<PAGE>
 
                                                         Exhibit 10.114

                               FIRST AMENDMENT TO
                      SUBORDINATED NOTE PURCHASE AGREEMENT
                      ------------------------------------


     THIS FIRST AMENDMENT TO SUBORDINATED NOTE PURCHASE AGREEMENT ("Amendment")
                                                                    ---------  
is entered into as of March 27, 1998 by and among RAMSAY HEALTH CARE, INC., a
Delaware corporation (the "Company"), GENERAL ELECTRIC CAPITAL CORPORATION, a
                           -------                                           
New York corporation ("GE Capital"), and PAUL RAMSAY HOLDINGS PTY. LIMITED ACN
                       ----------                                             
008 446 151, an Australian corporation ("Ramsay Holdings;" GE Capital and Ramsay
                                         ----------------                       
Holdings are hereinafter each individually referred to as a "Purchaser", and
                                                             ---------      
collectively, as "Purchasers"), for the benefit of the parties and each of the
                  ----------                                                  
Holders.


                                    RECITALS
                                    --------

     A.  The Company and Purchasers are parties to a certain Subordinated Note
Purchase Agreement dated as of September 30, 1997 (the "Purchase Agreement;"
                                                        ------------------  
capitalized terms used herein and not defined herein have the meanings assigned
to them in the Purchase Agreement).

     B.  Purchasers are all of the Holders of the Bridge Notes.

     C.  The Company and Purchasers desire to amend the Purchase Agreement as
hereinafter set forth.


                               1.    AMENDMENTS
                                     ----------

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and intending to be legally bound, the parties hereto
agree as follows:

     1.   Amendment to Article 3.  The Purchase Agreement is hereby amended by
          ----------------------                                              
deleting Article 3 thereof in its entirety and by substituting in lieu thereof
the following Article 3:

                                 ARTICLE 3

                         CONTINGENT PAYMENT OBLIGATION
                         -----------------------------

          Section 3.01. Contingent Payment Obligation. In the event
                        -----------------------------
     that the Series A Bridge Notes have not been repaid in full on or
     before March 30, 1998, then, in addition to interest payable at
     the rates specified in Section 2.01 hereof, the Company shall pay
                            ------------
     to the Holders of the Series A Bridge Notes, concurrently with
     the Exit Event, an amount (the "Contingent Payment Amount") equal
                                     -------------------------
     to (a) if the Series A Bridge Notes have not been repaid in full
     on or before March 30, 1998, but are repaid
<PAGE>
 
     in full on or before September 30, 1998, $1,000,000; or (b) if
     the Series A Bridge Notes have not been repaid in full on or
     before September 30, 1998, the greater of (1) $1,000,000 or (2)
     an amount equal to fourteen percent (14%) of the product of (i)
     the number of Outstanding Shares of Common Stock as of the
     Determination Date, multiplied by (ii) the Current Market Price
                         -------------
     per Share of Common Stock as of the Determination Date. If Series
     A Bridge Notes are held by more than one Holder at such time, the
     Contingent Payment Amount shall be paid to the Holders of Series
     A Bridge Notes pro rata, based on the proportion that the
                    --------
     principal amount of the Series A Bridge Note held by each such
     Holder bears to the aggregate principal amount of all Series A
     Bridge Notes.

          Section 3.02. Notice of Exit Event. As soon as is reasonably
                        --------------------
     practicable after the Company has knowledge that an Exit Event
     will or is reasonably likely to occur, but in no event later than
     the Determination Date with respect thereto, it shall provide
     written notice thereof (an "Exit Event Notice") to all of the
                                 -----------------
     Holders of the Series A Bridge Notes, setting forth the nature of
     the Exit Event and the actual or proposed date thereof. Promptly
     after giving an Exit Event Notice pursuant to this Section 3.02,
                                                        ------------
     the Company shall cause the Contingent Payment Amount to be
     determined on the basis set forth in Section 3.03, if applicable,
                                          ------------
     as soon as is reasonably practicable, but in any event within
     five Business Days following the Determination Date.

          Section 3.03. Determination of Contingent Payment Amount. If
                        ------------------------------------------
     the Contingent Payment Amount is determined pursuant to clause
     (c) of Section 3.01:
            ------------

                 (a)    The determination of the Current Market Price
     per Share of Common Stock as of the Determination Date, the
     number of Outstanding Shares of Common Stock as of the
     Determination Date and the resulting Contingent Payment Amount
     shall be made by the firm of independent accountants of
     recognized national standing then retained by the Company, at the
     sole expense of the Company. Concurrently with the determination
     of the Contingent Payment Amount pursuant to this Section
                                                       -------
     3.03(a), but in any event within five Business Days following the
     -------
     Determination Date, the Company shall provide written notice to
     each Series A Holder (a "Contingent Payment Amount Notice"),
                              --------------------------------
     setting forth the Contingent Payment Amount as so determined, and
     attaching thereto a schedule prepared by its independent public
     accountants showing in reasonable detail the calculation thereof.

                 (b)    The Required Series A Holders shall have the
     right to object to the Current Market Price per Share of Common
     Stock as of the Determination Date, the number of Outstanding
     Shares of Common Stock as of the Determination Date or the
     Contingent Payment Amount as so determined and set forth in the
     Contingent Payment Amount Notice (including, without limitation,
     any determination of the Current Market Price per Share of Common
     Stock made

                                       2
<PAGE>
 
     pursuant to the second sentence of the definition thereof), by
     giving written notice (an "Objection Notice") to the Company
                                ----------------
     specifying the nature of their objection, within three Business
     Days following receipt of the Contingent Payment Amount Notice
     pursuant to paragraph (a) hereof and, unless such objection is
     resolved by agreement of the Company and the Required Series A
     Holders on or before the date of the Exit Event, the Company and
     the Required Series A Holders shall each have the right to
     subject the disputed determination to separate firms of
     independent accountants of recognized national standing (or, in
     the case of a determination of the Current Market Price per Share
     of Common Stock made by an independent brokerage firm, to
     separate independent brokerage firms) for a joint resolution of
     such objection (neither of which shall be the firm of independent
     accountants regularly retained by the Company or the independent
     brokerage firm determining the Current Market Price per Share of
     Common Stock pursuant to the second sentence of the definition
     thereof). If such firms cannot jointly resolve such objection,
     then, unless otherwise directed by agreement of the Company and
     the Required Series A Holders, such firms shall choose another
     firm of independent accountants of recognized national standing,
     which firm shall resolve such objection. In such case, the
     Current Market Price per Share of Common Stock as of the
     Determination Date, the number of Outstanding Shares as of the
     Determination Date and the Contingent Payment Amount so
     determined shall be conclusive and binding on the Company, all of
     the Holders of Series A Bridge Notes and all Persons claiming
     under or through any of them.

                 (c)    In the event that an Objection Notice is given
     pursuant to paragraph (b), the cost of the independent
     accountants selected by the Company shall be borne solely by the
     Company, the cost of the independent accountants selected by the
     Required Series A Holders shall be borne solely by the Required
     Series A Holders, and the cost of any independent accountants
     chosen by the Company's and the Required Series A Holders'
     independent accountants to resolve any objection shall be borne
     one-half each by the Required Series A Holders and the Company.

          Section 3.04. Payment of Contingent Payment Amount. On the
                        ------------------------------------
     date of and concurrently with the Exit Event, the Company shall
     pay to each Holder of Series A Bridge Notes the ratable portion
     of the Contingent Payment Amount payable to such Holder pursuant
     to Section 3.01. If the Contingent Payment Amount is determined
        ------------
     pursuant to clauses (a) or (b) of Section 3.01, the amount
                                       ------------
     thereof shall be payable to the Holders of Series A Bridge Notes
     by wire transfer to an account in a bank located in the United
     States designated by each such Holder for such purpose (a "Cash
                                                                ----
     Payment"). If the Contingent Payment Amount is determined
     -------
     pursuant to clause (c) of Section 3.01, the first $1,000,000
                               ------------
     thereof shall be payable to the Holders of Series A Bridge Notes
     by a Cash Payment and the balance thereof, if any, shall be
     payable to the Holders of Series A Bridge Notes, at the option of
     the Company, either by (i) a Cash Payment, or (ii) delivery to
     each such Holder of that number of fully paid and

                                       3
<PAGE>
 
     non-assessable shares of Common Stock, duly registered under the
     Securities Act (if such registration is required to sell such
     shares to the public) and listed on the securities exchange on
     which the Common Stock is then listed or, if not so listed,
     listed on the NASDAQ automated quotation system, and having a
     value that is most nearly equal to the Contingent Payment Amount,
     or ratable portion thereof payable to such Holder, based on the
     Current Market Value per Share of Common Stock as of the
     Determination Date together with either (x) an amount of cash
     equal to the aggregate par value of such Common Stock, which
     shall be used by such Holder to pay to the Company such amount
     (not to exceed the par value of such Common Stock) as shall, in
     the written opinion of counsel to the Company, be necessary so
     that such Common Stock will be fully paid and non-assessable, or
     (y) a written opinion of counsel to the Company to the effect
     that such Common Stock will be fully paid and non-assessable as
     issued, without the payment by the Holder to the Company of an
     amount equal to the par value of such Common Stock as of the time
     of issuance (a "Stock Payment"). Notwithstanding anything to the
                     -------------
     contrary set forth in this Section 3.04, if at the time the
                                ------------
     Contingent Payment Amount is due and payable hereunder, the
     Company is then prohibited by the terms of the Senior Credit
     Agreement from paying all or any portion of the Contingent
     Payment Amount by a Cash Payment, the Company shall pay such
     amount (or portion thereof) by a Stock Payment.

          Section 3.05. Notices. Each Exit Event Notice, Contingent
                        -------
     Payment Amount Notice and Objection Notice given pursuant to this
     Article 3 shall be given by telecopier, with a copy thereof by
     hand delivery or by reputable overnight courier, and otherwise in
     compliance with Section 12.09.
                     -------------

     2.   Amendment to Article 5. The Purchase Agreement is hereby further
          ----------------------
amended by adding to the end of Article 5 thereof the following new Section
5.31:

                SECTION 5.31 Subordination of Subordinated
                             -----------------------------
          Indebtedness. This Agreement, and all amendments,
          ------------
          modifications, extensions, renewals, refinancings and
          refundings hereof, constitute the "Bridge Note Purchase
          Agreement" within the meaning of the Ramsay Subordinated
          Note Purchase Agreement; this Agreement, together with each
          of the other Bridge Note Documents and all amendments,
          modifications, extensions, renewals, refinancings and
          refundings hereof and thereof, constitute "Senior Credit
          Documents" within the meaning of the Subordinated Note
          Purchase Agreement; and all of the Bridge Note Obligations,
          and all amendments, modifications, extensions, renewals,
          refundings or refinancings thereof constitute "Senior
          Indebtedness" of the Company within the meaning of the
          Ramsay Subordinated Note Purchase Agreement, and the Holders
          of the Bridge Notes from time to time constitute "Senior
          Lenders" entitled to all of

                                       4
<PAGE>
 
          the rights of a holder of "Senior Obligations" pursuant to
          Article 4 of the Ramsay Subordinated Note Purchase
          Agreement.

     3.   Amendment to Section 7.12. The Purchase Agreement is hereby further
          -------------------------
amended by adding the following as new clauses (e) and (f) to Section 7.12
thereof:

          , (e) Borrower may make payments of interest under the
          Ramsay Subordinated Note in kind and (f) with the consent of
          the Required Holders, Borrower may prepay the Ramsay
          Subordinated Notes in full.

     4.   Amendment to Article 7. The Purchase Agreement is hereby further
          ----------------------
amended by adding to the end of Article 7 thereof the following new Section
7.17:

                SECTION 7.17 Changes Relating to Subordinated Debt.
                             -------------------------------------
          The Company shall not change or amend the terms of the
          Ramsay Subordinated Note, the Ramsay Subordinated Note
          Purchase Agreement or any other Subordinated Indebtedness
          (or any indenture or agreement in connection therewith) if
          the effect of such amendment is to: (a) increase the
          interest rate on such Subordinated Indebtedness; (b) change
          the dates upon which payments of principal or interest are
          due on such Subordinated Indebtedness other than to extend
          such dates; (c) change any default or event of default other
          than to delete or make less restrictive any default
          provision therein; (d) change or add any covenant with
          respect to such Subordinated Indebtedness other than to make
          less restrictive any such covenant; (d) change the
          redemption or prepayment provisions of such Subordinated
          Indebtedness other than to extend the dates therefor or to
          reduce the premiums payable in connection therewith; (e)
          grant any security or collateral to secure payment of such
          Subordinated Indebtedness; or (f) change or amend any other
          term if such change or amendment would materially increase
          the obligations of the obligor or confer additional material
          rights to the holder of such Subordinated Indebtedness in a
          manner adverse to any Holder.

     5.   Amendment to Section 10.02.  The Purchase Agreement is hereby further
          --------------------------                                           
amended by (a) deleting in its entirety from Section 10.02 thereof the defined
                                             -------------                    
term "Base Amount;" and (b) adding the following to Section 10.02 as new
                                                    -------------       
definitions, in proper alphabetical order:

               "Dothan Alabama Acquisition" shall mean the acquisition
                --------------------------
          by Ramsay Youth Services of Alabama, Inc. of certain land
          and personal property located in Dothan, Houston County,
          Alabama from Crescent Real Estate Funding VII, L.P. pursuant
          to the terms and conditions set forth in the Dothan Alabama
          Acquisition Agreement.

                                       5
<PAGE>
 
               "Dothan Alabama Acquisition Agreement" shall mean that
                ------------------------------------
          certain Agreement of Purchase and Sale, dated as of the 30th
          day of January, 1998, by and among Crescent Real Estate
          Funding VII, L.P. and Ramsay Youth Services of Alabama, Inc.

               "Palm Bay Acquisition" shall mean the acquisition by
                --------------------
          Ramsay Youth Services of Florida, Inc. of certain land and
          personal property located in Palm Bay, Brevard County,
          Florida from BHC Properties, Inc. pursuant to the terms and
          conditions set forth in the Palm Bay Acquisition Agreement.

               "Palm Bay Acquisition Agreement" shall mean that
                ------------------------------
          certain Real Estate Purchase and Sale Agreement, dated as of
          March 6, 1998, by and between BHC Properties, Inc. and
          Ramsay Youth Services of Florida, Inc.

               "Ramsay Subordinated Note Purchase Agreement" shall
                -------------------------------------------
          mean the Subordinated Note Purchase Agreement, dated as of
          March 25, 1998, among the Company, as issuer, and Ramsay
          Holdings, as purchaser, as the same may be amended, modified
          or supplemented with the consent of the Holders.

               "Ramsay Subordinated Note" shall mean the Company's
                ------------------------
          Junior Subordinated Note due September 30, 2006, issued
          pursuant to the Ramsay Subordinated Note Purchase Agreement
          in the principal amount of $5,000,000 plus Capitalized
          Interest (as defined therein).

               "Subordinated Indebtedness" shall mean the Indebtedness
                -------------------------
          evidenced by or in respect of the Ramsay Subordinated Note.

     6.   Amendment to Annex B. The Purchase Agreement is hereby further amended
          --------------------
by renumbering paragraph 11 of Annex B thereof as paragraph 12 and by adding
immediately prior thereto the following new paragraph 11:

               11.  Upon receipt thereof, copies of (i) any material
          notice or other material communication delivered by or on
          behalf of the Company to any Person in connection with the
          Ramsay Subordinated Note Purchase Agreement or any other
          agreement or other document relating to Subordinated
          Indebtedness at the same time and by the same means as such
          notice or other communication is delivered to such Person,
          and (ii) any material notice or other material communication
          received by the Company from any Person in connection with
          the Ramsay Subordinated Note Purchase Agreement or any other
          agreement, document or instrument relating to Subordinated
          Indebtedness promptly after such notice or other
          communication is received by the Company.

                                       6
<PAGE>
 
                           2.    CONSENTS
                                 --------

     1.   The Holders consent to the Palm Bay Acquisition and waive any Default
that would arise therefrom under Section 8.01 of the Purchase Agreement,
provided that (i) the Palm Bay Acquisition and the initial loan contemplated by
--------
the Ramsay Subordinated Note Purchase Agreement are consummated no later than
March 31, 1998, and (ii) the Company receives an initial loan under the Ramsay
Subordinated Note Purchase Agreement in the principal amount of $1,475,000, of
which $100,000 shall be applied to reimburse the Company for the cash deposit it
previously made under the Palm Bay Acquisition Agreement, $1,300,000, together
with such cash deposit, shall be applied to pay the entire purchase price of the
Palm Bay Acquisition in full and $75,000 shall be applied to pay certain
transaction costs incurred in connection therewith

     2.   The Holders consent to the Dothan Alabama Acquisition and waive any
Default that would arise therefrom under Section 8.01 of the Purchase Agreement,
provided that (i) the Dothan Alabama Acquisition is consummated no later than
--------
May 15, 1998 on the terms and conditions set forth in the Dothan Alabama
Acquisition Agreement, and (ii) the Company receives a loan under the Ramsay
Subordinated Note Purchase Agreement in the principal amount of $1,900,000, of
which $50,000 shall be applied to reimburse the Company for the cash deposit it
previously made under the Dothan Alabama Acquisition Agreement and $1,850,000,
together with such cash deposit, shall be applied to pay the entire purchase
price of the Dothan Alabama Acquisition in full

                          3.    CONDITIONS PRECEDENT
                                --------------------

     Notwithstanding any other provision of this Amendment and without affecting
in any manner the rights of the Holders hereunder, it is understood and agreed
that this Amendment shall not become effective, and the Purchase Agreement shall
remain in full force and effect in its unamended form, the Company shall have no
rights under this Amendment and the Holders shall not be obligated to take,
fulfill or perform any action hereunder, until the following conditions have
been fulfilled to the satisfaction of the Holders:

     1.   The Holders shall have received the following, each dated as of the
date of this Amendment, in form and substance reasonably satisfactory to the
Holders and their respective counsel:

          (1)  This Amendment, duly executed by all parties hereto;

          (2)  A certificate of the Secretary or an Assistant Secretary of the
Company certifying true and correct copies of (1) the articles or certificate of
incorporation and by-laws of the Company, (2) the resolutions adopted by the
Board of Directors of the Company approving this Amendment and all documents,
certificates and instruments being executed in connection herewith and the
transactions contemplated hereby, (3) all documents evidencing other necessary
corporate action by the Company and required governmental and third party
approvals with respect to each of the foregoing and (4) the names and true
signatures of the authorized officers of the Company;

                                       7
<PAGE>
 
          (3)  An opinion of Haythe & Curley, special counsel to the Company, in
substantially the form of Exhibit C to the Purchase Agreement with appropriate
                          ---------
changes to address this Amendment; and

          (4)  A certificate from a Responsible Financial Officer of Borrower as
to the Ramsay Subordinated Note Purchase Agreement and the Ramsay Subordinated
Note certifying true and correct copies of the Ramsay Subordinated Note Purchase
Agreement and the Ramsay Subordinated Note, each of which shall be in form and
substance satisfactory to the Holders.

     2.   Ramsay Subordinated Note Purchase Agreement is executed and delivered
by all parties thereto, and all conditions precedent thereto are satisfied.


                             4.    REPRESENTATIONS
                                   ---------------

     The Company hereby represents and warrants to Purchasers that:

     1.   The execution, delivery and performance by the Company of this
Amendment (i) are within the Company's corporate power; (ii) have been duly
authorized by all necessary corporate and shareholder action; (iii) are not in
contravention of any provision of the Company's certificate of incorporation or
bylaws or other organizational documents; (iv) do not violate any law or
regulation, or any order or decree of any Governmental Authority; (v) do not
conflict with or result in the breach or termination of, constitute a default
under or accelerate any performance required by, any indenture, mortgage, deed
of trust, lease, agreement or other instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any such Subsidiary or
any of their respective property is bound; (vi) do not result in the creation or
imposition of any Lien upon any of the property of the Company or any of its
Subsidiaries; and (vii) do not require the consent or approval of any
Governmental Authority or any other person other than the consent of the Senior
Lenders set forth below;

     2.   This Amendment has been duly executed and delivered for the benefit of
or on behalf of the Company and constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms except as the enforceability hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws affecting creditors'
rights and remedies in general; and

     3.   After giving effect to this Amendment, no Default or Event of Default
has occurred and is continuing as of the date hereof.

                              5.    MISCELLANEOUS
                                    -------------

                                       8
<PAGE>
 
     1.   The Company hereby restates, ratifies and reaffirms each and every
term and condition set forth in the Purchase Agreement, as modified by this
Amendment, effective as of the date hereof.

     2.   The Company agrees to pay on demand all costs and expenses of GE
Capital in connection with the preparation, execution, delivery and enforcement
of this Amendment, including the reasonable fees and out-of-pocket expenses of
counsel to GE Capital.

     3.   This Amendment shall be governed by, and construed in accordance with,
the internal laws (and not the laws of conflicts), of the State of New York and
all applicable laws of the United States of America.

     4.   This Amendment may be executed in any number of separate counterparts,
each of which shall, collectively and separately, constitute one agreement.

     IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first written above.

                                    RAMSAY HEALTH CARE, INC.



                                    By: /s/ Remberto G. Cibran
                                        --------------------------------------
                                        Remberto G. Cibran
                                        President


                                    GENERAL ELECTRIC CAPITAL
                                      CORPORATION



                                    By: /s/ Cheryl P. Boyd
                                        --------------------------------------
                                        Cheryl P. Boyd
                                        Authorized Signatory


                                    PAUL RAMSAY HOLDINGS PTY.    
                                      LIMITED



                                    By: /s/ Peter Evans
                                        --------------------------------------
                                        Peter Evans
                                        Director

                                       9
<PAGE>
 
     The undersigned, being the Senior Agent and all of the Senior Lenders under
the Senior Credit Agreement, hereby consent to the foregoing Second Amendment as
of the date first written above.

                                    GENERAL ELECTRIC CAPITAL
                                      CORPORATION



                                    By:  /s/ Cheryl P. Boyd
                                         -------------------------------------
                                         Cheryl P. Boyd
                                         Authorized Signatory


                                    THE ING CAPITAL SENIOR SECURED
                                     HIGH INCOME FUND, L.P.



                                    By: /s/ Michael D. Hatley
                                        --------------------------------------
                                        Name:   Michael D. Hatley
                                        Title:  Vice President and Portfolio
                                                Manager

                                       10