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Exhibit 10.1
Xxxx Xxxxx Management Company, L.P.
Xxxx Xxxxx Strategic Investments, L.P.
Xxxx Xxxxx Strategic Investments II, L.P.
Xxxxxx X. Xxxx
Xxxxxx X. Xxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
April 5, 1999
Thousand Trails, Inc.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
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.
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.
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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, no transfer or other disposition
of Restricted Stock by us or our Affiliates shall be subject to 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 ___, 1999, among Xxxx
Xxxxx Management Company, L.P., Xxxx Xxxxx Strategic Investments, L.P.,
Xxxx Xxxxx Strategic Investments II, L.P., Xxxxxx X. Xxxx, Xxxxxx X.
Xxxxxx, 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.
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.
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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.
"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.
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"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.
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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,
Xxxx Xxxxx Management Company, L.P.
By: /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, General Partner
Xxxx Xxxxx Strategic Investments, L.P.
By: Xxxx Xxxxx Management Company, L.P.
By: /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, General Partner
Xxxx Xxxxx Strategic Investments II, L.P.
By: Xxxx Xxxxx Management Company, L.P.
By: /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, General Partner
/s/ Xxxxxx Xxxx
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Xxxxxx X. Xxxx
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
ACCEPTED AND AGREED:
Thousand Trails, Inc.
By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
Chairman of the Board, President,
and Chief Executive Officer
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