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		Page
Prospectus Summary			1
Risk Factors			6
Cautionary Note Regarding Forward-Looking Statements			20
Use of Proceeds			20
Capitalization			21
Price Range of Securities and Dividends			22
Selected Financial Data			23
Management’s Discussion and Analysis of Financial Condition and Results of Operations			26
Business			36
Management			54
Certain Relationships and Related Party Transactions			64
Security Ownership of Certain Beneficial Owners and Management			70
Description of Securities			72
Underwriting			77
Legal Matters			79
Experts			79
Disclosure of Commission Position on Indemnification for Securities Act Liabilities			79
Where You Can Find More Information			80
Index to Consolidated Financial Statements			F-1

 

You should rely only on the information contained in this prospectus. Neither the underwriters nor we have authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. Neither the underwriters nor we are making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate as of the date on the front cover of this prospectus only. Our business, financial condition, results of operations and prospects may have changed since that date.

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PROSPECTUS SUMMARY

This summary highlights basic information about us and this offering. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully before making an investment decision. When we use the words “Company,” “we,” “us” or “our company” in this prospectus, we are referring to Ultimate Escapes, Inc., a Delaware corporation, and our subsidiaries, unless it is clear from the context or expressly stated that these references are only to Ultimate Escapes, Inc. Unless otherwise indicated, all information contained in this prospectus assumes that the underwriters will not exercise their over-allotment option and that no outstanding stock options or warrants will be exercised. This prospectus contains forward-looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under “Risk Factors” and elsewhere in this prospectus.

Unless otherwise indicated, all share amounts and prices in this prospectus (other than in the financial statements and pro-forma financial statements and in the summary and selected financial data derived therefrom) assume the consummation of a reverse stock split, at an assumed ratio of 1-for-1.5, to be effected prior to the effectiveness of the registration statement of which this prospectus is a part, with the exact ratio and timing of the reverse stock split to be determined by our board of directors.

Our Company

We operate a family of luxury destination club offerings, including Elite Club^TM, Signature Club^TM and Premiere Club^TM, with over 1,200 affluent club members, as well as an experienced management team and increasing market share. We provide club members and their families with flexible access to a growing portfolio of multi-million dollar club residences, exclusive member services and resort amenities. We believe that we offer our club members access to more club destinations than any other luxury destination club in the world, with over 130 luxury club residences in 45 global destinations available today in the mainland United States and Hawaii, Mexico, Central America, the Caribbean and Europe. Elite Club properties have a target home value of approximately $3 million, Signature Club properties have a target home value of approximately $2 million and Premiere Club properties have a target home value of approximately $1 million. As of December 31, 2009, we had 433 Elite Club members, 545 Signature Club members and 236 Premiere Club members.

Our strategy is to combine the privacy and intimacy of multi-million dollar residences in a wide variety of global resort destinations with “white glove” member concierge services and club amenities. We offer a unique and compelling value proposition that is a cost effective vacation alternative for a large, affluent target market. For the consumer market, a club membership offers a more flexible, efficient and cost effective vacation alternative as compared with the high costs, inefficiencies and hassles of second home ownership in this cost range, the expense, uncertainties and time-consuming effort to rent luxury villas in the United States and international markets or the high costs and typical small rooms of luxury hotels. For the corporate market, our corporate membership option targets the growing multi-billion dollar corporate reward and incentive market, and offers corporations an affordable, flexible corporate reward and incentive program for top performing employees, senior executives, board members, key advisors, existing customers and new prospects.

Our Industry

Although there are significant differences between destination club offerings and timeshare offerings, we believe that the continued growth of luxury destination clubs will parallel the dramatic growth of timeshare sales over the last 20 years. The increasing wealth of “baby boomers,” coupled with the desirability of shared-use vacation alternatives, bodes well for continued destination club growth over many years, particularly given the low 1% market penetration of qualified buyers of luxury share-use vacation offerings, according to Ragatz Associates, an international consulting and market research firm in the resort real estate industry. If luxury destination clubs are able to achieve the same market penetration in their target market over the next 10 – 20 years as timeshare operators have achieved over the last 20 years, the luxury destination club industry could potentially grow from approximately 5,000 club members today to over 300,000 club members in 10 – 20 years (assuming a 5% market penetration of Spectrem Group’s estimated 6.7 million “millionaires”

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in the United States with assets of at least $1 million and 840,000 “pentamillionaires” in the United States with assets of at least $5 million), in addition to the large potential corporate membership market.

Our management believes that the emerging luxury destination club market is still in its infancy and has many years of continued growth potential when the global economy improves, as major resort and hospitality brands like the Ritz Carlton Destination Club and other luxury brands and new market entrants continue to enter the luxury marketplace. Our management believes that barriers to entry in the luxury destination club market are increasing and further consolidation is likely, forcing smaller destination club players to focus on niche markets, sell to or merge with larger clubs or go out of business. Established hospitality and resort brands will likely enter the growing luxury destination club market in greater numbers, as most recently demonstrated by the 2009 launch of the Ritz Carlton Destination Club. In addition, new destination clubs will continue to form in Europe and Asia, as well as existing clubs expanding their presence internationally to address greater affluence and future high growth markets in Europe and Asia.

Our Products and Services

We offer a variety of club membership plans that provide club members between 14 and 60 days of use annually at a unique collection of club destinations and affiliate destinations located around the world. Our destination properties are located in or near resort markets with global tourist and business appeal that offer club members a world class vacation experience. By combining the best elements of multi-million dollar single family residences with world class amenities and concierge service, management believes it has created the best and most cost-effective option for luxury second-home ownership available in the market today. Other services provided by us include:

Our Strengths

Our management believes that our primary business strengths include:

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Our Growth Strategy

Our management expects to achieve strong EBITDA and revenue growth over the next several years.

Key elements of our future growth strategy include:

Recent Development

We currently intend, subject to the receipt of any required consents (including the consent of the lender under our revolving credit facility), to convert the $10 million note payable by our subsidiary Ultimate Escapes Holdings, LLC (“Ultimate Escapes Holdings”) to Ultimate Resort Holdings, LLC (“Ultimate Resort”) into shares of our common stock, at a conversion price of $6.65 per share (after giving effect to the proposed 1-for-1.5 reverse stock split). Ultimate Resort, an entity controlled by James M. Tousignant, our President and Chief Executive Officer and a member of our board of directors, is the holder of ownership units in Ultimate Escapes Holdings which may be exchanged at any time in Ultimate Resort’s discretion for a total of 2,572,381 shares of our common stock. We believe that this conversion, if implemented, may increase the likelihood that we will be able to maintain our listing on the NYSE Amex, or be approved for listing on an alternate exchange, by increasing our stockholders’ equity.

Corporate Information

We were incorporated in Delaware on May 14, 2007 under the name “Fortress America Acquisition Corporation II” (subsequently changed to Secure America Acquisition Corporation) as a blank check company for the purpose of acquiring one or more domestic or international businesses. On October 29, 2009, we consummated a business combination with Ultimate Escapes Holdings pursuant to a Contribution Agreement, as amended (the “Contribution Agreement”), whereby we acquired ownership units in Ultimate Escapes Holdings and Ultimate Escapes Holdings became a subsidiary of us. In this prospectus, we refer to our acquisition of Ultimate Escapes Holdings pursuant to the Contribution Agreement as the “Acquisition,” and we refer to the limited liability company membership units in Ultimate Escapes Holdings as “ownership units.” Effective upon the consummation of the Acquisition, we changed our name to Ultimate Escapes, Inc. Prior to the consummation of the Acquisition, on September 15, 2009, Ultimate Escapes Holdings acquired all of the assets and business of its former parent company Ultimate Resort and also acquired a majority of the assets and business of Private Escapes Destination Clubs (“Private Escapes”).

Our principal executive offices are located at 3501 West Vine Street, Suite 225, Kissimmee, Florida 34641, and our telephone number is (407) 483-1900. Our website is www.ultimateescapes.com. The information contained in our website is not a part of this prospectus.

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The Offering

Unless otherwise indicated, all share amounts and prices in this prospectus (other than in the historical financial statements and in the summary and selected financial data derived therefrom) assume the consummation of a reverse stock split, at a ratio of 1-for-1.5, to be effected prior to the effectiveness of the registration statement of which this prospectus is a part. The objective of the reverse stock split is to maintain a stock price for our common stock substantially above the minimum price required to maintain our NYSE Amex listing. All information in this prospectus assumes no exercise by the underwriters of their right to purchase up to an additional 1,000,000 shares of common stock to cover over-allotments.

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Summary Consolidated Financial Data of Ultimate Escapes Holdings

Because the Acquisition was considered a reverse acquisition and recapitalization for accounting purposes, the historical financial statements of Ultimate Escapes Holdings became our historical financial statements. On September 15, 2009, Ultimate Resort contributed all of its assets and liabilities to its wholly-owned subsidiary, Ultimate Escapes Holdings. On September 15, 2009, Private Escapes contributed a majority of its assets, liabilities, properties and other rights to Ultimate Escapes Holdings in exchange for an 8% ownership interest in Ultimate Escapes Holdings. The following summary consolidated historical financial information of Ultimate Escapes Holdings as of December 31, 2008 and 2007 and for the years then ended was derived from the audited consolidated financial statements of Ultimate Escapes Holdings included in this prospectus. The summary consolidated historical financial information of Ultimate Escapes Holdings as of and for the nine months ended September 30, 2009 and 2008 was derived from the unaudited condensed consolidated financial statements of Ultimate Escapes Holdings included in this prospectus and includes the unaudited results of the acquired operations of Private Escapes from September 16, 2009 through September 30, 2009. The selected financial data of Private Escapes for periods prior to September 16, 2009 is included elsewhere in this prospectus.

The results of operations for the interim period are not necessarily indicative of the results of operations which might be expected for the entire year. This information should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements of Ultimate Escapes Holdings and Private Escapes and the notes thereto included elsewhere in this prospectus.

		As of and for the Nine Months Ended September 30,								As of and for the Years Ended December 31,
		2009				2008				2008				2007
		(unaudited)				(unaudited)
		(In thousands)
Statement of Operations Data:
Revenues		$	25,061			$	16,497			$	22,541			$	15,113
Operating income (loss)			3,823				(11,830	)			(14,344	)			(17,853	)
Net loss			(3,225	)			(18,948	)			(23,222	)			(24,645	)
Balance Sheet Data:
Total assets		$	216,520				N/A			$	131,609			$	135,822
Working capital			(17,461	)			N/A				(8,804	)			(3,843	)
Owners’ equity			(34,579	)			N/A				(36,813	)			(15,668	)

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RISK FACTORS

Our business, industry and common stock are subject to numerous risks and uncertainties. The discussion below sets forth all of such risks and uncertainties that are material and presently known to us. Any of the following risks, if realized, could materially and adversely affect our revenues, operating results, profitability, financial condition, prospects for future growth and overall business, as well as the value of our common stock.

Risks Related to Our Company

The luxury vacation industry is highly competitive and we are subject to risks relating to competition that may adversely affect our performance.

We operate principally in the luxury vacation industry and compete against numerous global, regional and boutique destination clubs; as well as other shared usage or interval ownership resort and vacation property companies, real estate developers and sponsors; vacation home owners, brokers and managers; resort sponsors and managers; and, more broadly, luxury resorts and other transient/leisure accommodations; as well as alternative leisure and recreation categories, such as golf clubs or other club membership organizations. We have encountered and expect to encounter in the future intense competition from our rivals in the destination club industry and from other companies offering competitive products and services. Many of our competitors have greater consumer recognition or resources and/or more established and familiar products than us. The factors that we believe are important to customers include:

We have many competitors for our club members, including other major resort destinations worldwide. We also directly compete with other destination clubs, such as Exclusive Resorts, which is the largest company in the destination club marketplace, as measured by number of club members. Our destination club members can choose from any of these alternatives.

We compete with numerous other resorts that may have greater financial resources than we do and that may be able to adapt more quickly to changes in customer requirements or devote greater resources to promotion of their offerings than we can. We believe that developing and maintaining a competitive advantage will require continued investment in our technology platform, brand, existing destination club properties and the acquisition of additional luxury properties to our portfolio of destination club properties. There can be no assurance that we will have sufficient resources to make the necessary investments to do so, or that we will be able to compete successfully in this market or against such competitors.

We are subject to the operating risks common to the luxury vacation industry which could adversely affect our business, financial condition and results of operations.

Our business is subject to numerous operating risks common to the luxury vacation industry. Some of these risks include:

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The matters described above could result in a decrease in the number, or lack of growth, in our destination club members and could have a material adverse effect on the luxury vacation industry, which in turn could have a material adverse effect on our business, financial condition and results of operations.

The current slowdown in the travel industry and the global economy generally will continue to impact our financial results and growth.

The present economic slowdown and the uncertainty over its breadth, depth and duration has had a negative impact on the luxury vacation industry. There is now general consensus among economists that the economies of the United States, Europe and much of the rest of the world have been in a recession since December 2007. The current downturn in the economy has reduced, and may in the future reduce, the demand for our destination club memberships and may increase club member resignations and redemptions. Accordingly, our financial results have been impacted by the economic slowdown and both our future financial results and growth could be further harmed if the recession continues for a significant period or becomes worse.

We have a history of losses, and may never achieve or sustain profitability.

Prior to the Acquisition, we incurred substantial losses, and we may continue to incur substantial losses in the future. Ultimate Escapes incurred net losses of $3.2 million, $23.2 million and $24.6 million during the nine months ended September 30, 2009 and the years ended December 31, 2008 and 2007, respectively. We have also experienced a decrease in new club membership sales and existing club member upgrades during the last six months of 2008 and all of 2009. These circumstances raise substantial doubt about our ability to continue to fund operating losses and provide necessary operating liquidity. Even if we do achieve profitability, we may be unable to sustain or increase our profitability in the future.

Our business is capital intensive and the lack of available financing to fund the acquisition of additional destination club properties and our operations could adversely affect our ability to maintain and grow our club membership base which could adversely affect our business, financial condition and results of operations.

In order for our destination clubs to remain attractive and competitive, we have to spend a significant amount of money to keep the properties well maintained, modernized and refurbished and to add new luxury properties periodically to our portfolio of destination club properties as we add new club members. This creates an ongoing need for cash and, to the extent we cannot fund expenditures from cash generated by operations, funds must be borrowed or otherwise obtained. We could finance future expenditures from any of the following sources:

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We might not be able to obtain financing for future expenditures on favorable terms or at all, which could inhibit our ability to continue to grow. Events during 2008 and 2009, including the failures and near failures of numerous financial services companies and the decrease in liquidity and available equity and debt capital have negatively impacted the capital markets for real estate investments. Accordingly, our financial results have been and may continue to be impacted by the cost and availability of funds needed to grow our business.

We have a substantial amount of indebtedness, which could adversely affect our financial position.

We have a substantial amount of indebtedness. As of December 31, 2009, we had total debt of approximately $123 million, consisting of $99 million of borrowings under our senior secured credit facility and $24 million of additional debt obligations secured by destination club properties. Our senior secured credit facility is an amended and restated $110 million revolving credit facility with CapitalSource, secured by our real estate assets, which will mature on April 30, 2011, subject to extension by us for up to two one-year periods. The revolving credit facility includes financial and operational covenants that limit our ability to incur additional indebtedness and pay dividends as well as purchase or dispose of significant assets. Covenants in the revolving credit facility include obligations to maintain either a restricted cash balance of not less than six months of debt service or a debt service coverage ratio of 1.25 to 1, to maintain a leverage ratio between debt and consolidated net worth of no more than 3.5 to 1, to comply with specified ratios of number of club properties to club members, to have a net loss of no more than $10 million in fiscal 2009 and $5 million in fiscal 2010, and to have net income in each year thereafter, and to maintain a consolidated debt ratio of no more than 80%. Although we believe that we are in compliance with all of the covenants in the revolving credit facility, we have previously violated certain covenants contained in our prior revolving credit facility with CapitalSource, which covenant violations were waived by the lender. In addition, we have approximately $24 million in additional indebtedness secured by real estate assets with various first and second mortgage lenders. In the event we default on our secured debt obligations, the lenders could enforce their rights under the loan agreements, which would impair our ability to conduct our business and have a material adverse effect on our business, financial condition and results of operations. If we are unable to make payments on one or more mortgages on the properties or otherwise default on our debt obligations, the lenders could foreclose on such properties, which would have a material adverse effect on our business, financial condition and results of operations. We may also incur significant additional indebtedness in the future. Our substantial indebtedness may:

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We may not be able to generate sufficient cash to service our debt obligations.

Our ability to make payments on and to refinance our indebtedness will depend on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. Our senior secured credit agreement restricts our ability to dispose of assets, and requires the use of proceeds from any disposition of assets to repay our indebtedness. We may not be able to consummate those dispositions or to obtain the proceeds that we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due.

We are subject to the risks that generally relate to real estate investments, which may have a material adverse effect on our business, financial condition and results of operations.

We are subject to the risks that generally relate to investments in real property because we own most of our destination club properties. The investment returns available from equity investments in real estate depend in large part on the amount of income earned and capital appreciation generated by the related properties, and the expenses incurred. In addition, a variety of other factors affect income from properties and real estate values, including governmental regulations, insurance, zoning, tax and eminent domain laws, interest rate levels and the availability of financing. When interest rates increase, the cost of acquiring, developing, expanding or renovating real property increases and real property values may decrease as the number of potential buyers decreases. Similarly, as financing becomes less available, it becomes more difficult both to acquire and to sell real property. In addition, our loan facility restricts our ability to sell our assets, including our real estate holdings. Finally, under eminent domain laws, governments can take real property. Sometimes this taking is for less compensation than the owner believes the property is worth. Any of these factors could have a material adverse impact on our results of operations or financial condition. In addition, equity real estate investments are difficult to sell quickly and we may not be able to adjust our portfolio of owned properties quickly in response to economic or other conditions. If our properties do not generate revenue sufficient to meet operating expenses, including debt service and capital expenditures, our income and financial condition will be adversely affected. The real estate investment industry is susceptible to trends in the national and/or regional economies and there can be no assurance that we can operate our destination club properties and then later sell any or all of them at a profit.

The need for ongoing property renovations could adversely affect our business, financial condition and results of operations.

Our properties require routine maintenance as well as periodic renovations and capital improvements. Ongoing renovations at a particular property may negatively impact the desirability of the property as a vacation destination. A significant decrease in the supply of available vacation rental accommodations and the need for vacation rental services during renovation periods, coupled with the inability to attract vacationers to properties undergoing renovations, could have a material adverse effect on our business, financial condition and results of operations.

Environmental liabilities, including claims with respect to mold or hazardous or toxic substances, could have a negative impact on our reputation and cause us to incur additional expense to remedy any such liability or claim.

Under various federal, state, local and foreign environmental laws, ordinances and regulations, a current or previous property owner of real property may be liable for the costs of removal or remediation of hazardous or toxic substances, including mold, on, under or in such property. These laws could impose

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liability without regard to whether we knew of, or were responsible for, the presence of hazardous or toxic substances. The presence of hazardous or toxic substances, or the failure to properly clean up such substances when present, could jeopardize our ability to develop, use, sell or rent the real property or to borrow using the real property as collateral. If we arrange for the disposal or treatment of hazardous or toxic wastes, we could be liable for the costs of removing or cleaning up wastes at the disposal or treatment facility, even if we never owned or operated that facility. Other laws, ordinances and regulations could require us to manage, abate or remove lead or asbestos containing materials. Similarly, the operation and closure of storage tanks are often regulated by federal, state, local and foreign laws. Certain laws, ordinances and regulations, particularly those governing the management or preservation of wetlands, coastal zones and threatened or endangered species, could limit our ability to develop, use, sell or rent our real property.

We cannot provide any assurances that environmental issues will not exist with respect to any destination club property we own or acquire. Even if environmental inspections are made, environmental issues may later be determined to exist because the inspections were not complete or accurate or environmental releases migrate to the properties from adjacent property. In addition to liability for environmental issues which can substantially adversely impact our business and financial condition, the marketability of the destination club properties for sale or refinancing can be adversely affected because of the concerns of a third party who may buy or lend money on the properties over the possible environmental liability and/or environmental clean-up costs. In addition, our reputation may be damaged by any alleged claim or incurrence of environmental liabilities, which could reduce demand for our destination club memberships and have a material adverse effect on our business.

We own properties that are located internationally and thus are subject to special political and monetary risks not generally applicable to our domestic properties.

We operate properties located abroad which as of December 31, 2009, included 44 properties in 12 international locations, and we intend to expand our portfolio of international destination club properties. Properties abroad generally are subject to various political, geopolitical, and other risks that are not present or are different in the United States. These risks include the risk of war, terrorism, civil unrest, expropriation and nationalization and regulation, as well as the impact in cases in which there are inconsistencies between U.S. law and the laws of an international jurisdiction. In addition, sales in international jurisdictions typically are made in local currencies, which subject us to risks associated with currency fluctuations. Currency devaluations and unfavorable changes in international monetary and tax policies could have a material adverse effect on our profitability and financing plans, as could other changes in the international regulatory climate and international economic conditions, in the event that we increase our operation of properties abroad.

We have a limited operating history, which may make it difficult to predict our future performance.

We have been operating only since 2004 and therefore do not have an established operating history. In addition, the acquisition of certain assets and liabilities of Private Escapes was consummated on September 15, 2009, and as a result we now have a much larger base of club members, club properties and employees to manage and operate. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history.

We may experience financial and operational risks in connection with acquisitions. In addition, businesses acquired by us may incur significant losses from operations or experience impairment of carrying value.

We completed our acquisition of certain assets and liabilities of Private Escapes on September 15, 2009, and intend to selectively pursue other acquisitions. However, we may be unable to identify attractive acquisition candidates or complete transactions on favorable terms. In addition, in the case of acquired assets or businesses, we may need to:

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We may not be successful in addressing these challenges or any others encountered in connection with historical and future acquisitions. In addition, the anticipated benefits of one or more acquisitions may not be realized and future acquisitions could result in potentially dilutive issuances of equity securities and/or the assumption of contingent liabilities. Also, the value of goodwill and other intangible assets acquired could be impacted by one or more unfavorable events or trends, which could result in impairment charges. The occurrence of any of these events could adversely affect our business, financial condition and results of operations.

We may not be able to achieve our growth objectives.

We may not be able to achieve our objectives for maintaining our existing club members, increasing our number of new club members through organic growth, acquisitions and acquiring additional luxury properties to add to our portfolio of destination club properties. Our ability to complete acquisitions of additional properties depends on a variety of factors, including our ability to obtain financing on acceptable terms and requisite lender and government approvals. Even if we are able to complete acquisitions of additional luxury properties, we may not be able to grow our club membership base or effectively integrate such acquisitions.

Extensive laws and government regulations could affect the way we conduct our business plan.

Our business exists in a regulatory environment that is changing and evolving and where certain regulatory matters are currently uncertain. Such matters include, but are not limited to, the question of whether our destination club memberships constitute timeshare/vacation ownership plans or timeshare use plans, as well as whether such club memberships being offered may constitute the offering of unregistered securities under the US federal and/or state securities laws. We believe that our club membership sales do not constitute timeshare/vacation ownership plans or timeshare use plans, nor do they constitute offers of securities under any federal or state laws or regulations. If, however, the club membership sales were determined to constitute timeshare/vacation ownership plans or timeshare use plans, or be deemed to be securities under any state or federal law, we would be required to comply with applicable state timeshare regulations or state and federal securities laws, including those laws pertaining to registration or qualification of securities, licensing of salespeople and other matters. If we cannot comply with the applicable timeshare regulations or state and federal securities requirements, in that event, and/or the determination may create liabilities or contingencies, including rescission rights relating to the club memberships we previously sold, as well as fines and penalties, that could adversely affect our business, financial condition and results of operations.

If we are unable to obtain the necessary permits and approvals in connection with our acquisition of destination club properties, it may have a material adverse effect on our business.

We intend to continue to acquire additional destination club properties for our portfolio. To successfully acquire and operate the properties as intended, we and/or our subsidiaries must apply for and receive any necessary federal, state and/or local and foreign permits and licenses as may be applicable to the properties. We expect to receive such necessary permits and approvals; however, there can be no assurance that such permits and approvals will be obtained. Failure to receive the necessary permits and approvals could prohibit or substantially and adversely impact our operations.

Increased insurance risk, perceived risk of travel and adverse changes in economic conditions as a result of recent events could significantly reduce our cash flow, revenues and earnings.

We believe that insurance and surety companies are re-examining many aspects of their business, and may take actions including increasing premiums, requiring higher self-insured retentions and deductibles, requiring additional collateral on surety bonds, reducing limits, restricting coverages, imposing exclusions, such as mold damage, sabotage and terrorism, and refusing to underwrite certain risks and classes of business. Any increased premiums, mandated exclusions, change in limits, coverages, terms and conditions or reductions in the amounts of bonding capacity available may adversely affect our ability to obtain appropriate insurance coverages at reasonable costs, which could significantly reduce our business cash flow, revenues and earnings.

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The illiquidity of real estate investments could significantly limit our ability to respond to adverse changes in the performance of our properties and significantly reduce our cash flow, revenues and earnings.

Because real estate investments are relatively illiquid, our ability to promptly sell one or more of our properties in response to changing economic, financial and investment conditions is limited. We cannot predict whether we will be able to sell any property for the price or on the terms set by us, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property.

We may be required to expend funds to correct defects or to make improvements before a property can be sold. We may not have funds available to correct those defects or to make those improvements and as a result our ability to sell the property would be limited. In acquiring a property, we may agree to lock-out provisions that materially restrict us from selling that property for a period of time or impose other restrictions on us. These factors and any others that would impede our ability to respond to adverse changes in the performance of our properties could significantly reduce our cash flow, revenues and earnings.

We are subject to litigation in the ordinary course of business which could be costly and time consuming.

We are, from time to time, subject to various legal proceedings and claims, either asserted or unasserted. Any such claims, whether with or without merit, could be time-consuming and expensive to defend and could divert management’s attention and resources. Although our management believes that we have adequate insurance coverage and accrues loss contingencies for all known matters that are probable and can be reasonably estimated, we cannot assure that the outcome of all current or future litigation will not be costly and time consuming and otherwise divert management’s attention away from operating the business.

Fluctuations in real estate values may require us to write down the book value of real estate assets.

Under United States generally accepted accounting principles, we are required to assess the impairment of our long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors management considers that could trigger an impairment review include significant underperformance relative to minimum future operating results, significant change in the manner of use of the assets, significant technological or industry changes, or changes in the strategy for our overall business. When we determine that the carrying value of certain long-lived assets is impaired, an impairment loss equal to the excess of the carrying value of the asset, or asset group, over its estimated fair value is recognized. These impairment charges would be recorded as operating losses. Any material write-downs of assets could have a material adverse effect on our financial condition and earnings.

We will incur increased costs as a result of being a public company.

As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. The U.S. Sarbanes-Oxley Act of 2002 and related rules of the SEC and stock exchanges regulate corporate governance practices of public companies. We expect that compliance with these public company requirements will increase costs and make some activities more time-consuming. For example, we have created new board committees and adopted new internal controls and disclosure controls and procedures. In addition, we incur additional expenses associated with our SEC reporting requirements. A number of those requirements require us to carry out activities we have not done previously. For example, under Section 404 of the Sarbanes-Oxley Act, our management will need to assess and report on our internal control over financial reporting and our independent accountants may need to issue an opinion on that assessment and the effectiveness of those controls. Furthermore, if we identify any issues in complying with those requirements (for example, if we or our independent accountants identified a material weakness or significant deficiency in our internal control over financial reporting), we could incur additional costs rectifying those issues, and the existence of those issues could adversely affect us, our reputation or investor perceptions of us.

We also expect that it will be difficult and expensive to obtain and maintain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. Advocacy efforts by stockholders and third parties may also prompt even more changes in governance and reporting requirements. We cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

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We depend on key personnel for the future success of our business and the loss of one or more of our key personnel could have an adverse effect on our ability to manage our business and implement our growth strategies, or could be negatively perceived in the capital markets.

Our future success and ability to manage future growth depends, in large part, upon the efforts and continued service of our senior management team, which has substantial experience in the resort and hospitality industry. Our President and Chief Executive Officer, James Tousignant, our Chairman, Richard Keith, and our Chief Financial Officer, Philip Callaghan, have been actively involved in the acquisition, ownership and operation of resort properties and are actively engaged in our management. Messrs. Tousignant, Keith and Callaghan substantially determine our strategic direction, especially with regard to operational, financing, acquisition and disposition activity. The departure of any of them could negatively impact our ability to grow and manage our operations.

Although we are party to employment agreements with some of our key personnel, these employment agreements do not require them to remain our employees and, therefore, they could terminate their employment with us at any time without penalty. We do not currently maintain key man life insurance on any of our executives, and such insurance, if obtained in the future, may not be sufficient to cover the costs of recruiting and hiring a replacement or the loss of an executive’s services.

It could be difficult for us to find replacements for such key personnel, as competition for such personnel is intense. The loss of services of one or more members of senior management could have an adverse effect on our ability to manage our business and implement our growth strategies. Further, such a loss could be negatively perceived in the capital markets, which could reduce the market value of our securities.

Damage to our destination club properties and other operational risks may disrupt our business and adversely impact our financial results.

Depending on the location of our destination club properties, a particular property may bear an increased risk for damage by inclement weather, construction defects, environmental matters, acts of terrorism, or other forces or acts, whether intentional or unintentional. In addition, we rely heavily on our information systems and other data processing systems. Any such damage to properties or disruption in information systems could cause us to suffer financial loss, a disruption of our businesses, regulatory intervention or reputational damage.

Furthermore, we depend on our headquarters in Kissimmee, Florida, where most of our information systems and personnel are located, for the continued operation of our business. A natural disaster or other catastrophic event or disruption in the infrastructure that supports our businesses, including a disruption involving electronic communications or other services used by us or third parties with whom we conduct business, or directly affecting our headquarters, could have a material adverse impact on our ability to continue to operate our business without interruption. The impact of any disaster or disruption on our business will likely be exacerbated by the fact that we do not have any disaster recovery program in place to mitigate the harm or minimize the lost data that may result from such a disaster or disruption. In addition, insurance and other safeguards might only partially reimburse us for our losses, if at all.

We are vulnerable to the risk of unfavorable weather conditions and continued inclement weather could reduce our revenues and earnings.

Our ability to attract visitors to our resorts is influenced by weather conditions. Unfavorable weather conditions can adversely affect visits and our revenues and profits. Adverse weather conditions may discourage visitors from participating in outdoor activities at our resorts. There is no way for us to predict future weather patterns or the impact that weather patterns may have on results of operations or visitation. Extreme weather conditions such as hurricanes or prolonged periods of adverse weather conditions, or the occurrence of such conditions during peak visitation periods, could have a material adverse effect on our financial condition and results of operations by reducing revenues and earnings.

Our property development and management operations are conducted in many areas that are subject to natural disasters and severe weather, such as hurricanes and floods. We also may be affected by unforeseen engineering, environmental, or geological problems. These conditions could delay or increase the cost of construction projects, damage or reduce the availability of materials, and negatively impact the demand for

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resorts in affected areas. If insurance does not fully cover business interruptions or losses resulting from these events, our earnings, liquidity and capital resources could be adversely affected.

Our success depends, in part, on the integrity of our systems and infrastructure. System interruptions may have an adverse impact on our business, financial condition and results of operations.

Our success depends, in part, on our ability to maintain the integrity of our systems and infrastructure, including websites, information and related systems and call centers. System interruptions may adversely affect our ability to operate websites, process and fulfill club member reservations and other transactions, respond to customer inquiries and generally maintain cost-efficient operations. We may experience occasional system interruptions that make some or all systems or data unavailable or prevent us from efficiently providing services. We also rely on third-party computer systems, broadband and other communications systems and service providers in connection with the provision of services generally, as well as to facilitate, process and fulfill transactions. Any interruptions, outages or delays in these systems, or deterioration in the performance of these systems and infrastructure, could impair our ability to provide services. Fire, flood, power loss, telecommunications failure, hurricanes, tornadoes, earthquakes, acts of war or terrorism, acts of God and similar events or disruptions may damage or interrupt computer, broadband or other communications systems and infrastructure at any time. Any of these events could cause system interruption, delays and loss of critical data, and could prevent us from providing services. Although we have backup systems for certain aspects of our operations, these systems are not fully redundant and disaster recovery planning is not sufficient for all eventualities. In addition, we may not have adequate insurance coverage to compensate for losses from a major interruption. If any of these adverse events were to occur, it could adversely affect our business, financial condition and results of operations.

In addition, any penetration of network security or other misappropriation or misuse of personal consumer information could cause interruptions in our operations and subject us to increased costs, litigation and other liabilities. Claims could also be made against us for other misuse of personal information, such as for unauthorized purposes or identity theft, which could result in litigation and financial liabilities, as well as administrative action from governmental authorities. Security breaches could also significantly damage our reputation with consumers and third parties with whom we do business. It is possible that advances in computer capabilities, new discoveries, undetected fraud, inadvertent violations of company policies or procedures or other developments could result in a compromise of information or a breach of the technology and security processes that are used to protect consumer transaction data. As a result, current security measures may not prevent any or all security breaches. We may be required to expend significant capital and other resources to protect against and remedy any potential or existing security breaches and their consequences. Consumers are generally concerned with security and privacy of the Internet, and any publicized security problems affecting us may discourage consumers from doing business with us, which could have an adverse effect on our business, financial condition and results of operations.

Our success depends on the value of our name, image and brand, and if demand for our destination club properties and their features decreases or the value of our name, image or brand diminishes, our business, revenues and results of operations would be reduced.

Our success depends, to a large extent, on our ability to shape and stimulate consumer tastes and demands by producing and maintaining luxurious, attractive, and exciting properties and services, as well as our ability to remain competitive in the areas of design and quality. There can be no assurance that we will be successful in this regard or that we will be able to anticipate and react to changing consumer tastes and demands in a timely manner.

Furthermore, a high media profile is an integral part of our ability to shape and stimulate demand for our destination club memberships with our target customers. A key aspect of our marketing strategy is to focus on attracting media coverage. If we fail to attract that media coverage, we may need to substantially increase our advertising and marketing costs, which would decrease our earnings. In addition, other types of marketing tools, such as traditional advertising and marketing, may not be successful in attracting target customers.

Our business would be adversely affected if our public image or reputation were to be diminished. Our brand names and trademarks are integral to our marketing efforts. If the value of our name, image or brands were diminished, our business, revenues and results of operations would be reduced.

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Any failure to protect our trademarks could have a negative impact on the value of our brand names and reduce our business and reduce revenues.

We believe our trademarks are critical to our success. We rely on trademark laws to protect our proprietary rights. The success of our business depends in part upon our continued ability to use our trademarks to increase brand awareness and further develop our brand. Monitoring the unauthorized use of our intellectual property is difficult. Litigation may be necessary to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others. Litigation of this type could result in substantial costs and diversion of resources, may result in counterclaims or other claims against us and could significantly harm our results of operations. In addition, the laws of some foreign countries do not protect our proprietary rights to the same extent as do the laws of the United States. From time to time, we apply to have certain trademarks registered. There is no guarantee that such trademark registrations will be granted. We cannot assure that all of the steps we have taken to protect our trademarks will be adequate to prevent imitation of our trademarks by others. The unauthorized reproduction of our trademarks could diminish the value of our brand and our market acceptance, competitive advantages or goodwill, which could reduce our business and reduce revenues.

Changes in weather patterns as a result of global warming could have an adverse effect on our business.

Scientific reports indicate that, as a result of human activity:

We cannot predict the effects that these phenomena may have on our business. We could be impacted to the extent that global warming trends affect established weather patterns or exacerbate extreme weather or weather fluctuations, hindering or preventing travel by our club members in certain circumstances. They might also affect the desirability of some of our properties, such as ones located on beaches or in skiing areas, increase the cost and reduce the availability of insurance covering damage from natural disasters for some of our properties and lead to new laws and regulations that increase our expenses and reduce our revenues. Any of these consequences, and other consequences of global warming that we do not foresee, could materially and adversely affect our sales, profits and financial condition.

Risks Related to Our Common Stock

We are currently not in compliance with the minimum listing requirements of the NYSE Amex’s Company Guide, and the NYSE Amex has notified us that it intends to delist our securities if this offering is not completed by February 16, 2010. Delisting would limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

Our common stock and warrants are listed on the NYSE Amex, a national securities exchange. On December 7, 2009, we received notification from the NYSE Amex that it intends to file a delisting application with the SEC to remove our securities from listing and registration on the NYSE Amex, due to our failure to satisfy one or more of the NYSE Amex continued listing standards. Specifically, the NYSE Amex noted that as of the closing of the Acquisition, we failed to satisfy the NYSE Amex’s original listing standards and minimum distribution standards, which require a minimum public distribution of 500,000 shares of common stock together with a minimum 800 public shareholders or a minimum public distribution of 1,000,000 shares of common stock together with a minimum of 400 public shareholders. The listing standards applicable to us also require a minimum market capitalization of $75 million, or a minimum of $4 million of stockholders’ equity. As of February 9, 2010, we had 1,657,664 outstanding shares, 195 record holders and approximately 325 beneficial holders. On a pro-forma basis, treating as issued the 5,037,784 shares issuable upon conversion of outstanding ownership units in Ultimate Escapes Holdings and assuming the distribution of the underlying

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shares by Ultimate Escapes Holdings to their respective owners, we had approximately 6.7 million outstanding shares, approximately 440 public shareholders and a market capitalization of approximately $34.3 million. As of September 30, 2009, our stockholders equity, on a pro-forma basis, was approximately $(29.4) million. On January 20, 2010, we received an additional notification from the NYSE Amex, indicating that we did not comply with the NYSE Amex’s requirement to file an application and obtain approval for the issuance of shares we issued to certain of our members pursuant to our redemption conversion program.

We submitted an appeal letter to the NYSE Amex and requested a hearing before a Listing Qualifications Panel of the NYSE Amex’s Committee on Securities, which was held on January 28, 2010. On February 2, 2010, the Panel issued its decision, determining that the NYSE Amex should continue the delisting procedures against us. Following the issuance of the Panel’s decision, the NYSE Amex staff advised us that the suspension of trading of our securities would take effect on February 17, 2010, unless we complete this offering and demonstrate compliance with the applicable listing requirements prior to that date. In furtherance of this process, on February 4, 2010, the staff notified us that the NYSE Amex had cleared the Company to file an original listing application (which we filed with the NYSE Amex on February 5, 2010), thus facilitating our continued listing on the NYSE Amex, provided we successfully complete this offering on or before February 16, 2010, and thereby demonstrate compliance with all applicable original listing criteria. Accordingly, if this offering is not completed on or before February 16, 2010, or if we do not satisfy the NYSE Amex’s original listing criteria upon the completion of this offering, we expect that our securities will cease to be listed on the NYSE Amex beginning on February 17, 2010. If the NYSE Amex delists our securities from quotation on its exchange, this would limit investors’ ability to make transactions in our securities.

The concentration of our capital stock ownership with insiders will likely limit your ability to influence corporate matters.

As of February 9, 2010, our executive officers, directors and affiliated entities together beneficially owned over 70% of our outstanding common stock and we anticipate that these stockholders will together beneficially own approximately 32% of our common stock outstanding after this offering (in each case after giving effect to the exchange of all ownership units of Ultimate Escapes Holdings held by them into shares of our common stock, excluding any earn-out units that may be issued). In addition, James M. Tousignant, our President and Chief Executive Officer and a member of our board of directors, holds, as representative on behalf of the other owners of Ultimate Escapes Holdings, 5,037,784 shares of our Series A Preferred Voting Stock, which vote as a single class with shares of our common stock on all matters. As a result, Mr. Tousignant has control over most matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions. Corporate action might be taken even if other stockholders, including those who purchase shares in this offering, oppose them. This concentration of ownership might also have the effect of delaying or preventing a change of control of our company that other stockholders may view as beneficial.

Our management will have broad discretion over the use of the proceeds we receive in this offering and might not apply the proceeds in ways that increase the value of your investment.

Our management will have broad discretion to use the net proceeds from this offering, and you will be relying on the judgment of our management regarding the application of these proceeds. We may not apply the net proceeds of this offering in ways that increase the value of your investment. We expect to use the net proceeds from this offering for reduction of indebtedness and other general corporate purposes, including working capital and capital expenditures, and for possible investments in, or acquisitions of, properties and/or complementary businesses. We have not allocated these net proceeds for any specific purposes. Our management might not be able to yield a significant return, if any, on any investment of these net proceeds. You will not have the opportunity to influence our decisions on how to use the proceeds.

We may issue additional shares of our common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. This might have an adverse effect on the market price of our common stock.

Outstanding warrants to purchase an aggregate of 8,050,000 shares of common stock are currently exercisable. These warrants would only be exercised if the $13.20 per share exercise price is below the market

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price of our common stock. To the extent they are exercised, additional shares of our common stock will be issued, which will result in dilution to our stockholders and increase the number of shares eligible for resale in the public market.

In addition, if Ultimate Escapes Holdings achieves certain Adjusted EBITDA targets in each of 2010, 2011 and/or 2012, we will be required to issue up to 4,666,667 additional shares of common stock to certain of Ultimate Escapes Holdings’ owners upon conversion of additional ownership units issued if such targets are met. See “Certain Relationships and Related Transactions — Operating Agreement of Ultimate Escapes Holdings” for additional information. Any such issuances would dilute the percentage ownership by our current stockholders and reduce their influence on our management. These issuances may also result in a decrease in the trading price of our common stock.

Future sales of our common stock may cause the market price of our securities to drop significantly, even if our business is doing well.

In accordance with lock-up obligations contained in the amended and restated operating agreement of Ultimate Escapes Holdings entered into in connection with the consummation of the Acquisition (the “Operating Agreement”), the other owners of Ultimate Escapes Holdings will be able to sell their shares of our common stock they are entitled to receive upon conversion of their ownership units in connection with the Acquisition beginning on the first anniversary of the consummation of the Acquisition. In accordance with SEC regulations, the founders, officers and directors of our company will not be able to sell any common stock they receive in exchange for their founders shares until October 29, 2010, the first anniversary of the consummation of the Acquisition, subject to certain exceptions. Pursuant to the registration rights agreement entered into in connection with the consummation of the Acquisition, the owners of Ultimate Escapes Holdings prior to the Acquisition, consisting of Ultimate Resort, Private Escapes and JDI Ultimate, L.L.C. (the “UE Owners”), have registration rights, subject to certain limitations, with respect to shares of our common stock for which their ownership units of Ultimate Escapes Holdings may be exchanged. We have agreed, as soon as possible after the closing date of the Acquisition but in no event later than eight months from the closing date, to file a registration statement covering the shares of our common stock for which their ownership units of Ultimate Escapes Holdings may be exchanged. The UE Owners also have certain “piggyback” registration rights applicable to some registration statements filed by us following the consummation of the Acquisition. In addition, pursuant to a registration rights agreement between us and our initial stockholders, our initial stockholders or their permitted transferees will be entitled to rights to demand two times that we register the resale of the founder shares and the sponsor warrants (and shares underlying the sponsor warrants) at any time, in addition to certain “piggyback” registration rights applicable to registration statements filed by us, generally commencing one year after the consummation of the Acquisition as to the founder shares and three months after the consummation of the Acquisition as to the sponsor warrants (and shares underlying the sponsor warrants). The presence of these additional securities trading in the public market may have an adverse effect on the market price of our securities. The sale by any of the foregoing, or entities they control or their permitted transferees, could cause the market price of our securities to decline.

Our ability to request indemnification from the UE Owners for damages arising out of the Acquisition is limited to those claims where damages exceed $600,000 and is also limited to the shares of common stock issued in the Acquisition that are held in escrow or may be set-off against earn-out payments.

To provide a fund to secure the indemnification obligations of Ultimate Escapes Holdings to us against losses that we may sustain as a result of (i) the inaccuracy or breach of any representation or warranty made by Ultimate Escapes Holdings or any UE Owner in the Contribution Agreement or any schedule or certificate delivered by it or the UE Owners in connection with the Contribution Agreement and (ii) the non-fulfillment or breach of any covenant or agreement made by Ultimate Escapes Holdings in the Contribution Agreement, the UE Owners placed in escrow an aggregate of 717,884 ownership units of Ultimate Escapes Holdings, or 10% of the aggregate number of ownership units owned by the UE Owners immediately prior to the Acquisition. With respect to claims based upon certain representations and warrants deemed “Fundamental Representations” by the parties or fraud or intentional misconduct, those claims are not limited to the escrowed units but are subject to a cap of 25% of the aggregate number of ownership units owned by the UE Owners immediately prior to the Acquisition, which amount in excess of the escrowed units may be

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satisfied by us setting off such claims against payments due to the UE Owners for any future earn-out payments. Claims for indemnification may be asserted against the escrow by us once our damages exceed a $600,000 deductible and will be reimbursable, by cancellation of such units or set-off against future earn-out payments, as applicable, to the full extent of the damages in excess of such amount. Claims for indemnification may be asserted until the later of fifteen days after the date on which we file our Annual Report on Form 10-K for the year ending December 31, 2010 or April 15, 2011, with respect to certain claims; up to the applicable statute of limitations with respect to claims based upon the breach of certain designated representations and warranties; and up to the sixth anniversary of the closing date of the Contribution Agreement with respect to claims based upon the breach of “Fundamental Representations” by the parties or fraud or intentional or willful misrepresentation or omission. As a consequence of these limitations, we may not be able to be entirely compensated for indemnifiable damages that we may sustain.

Public stockholders at the time of the Acquisition who purchased units in our initial public offering and did not exercise their conversion rights may have rescission rights and related claims.

There were several aspects of the Acquisition and the other matters which were not described in the prospectus issued by us in connection with our initial public offering. These include: that we may consummate a business combination outside of the homeland security industry; that we may seek to amend the definition of “business combination” in our certificate of incorporation; that we may seek to amend our amended and restated certificate of incorporation to provide conversion rights to holders of public shares, regardless of whether such holder votes for or against the business combination; that the funds in the trust account might be used to purchase shares from our stockholders who have indicated their intention to vote against the Acquisition and convert their shares into cash; and that we may seek to amend the terms of the warrant agreement between us, our warrant agent and warrantholders (the “Warrant Agreement”), to revise the exercise price and the expiration date. Consequently, our consummation of a business combination with Ultimate Escapes Holdings which does not operate in the homeland security industry, our filing of certain charter amendments in connection with the Acquisition, our use of funds in the trust account to purchase shares of stockholders who had indicated their intention to vote against the Acquisition or our amendment of the Warrant Agreement might be grounds for a stockholder who purchased shares in the initial public offering, excluding our founders, and still held them at the time of the Acquisition without seeking to convert them into cash, to seek rescission of the purchase of the units he acquired in the initial public offering. A successful claimant for damages under federal or state law could be awarded an amount to compensate for the decrease in value of his or her shares caused by the alleged violation (including, possibly, punitive damages), together with interest, while retaining the shares. If we are required to pay damages, our results of operations could be adversely affected.

If the Acquisition’s benefits do not meet the expectations of financial or industry analysts, the market price of our securities may decline.

The market price of our securities may decline if:

Accordingly, investors may experience a loss as a result of a decline in the market price of our securities. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

Volatility of our stock price could adversely affect stockholders.

The market price of our common stock could also fluctuate significantly as a result of:

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Fluctuations in the price of our common stock could contribute to the loss of all or part of an investor’s investment in our company.

We currently do not intend to pay dividends on our common stock and consequently your only opportunity to achieve a return on your investment is if the price of our common stock appreciates.

We currently do not plan to declare dividends on our common stock in the foreseeable future. Any payment of cash dividends will depend upon our financial condition, capital requirements, earnings and other factors deemed relevant by our board of directors. The terms of our current indebtedness contain, and agreements governing future indebtedness will likely contain, restrictions on our ability to pay cash dividends. Consequently, your only opportunity to achieve a return on your investment in the common stock of our company will be if the market price of our common stock appreciates and you sell your common stock at a profit.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements made in this prospectus constitute forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “potential,” “intend” or similar expressions. These statements include, among others, statements regarding our expected business outlook, anticipated financial and operating results, business strategy and means to implement the strategy, the amount and timing of capital expenditures, the likelihood of our success in building our business, financing plans, budgets, working capital needs and sources of liquidity. We believe it is important to communicate our expectations to our stockholders. However, there may be events in the future that we are not able to predict accurately or over which we have no control.

Forward-looking statements, estimates and projections are based on management’s beliefs and assumptions, are not guarantees of performance and may prove to be inaccurate. Forward-looking statements also involve risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement and which may have a material adverse effect on our business, financial condition, results of operations and liquidity. A number of important factors could cause actual results or events to differ materially from those indicated by forward-looking statements. These risks and uncertainties include, but are not limited to, those factors listed in this prospectus under “Risk Factors.”

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual future results to differ materially from those projected or contemplated in the forward-looking statements.

All forward-looking statements included herein attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable laws and regulations, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events. You should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this prospectus could have a material adverse effect on us.

USE OF PROCEEDS

We estimate that we will receive approximately $29.6 million in net proceeds from the sale of our common stock in this offering, or approximately $34.0 million if the underwriter’s over-allotment option is exercised in full, at an assumed public offering price of $4.88 per share (the last reported sales price on February 9, 2010, after giving effect to the anticipated 1-for-1.5 reverse stock split), which may not be indicative of the per share public offering price in this offering, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

We currently intend to use approximately $10 million of the net proceeds from this offering to repay a portion of the outstanding indebtedness under our credit facility with CapitalSource and potentially other notes payable. The CapitalSource credit facility accrues interest at the minimum rate of 8.75% as of December 31, 2009 and will mature on April 30, 2011. The amount outstanding under this credit facility was approximately $99 million at December 31, 2009. The notes payable have interest rates ranging from 8% to 8.75%. We also currently intend to use a portion of the net proceeds from this offering to fund possible investments in, or acquisition of, destination clubs, properties and/or other complementary businesses, and such acquisitions may also involve the issuance of unregistered and/or registered common stock of our company. We have no current agreements or commitments with respect to any material investment or acquisition. We currently intend to use the remaining proceeds for general corporate purposes, including working capital and capital expenditures. In addition, the amount and timing of what we actually spend for these purposes may vary significantly and will depend on a number of factors, including our future revenue and cash generated by operations and the other factors described in “Risk Factors.” Accordingly, our management will have discretion and flexibility in applying the net proceeds of this offering. Pending any uses, as described above, we intend to invest the net proceeds in high quality, investment grade, short-term fixed income instruments which include corporate, financial institution, federal agency or U.S. government obligations.

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CAPITALIZATION

The following table summarizes our balance sheet data as of September 30, 2009:

The numbers presented in this table assume the consummation of the proposed reverse stock split of our issued and outstanding common stock and Series A preferred stock at an assumed ratio of 1-for-1.5 to be effected prior to the effectiveness of the registration statement of which this prospectus is a part. You should read this table in conjunction with “Selected Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes included elsewhere in this prospectus.

		As of September 30, 2009
		Actual				Pro Forma				Pro Forma As Adjusted
		(unaudited, in thousands)
Cash and cash equivalents		$	79,476			$	12,315				31,715
Long term debt		$	—			$	125,063			$	115,063
Preferred stock, $.0001 par value; Actual – no shares authorized, issued and outstanding; Pro Forma and Pro Forma As Adjusted – 20,000,000 shares authorized, 14,556,675 Preferred Series A authorized and 5,037,784 issued and outstanding			—				1				1
Common stock, $.0001 par value; Actual – 50,000,000 shares authorized, 8,333,334 shares issued and outstanding; Pro Forma – 300,000,000 shares authorized, 1,049,016 shares issued and outstanding; Pro Forma As Adjusted – 300,000,000 shares authorized, 7,715,683 shares issued and outstanding			1				—				—
Additional paid-in capital			7,077				28,659				58,059
Accumulated income (deficit)			446				(58,021	)			(58,021	)
Total stockholders’ equity (deficit)			7,524				(29,361	)			38
Total capitalization		$	7,524			$	95,702				115,101

The number of shares to be outstanding after this offering is based on 1,657,664 shares outstanding on February 9, 2010 and excludes the following:

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PRICE RANGE OF SECURITIES AND DIVIDENDS

Price Range of Our Securities

Our common stock and warrants are each listed on the NYSE Amex under the symbols UEI and UEI.WS, respectively. Our units were listed on the NYSE Amex under the symbol UEI.U until October 30, 2009. Our units commenced public trading on October 23, 2007 and our common stock and warrants commenced public trading on January 18, 2008. On December 7, 2009, we received notification from the NYSE Amex that it intends to file a delisting application with the SEC to remove our securities from listing and registration on the NYSE Amex, due to our failure to satisfy one or more of the NYSE Amex continued listing standards. Specifically, the NYSE Amex noted that as of the closing of the Acquisition, we failed to satisfy the NYSE Amex’s original listing standards and minimum distribution standards, which require a minimum public distribution of 500,000 shares of common stock together with a minimum 800 public shareholders or a minimum public distribution of 1,000,000 shares of common stock together with a minimum of 400 public shareholders. The listing standards applicable to us also require a minimum market capitalization of $75 million, or a minimum of $4 million of stockholders’ equity. As of February 9, 2010, we had 1,657,664 outstanding shares, 195 record holders and approximately 325 beneficial holders, and a market capitalization of $9.2 million. On a pro-forma basis, treating as issued the 5,037,784 shares issuable upon conversion of outstanding ownership units in Ultimate Escapes Holdings and assuming the distribution of the underlying shares by Ultimate Escapes Holdings to their respective owners, we had approximately 6.7 million outstanding shares, approximately 440 public shareholders and a market capitalization of approximately $34.3 million. As of September 30, 2009, our stockholders equity, on a pro-forma basis, was approximately $(29.4) million. On January 20, 2010, we received an additional notification from the NYSE Amex, indicating that we did not comply with the NYSE Amex’s requirement to file an application and obtain approval for the issuance of shares we issued to certain of our members pursuant to our redemption conversion program.

We submitted an appeal letter to the NYSE Amex and requested a hearing before a Listing Qualifications Panel of the NYSE Amex’s Committee on Securities, which was held on January 28, 2010. On February 2, 2010, the Panel issued its decision, determining that the NYSE Amex should continue the delisting procedures against us. Following the issuance of the Panel’s decision, the NYSE Amex staff advised us that the suspension of trading of our securities would take effect on February 17, 2010, unless we complete this offering and demonstrate compliance with the applicable listing requirements prior to that date. In furtherance of this process, on February 4, 2010, the staff notified us that the NYSE Amex had cleared the Company to file an original listing application (which we filed with the NYSE Amex on February 5, 2010), thus facilitating our continued listing on the NYSE Amex, provided we successfully complete this offering on or before February 16, 2010, and thereby demonstrate compliance with all applicable original listing criteria. Accordingly, if this offering is not completed on or before February 16, 2010, or if we do not satisfy the NYSE Amex’s original listing criteria upon the completion of this offering, we expect that our securities will cease to be listed on the NYSE Amex beginning on February 17, 2010.

The table below sets forth, for the calendar quarters indicated, the high and low closing sales prices of our units, common stock and warrants as reported on the NYSE Amex (in the case of the units and common stock, as adjusted for the reverse stock split proposed to be effected in connection with this offering at an assumed ratio of 1-for-1.5).

Quarter Ended		Units								Common								Warrants
		High				Low				High				Low				High				Low
December 31, 2007		$	12.09			$	11.75			$	N/A			$	N/A			$	N/A			$	N/A
March 31, 2008			11.93				11.12				10.95				10.00				0.68				0.28
June 30, 2008			11.58				11.10				11.24				10.77				0.32				0.25
September 30, 2008			11.55				11.19				11.40				11.03				0.26				0.10
December 31, 2008			10.92				10.50				10.98				10.49				0.13				0.02
March 31, 2009			11.48				9.87				11.78				11.03				0.15				0.02
June 30, 2009			11.70				11.18				11.85				10.98				0.06				0.01
September 30, 2009			11.90				11.70				11.87				11.63				0.15				0.04
December 31, 2009			12.78				11.90				12.38				5.55				0.40				0.06

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On February 9, 2010, our common stock and warrants closed at $4.88 and $0.05, respectively, after giving effect, in the case of the common stock, to the anticipated 1-for-1.5 reverse stock split to be effected prior to the effectiveness of the registration statement of which this prospectus is a part.

Dividend Policy

We have not paid any dividends on our common stock to date and do not anticipate paying any dividends in the foreseeable future. We intend to retain future earnings, if any, in the operation and expansion of our business. Any future determination to pay cash dividends will be made at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements and other factors that our board of directors deems relevant. In addition, the terms of our current indebtedness precludes us, and the terms of any future indebtedness that we may incur could preclude us, from paying dividends. Investors should not purchase our common stock with the expectation of receiving cash dividends.

SELECTED CONSOLIDATED FINANCIAL DATA OF ULTIMATE ESCAPES HOLDINGS

Because the Acquisition was considered a reverse acquisition and recapitalization for accounting purposes, the historical financial statements of Ultimate Escapes Holdings became our historical financial statements. On September 15, 2009, Ultimate Resort contributed all of its assets and liabilities to its wholly-owned subsidiary, Ultimate Escapes Holdings. On September 15, 2009, Private Escapes contributed a majority of its assets, liabilities, properties and other rights to Ultimate Escapes Holdings in exchange for an 8% ownership interest in Ultimate Escapes Holdings. The following selected consolidated historical financial information of Ultimate Escapes Holdings as of December 31, 2008 and 2007 and for the years then ended was derived from the audited consolidated financial statements of Ultimate Escapes Holdings included in this prospectus. The selected consolidated historical financial information of Ultimate Escapes Holdings as of and for the nine months ended September 30, 2009 and 2008 was derived from the unaudited condensed consolidated financial statements of Ultimate Escapes Holdings included in this prospectus and includes the unaudited results of the acquired operations of Private Escapes from September 16, 2009 through September 30, 2009. The selected financial data of Private Escapes for periods prior to September 16, 2009 is included on the next page.

The results of operations for the interim period are not necessarily indicative of the results of operations which might be expected for the entire year. This information should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements of Ultimate Escapes Holdings and Private Escapes and the notes thereto included elsewhere in this prospectus.

		As of and for the Nine Months Ended September 30,								As of and for the Years Ended December 31,
		2009				2008				2008				2007
		(unaudited)				(unaudited)
		(In thousands)
Statement of Operations Data:
Revenues		$	25,061			$	16,497			$	22,541			$	15,113
Operating income (loss)			3,823				(11,830	)			(14,344	)			(17,853	)
Net loss			(3,225	)			(18,948	)			(23,222	)			(24,645	)
Balance Sheet Data:
Total assets		$	216,520				N/A			$	131,609			$	135,822
Working capital			(17,461	)			N/A				(8,804	)			(3,843	)
Owners’ equity			(34,579	)			N/A				(36,813	)			(15,668	)

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SELECTED COMBINED CONSOLIDATED FINANCIAL DATA OF PRIVATE ESCAPES

The following selected combined consolidated historical financial information of Private Escapes for the period January 1, 2009 to September 15, 2009 and the nine months ended September 30, 2008 was derived from the unaudited combined consolidated financial statements of Private Escapes included in this prospectus. The selected combined consolidated historical financial information of Private Escapes as of December 31, 2008 and 2007 and for the years then ended was derived from the audited combined consolidated financial statements of Private Escapes included in this prospectus. Historical financial information after September 15, 2009 is included in the historical financial information of Ultimate Escapes Holdings on the previous page. This information should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements of Private Escapes and the notes thereto included elsewhere in this prospectus.

		For the Period January 1 –  September 15, 2009				For the Nine Months Ended September 30, 2008				As of and for the Years Ended December 31,
										2008				2007
		(unaudited)				(unaudited)
		(In thousands)
Statement of Operations Data:
Revenues		$	9,434			$	5,541			$	7,425			$	5,283
Operating income (loss)			(959	)			(9,120	)			(11,587	)			(12,189	)
Net loss			(2,587	)			(10,991	)			(14,204	)			(15,078	)
Balance Sheet Data:
Total assets			N/A				N/A			$	55,204			$	54,697
Working capital			N/A				N/A				(29,741	)			(12,354	)
Owners’ equity (deficit)			N/A				N/A				(55,264	)			(43,462	)

SELECTED FINANCIAL DATA OF SECURE AMERICA ACQUISITION CORPORATION

The following selected historical financial information of Secure America Acquisition Corporation (renamed Ultimate Escapes, Inc. upon the consummation of the Acquisition on October 29, 2009) as of and for the nine months ended September 30, 2009 was derived from the unaudited condensed financial statements of Secure America Acquisition Corporation included in this prospectus. The following selected historical financial information of Secure America Acquisition Corporation as of December 31, 2008 and 2007 and for the year ended December 31, 2008 and for the period from May 14, 2007 (inception) through December 31, 2007 was derived from the audited financial statements included in this prospectus. The results of operations for the interim period are not necessarily indicative of the results of operations which might be expected for the entire year. This information should be read in conjunction with the financial statements of Secure America Acquisition Corporation and the notes thereto included elsewhere in this prospectus.

		As of and for the Nine Months Ended September 30,								As of and for the Year Ended December 31, 2008				As of and for the Period May 14, 2007 (Inception) Through December 31, 2007
		2009				2008
		(unaudited)				(unaudited)
		(In thousands, except share and per share data)
Statement of Operations Data:
Interest income		$	114			$	1,230			$	1,272			$	546
Net income (loss)			(265	)			461				432				279
Common Share Data:
Net income (loss) per share – basic and diluted		$	(0.02	)		$	0.04			$	0.03			$	0.05
Common shares outstanding			12,500,000				12,500,000				12,500,000				5,259,000
Balance Sheet Data:
Total assets		$	79,749			$	79,835			$	79,802			$	79,594
Working capital			7,265				76,311				76,259				76,039
Shareholders’ equity			7,521				53,726				53,698				53,266

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information is designed to show the effects of the accounting mergers of Ultimate Escapes Holdings and Private Escapes and Secure America Acquisition Corporation, giving effect to (a) the acquisition by Ultimate Escapes Holdings, through a contribution agreement, of certain assets and liabilities of Private Escapes and (b) the accounting reverse merger of Ultimate Escapes Holdings and Secure America Acquisition Corporation pursuant to a contribution agreement.

The following should be read in connection with the “Unaudited Pro Forma Condensed Combined Financial Statements” and the audited and unaudited financial statements Ultimate Escapes Holdings, Private Escapes and Secure America Acquisition Corporation which are included elsewhere in this prospectus.

The unaudited pro forma balance sheet data assumes that the accounting reverse merger of Ultimate Escapes Holdings and Secure America Acquisition Corporation took place on September 30, 2009. The acquisition of certain assets and liabilities of Private Escapes by Ultimate Escapes Holdings occurred on September 15, 2009 and its effects are already included in the balance sheet data of Ultimate Escapes Holdings as of September 30, 2009.

The unaudited pro forma statement of operations data for the nine months ended September 30, 2009 and for the year ended December 31, 2008 gives effect to the acquisition of certain assets and liabilities of Private Escapes by Ultimate Escapes Holdings and to the accounting reverse merger of Ultimate Escapes Holdings and Secure America Acquisition Corporation as if they occurred on January 1, 2008.

The summary unaudited pro forma condensed combined financial data is presented for illustrative purposes only and is not necessarily indicative of the financial condition or results of operations of future periods or the financial condition or results of operations that actually would have been realized had the entities been a single company during these periods.

		Pro Forma Combined as of and for the Nine Months Ended September 30, 2009				Pro Forma Combined as of and for the Year Ended December 31, 2008
		(unaudited)				(unaudited)
		(In thousands, except per share data)
Statement of Operations Data:
Revenues		$	33,994			$	31,953
Operating income (loss)			2,651				(26,336	)
Net loss			(6,393	)			(38,208	)
Common Share Data:
Net loss per share – basic and diluted			(0.76	)			(4.54	)
Common shares outstanding			8,412				8,412
Balance Sheet Data:
Total assets		$	222,356			$	N/A
Working capital (deficit)			(13,313	)			N/A
Owners’ equity (deficit)			(29,361	)			N/A

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the financial statements of Ultimate Escapes Holdings and the notes thereto included elsewhere in this prospectus.

Overview

We are a luxury destination club that sells club memberships offering members reservation rights to use our vacation properties, subject to the rules of the club member’s Club Membership Agreement. Our properties are located in various resort locations throughout the world.

On September 15, 2009, we consummated the contribution by Private Escapes of certain of its assets, liabilities, properties and rights thereto, in exchange for ownership units in Ultimate Escapes Holdings. The following discussion of financial condition and results of operations refers to the financial statements of Ultimate Escapes Holdings for the nine month periods ended September 30, 2009 and 2008, and for the years ended December 31, 2008 and 2007. The operating results of Private Escapes are included from September 16, 2009. The operating results of Secure America Acquisition Corporation (as Ultimate Escapes, Inc. was named prior to the consummation of the Acquisition) are not included in this discussion.

We believe that our financial performance will improve in 2010 and 2011 as a result of the combination of the Ultimate Resort and Private Escapes businesses, the utilization of current excess capacity and the arrangements with various hotels and resorts coming into effect in 2010, as well as anticipated improvements in worldwide economic conditions generally.

We had 1,214 members, 826 members and 782 members as of December 31, 2009, 2008 and 2007, respectively.

Critical Accounting Policies

Our financial statements and the notes to our financial statements contain information that is pertinent to management’s discussion and analysis. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. On a continual basis, management reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results may vary from these estimates and assumptions under different and/or future circumstances. Management considers an accounting estimate to be critical if:

The following critical accounting policies have been identified that affect the more significant judgments and estimates used in the preparation of the financial statements of Ultimate Escapes Holdings. We believe that the following are some of the more critical judgment areas in the application of our accounting policies that affect our financial condition and results of operations. The following critical accounting policies are not intended to be a comprehensive list of all of our accounting policies or estimates.

Use of Estimates — The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. The reported amounts of revenues and expenses during the reporting period may be affected by the estimates and assumptions we are required to make. Estimates that are critical to our accompanying consolidated financial statements arise from our belief that (1) we will be able to raise and/or generate sufficient cash to continue as a going concern, (2) our

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estimates of the expected lives of the club memberships from which we derive our revenues and on which we base our revenue recognition are reasonable, (3) all long-lived assets are recoverable, and (4) our estimates of the cost of our stock-based compensation plans are reasonable. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. It is at least reasonably possible that our estimates could change in the near term with respect to these matters.

Revenue Recognition

We derive our revenue from the club memberships we sell, which allow the club members to use the club properties owned or leased by us. Different levels of club membership provide access to different properties and/or increased usage of the properties. Club members pay a one-time club membership fee (which includes a non-refundable initiation fee), together with annual dues. Club members sometimes pay additional fees or charges related to their use of specific properties or club services. Club members may upgrade their level of membership at any time by paying additional upgrade fees and annual dues. The terms of each club membership is set out in a Club Membership Agreement.

Club members who resign may receive a partial redemption of their membership fee. We provide assistance to club members who resign by using commercially reasonable efforts to resell a resigned club members’ membership, and upon such resale, the resigning club member generally receives 80% of the proceeds of sale and we retain the remainder as a transfer fee. In the event we are unable to resell a resigning club members’ membership after an agreed period of time, we have certain arrangements with such club members to provide a partial redemption of their membership fee (excluding the initiation fee), based on a sliding scale that declines to zero over a 10 year period.

For purposes of our audited financial statements, we amortize the non-refundable initiation fee over the expected life of the club membership, currently estimated as 10 years. The remaining portion of the club membership fee, which is included in membership deposits-redemption assurance program in our consolidated balance sheet, is amortized over a 10 year period using the straight line method. Management believes that, based on their knowledge of the industry and our competitors, our own extrapolated experience, and practices in similar membership organizations, that period reasonably reflects the expected life of the club memberships, and is consistent with any obligation we may have to provide a partial refund of the membership fee.

Annual club membership dues are billed in advance. Payment of these annual dues permits the club member to continue to make reservations and use the club properties during their membership year and the annual dues are recognized in income on a straight-line basis over the 12 month period to which they relate. Revenue from ancillary charges and other services provided by us to club members when using club properties is recognized at the time of sale.

Impairment of Long-Lived Assets and Goodwill

We analyze our long-lived assets, including property and equipment and intangible assets, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360 “Property, Plant and Equipment” annually and when events and circumstances might indicate that the assets may not be recoverable. If the undiscounted net cash flows are less than the assets’ carrying amounts, we record an impairment based on the excess of the assets’ carrying value over fair value. Fair value is determined based on discounted cash flow models, quoted market values and third-party appraisals. We evaluate our real estate assets on a combined basis, as future cash flows include club membership sales and dues that are not identifiable to individual properties. Estimates of future cash flows are based on internal projections over the expected useful lives of the assets and include cash flows associated with future maintenance and replacement costs, but exclude cash flows associated with future capital expenditures that would increase the assets’ useful lives. Our management believes there is no impairment as of September 30, 2009.

Goodwill consists of the excess of the purchase price paid for Private Escapes over the fair value of the identifiable assets and liabilities acquired. Goodwill is not amortized, but is tested for impairment, at least annually, by applying the recognition and measurement provisions of FASB ASC 350-20 “Goodwill”, which compares the carrying amount of the asset with its fair value. If impairment of carrying value based on the estimated fair value exists, we measure the impairment through the use of projected discounted cash flows.

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We operate as a single operating segment. We have not identified any components within our single operating segment and thus have a single reporting unit for purposes of our goodwill impairment test.

Stock-based compensation

Ultimate Escapes Holdings previously had a stock-based compensation plan utilizing equity units of its former parent company, Ultimate Resort, LLC, which plan is described in its financial statements in “Note 13 — Equity Compensation”. Upon the consummation of the Acquisition, we adopted the 2009 Stock Option Plan, which provides for the issuance of options to acquire up to 800,000 shares of common stock of Ultimate Escapes.

We recognize compensation expense in an amount equal to the grant-date fair value of the equity units or, following adoption of the 2009 Stock Option Plan, the grant-date fair value of the common stock options. The estimated fair value of these equity units and options, as of the date of grant, is recorded as compensation cost over the vesting period.

Determining the fair value of the equity units previously issued required making potentially complex and subjective judgments. Ultimate Escapes Holdings’ approach to valuation of the units, which were granted to employees at no cost to them, was to estimate their fair value based on the proceeds received by the parent company for other equity units with broadly similar characteristics. There is inherent uncertainty in making these estimates. During 2008 and the 2009 period to date, Ultimate Escapes Holdings estimated the fair value at $30,000 per unit. During 2008 and the first nine months of 2009, there were 83 and 67 units, respectively, that vested. At September 30, 2009, there were a further 288 units that had not yet vested. All of these 288 units vested immediately on completion of the Acquisition on October 29, 2009. At the time of the Acquisition, ownership units convertible into common stock by the equity unit holders had an indicated value of approximately $30.6 million, equivalent to 2,572,382 shares of common stock valued at $11.91 per share. Ultimate Resort has 1,431 equity units outstanding, and on a pro rata basis each unit of Ultimate Resort would have an indicated value of approximately $25,700 when taking into account the assumption of the JDI note, which approximates the fair value of $30,000 used in the company’s estimate of compensation expense and the fair value of units. We recognized compensation expense of $5.3 million on October 29, 2009 as a result of the accelerated vesting of these units upon consummation of the Acquisition.

Recent Accounting Pronouncements — The following Accounting Standards Codification Updates have been issued, or will become effective, after the end of the period covered by this discussion:

Pronouncement		Issued		Title
ASU No. 2009-13		October 2009		Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements — a consensus of the FASB Emerging Issues Task Force
ASU No. 2009-14		October 2009		Software (Topic 985): Certain Revenue Arrangements That Include Software Elements — a consensus of the FASB Emerging Issues Task Force
ASU No. 2009-15		October 2009		Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing
ASU No. 2009-16		December 2009		Transfers and Servicing (Topic 860): Accounting for Transfers and Financial Assets.
ASU No. 2009-17		December 2009		Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities
ASU No. 2010-01		January 2010		Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash — a consensus of the FASB Emerging Issues Task Force
ASU No. 2010-02		January 2010		Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary — a Scope Clarification

Management does not anticipate that the new accounting pronouncements listed above will have a material impact on our consolidated financial statements.

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Results of Operations

The following table sets forth historical consolidated income statement data for Ultimate Escapes Holdings (in thousands of dollars):

		Nine Months Ended September 30,								% Change				Year Ended December 31,
		2009				2008								2008				2007				% Change
		(unaudited)				(unaudited)				(unaudited)												(unaudited)
REVENUES
Membership – annual dues		$	11,331			$	12,353				(8	)%		$	17,486			$	13,150				33	%
Membership – upgrade fees			48				319				(85	)%			409				338				21	%
Membership – fees			3,318				2,719				22	%			3,650				1,473				148	%
Membership – assessment fees			8,274				—				—				—				—				—
Other revenue			2,090				1,106				89	%			996				152				555	%
REVENUES			25,061				16,497				52	%			22,541				15,113				49	%
OPERATING EXPENSES:
Property operating expenses			7,757				7,031				10	%			9,900				6,952				42	%
Depreciation and amortization			3,176				3,275				(3	)%			4,479				2,819				59	%
Lease costs			2,457				2,720				(10	)%			3,593				2,461				46	%
Advertising			743				1,927				(61	)%			2,307				3,986				(42	)%
Salaries and contract labor			4,805				7,867				(39	)%			9,420				4,347				117	%
General and administrative			2,072				4,764				(57	)%			6,182				10,915				(43	)%
(Gain) on sale of property and equipment			(107	)			(178	)			(40	)%			(27	)			(12	)			132	%
Sales commissions			335				922				(64	)%			1,032				1,498				(31	)%
OPERATING EXPENSES			21,238				28,327				(25	)%			36,885				32,966				12	%
INCOME (LOSS) BEFORE OTHER INCOME (EXPENSE)			3,823				(11,830	)			132	%			(14,344	)			(17,853	)			20	%
OTHER INCOME (EXPENSE):
Interest expense			(7,120	)			(7,336	)			(3	)%			(9,156	)			(7,408	)			24	%
Interest income			73				219				(67	)%			278				616				(55	)%
OTHER INCOME (EXPENSE) – Net			(7,048	)			(7,117	)			(1	)%			(8,878	)			(6,792	)			31	%
NET LOSS		$	(3,225	)		$	(18,948	)			83	%		$	(23,222	)		$	(24,645	)			6	%

Nine Months Ended September 30, 2009 compared with the Nine Months Ended September 30, 2008 (in thousands) (unaudited)

Revenues

Revenues of $25,061 increased by $8,564, or 52%, during the nine months ended September 30, 2009, from $16,497 during the same period in 2008. The higher revenues during the nine months ended September 30, 2009 reflect $8,274 in assessment fees charged to members in 2009 that were not charged in 2008. Membership-annual dues were $11,331 during the nine months ended September 30, 2009, representing a decrease of $1,022, or 8%, from annual dues of $12,353 for the same period in 2008 primarily as a result of early dues renewal programs offered in 2008 and not offered in 2009, which accelerated revenues into 2008. Other revenue was $2,090 during the nine months ended September 30, 2009, representing an increase of $984, or 89%, compared to $1,106 for the same period in 2008 due to the cross reservation program fees in 2009 charged to Private Escapes for allowing their members to stay at Ultimate Escapes Holding’s properties. This cross reservation program ended effective September 15, 2009, the date of the business combination of Private Escapes and Ultimate Escapes Holdings.

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Operating Expenses

Operating expenses were $21,238 during the nine months ended September 30, 2009, representing a decrease of $7,090, or 25%, from operating costs of $28,327 for the same period in 2008. Salary and contract labor costs decreased $3,062 during the nine months ended September 30, 2009 compared with the same period in 2008 due to staffing reductions and labor cost savings implemented in the second half of 2008 and a reduction of $347 in equity compensation. General and administrative costs decreased for the nine months ended September 30, 2009 compared with the same period in 2008 by $2,692 due to reductions in credit card fees of $1,200, legal and professional fees of $466, insurance cost of $417, travel costs of $354, and office lease cost of $94. Advertising costs decreased $1,184 during the nine months ended September 30, 2009 from the same period in 2008 due to a revised marketing strategy to target member referrals and other qualified leads produced as a result of a joint marketing agreement with Private Escapes that began in the second half of 2008. Sales commissions decreased $586 for the nine months ended September 30, 2009 compared with the same period in 2008 due to lower sales volumes in 2009. Property operating costs increased $726 in 2009 from 2008 primarily due to the cross reservation program fees in 2009 charged by Private Escapes for allowing Ultimate Escapes Holdings’ members to stay at Private Escapes’ properties prior to the September 15, 2009 business combination. Depreciation and amortization decreased by $100 to $3,176 during the nine months ended September 30, 2009, from $3,275 during the same period in 2008, reflecting the sale of properties in 2008 and 2009. For the nine months ended September 30, 2009, we incurred a $107 net loss on the sales of certain properties. For the nine months ended September 30, 2008, we had a $178 net loss on the sale of certain properties.

Income (Loss) Before Other Income (Expense)

Income (loss) before other income (expense) increased by $15,653, or 132%, to $3,823 during the nine months ended September 30, 2009, from a loss of $11,830 during the nine months ended September 30, 2008.

Other Income (Expense)

Interest expense decreased slightly to $7,120 during the nine months ended September 30, 2009, from $7,336 during the same period in 2008. Interest income decreased by $146 to $73 during the nine months ended September 30, 2009 from $219 during the same period in 2008 due to lower interest bearing money market cash balances in 2009 than 2008.

Year Ended December 31, 2008 compared with the Year Ended December 31, 2007 (in thousands)

Revenues

Revenues of $22,541 increased by $7,427, or 49%, during the year ended December 31, 2008, from $15,113 during 2007. $4,336 of the increase was the result of a larger club membership base in 2008 from 2007 and offers to club members to renew their dues early. The second largest increase in revenue from 2007 to 2008 was due to the additional new club member and upgrade sales in 2007 and 2008 resulting in $2,248 of additional club membership amortization. The balance of the increase in 2008 was from other revenue sources including resort items billed to club members, nightly fees, reciprocity agreements, and American Express promotion programs.

Operating Expenses

Operating expenses were $36,885 during the year ended December 31, 2008, representing an increase of $3,919, or 12%, from operating costs of $32,966 for 2007. Property operating costs increased by $2,949 in 2008, but on a monthly basis they decreased by 5% due to an average reduction of total properties of two, and lease property costs were $1,132 higher in 2008, but on a monthly basis they were down 3% due to the elimination of four leases. Depreciation and amortization increased by $1,659 to $4,479 during the year ended December 31, 2008, from $2,819 during 2007. Asset additions in 2007, including the purchase of 56 properties from Complete Retreats in May 2007, and asset additions in 2008, including the February 2008 acquisition of six properties, resulted in increased depreciation in 2008 over 2007. Advertising expenses were $1,679 lower in 2008 due to a revised marketing strategy to target leads and the joint marketing agreement between us and Private Escapes that began in the second half of 2008. Salaries and contract labor increased

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$5,072 in 2008 from 2007 with approximately $1,600 due to additional employees and salary and wage increases in 2008, and increased equity compensation of $1,384 in 2008 compared with 2007. General and administrative expenses were $4,734 lower in 2008 compared with 2007, primarily as a result of a reduction of legal costs of $4,408 due to the completion of the asset purchase in 2007 of fifty-six properties, the closure of the Westport, Connecticut office in 2008 lowering costs by $321 and lower insurance costs of $707 in 2008. Sales commissions in 2008 were $466 lower on lower club membership sales.

Loss Before Other Income (Expense)

Loss before other income (expense) decreased by $3,509, or 20%, to $(14,344) during the year ended December 31, 2008, from a loss of $(17,853) during 2007.

Other Income (Expense)

Interest expense increased by $1,748, to $9,156 during the year ended December 31, 2008, from $7,408 during 2007. Interest on the CapitalSource revolving loan increased in 2008 from 2007 by $2,421. Although the average interest rate declined in 2008 to 9% from 10% in 2007, the average loan amount increased in 2008 to $86,283 from $76,514 in 2007. Interest on the CapitalSource 16% term loan decreased $476 in 2008 from 2007 due to principal payments reducing the average borrowing from $8,100 to $2,355. In connection with the loan agreement, on April 30, 2007, we issued to CapitalSource a warrant to purchase 43 Class C common equity units of Ultimate Resort, at an exercise price of $12 per unit. On May 23, 2008, the lender agreed to cancel the warrant in exchange for a $750 payment. Interest income decreased by $338 to $278 during the year ended December 31, 2008 from $616 during 2007 due to lower interest bearing money market cash balances in 2008 than 2007.

Liquidity and Capital Resources (in thousands)

Historically, our primary sources of cash have been cash flows from equity capital, club membership fees, annual dues, bank borrowings and term loans. Cash has been used for real estate purchase transactions, repayment of long term debt, purchases of equipment and working capital to support our growth.

Cash and cash equivalents, consisting primarily of deposits with financial institutions and credit card holdbacks, but excluding $4,795 of restricted cash, was $1,684 at September 30, 2009, compared with $1,077 at December 31, 2008. The increase of $607 was largely attributable to the club member assessment program initiated and implemented in the first five months of 2009.

We anticipate being able to meet our projected internal growth and operating needs, including capital expenditures, and expect to meet the cash requirements of our contractual obligations for at least the next 12 months. Planned capital expenditure projects include approximately $1,100 for the complete renovation of our seven Trump Tower units in New York, and the routine ongoing maintenance requirements of all owned properties in our portfolio.

We incurred net losses of $3,225, $23,222 and $24,645 during the nine months ended September 30, 2009 and the years ended December 31, 2008 and 2007, respectively. As of September 30, 2009 and December 31, 2008, our current liabilities exceeded our current assets by approximately $17,461 and $8,804, respectively. In addition, although we have completed the acquisition of certain assets and liabilities of Private Escapes, refinanced the credit facility with CapitalSource, and completed the business combination with Secure America Acquisition Corporation, we may not be able to meet certain covenants under the revolving loan agreement in the future. We have also experienced a decrease in new membership sales and existing member upgrades over the last six months of 2008 and all of 2009.

The above factors, among others, indicate that we may encounter a liquidity event in the future which may cause us to be in default of our loan covenants. Our management is taking steps to increase cash flow in order to cover 2010 operational expenses, including, without limitation, the sale of selected club properties, and closely monitoring and reducing operating expenses.

Total debt outstanding at September 30, 2009 was $125,063 compared with total debt outstanding at December 31, 2008, of $96,765. The debt outstanding at September 30, 2009 was primarily the CapitalSource revolving loan of $102,348, mortgages of $12,681 and the JDI second mortgage of $10,000 discussed below.

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CapitalSource Revolving Credit Line

Our amended and restated loan and security agreement with CapitalSource, entered into on September 15, 2009, provides for borrowings up to the lesser of a defined maximum amount or a defined borrowing base amount. The maximum amount available is $110 million through December 31, 2009, $108 million from January 1, 2010 through June 30, 2010, $105 million from July 1, 2010 through December 31, 2010 and $100 million from January 1, 2011 to the maturity date of April 30, 2011. The borrowing base amount is a percentage of the appraised value of all owned property encumbered by a mortgage in favor of CapitalSource. Through March 31, 2010, that percentage is 75%, from April 1, 2010 through December 31, 2010 it is 70% and from January 1, 2011 it is 65%.

Interest under the loan agreement is calculated on the actual days elapsed and the basis of a 360 day year and is payable monthly at the three-month LIBOR (approximately 0.25% at January 1, 2010) plus 5% per annum, subject to a floor of 8.75%. An exit fee of $1.65 million is due on maturity or earlier if the loan is terminated by us or the lender for any reason. The maturity date may be extended at our request for two additional one year periods, provided there is no default under the loan agreement and on payment of an extension fee of 0.25% of the then maximum loan amount of $100 million. Except for payments required on the sale of a mortgaged property, no principal payments are due until maturity on April 30, 2011, except required cash payments of $2 million on December 31, 2009 (which amount has been paid), $3 million on June 30, 2010 and $5 million on December 31, 2010. If we exercise one or both of the extension options, cash payments are required of $5 million on each of June 30, 2011, December 31, 2011, June 30, 2012 and December 31, 2012. We may voluntarily prepay any part of the loan at any time but may terminate the loan agreement only by providing 30 days written notice and prepaying outstanding amounts in full, including the $1.65 million exit fee.

We are required to meet certain covenants as defined in the loan agreement, including:

In addition to various covenants, the CapitalSource loan agreement contains customary events of default that would permit CapitalSource to accelerate repayment of amounts outstanding, including failure to pay any amounts outstanding under the loan agreement when due, insolvency, judgment or liquidation, failure to pay other borrowed money in excess of $500,000, failure to comply with the terms and conditions of the loan agreement, suspension of the sale of club memberships, termination of any club or club membership plan, failure to pay (without CapitalSource’s consent) any amounts due to a resigning club member in accordance with the terms of his or her club membership agreement and a change in our management (as defined in the loan agreement).

JDI Second Mortgage

On April 30, 2007, Ultimate Resort issued a $10 million note payable to JDI Ultimate, L.L.C. (“JDI”), which at the time was a minority owner in Ultimate Resort and is now a minority owner of Ultimate Escapes Holdings. The rights and obligations of Ultimate Resort under this loan were subsequently assigned to Ultimate Escapes Holdings, the current borrower under the loan. We refer to this loan as the “JDI Second

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Mortgage”. The JDI Second Mortgage has a ten year term, with interest payable quarterly at 5% per annum and no principal payments are due until maturity on April 30, 2017. The JDI Second Mortgage, which is subordinate to the revolving loan from CapitalSource, is collateralized by a second security interest in our assets and in certain real property.

On October 29, 2009, JDI released Ultimate Resort from its obligations under the JDI Second Mortgage (the obligations under which had been assigned to Ultimate Escapes Holdings), and concurrently assigned its interest in the JDI Second Mortgage, as lender, to Ultimate Resort. The financial terms of the note remain unchanged. At the same time, Ultimate Resort re-acquired from JDI the minority interest in Ultimate Resort held by JDI. In consideration for the re-acquisition of the minority interest and the transfer, as lender, to Ultimate Resort of the JDI Second Mortgage, JDI received 3,123,797 ownership units of Ultimate Escapes Holdings.

We currently intend, subject to the receipt of any required consents (including the consent of the lender under our revolving credit facility), to convert the JDI Second Mortgage into shares of our common stock, at a conversion price of $6.65 per share (after giving effect to the proposed 1-for-1.5 reverse stock split). We believe that this conversion, if implemented, may increase the likelihood that we will be able to maintain our listing on the NYSE Amex, or be approved for listing on an alternate exchange, by increasing our stockholders’ equity.

Kederike Loan Agreement

Private Escapes Pinnacle, LLC, a subsidiary of Private Escapes (which was acquired by Ultimate Escapes on September 15, 2009), borrowed $3.75 million from Kederike, LLC, an entity in which Richard Keith, our Chairman, is a 50% owner, pursuant to a loan agreement dated June 1, 2006, as subsequently amended. The loan proceeds were used to pay a portion of the purchase price for the acquisition of four properties. Interest accrues on the loan at a rate equal to 1.5% above the interest rate applicable to the primary bank loan financing the acquisition of the properties. In addition, Kederike was paid a loan fee of $250,000 that was earned upon origination, has been paid loan extension and similar fees totaling $86,806, and is entitled to receive, upon the earlier of the sale of a property or the request of Kederike commencing three years after the acquisition of the property, 50% of the then-current fair market value of the property, less (i) the original purchase price of the property and (ii) 2.5% of such fair market value. Upon the consummation of the acquisition of certain assets and liabilities of Private Escapes by Ultimate Escapes on September 15, 2009, Ultimate Escapes assumed liability for $234,000 of the remaining $936,000 outstanding principal balance of the loan; the remainder was assumed by an entity controlled by Mr. Keith. The maturity date of the loan was October 15, 2009; however, the parties are in the process of negotiating an extension of the maturity date.

Cash Flows

Nine Months Ended September 30, 2009 Compared with the Nine Months Ended September 30, 2008 (in thousands) (unaudited)

Operating Activities

Net cash used by operating activities during the nine months ended September 30, 2009 was $1,724, compared with net cash provided of $1,871 during the same period in 2008. This decrease in cash from operating activities of $3,596 when comparing the two periods was benefited by a $15,273 decrease in net loss, from $(18,498) for the nine months ended September 30, 2008 to $(3,225) for the nine months ended September 30, 2009. Cash usage when comparing the two periods was impacted $13,683 by the change in membership dues related to the assessment, a one-time fee subject to approval by a majority of members if required in the future, with the nine months ended September 30, 2009 totaling $91 compared to $13,774 for the nine months ended September 30, 2008. Other working capital changes for the nine months ended September 30, 2009 compared with the same period in 2008 were $2,600 less reduction in restricted cash, $1,918 more in member receivables, and $1,625 reduction in accounts payable.

Investing Activities

Net cash of $2,159 was provided by investing activities during the nine months ended September, 30, 2009 compared with $1,049 for the same period in 2008, a reduction of $1,110. There were no acquisitions of properties during the nine months ended September 30, 2009 and limited capital expenditures of $73 compared with $1,778 for the same period in 2008.

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Financing Activities

Net cash provided by financing activities was $172 during the nine months ended September 30, 2009, an increase of $9,165 compared with cash used in financing activities of $8,993 for the nine months ended September 30, 2008. There were no borrowed amounts in the first nine months of 2008 compared to $3,440 borrowed in the same period of 2009. The CapitalSource fixed rate term loan was paid down $5,263 for the nine months ended September 30, 2008 and $378 for the same period in 2009. The CapitalSource revolving loan was paid down $2,890 in the nine months ended September 30, 2008, and $2,196 for the same period in 2009.

Year Ended December 31, 2008 compared with the Year Ended December 31, 2007 (in thousands)

Operating Activities

Net cash provided by operating activities during 2008 was $1,273, compared with net cash provided by operations of $6,433 in 2007, a decrease in cash provided by operating activities of $5,160. The change was the result of several items, with the primary reason being the increase in club membership and member deposits in 2007 of $36,035 compared with $12,221 in 2008, a decrease of $23,814 offset by significant changes in restricted cash.

Investing Activities

Net cash provided by investing activities increased by $6,929, to $1,042 during 2008, from ($5,887) during 2007. In 2008, purchases of property and equipment were $1,959, compared with $10,527 in 2007, resulting in a decrease in cash provided by investing activities of $8,569. During 2007, we purchased club properties for approximately $105,000, financing $95,000 with long-term debt and $10,000 of cash. In 2008, we purchased club properties for approximately $15,100, financing $10,871 with long-term debt and $2,700 of club memberships, and $1,529 of cash.

Financing Activities

Net cash used in financing activities increased by $9,406, to $9,383 during 2008, from $(23) during 2007. This increase was primarily due to the small amount of owner capital raised in 2008 compared with $11,846 raised in 2007, additional repayments of debt net of borrowings, and the $2,643 loan costs incurred in 2007 related to the CapitalSource Loan Agreement of April 30, 2007.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Unaudited Operating Results using Pro Forma Adjusted GAAP Revenue Recognition (in thousands)

We use an adjusted revenue calculation as an integral part of our internal financial management reporting and planning process, based on adjusted GAAP revenue recognition. The non-refundable club membership initiation fee is recognized over the first 18 months of membership, with the remaining club membership fee amortized over ten years, rather than the full amount of the club membership fee (including the non-refundable portion) being recognized over the ten-year expected life of the club membership, as is reflected in our audited financial statements. Club members cannot resign within the first 18 months of membership. Because the club member initiation fee is non-refundable, we believe that treating such non-refundable initiation fee as earned over that 18 month minimum membership contract period better reflects the actual performance of our business and the actual contractual terms of our club membership plan.

Adjusted EBITDA, with respect to any period, includes organic growth and the effect of any acquisitions or dispositions of lines of businesses or other material assets and all member assessments incurred during the period for which Adjusted EBITDA is being calculated, but excludes all non-cash compensation related to the 2009 Stock Option Plan and the Class C units issued by Ultimate Resort (See Note 13 to Ultimate Escapes Holdings’ financial statements included herein for the fiscal year ended December 31, 2008).

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		Nine Months Ended September 30, 2009
		GAAP				Non-GAAP Revenue
		(In thousands)
Total Revenues		$	25,061			$	25,061
Add: Non-GAAP Revenue Accretion(1)							696
Adjusted Non-GAAP Revenue						$	25,757
Net Loss		$	(3,225	)		$	(3,225	)
Add:
Non-GAAP Revenue Accretion(1)							696
Non Cash Compensation(2)							1,257
Adjusted non-GAAP loss							(1,272	)
Add:
Interest			7,048				7,048
Depreciation			3,176				3,176
EBITDA		$	6,999
Adjusted EBITDA						$	8,952

We currently estimate that our adjusted non-GAAP revenues, adjusted non-GAAP income and Adjusted EBITDA for 2009 will be approximately $40.0 million, $1.2 million and $15.8 million, respectively. We are currently projecting adjusted non-GAAP revenues of approximately $54 million and $66 million for 2010 and 2011, respectively, adjusted non-GAAP income of approximately $4.0 million and $11.7 million for 2010 and 2011, respectively, and Adjusted EBITDA of approximately $21.0 million and $29.0 million for 2010 and 2011, respectively, based on projected club membership of 1,398 and 1,666 members at year-end 2010 and 2011, respectively. These revenue and net income estimates and projections are based on the adjusted GAAP revenue recognition policy described above. All of these estimates and projections are based on our current expectations and assumptions, and are subject to many risks and uncertainties, including the risk factors contained in this prospectus. We assume no obligation to publicly update or revise any of these estimates or projections.

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BUSINESS

We operate a family of luxury destination club offerings, including Elite Club^TM, Signature Club^TM and Premiere Club^TM, with over 1,200 affluent club members, as well as an experienced management team and increasing market share. We provide club members and their families with flexible access to a growing portfolio of multi-million dollar club residences, exclusive member services and resort amenities. We believe that we offer our club members access to more club destinations than any other luxury destination club in the world, with over 130 luxury club residences in 45 global destinations available today in the mainland United States and Hawaii, Mexico, Central America, the Caribbean and Europe. Elite Club properties target approximately $3 million in value, Signature Club properties target approximately $2 million in value and Premiere Club properties target approximately $1 million in value. As of December 31, 2009, we had 433 Elite Club members, 545 Signature Club members and 236 Premiere Club members. The majority of the properties are owned by us, and the others are leased on either a long or short term basis. All of the properties owned by us are subject to one or more mortgages. Of the 32 properties leased by us as of December 31, 2009, six were subject to long-term leases and 26 were subject to short-term leases (including two short-term leases in which Private Escapes Holdings, LLC (“PE Holdings”), an affiliate of ours, is the lessor).

We combine the privacy and intimacy of multi-million dollar residences in a wide variety of global resort destinations with “white glove” member concierge services and club amenities. Our management believes that we offer a unique and compelling value proposition that is a cost effective vacation alternative for a large, affluent target market that Spectrem Group estimates at year end 2008 included approximately 6.7 million “millionaires” in the United States with assets of at least $1 million and approximately 840,000 “pentamillionaires” in the United States with assets of at least $5 million. For the consumer market, a club membership offers a more flexible, efficient and cost effective vacation alternative as compared with the high costs, inefficiencies and hassles of second home ownership in this cost range, the expense, uncertainties and time-consuming effort to rent luxury villas in the United States and international markets or the high costs and typical small rooms of luxury hotels. For the corporate market, our corporate membership option targets the growing multi-billion dollar corporate reward and incentive market, and offers corporations an affordable, flexible corporate reward and incentive program for top performing employees, senior executives, board members, key advisors, existing customers and new prospects.

In addition to providing club members with flexible access to a growing portfolio of over 130 luxury club residences in 45 global destinations, we provide our club members with preferred access to over 140 four and five-star hotel properties and resorts affiliated with The Ultimate Collection^TM, offering club members access to hundreds of beach, mountain, golf, metropolitan and leisure club properties in world-class resorts and destinations throughout the world. With multiple club offerings and various club membership levels in each club, we believe that we have the widest market appeal in the destination club industry.

Club members join us by paying a one-time, membership fee (similar to a golf club membership) currently ranging from $70,000 to $450,000, depending on the club level and membership usage plan. Club members also pay annual dues currently ranging from $8,000 to $49,000 per year, again based on the corresponding club level and membership usage plan. In addition to annual dues, additional revenues are derived from upgrades, additional use fees and reciprocity fees from third party operations. If a club member resigns from the club, his or her club membership is redeemed on a three-in, one-out basis, which means that three new club members must join the club before a current club member who desires to resign from the club will have his or her club membership redeemed. Such redeemed club member typically receives 80% of the club membership resale proceeds with us retaining a 20% transfer fee. This redemption mechanism is common in private country clubs and has also been adopted by most destination clubs.

We also offer an Ultimate Discovery^TM “trial membership” whereby qualified club prospects or club member referrals can purchase a seven-day “mini-vacation package” for an average of $3,500 and experience the club as an authorized guest at one of our club properties within six months of purchasing an Ultimate Discovery trial membership. If the trial member purchases an Ultimate Escapes lifetime membership within 30 days of completing the Ultimate Discovery vacation experience, then 100% of the fee paid for the Ultimate Discovery trial membership is applied toward the purchase of the lifetime membership.

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In 2008, we launched the Ultimate Reciprocity Program^TM, an affiliate club membership reciprocity program targeting a growing market estimated by Ragatz Associates to consist of approximately 50,000 fractional and private residence club owners at hundreds of private residence clubs and luxury fractional ownership resorts in the United States, Mexico, Central America, the Caribbean and Europe. The Ultimate Reciprocity Program offers participating luxury resorts the opportunity to offer their shared-use owners an affiliate club membership that provides annual reciprocity access to our global club properties, affiliate member services and club amenities; this program provides owners at participating luxury resorts with reciprocal access to over 130 club properties offered by us in the continental United States, Hawaii, Mexico, Central America, the Caribbean and Europe. Participating resort developers sign multi-year reciprocity agreements with us and pay an upfront affiliate resort developer fee of $50,000 to $100,000, depending on resort size. In addition, participating resorts pay a one-time affiliate member fee of $3,000 for each shared-use owner that participates at each affiliated resort, which fee includes the affiliate club member’s first year annual dues. Affiliate club members also pay us a $250 transaction fee for each reciprocity transaction executed within our reservation system, and each affiliate club member continues to pay its affiliate member annual dues beginning in the second year of its affiliate club member reciprocity agreement with us.

Participating developers and shared-use owners contribute up to two weeks per year of participating shared-use ownership inventory into our proprietary web-based reservation system, providing over 1,200 club members with additional benefits, including expanded access to new destinations and affiliated resorts generally at no additional cost. The Ultimate Reciprocity Program also provides participating luxury resort developers with custom-designed websites developed and hosted by us that offer affiliate resort developers and their club members online information about our destinations, club properties, affiliate member services and on-line availability, leveraging our advanced web-based technology platform.

Participating resorts have access to a variety of our reciprocity services designed to help improve developer real estate sales performance, owner retention and owner referrals. Additionally, we offer participating resorts an opportunity to differentiate their shared ownership offerings from other non-affiliated resorts, helping to increase participating resort developer’s sales and maintain higher price points. To participating resort developers, bundling the Ultimate Reciprocity Program with luxury shared ownership real estate creates a unique “hybrid” offering that greatly expands the number of luxury resort destinations and club properties that affiliate club members can now book reservations and travel to at more than 130 Ultimate Escapes club properties in 45 global destinations.

Resorts that participate in the Ultimate Reciprocity Program receive increased market exposure from a base of over 1,200 affluent club members and their family and friends, some of whom also explore purchasing additional vacation real estate while traveling to club destinations. In addition, participating resorts benefit from reciprocal reservations booked by our club members and their guests, who on average spend between $5,000 and $10,000 per vacation on food, drinks, golf, spa, entertainment and shopping when traveling to various club properties and affiliated properties.

The destination club industry has gone through dramatic changes and a period of rapid consolidation over the last few years, which has led to fewer, larger destination clubs that have achieved operating efficiencies as a result of scalable, sustainable business models, experienced management teams, strong capital bases, financial transparency and affordable access to high quality club member services in the wide variety of global destinations.

We believe that the two largest clubs in the industry, as measured by numbers of club members, are Exclusive Resorts and us, with a combined 82% global market share in the destination club industry, as noted in the chart below, which shows the number of club members in various destination clubs and market share, based on industry data available to us as of December 2009.

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We were structured to be more affordable than other luxury consumer vacation travel options and business incentive travel options, including second home ownership, while simultaneously offering equal or superior benefits (especially for anyone requiring flexible access to private homes with multiple bedrooms for friends and family). For individual club members, we eliminate the burdens of owning one or multiple second homes and the uncertainties and expense of renting different homes or villas in multiple United States and international markets. For corporations, we offer a more affordable, flexible corporate reward and incentive program for top performers, key advisors, key employees and important customers and prospects.

We operate a proprietary occupancy model that provides club members with flexible access and reasonable availability, principally by maintaining a low 6-to-1 equivalent member-to-property ratio and purposely under-utilizing each club property, targeting annual club occupancy of 75% or less. Club occupancy was 57% for all club properties during 2008, and was 61% for all club properties during 2009. We charge a one-time membership fee to join the club that we believe is generally lower than the typical down payment for a single second home property, and charge annual dues that are generally a fraction of the cost of owning and operating a single $1 – $3 plus million second home.

We have focused on the creation of a unique brand supported by a valuable portfolio of luxury properties in some of the world’s premier resort and urban destinations. These luxury properties target the affluent family vacationer. We believe that this affluent segment is particularly well-positioned for future growth.

We differentiate ourselves from our competitors with the widest offerings in the destination club industry, with multiple clubs each offering five tiers of club membership plans. The breadth of this offering provides our club members with multiple upgrade paths, both in terms of use rights and club levels. Our club membership provides club members with internal reciprocity use within all club properties, which in some cases requires a nightly reciprocity fee for members in Premiere Club or Signature Club to reserve residences in more expensive clubs (for example, Premiere Club members reserving Elite Club residences through internal reciprocity). The flexibility allows club members to grow and change with the club, while providing incremental revenues streams to us.

James M. Tousignant, the founder of Ultimate Resort and our President and Chief Executive Officer, and Richard Keith, the founder of Private Escapes and our Chairman, along with many other members of our management team, have worked together for many years and have over 100 years of collective experience building and managing public and private companies.

History

We were formed on May 14, 2007, as a blank check company for the purpose of acquiring, or acquiring control of, through a merger, capital stock exchange, asset acquisition, stock purchase or other similar business combination, one or more domestic or international operating businesses. We changed our name from “Fortress America Acquisition Corporation II” to “Secure America Acquisition Corporation” on August 6, 2007 and on October 29, 2009 changed our name to “Ultimate Escapes, Inc”.

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On October 29, 2009, we consummated the Acquisition of Ultimate Escapes Holdings, pursuant to a Contribution Agreement dated September 2, 2009, by and among us, Ultimate Escapes Holdings, Ultimate Resort, and James M. Tousignant, in his capacity as the representative of the holders of the issued and outstanding ownership units of Ultimate Escapes Holdings and Ultimate Resort (the “Owner Representative”), as amended by Amendment No. 1 dated as of October 28, 2009, whereby Ultimate Escapes Holdings became our subsidiary.

Pursuant to the terms of the Contribution Agreement, we received 1,232,601 ownership units of Ultimate Escapes Holdings. The UE Owners retained the remaining 7,556,675 ownership units of Ultimate Escapes Holdings, which, under the terms of the Operating Agreement of Ultimate Escapes Holdings may be converted on a one-to-one basis into shares of our common stock (subject to adjustment to reflect the reverse stock split we expect to effect in connection with this offering). These 7,556,675 ownership units are held as follows: 3,858,571 units by Ultimate Resort, 3,123,797 units by JDI and 574,307 units by PE Holdings. Of such retained units, 717,884 units were deposited into escrow at the closing of the Acquisition to secure the indemnification obligations of the UE Owners to us. Additionally, the UE Owners are eligible to receive up to an aggregate of 7,000,000 additional ownership units of Ultimate Escapes Holdings, convertible on a one-to-one basis into shares of our common stock (subject to adjustment to reflect the reverse stock split we expect to effect in connection with this offering), upon the achievement by us of certain Adjusted EBITDA milestones, as set forth in the Operating Agreement. For each ownership unit of Ultimate Escapes Holdings issued to the UE Owners, the Owner Representative also received one share of our Series A Voting Preferred Stock. At any time that any UE Owner exchanges ownership units of Ultimate Escapes Holdings for shares of our common stock, a like number of shares of Series A Voting Preferred Stock will be canceled. Upon consummation of the Acquisition, Ultimate Escapes Holdings became our subsidiary, and the business and assets of Ultimate Escapes Holdings and its subsidiaries are our only operations.

Ultimate Escapes Holdings was founded in 2004 as Ultimate Resort, LLC, by Mr. Tousignant to address what he perceived was an emerging and underserved segment of the luxury shared-use market — the high-end “luxury destination club.” Mr. Tousignant has over 20 years of management experience, including with entrepreneurial ventures and public companies.

Since its inception in 2004, Ultimate Resort rapidly grew to become one of the largest players in the destination club industry. Recognizing that achieving “critical mass”, which it viewed as having at least 800 to 1,000 club members, is a key component to operating a successful destination club business model, Ultimate Resort aggressively pursued a two-tiered growth strategy of organic growth combined with strategic transactions to reach critical mass quickly.

In May 2007, Ultimate Resort acquired all of the assets and business of its parent company, Ultimate Resort, LLC, and purchased certain real estate assets for approximately $105 million in federal bankruptcy court as a result of the 2006 bankruptcy of Tanner & Haley. To finance the acquisition of the real estate assets, Ultimate Resort obtained secured debt financing from CapitalSource Finance, a NYSE-listed specialty lender. In addition, Ultimate Resort separately signed new club membership agreements with 645 previous Tanner & Haley club members who elected to become new club members of Ultimate Resort. In February 2008, Ultimate Resort purchased certain real estate assets for $12 million from Ventures Equity Vacation Club. In addition, Ultimate Resort separately signed new club membership agreements with 19 previous club members of Ventures Equity Vacation Club who elected to become new club members of Ultimate Resort.

In May 2008, Ultimate Resort signed a cooperative marketing agreement and a definitive contribution agreement to acquire certain assets and assume certain liabilities from Private Escapes, including acquiring 49 new club properties with recent appraised values of approximately $50 million. The 49 Private Escapes’ properties acquired by Ultimate Resort are located in 28 beach, mountain, golf and metropolitan destinations throughout the continental United States, Hawaii, Mexico, Central America, the Caribbean and Europe. Also in May 2008, Ultimate Resort began operating its business under the “Ultimate Escapes” brand name. Ultimate Escapes Holdings completed the acquisition of a majority of the assets of Private Escapes on September 15, 2009. Private Escapes was founded by Richard Keith in 2003 and became a market leader at the one million dollar home entry level category and, over several years of operations, became the industry’s third largest destination club as measured by number of club members, according to HalogenGuides.

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Prior to the Acquisition, we incurred net losses of $3.2 million, $23.2 million and $24.6 million during the nine months ended September 30, 2009 and the years ended December 31, 2008 and 2007, respectively. We had also experienced a decrease in new club membership sales and existing club member upgrades during the last six months of 2008 and all of 2009. These circumstances raised substantial doubt about our ability to continue to fund operating losses and provide necessary operating liquidity.

Industry Overview

Luxury destination clubs first started to appear in the market in 1999 and since then have become the second largest segment of the $1.5 billion luxury shared-use vacation market in 2008, according to Ragatz Associates. The luxury shared-use vacation market includes destination clubs, traditional fractional interests and private residence clubs. Destination clubs differ from traditional fractional interests and private residence clubs in a number of ways. The destination club and fractional industry business models are fundamentally based on the purchase of either a deeded real estate interest (timeshare/fractional) or some form of member use right to access a collection of various club properties and destinations (destination club). Within the fractional and destination club umbrella, there are a variety of approaches, classified into the following three categories:

Market Drivers and Industry Outlook

Although there are significant differences between destination club offerings and timeshare offerings, we believe that the continued growth of luxury destination clubs will parallel the dramatic growth of timeshare sales over the last 20 years.

Low-end timeshare offerings and high-end destination club offerings (as well as fractional interests and private residence clubs), both generally appeal to growing consumer demand for cost effective, flexible “shared-use” vacation travel alternatives. The vast majority of timeshare owners participate in vacation

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exchange networks like RCI LLC (a subsidiary of Wyndham Worldwide Corp.) and Interval Leisure Group, Inc., that allow timeshare owners the opportunity to exchange their timeshare weeks in their “home” resort for exchange use in other affiliated timeshare resorts, creating an expanded range of vacation experiences for timeshare owners. Wherever they vacation, timeshare owners know that they can “leave the keys” and go home after one to two weeks of vacation without the hassles and expenses of owning a one or two bedroom vacation condo and having to fund the annual operating costs and maintain the vacation property all year round. Destination club members generally join a club to avoid the costs and hassles of luxury second home ownership, as well as enjoy the flexibility to be able to travel to various club properties in a growing number of desirable luxury resort destinations, bundled with full concierge services and member services every year they remain a club member.

According to Northcourse, Inc., a leisure real estate consulting firm, 75% of income-qualified households in the United States have not yet purchased any type of second vacation home. Northshore suggests the reason for this behavior may be directly related to the costs of second homes and the fact that second home owners typically use second homes only three to four weeks per year. Destination club members, unlike second home owners, do not experience the large upfront costs, annual costs and ownership hassles associated with owning one or multiple second homes.

Destination club memberships and timeshares units are generally purchased by the same age demographic  — the “baby boomer” generation. According to recent club member surveys, over 70% of our club members are between the ages of 45 – 64. According to ARDA (American Resort Developers Association), baby boomers born between 1946 – 1964 make up 55.2% of all timeshare owners; individuals born between 1925 – 1945 account for an additional 22.9% of timeshare ownership. According to ARDA, the average age of timeshare owners today is 52 years old.

The real difference between the typical destination club member and the typical timeshare owner is in their level of income and financial net worth. According to ARDA, the average annual income of timeshare owners is less than $100,000 and the average net worth of timeshare owners is also less than $100,000. In our recent club member survey, the club members responded that over 50% have annual incomes ranging from $250,000 to $5 million per year and more than 50% of club members have a net worth greater than $5 million.

According to the Joint Center for Housing Studies at Harvard University (“JCHS”), in 2004, there were about 11 million households in the top tenth percentile of incomes, i.e., incomes of greater than $129,000 per year. Of this group, only 37% owned vacation or investment residential property (second homes, timeshares, one-to-four family rental properties, and other types of residential properties). The age groups with the largest share in owning other residential property were 16.3% of families with household head age of between 45 – 54 years old, 19.5% of families with household head age of between 55 – 64 years old, and 19.9% of families with household head age of between 65 – 74 years old.

The affluent population is increasing in both annual income and net worth, driving demand for high-end, luxury vacation alternatives. According to JCHS, in their 1995 and 2004 Survey of Consumer Finances, net worth increased for all groups but increased at a much faster rate for households in the top quartile of the population. Wealth also notably jumped for households with heads of households in the 50 – 59 age groups and 60 – 69 age groups.

At the very high end of the affluent population, Spectrem Group, a consulting and market research firm specializing in affluent and retirement markets, estimates that there are approximately 6.7 million “millionaires” (high net worth individuals with investable assets between $1 and $5 million, excluding housing) and roughly 840,000 “pentamillionaires” (very high net worth individuals with investable assets from $5 to $30 million, excluding housing).

The increasing wealth of “baby boomers,” coupled with the desirability of shared-use vacation alternatives, bodes well for continued destination club growth over many years, particularly given the low 1% market penetration of qualified buyers of luxury share-use vacation offerings, according to Ragatz Associates. If destination clubs are able to achieve the same market penetration in their target market over the next 10 – 20 years as timeshare operators have achieved over the last 20 years, the destination club industry

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could potentially grow from approximately 5,000 club members today to over 300,000 club members in 10 – 20 years (assuming a 5% market penetration of Sprectrem Group’s estimated 6.7 million “millionaires” in the US), without even considering the large potential corporate membership market (there are millions of private and public companies globally).

Timeshares currently comprise the largest segment of the overall shared ownership vacation market, with annual sales in 2008 of $9.7 billion, according to ARDA. According to ARDA, there were over 1,600 timeshare resorts operating in 2008, with seven million timeshare intervals owned and 99% of timeshare owners participating in either the RCI or Interval timeshare exchange program. As shown below, timeshare growth since its inception has been dramatic, and timeshare sales represent a significant portion of annual profits at public resort and hospitality companies including Marriott International, Inc., Wyndham Worldwide Corporation, Starwood Hotels & Resorts Worldwide, Inc., Hyatt Hotels Corporation, The Walt Disney Company and Hilton Hotels Corporation.

TIMESHARE ANNUAL SALES 1975 – 2008

Source: American Resort Developers Association (ARDA)

Since its inception, growth in the high-end shared-use luxury vacation market (fractional, private residence clubs and destination clubs) has been equally dramatic. As noted below, the luxury shared-use market, consisting of luxury destination clubs, private residence clubs and fractional offerings, has grown at a compounded annual growth rate (CAGR) of 32.5% from 2000 – 2008 (see graph below), as compared with the timeshare market during the same 2000 – 2008 period, which grew at a slower compounded annual growth rate (CAGR) of 11.1% (see graph above). Sales in both the timeshare and luxury shared-use markets declined substantially from 2007 to 2008 as a result of the global recession, and our management believes that this trend has continued into 2009.

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PRC, DESTINATION CLUB & LUXURY
FRACTIONAL SALES 1999 – 2008

Source: Ragatz Associates

Our management believes that the emerging luxury destination club market is still in its infancy and has many years of continued growth potential when the global economy improves, as major resort and hospitality brands like Ritz Carlton Destination Club and other luxury brands and new market entrants continue to enter the luxury marketplace. Our management believes that barriers to entry in the luxury destination club market are increasing and further consolidation is likely, forcing smaller destination club players to focus on niche markets, sell to or merge with larger clubs or go out of business. Established hospitality and resort brands will likely enter the growing luxury destination club market in greater numbers, as most recently demonstrated by the 2009 launch of the Ritz Carlton Destination Club. In addition, new destination clubs will continue to form in Europe and Asia, as well as existing clubs expanding their presence internationally to address greater affluence and future high growth markets in Europe and Asia.

Business Strengths

Our management believes that our primary business strengths include:

Strong Experienced Management Team.  We have created what we believe is the strongest and most experienced management team in the industry, with demonstrated leadership and a track record of innovation. Our management team has over 100 years of combined experience in hospitality and resort management, destination club operations, real estate, finance and technology.

Best Value; Broadest Product Offerings.  For the luxury consumer market, we believe that a club membership offers the best value and a more flexible, cost effective vacation alternative as compared with the high costs, inefficiencies and hassles of luxury second home ownership ($1 – $5 million purchase price), the expense, uncertainties and time-consuming effort to rent luxury villas in the United States and international markets or the high costs and typical small rooms of luxury hotels. For the corporate market, our corporate membership option targets the growing multi-billion dollar corporate reward and incentive market, and offers corporations an affordable, flexible corporate reward and incentive program for top performing employees, senior executives, board members, key advisors, existing customers and new prospects. We have created what we believe is the best value and broadest family of offerings of any destination club in the industry, with three distinct club offerings, each with five different club membership plans based on the number of annual included days, advance reservations and holiday advance reservations per year. This broad offering, for example, allows “entry level” club members to join our most affordable club, the Premiere Club, and have access to a growing collection of two to four bedroom homes targeting approximately $1 million in value for as little as $70,000 upfront and $8,000 per year in annual dues for 14 days of annual vacation experience. To help understand and appreciate the value proposition of our club memberships as compared with second home ownership, consider the cost and hassles of buying a single $1 million second vacation home comparable to

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any of our Premiere Club properties. A typical second home buyer will generally use a second vacation home approximately 3 – 4 weeks per year. Second home buyers typically need to pay a 20% down payment ($200,000 in this case) when purchasing the home and pay annual mortgage interest, principal, taxes, insurance, utilities and property maintenance for the second home each year of approximately $100,000 – $150,000 annually. Alternatively, a member joining Ultimate Escapes and purchasing an Ultimate Escapes Premiere Gold Membership, will have 28 included days of club use per year, access to hundreds of club properties and affiliated properties, and none of the hassles of second home ownership and maintenance, and will only pay a one-time upfront membership fee of $105,000 (approximately 50% less than the comparable 20% down payment) and pay annual dues of only $11,000 (approximately 90% less than the $100,000 – $150,000 in annual costs associated with owning a single comparable second home). This flexible structure allows club members to select a plan that meets their needs and potentially upgrade later to better plans or more expensive club offerings that provide more days of annual access or use of more expensive homes, all of which provide us with incremental future revenue opportunities from a growing base of potential affluent club members.

Our unique business model results in improving economies of scale and operational efficiencies.  The club operates a unique business model and club structure that we believe includes unique offerings, features and amenities only available to our club members (e.g., lifetime membership, redemption assurance program, three unique clubs and 15 unique membership plans, internal and external reciprocity use, access to affiliated hotels and resorts). Our membership plans are structured to provide that 100% of a member’s membership fee is earned as revenue by us over the first ten years of membership, allowing us to recognize 100% of our member’s membership fee as revenue, where most other clubs only recognize 20 – 25% of their initial membership fee or refundable deposit as revenue. We believe this unique business model and club structure allows us to generate higher revenues, EBITDA and net income than other destination clubs in the industry.

Our large growing membership base, high annual renewal rates, and strong member affinity generate growing recurring revenues.  Our membership base has grown each year we have been in business (including the effect of acquisitions) and today we have a large base of over 1,200 club members. Our club members have renewed their memberships at over 95% annual renewal rates over the last several years, generating increased revenue visibility and a growing base of recurring revenue each year from member annual dues. We are also increasing our focus on member referral programs to grow our membership base and our large and loyal membership base can earn Ultimate Reward^TM points for member referrals that can be redeemed for additional days of use at club properties or redeemed for an extensive list of luxury items and club services such as wine, ski tickets, golf, spa treatments or chef services. Our management believes that this program increases club member loyalty and generates a high level of club member referrals.

Substantial real estate portfolio with approximately $30.3 million of equity.  Our real estate portfolio was recently appraised at $153.6 million and has approximately $123.3 million of debt, resulting in approximately $30.3 million of equity in our real estate portfolio.

Planned use of energy efficient, “smart house” technology.  We plan to use energy efficient technology in the future in our homes, including remote access, monitoring and control of HVAC, computer, electrical, lighting, audio, security and landscaping systems. We believe these future efforts will provide our members with enhanced and personalized club experiences and reduce our operating costs as a result of integrating “green,” energy efficient technology to manage entertainment services, home security, energy costs and property management. We plan to begin rolling-out “smart home” technology in phases during 2010 and 2011, including a club member “smart card” technology that will provide club members with personalized experiences incorporating whole house audio, whole house video, preferred lighting settings, preferred temperature settings, electronic display of club member’s personal photos, music playlists and high definition art that can be uploaded to the home’s PC server and digital entertainment center via the internet. Pictures of friends and family and art will populate high definition displays and LCD picture frames located throughout the club’s property.

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Growth Strategy

Our management expects to achieve significant EBITDA and revenue growth over the next several years. Key elements of our future growth strategy include:

Club Membership Plans and Benefits

We offer multiple club membership plans that provide club members between 14 and 60 days of use annually at a unique collection of club and affiliate destinations located around the world. Our destination properties are located in or near markets with global tourist and business appeal that offer club members a world class vacation experience. By combining the best elements of multi-million dollar single family residences with world class amenities and concierge service, management believes it has created the best and most cost-effective option for access to luxury second-home ownership available in the market today.

Premiere Club^TM

Premiere Club membership plans range from the Bronze plan, with an initial membership fee of $70,000 and $8,000 in annual dues for 14 days of annual vacation use, up to the Platinum Plus plan, with an initial membership fee of $150,000 and $17,000 in annual dues for 60 days of annual vacation use. All of our club membership plans include extended family use for maximum value and flexibility, as club members may grant access to their unaccompanied family members (age 21 and over) for any amount of their given annual use. Each home in the Premiere Club portfolio is designed to accommodate families with children of all ages. Premiere Club properties have a target home value of approximately $1 million. The club allows its members to upgrade their club membership plans as their vacation needs evolve every year.

Signature Club^TM

Signature Club membership plans range from the Bronze plan, with an initial membership fee of $145,000 and $11,500 in annual dues for 14 days of annual vacation use, up to the Platinum Plus membership plan, with an initial membership fee of $300,000 and $35,500 in annual dues for 60 days of annual vacation use. All of our club membership plans included extended family use for maximum value and flexibility, as club members may grant access to their unaccompanied family members (age 21 and over) for any amount of their given annual use. Each home in the Signature Club portfolio is designed to accommodate families with children of all ages. Signature Club properties are generally larger than homes in the Premiere Club and have

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a target home value of approximately $2 million. The club allows its members to upgrade their club membership plans as their vacation needs evolve every year.

Elite Club^TM

Elite Club membership plans range from the Bronze plan, with an initial membership fee of $200,000 and annual dues of $16,000 for 14 days of annual vacation use, up to the Platinum Plus plan, with an initial membership fee of $450,000 and $49,000 in annual dues for 60 days of annual vacation use. All of our club membership plans included extended family use for maximum value and flexibility, as club members may grant access to their unaccompanied family members (age 21 and over) for any amount of their given annual use. Each home in the Elite Club portfolio is designed to accommodate families with children of all ages. Elite Club properties are generally larger than homes in the Premiere Club and Signature Club and are of the highest standards, with target home values of approximately $3 million and the club allows club members to upgrade their club membership plans as their vacation needs evolve every year.

Members of any club membership plan can add a “corporate option” to their club membership for an additional 10% of their club membership and annual dues. This allows the club member to designate any key executives, employees, customers and business prospects (21 and over) to use the club unattended by the primary club member. The corporate use option has proven to be a tremendous tool for employee rewards and retention programs.

The Ultimate Collection^TM

The Ultimate Collection provides club members with access to over 140 luxury four and five-star hotels in many of the world’s most desirable cities and resorts throughout the United States, Europe, Asia, the Middle East, Central America and South America, Africa and Australia. Club members can make reservations at any of the beautiful luxury hotels in exciting cities and resorts, using up to seven of the club membership “included days” each year, as if a club member was using club properties.

Ultimate Rewards Program^TM

The Ultimate Rewards Program is the destination club industry’s first club membership rewards points program which rewards club members who recommend a friend, family member or business colleague for club membership if they subsequently join us. Club members can redeem reward points for extra club days, annual dues, private yacht and jet charters, private chef services, trips to special events and much more.

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Smart Home Technology

We have invested millions of dollars in developing a proprietary web-based technology platform and we are planning to begin using “smart home” technology to improve our ability to manage club properties, reduce energy and water consumption and provide club members with a safer and more comfortable experience and home environment.

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Owned Properties

The following table sets forth, as of December 31, 2009, for each parcel of real property owned by us, the most recent appraised value of the property, the amount owed by us under any mortgage securing the property, and our equity in the property.

Destination		Home Name				Appraised Value				First Mortgage				Second Mortgage				Net Equity
Abaco, Bahamas			Abaco Club #42			$	2,100,000			$	1,572,913			$	199,973			$	327,114
Abaco, Bahamas			Abaco Club #43			$	2,100,000			$	1,572,913			$	199,973			$	327,114
Abaco, Bahamas			Abaco Club #5			$	1,100,000			$	823,907			$	104,748			$	171,346
Abaco, Bahamas			Abaco Club #6			$	1,100,000			$	823,907			$	104,748			$	171,346
Abaco, Bahamas			Abaco Club #8			$	2,200,000			$	584,476			$	880,000			$	735,524
Beaver Creek			Beaver Creek Lodge			$	3,550,000			$	2,658,971			$	338,050			$	552,979
Beaver Creek			The Charter			$	875,000			$	345,449			$	147,594			$	381,957
Belize			Belizean Dreams			$	700,000			$	266,988							$	433,012
Big Island, HI			Maluhia			$	430,000			$	322,073							$	107,927
Big Island, HI			Wailana			$	440,000			$	329,563							$	110,437
Breckenridge, CO			Snowflake at Blue Sky			$	1,825,000			$	1,233,984			$	494,038			$	96,978
Candlewood			Candlewood Lake			$	1,200,000			$	898,807			$	114,270			$	186,922
Chicago			Lincoln Park			$	715,000			$	535,539							$	179,461
Chicago			Millennium Park			$	1,250,000			$	936,257							$	313,743
Copper Mountain			Super Bee			$	1,600,000			$	1,198,410							$	401,590
Deer Valley			Silver Lake #2			$	2,350,000			$	1,760,164			$	223,780			$	366,056
Deer Valley			Silver Lake #6			$	3,684,000			$	2,759,338			$	350,810			$	573,852
Delray Beach			Ocean View			$	5,000,000			$	3,745,030			$	476,127			$	778,843
Dominican Republic			Villa Maria			$	850,000			$	306,850							$	543,150
Dominican Republic			Villa Kary			$	1,425,000			$	550,382							$	874,618
Fox Acres			Fox Acres			$	317,000			$	237,435							$	79,565
Indian Rocks Beach			Beach House			$	2,500,000			$	1,872,515			$	238,063			$	389,422
Jackson Hole			Teton Mountain Lodge			$	1,000,000			$	749,006							$	250,994
Jackson Hole			Snake River Lodge #231/232			$	1,235,000			$	925,022			$	117,603			$	192,374
Jackson Hole			Snake River Lodge #339/340			$	1,300,000			$	973,708			$	123,793			$	202,499
Kiawah			Windhaven			$	3,800,000			$	2,846,223			$	361,857			$	591,921
Kiawah			Night Heron			$	600,000			$	449,404							$	150,596
Kiawah			Broomsedge			$	950,000			$	711,556							$	238,444
La Costa			La Costa Resort #12			$	725,000			$	543,029							$	181,971
La Costa			La Costa Resort #7			$	1,440,000			$	1,078,569							$	361,431
La Quinta			Montana			$	500,000			$	374,503							$	125,497
La Quinta			Laguna			$	490,000			$	367,013							$	122,987
La Quinta			PGA West			$	900,000			$	674,105							$	225,895
Lake George			Sagamore			$	630,000			$	471,874							$	158,126
Lake Las Vegas			Tramonto			$	600,000			$	449,404			$	57,135			$	93,461
Lake Las Vegas			Viera			$	299,900			$	433,840							$	(133,940	)
Lake Tahoe			Squaw Valley #209			$	470,000			$	352,033			$	44,756			$	73,211
Lake Tahoe			Squaw Valley #309			$	470,000			$	352,033			$	44,756			$	73,211
Lake Tahoe			Third Creek			$	829,000			$	620,926							$	208,074
Lake Tahoe			Caddie Court			$	1,740,000			$	1,303,270			$	165,692			$	271,037
Los Cabos			Casa Eternidad			$	3,550,000			$	2,658,971			$	338,050			$	552,979
Los Cabos			Villa Paraiso			$	3,450,000			$	2,584,071			$	328,528			$	537,402
Los Cabos			Esperanza 1501			$	1,900,000			$	1,423,111			$	180,928			$	295,960
Los Cabos			Esperanza 1502			$	1,900,000			$	1,423,111			$	180,928			$	295,960
Los Cabos			Esperanza 1503			$	2,000,000			$	1,498,012			$	190,451			$	311,537
Los Cabos			Casa Oceano			$	1,000,000			$	749,006							$	250,994
Los Cabos			Villa Rubi			$	500,000			$	374,503							$	125,497

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Destination		Home Name				Appraised Value				First Mortgage				Second Mortgage				Net Equity
Los Cabos			Casa Paraiso			$	1,550,000			$	1,160,959							$	389,041
Los Cabos			Casa Martha			$	1,450,000			$	1,086,059			$	138,077			$	225,865
Los Cabos			Villa del Sol			$	1,400,000			$	1,048,608			$	133,316			$	218,076
Los Cabos			Casa Tortuga			$	1,500,000			$	1,123,509			$	142,838			$	233,653
Los Cabos			Esperanza 1601			$	1,800,000			$	1,348,211			$	171,406			$	280,384
Los Cabos			Esperanza 1602			$	1,800,000			$	1,348,211			$	171,406			$	280,384
Los Cabos			Esperanza 1603			$	1,900,000			$	1,423,111			$	180,928			$	295,960
Maui			Wailea #208			$	3,700,000			$	2,771,322			$	352,334			$	576,344
Miami Beach			Trump Miami			$	500,000			$	395,795			$	147,594			$	(43,389	)
Miami Beach			Acqualina			$	1,375,000			$	1,029,883			$	130,935			$	214,182
Naples			Monteverde			$	670,000			$	501,834			$	63,801			$	104,365
Naples			Strada Bella			$	775,000			$	580,480			$	73,800			$	120,721
Nevis			Villa 2			$	1,980,000			$	1,483,032			$	188,546			$	308,422
Nevis			Villa 3			$	1,980,000			$	1,483,032			$	188,546			$	308,422
Nevis			Villa 4			$	1,980,000			$	1,483,032			$	188,546			$	308,422
Nevis			Villa 6			$	2,290,000			$	1,715,224			$	218,066			$	356,710
Nevis			Villa 7			$	2,290,000			$	1,715,224			$	218,066			$	356,710
Nevis			Villa Paradiso #1 (slab)			$	810,000			$	606,695			$	77,133			$	126,173
Nevis			Villa Paradiso #10 (30% complete)			$	850,000			$	636,655			$	80,942			$	132,403
Nevis			Villa 8			$	1,560,000			$	1,168,449			$	148,552			$	242,999
Nevis			Villa 9			$	1,560,000			$	1,168,449			$	148,552			$	242,999
NYC			Trump #300/301			$	3,000,000			$	2,247,018			$	285,676			$	467,306
NYC			Trump #302/303			$	1,725,000			$	1,292,035			$	164,264			$	268,701
NYC			Trump #310			$	2,250,000			$	1,685,263			$	214,257			$	350,479
NYC			1600 Broadway #PH5D			$	3,150,000			$	1,776,648			$	375,281			$	998,071
NYC			Link #29C			$	910,000			$	681,595							$	228,405
NYC			Trump #318			$	1,050,000			$	786,456							$	263,544
NYC			1600 Broadway #18F			$	1,075,000			$	805,181							$	269,819
NYC			Trump #308			$	1,135,000			$	850,122							$	284,878
NYC			Link #31B			$	1,900,000			$	1,299,451							$	600,549
NYC			Trump #1222			$	1,065,000			$	797,691			$	101,415			$	165,894
NYC			Trump #1622			$	1,075,000			$	805,181			$	102,367			$	167,451
Outer Banks			Osprey			$	700,000			$	524,304							$	175,696
Outer Banks			Hunters Green			$	900,000			$	674,105							$	225,895
Punta Mita			La Playa			$	735,000			$	550,519							$	184,481
Reynolds Plantation			Carolyn’s Pond			$	680,000			$	509,324							$	170,676
Reynolds Plantation			Oconee Estate			$	1,100,000			$	1,160,000							$	(60,000	)
Scottsdale			Happy Valley			$	2,100,000			$	1,572,913			$	199,973			$	327,114
Scottsdale			The Rocks			$	900,000			$	674,105			$	85,703			$	140,192
Scottsdale			Highpoint			$	775,000			$	580,480			$	73,800			$	120,721
Scottsdale			Preserve Way			$	655,000			$	490,599			$	62,373			$	102,028
St. Thomas			Lovenlund Estate			$	1,700,000			$	1,273,310			$	161,883			$	264,807
Steamboat Springs			Eagle Ridge Lodge			$	590,000			$	441,914							$	148,086
Steamboat Springs			Mountaineer			$	1,100,000			$	823,907			$	104,748			$	171,346
Stowe Vermont			Topnotch #512			$	696,000			$	521,308							$	174,692
Sun Valley			MacKenzie Lane			$	3,100,000			$	2,321,918			$	295,199			$	482,883
Sun Valley			Plaza #2			$	1,800,000			$	1,348,211			$	171,406			$	280,384
Telluride			Country Club			$	2,000,000			$	1,498,012			$	190,451			$	311,537
Telluride			Cabin #4			$	1,600,000			$	1,198,410			$	152,361			$	249,230
Telluride			Cabin #8			$	1,400,000			$	1,048,608			$	133,316			$	218,076
Turks & Caicos			English Cottage			$	1,050,000			$	343,700							$	706,300

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Destination		Home Name				Appraised Value				First Mortgage				Second Mortgage				Net Equity
Turks & Caicos			Dundee Estate			$	2,800,000			$	2,097,217							$	702,783
Tuscany			Villa Cassia			$	800,000			$	606,750							$	193,250
Tuscany			Borgo di Vagli			$	700,000			$	0							$	700,000
Tuscany			Rigo Salcio			$	1,500,000			$	1,314,625							$	185,375
Watercolor			Seaside			$	905,000			$	490,044							$	414,956
Watercolor			Seagrove			$	1,650,000			$	981,020			$	147,594			$	521,386
TOTAL						$	153,580,900			$	111,071,889			$	12,192,101			$	30,316,910

Intellectual Property

We own the trademarks “Ultimate Escapes,” “Ultimate Resort,” “Private Escapes” and related trademarks. Such trademarks are material to our business. All of the material trademarks are registered (or have applications pending) with the United States Patent and Trademark Office as well as, in some cases, with the relevant authorities in certain foreign countries.

We also own the following Internet domain names: ultimateescapes.com, whatisadestinationclub.com, whatsadestinationclub.com, private-escapes.com, ultimateescapes.info, ultimateescapes.net, ultimateescapes.org, ultimateescapes.tv, privateescapes.com and privateescapes.co.uk.

Seasonality

Our business, like all organizations in the travel industry, is subject to seasonal activity. The chart below shows overall club occupancy by month for 2009 and this seasonality pattern is typical for historical years as well. High travel seasons are typically January through March for winter vacations and June through August for summer vacations. A key factor is the school calendar, for those club members with children still living at home, which creates greater occupancy pressure during holiday periods. Seasonality also varies by type of destination. For example, club mountain properties are typically heavily occupied during the ski season, yet tend to remain vacant during the “shoulder seasons” (April through early June and September through December) resulting in an annualized occupancy of 40 – 45%. Conversely, club city destinations are typically not seasonal due to both business and pleasure trips, consistently generating month-over-month club occupancies in the 80 – 90% range.

2009 Seasonality

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International Properties and Club Members Located Abroad

As of December 31, 2009, we operated a total of 44 properties located outside of the United States, as follows:

Bahamas			5
Belize			1
Costa Rica			2
Dominican Republic			2
England			2
France			1
Italy			3
Mexico			17
Nevis			7
St. Thomas, USVI			1
Tortola, BVI			1
Turks & Caicos			2
Total			44

In addition, as of December 31, 2009 we had 54 club members that reside outside the United States in the following countries:

Mexico			2
Canada			41
Estonia			1
Germany			1
UK			8
Brazil			1
Total:			54

Regulation

Government Regulation

Our business is subject to and affected by international, federal, state and local laws, regulations and policies, which are subject to change. The descriptions of the laws, regulations and policies that follow are summaries of those which we believe to be most relevant to our business and do not purport to cover all of the laws, regulations and policies that affect our businesses. We believe that we are in material compliance with these laws, regulations and policies.

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Competition

We operate principally in the luxury vacation industry and compete against numerous global, regional and boutique destination clubs; as well as other shared usage or interval ownership resort and vacation property companies, real estate developers and sponsors; vacation home owners, brokers and managers; resort sponsors and managers; and, more broadly, luxury resorts and other transient/leisure accommodations; as well as alternative leisure and recreation categories, such as golf clubs or other club membership organizations. We have encountered and expect to encounter in the future intense competition from our rivals in the destination club industry and from other companies offering competitive products and services. Many of our competitors have greater consumer recognition or resources and/or more established and familiar products than us. The factors that we believe are important to customers include:

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We have many competitors for our club members, including other major resort destinations worldwide. We also directly compete with other destination clubs, such as Exclusive Resorts, which is the largest company in the destination club marketplace, as measured by number of club members. Our destination club members can choose from any of these alternatives.

Facilities

Our executive offices are located at 3501 W. Vine Street, Suite 225, Kissimmee, Florida, 34741. The cost for this space is approximately $11,650 per month, pursuant to a lease agreement with La Mirada, LLC, an affiliate of James M. Tousignant, our President and Chief Executive Officer and a member of our board of directors, which terminates on October 31, 2010. The approximate square footage of the space is 5,500 square feet. We believe that its existing facilities are suitable and adequate for the business conducted therein, appropriately used and have sufficient capacity for its intended purpose.

Legal Proceedings

We are not currently subject to any material legal proceedings. From time to time, however, we and/or our subsidiaries may become involved in litigation and other legal proceedings relating to claims arising from our operations in the normal course of business, including claims involving club membership disputes.

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MANAGEMENT

Directors and Executive Officers

Our directors and executive officers, and their ages as of January 1, 2010, are set forth below:

Name		Age		Position
James M. Tousignant		49		President, Chief Executive Officer and Class C Director
Richard Keith		54		Chairman and Class B Director
Philip Callaghan		57		Chief Financial Officer and Secretary
Robert Glinka		53		Chief Operating Officer
Ted Curtis		56		Chief Sales and Marketing Officer
Gregg Amonette		56		Senior Vice President, Business Development
Thomas D’Ambrosio		53		Senior Vice President, Chief Technology Officer
C. Thomas McMillen		57		Class C Director
Mark A. Frantz		41		Class B Director
Stephen Griessel		50		Class A Director

The Class A, Class B and Class C directors will stand for reelection at the 2010, 2011 and 2012 annual meetings of our stockholders, respectively.

James M. Tousignant has served as our President, Chief Executive Officer and Class C Director since October 2009. Prior to that, Mr. Tousignant served as the Founder, President, Chief Executive Officer and Director of Ultimate Escapes Holdings from May 2004. Prior to founding Ultimate Escapes Holdings in May 2004, Mr. Tousignant was most recently managing director at Thomson Financial and Morgan Stanley (NYSE: MS), where he was responsible for global sales and business development. From April 1993 to September 2000, Mr. Tousignant was the co-founder and president of Multex.com, Inc. (formerly NASDAQ: MLTX), a global provider of online financial information services, and was responsible for managing a rapidly growing global company with thousands of customers, 500 employees and revenues of $100 million worldwide. He was also active in raising more than $50 million in private venture capital at Multex, managing four acquisitions, and overseeing the company’s successful $40 million initial public offering in 1999. Mr. Tousignant started his first company, Mirror Images Software, Inc., as a senior at Rensselaer Polytechnic Institute (RPI). Mr. Tousignant attended RPI from 1978 to 1982, majoring in Management with a minor in Computer Science.

Richard Keith has served as our Chairman and Class B Director since October 2009. In April 1990, Mr. Keith started AppleOne Employment Services of Colorado. In five years, Mr. Keith sold the company to Corestaff Services and co-founded a second start-up company, Center Partners, Inc., a call center business. In October 1999, Center Partners was sold to the London-based WPP Group. In 2003, Mr. Keith founded Private Escapes Destination Clubs and created Private Escapes Premiere, and he served as Chief Executive Officer of Private Escapes Destination Clubs from 2004 until September 2009. In August 2004, Mr. Keith and his team launched Private Escapes Platinum, and Private Escapes Pinnacle followed in August 2006. Mr. Keith attended Bates College.

Philip Callaghan has served as our Chief Financial Officer and Secretary since October 2009. Prior to that, Mr. Callaghan served as Ultimate Escapes Holdings’ Chief Financial Officer since July 2004. From September 2002 to June 2004, Mr. Callaghan was Chief Financial Officer of the Global Sales Account Management team for the Thomson Corporation. He served as Chief Financial Officer of eNews.Com, Inc. a subsidiary of Barnes and Noble (NYSE: BKS), from January 2000 through June 2002. From December 1996 through September 1999, he served as Chief Financial Officer for Multex.com, Inc. (formerly NASDAQ: MLTX) during which time the company went public. Mr. Callaghan has also served as Chief Financial Officer of Graff Pay Per View, a distributor of programming to the cable and satellite industries, as Managing Director of Media Computer Systems Limited, a software developer for the television industry, and as Finance Director for MTV Europe, the cable television programmer. Mr. Callaghan was admitted as a Fellow of the Institute of Chartered Accountants of England and Wales in 1982, received a Bachelor of Science in Pure Physics, from University College London and holds dual nationality in the United States and United Kingdom.

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Robert S. Glinka has served as our Chief Operating Officer since January 2010. From November 2009 until January 2010, Mr. Glinka served as a consultant to us. From October 2008 until October 2009, Mr. Glinka served as Chief Executive Officer of Areus Holdings, LLC, a startup privately held business whose concentration was in the hotel segment of the hospitality industry. From 2005 through 2008, Mr. Glinka served in a variety of capacities with Celebrity Resorts, a privately held vacation ownership company. Mr. Glinka’s roles during this time ranged from Executive Director of Acquisitions & Development to Chief Development Officer. From 2003 to 2005, Mr. Glinka served as both a consultant and Vice President of Development for The Sol Melia Vacation Club and was a member of the startup team for this international venture. From 1998 to 2003, Mr. Glinka served in several capacities with Fairfield Resorts and with the Cendant Corporation following the 2001 acquisition of Fairfield by Cendant. During this time, Mr. Glinka served as Vice President of Planning, Senior Vice President of Planning & Development and as Executive Vice President of Business Development. From 1978 to 1998, Mr. Glinka worked for The Walt Disney Company, serving in a variety of capacities within functional areas such as Accounting, Financial Planning, Business Development and Operations Planning. Mr. Glinka holds a Bachelor of Science in Business Administration from Western New England College in Springfield, Massachusetts and a Master of Business Administration from the Roy E. Crummer Graduate School of Business. Mr. Glinka is a member of Beta Gamma Sigma, the prestigious international honor society which recognizes business excellence.

Ted Curtis has served as our Chief Sales and Marketing Officer since January 2010. From November 2009 until January 2010, Mr. Curtis served as a consultant to us. From August 2004 to April 2007 and from June 2008 to December 2009, Mr. Curtis provided sales and marketing services to privately held vacation ownership companies with operations throughout the United States, Caribbean, Middle East and North Africa. In addition, since June 2008 Mr. Curtis has served as President and Chief Operating Officer, and as a member of the board of directors, of Freedom Environmental Services, Inc., a publicly-traded wastewater management company. Mr. Curtis also served as Senior Vice President of Sales and Marketing for Celebrity Resorts from May of 2007 through May of 2008. From 2003 to 2004, Mr. Curtis served as Senior Vice President of Sales and Marketing for Trendwest Resorts, a subsidiary of the Cendant Corporation, with direct operating responsibility for 2,000 employees, annual revenue generation of $550 million and full P&L performance. From 1997 to 2003, Mr. Curtis held the positions of Managing Director and Vice President at Hilton Grand Vacations Company, a subsidiary of the Hilton Hotel Corporation where he also served as a Member of the Executive Committee. From 1994 through 1996, Mr. Curtis was a Director at Marriott Vacation Club responsible for restructuring and growing the offsite sales channel. Prior to that Mr. Curtis, in partnership with Robert Trent Jones, Sr., developed the national award winning Ipswich Country Club in Massachusetts and held other senior sales and marketing positions with regional developers in the northeastern U.S. Mr. Curtis received a Bachelor of Science in Finance from the University of Vermont.

Gregg Amonette has served as our Senior Vice President of Business Development since October 2009. Prior that, Mr. Amonette has served as Senior Vice President of Business Development for Ultimate Escapes Holdings since July 2006, and has 25 years experience as a corporate officer, sales executive, and marketing executive. Mr. Amonette joined Ultimate Escapes Holdings in July 2006 as head of Business Development and is responsible for creating strategic partnerships with resort developers, hotel groups and marketing companies. From January 2004 to June 2006, Mr. Amonette served as Director of Marketing for SNL Financial, LC, a provider of sector-based business information. From August 1996 to March 2003, Mr. Amonette held various executive roles at Multex, Inc. (formerly NASDAQ: MLTX) a leading distributor of sellside research and data to buyside institutions. Mr. Amonette served as Executive Vice President, Global Product Groups, and corporate officer of Multex until it was acquired by Reuters, PLC (now Thomson Reuters; NYSE: TRI) in March 2003. From December 1994 to July 1996, he was Vice President and General Manager, North America of Micrognosis, the trading room technology division of CSK Corporation in Japan. From December 1984 to December 1994, Mr. Amonette held various sales management positions at the Brokerage Services Division of Automatic Data Processing, Inc. (NYSE: ADP) including Vice President of Retail Sales. Mr. Amonette received a Bachelor of Arts from Washington & Lee University.

Thomas D’Ambrosio has served as our Senior Vice President and Chief Technology Officer since October 2009. Prior to that, Mr. D’Ambrosio served as Senior Vice President and Chief Technology Officer for Ultimate Escapes Holdings since October 2005. Mr. D’Ambrosio began his employment with Ultimate

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Escapes Holdings in October 2005. From January 2005 to October 2005, Mr. D’Ambrosio was working on developing a private business venture. From March 2003 through December 2004, Mr. D’Ambrosio served as the Chief Information Officer for Reuters Research, a division of Reuters PLC (now Thomson Reuters, NYSE: TRI) formed with the acquisition of Multex.com, Inc. (formally NASDAQ: MLTX). From March 1992 to March 2003, Mr. D’Ambrosio served as Chief Information Officer and Chief Security Officer for Multex.com. From March 1989 to March 1992, Mr. D’Ambrosio served as Director of Advanced Systems Development for Automatic Data Processing (NYSE: ADP). Mr. D’Ambrosio received a Bachelor of Science in Business Information Systems and an Associate of Science degree in Computer Technology. Mr. D’Ambrosio is a veteran, having served as a member of the United States Air Force.

C. Thomas McMillen has served as a Class C Director since October 2009. Prior to that, Mr. McMillen served as our Chairman and Co-Chief Executive Officer since our inception and has over 20 years of experience in government, finance and acquisitions. From December 2004 until January 2007, he served as the Chairman and, from January 2007 until August 2008, he served as the Vice Chairman, of Fortress America Acquisition Corporation (now Fortress International Group, Inc.; NASDAQ: FIGI). Mr. McMillen has also served, since August 2005, as the President, Chief Executive Officer and Chairman of the board of directors, and from August 2005 to March 2007 served as the President, of Homeland Security Capital Corporation (OTC: HOMS), a consolidator of homeland security companies that provides capital and management advice for developing companies. In 2003, Mr. McMillen co-founded Global Secure Corp., a homeland security company providing integrated products and services for critical incident responders, and served as its Chief Executive Officer from March 2003 until February 2004. From February 2004 until February 2005, Mr. McMillen served as a consultant to Global Secure Corp. In addition, from October 2004 to July 2005, he served as a Chairman of the board of directors of Global Defense Corporation, a development stage company focused on acquiring companies in critical infrastructure security. From December 2002 to February 2004, Mr. McMillen served as Vice Chairman and Director of Sky Capital Enterprises, Inc., a venture firm, and until February 2005 served as a consultant. From March 2003 to February 2004, Mr. McMillen served as Chairman of Sky Capital Holdings, Ltd, Sky Capital Enterprises’ London stock exchange-listed brokerage affiliate. In addition, Mr. McMillen is a founder and has been Chief Executive Officer and Chairman of Washington Capital Advisors, LLC, a merchant bank, since 2003. He also served as Chairman of TPF Capital, Washington Capital Advisors, LLC’s predecessor company, from June 2001 through December 2002. Mr. McMillen has also been an independent consultant throughout his career. From November 1994 through February 1999, Mr. McMillen served as the Founder, Chief Executive Officer and Director of Complete Wellness Centers, Inc. (OTC: CMWCO), a medical multi-disciplinary clinic management company. Mr. McMillen was appointed by President Clinton to Co-Chair the President’s Council on Physical Fitness and Sports from 1993 to 1997. From 1987 through 1993, he served three consecutive terms in the United States House of Representatives from the 4^th Congressional District of Maryland. Prior to that, Mr. McMillen played 11 years in the National Basketball Association. Since October 2009, Mr. McMillen has served on the board of directors of the Foxhall Global Trends Fund (formerly known as the Shepherd Fund), a series of Dominion Funds, Inc. Mr. McMillen serves on the Board of Regents of the University of Maryland System. Mr. McMillen received a Bachelor of Science in chemistry from the University of Maryland and a Bachelor of Arts and a Master of Arts from Oxford University as a Rhodes Scholar.

Mark A. Frantz has served as a Class B Director since October 2009, and was a Special Advisor to our board of directors since inception Mr. Frantz founded BlueDelta Capital Partners in October 2009, and was a venture partner at RedShift Ventures from July 2006 to September 2009. Mr. Frantz currently serves on the board of directors of RedShift Ventures’ portfolio companies Intelliworks, Telarix and TerraGo Technologies. Mr. Frantz also serves on the board of directors at ODIN Technologies and the Northern Virginia Technology Council (NVTC). Mr. Frantz has also been an investor/advisor to New Media Strategies (acquired by Meredith Corp., NYSE: MDP), Sourcefire (NASDAQ: FIRE) and Luna Innovations (NASDAQ: LUNA). From March to July 2006, Mr. Frantz was the Managing General Partner of In-Q-Tel, the strategic venture capital affiliate of the U.S. Intelligence Community. From January 2001 to March 2006, Mr. Frantz was with Carlyle Venture Partners, where he worked with Blackboard (NASDAQ: BBBB), Imagitas (acquired by Pitney Bowes, NYSE: PBI), ISR Solutions (acquired by Stanley Works, NYSE: SWK), and Secure Elements (acquired by Fortinet, NASDAQ: FTNT). Mr. Frantz joined Carlyle from Redleaf and prior to Redleaf, he was the Associate to the Senior Chairman of investment bank Alex. Brown (now Deutsche Bank Alex. Brown, NYSE: DB). He also served as the Associate Director in his last position at The White House Office of Intergovernmental Affairs

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under President George H. W. Bush from December 1990 to January 1993 and as the economic and technology policy advisor to Pennsylvania Governor Tom Ridge from January 1995 to 1997. He holds a Bachelor of Arts from Allegheny College and Juris Doctor and Master of Business Administration from the University of Pittsburgh.

Stephen Griessel has served as our Class A Director since October 2009. He was the Chief Executive Officer of American Community Properties Trust (NYSEA: APO), a public real estate investment trust, from October 2008 until its sale in December 2009. Mr. Griessel previously served as the Managing Director of RCI Southern Africa for nine years, from 1989 to 1998, and was a founding shareholder and Chief Executive Officer of Tourvest, until recently a publicly traded multi-faceted tourism company in Southern Africa, from 1997 to 2001. Prior to his work for American Community Properties Trust, Mr. Griessel was Executive Vice President of The Ginn Company, a developer of large scale residential resort properties throughout the United States and the Caribbean, from May 2004 to April 2007. Mr. Griessel received a Bachelor of Commerce and Master of Building Science from the University of Witwatersrand in Johannesburg, South Africa.

Independence of Directors

As a result of our securities being listed on the NYSE Amex, we adhere to the rules of that exchange in determining whether a director is independent. We are seeking to regain compliance with the minimum distribution requirements of the NYSE Amex Company Guide and apply to have our securities continue to be listed on the NYSE Amex. As a result, our board of directors will consult with our counsel to ensure that the board’s determinations are consistent with those rules and all relevant securities and other laws and regulations regarding the independence of directors. The NYSE Amex requires that a majority of the board must be composed of “independent directors,” which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion of the company’s board of directors would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Consistent with these considerations, our board of directors has affirmatively determined that C. Thomas McMillen, Mark A. Frantz and Stephen Griessel are independent directors.

Audit Committee

Our audit committee consists of Messrs. McMillen, Frantz and Griessel with Mr. McMillen serving as chairman. Each is an independent director under the NYSE Amex listing standards. The audit committee’s duties, which are specified in our Audit Committee Charter, include, but are not limited to:

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Our audit committee will at all times be composed exclusively of “independent directors” who are “financially literate” as defined under the NYSE Amex listing standards. The NYSE Amex listing standards define “financially literate” as being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement.

In addition, a listed company must certify to the NYSE Amex that the committee will have at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication. Our board of directors has determined that Mr. McMillen satisfies the definition of financial sophistication and also qualifies as an “audit committee financial expert,” as defined under rules and regulations of the Securities and Exchange Commission.

Compensation Committee

Our compensation committee consists of Messrs. McMillen, Frantz and Griessel as its members, with Mr. Frantz serving as chairman. Each is an independent director under the NYSE Amex listing standards. The purpose of the compensation committee is to review and approve compensation paid to our officers and directors and to administer our incentive compensation plans, including our 2009 Stock Option Plan and any other plans that may be adopted in the future, including authority to make and modify awards under such plans.

Nominating Committee

Our nominating committee consists of Messrs. McMillen, Frantz and Griessel, with Mr. Griessel, serving as chairman, each of whom is an independent director under the NYSE Amex listing requirements. During the period commencing with the closing of the Acquisition and ending with the 2012 annual meeting, the nominees for our board of directors will be determined pursuant to the terms of the Voting Agreement (described below), a copy of which was filed as an exhibit to our Form 8-K filed on November 4, 2009.

Director Nominees

In connection with the Acquisition, on October 29, 2009, the SAAC founders, Ultimate Resort and Ultimate Escapes Holdings entered into a voting agreement, pursuant to which our board of directors is set at six directors, and the SAAC founders or their respective affiliates have the right to nominate two individuals for appointment to our board of directors and Ultimate Resort or its affiliates have the right to nominate four individuals for appointment to our board of directors. Both of the nominees of the SAAC founders and two of the four nominees of Ultimate Resort must be independent pursuant to the Securities and Exchange Commission and the NYSE Amex rules and regulations. The SAAC founders caused their two nominees to be appointed to the board of directors immediately prior to the Acquisition, and Ultimate Resort caused three out of its four nominees to be appointed to the board of directors immediately prior to the Acquisition. There is one vacancy on the board of directors, which will be filled at a later date.

Our nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors. Our nominating committee considers persons identified by our stockholders, management, investment bankers and others. The guidelines for selecting nominees, which are specified in the nominating committee charter, provide that, generally, persons to be nominated should be actively engaged in business, have an understanding of financial statements, corporate budgeting and capital structure, be familiar with the requirements of a publicly traded company, be familiar with industries relevant to our business, be willing to devote significant time to the oversight duties of the board of directors of a public company, and be able to promote a diversity of views based on the person’s education, experience and professional employment. The nominating committee will evaluate each individual in the context of the board as a whole, with the objective of recommending a group of persons that can best implement our business plan, perpetuate our business and represent stockholder interests. The nominating committee may require certain skills or

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attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time. The nominating committee will not distinguish among nominees recommended by stockholders and other persons.

Specifically, the guidelines for selecting nominees provide that our nominating committee will consider and evaluate candidates based on, among other factors, the following criteria:

Code of Conduct and Ethics

We have adopted a code of conduct and ethics applicable to our directors and officers in accordance with applicable federal securities laws and the rules of the NYSE Amex. A copy of the Code of Conduct and Ethics is publicly available on our website at www.ultimateescapes.com. In addition, a copy of the Code of Conduct and Ethics will be provided by us without charge upon request.

Communication with the Board of Directors

Our stockholders and other interested parties may send written communications directly to the board of directors or to specified individual directors, including the Chairman or any non-management directors, by sending such communications to our corporate headquarters. Such communications will be reviewed by our legal counsel and, depending on the content, will be:

Director Compensation and Other Information

Our board of directors adopted a compensation plan for independent directors of the board (the “Director Compensation Plan”), following the recommendation to do so by the compensation committee of our board. According to the Director Compensation Plan, our independent directors will be paid $40,000 annually, payable in quarterly installments. Each independent director serving as the chair of the audit committee, the compensation committee or the nominating committee will be paid an additional $10,000 (in the case of the audit committee) or $5,000 (in the case of the compensation and nominating committees) per year. We will reimburse the independent directors for reasonable travel and other expenses in connection with attending meetings of the board. Additionally, each independent director can use our properties for a total of 14 days each calendar year, subject to certain restrictions set forth in the Director Compensation Plan. The Director Compensation Plan also provides for the grant of options under our 2009 Stock Option Plan to purchase our common stock at an exercise price of either the par value of our common stock or the closing price of our common stock on the date of grant. These options were granted upon the adoption of the Director Compensation Plan in November 2009. Additional options may be awarded on an annual basis in the discretion of our board of directors.

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Pursuant to the Director Compensation Plan, effective as of December 1, 2009, Mr. McMillen was appointed as non-executive Vice Chairman of our board of directors. For such service, Mr. McMillen will be paid $60,000 in cash per annum, payable in arrears in equal installments on our payroll schedule, and will receive $60,000 worth of options under our 2009 Stock Option Plan to purchase common stock with an exercise price of $0.0001 per share, issuable in equal quarterly installments in arrears (with the first grant to occur on February 28, 2010). The stock issued upon exercise of the options will have “piggyback” registration rights.

The following table shows the compensation earned by our non-employee directors in 2009:

Name		Fees Earned or Paid in Cash ($)				Option Awards ($)(1)(2)				Total ($)
C. Thomas McMillen			17,500				11,667				29,167
Mark A. Frantz			11,250				11,667				22,917
Steve Griessel			11,250				11,667				22,917

Name		Option Awards Outstanding
C. Thomas McMillen			11,873
Mark A. Frantz			11,873
Steve Griessel			11,873

Summary Compensation Table

The following table shows, for the years ended December 31, 2009 and 2008, the compensation paid to or earned by our chief executive officer and the two other most highly compensated executive officers of Ultimate Escapes in 2009, who we refer to collectively as our named executive officers.

Name and Principal Position(1)		Year				Salary $				Stock Awards(2) $				Option Awards(2) $				Total $
James M. Tousignant, President and Chief Executive Officer			2009				316,154				3,000,000				794				3,316,948
			2008				425,769				925,000				—				1,350,769
Philip Callaghan, Chief Financial Officer and Secretary			2009				261,057				1,050,000				794				1,311,852
			2008				355,192				356,250				—				711,442
Richard Keith, Chairman(3)			2009				334,616				—				794				335,410
			2008				374,152				—				—				374,152

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Outstanding Equity Awards at Fiscal Year End 2009

None of the named executive officers held outstanding equity awards at December 31, 2009.

Employment Agreements

We entered into employment agreements with each of James M. Tousignant, Richard Keith and Philip Callaghan, effective as of October 29, 2009.

James Tousignant Employment Agreement

Mr. Tousignant’s employment agreement with us provides for an annual base salary of $450,000 and will increase each year of the term by 10%. In addition, Mr. Tousignant is eligible to receive an annual bonus each year of the term of at least 10% and at most 100% of his base salary, determined at the sole discretion of the board of directors and based on such factors as the board of directors establishes. Mr. Tousignant is also eligible to receive a pro rata bonus amount for the portion of the year he was employed should his employment terminate other than for “cause.” In addition, Mr. Tousignant is entitled to additional benefits, including reimbursement of business expenses, paid vacation, a $25,000 per year car allowance, continuation of certain Ultimate Escapes luxury destination club memberships and participation in other company benefits, plans, or programs that may be available to other senior executives from time to time. The employment agreement also entitles Mr. Tousignant to certain equity incentives, in an amount to be determined within 120 days of the closing date of the Acquisition but which will vest ratably in three equal annual installments commencing on the first anniversary of the initial grant date(s) thereof, and may be further accelerated or forfeited as set forth in the equity agreement that the parties will enter into in connection with the employment agreement.

The employment agreement has an initial term beginning on October 29, 2009, and ending on October 29, 2012, unless sooner terminated by the parties in accordance with the terms of the employment agreement, or extended for successive one-year terms, unless either party gives written notice within 90 days prior to the end of the term that such party desires not to renew the employment agreement.

The employment agreement permits the parties to terminate the agreement at any time for any reason. Should the employment agreement terminate because of the expiration of the agreement term, for “Cause,” or due to the voluntary resignation by Mr. Tousignant without “Good Reason,” then the employment agreement entitles Mr. Tousignant to the compensation and benefits, including payment for accrued but untaken vacation days, otherwise payable to him through the last day of his employment (referred herein as the “Accrued Obligations”). However, should we terminate Mr. Tousignant’s employment without Cause, or should the agreement terminate due to Mr. Tousignant’s death or disability, or should Mr. Tousignant resign his employment for Good Reason, then, subject to the execution of a release by Mr. Tousignant, the employment agreement will entitle Mr. Tousignant to his Accrued Obligations and his annual base salary then in effect for a period of twelve months on a regular payroll basis, and continued coverage under, and contributions towards, Mr. Tousignant’s health care, dental, disability and life insurance benefits on the same basis as immediately prior to the date of termination, for twelve months from the last day of Mr. Tousignant’s employment; subject to certain exceptions, including that we are relieved of our obligation to provide continued benefit coverage should Mr. Tousignant become covered by an equivalent benefit from another source.

The employment agreement requires us to indemnify Mr. Tousignant to the same extent we indemnify our officers and directors under our charter and bylaws, including maintaining Directors and Officers insurance.

The employment agreement includes a confidentiality provision prohibiting Mr. Tousignant from misappropriating our confidential and proprietary information. The employment agreement includes a non-solicitation provision prohibiting Mr. Tousignant from soliciting our employees and customers for a period of (i) one year from the date of his termination or (ii) 30 months from the closing date of the Acquisition, whichever is longer. The employment agreement prohibits Mr. Tousignant from competing with us, including any company providing luxury destination club vacation opportunities or the ownership and/or operation of a business of providing luxury destination club vacation opportunities for a period of (a) one year from the date of his termination or (b) 30 months from the closing date of the Acquisition, whichever is longer.

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Richard Keith Employment Agreement

Mr. Keith’s employment agreement with us provides for an annual base salary of $375,000. In addition, Mr. Keith is eligible to receive an annual bonus determined at the sole discretion of the board of directors and based on such factors as the board of directors establishes. Mr. Keith is also eligible to receive a pro rata bonus amount for the portion of the year he was employed should his employment terminate other than for “cause.” In addition, Mr. Keith is entitled to additional benefits, including reimbursement of business expenses, paid vacation, and participation in other company benefits, plans, or programs that may be available to our other senior executives from time to time. The employment agreement also provides that Mr. Keith is eligible to receive certain equity incentives, in an amount and with a vesting schedule to be determined by our board of directors, and may be further accelerated or forfeited as set forth in the equity agreement that the parties may enter into in connection with the employment agreement.

The employment agreement has an initial term beginning on October 29, 2009, and ending on October 29, 2010, unless sooner terminated by the parties in accordance with the terms of the employment agreement, or extended for successive one-year terms, unless either the executive or we give written notice within 60 days prior to the end of the term that such party desires not to renew the employment agreement.

The employment agreement permits the parties to terminate the agreement at any time for any reason. Should the employment agreement terminate because of the expiration of the agreement term, for “Cause,” or due to the voluntary resignation by Mr. Keith without “Good Reason,” then the employment agreement entitles Mr. Keith to the compensation and benefits, including payment for accrued but untaken vacation days, otherwise payable to him through the last day of his employment (referred herein as the “Accrued Obligations”). However, should we terminate Mr. Keith’s employment without Cause, or should the agreement terminate due to Mr. Keith’s death or disability, or should Mr. Keith resign his employment for Good Reason, then, subject to the execution of a release by Mr. Keith, the employment agreement will entitle Mr. Keith to his Accrued Obligations and his annual base salary then in effect for a period of six months on a regular payroll basis, and continued coverage under, and contributions towards, Mr. Keith’s health care, dental, disability and life insurance benefits on the same basis as immediately prior to the date of termination, for six months from the last day of Mr. Keith’s employment; subject to certain exceptions, including that we are relieved of our obligation to provide continued benefit coverage should Mr. Keith become covered by an equivalent benefit from another source.

The employment agreement requires us to indemnify Mr. Keith to the same extent as we indemnify our officers and directors under our charter and bylaws, including maintaining Directors and Officers insurance.

The employment agreement includes a confidentiality provision prohibiting Mr. Keith from misappropriating our confidential and proprietary information. The employment agreement includes a non-solicitation provision prohibiting Mr. Keith from soliciting our employees and customers for a period of (i) one year from the date of his termination or (ii) 30 months from the closing date of the Acquisition, whichever is longer. The employment agreement prohibits Mr. Keith from competing with us, including any company providing luxury destination club vacation opportunities or the ownership and/or operation of a business of providing luxury destination club vacation opportunities for a period of (a) one year from the date of his termination or (b) 30 months from the closing date of the Acquisition, whichever is longer.

Philip Callaghan Employment Agreement

Mr. Callaghan’s employment agreement with us provides for an annual base salary of $375,000. In addition, Mr. Callaghan is eligible to receive an annual bonus determined at the sole discretion of the board of directors and based on such factors as the board of directors establishes. Mr. Callaghan is also eligible to receive a pro rata bonus amount for the portion of the year he was employed should his employment terminate other than for “cause.” In addition, Mr. Callaghan is entitled to additional benefits, including reimbursement of business expenses, paid vacation, and participation in other company benefits, plans, or programs that may be available to other senior executives from time to time. The employment agreement also provides that Mr. Callaghan is eligible to receive certain equity incentives, in an amount and with a vesting schedule to be determined by the our board of directors, and may be further accelerated or forfeited as set forth in the equity agreement that the parties may enter into in connection with the employment agreement.

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The employment agreement has an initial term beginning on October 29, 2009, and ending on October 29, 2010, unless sooner terminated by the parties in accordance with the terms of the employment agreement, or extended for successive one-year terms, unless either party gives written notice within 60 days prior to the end of the term that such party desires not to renew the employment agreement.

The employment agreement permits the parties to terminate the agreement at any time for any reason. Should the employment agreement terminate because of the expiration of the agreement term, for “Cause,” or due to the voluntary resignation by Mr. Callaghan without “Good Reason,” then the employment agreement entitles Mr. Callaghan to the compensation and benefits, including payment for accrued but untaken vacation days, otherwise payable to him through the last day of his employment (referred herein as the “Accrued Obligations”). However, should we terminate Mr. Callaghan’s employment without Cause, or should the agreement terminate due to Mr. Callaghan’s death or disability, or should Mr. Callaghan resign his employment for Good Reason, then, subject to the execution of a release by Mr. Callaghan, the employment agreement will entitle Mr. Callaghan to his Accrued Obligations and his annual base salary then in effect for a period of six months on a regular payroll basis, and continued coverage under, and contributions towards, Mr. Callaghan’s health care, dental, disability and life insurance benefits on the same basis as immediately prior to the date of termination, for six months from the last day of Mr. Callaghan’s employment; subject to certain exceptions, including that we are relieved of our obligation to provide continued benefit coverage should Mr. Callaghan become covered by an equivalent benefit from another source.

The employment agreement requires us to indemnify Mr. Callaghan to the same extent we indemnify our officers and directors under our charter and bylaws, including maintaining Directors and Officers insurance.

The employment agreement includes a confidentiality provision prohibiting Mr. Callaghan from misappropriating our confidential and proprietary information. The employment agreement includes a non-solicitation provision prohibiting Mr. Callaghan from soliciting our employees and customers for a period of (i) one year from the date of his termination or (ii) 30 months from the closing date of the Acquisition, whichever is longer. The employment agreement prohibits Mr. Callaghan from competing with us, including any company providing luxury destination club vacation opportunities or the ownership and/or operation of a business of providing luxury destination club vacation opportunities for a period of (a) one year from the date of his termination or (b) 30 months from the closing date of the Acquisition, whichever is longer.

2009 Stock Option Plan

In October 2009, our stockholders approved the adoption of the 2009 Stock Option Plan (the “Plan”). The Plan provides for the issuance of a maximum of 800,000 shares of common stock in connection with the grant of options to our employees, directors and consultants. As of February 9, 2010, options to purchase a total of 35,618 shares of our common stock, at a weighted average exercise price of $8.47, were outstanding under the Plan, and 758,516 shares of common stock remained available for issuance pursuant to future option grants under the Plan.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Related Person Policy

Our audit committee, pursuant to its written charter, is responsible for reviewing and approving related-party transactions to the extent we enter into such transactions. The audit committee will consider all relevant factors when determining whether to approve a related party transaction, including whether the related party transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related party’s interest in the transaction. No director may participate in the approval of any transaction in which he is a related party, but that director is required to provide the audit committee with all material information concerning the transaction. Additionally, we require each of our directors and executive officers to complete a directors’ and officers’ questionnaire on an annual basis that elicits information about related party transactions. These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.

Founder Shares

In May 2007, we issued an aggregate of 1,666,667 shares of our common stock to Secure America Acquisition Holdings, LLC (our principal initial stockholder and an entity controlled by Philip A. McNeill and S. Kent Rockwell, members of our board of directors prior to the Acquisition and certain other members of our management prior to the Acquisition) for $25,000 in cash, at a purchase price of $0.01 per share. At the closing of the Acquisition, the 1,666,667 shares of common stock issued to Secure America Acquisition Holdings, LLC were reduced to 209,804 shares pursuant to the terms of the Contribution Agreement.

Sponsor Warrants

Secure America Acquisition Holdings, LLC purchased, for $2,075,000, in a private placement that occurred simultaneously with the consummation of our initial public offering, sponsor warrants to acquire up to 1,383,334 shares of our common stock. The sponsor warrants are identical to the warrants sold as part of the units sold in our IPO, except that the sponsor warrants (i) are not subject to redemption and (ii) may be exercised on a cashless basis whereas the warrants included in the units sold in our IPO cannot be exercised on a cashless basis and (iii) upon an exercise of the sponsor warrants, the holders of the sponsor warrants may receive unregistered shares of our common stock.

Acquisition

On October 29, 2009, we consummated the Acquisition. Pursuant to the terms of the Contribution Agreement, we received 1,232,601 ownership units of Ultimate Escapes Holdings, in consideration for contributing $9.8 million to Ultimate Escapes Holdings. The UE Owners retained the remaining 7,556,675 ownership units of Ultimate Escapes Holdings, which, under the terms of the Operating Agreement, may be converted by the UE Owners on a one-to-one basis into shares of our common stock (subject to adjustment to reflect the reverse stock split we expect to effect in connection with this offering). Of such retained units, 717,884 units were deposited into escrow at the closing of the Acquisition to secure the indemnification obligations of the UE Owners to us in connection with the Acquisition, pursuant to an escrow and indemnification agreement. Additionally, the UE Owners are eligible to receive up to an aggregate of 7,000,000 additional ownership units of Ultimate Escapes Holdings, convertible on a one-to-one basis into shares of our common stock (subject to adjustment to reflect the reverse stock split we expect to effect in connection with this offering), upon the achievement by Ultimate Escapes Holdings of certain Adjusted EBITDA milestones, as set forth in the Operating Agreement. For each ownership unit of Ultimate Escapes Holdings issued to the UE Owners, James T. Tousignant, in his capacity as the Owner Representative, also received one share of our Series A Voting Preferred Stock. At any time that any UE Owner exchanges ownership units of Ultimate Escapes Holdings for shares of our common stock, a like number of shares of Series A Voting Preferred Stock will be canceled. Upon consummation of the Acquisition, Ultimate Escapes Holdings became our subsidiary, and the business and assets of Ultimate Escapes Holdings and its subsidiaries are our only operations. In connection with the Acquisition, we entered into the employment agreements described under “Management” above.

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Operating Agreement of Ultimate Escapes Holdings

In connection with the Acquisition, on October 29, 2009, we, Ultimate Escapes Holdings, Ultimate Resort, JDI and Private Escapes Holdings, LLC entered into the Operating Agreement, which provides for the management of Ultimate Escapes Holdings after the consummation of the Acquisition. Under the terms of the Operating Agreement, the board of managers of Ultimate Escapes Holdings will mirror the board of directors of our company at all times during which the Voting Agreement (as described below) is in effect.

Pursuant to the Operating Agreement, the UE Owners will have the right to receive, in the aggregate, the following amount of additional Ultimate Escapes Holdings’ ownership units, in proportion to their respective earn-out sharing percentages, subject to the conditions described below:

“Adjusted EBITDA,” with respect to any period, means, as determined in accordance with GAAP, the difference between revenue (plus the non-refundable portion of Ultimate Escapes’ club membership fees, to the extent such club membership fees are not included in revenue pursuant to GAAP) and expense of Ultimate Escapes and its subsidiaries, on a consolidated basis for such period, plus the sum of (i) interest expense, (ii) income tax expense, (iii) depreciation expense and (iv) amortization expense. Adjusted EBITDA, with respect to any period, includes organic growth and the effect of any acquisitions or dispositions of lines of businesses or other material assets and all club member assessments incurred during the period for which Adjusted EBITDA is being calculated, but excludes all non-cash compensation related to our 2009 Stock Option Plan.

The UE Owners also have the right to exchange each of their Ultimate Escapes Holdings’ ownership units, including all earn-out units received, if any, at any time for shares of our common stock. However, we may, in our sole discretion, elect to make a cash payment to holders of ownership units in lieu of issuing common stock. The exchange ratio for any ownership units so converted into shares of our common stock will be one-for-one (subject to adjustment to reflect the reverse stock split we expect to effect in connection with this offering).

Voting Agreement

Also in connection with the Acquisition, on October 29, 2009, the SAAC founders, Ultimate Resort and Ultimate Escapes Holdings entered into a voting agreement, pursuant to which, until October 28, 2012, our board of directors is set at six directors, and the SAAC founders or their respective affiliates have the right to nominate two individuals for appointment to our board of directors following the Acquisition and Ultimate Resort or its affiliates have the right to nominate four individuals for appointment to our board of directors following the Acquisition. Both of the nominees of the SAAC founders and two of the nominees of Ultimate Resort must be independent pursuant to the Securities and Exchange Commission and the NYSE Amex rules

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and regulations. The SAAC founders caused their nominees to be appointed to the board of directors immediately prior to the Acquisition, and Ultimate Resort caused three out of its four nominees to be appointed to the board of directors immediately prior to the Acquisition. There is one vacancy on the board of directors, which will be filled at a later date.

Secure America Acquisition Holdings Voting Agreement

On November 11, 2009, Ultimate Escapes, Ultimate Resort, Secure America Acquisition Holdings, LLC (“SAAH”) and certain direct or indirect owners of SAAH, including Mr. McMillen, entered into a voting agreement pursuant to which, among other things, SAAH granted to Ultimate Resort a proxy to vote the shares of our common stock owned by SAAH or its direct or indirect owners until November 11, 2010. Also pursuant to this voting agreement, we agreed to repay certain advances previously made by certain members of SAAH to us, in the aggregate amount of $225,000 plus interest at the rate of 6% through payment in full on January 31, 2010. We also agreed to provide to SAAH, for the benefit of certain SAAH members (including Mr. McMillen) use of an Elite Club platinum membership for a period of three years.

Indemnification Escrow

Also on October 29, 2009, we, Ultimate Escapes Holdings, the Owner Representative and SunTrust Banks, Inc., as escrow agent, entered into an indemnification and escrow agreement, which provides that the covenants, agreements and representations and warranties of a party made in or pursuant to the Contribution Agreement shall survive the closing of the Acquisition until the earlier of (i) the fifteenth day after the date we file with the SEC our Annual Report on Form 10-K for the year ending December 31, 2010 or (ii) April 15, 2011; provided, however, that certain of the representations and warranties will survive until the expiration of the applicable statutes of limitation for claims thereunder; and provided, further that certain of the representations and warranties, designated as the “Fundamental Representations,” shall survive for six years after the closing of the Acquisition. Each of us, on the one hand, and the UE Owners, jointly and severally, on the other hand (each of which is referred to as a party and for the purpose of this description of the indemnification provisions, the “indemnifying party”), have agreed to indemnify and hold the other parties (the “indemnified party,” which expression shall include its affiliates, and its or their successors and assigns and respective directors, officers, employees and agents), harmless from and against any liability, claim (including claims by third parties), demand, judgment, loss, cost, damage, or expense whatsoever (including reasonable attorneys’, consultants’ and other professional fees and disbursements of every kind, nature and description), which are referred to collectively herein as the “Damages”, that arise from (i) any breach of any representation or warranty of such indemnifying party contained in the Contribution Agreement and (ii) any fraud or intentional misconduct committed by the indemnifying party.

At the closing of the Acquisition, the UE Owners deposited into escrow a total of 717,884 ownership units of Ultimate Escapes, which are referred to as the “Escrowed Indemnification Units”. The Escrowed Indemnification Units will be used to satisfy indemnification claims pursuant to the terms of the Indemnification and Escrow Agreement. No amount shall be payable to an indemnified party unless and until the aggregate amount of all indemnifiable Damages otherwise payable to all indemnified parties exceeds $600,000, in which event the amount payable shall only be the amount in excess of $600,000. Moreover, the indemnification obligations of the UE Owners shall not in any event exceed 10% of the Retained Units (as defined in the Operating Agreement); provided that, with respect to any Damages based on breach of the Fundamental Representations or on fraud or intentional misconduct, the aggregate liability for Damages shall be 25% of the Retained Units; and provided, further, that, in no event shall the aggregate liability for Damages exceed 25% of the Retained Units.

In addition, a portion of the earn-out payable under the Operating Agreement equal to 15% of the Retained Units is subject to set-off for any claim for Damages that the SAAC indemnified parties have against the UE Owners, including, without limitation, any claim for Damages which is based on a breach of a Fundamental Representation or on fraud or intentional misconduct. This right of set-off is in addition to, and not in lieu of, the indemnification rights discussed above, however, the parties have agreed that we shall first look to any units held in escrow prior to attempting to set-off any amounts from future earn-out payments.

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The Escrowed Indemnification Units will be released from escrow on the earlier to occur of: (i) the fifteenth day after the date we file our Annual Report on Form 10-K for the year ending December 31, 2010 with the SEC, and (ii) April 15, 2011, less that portion of the units applied in satisfaction of or reserved with respect to escrow claims. With respect to any escrow claims properly and timely delivered pursuant to the Indemnification and Escrow Agreement that remain unresolved at the time of the release of Escrowed Indemnification Units, a portion of the Escrowed Indemnification Units shall remain in escrow until such claims are resolved, at which time the remaining Escrowed Indemnification Units shall be promptly returned to the UE Owners.

Private Escapes Contribution Agreement

On September 15, 2009, pursuant to the terms of an amended and restated contribution agreement among Ultimate Escapes, Private Escapes and the other parties thereto, Private Escapes, an entity controlled by Mr. Keith, contributed various assets, liabilities, properties, and rights to Ultimate Escapes Holdings in exchange for an 8% ownership interest in Ultimate Escapes Holdings. The assets contributed to Ultimate Escapes Holdings at the closing of the contribution agreement included 49 real properties, the Private Escapes destination clubs and the majority of Private Escapes’ destination club memberships. This contribution was consummated through assignments of ownership interests in subsidiaries of Private Escapes and various direct transfers of assets to Ultimate Escapes Holdings and its subsidiaries.

Real Property Leases

The corporate headquarters of Ultimate Escapes at 3501 W. Vine Street, Suite 225, Kissimmee, Florida, 34741, is leased from La Mirada Plaza, LLC, an affiliate of Mr. Tousignant, at a rate of $11,650 per month pursuant to a lease that commenced in March 2005 and expires on October 31, 2010.

CastleRock Arrangements

Through April 30, 2007, Ultimate Escapes leased certain of its employees from CastleRock Partners, LLC, an entity owned by Mr. Tousignant. Ultimate Escapes paid the direct costs for these employees without markup plus a monthly management fee of $50,000 from January 1, 2007 to April 30, 2007 (for a total management fee of $200,000 in 2007). On May 1, 2007, the lease agreement was cancelled and Ultimate Escapes entered into a new agreement with a non-related third party. During 2008, Ultimate Escapes paid a monthly management fee of $5,000 to CastleRock Partners, LLC. In addition, during 2008, Ultimate Escapes made a $40,000 advance to CastleRock Partners, LLC, which was non-interest bearing and due on demand. The amount was repaid in 2009.

Private Escapes Financing Arrangements

Private Escapes Pinnacle, LLC, a subsidiary of Private Escapes, borrowed $3.75 million from Kederike, LLC (“Kederike”), an entity in which Mr. Keith is a 50% owner, pursuant to a loan agreement dated June 1, 2006, as subsequently amended. The loan proceeds were used to pay a portion of the purchase price for the acquisition of four properties. Interest accrues on the loan at a rate equal to 1.5 percentage points over the interest rate applicable to the primary bank loan financing the acquisition of the properties. In addition, Kederike was paid a loan fee of $250,000 that was earned upon origination, has been paid loan extension and similar fees totaling $86,806, and is entitled to receive, upon the earlier of the sale of a property or the request of Kederike commencing three years after the acquisition of the property, 50% of the then-current fair market value of the property, less (i) the original purchase price of the property and (ii) 2.5% of such fair market value. Upon the consummation of the acquisition of certain assets and liabilities of Private Escapes by Ultimate Escapes on September 15, 2009, Ultimate Escapes acquired one of these four properties, and assumed liability for $234,000 of the $936,000 outstanding principal balance of the loan related to that property; the remaining three properties, and the remainder of the loan balance, were retained and assumed by an entity controlled by Mr. Keith. The maturity date of the loan was October 15, 2009; however, the parties are in the process of negotiating an extension of the maturity date.

Private Escapes Premiere Villa Cassia, a subsidiary of Private Escapes that we acquired in September 2009, borrowed $450,000 from Kederike pursuant to a loan agreement dated July 19, 2006. The loan proceeds were used to pay a portion of the purchase price for the acquisition of a property. Interest accrued on the loan

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at a rate of 15% per annum. In addition, Kederike was paid a loan origination fee of $22,500. The loan matured and was repaid in full on April 19, 2007. The total amount of interest paid under the loan was $72,563.

During 2007, Mr. Keith purchased seven properties which he leased to Private Escapes and Private Escapes assumed liability for the mortgage, but for which he remained liable as a guarantor for the mortgage, for a monthly payment equal to the amount of the mortgage payments. During 2008, all but one of these properties were purchased from Mr. Keith, at the original acquisition cost, by subsidiaries of Private Escapes. Mr. Keith continues to own the remaining property. The total lease payments made to Mr. Keith under these lease arrangements were $419,737 in 2007, $345,849 in 2008 and $151,639 during the nine months ended September 30, 2009. As part of the September 15, 2009 acquisition of certain assets and liabilities of Private Escapes by Ultimate Escapes, Ultimate Escapes acquired four of these properties. Two of the remaining properties continue to be owned by PE Holdings, an entity controlled by Mr. Keith, and Mr. Keith continues to own one property. Ultimate Escapes has negotiated new leases with PE Holdings and Mr. Keith for two of the three remaining properties. These leases will expire on March 31, 2010 and provide for a monthly rental rate equal to the monthly carrying cost of each property, which is approximately $15,000 per month per property.

Mr. Keith has executed a personal guaranty of mortgages for certain properties owned by subsidiaries of Private Escapes. As of September 30, 2009, the aggregate original loan amounts of the mortgages guaranteed by Mr. Keith were $7,490,125.

Prior to Ultimate Escapes’ acquisition of certain assets and liabilities of Private Escapes, a subsidiary of Private Escapes was a minority member in Villa Bugambilia, LLC, an entity which owns a property located in Mexico on which a condominium is being constructed. Mr. Keith currently owns a majority interest in, and is the managing member of Villa Bugambilia. Upon the closing of Ultimate Escapes’ acquisition of certain assets and liabilities of Private Escapes, Mr. Keith contributed a portion of his ownership interest (5%) in Villa Bugambilia to Ultimate Escapes, such that Mr. Keith and Ultimate Escapes have ownership interests of 71.2% and 15%, respectively.

Mr. Keith borrowed $505,001 from Private Escapes in March 2008. Mr. Keith repaid $250,000 of the principal amount of the loan in November 2008. Upon the closing of Ultimate Escapes’ acquisition of certain assets and liabilities of Private Escapes, Ultimate Escapes received a 5% equity interest in Villa Bugamabilia, and the balance of the loan amount was forgiven. No interest was paid on the loan.

In November 2008, Mr. Keith advanced $150,000 to Private Escapes in the form of short-term loans, which were repaid in full during 2008. Interest was paid on these loans at a rate of 11% per annum. The total interest paid to Mr. Keith was $949.

Registration Rights

Our founders holding a majority of the outstanding 209,804 shares held by our founders are entitled to demand that we register these shares pursuant to an agreement dated October 23, 2007. The holders of the majority of these shares may elect to exercise these registration rights at any time commencing on the date on which their shares are released from escrow (one year after the consummation of the Acquisition). In addition, these stockholders have certain “piggyback” registration rights with respect to registration statements filed by us subsequent to the date on which these shares of common stock are released from escrow.

The holders of the majority of our sponsor warrants or underlying shares are entitled to demand that we register these securities pursuant to the registration rights agreement referred to above. The holders of the majority of these securities may elect to exercise these registration rights with respect to such securities at any time. In addition, these holders will have certain “piggyback” registration rights with respect to registration statements filed subsequent to such date.

In connection with the Acquisition, on October 29, 2009, we entered into a registration rights agreement with the UE Owners, pursuant to which the UE Owners are entitled to registration rights, subject to certain limitations, with respect to shares of our common stock for which their ownership units of Ultimate Escapes Holdings may be exchanged. We have agreed, as soon as possible after the closing date of the Acquisition but in no event later than eight months from the closing date, to file a registration statement covering the shares

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of our common stock for which their ownership units of Ultimate Escapes Holdings may be exchanged. In addition, the UE Owners will have certain “piggyback” registration rights on registration statements filed by us. We will bear the expenses incurred in connection with the filing of any such registration statements.

Administrative Services

Prior to the Acquisition, we did not own any real estate or other physical property, and maintained our executive offices at 1005 North Glebe Road, Suite 550, Arlington, Virginia 22201. The cost for this space was included in the $7,500 per-month fee Homeland Security Capital Corporation charged us for general and administrative services pursuant to a letter agreement between us and Homeland Security Capital Corporation, an affiliate of Mr. McMillen.

Expenses

We will reimburse our officers, directors and existing stockholders for any out-of-pocket business expenses incurred by them in connection with certain activities on our behalf such as identifying and investigating possible target businesses and business combinations. There is no limit on the amount of accountable out-of-pocket expenses reimbursable by us.

Other than reimbursable out-of-pocket expenses payable to our officers and directors and the general and administrative services arrangement with Homeland Security Capital Corporation, no compensation or fees of any kind, including finders’ and consulting fees, were paid to any of our existing stockholders, officers or directors who owned shares of our common stock prior to the IPO, or to any of their respective affiliates, for services rendered to us prior to or with respect to the Acquisition.

All ongoing and future transactions between us and any of our officers, directors and existing stockholders or their respective affiliates, including loans by our officers, directors and existing stockholders, will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties, and such transactions or loans, including any forgiveness of loans, will require prior approval in each instance by a majority of our uninterested, “independent” directors or the members of our board of directors who do not have an interest in the transaction, in either case who have access, at our expense, to our attorneys or independent legal counsel.

JDI Second Mortgage

On April 30, 2007, Ultimate Resort issued the $10,000,000 JDI Second Mortgage. The rights and obligations of Ultimate Resort under this loan were subsequently assigned to Ultimate Escapes Holdings, the current borrower under the loan. The JDI Second Mortgage has a ten year term, with interest payable quarterly at 5% per annum and no principal payments are due until maturity on April 30, 2017. The JDI Second Mortgage, which is subordinate to the revolving loans from CapitalSource, is collateralized by a second security interest in the assets of the borrowers and in certain real property.

On October 29, 2009, JDI released Ultimate Resort from its obligations under the JDI Second Mortgage (the obligations under which had been assigned to Ultimate Escapes Holdings), and concurrently assigned its interest in the JDI Second Mortgage, as lender, to Ultimate Resort. The financial terms of the note remain unchanged. At the same time, Ultimate Resort re-acquired from JDI the minority interest in Ultimate Resort held by JDI. In consideration for the re-acquisition of the minority interest and the transfer, as lender, to Ultimate Resort of the JDI Second Mortgage, JDI received 3,123,797 ownership units of Ultimate Escapes Holdings.

We currently intend, subject to the receipt of any required consents (including the consent of the lender under our revolving credit facility), to convert the JDI Second Mortgage into shares of our common stock, at a conversion price of $6.65 per share (after giving effect to the proposed 1-for-1.5 reverse stock split). We believe that this conversion, if implemented, may increase the likelihood that we will be able to maintain our listing on the NYSE Amex, or be approved for listing on an alternate exchange, by increasing our stockholders’ equity.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information known to us regarding the beneficial ownership of our common stock as of February 9, 2010 by:

Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by them.

Beneficial ownership is determined in accordance with the rules of the SEC, and is based on a total of 1,657,664 shares of our common stock outstanding as of February 9, 2010 (after giving effect to the proposed 1-for-1.5 reverse stock split). The table also lists the applicable percentage beneficial ownership based on 8,324,331 shares of common stock outstanding upon completion of this offering, assuming no exercise of the underwriters’ over-allotment option to purchase up to an aggregate of 1,000,000 shares of common stock. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options, warrants or rights held by that person that are currently exercisable or exercisable, convertible or issuable within 60 days of February 9, 2010, are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person. Information in the following table (i) does not reflect beneficial ownership of any shares of our common stock into which earn-out units which may be issued pursuant to the Operating Agreement may be exchanged, (ii) assumes that none of the escrowed indemnification units are forfeited by the UE Owners, and (iii) does not give effect to the potential conversion of the $10 million note payable by Ultimate Escapes Holdings to Ultimate Resort into shares of our common stock.

		Prior to the Offering								After the Offering
Name and Address of Beneficial Owner(1)		Number of Shares Beneficially Owned				Approximate Percentage of Outstanding Common Stock				Approximate Percentage of Outstanding Common Stock
Executive officers and directors:
James M. Tousignant(2)			2,583,556				61.1	%			23.7	%
Richard Keith(3)			382,939				18.8	%			4.4	%
Philip Callaghan(4)			734				*				*
Robert S. Glinka			—				*				*
Ted Curtis			—				*				*
Gregg Amonette(5)			2,866				*				*
Thomas D’Ambrosio(6)			67				*				*
C. Thomas McMillen(7)			909,298				36.9	%			10.0	%
Mark Frantz(8)			1,679				*				*
Stephen Griessel(9)			—				*				*
All officers and directors as a group (10 individuals)(2)(3)(4)(5)(6)(7)(8)(9)			3,881,138				71.7	%			32.1	%
Other 5% Stockholders:
Ultimate Resort Holdings, LLC(10)			2,572,381				60.8	%			23.6	%
JDI Ultimate, L.L.C.(11)			2,082,532				55.7	%			20.0	%
Private Escapes Holdings, LLC(12)			382,872				18.8	%			4.4	%
Secure America Acquisition Holdings, LLC(13)			1,581,389				52.0	%			16.3	%
Brian Taylor(14)			1,107,634				40.0	%			11.7	%