UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(AMENDMENT NO. 9)
-----------------------
THOUSAND TRAILS, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
917326-10-0
(CUSIP Number)
-----------------------
IRIS B. ROSKEN 1/
Carl Marks Management Company, L.P.
135 East 57th Street
New York, NY 10022-2032
Tel. No.: (212) 909-8400
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
-----------------------
APRIL 22, 1999
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
statement because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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Page 1 of 27 Pages
- --------
1/ Copy to: John C. Kennedy, Esq., Paul, Weiss, Rifkind, Wharton & Garrison,
1285 Avenue of the Americas, New York, New York 10019-6064,
Tel: (212) 373-3000.
<PAGE>
SCHEDULE 13D
CUSIP NO. 917326-10-0 Page 2 of 27 Pages
-----------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Carl Marks Strategic Investments, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF 3,436,863 shares
SHARES
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH REPORTING
PERSON None
WITH
9 SOLE DISPOSITIVE POWER
3,436,863 shares
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,436,863 shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
41.2%
14 TYPE OF REPORTING PERSON
PN
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<PAGE>
SCHEDULE 13D
CUSIP NO. 917326-10-0 Page 3 of 27 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Carl Marks Strategic Investments II, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF 1,140,481 shares
SHARES
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH REPORTING
PERSON None
WITH
9 SOLE DISPOSITIVE POWER
1,140,481 shares
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,140,481 shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.5%
14 TYPE OF REPORTING PERSON
PN
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<PAGE>
SCHEDULE 13D
CUSIP NO. 917326-10-0 Page 4 of 27 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Carl Marks Management Company, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF 4,577,344 shares
SHARES
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH REPORTING
PERSON None
WITH
9 SOLE DISPOSITIVE POWER
4,577,344 shares
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,577,344 shares 2/
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.9%
14 TYPE OF REPORTING PERSON
PN, IA
--------------
2/ Includes shares also reported herein as beneficially owned by other
Reporting Persons. See Item 5.
<PAGE>
SCHEDULE 13D
CUSIP NO. 917326-10-0 Page 5 of 27 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Andrew M. Boas
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF, PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States Citizen
7 SOLE VOTING POWER
NUMBER OF 31,569 shares
SHARES
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH REPORTING
PERSON 4,896,917 shares
WITH
9 SOLE DISPOSITIVE POWER
31,569 shares
10 SHARED DISPOSITIVE POWER
4,896,917 shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,928,486 shares 3/
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
59.0%
14 TYPE OF REPORTING PERSON
IN
--------------
3/ Includes shares also reported herein as beneficially owned by other
Reporting Persons. See Item 5.
<PAGE>
SCHEDULE 13D
CUSIP NO. 917326-10-0 Page 6 of 27 Pages
-----------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert C. Ruocco
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States Citizen
7 SOLE VOTING POWER
NUMBER OF None
SHARES
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH REPORTING
PERSON 4,894,329 shares
WITH
9 SOLE DISPOSITIVE POWER
None
10 SHARED DISPOSITIVE POWER
4,894,329 shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,894,329 shares 4/
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
58.7%
14 TYPE OF REPORTING PERSON
IN
--------------
4/ Includes shares also reported herein as beneficially owned by other
Reporting Persons. See Item 5.
<PAGE>
Page 7 of 27 Pages
ITEM 1. SECURITY AND ISSUER.
This Amendment No. 9 to Schedule 13D (this "Amendment") relates to the
Common Stock, par value $.01 per share (the "Common Stock"), issued by Thousand
Trails, Inc. (formerly USTrails Inc.), a Nevada corporation (the "Company"). The
principal executive offices of the Company are located at 2711 LBJ Freeway,
Suite 200, Dallas, Texas 75234.
This Amendment is being filed pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Exchange Act"). This Amendment further amends a
Schedule 13D, dated January 9, 1992, as previously amended by Amendment No. 1,
dated February 7, 1992, Amendment No. 2, dated November 17, 1992, Amendment No.
3, dated March 9, 1993, Amendment No. 4, dated June 30, 1994, Amendment No. 5,
dated November 13, 1995, Amendment No. 5, dated August 8, 1996, Amendment No. 6,
dated December 20, 1996, Amendment No. 7, dated January 10, 1997 and Amendment
No. 8, dated November 6, 1997 (the "Original Schedule 13D").
Except as amended hereby, the responses in the Original Schedule 13D
remain unchanged.
ITEM 2. IDENTITY AND BACKGROUND.
(a) The persons filing this Amendment are (i) Carl Marks Strategic
Investments, L.P., a Delaware limited partnership ("Partnership I"); (ii) Carl
Marks Strategic Investments II, L.P., a Delaware limited partnership
("Partnership II," and, together with Partnership I, the "Partnerships"); (iii)
Carl Marks Management Company, L.P., a Delaware limited partnership and the sole
general partner of the Partnerships (the "General Partner"); and (iv) Messrs.
Andrew M. Boas and Robert C. Ruocco, the two general partners of the General
Partner (the Partnerships, the General Partner and Messrs. Boas and Ruocco being
sometimes referred to herein collectively as the "Reporting Persons").
This Schedule reports the direct beneficial ownership of the Common
Stock by (i) the Partnerships; (ii) a managed institutional advisory account
(the "Account"); and (iii) various other holders affiliated with Mr. Boas. The
investment manager of the Account is Carl Marks Offshore Management, Inc., a New
York corporation (the "Manager"). The two individuals who are Reporting Persons,
Messrs. Boas and Ruocco, are executive officers of the Manager and share
responsibility for investment decisions made by the Manager for the Account.
The Reporting Persons are filing this Amendment in the event that they
are deemed a "group" for purposes of Section 13(d) and Rule13d-1(f) under the
Exchange Act, because of their relationships. Neither such filing nor anything
set forth herein shall be deemed to be an admission that such a "group" exists.
(b) The principal business of each of the Partnerships is investment in
securities. The principal business of the General Partner and the Manager is
investment management including the management of the Partnerships and the
Account, respectively. The business address of each of the Partnerships, the
General Partner and the Manager is 135 East 57th Street, New York, New York
10022.
The principal business of each of Messrs. Boas and Ruocco is acting as
general partner of the General Partner and as executive officers of the Manager.
In addition to serving as a general partner of the General Partner, Mr. Boas is
a Vice President of Carl Marks & Co., Inc., which through affiliates is engaged
in a broad variety of investment activities, including securities trading, money
management, venture capital, real estate investing, corporate merchant banking
and workout activities. The business address of Messrs. Boas and Ruocco is 135
East 57th Street, New York, New York 10022.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to the Stock Purchase Agreement, which is summarized in Item 6
and attached as Exhibit 1 hereto, Partnership I purchased 768,098 shares of
Common Stock for $4,032,514.50 in cash, and Partnership II purchased 450,000
shares of Common Stock for $2,362,500.00 in cash. The source of funds was the
investment capital of Partnership I and Partnership II. As part of the same
transaction, Sean Mathis, who is unrelated to the Reporting Persons and a member
of the board of directors of the Company, purchased 20,000 shares of Common
Stock for $105,000.00 in cash. The per share price paid by each of Partnership
I, Partnership II and Mr. Mathis was $5.25 per share.
ITEM 4. PURPOSE OF TRANSACTION.
The Reporting Persons consummated the transactions described herein in
order to acquire a significant interest in the Company and for investment
purposes.
Messrs. Boas and Ruocco own beneficially approximately 59% of the
outstanding shares (including shares issuable upon exercise of certain
warrants), and Partnership I constitutes the largest direct shareholder of the
Company, holding 41.2% of its outstanding stock (including shares issuable upon
exercise of certain warrants). The Reporting Persons have the power to elect a
majority of the board of directors of the Company and thereby to control the
management of the Company, but they have no present intention to change the
management and policies of the Company.
<PAGE>
Page 8 of 27 Pages
The Reporting Persons expect to consult frequently with management
concerning the Company's operations and future plans. The Reporting Persons
intend to review continuously their position in the Company. Depending upon
future evaluations of the business prospects of the Company and upon other
developments, including, but not limited to, general economic and business
conditions, stock market conditions and performance of the Common Stock, each of
the Reporting Persons may retain or from time to time dispose of all or a
portion of their holdings, subject to any applicable legal and contractual
restrictions on their ability to do so.
Except as set forth in this Item 4, the Reporting Persons have no
present plans or proposals that relate to or that would result in any of the
actions specified in clauses (a) through (j) of Item 4 of Schedule 13D of the
Exchange Act. However, in his capacity as a director of the Company, Mr. Boas
will necessarily consider proposals from time to time regarding the business and
affairs of the Company, including matters of the nature referred to above. If
any such matter is presented to the board of directors, Mr. Boas intends to act
thereon in accordance with his judgment at the time.
In connection with the acquisition of shares of Common Stock reported
herein, on April 5, 1999, the Company required that the Reporting Persons enter
into a Stockholder Agreement with it (the "Stockholder Agreement"). The
Stockholder Agreement limits the ability of the Reporting Persons and their
affiliates from entering into Extraordinary Transactions (as defined below) with
the Company by requiring the prior approvals of either (a) the board of
directors of the Company (including a majority of Disinterested Directors (as
defined below)) or (b) the other stockholders of the Company. In any stockholder
vote under clause (b) above, the Reporting Persons and their affiliates have
agreed to vote or cause to be voted their shares of Common Stock in the same
proportion as the votes cast by or on behalf of the other stockholders of the
Company on such Extraordinary Transaction. The Stockholder Agreement also
requires the Reporting Persons and their affiliates (a) to be represented in
person or by proxy at all stockholder meetings considering Extraordinary
Transactions and (b) to require any of their transferees, who as a result of a
transfer of shares by the Reporting Persons or their affiliates, acquires a
majority of the voting securities of the Company, to be bound by the provisions
of the Stockholder Agreement.
For purposes of the foregoing summary of the Stockholder Agreement, the
following terms have the following meanings:
"Associate" means (1) a corporation or organization (other than the
Company) of which the Reporting Persons or any of their affiliates is, directly
or indirectly, the beneficial owner of 20% or more of any class of equity
securities, (2) any trust or other estate in which the Reporting Persons or any
of their affiliates has a substantial beneficial interest or as to which the
Reporting Persons or any of their affiliates serves as trustee or in a similar
capacity, and (3) any of the Reporting Persons' or their affiliates' relatives
or spouses or any relatives of such spouses, who have the same home as the
Reporting Persons or their affiliates.
<PAGE>
Page 9 of 27 Pages
"Disinterested Director" means a director who is not one of the
Reporting Persons or any of their affiliates and who does not have a Material
Relationship with the Reporting Persons or any of their affiliates.
"Extraordinary Transaction" means (1) any "Rule 13e-3 transaction" as
defined by Rule 13e-3 of the Exchange Act as in effect on the date hereof, or
(2) the adoption of any plan or proposal for the liquidation or dissolution of
the Company, or any spin-off or split-up of any kind involving the Company, in
any case (whether pursuant to clause 1 or 2) that was proposed by or on behalf
of the Reporting Persons or any of their affiliates or Associates.
"Material Relationship" means (1) being a member of a "group" (as
defined in Regulation 13D-G of the Exchange Act) with one of the Reporting
Persons or any of their affiliates or Associates with respect to the Common
Stock, (2) being an Associate of one of the Reporting Persons or any of their
affiliates, or (3) having a relationship with one of the Reporting Persons or
any of their affiliates or Associates that would otherwise be required to be
disclosed pursuant to Item 404(b) of Regulation S-K of the Exchange Act if such
person were a nominee or director and if the Reporting Persons or any of their
affiliates or Associates were deemed to be the registrant for definitional
purposes of such Item.
The foregoing summary of the Stockholder Agreement is qualified in its
entirety by reference to Exhibit 2, which is incorporated herein by reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the date hereof, Partnership I owned beneficially 3,436,863
shares of Common Stock (including 194,521 shares issuable upon exercise of
certain warrants), constituting approximately 41.2% of the outstanding shares.
In its capacity as general partner of Partnership I, such shares may be deemed
also owned beneficially by the General Partner and, in their capacity as general
partners of the General Partner, by Messrs. Boas and Ruocco.
As of the date hereof, Partnership II owned beneficially 1,140,481
shares of Common Stock, constituting approximately 14.5% of the outstanding
shares. In its capacity as general partner of Partnership II, such shares may be
deemed also owned beneficially by the General Partner and, in their capacity as
general partners of the General Partner, by Messrs. Boas and Ruocco.
As of the date hereof, the Account owned beneficially 316,985 shares of
Common Stock, constituting approximately 4.0% of the outstanding shares, which
shares may be deemed also owned beneficially by the Manager in its capacity as
investment manager for the Account and, in their capacity as executive officers
of the Manager, by Messrs. Boas and Ruocco.
<PAGE>
Page 10 of 27 Pages
As of the date hereof, Mr. Boas owned beneficially directly 31,569
shares of Common Stock, including 20,000 shares issuable upon the exercise of
certain options, and the Boas Trusts, for the benefit of Mr. Boas' children as
to which Mr. Boas and his wife are trustees, owned beneficially 2,588 shares of
Common Stock, together constituting approximately 0.4% of the outstanding
shares.
By reason of the foregoing (and ownership previously reported in the
Original Schedule 13D), as of the date hereof the Reporting Persons owned
beneficially the following respective aggregate amounts and approximate
percentages of the outstanding shares of Common Stock: (i) Partnership I,
3,436,863 shares (including 194,521 shares issuable upon exercise of certain
warrants) (41.2%); (ii) Partnership II, 1,140,481 shares (14.5%); (iii) the
General Partner, 4,577,344 shares (including 194,521 shares issuable upon
exercise of certain warrants) (54.9%); (iv) Mr. Boas, 4,928,486 shares
(including 194,521 shares issuable upon exercise of certain warrants and 20,000
shares issuable upon exercise of certain options) (59.0%); and (v) Mr. Ruocco,
4,894,329 shares (including 194,521 shares issuable upon exercise of certain
warrants) (58.7%).
(b) Partnership I has the sole power to vote or direct the vote and the
sole power to dispose of or direct the disposition of 3,436,863 shares
(including 194,521 shares issuable upon exercise of certain warrants) of Common
Stock.
Partnership II has the sole power to vote or direct the vote and the
sole power to dispose of or direct the disposition of 1,140,481 shares of Common
Stock.
The General Partner has the sole power to vote or direct the vote and
the sole power to dispose of or direct the disposition of 4,577,344 shares
(including 194,521 shares issuable upon exercise of certain warrants) of Common
Stock.
Mr. Boas has the sole power to vote or direct the vote and the sole
power to dispose of or direct the disposition of 31,569 shares (including 20,000
shares issuable upon exercise of certain options) of Common Stock. He shares
such powers to vote and to dispose of 4,896,917 shares (including 194,521 shares
issuable upon exercise of certain warrants) of Common Stock.
Mr. Ruocco shares the powers to vote or direct the vote and to dispose
of or direct the disposition of 4,894,329 shares (including 194,521 shares
issuable upon exercise of certain warrants) of Common Stock.
(c) Except as described in Item 4, or as previously reported in the
Original Schedule 13D, none of the Reporting Persons has effected any
transactions in the Common Stock during the past 60 days.
(d) No person other than the Reporting Persons and the other persons
referred to in this Item 5 is known to have the right to receive or the power to
direct the receipt of dividends from the sale of the shares of Common Stock
listed in this Item 5.
<PAGE>
Page 11 of 27 Pages
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
In connection with the acquisitions reported herein of shares of Common
Stock by Partnership I and Partnership II, on April 22, 1999, SC Fundamental
Value Fund, LP and SC Fundamental Value Fund BVI, Inc. (together, the "Sellers")
and Partnership I, Partnership II, and Sean Mathis, who is unrelated to the
Reporting Persons and a member of the board of directors of the Company
(collectively, the "Buyers") entered into a Stock Purchase Agreement (the "Stock
Purchase Agreement") pursuant to which, subject to the terms and conditions
therein, the Buyers agreed to purchase 1,238,098 shares of Common Stock of the
Company for an aggregate purchase price of $6,500,014.50 (or $5.25 per share).
Partnership I purchased 768,098 shares of Common Stock for $4,032,514.50,
Partnership II purchased 450,000 shares of Common Stock for $2,362,500.00, and
Mr. Mathis purchased 20,000 shares of Common Stock for $105,000.00. The
foregoing summary of the Stock Purchase Agreement is qualified in its entirety
by reference to Exhibit 1, which is incorporated herein by reference.
In addition, the Stockholder Agreement which is summarized in Item 4 is
incorporated in this Item 6 by reference as if fully set forth herein.
Other than as set forth above or in Item 4, or as previously reported
in the Original Schedule 13D, none of the Reporting Persons, to the best
knowledge of such persons, has any contract, arrangement, understanding or
relationship (legal or otherwise) with any person with respect to securities of
the Company, including but not limited to, transfer or voting of any such
securities, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or losses, or the giving or
withholding of proxies.
<PAGE>
Page 12 of 27 Pages
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit
Number Description
- ------ -----------
1. Stock Purchase Agreement, dated as of April 22, 1999, by and among SC
Fundamental Value Fund, LP, and SC Fundamental Value BVI, Inc. and
Partnership I, Partnership II, and Sean Mathis.
2. Stockholder Agreement, dated April 5, 1999, by and among the Company
and Partnership I, Partnership II, the General Partner, Andrew M. Boas
and Robert C. Ruocco.
<PAGE>
Page 13 of 27 Pages
SIGNATURE
After reasonable inquiry and to the best of the knowledge and belief of
the undersigned, each of the undersigned certifies that the information set
forth in this statement is true, complete and correct.
Dated: April 29, 1999
CARL MARKS STRATEGIC INVESTMENTS, L.P.
By: Carl Marks Management Company, L.P.,
its general partner
By: /s/ Andrew M. Boas
------------------
Name: Andrew M. Boas
Title: General Partner
CARL MARKS STRATEGIC INVESTMENTS II, L.P.
By: Carl Marks Management Company, L.P.,
its general partner
By: /s/ Andrew M. Boas
------------------
Name: Andrew M. Boas
Title: General Partner
CARL MARKS MANAGEMENT COMPANY, L.P.
By: /s/ Andrew M. Boas
------------------
Name: Andrew M. Boas
Title: General Partner
ANDREW M. BOAS
By: /s/ Andrew M. Boas
------------------
ROBERT C. RUOCCO
By: /s/ Robert C. Ruocco
--------------------
<PAGE>
Page 14 of 27 Pages
EXHIBIT INDEX
Sequential
Exhibit Page
Number Description Number
------ ----------- ------
1. Stock Purchase Agreement, dated as of April 22, 1999, 15
by and among SC Fundamental Value Fund, LP, and SC
Fundamental Value BVI, Inc. and Partnership I,
Partnership II, and Mr. Mathis.
2. Stockholder Agreement, dated April 5, 1999, by and 23
among the Company and Partnership I, Partnership II,
the General Partner, Mr. Boas and Mr. Ruocco.
Page 15 of 27 Pages
Exhibit 1
---------
STOCK PURCHASE AGREEMENT
------------------------
STOCK PURCHASE AGREEMENT, dated as of April 22, 1999, by and among Carl
Marks Strategic Investments, L.P. ("CMSI"), Carl Marks Strategic Investments II,
L.P. ("CMSI II"), and Sean Mathis ("Mathis," and together with CMSI and CMSI II,
the "Buyers"), and SC Fundamental Value Fund, LP ("SCF"), and SC Fundamental
Value BVI, Inc. ("SBVI" and, together with SCF, the "Sellers").
Sellers are the beneficial owners and record owners of 1,238,098 shares
of common stock, par value $.01 per share, of Thousand Trails, Inc. (the
"Shares"). Sellers wish to sell the Shares, and Buyers wish to purchase the
Shares, upon the terms of this Agreement.
Accordingly the parties agree as follows:
1. Sale and Purchase of the Shares.
1.1 Sale of the Shares. Subject to the terms and conditions of
this Agreement, each Seller hereby agrees to sell to Buyers the Shares set forth
opposite its name on Schedule A, and each Buyer hereby agrees to purchase from
Sellers the Shares set forth opposite its name on Schedule B. The purchase price
for the Shares to be paid to each of the Sellers is set forth on Schedule A
opposite its name and the purchase price to be paid by each Buyer is set forth
on Schedule B opposite its name. The closing of the purchase of the Shares shall
occur as soon as practicable (the "Closing Date"). On the Closing Date, Sellers
(i) shall deliver to Buyers stock certificates representing the
<PAGE>
Page 16 of 27 Pages
Shares, with stock powers duly endorsed or (ii) shall deliver the Shares to the
Buyers in such other manner as the Buyers agree to in writing prior to the
Closing Date.
1.2 Purchase Price. On the Closing Date, the purchase price
for the Shares will be paid in cash to the Sellers by wire transfer of
immediately available funds to such account or accounts as may be specified by
the Sellers to the Buyers in writing at least two days prior to the Closing
Date.
1.3 Acknowledgment of Buyers. Buyers acknowledge that they are
purchasing the Shares without relying on any representations, oral or written,
made by or on behalf of the Sellers except for the representations contained
herein.
1.4 Acknowledgment of Sellers. Sellers acknowledge that they
are selling the Shares without relying on any representations, oral or written,
made by or on behalf of the Buyers except the representations contained herein.
1.5 Condition. The obligation of the Buyers to purchase the
Shares is subject to the condition that the representations and warranties of
the Sellers in Section 2 are true and correct on the Closing Date, and the
obligations of the Sellers to sell the Shares is subject to the condition that
the representations and warranties of Buyer in Section 3 are true and correct on
the Closing Date.
2. Representations and Warranties of Seller. The Sellers each represent
and warrant to the Buyers as follows:
2.1 Title to the Shares. Each Seller legally and beneficially
owns the Shares listed on Schedule A opposite its name free and clear of all
liens, transfer restrictions or other encumbrances. Upon delivery of, and
payment for, the Shares in
<PAGE>
Page 17 of 27 Pages
accordance with the terms of this Agreement, Buyers will acquire good and valid
title to the Shares, free and clear of all liens, transfer restrictions or other
encumbrances.
2.2 Due Organization. SCF is a limited partnership duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has full power and authority to carry on its
business as it is presently conducted. SBVI is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has full power and authority to carry on its business as it is
presently conducted.
2.3 Authority to Execute and Perform Agreement. Sellers have
the full legal right and power to enter into, execute and deliver this Agreement
and to perform fully their obligations hereunder. This Agreement has been duly
authorized, executed and delivered by Sellers, and is the legal, valid and
binding obligation of the Sellers enforceable in accordance with its terms,
except as enforcement of such terms may be limited by applicable bankruptcy,
reorganization, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
3. Representations and Warrants of Buyer. The Buyers each represent and
warrant to the Sellers as follows:
3.1 Due Organization. CMSI and CMSI II are limited
partnerships duly organized, validly existing and in good standing under the
laws of their jurisdiction of organization and have full power and authority to
carry on their businesses as they are presently conducted.
3.2 Authority to Execute and Perform Agreement. CMSI and CMSI
II have the full legal right and power to enter into, execute and deliver this
<PAGE>
Page 18 of 27 Pages
Agreement and to perform fully their obligations hereunder. This Agreement has
been duly authorized, executed and delivered by the Buyers, and is the legal,
valid and binding obligation of the Buyers enforceable in accordance with its
terms, except as enforcement of such terms may be limited by applicable
bankruptcy, reorganization, insolvency or similar laws affecting the enforcement
of creditors' rights generally. No consents or approvals are required for Buyers
to acquire the Shares in accordance with this Agreement.
4. Additional Agreements. The Sellers and the Buyers hereby agree to
take all steps reasonably necessary to carry out this agreement.
5. Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the purchase of the Shares and supersedes
all prior agreements, written or oral, with respect thereto.
6. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed wholly within such State.
7. Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall altogether constitute one and the
same instrument.
<PAGE>
Page 19 of 27 Pages
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
BUYERS:
CARL MARKS STRATEGIC
INVESTMENTS, L.P.
By: Carl Marks Management Company, L.P.
General Partner
By: /s/ Andrew M. Boas
------------------
Andrew M. Boas
General Partner
CARL MARKS STRATEGIC
INVESTMENTS II, L.P.
By: Carl Marks Management Company, L.P.
General Partner
By: /s/ Andrew M. Boas
------------------
Andrew M. Boas
General Partner
/s/ Sean Mathis
---------------
Sean Mathis
SELLERS:
SC FUNDAMENTAL VALUE FUND, LP
By: SC Fundamental, LLC
General Partner
By: /s/ Peter M. Collery
--------------------
Peter M. Collery
Vice-President
<PAGE>
Page 20 of 27 Pages
SC FUNDAMENTAL VALUE BVI, INC.
By: /s/ Peter M. Collery
--------------------
Peter M. Collery
Vice-President
<PAGE>
Page 21 of 27 Pages
SCHEDULE A
Shares of Common Stock of
Seller Thousand Trails, Inc. to be Sold Purchase Price
- ------ -------------------------------- --------------
SC Fundamental Value 896,158 $4,704,829.50
Fund, LP
SC Fundamental Value 341,940 $1,795,185.00
BVI, Inc.
-------------------------------- --------------
1,238,098 $6,500,014.50
========= =============
<PAGE>
Page 22 of 27 Pages
SCHEDULE B
Shares Common Stock of Thousand
Buyer Trails, Inc. to be Purchased Purchase Price
- ----- ---------------------------- --------------
Carl Mark Strategic 768,098 $4,032,514.50
Investments, L.P.
Carl Marks Strategic 450,000 $2,362,500.00
Investments II, L.P.
Sean Mathis 20,000 $ 105,000.00
---------------------------- --------------
1,238,098 $6,500,014.50
========= =============
Page 23 of 27 Pages
Exhibit 2
---------
Carl Marks Management Company, L.P.
Carl Marks Strategic Investments, L.P.
Carl Marks Strategic Investments II, L.P.
Andrew M. Boas
Robert C. Ruocco
135 East 57th Street
New York, New York 10022
April 5, 1999
Thousand Trails, Inc.
2711 LBJ Freeway, Suite 200
Dallas, TX 75234
Attn: Board of Directors
Re: STOCKHOLDER AGREEMENT
Ladies and Gentlemen:
We have requested your consent to our proposed acquisition of up to
1,308,498 shares (the "Shares") of common stock, $.01 par value (the "Common
Stock"), of Thousand Trails, Inc. (together with its subsidiaries, the
"Company") from SC Fundamental Value Fund, LP and SC Fundamental Value BVI, Inc.
and any affiliates thereof. We have requested your consent pursuant to Section
9.2 of the Company's Certificate of Incorporation. We understand that, if
approved, the proposed acquisition of the Shares will result in our holding a
majority of the outstanding shares of Common Stock. In order to induce your
consent to our proposed acquisition of the Shares and to ensure the preservation
of the rights of the other stockholders (the "Minority Stockholders"), we
hereby, jointly and severally, agree as follows:
1. REQUIRED APPROVALS; VOTING. Neither we nor any of our Affiliates
will commence or engage in any Extraordinary Transaction without (a) the
approval of the Extraordinary Transaction by the board of directors of the
Company that includes the affirmative vote of a majority of the Disinterested
Directors or (b) the approval of the stockholders of the Company in which we and
our Affiliates vote in the same proportion as the votes cast by the Minority
Stockholders. If any Extraordinary Transaction is not approved by the
Disinterested Directors pursuant to clause (a), we and any Affiliate who
beneficially owns Voting Securities will, as a stockholder, vote or cause to be
voted all shares of Restricted Stock in the same proportion as the votes cast by
or on behalf of the Minority Stockholders on such Extraordinary Transaction.
<PAGE>
Page 24 of 27 Pages
2. QUORUM OBLIGATIONS. We and any Affiliate who beneficially owns
Common Stock will, as a stockholder, be present in person or be represented by
proxy at all stockholder meetings of the Company which consider Extraordinary
Transactions so that all shares of Restricted Stock may be counted for the
purpose of determining the presence of a quorum at such meeting.
3. TRANSFER. Neither we nor any of our Affiliates will transfer or
otherwise dispose of shares of Restricted Stock to any Person who, immediately
after acquiring shares of Restricted Stock would, beneficially own or have the
right to vote a majority of the outstanding shares of Common Stock or a majority
of the outstanding shares of Voting Securities unless such transferee agrees in
writing to be bound by this letter agreement and, with respect to all of its
shares of Common Stock and other Restricted Securities, executes such documents,
certificates, or agreements as the Company deems reasonably necessary to
evidence the restrictions provided in this letter agreement. Any purported
transfer of the Restricted Stock in violation of the preceding sentence shall be
void. Except as provided in the first sentence of this paragraph 3, no transfer
or other disposition of Restricted Stock by us or our Affiliates shall be
subject to any transfer restriction under this letter agreement.
4. LEGEND. To assist in effecting the provisions of this letter
agreement, we hereby consent to the placement of the following legend (or a
legend substantially similar thereto) on all certificates representing
Restricted Stock:
The shares represented by this certificate are subject to the
provisions of the Letter Agreement, dated April 5, 1999, among Carl
Marks Management Company, L.P., Carl Marks Strategic Investments, L.P.,
Carl Marks Strategic Investments II, L.P., Andrew M. Boas, Robert C.
Ruocco, and Thousand Trails, Inc., and may not be transferred or
otherwise disposed of except in accordance therewith and only upon such
transferee's agreement to be bound by such letter agreement. Copies of
such letter agreement are on file at the office of the Secretary of
Thousand Trails, Inc.
The Company shall remove such legend promptly upon (i) termination of this
letter agreement, as to all shares of Restricted Stock, and (ii) upon request by
a transferee who acquired such shares of Restricted Stock without restriction
pursuant to the last sentence of Section 3 hereof as to the shares so acquired.
5. STOP TRANSFER ORDER. To assist in effecting the provisions of this
letter agreement, we hereby consent to the entry of a stop transfer order with
the transfer agent or agents of the Company against the transfer of any shares
of Restricted Stock except in compliance with the requirements of this letter
agreement, or if the Company is its own transfer agent with respect to any
shares of Common Stock, to the refusal by the Company to transfer any such
securities except in compliance with the requirements of this letter agreement.
<PAGE>
Page 25 of 27 Pages
6. REMEDIES. We acknowledge that money damages will not be a sufficient
remedy for any breach of this letter agreement by us or any of our Affiliates
and that the Company is entitled to equitable relief, including injunction and
specific performance, as a remedy for such breach. Such remedies shall not be
deemed to be the exclusive remedies for a breach of this letter agreement, but
shall be in addition to all other remedies available at law or equity.
7. WAIVERS AND AMENDMENTS. No failure or delay by the Company in
exercising any right, power, or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
future exercise thereof or the exercise of any other right, power, or privilege
hereunder. No provision of this letter agreement can be amended without the
specific written consent of the majority of Disinterested Directors.
8. TERM. This letter agreement shall continue in full force and effect
for so long as we or any of our Affiliates own or control, directly or
indirectly, shares of Common Stock or any other security convertible into or
exchangeable for or exercisable for the purchase of shares of Common Stock that,
in the aggregate, constitute a majority of the outstanding shares of Common
Stock; provided that this letter agreement shall terminate on the fourth
anniversary of the date hereof.
9. SUCCESSORS AND ASSIGNS. The provisions of this letter agreement
shall irrevocably bind our heirs, executors, personal representatives,
successors, and assigns.
10. GOVERNING LAW. The provisions hereof shall be governed by and
construed in accordance with the laws of Delaware without regard to principles
of conflicts of laws that would apply any other law.
11. DEFINITIONS. "Affiliate" shall mean any Person that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, any of us.
"Associate" shall mean (1) a corporation or organization (other than
the Company) of which we or any of our Affiliates is, directly or indirectly,
the beneficial owner of 20% or more of any class of equity securities, (2) any
trust or other estate in which we or any of our Affiliates has a substantial
beneficial interest or as to which we or any of our Affiliates serves as trustee
or in a similar capacity, and (3) any of our or our Affiliates' relatives or
spouses or any relatives of such spouses, who have the same home as we or any of
our Affiliates.
"Disinterested Director" shall mean a director who is not one of us or
any of our Affiliates and who does not have a Material Relationship with us or
any of our Affiliates.
<PAGE>
Page 26 of 27 Pages
"Extraordinary Transaction" shall mean (1) any "Rule 13e-3 transaction"
as defined by Rule 13e-3 of the Securities Exchange Act of 1934, as amended and
in effect on the date hereof (the "Securities Exchange Act"), or (2) the
adoption of any plan or proposal for the liquidation or dissolution of the
Company, or any spin-off or split-up of any kind involving the Company, in any
case (whether clause 1 or 2) that was proposed by or on behalf of us or any of
our Affiliates or Associates.
"Material Relationship" shall mean (1) being a member of a "group" (as
defined in Regulation 13D-G of the Securities Exchange Act) with one of us or
any of our Affiliates or Associates with respect to the Common Stock, (2) being
an Associate of one of us or any of our Affiliates, or (3) having a relationship
with us or any of our Affiliates or Associates that would otherwise be required
to be disclosed pursuant to Item 404(b) of Regulation S-K of the Securities
Exchange Act if such person were a nominee or director and if we or any of our
Affiliates or Associates were deemed to be the registrant for definitional
purposes of such Item.
"Person" shall mean an individual, a corporation, a partnership, an
association, a joint-stock company, a trust, any unincorporated organization, or
a government or political subdivision thereof.
"Restricted Stock" shall mean all shares of Voting Securities
beneficially owned by us or our Affiliates, whether now owned or hereafter
acquired.
"Voting Securities" shall mean shares of Common Stock and any other
securities of the Company entitled to vote generally for the election of
directors, or any security convertible into or exchangeable for or exercisable
for Common Stock or other securities entitled to vote generally for the election
of directors.
[SIGNATURES ON NEXT PAGE]
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Page 27 of 27 Pages
If the foregoing correctly sets forth the agreement of the Company and
us, please so indicate by signing and returning a copy of this letter, whereupon
it shall become a binding agreement between the parties.
Very truly yours,
Carl Marks Management Company, L.P.
By: /s/ Andrew Boas
---------------
Andrew Boas, General Partner
Carl Marks Strategic Investments, L.P.
By: Carl Marks Management Company, L.P.
By: /s/ Andrew Boas
---------------
Andrew Boas, General Partner
Carl Marks Strategic Investments II, L.P.
By: Carl Marks Management Company, L.P.
By: /s/ Andrew Boas
---------------
Andrew Boas, General Partner
/s/ Andrew M. Boas
------------------
Andrew M. Boas
/s/ Robert C. Ruocco
--------------------
Robert C. Ruocco
ACCEPTED AND AGREED:
Thousand Trails, Inc.
By: /s/ William J. Shaw
-------------------
William J. Shaw
Chairman of the Board, President,
and Chief Executive Officer
