ESCROW AGREEMENT
Exhibit
10.2
This
Escrow Agreement, dated as of
November 19, 2007, among Xxxx Xxxxxxx Xxxxx II, an individual
(“Xxxxx”); Xxxxxxx X. Xxxxxxxx Xx., an
individual (“Xxxxxxxx”); Xxxx Xxxxxx Xxxxxx, an individual
(“Xxxxxx”); Xxxxx Xxxxx Xxxx, an individual
(“Xxxx”); Xxxxxxx Xxxxxx Xxxxxx, Xx., an individual
(“Xxxxxx”); Xxxxx Xxx Xxxxxx, Jr., an individual
(“Xxxxxx”); Xxxxxxx Xxxxx Xxxx, an individual
(“Xxxx”); and Xxxxx Xxx Xxxxxxx, an individual
(“Xxxxxxx”) (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 Xxxx Xxxx, 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
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1.
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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.
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2.
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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.
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3.
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Appointment
of Representative. Each of the Sellers hereby
appoint Xxxxx 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”).
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4.
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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.
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5.
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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.
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6.
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Duties
of Escrow Agent.
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(a)
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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.
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(b)
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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.
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(c)
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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.
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(d)
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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.
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(e)
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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.
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(f)
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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.
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(g)
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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.
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(h)
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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.
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7.
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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.
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8.
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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):
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If
to
Deer Valley, to:
Deer
Valley Corporation
0000
Xxxxxxxxxx Xxxx., Xxxxx 000
Xxxxx,
Xxxxxxx 00000
Attn: Xxxxxxx
X. Xxxxxxx
If
to the
Sellers, to:
Attn:
Xxxx Xxxxxxx Xxxxx II
000
Xxxxxxxx Xx.
Xxxx,
Xxxxxxx 00000
If
to
Escrow Agent, to:
Xxxx
Xxxx, P.A.
000
Xxxxx
Xxxxxxxx Xxxxxx
Xxxxx,
Xxxxxxx 00000
Facsimile
No. (000) 000-0000
Attn: Xxxxx
X. Xxxxx
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9.
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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.
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10.
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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.
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11.
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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.
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12.
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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.
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13.
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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.
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14.
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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.
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The
parties have executed and delivered
this Escrow Agreement as of the date first written above.
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DEER
VALLEY CORPORATION
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By:
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx
X. Xxxxxxx, President & CEO
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DEER
VALLEY HOMEBUILDERS, INC.
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By:
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx
X. Xxxxxxx, Chairman Board of Directors
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SELLERS:
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| /s/ Xxxx Xxxxxxx Xxxxx II | |
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Xxxx
Xxxxxxx Xxxxx II
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| /s/ Xxxxxxx X. Xxxxxxxx, Xx. | |
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Xxxxxxx
X. Xxxxxxxx, Xx.
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| /s/ Xxxx Xxxxxx Xxxxxx | |
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Xxxx
Xxxxxx Xxxxxx
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| /s/ Xxxxx Xxxxx Xxxx | |
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Xxxxx
Xxxxx Xxxx
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| /s/ Xxxxxxx Xxxxxx Xxxxxx, Xx. | |
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Xxxxxxx
Xxxxxx Xxxxxx, Xx.
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| /s/ Xxxxx Xxx Xxxxxx, Jr. | |
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Xxxxx
Xxx Xxxxxx, Jr.
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| /s/ Xxxxxxx Xxxxx Xxxx | |
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Xxxxxxx
Xxxxx Xxxx
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| /s/ Xxxxx Xxx Xxxxxxx | |
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Xxxxx
Xxx Xxxxxxx
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XXXX
XXXX, P.A.
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By:
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Name:
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Its:
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[SIGNATURE
PAGE - ESCROW AGREEMENT]
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