CONFIDENTIAL Hythiam, Inc. 11150 Santa Monica Boulevard Suite 1500 Los Angeles CA 90025 Attn: Terren S. Peizer, Chairman & CEO Dear Terren:
Exhibit 10.2
November 6, 2007
CONFIDENTIAL
Hythiam, Inc.
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Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman & CEO
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Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman & CEO
Dear Terren:
This letter (the “Agreement”) constitutes the agreement between ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC
(“R&R” or the “Placement Agent”) and Hythiam, Inc. (the “Company”), that
R&R shall serve as a placement agent for the Company, on a “reasonable best efforts” basis, in
connection with the proposed placement (the “Placement”) of registered securities (the
“Securities”) of the Company, including shares (the “Shares”) of the Company’s
common stock, par value $0.0001 per share (the “Common Stock”) and warrants to purchase
shares of Common Stock. The terms of such Placement and the Securities shall be mutually agreed
upon by the Company and the purchasers (each, a “Purchaser” and collectively, the
“Purchasers”) and nothing herein constitutes that R&R would have the power or authority to
bind the Company or any Purchaser or an obligation for the Company to issue any Securities or
complete the Placement. This Agreement and the documents executed and delivered by the Company and
the Purchasers in connection with the Placement shall be collectively referred to herein as the
“Transaction Documents.” The date of the closing of the Placement shall be referred to
herein as the “Closing Date.” The Company expressly acknowledges and agrees that R&R’s
obligations hereunder are on a reasonable best efforts basis only and that the execution of this
Agreement does not constitute a commitment by R&R to purchase the Securities and does not ensure
the successful placement of the Securities or any portion thereof or the success of R&R with
respect to securing any other financing on behalf of the Company.
SECTION 1. Compensation and other Fees.
| a) | As compensation for the services provided by R&R hereunder, the Company agrees to pay to R&R: |
| (A) | a cash fee payable immediately upon the closing of the Placement of $1,295,000.00, and | ||
| (B) | if there is any financing of equity or debt or other capital raising activity of the Company (a “Financing”) within 18 months after the expiration or termination of this Agreement with any investors that were introduced to the Company by R&R pursuant to this Agreement, a cash fee payable immediately upon the closing of any portion of any Financing and equal to 7% of the aggregate gross proceeds raised in such Financing from such investors. |
| b) | The Company also agrees to reimburse R&R’s reasonable and customary expenses, including legal fees (with supporting invoices/receipts) up to a maximum of $35,000. Such reimbursement shall be payable immediately upon (but only in the event of) the closing of the Placement. |
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▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ o Member: FINRA, SIPC
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SECTION 2. REGISTRATION STATEMENT.
The Company represents and warrants to, and agrees with, the Placement Agent that:
(A) The Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3 (Registration File No. 333-145906) under
the Securities Act of 1933, as amended (the “Securities Act”), which became effective on
October 5, 2007, for the registration under the Securities Act of the Shares. At the time of such
filing, the Company met the requirements of Form S-3 under the Securities Act. Such registration
statement meets the requirements set forth in Rule 415(a)(1)(x) under the Securities Act and
complies with said Rule. The Company will file with the Commission pursuant to Rule 424(b) under
the Securities Act, and the rules and regulations (the “Rules and Regulations”) of the
Commission promulgated thereunder, a supplement to the form of prospectus included in such
registration statement relating to the placement of the Shares and the plan of distribution thereof
and has advised the Placement Agent of all further information (financial and other) with respect
to the Company required to be set forth therein. Such registration statement, including the
exhibits thereto, as amended at the date of this Agreement, is hereinafter called the
“Registration Statement”; such prospectus in the form in which it appears in the
Registration Statement is hereinafter called the “Base Prospectus”; and the supplemented
form of prospectus, in the form in which it will be filed with the Commission pursuant to Rule
424(b) (including the Base Prospectus as so supplemented) is hereinafter called the “Prospectus
Supplement.” Any reference in this Agreement to the Registration Statement, the Base Prospectus
or the Prospectus Supplement shall be deemed to refer to and include the documents incorporated by
reference therein (the “Incorporated Documents”) pursuant to Item 12 of Form S-3 which were
filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or
before the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus
Supplement, as the case may be; and any reference in this Agreement to the terms “amend,”
“amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus or the
Prospectus Supplement shall be deemed to refer to and include the filing of any document under the
Exchange Act after the date of this Agreement, or the issue date of the Base Prospectus or the
Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference. All
references in this Agreement to financial statements and schedules and other information which is
“contained,” “included,” “described,” “referenced,” “set forth” or “stated” in the Registration
Statement, the Base Prospectus or the Prospectus Supplement (and all other references of like
import) shall be deemed to mean and include all such financial statements and schedules and other
information which is or is deemed to be incorporated by reference in the Registration Statement,
the Base Prospectus or the Prospectus Supplement, as the case may be. No stop order suspending the
effectiveness of the Registration Statement or the use of the Base Prospectus or the Prospectus
Supplement has been issued, and no proceeding for any such purpose is pending or has been initiated
or, to the Company’s knowledge, is threatened by the Commission. For purposes of this Agreement,
“free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act
and the “Time of Sale Prospectus” means the preliminary prospectus, if any, together with
the free writing prospectuses, if any, used in connection with the Placement, including any
documents incorporated by reference therein.
(B) The Registration Statement (and any further documents to be filed with the Commission)
contains all exhibits and schedules as required by the Securities Act. Each of the Registration
Statement and any post-effective amendment thereto, at the time it became effective, complied in
all material respects with the Securities Act and the Exchange Act and the applicable Rules and
Regulations and did not and, as amended or supplemented, if applicable, will not, contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. The Base Prospectus, the Time of Sale
Prospectus, if any, and the Prospectus Supplement, each as of its respective date, comply in all
material respects with the Securities Act and the Exchange Act and the applicable Rules and
Regulations. Each of the Base Prospectus, the Time of Sale Prospectus, if any, and the Prospectus
Supplement, as amended or supplemented, did not and will not contain as of the date thereof any
untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements
therein, in light of the circumstances under which they were made, not misleading. The
Incorporated Documents, when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the applicable Rules and Regulations, and none
of such documents,
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when they were filed with the Commission, contained any untrue statement of a
material fact or omitted to state a material fact necessary to make the statements therein (with
respect to Incorporated Documents incorporated by reference in the Base Prospectus or Prospectus
Supplement), in light of the circumstances under which they were made not misleading; and any
further documents so filed and incorporated by reference in the Base Prospectus, the Time of Sale
Prospectus, if any, or Prospectus Supplement, when such documents are filed with the Commission,
will conform in all material respects to the requirements of the Exchange Act and the applicable
Rules and Regulations, as applicable, and will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. No post-effective amendment to the
Registration Statement reflecting any facts or events arising after the date thereof which
represent, individually or in the aggregate, a fundamental change in the information set forth
therein is required to be filed with the Commission. There are no documents required to be filed
with the Commission in connection with the transaction contemplated hereby that (x) have not been
filed as required pursuant to the Securities Act or (y) will not be filed within the requisite time
period. There are no contracts or other documents required to be described in the Base Prospectus,
the Time of Sale Prospectus, if any, or Prospectus Supplement, or to be filed as exhibits or
schedules to the Registration Statement, which have not been described or filed as required.
(C) The Company is eligible to use free writing prospectuses in connection with the Placement
pursuant to Rules 164 and 433 under the Securities Act. Any free writing prospectus that the
Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be,
filed with the Commission in accordance with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder. Each free writing prospectus that
the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or
that was prepared by or behalf of or used by the Company complies or will comply in all material
respects with the requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder. The Company will not, without the prior consent of the Placement Agent,
prepare, use or refer to, any free writing prospectus.
(D) The Company has delivered, or will as promptly as practicable deliver, to the Placement
Agent complete conformed copies of the Registration Statement and of each consent and certificate
of experts, as applicable, filed as a part thereof, and conformed copies of the Registration
Statement (without exhibits), the Base Prospectus, the Time of Sale Prospectus, if any, and the
Prospectus Supplement, as amended or supplemented, in such quantities and at such places as the
Placement Agent reasonably requests. Neither the Company nor any of its directors and officers has
distributed and none of them will distribute, prior to the Closing Date, any offering material in
connection with the offering and sale of the Shares other than the Base Prospectus, the Time of
Sale Prospectus, if any, the Prospectus Supplement, the Registration Statement, copies of the
documents incorporated by reference therein and any other materials permitted by the Securities
Act.
SECTION 3. REPRESENTATIONS AND WARRANTIES. Except as set forth under the
corresponding section of the Disclosure Schedules which Disclosure Schedules shall be deemed a part
hereof, the Company hereby makes the representations and warranties set forth below to the
Placement Agent.
(A) Organization and Qualification. The Company is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the jurisdiction of
its incorporation , with the requisite power and authority to own and use its properties and assets
and to carry on its business as currently conducted.
(B) Authorization; Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each of the Transaction
Documents and
otherwise to carry out its obligations hereunder and thereunder. The execution and delivery
of each of the Transaction
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Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the part of the Company
and no further action is required by the Company, its board of directors or its stockholders in
connection therewith other than in connection with the “Required Approvals” (as defined in
subsection 3(D) below). Each Transaction Document has been (or upon delivery will have been) duly
executed by the Company and, when delivered in accordance with the terms hereof and thereof, will
constitute the valid and binding obligation of the Company enforceable against the Company in
accordance with its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of
creditors’ rights generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
(C) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company, the issuance and sale of the Securities and the consummation by the
Company of the other transactions contemplated hereby and thereby do not and will not (i) conflict
with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both would become a default)
under, result in the creation of any Lien upon any of the properties or assets of the Company or
any Subsidiary, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility,
debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws and regulations), or by which
any property or asset of the Company or a Subsidiary is bound or affected; except in the case of
each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a
Material Adverse Effect.
(D) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any filing or registration
with, any court or other federal, state, local or other governmental authority or other
“Person” (defined as an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind, including, without
limitation, any Trading Market) in connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than such filings as are required to be made under
applicable Federal and state securities laws (collectively, the “Required Approvals”).
(E) Approvals. The issuance and listing on the NASDAQ Global Market of the Shares
requires no further approvals, including but not limited to, the approval of shareholders.
(F) FINRA Affiliations. There are no affiliations with any Financial Industry
Regulatory Authority (FINRA) member firm among the Company’s officers, directors or, to the
knowledge of the Company, any five percent (5%) or greater stockholder of the Company, except as
set forth in the Base Prospectus.
(G) Incorporation by Reference. Each of the representations and warranties (together
with any related disclosure schedules thereto) made in that certain Securities Purchase Agreement
dated as of November 6, 2007, between the Company, and each purchaser identified on the signature
pages thereto to the purchasers thereunder is hereby incorporated herein by reference (as though
fully restated herein) and is hereby made to, and in favor of, R&R.
SECTION 4. INDEMNIFICATION. The Company agrees to the indemnification and other
agreements set forth in the Indemnification Provisions (the “Indemnification”) attached
hereto as Addendum A, the
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provisions of which are incorporated herein by reference and shall survive the termination or
expiration of this Agreement.
SECTION 5. ENGAGEMENT TERM. R&R’s engagement hereunder will be for the period of
50 days. The engagement may be terminated by either the Company or R&R at any time upon 10 days’
written notice. Notwithstanding anything to the contrary contained herein, the provisions
concerning confidentiality, indemnification, contribution and the Company’s obligations to pay fees
and reimburse expenses contained herein and the Company’s obligations contained in the
Indemnification Provisions will survive any expiration or termination of this Agreement. R&R
agrees not to use any confidential information concerning the Company provided to them by the
Company for any purposes other than those contemplated under this Agreement.
SECTION 6. R&R INFORMATION. The Company agrees that any information or advice
rendered by R&R in connection with this engagement is for the confidential use of the Company only
in their evaluation of the Placement and, except as otherwise required by law, the Company will not
disclose or otherwise refer to the advice or information in any manner without R&R’s prior written
consent.
SECTION 7. NO FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall
not be construed as creating rights enforceable by any person or entity not a party hereto, except
those entitled hereto by virtue of the Indemnification Provisions hereof. The Company acknowledges
and agrees that R&R is not and shall not be construed as a fiduciary of the Company and shall have
no duties or liabilities to the equity holders or the creditors of the Company or any other person
by virtue of this Agreement or the retention of R&R hereunder, all of which are hereby expressly
waived.
SECTION 8. CLOSING. The obligations of the Placement Agent and the Purchasers,
and the closing of the sale of the Securities hereunder are subject to the accuracy, when made and
on the Closing Date, of the representations and warranties on the part of the Company and its
Subsidiaries contained herein, to the accuracy of the statements of the Company and its
Subsidiaries made in any certificates pursuant to the provisions hereof, to the performance by the
Company and its Subsidiaries of their obligations hereunder, and to each of the following
additional terms and conditions:
(A) No stop order suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been initiated or threatened by the
Commission, and any request for additional information on the part of the Commission (to be
included in the Registration Statement, the Base Prospectus or the Prospectus Supplement or
otherwise) shall have been complied with to the reasonable satisfaction of the Placement Agent.
Any filings required to be made by the Company in shall have been timely filed with the Commission.
(B) The Placement Agent shall not have discovered and disclosed to the Company on or prior to
the Closing Date that the Registration Statement, the Base Prospectus or the Prospectus Supplement
or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion
of counsel for the Placement Agent, is material or omits to state any fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary to make the
statements therein not misleading.
(C) All corporate proceedings and other legal matters incident to the authorization, form,
execution, delivery and validity of each of this Agreement, the Securities, the Registration
Statement, the Base Prospectus and the Prospectus Supplement and all other legal matters relating
to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Placement Agent, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to enable them to pass upon
such matters.
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(D) The Placement Agent shall have received from outside counsel to the Company such counsel’s
written opinion, addressed to the Placement Agent and the Purchasers dated as of the Closing
Date, in form and substance reasonably satisfactory to the Placement Agent, which opinion
shall include a “10b-5” representation from such counsel.
(E) Neither the Company nor any of its Subsidiaries shall have sustained since the date of the
latest audited financial statements included or incorporated by reference in the Base Prospectus,
any loss or interference with its business from fire, explosion, flood, terrorist act or other
calamity, whether or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth in or contemplated by the Base Prospectus and
(ii) since such date there shall not have been any change in the capital stock or long-term debt of
the Company or any of its Subsidiaries or any change, or any development involving a prospective
change, in or affecting the business, general affairs, management, financial position,
stockholders’ equity, results of operations or prospects of the Company and its Subsidiaries,
otherwise than as set forth in or contemplated by the Base Prospectus, the Time of Sale Prospectus,
if any, and the Prospectus Supplement, the effect of which, in any such case described in clause
(i) or (ii), is, in the judgment of the Placement Agent, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or delivery of the Securities on the terms
and in the manner contemplated by the Base Prospectus, the Time of Sale Prospectus, if any, and the
Prospectus Supplement.
(F) The Common Stock is registered under the Exchange Act and, as of the Closing Date, the
Shares shall be listed and admitted and authorized for trading on the NASDAQ Global Market, and
satisfactory evidence of such actions shall have been provided to the Placement Agent. The Company
shall have taken no action designed to, or likely to have the effect of terminating the
registration of the Common Stock under the Exchange Act or delisting or suspending from trading the
Common Stock from NASDAQ Global Market, nor has the Company received any information suggesting
that the Commission or NASDAQ Global Market is contemplating terminating such registration or
listing.
(G) Subsequent to the execution and delivery of this Agreement, there shall not have occurred
any of the following: (i) trading in securities generally on the New York Stock Exchange, the
NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the American
Stock Exchange or in the over-the-counter market, or trading in any securities of the Company on
any exchange or in the over-the-counter market, shall have been suspended or minimum or maximum
prices or maximum ranges for prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared by federal or state
authorities or a material disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, (iii) the United States shall have become engaged in
hostilities in which it is not currently engaged, the subject of an act of terrorism, there shall
have been an escalation in hostilities involving the United States, or there shall have been a
declaration of a national emergency or war by the United States, or (iv) there shall have occurred
any other calamity or crisis or any change in general economic, political or financial conditions
in the United States or elsewhere, if the effect of any such event in clause (iii) or (iv) makes
it, in the sole judgment of the Placement Agent, impracticable or inadvisable to proceed with the
sale or delivery of the Securities on the terms and in the manner contemplated by the Base
Prospectus and the Prospectus Supplement.
(H) No action shall have been taken and no statute, rule, regulation or order shall have been
enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities or materially and adversely affect or potentially
and adversely affect the business or operations of the Company; and no injunction, restraining
order or order of any other nature by any federal or state court of competent jurisdiction shall
have been issued as of the Closing Date which would prevent the issuance or sale of the Securities
or materially and adversely affect or potentially and adversely affect the business or operations
of the Company.
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(I) The Company shall have prepared and filed with the Commission a Current Report on Form 8-K
with respect to the Placement, including as an exhibit thereto this Agreement.
(J) The Company shall have entered into subscription agreements with each of the Purchasers
and such agreements shall be in full force and effect and shall contain representations and
warranties of the Company as agreed between the Company and the Purchasers.
(K) The FINRA shall have raised no objection to the fairness and reasonableness of the terms
and arrangements of this Agreement. In addition, the Company shall, if requested by the Placement
Agent, make or authorize Placement Agent’s counsel to make on the Company’s behalf, an Issuer
Filing with the Financial Industry Regulatory Authority, Inc. Corporate Financing Department
pursuant to NASD Rule 2710 with respect to the Registration Statement and pay all filing fees
required in connection therewith.
(L) Prior to the Closing Date, the Company shall have furnished to the Placement Agent such
further information, certificates and documents as the Placement Agent may reasonably request.
All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Placement Agent.
SECTION 9. Governing Law. This Agreement will be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements made and to be
performed entirely in such State. This Agreement may not be assigned by either party without the
prior written consent of the other party. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and permitted assigns. Any right to
trial by jury with respect to any dispute arising under this Agreement or any transaction or
conduct in connection herewith is waived. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by
delivering a copy thereof via overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law. If
either party shall commence an action or proceeding to enforce any provisions of a Transaction
Document, then the prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorneys fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.
SECTION 10. Entire Agreement/Misc. This Agreement (including the attached
Indemnification Provisions) embodies the entire agreement and understanding between the parties
hereto and supersedes all prior agreements and understandings relating to the subject matter
hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any
respect, such determination will not affect such provision in any other respect or any other
provision of this Agreement, which will remain in full force and effect. This Agreement may not be
amended or otherwise modified or waived except by an instrument in writing signed by both R&R and
the Company. The representations, warranties, agreements and covenants contained herein shall
survive the closing of the Placement and delivery and/or exercise of the Securities, as applicable.
This Agreement may be executed in two or more counterparts, all of which when taken together shall
be considered one and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood that both parties need
not sign the same counterpart. In the event that any signature is delivered by facsimile
transmission or a .pdf format file, such electronic signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or .pdf signature page were an original thereof.
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SECTION 11. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified on the signature pages attached hereto
prior to 6:30 p.m. (New York City time) on a business day, (b) the next business day after the date
of transmission, if such notice or communication
is delivered via facsimile at the facsimile number on the signature pages attached hereto on a day
that is not a business day or later than 6:30 p.m. (New York City time) on any business day, (c)
the business day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be as set forth on the signature
pages hereto.
[Remainder of page intentionally left blank. Signature page follows]
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Please confirm that the foregoing correctly sets forth our agreement by signing and returning to
R&R the enclosed copy of this Agreement.
| Very truly yours, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC |
||||
| By: | /s/ ▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Senior Managing Director | |||
| Address for notice: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ |
||||
Accepted and Agreed to as of
the date first written above:
the date first written above:
HYTHIAM, INC.
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: ▇▇▇▇▇ ▇▇▇▇▇ Title: Chief Financial Officer |
Address for notice:
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With a copy (which will not constitute notice) to: | |
11150 Santa ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇ | |
▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ Tower, 6th Floor | |
Los Angeles, CA 90025
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▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | |
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman & CEO
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Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq. |
Hythiam, Inc.
Indemnification Provisions
November 6, 2007
Indemnification Provisions
November 6, 2007
ADDENDUM A
INDEMNIFICATION PROVISIONS
In connection with the engagement of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC (“R&R”) by Hythiam, Inc.
(the “Company”) pursuant to a letter agreement dated November 6, 2007, between the Company
and R&R, as it may be amended from time to time in writing (the “Agreement”), the Company
hereby agrees as follows:
| 1. | To the extent permitted by law, the Company will indemnify R&R and its affiliates, stockholders, directors, officers, employees and controlling persons (within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934) against all losses, claims, damages, expenses and liabilities, as the same are incurred (including the reasonable fees and expenses of counsel), relating to or arising out of its activities hereunder or pursuant to the Agreement, except to the extent that any losses, claims, damages, expenses or liabilities (or actions in respect thereof) are found in a final judgment (not subject to appeal) by a court of law to have resulted primarily and directly from R&R’s willful misconduct or gross negligence in performing the services described herein. |
| 2. | Promptly after receipt by R&R of notice of any claim or the commencement of any action or proceeding with respect to which R&R is entitled to indemnity hereunder, R&R will promptly notify the Company in writing of such claim or of the commencement of such action or proceeding, and the Company will assume the defense of such action or proceeding and will employ counsel reasonably satisfactory to R&R (▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ LLP being deemed satisfactory) and will pay the fees and expenses of such counsel. Notwithstanding the preceding sentence, R&R will be entitled to employ counsel reasonably satisfactory to Company (▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP being deemed satisfactory) separate from counsel for the Company and from any other party in such action if counsel for R&R reasonably determines that it would be inappropriate under the applicable rules of professional responsibility for the same counsel to represent both the Company and R&R. In such event, the reasonable fees and disbursements of no more than one such separate counsel will be paid by the Company. The Company will have the exclusive right to settle the claim or proceeding provided that the Company will not settle any such claim, action or proceeding without the prior written consent of R&R, which will not be unreasonably withheld. |
| 3. | The Company agrees to notify R&R promptly of the assertion against it or any other person of any claim or the commencement of any action or proceeding relating to a transaction contemplated by the Agreement. |
| 4. | If for any reason the foregoing indemnity is unavailable to R&R or insufficient to hold R&R harmless, then the Company shall contribute to the amount paid or payable by R&R as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and R&R on the other, but also the relative fault of the Company on the one hand and R&R on the other that resulted in such losses, claims, damages or liabilities, as well as any relevant equitable considerations. The amounts paid or payable by a party in respect of losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees and expenses incurred in defending any litigation, proceeding or other action or claim. Notwithstanding the provisions hereof, R&R’s share of the liability hereunder shall not be in excess of the amount of fees actually received, or to be received, by R&R under the Agreement (excluding any amounts received as reimbursement of expenses incurred by R&R). |
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ o Tel:: ▇▇▇ ▇▇▇ ▇▇▇▇ Fax: ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ o Member: FINRA, SIPC
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ o Member: FINRA, SIPC
Hythiam, Inc.
November 6, 2007
Indemnification Provisions
November 6, 2007
Indemnification Provisions
| 5. | These Indemnification Provisions shall remain in full force and effect whether or not the transaction contemplated by the Agreement is completed and shall survive the termination of the Agreement, and shall be in addition to any liability that the Company might otherwise have to any indemnified party under the Agreement or otherwise. |
| ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC |
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| By: | /s/ ▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Senior Managing Director | |||
Accepted and Agreed to as of
the date first written above:
the date first written above:
HYTHIAM, INC.
By:
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/s/ ▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: ▇▇▇▇▇ ▇▇▇▇▇ Title: Chief Financial Officer |