Document:

THIRD AMENDMENT TO CREDIT AGREEMENT

         THIS THIRD AMENDMENT TO CREDIT  AGREEMENT,  dated as of the 17th day of
March,  2000  (this  "Amendment"),  is made among  MATRIA  HEALTHCARE,  INC.,  a
Delaware  corporation (the "Borrower"),  the Required Lenders (as defined in the
Credit  Agreement  referred  to  below),  and  FIRST  UNION  NATIONAL  BANK,  as
administrative  agent for the Lenders  (in such  capacity,  the  "Administrative
Agent").

                                    RECITALS

         A. The Borrower,  certain banks and other financial  institutions,  the
Administrative  Agent,  and Harris  Trust and Savings  Bank,  as  Co-Agent,  are
parties to a Credit  Agreement,  dated as of January 19, 1999 (as  amended,  the
"Credit Agreement"), providing for the availability of certain credit facilities
to the Borrower upon the terms and  conditions  set forth  therein.  Capitalized
terms used herein  without  definition  shall have the meanings given to them in
the Credit Agreement.

     B. The Borrower  and the  Required  Lenders have agreed to amend the Credit
Agreement upon the terms and conditions set
forth herein.

                             STATEMENT OF AGREEMENT

         NOW,  THEREFORE,  in  consideration of the foregoing and other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties hereto agree as follows:

1.       Amendments to Covenants.
--------------------------------

     (a) Leverage Ratio.  Section 7.1 of the Credit  Agreement is hereby amended
and restated in its entirety as follows: -----------------------

                  "7.1 Leverage Ratio. Matria will not permit the Leverage Ratio
         as of the last day of any fiscal  quarter  during the periods set forth
         below,  beginning  with the fiscal quarter ending March 31, 1999, to be
         greater than the ratio set forth below opposite such period:

                                                                Maximum

         Date                                              Leverage Ratio

         Closing Date through

     December  31,  1999 3.5 : 1.0  Thereafter  3.0 : 1.0" (b)  Senior  Leverage
Ratio. Section 7.2 of the Credit Agreement is hereby amended and restated in its
entirety as follows:

                  "7.2 Senior Leverage Ratio.  Matria will not permit the Senior
         Leverage  Ratio as of the last day of any  fiscal  quarter  during  the
         periods set forth below, beginning with the fiscal quarter ending March
         31, 1999,  to be greater than the ratio set forth below  opposite  such
         period:

                                                              Maximum Senior

         Date                                                 Leverage Ratio

         Closing Date through

     December 31, 1999 3.5 : 1.0 Thereafter 2.5 : 1.0" (c) Fixed Charge Coverage
Ratio. Section 7.3 of the Credit Agreement is hereby amended and restated in its
entirety as follows:

                  "7.3 Fixed Charge Coverage  Ratio.  Matria will not permit the
         Fixed Charge  Coverage  Ratio as of the last day of any fiscal  quarter
         during the periods set forth below,  beginning  with the fiscal quarter
         ending  March 31,  1999,  to be less  than the  ratio  set forth  below
         opposite such period:

<PAGE>

                                                        Minimum Fixed Charge
         Date                                               Coverage Ratio

         Closing Date through
              December 31, 2000                              1.25 : 1.0
         Thereafter                                          1.35 : 1.0"
     (d) Capital  Expenditures.  Section 7.5 of the Credit  Agreement  is hereby
amended and restated in its entirety as follows:

                  "7.5  Capital  Expenditures.  Matria  will not permit  Capital
         Expenditures  during any period of four consecutive  fiscal quarters (a
         "Reference Period") ending on the last day of any fiscal quarter during
         the periods set forth below, beginning with the period ending March 31,
         1999,  to be greater  than the sum of (i) the  amount  set forth  below
         opposite such period plus (ii) fifty  percent  (50%) of the excess,  if
         any,  of the  amount  set forth  below  applicable  to the  immediately
         preceding Reference Period (without giving effect to any carryover from
         any  prior  Reference   Period)  over  the  actual  amount  of  Capital
         Expenditures for such immediately preceding Reference Period:

<PAGE>

                                                  Maximum Amount of Capital
         Period                                          Expenditures

         Closing Date through

     December  31,  1999  $10,500,000  January 1, 2000  through  March 31,  2000
$11,500,000  Thereafter  $12,500,000" 2.  Representations  and  Warranties.  The
Borrower      hereby      represents      and      warrants      as     follows:

(a) Each of the representations and warranties contained in the Credit Agreement
and in the other  Credit  Documents  is true and  correct  on and as of the date
hereof and will be true and correct on and as of the  Amendment  Effective  Date
(as hereinafter defined) and after giving effect to this Amendment with the same
effect  as if  made  on and as of such  date  (except  to the  extent  any  such
representation  or  warranty  is  expressly  stated  to have  been  made as of a
specific date, in which case such representation or warranty is true and correct
as of such date).

(b) On and as of the date  hereof,  no Default or Event of Default has  occurred
and is  continuing,  and on and as of the  Amendment  Effective  Date and  after
giving  effect to this  Amendment,  no  Default  or Event of  Default  will have
occurred and be continuing.

3. Effect of Amendment.  From and after the effective  date of the amendments to
the Credit  Agreement set forth herein,  all references to the Credit  Agreement
set forth in any other Credit Document or other  agreement or instrument  shall,
unless otherwise specifically provided, be references to the Credit Agreement as
amended by this Amendment and as may be further amended,  modified,  restated or
supplemented from time to time. This Amendment is limited as specified and shall
not constitute or be deemed to constitute an amendment,  modification  or waiver
of any provision of the Credit  Agreement  except as expressly set forth herein.
Except as expressly  amended hereby,  the Credit  Agreement shall remain in full
force and effect in accordance with its terms.

     4.  Governing  Law. This  Amendment  shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia  (without regard to
the conflicts of law provisions thereof).

5. Severability.  To the extent any provision of this Amendment is prohibited by
or invalid under the applicable law of any jurisdiction, such provision shall be
ineffective only to the extent of such prohibition or invalidity and only in any
such  jurisdiction,  without  prohibiting or invalidating  such provision in any
other  jurisdiction  or  the  remaining  provisions  of  this  Amendment  in any
jurisdiction.

     6. Successors and Assigns.  This Amendment shall be binding upon,  inure to
the benefit of and be enforceable  by the  respective  successors and assigns of
the parties hereto.

     7. Construction. The headings of the various sections and subsections of
this Amendment have been inserted for convenience only and
shall not in any way affect the meaning or construction of any of the provisions
hereof.

8. Counterparts;  Effectiveness. This Amendment may be executed in any number of
counterparts and by different parties hereto on separate  counterparts,  each of
which when so executed  and  delivered  shall be an  original,  but all of which
shall together  constitute  one and the same  instrument.  This Amendment  shall
become  effective on the date (the  "Amendment  Effective  Date") upon which the
Administrative  Agent shall have  received an executed  counterpart  hereof from
each of the Borrower and the Required Lenders.

<PAGE>

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

              MATRIA HEALTHCARE, INC.

              By:      _______________________________

              Title:   _______________________________

               FIRST UNION NATIONAL BANK, as Administrative Agent and as Lender

               By:      _______________________________

               Title:   _______________________________

               HARRIS TRUST AND SAVINGS BANK, as Co-Agent and as Lender

               By:      _______________________________

               Title:   _______________________________

               BANKERS TRUST COMPANY

               By:      _______________________________

               Title:   _______________________________

               FINOVA CAPITAL CORPORATION

               By:      _______________________________

               Title:   _______________________________PROMISSORY NOTE

$200,000.00                                                    October 12, 2000

         FOR VALUE RECEIVED, the undersigned hereby promises to pay to the order
of Matria Healthcare,  Inc., a Delaware corporation  ("Company"),  the principal
sum of Two  Hundred  Thousand  Dollars  and Zero Cents  ($200,000.00),  payable,
together with all accrued  interest,  in full on January 1, 2002 (the  "Maturity
Date");  provided  that,  (i) if the closing bid price for the Company's  Common
Stock  on any  trading  day  between  the date of this  Promissory  Note and the
Maturity   Date  equals  or  exceeds  $6.00  per  share  (as  adjusted  for  any
reorganizations,  recapitalizations,  stock  splits,  reverse  stock  splits  or
similar  transactions),  and (ii) the undersigned is still employed as President
and CEO of the Company on the Maturity Date or the  undersigned's  employment as
President and CEO is earlier  terminated by the Company  without cause or due to
the undersigned's death or disability, the entire principal and interest payable
under this Promissory Note and all accrued and unpaid interest shall be forgiven
and the undersigned shall have no further  obligation to the Company  hereunder.
For  purposes  of the  preceding  sentence,  "cause"  shall  mean the  Company's
termination  of the  undersigned's  employment on the basis of criminal or civil
fraud on the party of the  undersigned  involving a material  amount of funds of
the Company. This Promissory Note shall bear interest until maturity (whether by
acceleration or otherwise) at the rate of six percent (6%) per annum.

         This Promissory  Note shall  automatically  become due and payable,  in
full,  prior to maturity  without the giving of notice of any kind (all of which
is expressly waived) upon the first to occur of the following events or dates:

     (1)  the  voluntary  or  involuntary   termination  of  the   undersigned's
employment with the Company for any reason whatsoever;

     (2) a decree  or order  by a court  having  jurisdiction  shall  have  been
entered  adjudging  the  undersigned  bankrupt or  insolvent,  or  approving  as
properly  filed  a  petition  seeking  reorganization  of the  undersigned  or a
substantial part of the undersigned's property under the federal bankruptcy laws
or any other similar  applicable  federal or state law, and such decree or order
shall have  continued  undischarged  or unstayed  for a period of 60 days;  or a
decree  or  order  of a  court  having  jurisdiction  in the  premises  for  the
appointment  of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the undersigned or a substantial  part of her affairs,  shall have
been entered,  and such decree order shall have  remained in force  undischarged
and unstayed for a period of 60 days; or

     (3)  the  undersigned  shall  institute  proceedings  to be  adjudicated  a
voluntary  bankrupt,  or shall consent to the filing of a bankruptcy  proceeding
against   him,  or  shall  file  a  petition   or  answer  or  consent   seeking
reorganization   under  the  federal  bankruptcy  laws,  or  any  other  similar
applicable  federal  or state  law,  or shall  consent to the filing of any such
petition,  or shall  consent to the  appointment  or a receiver or liquidator or
trustee or  assignee in  bankruptcy  for  himself or a  substantial  part of his
property,  or shall make an assignment  for the benefit of  creditors,  or shall
admit, in writing, his inability to pay his debts generally as they become due.

         In the event the note is not paid in full at  stated  maturity  or upon
the  occurrence  of events (i),  (ii), or (iii) stated  above,  the  undersigned
hereby  expressly  authorizes  the  Company to  automatically  withhold a dollar
amount equal to the Company  determined  installments  of principal and interest
due hereunder from the  undersigned's  biweekly  paycheck for purposes of paying
the scheduled installments of principal and interest on this Promissory Note. In
addition, the undersigned expressly authorizes the Company to withhold and apply
as a repayment of the principal of this Promissory Note and the interest accrued
thereon  through  the date of such  prepayment,  the full  amount of any  bonus,
severance  or similar  compensation  payable to the  undersigned  after the date
hereof and prior to the payment,  in full,  of the  principal of and interest on
this Promissory Note.

         Payments of principal and interest shall be made in lawful money of the
United States of America at the offices of Matria Healthcare, Inc., 1850 Parkway
Place, Marietta, Georgia 30067, or such other address as shall be designated, in
writing, from time to time.

         Nothing  in this  Promissory  Note  shall be  deemed  to  constitute  a
contract of employment.

         This  Promissory  Note shall be governed by and construed in accordance
with the laws of the State of Georgia.

                                        ----------------------------------
                                        Parker H. Petit

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