10.30
SECURED PROMISSORY NOTE
$1,000,000.00 February 1, 2004
Note A Phoenix, Arizona
FOR VALUE RECEIVED, PHC, Inc., a Massachusetts corporation ("PHC") agrees
and promises to pay to the order of Louis C. Kirby ("Kirby"), Carol A. Colombo
("Colombo") and Anthony A. Bonacci ("Bonacci"), or their heirs, successors and
assigns (Kirby, Colombo and Bonacci may be collectively referred to herein as
"Lenders" or individually as a "Lender"), the principal sum of $1,000,000, with
interest accruing on a daily basis on the unpaid principal balance from time to
time outstanding from the date hereof at the rate of six percent (6%) per annum,
compounded annually (the "Note Rate"), interest to be calculated on a 360-day
year, both principal and interest being payable to Lender at Lenders' respective
accounts at 1st National Bank of Arizona7150 East Camelback Road, Ste. 275,
Scottsdale, AZ 85251, Attention: Mr. Joe Botero, or at such other address as
Lender may designate by notice from time to time, without presentment for
payment, diligence, grace, exhibition of this Note, protest, or special notice
of any kind, all of which are hereby expressly waived. For purposes of this
Note, PHC shall be referred to as "Debtor." The unpaid balance of this Note at
any time shall be the then current Remaining Note Principal (as defined herein),
plus interest accrued thereon and costs, expenses and fees chargeable hereunder,
which balance may be endorsed hereon from time to time by the holder hereof. The
term of this Note will be five (5) years, commencing on the date of execution of
this Note. All payments due under this Note will be paid by Debtor to each
Lender pro-rata, calculated by multiplying the applicable payment amount by each
Lender's Percentage Interest.
1. Definitions.
1.1 Generally. All capitalized terms not defined herein shall have the
meanings set forth in that certain Membership Purchase Agreement (the
"Purchase Agreement") between PHC, Pivotal Research Centers, L.L.C.
("Pivotal"), and Lenders of even date herewith.
1.2 "EBITDA" for any applicable period means the earnings of the Pivotal
Business before interest, taxes, depreciation or amortization,
determined in accordance with GAAP. For purposes of determining the
EBITDA of the Pivotal Business, all costs attributable to the
Non-Pivotal Business shall not be included regardless where such cost
is incurred.
1.3 "Adjusted EBITDA" means an amount equal to the sum (without
duplication) of (i) all bonuses paid to employees of Pivotal
(including but not limited to Michael J. Colombo and Louis C. Kirby),
plus (ii) the EBITDA generated by the Pivotal Business during the
applicable Note Adjustment Period, plus (iii) the sum of all principal
and interest payments, if any, made by the Pivotal Business to repay
any portion of the Acquisition Financing, the Line of Credit, and the
Notes, plus (iv) any corporate level overhead charges assessed against
the Pivotal Business by PHC in violation of the provisions of Section
3.10 of the Purchase Agreement.
1.4 "Base Amount" means $780,000 (U.S.) for any calendar year, pro-rated
for any partial periods.
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1.5 "Note Adjustment Amount" means an amount equal to the Adjusted EBITDA
of the Pivotal Business at the conclusion of the applicable Note
Adjustment Period minus the Base Amount, provided however, that if the
Note Adjustment Amount is a negative number, then the procedures set
forth in Section 2.4.1(c) or 2.4.2(c), as applicable, of this Note
shall be applied to determine the Note Adjustment Amount.
1.6 "Note Adjusted Interest" means, in the case of any Determination Date
where a Note Adjustment Amount is a negative number, the lesser amount
of Interest that would have otherwise been due and payable under this
Note during the applicable Note Adjustment Period if the Principal was
reduced by an amount equal to the Note Adjustment Amount. In the case
of any Determination Date where a Note Adjustment Amount is a positive
number, "Note Adjusted Interest" means the greater amount of Interest
that would have otherwise been due and payable under this Note during
the applicable Note Adjustment Period if the Principal was increased
by an amount equal to the Note Adjustment Amount.
1.7 "Note Adjustment Period" means the two periods, the first of which
shall commence on the date of execution of this Note and end on
December 31, 2004 ("Note Adjustment Period A"), and the second of
which shall commence on January 1, 2005 and end on December 31, 2005
("Note Adjustment Period B").
1.8 "Note Interest Adjustment Amount" means (a) in the case the Note
Adjusted Interest for the applicable Note Adjustment Period is a
positive number, an amount equal to the net interest payments made by
Debtor to Sellers pursuant to this Note during the applicable Note
Adjustment Period, plus the Note Adjusted Interest, or (b) in the case
the Note Adjusted Interest for the applicable Note Adjustment Period
is a negative number, an amount equal to the net interest payments
made by Debtor to Sellers pursuant to this Note during the applicable
Note Adjustment Period, minus the Note Adjusted Interest.
1.9 "Remaining Note Principal" means, on a given date, an amount equal to
the principal of this Note minus any principal payments made by Debtor
to Sellers pursuant to this Note prior to such date, plus any Note
Adjustment Amounts and Note Interest Adjustment Amounts determined
pursuant to Sections 1.7 and 1.8 hereof prior to such date.
2. Payments. Debtor shall make payments under this Note as follows:
2.1 Interest Accrual. Interest shall begin to accrue on the principal
balance of this Note from the date of execution of this Note. All
interest that accrues from the date of execution of this Note until
December 31, 2004 shall be added to the then outstanding principal
balance of this Note on the date the Quarterly Installment (as defined
below) would otherwise have been due, as set forth below.
2.2 Quarterly Installments of Principal and Interest. Commencing on
January 1, 2005 and on the first day of each quarterly period
thereafter (March, June, September, December) through and including
December 1, 2008, Debtor shall make quarterly installment payments of
principal and interest to Lender with such installments based on the
Remaining Note Principal outstanding at the beginning of such quarter
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amortized in quarterly installments over the remaining term (the
"Quarterly Installments"). The annual principal adjustments described
in Section 1.5 of this Note shall adjust the principal balance of this
Note, if at all, on February 1 of the year in which such adjustment
occurs.
2.3 Maturity. Anything in this Note to the contrary notwithstanding,
absent earlier acceleration upon an Event of Default, all then
outstanding principal and accrued and unpaid interest and all other
amounts due under this Note shall be due and payable to Lender in full
on December 31, 2008 (the "Maturity Date").
2.4 Two Annual Principal Adjustments. The principal balance of this Note
shall be adjusted annually for each of the first two years after the
date of execution of this Note, in the manner described below. The
adjustment for Note Adjustment Period A shall take place on February
1, 2005 ("Determination Date A") and the adjustment for Note
Adjustment Period B shall take place on February 1, 2006
("Determination Date B"). Debtor shall be responsible for calculating
the Note Adjustment Amount for each Note Adjustment Period, all of
which calculations shall be made in good faith, in accordance with the
requirements set forth in this Note, and utilizing commercially
reasonable standards of care. Debtor shall provide Lenders with
written notice of its findings and reasonable financial support for
its calculations on or before the applicable Determination Date.
2.4.1 Year One Adjustment.
(a) Positive Adjustment. If the Pivotal Business for Note
Adjustment Period A generates a positive Note Adjustment
Amount, the Remaining Note Principal shall be increased in
an amount equal to the Note Adjustment Amount plus an amount
equal to the Note Interest Adjustment Amount, and Debtor
shall make all payments under this Note subsequent to
Determination Date A in accordance with such adjusted
Remaining Note Principal. So for example, if the Adjusted
EBITDA for Note Adjustment Period A equals $850,000, then
the Remaining Note Principal shall be increased by $70,000
($850,000 - $780,000 = $70,000).
(b) Negative Adjustment. If the Pivotal Business generates an
Adjusted EBITDA of less than the Base Amount during Note
Adjustment Period A, then, subject to the provisions of
Section 2.4.1(c) below, the Remaining Note Principal shall
be decreased by an amount equal to the Note Adjustment
Amount minus an amount equal to the Note Interest Adjustment
Amount, and Debtor shall make all payments under this Note
subsequent to Determination Date A in accordance with such
adjusted Remaining Note Principal. So for example, if the
Adjusted EBITDA for Note Adjustment Period A equals
$700,000, then the Remaining Note Principal shall be
decreased by $80,000 ($700,000 - $780,000 = ($80,000))
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(c) Adjustment Review. If, in the case of a Note Adjustment
Amount to which Section 2.4.1(b) applies, such Note
Adjustment Amount is equal to or greater than $50,000, then
the CEO of the Pivotal Business shall meet with the CEO of
PHC and, in good faith, determine the amount of salary
related expenses borne by the Pivotal Business that
reasonably could have been allocated to activities other
than the Pivotal Business (e.g., a percentage of the
salaries of employees that were spending a portion of their
time supporting the development of Debtor's other clinical
research sites and operations) (hereinafter referred to as
the "Estimated Allocation") and the principal balance of the
Note shall be reduced by an amount equal to the Base Amount
minus the Adjusted EBITDA plus the Estimated Allocation, if
any. Notwithstanding anything herein to the contrary, if
after the Estimated Allocation is added to the Adjusted
EBITDA the result is that there exists an overage that under
normal circumstances would result in a positive adjustment
to the face value of this Note, then the principal balance
of this Note will not be adjusted and no overage adjustment
will be made except to satisfy any shortfalls in any prior
or any future years. Notwithstanding anything in this Note
to the contrary, if the Pivotal Business generates an
Adjusted EBITDA of less than the Base Amount during the
above referenced period, and if Debtor has increased the
salary or salaries of any employees of the Pivotal Business
by an amount that exceeds the standard salary increase, then
the Adjusted EBITDA for such period shall be increased by an
amount equal to the salary increases actually granted by
Debtor to the employees of the Pivotal Business minus
standard salary increase.
2.4.2 Year Two Adjustment:
(a) Positive Adjustment. If the Pivotal Business for Note
Adjustment Period B generates a positive Note Adjustment
Amount, the Remaining Note Principal shall be increased in
an amount equal to the Note Adjustment Amount plus an amount
equal to the Note Interest Adjustment Amount, and Debtor
shall make all payments under this Note subsequent to
Determination Date B in accordance with such adjusted
Remaining Note Principal. So for example, if the Adjusted
EBITDA for Note Adjustment Period B equals $850,000, then
the Remaining Note Principal shall be increased by $70,000
($850,000 - $780,000 = $70,000).
(b) Negative Adjustment. If the Pivotal Business generates an
Adjusted EBITDA of less than the Base Amount during Note
Adjustment Period B, then subject to the provisions of
Section 2.4.2 (c) below, the Remaining Note Principal shall
be decreased by an amount equal to the Note Adjustment
Amount minus an amount equal to the Note Interest Adjustment
Amount, and Debtor shall make all payments under this Note
subsequent to Determination Date B in accordance with such
adjusted Remaining Note Principal. So for example, if the
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Adjusted EBITDA for Note Adjustment Period B equals
$700,000, then the Remaining Note Principal shall be
decreased by $80,000 ($700,000 - $780,000 = ($80,000)).
(c) Adjustment Review. If, in the case of a Note Adjustment
Amount to which Section 2.4.2(b) applies, such Note
Adjustment Amount is equal to or greater than $50,000, then
the CEO of the Pivotal Business shall meet with the CEO of
PHC and, in good faith, determine the amount of salary
related expenses borne by the Pivotal Business that
reasonably could have been allocated to activities other
than the Pivotal Business (e.g., a percentage of the
salaries of employees that were spending a portion of their
time supporting the development of Debtor's other clinical
research sites and operations) (hereinafter referred to as
the "Estimated Allocation") and the principal balance of the
Note shall be reduced by an amount equal to the Base Amount
minus the Adjusted EBITDA plus the Estimated Allocation, if
any. Notwithstanding anything herein to the contrary, if
after the Estimated Allocation is added to the Adjusted
EBITDA the result is that there exists an overage that under
normal circumstances would result in a positive adjustment
to the face value of this Note, then the principal balance
of this Note will not be adjusted and no overage adjustment
will be made except to satisfy any shortfalls in any prior
or any future years. Notwithstanding anything in this Note
to the contrary, if the Pivotal Business generates an
Adjusted EBITDA of less than the Base Amount during the
above referenced period, and if Debtor has increased the
salary or salaries of any employees of the Pivotal Business
by an amount that exceeds the standard salary increase, then
the Adjusted EBITDA for such period shall be increased by an
amount equal to the salary increases actually granted by
Debtor to the employees of the Pivotal Business minus the
standard salary increase.
2.4.3 "Freeze" of Remaining Principal.
In the event (i) Debtor breaches its obligation to maintain the
Line of Credit as set forth in Section 3.5 of the Purchase
Agreement, (ii) Debtor terminates an Executive without Cause, as
defined in the applicable Employment Agreement, or (iii) an
Executive terminates his employment with Debtor for Good Reason,
as defined in the applicable Employment Agreement, then, in such
event, the Remaining Principal shall, at Lender's option, no
longer be subject to adjustment pursuant to this Section 2.4.3 (a
"freeze") provided that Lender provides to Debtor written notice,
within thirty (30) days of the first to occur of items (i), (ii)
or (iii) above, of the Lender's desire to freeze the Remaining
Principal (the "Election Term"). If an election is made under
this Section 2.4.3 to freeze the Remaining Principal, then the
date upon which such Remaining Principal shall be deemed to have
been frozen shall the on the first to occur of items (i), (ii) or
(iii) above. Notwithstanding the foregoing, Lender shall not be
entitled to accelerate payment under this Note based solely on
the occurrence of items (ii) or (iii) above.
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3. Adjustments to Reflect Actual Collections. If the actual cash collections
of the Pivotal Business during Note Adjustment Period A shall be less than
the EBITDA of the Pivotal Business utilized for purposes of determining
principal adjustments under this Note for such Note Adjustment Period,
then, for purposes of making the Year Two Adjustment, Adjusted EBITDA for
Adjustment Period B will be reduced by an amount equal to the shortfall.
4. Application. All payments received by Lender under this Note shall be
applied as follows: (a) first, to any amounts due under this Note, other
than interest and principal accrued or outstanding under this Note; (b)
second, to accrued and unpaid interest under this Note; and (c) third, to
the outstanding principal balance of this Note.
5. Prepayment. Debtor may prepay the principal balance of this Note in whole
or in part at any time.
6. Related Documents. The transaction evidenced by this Note is also evidenced
and secured by: (a) the Security Agreement; (b) the Financing Statements;
and (c) the Pledge Agreement.
7. Additional Indebtedness. Debtor shall not incur any material indebtedness
related to the Pivotal Business except the indebtedness resulting from the
Acquisition Financing or the Line of Credit.
8. Compliance with Covenants. Debtor will provide the Line of Credit to the
Pivotal Business in the manner described in the Purchase Agreement.
Debtor's breach of that obligation under the Purchase Agreement, and
Debtor's failure to cure such breach within the Cure Period specified in
the Purchase Agreement, shall be deemed an Event of Default under the terms
of this Note.
9. Prohibition on PHC's Corporate Overhead Charges. PHC will not impose any
corporate level overhead charges or expenses upon the Pivotal Business as
provided in Section 3.10 of the Purchase Agreement. If, for any reason, the
Pivotal Business pays any PHC corporate level overhead charge on the
Pivotal Business in violation of Section 3.10 of the Purchase Agreement,
then notwithstanding anything to the contrary in this Note, the Adjusted
EBITDA for the period during which such charges are paid shall be increased
by an amount equal to the corporate level overhead charges paid by the
Pivotal Business as determined in accordance with the Purchase Agreement.
10. Default.
10.1 Events of Default. The existence of any one or more of the following
shall constitute an "Event of Default" under this Note:
10.1.1 Non-Payment. Debtor's failure to make any payment to Lender
under this or any of the other Notes, including, without
limitation, any Quarterly Installment or Annual Installment, as
applicable, on or before the date such payment is due; or
10.1.2 Non-Performance. Debtor's failure to comply timely and fully
with (i) any other provision of this Note or any of the other
Notes (other than those described in Section 10.1.1 above) within
ten (10) calendar days after Lender's delivery of written notice
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of non-performance, or, with respect to Section 9 of this Note,
within the cure period specified in the Purchase Agreement.
10.1.3 Bankruptcy; Insolvency. (a) Debtor making a general assignment
for the benefit of creditors; (b) the filing by Debtor of a
voluntary petition or application for a custodian, as defined by
the United States Bankruptcy Code, or for the appointment of a
receiver; (c) the filing against Debtor of an involuntary
petition or case under any state insolvency law of the United
States Bankruptcy Code, including, without limitation, for the
appointment of a receiver, and the petition or case remains
pending for more than 60 days or the court in which such petition
or case is pending approves it or Debtor is adjudicated a
bankrupt or becomes a debtor or debtor in possession in any such
proceeding; or (d) the commencement, under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors, of
proceedings for the relief of Debtor or for the composition, or
arrangement of a substantial portion of the obligations of Debtor
or affecting the property of Debtor.
10.1.4 Assignment; Change in Control. Debtor shall not assign this
Note or its obligations hereunder without the prior written
consent of Lender except in conjunction with a transaction
described in Section 10.10 of the Purchase Agreement.
10.2 Default Interest. Upon the occurrence and continuance of an Event of
Default, at the option of Lender without notice to Debtor, all amounts
then unpaid under this Note and the Transaction Documents shall bear
default interest at the rate of 15% per annum (the "Default Interest
Rate") commencing on the initial due date of the failed payment or
performance constituting the Event of Default. Interest at the Default
Interest Rate shall continue for so long as the Event of Default shall
remain uncured and shall be payable monthly on the same day that the
Quarterly Installments are due under Section 2.2, or at the Maturity
Date, including any maturity as the result of the acceleration of this
Note.
10.3 Acceleration. In addition to all other rights and remedies Lender may
have if an Event of Default shall occur and (i) shall not have been
cured within the applicable cure period or, (ii) if no cure period,
shall continue for a period of 10 calendar days, Lender, at its option
without further notice to Debtor, may declare immediately due and
payable the Remaining Note Principal and interest accrued thereon
together with all other sums owed by Debtor under this Note and any
other Notes. Lender shall not be entitled to exercise its right to
accelerate payment of this Note, as provided in this Section 10.3,
during any period when Kirby or Michael J. Colombo are not in
compliance with their obligations under Section 3 of the applicable
Employment Agreement, or Kirby, Colombo and Bonacci are not in
compliance with their obligations under Article IV of the Purchase
Agreement.
11. Remedies Cumulative. The remedies provided in this Note and the other Notes
shall be cumulative and concurrent and may be pursued singly, successively
or together, at the sole discretion of affected party, and may be exercised
as often as occasion therefore shall occur. The exercise or the failure to
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exercise any such right or remedy shall in no event be construed as a
waiver or release thereof.
12. Enforcement Costs. If Lender brings suit on any of the Notes or employs an
attorney or incurs expenses to interpret or enforce this Note or otherwise
to compel payment of any amounts due under this Note or to defend the
priority of any of the collateral evidenced by the Pledge Agreement or the
Security Agreement, or to preserve and enforce its rights in connection
with any bankruptcy or other proceeding, Debtor shall pay all reasonable
attorneys' fees, costs and expenses actually incurred by Lender as a result
thereof. Lender shall be entitled to enforce this Note in any court of
competent jurisdiction and shall not be bound by the arbitration provisions
set forth in the Purchase Agreement.
13. Maximum Rate of Interest. The undersigned acknowledges that the undersigned
has agreed to the rate of interest represented by the Note Rate and the
Default Interest Rate (as applicable). Any provision in this Note to the
contrary notwithstanding, the total liability for payments of interest and
payments in the nature of interest, including, without limitation, all
charges, fees or any sums that may at any time be deemed to be interest by
a court of competent jurisdiction, shall not exceed the amount Lender may
lawfully collect. If the total liability for payments of interest and
payments in the nature of interest, including, without limitation, all
charges, fees or other sums that may at any time be deemed to be interest,
shall, for any reason whatsoever, result in an effective rate of interest
that for any month or other interest payment period exceeds the amount
Lender may lawfully collect, all sums in excess of those lawfully
collectible as interest for the period in question automatically shall,
without further notice to Debtor, be applied as a reduction of the then
outstanding principal balance of this Note or any other amounts due under
this Note (other than interest) immediately upon receipt of such sums by
Lender, with the same force and effect as if Debtor had specifically
designated such excess sums to be so applied to the reduction of such
principal balance or such other amounts due; provided, however, that Lender
may elect, at any time and from time to time by notice in writing to
Debtor, to waive, reduce or limit the collection of any sums (or to refund
to Debtor any sums collected) in excess of those lawfully collectible as
interest rather than accept such sums on prepayment of the principal
balance of this Note or as payment of such other amounts.
14. Notices. All notices or other communications hereunder shall be made in
accordance with Section 10.6 of the Purchase Agreement.
15. Waiver of Notice. Debtor hereby waives diligence, grace, demand,
presentment for payment, protest, notice of protest, notice of dishonor,
notice of demand, notice of nonpayment, exercise of any option hereunder,
any homestead or exemption rights and any release or discharge arising from
any extension or extensions of time of payment of this Note any other cause
of release or discharge arising from any extension or extension of time of
payment of this Note, or any other cause of release or discharge other than
actual payment in full hereof.
16. No Waiver by Lender. Lender shall not be deemed, by an act of omission or
commission, to have waived any of its rights or remedies under this Note
unless such waiver is in writing and signed by Lender, and then only to the
extent specifically set forth in such writing. The acceptance by Lender of
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any payment hereunder that is less than payment in full of all amounts due
and payable at the time of such payment shall not constitute a waiver of
the right to exercise any of Lender's remedies under this Note at that time
or at any subsequent time or nullify any prior exercise of any such
remedies without the express written consent of Lender, except as and to
the extent otherwise provided by law. A waiver with reference to one event
shall not be construed as continuing or as a bar to or waiver of any right
or remedy as to a subsequent event.
17. Transfer by Lender. The term "Lender," as used in this Note, as far as
covenants or obligations on the part of Lender are concerned, shall include
Lender, and any heirs, successors, assigns or future holders. Except as
otherwise provided herein or in the Purchase Agreement, Lender may transfer
all or part of its interest in this Note or any of the other Transaction
Documents without the consent of Debtor and such act or subsequent act
shall not be deemed in violation on Lender's part of any of the terms and
conditions of this Note or the other Transaction Documents. Upon any
transfer by Lender, at Lender's option, Lender may surrender this Note to
Debtor for issuance to transferee of a new instrument in replacement of
this Note. In the event of any surrender of this Note to Debtor for
reissuance or replacement as provided in the immediately preceding
sentence, Debtor shall, contemporaneously with such surrender, reissue the
Note acknowledging the transferee as the new "Lender" hereunder or, if
requested by Lender, execute and deliver to the transferee a replacement
Note identical to this Note except identifying the transferee as the Lender
hereunder, and Debtor's failure to do so shall be an Event of Default under
this Note.
18. Severability. If any term or provision of this Note shall, to any extent,
be determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Note shall not be affected thereby,
but such term or provision shall be reduced or otherwise modified by such
court or authority only to the minimum extent necessary to make it valid
and enforceable, and each term and provision of this Note shall be valid
and enforceable to the fullest extent permitted by law. If any term or
provision cannot be reduced or modified to make it reasonable and permit
its enforcement, it shall be severed from this Note and the remaining terms
shall be interpreted in such a way as to give maximum validity and
enforceability to this Note. It is the intention of the parties hereto that
if any provision of this Note is capable of two constructions, one of which
would render the provision void and the other of which would render the
provision valid, then the provision shall have the meaning which renders it
valid.
19. Acknowledgments. Debtor acknowledges that, except as otherwise provided in
Section 10.1 of the Purchase Agreement: (a) with respect to the amounts
payable to Lender under this Note, that Debtor has no offset, defense or
counterclaim with respect thereto, no claim against Lender or with respect
to any document forming part of the transaction in respect of which this
Note was made or forming part of any other transaction under which the
undersigned is indebted to Lender; and (b) all interest imposed under this
Note through the date hereof, and all fees and other charges that have been
collected from or imposed with respect to this Note were and are agreed to,
and were properly computed from or imposed with respect to this Note were
and are agreed to, and were properly computed and collected.
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20. Headings and Captions. The headings and captions in this Note are for
convenience of reference only and shall in no way alter or modify the terms
of this Note.
21. Governing Law. This Note and the Transaction Documents shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Arizona except for conflict of Law principles in the event of a conflict
between the defined terms of this Note and those of the Purchase Agreement,
in which case Delaware Law shall govern the interpretation of the defined
term.
22. Time of Essence. Time is of the essence of this Note.
PHC, Inc.
A Massachusetts corporation
By: /s/ Bruce A. Shear
________________________________
Bruce Shear, President
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STATE OF MASSACHUSETTS)
SS
County of Essex)
On this __ day of February, 2004, before me, the undersigned officer,
personally appeared Bruce Shear, who acknowledged himself to be President of
PHC, Inc., a Massachusetts corporation and that he, in such capacity, being
authorized so to do, executed the foregoing instrument for the purposes therein
contained by signing the name of the company by himself.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Janet Esterkes
Notary Public
My Commission Expires:
March 12, 2010
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