Attached files
| file | filename |
|---|---|
| S-1/A - Secure America Acquisition CORP | v173612_s1a.htm |
| EX-5.1 - Secure America Acquisition CORP | v173612_ex5-1.htm |
| EX-21.1 - Secure America Acquisition CORP | v173612_ex21-1.htm |
| EX-23.2 - Secure America Acquisition CORP | v173612_ex23-2.htm |
| EX-23.1 - Secure America Acquisition CORP | v173612_ex23-1.htm |
Exhibit
1.1
_________
SHARES OF COMMON STOCK
ULTIMATE
ESCAPES, INC.
UNDERWRITING
AGREEMENT
February
__, 2010
Roth
Capital Partners, LLC
24
Corporate Plaza
Newport
Beach, CA 92660
As
Representative of the Underwriters
named
on Schedule A
hereto
Ladies
and Gentlemen:
Ultimate
Escapes, Inc., a corporation organized and existing under the laws of the State
of Delaware (the “Company”), confirms its
agreement, subject to the terms and conditions set forth herein, with each of
the underwriters listed on Exhibit A hereto
(collectively, the “Underwriters”), for whom Roth
Capital Partners, LLC is acting as representative (in such capacity, the “Representative”), to sell and
issue to the Underwriters an aggregate of _________ shares of common stock, par
value $.0001 per share (the “Common Stock”) of the Company
(the “Firm Shares”). The
Firm Shares are more fully described in the Registration Statement and
Prospectus referred to below.
The
offering and sale of the Common Stock contemplated by this underwriting
agreement (this “Agreement”) is referred to
herein as the “Offering.”
1.1
Firm Shares;
Over-Allotment Option.
(a) Purchase of Firm
Shares. On the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to issue and sell, severally and not jointly, to the several
Underwriters, an aggregate of ______ Firm Shares of the Company at a purchase
price of $___ per Firm Share. The Underwriters, severally and not jointly,
agree to purchase from the Company the number of Firm Shares set forth opposite
their respective names on Schedule A attached
hereto and made a part hereof at a purchase price of $___ per Firm
Share. In addition, the Representative shall receive the fees set
forth in Section 6(b)(i) hereof.
Roth
Capital Partners, LLC
February
__, 2010
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38
(b) Payment and
Delivery. Delivery and payment for the Firm Shares shall be
made at 10:00 A.M., New York time, on the third business day following the
effective date (the “Effective
Date”) of the Registration Statement (or the fourth business day
following the Effective Date, if the Registration Statement is declared
effective after 4:30 p.m.) or at such earlier time as shall be agreed upon by
the Representative and the Company at the offices of the Representative or at
such other place as shall be agreed upon by the Representative and the
Company. The hour and date of delivery and payment for the Firm Shares is
called the “Closing
Date.” The closing
of the payment of the purchase price for, and delivery of certificates
representing, the Firm Shares is referred to herein as the “Closing.” Payment for the Firm Shares
shall be made on the Closing Date at the Representative’s election by wire
transfer in Federal (same day) funds or by certified or bank cashier’s check(s)
in New York Clearing House funds. At the Closing, certificates (in
form and substance reasonably satisfactory to the Representative) representing
the Firm Shares shall be delivered to you (or through the full fast transfer
facilities of the Depository Trust Company (the “DTC”)) for the account of the
Underwriters. The Firm Shares shall be registered in such name or names
and in such authorized denominations as the Representative may request in
writing at least two business days prior to the Closing Date. The Company
shall not be obligated to sell or deliver the Firm Shares except upon tender of
payment by the Representative for all the Firm Shares.
(c) Option Shares.
For the purposes of covering any over-allotments in connection with the
distribution and sale of the Firm Shares, the Representative on behalf of the
Underwriters is hereby granted an option to purchase up to an additional 15% of
the number of Firm Shares, or ______ shares (the “Option Shares”), to be offered
by the Company in the Offering (the “Over-allotment
Option”). The Firm Shares and the Option Shares are
hereinafter collectively referred to as the “Shares”. The
purchase price to be paid for the Option Shares will be $___ per Option
Share. In addition, the Representative shall receive the fees set
forth in Section 6(b)(i) hereof.
(d) Exercise of
Option. The Over-allotment Option granted pursuant to
Section 1.1(c) hereof may be exercised by the Representative as to all (at
any time) or any part (from time to time) of the Option Shares within 30 days
after the Effective Date. The Underwriters will not be under any
obligation to purchase any Option Shares prior to the exercise of the
Over-allotment Option. The Over-allotment Option granted hereby may be
exercised by the giving of oral notice to the Company from the Representative,
which must be confirmed in writing by overnight mail or facsimile transmission
setting forth the number of Option Shares to be purchased and the date and time
for delivery of and payment for the Option Shares, which will not be later than
five business days,
and will not be earlier than two business days, after the date of the notice or
such other time as shall be agreed upon by the Company and the Representative,
at the offices of the Representative or at such other place as shall be agreed
upon by the Company and the Representative. If such delivery and payment
for the Option Shares does not occur on the Closing Date, the date and time of
the closing for such Option Shares will be as set forth in the notice
(hereinafter the “Option
Closing Date”). Upon exercise of the Over-allotment Option, subject
to the terms and conditions set forth herein, the Company will become obligated
to convey to the Underwriters, and the Underwriters will become obligated to
purchase, the number of Option Shares specified in such notice.
Roth
Capital Partners, LLC
February
__, 2010
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(e) Payment and Delivery of
Option Shares. Payment for the Option Shares shall be made on the
Option Closing Date at the Representative’s election by wire transfer in Federal
(same day) funds or by certified or bank cashier’s check(s) in New York Clearing
House funds, by deposit of the price per Option Share to the Company upon
delivery to the Underwriters of certificates (in form and substance reasonably
satisfactory to the Representative) representing the Option Shares (or through
the full fast transfer facilities of DTC) for the account of the Underwriters.
The certificates representing the Option Shares to be delivered will
be in such denominations and registered in such names as the Representative
requests not less than two Business Days prior to the Option Closing
Date.
2. Representations and
Warranties of the Company.
2.1 The
Company represents, warrants and covenants to, and agrees with, each of the
Underwriters that, as of the date hereof and as of the Closing
Date:
(a) The
Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”) a
registration statement on Form S-1 (Registration No. 333-164350), and amendments
thereto, and related preliminary prospectuses for the registration under the
Securities Act of 1933, as amended (the “Securities Act”), of the
Shares which registration statement, as so amended (including post-effective
amendments, if any), has been declared effective by the Commission and copies of
which have heretofore been delivered to the Underwriters. The
registration statement, as amended at the time it became effective, including
the prospectus, financial statements, schedules, exhibits and other information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Securities Act, is hereinafter
referred to as the “Registration
Statement.” If the Company has filed or is required pursuant
to the terms hereof to file a registration statement pursuant to Rule 462(b)
under the Securities Act registering additional Common Stock (a “Rule 462(b) Registration
Statement”), then, unless otherwise specified, any reference herein to
the term “Registration Statement” shall be deemed to include such Rule 462(b)
Registration Statement. All of the Shares have been registered under
the Securities Act pursuant to the Registration Statement or, if any Rule 462(b)
Registration Statement is filed, will be duly registered under the Securities
Act with the filing of such Rule 462(b) Registration Statement. The
Company has responded to all requests of the Commission for additional or
supplemental information. Based on communications from the
Commission, no stop order suspending the effectiveness of either the
Registration Statement or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or threatened
by the Commission. The Company, if required by the Securities Act and
the rules and regulations of the Commission (the “Rules and Regulations”),
proposes to file the Prospectus with the Commission pursuant to Rule 424(b)
under the Securities Act (“Rule
424(b)”). The prospectus, in the form in which it is to be
filed with the Commission pursuant to Rule 424(b), or, if the prospectus is not
to be filed with the Commission pursuant to Rule 424(b), the prospectus in the
form included as part of the Registration Statement at the time the Registration
Statement became effective, is hereinafter referred to as the “Prospectus,” except that if
any revised prospectus or prospectus supplement shall be provided to the
Underwriters by the Company for use in connection with the Offering which
differs from the Prospectus (whether or not such revised prospectus or
prospectus supplement is required to be filed by the Company pursuant to Rule
424(b)), the term “Prospectus” shall also refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time it is first
provided to the Underwriters for such use. Any preliminary prospectus
or prospectus subject to completion included in the Registration Statement or
filed with the Commission pursuant to Rule 424 under the Securities Act is
hereafter called a “Preliminary
Prospectus.” Any reference herein to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the exhibits incorporated by reference therein pursuant to the
Rules and Regulations on or before the effective date of the Registration
Statement, the date of such Preliminary Prospectus or the date of the
Prospectus, as the case may be. Any reference herein to the terms
“amend”, “amendment” or “supplement” with respect to the Registration Statement,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include: (i) the filing of any document under the Securities Exchange Act of
1934, as amended, and together with the Rules and Regulations promulgated
thereunder (the “Exchange
Act”) after the effective date of the Registration Statement, the date of
such Preliminary Prospectus or the date of the Prospectus, as the case may be,
which is incorporated therein by reference, and (ii) any such document so
filed. All references in this Agreement to the Registration
Statement, the Rule 462(b) Registration Statement, a Preliminary Prospectus and
the Prospectus, or any amendments or supplements to any of the foregoing shall
be deemed to include any copy thereof filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”).
Roth
Capital Partners, LLC
February
__, 2010
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(b) At
the time of the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement or the effectiveness of any post-effective amendment to
the Registration Statement, when the Prospectus is first filed with the
Commission pursuant to Rule 424(b), when any supplement to or amendment of the
Prospectus is filed with the Commission, and at the Closing Date, if any, the
Registration Statement and the Prospectus (as amended or supplemented, if
applicable) complied or will comply in all material respects with the applicable
provisions of the Securities Act, the Exchange Act and the Rules and
Regulations, and did not and will not contain an untrue statement of a material
fact and did not and will not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein: (i) in the
case of the Registration Statement, not misleading, and (ii) in the case of the
Prospectus in light of the circumstances under which they were made, not
misleading. When any Preliminary Prospectus was first filed with the
Commission (whether filed as part of the registration statement for the
registration of the Shares or any amendment thereto or pursuant to Rule 424(a)
under the Securities Act) and when any amendment thereof or supplement thereto
was first filed with the Commission, such Preliminary Prospectus and any
amendments thereof and supplements thereto complied in all material respects
with the applicable provisions of the Securities Act, the Exchange Act and the
Rules and Regulations and did not contain an untrue statement of a material fact
and did not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. No representation and
warranty is made in this subsection (b), however, with respect to any
information contained in or omitted from the Registration Statement or the
Prospectus or any related Preliminary Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of any Underwriter through the
Representative specifically for use therein. The parties acknowledge
and agree that such information provided by or on behalf of any Underwriter
consists solely of the statements in the “Underwriting” section of the
Prospectus regarding the aggregate number of Firm Shares and Option Shares that
the Underwriters have agreed to purchase, and the fourth and eleventh paragraphs
of the “Underwriting” section of the Prospectus (the “Underwriters’
Information”).
Roth
Capital Partners, LLC
February
__, 2010
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(c) The
Statutory Prospectus (as defined below) does not include, and did not include as
of the Time of Sale, any untrue statement of a material fact or omit, and did
not omit as of the Time of Sale, any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to statements in or
omissions from any Statutory Prospectus included in the Registration Statement
based upon and in conformity with the Underwriters' Information.
(d) The
Company has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Shares other
than the Statutory Prospectus and the Prospectus or other materials permitted by
the Act to be distributed by the Company. The Company has not made
and will not make any offer relating to the Shares that would constitute an
“issuer free writing prospectus,” as defined in Rule 433 under the Act, or that
would otherwise constitute a “free writing prospectus,” as defined in Rule 405
under the Act, required to be filed with the Commission.
As used
in this Agreement, the terms set forth below shall have the following
meanings:
(i) “Time of Sale” means 4:30 P.M.
(Eastern time) on the date of this Agreement.
(ii) “Statutory Prospectus” as of
any time means the prospectus that is included in the Registration Statement
immediately prior to that time. For purposes of this definition,
information contained in a form of prospectus that is deemed retroactively to be
a part of the Registration Statement pursuant to Rule 430A or 430B shall be
considered to be included in the Statutory Prospectus as of the actual time that
form of prospectus is filed with the Commission pursuant to Rule 424(b) under
the Act.
Roth
Capital Partners, LLC
February
__, 2010
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(iii) “Issuer-Represented Free Writing
Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433 under the Act, relating to the Shares that (A) is required to be filed
with the Commission by the Company, or (B) is exempt from filing pursuant to
Rule 433(d)(5)(i) under the Act because it contains a description of the Shares
or of the offering that does not reflect the final terms or pursuant to Rule
433(d)(8)(ii) because it is a “bona fide electronic road show,” as defined in
Rule 433 of the Regulations, in each case in the form filed or required to be
filed with the Commission or, if not required to be filed, in the form retained
in the Company’s records pursuant to Rule 433(g) under the Act.
(e) Each
of Kingery & Crouse P.A. (“K&C”) and McGladrey &
Pullen, LLP (“M&P”),
whose reports relating to the Company are included in the Registration
Statement, are independent public accounting firms as required by the Securities
Act, the Exchange Act and the Rules and Regulations and, to the Company’s
knowledge, such accountants are not, and were not during any periods covered by
the financial statements included in the Registration Statement, in violation of
the auditor independence requirements of the Sarbanes-Oxley Act of 2002 (“Sarb-Ox”).
(f) Subsequent
to the respective dates as of which information is presented in the Registration
Statement, the Statutory Prospectus and the Prospectus, and except as disclosed
in the Registration Statement, the Statutory Prospectus and the Prospectus: (i)
the Company has not declared, paid or made any dividends or other distributions
of any kind on or in respect of its capital stock, and (ii) there has been no
material adverse change (or, to the knowledge of the Company, any development
which has a high probability of involving a material adverse change in the
future), whether or not arising from transactions in the ordinary course of
business, in or affecting: (A) the business, condition (financial or otherwise),
results of operations, shareholders’ equity, properties or prospects of the
Company and its subsidiaries (as defined below), taken as a whole; or (B) the
long-term debt or capital stock of the Company or any of its subsidiaries (a
“Material Adverse
Change”). Since the date of the latest balance sheet presented
in the Registration Statement, the Statutory Prospectus and the Prospectus,
neither the Company nor any subsidiary has incurred or undertaken any
liabilities or obligations, whether direct or indirect, liquidated or
contingent, matured or unmatured, or entered into any transactions, including
any acquisition or disposition of any business or asset, which are material to
the Company and the subsidiaries taken as a whole, except for liabilities,
obligations and transactions which are disclosed in the Registration Statement,
the Statutory Prospectus and the Prospectus.
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Capital Partners, LLC
February
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(g) As
of the dates indicated in the Registration Statement, the Statutory Prospectus
and the Prospectus, the authorized, issued and outstanding shares of capital
stock of the Company were as set forth in the Registration Statement, the
Statutory Prospectus and the Prospectus in the section thereof captioned
“Capitalization”. All of the issued and outstanding shares of capital
stock of the Company are fully paid and non-assessable and have been duly and
validly authorized and issued, in compliance with all applicable state, federal
and foreign securities laws and not in violation of or subject to any preemptive
or similar right that does or will entitle any Person (as defined below), upon
the issuance or sale of any security, to acquire from the Company or any
subsidiary any Relevant Security. As used herein, the term “Relevant Security” means any
Common Stock or other security of the Company or any subsidiary that is
convertible into, or exercisable or exchangeable for Common Stock or equity
securities, or that holds the right to acquire any Common Stock or equity
securities of the Company or any subsidiary or any other such Relevant Security,
except for such rights as may have been fully satisfied or waived prior to the
effectiveness of the Registration Statement. As used herein,
the term “Person” means
any foreign or domestic individual, corporation, trust, partnership, joint
venture, limited liability company or other entity. Except as set
forth in, or contemplated by, the Registration Statement, the Statutory
Prospectus and the Prospectus, on the Effective Date and on the Closing Date,
there will be no options, warrants, or other rights to purchase or otherwise
acquire any authorized, but unissued Common Stock or any security convertible
into Common Stock, or any contracts or commitments to issue or sell Common Stock
or any such options, warrants, rights or convertible securities.
(h) The
Shares have been duly and validly authorized and, when issued, delivered and
paid for in accordance with this Agreement on the Closing Date, will be
duly and validly issued, fully paid and non-assessable, will have been issued in
compliance with all applicable state, federal and foreign securities laws and
will not have been issued in violation of or subject to any preemptive or
similar right that does or will entitle any Person to acquire any Relevant
Security from the Company or any subsidiary upon issuance or sale of the Shares
in the Offering. The Common Stock conform to the descriptions thereof
contained in the Registration Statement, the Statutory Prospectus and the
Prospectus.
(i) Intentionally
Omitted.
(j) All
of the material subsidiaries of the Company are set forth on Schedule 21.1 to
the Registration Statement and are the only material subsidiaries of the Company
within the meaning of Rule 405 under the Securities Act. Except as
disclosed in the Registration Statement, the Statutory Prospectus and the
Prospectus, each of the subsidiaries is owned 100% by the Company. Except for
its subsidiaries, the Company holds no ownership or other interest, nominal or
beneficial, direct or indirect, in any corporation, partnership, joint venture
or other business entity. Except as disclosed in the Registration
Statement, the Statutory Prospectus and the Prospectus, all of the issued and
outstanding shares of capital stock of, or other ownership interests in, each
subsidiary have been duly and validly authorized and issued and are fully paid
and non-assessable. Except as disclosed in the Registration
Statement, the Statutory Prospectus and the Prospectus, all of the issued and
outstanding shares of capital stock of, or other ownership interests in, each
subsidiary have been duly and validly authorized and issued and are fully paid
and non-assessable and are owned, directly or indirectly, by the Company, free
and clear of any lien, charge, mortgage, pledge, security interest, claim,
equity, trust or other encumbrance, preferential arrangement, defect or
restriction of any kind whatsoever. Except as disclosed in the
Registration Statement, the Statutory Prospectus and the Prospectus, no
director, officer or key employee of the Company named in the Prospectus holds
any direct equity, debt or other pecuniary interest in any subsidiary or any
Person with whom the Company or any subsidiary does business or is in privity of
contract with, other than, in each case, indirectly through the ownership by
such individuals of Common Stock.
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Capital Partners, LLC
February
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(k) Each
of the Company and its subsidiaries has been duly incorporated, formed or
organized, and validly exists as a corporation, partnership or limited liability
company in good standing under the laws of its jurisdiction of incorporation,
formation or organization. Each of the Company and the subsidiaries
has all requisite power and authority to carry on its business as it is
currently being conducted and as described in the Registration Statement and the
Prospectus, and to own, lease and operate its respective
properties. Each of the Company and the subsidiaries is duly
qualified to do business and is in good standing as a foreign corporation,
partnership or limited liability company in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification necessary, except, in
each case, for those failures to be so qualified or in good standing which
(individually and in the aggregate) would not reasonably be expected to result
in a Material Adverse Change.
(l) Neither
the Company nor any subsidiary: (i) is in violation of its certificate or
articles of incorporation, by-laws, certificate of formation, limited liability
company agreement, joint venture agreement, partnership agreement or other
organizational documents, (ii) is in default under, and no event has occurred
which, with notice or lapse of time or both, would constitute a default under or
result in the creation or imposition of any lien, charge, mortgage, pledge,
security interest, claim, equity, trust or other encumbrance, preferential
arrangement, defect or restriction of any kind whatsoever (any “Lien”) upon any of its
property or assets pursuant to, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by which it
is bound or to which any of its property or assets is subject which would result
in a Material Adverse Change or (iii) is in violation in any respect of any law,
rule, regulation, ordinance, directive, judgment, decree or order of any
judicial, regulatory or other legal or governmental agency or body, foreign or
domestic which would result in a Material Adverse Change, except (in the case of
clause (ii) above) for any Lien disclosed in the Registration Statement, the
Statutory Prospectus and the Prospectus.
(m) The
Company has full right, power and authority to execute and deliver this
Agreement and all other agreements, documents, certificates and instruments
required to be delivered pursuant to this Agreement. The Company has
duly and validly authorized this Agreement and each of the transactions
contemplated by this Agreement. This Agreement has been duly and
validly executed and delivered by the Company and constitutes the legal, valid
and binding obligations of the Company and is enforceable against the Company in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
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Capital Partners, LLC
February
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(n) The
execution, delivery, and performance of this Agreement and all other agreements,
documents, certificates and instruments required to be delivered pursuant to
this Agreement, and consummation of the transactions contemplated by this
Agreement do not and will not: (i) conflict with, require consent under or
result in a breach of any of the terms and provisions of, or constitute a
default (or an event which with notice or lapse of time, or both, would
constitute a default) under, or result in the creation or imposition of any Lien
upon any property or assets of the Company or any subsidiary pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement,
instrument, franchise, license or permit to which the Company or any subsidiary
is a party or by which the Company or any subsidiary or their respective
properties, operations or assets may be bound or (ii) violate or conflict with
any provision of the certificate or articles of incorporation, by-laws,
certificate of formation, limited liability company agreement, partnership
agreement or other organizational documents of the Company or any subsidiary, or
(iii) violate or conflict with any law, rule, regulation, ordinance, directive,
judgment, decree or order of any judicial, regulatory or other legal or
governmental agency or body, domestic or foreign, except in the case of
subsections (i) and (iii) for any default, conflict or violation that would not
result in a Material Adverse Change.
(o) Except
as disclosed in the Registration Statement, the Statutory Prospectus and the
Prospectus or as would not result in a Material Adverse Change, each
of the Company and its subsidiaries has all consents, approvals, authorizations,
orders, registrations, qualifications, licenses, filings and permits of, with
and from all judicial, regulatory and other legal or governmental agencies and
bodies and all third parties, foreign and domestic (collectively, the “Consents”), to own, lease and
operate its properties and conduct its business as it is now being conducted and
as disclosed in the Registration Statement, the Statutory Prospectus and the
Prospectus, and each such Consent is valid and in full force and
effect. Neither the Company nor any subsidiary has received notice of
any investigation or proceedings which results in or, if decided adversely to
the Company or any subsidiary, could reasonably be expected to result in, the
revocation of, or imposition of a materially burdensome restriction on, any
Consent. No Consent contains a materially burdensome restriction not
adequately disclosed in the Registration Statement, the Statutory Prospectus and
the Prospectus.
(p) Each
of the Company and the subsidiaries is in compliance with all applicable laws,
rules, regulations, ordinances, directives, judgments, decrees and orders,
foreign and domestic, except for any non-compliance the consequences of which
would not result in a Material Adverse Change. Neither the Company,
nor any of its affiliates (within the meaning of Rule 144 under the Securities
Act) (“Affiliates”) has
received any notice or other information from any regulatory or other legal or
governmental agency which would reasonably be expected to result in any default
or potential decertification by the Company, or any of its
Affiliates.
(q) No
Consent of, with or from any judicial, regulatory or other legal or governmental
agency or body or any third party, foreign or domestic is required for the
execution, delivery and performance of this Agreement or consummation of each of
the transactions contemplated by this Agreement, including the issuance, sale
and delivery of the Shares to be issued, sold and delivered hereunder, except
the registration under the Securities Act of the Shares, which has become
effective, and such Consents as may be required under state securities or blue
sky laws or the by-laws and rules of the NYSE Amex, where the Common Stock has
been approved for listing, and the Financial Industry Regulatory Authority, Inc.
(“FINRA”) in connection
with the purchase and distribution of the Shares by the Underwriters, each of
which has been obtained and is in full force and effect.
Roth
Capital Partners, LLC
February
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(r) Except
as disclosed in the Registration Statement, the Statutory Prospectus and the
Prospectus, there is no judicial, regulatory, arbitral or other legal or
governmental proceeding or other litigation or arbitration, domestic or foreign,
pending to which the Company or any subsidiary is a party or of which any
property, operations or assets of the Company or any subsidiary is the subject
which are required to be disclosed in the Registration Statement, the Statutory
Prospectus and the Prospectus. To the Company’s knowledge, no such
proceeding, litigation or arbitration is threatened or
contemplated.
(s) The
financial statements, including the notes thereto, and the supporting schedules
included in the Registration Statement, the Statutory Prospectus and the
Prospectus comply in all material respects with the requirements of the
Securities Act and present fairly in all material respects the financial
position as of the dates indicated and the cash flows and results of operations
for the periods specified of (i) Ultimate Escapes Holdings, LLC and its
consolidated subsidiaries, (ii) Private Escapes Destination Clubs and its
consolidated subsidiaries and (iii) Secure America Acquisition
Corporation. Except as otherwise stated in the Registration
Statement, the Statutory Prospectus and the Prospectus, said financial
statements have been prepared in conformity with United States generally
accepted accounting principles applied on a consistent basis throughout the
periods involved, except in the case of unaudited financials which are subject
to normal year end adjustments and do not contain certain
footnotes. No other financial statements or supporting schedules are
required to be included or incorporated by reference in the Registration
Statement, the Statutory Prospectus and the Prospectus. The other
historic financial information included in the Registration Statement, the
Statutory Prospectus and the Prospectus present fairly in all material respects
the information included therein and have been prepared on a basis consistent
with that of the financial statements that are included in the Registration
Statement, the Statutory Prospectus and the Prospectus and the books and records
of the respective entities presented therein.
(t) There
are no pro forma or as adjusted financial statements which are required to be
included in the Registration Statement, the Statutory Prospectus and the
Prospectus in accordance with Regulation S-X which have not been included as so
required. The pro forma and pro forma as adjusted financial
information included in the Registration Statement, the Statutory Prospectus and
the Prospectus has been properly compiled and prepared in accordance with the
applicable requirements of the Securities Act and the Rules and Regulations and
include all adjustments necessary to present fairly in all material respects in
accordance with generally accepted accounting principles the pro forma and as
adjusted financial position of the respective entity or entities presented
therein at the respective dates indicated and their cash flows and the results
of operations for the respective periods specified. The assumptions
used in preparing the pro forma and pro forma as adjusted financial information
included in the Registration Statement, the Statutory Prospectus and the
Prospectus provide a reasonable basis for presenting the significant effects
directly attributable to the transactions or events described
therein. The related pro forma and pro forma as adjusted adjustments
give appropriate effect to those assumptions; and the pro forma and pro forma as
adjusted financial information reflect the proper application of those
adjustments to the corresponding historical financial statement
amounts.
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Capital Partners, LLC
February
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(u) The
statistical, industry-related and market-related data included in the
Registration Statement, the Statutory Prospectus and the Prospectus are based on
or derived from sources which the Company reasonably and in good faith believes
are reliable and accurate, and such data agree with the sources from which they
are derived.
(v) The Company is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act and files reports with
the Commission on the EDGAR system. The Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act and the outstanding
Common Stock is listed on the NYSE Amex. Except as otherwise stated
in the Registration Statement, the Statutory Prospectus and the Prospectus, the
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
de-listing the Common Stock from the NYSE Amex, nor has the Company received any
notification that the Commission or the NYSE Amex is contemplating terminating
such registration or listing.
(w) The
Company has established and maintains disclosure controls and procedures (as
defined in Rules 13a-14 and 15d-14 under the Exchange Act) and such controls and
procedures are, to the Company’s knowledge, effective in ensuring that material
information relating to the Company, including its subsidiaries, is made known
to the principal executive officer and the principal financial
officer. The Company has utilized such controls and procedures in
preparing and evaluating the disclosures in the Registration Statement, the
Statutory Prospectus and in the Prospectus.
(x) Except
as disclosed in the Registration Statement, the Statutory Prospectus and the
Prospectus, the Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are executed
in accordance with management’s general or specific authorization; (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with United States generally accepted accounting
principles and to maintain accountability for assets; (C) access to assets is
permitted only in accordance with management’s general or specific
authorization; and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(y) The
projections included in Registration Statement, the Statutory Prospectus and the
Prospectus (the “Projections”) were prepared by
the Company based on, to the Company’s knowledge, reasonable and
appropriate assumptions for projections of such kind, including, among other
things, (i) the Company’s anticipated future performance after the consummation
of the Offering, (ii) general business and economic conditions, (iii)
competitive forces and (iv) the actions of regulatory agencies and governmental
bodies. The Projections are based upon an analysis of the data
available to the Company, after due inquiry, at the time of the
Projections. The Company expects that the Projections will be
realized.
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Capital Partners, LLC
February
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(z) The
Company’s Board of Directors has validly appointed an audit committee whose
composition satisfies the requirements of the rules and regulations of the NYSE
Amex and the Board of Directors and/or audit committee has adopted a charter
that satisfies the requirements of the rules and regulations of the NYSE
Amex. Neither the Board of Directors nor the audit committee has been
informed, nor is any director of the Company aware, of: (i) any significant
deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect
the Company’s ability to record, process, summarize and report financial
information; or (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s
internal control over financial reporting.
(aa) The
Company has not taken, directly or indirectly, any action which constitutes or
is designed to cause or result in, or which could reasonably be expected to
constitute, cause or result in, the stabilization or manipulation of the price
of any security to facilitate the sale or resale of the Shares.
(bb) The
Company has not, prior to the date hereof, made any offer or sale of any
securities which are required to be “integrated” pursuant to the Securities Act
or the Rules and Regulations with the offer and sale of the Shares pursuant to
the Registration Statement. Except as disclosed in the Registration
Statement, the Statutory Prospectus and the Prospectus, the Company has not sold
or issued any Relevant Security during the six-month period preceding the date
of the Prospectus, including but not limited to any sales pursuant to Rule 144A
or Regulation D or S under the Securities Act, other than Common Stock issued
pursuant to employee benefit plans, qualified stock option plans or the employee
compensation plans or pursuant to outstanding options, rights or warrants as
described in the Registration Statement, the Statutory Prospectus and the
Prospectus.
(cc) Except
as disclosed in the Registration Statement, the Statutory Prospectus and the
Prospectus, no holder of any Relevant Security has any rights to require
registration of any Relevant Security as part or on account of, or otherwise in
connection with, the offer and sale of the Shares contemplated hereby, and any
such rights so disclosed have either been fully complied with by the Company or
effectively waived by the holders thereof, and any such waivers remain in full
force and effect.
(dd) To
the Company’s knowledge, there are no affiliations or associations between
(i) any member of FINRA and (ii) the Company or any of the Company’s
officers, directors or 5% or greater security holders of the Company or any
beneficial owner of the Company’s unregistered equity securities that were
acquired at any time on or after the 180th day immediately preceding the date
the Registration Statement was initially filed with the Commission, except as
disclosed in the Registration Statement, the Statutory Prospectus and the
Prospectus.
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Capital Partners, LLC
February
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(ee) The
conditions for use of Form S-1 to register the Offering under the Securities
Act, as set forth in the General Instructions to such Form, have been
satisfied.
(ff)
The Company is not and, at all times up to and including consummation of the
transactions contemplated by this Agreement, and after giving effect to
application of the net proceeds of the Offering, will not be, subject to
registration as an “investment company” under the Investment Company Act of
1940, as amended, and is not and will not be an entity “controlled” by an
“investment company” within the meaning of such act.
(gg)
No relationship, direct or
indirect, exists between or among any of the Company or any Affiliate of the
Company, on the one hand, and any director, officer, shareholder, customer or
supplier of the Company or any affiliate of the Company, on the other hand,
which is required by the Securities Act, the Exchange Act or the Rules and
Regulations to be described in the Registration Statement, the Statutory
Prospectus or the Prospectus which is not so described as
required. There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of their respective family members, except as
described in the Registration Statement, the Statutory Prospectus and the
Prospectus. The Company has not, in violation of the Sarb-Ox directly
or indirectly, including through a subsidiary (other than as permitted under the
Sarb-Ox for depositary institutions), extended or maintained credit, arranged
for the extension of credit, or renewed an extension of credit, in the form of a
personal loan to or for any director or executive officer of the
Company.
(hh) The
Company is in material compliance with the provisions of Sarb-Ox and the Rules
and Regulations promulgated thereunder and related or similar rules and
regulations promulgated by the NYSE Amex or any other governmental or self
regulatory entity or agency, except for such violations which, singly or in the
aggregate, would not result in a Material Adverse Change. Without
limiting the generality of the foregoing, to the Company’s knowledge: (i) all
members of the Company’s board of directors who are required to be “independent”
(as that term is defined under applicable laws, rules and regulations),
including, without limitation, all members of the audit committee of the
Company’s board of directors, meet the qualifications of independence as set
forth under applicable laws, rules and regulations and (ii) the audit committee
of the Company’s board of directors has at least one member who is an “audit
committee financial expert” (as that term is defined under applicable laws,
rules and regulations).
(ii) Except
as disclosed in the Registration Statement, the Statutory Prospectus and the
Prospectus, there are no contracts, agreements or understandings between the
Company and any Person that would give rise to a valid claim against the Company
or any Underwriter for a brokerage commission, finder’s fee or other like
payment in connection with the transactions contemplated by this Agreement or,
to the Company’s knowledge, any arrangements, agreements, understandings,
payments or issuance with respect to the Company or any of its officers,
directors, shareholders, partners, employees, subsidiaries or Affiliates that
may affect the Underwriters’ compensation as determined by
FINRA.
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Capital Partners, LLC
February
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(jj) The
Company and each subsidiary owns or leases all such properties as are necessary
to the conduct of its business as presently operated and as proposed to be
operated as described in the Registration Statement, the Statutory Prospectus
and the Prospectus. The Company and the subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all material personal property owned by them, in each case free and
clear of all Liens except such as are described in the Registration Statement,
the Statutory Prospectus and the Prospectus or such as do not (individually or
in the aggregate) materially affect the business or prospects of the Company or
any of its subsidiaries. All the property described in the
Registration Statement, the Statutory Prospectus and the Prospectus as being
held under lease by the Company or a Subsidiary is held thereby under valid,
subsisting and enforceable leases, except as would not result in a Material
Adverse Change and except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(kk) The
Company and each subsidiary: (i) owns or possesses adequate right to use all
patents, patent applications, trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights, licenses, formulae,
customer lists, and know-how and other intellectual property (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures, “Intellectual Property”)
necessary for the conduct of their respective businesses as being conducted and
as described in the Registration Statement, the Statutory Prospectus and
Prospectus and (ii) have no knowledge that the conduct of their respective
businesses do or will conflict with, and they have not received any notice of
any claim of conflict with, any such right of others. To the
Company’s knowledge, there is no infringement by third parties of any such
Intellectual Property; there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging the Company’s
or any subsidiary’s rights in or to any such Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis for any such
claim; and there is no pending or, to the Company’s knowledge, threatened
action, suit, proceeding or claim by others that the Company or any subsidiary
infringes or otherwise violates any patent, trademark, copyright, trade secret
or other proprietary rights of others, and the Company is unaware of any other
fact which would form a reasonable basis for any such claim; in each case which
would result in a Material Adverse Change.
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Capital Partners, LLC
February
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(ll) The
agreements and documents described in the Registration Statement, the Statutory
Prospectus and Prospectus conform in all material respects to the descriptions
thereof contained therein and there are no agreements or other documents
required to be described in the Registration Statement, the Statutory Prospectus
or the Prospectus or to be filed with the Commission as exhibits to the
Registration Statement, that have not been so described or
filed. Each material contract, agreement and license listed as an
exhibit to, described in or incorporated by reference in the Registration
Statement, the Statutory Prospectus and the Prospectus to which the Company or
any of its subsidiaries is bound is legal, valid, binding, enforceable and in
full force and effect against the Company or such Subsidiary, and to the
knowledge of the Company, each other party thereto, except as would not result
in a Material Adverse Change and except to the extent such enforceability is
subject to (i) laws of general application relating to bankruptcy, insolvency,
moratorium and the relief of debtors and (ii) the availability of specific
performance, injunctive relief and other equitable remedies. Neither
the Company nor any of its subsidiaries nor to the Company’s knowledge any other
party is in material breach or default with respect to any such contract,
agreement and license. To the Company’s knowledge, no event has
occurred which with notice or lapse of time would constitute a material breach
or default, or permit termination, modification, or acceleration, under any such
contract, agreement or license. No party has repudiated any material
provision of any such contract, agreement or license.
(mm) The
disclosures in the Registration Statement, the Statutory Prospectus and
Prospectus concerning the effects of foreign, federal, state and local
regulation on the Company’s business as currently contemplated are correct in
all material respects and do not omit to state a material fact necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading.
(nn) Each
of the Company and its subsidiaries has accurately prepared and timely filed all
federal, state, foreign and other tax returns that are required to be filed by
it and has paid or made provision for the payment of all taxes, assessments,
governmental or other similar charges, including without limitation, all sales
and use taxes and all taxes which the Company or any subsidiary is obligated to
withhold from amounts owing to employees, creditors and third parties, with
respect to the periods covered by such tax returns (whether or not such amounts
are shown as due on any tax return); in each case except as would not result in
a Material Adverse Change. No deficiency assessment with respect to a
proposed adjustment of the Company’s or any subsidiary’s federal, state, local
or foreign, taxes is pending or, to the Company’s knowledge, threatened; in each
case except as would not result in a Material Adverse Change.
(oo) No
labor disturbance by the employees of the Company or any subsidiary currently
exists or, to the Company’s knowledge, is likely to occur.
(pp) Except
as disclosed in the Registration Statement, the Statutory Prospectus and
Prospectus, the Company and each subsidiary have at all times operated their
respective businesses in material compliance with all Environmental Laws, and no
material expenditures are or will be required in order to comply
therewith. Neither the Company nor any subsidiary has received any
notice or communication that relates to or alleges any actual or potential
violation or failure to comply with any Environmental Laws that will result in a
Material Adverse Change. As used herein, the term “Environmental Laws” means all
applicable laws and regulations, including any licensing, permits or reporting
requirements, and any action by a federal state or local government entity
pertaining to the protection of the environment, protection of public health,
protection of worker health and safety, or the handling of hazardous materials,
including without limitation, the Clean Air Act, 42 U.S.C. § 7401, et seq., the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. § 9601, et seq., the Federal Water Pollution Control Act, 33 U.S.C. §
1321, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 690-1, et seq.,
and the Toxic Substances Control Act, 15 U.S.C. § 2601, et seq. or similar laws
and regulations, to the extent applicable, under the laws and regulations of any
foreign jurisdiction to which the Company and its subsidiaries are
subject.
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Capital Partners, LLC
February
__, 2010
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(qq) Except
as set forth in the Registration Statement, the Statutory Prospectus and
Prospectus, neither the Company nor any subsidiary is a party to an “employee
benefit plan,” as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 (“ERISA”) which: (i) is subject
to any provision of ERISA and (ii) is or was at any time maintained,
administered or contributed to by the Company or any subsidiary and covers any
employee or former employee of the Company or any subsidiary or any ERISA
Affiliate (as defined hereafter). These plans are referred to
collectively herein as the “Employee
Plans.” For purposes of this Section, “ERISA Affiliate” of any person
or entity means any other person or entity which, together with that person or
entity, could be treated as a single employer under Section 414(m) of the
Internal Revenue Code of 1986, as amended (the “Code”), or is an “affiliate,”
whether or not incorporated, as defined in Section 407(d)(7) of ERISA, of the
person or entity.
(rr) The
Registration Statement, the Statutory Prospectus and Prospectus identify each
employment, severance or other similar agreement, arrangement or policy and each
material plan or arrangement providing for insurance coverage (including any
self-insured arrangements), workers’ compensation, disability benefits,
severance benefits, supplemental unemployment benefits, vacation benefits,
retirement benefits or for deferred compensation, profit-sharing, bonuses, stock
options, stock appreciation or other forms of incentive compensation, or
post-retirement insurance, compensation or benefits which: (i) is not an
Employee Plan, (ii) is entered into, maintained or contributed to, as the case
may be, by the Company or any subsidiary or any of their respective ERISA
Affiliates, (iii) covers any employee or former employee of the Company or any
subsidiary or any of their respective ERISA Affiliates and (iv) is required to
be identified in the Registration Statement or the Prospectus. These
contracts, plans and arrangements are referred to collectively in this Agreement
as the “Benefit
Arrangements.”
(ss) Except
as set forth in the Registration Statement, the Statutory Prospectus and
Prospectus, there is no material liability in respect of post-retirement health
and medical benefits for retired employees of the Company or any subsidiary or
any of their respective ERISA Affiliates other than medical benefits required to
be continued under applicable law, determined using assumptions that are
reasonable in the aggregate, over the fair market value of any fund, reserve or
other assets segregated for the purpose of satisfying such liability (including
for such purposes any fund established pursuant to Section 40 1(h) of the
Code). With respect to any of the Company’s or any subsidiaries’
Employee Plans which are “group health plans” under Section 4980B of the Code
and Section 607(1) of ERISA, there has been material compliance with all
requirements imposed there under such that the Company or any subsidiary or
their respective ERISA Affiliates have no (and will not incur any) loss,
assessment, tax penalty, or other sanction with respect to any such
plan.
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Capital Partners, LLC
February
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(tt) The
execution of this Agreement or consummation of the Offering does not constitute
a triggering event under any Employee Plan or any other employment contract,
whether or not legally enforceable, which (either alone or upon the occurrence
of any additional or subsequent event) will or may result in any payment (of
severance pay or otherwise), acceleration, increase in vesting, or increase in
benefits to any current or former participant, employee or director of the
Company or any subsidiary other than an event that is not material to the
financial condition or business of the Company or any subsidiary, either
individually or taken as a whole.
(uu) Neither
the Company, any subsidiary nor, to the Company’s knowledge, any of their
respective employees or agents has at any time during the last five (5) years:
(i) made any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law, or (ii) made any
payment to any federal or state governmental officer or official or other Person
charged with similar public or quasi-public duties, other than payments that are
not prohibited by the laws of the United States of any jurisdiction
thereof.
(vv) The Company has not offered, or caused the Underwriters
to offer, the Firm Shares to any Person or entity with the intention of
unlawfully influencing: (i) a customer or supplier of the Company or any
subsidiary to alter the customer’s or supplier’s level or type of business with
the Company or any subsidiary or (ii) a journalist or publication to write or
publish favorable information about the Company, any subsidiary or its products
or services.
(ww) As
of the date hereof and as of the Closing Date, and except as contemplated by
this Agreement, neither the Company nor any subsidiary operates within the
United States or any state or territory thereof in such a manner so as to
subject the Company or its operations or businesses to registration as a foreign
company doing business in any state within the United States or to any of the
following laws in any material respect: (i) the Bank Secrecy Act, as amended,
(ii) the Uniting and Strengthening of America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, as amended, (iii) the
Foreign Corrupt Practices Act of 1977, as amended, (iv) the Currency and Foreign
Transactions Reporting Act of 1970, as amended, (v) the Employee Retirement
Income Security Act of 1974, as amended, (vi) the Money Laundering Control Act
of 1986, as amended (vii) the rules and regulations promulgated under any such
law, or any successor law, or any judgment, decree or order of any applicable
administrative or judicial body relating to such law and (viii) any
corresponding law, rule, regulation, ordinance, judgment, decree or order of any
state or territory of the United States or any administrative or judicial body
thereof.
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Capital Partners, LLC
February
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(xx) The
operations of the Company and its subsidiaries are and have been conducted at
all times in compliance with applicable financial record keeping and reporting
requirements and money laundering statutes of the United States and, to the
Company’s knowledge, all other jurisdictions to which the Company and its
subsidiaries are subject, the rules and regulations thereunder and any related
or similar rules, regulations or guidelines, issued, administered or enforced by
any applicable governmental agency (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending or, to the
knowledge of the Company, threatened.
(yy) Neither
the Company nor, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company (as such term is defined under Rule 144
under the Securities Act, an “Affiliate”) is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and the Company will
not directly or indirectly use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any joint venture partner or other
person or entity, for the purpose of
financing the activities of any person currently subject
to any U.S. sanctions administered by OFAC.
(zz) Except
as disclosed in the Registration Statement, the Statutory Prospectus and
Prospectus, the acquisition of certain of the equity interests of Ultimate
Escapes Holdings, LLC, all of the assets and business of Ultimate Resort
Holdings, LLC and the majority of the assets and business of Private Escapes
Destination Clubs fully complied with all applicable laws and regulations and
all the necessary approvals and registrations for such acquisitions had been
obtained.
(aaa) Neither
the Company nor any of its Subsidiaries own any “margin securities” as that term
is defined in Regulation U of the Board of Governors of the Federal Reserve
System (the “Federal Reserve
Board”), and none of the proceeds of the sale of the Securities will be
used, directly or indirectly, for the purpose of purchasing or carrying any
margin security, for the purpose of reducing or retiring any indebtedness which
was originally incurred to purchase or carry any margin security or for any
other purpose which might cause any of the Securities to be considered a
“purpose credit” within the meanings of Regulation T, U or X of the Federal
Reserve Board.
(bbb) As
used in this Agreement, references to matters being “material” with respect to the
Company or its subsidiaries shall mean a material event, change, condition,
status or effect related to the condition (financial or otherwise), properties,
assets (including intangible assets), liabilities, business, prospects,
operations or results of operations of the Company or the applicable
subsidiaries, either individually or taken as a whole, as the context
requires.
(ccc) As
used in this Agreement, the term “knowledge of the Company” (or
similar language) shall mean the knowledge of the officers and directors of the
Company and the applicable subsidiaries who are named in the Prospectus, with
the assumption that such officers and directors shall have made reasonable
inquiry of the matters presented (with reference to what is customary and
prudent for the applicable individuals in connection with the discharge by the
applicable individuals of their duties as officers, directors or managers of the
Company or the applicable subsidiaries).
Roth
Capital Partners, LLC
February
__, 2010
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Any
certificate signed by or on behalf of the Company and delivered to the
Underwriters or to Lowenstein Sandler PC (“Underwriters’ Counsel”) shall
be deemed to be a representation and warranty by the Company to each Underwriter
listed on Schedule
A hereto as to the matters covered thereby.
3. Reserved.
4. Offering. Upon
authorization of the release of the Firm Shares by the Representative, the
Underwriters propose to offer the Shares for sale to the public at a price of
$[●] per share, upon the terms and conditions set forth in the
Prospectus. Each Underwriter agrees that it will not make any offer
relating to the Shares that would constitute an Issuer-Represented Free Writing
Prospectus or that would otherwise (without taking into account any approval,
authorization, use or reference thereto by the Company) constitute a “free
writing prospectus” required to be filed by the Company with the Commission or
retained by the Company under Rule 433 of the Securities Act.
5. Covenants of the
Company. The Company acknowledges, covenants and agrees with
the Underwriters that:
(a) The
Registration Statement and any amendments thereto have been declared effective,
and if Rule 430A is used or the filing of the Prospectus is otherwise required
under Rule 424(b), the Company will file the Prospectus (properly completed if
Rule 430A has been used) pursuant to Rule 424(b) within the prescribed time
period and will provide evidence satisfactory to the Representative of such
timely filing.
(b) During
the period beginning on the date hereof and ending on the later of the Closing
Date or such date, as in the opinion of counsel for the Underwriter, the
Prospectus is no longer required by law to be delivered (or in lieu thereof the
notice referred to in Rule 173(a) under the Securities Act is no longer required
to be provided), in connection with sales by an underwriter or dealer (the
“Prospectus Delivery
Period”), prior to amending or supplementing the Registration Statement,
the Statutory Prospectus or the Prospectus, the Company shall furnish to the
Underwriter for review a copy of each such proposed amendment or supplement, and
the Company shall not file any such proposed amendment or supplement to which
the Underwriter reasonably object within 36 hours of delivery thereof to the
Underwriter and its counsel.
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Capital Partners, LLC
February
__, 2010
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(c) During
the Prospectus Delivery Period, the Company shall promptly advise the
Underwriter in writing (i) of the receipt of any comments of, or requests for
additional or supplemental information from, the Commission with respect to the
Registration Statement or the Prospectus, (ii) of the time and date of any
filing of any post-effective amendment to the Registration Statement or any
amendment or supplement to any Prospectus, Statutory Prospectus or the
Prospectus, (iii) of the time and date that any post-effective amendment to the
Registration Statement becomes effective and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or of any order preventing or
suspending its use or the use of any Prospectus, the Prospectus, or of any
proceedings to remove, suspend or terminate from listing the Common Stock from
any securities exchange upon which it is listed for trading, or of the
threatening or initiation of any proceedings for any of such
purposes. If the Commission shall enter any such stop order at any
time, the Company will use its reasonable efforts to obtain the lifting of such
order at the earliest possible moment. Additionally, the Company
agrees that it shall comply with the provisions of Rules 424(b), 430A and 430B,
as applicable, under the Securities Act and will use its reasonable efforts to
confirm that any filings made by the Company under Rule 424(b) or Rule 433 were
received in a timely manner by the Commission (without reliance on Rule
424(b)(8) or Rule 164(b)).
(d) During
the Prospectus Delivery Period, the Company will comply as far as it is able
with all requirements imposed upon it by the Securities Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to time in
force, and by the Exchange Act so far as necessary to permit the continuance of
sales of or dealings in the Shares as contemplated by the provisions hereof, and
the Registration Statement, the Statutory Prospectus and the
Prospectus. If during such period any event occurs as a result of
which the Prospectus would include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances then existing, not misleading, or if during such
period it is necessary or appropriate in the opinion of the Company or its
counsel or the Underwriter or counsel to the Underwriter to amend the
Registration Statement or supplement the Statutory Prospectus or the Prospectus
(or if the Prospectus is not yet available to prospective purchasers ) to comply
with the Securities Act or to file under the Exchange Act any document which
would be deemed to be incorporated by reference in the Prospectus in order to
comply with the Securities Act or the Exchange Act, the Company will promptly
notify the Underwriter and will amend the Registration Statement or supplement
the Statutory Prospectus or the Prospectus or file such document (at the expense
of the Company) so as to correct such statement or omission or effect such
compliance.
(e) The
Company will promptly deliver to the Underwriters and Underwriters’ Counsel a
signed copy of the Registration Statement, as initially filed and all amendments
thereto, including all consents and exhibits filed therewith, and will maintain
in the Company’s files manually signed copies of such documents for at least
five (5) years after the date of filing thereof. The Company will
promptly deliver to each of the Underwriters such number of copies of any
Preliminary Prospectus, the Prospectus, the Registration Statement, and all
amendments of and supplements to such documents, if any, and all documents which
are exhibits to the Registration Statement and Prospectus or any amendment
thereof or supplement thereto, as the Underwriters may reasonably
request. Prior to 10:00 A.M., New York time, on the business day next
succeeding the date of this Agreement and from time to time thereafter, the
Company will furnish the Underwriters with copies of the Prospectus in New York
City in such quantities as the Underwriters may reasonably
request.
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(f) The
Company consents to the use and delivery of the Preliminary Prospectus by the
Underwriters in accordance with Rule 430 and Section 5(b) of the Securities
Act.
(g) If
the Company elects to rely on Rule 462(b) under the Securities Act, the Company
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 of the Act by the earlier of: (i) 10:00 p.m., New York City time, on the
date of this Agreement, and (ii) the time that confirmations are given or sent,
as specified by Rule 462(b)(2).
(h) The
Company will use its best efforts, in cooperation with the Representative, at or
prior to the time of effectiveness of the Registration Statement, to qualify the
Shares for offering and sale under the securities laws relating to the offering
or sale of the Shares of such jurisdictions, domestic or foreign, as the
Representative may designate and to maintain such qualification in effect for so
long as required for the distribution thereof; except that in no event shall the
Company be obligated in connection therewith to qualify as a foreign corporation
or to execute a general consent to service of process or to subject itself to
taxation if it is otherwise not so subject.
(i) The
Company will make generally available to its security holders as soon as
practicable, but in any event not later than 15 months after the end of the
Company’s current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period that shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 of the Rules and
Regulations.
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(j) Except
as disclosed in the Registration Statutory Prospectus and the Prospectus, for a
period of one hundred eighty (180) days after the date hereof (the “Lock-Up Period”), the Company
will not directly or indirectly, (1) offer to sell, hypothecate, pledge,
announce the intention to sell, sell, contract to sell, sell any option or
contract to purchase (to the extent such option or contract to purchase is
exercisable within one year from the Closing Date), purchase any option or
contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Exchange Act, with respect to, any shares of
Common Stock, or any securities convertible into or exercisable or exchangeable
for shares of Common Stock; (2) file or cause to become effective a registration
statement under the Securities Act relating to the offer and sale of any shares
of Common Stock or securities convertible into or exercisable or exchangeable
for shares of Common Stock or (3) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clauses (1), (2) or
(3) above is to be settled by delivery of shares of Common Stock or such other
securities, in cash or otherwise, without the prior written consent of the
Underwriter (which consent may be withheld in its sole discretion), provided,
however, that the Company may (i) issue, sell and register Common Stock and
securities convertible into Common Stock pursuant to any employee stock option
plan, stock ownership plan or dividend reinvestment plan of the Company in
effect at the Time of Sale, (ii) issue Common Stock and other securities
pursuant to currently outstanding obligations, (iii) issue Common Stock and
other securities as some or all of the consideration in mergers, acquisitions or
real estate purchases and (iv) file resale registration statements for shares of
Common Stock held by holders of any securities of the Company or any rights
exercisable for or convertible or exchangeable into securities of the Company
who have the right to require the Company to register any such securities of the
Company under the Act or to include any such securities in a registration
statement to be filed by the Company, except to the extent that such holder of
securities has executed a lock up agreement with respect to such securities
pursuant to this Agreement; or (v) the purchase or sale of the Company’s
securities pursuant to a plan, contract or instruction that satisfies all of the
requirements of Rule 10b5-1(c)(1)(i)(B) that was in effect prior to the date
hereof. Notwithstanding the foregoing, for the purpose of allowing
the Underwriter to comply with FINRA Rule 2711(f)(4), if (1) during the last 17
days of the Lock-Up Period, the Company releases earnings results or publicly
announces other material news or a material event relating to the Company occurs
or (2) prior to the expiration of the Lock-Up Period, the Company announces that
it will release earnings results during the 16 day period beginning on the last
day of the Lock-Up Period, then in each case the Lock-Up Period will be extended
until the expiration of the 18 day period beginning on the date of release of
the earnings results or the public announcement regarding the material news or
the occurrence of the material event, as applicable, unless the Underwriter
waives, in writing, such extension. The Underwriter agrees to waive
such extension if the provisions of FINRA Rule 2711(f)(4) are not applicable to
the Offering. The Company agrees not to accelerate the vesting of any option or
warrant or the lapse of any repurchase right prior to the expiration of the
Lock-Up Period.
(k) During
the Prospectus Delivery Period, the Company will not issue press releases or
engage in any other publicity, without the Representative’s prior written
consent (which consent shall not be unreasonably withheld, conditioned or
delayed), other than normal and customary releases issued in the ordinary course
of the Company’s business or as required by applicable law or the rules of any
exchange on which the Common Stock is then traded.
(l) The
Company agrees to consult with the Representative as is customary within the
securities industry prior to distribution to third parties of any financial
information, news releases, and/or other publicity regarding the proposed
Offering, it being agreed that the Company shall give the Representative no less
than twelve (12) hours prior notice of any such distribution and a reasonable
opportunity during or prior to such period to review the contents of the
proposed distribution.
(m) The
Company has or will retain Continental Stock Transfer (or a transfer agent of
similar competence and quality) as transfer agent for the Shares and shall
continue to retain such transfer agent for a period of three (3) years following
the Closing Date.
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(n) The
Company will apply the net proceeds from the sale of the Shares as set forth
under the caption “Use of Proceeds” in the Prospectus. Without the
written consent of the Representative, no proceeds of the Offering will be used
to pay outstanding loans from officers, directors or shareholders or to pay any
accrued salaries or bonuses to any employees or former employees.
(o) The
Company will use its reasonable best efforts to effect and maintain the listing
of the Shares on the NYSE Amex (or a comparable exchange) for at least three (3)
years after the Closing Date.
(p) The
Company, during the period when the Prospectus is required to be delivered under
the Securities Act or the Exchange Act, will file all documents required to be
filed with the Commission pursuant to the Securities Act, the Exchange Act and
the Rules and Regulations within the time periods required thereby.
(q) The
Company will use its best efforts to do and perform all things required to be
done or performed under this Agreement by the Company prior to the Closing Date,
and to satisfy all conditions precedent to the delivery of the Firm
Shares.
(r) The
Company will not take, and will use reasonable best efforts to cause its
Affiliates not to take, directly or indirectly, any action which constitutes or
is designed to cause or result in, or which could reasonably be expected to
constitute, cause or result in, the stabilization or manipulation of the price
of any security to facilitate the sale or resale of the Shares.
(s) The
Company shall cause to be prepared and delivered to the Representative, at its
expense, within one (1) business day from the effective date of this Agreement,
an Electronic Prospectus to be used by the Underwriters in connection with the
Offering. As used herein, the term “Electronic Prospectus” means a
form of prospectus, and any amendment or supplement thereto, that meets each of
the following conditions: (i) it shall be encoded in an electronic format,
satisfactory to the Representative, that may be transmitted electronically by
the other Underwriters to offerees and purchasers of the Shares for at least the
period during which a Prospectus relating to the Shares is required to be
delivered under the Securities Act; (ii) it shall disclose the same information
as the paper prospectus and prospectus filed pursuant to EDGAR, except to the
extent that graphic and image material cannot be disseminated electronically, in
which case such graphic and image material shall be replaced in the electronic
prospectus with a fair and accurate narrative description or tabular
representation of such material, as appropriate; and (iii) it shall be in or
convertible into a paper format or an electronic format, satisfactory to the
Representative, that will allow recipients thereof to store and have
continuously ready access to the prospectus at any future time, without charge
to such recipients (other than any fee charged for subscription to the Internet
as a whole and for on-line time). The Company hereby confirms that it
has included or will include in the Prospectus filed pursuant to EDGAR or
otherwise with the Commission and in the Registration Statement at the time it
was declared effective an undertaking that, upon receipt of a request by an
investor or his or her representative within the period when a prospectus
relating to the Shares is required to be delivered under the Securities Act, the
Company shall transmit or cause to be transmitted promptly, without charge, a
paper copy of the Prospectus.
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6. Consideration; Payment of
Expenses.
(a) In
consideration of the services to be provided for hereunder, the Company shall
pay to the Underwriters or their respective designees their pro rata portion
(based on the Shares purchased) an underwriting discount of six percent (6%) as
set forth in Section 1.1(a) and (c).
(b) In
consideration of the services to be provided by the Representative hereunder,
the Company shall pay to the Representative or its designee the
following:
(i) an
advisory fee in the amount of two percent (2%) of the gross proceeds of the
Offering, or $_____ per share, for the structuring of the terms of the Offering
which amount shall be in addition to the amount set forth in Section 1.1(a) and
(c); and
(ii) an
accountable expense of up to $100,000 for all out of pocket expenses incurred by
the Representative (including but not limited to the fees and expenses of
counsel to the Underwriters).
(c) The
Representative reserves the right to reduce any item of compensation or adjust
the terms thereof as specified herein in the event that a
determination shall be made by FINRA to the effect that the Underwriters’
aggregate compensation is in excess of FINRA Rules or that the terms thereof
require adjustment.
(d) Whether
or not the transactions contemplated by this Agreement, the Registration
Statement and the Prospectus are consummated or this Agreement is terminated,
the Company hereby agrees to pay all costs and expenses incident to the
performance of its obligations hereunder, including the following:
(i) all
expenses in connection with the preparation, printing, formatting for EDGAR and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and any and all amendments and supplements thereto and the mailing
and delivering of copies thereof to the Underwriters and dealers;
(ii) all
fees and expenses in connection with the filing of Corporate Offerings Business
& Regulatory Analysis (“COBRADesk”) filings with
FINRA;
(iii) all
fees and expenses in connection with filing of the Registration Statement and
Prospectus with the Commission;
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(iv) the
fees, disbursements and expenses of the Company’s counsel and accountants in
connection with the registration of the Shares under the Securities Act and the
Offering;
(v) all
expenses in connection with the qualifications of the Shares for offering and
sale under state or foreign securities or blue sky laws, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with any blue by survey undertaken by such
counsel;
(vi) all
fees and expenses in connection with listing the Shares on the NYSE
Amex;
(vii) all
travel expenses of the Company’s officers and employees and any other expense of
the Company incurred in connection with attending or hosting meetings with
prospective purchasers of the Shares (“Road Show
Expenses”);
(viii) any
stock transfer taxes incurred in connection with this Agreement or the
Offering
(ix) the
cost of preparing stock certificates representing the Shares;
(x) the
cost and charges of any transfer agent or registrar for the Shares;
(xi) any
cost and expenses in conducting satisfactory due diligence investigation and
analysis of the Company’s officers, directors, employees, and affiliates;
and
(xii) all
other costs and expenses incident to the performance of the Company obligations
hereunder which are not otherwise specifically provided for in this Section
6.
(e) It
is understood, however, that except as provided in this Section and Sections 7,
8 and 12(d) hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel.
7. Conditions of Underwriters’
Obligations. The obligations of the Underwriters to purchase
and pay for the Firm Shares or Option Shares, as the case may be, as provided
herein shall be subject to: (i) the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date (ii) the absence from any certificates, opinions, written
statements or letters furnished to the Representative or to Underwriters’
Counsel pursuant to this Section 7 of any misstatement or omission (iii) the
performance by the Company of its obligations hereunder, and (iv) each of the
following additional conditions. For purposes of this Section 7, the
terms “Closing Date” and “Closing” shall refer to the Closing Date for the Firm
Shares or Option Shares, as the case may be, and each of the foregoing and
following conditions must be satisfied as of each Closing.
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(a) The
Registration Statement shall have become effective and all necessary regulatory
or listing approvals shall have been received not later than 5:30 P.M., New York
time, on the date of this Agreement, or at such later time and date as shall
have been consented to in writing by the Representative. If the
Company shall have elected to rely upon Rule 430A under the Securities Act, the
Prospectus shall have been filed with the Commission in a timely fashion in
accordance with the terms hereof and a form of the Prospectus containing
information relating to the description of the Shares and the method of
distribution and similar matters shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period; and, at or prior to
the Closing Date or the actual time of the Closing, no stop order suspending the
effectiveness of the Registration Statement or any part thereof, or any
amendment thereof, nor suspending or preventing the use of the Statutory
Prospectus or the Prospectus shall have been issued; no proceedings for the
issuance of such an order shall have been initiated or threatened; any request
of the Commission for additional information (to be included in the Registration
Statement, the Statutory Prospectus, the Prospectus or otherwise) shall have
been complied with to the Representative’s satisfaction; and FINRA shall have
raised no objection to the fairness and reasonableness of the underwriting terms
and arrangements.
(b) The
Representative shall have received (i) the favorable written opinion of each of
Greenberg Traurig LLP, legal counsel for the Company, dated as of the Closing
Date addressed to the Representative of the Underwriters in the form attached
hereto as Annex II, and (ii) the favorable written opinion of Weinstock &
Scavo, PC, legal counsel for the Company with respect regulatory matters, dated
as of the Closing Date, addressed to the Representative of the Underwriters in
the form attached hereto as Annex III.
(c) Intentionally
Omitted.
(d) The
Representative shall have received a certificate of the Chief Executive Officer
and Chief Financial Officer of the Company, dated as of each Closing Date to the
effect that: (i) the condition set forth in subsection (a) of this Section 7 has
been satisfied, (ii) as of the date hereof and as of the applicable Closing
Date, the representations and warranties of the Company set forth in Sections 1
and 2 hereof are accurate, (iii) as of the applicable Closing Date, all
agreements, conditions and obligations of the Company to be performed or
complied with hereunder on or prior thereto have been duly performed or complied
with, (iv) to their knowledge, no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereof has been issued
and no proceedings therefor have been initiated or threatened by the Commission,
and (v) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus there has not been any Material
Adverse Change, whether or not arising from transactions in the ordinary course
of business.
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(e) On
the date of this Agreement and on the Closing Date, the Representative shall
have received a “cold comfort” letter from each of K&C and M&P as of the
date of the date of delivery and addressed to the Underwriters and in form and
substance reasonably satisfactory to the Representative and Underwriters’
Counsel, confirming that each is an independent certified public accounting firm
with respect to the Company and its subsidiaries within the meaning of the
Securities Act and the Rules and Regulations, and stating, as of the date of
delivery (or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five (5) days prior to the date of such
letter), the conclusions and findings of such firm with respect to the financial
information and other matters relating to the Registration Statement covered by
such letter.
(f) Subsequent
to the execution and delivery of this Agreement or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been any Material Adverse Change.
(g) The
Representative shall have received a lock-up agreement from each of the
individuals listed on Schedule B hereto
(the “Lock-Up Parties”),
duly executed by the applicable Lock-Up Party, in each case substantially in the
form attached as Annex I.
(h) The
Securities shall have been approved for quotation on the NYSE Amex.
(i)
FINRA shall have confirmed that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(j)
No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any federal, state or
foreign governmental or regulatory authority that would, as of the Closing Date,
prevent the issuance or sale of the Shares; and no injunction or order of any
federal, state or foreign court shall have been issued that would, as of the
Closing Date, prevent the issuance or sale of the Shares.
(k) The
Company shall have furnished the Underwriters and Underwriters’ Counsel with
such other certificates, opinions or other documents as they may have reasonably
requested.
If any of
the conditions specified in this Section 7 shall not have been fulfilled when
and as required by this Agreement, or if any of the certificates, opinions,
written statements or letters furnished to the Representative or to
Underwriters’ Counsel pursuant to this Section 7 shall not be reasonably
satisfactory in form and substance to the Representative and to Underwriters’
Counsel, all obligations of the Underwriters hereunder may be cancelled by the
Representative at, or at any time prior to, the consummation of the
Closing. Notice of such cancellation shall be given to the Company in
writing, or by telephone. Any such telephone notice shall be
confirmed promptly thereafter in writing.
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8. Indemnification.
(a) The
Company agrees to indemnify and hold harmless the Underwriters and each Person,
if an, who controls each Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities to which such party may become subject, under the
Securities Act or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, including the information
deemed to be a part of the Registration Statement at the time of effectiveness
and at any subsequent time pursuant to Rules 430A and 430B of the Rules and
Regulations, the Statutory Prospectus, the Prospectus, or any amendment or
supplement thereto (including any documents filed under the Exchange Act and
deemed to be incorporated by reference into the Statutory Prospectus or the
Prospectus), or in any materials or information provided to investors by, or
with the approval of, the Company in connection with the marketing of the
offering of the Shares (“Marketing Materials”),
including any roadshow or investor presentations made to investors by the
Company (whether in person or electronically) or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse such indemnified party for any legal or other expenses reasonably
incurred by it in connection with investigating or defending against such loss,
claim, damage, liability or action; or (ii) in whole or in part upon any
inaccuracy in the representations and warranties of the Company contained
herein; or (iii) in whole or in part upon any failure of the Company to perform
its obligations hereunder or under law; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in the
Registration Statement, the Statutory Prospectus, the Prospectus, or any such
amendment or supplement or in any Marketing Materials, in reliance upon and in
conformity with the Underwriters' Information.
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(b) Each
Underwriter, severally and not jointly, shall indemnify and hold harmless the
Company, each of the directors of the Company, each of the officers of the
Company who shall have signed the Registration Statement, and each other Person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys’ fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with the
Underwriters’ Information; ; provided, however, that in no
case shall any Underwriter be liable or responsible for any amount in excess of
the underwriting discount applicable to the Shares to be purchased by such
Underwriter hereunder. The parties agree that such information
provided by or on behalf of any Underwriter through the Representative consists
solely of the material referred to in the last sentence of Section 1(b)
hereof.
(c) Promptly
after receipt by an indemnified party under subsection (a) or (b) above of
notice of any claims or the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the claim or the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve the indemnifying
party from any liability which it may have under this Section 8 to the extent
that it is not materially prejudiced as a result thereof and in any event shall
not relieve it from any liability that such indemnifying party may have
otherwise than on account of the indemnity agreement hereunder). In
case any such claim or action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate, at its own expense in the defense of such
action, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided however, that counsel to the
indemnifying party shall not (except with the written consent of the indemnified
party) also be counsel to the indemnified party. Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in writing by one of the
indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice of commencement of
the action, (iii) the indemnifying party does not diligently defend the action
after assumption of the defense, or (iv) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. No indemnifying party shall, without the prior
written consent of the indemnified parties, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any pending or
threatened claim, investigation, action or proceeding in respect of which
indemnity or contribution may be or could have been sought by an indemnified
party under this Section 8 or Section 9 hereof (whether or not the indemnified
party is an actual or potential party thereto), unless (x) such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such claim, investigation, action or
proceeding and (ii) does not include a statement as to or an admission of fault,
culpability or any failure to act, by or on behalf of the indemnified party, and
(y) the indemnifying party confirms in writing its indemnification obligations
hereunder with respect to such settlement, compromise or
judgment.
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9. Contribution. In
order to provide for contribution in circumstances in which the indemnification
provided for in Section 8 hereof is for any reason held to be unavailable from
any indemnifying party or is insufficient to hold harmless a party indemnified
thereunder, the Company and the Underwriters shall contribute to the aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated by
such indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, liabilities and expenses suffered by the
Company, any contribution received by the Company from Persons, other than the
Underwriters, who may also be liable for contribution, including Persons who
control the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, officers of the Company who signed the
Registration Statement and directors of the Company) as incurred to which the
Company and one or more of the Underwriters may be subject, in such proportions
as is appropriate to reflect the relative benefits received by the Company and
the Underwriters from the Offering or, if such allocation is not permitted by
applicable law, in such proportions as are appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
and the Underwriters in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits
received by the Company and the Underwriters shall be deemed to be in the same
proportion as (x) the total proceeds from the Offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
bears to (y) the underwriting discount or commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of each of the Company and of the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this
Section. The aggregate amount of losses, liabilities, claims, damages
and expenses incurred by an indemnified party and referred to above in this
Section 9 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any judicial,
regulatory or other legal or governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the
provisions of this Section 9: (i) no Underwriter shall be required to contribute
any amount in excess of the amount by which the discounts and commissions
applicable to the Shares underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission and (ii) no Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, each Person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each Person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) of the immediately preceding sentence. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties, notify each party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 9 or
otherwise. The obligations of the Underwriters to contribute pursuant
to this Section 9 are several in proportion to the respective number of Shares
to be purchased by each of the Underwriters hereunder and not
joint.
Roth
Capital Partners, LLC
February
__, 2010
Page 31
of 38
10. Underwriter
Default.
(a) If
any Underwriter or Underwriters shall default in its or their obligation to
purchase Firm Shares hereunder, and if the Firm Shares with respect to which
such default relates (the “Default Shares”) do not (after
giving effect to arrangements, if any, made by the Representative pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares,
each non-defaulting Underwriter, acting severally and not jointly, agrees to
purchase from the Company that number of Default Shares that bears the same
proportion of the total number of Default Shares then being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on Schedule A hereto
bears to the aggregate number of Firm Shares set forth opposite the names of the
non-defaulting Underwriters, subject, however, to such adjustments to eliminate
fractional shares as the Representative in its sole discretion shall
make.
Roth
Capital Partners, LLC
February
__, 2010
Page 32
of 38
(b) In
the event that the aggregate number of Default Shares exceeds 10% of the number
of Firm Shares, the Representative may in their discretion arrange for
themselves or for another party or parties (including any non-defaulting
Underwriter or Underwriters who so agree) to purchase the Default Shares on the
terms contained herein. In the event that within five calendar days
after such a default the Representative do not arrange for the purchase of the
Default Shares as provided in this Section 10, this Agreement shall thereupon
terminate, without liability on the part of the Company with respect thereto
(except in each case as provided in Sections 5, 7, 8, 10 and 12(d)) or the
Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter or Underwriters of its or their liability, if any, to the other
Underwriters and the Company for damages occasioned by its or their default
hereunder.
(c) In
the event that any Default Shares are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
the Representative or the Company shall have the right to postpone the Closing
Date for a period, not exceeding five (5) business days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus or in any other documents and arrangements, and the Company
agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the reasonable opinion of Underwriters’
Counsel, may thereby be made necessary or advisable. The term
“Underwriter” as used in this Agreement shall include any party substituted
under this Section 10 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares.
11. Survival of Representations
and Agreements. All representations and warranties, covenants
and agreements of the Company and the Underwriters contained in this Agreement
or in certificates of officers of the Company or any subsidiary submitted
pursuant hereto, including the agreements contained in Section 6, the indemnity
agreements contained in Section 8 and the contribution agreements contained in
Section 9 hereof, shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any Underwriter or any controlling
Person thereof or by or on behalf of the Company, any of its officers and
directors or any controlling Person thereof, and shall survive delivery of and
payment for the Shares to and by the Underwriters. The
representations contained in Section 2 hereof and the covenants and agreements
contained in Sections 5, 6, 8, 9, this Section 11 and Sections 15 and 16 hereof
shall survive any termination of this Agreement, including termination pursuant
to Section 10 or 12 hereof.
12. Effective Date of Agreement;
Termination.
(a) This
Agreement shall become effective upon the later of: (i) receipt by the
Representative and the Company of notification of the effectiveness of the
Registration Statement or (ii) the execution of this
Agreement. Notwithstanding any termination of this Agreement, the
provisions of this Section 12 and of Sections 1, 5, 7, 8 and 12 through 17,
inclusive, shall remain in full force and effect at all times after the
execution hereof.
Roth
Capital Partners, LLC
February
__, 2010
Page 33
of 38
(b) The
Representative shall have the right to terminate this Agreement at any time
prior to the consummation of the Closing
if: (i) any domestic or international event or act or occurrence has materially
disrupted, or in the opinion of the Representative will in the immediate future
materially disrupt, the market for the Company’s securities or securities in
general; or (ii) trading on the New York Stock Exchange, the Nasdaq Stock Market
or the NYSE Amex shall have been suspended or been made subject to material
limitations, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, on the New
York Stock Exchange, the Nasdaq Stock Market or the NYSE Amex or by order of the
Commission or any other governmental authority having jurisdiction; or (iii) a
banking moratorium has been declared by any state or federal authority or if any
material disruption in commercial banking or securities settlement or clearance
services shall have occurred; (iv) any downgrading shall have occurred in the
Company’s corporate credit rating or the rating accorded the Company’s debt
securities or trust preferred stock by any “nationally recognized statistical
rating organization” (as defined for purposes of Rule 436(g) under the
Securities Act) or if any such organization shall have been publicly announced
that it has under surveillance or review, with possible negative implications,
its rating of any of the Company’s debt securities; or (v) (A) there shall have
occurred any outbreak or escalation of hostilities or acts of terrorism
involving the United States or there is a declaration of a national emergency or
war by the United States or (B) there shall have been any other calamity or
crisis or any change in political, financial or economic conditions if the
effect of any such event in (A) or (B), in the judgment of the Representative,
is so material and adverse that such event makes it impracticable or
inadvisable to proceed with the offering, sale and delivery of the Firm Shares
on the terms and in the manner contemplated by the Prospectus.
(c) Any
notice of termination pursuant to this Section 12 shall be in
writing.
(d) If
this Agreement shall be terminated pursuant to any of the provisions hereof
(other than pursuant to Section 10(b) hereof), or if the sale of the Shares
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth herein is not satisfied or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof, the Company will, subject to demand by the
Representative, reimburse the Underwriters for only those out-of-pocket expenses
(including the fees and expenses of their counsel), actually incurred by the
Underwriters in connection herewith up to $100,000 less any amounts previously
paid by the Company.
13. Notices. All
communications hereunder, except as may be otherwise specifically provided
herein, shall be in writing, and:
(a) if
sent to the Representative or any Underwriter, shall be mailed, delivered, or
faxed and confirmed in writing, to Roth Capital Partners,
LLC, 24 Corporate Plaza, Newport Beach, CA 92660, Attention: Managing
Director, with a copy to Underwriters’ Counsel at Lowenstein Sandler PC, 65
Livingston Avenue, Roseland, New Jersey, Attention: Steven M. Skolnick, Esq.;
and
(b) if
sent to the Company, shall be mailed, delivered, or faxed and confirmed in
writing to the Company and its counsel at the addresses set forth in the
Registration Statement;
provided, however, that any
notice to an Underwriter pursuant to Section 8 shall be delivered or sent by
mail or facsimile transmission to such Underwriter at its address set forth in
its acceptance facsimile to the Representative, which address will be supplied
to any other party hereto by the Representative upon request. Any
such notices and other communications shall take effect at the time of receipt
thereof.
Roth
Capital Partners, LLC
February
__, 2010
Page 34
of 38
14. Parties; Limitation of
Relationship. This Agreement shall inure solely to the benefit
of, and shall be binding upon, the Underwriters, the Company and the controlling
Persons, directors, officers, employees and agents referred to in Sections 7 and
8 hereof, and their respective successors and assigns, and no other Person shall
have or be construed to have any legal or equitable right, remedy or claim under
or in respect of or by virtue of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof
are intended to be for the sole and exclusive benefit of the parties hereto and
said controlling Persons and their respective successors, officers, directors,
heirs and legal Representative, and it is not for the benefit of any other
Person. The term “successors and assigns” shall not include a
purchaser, in its capacity as such, of Units from any of the
Underwriters.
15. Governing
Law. This Agreement shall be deemed to have been executed and
delivered in New York and both this Agreement and the transactions contemplated
hereby shall be governed as to validity, interpretation, construction, effect,
and in all other respects by the laws of the State of New York, without regard
to the conflicts of laws principals thereof (other than Section 5-1401 of The
New York General Obligations Law). Each of the Underwriters and the
Company: (a) agrees that any legal suit, action or proceeding arising out of or
relating to this Agreement and/or the transactions contemplated hereby shall be
instituted exclusively in the Supreme Court of the State of New York, New York
County, or in the United States District Court for the Southern District of New
York, (b) waives any objection which it may have or hereafter to the venue of
any such suit, action or proceeding, and (c) irrevocably consents to the
jurisdiction of Supreme Court of the State of New York, New York County, or in
the United States District Court for the Southern District of New York in any
such suit, action or proceeding. Each of the Underwriters and the
Company further agrees to accept and acknowledge service of any and all process
which may be served in any such suit, action or proceeding in the Supreme Court
of the State of New York, New York County, or in the United States District
Court for the Southern District of New York and agrees that service of process
upon the Company mailed by certified mail to the Company’s address or delivered
by Federal Express via overnight delivery shall be deemed in every respect
effective service of process upon the Company, in any such suit, action or
proceeding, and service of process upon the Underwriters mailed by certified
mail to the Underwriters’ address or delivered by Federal Express via overnight
delivery shall be deemed in every respect effective service process upon the
Underwriter, in any such suit, action or proceeding. THE COMPANY (ON
BEHALF OF ITSELF, THE SUBSIDIARIES AND, TO THE FULLEST EXTENT PERMITTED BY LAW,
ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVE ANY RIGHT
THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS.
Roth
Capital Partners, LLC
February
__, 2010
Page 35
of 38
16. Entire
Agreement. This Agreement, together with the schedule and
exhibits attached hereto and as the same may be amended from time to time in
accordance with the terms hereof, contains the entire agreement among the
parties hereto relating to the subject matter hereof and there are no other or
further agreements outstanding not specifically mentioned
herein. Without limited the generality of the foregoing, the
engagement letter between the Company and the Representation dated December 30,
2009 is hereby terminated and of no further force or effect.
17. Severability. If
any term or provision of this Agreement or the performance thereof shall be
invalid or unenforceable to any extent, such invalidity or unenforceability
shall not affect or render invalid or unenforceable any other provision of this
Agreement and this Agreement shall be valid and enforced to the fullest extent
permitted by law.
18. Amendment. This
Agreement may only be amended by a written instrument executed by each of the
parties hereto.
19. Waiver, etc.
The failure of any of the parties hereto to at any time enforce any of the
provisions of this Agreement shall not be deemed or construed to be a waiver of
any such provision, nor to in any way effect the validity of this Agreement or
any provision hereof or the right of any of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any
breach, non-compliance or non-fulfillment of any of the provisions of this
Agreement shall be effective unless set forth in a written instrument executed
by the party or parties against whom or which enforcement of such waiver is
sought; and no waiver of any such breach, non-compliance or non-fulfillment
shall be construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
20. No Fiduciary
Relationship. The Company hereby acknowledges that the Underwriters are
acting solely as underwriters in connection with the offering of the Company’s
securities. The Company further acknowledge that the Underwriters are acting
pursuant to a contractual relationship created solely by this Agreement entered
into on an arm’s length basis and in no event do the parties intend that the
Underwriters act or be responsible as a fiduciary to the Company, its
management, shareholders, creditors or any other person in connection with any
activity that the Underwriters may undertake or have undertaken in furtherance
of the offering of the Company’s securities, either before or after the date
hereof,. The Underwriters hereby expressly disclaim any fiduciary or similar
obligations to the Company, either in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions,
and the Company hereby confirms its understanding and agreement to that effect.
The Company hereby further confirms its understand that no Underwriter has
assumed an advisory or fiduciary responsibility in favor of the Company with
respect to the Offering contemplated hereby or the process leading thereto,
including any negotiation related to the pricing of the Units; and the Company
has consulted its own legal and financial advisors to the extent it has deemed
appropriate in connection with this Agreement and the Offering. The Company and
the Underwriters agree that they are each responsible for making their own
independent judgments with respect to any such transactions, and that any
opinions or views expressed by the Underwriters to the Company regarding such
transactions, including but not limited to any opinions or views with respect to
the price or market for the Company’s securities, do not constitute advice or
recommendations to the Company. The Company hereby waives and releases, to the
fullest extent permitted by law, any claims that the Company may have against
the Underwriters with respect to any breach or alleged breach of any fiduciary
or similar duty to the Company in connection with the transactions contemplated
by this Agreement or any matters leading up to such
transactions.
Roth
Capital Partners, LLC
February
__, 2010
Page 36
of 38
21. Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument. Delivery of a signed counterpart of this
Agreement by facsimile transmission shall constitute valid and sufficient
delivery thereof.
22. Headings. The
headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this
Agreement.
23. Time is of the
Essence. Time shall be of the essence of this
Agreement. As used herein, the term “business day” shall mean any day
other than a Saturday, Sunday or any day on which the major stock exchanges in
New York, New York are not open for business.
[Signature
Pages Follow]
Roth
Capital Partners, LLC
February
__, 2010
Page 37
of 38
If the
foregoing correctly sets forth your understanding, please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
|
Very
truly yours,
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||
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ULTIMATE
ESCAPES, INC.
|
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By:
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Name:
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Title:
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Roth
Capital Partners, LLC
February
__, 2010
Page 38
of 38
Accepted
by the Representative, acting for themselves and as
Representative
of the Underwriters named on Schedule A attached
hereto,
as
of the date first written above:
|
ROTH
CAPITAL PARTNERS, LLC
|
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By:
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Name:
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Title:
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SCHEDULE
A
Underwriters
|
Underwriter
|
Number
of Firm
Shares
to be Purchased
from
the Company
|
Over-Allotment
Option
Shares
|
||
|
Roth
Capital Partners, LLC
|
||||
|
Maxim
Group LLC
|
||||
|
Total
|
V-1