Under Section 902 of the New York Not-for-Profit Corporation Law and Section 2852 of the New York Education Law

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1 PLAN OF MERGER BY AND AMONG SUCCESS ACADEMY CHARTER SCHOOLS NYC AND SUCCESS ACADEMY CHARTER SCHOOL BRONX 1 AND SUCCESS ACADEMY CHARTER SCHOOL BRONX 2 AND SUCCESS ACADEMY CHARTER SCHOOL UPPER WEST AND SUCCESS ACADEMY CHARTER SCHOOL BED-STUY 1 AND SUCCESS ACADEMY CHARTER SCHOOL BED-STUY 2 AND SUCCESS ACADEMY CHARTER SCHOOL COBBLE HILL AND SUCCESS ACADEMY CHARTER SCHOOL WILLIAMSBURG Under Section 902 of the New York Not-for-Profit Corporation Law and Section 2852 of the New York Education Law This Plan of Merger (the Plan ), dated as of September 20, 2013, is by and among SUCCESS ACADEMY CHARTER SCHOOLS NYC (f/k/a Harlem Success Academy Charter School 3) ( SA-NYC ), SUCCESS ACADEMY CHARTER SCHOOL BRONX 1 (f/k/a Bronx Success Academy Charter School 1) ( SA-BX1 ), SUCCESS ACADEMY CHARTER SCHOOL BRONX 2 (f/k/a Bronx Success Academy Charter School 2) ( SA- BX2 ), SUCCESS ACADEMY CHARTER SCHOOL UPPER WEST (f/k/a Upper West Success Academy Charter School) ( SA-UW ), SUCCESS ACADEMY CHARTER SCHOOL BED-STUY 1 (f/k/a Brooklyn Success Academy Charter School 1) ( SA-BS1 ), SUCCESS ACADEMY CHARTER SCHOOL BED-STUY 2 (f/k/a Brooklyn Success Academy Charter School 2) ( SA-BS2 ), SUCCESS ACADEMY CHARTER SCHOOL COBBLE HILL (f/k/a Brooklyn Success Academy Charter School 3) ( SA-CH ), and SUCCESS ACADEMY CHARTER SCHOOL WILLIAMSBURG (f/k/a Brooklyn Success Academy Charter School 4) ( SA-WB and, together with SA-NYC, SA-BX1, SA-BX2, SA-UW, SA-BS1, SA-BS2, and SA-CH, the Constituent Corporations ), each a New York not-for-profit education corporation. WITNESSETH: WHEREAS, each Constituent Corporation is a not-for-profit corporation duly organized and existing under the laws of the State of New York; Revised: 9/18/2013

2 WHEREAS, SA-NYC was established and is operating the charter schools known as Success Academy Charter School Harlem 1 (f/k/a Harlem Success Charter School) (the SA-H1 Charter School ), Success Academy Charter School Harlem 2 (f/k/a Harlem Success Academy Charter School 2) (the SA-H2 Charter School ), Success Academy Charter School Harlem 3 (f/k/a Harlem Success Academy Charter School 3) (the SA-H3 Charter School ), Success Academy Charter School Harlem 4 (f/k/a Harlem Success Academy Charter School 4) (the SA-H4 Charter School ), Success Academy Charter School Harlem 5 (f/k/a Bronx Success Academy Charter School 5) (the SA-H5 Charter School ), Success Academy Charter School Union Square (f/k/a Success Academy Charter School Manhattan 1) (the SA-US Charter School ), Success Academy Charter School Hell s Kitchen (f/k/a Success Academy Charter School Manhattan 2) (the SA-HK Charter School ), Success Academy Charter School Bronx 3 (f/k/a Success Academy Charter School Manhattan 3) (the SA-BX3 Charter School ), Success Academy Charter School Fort Greene (f/k/a Success Academy Charter School Brooklyn 5) (the SA-FG Charter School ), Success Academy Charter School Prospect Heights (f/k/a Success Academy Charter School Brooklyn 6) (the SA-PH Charter School ), and Success Academy Charter School Crown Heights (f/k/a Success Academy Charter School Brooklyn 7) (the SA-CR Charter School and, together with the SA-H1 Charter School, the SA-H2 Charter School, the SA-H3 Charter School, the SA-H4 Charter School, the SA-H5 Charter School, the SA-US Charter School, the SA-HK Charter School, the SA-BX3 Charter School, the SA-FG Charter School, the SA-PH Charter School, the SA-CR Charter School, the SA-NYC Charter Schools ), independent and autonomous public schools chartered under the New York Charter Schools Act of 1998, Chapter 4 of the Laws of 1998, as amended (the Charter Act ), pursuant and subject to (a) the Amended and Restated Second Renewal Charter Agreement, dated November 1, 2013, as amended (the SA-NYC Charter Agreement ), by and between the Board of Trustees of the State University of New York (the Board of Trustees ) and SA-NYC, (b) the Provisional Charter issued to Harlem Success Academy Charter School 3 (subsequently renamed SA-NYC) on March 11, 2008, as renewed by the Board of Trustees on February 26, 2013 and as subsequently amended, (the SA-NYC Provisional Charter ), by the Board of Regents of The University of the State of New York (the Board of Regents ) for and on behalf of the New York State Education Department and (c) the applicable provisions of the Charter Act and the Education Law of New York, as amended (the Education Law ); WHEREAS, SA-BX1 was established and is operating the charter school known as Success Academy Charter School Bronx 1 (the SA-BX1 Charter School ), an independent and autonomous public school chartered under the Charter Act, pursuant and subject to (a) the Charter Agreement, dated October 29, 2009, as amended (the SA-BX1 Charter Agreement ), by and between the Board of Trustees and Eva Moskowitz (the applicant for SA-BX1), (b) the Provisional Charter issued on February 17, 2010, as amended, by the Board of Regents for and on behalf of the New York State Education Department and (c) the applicable provisions of the Charter Act and the Education Law; WHEREAS, SA-BX2 was established and is operating the charter school known as Success Academy Charter School Bronx 2 (the SA-BX2 Charter School ), an independent and autonomous public school chartered under the Charter Act, pursuant and subject to (a) the Charter Agreement, dated October 23, 2009, as amended (the SA-BX2 Charter Agreement ), by and between the Board of Trustees and Eva Moskowitz (the applicant for SA-BX2), (b) the Provisional Charter issued on February 17, 2010, as amended (the SA-BX2 Provisional 2

3 Charter ), by the Board of Regents for and on behalf of the New York State Education Department and (c) the applicable provisions of the Charter Act and the Education Law; WHEREAS, SA-UW was established and is operating the charter school known as Success Academy Charter School Upper West (the SA-UW Charter School ), an independent and autonomous public school chartered under the Charter Act, pursuant and subject to (a) the Charter Agreement, dated October 27, 2010, as amended (the SA-UW Charter Agreement ), by and between the Board of Trustees and Eva Moskowitz (the applicant for SA- UW), (b) the Provisional Charter issued on November 16, 2010, as amended, by the Board of Regents for and on behalf of the New York State Education Department and (c) the applicable provisions of the Charter Act and the Education Law; WHEREAS, SA-BS1 was established and is operating the charter school known as Success Academy Charter School Bed-Stuy 1 (the SA-BS1 Charter School ), an independent and autonomous public school chartered under the Charter Act, pursuant and subject to (a) the Charter Agreement, dated October 27, 2010, as amended (the SA-BS1 Charter Agreement ), by and between the Board of Trustees and Eva Moskowitz (the applicant for SA- BS1), (b) the Provisional Charter issued on November 16, 2010, as amended, by the Board of Regents for and on behalf of the New York State Education Department and (c) the applicable provisions of the Charter Act and the Education Law; WHEREAS, SA-BS2 was established and is operating the charter school known as Success Academy Charter School Bed-Stuy 2 (the SA-BS2 Charter School ), an independent and autonomous public school chartered under the Charter Act, pursuant and subject to (a) the Charter Agreement, dated August 11, 2011, as amended (the SA-BS2 Charter Agreement ), by and between the Board of Trustees and Eva Moskowitz (the applicant for SA- BS2), (b) the Provisional Charter issued on September 13, 2011, as amended, by the Board of Regents for and on behalf of the New York State Education Department and (c) the applicable provisions of the Charter Act and the Education Law; WHEREAS, SA-CH was established and is operating the charter school known as Success Academy Charter School Cobble Hill (the SA-CH Charter School ), an independent and autonomous public school chartered under the Charter Act, pursuant and subject to (a) the Charter Agreement, dated August 11, 2011, as amended (the SA-CH Charter Agreement ), by and between the Board of Trustees and Eva Moskowitz (the applicant for SA- CH), (b) the Provisional Charter issued on September 13, 2011, as amended, by the Board of Regents for and on behalf of the New York State Education Department and (c) the applicable provisions of the Charter Act and the Education Law; WHEREAS, SA-WB was established and is operating the charter school known as Success Academy Charter School Williamsburg (the SA-WB Charter School and, together with the SA-NYC Charter Schools, the SA-BX1 Charter School, the SA-BX2 Charter School, the SA-UW Charter School, the SA-BS1 Charter School, the SA-BS2 Charter School, and the SA-CH Charter School, the Charter Schools ), an independent and autonomous public school chartered under the Charter Act, pursuant and subject to (a) the Charter Agreement, dated August 11, 2011, as amended (the SA-WB Charter Agreement ), by and between the Board of Trustees and Eva Moskowitz (the applicant for SA-WB), (b) the Provisional Charter issued on September 13, 2011, as amended, by the Board of Regents for and on behalf of the New York 3

4 State Education Department and (c) the applicable provisions of the Charter Act and the Education Law; WHEREAS, the Board of Trustees of SA-NYC (the SA-NYC Board ) has determined that it is advisable and in the best interest of SA-NYC that, subject to the terms and conditions set forth in this Plan, the Constituent Corporations combine into a single not-for-profit education corporation through the statutory merger of SA-BX1, SA-BX2, SA-UW, SA-BS1, SA- BS2, SA-CH, and SA-WB (collectively, the Merging Corporations ) with and into SA-NYC (the Merger ); WHEREAS, the Board of Trustees of SA-BX1 (the SA-BX1 Board ) has determined that it is advisable and in the best interest of SA-BX1 that, subject to the terms and conditions set forth in this Plan, the Constituent Corporations combine into a single not-for-profit education corporation through the Merger; WHEREAS, the Board of Trustees of SA-BX2 (the SA-BX2 Board ) has determined that it is advisable and in the best interest of SA-BX2 that, subject to the terms and conditions set forth in this Plan, the Constituent Corporations combine into a single not-for-profit education corporation through the Merger; WHEREAS, the Board of Trustees of SA-UW (the SA-UW Board ) has determined that it is advisable and in the best interest of SA-UW that, subject to the terms and conditions set forth in this Plan, the Constituent Corporations combine into a single not-for-profit education corporation through the Merger; WHEREAS, the Board of Trustees of SA-BS1 (the SA-BS1 Board ) has determined that it is advisable and in the best interest of SA-BS1 that, subject to the terms and conditions set forth in this Plan, the Constituent Corporations combine into a single not-for-profit education corporation through the Merger; WHEREAS, the Board of Trustees of SA-BS2 (the SA-BS2 Board ) has determined that it is advisable and in the best interest of SA-BS2 that, subject to the terms and conditions set forth in this Plan, the Constituent Corporations combine into a single not-for-profit education corporation through the Merger; WHEREAS, the Board of Trustees of SA-CH (the SA-CH Board ) has determined that it is advisable and in the best interest of SA-CH that, subject to the terms and conditions set forth in this Plan, the Constituent Corporations combine into a single not-for-profit education corporation through the Merger; WHEREAS, the Board of Trustees of SA-WB (the SA-WB Board and, together with the SA-NYC Board, the SA-BX1 Board, the SA-BX2 Board, the SA-UW Board, the SA-BS1 Board, the SA-BS2 Board, and the SA-CH Board, the Constituent Boards ) has determined that it is advisable and in the best interest of SA-WB that, subject to the terms and conditions set forth in this Plan, the Constituent Corporations combine into a single not-for-profit education corporation through the Merger; WHEREAS, each Constituent Board has, subject to the terms and conditions set forth in this Plan, approved the Merger and this Plan. NOW, THEREFORE, in consideration of the representations, warranties and mutual agreements herein contained, the parties hereby agree that all of the assets and liabilities 4

5 of the Merging Corporations will be acquired and held by SA-NYC, and subsequent to the Effective Date (as defined herein), the business of each Merging Corporation will be conducted through SA-NYC, and that SA-NYC will continue its corporate existence. The terms and conditions of the Merger and the manner of carrying it into effect are as follows. ARTICLE I. NAMES OF CONSTITUENT CORPORATIONS AND OF SURVIVING CORPORATION The names of the Constituent Corporations are SA-NYC, SA-BX1, SA-BX2, SA- UW, SA-BS1, SA-BS2, SA-CH, and SA-WB. The surviving corporation shall be SA-NYC. ARTICLE II. MEMBERSHIP 1. SA-NYC. Pursuant to and in accordance with the SA-NYC Amended and Restated By-Laws (the SA-NYC By-Laws ), SA-NYC has no members. 2. SA-BX1. Pursuant to and in accordance with the SA-BX1 By-Laws, SA- BX1 has no members. 3. SA-BX2. Pursuant to and in accordance with the SA-BX2 By-Laws, SA- BX2 has no members. 4. SA-UW. Pursuant to and in accordance with the SA-UW By-Laws, SA- UW has no members. 5. SA-BS1. Pursuant to and in accordance with the SA-BS1 By-Laws, SA- BS1 has no members. 6. SA-BS2. Pursuant to and in accordance with the SA-BS2 By-Laws, SA- BS2 has no members. 7. SA-CH. Pursuant to and in accordance with the SA-CH By-Laws, SA-CH has no members. 8. SA-WB. Pursuant to and in accordance with the SA-WB By-Laws, SA- WB has no members. 5

6 ARTICLE III. TERMS AND CONDITIONS OF PROPOSED MERGER 1. Approval. This Plan has been submitted to each Constituent Board for discussion and approval by three-fourths of the whole number of trustees of each Constituent Board. 2. Surviving Corporation. The Merging Corporations will be merged with and into SA-NYC. SA-NYC will be the sole surviving corporation (the Surviving Corporation ), and will continue to be organized and existing under the laws of the State of New York, but the separate existence of each Merging Corporation will cease upon the Effective Date. 3. Board of Trustees. Subject to this Article III, Section 9(a), the Board of Trustees of the Surviving Corporation will be the Board of Trustees of SA-NYC immediately as it exists prior to the Effective Date. 4. Principal Location. The principal location of the Surviving Corporation will be the principal location of SA-NYC immediately prior to the Effective Date. 5. Provisional Charter. The provisional charter of the Surviving Corporation will be the SA-NYC Provisional Charter, as amended to effect the Merger. 6. By-Laws. The SA-NYC By-Laws, as amended and restated in accordance with this Article III, Section 9(c), shall be the by-laws of the Surviving Corporation until otherwise amended as provided by law. 7. Effective Date of Merger. The proposed Merger will become legally effective upon the later of (i) July 1, 2014 or (ii) the first day of SA-NYC s fiscal quarter following the approval and consent of the Merger by the Board of Trustees (the Trustees Approval ) and the Board of Regents, whether by operation of law or otherwise (the Regents Approval ), pursuant to the applicable sections of the Charter Act, Education Law and/or the New York Not- For-Profit Corporation Law, as amended (the Not-for-Profit Corporation Law ) or, if required, the filing of a Certificate of Merger on such later date, substantially in the form attached hereto as Exhibit A (the Certificate of Merger ), by the Board of Regents and/or the New York Department of State (the Department of State ), as applicable; unless, prior to July 1, 2014 and prior to such approval by the Board of Regents, or, if required, prior to such delivery of such certificate to the Board of Regents and/or the Department of State, as applicable, for filing, it is agreed between the Constituent Boards that a later effective date is advisable, in which event such later date as is agreed upon between the Constituent Boards shall be communicated to the Board of Regents and the Board of Trustees or, if required, the Certificate of Merger will contain a provision specifying such later effective date as is agreed upon between such Boards, but which date, if required, under Section 905(a) of the Not-for-Profit Corporation Law, may not exceed thirty days subsequent to the filing of the Certificate of Merger by the Board of Regents and/or the Department of State, as applicable (the Effective Date ). 8. Further Assurance of Title; Prior and Future Actions. (a) If at any time SA-NYC considers or is advised that any acknowledgements or assurances in law or other similar actions are necessary or desirable in order to acknowledge or confirm in and to SA-NYC any right, title or interest of any Merging 6

7 Corporation held immediately prior to the Effective Date, such Merging Corporation and its proper officers and directors will execute and deliver all such acknowledgements or assurances in law and do all things necessary or proper to acknowledge or confirm such right, title or interest in SA-NYC as is necessary to carry out the purposes of this Plan, and SA-NYC and the proper officers and directors thereof, or authorized agents of such officers and directors, are fully authorized to take any and all such action in the name of SA-NYC or otherwise. (b) The Constituent Corporations agree that any and all prior or future actions taken or to be taken by SA-NYC or proper officers or directors thereof, or any authorized agent of such officers or directors, and any and all prior or future actions taken or to be taken by any Merging Corporation or proper officers or directors of such Merging Corporation, or any authorized agent of such officers or directors, necessary or desirable to carry out the purposes of this Plan are hereby confirmed, approved and authorized in all respects. 9. Certain Corporate Matters. (a) Prior to the Effective Date, the Board of Trustees of SA-NYC shall, in accordance with the Amended and Restated SA-NYC By-Laws or the Second Amended and Restated SA-NYC By-Laws (as defined herein), as the case may be, be reconstituted to a size of fourteen (14) trustees consisting of the proposed trustees listed on Schedule I attached hereto, to serve such roles until the first annual election of the Board of Trustees of the Surviving Corporation (the Surviving Board ) on such date as set forth in the Amended and Restated SA- NYC By-Laws or the Second Amended and Restated SA-NYC By-Laws. (b) All necessary corporate action shall be taken by the Surviving Corporation such that, at the meeting of the Surviving Board immediately following the Effective Date, any and all prior actions taken by any Merging Corporation or proper officers or directors of such Merging Corporation, or any authorized agent of such officers or directors, and any and all prior actions taken by SA-NYC or proper officers or directors thereof, or any authorized agent of such officers or directors, in connection with carrying out the purposes and intent of this Plan shall be confirmed, approved and authorized in all respects by the Surviving Board. (c) All necessary corporate action shall be taken by the Constituent Corporations such that prior to the Effective Date, the SA-NYC By-Laws shall be amended and restated in substantially the form as the SA-NYC By-Laws attached hereto as Exhibit B (the Second Amended and Restated SA-NYC By-Laws ), which, among other things, reflects certain organizational changes of SA-NYC resulting from the Merger, in accordance with Section 2.2(b) of the SA-NYC Second Renewal Charter Agreement, which requires, among other things, the prior written approval of the Board of Trustees. 10. Rights and Liabilities of the Surviving Corporation. On the Effective Date the following will occur: (a) The Surviving Corporation will succeed to and possess, without further act or deed, all of the rights, privileges, powers, and franchises, both public and private, and all of the property, real, personal, and mixed, of each of the Constituent Corporations, including, without limitation, each Amended Charter (as defined herein). 7

8 (b) All debts due each Merging Corporation on whatever account will be vested in the Surviving Corporation, and all claims, demands, property, rights, privileges, powers, and franchises and every other interest of each Constituent Corporation will be as effectively the property of the Surviving Corporation as they were of the respective party to this Plan. (c) The title to any real estate vested by deed or otherwise in each Merging Corporation will not revert or be in any way impaired by reasons of the Merger, but will be vested in the Surviving Corporation. (d) All rights of creditors and all liens upon any property of each Constituent Corporation will be preserved unimpaired, limited in lien to the property affected by such lien at the Effective Date; all debts, liabilities, and duties of the Constituent Corporations will thenceforth attach to the Surviving Corporation and may be enforced against it to the same extent as if such debts, liabilities, and duties had been incurred or contracted by the Surviving Corporation. (e) All corporate acts, plans, policies, agreements, approvals, and authorizations of the Constituent Corporations, governing boards and committees thereof, officers and agents, which were valid and effective immediately prior to the Effective Date, will be taken for all purposes as the acts, plans, policies, agreements, approvals, and authorizations of the Surviving Corporation and will be as effective and binding on the Surviving Corporation as the same were with respect to each Constituent Corporation subject to the provisions of the charter agreement(s) of the Surviving Corporation. 11. Charter Schools. Upon final approval of the Merger, the Merging Corporations will only conduct business in the name of the Surviving Corporation, unless the Board of Trustees, and, to the extent necessary, the Board of Regents, otherwise approves. Each Merging Corporation and, to the extent necessary, the Surviving Corporation, will take such other and further steps as required by the Board of Trustees and, to the extent necessary, the Board of Regents, to identify and maintain names for schools, campuses or sites as the case may be. ARTICLE IV. ADDITIONAL COVENANTS 1. Amended and Restated SA-NYC Second Renewal Charter Agreement. Prior to the Effective Date, the Constituent Corporations shall take any and all actions that any Constituent Corporation may, in its reasonable discretion, deem necessary or advisable to amend and restate the SA-NYC Second Renewal Charter Agreement in such form as may be required by the Board of Trustees (the Amended and Restated SA-NYC Second Renewal Charter Agreement ), or take any action the Board of Trustees may require, all in accordance with and subject to Section 2852(7)(a) of the Education Law to carry out and accomplish the purposes and intent of this Plan, the Merger and the Charter Act. Prior to the Effective Date, the Constituent Corporations shall use their best efforts to obtain the approval of the Board of Trustees and the Board of Regents of the Amended and Restated SA-NYC Second Renewal Charter Agreement in accordance with and subject to Subdivision 2852(7)(a) of the Education Law. 8

9 2. Amended Charters. The parties understand that the Board of Trustees will draft a single proposed Amended and Restated Second Renewal Charter Agreement for SA-NYC and that there will be no separate charter agreements. Such Amended and Restated Second Renewal Charter Agreement shall set forth the Terms of Operation for the successor SA-NYC education corporation and the Terms of Operation for each Charter School. Accordingly, the Constituent Corporations agree as follows: (a) SA-NYC Amended Charter. Prior to the Effective Date, SA-NYC shall take any and all actions that it may, in its reasonable discretion, deem necessary or advisable, or as the Board of Trustees may require, to: (i) amend, revise and/or restate, as applicable, the charter agreement including the Terms of Operation of SA-NYC attached as Exhibit A to the SA-NYC Second Renewal Charter Agreement (the SA-NYC Terms of Operation ) to reflect the operational changes of the SA-NYC Charter Schools that may result from the Merger in such form as may be required by the Board of Trustees (the SA-NYC Amended Terms of Operation ); provided that the SA- NYC Amended Terms of Operation shall be substantially similar to the terms of operation of the other Merging Corporations, except as is necessary to carry out the purposes and intent of this Plan; (ii) adopt a monitoring plan for the SA-NYC Charter Schools to carry out the purposes and intent of this Plan in such form as may be required by the Board of Trustees (the SA-NYC Monitoring Plan ); and (iii) adopt an accountability plan for the SA-NYC Charter Schools in such form as may be required by the Board of Trustees (the SA-NYC Accountability Plan ). The SA-NYC Terms of Operation, together with the SA- NYC Monitoring Plan and the SA-NYC Accountability Plan, each to be attached as a schedule or an exhibit to, or otherwise incorporated into, the SA-NYC Second Renewal Charter Agreement, and the SA-NYC Amended and Restated Second Renewal Charter Agreement, shall be known as the amended charter of the SA-NYC Charter Schools (the SA-NYC Amended Charter ). Prior to the Effective Date, SA-NYC shall use its best efforts to obtain the approval of the Board of Trustees and the Board of Regents of the SA-NYC Amended Charter, including seeking to have the Board of Regents approve a revision to its charter to allow it to participate in the Merger in accordance with and subject to Subdivision 2852(7)(a) of the Education Law. (b) SA-BX1 Amended Charter. Prior to the Effective Date, SA-BX1 shall take any and all actions that it may, in its reasonable discretion, deem necessary or advisable, or as the Board of Trustees may require, to: (i) amend, revise and/or restate, as applicable, the charter agreement including the Terms of Operation of SA-BX1 attached as Exhibit A to the SA-BX1 Charter Agreement (the SA-BX1 Terms of Operation ) to reflect the operational changes of the SA-BX1 Charter School that may result from the Merger in such form as may be required by the Board of Trustees (the SA-BX1 9

10 Amended Terms of Operation ); provided that the SA-BX1 Amended Terms of Operation shall be substantially similar to the terms of operation of the other Merging Corporations, except as is necessary to carry out the purposes and intent of this Plan; (ii) amend, revise and/or restate, as applicable, the Monitoring Plan of SA-BX1 attached as Exhibit B to the SA-BX1 Charter Agreement to carry out the purposes and intent of this Plan in such form as may be required by the Board of Trustees (the SA-BX1 Amended Monitoring Plan ); and (iii) amend, revise and/or restate, as applicable, the Accountability Plan of SA-BX1 attached as Exhibit C to the SA-BX1 Charter Agreement in such form as may be required by the Board of Trustees (the SA- BX1 Amended Accountability Plan ). The SA-BX1 Amended Terms of Operation, together with the SA-BX1 Amended Monitoring Plan and the SA-BX1 Amended Accountability Plan, each to be attached as a schedule or an exhibit to, or otherwise incorporated into, the SA-NYC Second Renewal Charter Agreement, and the Amended and Restated SA-NYC Second Renewal Charter Agreement, shall be known as the amended charter of the SA-BX1 Charter School (the SA- BX1 Amended Charter ). Prior to the Effective Date, SA-BX1 shall use its best efforts to obtain the approval of the Board of Trustees and the Board of Regents of the SA-BX1 Amended Charter in accordance with and subject to Section 2852(7)(a) of the Education Law. (c) SA-BX2 Amended Charter. Prior to the Effective Date, SA-BX2 shall take any and all actions that it may, in its reasonable discretion, deem necessary or advisable, or as the Board of Trustees may require, to: (i) amend, revise and/or restate, as applicable, the charter agreement including the Terms of Operation of SA-BX2 attached as Exhibit A to the SA-BX2 Charter Agreement (the SA-BX2 Terms of Operation ) to reflect the operational changes of the SA-BX2 Charter School that may result from the Merger in such form as may be required by the Board of Trustees (the SA-BX2 Amended Terms of Operation ); provided that the SA-BX2 Amended Terms of Operation shall be substantially similar to the terms of operation of the other Merging Corporations, except as is necessary to carry out the purposes and intent of this Plan; (ii) amend, revise and/or restate, as applicable, the Monitoring Plan of SA-BX2 attached as Exhibit B to the SA-BX2 Charter Agreement to carry out the purposes and intent of this Plan in such form as may be required by the Board of Trustees (the SA-BX2 Amended Monitoring Plan ); and (iii) amend, revise and/or restate, as applicable, the Accountability Plan of SA-BX2 attached as Exhibit C to the SA-BX2 Charter Agreement in such form as may be required by the Board of Trustees (the SA- BX2 Amended Accountability Plan ). The SA-BX2 Amended Terms of Operation, together with the SA-BX2 Amended Monitoring Plan and the SA-BX2 10

11 Amended Accountability Plan, each to be attached as a schedule or an exhibit to, or otherwise incorporated into, the SA-NYC Second Renewal Charter Agreement, and the Amended and Restated SA-NYC Second Renewal Charter Agreement, shall be known as the amended charter of the SA-BX2 Charter School (the SA- BX2 Amended Charter ). Prior to the Effective Date, SA-BX2 shall use its best efforts to obtain the approval of the Board of Trustees and the Board of Regents of the SA-BX2 Amended Charter in accordance with and subject to Section 2852(7)(a) of the Education Law. (d) SA-UW Amended Charter. Prior to the Effective Date, SA-UW shall take any and all actions that it may, in its reasonable discretion, deem necessary or advisable, or as the Board of Trustees may require, to: (i) amend, revise and/or restate, as applicable, the charter agreement including the Terms of Operation of SA-UW attached as Exhibit A to the SA-UW Charter Agreement (the SA-UW Terms of Operation ) to reflect the operational changes of the SA-UW Charter School that may result from the Merger in such form as may be required by the Board of Trustees (the SA-UW Amended Terms of Operation ); provided that the SA-UW Amended Terms of Operation shall be substantially similar to the terms of operation of the other Merging Corporations, except as is necessary to carry out the purposes and intent of this Plan; (ii) amend, revise and/or restate, as applicable, the Monitoring Plan of SA-UW attached as Exhibit B to the SA-UW Charter Agreement to carry out the purposes and intent of this Plan in such form as may be required by the Board of Trustees (the SA-UW Amended Monitoring Plan ); and (iii) amend, revise and/or restate, as applicable, the Accountability Plan of SA-UW attached as Exhibit C to the SA-UW Charter Agreement in such form as may be required by the Board of Trustees (the SA- UW Amended Accountability Plan ). The SA-UW Amended Terms of Operation, together with the SA-UW Amended Monitoring Plan and the SA-UW Amended Accountability Plan, each to be attached as a schedule or an exhibit to, or otherwise incorporated into, the SA-NYC Second Renewal Charter Agreement, and the Amended and Restated SA-NYC Second Renewal Charter Agreement, shall be known as the amended charter of the SA-UW Charter School (the SA- UW Amended Charter ). Prior to the Effective Date, SA-UW shall use its best efforts to obtain the approval of the Board of Trustees and the Board of Regents of the SA-UW Amended Charter in accordance with and subject to Section 2852(7)(a) of the Education Law. (e) SA-BS1 Amended Charter. Prior to the Effective Date, SA-BS1 shall take any and all actions that it may, in its reasonable discretion, deem necessary or advisable, or as the Board of Trustees may require, to: (i) amend, revise and/or restate, as applicable, the charter agreement including the Terms of Operation of SA-BS1 attached as Exhibit A to 11

12 the SA-BS1 Charter Agreement (the SA-BS1 Terms of Operation ) to reflect the operational changes of the SA-BS1 Charter School that may result from the Merger in such form as may be required by the Board of Trustees (the SA-BS1 Amended Terms of Operation ); provided that the SA-BS1 Amended Terms of Operation shall be substantially similar to the terms of operation of the other Merging Corporations, except as is necessary to carry out the purposes and intent of this Plan; (ii) amend, revise and/or restate, as applicable, the Monitoring Plan of SA-BS1 attached as Exhibit B to the SA-BS1 Charter Agreement to carry out the purposes and intent of this Plan in such form as may be required by the Board of Trustees (the SA-BS1 Amended Monitoring Plan ); and (iii) amend, revise and/or restate, as applicable, the Accountability Plan of SA-BS1 attached as Exhibit C to the SA-BS1 Charter Agreement in such form as may be required by the Board of Trustees (the SA- BS1 Amended Accountability Plan ). The SA-BS1 Amended Terms of Operation, together with the SA-BS1 Amended Monitoring Plan and the SA-BS1 Amended Accountability Plan, each to be attached as a schedule or an exhibit to, or otherwise incorporated into, the SA-NYC Second Renewal Charter Agreement, and the Amended and Restated SA-NYC Second Renewal Charter Agreement, shall be known as the amended charter of the SA-BS1 Charter School (the SA- BS1 Amended Charter ). Prior to the Effective Date, SA-BS1 shall use its best efforts to obtain the approval of the Board of Trustees and the Board of Regents of the SA-BS1 Amended Charter in accordance with and subject to Section 2852(7)(a) of the Education Law. (f) SA-BS2 Amended Charter. Prior to the Effective Date, SA-BS2 shall take any and all actions that it may, in its reasonable discretion, deem necessary or advisable, or as the Board of Trustees may require, to: (i) amend, revise and/or restate, as applicable, the charter agreement including the Terms of Operation of SA-BS2 attached as Exhibit A to the SA-BS2 Charter Agreement (the SA-BS2 Terms of Operation ) to reflect the operational changes of the SA-BS2 Charter School that may result from the Merger in such form as may be required by the Board of Trustees (the SA-BS2 Amended Terms of Operation ); provided that the SA-BS2 Amended Terms of Operation shall be substantially similar to the terms of operation of the other Merging Corporations, except as is necessary to carry out the purposes and intent of this Plan; (ii) amend, revise and/or restate, as applicable, the Monitoring Plan of SA-BS2 attached as Exhibit B to the SA-BS2 Charter Agreement to carry out the purposes and intent of this Plan in such form as may be required by the Board of Trustees (the SA-BS2 Amended Monitoring Plan ); and (iii) amend, revise and/or restate, as applicable, the Accountability Plan of SA-BS2 attached as Exhibit C to the SA-BS2 Charter 12

13 Agreement in such form as may be required by the Board of Trustees (the SA- BS2 Amended Accountability Plan ). The SA-BS2 Amended Terms of Operation, together with the SA-BS2 Amended Monitoring Plan and the SA-BS2 Amended Accountability Plan, each to be attached as a schedule or an exhibit to, or otherwise incorporated into, the SA-NYC Second Renewal Charter Agreement, and the Amended and Restated SA-NYC Second Renewal Charter Agreement, shall be known as the amended charter of the SA-BS2 Charter School (the SA- BS2 Amended Charter ). Prior to the Effective Date, SA-BS2 shall use its best efforts to obtain the approval of the Board of Trustees and the Board of Regents of the SA-BS2 Amended Charter in accordance with and subject to Section 2852(7)(a) of the Education Law. (g) SA-CH Amended Charter. Prior to the Effective Date, SA-CH shall take any and all actions that it may, in its reasonable discretion, deem necessary or advisable, or as the Board of Trustees may require, to: (i) amend, revise and/or restate, as applicable, the charter agreement including the Terms of Operation of SA-CH attached as Exhibit A to the SA-CH Charter Agreement (the SA-CH Terms of Operation ) to reflect the operational changes of the SA-CH Charter School that may result from the Merger in such form as may be required by the Board of Trustees (the SA-CH Amended Terms of Operation ); provided that the SA-CH Amended Terms of Operation shall be substantially similar to the terms of operation of the other Merging Corporations, except as is necessary to carry out the purposes and intent of this Plan; (ii) amend, revise and/or restate, as applicable, the Monitoring Plan of SA-CH attached as Exhibit B to the SA-CH Charter Agreement to carry out the purposes and intent of this Plan in such form as may be required by the Board of Trustees (the SA-CH Amended Monitoring Plan ); and (iii) amend, revise and/or restate, as applicable, the Accountability Plan of SA-CH attached as Exhibit C to the SA-CH Charter Agreement in such form as may be required by the Board of Trustees (the SA- CH Amended Accountability Plan ). The SA-CH Amended Terms of Operation, together with the SA-CH Amended Monitoring Plan and the SA-CH Amended Accountability Plan, each to be attached as a schedule or an exhibit to, or otherwise incorporated into, the SA-NYC Second Renewal Charter Agreement, and the Amended and Restated SA-NYC Second Renewal Charter Agreement, shall be known as the amended charter of the SA-CH Charter School (the SA- CH Amended Charter ). Prior to the Effective Date, SA-CH shall use its best efforts to obtain the approval of the Board of Trustees and the Board of Regents of the SA-CH Amended Charter in accordance with and subject to Section 2852(7)(a) of the Education Law. (h) SA-WB Amended Charter. Prior to the Effective Date, SA-WB shall take any and all actions that it may, in its reasonable discretion, deem necessary or advisable, or as the Board of Trustees may require to: 13

14 (i) amend, revise and/or restate, as applicable, the charter agreement including Terms of Operation of SA-WB attached as Exhibit A to the SA-WB Charter Agreement (the SA-WB Terms of Operation ) to reflect the operational changes of the SA-WB Charter School that may result from the Merger in such form as may be required by the Board of Trustees (the SA-WB Amended Terms of Operation ); provided that the SA-WB Amended Terms of Operation shall be substantially similar to the terms of operation of the other Merging Corporations, except as is necessary to carry out the purposes and intent of this Plan; (ii) amend, revise and/or restate, as applicable, the Monitoring Plan of SA-WB attached as Exhibit B to the SA-WB Charter Agreement to carry out the purposes and intent of this Plan in such form as may be required by the Board of Trustees (the SA-WB Amended Monitoring Plan ); and (iii) amend, revise and/or restate, as applicable, the Accountability Plan of SA-WB attached as Exhibit C to the SA-WB Charter Agreement in such form as may be required by the Board of Trustees (the SA- WB Amended Accountability Plan ). The SA-WB Amended Terms of Operation, together with the SA-WB Amended Monitoring Plan and the SA-WB Amended Accountability Plan, each to be attached as a schedule or an exhibit to, or otherwise incorporated into, the SA-NYC Second Renewal Charter Agreement, and the Amended and Restated SA-NYC Second Renewal Charter Agreement, shall be known as the amended charter of the SA-WB Charter School (the SA- WB Amended Charter and, together with the SA-NYC Amended Charter, the SA-BX1 Amended Charter, the SA-BX2 Amended Charter, the SA-UW Amended Charter, the SA-BS1 Amended Charter, the SA-BS2 Amended Charter, and the SA-CH Amended Charter, the Amended Charters ). Prior to the Effective Date, SA-WB shall use its best efforts to obtain the approval of the Board of Trustees and the Board of Regents of the SA-WB Amended Charter in accordance with and subject to Section 2852(7)(a) of the Education Law. 3. Tax Exempt Status. Prior to the Effective Date, SA-NYC shall take any and all actions that it may, in its sole and absolute discretion, deem necessary or advisable to remain qualified as exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. Each Constituent Corporation shall similarly take any and all actions deemed necessary to or advisable to remain qualified as exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. In addition, after the Effective Date, the Surviving Corporation shall take any and all actions deemed necessary to or advisable to advise the Internal Revenue Service of the Merger and file or amend Form 990s or other forms to comply with applicable provisions of the Code. 4. Board of Regents Approval. Prior to the Effective Date, the Constituent Corporations shall use best efforts to obtain the Regents Approval in accordance with the applicable sections of the Education Law and/or the Not-For-Profit Corporation Law. 5. Certificate of Merger. If required, prior to or on the Effective Date, as applicable, SA-NYC shall prepare and file the Certificate of Merger with the Board of Trustees 14

15 and the Board of Regents and/or the Department of State, as applicable, in accordance with, and including such information as required by, Section 223 of the Education Law and/or Section 905 of the Not-for-Profit Corporation Law, as applicable. In the event that the Certificate of Merger is required to be filed with the Department of State, the Certificate of Merger shall have the Regents Approval endorsed thereon or annexed thereto. 6. Indemnification. From and after the Effective Date, SA-NYC shall assume and honor any obligation of any Merging Corporation immediately prior to the Effective Date with respect to the indemnification of each person who is now, or has been at any time prior to the date hereof or who becomes prior to the Effective Date, a director of such Merging Corporation (collectively, the Indemnitees ) arising from the By-Laws of such Merging Corporation, as if such obligations were pursuant to a contract or arrangement between SA-NYC and such Indemnitees. 7. Audits. Each Constituent Corporation, or the Surviving Corporation, as the case may be, shall retain an independent certified public accountant or certified public accounting firm licensed in New York State to perform an annual audit of each Constituent Corporation for the fiscal year annual financial statements. The independent audit of each Constituent Corporation s financial statements must be performed in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States, as well as any additional requirements and guidelines provided by the Board of Trustees. The audited financial statements must be submitted to the Trustees by November 1, In addition, and pursuant to the same timetable, each Constituent Corporation or the Surviving corporation, as the case may be, must require its independent certified public accountant to issue a report on compliance with laws, regulations, contracts and grants and on internal controls over financial reporting, based on its audit of the financial statements of each Constituent Corporation. Each Constituent Corporation, or the Surviving Corporation, as the case may be, must submit this report to the Board of Trustees together with a corrective plan addressing any weaknesses or problems identified in the planning and performance of the audit. The corrective plan must address each suggestion for consideration of management contained in the compliance report and include a timetable that identifies the date by which each corrective step will have been completed. Each Constituent Corporation, or the Surviving Corporation, as the case may be, shall also conduct programmatic audits of each Constituent Corporation s Charter School when and to the extent required of other public schools, with such audits being comparable in scope to those required of other public schools. All documents required to be submitted pursuant to this paragraph 7 shall be submitted electronically in accordance with guidance published on the website of the Board of Trustees Charter Schools Institute. ARTICLE V. CONDITIONS PRECEDENT 1. Condition of Each Party s Obligations Under this Plan. The respective obligations of each party under this Plan to consummate the Merger shall be subject to the satisfaction or waiver at or prior to the Effective Date of the following condition: no governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered 15

16 any statute, rule, regulation, judgment, decree, injunction or other order (whether temporary, preliminary or permanent) that is in effect and prohibits consummation of the Merger. 2. Condition of SA-NYC s Obligations Under this Plan. The obligations of SA-NYC under this Plan to consummate the Merger shall be subject to the satisfaction or waiver at or prior to the Effective Date of the following condition: the Board of Trustees and the Board of Regents, whether by operation of law or otherwise, shall have approved the SA-NYC Amended Charter, in accordance with and subject to Section 2852(7)(a) of the Education Law; provided that the failure to obtain such approval of the SA-NYC Amended Charter shall be neither a condition of nor affect the obligations of the other Constituent Corporations to consummate the Merger as contemplated herein. 3. Condition of SA-BX1 s Obligations Under this Plan. The obligations of SA-BX1 under this Plan to consummate the Merger shall be subject to the satisfaction or waiver at or prior to the Effective Date of the following condition: the Board of Trustees and the Board of Regents, whether by operation of law or otherwise, shall have approved the SA-BX1 Amended Charter, in accordance with and subject to Section 2852(7)(a) of the Education Law; provided that the failure to obtain such approval of the SA-BX1 Amended Charter shall be neither a condition of nor affect the obligations of the other Constituent Corporations to consummate the Merger as contemplated herein. 4. Condition of SA-BX2 s Obligations Under this Plan. The obligations of SA-BX2 under this Plan to consummate the Merger shall be subject to the satisfaction or waiver at or prior to the Effective Date of the following condition: the Board of Trustees and the Board of Regents, whether by operation of law or otherwise, shall have approved the SA-BX2 Amended Charter, in accordance with and subject to Section 2852(7)(a) of the Education Law; provided that the failure to obtain such approval of the SA-BX2 Amended Charter shall be neither a condition of nor affect the obligations of the other Constituent Corporations to consummate the Merger as contemplated herein. 5. Condition of SA-UW s Obligations Under this Plan. The obligations of SA-UW under this Plan to consummate the Merger shall be subject to the satisfaction or waiver at or prior to the Effective Date of the following condition: the Board of Trustees and the Board of Regents, whether by operation of law or otherwise, shall have approved the SA-UW Amended Charter, in accordance with and subject to Section 2852(7)(a) of the Education Law; provided that the failure to obtain such approval of the SA-UW Amended Charter shall be neither a condition of nor affect the obligations of the other Constituent Corporations to consummate the Merger as contemplated herein. 6. Condition of SA-BS1 s Obligations Under this Plan. The obligations of SA-BS1 under this Plan to consummate the Merger shall be subject to the satisfaction or waiver at or prior to the Effective Date of the following condition: the Board of Trustees and the Board of Regents, whether by operation of law or otherwise, shall have approved the SA-BS1 Amended Charter, in accordance with and subject to Section 2852(7)(a) of the Education Law; provided that the failure to obtain such approval of the SA-BS1 Amended Charter shall be neither a condition of nor affect the obligations of the other Constituent Corporations to consummate the Merger as contemplated herein. 7. Condition of SA-BS2 s Obligations Under this Plan. The obligations of SA-BS2 under this Plan to consummate the Merger shall be subject to the satisfaction or waiver at 16

17 or prior to the Effective Date of the following condition: the Board of Trustees and the Board of Regents, whether by operation of law or otherwise, shall have approved the SA-BS2 Amended Charter, in accordance with and subject to Section 2852(7)(a) of the Education Law; provided that the failure to obtain such approval of the SA-BS2 Amended Charter shall be neither a condition of nor affect the obligations of the other Constituent Corporations to consummate the Merger as contemplated herein. 8. Condition of SA-CH s Obligations Under this Plan. The obligations of SA-CH under this Plan to consummate the Merger shall be subject to the satisfaction or waiver at or prior to the Effective Date of the following condition: the Board of Trustees and the Board of Regents, whether by operation of law or otherwise, shall have approved the SA-CH Amended Charter, in accordance with and subject to Section 2852(7)(a) of the Education Law; provided that the failure to obtain such approval of the SA-CH Amended Charter shall be neither a condition of nor affect the obligations of the other Constituent Corporations to consummate the Merger as contemplated herein. 9. Condition of SA-WB s Obligations Under this Plan. The obligations of SA-WB under this Plan to consummate the Merger shall be subject to the satisfaction or waiver at or prior to the Effective Date of the following condition: the Board of Trustees and the Board of Regents, whether by operation of law or otherwise, shall have approved the SA-WB Amended Charter, in accordance with and subject to Section 2852(7)(a) of the Education Law; provided that the failure to obtain such approval of the SA-WB Amended Charter shall be neither a condition of nor affect the obligations of the other Constituent Corporations to consummate the Merger as contemplated herein. ARTICLE VI. TERMINATION 1. Termination by Consent. This Plan may be terminated at any time prior to the Effective Date by mutual written consent of the Merging Corporations and SA-NYC. 2. Abandonment. Notwithstanding Section 1 of this Article VI or authorization of this Plan by the Constituent Boards, if at any time prior to the Trustees Approval or the Regents Approval, any Constituent Board makes a good faith, reasoned determination that events or circumstances have occurred that render it imprudent, consistent with the fiduciary duties of the trustees, to consummate the Merger, this Plan may be abandoned by such Constituent Board; provided that the Constituent Corporation proposing abandonment of this Plan provides all other Constituent Corporations with written notice of such Constituent Corporation s proposed abandonment, including a detailed explanation of the reasons for such Constituent Corporation s abandonment. The Trustees Approval and the Regents Approval will conclusively establish that this Plan has not been abandoned pursuant to this Article VI, Section 2. 17