AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

TABLE OF CONTENTS

AGREEMENT AND PLAN OF MERGER

     This Agreement and Plan of Merger (this “ Agreement ”) is entered into as of January 18, 2007, by and between Hythiam, Inc., a Delaware corporation (“ Buyer ”), HCCC Acquisition Corporation, a Delaware corporation and newly-formed wholly-owned subsidiary of Buyer (“ Merger Sub ”), and Comprehensive Care Corporation, a Delaware corporation (“ Company ”). Buyer, Merger Sub and Company are referred to collectively herein as the “ Parties. ”

     This Agreement contemplates a tax-free merger of Merger Sub with and into Company in a reorganization pursuant to Code 368(a)(1)(A). Company Stockholders will receive Buyer stock in exchange for their Company stock. The Parties expect that the Merger will further their business objectives, including providing Company with access to needed additional capital and providing Buyer with an expanded ability to offer its products and services.

     Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows.

     §1. Definitions .

     “ Affiliate ” has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act.

     “ Buyer ” has the meaning set forth in the preface above.

     “ Buyer-owned Share ” means any Company Share that Buyer owns beneficially.

     “ Buyer Share ” means any share of the common stock, $0.0001 par value per share, of Buyer.

     “ Certificate of Merger ” has the meaning set forth in §2(c) below.

     “ Closing ” has the meaning set forth in §2(b) below.

     “ Closing Date ” has the meaning set forth in §2(b) below.

     “ Company ” has the meaning set forth in the preface above.

     “ Company Comfort Letter ” has the meaning set forth in §5(d) below.

     “ Company Disclosure Schedule ” has the meaning set forth in §3 below.

     “ Company Share ” means any share of the common stock, $0.01 par value per share, of Company.

     “ Company Stockholder ” means any Person who or that holds any Company Shares.

     “ Confidential Information ” means any information concerning the business and affairs of Company and its Subsidiaries that is not already generally available to the public.

     “ Conversion Ratio ” has the meaning set forth in §2(d)(v) below.

     “ DGCL ” means the General Corporation Law of the State of Delaware, as amended.

     “ Dissenting Share ” means any Company Share held of record by any stockholder who or that has exercised his, her, or its appraisal rights under the DGCL.

     “ Effective Time ” has the meaning set forth in §2(d)(i) below.

     “ Exchange Agent ” has the meaning set forth in §2(e) below.

     “ Fairness Opinion ” has the meaning set forth in §5(d) below.

     “ GAAP ” means United States generally accepted accounting principles as in effect from time to time, consistently applied.

     “ Information Statement ” means the definitive information statement relating to Company stockholder approval of the Merger.

     “ IRS ” means the Internal Revenue Service.

     “ Knowledge ” includes actual knowledge and knowledge that a Party should have after reasonable investigation.

     “ Lien ” means any mortgage, pledge, lien, encumbrance, charge, or other security interest.

     “ Material Adverse Effect ” or “ Material Adverse Change ” means any effect or change that would be (or could reasonably be expected to be) materially adverse to the business, assets, condition (financial or otherwise), operating results, operations, or business prospects of Company and its Subsidiaries, taken as a whole, or to the ability of Sellers to consummate timely the transactions contemplated hereby (regardless of whether or not such adverse effect or change can be or has been cured at any time or whether Buyer has knowledge of such effect or change on the date hereof), including any adverse change, event, development, or effect arising from or relating to (a) general business or economic conditions, including such conditions related to the business of Company and its Subsidiaries, (b) national or international political or social conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States, (c) financial, banking, or securities markets (including any suspension of trading in, or limitation on prices for, securities on The Nasdaq Global Market for a period in excess of three hours or any decline of either the Dow Jones Industrial Average or the Standard & Poor’s Index of 500 Industrial Companies by an amount in excess of 15% measured from the close of business on the date hereof), (d) changes in United States generally accepted accounting principles, (e) changes in laws, rules, regulations, orders, or other binding directives issued by any governmental entity, and (f) the taking of any action contemplated by this Agreement and the other agreements contemplated hereby.

     “ Merger ” has the meaning set forth in §2(a) below.

     “ Merger Sub ” has the meaning set forth in the preface above.

     “ Most Recent Fiscal Quarter End ” has the meaning set forth in §3(f) below.

     “ Ordinary Course of Business ” means the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency).

     “ Party ” has the meaning set forth in the preface above.

     “ Person ” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, any other business entity, or a governmental entity (or any department, agency, or political subdivision thereof).

     “ Prospectus ” means the final prospectus relating to the registration of the Buyer Shares under the Securities Act.

     “ Public Report ” has the meaning set forth in §3(e) below.

     “ Registration Statement ” has the meaning set forth in §5(c)(i) below.

     “ Requisite Company Stockholder Approval ” means the affirmative vote of the holders of a majority of the Company Shares in favor of this Agreement and the Merger.

     “ SEC ” means the Securities and Exchange Commission.

     “ Securities Act ” means the Securities Act of 1933, as amended.

     “ Securities Exchange Act ” means the Securities Exchange Act of 1934, as amended.

     “ Subsidiary ” means, with respect to any Person, any corporation, limited liability company, partnership, association, or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof or (ii) if a limited liability company, partnership, association, or other business entity (other than a corporation), a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof and for this purpose, a Person or Persons own a majority ownership interest in such a business entity (other than a corporation) if such Person or Persons will be allocated a majority of such business entity’s gains or losses or will be or control any managing director or general partner of such business entity (other than a corporation). The term “ Subsidiary ” will include all Subsidiaries of such Subsidiary.

     “ Surviving Corporation ” has the meaning set forth in §2(a) below.

     §2. Basic Transaction .

     (a)  The Merger . On and subject to the terms and conditions of this Agreement, Company will merge with and into Merger Sub (the “ Merger ”) at the Effective Time. Company will be the corporation surviving the Merger (the “ Surviving Corporation ”).

     (b)  The Closing . The closing of the transactions contemplated by this Agreement (the “ Closing ”) will take place at the offices of Dreier Stein & Kahan LLP, located at 1620 26 ^th Street, Sixth Floor, North Tower, Santa Monica, California 90404, commencing at 9:00 a.m. local time on the business day following the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the transactions contemplated hereby (other than conditions with respect to actions the respective Parties will take at the Closing itself) or such other date as the Parties may mutually determine (the “ Closing Date ”).

     (c)  Actions at the Closing . At the Closing, (i) Company will deliver to Buyer the various certificates, instruments, and documents referred to in §6(a) below, (ii) Buyer and Merger Sub will deliver to Company the various certificates, instruments, and documents referred to in §6(b) below, (iii) Buyer and Company will file with the Secretary of State of the State of Delaware a Certificate of Merger in the form attached hereto as Exhibit A (the “ Certificate of Merger ”), and (iv) Buyer will deliver to the Exchange Agent in the manner provided below in this §2 the certificate evidencing the Buyer Shares issued in the Merger.

     (d)  Effect of Merger .

     (i) General . The Merger will become effective at the time (the “ Effective Time ”) Buyer and Merger Sub file the Certificate of Merger with the Secretary of State of the State of Delaware. The Merger will have the effect set forth in the DGCL. The Surviving Corporation may, at any time after the Effective Time, take any action (including executing and delivering any document) in the name and on behalf of either Buyer or Company in order to carry out and effectuate the transactions contemplated by this Agreement.

     (ii) Certificate of Incorporation. The certificate of incorporation of Company in effect at and as of the Effective Time will remain the certificate of incorporation of Surviving Corporation without any modification or amendment in the Merger.

     (iii) Bylaws . The bylaws of Company in effect at and as of the Effective Time will remain the bylaws of Surviving Corporation without any modification or amendment in the Merger.

     (iv) Directors and Officers . The directors and officers of Company in place at and as of the Effective Time will become the directors and officers of Surviving Corporation and retain their respective positions and terms of office.

     (v) Conversion of Company Shares . At and as of the Effective Time, (A) each twelve (12) Company Shares (other than any Dissenting Share or Buyer-owned Share) will be converted into the right to receive one (1) Buyer Share (the ratio of Buyer Shares to Company Shares is referred to herein as the “ Conversion Ratio ”), (B) each Dissenting Share will be converted into the right to receive payment from Surviving Corporation with respect thereto in accordance with the provisions of the DGCL, and (C) each Buyer-owned Share will be canceled; provided, however , that the Conversion Ratio will be subject to equitable adjustment in the event of any stock split, stock dividend, reverse stock split, or other change in the number of Company Shares outstanding. No Company Share will be deemed to be outstanding or to have any rights other than those set forth above in this §2(d)(v) after the Effective Time. All fractional shares shall be paid out in cash.

     (e)  Payment Procedure .

     (i) Immediately after the Effective Time, Buyer will (A) furnish to American Stock Transfer & Trust Company (the “ Exchange Agent ”) an instruction, irrevocable for a period of at least 90 days, to issue stock certificates representing that number of Buyer Shares equal to the product of (I) the Conversion Ratio times (II) the number of outstanding Company Shares (other than any Dissenting Shares and Buyer-owned Shares) and (B) mail a letter of transmittal (with instructions for its use) in the form attached hereto as Exhibit B to each record holder of outstanding Company Shares for the holder to use in surrendering the certificates that represented his, her, or its Company Shares in exchange for a certificate representing the number of Buyer Shares to which he, she, or it is entitled.

     (ii) Buyer will not pay any dividend or make any distribution on Buyer Shares (with a record date at or after the Effective Time) to any record holder of outstanding Company Shares until the holder surrenders for exchange his, her, or its certificates that represented Company Shares.

     (iii) Buyer may instruct the Exchange Agent not to issue any Buyer Shares remaining unclaimed 90 days after the Effective Time, and thereafter each remaining record holder of outstanding Company Shares will be entitled to look to Buyer (subject to abandoned property, escheat, and other similar laws) as a general creditor thereof with respect to the Buyer Shares and dividends and distributions thereon to which he, she, or it is entitled upon surrender of his, her, or its certificates.

     (iv) Buyer will pay all charges and expenses of the Exchange Agent.

     (f)  Closing of Transfer Records . After the close of business on the Closing Date, transfers of Company Shares outstanding prior to the Effective Time will not be made on the stock transfer books of Surviving Corporation.

     §3. Company’s Representations and Warranties . Company represents and warrants to Buyer that the statements contained in this §3 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this §3), except as set forth in the Public Reports or in the disclosure schedule accompanying this Agreement and initialed by the Parties (the “ Company Disclosure Schedule ”), which Company Disclosure Schedule shall be deemed a part hereof. The Company Disclosure Schedule will be arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this §3.

     (a)  Organization, Qualification, and Corporate Power . Each of Company and its Subsidiaries is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation. Each of Company and its Subsidiaries is duly authorized to conduct business and is in good standing under the laws of each jurisdiction where such qualification is required. Each of Company and its Subsidiaries has full corporate power and authority to carry on the business in which it is engaged and to own and use the properties owned and used by it.

     (b)  Capitalization . The entire authorized capital stock of Company consists of 30,000,000 Company Shares, of which 7,655,283 Company Shares are issued and outstanding,

and 60,000 shares of Preferred Stock, of which 14,400 shares of Series A Convertible Preferred Stock are issued and outstanding. All of the issued and outstanding Company Shares Series A Convertible Preferred shares have been duly authorized and are validly issued, fully paid, and non-assessable. There are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require Company to issue, sell, or otherwise cause to become outstanding any of its capital stock. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or similar rights with respect to Company.

     (c)  Authorization of Transaction . Company has full power and authority (including full corporate power and authority) to execute and deliver this Agreement and to perform its obligations hereunder; provided, however , that Company cannot consummate the Merger unless and until it receives the Requisite Company Stockholder Approval. This Agreement constitutes the valid and legally binding obligation of Company, enforceable in accordance with its terms and conditions.

     (d)  Non-contravention . To the Knowledge of any director or officer of Company, neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Company or any of its Subsidiaries is subject or any provision of the charter or bylaws of Company or any of its Subsidiaries or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which Company or any of its Subsidiaries is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Lien upon any of its assets), except any such conflicts, breaches, violations, defaults, rights or losses which could not, individually or in the aggregate, have a Material Adverse Effect on the Company and its Subsidiaries taken together as a whole. To the Knowledge of any director or officer of Company, other than in connection with the provisions of the DGCL, the Securities Exchange Act, the Securities Act, and the state securities laws, neither Company nor any of its Subsidiaries needs to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement, except where the failure to give notice, to file, or to obtain any authorization, consent, or approval would not have a Material Adverse Effect.

     (e)  Filings with SEC . Since June 1, 2005, Company has made all filings with SEC that it has been required to make under the Securities Act and the Securities Exchange Act (collectively the “ Public Reports ”). Each of the Public Reports has complied with the Securities Act and the Securities Exchange Act in all material respects. None of the Public Reports, as of their respective dates, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. Company has delivered to Buyer, or made available through the SEC’s website at http://www.sec.gov, a correct and complete copy of each Public Report (together with all exhibits and schedules thereto and as amended to date).

     (f)  Financial Statements . Company has filed a quarterly report on Form 10-Q for the fiscal quarter ended August 31, 2006 (the “ Most Recent Fiscal Quarter End ”) and an Annual Report on Form 10-K for the fiscal year ended May 31, 2006. The financial statements included

in or incorporated by reference into these Public Reports (including the related notes and schedules) have been prepared in accordance with GAAP throughout the periods covered thereby (except as may be otherwise indicated in such financial statements or the notes thereto), and present fairly the financial condition of Company and its Subsidiaries as of the indicated dates and the results of operations of Company and its Subsidiaries for the indicated periods, are correct and complete in all material respects, and are consistent with the books and records of Company and its Subsidiaries; provided, however , that the interim statements are subject to normal year-end adjustments.

     (g)  Events Subsequent to Most Recent Fiscal Quarter End . Since the Most Recent Fiscal Quarter End, there has not been any Material Adverse Change.

     (h)  Undisclosed Liabilities . Neither Company nor any of its Subsidiaries has any liability (whether accrued, absolute, contingent or otherwise), including any liability for taxes, except for (i) liabilities set forth on the face of the balance sheet dated as of the Most Recent Fiscal Quarter End (rather than in any notes thereto) and (ii) liabilities that have arisen after the Most Recent Fiscal Quarter End in the Ordinary Course of Business (none of which results from, arises out of, relates to, is in the nature of, or was caused by any breach of contract, breach of warranty, tort, infringement, or violation of law), and which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect on Company and its Subsidiaries taken together as a whole.

     (i)  Broker’s Fees . Neither Company nor any of its Subsidiaries has any liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.

     (j)  Continuity of Business Enterprise . It is the present intention of Company to continue at least one significant historic business line, or to use at least a significant portion of its historic business assets in a business, in each case within the meaning of Reg. §1.368-1(d).

     (k)  Disclosure . The Information Statement will comply with the Securities Exchange Act in all material respects. The Information Statement will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they will be made, not misleading; provided