Exhibit 10.2h

 
SUPPLEMENT NO. 8 dated as of May 23, 2008, to the Security Agreement dated as of
February 6, 2006 among CRC HEALTH CORPORATION, a Delaware corporation (f/k/a CRC
HEALTH GROUP, INC.) (the “Borrower”), CRC HEALTH GROUP, INC., a Delaware
corporation, (f/k/a/ CRCA Holdings, Inc.) (“Holdings”), and the Subsidiaries of
the Borrower identified therein and CITIBANK, N.A., as Collateral Agent for the
Secured Parties (as defined below).
 
A.           Reference is made to the Credit Agreement dated as of February 6,
2006 (as amended and restated as of November 17, 2006 and as subsequently
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Holdings, the Borrower, the lenders from time to time party
thereto, Citibank, N.A., as Administrative Agent, Collateral Agent, Swing Line
Lender and L/C Issuer, each Lender from time to time party thereto, JPMorgan
Chase Bank, N.A., as Syndication Agent, and Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Credit Suisse, as Co-Documentation Agents.
 
B.           Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement and the
Security Agreement referred to therein.
 
C.           The Grantors have entered into the Security Agreement in order to
induce the Lenders to make Loans and the L/C Issuers to issue Letters of
Credit.  Section 7.14 of the Security Agreement provides that additional
Restricted Subsidiaries of the Borrower may become Subsidiary Parties under the
Security Agreement by execution and delivery of an instrument in the form of
this Supplement.  The undersigned Restricted Subsidiary (the “New Subsidiary”)
is executing this Supplement in accordance with the requirements of the Credit
Agreement to become a Subsidiary Party under the Security Agreement in order to
induce the Lenders to make additional Loans and the L/C Issuers to issue
additional Letters of Credit and as consideration for Loans previously made and
Letters of Credit previously issued.
 
Accordingly, the Collateral Agent and the New Subsidiary agree as follows:
 
SECTION 1.  In accordance with Section 7.14 of the Security Agreement, the New
Subsidiary by its signature below becomes a Subsidiary Party (and accordingly,
becomes a Grantor) and Grantor under the Security Agreement with the same force
and effect as if originally named therein as a Subsidiary Party and the New
Subsidiary hereby (a) agrees to all the terms and provisions of the Security
Agreement applicable to it as a Subsidiary Party and Grantor thereunder and
(b) represents and warrants that the representations and warranties made by it
as a Grantor thereunder are true and correct on and as of the date hereof.  In
furtherance of the foregoing, the New Subsidiary, as security for the payment
and performance in full of the Obligations does hereby create and grant to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, their successors and assigns, a security interest in and lien on all of
the New Subsidiary’s right, title and interest in and to the Collateral (as
defined in the Security Agreement) of the New Subsidiary.  Each reference to a
“Grantor” in the Security Agreement shall be deemed to include the New
Subsidiary.  The Security Agreement is hereby incorporated herein by reference.
 
SECTION 2.  The New Subsidiary represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
 
SECTION 3.  This Supplement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which when taken together shall
constitute a single contract.  Delivery by telecopier of an executed counterpart
of a signature page to this Supplement shall be as effective as delivery of an
original executed counterpart of this Supplement.  This Supplement shall become
effective when the Collateral Agent shall have received a counterpart of this
Supplement that bears the signature of the New Subsidiary and a counterpart
hereof shall have been executed on behalf of the Collateral Agent, and
thereafter shall be binding upon such New Subsidiary and the Collateral Agent
and their respective permitted successors and assigns, and shall inure to the
benefit of such New Subsidiary, the Collateral Agent and the other Secured
Parties and their respective successors and assigns, except that the New
Subsidiary shall not have the right to assign or transfer its rights or
obligations hereunder or any interest herein or in the Collateral (and any such
assignment or transfer shall be void) except as expressly contemplated by the
Security Agreement or the Credit Agreement.
 
SECTION 4.  The New Subsidiary hereby represents and warrants that (a) set forth
on Schedule I attached hereto is a true and correct schedule of the location of
any and all Collateral of the New Subsidiary and (b) set forth under its
signature hereto is the true and correct legal name of the New Subsidiary, its
jurisdiction of formation and the location of its chief executive office.
 
SECTION 5.  Except as expressly supplemented hereby, the Security Agreement
shall remain in full force and effect.
 
SECTION 6.  THIS SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
 
SECTION 7.  Any provision of this Supplement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.  The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
 
SECTION 8.  All communications and notices hereunder shall be in writing and
given as provided in Section 7.01 of the Security Agreement.
 
SECTION 9.  The New Subsidiary agrees to reimburse the Collateral Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, other charges and disbursements of counsel for the
Collateral Agent.
 

 

 

 
 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.
 

 
CRC WISCONSIN RD, LLC
 
 
By:
 
_____________________________
   
Name:
Kevin Hogge
   
Title:
Chief Financial Officer
   
 
Legal Name: CRC Wisconsin RD, LLC
   
Jurisdiction of Formation: Wisconsin
   
Location of Chief Executive office:
         
20400 Stevens Creek Blvd.
   
Suite 600
   
Cupertino, California 95014

Signature Page to Supplement to Security Agreement
 
 

--------------------------------------------------------------------------------

 

 

 
CITIBANK, N.A.,
 
as Collateral Agent
 
By:
___________________________________
   
Name:
   
Title:

Signature Page to Supplement to Security Agreement