Related Party Transactions and Outside Related Director Information

Hythiam, Inc. (HYTM)

5/1/2006 Proxy Information

Andrea Grubb Barthwell, M.D., a director, is the founder and chief executive officer of EMGlobal LLC, a healthcare and policy consulting firm providing consulting services to us. In 2005 and through March 31, 2006, we paid or accrued approximately $83,000 and $27,000, respectively, in fees to the consulting firm.

David E. Smith, M.D., our senior vice president of medical affairs, is the sole shareholder of The PROMETA Center, Inc., a California professional corporation. Under the terms of a management services agreement with the PROMETA Center, we provide and perform all nonmedical management and administrative services for the medical group. We also agreed to provide a working capital loan to the PROMETA Center up to a maximum of $1,500,000 to allow for the medical group to pay for its obligations, including our management fees. As of April 30, the amount of loan outstanding was approximately $650,000, with interest at 9.75%. Payment of our management fee is subordinate to payments of the obligations of the medical group, and repayment of the working capital loan is not guaranteed by the shareholder or other third party.