Exhibit 5.4
[DLA PIPER RUDNICK LETTERHEAD APPEARS HERE]
June 20, 2006
CRC Health Corporation
20400 Stevens Creek Boulevard
Suite 600
Cupertino, California 95014
| Re: | $200,000,000 aggregate principal amount of 10 3/4% Senior Subordinated Notes due February 1, 2016 of CRC Health Corporation issued in exchange for $200,000,000 aggregate principal amount outstanding of 10 3/4% Senior Subordinated Notes due February 1, 2016 of CRC Health Corporation and the related Exchange Guarantees. |
Ladies and Gentlemen:
We have acted as local Texas counsel to Sheltered Living Incorporated, a Texas corporation (“SLI”), in connection with (i) the proposed issuance by CRC Health Corporation, a Delaware corporation (the “Issuer”), in an exchange offer (the “Exchange Offer”) of Two Hundred Million Dollars ($200,000,000) aggregate principal amount of its 10 3/4% Senior Subordinated Notes due February 1, 2016 (the “Exchange Notes”), which are to be registered under the Securities Act of 1933, as amended (the “Securities Act”) in exchange for a like principal amount of the Issuer’s outstanding 10 3/4% Senior Subordinated Notes due February 1, 2016 (the “Initial Notes”), which have not been, and will not be, so registered, (ii) the guarantee of the Exchange Notes (the “Exchange Guarantee”) by the Subsidiary, and (iii) the preparation of the registration statement on Form S-4 filed by the Issuer and SLI with the Securities and Exchange Commission (the “Registration Statement”) for the purpose of registering the Exchange Notes and the Exchange Guarantees under the Securities Act.
The Initial Notes have been, and the Exchange Notes will be, issued pursuant to that certain Indenture dated as of February 6, 2006 (the “Indenture”) between the Issuer, CRCA Merger Corporation, a Delaware corporation (the “Initial Issuer”), SLI, the other subsidiaries named in the signatures pages thereto and U.S. Bank National Association, as trustee. The terms of the Exchange Guarantee are contained in the Indenture and the Exchange Guarantee will be issued pursuant to the Indenture. Capitalized terms defined in the Indenture, used herein and not otherwise defined herein, shall have the meanings given them in the Indenture.
As used herein:
(i) “Applicable Law” means the laws of the State of Texas (the “State”) and the Federal laws of the United States of America, that are binding on SLI and, in our experience, are normally applicable to transactions of the type contemplated by the Transaction Documents (defined below), without our having made any special investigation as to the applicability of any specific law.
CRC Health Corporation
June 20, 2006
Page Two
(ii) “Governmental Approval” means any consent, approval, license, authorization or validation of, or filing, recording or registration with, any governmental authority required by the Applicable Laws.
| I. | BASIS OF OPINIONS |
We have based our opinion upon our review of the following records, documents, instruments and certificates and such additional certificates relating to factual matters as we have deemed necessary or appropriate for our opinion:
(a) An executed copy of that certain Indenture (the “Indenture”), dated as of February 6, 2006, by and among U.S. Bank National Association, the Initial Issuer, the Issuer and the Guarantors (as defined therein), including SLI;
(b) An executed copy of that certain Registration Rights Agreement (the “Registration Rights Agreement”), dated as of February 6, 2006, by and among J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., and Credit Suisse Securities (USA) LLC as initial purchasers, the Initial Issuer, the Issuer and the Guarantors (as defined therein), including SLI;
(c) An executed copy of that certain Notation of Guarantee (the “Notation of Guarantee”), dated as of February 6, 2006, by the Guarantors (as defined in the Indenture), including SLI;
(d) The Articles of Incorporation of SLI, certified by the Office of the Secretary of State of Texas as of April 25, 2006, and certified to us by an officer of SLI as being complete and in full force and effect as of the date of this opinion;
(e) The Bylaws of SLI, certified to us by an officer of SLI as being complete and in full force and effect as of the date of this opinion;
(f) records certified to us by an officer of SLI as constituting all records of proceedings and actions of the Board of Directors and stockholders of SLI relating to the transactions contemplated by the Transaction Documents;
(g) a Certificate of Good Standing relating to SLI issued by the Secretary of State of the State of Texas, dated April 25, 2006; and
(h) Certificates from an officer of SLI, including an incumbency certificate (collectively, the “Officer’s Certificate”).
CRC Health Corporation
June 20, 2006
Page Three
The documents described in subsections (a) through (c) above are referred to herein collectively as the “Transaction Documents”. The documents described in subsections (d) and (e) are referred to herein collectively as the “Governing Documents”.
Our opinion expressed in Paragraph 1 of Part IV as to the good standing of SLI under the laws of the State is based solely upon the certificate enumerated in Paragraph (g) of this Part I (the “Certificate”). We have made no additional investigation after the respective dates of the Certificate in rendering our opinion expressed in Paragraph 1 of Part IV.
Our opinion in Subparagraph 3(c) of Part IV is based solely on our review of the decrees, orders or judgments identified to us in the Officer’s Certificate as constituting all decrees orders or judgments binding on SLI (each, a “Governmental Order”); such Governmental Orders, if any, are listed onSchedule A attached hereto.
| II. | ASSUMPTIONS |
We have assumed the following:
1. The authenticity of all records, documents and instruments submitted to us as originals, the genuineness of all signatures, the legal capacity of natural persons and the conformity to the originals of all records, documents and instruments submitted to us as copies.
2. The representations and warranties as to factual matters made by SLI in the Indenture and the other parties thereto are true and correct. We have also assumed the due execution and delivery of the Indenture and all other documents referenced therein by each party other than SLI when due execution and delivery are a prerequisite to the effectiveness thereof.
| III. | LIMITATIONS AND EXCLUSIONS |
We express no opinion as to any securities, anti-trust, tax, land use, safety, environmental, hazardous materials, privacy, insurance, company or banking laws, rules or regulations or as to the enforceability of the Transaction Documents.
This opinion is limited to the federal laws of the United States of America and the laws of the State, and we disclaim any opinion as to the laws of any other jurisdiction. We further disclaim any opinion as to any statute, rule, regulation, ordinance, order or other promulgation of any regional or local governmental body or as to any related judicial or administrative decision. As to matters of the laws of the State, we have based our opinion solely upon our examination of such laws, as reported in standard, unofficial compilations.
CRC Health Corporation
June 20, 2006
Page Four
| IV. | OPINIONS |
Based upon the foregoing and our examination of such questions of law as we have deemed necessary or appropriate for our opinion, and subject to the limitations and qualifications expressed below, it is our opinion that:
1. SLI is a corporation validly existing under the laws of the State of Texas. SLI is duly qualified to do business and is in good standing in the State of Texas.
2. Each Transaction Document has been duly authorized by all necessary corporate action on the part of SLI and has been duly executed and delivered by SLI.
3. The execution, delivery and performance by SLI of the Transaction Documents will not: (a) violate any Applicable Law; (b) conflict with or result in a breach of or constitute a default under the Governing Documents; or (c) violate any Governmental Order.
We consent to the incorporation by reference of this opinion in the Registration Statement and the filing of this opinion as an exhibit thereto and as an exhibit to the applications to securities commissioners for the various states of the United States for registration of the Exchange Guarantees. We also consent to the identification of our firm as local counsel to SLI. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act. Ropes & Gray LLP may rely on this opinion in rendering their opinion to you with respect to the validity and enforceability of the Exchange Guarantees for inclusion as an exhibit to the Registration Statement. We disclaim any obligation to advise you of any change of law that occurs, or any facts of which we become aware, after the date of this opinion.
Very truly yours,
DLA PIPER RUDNICK GRAY CARY US LLP
/s/ DLA PIPER RUDNICK GRAY CARY US LLP
CRC Health Corporation
June 20, 2006
Page Five
SCHEDULE A
GOVERNMENTAL ORDERS
None.