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                                                                    EXHIBIT 10.6

                      FOURTH AMENDMENT TO CREDIT AGREEMENT
                                       and
                    FIFTH AMENDMENT TO LETTER LOAN AGREEMENT


         THIS FOURTH AMENDMENT TO CREDIT AGREEMENT and FIFTH AMENDMENT TO LETTER
LOAN AGREEMENT (the "Amendment"), dated as of October 12, 1999, is among HORIZON
HEALTH CORPORATION, a corporation duly organized and validly existing under the
laws of the State of Delaware (the "Borrower"), each of the banks or other
lending institutions which is a signatory hereto (individually, a "Bank" and,
collectively, the "Banks"), CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, formerly
known as Texas Commerce Bank National Association, individually as a Bank and as
agent for itself and the other Banks under the hereinafter defined Credit
Agreement (in its capacity as agent, together with its successors in such
capacity, the "Agent") and in its individual capacity as a lender under the
hereinafter defined Term Loan Agreement (in such capacity, "Chase"), NORTH
CENTRAL DEVELOPMENT AUTHORITY ("North Central") and the other Obligated Parties
(as defined in the Credit Agreement).

                                    RECITALS:

         WHEREAS, Borrower, the Banks and Agent have entered into that certain
Credit Agreement dated as of December 9, 1997 (as amended by that certain letter
agreement dated as of June 30, 1998, that certain Second Amendment to Credit
Agreement and Third Amendment to Letter Loan Agreement (the "Second Amendment")
dated as of September 30, 1998 and that certain Third Amendment to Credit
Agreement and Fourth Amendment to Letter Loan Agreement (the "Third Amendment")
dated as of November 6, 1998 herein the "Credit Agreement").

         WHEREAS, Borrower, certain Subsidiaries of Borrower, North Central and
Chase have entered into that certain Letter Loan Agreement dated as of
December 20, 1995 (as amended by that certain First Amendment to Letter Loan
Agreement and Note Modification Agreement dated as of December 9, 1997, that
certain letter agreement dated as of June 30, 1998, the Second Amendment and the
Third Amendment, herein the "Term Loan Agreement")

         WHEREAS, Borrower, the Obligated Parties, North Central, the Banks,
Agent and Chase now desire to further amend the Credit Agreement and the Term
Loan 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:

                                    ARTICLE 1

                                   Definitions

         Section 1.13 Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meanings as in the
Credit Agreement and Term Loan Agreement, as amended hereby.

                                    ARTICLE 2

                                   Amendments

         Section 1.14 Amendment to Section 10.4. Effective as of the date
hereof, Section 10.4 of the Credit Agreement and the similar provision
incorporated into the Term Loan


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Agreement pursuant to Section 6.01 of the Term Loan Agreement are amended in
their entirety as follows:

                  Section 10.4 Restrictions on Dividends and other
         Distributions. The Borrower will not and will not permit any Subsidiary
         to directly or indirectly declare, order, pay, make or set apart any
         sum for (a) any dividend or other distribution, direct or indirect, on
         account of any shares of any class of stock (or other equity interest)
         of the Borrower or any Subsidiary now or hereafter outstanding; (b) any
         redemption, conversion, exchange, retirement, sinking fund or similar
         payment, purchase or other acquisition for value, direct or indirect,
         of any shares of any class of stock (or other equity interest) of the
         Borrower or any Subsidiary now or hereafter outstanding; or (c) any
         payment made to retire, or to obtain the surrender of, any outstanding
         warrants, options, or other rights to acquire shares of any class of
         stock (or other equity interest) of the Borrower or any Subsidiary now
         or hereafter outstanding; except that (i) Subsidiaries (other than
         Borrower) may make, declare and pay dividends and make other
         distributions with respect to their capital stock (or other equity
         interest) to Borrower or the other Subsidiaries, (ii) the Borrower may
         redeem or repurchase shares of its stock issued to employees and
         directors in connection with the exercise by such Person of stock
         options granted to such Person under the Borrower?s stock option plans;
         provided that no Default exists or would result therefrom and the
         Dollar amount of such repurchases in any individual case shall not
         exceed an amount equal to the exercise price pay by such Person to
         exercise the option in question plus all United States federal
         withholding taxes arising as a result of such exercise, (iii) this
         Section 10.4 shall not prohibit the transactions permitted by clauses
         (a), (j) or (m) of Section 10.5, and (iv) from September 30, 1998
         through and including November 30, 1999, the Borrower may redeem or
         repurchase shares of its capital stock; provided that the aggregate
         amount paid by Borrower in connection with such redemptions and
         repurchases during such period does not exceed Nine Million Dollars
         ($9,000,000) and no Default exists or would result therefrom.

                                    ARTICLE 3

                                  Miscellaneous

         Section 1.15 Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Credit Agreement and Term Loan Agreement and except as expressly
modified and superseded by this Amendment, the terms and provisions of the
Credit Agreement and Term Loan Agreement and the other Transaction Documents are
ratified and confirmed and shall continue in full force and effect. The Loan
Parties and the Lenders agree that the Credit Agreement and Term Loan Agreement
as amended hereby and the other Transaction Documents shall continue to be
legal, valid, binding and enforceable in accordance with their respective terms.

         Section 1.16 Reference to Credit Agreement and Term Loan Agreement.
Each of the Transaction Documents, including the Credit Agreement and Term Loan
Agreement and any and all other agreements, documents, or instruments now or
hereafter executed and delivered pursuant to the terms hereof or pursuant to the
terms of the Credit Agreement or Term Loan Agreement as amended hereby, are
hereby amended so that any reference in such Transaction Documents to the Credit
Agreement or Term Loan Agreement shall mean a reference to the Credit Agreement
and Term Loan Agreement as amended hereby.


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         Section 1.17 Expenses of Agent. As provided in the Credit Agreement and
the Term Loan Agreement, 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.

         Section 1.18 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 1.19 Applicable Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas.

         Section 1.20 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of the Loan Parties, the Lenders and their respective
successors and assigns, except the Loan Parties may not assign or transfer any
of their rights or obligations hereunder without the prior written consent of
the Lenders.

         Section 1.21 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 1.22 Effect of Waiver. No consent or waiver, express or
implied, by any Lender to or for any breach of or deviation from any covenant,
condition or duty by Borrower or any other Loan 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 1.23 Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.

         Section 1.24 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.

                                    LENDERS:

                                    CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
                                    as Agent and in its individual capacity as a
                                    Lender under the Credit Agreement and the
                                    Term Loan Agreement


                                    By:
                                        ----------------------------------------
                                            Joanne Bramanti, Vice President


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                                    BANK OF AMERICA, N.A.


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


                                    COMERICA BANK-TEXAS


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

                                    COOPERATIEVE CENTRALE RAIFFEISEN-
                                        BOERENLEENBANK B.A., "RABOBANK
                                        NEDERLAND," NEW YORK BRANCH


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


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


                                    BANQUE PARIBAS, HOUSTON AGENCY


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


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


LOAN PARTIES

HORIZON HEALTH CORPORATION
HORIZON MENTAL HEALTH MANAGEMENT, INC.
MENTAL HEALTH OUTCOMES, INC.
GERIATRIC MEDICAL CARE, INC.
SPECIALTY REHAB MANAGEMENT, INC.
ACORN BEHAVIORAL HEALTHCARE MANAGEMENT CORPORATION
HHMC PARTNERS, INC.
HORIZON BEHAVIORAL SERVICES, INC.
FLORIDA PSYCHIATRIC ASSOCIATES, INC.
FLORIDA PSYCHIATRIC MANAGEMENT, INC.
FPMBH OF TEXAS, INC.
CHOICEHEALTH, INC.
RESOURCES IN EMPLOYEE ASSISTANCE AND CORPORATE HEALTH, INC.


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


NORTH CENTRAL DEVELOPMENT COMPANY


By:
   ----------------------------------------
         John T. Amend, President