SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

Exhibit 10.3

SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (the “Amendment”), dated as of April 19, 2004 is among HORIZON HEALTH CORPORATION, a Delaware Corporation (the “Parent”), HORIZON MENTAL HEALTH MANAGEMENT, INC., a Texas Corporation (the “Borrower”), each of the banks or other lending institutions party hereto, and 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, that certain Third Amendment to Second Amended and Restated Credit Agreement dated as of April 4, 2003, that certain Fourth Amendment to Second Amended and Restated Credit Agreement dated as of August 29, 2003, that certain Fifth Amendment to Second Amended and Restated Credit Agreement dated as of February 10, 2004, and as the same may hereafter be further amended or otherwise modified, herein the “Agreement”).

B. The Parent entered into an Asset Purchase Agreement dated as of March 12, 2004 with Northern Indiana Hospital, LLC (the “NIH Asset Purchase Agreement”). The Parent assigned its rights and obligations under the NIH Asset Purchase Agreement to HHC Indiana, Inc. (“HHC Indiana”), a wholly-owned subsidiary of the Borrower (such assignment, herein the “Parent Assignment”). In connection with the transactions contemplated by the NIH Asset Purchase Agreement and the Parent Assignment, HHC Indiana entered into (1) a Subsidiary Joinder Agreement, dated as of April 1, 2004, joining into the Subsidiary Security Agreement and the Guaranty as a debtor and a guarantor, respectively, under the Agreement and (2) a Commercial Mortgage, Absolute Assignment of Rents, Security Agreement and Financing Statement, dated as of April 1, 2004, granting Agent a lien in the real property commonly known as 1800 N. Oak Road, Plymouth, IN 46563. The Borrower entered into a Pledge Amendment, dated as of April 1, 2004, amending Schedule 1 to the Borrower Pledge Agreement to add 100% of the capital stock of HHC Indiana thereto.

C. The Borrower created a new subsidiary, HHC Poplar Springs, Inc. (“HHC Poplar”). HHC Poplar has requested that the Agent and the Banks consent to HHC Poplar’s purchase of Poplar Springs Hospital and certain other assets of PSH Acquisition Corporation pursuant to an Asset Purchase Agreement between HHC Poplar and PSH Acquisition Corporation (the “PSH Asset Purchase Agreement”). In connection with the transactions contemplated by the PSH Asset Purchase Agreement, (1) HHC Poplar will enter into a Subsidiary Joinder Agreement joining into the Subsidiary Security Agreement and the Guaranty as a debtor and guarantor, respectively, under the Agreement, (2) the Borrower will enter into a Pledge Amendment amending Schedule 1 to the Borrower Pledge Agreement to add 100% of the capital stock of HHC Poplar thereto and (3) HHC Poplar will enter into a Deed of Trust, Absolute Assignment of Rents, Security Agreement and Financing Statement granting Agent a lien in real property located in the Commonwealth of Virginia.

D. In connection with HHC Poplar’s acquisition of Poplar Springs Hospital and certain other assets of PSH Acquisition Corporation, 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 1.1 - Definitions. Section 1.1 of the Agreement is amended to add the following definition, in alphabetical order, thereto:

“HHC Poplar” means HHC Poplar Springs, Inc., a Virginia corporation.

Section 2.2. Amendment to Section 8.14 – Subsidiaries. Section 8.14 of the Agreement is amended in its entirety to read as follows:

Section 8.14 Subsidiaries. As of April 19, 2004, Parent has no Subsidiaries other than those listed on Schedule 8.14 hereto. Schedule 8.14 sets forth the type of each Subsidiary listed thereon, the jurisdiction of incorporation or organization of each such Subsidiary, the percentage of Parent’s or a Subsidiary’s ownership of the outstanding voting stock (or other ownership interests) of each such Subsidiary and, the authorized, issued, and outstanding capital stock (or other equity interests) of each such Subsidiary. All of the outstanding capital stock (or other equity interests) of each Subsidiary listed on Schedule 8.14 has been validly issued, is fully paid, and is nonassessable. There are no outstanding subscriptions, options, warrants, calls, or rights (including preemptive rights) to acquire, and no outstanding securities or instruments convertible into, capital stock of any Subsidiary except as disclosed on Schedule 8.14. All of the outstanding capital stock (or other equity interests) of the Borrower, each of the Obligated Parties (other than the Parent) and each of the Restricted Group Members has been pledged to the Agent. Borrower and all of the Obligated Parties are parties to either the Subsidiary Security Agreement or the Parent Security Agreement and the Guaranty.

Section 2.3. Amendment to Section 10.5 – Bank Approval and Delivery and Notice Requirements. Clauses (ii) and (iii) of Section 10.5(a) of the Agreement are amended in their respective entireties to read as set forth in clauses (ii) and (iii) below:

(ii) Bank Approval. Parent shall have obtained the prior written consent of the Required Banks if: (A) the Purchase Price for the acquisition is greater than Ten Million Dollars ($10,000,000); (B) after giving effect to such acquisition, the aggregate Purchase Price of all Permitted Acquisitions that have occurred during the four (4) consecutive Fiscal Quarters then most recently ending is greater than Twenty Five Million Dollars ($25,000,000); or (C) the ratio of Indebtedness outstanding as of the date

SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Page 2

of determination (which shall not be more than thirty (30) days prior to the acquisition date) to Adjusted EBITDA (as defined in Section 11.4) for the most recent four (4) Fiscal Quarter period then ended as of such date would exceed 2.05 to 1.00, calculated on a pro forma basis as if the acquisition had occurred as of the first day of such four (4) Fiscal Quarters and including in the ratio calculation any Debt incurred or assumed in connection therewith as if the Target were a “Prior Target” for purposes of Calculating Adjusted EBITDA; provided, however, no such prior written consent of the Required Banks shall be required in connection with the acquisition by HHC Poplar of Poplar Springs Hospital and certain other assets of PSH Acquisition Corporation. As used above, the phrase “Purchase Price” means, as of any date of determination and with respect to a proposed acquisition, the purchase price to be paid for the Target or its assets, including all cash consideration paid (whether classified as purchase price, non-compete, consulting or post-closing performance based payments or otherwise) or to be paid (based on the estimated amount thereof), the value of all other assets to be transferred by the purchaser in connection with such acquisition to the seller (but specifically excluding any stock of Parent issued to the seller which shall not be part of the Purchase Price for purposes of this clause (ii)) all valued in accordance with the applicable purchase agreement and the outstanding principal amount of all Debt of the Target or the seller assumed or acquired in connection with such acquisition.

(iii) Delivery and Notice Requirements. Parent shall provide to Agent, fifteen (15) days prior to the consummation of the acquisition, the following: (A) notice of the acquisition, (B) the most recent financial statements of the Target that Parent has available, (C) such other documentation and information relating to the Target and the acquisition as Agent may reasonably request, including, without limitation, for the acquisition by HHC Poplar of the Poplar Springs Hospital and certain other assets of PSH Acquisition Corporation a certification by HHC Poplar three (3) days prior to the consummation of the acquisition that there has been no material adverse change in the financial condition of Poplar Springs Hospital from the financial condition reflected in the financial statements delivered to Agent in accordance with Section 10.5(a)(iii)(B), and (D) evidence certified by the chief executive or chief financial officer of Parent that Parent shall be in compliance with the covenants contained in Article XI on a pro forma basis for the four (4) Fiscal Quarter period then most recently ending (assuming (1) the consummation of the acquisition in question; (2) that the incurrence or assumption of any Debt in connection therewith occurred on the first day of such period; (3) to the extent such Debt bears interest at a floating rate, the rate in effect for the entire period of calculation was the rate in effect at the time of calculation; and (4) any sale of Subsidiaries or lines of business which occurred during such period occurred on the first day of such period). Within sixty (60) days of such acquisition the obligations under subsections 9.10(b) and (c) shall be fulfilled.

Section 2.4. Amendment to Section 11.4 – Indebtedness to Adjusted EBITDA. The first sentence of Section 11.4 of the Agreement is amended in its entirety to read as follows:

As of the last day of each Fiscal Quarter, Parent shall not permit the ratio of Indebtedness outstanding as of such day to the Adjusted EBITDA for the four (4) Fiscal Quarter period then ended to exceed 2.50 to 1.00.

Section 2.5. 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.

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Section 2.6. Amendment to Schedules 8.14 and 8.14A – List of Subsidiaries and Organizational Chart. Schedules 8.14 and 8.14A to the Agreement are amended in their respective entireties as set forth on Schedules 8.14 and 8.14A, respectively, 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; and

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

(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 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.

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

SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Page 4

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 ITS 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 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 of JPMorgan Chase Bank, Bank of America, National Association and Wells Fargo Bank Texas, National Association, on the date hereof, an amendment fee in the amount of $10,000 each, in consideration for such Banks’ agreement to enter into this Amendment.

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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.

Executed as of the date first written above.

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OBLIGATED PARTY CONSENT

Each Obligated Party (i) consents and agrees to this Sixth 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 and the increase in the Revolving Commitments contemplated hereby) 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.

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EXHIBIT A

TO

HORIZON HEALTH CORPORATION

SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

Compliance Certificate

EXHIBIT A, Cover Page

COMPLIANCE CERTIFICATE

for the

Fiscal Quarter ending                  ,         

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:

Compliance Certificate, Page 1

Compliance Certificate, Page 2

Compliance Certificate, Page 3

Compliance Certificate, Page 4

Compliance Certificate, Page 5

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

Compliance Certificate, Page 6

Schedule 1

to

Compliance Certificate

Parent Consolidated Net Income

for period                      to                     

Schedule 1 to Compliance Certificate, Page 1

Schedule 1 to Compliance Certificate, Page 2

SCHEDULE 8.14

TO

HORIZON HEALTH CORPORATION

SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

List of Subsidiaries

Schedule 8.14, Page 1

Schedule 8.14, Page 2

The organizational structure of Parent and the Subsidiaries can be graphically depicted as reflected on Schedule 8.14A.

Schedule 8.14, Page 3

SCHEDULE 8.14A

TO

HORIZON HEALTH CORPORATION

SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

Organizational Chart

As of April 19, 2004