Exhibit 4.21

THE SECURITIES  EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES  ACT OF  1933,  AS  AMENDED  (THE  "ACT"),  OR ANY  APPLICABLE  STATE
SECURITIES LAW, AND MAY NOT BE OFFERED,  SOLD, ASSIGNED,  TRANSFERRED,  PLEDGED,
HYPOTHECATED   OR  OTHERWISE   DISPOSED  OF  IN  THE  ABSENCE  OF  AN  EFFECTIVE
REGISTRATION  STATEMENT UNDER THE ACT AND SUCH  REGISTRATION OR QUALIFICATION AS
MAY BE NECESSARY  UNDER THE SECURITIES  LAWS OF ANY STATE,  OR AN EXEMPTION FROM
SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS UNDER THE ACT OR SUCH STATE LAW.


                                    PHC, INC.
                    ________________________________________

                      CLASS A COMMON STOCK PURCHASE WARRANT
                    ________________________________________


                                                   Dated as of June 13, 2007

     Reference is made to that certain  Amended and Restated  Revolving  Credit,
Term  Loan and  Security  Agreement  dated as of the date  hereof  (as  amended,
supplemented  or modified from time to time, the "Loan  Agreement"),  among PHC,
INC. a Massachusetts corporation (the "Company") and certain of its subsidiaries
and  CAPITALSOURCE  FINANCE  LLC (the  "Lender"),  an  affiliate  of CSE  EQUITY
HOLDINGS LLC, a Delaware limited liability company ("CapitalSource"), and to the
other Loan  Documents,  pursuant to which the Lender has agreed to make  certain
loans to the Borrowers  (the  "Loans").  This Warrant is issued at Closing under
the Loan  Agreement and means and shall  include any and all warrants  issued in
substitution  for and/or in replacement of this Warrant.  The obligations of the
Lender  to  execute  and  deliver  the  Loan  Documents  and to  consummate  the
transactions  thereunder are conditioned on, among other things, the issuance of
this Warrant to CapitalSource,  and the Company has agreed to issue this Warrant
to  CapitalSource  in order to  induce  such  affiliate  to enter  into the Loan
Documents.

     Capitalized  terms used in this Warrant and not  elsewhere  defined  herein
shall have the  meanings  set forth in Schedule 1 to this Warrant or in the Loan
Agreement (if not defined herein).

     1. Grant. In consideration  of the foregoing and other value received,  the
Company  hereby  grants to  CapitalSource  and/or  its  assigns  or  transferees
(collectively,  the  "Holder"),  at the  exercise  price set forth in  Section 3
below,  the right to purchase up to 250,000  shares of Class A Common  Stock (or
other security  issued in accordance  with Section 8) subject to adjustment from
time to time (the "Warrant Shares").


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     2. Exercise  Period.  The right to exercise  this  Warrant,  in whole or in
part, begins on the date hereof and expires on the tenth anniversary of the date
hereof (such date, the "Expiration Date").

     3.  Exercise  Price.  The  exercise  price  of this  Warrant  is  $3.09  on
execution] per share (the "Exercise Price").

     4. Anti-Dilution Adjustment.

     (a)  Dilutive  Transactions.  Each time the Company  enters into a Dilutive
     Transaction,  the  number of Warrant  Shares  issuable  hereunder  shall be
     increased to the number determined by performing the following  calculation
     and rounding the resulting number to the nearest whole share:  divide:  (i)
     the Non-Dilutive  Price of a Warrant Share then in effect multiplied by the
     number of Warrant  Shares then  issuable  hereunder,  by (ii) the  Weighted
     Average Per Share Value.

     (b) Readjustment.  If any option, right or right to convert or exchange any
     Common Stock  Equivalent  issued in connection with a Dilutive  Transaction
     expires  without having been exercised  prior to the exercise by the Holder
     of its  rights  hereunder,  the  number of  Warrant  Shares  then  issuable
     hereunder shall forthwith be readjusted to such lesser number as would have
     been issuable had the option,  right or Common Stock  Equivalent never been
     issued.

     (c)  Adjustment of Exercise  Price.  Upon each  adjustment of the number of
     Warrant Shares as provided in Subsection  4(a), the Exercise Price shall be
     adjusted to the dollar  figure  (calculated  to the nearest  hundredth of a
     cent)  obtained by  multiplying  the Exercise  Price in effect  immediately
     prior to such  adjustment  by the  number  of  Warrant  Shares  purchasable
     pursuant  hereto  immediately  prior to such  adjustment  and  dividing the
     product thereof by the number of Warrant Shares purchasable pursuant hereto
     immediately following such adjustment.

     5. Other Adjustments.

     (a) Adjustment for Change in Class A Common Stock.  If the Company (i) pays
     a dividend or makes a distribution on its Class A Common Stock in shares of
     its Common Stock,  (ii) subdivides,  splits or reclassifies its outstanding
     shares of Class A Common  Stock into a greater  number of shares,  or (iii)
     combines or  reclassifies  its  outstanding  shares of Common  Stock into a
     smaller  number of shares  (each,  an  "Adjustment  Event"),  the number of
     Warrant Shares issuable hereunder immediately prior to such action shall be
     proportionately  adjusted so that the Holder will receive,  upon  exercise,
     the  aggregate  number and kind of shares of capital  stock of the  Company
     which it would have owned  immediately  following such action if the Holder
     had exercised  this Warrant in full  immediately  prior to such  Adjustment
     Event. The adjustment shall become effective  immediately  after the record
     date in the case of a dividend or distribution  and  immediately  after the
     effective   date   in  the   case   of  a   subdivision,   combination   or
     reclassification.  The adjustment shall be made  successively  whenever any
     Adjustment Event occurs.

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     (b) Adjustment for Reorganization. Subject to Section 11.9, if there occurs
     any Change of Control, there shall thereafter be deliverable, upon exercise
     of this  Warrant  (in lieu of the  number  of  Warrant  Shares  theretofore
     deliverable)  the number of shares of stock or other securities or property
     to which a holder of the  number of  shares  of Class A Common  Stock  that
     would otherwise have been deliverable upon exercise of this Warrant in full
     would have been  entitled  upon such Change of Control if such  Warrant had
     been exercised in full immediately prior to such Change of Control.

     (c)  Adjustment of Exercise  Price.  Upon each  adjustment of the number of
     Warrant  Shares  issuable  hereunder  as  provided  in this  Section 5, the
     Exercise Price shall also be equitably and proportionately adjusted.

     (d)  Certificate  as to  Adjustments.  In each  case of any  adjustment  or
     readjustment in the number of shares, securities or other property issuable
     upon exercise of this Warrant and/or in the Exercise Price,  the Company at
     its expense will promptly  provide written notice to the Holder stating the
     number  of  shares  of  Class A Common  Stock,  other  securities  or other
     property then  issuable  upon  exercise of this Warrant and the  applicable
     Exercise  Price  after  such  adjustment,  showing  how such  amounts  were
     calculated.

     6. Participation in Dividends,  Distributions,  Repurchases or Redemptions.
If the Company  declares any dividend or makes any  distribution,  in each case,
that is not in shares of Class A Common Stock,  or repurchases or redeems any of
its capital stock (except  forfeitures  by holders,  and/or  repurchases  by the
Company,  of any  shares  of Class A Common  Stock or  options  pursuant  to any
employment  agreements  with executives of the Company or pursuant to any equity
incentive  plan in  existence  on the date hereof that has been  approved by the
stockholders  of the  Company  and  qualifies  as an  incentive  plan  under the
Internal   Revenue   Code  of  1986,   as  amended   (collectively,   "Permitted
Redemptions")),  the Company will pay the Holder the declared dividend, or offer
to include the Holder in such distribution,  repurchase or redemption, as if the
Holder had exercised this Warrant in full immediately prior to such event or any
record date with  respect  thereto.  If the Holder  elects to  participate  in a
repurchase or redemption, this Warrant shall be modified (as of the date of such
event) so that the Holder  shall be  entitled  to receive,  upon  exercise,  the
number of Warrant  Shares  issuable  hereunder less the number of Warrant Shares
redeemed or repurchased.

     7. Prior Notice as to Certain Events.

     (a) Dividends, Distributions,  Subscription Rights. If the Company (i) pays
     any dividend,  or makes any distribution,  or repurchases or redeems any of
     its  capital  stock  (except  Permitted   Redemptions),   (ii)  offers  any
     subscription  rights to the  holders of its capital  stock to purchase  any
     additional  shares  of stock of any  class or any  other  rights,  or (iii)
     authorizes  the  issuance  of  shares  of  Common  Stock  or  Common  Stock
     Equivalents,  then at least 15 Business  Days prior to the action or record
     date for such action, the Company will send written notice to the Holder of
     the dates on which (A) the  Company  will  close its books or take a record
     for such action, (B) such action will occur, and (C) the holders of capital
     stock of record will participate in such action.


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     (b) Change of Control. If the Company (i) enters into any Change of Control
     or reclassification of its capital stock or equity securities,  (ii) is the
     subject of a voluntary or involuntary  dissolution,  liquidation or winding
     up or (iii) receives a notice from any holder of its equity securities that
     such holder desires to exercise its right to "put" or sell such  securities
     back to the Company or to have such  securities  redeemed or repurchased by
     the  Company,  then at least 15  Business  Days  prior  to such  action  or
     transaction,  the  Company  will send  written  notice to the Holder of the
     dates on which (A) the  Company  will  close its books or take a record for
     such action, (B) such action will occur, and (C) if applicable, the holders
     of capital stock of record may exchange  their capital stock for securities
     or other property deliverable upon such action.

     8. Intentionally Omitted

     9.  Reservation of Class A Common Stock; Par Value. The Company now has and
will have upon the exercise of this Warrant  such number of its  authorized  but
unissued  shares of Class A Common  Stock as will be  sufficient  to permit  the
exercise in full of this Warrant. Upon issuance, each of the Warrant Shares will
be  validly  issued,  fully  paid  and  nonassessable,  free  and  clear  of all
preemptive  or similar  rights,  liens,  security  interests,  charges and other
encumbrances  and/or  restrictions  on sale or otherwise.  Without  limiting the
generality of the foregoing,  the Company will (i) not permit the par value,  if
any, of its Class A Common Stock to exceed the then  effective  Exercise  Price,
and in  furtherance of the  foregoing,  shall promptly cause the  Certificate of
Incorporation  of the Company to be amended to reduce the par value of the Class
A Common Stock if the Exercise Price is reduced below the current par value, and
(ii) not amend or modify any provision of the  Certificate of  Incorporation  of
the Company or by-laws of the Company in any manner that would adversely  affect
in any way the  powers,  preferences  or rights  of the Class A Common  Stock or
which would adversely affect the rights of the Holder.

     10. No Voting  Rights;  Limitations of Liability.  Prior to exercise,  this
Warrant  will not entitle the Holder to any voting  rights or other  rights as a
stockholder of the Company not granted herein. No provision of this Warrant,  in
the absence of affirmative action by the Holder to exercise this Warrant, and no
enumeration in this Warrant of the rights or privileges of the Holder, will give
rise to any liability of such Holder for the Exercise Price.

     11. Registration Rights.

          11.1 Effective Date. The rights of each Holder that holds  Registrable
          Securities  under this Section 11 are  effective as of the date hereof
          and shall  remain in full  force and  effect for so long as the Holder
          continues to hold any  Registrable  Securities  and  regardless of any
          transfer of this Warrant or its termination upon its exercise in full.

          11.2 Intentionally Omitted.

          11.3 Piggyback Registrations.

               (1) RIGHT TO PIGGYBACK. Whenever the Company proposes to register
               any of its  securities  under  the  Securities  Act  (other  than

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               pursuant  to a  registration  on  Form  S-8  or  Form  S-4 or any
               successor forms, a registration covering only an employee benefit
               plan  (as  defined  in  Rule  405 of  the  Securities  Act)  or a
               registration  covering only  securities  proposed to be issued in
               exchange for securities or assets of another corporation) and the
               registration  form to be used may be used for the registration of
               Registrable Securities (a "Piggyback Registration"),  the Company
               will give prompt  written  notice to all  holders of  Registrable
               Securities and (subject to  subsections  (2) and (3) below) shall
               include in such  registration  all  Registrable  Securities  with
               respect to which the Company has  received  written  requests for
               inclusion  therein within 15 Business Days after the day on which
               the Company's  notice is deemed delivered under the terms hereof.
               The foregoing  right shall not apply to the Company  registration
               of shares of its Class A Common  Stock on Form S-3 filed with the
               SEC prior to the date hereof and awaiting SEC effectiveness.

               (2) PRIORITY ON INITIAL REGISTRATION. If a Piggyback Registration
               is an  underwritten  registration  of  shares  being  sold by the
               Company,  and the managing  underwriter(s)  advise the Company in
               writing that in their opinion the number of securities  requested
               to be included in such registration  exceeds the number which can
               be  sold  in  such  offering  without  adversely   affecting  the
               marketability  of the offering,  the Company will include in such
               registration:

                    (i) first, the securities the Company proposes to sell;

                    (ii) second, to the extent a number of additional securities
                    are to be  included  in the  registration,  the  Registrable
                    Securities  requested  to be included in such  registration;
                    and

                    (iii) third, to the extent a number of additional securities
                    are to be included in the registration, all other securities
                    requested  to be included in such  registration  pursuant to
                    the exercise of other piggyback  registration rights granted
                    by the Company.

               (3)  PRIORITY  ON   SUBSEQUENT   REGISTRATION.   If  a  Piggyback
               Registration  is  an  underwritten   registration  other  than  a
               registration  of  shares  being  sold  by the  Company,  and  the
               managing  underwriter(s)  advise the  Company in writing  that in
               their opinion the number of  securities  requested to be included
               in such registration exceeds the number which can be sold in such
               offering  without  adversely  affecting the  marketability of the
               offering, the Company will include in such registration:

                    (i) first,  Registrable  Securities requested to be included
                    in such registration;

                    (ii) second, to the extent a number of additional securities
                    are to be included in the  registration,  the securities the
                    Company proposes to sell; and

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                    (iii) third, to the extent a number of additional securities
                    are to be included in the registration, all other securities
                    requested  to be included in such  registration  pursuant to
                    the exercise of other piggyback  registration rights granted
                    by the Company.

          11.4 Intentionally Omitted.

          11.5  Registration  Procedures.  Whenever  the holders of  Registrable
          Securities   have  requested  that  any   Registrable   Securities  be
          registered  pursuant to this Agreement,  the Company will use its best
          reasonable  efforts  to effect the  registration  and the sale of such
          Registrable  Securities  in  accordance  with the  intended  method of
          disposition  therefor,  and pursuant  thereto,  the Company  will,  as
          expeditiously as possible, do all of the following:

               (1)  REGISTRATION  STATEMENT.  Prepare  and  file  with  the U.S.
               Securities  and Exchange  Commission  (the "SEC") a  registration
               statement with respect to such Registrable Securities and use its
               best reasonable  efforts to cause such registration  statement to
               become  effective  (provided  that before  filing a  registration
               statement or prospectus or any amendments or supplements thereto,
               the Company will  furnish to the counsel  selected by the holders
               of a  majority  of the  Registrable  Securities  covered  by such
               registration  statement copies of all such documents  proposed to
               be filed,  which  documents  will be  subject  to the  review and
               approval of such counsel) and use its best reasonable  efforts to
               avoid the issuance of (or if issued,  obtain the  withdrawal  of)
               any  order   suspending  the   effectiveness  of  a  registration
               statement,  or the lifting of any suspension of the qualification
               (or  exemption  from  qualification)  of any  of the  Registrable
               Securities for sale in any jurisdiction as soon as possible;

               (2) AMENDMENTS & SUPPLEMENTS.  Prepare and file with the SEC such
               amendments and supplements to such registration statement and the
               prospectus  used in  connection  therewith as may be necessary to
               keep such registration statement effective for a period necessary
               to comply with the  provisions of the Securities Act with respect
               to the disposition of all securities covered by such registration
               statement  during such  period in  accordance  with the  intended
               methods of disposition by the sellers thereof, which period shall
               not be less than six months;

               (3)  FURNISH  COPIES.  Furnish  to  each  seller  of  Registrable
               Securities such number of copies of such registration  statement,
               each amendment and supplement  thereto,  the prospectus  included
               therein  (including each  preliminary  prospectus) and such other
               documents  as such  seller  may  reasonably  request  in order to
               facilitate the disposition of the Registrable  Securities covered
               by such registration statement;

               (4)  BLUE-SKY  COMPLIANCE.  Use its best  reasonable  efforts  to
               register or qualify such Registrable  Securities under such other
               securities or blue sky laws of such United  States  jurisdictions
               as any seller  reasonably  requests and do any and all other acts

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               and things  which may be  reasonably  necessary  or  advisable to
               enable  such  seller  to  consummate  the   disposition  in  such
               jurisdictions of the Registrable  Securities owned by such seller
               (provided  that the  Company  will not be required to (i) qualify
               generally to do business in any  jurisdiction  where it would not
               otherwise  be  required to qualify  for this  subparagraph,  (ii)
               subject  itself to  taxation in any such  jurisdiction,  or (iii)
               consent  to general  service of process in any such  jurisdiction
               other than with  respect to the  registration,  qualification  or
               exemption therefrom of the Registrable Securities);

               (5)  NOTIFICATIONS.   Notify  each  seller  of  such  Registrable
               Securities  at any time  when a  registration  statement  related
               thereto is effective  under the Securities  Act, of the happening
               of any event as a result of which the prospectus included in such
               registration statement contains an untrue statement of a material
               fact or omits any fact necessary to make the  statements  therein
               not misleading in light of the circumstances then existing,  and,
               at the request of any such  seller,  the Company  will  prepare a
               supplement or amendment to such prospectus so that, as thereafter
               delivered to the purchasers of such Registrable Securities,  such
               prospectus  will not  contain an untrue  statement  of a material
               fact or omit to state any fact  necessary to make the  statements
               therein not misleading;

               (6) LISTING.  Use its best  reasonable  efforts to cause all such
               Registrable  Securities to be listed on any nationally recognized
               United States trading  market,  if  applicable,  on which similar
               securities  of the same  class  issued  by the  Company  are then
               listed;

               (7)  TRANSFER  AGENT;  REGISTRAR.  Provide a  transfer  agent and
               registrar for all such Registrable  Securities not later than the
               effective date of such registration statement;

               (8) OMITTED.

               (9) SUPPLY  INFORMATION.  Make  available  for  inspection by any
               seller of Registrable  Securities,  underwriter  participating in
               any disposition  pursuant to such registration  statement and any
               attorney,  accountant or other agent  retained by any such seller
               or  underwriter,  all  financial  and  other  records,  pertinent
               corporate documents and properties of the Company,  and cause the
               Company's   officers,   directors,   employees  and   independent
               accountants to supply all information reasonably requested by any
               such  seller,  underwriter,  attorney,  accountant  or  agent  in
               connection with such registration statement; and

               (10) OBTAIN COLD COMFORT LETTER AND OPINIONS OF COUNSEL. Obtain a
               cold  comfort  letter  from  the  Company's   independent  public
               accountants and opinions of counsel from the Company's attorneys,
               each  in  customary   form  and  covering  such  matters  as  are
               customarily  given or covered by independent  public  accountants
               and attorneys, as applicable,  in an underwritten public offering
               of securities, addressed to the sellers.

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     11.6  Registration  Expenses.  The Company  shall bear and pay all expenses
     incurred in connection with any  registration,  filing or  qualification of
     Registrable  Securities with respect to the registrations  pursuant to this
     Section 11, including,  without  limitation,  all registration,  filing and
     qualification   fees,  printing  and  accounting  fees,  listing  fees  and
     expenses, fees and expenses of compliance with securities or blue sky laws,
     fees and  disbursements  of counsel for the Company and the reasonable fees
     and disbursements of one counsel for the sellers of Registrable Securities.
     Underwriting  discounts and commissions relating to Registrable  Securities
     will  be  borne  and  paid  ratably  by the  sellers  of  such  Registrable
     Securities.

     11.7 Indemnification Provisions.

          (1) INDEMNITY OF HOLDERS OF REGISTRABLE SECURITIES. The Company agrees
          to  indemnify,  to  the  extent  permitted  by  law,  each  holder  of
          Registrable Securities, its officers and directors and each Person who
          controls each such holder (within the meaning of the  Securities  Act)
          against all losses, claims,  damages,  liabilities and expenses caused
          by any untrue or alleged  untrue  statement of material fact contained
          in any registration statement, prospectus or preliminary prospectus or
          any amendment thereof or supplement thereto or any omission or alleged
          omission of a material fact required to be stated therein or necessary
          to make the statements  therein not misleading,  except insofar as the
          same are  caused  by or  contained  in any  information  furnished  in
          writing to the Company or any underwriter by such holder expressly for
          use therein or by such  holder's  failure to deliver to the Company in
          writing the information  and affidavits  required by subsection (2) of
          this Section 11.7 after the Company has  furnished  such holder with a
          sufficient   number  of  copies  of  the  registration   statement  or
          prospectus or any amendments or supplements thereto.

          (2)   DISCLOSURE  AND   INDEMNIFICATION   BY  HOLDERS  OF  REGISTRABLE
          SECURITIES.  In connection with any registration  statement in which a
          holder of such  Registrable  Securities  is  participating,  each such
          holder will  furnish to the Company in writing  such  information  and
          affidavits  relating to disclosure  concerning such holder required to
          be included in the  registration  statement as the Company  reasonably
          requests for use in connection with any such registration statement or
          prospectus  and, to the extent  permitted by law,  will  indemnify the
          Company,  its  directors and officers and each person who controls the
          Company (within the meaning of the Securities Act) against any losses,
          claims,  damages,  liabilities and expenses  resulting from any untrue
          statement of material fact  contained in the  registration  statement,
          prospectus  or  preliminary  prospectus  or any  amendment  thereof or
          supplement  thereto or any omission of a material  fact required to be
          stated  therein  or  necessary  to make  the  statements  therein  not
          misleading,  but only to the  extent  that such  untrue  statement  or
          omission is contained in any  information or affidavit so furnished in
          writing by such holder;  provided,  however,  that the  obligation  to
          indemnify will be several, not joint and several,  among such holders;
          and provided,  further, however that the liability of each holder will

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          be in  proportion  to and  limited to the net amount  received by such
          holder  from  the  sale of  Registrable  Securities  pursuant  to such
          registration statement.

          (3)  NOTICE  AND  DEFENSE.  Any  person  entitled  to  indemnification
          hereunder  will: (i) give prompt  written  notice to the  indemnifying
          party of any claim with respect to which it seeks indemnification, and
          (ii)  unless in the  reasonable  opinion of such  indemnified  party's
          counsel  a  conflict  of  interest   between  such   indemnified   and
          indemnifying parties may exist with respect to such claim, permit such
          indemnifying  party to assume the  defense of such claim with  counsel
          reasonably  satisfactory to the indemnified party. The failure to give
          timely notice will not relieve the receiving  party of any  obligation
          unless such delay unduly  prejudices  such  party's  ability to defend
          such claim. If such defense is assumed,  the  indemnifying  party will
          not be subject to any liability for any settlement or omission made by
          the  indemnified  party without its consent (but such consent will not
          be unreasonably withheld) and an indemnified party will not be subject
          to  any  liability  for  any   settlement  or  omission  made  by  the
          indemnifying  party  without its consent (but such consent will not be
          unreasonably  withheld). An indemnifying party who is not entitled to,
          or elects not to,  assume the defense of a claim will not be obligated
          to pay the fees and  expenses of more than one counsel for all parties
          indemnified  by such  indemnifying  party with  respect to such claim,
          unless in the reasonable  judgment of any indemnified party a conflict

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          of interest may exist between such indemnified  party and any other of
          such indemnified parties with respect to such claim.

          (4) CONTINUING AND SURVIVING OBLIGATIONS;  RIGHT OF CONTRIBUTION.  The
          indemnification  provided  for under this  Warrant will remain in full
          force and effect regardless of any investigation  made by or on behalf
          of the  indemnified  party or any  officer,  director  or  controlling
          person of such  indemnified  party and will  survive  the  transfer of
          securities  after the  completion  of any  offering.  The Company also
          agrees to make  such  provisions,  based on its  relative  fault,  for
          contribution to such party in the event the Company's  indemnification
          is unavailable  for any reason.  The relative fault of the Company and
          the selling  holder shall be  determined  by reference to, among other
          things,  whether the untrue statement or alleged untrue statement of a
          material fact or the omission or alleged  omission to state a material
          fact  relates to  information  supplied  by the Company or the selling
          holder  and  the  parties'  relative  intent,  knowledge,   access  to
          information  and  opportunity  to correct or prevent such statement or
          omission.

     11.8 Rule 144 Requirements. With a view to making available the benefits of
          certain rules and  regulations of the SEC which may at any time permit
          the  sale  of  the  Registrable   Securities  to  the  public  without
          registration, the Company agrees to:

          (1)  make  and keep  public  information  available,  as  defined  for
          purposes of Rule 144 under the Securities Act;

          (2) use its best  reasonable  efforts to file with the SEC in a timely
          manner all reports and other  documents  required of the Company to be
          filed under the  Securities  Act and the  Securities  Exchange  Act of



                                      104
<PAGE>
          1934, as amended (the "Exchange Act"); and

          (3) furnish to any holder of Registrable  Securities,  upon request, a
          written  statement  by the  Company  as to  its  compliance  with  the
          reporting requirements of Rule 144 under the Securities Act and of the
          Securities  Act, a copy of the most recent annual or quarterly  report
          of the Company and such other  reports and documents of the Company as
          such holder may reasonable request to avail itself of any similar rule
          or  regulation  of the SEC  allowing  it to sell any  such  securities
          without registration.

     11.9 Mergers,  Etc. The Company shall not,  directly or  indirectly,  enter
     into any Change of Control  transaction  in which the Company  shall not be
     the surviving Company unless the proposed surviving Company shall, prior to
     such transaction, agree in writing to assume the obligations of the Company
     under this Warrant,  including but not limited to those under Section 11 of
     this Warrant,  and for that purpose  references  hereunder to  "Registrable
     Securities"  shall be  deemed to be  references  to the  securities  that a
     Holder would be entitled to receive in exchange for Registrable  Securities
     under and/or in connection with any such  transaction;  provided,  however,
     that the  provisions  of this  Warrant  shall not apply in the event of any
     such  transaction in which the Company is not the surviving  Company if all
     Holders holding Registrable  Securities are entitled to receive in exchange
     for all of their Registrable Securities  consideration consisting solely of
     (i) cash, (ii) securities of the acquiring  Company that may be immediately
     sold to the public without  registration under the Securities Act, or (iii)
     securities of the acquiring  Company that the acquiring  Company has agreed
     to register,  and actually does register, for resale to the public pursuant
     to the Securities Act, provided such registration occurs  contemporaneously
     with consummation of the transaction.

     11.10 Miscellaneous.  The Company has not granted and will not grant to any
     Person the right to request the Company to register  any equity  securities
     of the Company,  or any  securities  convertible  or  exchangeable  into or
     exercisable for such securities or any other Common Stock Equivalents, that
     in any material manner are more favorable to such Person than those granted
     herein.

     12. Exercise Procedure.  To exercise this Warrant,  the Holder must deliver
to the  principal  office of the  Company  (prior to the  Expiration  Date) this
Warrant, the subscription substantially in the form of Exhibit A attached hereto
and the Exercise  Price for the Warrant Shares being  purchased.  The Holder may
deliver the Exercise Price by any of the following  methods,  at its option: (i)
in legal  tender,  (ii) by bank  cashier's  or  certified  check,  (iii) by wire
transfer to an account  designated by the Company,  or (iv) in  accordance  with
Section 13. Upon  exercise,  the  Company,  at its sole expense  (including  the
payment by the Company of any documentary, stamp, issue or transfer taxes), will
issue and deliver to Holder,  within five  Business Days after the date on which
the Holder exercises this Warrant, certificates for the Warrant Shares purchased
upon exercise of this Warrant.  The Warrant Shares so purchased  shall be deemed
issued, and the Holder deemed the holder of record of such Warrant Shares, as of
9:00 a.m.  (New York City time) on the date on which the Holder  exercises  this
Warrant. The Company shall pay any and all documentary, stamp or issue, transfer
or similar  taxes  payable in respect of the issue or  delivery  of the  Warrant
Shares.  This Warrant may be exercised in whole or in part and in the event this


                                      105
<PAGE>
Warrant is partially exercised, the Company shall forthwith issue and deliver to
the Holder a new Warrant of like tenor to purchase that number of Warrant Shares
with respect to which such partial exercise did not apply.

     13. Cashless Exercise.  In lieu of paying the applicable  Exercise Price by
legal tender, check, or wire transfer, the Holder may elect to receive, upon any
exercise of this  Warrant,  that number of Warrant  Shares equal to the quotient
obtained by dividing:

                            [(A-B)(X)] by (A), where:

          A = the Fair  Market  Value of a share of Class A Common  Stock on the
          date of exercise;

          B = the Exercise Price for a share of Class A Common Stock; and

          X = the number of Warrant  Shares (equal to or less than the number of
          Warrant  Shares then  issuable  hereunder) as to which this Warrant is
          being exercised.

     14. Sale of Warrant or Warrant Shares. Neither the issuance of this Warrant
nor the issuance of any of the Warrant Shares upon exercise of this Warrant have
been  registered  under  the  Securities  Act or the  Exchange  Act or under the
securities  laws of any state.  The issuance of the Warrant Shares upon exercise
of this Warrant shall be subject to compliance  with all applicable  federal and
state securities laws.  Neither this Warrant nor any of the Warrant Shares (when
issued) may be sold, assigned, transferred, pledged or hypothecated or otherwise
disposed of except:  (i) as permitted by any  effective  registration  statement
under  the  Securities  Act and such  registration  or  qualification  as may be
required  under  the  securities  laws  of any  state  in  question,  or (ii) as
permitted  by  an  exemption  from  such   registration   and/or   qualification
requirements under the Securities Act and the securities laws of any state or if
any such registration and/or  qualification is not required.  For so long as any
Warrant  Shares  are  Registrable  Securities,  the  Company  shall  cause  each
certificate evidencing any such Warrant Shares to bear the following legend:

     THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
     THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY APPLICABLE
     SECURITIES  LAWS OF ANY  STATE,  AND MAY NOT BE  OFFERED,  SOLD,  ASSIGNED,
     TRANSFERRED,  PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE
     OF AN EFFECTIVE  REGISTRATION STATEMENT UNDER THE ACT AND SUCH REGISTRATION
     OR  QUALIFICATION  AS MAY BE  NECESSARY  UNDER THE  SECURITIES  LAWS OF ANY
     STATE, OR AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS
     UNDER THE ACT OR SUCH STATE LAW.

     15. Intentionally Omitted

                                      106
<PAGE>
     16. Transfer.  The Company will register this Warrant on its books and keep
such books at its offices.  To effect a transfer  permitted by clause (ii) under
Section  14 hereof,  the  Holder  must  present  (either  in person,  or by duly
authorized  attorney)  written  notice  substantially  in the form of  Exhibit B
attached  hereto.  To prevent a transfer in violation of Section 14, the Company
may issue appropriate stop orders to its transfer agent.

     17.  Replacement  of Warrant.  If the Holder  provides  evidence  that this
Warrant or any certificate or certificates  representing the Warrant Shares have
been lost,  stolen,  destroyed  or  mutilated,  the  Company (at the request and
expense  of the  Holder)  will  issue  a  replacement  warrant  or  certificates
evidencing such Warrant  Shares,  as applicable,  upon  reasonably  satisfactory
indemnification by the Holder (if required by the Company).

     18.  Governing Law;  Interpretation.  This Warrant shall be governed by and
construed in accordance with the internal laws of the State of Maryland  without
giving effect to its choice of law provisions.  Any judicial  proceeding against
the Company or the Holder  hereunder  or with  respect  hereto  shall be brought
exclusively in any federal or state court of competent  jurisdiction  located in
the State of  Maryland.  Each of the  Company  and the  Holder (i)  accepts  the
non-exclusive  jurisdiction of the aforesaid courts and irrevocably agrees to be
bound by any judgment rendered thereby, (ii) waives personal service of process,
(iii) agrees that service of process upon it may be made as provided in the Loan
Agreement,  (iv) waives any  objection to  jurisdiction  and venue of any action
instituted  hereunder  and  agrees not to assert  any  defense  based on lack of
jurisdiction,  venue or convenience, and (v) agrees that this Warrant was issued
in Maryland. Each party acknowledges that it participated in the negotiation and
drafting of this  Warrant  and that,  accordingly,  neither  party shall move or
petition a court construing this Warrant to construe it more stringently against
one party than against any other.

     19. Information Covenants.

     (a) Notice of Stockholder Meetings. If a meeting of the stockholders of the
     Company  is  called  or if  consents  of  the  Company's  stockholders  are
     solicited to consider and take action on a proposal for (i) the declaration
     of a  dividend  or payment of a  distribution  with  respect to the Class A
     Common Stock, (ii) the voluntary dissolution,  liquidation or winding up of
     the  Company,  (iii) the  issuance of shares of Class A Common Stock or any
     Common  Stock  Equivalents,  (iv) any  Change of  Control  or (v) any other
     action,  then the Company  send  written  notice  thereof to each Holder at
     least  five (5)  Business  Days prior to the  record  date for  determining
     stockholders  entitled  to vote  at such  meeting  or to take  action  with
     respect to such consent.

     (b)  Cooperation.  The Company  shall  cooperate  with each Holder and each
     holder of Warrant Shares in supplying such information as may be reasonably
     necessary  for such Person to complete and file any  information  reporting
     forms  presently  or  hereafter  required  by  the  SEC  and/or  any  other
     Governmental  Authority as a condition to the  availability of an exemption
     under the Securities Act and any  applicable  state  securities law for the
     sale or purchase of this Warrant or any Warrant Shares.

                                      107
<PAGE>
     (c) Proper Books and Records.  The Company covenants that it will, and will
     cause its  Subsidiaries  to, keep  proper  books and records in which full,
     true and correct entries in conformity with generally  accepted  accounting
     principles  shall be made of all dealings and  transactions  in relation to
     its business and activities.

     20.  Notice.  All notices and other  communications  given to or made under
this  Warrant  shall be in  writing  and  shall be given to the  Company  at its
address set forth in the Loan  Agreement  and to Holder at its address  shown on
the books of the Company,  or at such other  address as such party may hereafter
specify in a notice  given in the manner  required  under this  Section  20, and
shall be given  only by,  and shall be deemed to have been  received  upon:  (i)
registered or certified  mail,  return receipt  requested,  on the date on which
such received as indicated in such return receipt, (ii) delivery by a nationally
recognized  overnight  courier,  one (1)  Business  Day after  deposit with such
courier,  or (iii)  facsimile  or  electronic  transmission,  in each  case upon
telephone or further electronic  communication from the recipient  acknowledging
receipt (whether automatic or manual from recipient), as applicable.

     21.  Assignment;  Registration  of Transfer.  Subject to Section 14 hereof,
Warrant and the Warrant  Shares may be  assigned or  transferred  by the Holder.
This Warrant may not be assigned by the Company.  This Warrant  shall be binding
on and inure to the benefit of the parties hereto and their respective permitted
successors  and  assigns.  Subject to the  preceding  sentence,  nothing in this
Warrant  shall be construed  to give to any Person  other than the Company,  the
Holder and any holders of Registrable  Securities any legal or equitable  right,
remedy or cause of action  under this  Warrant.  This  Warrant may be amended or
modified  only in  writing  signed  by the  Company  and the  Holder  and  their
permitted  successors and assigns.  Upon any  assignment of this Warrant,  a new
warrant in substantially the form of this Warrant (any such new warrant,  a "New
Warrant"), evidencing the portion of this Warrant so transferred shall be issued
to the  transferee and a New Warrant  evidencing  the remaining  portion of this
Warrant not so transferred,  if any, shall be issued to the transferring Holder.
The acceptance of the New Warrant by the transferee  thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a Holder.


               [intentionally left blank - signature page follows]

                                      108
<PAGE>
     [signature page to PHC, Inc. Warrant issued to CSE Equity Holdings LLC]


     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on its
behalf,  in its corporate  name, by its President,  and its corporate seal to be
hereunto  affixed and the said seal to be attested by its  Secretary,  as of the
date first written above.


                                        PHC, INC.


Attest:     /s/ Paula C. Wurts              By:  /s/ Bruce A. Shear
      ___________________________           ________________________
      Name:     Paula C. Wurts              Name:    Bruce A. Shar
      Title:    Secretary                   Title:   President


By signing below, the undersigned,  as a shareholder and as the President of the
Company,  hereby agrees to use his best  reasonable  efforts,  including but not
limited to favorably voting his shares of capital stock in the Company, to cause
the Company to comply with its  obligation  in the second  sentence of Section 9
above.


/s/ Bruce A. Shear
_________________________
    Bruce A. Shear

                                      109
<PAGE>
EXHIBIT A

                            IRREVOCABLE SUBSCRIPTION

To:  PHC, Inc.

     The  undersigned  hereby  elects to exercise  its right under the  attached
Warrant  by  purchasing  ____  shares of the Class A Common  Stock,  and  hereby
irrevocably  subscribes to such issue. The certificates for such shares shall be
issued in the name of:

     _____________________________________
     (Name)

     _____________________________________
     (Address)

     _____________________________________
     (Taxpayer Number)

     and delivered to:

     _____________________________________
     (Name)

     _____________________________________
     (Address)

     PAYMENT  EXERCISE:  The  aggregate  Exercise  Price of $____  per  share is
     enclosed.

     or

     CASHLESS  EXERCISE:  In lieu of payment  of the  aggregate  Exercise  Price
     hereof,  the attached Warrant is being exercised in accordance with Section
     13 of the attached Warrant.

     Date:_______________

     Signed: _____________________________________
             (Name of Holder,  Please Print)

             _____________________________________
             (Address)

             _____________________________________
             (Signature)



                                      110
<PAGE>
EXHIBIT B

                                   ASSIGNMENT


     FOR VALUE  RECEIVED,  the undersigned  hereby sells,  assigns and transfers
unto:

     _____________________________________
     (Name)

     _____________________________________-
     (Address)

     the attached Warrant,  together with all right,  title and interest therein
to purchase ____ shares of the Class A Common Stock, and does hereby irrevocably
appoint  _______________________ as attorney-in-fact to transfer said Warrant on
the books of  _______________________,  with full power of  substitution  in the
premises.

     Done this ______ day of ____________ 20____.



                                        _____________________________________
                                                   (Signature)

                                        ____________________________________
                                                 (Name and title)

                                        _____________________________________
                                                    (Address)




                                      111
<PAGE>
                        SCHEDULE 1 TO PHC, INC. WARRANT

"Change of Control" shall mean,  with respect to the Company,  the occurrence in
any transaction or series of transactions of any of the following: (i) a merger,
consolidation,  reorganization,  recapitalization or share or interest exchange,
sale or transfer or any other transaction or series of transactions in which its
stockholders  immediately  prior to such  transaction or series of  transactions
receive, in exchange for the stock or interests owned by them, cash, property or
securities of the resulting or surviving entity or any Affiliate  thereof,  and,
as a result thereof, Persons who, individually or in the aggregate, were holders
of 50% or more of its voting  stock  immediately  prior to such  transaction  or
series of  transactions  hold less than 50% of the voting stock of the resulting
or surviving  entity or such  Affiliate  thereof,  calculated on a fully diluted
basis or (ii) a direct  or  indirect  sale,  transfer  or  other  conveyance  or
disposition,  in any single  transaction  or series of  transactions,  of all or
substantially all of its assets.

"Class A Common Stock" means the Class A Common Stock, par value $.01 per share,
of the Company.

"Common Stock" means any class of common stock of the Company, including but not
limited to the Class A Common Stock and the Class B Common Stock, par value $.01
per share, of the Company.

"Common Stock  Equivalent" means any security of the Company that is directly or
indirectly  convertible,  exercisable,  or exchangeable into any Common Stock or
any other Common Stock Equivalent at any time.

"Common Stock Deemed  Outstanding" means, at any given time, the sum of: (i) the
number of shares of Common Stock of the Company  outstanding at such time,  plus
(ii) the full  number  of  shares  of Common  Stock  issuable  upon  conversion,
exercise, or exchange of any Common Stock Equivalents outstanding at such time.

"Consideration" means:

     (i) if the Company issues Common Stock, the gross proceeds  received by the
     Company for each such share of Common Stock;

     (ii) if the Company  issues Common Stock  Equivalents,  the gross  proceeds
     received by the Company for each such  Common  Stock  Equivalent,  plus the
     minimum aggregate amount of gross proceeds,  if any, payable to the Company
     upon exchange or conversion of each such Common Stock Equivalent;

     (iii) if the  Company  issues  options  or  rights to  subscribe  for or to
     purchase Common Stock or Common Stock Equivalents,  the gross proceeds,  if
     any,  received  by the  Company  for each such  option  or right,  plus the
     minimum aggregate amount of gross proceeds,  if any, payable to the Company
     upon  exercise  of each such option or right and upon  further  exchange or

                                      112
<PAGE>
                                                   Schedule 1 to Warrant (Con't)

     conversion of each such Common Stock  Equivalent  into which such option or
     right was exercised or converted;

     (iv) if the Company issues a combination of securities consisting of Common
     Stock or Common Stock Equivalents and other securities of the Company,  and
     if the amount of gross  proceeds  allocable  to the Common  Stock or Common
     Stock  Equivalents  is not  determinable  on its  face at the  time of such
     issuance,  the  portion  of gross  proceeds  received  by the  Company,  as
     determined in good faith by the Company's Board of Directors; and

     (v) if the Company receives any non-cash  consideration,  the fair value of
     the non-cash  consideration,  as  determined in good faith by the Company's
     Board of Directors.

"Dilutive  Transaction" means any transaction  (other than Exempt  Transactions)
effected on or after the date hereof,  including but not limited to transactions
pursuant to or in connection with the Membership  Purchase Agreement between the
Company,  Pivotal Research  Centers,  L.L.C.,  and other parties dated April 30,
2004, in which the Company does any of the following, based on a Per Share Price
which is less than the Non-Dilutive  Price: (i) issues or sells any Common Stock
or any Common Stock Equivalents;  (ii) issues or sells any options,  warrants or
other  rights to purchase or  otherwise  acquire any Common  Stock or any Common
Stock Equivalent; or (iii) decreases the subscription,  exercise,  conversion or
exchange price of the securities  described in (i) or (ii) whether or not issued
or sold initially at a Per Share Price in excess of the Non-Dilutive Price.

"Employee  Options"  means options to purchase  shares of Common Stock issued by
the  Company   pursuant  to  its  currently   effective  stock  option  plan  or
non-employee directors' stock option plan.

"Employee  Option  Shares" means both shares of Common Stock into which Employee
Options are  exercisable  and shares of Common Stock issued under the  Company's
currently effective employee stock purchase plan.

"Exempt  Transaction"  means any transaction  where the Company:  (i) issues any
Common Stock upon conversion or exercise of securities  outstanding or issued as
of the date hereof;  (ii) issues any Common Stock upon exercise of this Warrant;
(iii) issues  equity  securities  as a dividend or upon a stock  split;  or (iv)
issues Employee Options or Employee Option Shares in the aggregate not exceeding
the number of shares of such authorized as of the date hereof.

"Fair Market Value" of a share of Class A Common Stock means:

     (i) the average of the daily closing prices for the thirty (30) consecutive
     business  days  ending  fifteen  (15)  business  days  before  the  date of
     determination  (as adjusted for any stock dividend,  split,  combination or
     reclassification  that took effect during such 30 business day period) with
     the closing price for each day being the last  reported  sales price or, in
     case no such reported sales took place on such day, the average of the last
     reported bid and asked  prices,  in either case on the  principal  national
     securities exchange on which the Class A Common Stock is listed or admitted
     to trading or as reported by Nasdaq (or if the Class A Common  Stock is not
     at the time  listed or  admitted  for  trading on any such  exchange  or if
     prices of the Class A Common  Stock are not  reported by Nasdaq,  then such


                                      113
<PAGE>
                                                   Schedule 1 to Warrant (Con't)

     price as shall be equal to the average of the last  reported  bid and asked
     prices  on  such  day  as  reported  by  The  National   Quotation   Bureau
     Incorporated or any similar reputable  quotation and reporting service,  if
     such   quotation  is  not  reported  by  The  National   Quotation   Bureau
     Incorporated);

     (ii) if clause (i) does not apply, and if the transaction involves the sale
     by the Company of securities to unaffiliated  third parties  (utilizing the
     services of an investment banker acceptable to Holder),  the applicable per
     share price in such transaction; and

     (iii)  in all  other  cases as  determined  in good  faith by the  Board of
     Directors of the Company and approved by the Holder;  provided  that if the
     Holder does not approve such  determination by the Board of Directors,  the
     Fair Market Value shall be determined  based on earnings and book value and
     other appropriate items in accordance with the following procedure: (A) the
     Holder  will  recommend  three  qualified,  independent  appraisers  to the
     Company; and (B) the Company will select one of the three appraisers (to be
     compensated  by the Company) to determine a value,  which value will be the
     "Fair Market Value". All appraisal costs will be paid by the Company.

For all purposes, the Company and the Holder agree that the Fair Market Value of
the Warrant  Rights or Warrant  Shares,  as the case may be, shall be determined
without  any  reduction  in value for lack of  control or the  inherent  lack of
liquidity of non-public minority interests.

"Non-Dilutive  Price"  means the Fair  Market  Value of a share of Common  Stock
immediately prior to the Dilutive Transaction.

"Other  Securities"  means any stock (other than Class A Common Stock) and other
securities  of the  Company or any other  Person  which the  Holders at any time
shall be entitled to receive,  or shall have received,  upon the exercise of the
Warrants,  in lieu of or in addition to the Class A Common Stock, or which shall
be issuable or shall have been issued in exchange for or in replacement of Class
A Common Stock or Other Securities pursuant to this Warrant.

"Per Share Price" means the total Consideration for each share of Class A Common
Stock or Common Stock Equivalent issued or issuable by the Company in connection
with a Dilutive Transaction.

"Registrable Securities" means: (i) all of the shares of Class A Common Stock or
Other  Securities  now  held or  hereafter  acquired  by the  Holder,  including
(without limitation) shares of Class A Common Stock constituting Warrant Shares,
and (ii) all of the shares of Class A Common Stock issued or issuable,  directly
or indirectly,  with respect to the securities  referred to in clause (i) by way
of a stock  dividend or stock split in connection  with a combination of shares,
recapitalization  or  Change  of  Control.  As  to  any  particular  Registrable
Securities,  such  securities  will cease to be Registrable  Securities upon the
earlier  of  (a)  when  they  have  been  registered  pursuant  to an  effective

                                      114
<PAGE>
                                                   Schedule 1 to Warrant (Con't)

registration  statement  under the Securities  Act, and registered and qualified
under the securities laws of all applicable  states,  or (b) at such time as all
of the Registrable Securities of a holder are transferable without limitation or
restriction by the holder thereof in a single  brokerage  transaction  under the
provisions of Rule 144(k) or any similar rule then in effect, but subsection (b)
shall apply only if there is then an active public  trading market for the class
of securities  constituting  the Registrable  Securities so that the Registrable
Securities may be sold in a single transaction without negatively  affecting the
sale price therefor.

"Warrant"  means this  Warrant,  each New  Warrant  and each  Warrant  issued in
replacement or substitution hereof or thereof.

"Warrant  Rights" means the right of the Holder to purchase  Warrant Shares upon
the exercise  hereof,  with one Warrant Right equaling the right to purchase one
Warrant Share hereunder.

"Weighted Average Per Share Value" means the amount determined by performing the
following  calculation  and rounding the  resulting  number to the nearest whole
cent: divide:

     (i) the sum of:

          (a) the Non-Dilutive Price of a Warrant Share multiplied by the number
          of shares of Common Stock Deemed Outstanding  immediately prior to the
          Dilutive Transaction, plus

          (b) the aggregate Consideration, if any, received or to be received by
          the Company in connection with the Dilutive Transaction, by

     (ii) the number of shares of Common  Stock Deemed  Outstanding  immediately
     after the Dilutive Transaction.


                                      115