Document:

EX-10.1 FORM OF BLUELINX HOLDINGS INC. SHORT TERM

 

Exhibit 10.1

BLUELINX HOLDINGS INC.

SHORT-TERM INCENTIVE PLAN

1. PURPOSE

     The purpose of this Plan is to permit the Company, through awards of annual bonuses, to
reinforce the importance of teamwork for corporate success and to motivate Employees to achieve
maximum profitability and success of the Company. Under the Plan, the incentive compensation
“pool” will be funded based solely on performance as measured against established business
and/or financial goals at multiple Organizational Levels. Once funded, a designated percentage
of the incentive compensation “pool” will be allocated pro rata based on the actual performance
of the applicable Organizational Level, with the remainder allocated in the discretion of
management to reward individual performance.

2. DEFINITIONS

     “Achieved Performance Percentage” means, with respect to each Performance Measure
applicable to an Organizational Level for a Fiscal Year, such Organizational Level’s actual
performance expressed as a percentage of the “target” Performance Goal. Where an Organizational
Level’s performance falls between Performance Goal levels, the Achieved Performance Percentage
shall be determined by interpolation. If the actual performance with respect to a Performance
Goal for an Organizational Level is less than “threshold,” then the Achieved Performance
Percentage with respect to that Performance Measure shall be zero. If the actual performance
with respect to a Performance Goal for an Organizational Level is more than the “maximum,” then
the Achieved Performance Percentage with respect to that Performance Measure shall be determined
at such maximum level.

     “Administrator” means the Board of Directors, or a committee of the Board of
Directors, duly appointed to administer the Plan. The Committee may appoint one or more
individuals who are not members of the Committee to administer the Plan on behalf of the Company
except that the Committee remains responsible for approving all aspects of the Plan that may affect
the compensation of the CEO or any of the Executive Officers.

     “Board of Directors” shall mean the Board of Directors of the Company.

     “Bonus” shall mean the amount payable to a Participant as determined by the
Administrator in accordance with this Plan as an annual bonus for any Fiscal Year.

 

 

     “Bonus Pool” means the total dollar amount determined in Section 4.2 which will fund
the Plan and be available for allocation pursuant to Section 5.

     “CEO” means the Chief Executive Officer of BlueLinx Holdings Inc.

     “Committee” means the Compensation Committee of the Board of Directors of BlueLinx
Holdings Inc.

     “Compensation” means a Participant’s annualized rate of pay as of December 31 of the
applicable calendar year.

     “Company” means BlueLinx Holdings Inc. and its subsidiaries.

     “Employee” means any exempt full-time, salaried employee of the Company.

     “Executive Officer” means a Participant who has been designated as an executive
officer by the Company’s Board of Directors.

     “Organizational Level” means a level of the Company’s organizational structure
identified by senior management for purposes of measuring performance under the terms of this
Plan for a Fiscal Year.

     “Participant” means an Employee of the Company who, for a given Fiscal Year, has
been selected to participate in the Plan by senior management.

     “Participant Funding Amount” means the amount calculated with respect to each
Participant under Section 4.2(b).

     “Performance Goal” means the financial or business goals established with respect to
each Performance Measure applicable to an Organizational Level for a Fiscal Year.

     “Performance Measure” means the criteria selected by senior management for a Fiscal
Year to measure performance at an Organizational Level. The Performance Measures are set forth
hereto in Exhibit A. The Committee must approve the Performance Measures applicable to
any Organizational Level in which an Executive Officer is included.

     “Performance Measure Weighting Percentage” means the percentage weighting accorded
to each Performance Measure applicable to an Organizational Level. The total of the Performance
Measure Weighting Percentages shall equal one hundred percent (100%). The Performance Measure
Weighting Percentage is set forth on Exhibit A.

     “Plan” means the BlueLinx Holdings Inc. Short-Term Incentive Plan as set forth in
this document, as amended from time to time.

 

 

     “Primary Organizational Level” means the Organizational Level with respect to which
a Participant has primary responsibility or to which he or she is most closely aligned.

     “Primary Level Weighting Percentage” means the percentage weighting given to a
Participant’s Primary Organizational Level. The total of the Primary Level Weighting Percentage
and the Secondary Level Weighting Percentage(s), if any, shall equal one hundred percent (100%).

     “RONA” shall mean Return on Net Assets.

     “Secondary Level Weighting Percentage” means the percentage weighting given to the
performance of one or more Secondary Organizational Levels. The total of the Primary Level
Weighting Percentage and the Secondary Level Weighting Percentage(s), if any, shall equal one
hundred percent (100%).

     “Secondary Organizational Level” means a level of the Company’s organizational
structure to which the Participant has significant (but not primary) responsibility or alignment.

     “Target Bonus Percentage” means the percentage of a Participant’s Compensation that
will be contributed to the Bonus Pool under this Plan if the Participant’s Organizational Level(s)
achieves the “target” performance level with respect to each applicable Performance Goal. The
Target Bonus Percentages are listed on Exhibit B.

3. Administration

     The Plan shall be administered by the Administrator, which shall have full authority to
interpret the Plan, to establish rules and regulations relating to the operation of the Plan, to
determine the amount of any Bonuses (subject to the terms and conditions hereof) and to make all
other determinations and take all other actions necessary or appropriate for the proper
administration of the Plan. The Administrator’s interpretation of the Plan, and all actions taken
within the scope of its authority, shall be final and binding on the Company, any Participants,
former Participants or their designated beneficiaries, and other employees of the Company.

     It is the intention of the Company that, to the extent that Section 162(m) of the Internal
Revenue Code of 1986, as amended (the “Code”), could operate to result in the loss of a deduction
to the Company, on its federal income tax return, for the bonuses to be paid under this Plan, then
steps shall be taken so that the bonuses will constitute qualified “performance-based compensation”
for purposes of Code section 162(m) and Section 1.162-27 of the Treasury regulations promulgated
thereunder.

4. Determination of Bonus Pool

     4.1. Determination of Standards. Prior to March 31 of each calendar year, the
Administrator will determine, in its discretion:

 

 

	 	(a)	 	The applicable Performance Measures applicable to each Organizational
Level;
	 
	 	(b)	 	The applicable Performance Measure Weighting Percentage for each
Performance Measure at each Organizational Level;
	 
	 	(c)	 	The applicable Primary Level Weighting Percentage for each Organizational
Level;
	 
	 	(d)	 	The applicable Secondary Level Weighting Percentage, if any, for each
Organizational Level;
	 
	 	(e)	 	The threshold, target and maximum Performance Goals with respect to
each Performance Measure established for an Organizational Level; and
	 
	 	(f)	 	Each Participant’s Target Bonus Percentage.

The Compensation Committee must approve all standards applicable to the CEO and the Company’s
other Executive Officers.

     4.2 Funding of Bonus Pool.

	 	(a)	 	The Bonus Pool shall equal the sum of the Participant Funding Amounts as calculated in
4.2(b) below for each Participant in the Plan for a Fiscal Year. Following determination of the
total amount of the Bonus Pool, such Bonus Pool shall be allocated in accordance with Section 5.
	 
	 	(b)	 	The Participant Funding Amount shall be calculated as follows:

     (i) multiply the Achieved Performance Percentage determined for each
Performance Measure applicable to the Participant’s Primary Organizational Level
by the Performance Measurement Weighting Percentage assigned to each such
Performance Measure;

     (ii) multiply the sum of the results determined in (i) above by the Primary
Level Weighting Percentage applicable to the Participant;

     (iii) where a Participant’s performance is based in part on the performance
of one or more Secondary Organizational Levels, repeat step (i) above with
respect to each Secondary Organizational Level and multiply the result by the
applicable Secondary Level Weighting Percentage;

     (iv) multiply the sum of (ii) and (iii) above by the product of
Participant’s Target Bonus Percentage, as adjusted if applicable, and
Participant’s Compensation.

An example of this calculation is attached as Exhibit C for illustration purposes
only.

5. Allocation of Bonus Pool

 

 

     5.1 General. The Bonus Pool shall consist of a “Discretionary Component” and a
“Non-Discretionary Component.” Prior to March 31 of each calendar year, senior management will
determine the percentage of the Bonus Pool to be allocated to the Discretionary Component (the
“Discretionary Allocation Percentage”) and the percentage to be allocated to the
Non-Discretionary Component (the “Non-Discretionary Allocation Percentage”).

     5.2. Discretionary Allocation. The Discretionary Component of the Bonus Pool for a
Fiscal Year shall equal the total Bonus Pool multiplied by the Discretionary Allocation
Percentage for such Fiscal Year. Management in its discretion shall determine the amount of the
Discretionary Component, if any, to award each Participant (other than the CEO or any Executive
Officer) after reviewing his or her individual performance and contribution to the Company. The
amount of the Discretionary Component awarded to the CEO or any Executive Officer shall be equal
to his or her Participant Funding Amount multiplied by the Discretionary Allocation Percentage,
which amount shall be subject to adjustment by the Committee, in its discretion, after reviewing
his or her individual performance and contribution to the Company.

     5.3. Non-Discretionary Allocation. The Non-Discretionary Component of the Bonus
Pool for a Fiscal Year shall equal the total Bonus Pool multiplied by the Non-Discretionary
Allocation Percentage for such Fiscal Year. The Non-Discretionary Component of the Bonus Pool
shall be allocated among Participants in an amount equal to his or her Participant Funding Amount
multiplied by the Non-Discretionary Allocation Percentage. Notwithstanding the foregoing, in the
event that senior management, determines that a Participant’s performance warrants a lesser
incentive compensation payment, such Participant’s allocation as described in this Section 5.3
may be reduced or forfeited.

6. Payment of Awards

     6.1. General. Bonuses will be paid as soon as practicable after the calculation and
allocation of the Bonus Pool as described above for each Fiscal Year, but in no event later than
March 15 following the end of that Fiscal Year. Except as provided in Section 6.3, no bonus will
be payable under this Plan for a Fiscal Year to any Participant who (i) voluntarily terminates his
or her employment with the Company during that year, or (ii) is involuntarily terminated by the
Company for any reason during that Fiscal Year.

     6.2. Prorated Bonus. A Participant will be entitled to a bonus for a Fiscal Year
which is prorated to reflect the period actually worked during that year and which will be
payable at the same time bonuses for other Participants are paid for that Fiscal Year, if the
Participant is added as a Participant prior to October 1 of the applicable Fiscal Year by act of
senior management.

     6.3 Limitations with Respect to Bonuses.

	 	(a)	 	No Participant shall have any right to receive payment of any Bonus unless the
Participant remains in the employ or service of the Company

 

 

	 	 	 	through the end of the applicable Fiscal Year; provided, however, that the Administrator
may, in its sole discretion, pay all or part of a Bonus to any Participant whose employment or
service with the Company or its subsidiaries is terminated prior to such date for any reason.
The determination of the Administrator shall be final and conclusive.
	 
	 	(b)	 	In no event shall Participants, as a group, receive Bonuses in excess of 100% of the
Pool Amount for any Fiscal Year. Each Participant’s Bonus shall be reduced pro rata in the event
that the foregoing 100% limitation is exceeded.

7. Designation of Beneficiary

          A Participant may designate a beneficiary or beneficiaries who, in the event of the
Participant’s death prior to the payment of any Bonus earned hereunder, shall receive such payment
when due under the Plan. Such designation shall be made by the Participant on a form prescribed by
the Administrator. The Participant may at any time change or revoke such designation. A
beneficiary designation, or revocation of a prior beneficiary designation, will be effective only
if it is made in writing on a form provided by the Company, signed by the Participant and received
by the Company. If the Participant does not designate a beneficiary or the designated beneficiary
dies prior to the payment of any Bonus, any amounts remaining to be paid shall be paid to the
Participant’s estate.

8. Adjustments

          If any Company Target or other criterion upon which Bonuses for any Fiscal Year is based shall
have been affected by special factors, including, but not limited to, material changes in
accounting policies or practices, material acquisitions or dispositions of property, or other
unusual or unplanned items, which in the Administrator’s judgment should or should not be taken
into account, in whole or in part, in the equitable administration of the Plan, the Administrator
may, for any purpose of the Plan, adjust such Company Targets or criterion for such Fiscal Year
(and subsequent Fiscal Years, as appropriate) and make credits, payments and reductions accordingly
under the Plan.

9. Amendment or Termination

     The Board, by action of the Committee, expressly reserves the right to amend or terminate
the Plan at any time.

10. Miscellaneous 

     10.1. Bonuses Unfunded. It is the intention of the Company that the Plan shall be
considered unfunded for tax purposes and for purposes of the Employee Retirement Income Security
Act of 1974, as amended. The Company shall not be required to set aside assets in trust or to
establish any special segregation of assets to assure payment

 

 

of Bonuses. Any bonuses payable pursuant to the Plan (if any) shall be paid solely from the
general assets of the Company.

     10.2. Taxation of Bonuses. The Company shall have the right to deduct at the time
of payment of any Bonus any amounts required by law to be withheld for the payment of federal,
state, local or foreign taxes, social insurance contributions, benefit plan contributions or
other required withholdings.

     10.3. Spendthrift Clause. A Participant may not assign, anticipate, alienate,
commute, pledge or encumber any bonus to which he or she may become entitled under the Plan, nor
are the bonuses subject to attachment or garnishment by any creditor.

     10.4. No Contract of Employment. Participation in this Plan shall not constitute an
agreement (1) of the Participant to remain in the employ of and to render his/her services to the
Company or (2) of the Company to continue to employ such Participant, and the Company may
terminate the employment of a Participant at any time with or without cause.

     10.5. Deletion of Participants. Notwithstanding anything in this Plan to the
contrary, the CEO in his sole discretion may delete any Employee from the Participant group for a
Fiscal Year.

     10.6 No Interest on Bonus Payment. If the Company for any reason fails to make
payment of a Bonus at the time such Bonus becomes payable, the Company shall not be liable for
any interest or other charges thereon.

     10.7 Governing Law. Except where federal law is applicable, the provisions of the
Plan shall be governed by and construed in accordance with the laws of the State of Georgia.

     10.8 Severability. If any provision of this Plan is found to be illegal or invalid,
the Administrator shall have discretion to sever that provision from this Plan and, thereupon,
such provision shall not be deemed to be a part of this Plan.

     10.9 Limitation of Liability. No member of the Board of Directors or the
Administrator, and no officer, employee, consultant or agent of the Company shall be liable for
any act or action hereunder, whether of commission or omission, taken by any other member, or by
any officer, agent, or employee or consultant, or, except in circumstances involving bad faith,
for anything done or omitted to be done in the administration of the Plan.<PAGE>
                       FIRST AMENDMENT TO CREDIT AGREEMENT

      THIS FIRST AMENDMENT TO CREDIT AGREEMENT dated as of February 2, 2006 (the
"Amendment") is entered into among Matria Healthcare, Inc., a Delaware
corporation (the "Borrower"), the Guarantors party hereto, the Lenders party
hereto and Bank of America, N.A., as Administrative Agent and Collateral Agent.
All capitalized terms used herein and not otherwise defined herein shall have
the meanings given to such terms in the Credit Agreement (as defined below).

                                    RECITALS

      WHEREAS the Borrower, the Guarantors, the Lenders and Bank of America,
N.A., in its capacity as Administrative Agent and Collateral Agent entered into
that certain Credit Agreement dated as of January 19, 2006 (as amended or
modified from time to time, the "Credit Agreement"); and

      WHEREAS, the Borrower has requested that the Lenders amend the Credit
Agreement as set forth below;

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

      1.    Amendment. The Credit Agreement is hereby amended as follows:

            (a) The following definitions are hereby added to Section 1.01 of
      the Credit Agreement in the appropriate alphabetical order and shall read
      as follows:

                  "First Amendment Effective Date" means February 2, 2006.

                  "Initial Tranche B Term Loan" has the meaning specified in
                  Section 2.01(b).

                  "Second Tranche B Term Loan" has the meaning specified in
                  Section 2.01(b).

            (b) The definition of "Applicable Rate" in Section 1.01 of the
      Credit Agreement is hereby amended to read as follows:

                  "Applicable Rate" means (a) with respect to Revolving Loans,
            Swing Line Loans, Letters of Credit and the Commitment Fee, the
            following percentages per annum, based upon the Consolidated
            Leverage Ratio as set forth in the most recent Compliance
            Certificate received by the Administrative Agent pursuant to Section
            7.02(a):
<TABLE>
<CAPTION>
                                 Consolidated
       Pricing                     Leverage               Commitment              Letters of        Eurodollar Rate      Base Rate
         Tier                        Ratio                   Fee                    Credit               Loans             Loans
       <S>                    <C>                         <C>                     <C>               <C>                  <C>

         1                    > or = 3.5:1.0              0.50%                     2.50%             2.50%                  1.50%

         2                    > or = 2.5:1.0 but
                              < 3.5:1.0

                                                          0.50%                     2.25%             2.25%                  1.25%
         3                    < 2.5:1.0                   0.50%                     2.00%             2.00%                  1.00%
</TABLE>

<PAGE>

            and (b) with respect to the Tranche B Term Loan and the Tranche C
            Term Loan, the following percentages per annum, based upon the
            Consolidated Leverage Ratio as set forth in the most recent
            Compliance Certificate received by the Administrative Agent pursuant
            to Section 7.02(a):

<TABLE>
<CAPTION>
                            Consolidated
         Pricing Tier       Leverage Ratio            Eurodollar Rate Loans             Base Rate Loans
         <S>                <C>                       <C>                               <C>
             1              > OR = 4.0:1.0                2.25%                              1.25%
             2              < 4.0:1.0                     2.00%                              1.00%
</TABLE>

            Any increase or decrease in the Applicable Rate resulting from a
            change in the Consolidated Leverage Ratio shall become effective as
            of the first Business Day immediately following the date a
            Compliance Certificate is delivered pursuant to Section 7.02(a);
            provided, however, that if a Compliance Certificate is not delivered
            when due (after giving effect to any applicable grace period) in
            accordance with such Section, then Pricing Tier 1 in each respective
            grid above shall apply as of the first Business Day after the date
            on which such Compliance Certificate was required to have been
            delivered and shall continue to apply until the first Business Day
            immediately following the date a Compliance Certificate is delivered
            in accordance with Section 7.02(a), whereupon the Applicable Rate
            shall be adjusted based upon the calculation of the Consolidated
            Leverage Ratio contained in such Compliance Certificate. The
            Applicable Rate in effect from the Closing Date through the first
            Business Day immediately following the date a Compliance Certificate
            is required to be delivered pursuant to Section 7.02(a) for the
            fiscal quarter ending March 31, 2006 shall be determined based upon
            Pricing Tier 1 in each respective grid.

            (c) The definition of "Intercreditor Agreement" in Section 1.01 of
      the Credit Agreement is hereby amended to read as follows:

                  "Intercreditor Agreement" means the Intercreditor Agreement,
            dated as of the Closing Date, among the Collateral Agent, the Second
            Lien Collateral Agent, the Control Agent and the Borrower, as
            amended in accordance with the terms thereof and hereof.

            (d) The definition of "Related Parties" in Section 1.01 of the
      Credit Agreement is hereby amended to read as follows:

                  "Related Parties" means, with respect to any Person, such
            Person's Affiliates and the partners, directors, officers,
            employees, agents, trustees and advisors of such Person and of such
            Person's Affiliates.

            (e) The definition of "Tranche B Term Loan" in Section 1.01 of the
      Credit Agreement is hereby amended to read as follows:

                  "Tranche B Term Loan" means the collective reference to the
            Initial Tranche B Term Loan and the Second Tranche B Term Loan.

            (f) The definition of "Tranche B Term Loan Commitment" in Section
      1.01 of the Credit Agreement is hereby amended to read as follows:

                  "Tranche B Term Loan Commitment" means, as to each Lender, its
            obligation to make its portion of the Tranche B Term Loan to the
            Borrower pursuant to Section

                                       2
<PAGE>

            2.01(b), in the principal amount set forth opposite such Lender's
            name on Schedule 2.01. The aggregate principal amount of the Tranche
            B Term Loan Commitments of all of the Lenders is TWO HUNDRED SIXTY
            FIVE MILLION DOLLARS ($265,000,000). After giving effect to the
            funding of Two Hundred Forty Five Million Dollars ($245,000,000) of
            the Tranche B Term Loan on the Closing Date, the aggregate principal
            amount of the Tranche B Term Loan Commitments of all the Lenders as
            in effect on the First Amendment Effective Date is TWENTY MILLION
            DOLLARS ($20,000,000).

            (g) Section 2.01(b) of the Credit Agreement is hereby amended to
      read as follows:

                  (b) Tranche B Term Loan. Subject to the terms and conditions
            set forth herein, the Lenders made available to the Borrower on the
            Closing Date a term loan (the "Initial Tranche B Term Loan") in
            Dollars in an aggregate principal equal to Two Hundred Forty Five
            Million Dollars ($245,000,000). Subject to the terms and conditions
            set forth herein, each Lender severally agrees to make its portion
            of a term loan (the "Second Tranche B Term Loan") to the Borrower in
            Dollars on the First Amendment Effective Date in an amount not to
            exceed such Lender's remaining Tranche B Term Loan Commitment on the
            First Amendment Effective Date. Amounts repaid on the Tranche B Term
            Loan may not be reborrowed. The Tranche B Term Loan may consist of
            Base Rate Loans or Eurodollar Rate Loans, as further provided
            herein, provided, however, all Borrowings made on the Closing Date
            and the First Amendment Effective Date shall be made as Base Rate
            Loans.

            (h) The reference to "Section 2.04(b)(i)" in Section 2.05(b)(i) of
      the Credit Agreement is hereby amended to read "Section 2.05(b)(i)".

            (i) (i) The reference to "Section 2.04(b)" in Section 2.05(b)(vii)
      of the Credit Agreement is hereby amended to read "Section 2.05(b)", (ii)
      the reference to "Section 2.04(b)(i)" in Section 2.05(b)(vii)(A) of the
      Credit Agreement is hereby amended to read "Section 2.05(b)(i)" and (iii)
      the reference to "Sections 2.04(b)(ii), (iii), (iv), (v) and (vi)" in
      Section 2.05(b)(vii)(B) of the Credit Agreement is hereby amended to read
      "Sections 2.05(b)(ii), (iii), (iv), (v) and (vi)".

            (j) The reference to "Section 2.04(b)" in the last paragraph of
      Section 2.05(b) of the Credit Agreement is hereby amended to read "Section
      2.05(b)".

            (k) Section 2.07(c) of the Credit Agreement is hereby amended to
      read as follows:

                  (c) Tranche B Term Loan. The Borrower shall repay the
            outstanding principal amount of the Tranche B Term Loan in
            installments on the dates and in the amounts set forth in the table
            below (as such installments may hereafter be adjusted as a result of
            prepayments made pursuant to Section 2.04), unless accelerated
            sooner pursuant to Section 9.02:

<TABLE>
<CAPTION>
                             Principal Amortization
Payment Dates                    Payment
<S>                          <C>
   March 31, 2006                 $   662,500
    June 30, 2006                 $   662,500
 September 30, 2006               $   662,500
</TABLE>

                                       3
<PAGE>

<TABLE>
<S>                               <C>
  December 31, 2006               $   662,500
   March 31, 2007                 $   662,500
    June 30, 2007                 $   662,500
 September 30, 2007               $   662,500
  December 31, 2007               $   662,500
   March 31, 2008                 $   662,500
    June 30, 2008                 $   662,500
 September 30, 2008               $   662,500
  December 31, 2008               $   662,500
   March 31, 2009                 $   662,500
    June 30, 2009                 $   662,500
 September 30, 2009               $   662,500
  December 31, 2009               $   662,500
   March 31, 2010                 $   662,500
    June 30, 2010                 $   662,500
 September 30, 2010               $   662,500
  December 31, 2010               $   662,500
   March 31, 2011                 $62,937,500
    June 30, 2011                 $62,937,500
 September 30, 2011               $62,937,500
    Maturity Date                 $62,937,500
</TABLE>

            (l) Section 8.03(f) of the Credit Agreement is hereby amended to
      read as follows:

                  (f) Indebtedness under the Second Lien Loan Documents in an
            aggregate principal amount not to exceed $65,000,000 at any one time
            outstanding; provided that the same is subject to the terms of the
            Intercreditor Agreement;

            (m) The language preceding the proviso in Section 11.06(f) of the
      Credit Agreement is hereby amended to read as follows:

            Any Lender may at any time pledge or assign a security interest in
            all or any portion of its rights under this Agreement (including
            under its Note, if any) to secure obligations of such Lender,
            including, without limitation, any pledge or assignment to secure
            obligations to a Federal Reserve Bank;

            (n) Clause (a) in the first sentence of Section 11.07 of the Credit
      Agreement is hereby amended to read as follows:

            (a) to its Affiliates and to its and its Affiliates' respective
            partners, directors, officers, employees, agents, trustees, advisors
            and representatives and to any direct or indirect contractual
            counterparty (or such contractual counterparty's professional
            advisor) under any Swap Contract relating to Loans outstanding under
            this Agreement (it being understood that the Persons to whom such
            disclosure is made will be informed of the confidential nature of
            such Confidential Information and instructed to keep such
            Confidential Information confidential),

            (o) Schedule 2.01 of the Credit Agreement is hereby amended to read
      as provided on Schedule 2.01 attached hereto.

                                       4
<PAGE>

      2. Consent. (a) Notwithstanding the terms of Section 8.12 of the Credit
Agreement, the Lenders hereby agree that the Borrower may prepay the Second Lien
Term Loan on the First Amendment Effective Date in an aggregate principal amount
not to exceed $20,000,000, (b) the Lenders hereby consent to and approve the
First Amendment to Term Loan Agreement dated as of the date hereof entered into
among the Borrower, the Guarantors, the Second Lien Lenders and Bank of America,
N.A., in its capacity as Second Lien Agent and the Second Lien Collateral Agent,
a copy of which is attached hereto as Exhibit A (the "First Amendment to Term
Loan Agreement") and (c) the Lenders hereby (i) consent to and approve the First
Amendment to Intercreditor Agreement dated as of the date hereof entered into
among the Collateral Agent, the Second Lien Collateral Agent, the Control Agent
and the Borrower, a copy of which is attached hereto as Exhibit B ("First
Amendment to Intercreditor Agreement") and (ii) authorize and direct the
Collateral Agent and the Control Agent to enter into the First Amendment to
Intercreditor Agreement on behalf of the Lenders.

      3. Conditions Precedent. This Amendment shall be effective upon
satisfaction of the following conditions precedent:

            (a) Receipt by the Administrative Agent of counterparts of this
      Amendment duly executed by the Borrower, the Guarantors, the Lenders and
      Bank of America, N.A., as Administrative Agent and Collateral Agent;

            (b) Receipt by the Administrative Agent of copies of resolutions of
      each Loan Party (in form and substance reasonably satisfactory to the
      Administrative Agent), certified by a Responsible Officer of such Loan
      Party to be true and correct and in force and effect as of the date
      hereof;

            (c) Receipt by the Administrative Agent of a copy, certified by a
      Responsible Officer of the Borrower as true and complete, of the First
      Amendment to Term Loan Agreement; and

            (d) Receipt by the Administrative Agent of favorable opinions of
      legal counsel to the Loan Parties, addressed to the Administrative Agent
      and each Lender, dated as of the First Amendment Effective Date, in form
      and substance satisfactory to the Administrative Agent.

      4. Miscellaneous.

            (a) The Credit Agreement, and the obligations of the Loan Parties
      thereunder and under the other Loan Documents, are hereby ratified and
      confirmed and shall remain in full force and effect according to their
      terms.

            (b) Each Guarantor (a) acknowledges and consents to all of the terms
      and conditions of this Amendment, (b) affirms all of its obligations under
      the Loan Documents and (c) agrees that this Amendment and all documents
      executed in connection herewith do not operate to reduce or discharge its
      obligations under the Credit Agreement or the Loan Documents.

            (c) Each Loan Party hereby represents and warrants as follows:

                  (i) Each Loan Party has taken all necessary action to
            authorize the execution, delivery and performance of this Amendment.

                                       5
<PAGE>

                  (ii) This Amendment has been duly executed and delivered by
            the Loan Parties and constitutes each of the Loan Parties' legal,
            valid and binding obligations, enforceable in accordance with its
            terms, except as such enforceability may be limited by Debtor Relief
            Laws and general principles of equity (regardless of whether such
            enforceability is considered in a proceeding in equity or at law).

                  (iii) No consent, approval, authorization or order of, or
            filing, registration or qualification with, any court or
            governmental authority or third party is required in connection with
            the execution, delivery or performance by any Loan Party of this
            Amendment.

            (d) The Loan Parties represent and warrant to the Lenders that (i)
      the representations and warranties of the Loan Parties set forth in
      Article VI of the Credit Agreement and in each other Loan Document are
      true and correct in all material respects as of the date hereof with the
      same effect as if made on and as of the date hereof, except to the extent
      such representations and warranties expressly relate solely to an earlier
      date and (ii) no event has occurred and is continuing which constitutes a
      Default or an Event of Default.

            (e) This Amendment may be executed in any number of counterparts,
      each of which when so executed and delivered shall be an original, but all
      of which shall constitute one and the same instrument. Delivery of an
      executed counterpart of this Amendment by telecopy shall be effective as
      an original and shall constitute a representation that an executed
      original shall be delivered.

            (f) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
      HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
      WITH THE LAWS OF THE STATE OF NEW YORK.

                  [remainder of page intentionally left blank]

                                       6
<PAGE>

      Each of the parties hereto has caused a counterpart of this Amendment to
be duly executed and delivered as of the date first above written.

BORROWER:         MATRIA HEALTHCARE, INC.,
                  a Delaware corporation

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  Chairman and CEO

GUARANTORS:       MATRIA WOMEN'S AND CHILDREN'S HEALTH, LLC,
                  a Delaware limited liability company

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  Chairman

                  MATRIA CASE MANAGEMENT, INC.,
                  a Georgia corporation

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  President

                  MIAVITA, INC.,
                  a Georgia corporation

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  Chairman

                  MATRIA HEALTH ENHANCEMENT COMPANY,
                  a Delaware corporation

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  Chairman

                  DIABETES ACQUISITION, INC.,
                  a Georgia corporation

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  President

<PAGE>

                  GAINOR MEDICAL ACQUISITION COMPANY,
                  a Georgia corporation

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  President

                  FACET TECHNOLOGIES, LLC,
                  a Georgia limited liability company

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  Chairman

                  MATRIA HEALTHCARE OF ILLINOIS, INC.,
                  a Georgia corporation

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  President

                  MATRIA OF NEW YORK, INC.,
                  a New York corporation

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  President

                  QUALITY ONCOLOGY, INC.,
                  a Delaware corporation

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  Chairman

                  WINNINGHABITS, INC.,
                  a Delaware corporation

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  Chairman

<PAGE>

                  WINNINGHABITS.COM, LTD.,
                  a Texas limited partnership

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  Chairman

                  WINNINGHABITS GP, INC.,
                  a Delaware corporation

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  Chairman

                  WINNINGHABITS LP, INC.,
                  a Delaware corporation

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  Chairman

                  CORSOLUTIONS MEDICAL, INC.,
                  a Delaware corporation

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  Chairman and CEO

                  CORSOLUTIONS INC.,
                  a Delaware corporation

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  Chairman and CEO

                  HEALTH AND PRODUCTIVITY CORPORATION OF AMERICA, INC.,
                  a Delaware corporation

                  By:    /s/ Parker H. Petit
                     -----------------------------------------------------------
                  Name:  Parker H. Petit
                  Title:  Chairman and CEO

<PAGE>
ADMINISTRATIVE
AGENT:             BANK OF AMERICA, N.A.,
                   as Administrative Agent and Collateral Agent

                   By:    /s/ Kristine Thennes
                      ----------------------------------------------------------
                   Name:  Kristine Thennes
                   Title: Vice President

LENDERS:           BANK OF AMERICA, N.A.,
                   as a Lender, Swing Line Lender and L/C Issuer

                   By:    /s/ William H. Powell
                      ----------------------------------------------------------
                   Name:  William H. Powell
                   Title: Senior Vice President

<PAGE>

                                 SCHEDULE 2.01

                                  COMMITMENTS
<TABLE>
<CAPTION>
                         Revolving      Applicable    Tranche B Term    Applicable    Tranche C Term    Applicable
   Lender                Commitment     Percentage    Loan Commitment   Percentage    Loan Commitment   Percentage
<S>                    <C>             <C>            <C>              <C>            <C>              <C>
Bank of America, N.A.  $30,000,000.00  100.000000000% $265,000,000.00  100.000000000% $125,000,000.00  100.000000000%
Total                  $30,000,000.00  100.000000000% $265,000,000.00  100.000000000% $125,000,000.00  100.000000000%
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]