EXHIBIT 99.2
To the Holders of Certain Senior
Subordinated Pay-In-Kind
Notes Due 2003
of Thousand Trails, Inc.
Re: Supplement to the Compliance Agreements between Thousand Trails, Inc.
(the "Company") and the Selling Security Holders Party Thereto
("Compliance Agreements") for Proposed Secondary Offerings of the
Company's Senior Subordinated Pay-In-Kind Notes Due 2003 (the "PIK
Notes")
Please be advised that the Securities and Exchange Commission has recently
adopted Regulation M ("Regulation M") under the Securities Exchange Act of 1934
(the "Exchange Act"). This new regulation will become effective March 4, 1997.
Regulation M contains successor provisions to Rules 10b-6 and 10b-7 of the
Exchange Act. As a consequence, following the effectiveness of Regulation M, the
provisions of the Compliance Agreements will be supplemented by these successor
provisions.
As applied to the procedures set out in the Compliance Agreements regarding
the secondary offering of PIK Notes, Regulation M permits the reduction in the
number of Business Days immediately prior to the date a Selling Security Holder
commences selling efforts that the Selling Security Holder and its "affiliated
purchasers" are restricted from bidding for or purchasing the PIK Notes. The
restriction under Rule 10b-6 applies for nine(9) Business Days before the
commencement date; under Regulation M, this period will be shortened to five (5)
Business Days. The Compliance Agreements will be, therefore, deemed amended to
reflect such five (5) Business Day Period from and after the effective date of
Regulation M.
Resales of PIK Notes may not be effected under the Company's Registration
Statement relating to the proposed offering, which was filed January 7, 1997,
until it has been declared effective by the Securities and Exchange Commission.
The Company will notify you when that occurs. Until then, resales may only be
effected pursuant to an available exemption from the registration requirements
of the Securities Act of 1933, as amended, and applicable state securities laws.
Selling Security Holders
February 26, 1997
Page 2
Xxxxxx X. Xxxxxxx, General Counsel and Secretary of the Company, can be
reached at 000-000-0000 or 000-000-0000 to address any questions concerning the
foregoing.
Dated: February 25, 1997
Very truly yours,
THOUSAND TRAILS, INC.
By: Xxxxxx X. Xxxxxxx
General Counsel and Secretary
