Document:

exhibit_10-33.htm

EXHIBIT 10.33

Hythiam, Inc.

11150 Santa Monica Blvd. #1500

Los Angeles, CA  90025

August 19, 2010

Peter L. Donato

Dear Mr. Donato:

I am pleased to confirm, subject to your signature below, our offer to you for the position of Chief Financial Officer at Hythiam, Inc. (“Hythiam” or the “Company”) commencing on August 25, 2010 (Commencement Date). This is a full-time, exempt position reporting to the President and Chief Operating Officer.

Your salary will be initially set at $8,461.54 bi-weekly ($220,000.00 per year) with eligibility for discretionary annual bonuses of up to 40% of your salary based on your performance and the operational and financial performance of the Company. In addition, you will initially be granted options to purchase 400,000 shares of Employer’s common stock under the Hythiam, Inc. Stock Incentive Agreement (the “Plan”). Such shares will vest over three years from date of grant with one-third (1/3) vesting one year from the date of grant, and the remainder vesting monthly thereafter according to the Plan’s provisions. Your compensation is subject to annual review for adjustment based on, among other things, your performance and the Company’s progress toward milestones and profitability. All compensation will be paid in accordance with the Company’s usual payroll practices, and is subject to required tax and other withholding as required by law.

 

The Company will provide you with medical, dental, vision, life, short-term and long-term disability insurance and flexible spending accounts (subject to certain co-payments by you). In addition, the Company provides you the opportunity to participate in a 401(k) plan after two calendar months of service and you will have the ability to participate in the employee stock purchase plan when eligible. You will receive four weeks paid time off, consistent with Company policies.

 

You agree to sign and be bound by the Company’s Employee Innovation, Proprietary Information and Confidentiality Agreement (copy attached) at the commencement of your employment. You also acknowledge that in the unlikely event any controversy should arise out of or concerning your employment at the Company, that this controversy or dispute will be resolved by final and binding arbitration as outlined in the Employee Handbook.

Notwithstanding any other term set forth in this agreement, we agree that your employment may be terminated at any time with or without cause by either of us and that your employment is on an “at will” basis. Your acceptance of this offer represents the final, complete agreement between you and Hythiam, Inc. It supersedes all prior oral and written agreements and discussions between you and Hythiam, Inc.

No officer, employee or other representative of the Company has the authority to modify or waive the matters set forth herein except the CEO, or COO who must do so in writing. This offer is contingent upon satisfactory completion of the Company’s standard background investigation and pre-employment drug and alcohol screen. I am delighted to be able to confirm to you your terms of employment. If you have any questions please feel free to discuss them with me. If the above terms are acceptable, please sign this letter as agreed and accepted and return to me.

Sincerely,

	
/s/ THOMAS ABT

	  	
August 19, 2010

	
Director of Recruitment

	  	
Date

	  	  	  
	
/s/ RICHARD A. ANDERSON

	  	
August 25, 2010

	
President and Chief Operating Officer

	  	
Date

AGREED AND ACCEPTED:

	
/s/ PETER L. DONATO

	  	
August 19, 2010

	
Peter L. Donato

	  	
DateUnassociated Document

     

    
      Exhibit
10.12

      

      Bridge
Loan and Financing Agreement

      

      This
Bridge Financing Agreement (the “Agreement”) is related to
funding provided by Pope Asset, Ancora Greater China Fund, LP and MMH Group LLC.
(collectively, “Investors”) that will be
utilized to complete the pre-reverse merger activities for Korea Jinduren
International Fashion Co. Ltd. (“vLov”), a Chinese company
based at No. 1 Building, West Xiangjiang Road, Shishi City, Fujian Province,
China which designs, manufactures, markets and sells branded contemporary
fashion clothing and accessories to the 15-34 age group (30% of the PRC
Population) through 650 points of sale which are located at retail
and  department stores throughout the PRC. vLov shall proceed through
the process of reverse merger (“RTO”) to be listed as a public
company in the United States and to close a financing at the same time in the
minimum amount of $6,000,000 (the “Financing;” collectively with
the RTO, referred to herein as the “APO”).

      

      A.  Parties to this
Agreement:

      

      
        	
                 
      

              	
                (1)

              	
                Investors will
      provide a bridge loan of US$550,000 towards covering the costs for
      pre-auditing, U.S. auditing, China legal, US legal and other necessary
      professional fees for vLov to complete the reverse merger process to
      obtain public status in the US.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                The
      investors and their affiliates, have experience and knowledge in the
      reverse merger process.  The Company’s advisors shall manage,
      the entire process including but not limited to, auditing, legal, roadshow
      coordination, etc. necessary for vLov to become a public company in the
      U.S.  Investors will provide, but are not obligated to provide
      assistance in this process.

              

      

      

      B.  Obligations:

      

      
        	
                 
      

              	
                (1)

              	
                Investors
      shall provide a bridge Loan of US$550,000 to be held in an
      escrow established by the Company’s US legal firm, Richardson Patel
      (“Richardson Patel
      LLP”) to cover the
following:

              

      

      

      
        	 
      	
                (a)

              	
                Engagement
      and payment through escrow to a Chinese accounting and legal firm, to
      perform the required pre-audit and the legal due diligence, setting up the
      off-shore structure, etc. for vLov.

                 

              
	 
      	
                (b)

              	
                Engagement
      of and payment through escrow to a U.S. auditing firm (“Moore Stephens”) and
      Richardson Patel, which are necessary to complete an SEC-approved audit
      and the required reverse merger of vLov.

                 

              

      

      
        	 
      	
                (c)

              	
                Investors
      will have the right of first refusal to provide the capital for the
      Financing. The specifics of the Financing proposal by the Investors will
      be clearly delineated in a separate Letter of Intent or Term Sheet which
      will be presented to the Company; provided, however, that the minimum
      pre-money valuation for the Financing is US$52.5M (based on  7X
      2007 Net Profits of US$7.5M).

                 

              
	 
      	
                (d)

              	
                The
      investors shall provide a public shell company quoted on the OTC Bulletin
      Board suitable for the RTO that is acceptable to the vLov.

                 

              

      

      
        	 
      	
                (e)

              	
                Any
      extra payments beyond $550,000 that are deemed necessary to complete the
      reverse merger process for vLov, not including any cash component
      necessary to acquire the shell, will be negotiated in good faith with vLov
      directly and payment for such services being made at the time the
      RTO/Funding is completed and as a portion for a use of
      proceeds.

              

      

        

      
        	
                 
      

              	
                (2)

              	
                The
      Company’s Financial Advisor/Consultant and the Company (where
      necessitated) shall provide the
following:

              

      

       

      
        	 	

                (a)

              	

                Assisting
      and managing the process so Investors can complete further due diligence
      of vLov.

                 

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      
        	 
      	
                (b)

              	
                Engagement
      with Richardson Patel LLP to set up the escrow account and manage the
      payment from the escrow account to various professionals engaged to
      perform the necessary services required for the reverse
      merger.

                 

              
	 
      	
                (c)

              	
                Coordinating
      between Investors, consultants and vLov, in addition to investment bankers
      (only if necessary), to ensure a smooth completion of the reverse merger
      and funding process for vLov.

              

      

       

      C.  Terms:

      

      Commitment. Within seven (7)
business days after all parties execute this Agreement, Investors, on a prorata
basis, shall transfer US$250,000 of the required $550,000 to an escrow account
established by Richardson Patel LLP specifically for the use of payment to
designated service providers and consultants for vLov, as set forth on Schedule
A, attached hereto. Once the formal agreements between Richardson Patel and
Moore Stephens have been established and provided for review, the Investors will
contribute the additional $300,000 on a prorate basis, by wire no less than five
(5) business days to the escrow account.

      

      
        	
                 
      

              	
                (1)

              	
                Repayment of Bridge Loan and
      Entitlement of Pubco shares.  The parties agree that VLOV
      shall have no obligation to repay the Bridge Loan prior to October 1,
      2009, provided that VLOV shall be obligated to repay the Bridge Loan in
      full on or after October 1, 2009 when the initial private (or public)
      placement is completed. The Investors shall also receive stock of Pubco
      (as defined below) upon the closing of the APO equal to 1.0% of the total
      shares of common stock outstanding after the RTO, but before the
      Financing, on a prorata basis per the ownership percentages in Schedule A
      attached hereto.  These shares issued to the Investors, or its
      nominees, shall be initially restricted 144 shares.  After the
      completion of the Financing, vLov agrees to
      register these shares in the registration statement to be filed under the
      same terms as in the Financing Agreement. This agreement does not expire
      until the shares are issued and the loan of $550,000 is returned to the
      Investors, at which time all the obligations from both parties pursuant to
      this Agreement shall be considered
fulfilled.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                Provision of
      Shell.  The Investors shall provide a qualified merger
      candidate that is a US public company quoted on the OTC Bulletin Board
      (“Pubco”).  The total consideration paid by vLov for Pubco will
      be 4.0% of the total outstanding common shares of Pubco at the time of the
      RTO (but before the issuance of stock to investors in the
      Financing).  No other cash consideration shall be paid by vLov
      for Pubco.  For avoidance of doubt, the 4.0% of the total
      outstanding common shares of Pubco provided to the Investors shall be
      proportioned to each Investor based upon the amount of funds contributed
      by each Investor to obtain, acquire, etc. the Pubco divided by total cost
      of Pubco.  Additionally, each Investor has the right, but not
      the obligation, to contribute their prorate share of the Pubco cost based
      upon the ownership percentages outlined in Schedule
  B.

              

      

      

      
        	
                 
      

              	
                (3)

              	
                Entire
      contribution.  US$550,000 is the entire contribution
      obligation of the Investors, excluding any monies that the investors might
      pay to acquire the public shell company. There shall be no additional
      contribution from, nor refund to Investors regardless of the actual cost
      situation.

              

      

      

      
        	
                 
      

              	
                (4)

              	
                Failure. In case the
      reverse merger process is aborted at any time by the vLov side after
      consummating this agreement, vLov shall refund all the costs spent up to
      the time of termination back to the Investors and the balance of the
      monies in the Escrow will also be forwarded back to the Investors. In
      addition, any failure of the reverse merger process directly related to
      changes in the overall Chinese law or regulations, the Company agrees to
      reimburse the investors for the money spent through that point, including
      all monies remaining in escrow.  In both cases, no equity of any
      kind shall be granted to the Investors and Investors shall have no
      obligation of any kind to vLov.

              

      

      

      
        	
                 
      

              	
                (5)

              	
                Put Option. In the event
      that the Chinese Government (or any agency) proceeds with an action
      against or challenges specifically the vLov merger (not including an
      overall blanket ruling) that adversely affects this proposed transaction
      and vLov cannot cure such governmental action or otherwise address the
      material adverse effect to the reasonable satisfaction of the Investors,
      vLov shall promptly pay to the Investors, an amount equal to the monies
      loaned up to that point, including any monies left in escrow.
      Additionally, if the auditor or legal counsel resigned due to a dispute
      with vLov and another firm can not be retained due to Company’s
      shortcomings, Investors would be paid back all money loaned up to that
      point.

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      
        	
                 
      

              	
                (6)

              	
                Make Whole. To the
      extent that vLov’s audited 2007 Net Income falls below $7.0 million US,
      Investors’ equity position (on a pro-rata basis) at the time of the share
      exchange will be adjusted proportionately to reflect such
      shortfall.  The Investors’ equity interest is to be adjusted
      upward by the product of the formula: ($7.0 million/ Audited 2007 Net
      Income) x current Investor ownership percentage (1.0%).  For
      avoidance of doubt, if the Company’s audited 2007 Net Income was $5
      million, the Investment Group’s equity position (1.0%) in the Pubco
      referenced above would be increased by 40% to 1.40% on a pro-rata basis.
      Additionally, if the audited 2007 net income for vLov were to be less than
      $3.5 million, the investors would at their option be able to recover all
      monies loaned to date, including money in escrow and terminate this bridge
      agreement.

              

      

      

      
        	
                 
      

              	
                (7)

              	
                Indemnification and
      Confidentiality. The parties shall provide standard indemnification
      and defense for claims arising on the reverse merger and on the resulting
      Pubco. All parties agree to abide by the standard confidentiality terms.
      No portion of this Agreement, nor any info on vLov, Pubco or any project
      related information shall be disclosed to any third
  party.

              

      

      

      
        	
                 
      

              	
                (8)

              	
                Entire
      Agreement.  This Agreement, the Promissory Note and the
      Escrow Agreement constitutes the entire agreement of the parties on the
      bridge financing  portion of the transations contemplated
      hereby.

              

      

      

      
        	
                 
      

              	
                (9)

              	
                Participation Right. In
      the event the APO closes, for a period of Twelve (12) months following the
      execution of this agreement following the closing of the APO, vLov agrees
      to give Investors, and
      their nominees or affiliates, the right to participate on any type of debt
      or equity securities issued or proposed to be issued by
      Pubco  (“Future  Securities”)
      in the same amount as such Investor invested in the Financing (if
      any).  The Investors and their nominees or affiliates, will have
      the right, but not the obligation, to participate and invest up to the
      same about such Investor invested in the Financing (if
      any).  This right to participate shall survive any termination
      of this Agreement or repayment of the monies invested by the Investors
      pursuant hereto for the full 12 month
term.

              

      

      

      
        	
                 
      

              	
                (6)

              	
                Execution of
      Agreement.  The parties may execute this Agreement
      individually or in combination, in one or more counterparts, each of which
      shall be an original and all of which will constitute one and the same
      agreement.  The parties hereby agree that an executed facsimile
      copy of this Agreement may be transmitted to either party and be deemed an
      original for purposes hereof.

              

      

      

      
        	
                 
      

              	
                (7)

              	
                Lock-Up Agreement.
      Shares owned by senior management, their relatives, and affiliates will be
      locked-up until twelve (12) months after the registration statement
      associated with this transaction and the RTO is declared
      effective.

              

      

      

      
        	
                 
      

              	
                (8)

              	
                Governing Law. This
      agreement will be government under a binding arbitration agreement with
      the State of New York, United States of
America.

              

      

      

      
        	
                 
      

              	
                (9)

              	
                Additional Actions. vLov
      and the Investors agree that the closing of the RTO will have to be
      concurrent with the closing of the Financing accepted by both vLov and
      Investors and or other funding sources. vLov and the Investors also agree
      that it will be necessary and appropriate to enter into other documents to
      set forth the terms of the various steps of the RTO as contemplated by
      this Agreement, including but not limited to, (i) a share exchange
      agreement with the public shell; and (ii) a registration rights agreement;
      and (iii) a securities purchase agreement, and the parties covenant and
      agree to negotiate in good faith such additional agreements to contain
      terms and provisions customary in transactions of such nature, and upon
      agreement in good faith of such terms, to execute and deliver such
      additional agreements.  vLov agrees to retain Hayden
      Communications International, Inc. to provide Investor Relations and
      consulting services for the company under a one year agreement just prior
      to the completing of the RTO.

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      
        	
                 
      

              	
                (10)

              	
                Signatory. Mr. Qing Qing
      Wu, Chairman, and as a majority shareholder, has full authority and board
      approval to enter into this binding
agreement.

              

      

      

       

      Agreed to
and approved by:

       

      
        	

                Pope
      Asset Management, LLC, Manager of

                Pope
      Investments II LLC

              	 	 
	 	 	 	 
	By:	/s/ William P.
      Wells	 	June 11,
    2008
	William P. Wells,
      Managing Member	 	 
	 	 	 
	Ancora Greater China
      Fund, LP (Ancora)	 	 
	 	 	 
	By:	/s/ John
      Micklitsch	 	June 11,
    2008
	John Micklitsch,
      Managing Member	 	 
	 	 	 
	MMH Group,
    LLC	 	 
	 	 	 
	By:	/s/ Matthew
      Hayden	 	June 11,
    2008
	Matthew Hayden,
      President	 	 
	 	 	 
	

                Korea
      Jinduren International Fashion Co. Ltd. (vLov)

              	 	 
	 	 	 
	By:	/s/ Qing Qing
      Wu	 	June 11,
    2008
	Qing Qing Wu,
      Chairman	 	 
	Jinduren
      International Fashion Co. Ltd	 	 

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Schedule
A

      

      List
of Investors and Ownership Percentages for Bridge Investment

       

      
        	Investor	Amount	Ownership
  %
	1. Pope Investments
      II LLC	$400,000	72.73%
	2. Ancora Greater
      China Fund, LP (Ancora)	$150,000 	27.27%
	3. MMH Group,
      LLC	$N/A	N/A
	 	$550,000	100.00%

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Schedule
B

      

      List
of Investors and Ownership Percentages for Shell Participation

      
         

        
          	Investor	Amount	Ownership
  %
	1. Pope Investments
      II LLC	58.2%	58.2%
	2. Ancora Greater
      China Fund, LP (Ancora)	21.8%	21.8%
	3. MMH Group,
      LLC	20.0%	20.0%
	 	100.00%	100.0%

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