if any;
(C) allowed secured claims against the Debtors, if any; (D) allowed general
unsecured claims against the Debtors; (ii) for working capital of $10 million,
the minimum amount necessary to enable Reorganized Coram to operate its business
in the ordinary course following the Effective Date; and (iii) to make payment
under the Trustee's Plan to the holders of allowed CHC equity interests in an
amount equal to remaining Plan Funding Cash, which the parties at this time
estimate will total in excess of $40 million. Reorganized Coram is entitled, by
virtue of the Debtors' agreement with the IRS. which was approved by order of
the Bankruptcy Court dated October 31, 2003, to defer payment of certain federal
income taxes plus any interest accrued thereon and penalties that have not been
abrogated (the

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"Deferred Tax Claim"). As provided in subsection 2(b) above, the Noteholders
shall assume on the Effective Date and pay when due, the amount of Deferred Tax
Claim, so as to relieve Reorganized Coram and its subsidiaries from the entire
burden of paying the Deferred Tax Claim.

                  In computing Plan Funding Cash, there shall be taken into
account as of the time of the computation all outstanding ordinary course vendor
payments and checks that have been issued and have not been debited from the
bank accounts of the Debtors and wire transfer instructions that have been
issued by the Debtors but not yet honored by the transferring institution.

         3.       Dissolution of CHC

                  The Trustee shall cause the dissolution of CHC promptly
following the Effective Date, in accordance with the provisions of the Trustee's
Amended Plan. The Trustee shall, however, cause the distribution of the
consideration to be distributed to holders of claims against and equity
interests in CHC under and in accordance with the provisions of the Trustee's
Amended Plan.

         4.       Corporate Matters

                  The Trustee's Amended Plan contemplates that the Noteholders
shall be the sole shareholders of Reorganized Coram from and after the Effective
Date. Accordingly, the Trustee agrees and acknowledges that the corporate
charter, by-laws, other organizational documents for Reorganized Coram shall be
in form and substance satisfactory to the Noteholders, subject in all events to
the provisions of this Amended Agreement and the requirements of Sections 1123
and 1129 of the Bankruptcy Code.

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         5.       Plan Releases

                  (a)      In consideration of the agreement of the Noteholders
to fund payments to be made pursuant to the Trustee's Amended Plan on and after
the Effective Date thereof, the Trustee agrees that such plan shall contain
provisions that release the Noteholders and all present and former officers,
directors, partners, members or employees of the Noteholders and their
respective affiliates, agents, representatives including Stephen A. Feinberg in
his role as a former director of the Debtors; Cerberus Associates L..L.C.;
Cerberus Capital Management L.P., and the Noteholders' counsel from any and all
claims, obligations. rights, causes of action and liabilities which any person
or entity may be entitled to assert, whether known or unknown, foreseen or
unforeseen, existing or hereafter arising, based in whole or in part upon any
act or omission, transaction or other occurrence taking place on or prior to the
Effective Date and in any way relating to the Debtors or their chapter 11 cases
or the Trustee's Amended Plan, and including all claims or causes of action
incorporated in the Draft Complaint and the equitable subordination complaint,
dated March 28, 2003 (Adversary Proceeding No. 03-52270), except that such
releases shall not release the obligations of the Noteholders pursuant to
Section 2 of this Amended Agreement, or any obligations of Crowley to the
Debtors' estates.

                  (b)      The Plan shall also include provisions that release
the Trustee and the Equity Committee, and all present and former officers,
directors, members or employees of the Trustee or the Equity Committee from any
and all claims, obligations, rights, causes of action and liabilities which any
person or entity may be entitled to assert, whether known or unknown, foreseen
or unforeseen, existing or hereafter arising, based

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in whole or in part upon any act or omission, transaction or other occurrence
taking place on or before the Effective Date in any way relating to the Debtors
or their chapter 11 cases or the Trustee's Amended Plan.

         6.       Incorporation in Plan

                  The Trustee agrees that this Amended Agreement is integral to
the Trustee's Amended Plan, and shall be incorporated in the Trustee's Amended
Plan, including any modification or amendment of the Trustee's Amended Plan. If
the Noteholders' claims or equity interests are disallowed or subordinated for
whatever reason without their consent, or if confirmation of the Trustee's
Amended Plan is denied, the Noteholders will be released from their obligations
under this Amended Agreement, and if the Trustee determines that it is in the
best interest of the Estates to propose another Plan, the Trustee shall make a
good faith effort to (a) to continue negotiating with the Noteholders; (b)
propose a Plan the terms of which are acceptable to the Noteholders; and (c)
seek approval of the settlement embodied in this Amended Agreement unless that
settlement is not approved by the Court or the Trustee is otherwise legally
precluded from doing so.

         7.       Amendment

                  This Amended Agreement may not be amended except by an
instrument in writing signed by all parties hereto.

         8.       Notices

                  Any notices or other communications hereunder or in connection
herewith shall be in writing and shall be deemed to be duly given or delivered
in person, by

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facsimile transmission or by overnight delivery by a recognized national courier
service, prepaid and addressed as follows:

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         If to the Trustee:         Arlin M. Adams, Esq.
                                    Schnader, Harrison, Segal & Lewis LLP
                                    1600 Market Street - Suite 3600
                                    Philadelphia, PA  19103-7268
                                    (215) 751-2205 (telecopy)

         with a copy to:            Schnader, Harrison, Segal & Lewis LLP
                                    1600 Market Street - Suite 3600
                                    Philadelphia, PA  19103-7268
                                    Attention:  Barry E. Bressler, Esq.
                                    (215) 751-2205 (telecopy)

                                    Wells Fargo Foothill, Inc.
                                    2450 Colorado Avenue - Suite 3000W
                                    Santa Monica, CA  90404
                                    Attention:  M. E. Stearns
                                    (310) 453-7470 (telecopy)

                                    Goldman Sachs Credit Partners L.P.
                                    85 Broad Street
                                    New York, NY  10005
                                    Attention:  Kimberly Niehaus
                                    (212) 493-9506 (telecopy)

         with copies to:            Steven Vincent, Esq.
                                    Goldman, Sachs & Co.
                                    One New York Plaza - 37th Floor
                                    New York, NY  10004
                                    (212) 428-1273 (telecopy)

                                               and

                                    Alan B. Miller, Esq.
                                    Weil, Gotshal & Manges LLP
                                    767 Fifth Avenue
                                    New York, NY  10153
                                    (212) 735-4965 (telecopy)

                                    Cerberus Partners LP
                                    450 Park Avenue
                                    New York, NY  10022
                                    Attention:  Mark A. Neporent, Esq.
                                    (212) 891-1540 (telecopy)

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         with a copy to:            Michael L. Cook. Esq.
                                    Schulte Roth & Zabel LLP
                                    919 Third Avenue
                                    New York, NY  10022
                                    (212) 593-5956 (telecopy)

         9.       Applicable Law

                  This Amended Agreement shall be governed in all respects,
including the validity, interpretation and effect, by title 11 of the United
States Code and the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof. The parties agree to submit for
determination by the Bankruptcy Court any disputes as to the interpretation or
construction of this Amended Agreement.

         10.      Assignments/Successors

                  This Amended Agreement and all the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, including any successor to Arlin M. Adams, as chapter 11
trustee of the Debtors, subject only to the approval of this Amended Agreement
by order of the Bankruptcy Court, which order may be the Confirmation Order (as
defined in the Trustee's Amended Plan).

         11.      Counterparts

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

         12.      This Amended Agreement, including any Exhibits hereto and the
Trustee's Amended Plan, constitutes the entire agreement between the parties
with

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respect to the subject matter hereof, and except as otherwise expressly provided
herein, is not intended to confer upon any other person any rights or remedies
hereunder.

         13.      The Effect on Litigation

                  Neither this Amended Agreement nor any of the terms hereof, or
any negotiations or proceedings in connection herewith, shall constitute or be
construed as evidence of an admission on the part of either the Trustee or any
of the Noteholders of any liability or wrongdoing whatsoever, or of the truth or
untruth of any of the claims made by any party in interest, including the claims
alleged in the Draft Complaint, or the merit or any lack of merit of any of the
defenses thereto; nor shall this Amended Agreement or any of the terms hereof,
or any negotiations or proceedings in connection herewith, be offered or
received in evidence or used in any proceeding against the Trustee or any of the
Noteholders for any purpose whatsoever, except with respect to (a) effectuation
and enforcement of this Amended Agreement, and (b) with respect to proceedings
in the chapter 11 cases in respect of the Debtors to confirm the Trustee's
Amended Plan, to oppose any other plan of reorganization for the Debtors, and to
authorize and approve this Amended Agreement and the execution and delivery
hereof by the Trustee and the Debtors.

         IN WITNESS WHEREOF, each of the parties hereto has caused this Amended
Agreement to be executed on its

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behalf by its officers or members thereunto duly authorized, as of the day and
year first above written.

                                        /s/ ARLIN M. ADAMS
                                        --------------------------------------
                                        Arlin M. Adams, as Trustee
                                        of CHC and Coram, and not
                                        individually

                                        CERBERUS PARTNERS, L.P.
                                        By Cerberus Associates LLC.,
                                        Its General Partner

                                        By /s/ MARK A. NEPORENT
                                          ------------------------------------
                                             Its:  COO/Managing Director

                                        WELLS FARGO FOOTHILL, INC.
                                        M.E. Stearns

                                        By /s/ M.E. STEARNS
                                          ------------------------------------
                                             Its: Sr. Vice President

                                        GOLDMAN SACHS CREDIT
                                        PARTNERS, L.P.

                                        By /s/ MARK DENATALE
                                          ------------------------------------
                                            Its:

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