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Non-Tech : Hometown Auto (HCAR) - an internet/web play - profitbl co. -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (32)	11/24/2006 10:28:00 AM
From: Scoobah	Read Replies (1) \| Respond to of 42

news: 24-Nov-2006 Entry into a Material Definitive Agreement Item 1.01 - Entry into a Material Definitive Agreement On June 2, 2005, the Registrant publicly announced that its board of directors had approved the split-up of the Registrant between the Shaker Group and the Muller Group (as defined below). On June 30, 2005, certain stockholders of the Registrant who are not members of the Shaker Group or the Muller Group filed a class action lawsuit on behalf of all of the stockholders of the Registrant other than the members of the Shaker Group and the Muller Group (the "Public Stockholders"). The complaint alleged that the Registrant and the board of directors of the Registrant had breached their fiduciary duties to the Public Stockholders. Following the filing of the lawsuit, the parties engaged in negotiations to resolve the action. In order to avoid the expense and uncertainty of litigation, the parties negotiated a settlement of the class action. Pursuant to the terms of the settlement, on November 22, 2006 the Registrant and Hometown Acquisition I Corporation ("Newco") entered into an Agreement and Plan of Merger (the "Merger Agreement"). Newco is a corporation that was organized by the Registrant under the laws of the State of Delaware for the sole purpose of consummating the merger. The Registrant is the sole shareholder of Newco. According to the terms of the Merger Agreement, Newco will be merged with and into the Registrant. In connection with the merger: (a) the Public Stockholders (as defined below) will receive $2.30 in cash ($2.40 per share reduced by legal fees in the amount of $0.10 per share) for each share of the Registrant's Class A Common Stock which they own; and (b) the employees and directors of the Registrant who are not members of the Shaker Group or the Muller Group (as defined below) and who were granted options to acquire shares of Class A Common Stock will receive a per share cash payment equal to the excess, if any, of $2.30 ($2.40 per share reduced by legal fees in the amount of $0.10 per share) over the exercise price per share of any options to acquire shares of Class A Common Stock which they own. The Shaker Group and the Muller Group will continue to own the shares of Common Stock which they owned prior to the merger. Therefore, immediately following the merger: (a) the Shaker Group will own 801,910 shares, or 68.6%, of the outstanding shares of Class A Common Stock and 1,802,500 shares, or 69.9%, of the outstanding shares of Class B Common Stock (representing 69.8% of the voting power of the outstanding shares of Common Stock of the Registrant); and (b) the Muller Group will own 367,500 shares, or 31.4%, of the outstanding shares of Class A Common Stock and 776,752 shares, or 30.1%, of the outstanding shares of Class B Common Stock (representing 30.2% of the voting power of the outstanding shares of Common Stock of the Registrant). -------------------------------------------------------------------------------- In order to consummate the merger, the Registrant anticipates that it will borrow approximately $5.0 million from Comerica Bank. The proceeds of the loan, together with cash on hand, will be used to acquire the outstanding shares of Class A Common Stock from the Public Stockholders and the options to purchase shares of Class A Common Stock granted to certain employees and directors of the Registrant. The Shaker Group consists of the following individuals and trusts: Corey Shaker (individually and as custodian for Lindsay Shaker, Kristen Shaker and Edward Shaker), Edward Shaker Family Trust, Joseph Shaker, Shaker Irrevocable Trust, Richard Shaker Family Trust, Steven Shaker, Janet Shaker, Paul Shaker, Edward D. Shaker, Edward Shaker, Lillian Shaker, Richard Shaker and Rose Shaker. The Muller Group consists of the following individuals and trust: William C. Muller, Jr., Douglas D. Muller, Angela P. Muller, Rose Muller Trust, Robert Scott Doyle, Andrea L. Pantuso and Michelle Muller. A copy of the Agreement and Plan of Merger is attached as Exhibit 99.1. Section 9 - Financial Statements and Exhibits