PRESS RELEASE
For Immediate Release
January 13, 2009 Contact: Charla White
734.661.2340
First Step Taken to Create a Newly Independent Antioch College
Letter of Intent Approved by Boards of Antioch University and Antioch College Continuation Corporation
Great Lakes Colleges Association
535 W. William, Suite 301, Ann Arbor, MI 48103
www.glca.org
Phone: 734.661.2350
Fax: 734.661.2349
Ann Arbor, MI—Six months after operations were suspended at Antioch College in Yellow Springs, Ohio a Letter of Intent to finalize an agreement to create a newly independent Antioch College, separate from Antioch University, has been approved by both the Board Pro Tempore of the Antioch College Continuation Corporation and the Antioch University Board of Trustees.
“This Letter of Intent seeks to protect the interests of Antioch University while creating the prospect for a newly independent and viable Antioch College,” said Richard Detweiler, President of the Great Lakes Colleges Association and mediator and chair of the Taskforce. Detweiler continues, “This letter of intent, while not binding on the parties, establishes the framework to negotiate a more detailed and comprehensive definitive agreement.”
The Taskforce was proposed by the Alumni Association in response to a request from the University Board of
Trustees to develop a process to create an independent college; both the University and the Alumni have sanctioned its work. The Taskforce, in addition to Richard Detweiler, also included Antioch College alumni Matthew Derr, ’89, Lee Morgan, ’67, and Antioch University Trustees Dan Fallon, ’61 and Antioch University-New England alumnus Jack Merselis, ’96.
The Taskforce has been working since August and has explored a number of possible solutions while also taking into consideration the volatility in the financial marketplace. With the financial support of the Andrew W. Mellon Foundation and the Morgan Family Foundation, the Taskforce was able secure independent financial analyses from George K. Baum and Company and legal counsel from Bond, Schoeneck & King, LLC.
Lee Morgan, Antioch College graduate of 1967, Chairman of the Antioch College Continuation Corporation, and grandson of Antioch College’s 11th president and educational pioneer, Arthur Morgan, stated: “This is an historic moment for the College and for Yellow Springs, Ohio. We have monumental work ahead, but we now have the framework in place to restore the College to health as an independent institution for the first time in forty years. I am honored to lead this effort with my fellow Board Pro Tem members and we are pleased with the support this Letter of Intent has been given by both Antioch University and the Antioch College community.”
Art Zucker, Antioch College graduate of 1955 and Chairman of the Board of Trustees of Antioch University said, “This Board of Trustees made a clear commitment to the revitalization of Antioch College and I am pleased at the high level of collaboration that took place.” As an alumnus of the College and a member of the University Board Zucker said he looks forward to continued work with the Board Pro Tempore. “We all know that the world needs Antioch University and Antioch College – both great educational innovators — to be healthy and thriving and this agreement moves both institutions in that direction,” Zucker said.
“Antioch University and Antioch College are best served by our collaborative work to develop a plan that will restore the college to successful operation for the long term,” said Chancellor Toni Murdock.
The Taskforce will continue to work with the Great Lakes Colleges Association and its legal team to develop the definitive agreements necessary to finalize the transaction. Included in this agreement are ambitious fundraising goals on the part of the newly independent college and important conditions to complete regarding the transaction such as the approval of third-party financial institutions and governmental bodies in the State of Ohio such as, the Ohio Attorney General. The Letter of Intent calls for a 90-day period of “exclusive dealing” in which to accomplish this work starting in early January.
Nancy Crow, Antioch College graduate of 1970 and president of the Antioch College Alumni Association and Antioch University trustee said ”Throughout this year, many different groups have worked to find a way forward for Antioch College and we all share in this important accomplishment. I know that the alumni, former faculty, staff and students will look at this Letter of Intent as a promising sign for the future of the College and that we can begin to work together on inventing an exciting future.”
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Founded in 1962, the Great Lakes Colleges Association (GLCA) is a non-profit organization
governed by thirteen selective liberal arts colleges in the Midwest: Albion, Allegheny, Antioch,
DePauw, Denison, Earlham, Hope, Kalamazoo, Kenyon, Oberlin, Ohio Wesleyan, Wabash, and
Wooster. Its purpose is to strengthen and extend education in the tradition of the liberal arts
and sciences. GLCA often works conjointly with similar associations of liberal arts colleges to
enhance the strength and vitality of member institutions. For additional information contact:
Charla White at 734.661.2340
LETTER OF INTENT
PERTAINING TO THE PURCHASE OF CERTAIN ASSETS OF ANTIOCH UNIVERSITY
This Letter of Intent (LOI) dated January 9, 2009, between the Antioch University Board of
Trustees (“Trustees”), and the Board Pro Tempore of the Antioch College Continuation
Corporation (“BPT”) acting at the request of the elected Antioch College Alumni Association
Board of Directors, sets forth the terms and conditions under which the Trustees and the BPT
intend to enter into one or more definitive agreements.
WHEREAS, the Trustees requested the Alumni Association to create the necessary
process, plans and resources in order to permit Antioch College to operate as an independent
four-year, residential, liberal arts college in Yellow Springs, Ohio, and a business plan for the
transfer of assets from the University to the College, and to present those processes, resources,
timetable and business plan to the Trustees for its consideration; and
WHEREAS, the Trustees are committed to resumption of operations at the College at an
early time; and
WHEREAS, the Trustees have determined that the College can best be brought to health,
vigor, vitality, and long-term sustainability through governance by an independent board of
trustees; and
WHEREAS, the Trustees and the BPT stand ready to collaborate to achieve these
objectives, pursuant to a plan which contemplates the operation of the newly independent
College (the “Independent College”) by Antioch College Continuation Corporation under the
direction of the BPT;
NOW, THEREFORE, in support of the stated educational mission of the University,
protecting or enhancing the University’s financial position, and allowing for the creation of a
plausibly viable College, this LOI details the basis for separation of the College from the
University (the “Transaction”). The basic terms and conditions to the Transaction are as follows:
A. Intellectual Property Licenses
Subject to the reversion terms described in Section H, the University will license to the
Independent College, on an exclusive, non-transferrable, perpetual, royalty-free basis, the right to
use the name “Antioch College” and any and all associated logos, including the exclusive use of
the logo identified as the “Vitruvian A” and other appropriate trademarks, service marks, and
internet domain names historically associated exclusively with the College (collectively, the
“Marks”). The University retains all rights to the name “Antioch” in connection with education
institutions other than the name “Antioch College” and further retains any trademarks, service
marks, and internet domain names not used exclusively by the College. Further detail regarding the possible reversion of intellectual property under certain circumstances will be addressed in
one or more definitive agreements.
B. Asset Purchase
The Independent College will acquire the right, title, and interest that the University possesses
and has in and to the following assets (the “Purchased Assets”):
1. The real estate comprising the campus of Antioch College owned by the University in
Yellow Springs Ohio (the “Campus”) in its then as-is condition, subject to normal due
diligence, including the University’s real estate holdings roughly east of Xenia Avenue,
with the exception of the Kettering Building, 150 E South College Street, and adjacent
land and structures as shown on the diagram annexed hereto as Exhibit A.
2. The real estate comprising Glen Helen Nature Preserve (“Glen Helen”).
3. Except as otherwise excluded pursuant to the terms of this LOI, all tangible and
intangible personal property (other than the Marks, the treatment of which is described in
Section A above), including, but not limited to, furnishings, fixtures, equipment and
vehicles, used in connection with the operation of the Campus and Glen Helen, including
without limitation those that were placed in storage when and since operations at the
College were suspended; no such furnishings, equipment and vehicles will be removed
from inventory while agreements pursuant to this LOI are under discussion.
4. All assets owned by the University associated with the periodical known as the Antioch
Review (the “Review”).
5. Any assets and agreements currently owned or held by the University regarding the
Coretta Scott King Center.
6. The real estate and improvements associated with the University’s power plant.
7. Copies of records regarding former employees, former students and alumni of the
Antioch College campus of the University, transferred as and to the extent permitted by
applicable law. Records of students holding contracts for financial aid will not be
transferred until the terms of said contracts have been satisfied.
8. The endowments, securities, reserve funds, charitable remainder trusts, and charitable gift
annuity funds held for the exclusive use of or intended for the benefit of Antioch College,
Glen Helen or the Review, transferred as and to the extent permitted by applicable law.
Issues related to endowment or gift liabilities will be addressed in the Definitive
Agreements. It is understood by the Trustees and the BPT that the independent Antioch College and
Antioch University will separately assume existing liabilities in unfunded restricted
obligations.
9. Exclusive of the University’s corporate business records, all books, research materials,
and related items owned by the University located in the Olive Kettering Library;
provided that the University remains eligible for continued membership in the Ohio Link
system from and after the transfer (it being understood that such materials shall be
transferred only upon confirmation of such continued eligibility).
10. Antiochiana (the archive and its collections) exclusive of the University’s corporate
business records.
.
The following assets of the University would not be transferred in connection with the
Transaction:
11. Existing University accounts receivable associated with the operation of the College.
12. The program known as Antioch Education Abroad, including all assets associated with
such program.
13. WYSO Radio and its associated FCC licenses, including all assets associated with such
program; provided that the University and the Independent College shall enter into a
“right of first refusal” purchase agreement pursuant to which the Independent College
would be entitled to acquire the aforementioned assets upon the same terms as any
proposed disposition thereof by the University.
14. The Kettering Building, 150 E South College Street, and adjacent land and structures;
provided that the University and the Independent College shall enter into a “right of first
refusal” purchase agreement pursuant to which the Independent College would be
entitled to acquire the aforementioned assets upon the same terms as any proposed
disposition thereof by the University.
15. All other real property or tangible or intangible personal property not specifically listed in
Sections A.1. through A.10.
C. Collaborative Use Descriptions
The following assets of the University have programmatic value to Antioch College. Therefore,
although the University will have sole management authority, the Trustees and BPT will develop
agreements for collaborative use:
1. WYSO Radio
2. Antioch Education Abroad
The following current and future assets of the Independent College have programmatic value to
Antioch University. Therefore, although the Independent College will have sole management
authority, the Trustees and BPT will develop agreements for collaborative use:
3. The Glen Helen Nature Preserve
4. Olive Kettering Library (from and after satisfaction of the condition referenced in Section
B.9).
5. Antiochiana
6. Sontag Fels Hall provided, however, that the Independent College shall enter into a lease
agreement with the University for the space currently occupied by WYSO.
D. Consideration
Consistent with the mutually agreed goal of protecting or enhancing the University’s financial
position and allowing for the creation of a plausibly viable College, the following are the
financial considerations of this transaction.
Cash provided by the Independent College on the Closing Date:
Cash at Closing [a] $5,000,000
Payment for Bonds Payable [b] $1,500,000
TOTAL CASH $6,500,000
[a] Non-public confidential gift(s) conditioned on the successful completion of the
Transaction to the satisfaction of the BPT on a predetermined established
timetable. To be paid to the University in cash on the Closing Date.
[b] Figure represents an estimate of the remaining tax-exempt bond debt principal
on improvements to the Campus. Estimate to be revised, and paid to the
University in cash, on the Closing Date.
E. Mediation
The Definitive Agreements (as defined in Section F.1 below) would contain provisions requiring
the submission of certain disputes to mediation.
F. Conditions
Consummation of the Transaction shall be conditioned upon the satisfaction of the following, in
addition to any conditions that may be set forth in the Definitive Agreements, on or before the
closing date:
1. The negotiation and execution of definitive agreements setting forth the terms of the
Transaction (the “Definitive Agreements”) acceptable to the Trustees and BPT, which
will contain representations, warranties, and indemnification provisions and other
provisions or conditions customary for a transaction of this nature and mutually agreeable
to the parties, including any contracts that may need to be transferred from the University
to the Independent College.
2. The receipt of any necessary consents or approvals from governmental authorities,
creditors and other third parties to the transactions contemplated by this LOI and the
Definitive Agreements and/or the operation of the Independent College.
3. Valid assignment to the Independent College of any permits related to ownership and/or
use, as applicable, of any of the Purchase Assets, to the extent permitted by applicable
law.
4. The election of the BPT to the board of directors of Antioch College Continuation
Corporation and the approval by the IRS of an application for recognition of the Antioch
College Continuation Corporation as a tax-exempt organization under Section 501(c)(3)
of the Internal Revenue Code.
5. Completion of the due diligence review by BPT, which reveals no material financial
obligations, lawsuits, or other issues impacting the value of the Purchased Assets or the
Marks.
6. Completion of a documented strategic plan, endorsed by the Great Lakes Colleges
Association, to seek provisional authorization for Antioch College by the Ohio Board of
Regents and provisional accreditation by the North Central Association of Schools and
Colleges.
G. Exclusive Dealing
For a period beginning upon the execution of this LOI by each party hereto and ending 90 days
thereafter (the “Exclusivity Period”), none of the Trustees, the University, BPT, the Antioch
College Continuation Corporation or their respective members, directors, officers, employees,
agents or representatives will, directly or indirectly solicit, initiate or encourage any inquiries,
proposals or offers from any other person or entity relating to any sale or assignment of any of
the Purchased Assets or the Marks. During the Exclusivity Period, the Trustees and the
University shall negotiate exclusively with the BPT concerning the sale, assignment, transfer or
conveyance of any of the Purchased Assets and/or Marks. The Exclusivity Period can be
extended by mutual agreement.
H. Reversion
In the event that the Independent College is unable to achieve accreditation within five years, or
to maintain its accreditation (once earned), the University will have the right, if it chooses and
subject to the receipt of any necessary governmental or other third party approvals, to have all
assets transferred under the Definitive Agreements revert back to the University at no cost,
including all items listed in Paragraphs B(1) through (10) above and including all improvements
made. In the event that the University is unable to sustain itself as an independent institution,
the name “Antioch” used to indicate an educational institution will be assigned and transferred to
the Independent College.
I. Expenses
The taskforce (“Taskforce”)consisting of two members of the University Board of Trustees, two
members of the BPT, and a chair/mediator that has been working with the consent of the
University and the BPT to create an agreement, through its legal counsel, will prepare the
Definitive Agreements. The cost of the Taskforce attorney (estimated at $175,000 to $225,000
for the preparation of the definitive general transaction document, as well as ancillary
instruments such as IP licenses, real estate deeds, etc.) will be equally shared by the University
and the BPT. The legal fees of the University and the BPT to review and negotiate the Definitive
Agreements, and the legal fees of the University and the BPT associated with obtaining approval
of the Ohio Attorney General and any other required third party approvals for transfer of
endowment funds from the University to the Independent College, up to an aggregate total of
$100,000 shall also be shared equally by the University and the BPT. Except as set forth in the
preceding two sentences, each party shall bear its own fees and expenses incurred in connection
with this LOI, the Transaction, and the Definitive Agreements.
J. Miscellaneous
1. The Trustees and the BPT shall negotiate in good faith the terms of the Definitive
Agreements and shall use their best efforts to finalize the Definitive Agreements within
90 days of the signing of this Letter of Intent, it being understood and acknowledged that
the actual execution of the Definitive Agreements may occur later if necessary consents
or approvals from the Ohio Attorney General, other governmental authorities of
competent jurisdiction, and the University’s creditors have not been received by such
date. Further, consistent with Section G, negotiations can be extended beyond 90 days by
mutual agreement.
2. It is understood that this LOI is only a letter of intent summarizing and evidencing the
discussions between the parties and not an offer or agreement by any party to engage in
the Transaction. This LOI does not contain all matters upon which an agreement must be
reached in order for the Transaction to be consummated. This LOI does not create a
legally binding commitment of any kind with respect to such a Transaction, other than an
obligation to negotiate in good faith as required by Section J.1 and to negotiate exclusively to the extent required by Section G. Except as set forth in the preceding sentence, no obligation of any kind shall exist or arise between the parties by virtue of this LOI unless and until the Definitive Agreements have been executed, in which event the obligations of the parties shall be solely as provided in such Definitive Agreements.
3. This LOI, unless extended by agreement of the parties, shall terminate on the last day of
the Exclusivity Period, or earlier upon execution of the Definitive Agreements.
4. This LOI may be executed in counterparts, each of which shall be an original, but both of
which together shall constitute one and the same instrument. Facsimile signatures will be
an acceptable form of execution.
5. This LOI shall be governed by and construed in accordance with the laws of the State of
Ohio.
