T-3 1 d95001t-3.txt FORM T-3 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM T-3 APPLICATION FOR QUALIFICATION OF INDENTURE UNDER THE TRUST INDENTURE ACT OF 1939 SILVERLEAF RESORTS, INC. -------------------------------------------------------------------------------- (Name of Applicant) 1221 River Bend Drive Suite 120 Dallas, Texas 75247 -------------------------------------------------------------------------------- (Address of Principal Executive Offices) SECURITIES TO BE ISSUED UNDER INDENTURE TO BE QUALIFIED: Title of Class Amount -------------- ------ Senior Subordinated Notes due 2007 $ 33,350,000 Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of this application. NAME AND ADDRESS OF AGENT WITH A COPY TO: FOR SERVICE: Robert E. Mead David N. Reed Chairman & Chief Executive Officer Meadows, Owens, Collier, Reed, Silverleaf Resorts, Inc. Cousins & Blau, LLP 1221 River Bend Drive 901 Main Street Suite 120 Suite 3700 Dallas, Texas 75247 Dallas, Texas 75202 ================================================================================ GENERAL ITEM 1. GENERAL INFORMATION (a) Form of Organization: Corporation (b) State or Other Sovereign Power under the Laws of Which Organized: Texas ITEM 2. SECURITIES ACT EXEMPTION APPLICABLE The Applicant (hereinafter referred to as the "Company") is relying upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), provided by Section 3(a)(9) thereunder, in connection with the Company's exchange offer as described herein (the "Exchange Offer"). The Exchange Offer is being made by the Company pursuant to its Offer to Exchange dated March 15, 2002 and the related Letter of Transmittal and Consent, and consists of an offer to exchange for all $66.7 million of the Company's outstanding 10 1/2% Senior Subordinated Notes due 2008 (the "Old Notes"). As consideration, the Company is offering (i) up to $33.35 million of the Company's Senior Subordinated Notes due 2007 (the "Exchange Notes"), (ii) a pro rata share of 23,937,489 shares of Common Stock of the Company (the "Exchange Stock" and collectively with the Exchange Notes, the "Exchange Securities"), (iii) an amount of cash (said amount is hereafter referred to as the "Partial Interest Payment") equal to a pro rata share of the difference between (a) the amount of the interest on 20% of the Old Notes that the Company would be required to pay to cure the default thereon, and (b) the amount of interest that will be actually paid to non-exchanging holders of the Old Notes, and (iv) an additional interest payment (the "Additional Interest Payment") in an amount equal to the amount of interest that would have accrued from October 1, 2001 through the date before the Exchange Date had the Exchange Notes been issued on October 1, 2001. The Partial Interest Payment and the Additional Interest Payment shall each be partial payments of interest accruing on the Old Notes. The Exchange Offer is contingent on, among other things, a tender of at least 80% in principal amount of the Old Notes. The Company has not paid or given, and will not pay or give, directly or indirectly, any commission or other remuneration to any broker, dealer, salesman, or other person for soliciting tenders of Old Notes. There have not been and there will not be any sales of securities of the same classes as the Exchange Securities by the Company or through any underwriter at or about the same time as the Exchange Offer. Officers, directors and employees of the Company may engage in the solicitation of holders of Old Notes in connection with the Exchange Offer, but such employees will receive no additional compensation for such activities. AFFILIATIONS ITEM 3. AFFILIATES Each of the following corporations is a wholly-owned subsidiary of the Company: Silverleaf Berkshires, Inc., a Texas corporation Silverleaf Travel, Inc., a Texas corporation Silverleaf Resort Acquisitions, Inc., a Texas corporation Database Research Inc., a Texas corporation Bull's Eye Marketing, Inc., a Delaware corporation eStarCommunications, Inc., a Texas corporation Silverleaf Finance I, Inc., a Delaware corporation 1 Additionally, the following person may be deemed to be an affiliate of the company as of March 15, 2002, based upon ownership of 5% or more of the Company's voting securities and/or the respective positions he holds with the company: Robert E. Mead, Chairman of the Board and beneficial owner of 56.25% of the Company's outstanding common stock. The Company anticipated no change in affiliates prior to the effective date of the Exchange Offer. MANAGEMENT AND CONTROL ITEM 4. DIRECTORS AND EXECUTIVE OFFICERS. The following persons serve as directors and executive officers of the Company as of the date hereof:
NAME AND ADDRESS* OFFICE ----------------- ------ Robert E. Mead Chairman, Chief Executive Officer and Director Sharon K. Brayfield President and Director Harry J. White, Jr. Chief Financial Officer and Treasurer David T. O'Connor Executive Vice President--Sales Larry H. Fritz Vice President--Marketing Michael L. Jones Vice President--Information Services Edward L. Lahart Vice President--Corporate Operations Robert Levy Vice President--Resort Operations Darla Cordova Vice President--Employee and Marketing Services Lelori ("Buzz") Marconi Vice President--Marketing Operations Sandra G. Cearley Secretary James B. Francis, Jr. Director Michael A. Jenkins Director
* The mailing address for each Director and Executive Officer is and as of the Effective Date will be Silverleaf Resorts, Inc., 1221 River Bend Drive, Suite 120, Dallas, Texas 75247. ITEM 5. PRINCIPAL OWNERS OF VOTING SECURITIES Presented below is certain information regarding each person known or believed by the Company to own 10% or more of the Company's voting securities as of the date hereof and as of the Effective Date:
NAME AND COMPLETE TITLE OF CLASS AMOUNT PERCENTAGE OF VOTING MAILING ADDRESS OWNED OWNED SECURITIES OWNED ----------------- -------------- ------------ -------------------- Robert E. Mead Common Stock 7,250,100(1) 56.25% 1221 River Bend Drive Suite 120 Dallas, TX 75247
---------- (1) All 7,250,100 shares are held in the name of "Robert E. Mead, Trustee" under the terms and conditions of that certain Voting Trust Agreement dated November 11, 1999 between Mr. Mead and his wife, Judith F. Mead. Mr. Mead holds sole voting and dispositive power over all 7,250,100 shares held under the Voting Trust Agreement. 2 UNDERWRITERS ITEM 6. UNDERWRITERS. (a) Persons Acting As Underwriters Within Last Three Years: None (b) Proposed Principal Underwriter Of Securities Proposed To Be Offered: None CAPITAL SECURITIES ITEM 7. CAPITAL SECURITIES (a) The Company has the following authorized class of securities: (i) Equity Securities as of September 30, 2001:
TITLE OF CLASS AMOUNT AUTHORIZED AMOUNT OUTSTANDING -------------- ------------------- ------------------ Common Stock, 100,000,000 shares 12,889,417 shares $.01 par value Preferred Stock, 10,000,000 shares None $.01 par value
(ii) Debt Securities as of September 30, 2001:
TITLE OF CLASS AMOUNT AUTHORIZED AMOUNT OUTSTANDING -------------- ----------------- ------------------ 10 1/2% Senior $125,000,000 $66,700,000 Subordinated Notes due 2008
(b) Voting Rights Each share of the common stock of the Company issued and outstanding has one vote with respect to all matters submitted to a vote of stockholders. There are no other outstanding securities with voting rights. INDENTURE SECURITIES ITEM 8. ANALYSIS OF INDENTURE PROVISIONS. The following analysis of Indenture provisions required under Section 305(a)(2) of the Trust Indenture Act of 1939, as amended ("TIA"), is a summary and is qualified in its entirety by reference to the Indenture, a copy of which is filed as an exhibit to this application. Capitalized terms used herein and not otherwise defined shall have the meanings given them in the Indenture. A. EVENT OF DEFAULT The Indenture will provide that each of the following constitutes an Event of Default: (i) default for 30 days in the payment when due of interest on the Exchange Notes (whether or not prohibited by the subordination provisions of the Indenture); (ii) default in payment when due of the principal of or premium, if any, on the 3 Exchange Notes (whether or not prohibited by the subordination provisions of the Indenture); (iii) failure by the Company to comply for 30 days after notice from the Trustee or the Holders of at least 25% in principal amount of their outstanding Exchange Notes with the provisions described under the Sections of the Indenture entitled "Restricted Payments," "Incurrence and Issuance of Preferred Stock," "Asset Sales," "Offer to Repurchase Upon Change of Control," and "Merger Consolidation or Sale of Assets"; (iv) failure by the Company to comply with any of its other agreements in the Indenture or the Exchange Notes for 60 days after notice from the Trustee or the Holders of at least 25% in principal amount of the then outstanding Exchange Notes; (v) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the date of the Indenture, which default (a) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a "Payment Default") or (b) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $5.0 million or more; provided, that in the case of any such Payment Default under clause (a) such default continues beyond the lesser of 30 days or the longest period for cure provided in any such Indebtedness as to which a Payment Default exists, or in the case of any acceleration of Indebtedness described in clause (b), such Indebtedness is not discharged or such acceleration cured, waived, rescinded or annulled within the lesser of 30 days after acceleration or the longest period for cure provided in any such Indebtedness which has been accelerated; (vi) a final judgment or judgments aggregating in excess of $5.0 million are entered against the Company or any of its Restricted Subsidiaries, which judgments are not paid, discharged or stayed for a period of 60 days; (viii) except as permitted by the Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Subsidiary Guarantee; and (ix) certain events of bankruptcy or insolvency with respect to the Company, any of its Significant Restricted Subsidiaries, or any group of Restricted Subsidiaries, that taken as a whole, would constitute a Significant Restricted Subsidiary. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Exchange Notes may declare all the Exchange Notes to be due and payable immediately; provided, however, that so long as any Designated Senior Debt is outstanding, no such acceleration shall be effective until five business days after the giving of written notice to the Company and the representatives under the Designated Senior Debt of such acceleration. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Company, any Significant Restricted Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Restricted Subsidiary, all outstanding Exchange Notes will become due and payable without further action or notice. Holders of the Exchange Notes may not enforce the Indenture or the Exchange Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Exchange Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Exchange Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. In the case of any Event of Default occurring by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company or any Guarantor with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Exchange Notes pursuant to the optional redemption provisions of the Indenture, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Exchange Notes. If an Event of Default occurs prior to April 1, 2003 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company or any Guarantor with the intention of avoiding the prohibition on redemption of the Exchange Notes prior to such date, then the Make-Whole Price shall become immediately due and payable to the extent permitted by law upon the acceleration of the Exchange Notes. The Holders of a majority in aggregate principal amount of the Exchange Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Exchange Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Exchange Notes. 4 B. AUTHENTICATION AND DELIVERY Two Officers of the Company shall sign the Exchange Notes by manual or facsimile signature. The Company's seal shall be reproduced on the Exchange Notes and may be in facsimile form. An Exchange Note shall not be valid until authenticated by the manual signature of the Trustee, or its designated authenticating agent. The signature shall be conclusive evidence that the Exchange Note has been authenticated under the Indenture. The Trustee shall, upon a written order of the Company signed by two Officers (an "Authentication Order"), authenticate Exchange Notes for original issue up to the aggregate principal amount of $33,350,000. The aggregate principal amount of Exchange Notes outstanding at any time may not exceed such amount. C. RELEASE OR SUBSTITUTION OF PROPERTY SUBJECT TO LIEN The Company's obligations under the Exchange Notes are not secured by any liens or security interests on any assets of the Company. Accordingly, the Indenture does not contain any provisions with respect to the release or the release and substitution of any property subject to such a lien. D. SATISFACTION AND DISCHARGE OF THE INDENTURE The Company may, at its option and at any time, elect to have all of its and the Guarantors' obligations discharged with respect to the outstanding Exchange Notes ("Legal Defeasance") except for (i) the rights of Holders of outstanding Exchange Notes to receive payments in respect of the principal of, interest and premium, if any, on such Exchange Notes when such payments are due from the trust referred to below, (ii) the Company's obligations with respect to the Exchange Notes concerning issuing temporary Exchange Notes, mutilated, destroyed, lost or stolen Exchange Notes and the maintenance of an office or agency for payment and money for security payments held in trust, (iii) the rights, powers, trusts, duties and immunities of the Trustee, and the Company's obligations in connection therewith and (iv) the Legal Defeasance provisions of the Indenture. In addition, the Company may, at its option and at any time, elect to have the obligations of the Company and its Subsidiaries released with respect to certain covenants that are described in the Indenture ("Covenant Defeasance") and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to the Exchange Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under "Events of Default" will no longer constitute an Event of Default with respect to the Exchange Notes. In order to exercise either Legal Defeasance or Covenant Defeasance, (i) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Exchange Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, interest and premium, if any, on the outstanding Exchange Notes on the stated maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Exchange Notes are being defeased to maturity or to a particular redemption date; (ii) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of the Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the Holders of the outstanding Exchange Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (iii) in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Exchange Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (iv) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit; (v) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; (vi) the 5 Company must have delivered to the Trustee an opinion of counsel to the effect that after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (vii) the Company must deliver to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Exchange Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and (viii) the Company must deliver to the Trustee an Officers' Certificate and an opinion of counsel, each stating that all conditions precedent provided for relating to the Legal Defeasance or the Covenant Defeasance have been complied with. E. EVIDENCE OF COMPLIANCE WITH CONDITIONS AND COVENANTS The Company shall, within 90 days after the close of each fiscal year following the issuance of the Exchange Notes, file with the Trustee an Officers' Certificate, with one of the Officers executing the same being the principal executive officer, the principal financial officer or the principal accounting officer of the Company, covering the period from the date of issuance of the Exchange Notes to the end of the fiscal year in which the Exchange Notes were issued, in the case of the first such certificate, and covering the preceding fiscal year in the case of each subsequent certificate, and stating whether or not, to the knowledge of each such executing officer, the Company and each Subsidiary Guarantor has complied with and performed and fulfilled all conditions and covenants on its part contained in the Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions contained in the Indenture. The Company is also required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. ITEM 9. OTHER OBLIGORS. The Company's obligations under the Indenture will be guaranteed by the following wholly-owned subsidiaries of the Company: Silverleaf Berkshires, Inc. Silverleaf Travel, Inc. Silverleaf Resort Acquisition, Inc. Database Research, Inc. Bull's Eye Marketing, Inc. eStarCommunications, Inc. CONTENTS OF APPLICATION FOR QUALIFICATION This Application for Qualification comprises: (a) Pages numbered 1 to 8, consecutively. (b) The statement of eligibility and qualification on Form T-1 of the trustee under the indenture to be qualified. (c) The following exhibits in addition to those filed as part of the statement of eligibility and qualification of the trustee: EXHIBIT NO. DESCRIPTION OF EXHIBIT Exhibit T3A Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to Amendment No. 1 dated May 16, 1997 to Company's Registration Statement of Form S-1, File No. 333-24273). Exhibit T3B Bylaws of Company (incorporated by reference to Exhibit 3.2 to Company's Form 10-K for year ended December 31, 1997). 6 Exhibit T3C Indenture, dated as of the Exchange Date, between the Company and the Guarantors and Wells Fargo Bank Minnesota, National Association, in the form to be qualified, including an itemized table of contents showing the articles, sections and subsections of the Indenture together with the subject matter thereof and the pages on which they appear* Exhibit T3E.1 Form of Offer to Exchange and Solicitation of Consents, dated March 15, 2002* Exhibit T3E.2 Form of Letter of Transmittal and Consent* Exhibit T3E.3 Form of Notice of Guaranteed Delivery* Exhibit T3E.4 Form of letter to Brokers, Dealers, Commercial Banks, and other Nominees* Exhibit T3E.5 Form of letter to clients (beneficial owners) for use by Brokers, Dealers, Commercial Banks and other Nominees* Exhibit T3E.6 Form of transmittal letter to holders from the Company* Exhibit T3F Cross reference sheet showing the location in the Indenture of the provisions inserted therein pursuant to Sections 310 through 318(a), inclusive, of the TIA* Exhibit T3G Statement of eligibility and qualifications of the Trustee on Form T-1* ---------- *filed herewith SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Company, Silverleaf Resorts, Inc., a Texas corporation, has duly caused this Application on Form T-3 to be signed on its behalf by the undersigned, thereunto duly authorized, and its seal to be hereunto affixed and attested, all in the City of Dallas, and State of Texas, on the 15th day of March, 2002. SILVERLEAF RESORTS, INC. [SEAL] By: /s/ Robert E. Mead ----------------------------- Name: Robert E. Mead Title: Chairman and Chief Executive Officer Attest: By: /s/ Sandra G. Cearley ----------------------- Name: Sandra G. Cearley Title: Secretary 7 EXHIBIT INDEX
EXHIBIT NO. EXHIBIT ----------- ------- Exhibit T3A Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to Amendment No. 1 dated May 16, 1997 to Company's Registration Statement of Form S-1, File No. 333-24273). Exhibit T3B Bylaws of Company (incorporated by reference to Exhibit 3.2 to Company's Form 10-K for year ended December 31, 1997). Exhibit T3C Indenture, dated as of the Exchange Date, between the Company and the Guarantors and Wells Fargo Bank Minnesota, National Association, in the form to be qualified, including an itemized table of contents showing the articles, sections and subsections of the Indenture together with the subject matter thereof and the pages on which they appear* Exhibit T3E.1 Form of Offer to Exchange and Solicitation of Consents, dated March 15, 2002* Exhibit T3E.2 Form of Letter of Transmittal and Consent* Exhibit T3E.3 Form of Notice of Guaranteed Delivery* Exhibit T3E.4 Form of letter to Brokers, Dealers, Commercial Banks, and other Nominees* Exhibit T3E.5 Form of letter to clients (beneficial owners) for use by Brokers, Dealers, Commercial Banks and other Nominees* Exhibit T3E.6 Form of transmittal letter to holders from the Company* Exhibit T3F Cross reference sheet showing the location in the Indenture of the provisions inserted therein pursuant to Sections 310 through 318(a), inclusive, of the TIA* Exhibit T3G Statement of eligibility and qualifications of the Trustee on Form T-1*
---------- *filed herewith 8