ex10-2.htm


     

    Exhibit
      10.2

    ESCROW
      AGREEMENT

    


    This
      Escrow Agreement, dated as of
      November 19, 2007, among Joel Stephen Logan II, an individual
      (“Logan”); Charles L. Murphree Jr., an
      individual (“Murphree”); John Steven Lawler, an individual
      (“Lawler”); James David Shaw, an individual
      (“Shaw”); William Joseph Aycock, Jr., an individual
      (“Aycock”); Jerry Ray Cooper, Jr., an individual
      (“Cooper”); Timothy Wayne Gann, an individual
      (“Gann”); and Jimmy Ray Hawkins, an individual
      (“Hawkins”) (individually, a “Seller” and
      collectively, the “Sellers”) and Deer Valley Homebuilders,
      Inc., an Alabama corporation (“DVHB”) and  Deer
      Valley Corporation, a Florida corporation (“Deer Valley”), as
      successor to DeerValley Acquisitions Corp., a Florida corporation (all
      previously listed entities, including the Sellers, are collectively the
“Parties”); and Bush Ross, P.A. a Florida professional
      association, as escrow agent (“Escrow
      Agent”).   Capitalized terms used in this Agreement not
      otherwise defined herein shall have the respective meanings given to them in
      the
      First Amendment to Earnout Agreement (the “Amended Earnout
      Agreement”) dated November 19, 2007 between the Sellers and DVHB and
      Deer Valley to amend the Earnout Agreement dated January 18, 2006 (the
“Transaction”).

    


    Background

    


    The
      Amended Earnout Agreement provides
      that Deer Valley shall, among other things, issue 2,000,000 shares of common
      stock of Deer Valley (“Common Stock”) to the Sellers, which the
      Sellers are required to place in escrow to be released in accordance with the
      terns and conditions of the Amended Earnout Agreement.  Accordingly,
      in consideration of the foregoing and the respective covenants and promises
      set
      forth in this Agreement, and for other good and valuable consideration, the
      Parties hereby agree as follows:

    


    Operative
      Provisions

    


    
      	
              1.

            	
              Appointment
                of the Escrow Agent. The Parties hereby appoint Escrow Agent
                to serve as, and Escrow Agent hereby agrees to act as, escrow agent
                upon
                the terms and conditions of this Agreement.  Notwithstanding the
                references in this Agreement to the Amended Earnout Agreement, the
                Parties
                acknowledge that Escrow Agent is not a party to the Amended Earnout
                Agreement for any purpose or responsible for it interpretation or
                enforcement.

            


    

     

    
      	
              2.

            	
              Deposit
                in Escrow.  In accordance with the Amended Earnout
                Agreement, the Sellers are depositing with Escrow Agent two million
                (2,000,000) shares of Common Stock (the “Escrow Shares”).
                Escrow Agent hereby acknowledges receipt thereof.  Escrow Agent
                hereby agrees to act as escrow agent and to hold, safeguard and disburse
                the Escrow Shares pursuant to the terms and conditions
                hereof.

            


    

     

    
      	
              3.

            	
              Appointment
                of Representative.  Each of the Sellers hereby
                appoint Logan as his authorized representative to provide and receive
                notices referenced herein, and to otherwise act on their behalf in
                connection with the Escrow Shares (“Sellers’
                Representative”).

            


    

     

    
      	
              4.

            	
              Escrow
                Distributions. The Parties agree that
                the Escrow Shares shall be released in accordance with the terms
                and
                conditions of the Amended Earnout Agreement.  The procedure for
                distribution shall be as follows:  Written notice shall be
                provided to Escrow Agent by Deer Valley, on the one hand, or by the
                Sellers Representative, on the other, stating that a Distribution
                Date (as
                defined in Section 1.4 of the Amended Earnout Agreement) has occurred
                and
                the Escrow Shares are to be released (the
                “Notice”).  Such Notice shall specify the
                number of shares to be released and shall provide instructions on
                how to
                release the specified shares.  Within five (5) days of Escrow
                Agent receiving the Notice, Escrow Agent shall transmit the Notice
                to Deer
                Valley, if provided by the Sellers’ Representative, or to the Sellers’
                Representative, if provided by Deer Valley.  At such time, the
                receiving party shall have thirty (30) days (the “Objection
                Period”) within which to a provide written objection to the
                Escrow Agent contesting the release of Escrow Shares as specified
                in the
                Notice (an “Objection”).  An Objection will be
                deemed received upon receipt by the Escrow Agent.  If an
                Objection is received by the Escrow Agent, the Escrow Agent shall
                hold the
                Escrow Shares until either (1) the Escrow Agent receives written
                instructions for distribution executed by Deer Valley and the Sellers’
                Representative; or (2) a judge having jurisdiction over the Amended
                Earnout Agreement shall provide other instructions to the Escrow
                Agent.  If an Objection is not received during the Objection
                Period, the Escrow Agent shall distribute the Escrow Shares in accordance
                with the Notice.

            


    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              5.

            	
              Termination
                of Escrow.  Upon written notice executed by Deer
                Valley and the Sellers’ Representative that this Escrow Agreement has been
                terminated, Escrow Agent shall distribute the then remaining Escrow
                Shares
                as directed in the written notice.

            


    

     

    
      	
              6.

            	
              Duties
                of Escrow Agent.

            


    

     

    
      	
               

            	
              (a)

            	
              Escrow
                Agent shall not be under any duty to give the Escrow Shares held
                by it
                hereunder any greater degree of care than it gives its own similar
                property and shall not be required to invest any shares held hereunder
                except as directed in this
                Agreement.

            


    

     

    
      	
               

            	
              (b)

            	
              Escrow
                Agent shall not be liable for actions or omissions hereunder, except
                for
                its own willful misconduct and, except with respect to claims based
                upon
                such willful misconduct that are successfully asserted against Escrow
                Agent, the Parties shall jointly and severally indemnify and hold
                harmless
                Escrow Agent (and any successor Escrow Agent) from and against any
                and all
                losses, liabilities, claims, actions, damages and expenses, including
                reasonable attorneys’ fees and disbursements, arising out of and in
                connection with this Agreement.

            


    

     

    
      	
               

            	
              (c)

            	
              Escrow
                Agent shall be entitled to rely upon any order, judgment, certification,
                demand, notice, instrument or other writing delivered to it hereunder
                without being required to determine the authenticity or the correctness
                of
                any fact stated therein or the propriety or validity of the service
                thereof. Escrow Agent may act in reliance upon any instrument or
                signature
                believed by it to be genuine and may assume that the person purporting
                to
                give receipt or advice or make any statement or execute any document
                in
                connection with the provisions hereof has been duly authorized to
                do so.
                Escrow Agent may conclusively presume that the undersigned representative
                of any party hereto which is an entity other than a natural person
                has
                full power and authority to instruct Escrow Agent on behalf of that
                party
                unless written notice to the contrary is delivered to Escrow
                Agent.

            


    

     

    
      	
               

            	
              (d)

            	
              Escrow
                Agent may act pursuant to the advice of counsel with respect to any
                matter
                relating to this Agreement and shall not be liable for any action
                taken or
                omitted by it in good faith in accordance with such
                advice.

            


    

     

    
      	
               

            	
              (e)

            	
              Escrow
                Agent does not have any interest in the Escrow Shares deposited hereunder
                but is serving as escrow holder only and has only possession thereof.
                Any
                payments of income from the Escrow Shares shall be subject to withholding
                regulations then in force with respect to United States taxes. The
                parties
                hereto will provide Escrow Agent with appropriate Internal Revenue
                Service
                Forms W-9 for tax identification number certification, or nonresident
                alien certifications. This Section 7 shall survive notwithstanding
                any
                termination of this Agreement or the resignation of Escrow
                Agent.

            


    

     

    
      	
               

            	
              (f)

            	
              Escrow
                Agent shall not be called upon to advise any party as to the wisdom
                in
                selling or retaining or taking or refraining from any action with
                respect
                to any securities or other property deposited
                hereunder.

            


    

     

    
      	
               

            	
              (g)

            	
              Escrow
                Agent (and any successor Escrow Agent) may at any time resign as
                such by
                delivering the Escrow Shares to any successor Escrow Agent jointly
                designated by the other parties hereto in writing, or to any court
                of
                competent jurisdiction, whereupon Escrow Agent shall be discharged
                of and
                from any and all further obligations arising in connection with this
                Agreement. The resignation of Escrow Agent will take effect on the
                earlier
                of (i) the appointment of a successor (including a court of competent
                jurisdiction) or (ii) the day which is ten (10) days after the date
                of
                delivery of its written notice of resignation to the Parties. If,
                at that
                time, Escrow Agent has not received a designation of a successor
                Escrow
                Agent, Escrow Agent’s sole responsibility after that time shall be to
                retain and safeguard the Escrow Shares until receipt of a designation
                of
                successor Escrow Agent or a joint written disposition instruction
                from the
                Parties or a final, nonappealable order of a court of competent
                jurisdiction.

            


    

     

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              (h)

            	
              The
                Parties shall pay Escrow Agent, at its standard hourly rates, for
                services
                rendered by Escrow Agent hereunder and agree to reimburse Escrow
                Agent for
                all reasonable expenses, disbursements and advances incurred or made
                by
                Escrow Agent in performance of its duties hereunder (including reasonable
                fees, expenses and disbursements of its counsel).  Any fees or
                expenses of Escrow Agent or its counsel that are not paid as provided
                for
                herein may be taken from any property held by Escrow Agent
                hereunder.

            


    

     

    
      	
              7.

            	
              Limited
                Responsibility.  This Agreement expressly sets
                forth all the duties of Escrow Agent with respect to any and all
                matters
                pertinent hereto. No implied duties or obligations shall be read
                into this
                Agreement against Escrow Agent. Escrow Agent shall not be bound by
                the
                provisions of any agreement among the other parties hereto except
                this
                Agreement.

            


    

     

    
      	
              8.

            	
              Notices.  All
                notices, consents, waivers and other communications required or permitted
                under this Agreement shall be in writing and shall be deemed given
                to a
                party when (a) delivered to the appropriate address by hand or by
                a
                nationally recognized overnight courier service (costs prepaid);
                (b) sent
                by facsimile (with confirmation by the transmitting equipment); or
                (c)
                received by the addressee, if sent by certified mail, return receipt
                requested, in each case to the following addresses and facsimile
                numbers
                and marked to the attention of the person (by name or title) designated
                below (or to such other address, facsimile number or person as a
                party may
                designate by notice to the other
                parties):

            


    

     

    If
      to
      Deer Valley, to:

     

    Deer
      Valley Corporation

    4904
      Eisenhower Blvd., Suite 185

    Tampa,
      Florida 33634

    Attn:  Charles
      G. Masters

    


     

    If
      to the
      Sellers, to:

     

    Attn:
      Joel Stephen Logan II

    205
      Carriage St.

    Guin,
      Alabama 35563

    


    If
      to
      Escrow Agent, to:

     

    Bush
      Ross, P.A.

    220
      South
      Franklin Street

    Tampa,
      Florida 33602

    Facsimile
      No. (813) 223-9620

    Attn:  Brent
      A. Jones

     

    
      	
              9.

            	
              Jurisdiction;
                Service of Process.  Any proceeding arising out of
                or relating to this Agreement may be brought in the courts of the
                State of
                Florida, County of Hillsborough, or, if it has or can acquire
                jurisdiction, in the United States District Court for the Middle
                District
                of Florida, and each of the parties irrevocably submits to the exclusive
                jurisdiction of each such court in any such proceeding and waives
                any
                objection it may now or hereafter have to venue or to convenience
                of
                forum, agrees that all claims in respect of the proceeding shall
                be heard
                and determined only in any such court and agrees not to bring any
                proceeding arising out of or relating to this Agreement in any other
                court. Process in any proceeding referred to in the preceding sentence
                may
                be served on any party anywhere in the
                world.

            


    

     

    
      	
              10.

            	
              Execution
                of Agreement.  This Agreement may be executed in
                one or more counterparts, each of which will be deemed to be an original
                copy of this Agreement and all of which, when taken together, will
                be
                deemed to constitute one and the same agreement. The exchange of
                copies of
                this Agreement and of signature pages by facsimile transmission shall
                constitute effective execution and delivery of this Agreement as
                to the
                parties and may
                be used in lieu of the original Agreement for all purposes. Signatures
                of
                the parties transmitted by facsimile shall be deemed to be their
                original
                signatures for any purposes
                whatsoever.

            


    

     

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    
      	
              11.

            	
              Waiver.
                The rights and remedies of the parties to this Agreement are cumulative
                and not alternative. Neither the failure nor any delay by any party
                in
                exercising any right, power or privilege under this Agreement or
                the
                documents referred to in this Agreement will operate as a waiver
                of such
                right, power or privilege, and no single or partial exercise of any
                such
                right, power or privilege will preclude any other or further exercise
                of
                such right, power or privilege or the exercise of any other right,
                power
                or privilege. To the maximum extent permitted by applicable law,
                (a) no
                claim or right arising out of this Agreement or the documents referred
                to
                in this Agreement can be discharged by one party, in whole or in
                part, by
                a waiver or renunciation of the claim or right unless in writing
                signed by
                the other party; (b) no waiver that may be given by a party will
                be
                applicable except in the specific instance for which it is given;
                and (c)
                no notice to or demand on one party will be deemed to be a waiver
                of any
                obligation of such party or of the right of the party giving such
                notice
                or demand to take further action without notice or demand as provided
                in
                this Agreement or the documents referred to in this
                Agreement.

            


    

     

    
      	
              12.

            	
              Entire
                Agreement and Modification.  This Agreement
                supersedes all prior agreements among the parties with respect to
                its
                subject matter and constitutes (along with the documents referred
                to in
                this Agreement) a complete and exclusive statement of the terms of
                the
                agreement between the parties with respect to its subject matter.
                This
                Agreement may not be amended except by a written agreement executed
                by
                each of the Parties and the Escrow
                Agent.

            


    

     

    
      	
              13.

            	
              Governing
                Law.  This Agreement shall be governed by the laws
                of the State of Florida without regard to conflicts of law principles
                that
                would require the application of any other
                Law.

            


    

     

    
      	
              14.

            	
              Waiver
                of Conflict.  The Escrow Agent represents Deer
                Valley in various legal matters including consummation of the
                Transaction.  The Escrow Agent has agreed to serve as the escrow
                agent as an accommodation to the parties hereto.  Each party
                waives any conflict of interest that it might be able to assert against
                the Escrow Agent’s continued representation of Deer Valley or any of its
                Affiliates in the matters contemplated by the Amended Earnout Agreement,
                any dispute arising thereunder or
                otherwise.

            


    

     

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    


     

    The
      parties have executed and delivered
      this Escrow Agreement as of the date first written above.

     

    
      	 	
              DEER
                VALLEY CORPORATION

            
	 	 
	 	
              By:
                /s/ Charles G. Masters

            
	 	
              Charles
                G. Masters, President & CEO

            
	 	 
	 	 
	 	
              DEER
                VALLEY HOMEBUILDERS, INC.

            
	 	 
	 	 
	 	
              By:
                /s/ Charles G. Masters

            
	 	
              Charles
                G. Masters, Chairman Board of Directors

            
	 	 
	 	 
	 	
              SELLERS:

            
	 	 
	 	 
	 	/s/
              Joel Stephen Logan II
	 	
              Joel
                Stephen Logan II

            
	 	 
	 	/s/
              Charles L. Murphree, Jr.
	 	
              Charles
                L. Murphree, Jr.

            
	 	 
	 	/s/
              John Steven Lawler
	 	
              John
                Steven Lawler

            
	 	 
	 	/s/
              James David Shaw
	 	
              James
                David Shaw

            
	 	 
	 	/s/
              William Joseph Aycock, Jr.
	 	
              William
                Joseph Aycock, Jr.

            
	 	 
	 	/s/
              Jerry Ray Cooper, Jr.
	 	
              Jerry
                Ray Cooper, Jr.

            
	 	 
	 	/s/
              Timothy Wayne Gann
	 	
              Timothy
                Wayne Gann

            
	 	 
	 	/s/
              Jimmy Ray Hawkins
	 	
              Jimmy
                Ray Hawkins

            
	 	 
	 	 
	 	
              BUSH
                ROSS, P.A.

            
	 	 
	 	 
	 	
              By:

            
	 	
              Name:

            
	 	
              Its:

            
	 	 


    

    


    [SIGNATURE
      PAGE - ESCROW AGREEMENT]

     

     

     

    
      
         

      

      
        -5-