EXHIBIT 99.1
FORM OF THOUSAND TRAILS, INC. COMPLIANCE AGREEMENT
This Compliance Agreement (this "Agreement") is between Thousand Trails,
Inc., a Delaware corporation (the "Company"), and the undersigned holder (the
"Selling Security Holder") of the Company's Senior Subordinated Pay-In-Kind
Notes due 2003 (the "Securities").
RECITALS
A. The Company granted the Selling Security Holder or a predecessor holder
of its PIK Notes and others registration rights with respect to the Securities
in the Registration Rights Agreement, dated as of July 17, 1996 (the
"Registration Rights Agreement").
B. The Company contemplates filing a Registration Statement on Form S-1
(the "Registration Statement") with the Securities and Exchange Commission to
register the distribution of the Securities as contemplated by the Registration
Rights Agreement.
C. The Company has requested that the Selling Security Holder confirm the
inclusion of its Securities in the Registration Statement.
D. The Company and the Selling Security Holder desire to ensure that the
Company and the Selling Security Holder comply with all applicable laws, rules
and regulations in connection with the distributions or transfers of the
Securities as contemplated by the Registration Statement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. CONSENT. The Selling Security Holder consents to the inclusion of its
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Securities in the Registration Statement and to its being named as a selling
security holder in the Registration Statement. If the Selling Security Holder
is not the initial holder of its PIK Notes, the Selling Security Holder agrees
to provisions of the Registration Rights Agreement as if it were such initial
holder.
2. REPRESENTATIONS AND WARRANTIES. The Selling Security Holder represents
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and warrants to the Company as follows:
(a) CONFIRMATION OF INFORMATION. The information as to the beneficial
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ownership of its Securities and the plan of distribution for such
Securities provided by the Selling Security Holder is true and correct in
all material respects. Such information does not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading. Such information shall be deemed to be the information
furnished to the Company for
inclusion in the Registration Statement for the purposes of the Selling
Security Holder's indemnification obligations under Section 6(a) of the
Registration Rights Agreement.
(b) TITLE. The Selling Security Holder now has, and will have at all
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times that the Selling Security Holder engages in selling efforts with
respect to its Securities, valid and marketable title to the Securities to
be sold by it, free and clear of any lien, claim, security interest,
restriction or other encumbrance.
(c) AUTHORITY TO SELL. The Selling Security Holder now has, and will
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have at all times that the Selling Security Holder engages in selling
efforts with respect to its Securities, full power and authority (with
regard to a Selling Security Holder that is a corporation, partnership, or
other business entity) or full legal right, power, and capacity (with
regard to a Selling Security Holder who is an individual), and any approval
required by law, to sell, assign, transfer, and deliver such Securities.
3. COMPLIANCE WITH SECURITIES LAWS. The Selling Security Holder covenants
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to the Company as follows:
(a) RULE 10b-6. The Selling Security Holder will deliver to the
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Company a written notice at least 10 but not more than 20 Business Days
before engaging in any selling efforts with respect to any Securities. Such
notice shall set forth the name of the Selling Security Holder, the
Securities with respect to which the Selling Security Holder will engage in
selling efforts, and the date when the Selling Security Holder will begin
such selling efforts (the "Commencement Date"). The Selling Security Holder
may then engage in selling efforts and sell the Securities described in the
notice during the period beginning on the Commencement Date and ending on
the 20th Business Day immediately following the Commencement Date (the
"Selling Period"). After the expiration of the Selling Period, the Selling
Security Holder must deliver another notice to the Company pursuant to this
Section 3(a) before engaging in additional selling efforts. The Selling
Security Holder and any "affiliated purchaser," as defined in Rule 10b-
6(c), with respect to the distribution or transfer of Securities by the
Selling Security Holder will not bid for or purchase any Securities during
the period beginning on the 9th Business Day immediately before the
Commencement Date and ending on the last day of the Selling Period, and
will otherwise comply with the restrictions set forth in Rule 10b-6. The
term "Business Day" shall mean a day that is not a Sunday, Saturday, or
holiday for purposes of the federal securities laws.
(b) RULE 10b-7. The Selling Security Holder will not engage in
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stabilizing transactions with respect to its Securities or violate Rule
10b-7 under the Exchange Act.
(c) SECURITIES LAWS. The Selling Security Holder will not violate any
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federal securities laws, or the securities laws of any state or other
jurisdiction, in connection with the distribution or transfer of its
Securities.
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4. MISCELLANEOUS.
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(a) AMENDMENTS AND WAIVERS. No amendment or waiver of any of the
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provisions of this Agreement shall be effective unless in writing and
signed by the Company and the Selling Security Holder.
(b) NOTICES. All notices and other communications in connection with
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this Agreement shall be in writing and deemed to have been received on the
day of delivery if delivered by hand, overnight express or facsimile
transmission, or three days after the date of posting if mailed by
registered or certified mail, postage prepaid, addressed to each party at
its address described below (or to such other address to which such party
has notified each other party in accordance with this Section 4(b) to send
such notices or communications):
(i) If to the Selling Security Holder, at its address or
facsimile number as shown on the signature page hereto; and
(ii) If to the Company, at:
Thousand Trails, Inc.
0000 XXX Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: General Counsel or Secretary
(c) GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED
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ACCORDING TO, AND GOVERNED BY, THE LAWS OF THE STATE OF TEXAS, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF, AND SUCH FEDERAL LAWS
AS MAY APPLY.
[SIGNATURES ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement.
COMPANY:
Dated: December ___, 1996 THOUSAND TRAILS, INC.
By:
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Xxxxxx X. Xxxxxxx
Vice President
SELLING SECURITY HOLDER:
Dated: December ___, 1996 NAME:
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Address:
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Facsimile No.:
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By:
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Name:
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Title:
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