HORIZON HEALTH CORP /DE/
THIRD AMENDMENT TO AMENDED/RESTATED CREDIT AGRMT.
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>d07006exv10w2.txt
<DESCRIPTION>THIRD AMENDMENT TO AMENDED/RESTATED CREDIT AGRMT.
<TEXT>
<PAGE>


                                                                    EXHIBIT 10.2

         THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

         THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(the "Amendment"), dated as of April 4, 2003 is among HORIZON HEALTH
CORPORATION, a Delaware Corporation (the "Parent"), HORIZON MENTAL HEALTH
MANAGEMENT, INC., a Delaware Corporation (the "Borrower"), each of the banks or
other lending institutions party hereto, JPMORGAN CHASE BANK (formerly known as
The Chase Manhattan Bank, who was the successor in interest by merger to Chase
Bank of Texas, National Association, formerly known as Texas Commerce Bank
National Association), as the agent (the "Agent").

                                    RECITALS:

         A. The Parent, the Borrower, the Agent, and certain banks and other
lending institutions have entered into that certain Second Amended and Restated
Credit Agreement dated as of May 23, 2002 (as amended by that certain First
Amendment to Second Amended and Restated Credit Agreement dated as of September
25, 2002, that certain Second Amendment to Second Amended and Restated Credit
Agreement dated as of October 4, 2002 (the "Second Amendment"), and as the same
may hereafter be further amended or otherwise modified, herein the "Agreement").

         B. The Parent wishes to repurchase shares of its stock on the open
market or through privately negotiated transactions, in addition to those shares
that were repurchased pursuant to the Second Amendment, in an amount not to
exceed $7,500,000.

         C. In connection with the Parent's repurchase of shares of its stock,
the Parent and the Borrower have requested that the Agent and the Banks amend
certain provisions of the Agreement. Subject to satisfaction of the conditions
set forth herein, the Agent and the Banks party hereto are willing to amend the
Agreement as herein set forth

         NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows effective as of the
date hereof unless otherwise indicated:

                                   ARTICLE I.

                                   Definitions

         Section 1.1. Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.

                                  ARTICLE II.

                                   Amendments

         Section 2.1. Amendment to Section 10.4 - RESTRICTIONS ON DIVIDENDS AND
OTHER DISTRIBUTIONS. Clause (iv) of Section 10.4 of the Agreement is amended in
its entirety to read as set forth in clause (iv) below:

         (iv) during the period from April 5, 2003 through April 4, 2004, Parent
         may repurchase shares of its stock on the open market or through
         privately negotiated transactions (in addition to those purchased under
         clause (iii) of this Section 10.4); provided that (A) no


THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 1

<PAGE>

         Default exists or would result therefrom, (B) the aggregate amount paid
         by Parent for such repurchases completed during such period does not
         exceed Seven Million Five Hundred Thousand Dollars ($7,500,000), (C) as
         of the date of any such repurchase, the ratio of pro forma Indebtedness
         outstanding as of the date of any such repurchase (after giving effect
         to any borrowings made in connection therewith to fund the purchase
         thereof) to the Adjusted EBITDA for the most recently completed four
         (4) Fiscal Quarter period as of the date of such repurchase, does not
         exceed 1.50 to 1.00, and (D) as of the date of any such repurchase that
         is in an amount greater than $100,000 and, in any event, within fifteen
         (15) days after the end of each month ending during the period from
         April 5, 2003 through April 4, 2004, Parent delivers to Agent a
         certificate completed and executed by the chief executive or chief
         financial officer of Parent setting forth in reasonable detail the
         calculations required to establish compliance with clauses (B) and (C)
         of this clause (iv) and stating that no Default exists or would result
         from any such repurchase or, if applicable, existed during such month.

         Section 2.2. Amendment to Section 11.5 - CURRENT RATIO. Section 11.5 of
the Agreement is amended in its entirety to read "Reserved."

         Section 2.3. Amendment to Exhibit C - COMPLIANCE CERTIFICATE. Exhibit C
to the Agreement is amended in its entirety to read as set forth on Exhibit A
attached hereto.

                                  ARTICLE III.

                              Conditions Precedent

         Section 3.1. Conditions. The effectiveness of Article 2 of this
Amendment is subject to the satisfaction of the following conditions precedent:

         (a) The Agent shall have received all of the following, each dated
(unless otherwise indicated) the date of this Amendment, in form and substance
satisfactory to the Agent:

                  (i) Amendment Fee. Payment of the amendment fee required by
Section 4.6 of this Amendment.

                  (ii) Additional Information. Such additional documentation,
approvals, opinions, and information as Agent or its legal counsel Jenkens &
Gilchrist, a Professional Corporation, may request; and

         (b) The representations and warranties contained herein and in all
other Loan Documents, as amended hereby, shall be true and correct in all
material respects as of the date hereof as if made on the date hereof, except
for such representations and warranties limited by their terms to a specific
date;

         (c) No Default or Event of Default shall have occurred and be
continuing; and

         (d) All proceedings taken in connection with the transactions
contemplated by this Amendment and all documentation and other legal matters
incident thereto shall be satisfactory to the Agent and its legal counsel
Jenkens & Gilchrist, a Professional Corporation.


THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 2

<PAGE>

                                  ARTICLE IV.

                                  Miscellaneous

         Section 4.1. Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement and the other Loan
Documents are ratified and confirmed and shall continue in full force and
effect.

         Section 4.2. Representations and Warranties. Borrower hereby represents
and warrants to the Agent and the Banks as follows: (a) after giving effect to
this Amendment, no Default exists; (b) after giving effect to this Amendment,
the representations and warranties set forth in the Loan Documents are true and
correct in all material respects on and as of the date hereof with the same
effect as though made on and as of such date except with respect to any
representations and warranties limited by their terms to a specific date; and
(c) the execution, delivery, and performance of this Amendment has been duly
authorized by all necessary action on the part of Parent, Borrower, and each
Obligated Party and does not and will not (i) violate any provision of law
applicable to the Borrower, the Parent, or any Obligated Party, the certificate
of incorporation, bylaws, partnership agreement, membership agreement, or other
applicable governing document of the Borrower, the Parent, or any Obligated
Party or any order, judgment, or decree of any court or agency of government
binding upon the Borrower, the Parent, or any Obligated Party, (ii) conflict
with, result in a breach of or constitute (with due notice of lapse of time or
both) a default under any material contractual obligation of the Borrower, the
Parent, or any Obligated Party, (iii) result in or require the creation or
imposition of any material lien upon any of the assets of the Borrower, the
Parent, or any Obligated Party, or (iv) require any approval or consent of any
Person under any material contractual obligation of the Borrower, the Parent, or
any Obligated Party.

         IN ADDITION, TO INDUCE THE AGENT AND THE BANKS TO AGREE TO THE TERMS OF
THIS AMENDMENT, THE BORROWER, THE PARENT, AND EACH OBLIGATED PARTY (BY IT
EXECUTION BELOW) REPRESENTS AND WARRANTS THAT AS OF THE DATE OF ITS EXECUTION OF
THIS AMENDMENT THERE ARE NO CLAIMS OR OFFSETS AGAINST OR DEFENSES OR
COUNTERCLAIMS TO ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS AND IN ACCORDANCE
THEREWITH IT:

                  (a) WAIVER. WAIVES ANY AND ALL SUCH CLAIMS, OFFSETS, DEFENSES
         OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE DATE
         OF ITS EXECUTION OF THIS AMENDMENT AND

                  (b) RELEASE. RELEASES AND DISCHARGES THE AGENT AND THE BANKS,
         AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
         SHAREHOLDERS, AFFILIATES AND ATTORNEYS (COLLECTIVELY THE "RELEASED
         PARTIES") FROM ANY AND ALL OBLIGATIONS, INDEBTEDNESS, LIABILITIES,
         CLAIMS, RIGHTS, CAUSES OF ACTION OR DEMANDS WHATSOEVER, WHETHER KNOWN
         OR UNKNOWN, SUSPECTED OR UNSUSPECTED, IN LAW OR EQUITY, WHICH THE
         BORROWER OR ANY OBLIGATED PARTY EVER HAD, NOW HAS, CLAIMS TO HAVE OR
         MAY HAVE AGAINST ANY RELEASED PARTY ARISING PRIOR TO THE DATE HEREOF
         AND FROM OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS
         CONTEMPLATED THEREBY.

         Section 4.3. Survival of Representations and Warranties. All
representations and warranties made in this Amendment shall survive the
execution and delivery of this Amendment, and no


THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 3
<PAGE>

investigation by the Agent or any Bank or any closing shall affect the
representations and warranties or the right of the Agent or any Bank to rely
upon them.

         Section 4.4. Reference to Agreement. Each of the Loan Documents,
including the Agreement, are hereby amended so that any reference in such Loan
Documents to the Agreement shall mean a reference to the Agreement as amended
hereby.

         Section 4.5. Expenses of Agent. As provided in the Agreement, the
Borrower agrees to pay on demand all costs and expenses incurred by the Agent in
connection with the preparation, negotiation, and execution of this Amendment,
including without limitation, the costs and fees of the Agent's legal counsel.

         Section 4.6. Amendment Fee. The Borrower agrees to pay to each Bank, on
the date hereof, an amendment fee in the amount of $25,000 each, in
consideration for the Banks' agreement to enter into this Amendment.

         Section 4.7. Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

         Section 4.8. Applicable Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas and the applicable
laws of the United States of America.

         Section 4.9. Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of the Agent, each Bank and the Borrower and their
respective successors and assigns, except the Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Banks.

         Section 4.10. Counterparts. This Amendment may be executed in one or
more counterparts and on telecopy counterparts, each of which when so executed
shall be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.

         Section 4.11. Effect of Waiver. No consent or waiver, express or
implied, by the Agent or any Bank to or for any breach of or deviation from any
covenant, condition or duty by the Borrower or any Obligated Party shall be
deemed a consent or waiver to or of any other breach of the same or any other
covenant, condition or duty.

         Section 4.12. Headings. The headings, captions, and arrangements used
in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.

         Section 4.13. ENTIRE AGREEMENT. THIS AMENDMENT EMBODIES THE FINAL,
ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR
ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.


THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 4
<PAGE>

         Executed as of the date first written above.

                                 PARENT AND BORROWER:

                                 HORIZON HEALTH CORPORATION
                                 HORIZON MENTAL HEALTH MANAGEMENT, INC.


                                 By: /s/ Ronald C. Drabik
                                     -----------------------------------
                                 Name:  Ronald C. Drabik
                                 Authorized Officer for both Parent and Borrower


                                 AGENT AND BANKS:

                                 JPMORGAN CHASE BANK (formerly known as The
                                 Chase Manhattan Bank, who was successor-in-
                                 interest by merger to the Chase Bank of Texas,
                                 National Association who was formerly known
                                 as TEXAS COMMERCE BANK NATIONAL ASSOCIATION),
                                 individually as a Bank, as Agent, and as
                                 Issuing Bank


                                 By: /s/ Britt Langford
                                     -----------------------------------
                                 Britt Langford, Senior Vice President


                                 BANK OF AMERICA, NATIONAL ASSOCIATION


                                 By:  /s/ Daniel H. Penkar
                                     -----------------------------------
                                 Daniel H. Penkar, Senior Vice President


THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 5
<PAGE>

                             OBLIGATED PARTY CONSENT

         Each Obligated Party (i) consents and agrees to this Third Amendment to
Second Amended and Restated Credit Agreement; (ii) agrees that the Guaranty,
Subsidiary Security Agreement, and the Subsidiary Pledge Agreement to which it
is a party shall remain in full force and effect and shall continue to be the
legal, valid, and binding obligation of such Obligated Party enforceable against
it in accordance with its terms; (iii) agrees that the "Obligations" as defined
in the Agreement as amended hereby (including, without limitation, all
obligations, indebtedness, and liabilities arising in connection with the
Letters of Credit) are "Obligations" as defined in the Guaranty; and (iv) agrees
that any reference to the "Borrower" in the Guaranty, Subsidiary Security
Agreement or Subsidiary Pledge Agreement shall mean Horizon Mental Health
Management, Inc. as the "Borrower" hereunder successor by assumption to the
obligations of the Parent.


                                OBLIGATED PARTIES:

                                MENTAL HEALTH OUTCOMES, INC.
                                SPECIALTY REHAB MANAGEMENT, INC.
                                HHMC PARTNERS, INC.
                                HORIZON BEHAVIORAL SERVICES, INC.
                                FLORIDA PSYCHIATRIC ASSOCIATES, INC.
                                HORIZON BEHAVIORAL SERVICES OF FLORIDA, INC.
                                FPMBH OF TEXAS, INC.
                                HMHM OF TENNESSEE, INC.
                                OCCUPATIONAL HEALTH CONSULTANTS OF AMERICA, INC.
                                EMPLOYEE ASSISTANCE SERVICES, INC.
                                HORIZON BEHAVIORAL SERVICES IPA, INC.
                                HORIZON BEHAVIORAL SERVICES OF NEW JERSEY, INC.
                                HORIZON BEHAVIORAL SERVICES OF NEW YORK, INC.
                                PROCARE ONE NURSES, LLC
                                EMPLOYEE ASSISTANCE PROGRAMS INTERNATIONAL, INC.


                                By: /s/ Ronald C. Drabik
                                    ---------------------------------------
                                Name: Ronald C. Drabik
                                Authorized Officer for each Obligated Party


THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 6
<PAGE>

                                    EXHIBIT A
                                       TO
                           HORIZON HEALTH CORPORATION
         THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

                             Compliance Certificate


EXHIBIT A - COVER PAGE
<PAGE>


                             COMPLIANCE CERTIFICATE
                                     for the
                     Fiscal Quarter ending ________ __, ____

To:      JPMorgan Chase Bank
         P.O. Box 660197
         Dallas, Texas 75266-0197
         Fax No.:  (972) 888-7837
         Telephone No.:  (972) 888-7802
         Attention:  D. Scott Harvey
                     Steve Lewis

Ladies and Gentlemen:

         This Compliance Certificate (the "Certificate") is being delivered
pursuant to Section 9.1(c) of that certain Second Amended and Restated Credit
Agreement (as amended, the "Agreement") dated as of May 23, 2002, among the
Horizon Health Corporation ("Parent"), Horizon Mental Health Management, Inc.
("Borrower"), the banks and lending institutions named therein (the "Banks") and
JPMorgan Chase Bank, as agent for the Banks ("Agent"). All capitalized terms,
unless otherwise defined herein, shall have the same meanings as in the
Agreement. All the calculations set forth below shall be made pursuant to the
terms of the Agreement.

         The undersigned, as an authorized financial officer of Parent, and not
individually, does hereby certify to the Agents and the Banks that:

<Table>
<S>      <C>                                                                     <C>           <C>    <C>  <C>
1.       DEFAULT.

         No Default has occurred and is continuing or if a Default has occurred
         and is continuing, I have described on the attached Exhibit A the
         nature thereof and the steps taken or proposed to remedy such Default.

2.      SECTION 9.1 - FINANCIAL STATEMENTS AND RECORDS

        (a)  Annual audited financial statements of Parent and the Subsidiaries                Yes    No   N/A
             on or before ninety (90) days after the end of each Fiscal Year.

        (b)  Quarterly unaudited financial statements of Parent and the                        Yes    No   N/A
             Subsidiaries within forty-five (45) days after the end of
             each Fiscal Quarter

        (c)  Financial Projections of Parent and Subsidiaries within forty-five                Yes    No   N/A
             (45) days after the beginning of each Fiscal Year.

3.       SECTION 9.10(d) - INSIGNIFICANT SUBSIDIARIES

         EBITDA for the Insignificant Subsidiaries for the most
         recently completed four Fiscal Quarter period not to exceed:            $250,000
         Actual EBITDA for the Insignificant Subsidiaries for the most
         recently completed four Fiscal Quarter period:
                                                                                 $             Yes    No
                                                                                  ---------

</Table>


Compliance Certificate - Page 1

<PAGE>

<Table>
<S>      <C>                                                                     <C>           <C>    <C>

4.      SECTION 9.10(e) - RESTRICTED SUBSIDIARIES

         EBITDA for the Restricted Subsidiaries for the most recently
         completed four Fiscal Quarter period not to exceed 10% of line
         12(f):                                                                  $
                                                                                  ---------
         Actual EBITDA for the Restricted Subsidiaries for the most
         recently completed four Fiscal Quarter period:                          $             Yes    No
                                                                                  ---------
5.      SECTION 10.1 - DEBT

        (a)  Purchase money not to exceed:                                       $ 500,000
             Actual Outstanding:                                                 $             Yes    No
                                                                                  ----------
        (b)  Guarantees of surety, appeal bonds, etc. not to exceed:             $ 1,000,000
             Actual Outstanding:                                                 $             Yes    No
                                                                                  ----------
        (c)  Aggregate Debt of newly acquired or merged Subsidiaries
             not to exceed:                                                      $ 1,000,000
             Actual Outstanding:                                                 $             Yes    No
                                                                                  ----------
        (d)  Other Debt not to exceed:                                           $ 250,000
             Actual Outstanding:                                                 $             Yes    No
                                                                                  ----------

6.       SECTION 10.4 - RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS

         The total aggregate amount of redemptions or repurchases exercised by
         employees and directors in connection with the exercise by such Person
         of stock options granted to such Person under Parent's benefit programs
         in any Fiscal Year
         shall not exceed:                                                       $ 1,000,000   Yes    No
         Actual Expended:                                                        $
                                                                                  ----------

7.      SECTION 10.5 - INVESTMENTS

        (a)  Aggregate amount of loans to physicians employed by a
             Subsidiary not to exceed (calculated net of bad debt
             reserve):                                                           $ 500,000

             Actual Outstanding:                                                 $             Yes    No
                                                                                  ----------
        (b)  Aggregate amount of investments in or contributions to wholly
             owned Subsidiaries not to exceed:                                   $ 250,000

             Actual Outstanding:                                                 $             Yes    No
                                                                                  ----------
        (c)  Gross aggregate amount of loans, advances, and investments in
             or contributions to Valley Rehabilitation Hospital, LLP
             not to exceed:                                                      $1,500,000

             Actual Aggregate Amount:                                            $             Yes    No
                                                                                  ----------
        (d)  Aggregate amount of investments in HBS CA not to exceed the lesser
             of $1,500,000 or the minimum amount for compliance with minimum
             net worth requirements under Knox Keene Act:                        $
                                                                                  ----------
             Actual Aggregate Amount:                                            $             Yes    No
                                                                                  ----------
</Table>


Compliance Certificate - Page 2

<PAGE>

<Table>
<S>      <C>                                                                     <C>           <C>    <C>
        (e)  Aggregate amount of investments in Insights in addition to the
             Purchase Price paid for Insights not to exceed:                     $1,000,000

             Actual Aggregate Amount:                                            $             Yes    No
                                                                                  ----------
8.      SECTION 10.8 - ASSET DISPOSITIONS

        (a)  Aggregate book value of assets disposed during any
             12-month period not to exceed:                                      $ 500,000

        (b)  Total book value of asset dispositions for 12-month period
             most recently ending:                                               $             Yes    No
                                                                                  ----------
9.       SECTION 10.11 - PREPAYMENT OF DEBT

        (a)  Aggregate amount of Debt, other than the Obligations, prepaid or
             optionally redeemed during period from the Closing Date to the
             Termination Date not to exceed:                                     $ 300,000

        (b)  Total amount of Debt, other than the Obligations, prepaid
             or optionally redeemed:                                             $             Yes    No
                                                                                  ----------

10.     SECTION 11.1 - CONSOLIDATED NET WORTH

        (a)  Base Consolidated Net Worth                                         $
                                                                                  ----------
        (b)  The lesser of (i) $500,000 or (ii) aggregate amount of non-cash     $
             losses attributable to impairment of goodwill and incurred and       ----------
             reported on Parent's 8/31/02 financial statement for such fiscal
             year which have resulted from Parent's compliance with statement
             number 142 of FASB

        (c)  Cumulative positive Net Income since 2/28/02 Fiscal                 $
             Quarter end                                                          ----------

        (d)  50% of 10(c)                                                        $
                                                                                  ----------
        (e)  Aggregate amount of net cash proceeds or other Capital              $
             Contribution to Parent since 2/28/02                                 ----------

        (f)  the lesser of $7,500,000 or the aggregate amount paid by Parent     $
             for its repurchase of shares of its stock on the open market or      ----------
             through privately negotiated transactions pursuant to clause (iv)
             of Section 10.4

        (g)  Required Consolidated Net Worth:                                    $
             10(a) minus 10(b) plus 10(d) plus 10(e) minus 10(f)                  ----------

        (h)  Actual Consolidated Net Worth                                       $             Yes    No
                                                                                  ----------

11.     SECTION 11.2 - INDEBTEDNESS TO CAPITALIZATION

        (a)  Debt for borrowed money                                             $
                                                                                  ----------
        (b)  Debt evidenced by bonds, notes, etc.                                $
                                                                                  ----------
        (c)  Capital Lease Obligations                                           $
                                                                                  ----------
</Table>


Compliance Certificate - Page 3
<PAGE>

<Table>
<S>      <C>                                                                     <C>           <C>    <C>
        (d)  Reimbursement obligations for letters of credit                     $
                                                                                  ----------
        (e)  North Central Development Company debt                              $
                                                                                  ----------
        (f)  Sum of 11(a) through 11(e)                                          $
                                                                                  ----------
        (g)  Actual Consolidated Net Worth                                       $
             (from Section 11.1)                                                  ----------

        (h)  11(f) plus 11(g)                                                    $
                                                                                  ----------
        (i)  11(f) : 11 (h) =                                                          :1.00
                                                                                  -----
        (j)  Maximum Indebtedness to Capitalization                                0.50:1.00   Yes    No

12.     SECTION 11.3 - FIXED CHARGE COVERAGE

        (a)  Parent and the Subsidiaries' Consolidated Net Income for
             last four Fiscal Quarters (from Schedule 1)                         $
                                                                                  ----------
        (b)  Plus provisions for tax                                             $
                                                                                  ----------
        (c)  less benefit from tax                                               $
                                                                                  ----------
        (d)  Plus interest expense                                               $
                                                                                  ----------
        (e)  Plus amortization and depreciation                                  $
                                                                                  ----------
        (f)  Parent and the Subsidiaries' EBITDA:                                $
             (12(a) plus 12(b) minus 12(c) plus 12(d) plus 12 (e))                ----------

        (g)  provisions for taxes                                                $
                                                                                  ----------
        (h)  plus benefit from taxes                                             $
                                                                                  ----------
        (i)  minus cash dividends and other distributions made on                $
             account of the Parent's capital stock                                ----------

        (j)  aggregate amount of non-cash losses which have not already been     $
             excluded in determining Consolidated Net Income and which are        ----------
             attributable to impairment of Parent's goodwill incurred and
             reported by Parent on its financial statements which have resulted
             from Parent's compliance with statement number 142 of FASB

        (k)  Cash Flow                                                           $
          (12(f) plus 12(h) minus 12(g) minus 12(i) plus 12(j))                   ----------
</Table>


Compliance Certificate - Page 4

<PAGE>

<Table>
<S>      <C>                                                                     <C>           <C>    <C>
        (l)  Fixed Charges

             (i)   Cash interest expense for last four Fiscal Quarters           $
                                                                                  ----------
             (ii)  as of each date of determination (A) prior to the
                   Revolving Termination Date, one-fifth of the outstanding
                   balance of Loans and (B) on and after the Revolving
                   Termination Date, current maturities of long term debt
                   reflected on Parent's consolidated balance sheet, excluding
                   2/3 of the final principal installment due on the Termination
                   Date                                                          $
                                                                                  ----------
             (iii) Aggregate amount of Capital Expenditures for last
                   four Fiscal Quarters                                          $
                                                                                  ----------
             (iv)  Payments made pursuant to Capital Lease Obligations
                   for last four Fiscal Quarters                                 $
                                                                                  ----------
             (v)   Sum of 12(l)(i) through (iv)                                  $
                                                                                  ----------

        (m)  Actual Fixed Charge Coverage (12(k) : 12(l)(v))=                          :1.00
                                                                                  -----
        (n)  Minimum Fixed Charge Coverage                                         1.20:1.00   Yes    No

13.     SECTION 11.4 - INDEBTEDNESS TO ADJUSTED EBITDA

        (a)  Indebtedness (from 11(f))                                           $
                                                                                  ----------
        (b)  Actual EBITDA (from 12(f))                                          $
                                                                                  ----------
        (c)  Goodwill Impairment (from 12(j))                                    $
                                                                                  ----------
        (d)  Prior Period/Prior Target EBITDA; provided that, (i) the            $
             EBITDA for a Prior Target will not be included unless it             ----------
             can be established in a manner satisfactory to Agent based
             on financial statements of the Prior Target prepared in
             accordance with GAAP without adjustment for expense or
             other charges that will be eliminated after the
             acquisition;  and (ii) if such Prior Target has become a
             Restricted Subsidiary, then in calculating its pro forma
             EBITDA, any income which could not be distributed to its
             parent as a result of restrictions arising under governing
             documents, agreement, applicable law or otherwise shall
             not be included

        (e)  Adjusted EBITDA (13(b) plus 13(c) plus 13(d))                       $
                                                                                  ----------
        (f)  13(a) : 13(e)                                                             :1.00
                                                                                  -----
        (g)  Maximum Indebtedness to Adjusted EBITDA allowed by Credit
             Agreement                                                           2.25:1.00     Yes    No

14.     SECTION 11.6 - MANAGED CARE CONTRACTS

        (a)  Gross revenue during the immediately preceding 12 month             $
             period from contracts providing exclusively for managed              ----------
             care

        (b)  Gross revenue during the immediately preceding 12 month period      $
             from the managed care portions of contracts providing for EAS and    ----------
             managed care
</Table>


Compliance Certificate - Page 5

<PAGE>

<Table>
<S>      <C>                                                                     <C>           <C>    <C>
        (c)  Total Managed Care Gross Revenue (14(a) plus (14(b))                $
                                                                                  ----------
        (d)  Total Gross Revenue during such 12 month period                     $
                                                                                  ----------
        (e)  35% of 14(d)                                                        $
                                                                                  ----------
        (f)  Maximum Permitted Gross Revenue from Managed Care Contracts        14(c) > 14(e)  Yes    No

15.     ATTACHED SCHEDULES

        Attached hereto as schedules are the calculations supporting the
        computation set forth above in this Certificate. All information
        contained herein and on the attached schedules is true and correct.

16.     FINANCIAL STATEMENTS

        The unaudited financial statements attached hereto were prepared in
        accordance with GAAP (excluding footnotes) and fairly present (subject
        to year end audit adjustments) the financial conditions and the results
        of the operations of the Persons reflected thereon, at the date and for
        the periods indicated therein.

17.     CONFLICT

        In the event of any conflict between the definitions or covenants
        contained in the Credit Agreement and as they may be interpreted or
        abbreviated in the Compliance Certificate, the Credit Agreement shall
        control.
</Table>

         IN WITNESS WHEREOF, the undersigned has executed this Certificate
         effective this _______ day of ____________, _______.


                                                HORIZON HEALTH CORPORATION



                                                By:
                                                   -----------------------------
                                                   Name:
                                                        ------------------------
                                                   Title:
                                                         -----------------------


Compliance Certificate - Page 6

<PAGE>


                                   Schedule 1
                                       to
                             Compliance Certificate

                         Parent Consolidated Net Income
                 for period ______________ to _________________

<Table>
<S>     <C>                                                                                 <C>
1.      GAAP for Parent (the "Subject Person") excluding the following consolidated
        net income                                                                          $
                                                                                             -----------
        (a)  extraordinary gains or losses or nonrecurring revenue
             or expenses
                                                                                             -----------
        (b)  gains on sale of securities
                                                                                             -----------
        (c)  losses on sale of securities
                                                                                             -----------
        (d)  any gains or losses in respect of the write-up of any asset at greater
             than original cost or write-down at less than original cost;
                                                                                             -----------
        (e)  any gains or losses realized upon the sale or other disposition of
             property, plant, equipment or intangible assets which is not sold
             or otherwise disposed of in the ordinary course of business;
                                                                                             -----------
        (f)  any gains or losses from the disposal of a discontinued business;
                                                                                             -----------
        (g)  any net gains or losses arising from the extinguishment of any debt;
                                                                                             -----------
        (h)  any restoration to income of any contingency reserve for long term
             asset or long term liabilities, except to the extent that provision
             for such reserve was made out of income accrued during such period;
                                                                                             -----------
        (i)  the cumulative effect of any change in an accounting principle on
             income of prior periods;
                                                                                             -----------
        (j)  any deferred credit representing the excess of equity in any acquired
             company or assets at the date of acquisition over the cost of the
             investment in such company or asset;
                                                                                             -----------
        (k)  the  income  from any sale of  assets  in which  the book  value of such
             assets prior to their sale had been the book value inherited;
                                                                                             -----------
        (l)  the income (or loss) of any Person (other than a subsidiary) in
             which the Subject Person or a subsidiary has an ownership interest;
             provided, however, that (i) Consolidated Net Income shall include
             amounts in respect of the income of such Person when actually
             received in cash by the Subject Person or such subsidiary in the
             form of dividends or similar distributions and (ii) Consolidated
             Net Income shall be reduced by the aggregate amount of all
             investments, regardless of the form thereof, made by the Subject
             Person or any of its subsidiaries in such Person for the purpose
             of funding any deficit or loss of such Person;
                                                                                             -----------
</Table>


Schedule 1 to Compliance Certificate - Page 1
<PAGE>

<Table>
<S>     <C>                                                                                 <C>
        (m)  the income (or loss) of any Restricted Subsidiary; provided,
             however, that (i) Consolidated Net Income shall include amounts in
             respect of the income of such Restricted Subsidiary when actually
             received in cash by the Parent in the form of dividends or similar
             distributions and (ii) Consolidated Net Income shall be reduced by
             the aggregate amount of all investments, regardless of the form
             thereof, made by the Parent or any of its Subsidiaries in such
             Restricted Subsidiaries for the purpose of funding any deficit or
             loss of such Restricted Subsidiary;
                                                                                             -----------
        (n)  the income of any subsidiaries to the extent the payment of such
             income in the form of a distribution or repayment of any Debt to
             the Subject Person or a Subsidiary is not permitted, whether on
             account of any restriction in by-laws, articles of incorporation or
             similar governing document, any agreement or any law, statute,
             judgment, decree or governmental order, rule or regulation
             applicable to such Subsidiary;
                                                                                             -----------
        (o)  any reduction in or addition to income tax expense resulting from an
             increase or decrease in a deferred income tax asset due to the
             anticipation of future income tax benefits;
                                                                                             -----------
        (p)  any reduction in or addition to income tax expense due to the change in
             a statutory tax rate resulting in an increase or decrease in a deferred
             income tax asset or in a deferred income tax liability;
                                                                                             -----------
        (q)  any gains or losses attributable to returned surplus assets of any
             pension-benefit plan or any pension credit attributable to the
             excess of (i) the return on pension-plan assets over (ii) the
             pension obligation's service cost and interest cost;
                                                                                             -----------
        (r)  the income or loss of any Person acquired by the Subject Person or a
             subsidiary for any period prior to the date of such acquisition; and
                                                                                             -----------
        (s)  the income from any sale of assets in which the accounting basis of
             such assets had been the book value of any Person acquired by the
             Subject Person or a subsidiary prior to the date such Person became
             a subsidiary or was merged into or consolidated with the Subject
             Person or a subsidiary.
                                                                                             -----------

TOTAL:                                                                                      $
                                                                                             ===========
</Table>

Schedule 1 to Compliance Certificate - Page 2

</TEXT>
</DOCUMENT>
