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Page 12 of 18 Pages
EXHIBIT 2
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.
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.
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Page 13 of 18 Pages
Letter of Intent
Page 2
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.
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,
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Page 14 of 18 Pages
Letter of Intent
Page 3
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 such proposal. In the event that
USV does not consummate the Transaction by reason of receipt of a Superior
Proposal, USV shall
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Page 15 of 18 Pages
Letter of Intent
Page 4
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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Page 16 of 18 Pages
Letter of Intent
Page 5
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, 2000
U.S. VISION, INC.
By: /s/ WILLIAM A. SCHWARTZ, JR.
-------------------------------------------------
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
-----------------------------------------------------------
Dennis J. Shaughnessy
Managing Director
GROTECH CAPITAL GROUP IV, LLC
By: /s/ DENNIS J. SHAUGHNESSY
-----------------------------------------------------------
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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Page 17 of 18 Pages
Letter of Intent
Page 6
GROTECH III COMPANION FUND, L.P.
By: Grotech Capital Group, Inc., its general partner
By: /s/ DENNIS J. SHAUGHNESSY
-----------------------------------------------------------
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
-----------------------------------------------------------
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
-----------------------------------------------------------
E. Theodore Stolberg
CONSTITUTION PARTNERS I, L.P.
By: RKM Investment Company, its general partner
By: /s/ RICHARD K. MCDONALD
-----------------------------------------------------------
Richard K. McDonald
Managing Partner
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Page 18 of 18 Pages
Letter of Intent
Page 7
M&M GENERAL PARTNERSHIP
By: /s/ RICHARD K. MCDONALD
-----------------------------------------------------------
Richard K. McDonald
Managing Partner
/s/ RICHARD K. MCDONALD
-----------------------------------------------------
Richard K. McDonald
RKM INVESTMENT COMPANY
By: /s/ RICHARD K. MCDONALD
-----------------------------------------------------------
Richard K. McDonald
Managing Partner
