Exhibit 2.1
First Amendment, dated as of January 12, 1999, to the Agreement and
Plan of Merger, dated as of September 23, 1998, among YSI, CSC and Palm
Merger Corp.
FIRST AMENDMENT
TO AGREEMENT AND PLAN OF MERGER
This First Amendment ("Amendment") to the Agreement and Plan of Merger
dated as of September 23, 1998 (the "Merger Agreement") by and among Youth
Services International, Inc. ("YSI"), Correctional Services Corporation ("CSC")
and Palm Merger Corp., is entered into as of this 12th day of January, 1999.
WHEREAS, the parties desire to amend the Merger Agreement to address
certain issues;
NOW THEREFORE, in consideration of the covenants and agreements
contained herein, the Merger Agreement is hereby amended as set forth below.
Capitalized terms not otherwise defined herein shall have the meanings set forth
in the Merger Agreement.
1. Section 3.5. A new Section 3.5. shall be added as follows:
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"3.5. Assumption of Warrants.
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(a) At the Effective Time, each warrant to purchase Company Common
Stock described in Section 4.2 of the Company Disclosure Schedule (each, a
"Company Warrant"), whether then exerciseable or not, without any action on
the part of the holder, shall be deemed to constitute a warrant to acquire,
on the same terms and conditions as were applicable under such Company
Warrant, a number of shares of Parent Common Stock equivalent to (A) the
number of Shares that could have been purchased immediately prior to the
Effective Time under such Company Warrant multiplied by (B) the Exchange
Ratio (rounded down to the nearest whole number), at a price per share of
Parent Common Stock (rounded up to the nearest whole cent) equal to the
exercise price per share pursuant to such Company Warrant immediately prior
to the Effective Time divided by the Exchange Ratio. At or prior to the
Effective Time, the Company shall make all necessary arrangements with
respect to the Company Warrants to permit the assumption of the unexercised
Company Warrants by Parent pursuant to this Section 3.5.
(b) Effective at the Effective Time, Parent shall assume each
Company Warrant. At or prior to the Effective Time, Parent shall take all
corporate action necessary to reserve for issuance a sufficient number of
shares of Parent Common Stock for delivery upon exercise of Company
Warrants assumed by it in accordance with this Section."
2. Section 6.10.(a). The second and third sentences of Section 6.10.(a) shall
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be deleted in their entirety and the following sentence shall be inserted
in their place:
"The Company shall exercise its best efforts to deliver or cause to be
delivered to Parent, at least 35 days prior to the Effective Time, from
each Affiliate of the Company identified
in the foregoing list and any other person who Parent or the Company
reasonably believes to be an Affiliate of the Company, a letter in the form
attached as Exhibit A-2 (the "Company Affiliates Letter.")"
3. Section 6.10.(c). A new Section 6.10.(c) shall be added as follows:
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"(c) In order to preserve pooling-of-interests accounting treatment of the
Merger, the Company shall be entitled, with regard to Shares held by a
Person deemed by the Company to be an "Affiliate" of the Company
(within the meaning of Rule 145 under the Securities Act and for
purposes of applicable interpretations regarding the pooling-of-
interests method of accounting, and regardless of whether or not such
person is listed on Exhibit A-1), and Parent shall be entitled, with
regard to shares of Parent Common Stock held by a Person deemed by
Parent to be an "Affiliate" of Parent (within the meaning of Rule 145
under the Securities Act and for purposes of applicable
interpretations regarding the pooling-of-interests method of
accounting, and regardless of whether or not such person is listed on
the list delivered to the Company by Parent pursuant to Section
6.10.(b)), or shares of Parent Common Stock to be issued pursuant to
the terms of this Agreement to a Person deemed by Parent to be an
Affiliate of the Company (under the definition given above), to place
appropriate legends on the certificates for such Shares or shares of
Parent Common Stock, as the case may be, and to issue appropriate stop
transfer instructions to the transfer agent for the Shares or the
Parent Common Stock, as the case may be, and shall be entitled to
impose restrictions on any such Shares or shares of Parent Common
Stock, to the effect that such Shares or shares of Parent Common Stock
may only be sold, transferred or otherwise conveyed, and the holder
thereof may only reduce his interest in or risks relating to such
Shares or shares of Parent Common Stock, pursuant to an effective
registration statement under the Securities Act or in accordance with
the provisions Rule 145(d) promulgated under the Securities Act or
pursuant to an exemption from registration under the Securities Act
and, in any event, only after financial results covering at least 30
days of combined operations of the Company and Parent after the
Effective Time shall have been published. The foregoing restrictions
relating to the transferability of the shares of Parent Common Stock
to be issued to any deemed Affiliate pursuant to this Agreement shall
apply to all purported sales, transfers and other conveyances of such
shares of Parent Common Stock and to all purported reductions in the
interest in or risks relating to such shares of Parent Common Stock,
whether or not such deemed Affiliate has exchanged the certificates
previously evidencing such deemed Affiliate's Shares for certificates
evidencing shares of Parent Common Stock into which such Shares were
converted, and whether or not such deemed Affiliate has executed and
delivered a Company Affiliates Letter or a Parent Affiliates Letter."
4. Sections 8.1.(d) and 8.1.(e). The references to "January 31, 1999" in
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Sections 8.1.(d) and 8.1.(e) shall be deleted and replaced with references
to "March 31, 1999."
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5. Exhibit A-1. Exhibit A-1 shall be deleted in its entirety and Exhibit A-1
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to this Amendment shall be inserted in its place.
6. Exhibits C and D. Exhibits C and D shall be amended to reflect that they
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will be addressed to both Xxxxx & Xxxxxxx L.L.P. and Xxxxxxx Xxxxxx &
Green, P.C.
7. Exhibit E. Exhibit E shall be deleted in its entirety and Exhibit E to
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this Amendment shall be inserted in its place.
8. Company Disclosure Schedule. Section 4.14.(b) of the Company Disclosure
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Schedule shall be amended to include the following:
"Services Agreement dated as of March 18, 1998 between Youth Services
International, Inc. and P. Xxxxxxx Xxxxxxx
Advisory Services Agreement dated as of November 1, 1997 between Youth
Services International, Inc. and Xxxxx X. Xxxxxxx & Associates, Inc."
9. Counterparts. This Amendment may be executed in counterparts, each of
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which shall constitute one agreement, binding on the parties, and each
party hereby covenants and agrees to execute all duplicates or replacement
counterparts of this Amendment as may be required.
10. Merger Agreement. The terms and provisions of the Merger Agreement, as
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amended hereby, shall remain in full force and effect. All references to
the Merger Agreement contained therein shall refer to the Merger Agreement
as amended hereby.
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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by
the duly authorized officers of the parties hereto as of the date first written
above.
YOUTH SERVICES INTERNATIONAL, INC.
By:
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Name:
Title:
CORRECTIONAL SERVICES CORPORATION
By:
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Name:
Title:
PALM MERGER CORP.
By:
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Name:
Title:
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