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 --
<PAGE>
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 --
<PAGE>

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 --
<PAGE>
                      [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 --
<PAGE>
                      [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 --