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EXHIBIT 99.2
LETTER OF INTENT
GEORGE E. NORCROSS, III
JOSEPH J. ROBERTS, JR.
PHILLIP A. NORCROSS
P.O. BOX 1440
CHERRY HILL, NJ 08034-0058
(856) 424-4265
December 27, 2000
William A. Schwartz, Jr.
Chairman, President and Chief
Executive Officer
U.S. Vision, Inc.
1 Harmon Drive
Glen Oaks Industrial Park
Glendora, New Jersey 08012
Re: PROPOSED ACQUISITION OF U.S. VISION, INC.
Dear Mr. Schwartz:
In accordance with the terms set forth in this letter (this "Letter"),
I propose, directly or through an entity to be formed by the Norcross/Roberts
group ("Buyer"), to purchase all of the outstanding shares of capital stock (the
"Shares") and options currently exercisable for Shares of U.S. Vision, Inc.
("USV") held by its stockholders and option holders, on the terms and conditions
set forth below.
1. DESCRIPTION OF THE TRANSACTION. Buyer or a subsidiary of Buyer would acquire
all of the Shares, free and clear of all liens, encumbrances, restrictions and
obligations of any kind whatsoever, pursuant to a cash merger transaction (the
"Transaction").
2. THE TERMS OF THE TRANSACTION.
A. Consideration. The purchase price per share of issued and outstanding
capital stock of USV shall be $4.50, payable in cash at closing (the "Closing").
In addition, options to acquire shares of USV capital stock shall be purchased
by the Buyer for the amount by which $4.50 exceeds the exercise price of each of
such options, multiplied by the number of options to purchase capital stock of
USV. This proposal is based on the schedule of outstanding options and warrants,
including number, exercise price and vesting information, previously delivered
to me being true and correct.
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Letter of Intent
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B. Shares Issued and Outstanding. At the Closing, (i) approximately
7,802,942 shares of USV common stock, par value $.01 per share, shall be issued
and outstanding, plus any shares of USV common stock issued upon the exercise of
employee stock options after the date of this Letter and prior to the Closing,
and (ii) in the money options to acquire an aggregate of approximately
869,872 shares of USV common stock shall have been granted and are outstanding,
less any options exercised prior to the Closing and included in subsection (i)
above.
3. DEFINITIVE AGREEMENT. Buyer and USV will use their respective best efforts to
negotiate in good faith and enter into a definitive agreement (the "Agreement")
on terms consistent with this Letter, which Agreement will be drafted by Buyer.
The Agreement shall contain such terms, conditions and provisions as are
customary for a transaction of this type including, but not limited to,
representations and warranties given by USV regarding its operations, assets and
liabilities, as well as covenants and other agreements.
4. CONDITIONS TO CLOSING. The execution of the Agreement and the Closing of the
transaction will be subject to customary terms and conditions, including the
following:
A. Conduct of Business. For that period of time commencing on the date of
this Letter and ending upon the date of the execution of the Agreement, USV will
conduct its business and affairs in the ordinary course, consistent with past
practices, and will not without the prior written approval of Buyer, engage in
any activity or enter into any transaction which is not consistent with the past
practices of USV, nor make any capital expenditures or increase the compensation
of any director, officer or employee in excess of 5% the over last fiscal year.
Further, prior to the execution of the Agreement, USV will use its reasonable
best efforts to preserve and keep intact the business organization of USV, to
keep available to USV the services of its present employees, and to preserve for
USV and Buyer, the goodwill of the partners, customers, suppliers, creditors and
others having business relations with USV.
B. Stockholder Approval. Following the execution of the Agreement, USV shall
as promptly as practical submit the Transaction to its stockholders for
approval. Those stockholders party to this Letter and Buyer and its stockholders
hereby covenant and agree to vote all shares held or controlled by them in favor
of the Transaction, which shares represent, in the aggregate, approximately
78.7% of the Company's outstanding common stock.
C. HSR, SEC, Consents, and Permits. The expiration of all applicable waiting
periods under the Hart-Scott-Rodino Anti-Trust Improvements Act ("HSR") or the
determination by the parties that no HSR filing is required, and the receipt of
all state and federal permits necessary to operate the business on substantially
the same basis as USV operates the business. Buyer shall further have received
any consents and permits necessary for it to operate USV's business consistent
with past practices. USV shall, as soon as practical after the execution of the
Agreement, file a preliminary proxy statement pursuant to Schedule 14 of the
Rules and Regulations of the Securities and Exchange Commission ("SEC") and when
permitted mail such proxy statement to the stockholders of USV entitled to vote
upon the Transaction, accompanied by the board of directors' recommendation that
the stockholders of USV vote in favor of the Transaction.
D. Compliance with Terms. The compliance with the other terms of this Letter,
including without limitation, exclusivity, due diligence, publicity and
confidentiality.
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Letter of Intent
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E. Contract Renewals. JC Penney and Cole Vision shall have entered into or
otherwise agreed to renew their respective contracts with USV for a period of at
least 5 years, commencing on the date of such renewal, and JC Penney shall have
consented or agreed to consent to the Transaction.
F. Financing. Buyer shall have obtained financing necessary consummate the
Transaction on terms satisfactory to Buyer in its sole discretion.
G. No Material Adverse Change. There shall not have occurred any material
adverse change in the business, operations, prospects, financial condition,
assets or liabilities of USV.
H. No Litigation. There shall not be any pending or threatened litigation
which has a reasonable likelihood of preventing the consummation of the
Transaction.
I. Dissenting Stockholders. Stockholders holding in the aggregate more than
5% of the common stock of USV shall not have exercised their dissenters' rights.
J. Deposits. On or before January 15, 2001, Buyer and USV shall have entered
into an interest-bearing (at money market rates) escrow agreement with a state
or national bank reasonably acceptable to Buyer and USV and Buyer shall have
deposited in such escrow account the amount of $250,000 (the "Initial Deposit").
The Initial Deposit shall be disbursed as follows, all as more fully set forth
in the escrow agreement: (i) to USV if Buyer advises USV that it is unable to
obtain the financing set forth in Section 4(F) above; (ii) to Buyer if, prior to
the execution of the Agreement, any of USV's filings with the Securities and
Exchange Commission are found to contain a material misstatement of fact or
failed to disclose a fact which renders any statements therein misleading,
provided, however, that neither the Buyer nor its stockholders are the cause of
such misstatement or failure to disclose; and (iii) to Buyer in the event that
any condition set forth above (other than the condition set forth in Section
4(F) above) is not satisfied. Upon signing the Agreement, Buyer shall deposit an
additional $250,000 with the escrow agent, to be distributed in the same manner
as the Initial Deposit.
5. EXCLUSIVITY. Before committing the substantial time and resources necessary
to complete the Transaction, Buyer requires, and by signing this Letter below
USV represents, warrants and agrees that USV is not currently a party to, and
until the earlier of the failure to make the Initial Deposit, the disbursement
of the Initial Deposit, the execution of the Agreement, or March 15, 2001, USV
will not, either directly or indirectly, through any of its employees, officers,
directors, or agents, solicit, negotiate or discuss or enter into, any
discussions, agreements or understandings to sell all or substantially all of
its assets or stock to any person or entity or provide any party with
information about USV for the purpose of considering any such transaction, other
than to Buyer; provided, however, that if at any time prior to the approval of
the Transaction by the stockholders of USV, the board of directors of USV, in
response to a written proposal that (a) was unsolicited or that did not
otherwise result from a breach of this Section 5 and (b) is reasonably likely to
lead to a superior proposal in the judgment of the board of directors, after
consultation with outside legal counsel ("Superior Proposal"), may authorize USV
to (i) furnish non-public information with respect to USV to the person making
such proposal pursuant to a customary confidentiality agreement and (ii)
participate in negotiations regarding such proposal. USV further agrees that if
it receives any unsolicited proposals or indications of interest from any other
party, it will promptly so advise Buyer and provide copies of any such inquiry
upon receipt of any
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Letter of Intent
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such proposal. In the event that USV does not consummate the Transaction by
reason of receipt of a Superior Proposal, USV shall pay to Buyer an amount equal
to $1.5 million, plus expenses incurred by Buyer in connection with the
Transaction.
6. DUE DILIGENCE. For that period of time commencing on even date herewith and
ending upon the date of the execution of the Agreement, USV agrees to (a)
provide Buyer and its representatives, during normal business hours, reasonable
access to all of the properties, assets, books, agreements, commitments and
records of USV; (b) furnish Buyer and its representatives with all such
information concerning any of the affairs of USV as Buyer reasonably requests;
(c) use its reasonable efforts to cause the accountants to USV to make available
to Buyer and its representatives all reasonably requested financial information
relating to USV; and (d) provide such cooperation as Buyer and its
representatives may reasonably request in connection with any audit or review of
USV which Buyer may direct its representatives to make.
7. PUBLICITY. No party to this Letter shall make any announcements, press
releases or any public statement or disclosures to any third parties regarding
the Transaction or the contents of this Letter without the prior written consent
of the other party, except as required by law, in which case each party agrees
to use reasonable best efforts to consult with the other before issuing any such
announcement, press release or public statement. The parties agree that USV
will, within one (1) business day of the execution of this Letter, issue a press
release and file a Form 8-K with the SEC announcing the execution of this Letter
in a form reasonably satisfactory to the Buyer.
8. FEES AND EXPENSES. Except as set forth in Section 5, Buyer, USV and the
stockholders party hereto will be responsible for their own fees and expenses in
the negotiation of this Letter, the Agreement and the consummation of the
Transaction, including, without limitation, all legal, accounting and consulting
fees and expenses. In addition, the parties will share equally in the fees and
expenses incurred in connection with the HSR filing referred to in Section 4(C).
9. BINDING EFFECT. This Letter sets forth the general terms under which Buyer
and USV would mutually agree to enter into the Transaction described herein and,
as a result, does not contain all of the essential terms and conditions.
Accordingly, except for the sections entitled "Exclusivity," "Deposits" and
"Publicity" of this proposal, each of which are binding according to their
terms, this Letter is not intended, nor shall it be construed as, a legally
binding agreement of the parties.
10. GOVERNING LAW. This Letter will be governed by and construed in accordance
with the laws of the State of New Jersey.
11. COUNTERPARTS. This Letter may be executed in one or more counterparts, each
of which will be deemed an original, and any party hereto may execute any such
counterpart, all of which, when taken together, will constitute one and the same
instrument. Each party agrees to accept the facsimile signature of the other
party hereto and to be bound by its own facsimile signature hereon.
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Letter of Intent
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Please sign and date this Letter in the space provided below and return a
signed copy to the undersigned.
Very truly yours,
/s/ George E. Norcross, III
George E. Norcross, III
ACCEPTED and AGREED to by USV
this 27th day of December 27, 2000
U.S. VISION, INC.
By: /s/ William A. Schwartz, Jr.
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William A. Schwartz, Jr.
Chairman, President and Chief Executive Officer
ACCEPTED and AGREED to by the following
stockholders this 26th day of December, 2000:
GROTECH CAPITAL GROUP, INC.
By: /s/ Dennis J. Shaughnessy
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Dennis J. Shaughnessy
Managing Director
GROTECH CAPITAL GROUP IV, LLC
By: /s/ Dennis J. Shaughnessy
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Dennis J. Shaughnessy
Managing Director
GROTECH PARTNERS III, L.P.
By: Grotech Capital Group, Inc., its general partner
By: /s/ Dennis J. Shaughnessy
-----------------------------------------------------
Dennis J. Shaughnessy
Managing Director
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Letter of Intent
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GROTECH III COMPANION FUND, L.P.
By: Grotech Capital Group, Inc., its general partner
By: /s/ Dennis J. Shaughnessy
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Dennis J. Shaughnessy
Managing Director
GROTECH III PENNSYLVANIA FUND, L.P.
By: Grotech Capital Group, Inc., its general partner
By: /s/ Dennis J. Shaughnessy
-----------------------------------------------------
Dennis J. Shaughnessy
Managing Director
GROTECH PARTNERS IV, L.P.
By: Grotech Capital Group IV, LLC, its general partner
By: /s/ Dennis J. Shaughnessy
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Dennis J. Shaughnessy
Managing Director
STOLBERG PARTNERS, L.P.
By: SGMS, L.P., its general partner
By: Stolberg Meehan and Scano Inc., its general partner
By: /s/ E. Theodore Stolberg
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E. Theodore Stolberg
CONSTITUTION PARTNERS I, L.P.
By: RKM Investment Company, its general partner
By: /s/ Richard K. McDonald
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Richard K. McDonald
Managing Partner
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Letter of Intent
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M&M GENERAL PARTNERSHIP
By: /s/ Richard K. McDonald
-----------------------------------------------------
Richard K. McDonald
Managing Partner
/s/ Richard K. McDonald
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Richard K. McDonald
RKM INVESTMENT COMPANY
By: /s/ Richard K. McDonald
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Richard K. McDonald
Managing Partner
