FORM N-23C-3
[As adopted in release No. IC-19399, April 7, 1993,58 F.R. 19330.]
Notification of Repurchase Offer
PURSUANT TO RULE 23C-3 [17CFR 270.23C-3]
1. Investment Company Act File Number Date of Notification
811-90004 February 4, 1999
2. Exact name of investment company as specified in registration statement:
Avalon Capital Inc.
3. Address of principal executive office: (number, street, city, state, zip
code)
34 Chambers Street, Princeton, New Jersey 08542
4. Check one of the following:
A. [X] The notification pertains to a periodic repurchase offer under paragraph
(b) of rule 23c-3.
B. [ ] The notification pertains to a discretionary repurchase offer under
paragraph ( c ) of rule 23c-3.
C. [ ] The notification pertains to a periodic repurchase offer under paragraph
(b) of rule 23c-3 and a discretionary repurchase offer under paragraph
(c) of rule 23c-3.
By: _______________________________
Michael Miola
Title: _____________________________
Administrator
AVALON CAPITAL, INC.
OFFER TO PURCHASE FOR CASH 44,535
OF ITS ISSUED AND OUTSTANDING SHARES
AT NET ASSET VALUE PER SHARE
THE DEADLINE FOR SUBMITTING (OR WITHDRAWING) A TENDER OF
SHARES FOR REPURCHASE PURSUANT TO THIS OFFER IS 4:00 P.M.
(EASTERN TIME) ON FEBRUARY 26, 1999.
To the Holders of Shares of
AVALON CAPITAL, INC.:
Avalon Capital, Inc. (the "Company") is offering to purchase up to 44,535 of its
Shares of common stock (the "Shares") for cash at a price equal to their net
asset value ("NAV") as of the close of the New York Stock Exchange on February
26, 1999, upon the terms and conditions set forth in this Offer to Purchase and
the enclosed Letter of Transmittal which together constitute the "Offer."
If more than 44,535 Shares are duly tendered prior to the expiration of the
Offer, the Company may accept an additional amount of Shares not to exceed two
percent (2%) of the Shares outstanding on February 26, 1999 (currently 17,814
Shares). If security holders tender more than the repurchase offer amount plus
two percent of the outstanding Shares, the Company shall repurchase the Shares
tendered on a pro rata basis.
If you desire to tender all or any portion of your Shares, you should either (1)
complete and sign the Letter of Transmittal and mail or deliver it along with
any Share certificate(s) and any other required documents to American Data
Services, Inc. ("ADS") or (2) request your broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for you via a book
entry transfer or directly with American Stock Transfer & Trust Company, the
Company's transfer agent (the "Depositary").
IMPORTANT: IF YOUR SHARES ARE REGISTERED IN THE NAME OF A BROKER, DEALER,
COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE, YOU MUST CONTACT THAT BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE IF YOU DESIRE TO TENDER
YOUR SHARES.
<PAGE>
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. EACH
SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION WHETHER TO TENDER SHARES, AND IF
SO, HOW MANY SHARES TO TENDER.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER SHARES PURSUANT TO THE OFFER.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
Questions and requests for assistance may be directed to Hutner Capital
Management, Inc. ("Hutner Capital") or American Data Services, Inc. ("ADS") at
the addresses and telephone numbers set forth below. Requests for additional
copies of this Offer to Purchase and the Letter of Transmittal should be
directed to ADS.
February 4, 1999 AVALON CAPITAL, INC.
INVESTMENT ADVISER: ADMINISTRATOR:
Hutner Capital Management, Inc. American Data Services, Inc.
34 Chambers Street Hauppauge Corporate Center
Princeton, New Jersey 08542 150 Motor Parkway, Suite 109
Tel. (609) 683-3916 Hauppauge, New York 11788
Tel. (516) 951-0500 x 103
Fax (516) 951-0573
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SECTIONS
1. Number of Shares ......................................................... 3
2. Price..................................................................... 3
3. Procedure for Tendering Shares............................................ 3
4. Withdrawal Rights ........................................................ 5
5. Payment for Shares ....................................................... 5
6. Certain Conditions of the Offer .......................................... 6
7. Purpose of the Offer ..................................................... 6
8. Plans or Proposals of the Company ........................................ 7
9. Certain Effects of the Offer ............................................. 7
10. Source and Amount of Funds ............................................... 7
11. Certain Federal Income Tax Consequences .................................. 7
12. Extension of Tender Period; Termination; Amendments ...................... 7
1. NUMBER OF SHARES. The Company will, upon the terms and subject to the
conditions of the Offer, purchase up to 44,535 of its issued and outstanding
Shares that are tendered and not withdrawn before 4:00 p.m. (Eastern time) on
February 26, 1999.
On January 29, 1999, there were 890,693 Shares issued and outstanding and there
were approximately 264 holders of record of Shares, representing approximately
295 beneficial holders. The Company has been advised that none of the directors,
officers or affiliates intend to tender any Shares pursuant to the Offer. This
offer is being made to all shareholders of the Company and is not conditioned
upon any minimum number of Shares being tendered.
If more than 44,535 Shares are duly tendered prior to the expiration of the
Offer, the Company may accept an additional amount of Shares not to exceed two
percent (2%) of the Shares outstanding on February 26, 1999 (currently 17,814
Shares). If security holders tender more than the repurchase offer amount the
Company shall repurchase the Shares tendered on a pro rata basis.
2. PRICE. The purchase price of the Shares will be their net asset value ("NAV")
at the close of the New York Stock Exchange on February 26, 1999.
The NAV of a Share is normally calculated each Friday at the close of the New
York Stock Exchange. On January 29, 1999, the NAV was $17.72 per Share.
From December 6, 1995 until November 20, 1998 the Shares had been listed on the
NASDAQ SmallCap Market System, symbol MIST. As of November 20, 1998 the Shares
were no longer eligible to be listed on the NASDAQ SmallCap Market System. On
November 23, 1998 the Shares opened for trading on the Bulletin Board. The last
market price of the Shares was $16.25 on October 28, 1998, the most recent trade
date. On, January 29, 1999, utilizing the Bulletin Board, the bid and ask price
for a Share was $14.50 and $18.50, respectively.
The NAV of the Company's Shares will be calculated as of the close of the New
York Stock Exchange (typically 4:00 p.m. Eastern time) each Friday and each of
the five business days preceding February 26, 1999. You can obtain the Company's
current NAV and market quotations by calling ADS at (516) 951-0500 x 103.
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3. PROCEDURE FOR TENDERING SHARES. To tender any of your Shares pursuant to the
Offer, you may either: (a) send to ADS, at the address set forth above, any
certificates for such Shares, a properly completed and executed Letter of
Transmittal and any other documents required therein or (b) request your broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for you via a book entry transfer or directly with the Depositary.
Please call ADS at (516) 951-0500 x 103 to determine whether any additional
documents may be required.
THE METHOD OF DELIVERY OF ANY DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES, IS
AT THE ELECTION AND RISK OF THE PARTY TENDERING THE SHARES. IF DOCUMENTS ARE
SENT BY MAIL, IT IS RECOMMENDED THAT THEY BE SENT BY REGISTERED MAIL, PROPERLY
INSURED, WITH RETURN RECEIPT REQUESTED.
A. PROCEDURES FOR SHAREHOLDERS.
For shareholders to tender Shares effectively pursuant to the Offer, either (i)
the certificate Shares, if any, together with a properly completed and duly
executed Letter of Transmittal for the Shares being tendered and any other
documents required by such Letter of Transmittal must be received by ADS before
4:00 p.m. (Eastern time) on February 26, 1999, or (ii) the Shares must be
tendered pursuant to the procedure for book-entry transfer set forth below (and
a book-entry confirmation must be received by ADS) before 4:00 p.m. (Eastern
time) on February 26, 1999.
Signatures on the Letter of Transmittal need not be guaranteed unless (1) the
proceeds for the tendered Shares will amount to $50,000.00 or more, (2) the
Letter of Transmittal is signed by someone other than the registered holder of
the Shares tendered therewith or (3) payment for tendered Shares is to be sent
to a payee other than the registered owner of such Shares and/or to an address
other than that shown in the registration of the Shares. In those instances, all
signatures on the Letter of Transmittal must be guaranteed by an eligible
guarantor institution such as a bank, broker, dealer, credit union or savings
association authorized to guarantee signatures.
Payment for Shares tendered and purchased will be made only after receipt by ADS
at its address set forth on page 2 of this Offer to Purchase on or before 4:00
p.m. (Eastern time) on February 26, 1999 of a properly completed and duly
executed Letter of Transmittal, Share Certificates (if any) and any other
required documents.
IMPORTANT: BENEFICIAL OWNERS OF SHARES REGISTERED IN THE NAME OF A BROKER,
DEALER, BANK, TRUST COMPANY OR OTHER NOMINEE OR HELD THROUGH A BOOK-ENTRY
FACILITY, SHOULD NOT USE THE LETTER OF TRANSMITTAL. SUCH BENEFICIAL OWNERS
SHOULD CALL THEIR NOMINEES OR BOOK-ENTRY TRANSFER FACILITY PARTICIPANTS IF THEY
DESIRE TO TENDER SHARES.
B. PROCEDURES FOR BROKERS, DEALERS, COMMERCIAL BANKS, TRUST
COMPANIES AND NOMINEES:
You should transmit this Offer to your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. The Letter of Transmittal must be completed as
described above for accounts which are registered in your clients' name. Such
Letter of Transmittal is also to be used by your firm for tendering Shares
directly with ADS and it must be signed by an authorized officer of your firm
and signature guaranteed.
Accounts will be established at The Depository Trust Company, the Midwest
Securities Trust Company and the Philadelphia Depository Trust Company
(collectively referred to herein as the "Book-Entry Transfer Facilities", or
individually, as a "Book-Entry Transfer Facility") for purposes of the Offer
within two business days after the date of this Offer. Any financial institution
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<PAGE>
that is a participant in a Book-Entry Transfer Facility may make book-entry
delivery of Shares by causing such Book-Entry Transfer Facility to transfer such
Shares into the account, in accordance with such Book-Entry Transfer Facility's
procedure for such transfer. Although delivery of Shares may be effected through
a book-entry transfer at a Book-Entry Facility, a properly completed and duly
executed letter of Transmittal for the Shares being tendered, and any other
documents required by such Letter of Transmittal, must be received by ADS by
4:00 p.m. (Eastern time) on February 26, 1999.
C. DETERMINATIONS OF VALIDITY.
All questions as to the validity, form, eligibility (including time of receipt)
and acceptance of tenders will be determined by the Company, in its sole
discretion, whose determination shall be final and binding. The Company reserves
the absolute right to reject any or all tenders determined by it not to be in
appropriate form or the acceptance of or payment for which would, in the opinion
of the Company's counsel, be unlawful. The Company also reserves the absolute
right to waive any of the conditions of the Offer or any defect in any tender
with respect to any particular Shares or any particular shareholder, and the
Company's interpretations of the terms and conditions of the Offer will be final
and binding. Unless waived, any defects or irregularities in connection with
tenders must be cured within such times as the Company shall determine. Tenders
will not be deemed to have been made until the defects or irregularities have
been cured or waived. Neither the Company, Hutner Capital, ADS, or any other
person shall be obligated to give notice of any defects or irregularities in
tenders, nor shall any of them incur any liability for failure to give such
notice.
D. TENDER CONSTITUTES AN AGREEMENT.
A tender of Shares made pursuant to any one of the procedures set forth above
will constitute an agreement between the tendering shareholder and the Company
in accordance with the terms and subject to the conditions of the Offer.
4. WITHDRAWAL RIGHTS. You may withdraw a tender of Shares at any time before
4:00 p.m. (Eastern time) on February 25, 1999, and, if the Shares have not yet
been accepted for payment by the Company, at any time after February 26, 1999.
After that time, tenders made pursuant to the Offer will become irrevocable.
A withdrawal will be effective only if a written, telegraphic or facsimile
transmission notice of withdrawal is timely received by ADS at the address set
forth above. Any notice of withdrawal must specify the name of the person having
deposited the Shares to be withdrawn, the number of Shares to be withdrawn, and,
if the certificates representing such Shares have been delivered or otherwise
identified to ADS, the name of the registered holder(s) of such Shares as set
forth in such certificates and the number of Shares to be withdrawn. If the
certificates have been delivered to ADS, then, prior to the release of such
certificates, you must also submit the certificate numbers shown on the
particular certificates evidencing such Shares and the signature on the notice
of the withdrawal must be guaranteed by an Eligible Institution. All questions
as to the form and validity (including time of receipt) of notices of withdrawal
will be determined by the Company in its sole discretion, whose determination
shall be final and binding. Shares properly withdrawn shall not thereafter be
deemed to be tendered for purposes of the Offer. Withdrawn Shares may be
re-tendered, however, by following one of the procedures described in Section 2
before 4:00 p.m. (Eastern time) on February 26, 1999.
5. PAYMENT FOR SHARES. For purposes of the Offer, the Company will be deemed to
have accepted for payment (and hereby purchased) Shares which are tendered as,
if and when it gives oral or written notice to ADS of its election to purchase
such Shares.
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<PAGE>
Payment for Shares will be made by ADS to tendering shareholders as directed by
the Company within seven days after the Shares are accepted for repurchase. If
more than 44,535 Shares are duly tendered and a determination is made to accept
Shares for repurchase on a pro rata basis, there may be a delay in payment
because of the difficulty in determining the precise number of Shares validly
tendered. In the event of proration, the Company will not pay for Shares until
the final proration factor is known.
Certificates for Shares not purchased by the Company (see Sections 1 and 6), or
for Shares not tendered included in certificates forwarded to ADS, will be
returned promptly following the termination, expiration or withdrawal of the
Offer, without expense to the tendering shareholder.
The Company will pay all transfer taxes, if any, payable on the transfer to it
of Shares purchased pursuant to the Offer. If, however, payment of the purchase
price is to be made to, or (in the circumstances permitted by the Offer) if
unpurchased Shares are to be registered in the name of any person other than the
registered holder, or if tendered certificates are registered in the name of any
person other than the person signing the Letter of Transmittal, the amount of
any such transfer taxes (whether imposed on the registered holder or such other
person) payable on account of the transfer to such person will be deducted from
the purchase price unless satisfactory evidence of the payment of such taxes, or
exemption therefrom, is submitted. The Company will not pay any interest on the
purchase price under any circumstances.
A TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND SIGN THE
FORM W-9 INCLUDED WITH THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED
FEDERAL INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAID TO SUCH
SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTION 11.
6. CERTAIN CONDITIONS OF THE OFFER. The Company shall not be required to accept
for payment or pay for any Shares tendered, and may terminate or amend the
Offer; postpone the acceptance for payment of or payment for Shares tendered,
or, if more than 44,535 Shares are tendered, accept Shares for payment on a pro
rata basis, upon vote of a majority of the Directors, including a majority of
the Directors who are not interested persons of the Company under any of the
following conditions:
(1) the repurchase, if consummated, would impair the Company's status
as a regulated investment company under the Internal Revenue Code (which would
make the Company a taxable entity, causing the Company's income to be taxed at
the corporate level in addition to the taxation of shareholders who receive
dividends from the Company);
(2) for any period during which shares are not traded in the
Over-The-Counter Market, other than customary week-end and holiday closings, or
during which trading in such market is restricted;
(3) for any period during which an emergency exists as a result of
which disposal by the Company of securities owned by it is not reasonably
practicable, or during which it is not reasonably practicable for the Company
fairly to determine the value of its net assets; or
(4) for such other periods as the Securities and Exchange Commission
may by order permit for the protection of security holders of the Company.
If the Board of Directors of the Company determines to terminate or
amend the Offer or to postpone the acceptance for payment of or payment for
Shares tendered, it will, to the extent necessary, extend the period of time
during which the Offer is open (See Section 12). Moreover, in the event any of
the foregoing conditions are modified or waived in whole or in part at any time,
the Company will promptly make a public announcement of such waiver and may,
depending on the materiality of the modification or waiver, extend the Offer
period.
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7. PURPOSE OF THE OFFER. Shares of closed-end investment companies traded on a
secondary market frequently trade at a discount from, or premium to, the NAV per
share. In recognition of the possibility that its Shares might trade at a
discount, the Company has a fundamental policy, that may only be changed with
shareholder approval, to repurchase not less than five nor more than twenty-five
percent of its common stock at NAV on the last business day of February of each
year. The percentage of Shares to be repurchased is within the sole discretion
of the Board of Directors of the Company. The Directors have determined that it
would be in the best interest of shareholders for the Company to take action to
reduce or eliminate any market value discount from NAV that might exist by
offering to repurchase up to five percent of the Shares outstanding as of
January 29, 1999. There can be no assurance that repurchase offers will result
in the Shares trading at a price which is equal to their NAV.
8. PLANS OR PROPOSALS OF THE COMPANY. The Company has no present plans or
proposals which relate to, or would result in, any extraordinary corporate
transaction such as a merger, reorganization, or liquidation involving the
Company; a sale or transfer of a material amount of assets of the Company; any
material changes in the Company's present capitalization (except as resulting
from the Offer or otherwise set forth herein); or, any other material changes in
the Company's corporate structure or business.
9. CERTAIN EFFECTS OF THE OFFER. The purchase of Shares pursuant to the Offer
will have the effect of increasing the proportionate interest in the Company of
shareholders who do not tender their Shares. If you retain your Shares, however,
you will be subject to any increased risks that may result from the reduction in
the Company's aggregate assets resulting from payment for the Shares, E.G.,
greater volatility due to decreased diversification and higher expenses. All
Shares purchased by the Company pursuant to the Offer will be retired by the
Board of Directors of the Company.
10. SOURCE AND AMOUNT OF FUNDS. The total cost to the Company of purchasing
44,535 Shares pursuant to the Offer will be approximately $790,000. If, in the
sole discretion of the Company, the additional two percent (2%) is purchased,
the cost to the Company will be approximately $1,100,000. The Company
anticipates that the purchase price for any Shares acquired pursuant to the
Offer will first be derived from cash on hand, such as proceeds from the sale of
cash equivalents held by the Company.
11. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following discussion is a
general summary of the federal income tax consequences of a sale of Shares
pursuant to the Offer. It does not address all federal income tax considerations
that may be relevant to particular shareholders in light of their specific
circumstances, such as shareholders who are dealers in securities, foreign
persons or tax-exempt entities, nor does it address any aspects of state, local,
foreign or other tax laws. You should consult your own tax adviser for a
complete description of the tax consequences to you of a sale of Shares pursuant
to the Offer.
A shareholder who, pursuant to the Offer, tenders all Shares owned or considered
owned by such shareholder will realize a taxable gain or loss depending upon the
shareholder's basis in the Shares. Such gain or loss will be treated as capital
gain or loss if the Shares are capital assets in the shareholder's hands and
will be long-term or short-term depending upon the shareholder's holding period
for the Shares. If a tendering shareholder tenders less than all Shares owned by
and attributed to such shareholder (or if the Company purchases only some of the
Shares tendered by a shareholder), and if the distribution to such shareholder
does not otherwise qualify as an exchange, the proceeds received will be treated
as a dividend, return of capital or capital gain depending on the Company's
earnings and profits and the shareholder's basis in the tendered Shares. There
is a risk that non-tendering shareholders may be considered to have received a
deemed distribution as a result of the repurchase by the Company of tendered
Shares and that such distribution may be taxable as a dividend in whole or in
part.
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12. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS. The Company reserves
the right, at any time and from time to time, to extend the period of time
during which the Offer is pending by making a public announcement thereof. In
the event that the Company so elects to extend the tender period, the NAV for
the Shares tendered will be determined as of the close of the New York Stock
Exchange on the extended deadline date. During any such extension, all Shares
previously tendered and not purchased or withdrawn will remain subject to the
Offer. Without limiting the manner in which the Company may choose to make a
public announcement of extension or amendment, except as provided by applicable
law, the Company shall have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by making a release to the
Dow Jones News Service.
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LETTER OF TRANSMITTAL
To Be Used To Tender Shares Of
Avalon Capital, Inc.
Pursuant to the Offer to Purchase
Dated February 4, 1999
---------------------
THE DEADLINE FOR SUBMITTING (OR WITHDRAWING) A TENDER OF
SHARES FOR REPURCHASE IS 4:00 P.M. (EASTERN TIME) ON
FEBRUARY 26, 1999.
---------------------
PLEASE COMPLETE AND SUBMIT THIS LETTER OF TRANSMITTAL TO:
American Data Services, Inc.
Hauppauge Corporate Center
150 Motor Parkway, Suite 109
Hauppauge, New York 11788
Fax (516) 951-0573
DELIVERY TO ANOTHER ADDRESS DOES NOT CONSTITUTE VALID DELIVERY.
IF YOUR SHARES ARE REGISTERED IN THE NAME OF A BROKER, DEALER, COMMERCIAL BANK,
TRUST COMPANY OR OTHER NOMINEE, YOU MUST CONTACT THAT BROKER, DEALER, COMMERCIAL
BANK, TRUST COMPANY OR OTHER NOMINEE IF YOU DESIRE TO TENDER YOUR SHARES.
The Letter of Transmittal is to be completed by shareholders only if Shares are
being tendered herewith or if Shares are being tendered by book-entry transfer
to the account maintained by American Stock Transfer & Trust Company, the
Company's transfer agent (the "Depositary"), at The Depository Trust Company
("DTC"), the Midwest Securities Trust Company ("MSTC") and the Philadelphia
Depository Trust Company ("PDTC") (collectively referred to herein as the
"Book-Entry Transfer Facilities", or individually as a "Book-Entry Transfer
Facility"). Delivery of documents to a Book-Entry Transfer Facility does not
constitute delivery to American Data Services, Inc. See Instruction 2.
Capitalized terms used in this Letter of Transmittal are defined in the Offer to
Purchase.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
THIS FORM AND ANY NECESSARY DOCUMENTATION MUST BE RECEIVED
BY AMERICAN DATA SERVICES, INC. AT THE ABOVE ADDRESS, IN GOOD
ORDER, BY 4:00 P.M. ON FEBRUARY 26, 1999.
<PAGE>
To Whom it May Concern:
The undersigned hereby tenders to Avalon Capital, Inc., a closed-end
investment company organized as a Maryland corporation (the "Company"), the
Shares described below of its common stock, $0.001 par value per share, at a
price equal to the net asset value per share ("NAV") calculated on February 26,
1999, in cash upon the terms and conditions set forth in the Offer to Purchase
dated February 4, 1999, receipt of which is hereby acknowledged, and in this
Letter of Transmittal.
The undersigned hereby sells to the Company all Shares tendered hereby
that are purchased pursuant to the Offer and hereby irrevocably constitutes and
appoints the Depositary as attorney in fact of the undersigned, with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to present such Shares and any share certificates for
cancellation of such Shares on the Company's books. The undersigned hereby
warrants that the undersigned has full authority to sell the Shares tendered
hereby and that the Company will acquire good title thereto, free and clear of
all liens, charges, encumbrances, conditional sales agreements or other
obligations relating to the sale thereof, and not subject to any adverse claim,
when and to the extent the same are purchased by it. Upon request, the
undersigned will execute and deliver any additional documents necessary to
complete the sale in accordance with the terms of the Offer.
<PAGE>
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DESCRIPTION OF SHARES TENDERED FOR REDEMPTION AT NET ASSET VALUE
(SEE INSTRUCTIONS 3 AND 4)
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CHECK ONE:
[x] PARTIAL TENDER -- ONLY THE NUMBER OF SHARES OR DOLLARS
REFLECTED BELOW ARE TO BE TENDERED.
[x] COMPLETE TENDER -- ALL SHARES (CERTIFICATED AND UNCERTIFICATED)
ARE TO BE TENDERED.
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NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE(S)
(PLEASE FILL IN EXACTLY THE NAME(S) IN WHICH (ATTACH ADDITIONAL SCHEDULE
SHARES ARE REGISTERED)TENDERED IF NECESSARY)
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CERTIFICATE NO. OF NO. OF SHARES
NO.(S)* SHARES TENDERED**
--------------- ---------------- ----------------
--------------- ---------------- ----------------
--------------- ---------------- ----------------
--------------- ---------------- ----------------
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ACCOUNT NO.
TOTAL SHARES TENDERED __________ OR ALL [ ]
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DAYTIME TELEPHONE NUMBER ( ) OR TOTAL DOLLARS
------------------------ TENDERED $_______________
* NEED NOT BE COMPLETED BY SHAREHOLDERS WHOSE SHARES ARE NOT
EVIDENCED BY CERTIFICATES.
** TO BE COMPLETED BY ALL TENDERING SHAREHOLDERS, WHETHER OR NOT YOUR SHARES
ARE EVIDENCED BY CERTIFICATES. IF YOU DESIRE TO TENDER FEWER THAN ALL
SHARES HELD IN YOUR ACCOUNT OR EVIDENCED BY A CERTIFICATE LISTED ABOVE,
PLEASE INDICATED IN THIS COLUMN THE NUMBER YOU WISH TO TENDER. OTHERWISE
ALL SHARES EVIDENCED BY SUCH CERTIFICATE OR HELD IN YOUR ACCOUNT WILL BE
DEEMED TO HAVE BEEN TENDERED.
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BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY
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( CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH DTC AND COMPLETE THE
FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY
DELIVER SHARES BY BOOK-ENTRY TRANSFER)
NAME OF TENDERING INSTITUTION ............................................
DTC ACCOUNT NUMBER .......................................................
TRANSACTION CODE NUMBER ..................................................
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THE CHECK FOR THE PURCHASE PRICE FOR THE TENDERED SHARES SHOULD BE
ISSUED TO THE ORDER OF THE UNDERSIGNED AND MAILED TO THE ADDRESS INDICATED ABOVE
UNLESS OTHERWISE INDICATED UNDER THE SPECIAL PAYMENT INSTRUCTIONS OR SPECIAL
DELIVERY INSTRUCTIONS BELOW.
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SPECIAL PAYMENT OR DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5, 6 AND 7)
TO BE COMPLETED ONLY IF CERTIFICATES FOR
UNPURCHASED SHARES AND/OR ANY CHECK OR FEDERAL FUNDS
WIRE* ARE TO BE ISSUED IN THE NAME OF OR SENT TO
SOMEONE OTHER THAN THE UNDERSIGNED.
ISSUE: [x] CHECK OR [GRAPHIC
OMITTED] FEDERAL FUNDS WIRE* TO:
NAME(S) ...........................................
(PLEASE PRINT)
ADDRESS............................................
...................................................
(INCLUDE ZIP CODE)
...................................................
SIGNATURE(S) OF PAYEE(S)
...................................................
ACCOUNT # (IF APPLICABLE) .........................
ABA # (IF APPLICABLE) .............................
...................................................
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
* PROCEEDS MUST EXCEED $5,000 IN ORDER TO BE WIRED TO
YOUR BANK.
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- -----------------------------------------------------
MAIN SIGNATURE FORM
SIGN HERE
(SEE INSTRUCTIONS 1 AND 5)
...................................................
...................................................
(SIGNATURE(S) OF OWNER(S) EXACTLY AS REGISTERED)
DATE ......................., 1999
NAME(S) ...........................................
...................................................
(PLEASE PRINT)
TELEPHONE NUMBER ( )
SIGNATURE(S)
GUARANTEED* .......................................
* MUST BE OBTAINED FROM AN ELIGIBLE GUARANTOR
INSTITUTION SUCH AS A BANK, BROKER, DEALER, CREDIT
UNION OR SAVINGS ASSOCIATION AUTHORIZED TO
GUARANTEE SIGNATURES. SEE INSTRUCTION 1.
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
THIS LETTER OF TRANSMITTAL IS TO BE USED ONLY IF YOU DESIRE TO EFFECT THE TENDER
OFFER TRANSACTION YOURSELF AND DO NOT INTEND TO REQUEST YOUR BROKER, DEALER OR
OTHER SELLING GROUP MEMBER TO EFFECT THE TRANSACTION FOR YOU.
1. GUARANTEE OF SIGNATURES. If the Letter of Transmittal is signed by
the registered holder of the shares, the payment of the tender offer proceeds
are to be sent to the registered owner of the shares and to the address shown in
the share registration and that address has not changed within the previous six
months and the tender offer proceeds will be less than $50,000, no signature
guarantee is required. In all other cases, all signatures on this letter of
transmittal must be guaranteed by an eligible signature guarantor such as a
bank, broker, dealer, credit union or savings association authorized to
guarantee signatures.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES OR BOOK-ENTRY
CONFIRMATIONS. Shareholders should mail or deliver shares or confirmation of any
book-entry transfer of shares into the depositary's account with a book-entry
transfer facility to the depositary at the appropriate address set forth herein
pursuant to the procedure set forth in section 2 of the offer, together with a
properly completed and duly executed letter of transmittal and any other
documents required by this letter of transmittal. Shares or such confirmation
must be received by the depositary on or prior to the expiration date.
THE METHOD OF DELIVERY OF SHARES AND OTHER DOCUMENTS IS AT THE ELECTION
AND RISK OF THE TENDERING SHAREHOLDER. IT IS RECOMMENDED THAT SHARES DELIVERED
BY MAIL BE SENT BY REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IN SUFFICIENT TIME TO PERMIT RECEIPT BY THE DEPOSITARY ON OR PRIOR TO
FEBRUARY 26, 1999. FOR ASSISTANCE REGARDING METHOD OF DELIVERY OF SHARES, CALL
AMERICAN DATA SERVICES, INC. AT (516) 951-0500 X 103.
3. INADEQUATE SPACE. If the space provided is inadequate, the
certificate numbers and number of shares should be listed on a separate signed
schedule attached hereto.
4. PARTIAL TENDERS. If fewer than all of the shares evidenced by any
certificate submitted are to be tendered, fill in the number of shares which are
to be tendered in the column entitled "No. of Shares Tendered." A new
certificate for the remainder of the shares evidenced by your old certificate(s)
will be sent to you, unless otherwise specified in the "Special Payment
Instructions" or "Special Delivery Instructions" boxes on this Letter of
Transmittal, as soon as practicable under the Expiration Date of the offer. All
shares represented by certificates listed are deemed to have been tendered
unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, AUTHORIZATIONS AND
ENDORSEMENTS.
(a) If this Letter of Transmittal is signed by the registered holder of
the Shares tendered hereby, the signature(s) must correspond with the name(s) in
which the Shares are registered.
(b) If the Shares are held of record by two or more joint holders, all
such holders must sign this letter of transmittal.
(c) If any tendered shares are registered in different names it will be
necessary to complete, sign and submit as many separate Letters of Transmittal
as there are different registrations of Shares.
-1-
<PAGE>
(d) When this Letters of Transmittal is signed by the registered
holder(s) of the Shares listed and, if applicable, of the certificates
transmitted hereby, no endorsements of certificates or separate authorizations
are required. If, however, the unpurchased Shares are to be registered in the
name of any person other than the registered holder(s) or any certificates for
unpurchased shares are to be issued to a person other than the registered
holder(s), then the letter of transmittal and, if applicable, the certificates
transmitted hereby must be endorsed or accompanied by appropriate
authorizations, in either case signed exactly as the name(s) in which the shares
are registered.
(e) If this letter of transmittal or any certificates or authorizations
are signed by trustees, executors, administrators, guardians, attorneys in fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and must submit proper
evidence satisfactory to the company of their authority so to act.
6. TRANSFER TAXES. The company will pay all the taxes, if any, payable
on the transfer to it of Shares, purchased pursuant to the Offer. If, however,
payment of the purchase price is to be made to, or (in the circumstances
permitted by the offer) if unpurchased Shares are to be registered in the name
of any person other than the registered holder, or if tendered certificates are
registered in the name of any person other than the person(s) signing this
letter of transmittal, the amount of any transfer taxes (whether imposed on the
registered holder or such other person) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If certificates for
unpurchased shares and/or checks are to be issued in the name of a person other
than the signer of this Letters of Transmittal or if such certificates and/or
checks are to be sent to someone other than the signer of this Letters of
Transmittal, the appropriate boxes on this letter of transmittal should be
completed.
8. IRREGULARITIES. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance of any tender of Shares will be
determined by the company, whose determination shall be final and binding. The
company reserves the absolute right to reject any or all tenders determined by
it not to be in appropriate form or the acceptance of or payment for which
would, in the opinion of the company's counsel, be unlawful. The company also
reserves the absolute right to waive any of the conditions of the offer or any
defect in any tender with respect to any particular shares or any particular
shareholder, and the Company's interpretations of the terms and conditions of
the offer (including these instructions) will be final and binding. Unless
waived, any defects or irregularities in connection with tenders must be cured
within such time as the Company shall determine. Tenders will not be deemed to
have been made until all defects and irregularities have been cured or waived.
Neither the Company, hutner capital, American Data Services, inc., Nor any other
person shall be obligated to give notice of defects or irregularities in
tenders, nor shall any of them incur any liability for failure to give any such
notice.
9. IMPORTANT TAX INFORMATION. Under federal income tax law, a
shareholder whose tendered shares are accepted for payment must provide american
data services, inc. (As payer) with a correct taxpayer identification number,
which is accomplished by completing and signing the Substitute Form W-9 on the
front of this letter.
10. ADDITIONAL COPIES. Additional copies of the offer to purchase and
this Letters of Transmittal may be obtained from American Data Services, Inc.,
150 Motor Parkway, Suite 109, Hauppauge, New York 11788, or by telephoning (516)
951-0500 x 103.
-2-
OFFER BY
Avalon Capital, Inc.
TO PURCHASE 44,535 OF ITS SHARES
FOR CASH AT NET ASSET VALUE PER SHARE
To Our Clients:
Enclosed for your consideration is the offer of Avalon Capital, Inc.
(the "Company") dated February 4, 1999, to purchase a portion of its outstanding
shares of common stock and a related Letter of Transmittal. The Company is
offering to purchase up to 44,535 of its shares of common stock (the "Shares")
at the net asset value per Share ("NAV") calculated as of the close of the New
York Stock Exchange on February 26, 1999, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal
(which together constitute the "Offer").
The Offer to Purchase and the Letter of Transmittal are being forwarded
to you as the beneficial owner of Shares held by us in your account but not
registered in your name. A tender of such Shares can be made only by us as the
holder of record and only pursuant to your instructions.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 4:00 P.M. (EASTERN TIME) ON
FRIDAY, FEBRUARY 26, 1999. YOUR INSTRUCTIONS TO US SHOULD BE FORWARDED IN AMPLE
TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF.
Your attention is called to the following:
(1) The tender price is the NAV per Share in cash as of the close of
the New York Stock Exchange on February 26, 1999.
(2) The Offer is not conditioned upon any minimum number of Shares
being tendered, but is subject to certain other conditions set forth therein.
(3) Tendering shareholders will not be obligated to pay brokerage
commissions or, subject to Instruction 6 of the Letter of Transmittal, transfer
taxes on the purchase of Shares by the Company pursuant to the Offer. However, a
broker or dealer may charge a fee for processing the transaction on your behalf.
(4) If more than 44,535 Shares are duly tendered prior to the
expiration of the Offer, the Company may accept an additional amount of Shares
not to exceed two percent (2%) of the Shares outstanding on February 26, 1999
(currently 17,814 Shares). If security holders tender more than the repurchase
offer amount the Company shall repurchase the Shares tendered on a pro rata
basis.
<PAGE>
THIS FORM IS NOT TO BE USED TO TENDER SHARES DIRECTLY WITH THE
DEPOSITARY. IT SHOULD ONLY BE SENT TO YOUR BROKER IF YOUR BROKER WILL
BE EFFECTING THE TENDER ON YOUR BEHALF.
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter together with the
Offer to Purchase dated February 4, 1999, relating to the Offer by Avalon
Capital, Inc. (the "Company") to purchase 44,535 shares of common stock, $0.001
par value per share (the "Shares"), and the related Letter of Transmittal.
TO BROKERS:
This will instruct you to tender by Letter of Transmittal (Dealer Firm)
to the Company the number of Shares indicated below (or, if no number is
indicated below, all Shares) which are held by you for the account of the
undersigned, upon the terms and subject to the conditions set forth in the Offer
to Purchase, and in the related Letter of Transmittal.
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Aggregate number of Shares to be tendered by us.
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.................................. Shares.
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Unless otherwise indicated above,
it will be assumed that all of your Shares held by us are to be tendered.
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SIGNATURE BOX
......................................................................
......................................................................
Signature
......................................................................
......................................................................
......................................................................
(Please print Name(s) and Address here.)
......................................................................
Tax Identification or Social Security Number
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Date: February _____, 1999
Avalon Capital, Inc.
34 Chambers Street
Princeton, NJ 08542
February 4, 1999
Dear Shareholder:
Avalon Capital, Inc. (the "Company") annually offers to repurchase a
percentage of its issued and outstanding stock (the "Shares"). This is a
fundamental policy that cannot be changed except with the approval of the
Company's shareholders. We are enclosing the Company's Offer to Purchase
("Offer") 44,535 Shares at the net asset value ("NAV") per share determined on
February 26, 1999
Before you decide whether to tender any or all of your shares in this
repurchase offer, you should read the enclosed information carefully. If you
decide to participate in this repurchase offer, please complete the enclosed
Letter of Transmittal (the "Letter") or contact your broker, dealer, or nominee
to effect the tender for you.
THE LETTER OF TRANSMITTAL AND ALL NECESSARY DOCUMENTS MUST BE
COMPLETED, SIGNED AND RECEIVED IN GOOD ORDER BY AMERICAN DATA SERVICES, INC.
("ADS") NO LATER THAN 4:00 P.M. (EASTERN TIME) ON FRIDAY, FEBRUARY 26, 1999.
If you have any questions about the enclosed material, please contact
ADS at (516) 951-0500 x 103. Thank you for your continued interest in Avalon
Capital, Inc.
Sincerely,
Avalon Capital, Inc.
