Document:

Guarantee Agreement

 Exhibit 10.3 
 EXECUTION COPY 
  

 GUARANTEE AGREEMENT 
 dated as of 
 February 6, 2006, 
 Among 
 CRC HEALTH GROUP, INC. 
 (to be renamed CRC
HEALTH CORPORATION) 
 CRC INTERMEDIATE HOLDINGS, INC. 
 THE SUBSIDIARIES IDENTIFIED HEREIN 
 and 
 CITIBANK, N.A., 
 as Administrative Agent 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
		  	ARTICLE I	  	
			
		  	Definitions	  	
			
	 SECTION 1.01.
	  	Credit Agreement	  	3
	 SECTION 1.02.
	  	Other Defined Terms	  	3
		  	ARTICLE II	  	
			
		  	Guarantee	  	
			
	 SECTION 2.01.
	  	Guarantee	  	4
	 SECTION 2.02.
	  	Guarantee of Payment	  	4
	 SECTION 2.03.
	  	No Limitations	  	4
	 SECTION 2.04.
	  	Reinstatement	  	5
	 SECTION 2.05.
	  	Agreement To Pay; Subrogation	  	5
	 SECTION 2.06.
	  	Information	  	5
		  	ARTICLE III	  	
			
		  	Indemnity, Subrogation and Subordination	  	
			
	 SECTION 3.01.
	  	Indemnity and Subrogation	  	6
	 SECTION 3.02.
	  	Contribution and Subrogation	  	6
	 SECTION 3.03.
	  	Subordination	  	6
		  	ARTICLE IV	  	
			
		  	Miscellaneous	  	
			
	 SECTION 4.01.
	  	Notices	  	6
	 SECTION 4.02.
	  	Waivers; Amendment	  	7
	 SECTION 4.03.
	  	Administrative Agent’s Fees and Expenses; Indemnification	  	7
	 SECTION 4.04.
	  	Successors and Assigns	  	8
	 SECTION 4.05.
	  	Survival of Agreement	  	8
	 SECTION 4.06.
	  	Counterparts; Effectiveness; Several Agreement	  	8
	 SECTION 4.07.
	  	Severability	  	8
	 SECTION 4.08.
	  	Right of Set-Off	  	9
	 SECTION 4.09.
	  	Governing Law; Jurisdiction; Consent to Service of Process	  	9
	 SECTION 4.10.
	  	WAIVER OF JURY TRIAL	  	10
	 SECTION 4.11.
	  	Headings	  	10
	 SECTION 4.12.
	  	Security Interest Absolute	  	10
	 SECTION 4.13.
	  	Termination or Release	  	10
	 SECTION 4.14.
	  	Additional Restricted Subsidiaries	  	11
			
	 Schedules
	  		  	
		
	 Schedule I         Subsidiary Parties
	  	
			
	 Exhibits
	  		  	
		
	 Exhibit I             Form of Guarantee Agreement
Supplement
	  	

  

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 GUARANTEE AGREEMENT dated as of February 6, 2006 among CRC INTERMEDIATE HOLDINGS, INC.
(“Holdings”), the Subsidiaries of the Borrower (as defined below) identified herein and CITIBANK, N.A., as Administrative Agent. 
 Reference is made to the Credit Agreement dated as of February 6, 2006 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Holdings, CRC HEALTH GROUP, INC., a Delaware corporation (to
be renamed CRC HEALTH CORPORATION) (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, JPMorgan Chase Bank, N.A., as Syndication
Agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated and Credit Suisse, as Co-Documentation Agents. The Lenders have agreed to extend credit to the Borrower subject to the terms and conditions set forth in the Credit Agreement. The
obligations of the Lenders to extend such credit are conditioned upon, among other things, the execution and delivery of this Agreement. Holdings and the Subsidiary Parties are affiliates of the Borrower, will derive substantial benefits from the
extension of credit to the Borrower pursuant to the Credit Agreement and are willing to execute and deliver this Agreement in order to induce the Lenders to extend such credit. Accordingly, the parties hereto agree as follows: 
 ARTICLE I 
 Definitions

 SECTION 1.01. Credit Agreement 
 (a) Capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Credit Agreement. 
 (b) The rules of construction specified in Article I of the Credit Agreement also apply to this Agreement. 
 SECTION 1.02. Other Defined Terms . As used in this Agreement, the following terms have the meanings specified below: 
 “Agreement” means this Guarantee Agreement. 
 “Claiming Party” has the meaning assigned to such
term in Section 3.02. 
 “Contributing Party” has the meaning assigned to such term in Section 3.02. 
 “Credit Agreement” has the meaning assigned to such term in the preliminary statement of this Agreement. 
 “Guarantee Agreement Supplement” means an instrument in the form of Exhibit I hereto. 
 “Guarantor” means Holdings and each Restricted Subsidiary that is a Domestic Subsidiary and not an Excluded Subsidiary. 
  

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 “Subsidiary Parties” means (a) the Restricted Subsidiaries identified on Schedule I and
(b) each other Restricted Subsidiary that becomes a party to this Agreement as a Subsidiary Party after the Closing Date. 
 ARTICLE II

 Guarantee 
 SECTION 2.01. Guarantee. Each Guarantor unconditionally guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, the due and punctual payment and performance of the Obligations.
Each of the Guarantors further agrees that the Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any
Obligation. Each of the Guarantors waives presentment to, demand of payment from and protest to the Borrower or any other Loan Party of any of the Obligations, and also waives notice of acceptance of its guarantee and notice of protest for
nonpayment. 
 SECTION 2.02. Guarantee of Payment. Each of the Guarantors further agrees that its guarantee hereunder constitutes a
guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Administrative Agent or any other Secured Party to any security held for the payment of the Obligations or to any balance of any
deposit account or credit on the books of the Administrative Agent or any other Secured Party in favor of the Borrower or any other Person. 
 SECTION 2.03. No Limitations 
 (a) Except for termination of a Guarantor’s obligations hereunder as expressly provided
in Section 4.13, to the fullest extent permitted by applicable law, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting
the generality of the foregoing, to the fullest extent permitted by applicable law, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by (i) the failure of the Administrative Agent or any other
Secured Party to assert any claim or demand or to enforce any right or remedy under the provisions of any Loan Document or otherwise; (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of,
any Loan Document or any other agreement, including with respect to any other Guarantor under this Agreement; (iii) the release of any security held by the Collateral Agent (as defined in the Security Agreement) or any other Secured Party for the
Obligations; (iv) any default, failure or delay, willful or otherwise, in the performance of the Obligations; or (v) any other act or omission that may or might in any manner or to any extent vary the risk of any Guarantor or otherwise operate as a
discharge of any Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Obligations). Each Guarantor expressly authorizes the Secured Parties to take and hold security for the payment and performance
of the Obligations, to exchange, waive or release any or all such security (with or without consideration), to enforce or apply such security and direct the order and manner of any sale thereof 

  

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in their sole discretion or to release or substitute any one or more other guarantors or obligors upon or in respect of the Obligations, all without
affecting the obligations of any Guarantor hereunder. 
 (b) To the fullest extent permitted by applicable law, each Guarantor waives any
defense based on or arising out of any defense of the Borrower or any other Loan Party or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower or any other Loan
Party, other than the indefeasible payment in full in cash of all the Obligations. The Administrative Agent and the other Secured Parties may in accordance with the terms of the Collateral Documents, at their election, foreclose on any security held
by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with the Borrower or any other Loan
Party or exercise any other right or remedy available to them against the Borrower or any other Loan Party, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Obligations have been fully and
indefeasibly paid in full in cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any other Loan Party, as the case may be, or any security. 
 SECTION 2.04. Reinstatement. Each of the Guarantors agrees that its guarantee hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any
Obligation is rescinded or must otherwise be restored by the Administrative Agent or any other Secured Party upon the bankruptcy or reorganization of the Borrower any other Loan Party or otherwise. 
 SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the foregoing and not in limitation of any other right that the Administrative
Agent or any other Secured Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other Loan Party to pay any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Administrative Agent for distribution to the Secured Parties in cash the amount of such unpaid Obligation.
Upon payment by any Guarantor of any sums to the Administrative Agent as provided above, all rights of such Guarantor against the Borrower or any other Loan Party arising as a result thereof by way of right of subrogation, contribution,
reimbursement, indemnity or otherwise shall in all respects be subject to Article III. 
 SECTION 2.06. Information. Each Guarantor
assumes all responsibility for being and keeping itself informed of the Borrower’s and each other Loan Party’s, financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Obligations and the
nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Administrative Agent or the other Secured Parties will have any duty to advise such Guarantor of information known to it or any of
them regarding such circumstances or risks. 

	

  

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 ARTICLE III 
 Indemnity, Subrogation and Subordination 
 SECTION 3.01. Indemnity and Subrogation. In
addition to all such rights of indemnity and subrogation as the Guarantors may have under applicable law (but subject to Section 3.03), the Borrower agrees that in the event a payment of an obligation shall be made by any Guarantor under this
Agreement, the Borrower shall indemnify such Guarantor for the full amount of such payment and such Guarantor shall be subrogated to the rights of the Person to whom such payment shall have been made to the extent of such payment. 
 SECTION 3.02. Contribution and Subrogation. Each Subsidiary Party (a “Contributing Party”) agrees (subject to Section 3.03) that,
in the event a payment shall be made by any other Subsidiary Party hereunder in respect of any Obligation and such other Subsidiary Party (the “Claiming Party”) shall not have been fully indemnified by the Borrower as provided in
Section 3.01, the Contributing Party shall indemnify the Claiming Party in an amount equal to the amount of such payment, in each case multiplied by a fraction of which the numerator shall be the net worth of the Contributing Party on the date
hereof and the denominator shall be the aggregate net worth of all the Contributing Parties together with the net worth of the Claiming Party on the date hereof (or, in the case of any Guarantor becoming a party hereto pursuant to Section 4.14, the
date of the Guarantee Agreement Supplement hereto executed and delivered by such Guarantor). Any Contributing Party making any payment to a Claiming Party pursuant to this Section 3.02 shall be subrogated to the rights of such Claiming Party to the
extent of such payment. 
 SECTION 3.03. Subordination 
 (a) Notwithstanding any provision of this Agreement to the contrary, all rights of the Guarantors under Sections 3.01 and 3.02 and all other rights of indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full in cash of the Obligations. No failure on the part of the Borrower or any Guarantor to make the payments required by Sections 3.01 and 3.02 (or any other payments required
under applicable law or otherwise) shall in any respect limit the obligations and liabilities of any Guarantor with respect to its obligations hereunder, and each Guarantor shall remain liable for the full amount of the obligations of such Guarantor
hereunder. 
 (b) Each Guarantor hereby agrees that upon the occurrence and during the continuance of an Event of Default and after notice
from the Collateral Agent all Indebtedness owed by it to any Subsidiary shall be fully subordinated to the indefeasible payment in full in cash of the Obligations. 
 ARTICLE IV 
 Miscellaneous 
 SECTION 4.01. Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as
provided in 

  

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Section 10.02 of the Credit Agreement. All communications and notices hereunder to any Subsidiary Party shall be given to it in care of the Borrower as
provided in Section 10.02 of the Credit Agreement. 
 SECTION 4.02. Waivers; Amendment 
 (a) No failure or delay by the Administrative Agent, any L/C Issuer or any Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the Administrative Agent, the L/C Issuers and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 4.02, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default,
regardless of whether the Administrative Agent, any Lender or any L/C Issuer may have had notice or knowledge of such Default at the time. No notice or demand on any Loan Party in any case shall entitle any Loan Party to any other or further notice
or demand in similar or other circumstances. 
 (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance
with Section 10.01 of the Credit Agreement. 
 SECTION 4.03. Administrative Agent’s Fees and Expenses; Indemnification

 (a) The parties hereto agree that the Administrative Agent shall be entitled to reimbursement of its expenses incurred hereunder as
provided in Section 10.04 of the Credit Agreement. 
 (b) Without limitation of its indemnification obligations under the other Loan
Documents, the Guarantors agree to indemnify the Administrative Agent and the other Indemnities (as defined in Section 10.05 of the Credit Agreement) from and against, and hold each Indemnitee harmless from, any and all liabilities, obligations,
losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such
Indemnitee in any way relating to or arising out of or in connection with the Indemnified Liabilities, in all cases, whether or not caused by or arising, in whole or in part, out of the negligence of the Indemnitee; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements resulted from the gross negligence or
willful misconduct of such Indemnitee or of any affiliate, director, officer, employee, counsel, agent or attorney-in-fact of such Indemnitee. 
  

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 (c) Any such amounts payable as provided hereunder shall be additional Obligations secured hereby and by
the other Collateral Documents. The provisions of this Section 4.03 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Loan Document, the consummation of the transactions contemplated
hereby, the repayment of any of the Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Administrative Agent or any other Secured
Party. All amounts due under this Section 4.03 shall be payable within 10 Business Days of written demand therefor. 
 SECTION 4.04.
Successors and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on
behalf of any Guarantor or the Administrative Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns. 
 SECTION 4.05. Survival of Agreement. All covenants, agreements, representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by each Agent and each Lender, regardless of any investigation made by any Agent or
any Lender or on their behalf and notwithstanding that any Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding. 
 SECTION 4.06. Counterparts;
Effectiveness; Several Agreement. This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement. This Agreement shall become effective as to any Loan Party when a counterpart hereof executed on behalf of such Loan Party
shall have been delivered to the Administrative Agent and a counterpart hereof shall have been executed on behalf of the Administrative Agent, and thereafter shall be binding upon such Loan Party and the Administrative Agent and shall inure to the
benefit of such Loan Party, the Administrative Agent and the other Secured Parties, except that no Loan Party shall have the right to assign or transfer its rights or obligations hereunder or any interest herein (and any such assignment or transfer
shall be void) except as expressly contemplated by this Agreement or the Credit Agreement. This Agreement shall be construed as a separate agreement with respect to each Loan Party and may be amended, modified, supplemented, waived or released with
respect to any Loan Party without the approval of any other Loan Party and without affecting the obligations of any other Loan Party hereunder. 
 SECTION 4.07. Severability. Any provision of this Agreement 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
uneforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision 

  

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in a particular jurisdiction shall not invalidate 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 4.08. Right of Set-Off. In addition to any rights and remedies of the Lenders provided by Law, upon the occurrence and during the
continuance of any Event of Default, each Lender and its Affiliates is authorized at any time and from time to time, without prior notice to the Borrower or any other Loan Party, any such notice being waived by the Borrower (on its own behalf and on
behalf of each Loan Party and its Subsidiaries) to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other Indebtedness at
any time owing by, such Lender and its Affiliates to or for the credit or the account of the respective Loan Parties and their Subsidiaries against any and all Obligations owing to such Lender and its Affiliates hereunder or under any other Loan
Document, now or hereafter existing, irrespective of whether or not such Agent or such Lender or Affiliate shall have made demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured or
denominated in a currency different from that of the applicable deposit or Indebtedness. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set off and application made by such Lender; provided,
that the failure to give such notice shall not affect the validity of such setoff and application. The rights of the Administrative Agent and each Lender under this Section 4.08 are in addition to other rights and remedies (including other rights of
setoff) that the Administrative Agent and such Lender may have. 
 SECTION 4.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS 
 (A) THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK. 
 (b) ANY LEGAL ACTION OR PROCEEDING ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
EACH PARTY HERETO IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. 
  

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 SECTION 4.10. WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT
TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 4.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY 
 SECTION 4.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement. 
 SECTION 4.12. Security Interest Absolute. All rights of the Administrative Agent hereunder and all obligations of each Guarantor hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Credit Agreement, any other Loan Document, any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument, (c) any release or
amendment or waiver of or consent under or departure from any guarantee guaranteeing all or any of the Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Guarantor in respect of
the Obligations or this Agreement. 
 SECTION 4.13. Termination or Release 
 (a) This Agreement and the Guarantees made herein shall terminate with respect to all Obligations when all the outstanding Obligations have been
indefeasibly paid in full and the Lenders have no further commitment to lend under the Credit Agreement, the L/C Obligations have been reduced to zero (other than L/C Obligations that have been fully cash collateralized or supported by a backstop
letter of credit in form and substance satisfactory to the Administrative Agent) and the L/C Issuers have no further obligations to issue Letters of Credit under the Credit Agreement. 
 (b) A Subsidiary Party shall automatically be released from its obligations hereunder upon the consummation of any transaction permitted by the Credit
Agreement as a result of which such Subsidiary Party ceases to be a Subsidiary of the Borrower; provided that the Required Lenders shall have consented to such transaction (to the extent required by the Credit Agreement) and the terms of such
consent did not provide otherwise. 
  

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 (c) In connection with any termination or release pursuant to paragraph (a), the Administrative Agent
shall execute and deliver to any Guarantor, at such Guarantor’s expense, all documents that such Guarantor shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section 4.13
shall be without recourse to or warranty by the Administrative Agent. 
 SECTION 4.14. Additional Restricted Subsidiaries. Pursuant to
Section 6.11 of the Credit Agreement, certain Restricted Subsidiaries of the Borrower that were not in existence or not Restricted Subsidiaries on the date of the Credit Agreement are required to enter in this Agreement as Subsidiary Parties upon
becoming a Restricted Subsidiaries. Upon execution and delivery by the Administrative Agent and a Restricted Subsidiary of a Guarantee Agreement Supplement, such Restricted Subsidiary shall become a Subsidiary Party hereunder with the same force and
effect as if originally named as a Subsidiary Party herein. The execution and delivery of any such instrument shall not require the consent of any other Loan Party hereunder. The rights and obligations of each Loan Party hereunder shall remain in
full force and effect notwithstanding the addition of any new Loan Party as a party to this Agreement. 
  

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 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first
above written. 
  

			
	CRC INTERMEDIATE HOLDINGS, INC.
		
	By:	 	 /s/ Kevin Hogge

	Name:	 	Kevin Hogge
	Title:	 	Chief Financial Officer

 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first
above written. 
  

			
	CRC HEALTH GROUP, INC.
		
	By:	 	 /s/ Kevin Hogge

	Name:	 	Kevin Hogge
	Title:	 	Chief Financial Officer

  

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 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first
above written. 
  

			
	CRC HEALTH CORPORATION
		
	By:	 	 /s/ Kevin Hogge

	Name:	 	Kevin Hogge
	Title:	 	Chief Financial Officer

  

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	CORPORATE SUBSIDIARIES:
	
	4therapy.com NETWORK
	ADVANCED TREATMENT SYSTEMS, INC.
	ATS OF CECIL COUNTY, INC.
	ATS OF DELAWARE, INC.
	ATS OF NORTH CAROLINA, INC.
	BATON ROUGE TREATMENT CENTER, INC.
	BECKLEY TREATMENT CENTER, INC.
	BGI OF BRANDYWINE, INC.
	BOWLING GREEN INN OF PENSACOLA, INC.
	BOWLING GREEN INN OF SOUTH DAKOTA, INC.
	CAPS OF VIRGINIA, INC.
	CARTERSVILLE CENTER, INC.
	CHARLESTON TREATMENT CENTER INC.
	CLARKSBURG TREATMENT CENTER, INC.
	COMPREHENSIVE ADDICTION PROGRAMS, INC.
	CORAL HEALTH SERVICES, INC.
	CRC ED TREATMENT, INC.
	CRC RECOVERY, INC.
	EAST INDIANA TREATMENT CENTER, INC.
	EVANSVILLE TREATMENT CENTER INC.
	GALAX TREATMENT CENTER, INC.
	GREENBRIER TREATMENT CENTER, INC.
	HUNTINGTON TREATMENT CENTER, INC.
	INDIANAPOLIS TREATMENT CENTER, INC.
	JAYCO ADMINISTRATION, INC.
	JEFF-GRAND MANAGEMENT CO., INC.
	KANSAS CITY TREATMENT CENTER, INC.
		
	By:	 	 /s/ Kevin Hogge

	Name:	 	Kevin Hogge
	Title:	 	Chief Financial Officer

  

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	CORPORATE SUBSIDIARIES (cont.):
	
	MINERAL COUNTY TREATMENT CENTER, INC.
	MWB ASSOCIATES-MASSACHUSETTS, INC.
	NATIONAL SPECIALTY CLINICS, INC.
	NSC ACQUISITION CORP.
	PARKERSBURG TREATMENT CENTER, INC.
	RICHMOND TREATMENT CENTER, INC.
	SAN DIEGO HEALTH ALLIANCE
	SHELTERED LIVING INCORPORATED
	SIERRA TUCSON INC.
	SOUTHERN INDIANA TREATMENT CENTER INC.
	SOUTHERN WEST VIRGINIA TREATMENT CENTER, INC.
	SOUTHWEST ILLINOIS TREATMENT CENTER, INC.
	STONEHEDGE CONVALESCENT CENTER, INC.
	TRANSCULTURAL HEALTH DEVELOPMENT, INC.
	TREATMENT ASSOCIATES, INC.
	VIRGINIA TREATMENT CENTER, INC.
	VOLUNTEER TREATMENT CENTER, INC.
	WCHS OF COLORADO (G), INC.
	WCHS, INC.
	WHEELING TREATMENT CENTER, INC.
	WHITE DEER REALTY, LTD.
	WHITE DEER RUN, INC.
	WICHITA TREATMENT CENTER INC.
	WILLIAMSON TREATMENT CENTER, INC.
	WILMINGTON TREATMENT CENTER, INC.
		
	By:	 	 /s/ Kevin Hogge

	Name:	 	Kevin Hogge
	Title:	 	Chief Financial Officer

  

 S-5 

			
	SAN DIEGO TREATMENT SERVICES
	
	By: Jayco Administration, Inc.
	Its: Partner
		
	By:	 	 /s/ Kevin Hogge

	Name:	 	Kevin Hogge
	Title:	 	Chief Financial Officer
	
	By: Treatment Associates, Inc.
	Its: Partner
		
	By:	 	 /s/ Kevin Hogge

	Name:	 	Kevin Hogge
	Title:	 	Chief Financial Officer

  

 S-6 

			
	CALIFORNIA TREATMENT SERVICES
	
	By: Jayco Administration, Inc.
	Its: Partner
		
	By:	 	 /s/ Kevin Hogge

	Name:	 	Kevin Hogge
	Title:	 	Chief Financial Officer
	
	By: Treatment Associates, Inc.
	Its: Partner
		
	By:	 	 /s/ Kevin Hogge

	Name:	 	Kevin Hogge
	Title:	 	Chief Financial Officer

  

 S-7 

			
	MILWAUKEE HEALTH SERVICES SYSTEM
	
	By: WCHS, Inc.
	Its: Partner
		
	By:	 	 /s/ Kevin Hogge

	Name:	 	Kevin Hogge
	Title:	 	Chief Financial Officer
	
	By: Coral Health Services, Inc.
	Its: Partner
		
	By:	 	 /s/ Kevin Hogge

	Name:	 	Kevin Hogge
	Title:	 	Chief Financial Officer

  

 S-8 

			
	THE CAMP RECOVERY CENTERS, L.P.
	
	By: CRC Recovery, Inc.
	Its: General Partner
		
	By:	 	 /s/ Kevin Hogge

	Name:	 	Kevin Hogge
	Title:	 	Chief Financial Officer
	
	By: CRC Health Corporation
	Its: Limited Partner
		
	By:	 	 /s/ Kevin Hogge

	Name:	 	Kevin Hogge
	Title:	 	Chief Financial Officer

  

 S-9 

			
	STONEHEDGE CONVALESCENT CENTER LIMITED PARTNERSHIP
	
	By: Stonehedge Convalescent Center, Inc.
	Its: General Partner
		
	By:	 	 /s/ Kevin Hogge

	Name:	 	Kevin Hogge
	Title:	 	Chief Financial Officer
	
	By: Comprehensive Addiction Programs, Inc.
	Its: Limited Partner
		
	By:	 	 /s/ Kevin Hogge

	Name:	 	Kevin Hogge
	Title:	 	Chief Financial Officer

  

 S-10 

			
	CITIBANK, N.A., as Administrative Agent
		
	By:	 	 /s/ Aaron Dannenberg

	Name:	 	Aaron Dannenberg
	Title:	 	Vice President

  

 S-11 

 Schedule I to 
 the Guarantee Agreement 
 SUBSIDIARY PARTIES 
 4therapy.com NETWORK 
 Advanced Treatment Systems, Inc. 
 ATS of Cecil County, Inc. 
 ATS of Delaware, Inc. 
 ATS of North Carolina, Inc. 
 Baton Rouge Treatment Center, Inc. 
 Beckley Treatment Center, Inc. 
 BGI of Brandywine, Inc. 
 Bowling Green Inn of Pensacola, Inc. 
 Bowling Green Inn of South Dakota, Inc.

 California Treatment Services 
 CAPS of Virginia, Inc.

 Cartersville Center, Inc. 
 Charleston Treatment Center Inc.

 Clarksburg Treatment Center, Inc. 
 Comprehensive Addiction
Programs, Inc. 
 Coral Health Services, Inc. 
 CRC ED Treatment,
Inc. 
 CRC Health Corporation 
 CRC Recovery, Inc. 
 East Indiana Treatment Center, Inc. 
 eGetgoing, Inc. 
 Evansville Treatment Center, Inc. 
 Galax Treatment Center, Inc. 

Greenbrier Treatment Center, Inc. 
 Huntington Treatment Center, Inc.

 Indianapolis Treatment Center, Inc. 
 Jayco Administration,
Inc. 
 Jeff-Grand Management Co., Inc. 
 Kansas City Treatment
Center, Inc. 
 Milwaukee Health Services System 
 Mineral County
Treatment Center, Inc. 
 MWB Associates-Massachusetts, Inc. 
 National Specialty Clinics, Inc. 
 NSC Acquisition Corp. 
 Parkersburg Treatment Center, Inc. 
 Richmond Treatment Center, Inc. 
 San Diego Health Alliance 
 San Diego Treatment Services 
 Sheltered Living Incorporated 
 Sierra Tucson Inc. 

 Southern Indiana Treatment Center, Inc. 
 Southern West Virginia Treatment Center, Inc. 
 Southwest Illinois Treatment Center, Inc. 
 Stonehedge Convalescent Center, Inc. 
 Stonehedge Convalescent Center, Limited
Partnership 
 The Camp Recovery Centers L.P. 
 Transcultural
Health Development, Inc. 
 Treatment Associates, Inc. 
 Virginia
Treatment Center, Inc. 
 Volunteer Treatment Center, Inc. 
 WCHS
of Colorado (G) Inc. 
 WCHS, Inc. 
 Wheeling Treatment Center,
Inc. 
 White Deer Realty, Ltd. 
 White Deer Run, Inc. 

Wichita Treatment Center, Inc. 
 Williamson Treatment Center, Inc.

 Wilmington Treatment Center, Inc. 
  

 S-2 

 Exhibit I to the 
 Guarantee Agreement 
 SUPPLEMENT NO. __ dated as of [•], to the Guarantee Agreement dated as of
February 6, 2006, among CRC INTERMEDIATE HOLDINGS, INC. (“Holdings”), CRC HEALTH CORPORATION, the Subsidiaries of the Borrower (as defined below) identified herein and CITIBANK, N.A., as Administrative Agent. 
 A. Reference is made to the Credit Agreement dated as of February 6, 2006 (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among CRC Intermediate Holdings, a Delaware corporation (“Holdings”), CRC Health Group, Inc.(to be renamed CRC Health Corporation), a Delaware corporation (“Borrower), the Guarantors party thereto
(collectively, the “Guarantors”), 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 Guarantee Agreement referred to therein. 
 C.
The Guarantors have entered into the Guarantee Agreement in order to induce the Lenders to make Loans and the L/C Issuers to issue Letters of Credit. Section 4.14 of the Guarantee Agreement provides that additional Restricted Subsidiaries of the
Borrower may become Subsidiary Parties under the Guarantee 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 Guarantee 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 Administrative Agent and the New
Subsidiary agree as follows: 
 SECTION 1. In accordance with Section 4.14 of the Guarantee Agreement, the New Subsidiary by its signature
below becomes a Subsidiary Party (and accordingly, becomes a Guarantor) and Guarantor under the Guarantee 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 Guarantee Agreement applicable to it as a Subsidiary Party and Guarantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Guarantor thereunder are true and correct on
and as of the date hereof. Each reference to a “Guarantor” in the Security Agreement shall be deemed to include the New Subsidiary. The Guarantee Agreement is hereby incorporated herein by reference. 
 SECTION 2. The New Subsidiary represents and warrants to the Administrative 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 counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Administrative Agent shall have received a counterpart of this
Supplement that bears the signature of the New Subsidiary and the Administrative Agent has executed a counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Supplement. 
 SECTION 4. Except as expressly supplemented hereby, the Guarantee Agreement shall remain
in full force and effect. 
 SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK. 
 SECTION 6. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Guarantee Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto 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 7. All communications and notices hereunder shall be in writing and given as provided in Section 4.01 of the Guarantee Agreement. 
 SECTION 8. The New Subsidiary agrees to reimburse the Administrative 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 Administrative Agent. 
  

 -2- 

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

			
	[NAME OF NEW SUBSIDIARY],
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	CITIBANK, N.A., as Administrative Agent
		
	By:	 	  

	Name:	 	
	Title:	 	

  

 -3-Management Agreement with Bain

 Exhibit 10.4 
 Execution Version 
 MANAGEMENT AGREEMENT 
 This MANAGEMENT AGREEMENT (this “Agreement”) is entered into as of February 6, 2006 by and among CRCA Holdings, Inc., a Delaware
corporation (“Holdings”), CRC Intermediate Holdings, Inc., a Delaware Corporation (“Intermediate Holdings”), CRCA Merger Corporation, a Delaware corporation (the “MergerCo” and,
collectively with Holdings and Intermediate Holdings, the “CRC Companies”) and Bain Capital Partners, LLC, a Delaware limited liability company (“Bain”). 
 RECITALS 
 WHEREAS, each of
Holdings, Intermediate Holdings and MergerCo has been formed for the purpose of engaging in a transaction in which MergerCo will be merged with and into CRC Health Group, Inc. (the “Company”, with the Company surviving (the
“Merger”) pursuant to an Agreement and Plan of Merger between the Company, Holdings and MergerCo dated as of October 8, 2005 (the “Merger Agreement”); 
 WHEREAS, to enable MergerCo to engage in the Merger and related transactions, Bain provided financial and structural advice and analysis
as well as assistance with due diligence investigations and negotiations (the “Financial Advisory Services”); and 
 WHEREAS, the CRC Companies desire to retain Bain to provide certain management, consulting and advisory services to the CRC Companies, and Bain is willing to provide such services on the terms set forth below. 
 AGREEMENT 
 NOW,
THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto, intending to be legally bound, hereby agree as follows: 
 1. Services. Bain hereby agrees that, during the term of this Agreement (the “Term”), it will provide the following consulting and management advisory services to the CRC Companies: 

(a) advice in connection with the negotiation and consummation of agreements, contracts, documents and instruments necessary to provide
the CRC Companies with financing from banks or other financial institutions or other entities on terms and conditions satisfactory to the CRC Companies; 
 (b) financial, managerial and operational advice in connection with the CRC Companies’ day-to-day operations, including, without limitation, advice with respect to the development and implementation of strategies
for improving the operating, marketing and financial performance of the Company and its subsidiaries; and 

 (c) such other services (which may include financial and strategic planning and analysis,
consulting services, human resources and executive recruitment services and other services) as Bain and the CRC Companies may from time to time agree in writing. 
 Bain will devote such time and efforts to the performance of services contemplated hereby as Bain deems reasonably necessary or appropriate; provided, however, that no minimum number of hours is required to be devoted by Bain on a
weekly, monthly, annual or other basis. The CRC Companies acknowledge that Bain’s services are not exclusive and that Bain will render similar services to other persons and entities. Bain and the CRC Companies understand that the CRC Companies
may, at times, engage one or more investment bankers or financial advisers to provide services in addition to, but not in lieu of, services provided by Bain under this Agreement. In providing services to the CRC Companies, Bain will act as an
independent contractor and it is expressly understood and agreed that this Agreement is not intended to create, and does not create, any partnership, agency, joint venture or similar relationship and that neither Bain, on the one hand, nor the CRC
Companies, on the other, has the right or ability to contract for or on behalf of each other or to effect any transaction for each other’s account. 
 2. Payment of Fees. 
 (a) The CRC Companies will, jointly and severally pay to Bain
(or an affiliate of Bain designated by it) in consideration of Bain providing the Financial Advisory Services a fee in the amount of $7,200,000, such fee being payable upon the closing of the Merger, and will reimburse Bain for any and all expenses
incurred through the closing of the Merger or otherwise on behalf of the CRC Companies, such fees and expenses being payable upon the closing of the Merger or, if the Merger is not consummated, promptly after the time the CRC Companies have
abandoned the Merger; 
 (b) During the Term, the CRC Companies will jointly and severally pay to Bain (or an affiliate of
Bain designated by it) an annual management fee in exchange for the ongoing management services provided by Bain under this Agreement, such fee being payable quarterly in advance on or prior to the first day of each calendar quarter beginning on
each January 1, April 1, July 1 and October 1, the first such payment to be made by wire transfer on February 6, 2006 for the pro-rated amount of such management fee for the time from February 6, 2006 through March 31, 2006. The annual management
fee will be $2,000,000. 
 (c) During the Term, Bain will advise the CRC Companies in connection with debt or equity
financing, acquisition, disposition and change of control transactions (however structured) by the CRC Companies or any of their direct or indirect subsidiaries (however structured), and the CRC Companies will, for each transaction which has a gross
transaction value of at least $50,000,000, jointly and severally pay to Bain (or an affiliate of Bain designated by it) a fee in connection therewith equal to one percent (1%) of the gross transaction value (including cash purchase price paid and
all liabilities assumed or otherwise included in the transaction) of such transaction of which it is a part, such fee to be due and payable for the foregoing 

  

 -2- 

 
services at the closing of such transaction, and in the case of financing transactions whether or not any such financing is actually committed or drawn upon.

 Each payment made pursuant to this Section 2 will be paid by wire transfer of immediately available federal funds to the account specified
on Schedule 1 hereto, or to such other account(s) as Bain may specify to the CRC Companies in writing prior to such payment. 
 3.
Term. This Agreement will continue in full force and effect until February 6, 2011; provided that this Agreement shall be automatically extended each February 6 for an additional year unless the CRC Companies or Bain provide written
notice of their desire not to automatically extend the term of this Agreement to the other parties hereto at least 90 days prior to such February 6; provided, however, that (a) either party may terminate this Agreement following a material
breach of the terms of this Agreement by the other party hereto and a failure to cure such breach within 30 days following written notice thereof and (b) Bain may terminate this Agreement upon not less than 10 days written notice to the CRC
Companies; and provided further, that each of (x) the obligations of the CRC Companies under Section 4 below and the provisions of Section 5(b) below (whether in respect of or relating to services rendered prior to termination of this
Agreement or in respect of or relating to any services provided after termination of this Agreement), (y) any and all accrued and unpaid obligations of the CRC Companies owed under Section 2 above and (z) the provisions of Section 8 will all survive
any termination of this Agreement to the maximum extent permitted under applicable law. In the event of a termination of this Agreement, in addition to the obligations set forth in the previous sentence, the CRC Companies will, jointly and severally
pay to Bain (or an affiliate of Bain designated by it) the sum of the net present values (using discount rates equal to the then yield on U.S. Treasury Securities of like maturity) of the annual management fees that would have been payable pursuant
to Section 2(b) with respect to the period from the date of termination until the expiration date in effect immediately prior to such termination. 
 4. Expenses; Indemnification. 
 (a) Expenses. The CRC Companies will jointly and severally pay on
demand all expenses incurred by Bain and those certain funds affiliated with or advised by Bain or its affiliates who are providing equity financing to Holdings to help effectuate the Merger (such funds the “Bain Funds” and their
investments the “Equity Investments”) (or any of them) (i) in connection with this Agreement, the Merger or any related transactions, (ii) relating to operations of, or services provided by Bain to, the CRC Companies or any of their
affiliates from time to time or (iii) otherwise in any way relating to the CRC Companies or in any way relating to, or arising out of, the equity investments or the ownership thereof by any Bain Fund. Without limiting the generality of the
foregoing, the CRC Companies jointly and severally agree to pay on demand all expenses incurred by Bain and the Bain Funds (or any of them) in connection with, or relating to, (x) the preparation, negotiation and execution of this Agreement and any
other agreement executed in connection with, or related to, this Agreement, the Merger, the financing of the Merger, Equity Investments or the consummation of the transactions contemplated hereby and thereby or (y) any and all amendments,
modifications, restructurings and waivers, and exercises and preservations of rights and remedies relating to any of the foregoing, and in each case 

  

 -3- 

 
will specifically include the fees and disbursements of counsel, accountants, consultants or advisors retained by Bain, the Bain Funds or their respective
consultants or advisors and any out-of-pocket expenses incurred by Bain in connection with the provision of services to the CRC Companies from time to time or the attendance at any meeting of the managers or board of directors (or any committee
thereof) of any of the CRC Companies or any of their affiliates. 
 (b) Indemnity and Liability. The CRC Companies
hereby jointly and severally indemnify and agree to exonerate and hold each of Bain, each Bain Fund, and each of their respective partners, shareholders, members, affiliates, directors, officers, fiduciaries, managers, controlling persons, employees
and agents and each of the partners, shareholders, members, affiliates, directors, officers, fiduciaries, managers, controlling persons, employees and agents of each of the foregoing (collectively, the “Indemnitees”) free and
harmless from and against any and all actions, causes of action, suits, claims, liabilities, losses, damages and costs and expenses in connection therewith, including without limitation reasonable attorneys’ fees and expenses (collectively, the
“Indemnified Liabilities”), incurred by the Indemnitees or any of them as a result of, arising out of, or in any way relating to (i) this Agreement, the Acquisition, the Equity Investments or the ownership thereof by any Bain Fund
or any related transactions or (ii) operations of, or services provided by Bain to, any CRC Company or any affiliate of any CRC Company from time to time (including but not limited to any indemnification obligations assumed or incurred by any
Indemnitee to or on behalf of any of the CRC Companies or any of their accountants or other representatives, agents or affiliates) except for any such Indemnified Liabilities arising on account of such Indemnitee’s gross negligence, willful
misconduct or bad faith, and if and to the extent that the foregoing undertaking may be unenforceable for any reason, each CRC Company hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities that is permissible under applicable law. None of the Indemnitees will be liable to the CRC Companies or any of their affiliates for any act or omission suffered or taken by such Indemnitee that does not constitute gross negligence or
willful misconduct. 
 5. Disclaimer and Limitation of Liability; Opportunities. 
 (a) Disclaimer; Standard of Care. Bain makes no representations or warranties, express or implied, in respect of the services to be
provided by it hereunder. In no event will Bain or any of the Indemnitees be liable to any of the CRC Companies or any of their affiliates for any act, alleged act, omission or alleged omission that does not constitute gross negligence, willful
misconduct or bad faith of Bain as determined by a final, non-appealable determination of a court of competent jurisdiction. 
 (b) Freedom to Pursue Opportunities. In recognition that Bain and its affiliates currently have, and will in the future have or will consider acquiring, investments in numerous companies with respect to which Bain or its affiliates
may serve as an advisor, a director or in some other capacity, and in recognition that Bain and its affiliates have myriad duties to various investors and partners, and in anticipation that 

  

 -4- 

 
the CRC Companies and Bain (or one or more affiliates, associated investment funds or portfolio companies, or clients of Bain) may engage in the same or
similar activities or lines of business and have an interest in the same areas of corporate opportunities, and in recognition of the benefits to be derived by the CRC Companies hereunder and in recognition of the difficulties that may confront any
advisor who desires and endeavors fully to satisfy such advisor’s duties in determining the full scope of such duties in any particular situation, the provisions of this Section 5(b) are set forth to regulate, define and guide the conduct of
certain affairs of the CRC Companies as they may involve Bain. Except as Bain may otherwise agree in writing after the date hereof: 
 (i) Bain and its affiliates will have the right: (A) to directly or indirectly engage in any business (including, without limitation, any business activities or lines of business that are the same as or similar to those pursued by, or
competitive with, any of the CRC Companies and their subsidiaries, (B) to directly or indirectly do business with any client or customer of any of the CRC Companies and their subsidiaries, (C) to take any other action that Bain believes in good
faith is necessary to or appropriate to fulfill its obligations as described in the first sentence of this Section 5(b), and (D) not to present potential transactions, matters or business opportunities to any of the CRC Companies or any of their
subsidiaries, and to pursue, directly or indirectly, any such opportunity for itself, and to direct any such opportunity to another person. 
 (ii) Bain and its officers, employees, partners, members, other clients, affiliates and other associated entities will have no duty (contractual or otherwise) to communicate or present any corporate opportunities to
the CRC Companies or any of their affiliates or to refrain from any action specified in Section 5(b)(i), and the CRC Companies on their own behalf and on behalf of their affiliates, hereby renounce and waive any right to require Bain or any of its
affiliates to act in a manner inconsistent with the provisions of this Section 5(b). 
 (iii) Neither Bain nor any officer,
director, employee, partner, member, stockholder, affiliate or associated entity thereof will be liable to the CRC Companies or any of their affiliates for breach of any duty (contractual or otherwise) by reason of any activities or omissions of the
types referred to in this Section 5(b) or of any such person’s participation therein. 
 (c) Limitation of
Liability. In no event will Bain or any of its affiliates be liable to the CRC Companies or any of their affiliates for any indirect, special, incidental or consequential damages, including, without limitation, lost profits or savings, whether
or not such damages are foreseeable, or for any third party claims (whether based in contract, tort or otherwise), relating to the services to be provided by Bain hereunder. 
 6. Assignment, etc. Except as provided below, no party hereto has the right to assign this Agreement without the prior written consent of the
other parties. Notwithstanding the foregoing, (a) Bain may assign all or part of its rights and obligations hereunder to any affiliate 

  

 -5- 

 
of Bain that provides services similar to those called for by this Agreement, in which event Bain will be released of all of its rights and obligations
hereunder and (b) the provisions hereof for the benefit of the Bain Funds will inure to the benefit of their successors and assigns. 
 7.
Amendments and Waivers. No amendment or waiver of any term, provision or condition of this Agreement will be effective, unless in writing and executed by each of Bain and the CRC Companies. No waiver on any one occasion will extend to or
effect or be construed as a waiver of any right or remedy on any future occasion. No course of dealing of any person nor any delay or omission in exercising any right or remedy will constitute an amendment of this Agreement or a waiver of any right
or remedy of any party hereto. 
 8. Governing Law; Jurisdiction. 
 (a) Choice of Law. This Agreement and all matters arising under or related to this Agreement will be governed by and construed in
accordance with the domestic substantive laws of The State of New York without giving effect to any choice or conflict of law provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction. 

(b) Consent to Jurisdiction. Each of the parties agrees that all actions, suits or proceedings arising out of, based upon or
relating to this Agreement or the subject matter hereof will be brought and maintained exclusively in the federal and state courts of The State of New York. Each of the parties hereto by execution hereof (i) hereby irrevocably submits to the
jurisdiction of the federal and state courts in The State of New York for the purpose of any action, suit or proceeding arising out of or based upon this Agreement or the subject matter hereof and (ii) hereby waives to the extent not prohibited by
applicable law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such action, suit or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that it is immune from
extraterritorial injunctive relief or other injunctive relief, that its property is exempt or immune from attachment or execution, that any such action, suit or proceeding may not be brought or maintained in one of the above-named courts, that any
such action, suit or proceeding brought or maintained in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred to any court other than one of the above-named courts, should be stayed by
virtue of the pendency of any other action, suit or proceeding in any court other than one of the above-named courts, or that this Agreement or the subject matter hereof may not be enforced in or by any of the above-named courts. Notwithstanding the
foregoing, to the extent that any party hereto is or becomes a party in any litigation in connection with which it may assert indemnification rights set forth in this Agreement, the court in which such litigation is being heard will be deemed to be
included in clause (i) above. Each of the parties hereto hereby consents to service of process in any such suit, action or proceeding in any manner permitted by the laws of The State of New York, agrees that service of process by registered or
certified mail, return receipt requested, at the address specified in or pursuant to Section 10 is reasonably calculated to give actual notice and waives and agrees not to assert by way of motion, as a defense or otherwise, in any such action, suit
or proceeding any claim 

  

 -6- 

 
that service of process made in accordance with Section 10 does not constitute good and sufficient service of process. The provisions of this Section 8 will
not restrict the ability of any party to enforce in any court any judgment obtained in a federal or state court of The State of New York. 
 (c) Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
THAT CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY WAIVES, AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT, OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT
OF ANY ISSUE, CLAIM, DEMAND, CAUSE OF ACTION, ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT
MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING
AND WHETHER IN CONTRACT OR TORT OR OTHERWISE. EACH OF THE PARTIES
HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY EACH OTHER PARTY
THAT THE PROVISIONS OF THIS SECTION 8(C) CONSTITUTE A MATERIAL INDUCEMENT
UPON WHICH SUCH PARTY IS RELYING AND WILL RELY IN ENTERING INTO
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY. ANY OF THE PARTIES
HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH OF
THE PARTIES HERETO TO THE WAIVER OF ITS RIGHT TO TRIAL BY
JURY. 
 9. Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the
subject matter hereof and supersedes any prior communication or agreement with respect thereto. 
 10. Notice. All notices, demands,
and communications required or permitted under this Agreement will be in writing and will be effective if served upon such other party and such other party’s copied persons as specified below to the address set forth for it below (or to such
other address as such party will have specified by notice to each other party) if (i) delivered personally, (ii) sent and received by facsimile or (iii) sent by certified or registered mail or by Federal Express, DHL, UPS or any other comparably
reputable overnight courier service, postage prepaid, to the appropriate address as follows: 
 If to the CRC Companies, or any of them, to
them at: 
 CRC Health Group, Inc. 
 20400 Stevens Creek Blvd. 
 Suite 600 
 Cupertino, CA 95014 
 Facsimile: (408) 367-0037 
 Attention: Dr. Barry Karlin, President and CEO 
 with a copy to: 
 DLA Piper Rudnick Gray Gary US, LLP 
 2000 University Avenue 
 East Palo Alto, CA 94303 
 Attention: Bruce Schaeffer 
  

 -7- 

 If to Bain, to it: 
 111 Huntington Avenue 
 Boston, Massachusetts 02199 
 Facsimile: (617) 516-2010 
 Attention: John
Connaughton 
 with a copy to: 
 Ropes & Gray LLP 
 One International Place 
 Boston, Massachusetts 02210 
 Facsimile: (617)951-7050 
 Attention: Alfred O Rose, Esq. 
 Unless otherwise specified herein, such notices or other communications will be deemed effective, (a) on the date received, if personally delivered or sent by facsimile during normal business hours, (b) on the business day after being
received if sent by facsimile other than during normal business hours, (c) one business day after being sent by Federal Express, DHL or UPS or other comparably reputable delivery service and (d) five business days after being sent by registered or
certified mail. 
 11. Severability. If in any judicial or arbitral proceedings a court or arbitrator refuses to enforce any provision
of this Agreement, then such unenforceable provision will be deemed eliminated from this Agreement for the purpose of such proceedings to the extent necessary to permit the remaining provisions to be enforced. To the full extent, however, that the
provisions of any applicable law may be waived, they are hereby waived to the end that this Agreement be deemed to be valid and binding agreement enforceable in accordance with its terms, and in the event that any provision hereof is found to be
invalid or unenforceable, such provision will be construed by limiting it so as to be valid and enforceable to the maximum extent consistent with and possible under applicable law. 
 12. Third Party Beneficiaries. The Indemnitees are intended to be third party beneficiaries of this Agreement. 
 13. Counterparts. This Agreement may be executed in any number of counterparts and by each of the parties hereto in separate counterparts, each of
which when so executed will be deemed to be an original and all of which together will constitute one and the same agreement. 
 [The
remainder of this page is intentionally left blank. Signatures follow.] 
  

 -8- 

 IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf as an instrument under seal as of the date first above written by its officer or representative thereunto duly authorized. 
  

											
	 THE CRC COMPANIES:
	 		 	CRCA HOLDINGS, INC.
					
		 		 		 	 By:
	 	 /s/ Chris Gordon

		 		 		 		 	 Name:
	 	 Chris Gordon

		 		 		 		 	 Title:
	 	 Vice President

			
		 		 	CRC INTERMEDIATE HOLDINGS, INC.
					
		 		 		 	 By:
	 	 /s/ Chris Gordon

		 		 		 		 	 Name:
	 	 Chris Gordon

		 		 		 		 	 Title:
	 	 Vice President

			
		 		 	CRCA MERGER CORPORATION
					
		 		 		 	 By:
	 	 /s/ Chris Gordon

		 		 		 		 	 Name:
	 	 Chris Gordon

		 		 		 		 	 Title:
	 	 Vice President

			
	 BAIN:
	 		 	BAIN CAPITAL PARTNERS, LLC
				
		 		 	 By:
	 	 Bain Capital LLC, its sole member

					
		 		 		 	 By:
	 	 /s/ John Connaughton

		 		 		 		 	 Name:
	 	 John Connaughton

		 		 		 		 	 Title:
	 	 Managing Director

  

 Signature Page to Management Agreement

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