EX-10 7 exh10_25.txt FIRST ADMENDMENT 10.25 FIRST AMENDMENT TO REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT This FIRST AMENDMENT TO REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT (the "First Amendment") is made as of this 15th day of September, 2005 by and between CAPITALSOURCE FINANCE LLC, a Delaware limited liability company, with its chief executive office located at 4445 Willard Avenue, Chevy Chase, Maryland 20815 ( the "Lender") and PHC, INC., a Massachusetts corporation, PHC OF MICHIGAN, INC., a Massachusetts corporation, PHC OF NEVADA, INC., a Massachusetts corporation, PHC OF UTAH, INC., a Massachusetts corporation, PHC OF VIRGINIA, INC., a Massachusetts corporation, WELLPLACE, INC., a Massachusetts corporation, DETROIT BEHAVIORAL INSTITUTE, INC., a Massachusetts corporation and NORTH POINT - PIONEER, INC., a Massachusetts corporation (individually, collectively, and jointly and severally, the "Borrower") W I T N E S S E T H: WHEREAS, Lender and Borrower entered into a certain Revolving Credit, Term Loan and Security Agreement dated as of the 19th day of October, 2004 (the "Agreement") whereby Lender agreed to make loans, advances and other extensions of credit to Borrower thereunder; WHEREAS, Lender and Borrower desire to amend the Agreement in certain respects upon the terms and conditions set forth herein to provide for the foregoing; and WHEREAS, Section 12.8 of the Agreement provides that no modification or amendment of the Agreement shall be effective unless the same shall be in writing and signed by the parties thereto. NOW, THEREFORE, in consideration of the promises and other mutual covenants contained herein, the receipt and sufficiency of which is hereby acknowledged, Lender and Borrower agree as follows: 1. Amendment of Agreement. As of the Effective Date (defined below), Lender and Borrower hereby agree to amend the Agreement as follows: (a) The following sections of Annex I to the Agreement are hereby amended and restated as follows: 1) Minimum Census Commencing as of August 31, 2005 and as of the end each calendar month thereafter, the average aggregate census levels for the Test Period then ending at each of Harbor Oaks and Highland Ridge shall be not less than the census set forth below: As to Harbor Oaks, 75% of the bed capacity of such facility. As to Highland Ridge, 70% of the bed capacity of such facility. 2) Minimum EBITDAM Borrower shall not permit EBITDAM for any Test Period (commencing with the Test Period ending August 31, 2005) to be less than $300,000. -- 93 -- 2. Conditions to Effectiveness. This First Amendment shall be effective as of the date first set forth above on the date (the "Effective Date") upon which the following conditions precedent are satisfied: (a) Borrower shall have delivered to Lender an executed copy of this First Amendment duly executed by an authorized officer of Borrower and each other agreement, document or instrument reasonably requested by the Lender in connection with this First Amendment, each in form and substance reasonably satisfactory to Lender; and (b) Lender shall have received all fees, charges and expenses payable to Lender as required by this First Amendment and in connection with this First Amendment and the documentation related hereto, including, but not limited to, legal fees and out-of-pocket costs (including in-house counsel fees and expenses). 3. Effect of Amendment. Lender and Borrower hereby acknowledge and agree that except as provided in this First Amendment, the Agreement and the other Loan Documents remain in full force and effect and have not been modified or amended in any respect, it being the intention of Lender and Borrower that this First Amendment and the Agreement be read, construed and interpreted as one and the same instrument. 4. References to Loan Documents. Each of the other Loan Documents are hereby modified in such a manner as to be consistent with all modifications and agreements contained herein and to the extent that all references therein to and descriptions therein of the Agreement shall be deemed to refer to and describe the Agreement. 5. Capitalized Terms. All capitalized terms not otherwise defined in this First Amendment shall have the meanings ascribed to such terms in the Agreement. 6. Benefit. This First Amendment shall inure to the benefit of and bind the parties hereto and their respective successors and assigns. 7. Amendments. This First Amendment may not be changed, modified, amended, restated, waived, supplemented, discharged, canceled or terminated orally or by any course of dealing or in any other manner other than by the written agreement of Lender and Borrower. This First Amendment shall be considered part of the Agreement for all purposes under the Agreement. 8. Headings and Counterparts. The captions in this First Amendment are intended for convenience and reference only and do not constitute and shall not be interpreted as part of this First Amendment and shall not affect the meaning or interpretation of this First Amendment. This First Amendment may be executed in one or more counterparts, all of which taken together shall constitute but one and the same instrument. This First Amendment may be executed by facsimile transmission, which facsimile signatures shall be considered original executed counterparts for all purposes, and each party to this First Amendment agrees that it will be bound by its own facsimile signature and that it accepts the facsimile signature of each other party to this First Amendment. 9. Governing Law; JURY TRIAL WAIVER. THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS FIRST AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE CHOICE OF LAW PROVISIONS SET FORTH IN THE AGREEMENT AND SHALL BE SUBJECT TO THE WAIVER OF JURY TRIAL AND NOTICE PROVISIONS OF THE AGREEMENT. -- 94 -- 10. Entire Agreement. This First Amendment, the Agreement and the other Loan Documents constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, if any, relating to the subject matter hereof and thereof and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements between the parties. There are no unwritten oral agreements between the parties. 11. Miscellaneous. Whenever the context and construction so require, all words used in the singular number herein shall be deemed to have been used in the plural, and vice versa, and the masculine gender shall include the feminine and neuter and the neuter shall include the masculine and feminine. This First Amendment shall inure to the benefit of Lender, all future holders of any Note, any of the Obligations or any of the Collateral and all Transferees, and each of their respective successors and permitted assigns. No Borrower may assign, delegate or transfer this First Amendment or any of its rights or obligations under this First Amendment without the prior written consent of Lender. No rights are intended to be created under this First Amendment for the benefit of any third party donee, creditor or incidental beneficiary of Borrower. [Signature Pages Follow] -- 95 -- [Signature Page 1 to First Amendment] IN WITNESS WHEREOF, Lender and Borrower have executed this First Amendment as of the date first above written. LENDER: CAPITALSOURCE FINANCE LLC By: /s/ Keith D. Reuben Name: Keith D. Reuben Title: Managing Director BORROWER: PHC, INC. By:: /s/ Paula C. Wurts Name: Paula C. Wurts Title: Chief Financial Officer PHC OF MICHIGAN, INC. By:: /s/ Paula C. Wurts Name: Paula C. Wurts Title: Chief Financial Officercer PHC OF NEVADA, INC. By:: /s/ Paula C. Wurts Name: Paula C. Wurts Title: Chief Financial Officer PHC OF UTAH, INC. By:: /s/ Paula C. Wurts Name: Paula C. Wurts Title: Chief Financial Officer PHC OF VIRGINIA, INC By:: /s/ Paula C. Wurts Name: Paula C. Wurts Title: Chief Financial Officer -- 96 -- [Signature Page 2 to First Amendment] WELLPLACE, INC. By:: /s/ Paula C. Wurts Name: Paula C. Wurts Title: Chief Financial Officer DETROIT BEHAVIORAL INSTITUTE, INC, By:: /s/ Paula C. Wurts Name: Paula C. Wurts Title: Chief Financial Officer NORTH POINT - PIONEER, INC. By:: /s/ Paula C. Wurts Name: Paula C. Wurts Title: Chief Financial Officer -- 97 --