THIRD AMENDMENT



         THIS THIRD AMENDMENT to the Employment Agreement between MEDIQ
Incorporated ("MEDIQ") and Michael F. Sandler (the "Executive"), dated as of
June 26, 1995, as previously amended by Amendments dated as of April 30, 1997
and September 30, 1997 (the "Employment Agreement"), is made by and between
MEDIQ and the Executive as of September 30, 1997.

                                   BACKGROUND

         The parties hereto desire to set forth the terms of Executive's
transition from MEDIQ by extending through September 30, 1998 the term of
Executive's employment pursuant to the Employment Agreement on the terms and
conditions as set forth therein, except as amended hereby.

         NOW THEREFORE, in consideration of the premises and intending to be
legally bound hereby, the parties hereto agree as follows:

         1. Section 1.2 of the Employment Agreement is hereby amended to read in
its entirety as follows:

         1.2 Capacity and Duties.

             (a) Executive resigns all of his positions as an officer of MEDIQ
             and as an officer or director of any subsidiary of MEDIQ as of
             September 30, 1997.

             (b) During the term of his employment hereunder, Executive shall
             perform such services for MEDIQ and its subsidiaries as may
             reasonably be assigned to him, from time to time, by the Chief
             Executive Officer of MEDIQ (the "CEO"). Such duties may include,
             without limitation, the following:

                   (i) advising, consulting and assisting in transition matters
                  relating to the transfer of responsibilities to a successor
                  Senior Vice President of Finance and Chief Financial Officer;
                  and

                  (ii) advising, consulting and assisting in such other business
                  matters as requested by the CEO.

             Unless expressly authorized by MEDIQ's Board of Directors or the
             CEO, Executive shall not have, and shall not hold himself out as
             having, any


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             authority to make any representations on behalf of MEDIQ nor to
             execute any agreements on behalf of MEDIQ or otherwise to bind
             MEDIQ to any obligation to third parties.

             During the term of his employment hereunder, Executive shall not be
             required to spend more than 45 hours per month on the performance
             of his duties. Executive shall record the time spent by him on the
             duties assigned by the CEO and shall submit a statement of such
             time to the CEO, upon request from the CEO. Further, such duties
             may be performed via telephone and/or by written communication and
             shall not require Executive's presence at MEDIQ's facilities or his
             travel outside of the greater Philadelphia area unless otherwise
             mutually agreed by the parties.

         2.  Section 2.1 of the Employment Agreement is hereby amended to read
in its entirety as follows:

         2.1 Term. The term of Executive's employment hereunder shall continue
         through September 30, 1998, upon which such employment shall terminate
         without notice or further action by any party. The one-year period
         beginning October 1, 1997 and ending September 30, 1998 is referred to
         herein as the "Contract Period."

         3.  Sections 3.1, 3.2, 3.3 and 3.4 of the Employment Agreement are
hereby amended to read in their entirety as follows:

         3.1 Basic Compensation. As compensation for Executive's services
         hereunder, during the Contract Period MEDIQ shall pay to Executive a
         salary at the annual rate in effect for Executive as of September 1,
         1997 (the "Base Salary"). Such Base Salary shall be payable throughout
         the Contract Period in accordance with MEDIQ's regular payroll
         practices in effect from time to time, less applicable withholding and
         deductions.

         3.2 Performance Bonus. Any performance bonus due to Executive pursuant
         to Section 3.2 of the Agreement as in effect prior to this Third
         Amendment that is earned or accrued as of September 30, 1997 (as
         determined in accordance with GAAP), shall be payable to Executive in
         accordance with the corporate policies of MEDIQ. No performance bonus
         shall be payable to Executive with respect to fiscal years beginning
         after September 30, 1997.


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         3.3 Employee Benefits.

             (a) General Rule Regarding Benefits During Contract Period. Except
             as otherwise provided in this Section 3.3, Executive shall be
             entitled during the Contract Period to participate in all of
             MEDIQ's employee benefit plans and benefit programs as may from
             time to time be provided for employees of MEDIQ whose duties,
             responsibilities and compensation are reasonably comparable to
             those of Executive prior to October 1, 1997.

             (b) Vacation. Payment for all accrued vacation pay owed to
             Executive as of September 30, 1997 shall be made by MEDIQ to
             Executive on the first payroll payment date in January 1998.
             Executive shall not accrue vacation with respect to the Contract
             Period.

             (c) Automobile. During the Contract Period, MEDIQ shall continue to
             provide Executive with the automobile currently assigned to him in
             accordance with the terms of MEDIQ's executive benefits plan (the
             reasonable expenses of which automobile shall be borne by MEDIQ).

             (d) Incentive Compensation Plan. During the Contract Period, MEDIQ
             shall cause Executive to be included at "Level A" in its Incentive
             Compensation Plan.

             (e) Directors' and Officers' Liability Insurance. During the
             Contract Period, Executive shall be covered as an insured under
             such Directors' and Officers' Liability insurance as MEDIQ
             maintains generally for its Officers and Directors.

         3.4 Expense Reimbursement. During the Contract Period, MEDIQ shall
reimburse Executive for all reasonable expenses incurred by him in the
performance of his duties hereunder in accordance with its regular reimbursement
policies as in effect from time to time and upon receipt of itemized vouchers
therefor and such other supporting information as MEDIQ may reasonably require.

         4.  The last sentence of Section 3.5(a) is amended to read as follows:


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         3.5 Transaction Compensation.

             (a) * * * The term "Applicable Period" shall mean the Contract
             Period.

         5.  Sections 4.2, 4.3 and 4.4 of the Agreement are deleted in their
entirety.

         6.  Except as expressly modified herein, all other terms and conditions
set forth in the Employment Agreement shall remain in full force and effect.

         7.  This Third Amendment has been duly authorized, executed and
delivered by each of the parties hereto in accordance with Section 6.6 of the
Employment Agreement.

                                        MEDIQ Incorporated



                                        By: 
                                            ------------------------------
                                            Thomas E. Carroll, President


                                        ----------------------------------
                                        Date



                                        ----------------------------------
                                        Michael F. Sandler


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                                        Date

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