AMENDMENT AND EXCHANGE AGREEMENT
Exhibit 10.1
EXECUTION COPY
AMENDMENT AND EXCHANGE AGREEMENT (this “Agreement”), dated as of July 31, 2008, by and between
Hythiam, Inc., a Delaware corporation with headquarters located at 00000 Xxxxx Xxxxxx Xxxxxxxxx,
Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (the “Company”) and Highbridge International LLC (the
“Investor”).
WHEREAS:
A. The Company and the Investor are parties to that certain Securities Purchase Agreement,
dated as of January 17, 2007 (the “Existing Securities Purchase Agreement”), pursuant to which,
among other things, the Investor purchased from the Company (i) senior secured notes (the “Existing
Notes”) and (ii) warrants (the “Existing Warrants”) which are exercisable to acquire shares of the
Company’s common stock, par value $0.0001 per share (the “Common Stock”) (the “Existing Warrant
Shares”).
B. In connection with the execution and delivery of the Existing Securities Purchase
Agreement, the Company entered into that certain Registration Rights Agreement, dated January 17,
2007 (the “Registration Rights Agreement”), by and between the Company and the Investor, pursuant
to which the Company agreed to provide certain registration rights with respect to the Registrable
Securities (as defined in the Registration Rights Agreement) under the Securities Act of 1933, as
amended (the “1933 Act”), and the rules and regulations promulgated thereunder, and applicable
state securities laws.
C. The Company and the Investor desire to enter into this Agreement, pursuant to which, among
other things, the Company and the Investor shall amend and restate all of the Investor’s (i)
Existing Notes for the senior secured notes of the Company in the form attached hereto as
Exhibit A (the “Notes”) in the aggregate principal amount set forth opposite the Investor’s
name in column (3) on the Securities Schedule attached hereto and (ii) Existing Warrants for the
warrants in the form attached hereto as Exhibit B (the “Warrants”), to acquire up to that
number of shares of Common Stock set forth opposite the Investor’s name in column (4) of the
Securities Schedule attached hereto (as exercised, collectively, the “Warrant Shares”).
D. The amendment and restatement of the Existing Notes for the Notes and the Existing Warrants
for the Warrants is being made in reliance upon the exemption from registration provided by Section
3(a)(9) of the 1933 Act.
E. The Notes rank senior to all outstanding and future indebtedness of the Company and are
secured by a first priority, perfected security interest in all of the assets of the Company and
the stock of each of the Company’s subsidiaries, as evidenced by the pledge agreement, dated as of
January 17, 2007, by and among each entity listed as a pledgor on the signature pages thereto, and
the Collateral Agent (the “Pledge Agreement”) and the security agreement, dated as of January 17,
2007, by and between the Company and the Collateral Agent (the “Security Agreement” and together
with the Pledge Agreement and the Security Agreement, collectively the “Security Documents”).
F. The Investor delivered to the Company a Holder Optional Redemption Notice (as defined in
the Existing Notes), pursuant to which the Investor exercised its Holder Optional Redemption Right
(as defined in the Existing Notes) as of July 19, 2008 (the “Notice”). Contemporaneously with the
Closing (as defined below) the holder wishes to rescind and withdraw the Notice.
Capitalized terms used herein and not otherwise defined herein shall have the respective
meanings ascribed to them in the Existing Securities Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter
set forth, the Company and the Investor hereby agree as follows:
| 1. | AMENDMENT AND RESTATEMENT OF EXISTING NOTES AND EXISTING WARRANTS. |
(a) Amendment and Restatement of Existing Notes and Existing Warrants. Subject to
satisfaction (or waiver) of the conditions set forth in Sections 5 and 6 below, at the closing
contemplated by this Agreement (the “Closing”), the Investor shall surrender to the Company its
Existing Notes and Existing Warrants and the Company shall issue and deliver to the Investor (or as
directed by the Investor) Notes in the principal amount set forth opposite the Investor’s name in
column (3) of the Securities Schedule attached hereto and Warrants to acquire up to that number of
shares of Common Stock set forth opposite the Investor’s name in column (4) of the Securities
Schedule attached hereto.
(b) Closing Date. The date of the Closing (the “Closing Date”) shall be the date
hereof, subject to notification of satisfaction (or waiver) of the conditions to the Closing set
forth in Sections 5 and 6 below (or such other time and date as is mutually agreed to by the
Company and the Investor). The Closing shall occur on the Closing Date at the offices of Xxxxxxx
Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(c) Delivery. On the Closing Date, the Company shall deliver to the Investor (i) the
Notes in the principal amount set forth opposite the Investor’s name in column (3) of the
Securities Schedule attached hereto and (ii) the Warrants to acquire up to that number of shares of
Common Stock set forth opposite the Investor’s name in column (4) of the Securities Schedule
attached hereto. The foregoing securities shall be delivered in each case duly executed on behalf
of the Company and registered in the name of the Investor or its designee.
| 2. | AMENDMENTS TO TRANSACTION DOCUMENTS. |
(a) Ratifications. The Company hereby confirms and agrees that, except as otherwise
expressly provided in this Agreement:
(i) the Existing Securities Purchase Agreement and each other Transaction Document is,
and shall continue to be, in full force and effect and is hereby ratified and confirmed in
all respects, except that on and after the Closing Date (i) all references in the Existing
Securities Purchase Agreement to “this Agreement”, “hereto”, “hereof”, “hereunder” or words
of like import referring to the Securities Purchase Agreement shall mean the Existing
Securities Purchase Agreement as amended by this
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Agreement, (ii) all references in the other Transaction Documents to the “Securities
Purchase Agreement”, “thereto”, “thereof”, “thereunder” or words of like import referring to
the Securities Purchase Agreement shall mean the Existing Securities Purchase Agreement as
amended by this Agreement; (iii) all references in the other Transaction Documents to the
“Registration Rights Agreement”, “thereto”, “thereof”, “thereunder” or words of like import
referring to the Registration Rights Agreement shall mean the Registration Rights Agreement
as amended by this Agreement; (iv) all references in the other Transaction Documents to the
“Security Agreement”, “thereto”, “thereof”, “thereunder” or words of like import referring
to the Security Agreement shall mean the Security Agreement as amended by this Agreement;
(v) all references in the other Transaction Documents to the “Pledge Agreement”, “thereto”,
“thereof”, “thereunder” or words of like import referring to the Pledge Agreement shall mean
the Pledge Agreement as amended by this Agreement; and (vi) all references in the other
Transaction Documents to the “Security Documents”, “thereto”, “thereof”, “thereunder” or
words of like import referring to the Security Documents shall mean the Security Documents
as amended by this Agreement.
(ii) to the extent that the Securities Purchase Agreement or any other Transaction
Document purports to assign or pledge to the Collateral Agent for the Investor and the
holders of the Securities, or to grant to the Collateral Agent a security interest in or
lien on, any collateral as security for the obligations of the Company from time to time
existing in respect of the Existing Notes and any other existing Transaction Document, such
pledge, assignment and/or grant of the security interest or lien is hereby ratified and
confirmed in all respects, and shall apply with respect to the obligations under the Notes
and no additional filing is required to be made in order to maintain the perfection of the
security interest in, or lien, on such collateral; and
(iii) the execution, delivery and effectiveness of this Agreement shall not operate as
an amendment of any right, power or remedy of the Collateral Agent or the Investor under any
Transaction Document, nor constitute an amendment of any provision of any Transaction
Document.
(b) Amendment to Transaction Documents. Each of the Transaction Documents are hereby
amended as follows:
(i) All references to “Notes” shall be amended to include additionally the Notes as
defined in this Agreement.
(ii) All references to “Warrants” shall be amended to include additionally the Warrants
as defined in this Agreement.
(iii) All references to “Warrant Shares” shall be amended to include additionally the
Warrant Shares as defined in this Agreement.
(iv) The defined term “Transaction Documents” is hereby amended to include this
Agreement.
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(c) Amendment to Security Agreement. The Security Agreement is hereby amended by
inserting the following Section 11:
“SECTION 11 Auction Rate Securities. Notwithstanding anything in this Agreement to the
contrary, the Collateral Agent and the Buyers shall permit the Company to obtain a loan (“Margin
Loan”) against ARS held by the Company. The Company shall use its reasonable best efforts to cause
the lender for the Margin Loan to agree to a standard form of intercreditor agreement reasonably
satisfactory to the Buyers. The Collateral Agent, for the benefit of the Buyers, shall continue to
have a first priority security interest in the ARS prior to the consummation of a Margin Loan.
After the consummation of a Margin Loan and after the execution of an intercreditor agreement
between the Collateral Agent, for the benefit of the Buyers, and the creditor making the Margin
Loan, the Collateral Agent, for the benefit of the Buyers, shall have a second priority security
interest in the ARS, and hereby agrees to subordinate its security interest in the ARS to second
position behind the lender of the Margin Loan, it being understood that such the collateral
supporting the Margin Loan shall only include ARS deposited into the applicable account on or prior
to the date of the making or drawing down of the Margin Loan and shall not include any other assets
of the Company or any of its subsidiaries or affiliates unless otherwise agreed to by the
Collateral Agent.”
(d) Amendment to the Pledge Agreement. The Pledge Agreement is hereby amended by
inserting the following Section 14:
“SECTION 14 Auction Rate Securities. Notwithstanding anything in this Agreement to the
contrary, the Collateral Agent and the Buyers shall permit the Company to obtain a loan (“Margin
Loan”) against ARS held by the Company. The Company shall use its commercially reasonable best
efforts to cause the lender for the Margin Loan to agree to a standard form of intercreditor
agreement reasonably satisfactory to the Buyers. The Collateral Agent, for the benefit of the
Buyers, shall continue to have a first priority security interest in the ARS prior to the
consummation of a Margin Loan. After the consummation of a Margin Loan and after the execution of
an intercreditor agreement between the Collateral Agent, for the benefit of the Buyers, and the
creditor making the Margin Loan, the Collateral Agent, for the benefit of the Buyers, shall have a
second priority security interest in the ARS, and hereby agrees to subordinate its security
interest in the ARS to second position behind the lender of the Margin Loan, it being understood
that such the collateral supporting the Margin Loan shall only include ARS deposited into the
applicable account on or prior to the date of the making or drawing down of the Margin Loan and
shall not include any other assets of the Company or any of its subsidiaries or affiliates unless
otherwise agreed to by the Collateral Agent.”
| 3. | REPRESENTATIONS AND WARRANTIES |
(a) Investor Bring Down. The Investor hereby represents and warrants to the Company
with respect to itself only as set forth in Section 2 of the Existing Securities Purchase Agreement
(other than Sections 2(f) and 2(g)) as to this Agreement as if such representations and warranties
were made as of the date hereof and set forth in their entirety in this Agreement, except to the
extent such representation or warranty by nature speaks only as of a date certain. Such
representations and warranties to the transactions thereunder and the
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securities issued thereby are hereby deemed for purposes of this Agreement to be references to
the transactions hereunder and the issuance of the securities hereby.
(b) Notice. Effective as of the Closing, the Investor hereby withdraws and rescinds
the Notice.
(c) Company Bring Down. Except as set forth on the Amended and Restated Disclosure
Schedules attached hereto and the public reports on Schedule 14A and Forms 10-K, 10-Q and 8-K filed
by the Company since the date of the Existing Securities Purchase Agreement, which shall amend and
restate the Disclosure Schedules attached to the Existing Securities Purchase Agreement, the
Company represents and warrants to the Investor as set forth in Section 3 of the Securities
Purchase Agreement as if such representations and warranties were made as of the date hereof and
set forth in their entirety in this Agreement, except to the extent such representation or warranty
by nature speaks only as of a date certain. Such representations and warranties to the
transactions thereunder and the securities issued thereby are hereby deemed for purposes of this
Agreement to be references to the transactions hereunder and the issuance of the securities hereby,
references therein to “Closing Date” being deemed references to the Closing Date as defined in
Section 1(b) above, and references to “the date hereof” being deemed references to the date of this
Agreement.
(d) No Event of Default. The Company represents and warrants to the Investor that
after giving effect to the terms of this Agreement, no Event of Default (as defined in the Notes)
shall have occurred and be continuing as of the date hereof.
(e) Shell Company Status. The Company has complied with all of the requirements set
forth in Rule 144(i)(2).
| 4. | CERTAIN COVENANTS AND AGREEMENTS; WAIVER |
(a) Best Efforts. Each party shall use its best efforts timely to satisfy each of the
conditions to be satisfied by it as provided in Sections 5 and 6 of this Agreement.
(b) Disclosure of Transactions and Other Material Information. On or before 8:30
a.m., New York City time, on the first Business Day following the date of this Agreement, the
Company shall issue a press release and file a Current Report on Form 8-K describing the terms of
the transactions contemplated by this Agreement in the form required by the 1934 Act and attaching
the material Transaction Documents not previously filed (including, without limitation, this
Agreement, the Security Documents, the form of the Notes and the form of the Warrants) (including
all attachments, the “8-K Filing”). From and after the filing of the 8-K Filing with the SEC, the
Investor shall not be in possession of any material, nonpublic information received from the
Company, any of its Subsidiaries or any of their respective officers, directors, employees or
agents, that is not disclosed in the 8-K Filing. The Company shall not, and shall cause each of
its Subsidiaries and its and each of their respective officers, directors, employees and agents,
not to, provide the Investor with any material, nonpublic information regarding the Company or any
of its Subsidiaries from and after the filing of the 8-K Filing with the SEC without the express
written consent of the Investor. Subject to the foregoing, neither the Company, its Subsidiaries
nor the Investor shall issue any press releases or
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any other public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior approval
of the Investor, to make any press release or other public disclosure with respect to such
transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and
(ii) as is required by applicable law and regulations (provided that in the case of clause (i) the
Investor shall be consulted by the Company in connection with any such press release or other
public disclosure prior to its release).
(c) Fees and Expenses. The Company shall reimburse the Investor for its legal and due
diligence fees and expenses in connection with the preparation and negotiation of this Agreement
and transactions contemplated thereby by paying any such amount to Xxxxxxx Xxxx & Xxxxx LLP (the
“Investor Counsel Expense”). The Investor Counsel Expense shall be paid by the Company whether or
not the transactions contemplated by this Agreement are consummated. Except as otherwise set forth
in this Agreement, each party shall pay the fees and expenses of its advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement.
(d) Holding Period. For the purposes of Rule 144, the Company acknowledges that the
holding period of (i) the Notes may be tacked onto the holding period of the Existing Notes and
(ii) the Warrants (including the corresponding Warrant Shares) may be tacked onto the holding
period of the Existing Warrants (in the case of Cashless Exercise (as defined in the Warrants)),
and the Company agrees not to take a position contrary to this Section 4(d). The Company agrees to
take all actions, including, without limitation, the issuance by its legal counsel of any necessary
legal opinions, necessary to issue Warrant Shares (so long as such Warrants are exercised by way of
a Cashless Exercise) that are freely tradable on an Eligible Market (as defined in the Warrants)
without restriction and not containing any restrictive legend without the need for any action by
the Investor.
(e) Right of First Refusal. From the date hereof until the date that no Notes remain
outstanding, the Company will not, directly or indirectly, offer, sell, grant any option to
purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or
other disposition of) any ARS (as defined in the Notes) (any such offer, sale, grant, disposition
or announcement being referred to as an “ARS Disposition”) unless the Company shall have first
complied with this Section 4(e).
(i) The Company shall deliver to the Investor an irrevocable written notice (the “Offer
Notice”) of any proposed ARS Disposition (the “Offer”) of the ARS subject to the proposed
ARS Disposition (the “Offered Securities”), which Offer Notice shall (w) state the CUSIP
number or other identifying information) and the face amount of the Offered Securities, (x)
identify and describe the price and other terms upon which the Offered Securities are to be
sold or exchanged, and the number or amount of the Offered Securities to be sold or
exchanged, (y) identify the persons or entities (if known) to which or with which the
Offered Securities are to be offered, sold or exchanged and (z) offer to issue and sell to
or exchange with the Investor all of the Offered Securities. To accept an Offer, in whole
or in part, the Investor must deliver a written notice to the Company prior to the end of
the fifth (5th) Business Day after the
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Investor’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion
of the Offered Securities that the Investor elects to purchase (the “Notice of Acceptance”).
(ii) The Company shall have twenty (20) Business Days from the expiration of the Offer
Period above (i) to offer, issue, sell or exchange all or any part of such Offered
Securities as to which a Notice of Acceptance has not been given by the Investor (the
“Refused Securities”) pursuant to a definitive agreement(s) (the “ARS Disposition
Agreement”), but only upon terms and conditions (including, without limitation, unit prices
and interest rates) that are not more favorable to the acquiring person or persons or less
favorable to the Company than those set forth in the Offer Notice and (ii) to publicly
announce, if required, (a) the execution of such ARS Disposition Agreement, and (b) either
(x) the consummation of the transactions contemplated by such ARS Disposition Agreement or
(y) the termination of such ARS Disposition Agreement (unless the Company determines that
the termination of such ARS Disposition Agreement is not material and the Investor is no
longer in possession of material non-public information upon such termination), which shall
be filed with the SEC on a Current Report on Form 8-K with such ARS Disposition Agreement
and any documents contemplated therein filed as exhibits thereto. The purchase by the
Investor of any Offered Securities is subject in all cases to the preparation, execution and
delivery by the Company and the Investor of a purchase agreement relating to such Offered
Securities reasonably satisfactory in form and substance to the Investor and its legal
counsel.
(iii) The Company and the Investor agree that if the Investor elects to participate in
the Offer neither the ARS Disposition Agreement with respect to such Offer nor any other
transaction documents related thereto (collectively, the “ARS Disposition Documents”) shall
include any term or provisions whereby the Investor shall be required to agree to any
restrictions in trading as to any securities of the Company owned by the Investor prior to
such ARS Disposition.
(iv) Notwithstanding anything to the contrary in this Section 4(e) and unless otherwise
agreed to by the Investor, the Company shall either confirm in writing to the Investor that
the transaction with respect to the ARS Disposition has been abandoned or shall publicly
disclose its intention to issue the Offered Securities, in either case in such a manner such
that the Investor will not be in possession of material non-public information, by the
twentieth (20th) Business Day following delivery of the Offer Notice. If by the
twentieth (20th) Business Day following delivery of the Offer Notice no public
disclosure regarding a transaction with respect to the Offered Securities has been made, and
no notice regarding the abandonment of such transaction has been received by the Investor,
such transaction shall be deemed to have been abandoned and the Investor shall not be deemed
to be in possession of any material, non-public information with respect to the Company.
Should the Company decide to pursue such transaction with respect to the Offered Securities,
the Company shall provide the Investor with another Offer Notice and the Investor will again
have the right of participation set forth in this Section 4(e). The Company shall not be
permitted to deliver more than one such Offer Notice with respect to any particular ARS to
the Investor in any 60 day period.
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(f) On or prior to August 15, 2008, the Company shall, with respect to each of its securities
accounts, use its reasonable best efforts to deliver a standard form of control agreement, in form
and substance reasonably satisfactory to the Collateral Agent, executed and delivered by the
Company, the Collateral Agent, for the benefit of the Buyers, and the applicable securities
intermediary, which securities intermediary shall be acceptable to the Collateral Agent in its sole
discretion.
| 5. | CONDITIONS TO COMPANY’S OBLIGATIONS HEREUNDER. |
The obligations of the Company to the Investor hereunder are subject to the satisfaction of
each of the following conditions, provided that these conditions are for the Company’s sole benefit
and may be waived by the Company at any time in its sole discretion by providing the Investor with
prior written notice thereof:
(a) The Investor shall have executed this Agreement and the Security Documents to which it is
a party and delivered the same to the Company.
(b) The Investor shall have delivered to the Company the Investor’s Existing Note and Existing
Warrants for cancellation.
(c) The representations and warranties of the Investor shall be true and correct in all
material respects (except for those representations and warranties that are qualified by
materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the
date when made and as of the Closing Date as though made at that time (except for representations
and warranties that speak as of a specific date, which shall be true and correct as of such
specified date) and the Investor shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Investor at or prior to the Closing Date.
| 6. | CONDITIONS TO INVESTOR’S OBLIGATIONS HEREUNDER. |
The obligations of the Investor hereunder are subject to the satisfaction of each of the
following conditions, provided that these conditions are for the Investor’s sole benefit and may be
waived by the Investor at any time in its sole discretion by providing the Company with prior
written notice thereof:
(a) The Company shall have executed this Agreement and each of the Security Documents to which
it is a party and delivered the same to the Investor.
(b) The Company shall have executed and delivered to the Investor the Notes and the Warrants
being issued to the Investor at the Closing.
(c) The Common Stock (I) shall be designated for quotation or listed on the Principal Market
and (II) shall not have been suspended, as of the Closing Date, by the SEC or the Principal Market
from trading on the Principal Market nor shall suspension by the SEC or the Principal Market have
been threatened, as of the Closing Date, either (A) in writing by the SEC or the Principal Market
or (B) by falling below the minimum listing maintenance requirements of the Principal Market.
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(d) The Company shall have obtained all governmental, regulatory or third party consents and
approvals, if any, necessary for the sale of the Securities.
(e) The Company shall have delivered to the Investor such other documents relating to the
transactions contemplated by this Agreement as the Investor or its counsel may reasonably request.
| 7. | TERMINATION. |
In the event that the Closing does not occur on or before five (5) Business Days from the date
hereof, due to the Company’s or the Investor’s failure to satisfy the conditions set forth in
Sections 5 and 6 hereof (and the nonbreaching party’s failure to waive such unsatisfied
conditions(s)), the nonbreaching party shall have the option to terminate this Agreement with
respect to such breaching party at the close of business on such date without liability of any
party to any other party; provided, however, if this Agreement is terminated
pursuant to this Section 7, the Company shall remain obligated to reimburse the Investor for the
expenses described in Section 4(c) above. Upon such termination, the terms hereof shall be null
and void and the parties shall continue to comply with all terms and conditions of the Transaction
Documents, as in effect prior to the execution of this Agreement.
| 8. | MISCELLANEOUS. |
(a) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which 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;
provided that a facsimile signature shall be considered due execution and shall be binding upon the
signatory thereto with the same force and effect as if the signature were an original, not a
facsimile signature.
(b) Headings. The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement.
(c) Severability. If any provision of this Agreement is prohibited by law or
otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the
provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to
apply to the broadest extent that it would be valid and enforceable, and the invalidity or
unenforceability of such provision shall not affect the validity of the remaining provisions of
this Agreement so long as this Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially
impair the respective expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes as close as possible to that of
the prohibited, invalid or unenforceable provision(s).
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(d) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of New York. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by mailing a copy thereof
to such party at the address for such 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. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(e) No Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person.
(f) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may reasonably request in
order to carry out the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
(g) No Strict Construction. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.
(h) Entire Agreement; Effect on Prior Agreements; Amendments. Except for the
Transaction Documents in effect prior to this Agreement (to the extent any such Transaction
Document is not amended by this Agreement), this Agreement supersedes all other prior oral or
written agreements between the Investor, the Company, their affiliates and Persons acting on their
behalf with respect to the matters discussed herein, and this Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or therein, neither the
Company nor the Investor makes any representation, warranty, covenant or undertaking with respect
to such matters. No provision of this Agreement may be amended other than by an instrument in
writing signed by the Company. No provision hereof may be waived other than by an instrument in
writing signed by the party against whom enforcement is sought. No
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consideration shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of the Transaction Documents unless the same consideration
also is offered to all of the parties to the Transaction Documents, holders of Notes or holders of
the Warrants, as the case may be. The Company has not, directly or indirectly, made any agreements
with the Investor relating to the terms or conditions of the transactions contemplated by the
Transaction Documents except as set forth in the Transaction Documents.
(i) Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and will be deemed to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with an overnight
courier service, in each case properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:
if to the Company:
Hythiam, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
Xxxxxx Xxxxx Xxxxx Xxxxxx Xxxxx Xxxxxx LLP
The Water Garden
0000 00xx Xxxxxx
0xx Xxxxx, Xxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
The Water Garden
0000 00xx Xxxxxx
0xx Xxxxx, Xxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
if to the Investor, to its address and facsimile number set forth in the Securities Schedule
attached hereto, or, in each case, to such other address and/or facsimile number and/or to the
attention of such other Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such change. Written confirmation of
receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender’s facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such transmission or (C)
provided by an overnight courier service shall be rebuttable evidence of personal service, receipt
by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or
(iii) above, respectively.
11
(j) Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns in accordance with the terms of
the Existing Securities Purchase Agreement.
(k) Survival. Unless this Agreement is terminated under Section 7, the
representations and warranties of the Company and the Investor contained herein and the agreements
and covenants set forth herein shall survive the Closing.
(l) Remedies. The Investor and each holder of the Securities shall have all rights
and remedies set forth in the Transaction Documents and all rights and remedies which such holders
have been granted at any time under any other agreement or contract and all of the rights which
such holders have under any law. Any Person having any rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. Furthermore, the Company recognizes that in the event
that it fails to perform, observe, or discharge any or all of its obligations under this Agreement,
any remedy at law may prove to be inadequate relief to the Investor. The Company therefore agrees
that the Investor shall be entitled to seek temporary and permanent injunctive relief in any such
case without the necessity of proving actual damages and without posting a bond or other security.
[Signature Page Follows]
12
IN WITNESS WHEREOF, the Investor and the Company have caused their respective signature page
to this Agreement to be duly executed as of the date first written above.
| COMPANY: HYTHIAM, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Signature Page to Amendment and Exchange Agreement]
IN WITNESS WHEREOF, the Investor and the Company have caused their respective signature page
to this Agreement to be duly executed as of the date first written above.
| INVESTOR: HIGHBRIDGE INTERNATIONAL LLC |
||||
| By: HIGHBRIDGE CAPITAL MANAGEMENT, LLC, its Trading Manager |
||||
| By: | ||||
| Name: | Xxxx X. Chill | |||
| Title: | Managing Director | |||
[Signature Page to Amendment and Exchange Agreement]
SECURITIES SCHEDULE
| (1) | (2) | (3) | (4) | (5) | ||||||||
| Aggregate | ||||||||||||
| Principal | ||||||||||||
| Address and | Amount of | Number of | Legal Representative’s | |||||||||
| Investor | Facsimile Number | Notes | Warrant Shares | Address and Facsimile Number | ||||||||
Highbridge International LLC |
c/o Highbridge Capital Management, LLC 0 Xxxx 00xx Xxxxxx, 00xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000 |
$ | 5,000,000 | 1,300,000 | Xxxxxxx Xxxx & Xxxxx LLP 000 Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 |
|||||||
| Attention: Xxx X. Xxxxxx
Xxxx X. Chill Facsimile: (000) 000-0000 Telephone: (000) 000-0000 Residence: Cayman Islands |
Attention: Xxxxxxx Xxxxx, Esq. Facsimile: (000) 000-0000 Telephone: (000) 000-0000 | |||||||||||
