EXHIBIT 8.1
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[LETTERHEAD OF XXXXXXX XXXXXX & GREEN, P.C.]
February 16, 1999
Correctional Services Corporation
0000 Xxxx Xxxxxx - Xxxxx 0000
Xxxxxxxx, Xxxxxxx 00000
Re: Agreement and Plan of Merger among Correctional Services
Corporation, Palm Merger Corp., and Youth Services International, Inc.
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Ladies and Gentlemen:
We have acted as counsel to Correctional Services Corporation, a
Delaware corporation ("Parent"), and Palm Merger Corp., a Maryland corporation
wholly owned by Parent ("Merger Subsidiary"), in connection with the proposed
merger (the "Merger") of the Merger Subsidiary with and into Youth Services
International, Inc., a Maryland corporation (the "Company"), pursuant to the
terms of the Agreement and Plan of Merger, dated as of September 23, 1998 (the
"Merger Agreement"), by and among the Company, the Parent and the Merger
Subsidiary, as described in more detail in the Merger Agreement. This opinion
is being provided in satisfaction of the condition set forth in Section 7.2(e)
of the Merger Agreement. All capitalized terms, unless otherwise specified,
have the meanings assigned to them in the Merger Agreement.
In connection with the preparation of this opinion, we have examined
and with your consent relied upon (without any independent investigation or
review thereof) originals or copies, certified or otherwise identified to our
satisfaction, of the following documents (including all exhibits and schedules
thereto): (1) the Agreement; (2) the Registration Statement on Form S-4 filed
with the Securities and Exchange Commission (the "Registration Statement")
and/or the Proxy Statement/Prospectus of Parent and the Company; (3) certain
written representations and certifications made to us by Parent; (4) certain
written representations and certifications made to us by the Company (such
representations and certifications of the Parent and the Company, collectively
referred to herein as the "Representations and Warranties," are annexed hereto
as exhibits); (5) instruments and documents related to the formation,
organization and operation of Parent, Merger Subsidiary and the Company or to
the consummation of the Merger and the
Correctional Services Corporation
February 16, 1999
Page 2
transactions contemplated thereby and (6) such other documents as we have deemed
necessary or appropriate to enable us to render the opinion below. In addition,
we have reviewed the form of opinion of counsel received by the Company from the
Company's counsel, Xxxxx & Xxxxxxx L.L.P., with respect to the tax consequences
of the proposed transaction (the "Company Counsel's Opinion").
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such copies.
In connection with rendering this opinion, we also have assumed or
obtained representations that:
1. All information contained in each of the documents we have examined
and relied upon in connection with the preparation of this opinion is accurate
and completely describes all material facts relevant to our opinion, all copies
are accurate and all signatures are genuine. We have also assumed that there has
been (or will be by the Effective Time of the Merger) due execution and delivery
of all documents where due execution and delivery are prerequisites to the
effectiveness thereof.
2. The Merger will be consummated in accordance with the Maryland
General Corporation Law and will qualify as a statutory merger under such law.
3. All representations made in the exhibits hereto are true, correct,
and complete in all material respects. Any representation or statement made "to
the best of knowledge" or similarly qualified is correct without such
qualification.
4. The Merger will be consummated in accordance with the Agreement and
as described in the Proxy Statement/Prospectus (including satisfaction of all
covenants and conditions to the obligations of the parties without amendment or
waiver thereof); each of Parent, Merger Subsidiary and the Company will comply
with all reporting obligations with respect to the Merger required under the
Internal Revenue Code of 1986, as amended (the "Code") and the Treasury
Regulations promulgated thereunder; and the Agreement and all other documents
and instruments referred to therein or in the Proxy Statement/Prospectus are
valid and binding in accordance with their terms.
5. The Company Counsel's Opinion has been concurrently delivered and
not withdrawn.
Correctional Services Corporation
February 16, 1999
Page 3
Opinion - Federal Income Tax Consequences
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Based upon and subject to the qualifications and assumptions set forth
herein, and assuming that, as of the Effective Time of the Merger and following
the Merger there will be no acts or omissions which will violate or be
inconsistent with any of the Representations and Warranties, we are of the
opinion that:
1. The Merger will constitute a reorganization pursuant to Section
368(a) of the Code and Parent, Merger Subsidiary and the Company will each be
"party to the reorganization" within the meaning of Section 368(b) of the Code;
and
2. No gain or loss will be recognized for United States Federal income
tax purposes by the Parent or Merger Subsidiary as a result of the Merger.
In addition to the assumptions set forth above, this opinion is
subject to the exceptions, limitations and qualifications set forth below:
1. This opinion is based upon applicable current provisions of the
Code, Treasury Regulations, and interpretations of the foregoing as expressed in
pertinent judicial authorities, administrative determinations (including the
practices and procedures of the Internal Revenue Service (the "IRS")) of the
IRS, and such other authorities as we have considered relevant, all as of the
date hereof. An opinion of counsel merely represents counsel's best judgment
with respect to the probable outcome on the merits and is not binding on the IRS
or the courts. There can be no assurance that positions contrary to our opinion
will not be taken by the IRS, or that a court considering the issues would not
hold contrary to such opinion. Parent has not requested a ruling from the IRS
(and no ruling will be sought) as to any of the federal income tax consequences
addressed in this opinion. Furthermore, no assurance can be given that future
legislative, judicial or administrative changes, on either a prospective or
retroactive basis, would not adversely affect the accuracy of the opinion
expressed herein. We undertake no responsibility to advise you of any new
developments in the law or in the application or interpretation of the Federal
income tax laws.
2. This letter addresses only the specific tax opinion set forth above.
This letter does not address any other Federal, state, local or foreign tax
consequences that may result from the Merger or any other transaction (including
any transaction related to the Merger or contemplated by the Merger Agreement).
3. Our opinion is intended to address only the United States Federal
tax consequences to Parent and Merger Subsidiary and is not intended to address
(nor may it be relied upon with respect to) the tax consequences to the Company
or the Company's shareholders.
Correctional Services Corporation
February 16, 1999
Page 4
4. Our opinion set forth herein is based upon the description of the
contemplated transactions as set forth above in the Agreement and the Proxy
Statement/Prospectus. If the actual facts relating to any aspect of the
transactions differ from this description in any material respect, our opinion
may become inapplicable. In the event any of the Representations and Warranties
or any of the assumptions upon which we have relied to issue this opinion is
incorrect, our opinion might be adversely affected and may not be relied upon.
This opinion is provided solely for the use of Parent. This opinion
may not, without our prior consent, be relied upon, used, circulated, quoted or
otherwise referred to in any manner by any other person, firm, governmental
authority, entity or party whatsoever, including the Company shareholders. We
hereby consent to the use of this opinion letter as an exhibit to the
Registration Statement and to the use of our name in the Registration Statement.
In giving the consent, we do not thereby admit that we are an "expert" within
the meaning of the Securities Act of 1933, as amended.
Sincerely yours,
XXXXXXX XXXXXX & GREEN, P.C.
/s/ Xxxxxxx Xxxxxx & Green, P.C.
