**Exhibit
      10.08**





**REVOLVING
      BRIDGE LOAN AND SECURITY AGREEMENT**





THIS
      REVOLVING BRIDGE LOAN AND SECURITY
      AGREEMENT (this "Loan Agreement") is made as of this ______ day of August,
      2007,
      among **FIFTH THIRD BANK**, a Michigan banking corporation, having
      a mailing address of 201 East Kennedy Blvd., Suite 1800, Tampa, Florida 33602
      (the "Bank"), **DEER VALLEY HOMEBUILDERS, INC.**, an Alabama
      corporation authorized to do business in the State of Florida (the "Borrower"),
      having its principal place of business at 205 Carriage Street, Guin, Alabama
      35563, and **DEER VALLEY CORPORATION**, a Florida corporation,
      having a mailing address of 4902 Eisenhower Boulevard, Suite 185, Tampa, Florida
      33634 (the "Guarantor").





**RECITALS:**





WHEREAS,
      Borrower has applied to Bank
      for a revolving bridge loan not to exceed FIVE MILLION AND NO/100 DOLLARS
      ($5,000,000.00) (the "Loan") to be evidenced by a revolving bridge note (the
      "Note") and secured accounts receivable generated by Borrower in the fulfillment
      of one or more contracts between Borrower and the State of Mississippi Emergency
      Management Agency under the “Mississippi Alternative Housing Pilot Program,”
including all proceeds thereof.  Guarantor has guaranteed Borrower's
      payment and performance of the Loan and the Bank has agreed to make the Loan
      providing certain conditions herein outlined are fully complied
      with.





NOW,
      THEREFORE, in consideration of the
      premises and covenants hereinafter contained, the parties hereto agree as
      follows:





**SECTION
      I.  RECITALS; DEFINITIONS**





1.1             **Recitals**.  The
      foregoing recitals are true and correct and incorporated herein by
      reference.





1.2             **Defined
      Terms**.  As used in this Loan Agreement, the following
      terms shall have the following meanings:





"Advance"
      shall mean the amount
      advanced by the Bank to Borrower under the terms of this Loan Agreement and
      the
      Note.





"Borrowing
      Base" shall mean, as of any
      date of determination (which date and determination shall be in the Bank's
      sole
      discretion) an amount equal to 80% of Eligible Receivables. The Bank has
      bargained for and Borrower agrees and acknowledges that the Collateral not
      included in the Borrowing Base is a cushion of collateral value in excess of
      the
      secured advances under the Loan.









"Borrowing
      Base Certificate" shall mean
      a certificate prepared by Borrower in substantially the form attached hereto
      as
**Exhibit "A"**.





“Contract”
shall
      mean, collectively,
      one or more contracts by and between Borrower and the State of Mississippi
      Emergency Management Agency to construct one or more types of housing units
      under the “Mississippi Alternative Housing Pilot Program.”





"Collateral"
      shall mean all now
      existing or hereafter arising accounts receivable owed to Borrower pursuant
      to
      the Contract, together with an assignment of all income and profits in any
      manner arising therefrom, and all proceeds of said accounts
      receivable.





"Default
      Rate" shall mean the “Default
      Interest Rate” as defined in the Note.





"Eligible
      Receivables" shall mean, as
      of any date of determination, all accounts receivable due and owing to Borrower
      pursuant its performance under the Contract that are: (a) bona fide, valid
      and
      legally enforceable obligations; (b) except for the security interest in the
      Collateral granted to the Bank, solely owned by the Borrower, free and clear
      of
      any and all mortgages, liens, security interests, encumbrances, claims or rights
      of others; and (c) not the subject of any dispute, defense, offset, counterclaim
      or claim.





"Events
      of Default" shall have the
      meaning ascribed to such term in Section 8 hereof.





"Generally
      Accepted Accounting
      Principles" shall mean generally accepted accounting principles, in effect
      from
      time to time, applied on a consistent basis.





"Guarantee"
      shall mean a guarantee
      issued by each Guarantor of the loan obligations hereunder.  In the
      event that Borrower or Guarantor form any additional subsidiaries after the
      date
      of the Loan, but prior to full repayment, such subsidiaries shall also issue
      a
“Guarantee” in favor of Bank in form and substance satisfactory to
      Bank.





"Maturity
      Date" shall mean, unless
      sooner demanded by Bank after the occurrence of an Event of Default hereunder,
      6
      months from the date hereof.





"Permitted
      Liens" shall mean liens in
      favor of Lender pursuant to this Agreement.




2





**SECTION
      2.  THE LOAN**





2.1           **Revolving
      Loan**.





(a)           **Advances**.  Subject
      to the Borrowing Base limitations and subject to Bank’s receipt of a completed
      Borrowing Base Certificate, Bank may, in its discretion, make Advances to
      Borrower in accordance with the terms and conditions of this Loan Agreement,
      at
      any time and from time to time, on or after the date hereof until the Maturity
      Date, or until the occurrence of an event which with the giving of notice or
      the
      passage of time, or both, shall constitute an Event of Default.  Such
      Advances may be borrowed, re-paid and re-borrowed from time to
      time.





(b)           **Interest**.  The
      Bank shall make appropriate debits and credits to the loan account of Borrower
      corresponding to each Advance to reflect the Advances to, prepayments, payments
      by and other disbursements for the account of Borrower.  Each such
      entry shall be prima facie evidence of the principal amount of Advances
      hereunder at any time outstanding.  Each Advance shall bear interest
      from the date such Advance is made on the aggregate unpaid principal amount
      thereof until such principal amount is paid or shall become due and payable
      (whether at the stated maturity or by acceleration) pursuant to the terms of
      and
      at a rate per annum as set forth in the Note.





(c)           **Calculation**.  Interest
      on principal outstanding from time to time shall be paid monthly, and shall
      be
      calculated on the basis of a 360-day year for the actual days
      elapsed.





(d)           **Requests
      for Advances**.  Borrower shall request Advances under the
      Loan by (i) giving oral notice thereof to the Bank, and (ii) confirming such
      oral notice in writing, in form and substance satisfactory to the Bank, within
      two business days thereafter and delivering such written confirmation to the
      Bank, together with any supporting information it may reasonably request, at
      the
      above address.





(e)           **Commitment**.  The
      giving of oral notice as aforesaid shall irrevocably commit Borrower to accept
      the requested Advances under the Loan.  In the event of any
      discrepancy between any oral notice and written confirmation, the oral notice
      shall govern as to any action taken by the Bank prior to receipt of written
      confirmation.





(f)           **Limitation**.  In
      no event shall any interest charge, collected or reserved hereunder exceed
      the
      maximum rate then permitted by applicable law.





(g)           **Collateral**.  From
      the date hereof as security for the payment and the performance of the Loan,
      Borrower extends, sells, assigns, conveys, mortgages, pledges, transfers,
      grants, and re-grants to the Bank a continuing, first priority security interest
      in and to all of its respective right, title and interest in the
      Collateral.




3





**SECTION****3****.****REPRESENTATIONS AND
      WARRANTIES**.





From
      the date hereof, each of the
      Borrower and the Guarantor represent and warrant to the Bank as
      follows:





3.1           **Organization,
      Standing, Corporate Powers.**





(a)           **Duly
      Organized**.  In respect of the Borrower, it (1) is a
      corporation duly incorporated, validly existing and in good standing under
      the
      laws of the State of Alabama; (2) has all requisite power and authority,
      corporate or otherwise, to conduct its business as now being conducted and
      to
      own its properties and assets; and (3) is duly qualified to do business in
      every
      jurisdiction wherein the failure to so qualify would have a material adverse
      effect.





(b)           **Powers**.  It
      has all requisite power and authority, corporate or otherwise, to execute,
      deliver, and to perform all of its obligations under this Loan Agreement and
      under other documents or agreements relating to the transactions contemplated
      herein to which it is a party.





(c)           **Binding
      Obligation**.  This Loan Agreement and all corporate notes,
      guarantees, assignments, security agreements and all other loan and security
      agreements executed in connection therewith are legal, valid and binding
      obligations of the Borrower and enforceable in accordance with their respective
      terms, subject to the enforcement of remedies to bankruptcy, insolvency and
      other laws affecting creditors' rights generally and to moratorium laws, from
      time to time in effect, and to general equitable principles which may limit
      the
      right to obtain the remedy of specific performance.





3.2           **Authorization
      of Borrowing.**  The execution, delivery and performance of
      this Loan Agreement and the borrowings hereunder: (a) have been duly authorized
      by all requisite corporate action; (b) will not violate any provision of
      applicable law, any govern­mental rule or regulation, any order of any court
      or other agency of government to which either of such parties is subject or
      the
      articles of incorporation or by-laws of the Borrower; or (c) do not violate
      any
      provision of any indenture, agreement or other instrument to which Borrower
      is a
      party or by which Borrower or its properties or assets are bound and which
      is
      material to the conduct or operation of Borrower’s business and financial
      affairs, or conflict with, result in a breach of or constitute (with due notice
      or lapse of time or both) a default under any provision of such indenture,
      agreement or other instruments, or result in the creation or imposition of
      any
      lien, charge or encumbrance of any nature whatsoever upon the property or assets
      of the Borrower or the Guarantor, other than as provided herein.





3.3           **Financial
      Statements**.  Borrower and Guarantor have heretofore
      furnished to the Bank the financial statements which fairly present the
      financial condition and the results of operations of the Borrower and the
      Guarantor as of the date and for the
      period indicated, show all known material liabilities, direct or contingent,
      as
      of the respective dates thereof, and were prepared in accordance with Generally
      Accepted Accounting Principles applied on a consistent basis.






4





3.4           **Adverse
      Change, etc.**  There has been no material adverse change
      in the business, properties or condition (financial or otherwise) of Borrower
      or
      any Guarantor since the date of the most recent of the financial statements
      delivered to the Bank.





3.5           **Litigation**.  Except
      as set forth on Exhibit “B”, there are no actions, suits or proceedings pending
      or, to the knowledge of Borrower or any Guarantor, overtly threatened against
      or
      affecting any of them, at law or in equity, or before or by any Federal, state,
      municipal or other governmental court, tribunal, department, commission, board,
      bureau, agency or instrumentality, domestic or foreign, which involve any of
      the
      transactions herein contemplated or the possibility of any judgment or liability
      which would result in any material adverse change in the business, operations,
      properties or assets or in the financial condition of any of them, or materially
      and adversely affect the ability of any of them to perform
      hereunder.  Neither Borrower nor any Guarantor is in default with
      respect to (a) any judgment, order, writ, injunction or decree; or (b) any
      rule
      or regulation of any court or Federal, state, municipal or other governmental
      court, tribunal, department, commission, board, bureau, agency or
      instrumentality, domestic or foreign which would have a material adverse effect
      on its business, properties or condition (financial or otherwise).





3.6           **Payments
      of Taxes**.  Borrower and Guarantor have filed or caused to
      be filed all Federal, state and local tax returns that are required to be filed
      and has paid or caused to be paid all taxes as shown on such returns or on
      any
      assessment received by it, to the extent that such taxes have become due, except
      taxes the validity of which is being contested in good faith by appropriate
      proceedings and for which, in the exercise of reasonable business judgment,
      there have been set aside adequate reserves with respect to any such tax or
      assessment so contested the tax or assessment so contested shall not materially
      affect its ability to perform hereunder.





3.7           **Priority
      of Security Interest**.  Subject (a) to filing and
      recordation of the appropriate instruments in the appropriate offices of the
      proper jurisdiction or possession by the Bank or its agent where perfection
      is
      based upon possession; (b) to the enforcement of remedies to bankruptcy,
      insolvency, and other laws affecting creditors' rights generally and to
      moratorium laws, from time to time in effect; and (c) to general equitable
      principles which may limit the right to obtain the remedy of specific
      performance, each of the security interests granted to the Bank as identified
      under Section 2 of this Loan Agreement constitutes a valid first priority
      security interest or lien in and to the Collateral secured thereby, granting
      all
      rights and remedies to a secured party under the Uniform Commercial Code, as
      in
      effect in the State of Florida and Alabama, as the same may be modified or
      amended from time to time, except as otherwise permitted hereunder.






5




3.8           
      **Eligible Receivables**.  All Eligible
      Receivables included in the Borrowing Base meet the criteria for “Eligible
      Receivables” hereunder.





**SECTION****4****.****CONDITIONS OF
      LENDING**.





The
      obligation of the Bank to extend
      credit hereunder is subject to the following conditions:





4.1             **Representations
      and Warranties**.  At the date of each Advance, the
      representations and warranties set forth in Section 3 hereof shall be true
      and
      correct on and as of such date, with the same effect as though such
      representations and warranties had been made on and as of such date, except
      to
      the extent that such representations and warranties relate solely to an earlier
      date.





4.2             **Certificates**.  On
      or before the date hereof, the Bank shall have received: (a) from the Borrower:
      (1) a copy of its certificate of corporate status and Articles of Incorporation
      with all amendments, certified by the Secretary of States of Alabama and
      Florida, dated as of a recent date; (2) the certificate of its secretary or
      assistant secretary, dated the date hereof and certifying that attached thereto
      is a true and complete copy of all amendments to its Bylaws prior to the
      adoption of the resolutions by its Board of Directors authorizing the execution,
      delivery and performance of this Loan Agreement; and certification that its
      articles of incorporation have not been amended (except as provided therein)
      since the date of the last amendment thereof, if any, indicated on the
      certificate of the Secretary of State; and (b) such other documents as the
      Bank
      may reasonably request.





4.3             **No
      Default**.  At the date of each Advance, no Event of
      Default, or event which with the giving of notice or of the passage of time,
      or
      both, would constitute an Event of Default, shall have occurred and be
      continuing, and the representations and warranties of the Borrower and Guarantor
      contained herein shall remain true and correct as of such date, except to the
      extent that such representations and warranties relate to an earlier
      date.  Each request for an Advance shall constitute the confirmation
      by Borrower and Guarantor that at the date thereof the conditions contained
      in
      this Section 4.3 shall have been satisfied.





4.4             **Other
      Conditions Precedent**.  On or before the date hereof,
      there shall have been delivered to the Bank all of the financial statements,
      reports and other documents required by the Loan Commitment dated July 13,
      2007.





**SECTION****5****.****CROSS-DEFAULT AND
      CROSS-COLLATERALIZATION**.





Any
      Event of Default under the terms of
      the Loan shall constitute and hereby is declared to be an immediate and absolute
      default under the terms of all loans between Bank, Guarantor and
      Borrower.  Should an event of default occur under the terms of any of
      said loans, which event is subject to notice and cure periods, if any, failure
      to cure such event of default within such curative period shall constitute
      an
      immediate default
      under this Loan and all such other loans owed by Borrower and Guarantor to
      Bank.  Each of the foregoing loans between Bank, Borrower and/or
      Guarantor shall also be cross-collateralized, whether such loans are now
      existing or hereafter entered into between Bank, Borrower and/or Guarantor
      at
      any time.




6





**SECTION
      6.  AFFIRMATIVE COVENANTS**





From
      the date hereof and so long as the
      Loan shall be unpaid or unperformed, the Borrower and, as specified hereinbelow,
      the Guarantor, as the case may be, will:





6.1           **Existence
      and Properties.**  To the extent that the same are
      necessary for the proper and advantageous conduct of its business, do or cause
      to be done all things necessary to preserve, renew and keep in full force and
      effect its corporate existence, rights, licenses and permits and comply with
      all
      laws and regulations applicable to it and conduct and operate its business
      in
      substantially the manner in which it is presently conducted and
      operated.





6.2           **Insurance**.





(a)           Cause
      to be maintained at all times during the term of the Loan, general liability
      insurance with limits reasonably satisfactory to or as reasonably required
      by,
      Bank.





(b)           Cause
      the Collateral to be adequately insured at all times, by financially sound
      and
      reputable insurers, in an amount not less than the value thereof.





(c)           Cause
      the Bank to be a named insured to the extent of its interest in respect the
      policies of insurance required by Section 6.2(a) and (b)
      hereinabove.





6.3           **Obligations,
      Taxes and Laws**.  Pay or cause to be paid all indebtedness
      and obligations promptly and in accordance with their respective terms,
      including, without limitation, sales, use and personal property taxes as the
      same may be imposed upon the Borrower from time to time, and pay and discharge
      or cause to be paid and discharged promptly all taxes, assessments, and
      governmental charges or levies imposed upon it or in respect of its property
      before the same shall become in default, as well as all lawful claims for labor,
      materials, and supplies or otherwise which, if unpaid, might become a lien
      or
      charge upon such property or any part thereof, and timely comply with all
      applicable laws and governmental rules and regulations; provided, however,
      that
      the Borrower shall not be required to pay or discharge or cause to be paid
      or
      discharged any such tax, assessment, charge, lien or claim, or timely comply
      with the laws and governmental rules so long as the validity thereof shall
      be
      contested by appropriate legal proceedings timely initiated and conducted in
      good faith, and (a) in the case of an unpaid tax, assessment, governmental
      charge or levy, lien, encumbrance, charge or claim, such proceedings shall
      be
      effective to suspend the collection thereof from the Borrower and its property;
      (b) neither such property nor any part thereof, nor any interest therein would
      be in any danger of being sold, forfeited or lost; (c) in the case
      of a
      law and governmental rule or regulation, neither the Borrower nor the Bank
      would
      be in any danger of criminal liability for failure to comply therewith; (d)
      there shall have been established such reserve or other appropriate provision,
      if any, with respect thereto on the books of the entity involved, as shall
      be
      required by Generally Accepted Accounting Principles with respect to any such
      tax, assessment, charge, lien, claim, encumbrance, law, rule or regulation,
      so
      contested.






7





6.4           **Financial
      Statements and Reports.**  Borrower and each Guarantor
      shall maintain systems of accounting established and administered in accordance
      with Generally Accepted Accounting Principles.  The Borrower and the
      Guarantor, as appropriate, will furnish to the Bank:





(a)           Within
      120 days after the end of each fiscal year, the Borrower shall deliver to the
      Bank, audited balance sheets and statements of income, retained earnings and
      changes in financial position for such year, all of which shall be accompanied
      by supporting schedules and the unqualified opinion of independent certified
      public accountants of recognized standing reasonably acceptable to the Bank,
      together with copies of federal corporate tax returns within thirty (30) days
      of
      the filing thereof and upon filing, all filings required in accordance with
      SEC
      regulations, if any.





(b)           Within
      30****days after the end of each month, deliver to the Bank
      the following financial statements certified by the President or Vice-President
      of the Borrower as accurate to the best of his knowledge upon due inquiry and
      investigation: (1) the Borrowing Base Certificate; (2) an accounts receivable
      aging report by customer reflecting the past due status of each invoice; and
      (3)
      consolidated, interim financial statements for the Borrower; in such form and
      context as Bank may require.





(c)           Concurrently
      with the statements furnished pursuant to paragraphs (a) and (b) of this Section
      6.4, a certificate of an authorized officer of the Borrower certifying that
      to
      the best of his knowledge, no Event of Default hereunder, nor any event which
      with notice or lapse of time, or both, would constitute such an Event of
      Default, has occurred or, if such Event of Default or event has occurred,
      specifying the nature and extent thereof.





(d)           Quarterly
      covenant compliance certificates signed by an authorized officer of Borrower
      within 30 days after the end of each quarter.





(e)           Within
      120 days after the end of each fiscal year, the Guarantor
      shall  deliver to the Bank consolidated audited financial statements
      and, upon filing, all filings required in accordance with SEC regulations,
      if
      any.





(f)           Within
      30 days of filing, the Guarantors shall provide the Bank with consolidated
      annual corporate tax returns.




(g)           Promptly,
      from time to time, such other information regarding the operation, business,
      affairs and financial condition of the Borrower and the Guarantor as the Bank
      may reasonably request.




8





6.5           **Litigation
      Notice**.  Give the Bank prompt written notice of any
      action, suit or proceeding at law or in equity or by or before any governmental
      instrumentality or other agency, the outcome of which might materially adversely
      affect the operations or financial condition of the Borrower or the
      Guarantor.  The Bank has been given notice by Borrower of the
      currently pending litigation described in Exhibit "B" attached
      hereto.





6.6           **Notice
      of Default**.  Borrower and each Guarantor, as the case may
      be, shall give the Bank prompt written notice of any Event of Default hereunder,
      or any event which, with the passage of time or the giving of notice or both,
      would become such an Event of Default hereunder.





6.7           **Access
      to Premises and Inspections**.  At all reasonable times and
      as often as the Bank may reasonably request, permit or arrange for any
      authorized representative designed by the Bank to visit and inspect the
      principal office and operations of the Borrower, any of the other offices or
      properties of the Borrower, including, without limitation, the Collateral,
      and
      its books, and to make extracts from such books and to discuss the affairs,
      finances and accounts of the Borrower with its chief financial officer or such
      other person as may be designated by the chief executive or chief operating
      officer of the Borrower.





6.8           **Continued
      Assistance**.  Promptly, from time to time as the Bank may
      reasonably request, Borrower and each Guarantor shall perform such acts and
      execute, acknowledge, deliver, file, register, deposit or record any and all
      further instruments, agreements and documents whether to continue, preserve,
      renew, record or perfect the Bank's interests in the Collateral, as well as
      the
      priority thereof.





6.9           **Title
      to Collateral**.  The Borrower shall own all of the
      property constituting the security for the Loan.  All such property
      shall be and remain free and clear of all mortgages, pledges, liens, charges
      and
      other encumbrances of any nature whatsoever, except as granted to the Bank
      hereby or otherwise permitted herein.





6.10           **Financial
      Covenants**.  Until the Loan has been fully repaid to the
      Bank, Borrower, on a consolidated basis with Guarantor, shall:





(a)           **Consolidated
      Debt Service Coverage Ratio**.  Maintain a Consolidated
      Debt Service Coverage Ratio of not less than 1.25 to 1.00, measured on a rolling
      4-quarter basis.  As used herein "Consolidated Debt Service Coverage
      Ratio" shall be defined as (1) (A) Net Income, plus (B) Interest Expense, plus
      (C) Depreciation & Amortization, minus (D) Distributions, minus (E)
      Extraordinary Income/Non-Recurring Income, divided by (2) (A) Current Portion
      of
      Long Term Debt Payments, plus (2) Interest Expense (in each case, measured
      based
      upon the financial results of Borrower and Guarantor).




9





(b)           **Consolidated
      Debt to Tangible Net Worth Ratio**.  Maintain a
      Consolidated Debt to Tangible Net Worth Ratio of not more than 2.75 to
      1.00.  As used herein "Consolidated Debt to Tangible Net Worth Ratio"
      shall be defined as (1) (A) Total Liabilities, minus (B) Subordinated Debt,
      divided by (2) (A) Net Worth, plus (B) Subordinated Debt, minus (C) Intangibles,
      minus (D) Related Party Receivables (in each case, measured based upon the
      financial results of Borrower and Guarantor).





6.11         **Deposit
      Accounts**.  Borrower and Guarantor shall place on deposit
      with Bank all of their respective corporate deposit accounts (except for payroll
      accounts) making the Bank their respective primary depository
      relationships.





**SECTION
      7.  NEGATIVE COVENANTS**





From
      the date hereof and so long as any
      of the Obligations shall be unpaid, the Borrower and each Guarantor, as the
      case
      may be, will not:





7.1           **Negative
      Pledge**.  Either directly or indirectly, incur, create,
      assume or permit to exist any Liens with respect to any property securing the
      Loan or be bound by or subject to any assessments and other similar governmental
      charges or claims except as provided in Section 6.3 of this Loan Agreement
      or
      Permitted Liens.





7.2           **Sale
      or Disposition of Collateral**.  Sell, discount or
      otherwise dispose of any of the property securing the Loan or any part thereof
      except in the ordinary course of business, or incur additional material
      borrowings or enter into material leases without the prior written consent
      of
      the Bank upon terms and conditions satisfactory to the Bank.





7.3           **Organic
      Changes**.  Either directly or indirectly, (a) merge or
      consolidate the Borrower, with or into any other corporation; (b) sell (in
      bulk), lease or otherwise dispose of all or substantially all of the property
      of
      the Borrower, unless the transferee or the lessee shall be acceptable to the
      Bank, which acceptance must in writing and issued by the Bank prior to any
      such
      sale, lease or other disposition, and such transferee shall have assumed the
      Loan; or (c) without prior written consent of the Bank, sell, transfer, assign,
      or otherwise dispose, or permit the sale, transfer, assignment or disposition
      of
      the shares of the Borrower, directly or indirectly, or take any action
      whatsoever, the result of which is that the interest of the Guarantor in the
      Borrower, is changed to the extent that such shareholders fail to retain their
      current ownership interest as existing as of the date of this Loan
      Agreement.





7.4           **Distributions**.  Make
      any distributions to shareholders, whether dividends, debt repayment, stock
      re-purchase, advances or otherwise, whether directly or indirectly, without
      the
      prior written consent of the Bank other than stock dividends and distributions
      made pursuant to the Earnout Agreement dated January 18, 2006, pursuant to
      which, payments may be paid to the former owners of the Borrower, as an earnout,
      based upon the net income before taxes of the Borrower.






10


7.5           **Changes
      in Management**.  Suffer or permit any change in the
      management of Borrower as in effect on the date hereof, without the prior
      written consent of the Bank, which consent shall not be unreasonably
      withheld.





7.6           **Additional
      Indebtedness**.  Incur, create, assume or permit to exist
      any additional indebtedness in excess of $100,000.00 in the aggregate, or
      indebtedness secured by the Collateral pledged to secure the Loan, other than
      the indebtedness to the Bank and other indebtedness incurred in the normal
      course of business, without the prior written consent of Bank, except as may
      be
      permitted hereunder.





7.7           **Settlements**.  Enter
      into any transaction that materially and adversely affects the collateral
      referenced herein or the Borrower's ability to repay the Loan other than in
      the
      normal course of business.





**SECTION
      8.  EVENTS OF DEFAULT**





8.1           **Events
      of Default**.  The occurrence of any of the following
      events shall constitute an event of default (an "Event of Default")
      hereunder:





(a)           Any
      representation or warranty made in this Loan Agreement or in any report,
      certificate, financial statement or other instrument furnished in connection
      herewith at any time shall prove to be false or misleading in any material
      respect as of the time when made;





(b)           In
      the event any payment of principal, interest or other monetary obligation is
      not
      made within ten (10) days after the date when due under the Loan;





(c)           Default
      with respect to any material obligation for borrowed money or otherwise of
      the
      Borrower if the effect of such default is to accelerate the maturity of such
      indebtedness or to permit the holder or obligee thereof (or a trustee on behalf
      of such holder or obligee) to cause such indebtedness to become due prior to
      its
      stated maturity, or such material indebtedness shall not be paid as and when
      due
      and payable (in each case, giving effect to any applicable grace
      periods);





(d)           Default
      in the due observance or performance of any covenant, condition or agreement
      contained in Sections 6 and 7 of this Loan Agreement; and such default shall
      not
      be cured within 15 days after the earlier of knowledge thereof by an officer
      of
      the Borrower, or after written notice of the default is delivered by the Bank,
      but if the default is subject to cure and the cure is being diligently pursued
      by appropriate means at the end of such 15 days, then Borrower shall have an
      additional 15 days thereafter to complete the cure;





(e)           Default
      in the due observance or performance of any covenant, condition or agreement
      to
      be observed or performed pursuant to the terms of this Loan Agreement, and
      such
      default shall not be cured within 15 days after the earlier of knowledge there
      of by an officer of the Borrower, or after written notice of the default is delivered
      by the Bank, but if the default is subject to cure and the cure is being
      diligently pursued by appropriate means at the end of such 15 days, then
      Borrower shall have an additional 15 days thereafter to complete the
      cure;






11





(f)           The
      termination of its guarantee by the Guarantor or any other guarantor of Loan;
      provided, however, any such termination shall not affect the rights of the
      Bank
      and obligations of the Guarantor existing at the time of the Bank's receipt
      of
      written notice of the termination of guaranty;





(g)           The
      Borrower or Guarantor shall (1) make an assignment for the benefit of creditors,
      file a petition in bankruptcy, petition or apply to any tribunal for the
      appointment of a custodian, receiver or any trustee or shall commence any
      proceeding under any bankruptcy, reorganization, arrangement, readjustment
      of
      debt, dissolution or liquidation law or statute of any jurisdiction, whether
      now
      or hereafter in effect; or if there shall have been filed any such petition
      or
      application, or any such proceeding shall have been commenced against any of
      them in which an order for relief is entered or which remains undismissed for
      a
      period thirty (30) days or more; the Borrower or Guarantor, by any act or
      omission, shall indicate consent to, approval of or fail to timely object to,
      any such petition, application or proceeding or order for relief or for the
      appointment of a custodian, receiver or any trustee or shall suffer any such
      custodianship, receivership or trusteeship to continue undischarged for a period
      of thirty (30) days or more; (2) generally not pay its debts as such debts
      become due or admit in writing its inability to pay its debts as they mature;
      or
      (3) have concealed, removed, or permitted to be concealed or removed, any part
      of its properties or assets, with intent to hinder, delay or defraud its
      creditors or any of them, or made or suffered a transfer of any of its property
      which may be fraudulent under any bankruptcy, fraudulent conveyance or similar
      law, or shall have made any transfer of its property to or for the benefit
      of a
      creditor at a time when other creditors similarly situated have not been paid;
      or shall have suffered or permitted, while solvent, any creditor to obtain
      a
      lien upon any Collateral, through legal proceedings or distraint, which is
      not
      vacated or "bonded off" within ten (10) days from the date thereof; or (4)
      be
      "insolvent" as such term is defined in the Bankruptcy Code, 11 U.S.C.
§101(31).





8.2           **Default
      Rate**.  From and after the occurrence of an Event of
      Default, the  Loan shall accrue interest at the Default
      Rate.






















12





**SECTION
      9.  REMEDIES**





From
      and after the occurrence of an
      Event of Default:





9.1           **Termination
      of** **Advances and
      Acceleration**.  Bank may, at its sole option cease making
      Advances under this Loan Agreement and/or declare the principal of and interest
      on the Loan and all other obligations due by Borrower hereunder to be
      immediately due and payable without presentment, demand, protest or notice
      of
      any kind, all of which are hereby expressly waived, anything in this Loan
      Agreement to the contrary notwithstanding, and all amounts hereunder shall
      then
      be immediately due and payable.





9.2           **Collateral**.  With
      respect to the Collateral, Bank may:





(a)           Sell
      the Collateral at either a public or private sale, or both, by way of one or
      more contracts or transactions, for cash or on terms, in such manner and at
      such
      places (including Borrower’s premises) as Bank determines is commercially
      reasonable.  It is not necessary that the Collateral be present at any
      such sale.  Bank shall give notice of the disposition of the
      Collateral as follows:





(1)           Bank
      shall give Borrower notice in writing of the time and place of public sale,
      or,
      if the sale is a private sale or some other disposition other than a public
      sale
      is to be made of the Collateral, the time on or after which the private sale
      or
      other disposition is to be made; and





(2)           The
      notice shall be personally delivered or mailed, postage prepaid, to Borrower
      as
      provided in Section 10 below, at least ten (10) days before the earliest time
      of
      disposition set forth in the notice; no notice needs to be given prior to the
      disposition of any portion of the Collateral that is perishable or threatens
      to
      decline speedily in value or that is of a type customarily sold on a recognized
      market; provided, however, that Bank may credit bid and purchase
      the Collateral at any public sale.





(b)           Bank
      may seek the appointment of a receiver or keeper to take possession and operate,
      as applicable all or any portion of the Collateral, and to the maximum extent
      permitted by law, may seek the appointment of such a receiver without the
      requirement of prior notice or a hearing;





(c)           Bank
      shall have all other rights and remedies available to it at law or in equity
      pursuant to any other loan documents execution in connection
      herewith.  The rights and remedies of Bank hereunder shall be
      cumulative, and not exclusive. The exercise of one or more such remedies shall
      not preclude or prevent Bank from, at the same time, or at any other time,
      resorting to or exercising the same or other rights, powers, privileges or
      remedies herein granted to it or to which it might otherwise legally
      resort.






13


9.3           **Application
      of Proceeds Upon Disposition of Collateral**.  Apply, at
      Bank’s option, the proceeds of any sale of the Collateral as well as all sums
      received or collected by Bank from or on account of such Collateral and/or
      additional or substitute collateral to (a) the payment of reasonable expenses
      incurred or paid by Bank in connection with any sale, transfer or delivery
      of
      the Collateral and/or such additional or substitute collateral, and (b) the
      payment of the obligations or any part thereof, all in such order or manner
      as
      Bank in its sole discretion may determine, irrespective of the date of maturity.
      All acts done or to be done by Bank in conformity with the powers herein granted
      are hereby ratified and confirmed by Borrower.  Borrower agrees to pay
      to Bank any deficiency in the event the proceeds of any foreclosure sale of
      the
      Collateral are insufficient to satisfy the Loan obligations in full and Bank
      shall have the right to sue Borrower for such deficiency.





9.4           **Right
      to Income**.  Unless such Event of Default is waived in
      writing by Bank, Bank may, at its sole discretion, collect, receive and receipt
      for all income, interest, earnings or profits (including any dividends) now
      or
      hereafter payable upon or on account of the Collateral without any
      responsibility however for its failure to do so.  The sums or property
      so collected or received by Bank on account of the Collateral, and pursuant
      to
      this Section 9.4, shall be held and retained by Bank as further security for
      the
      Obligations and shall be deemed automatically to be Collateral under this Loan
      Agreement.





9.5          
      **Right to Setoff**.  In addition to any rights
      now or hereafter granted under applicable law and not by way of limitation
      of
      any such rights, Bank is hereby authorized by Borrower at any time or from
      time
      to time, after the occurrence of an Event of Default, without notice to
      Borrower, or to any other person, any such notice being hereby expressly waived,
      to set off and to appropriate and to apply any and all deposits (general or
      special, time or demand, including, but not limited to, indebtedness evidenced
      by certificates of deposit, in each case whether matured or unmatured) and
      any
      other Indebtedness at any time held or owing by Bank, its branches, subsidiaries
      or affiliates, for the credit or the account of Borrower against and on account
      of the obligations and liabilities of Borrower to Bank under this Loan Agreement
      and any other loan document, including, but not limited to, all claims of any
      nature or description arising out of or connected with this Loan Agreement
      or
      any other loan document, irrespective of whether or not: (a) Bank shall have
      made any demand hereunder; or (b) Bank shall have declared the principal of
      and
      interest on the Loan and the Loan Agreement and other amounts due hereunder
      to
      be due and payable.





9.6           **Bank’s
      Liability for Collateral**.  Borrower hereby agrees that so
      long as Bank complies with its obligations, if any, under the Uniform Commercial
      Code as in effect from time to time in the State of Florida or Alabama, Bank
      shall not in any way or manner be liable or responsible for: (a) the safekeeping
      of the Collateral, (b) any loss or damage thereto occurring or arising in any
      manner or fashion from any cause, (c) any diminution in the value thereof,
      (d)
      any act or default of any carrier, warehouseman, bailee, forwarding agency,
      or
      other persons, and all risk of loss, damage, or destruction of the Collateral
      shall be borne by Borrower.






14





**SECTION
      10.  NOTICES**





All
      notices, requests, demands or other
      communications to or from the parties hereto shall be deemed to have been duly
      given and made: (a) in the case of a letter sent other than by mail, when the
      letter is delivered to the party to whom it is addressed; (b) in the case of
      a
      telegram or facsimile document, when the telegram or facsimile is sent; (c)
      in
      the case of a letter sent by mail, three (3) days from the day on which the
      letter is deposited in a United States post office, certified mail, return
      receipt requested, and addressed as follows:





If
                to the Borroweror
                Guarantor:
            DEER
                VALLEY HOMEBUILDERS, INC.Attention:  Joel
                Logan, President205
                Carriage StreetGuin,
                Alabama 35563with
                a copy to:
            BUSH
                ROSS, P.A.Attention:  Brent
                A. Jones220
                S. Franklin StreetTampa,
                Florida  33602If
                to the Bank:
            FIFTH
                THIRD BANKAttention:  Chad
                Loar, Vice President201
                East Kennedy Blvd., Suite 1800Tampa,
                Florida 33602with
                a copy to:
            FISHER
                & SAULS, P.A.Attention:
                Kenneth E. Thornton100
                Second Avenue South, Suite 701St.
                Petersburg,
                Florida  33701





**SECTION
      11.  MISCELLANEOUS**





11.1         **Costs**.  The
      Borrower hereby agrees to pay to the Bank all costs and expenses of every kind
      and description incurred by the Bank in connection with the enforcement and
      protection in any legal or equitable proceeding of the rights of the Bank in
      connection with this Loan Agreement, and in connection with any action or claim
      under this Loan Agreement, or in any wise related thereto, including, without
      limitation, the reasonable fees and disbursements of counsel to the
      Bank.  In the event of litigation arising out of or related to this
      agreement, the prevailing party shall be entitled to reasonable fees and costs
      of its counsel.





11.2         **Severability**.  The
      provisions of this Loan Agreement are severable, and if any provision hereof
      shall be held by any court of competent jurisdiction to be unenforceable, such
      holding shall not affect or impair any other provision hereof.




15





11.1         **GOVERNING
      LAW**.  THIS LOAN AGREEMENT SHALL BE CONSTRUED IN
      ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF FLORIDA
      WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICT OF LAWS.





11.2         **Indemnity**.  Borrower
      agrees to indemnify and hold harmless Bank and each of its affiliates,
      employees, representatives, officers, directors, agents and attorneys (any
      of
      the foregoing shall be an "Indemnitee") from and against any and all
      claims, liabilities, losses, damages, actions, investigations, proceedings,
      attorneys’ fees and expenses (as such fees and expenses are incurred and
      irrespective of whether suit is brought) and demands by any party, including
      the
      costs of investigating and defending such claims, actions, investigations or
      proceedings, and the costs of answering any discovery served in connection
      therewith, whether or not Borrower or the person seeking indemnification is
      the
      prevailing party and whether or not the person seeking indemnification is a
      party to any such action or proceeding (a) resulting from any breach or alleged
      breach by Borrower of any representations or warranties made hereunder, or
      (b)
      arising out of (1) the Loan or otherwise under this Loan Agreement,
      including the use of the proceeds of the Loan hereunder in any fashion by
      Borrower or the performance of its obligations under the loan documents by
      Borrower, (2) allegations of any participation by Bank in the affairs of
      Borrower, or allegations that Bank has any joint liability with Borrower for
      any
      reason, or (3) any claims against Bank by any shareholder or other investor
      in
      or lender to Borrower, by any brokers or finders or investment advisers or
      investment bankers retained by Borrower or by any other third party, for any
      reason whatsoever, or (c) in connection with taxes (other than taxes imposed
      on
      the overall net income of the Bank), fees, and other charges payable in
      connection with the Loan, or the execution, delivery, and enforcement of this
      Loan Agreement, the other loan documents, and any subsequent amendments thereto
      or waivers of any of the provisions thereof, unless the person seeking
      indemnification under clause (a), (b) or (c) of this Section 11.2, is determined
      in such case to have acted or failed to act with gross negligence or willful
      misconduct by a non-appealable judicial order.





11.5         **Interpretation**.  To
      the extent not otherwise provided for hereby, the course of dealing by and
      between the Bank and the Borrower shall control in the determination and
      interpretation of the rights of the parties hereto.  Further, to the
      extent not otherwise provided for hereby nor by or inconsistent with the course
      of dealing by and between the parties hereto, the usage of trade in transactions
      substantially similar to the transactions contemplated herein shall control
      in
      the determination and interpretation of the rights of the parties
      hereto.





11.6         **Revival
      and Reinstatement of Obligations**.  If the incurrence or
      payment of the obligations by Borrower or the transfer to Bank of any property
      should for any reason subsequently be declared to be void or voidable under
      any
      state or federal law relating to creditors’ rights, including provisions of the
      bankruptcy code relating to fraudulent conveyances, preferences, or other
      voidable or recoverable payments
      of money or transfers of property (collectively, a "Voidable Transfer"),
      and if Bank is required to repay or restore, in whole or in part, any such
      Voidable Transfer, or elects to do so upon the reasonable advice of its counsel,
      then, as to any such Voidable Transfer, or the amount thereof that Bank is
      required or elects to repay or restore, and as to all costs, expenses, and
      reasonable attorneys fees of Bank related thereto, the liability of Borrower
      automatically shall be revived, reinstated, and restored and shall exist as
      though such Voidable Transfer had never been made.




16





11.7         **Attorney-in-fact**.  The
      Borrower hereby constitute any officer of the Bank as attorney-in-fact, with
      power to receive and open all mail addressed to them; to endorse their name
      on
      any notes, acceptances, checks, drafts, money orders or other evidences of
      payment or collateral that may come into the Bank's possession; to sign their
      name on any invoice or bill of lading relating to any Account Receivable, or
      on
      drafts against customers, to send requests for verification of Accounts
      Receivable to any account debtor and, to do all other acts and things necessary
      to carry out this Loan Agreement; provided, however, the Bank agrees that it
      shall not exercise the powers conferred upon in this Section 11.7 until the
      occurrence of an Event of Default, or an event which, with the giving of notice
      or the passage of time, or both, would constitute an Event of
      Default.  All acts of said attorney or designee are hereby ratified
      and approved by the Borrower and the Guarantor, and said attorney or designee
      shall not be liable for any acts of commission or omission nor for any error
      of
      judgment or mistake of fact or law, unless said attorney or designee is
      determined in such case to have acted or failed to act with gross negligence
      or
      willful misconduct by an non-appealable judicial order..  This power,
      being coupled with an interest, is irrevocable so long as any obligations,
      monetary or otherwise, remain, due to the Bank from the Borrower or the
      Guarantor.





11.8         **Headings**.  The
      name of this Loan Agreement, as well as Section headings used herein, are for
      conveniences of reference only and are not to affect the construction of, or
      be
      taken into consideration in interpreting this Loan Agreement.





11.9         **Terms**.  Any
      term used herein shall be equally applicable to both the singular and plural
      forms.





11.10       **JURY
      TRIAL**.  BORROWER, GUARANTOR AND THE BANK HEREBY
      KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVE THE RIGHT ANY
      OF
      THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION, WHETHER IN
      CONTRACT OR TORT, AT LAW OR IN EQUITY, BASED HEREON, OR ARISING OUT OF, UNDER
      OR
      IN CONNECTION WITH THIS LOAN AGREEMENT AND ANY OTHER DOCUMENT OR INSTRUMENT
      CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,
      COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
      PARTY HERETO.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK
      ENTERING INTO THIS LOAN AGREEMENT.  FURTHER, BORROWER HEREBY CERTIFIES
      THAT NO REPRE-SENTATIVE OR AGENT OF THE BANK, NOR THE BANK'S COUNSEL, HAS REPRESENTED,
      EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT, IN THE EVENT OF SUCH
      LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL
      PROVISION.  NO REPRESENTATIVE OR AGENT OF THE BANK, NOR BANK'S COUNSEL
      HAS THE AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION.








17





IN
      WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be
      executed and delivered as of the day and year first above written.





WITNESSES:
            "BORROWER"DEER
                VALLEY HOMEBUILDERS, INC.,an
                Alabama corporation_____________________________
            By:___________________________________Signature
                of Witness
            Joel
                Logan, as its President_____________________________Print
                or type Name of Witness_____________________________
            (CORPORATE
                SEAL)Signature
                of Witness_____________________________Print
                or type Name of Witness"GUARANTOR"DEER
                VALLEY CORPORATION.,a
                Florida corporation_____________________________
            By:___________________________________Signature
                of Witness
            Charles
                G. Masters, as its President____________________________Print
                or type Name of Witness_____________________________
            (CORPORATE
                SEAL)Signature
                of Witness_____________________________Print
                or type Name of Witness






18





"BANK"FIFTH
                THIRD BANK,a
                Michigan banking corporation_____________________________
            By:___________________________________Signature
                of Witness
            Chad
                Loar, as its Vice President_____________________________Print
                or type Name of Witness_____________________________
            (CORPORATE
                SEAL)Signature
                of Witness_____________________________Print
                or type Name of WitnessSTATE
                OF ALABAMACOUNTY
                OF _________________





The
      foregoing instrument was
      acknowledged before me this ____ day of August, 2007, by Joel Logan, as
      President of DEER VALLEY HOMEBUILDERS, INC., an Alabama corporation, on behalf
      of the corporation.





____
                Personally known
            _________________________________________
                Driver's License (State______)
            Notary
                Public____
                Other Identification Produced_________________
            ______________________________________________________
            Print
                or type name of Notary(SEAL)STATE
                OF FLORIDACOUNTY
                OF HILLSBOROUGH





The
      foregoing instrument was
      acknowledged before me this ____ day of August, 2007, by Charles G. Masters,
      as
      President of DEER VALLEY CORPORATION, a Florida corporation, on behalf of the
      corporation.





____
                Personally known
            _________________________________________
                Florida Driver's License
            Notary
                Public____
                Other Identification Produced_________________
            ______________________________________________________
            Print
                or type name of Notary(SEAL)





19


STATE
                OF FLORIDACOUNTY
                OF HILLSBOROUGH





The
      foregoing instrument was
      acknowledged before me this ___ day of August, 2007, by Chad Loar, as Vice
      President of FIFTH THIRD BANK, a Michigan banking corporation, on behalf of
      the
      Bank.





____
                Personally known
            _________________________________________
                Florida Driver's License
            Notary
                Public____
                Other Identification Produced_________________
            ______________________________________________________
            Print
                or type name of Notary(SEAL)








ATTACHMENTS:


Exhibit
      "A" - Borrowing Base
      Certificate


Exhibit
      "B" - Litigation
      Notice

















20





**EXHIBIT
      "A"**


**BORROWING
      BASE CERTIFICATE**











FIFTH
      THIRD BANK


201
      East
      Kennedy Blvd., Suite 1800


Tampa,
      Florida 33602





Pursuant
      to the Revolving Bridge Loan and Security Agreement, Borrower hereby certifies,
      as of the above date, the following:





(A)
            Aggregate
                Amount of Accounts Receivable underContract
            
            $   ___________(B)
            Less:
                IneligiblesAccounts
                Otherwise Encumbered(other
                than by Bank)
            $   ___________Disputed
                Accounts
            $   ___________Total
                Ineligible
            $   ___________(C)
            Net
                Amount of Eligible Receivables (A) Less (B)
            
            $   ___________(D)
            80%
                of (C) (CURRENT BORROWING BASE)
            
            $   ___________(E)
            Aggregate
                unpaid principal
            
            $   ___________Owed
                to Bank is (will not exceed maximumloan
                limit or (D) above)(F)
            Availability
                (D) Less (E)
            
            $   ___________Not
                to exceed the maximum loan limit of $5,000,000.00





The
      undersigned hereby certifies, represents, and warrants to FIFTH THIRD BANK
      (the
      "Bank") as follows:





1.           All
      the representations and warranties contained in the Revolving Bridge Loan and
      Security Agreement or in any other related loan document are true and correct
      on
      the date hereof.





2.           No
      event of default has occurred, or would result from the advance made in
      connection herewith, that constitutes an Event of Default under the Revolving
      Bridge Loan and Security Agreement or any other related document.






21


3.           The
      description of Eligible Receivables and the values assigned thereto are true
      and
      correct in all material respects (see attached accounts receivable
      aging).  We are legal owners of the accounts receivable as identified
      above.





4.           The
      aggregate unpaid principal balance of the Loan does not exceed the lesser of
      the
      $5,000,000.00 Commitment or the Borrowing Base.





This
      shall also certify that, for the month ending , 200___, DEER VALLEY
      HOMEBUILDERS, INC., an Alabama corporation (the "Borrower" or "Corporation")
      was
      in compliance with the following covenants contained in the Revolving Bridge
      Loan and Security Agreement between Bank and Borrower dated August ___,
      2007.





COVENANT
            ACTUAL
            COMPLIANCE1.
            Maintain
                a Consolidated Debt Service
            _____________
            _____________Coverage
                Ratio of not less than 1.25 to 1.00"Consolidated
                Debt Service Coverage Ratio" is:(1)
                (A) Net Income of Borrower and Guarantor,plus
                (B) Interest Expense,plus
                (C) Depreciation & Amortization,minus
                (D) Distributions,minus
                (E) Extraordinary Income /Non-Recurring
                Income,divided
                by (2) (A) Current Portion ofLong
                Term Debt Payments,plus
                (2) Interest Expense (in each case, measuredbased
                upon financials of Borrower and Guarantor)2.
            Maintain
                a Consolidated Debt to
            _____________
            ________________Tangible
                Net Worth Ratio of Not More than2.75
                to 1.00"Consolidated
                Debt to Tangible Net WorthRatio"
                is:(1)
                (A) Total Liabilities of Borrower and Guarantor,minus
                (B) Subordinated Debt,divided
                by (2) (A) Net Worth,plus
                (B) Subordinated Debt,minus
                (C) Intangibles,minus
                (D) Related Party Receivables(in
                each case, measured based uponfinancials
                of Borrower and Guarantor)


*[execution
      on following page]*






22





By:____________________________
            By:
                ___________________________Its:    __________________
            Its:    __________________Date:________________,
                200___
            Date:________________,
                200___























23








**EXHIBIT
      "B"**


**LITIGATION
      NOTICE**





Jason
      Don Gann v. Deer Valley
      Homebuilders, Inc., is a worker’s compensation and retaliatory discharge claim
      filed by an ex-employee.  The Company’s worker’s compensation
      insurance is defending the worker’s compensation portion of this lawsuit and the
      retaliatory discharge claim is being defended by the Company.  That
      issue should be resolved without any material adverse affect on the
      Company.
















































24