<PAGE>   1
                                                                    EXHIBIT 10.3



                                  AMENDMENT No. 3, dated as of April 20, 2000
                                  (this "Amendment"), to the Credit Agreement
                                  dated as of December 24, 1997 (the "Credit
                                  Agreement"), as amended by Amendment No. 1,
                                  dated as of April 15, 1998 and Amendment No. 2
                                  and Waiver dated as of December 20, 1999,
                                  among Frank's Nursery & Crafts, Inc. (the
                                  "Borrower"), FNC Holdings Inc. ("Holdings"),
                                  formerly known as General Host Corporation,
                                  the Lenders (as defined in the Credit
                                  Agreement), The Chase Manhattan Bank, as
                                  administrative agent (in such capacity, the
                                  "Administrative Agent") and collateral agent
                                  (in such capacity, the "Collateral Agent") for
                                  the Lenders, as swingline lender (in such
                                  capacity, the "Swingline Lender") and as an
                                  Issuing Bank (as defined in the Credit
                                  Agreement), and Goldman Sachs Credit Partners,
                                  L.P., as documentation agent.

                   A. Pursuant to the Credit Agreement, the Lenders, the
     Swingline Lender and the Issuing Banks have extended credit to the
     Borrower and have agreed to extend credit to the Borrower, in each case
     pursuant to the terms and subject to the conditions set forth therein.

                   B. The Borrower and Holdings have requested that the
     Administrative Agent and the Required Lenders amend certain provisions of
     the Credit Agreement as set forth herein.

                   C. The Administrative Agent and the Required Lenders are
     willing to amend the Credit Agreement, in each case, pursuant to the terms
     and subject to the conditions set forth herein.

                   D. Capitalized terms used and not otherwise defined herein
     shall have the meanings assigned to them in the Credit Agreement.

                   Accordingly, in consideration of the mutual agreements herein
     contained and other good and valuable consideration, the sufficiency and
     receipt of which are hereby acknowledged, the parties hereto agree as
     follows:

                   SECTION 1. Amendments to Section 6.04 of the Credit Agreement
     (Investments, Loans, Advance, Guarantees and Acquisitions). Section 6.04(p)
     of the Credit Agreement is hereby amended by deleting the amount
     "$1,000,000" appearing therein and substituting in lieu thereof the amount
     "3,500,000".




<PAGE>   2

                                                                               2





                   SECTION 2. Amendment to Section 6.13 (Capital Expenditures).
     Section 6.13 of the Credit Agreement is hereby amended by (a) deleting the
     table set forth therein and substituting therefor the following:

     <TABLE>
     <CAPTION>


                                   Fiscal Year                           Amount
                                   -----------                           ------
               <S>                                                   <C>
                 February 2, 1998--January 31, 1999                  $22,000,000
                 February 1, 1999--January 30, 2000                  $27,000,000
                 January 31, 2000--January 28, 2001                  $30,000,000
                 January 29, 2001--January 27, 2002                  $26,500,000
                 January 28, 2002--January 26, 2003                  $28,000,000
                 January 27, 2003--January 25, 2004                  $29,500,000
                 January 26, 2005--January 30, 2005                  $31,000,000
     </TABLE>


     and (b) by deleting the last two sentences thereof and substituting
     therefor the following:

         Capital Expenditures set forth above in respect of the fiscal year
         ending on or about January 28, 2001 in an amount not less than
         $11,500,000 (the "POS Capital Expenditures") shall be used solely to
         purchase a point of sale system during such fiscal year only.

         The amount of permitted Capital Expenditures set forth above in respect
         of any fiscal year other than the fiscal year ending on or about
         January 28, 2001 shall be increased by the lesser of (a)(i) the unused
         permitted Capital Expenditures for the immediately preceding fiscal
         year (other than unused POS Capital Expenditures in the case of the
         fiscal year ending on or about January 28, 2001) less (ii) an amount
         equal to unused Capital Expenditures carried forward to such preceding
         fiscal year and (b) $12,000,000. No increase from the amount set forth
         in the table above shall be permitted for the fiscal year ending on or
         about January 28, 2001.

                  SECTION 3. Representations and Warranties. Each of Holdings
     and the Borrower represents and warrants to the Administrative Agent and to
     each of the Lenders that:

                  (a) This Amendment has been duly authorized, executed and
         delivered by it and constitutes its legal, valid and binding
         obligation, enforceable in accordance with its terms, subject
         to applicable bankruptcy, insolvency, reorganization, moratorium
         or other laws affecting creditors' rights generally and subject to
         general principles of equity, regardless of whether considered in a
         proceeding in equity or at law, and an implied covenant of good faith
         and fair dealing.

                  (b) Before and after giving effect to this Amendment, the
         representations and warranties set forth in Article III of the
         Credit Agreement are true and correct in all material respects
         on and as of the date hereof, except to the extent suchrepresentations
         and warranties expressly relate to an earlier date, in which case such
         representations and warranties are, to such extent, true and correct in
         all material respects as of such earlier date.


<PAGE>   3

                                                                               3






                  (c) After giving effect to this Amendment, no Default has
         occurred and is continuing.

                  SECTION 4. Conditions to Effectiveness. This Amendment shall
     become effective as of the date first above written when (a) the
     representations and warranties set forth in Section 3 hereof are true and
     correct, (b) the Administrative Agent shall have received (i) counterparts
     of this Amendment that, when taken together, bear the signatures of
     Holdings, the Borrower and the Required Lenders and (ii) evidence
     satisfactory to it that (A) Cypress and its Affiliates shall have
     contributed at least $15,000,000 to Holdings in exchange for common stock
     of Holdings and (B) Holdings shall have contributed at least $15,000,000 to
     the Borrower in exchange for common stock of the Borrower.

                  SECTION 5. Effect of this Amendment. Except as expressly set
     forth herein, this Amendment shall not by implication or otherwise limit,
     impair, constitute a waiver of, or otherwise affect the rights and remedies
     of the Lenders, the Swingline Lender, any Issuing Bank, the Collateral
     Agent or the Administrative Agent under the Credit Agreement or any other
     Loan Document and shall not alter, modify, amend or in any way affect any
     of the terms, conditions, obligations, covenants or agreements contained in
     the Credit Agreement or any other Loan Document, all of which are ratified
     and affirmed in all respects and shall continue in full force and effect.
     Nothing herein shall be deemed to entitle the Borrower or Holdings to a
     consent to, or a waiver, amendment, modification or other change of, any of
     the terms, conditions, obligations, covenants or agreements contained in
     the Credit Agreement or any other Loan Document in similar or different
     circumstances. After the date hereof, any reference to the Credit Agreement
     shall mean the Credit Agreement as amended hereby. This Amendment shall
     constitute a Loan Document for all purposes under the Credit Agreement and
     the other Loan Documents.

                  SECTION 6. APPLICABLE LAW. THIS AMIENDMIENT SHALL BE GOVERNED
     BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                  SECTION 7. Counterparts, This Amendment may be executed in any
     number of counterparts and by different parties hereto in separate
     counterparts, each of which when so executed and delivered shall be deemed
     an original, but all such counterparts together shall constitute but one
     and the same instrument. Delivery of any executed counterpart of a
     signature page of this Amendment by facsimile transmission shall be as
     effective as delivery of a manually executed counterpart hereof.

                  SECTION 8. Expenses. The Borrower agrees to reimburse the
     Administrative Agent for its out-of-pocket expenses in connection with this
     Amendment, including the reasonable fees, charges and disbursements of
     Cravath, Swaine & Moore, counsel for the Administrative Agent.




<PAGE>   4

                                                                               4





                  IN WITNESS WHEREOF, the parties hereto have caused this
     Amendment to be duly executed by their respective authorized officers as of
     the day and year first above written.



                                   FRANKS NURSERY & CRAFTS, INC., as
                                   Borrower,


                                      by /s/ Larry T. Lakin
                                        ----------------------------------
                                        Name:   Larry T. Lakin
                                        Title:  Vice Chairman and Chief
                                                Financial Officer


                                   FNC HOLDINGS INC.,


                                      by /s/ Larry T. Lakin
                                        ----------------------------------
                                        Name:   Larry T. Lakin
                                        Title:  Vice Chairman and Chief
                                                Financial Officer

                                   THE CHASE MANHATTAN BANK, individually
                                   and as Administrative Agent,


                                      by
                                        ----------------------------------
                                        Name:
                                        Title:


                                   GOLDMAN SACHS CREDIT PARTNERS, L.P.,

                                      by
                                        ----------------------------------
                                        Name:
                                        Title:


<PAGE>   5



                                                                               4






                  IN WITNESS WHEREOF, the parties hereto have caused this
     Amendment to be duly executed by their respective authorized officers as of
     the day and year first above written.

                                   FRANK'S NURSERY & CRAFTS, INC., as
                                   Borrower,

                                      by
                                        ----------------------------------
                                        Name:
                                        Title:


                                   FNC HOLDINGS INC.,


                                      by
                                        ----------------------------------
                                        Name:
                                        Title:

                                   THE CHASE MANHATTAN BANK, individually
                                   and as Administrative Agent,


                                      by     /s/ Neil R. Boylan
                                        ----------------------------------
                                        Name          Neil R. Boylan
                                        Title:      Managing Director

                                   GOLDMAN SACHS CREDIT PARTNERS, L.P.,


                                      by
                                        ----------------------------------
                                        Name:
                                        Title:


<PAGE>   6

                                                                               5





                                 SIGNATURE PAGE TO AMENDMENT NO. 3 DATED AS OF
                                 APRIL 20,2000, TO THE CREDIT AGREEMENT DATED AS
                                 OF DECEMBER 24,1997, AMONG FRANKS NURSERY &
                                 CRAFTS, INC., FNC HOLDINGS INC. (F/K/A GENERAL
                                 HOST CORPORATION), THE LENDERS PARTY THERETO,
                                 THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE
                                 AGENT, COLLATERAL AGENT, SWINGLINE LENDER, and
                                 ISSUING BANK, and GOLDMAN SACHS CREDIT
                                 PARTNERS, L.P., AS DOCUMENTATION AGENT


        Name of Institution      GOLDMAN SACHS CREDIT PARTNERS, L.P.
                                 ---------------------------------------------



                                  by     /s/ ELIZABETH FISCHER
                                    ------------------------------------------
                                    Name:     ELIZABETH FISCHER
                                    Title:   AUTHORIZED SIGNATURE


<PAGE>   7

                                                                               5




                                 SIGNATURE PAGE TO AMENDMENT NO. 3 DATED AS OF
                                 APRIL 20, 2000, TO THE CREDIT AGREEMENT DATED
                                 AS OF DECEMBER 24, 1997. AMONG FRANK'S NURSERY
                                 & CRAFTS, INC., FNC HOLDINGS INC. (F/K/A
                                 GENERAL HOST CORPORATION), THE LENDERS PARTY
                                 THERETO, THE CHASE MANHATTAN BANK, AS
                                 ADMINISTRATIVE AGENT, COLLATERAL AGENT,
                                 SWINGLINE LENDER and ISSUING BANK, and GOLDMAN
                                 SACHS CREDIT PARTNERS, L.P., AS DOCUMENTATION
                                 AGENT


        Name of Institution      IBJ Whitehall Bank & Trust Co.
                                 ---------------------------------------------



                                  by   /s/ Patricia G. McCormack
                                    ------------------------------------------
                                    Name:   PATRICIA G. McCORMACK
                                    Title:   MANAGING DIRECTOR



<PAGE>   8


                                                                               5

                                 SIGNATURE PAGE TO AMENDMENT NO. 3 DATED AS OF
                                 APRIL 20, 2000, TO THE CREDIT AGREEMENT DATED
                                 AS OF DECEMBER 24, 1997, AMONG FRANK'S
                                 NURSERY & CRAFTS, INC., FNC HOLDINGS INC.
                                 (F/K/A GENERAL HOST CORPORATION), THE LENDERS
                                 PARTY THERETO, THE CHASE MANHATTAN BANK,
                                 AS ADMINISTRATIVE AGENT, COLLATERAL AGENT,
                                 SWINGLINE LENDER, and ISSUING BANK, and
                                 GOLDMAN SACHS CREDIT PARTNERS, L.P., AS
                                 DOCUMENTATION AGENT


        Name of Institution      KZH HIGHLAND-Z LLC
                                 ---------------------------------------------



                                  by   /s/ Susan Lee
                                    ------------------------------------------
                                    Name:  Susan Lee
                                    Title: Authorized Agent



<PAGE>   9


                                                                               5

                                 SIGNATURE PAGE TO AMENDMENT NO. 3 DATED AS OF
                                 APRIL 20, 2000, TO THE CREDIT AGREEMENT DATED
                                 AS OF DECEMBER 24, 1997, AMONG FRANK'S
                                 NURSERY & CRAFTS, INC., FNC HOLDINGS INC.
                                 (F/K/A GENERAL HOST CORPORATION), THE LENDERS
                                 PARTY THERETO, THE CHASE MANHATTAN BANK,
                                 AS ADMINISTRATIVE AGENT, COLLATERAL AGENT,
                                 SWINGLINE LENDER, and ISSUING BANK, and
                                 GOLDMAN SACHS CREDIT PARTNERS, L.P., AS
                                 DOCUMENTATION AGENT


        Name of Institution      KZH PAMCO LLC
                                 ---------------------------------------------



                                  by   /s/ Susan Lee
                                    ------------------------------------------
                                    Name:  Susan Lee
                                    Title: Authorized Agent



<PAGE>   10

                                                                               5



                                 SIGNATURE PAGE TO AMENDMENT NO. 3 DATED AS OF
                                 APRIL 20, 2000, TO THE CREDIT AGREEMENT DATED
                                 AS OF DECEMBER 24, 1997, AMONG FRANK'S NURSERY
                                 & CRAFTS, INC., FNC HOLDINGS INC. (F/K/A
                                 GENERAL HOST CORPORATION), THE LENDERS PARTY
                                 THERETO, THE CHASE MANHATTAN BANK, AS
                                 ADMINISTRATIVE AGENT, COLLATERAL AGENT,
                                 SWINGLINE LENDER, and ISSUING BANK, and GOLDMAN
                                 SACHS CREDIT PARTNERS, L.P., AS DOCUMENTATION
                                 AGENT


        Name of Institution      Transamerica Business Credit Corporation
                                 ---------------------------------------------



                                   by    /s/ Perry Vavoules
                                      ----------------------------------------
                                      Name:  Perry Vavoules
                                      Title: Senior Vice President