Second Amendment to Revolving Credit Loan and Security Agreement



 Exhibit 10.1 
 SECOND AMENDMENT TO REVOLVING CREDIT LOAN AND SECURITY 
 AGREEMENT

 $5,000,000 REVOLVING CREDIT LOAN 

This Second Amendment to Revolving Credit Loan and Security Agreement (the “Second Amendment”) is entered
into effective the 14th day of October, 2011, by and among
FIFTH THIRD BANK, an Ohio banking corporation, having a mailing address of 201 East Kennedy Boulevard, Suite 1800, Tampa, Florida 33602 (the “Bank”), DEER VALLEY FINANCIAL CORP., a Florida corporation (“DVFC”),
having its principal place of business at 205 Carriage Street, Guin, Alabama 35563, DEER VALLEY CORPORATION, a Florida corporation (“DVC”), having a mailing address of 3111 West Dr. MLK Boulevard, Suite 100, Tampa, Florida
33607, and DEER VALLEY HOMEBUILDERS, INC., an Alabama corporation authorized to do business in the State of Florida (“DVHI”), having its principal place of business at 205 Carriage Street, Guin, Alabama 35563, jointly and severally
(collectively the “Borrowers”), and amends and modifies that certain Revolving Credit Loan and Security Agreement dated October 14, 2009, as amended by Amendment dated April 7, 2010 (collectively “Loan Agreement”) as
follows: 
 1. Terms. All of the capitalized terms in this Second Amendment shall have the meanings as defined in
the Loan Agreement. 
 2. Loan Renewal. The Bank has reduced and renewed the Loan in the amount of $5,000,000.00
(the “Renewal Loan”) as evidenced by a Renewal Revolving Credit Note dated effective October 14, 2011 (the “Renewal Note”). 
 3. Loan and Note. The term “Loan” under the Loan Agreement is hereby modified to include the Renewal Loan, and the term “Note” under the Loan Agreement is hereby modified
to reference the Renewal Note. 
 4. Definitions. In Section 1.2, the definition of “Eligible Accounts
Receivable” is deleted in its entirety and the following definition of Eligible Accounts Receivable is hereby substituted in its place and stead: 
 “Eligible Accounts Receivable” shall mean, at any date of determination thereof, all Accounts Receivable of DVFC: (a) which are bona fide, valid and legally enforceable obligations of the
account debtors in respect thereof, which are unconditionally owing by such account debtors, and which do not represent sales on consignment, sales on return or other similar understandings; (b) which, except for the security interest in the
Accounts Receivable granted to the Bank, are solely owned by the Borrower, free and clear of any and all mortgages, liens, security interests, encumbrances, claims or rights of others, except sellers’ rights (if any) to reclaim goods under
Uniform Commercial Code Section 2-702; (c) which are not the subject of any defense, offset, counterclaim or claim; (d) as to which no more than 540 days shall have elapsed from the original date of the relevant invoice, but excluding
all Accounts Receivable of those account debtors that have more than 25% of their respective Accounts Receivable aged more than 540 days; (e) with respect to a single account debtor whose total obligations owing exceeds 20% of all Eligible
Accounts Receivable shall be limited to 20% of Eligible Accounts Receivable; (f) as to which the account debtors are (1) solvent, going concerns unaffiliated with any Borrower, and (2) reasonably satisfactory to the Bank from a credit
standpoint (the Bank’s satisfaction may be assumed unless the Bank shall at any time advise the Borrower to the contrary). 







 5. Borrowing Base and Borrowing Base Certificate. The Borrowing Base
definition in the Loan Agreement and the Borrowing Base Certificate are hereby modified to provide that total advances under the Loan shall not exceed $5,000,000.00, or such lesser amount as permitted by the Borrowing Base, and the Borrowing Base
Certificate is revised and restated as set forth in Exhibit “A” attached hereto. 
 6. Financial
Statements and Reports. Section 6.4 is deleted in its entirety and the following Section 6.4 is hereby substituted in its place and stead: 
 “6.4 Financial Statements and Reports. Each of the Borrowers shall maintain a system of accounting established and administered in accordance with Generally Accepted Accounting
Principles. Borrowers, as appropriate, will furnish to the Bank: 
 (a) Within one hundred twenty (120) days after the end
of each fiscal year, each of the Borrowers shall deliver to the Bank, consolidated, 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, and upon filing, all filings required in accordance with SEC regulations, if any. 

(b) Within forty-five (45) days after the end of each fiscal quarter-end, deliver to the Bank the following financial statements
certified by the President or Vice-President of each of the Borrowers as accurate to the best of their knowledge upon due inquiry and investigation: (1) a Compliance Certificate executed by an authorized officer for each of the Borrowers
certifying that to the best of their 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; and (2) internally prepared, consolidated, interim financial statements for each of the Borrowers; in such form and context as Bank may require. 

(c) Within fifteen (15) days of the end of each month, deliver to the Bank the following financial statements certified by the
President or Vice-President of each Borrower as accurate to the best of his knowledge upon due inquiry and investigation: (1) the Borrowing Base Certificate for DVFC; and (2) an accounts receivable aging report by customer reflecting the
past due status of each invoice for DVFC; all in such form and context as Bank may require. 

  
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 (d) Promptly, from time to time, such other information regarding the operation, business,
affairs and financial condition of any of the Borrowers as the Bank may reasonably request.” 
 7. Financial
Covenant. The Financial Covenant set forth in Section 6.10 (a) of the Loan Agreement is deleted in its entirety and the following Section 6.10 (b) is hereby substituted in its place and stead: 

“(a) Minimum Fixed Charge Coverage Ratio. Maintain a global Minimum Fixed Charge Coverage Ratio of not less than 1.20
to 1.00, measured on a rolling 4-quarter basis, commencing December 31, 2011. As used herein “Minimum Fixed Charge Coverage Ratio” shall be defined as the ratio of: (a) Borrowers EBITDA plus rent and operating lease payments,
less cash taxes paid, distributions, dividends and capital expenditures (other than Capital Expenditures financed with the proceeds of purchase money Indebtedness or Capital Leases to the extent permitted hereunder) and other extraordinary income
for the twelve month period then ending, to: (b) the consolidated sum of: (i) Borrowers interest expense; and, (ii) all principal payments with respect to Indebtedness (but excluding principal that is payable at maturity), including
capital leases and subordinated debt, that were paid or were due and payable by Borrowers during the period, plus rent and operating lease expense incurred in the same such period.” 

8. Notices. Section 10 of the Loan Agreement for Notices is amended to provide that all notices to the Bank shall be
sent to: 
  

			
	If to the Bank:	    	FIFTH THIRD BANK
		    	Attention: Julio C. Ramirez, Jr., Senior Vice President
		    	201 East Kennedy Blvd., Suite 1800
		    	Tampa, Florida 33602

 9. Consent and Waiver. Borrowers hereby consent to the foregoing and agrees that the
execution of this Second Amendment shall in no manner or way whatsoever impair or otherwise adversely affect Borrowers’ liability to the Lender under the Loan Documents or any other instrument set forth in the Recitals or herein, all as
modified by this Second Amendment. 
 10. Cross Document Default. Any default under the terms and conditions of
this Second Amendment or of any instrument set forth herein or contemplated by this Second Amendment shall be and is a default under every other instrument set forth herein or contemplated by this Second Amendment. 

  
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 11. Ratification. Except as modified by this Second Amendment, Borrowers
hereby ratify and confirm the continued validity and viability of all terms, conditions and obligations set forth in the Loan Documents and all other instruments as modified by this Second Amendment. 

12. Severability. Whenever possible, each provision of this Second Amendment shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision hereof shall be prohibited or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity only, without invalidating the remainder
of such provision or of the remaining provisions of this Second Amendment. 
 13. Florida Contract. This Second
Amendment shall be deemed a Florida contract and shall be construed according to the laws of the State of Florida, regardless of whether this Second Amendment is executed by certain of the parties hereto in other states. 

14. Time. Time is of the essence of this Second Amendment. 

15. Binding Effect and Modification. This Second Amendment shall bind the successors and assigns to the parties hereto and
constitutes the entire understanding of the parties, which may not be modified except in writing, executed by all parties hereto in the same form as this Second Amendment. 
 16. Other Terms. Except as specifically modified and amended by the terms set forth in this Second Amendment, all of the other terms, covenants, obligations and conditions of the Loan
Agreement shall remain in full force and effect. 
 Entered into as of the day and year first above written. 

 

							
	WITNESSES:	 		 	BORROWERS:
			
		 		 	DEER VALLEY HOMEBUILDERS, INC.,
		 		 	an Alabama corporation
				
	  
	 		 	By:	 	 s/ Steve Lawler

	Signature of Witness	 		 		 	John Steven Lawler,
	  
	 		 		 	as its Chief Financial Officer and Secretary
	Print or type name of Witness	 		 		 	
	  
	 		 		 	 (CORPORATE SEAL)

	Signature of Witness	 		 		 	
	  
	 		 		 	
	Print or type name of Witness	 		 		 	


  
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		 		 	DEER VALLEY CORPORATION, a Florida
corporation
				
	  
	 		 	By:	 	 s/ Steve Lawler

	Signature of Witness	 		 		 	John Steven Lawler, as its Chief Financial
	  
	 		 		 	Officer and Secretary
	Print or type name of Witness	 		 		 	
	  
	 		 		 	 (CORPORATE SEAL)

	Signature of Witness	 		 		 	
	  
	 		 		 	
	Print or type name of Witness	 		 		 	
				
		 		 		 	DEER VALLEY FINANCIAL CORP., a Florida
corporation
				
	  
	 		 	By:	 	 s/ Steve Lawler

	Signature of Witness	 		 		 	John Steven Lawler, as its Chief Financial
	  
	 		 		 	Officer and Secretary
	Print or type name of Witness	 		 		 	
	  
	 		 		 	 (CORPORATE SEAL)

	Signature of Witness	 		 		 	
	  
	 		 		 	
	Print or type name of Witness	 		 		 	

 STATE OF ALABAMA 

COUNTY OF
                             
 The foregoing instrument was acknowledged before me this          day of October, 2011, by as Chief Financial Officer and Secretary of DEER VALLEY HOMEBUILDERS,
INC., an Alabama corporation, on behalf of the corporation. 
  

									
	          
	 	Personally known	 	  

	  
	 	Driver’s License (St:        )	 	Notary Public
	  
	 	Other Identification Produced	 	
		 		 	      
	 		 	  

		 		 	  
	 		 	Print or type name of Notary
					
		 		 		 		 	 (SEAL)



  
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 STATE OF
                             
 COUNTY OF                          

The foregoing instrument was acknowledged before me this          day of October, 2011, by John
Steven Lawler, as Chief Financial Officer and Secretary of DEER VALLEY CORPORATION, a Florida corporation, on behalf of the corporation. 
  

									
	          
	 	Personally known	 	  

	  
	 	Driver’s License (St:         )	 	Notary Public
	  
	 	Other Identification Produced	 	
		 		 	      
	 		 	  

		 		 	  
	 		 	Print or type name of Notary
					
		 		 		 		 	 (SEAL)


 STATE OF
                             
 COUNTY OF                          

The foregoing instrument was acknowledged before me this          day of October 2011, by John
Steven Lawler, as Chief Financial Officer and Secretary of DEER VALLEY FINANCIAL CORP., a Florida corporation, a Florida corporation, on behalf of the corporation. 
  

									
	          
	 	Personally known	 	  

	  
	 	Driver’s License (St:         )	 	Notary Public
	  
	 	Other Identification Produced	 	
		 		 	      
	 		 	  

		 		 	  
	 		 	Print or type name of Notary
					
		 		 		 		 	 (SEAL)


  

							
		 		 	 BANK:

			
		 		 	 FIFTH THIRD BANK,

an Ohio banking corporation

				
	  
	 		 	By:	 	 s/ Julio C. Ramirez, Jr.

	Signature of Witness	 		 		 	Julio C. Ramirez, Jr.,
	  
	 		 		 	as its Senior Vice President
	Print or type name of Witness	 		 		 	
	  
	 		 		 	
	Signature of Witness	 		 		 	 (CORPORATE SEAL)

	  
	 		 		 	
	Print or type name of Witness	 		 		 	


  
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 STATE OF FLORIDA 
 COUNTY OF                              

The foregoing instrument was acknowledged before me this          day of October, 2011, by Julio
C. Ramirez, Jr., as Senior Vice President of FIFTH THIRD BANK, an Ohio 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” - Revised Borrowing Base Certificate 

  
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 EXHIBIT “A” 

BORROWING BASE CERTIFICATE - $5,000,000.00 RLOC 
 FIFTH THIRD BANK 
 201 East Kennedy Blvd., Suite 1800 

Tampa, Florida 33602 
 Pursuant to the Loan and
Security Agreement, Borrower hereby certifies, as of the above date, the following: 
  

											
				
	(A)	 	 DVFC Aggregate Amount of Accounts Receivable Aged less than 360 days
	 				  	$	 	  
		 		 				  	  
	  
	 
				
	(B)	 	 Less: Ineligibles
	 				  			
				
		 	 Accounts with Account Debtors having in excess of 20% of total Eligible A/R (only enter amounts over 20% of total A/R
threshold)
	 	$	                    	  	  			
		 		 	  
	  
	 	  			
		 	 Other (if applicable)
	 	$	 	  	  			
		 		 	  
	  
	 	  			
		 	 Total Ineligible
	 	$	 	  	  			
		 		 	  
	  
	 	  			
				
	(C)	 	 Net Amount of 360 Day Eligible Accounts Receivable (A) Less (B)
	 				  	$	 	  
		 		 				  	  
	  
	 
				
	(D)	 	 75% of (C)
	 				  	$	 	  
		 		 				  	  
	  
	 
				
	(E)	 	 DVFC Aggregate Amount of Accounts Receivable Aged greater than 360 days, but less than 540 days
	 				  	$	                    	  
		 		 				  	  
	  
	 
				
	(F)	 	 Less: Ineligibles
	 				  			
				
		 	 Accounts with 25% aged over 540 days
	 	$	 	  	  			
		 		 	  
	  
	 	  			
		 	 Accounts with Account Debtors having in excess of 20% of total Eligible A/R (only enter amounts over 20% of total A/R
threshold)
	 	$	 	  	  			
		 		 	  
	  
	 	  			
		 	 Other (if applicable)
	 	$	 	  	  			
		 		 	  
	  
	 	  			
		 	 Total Ineligible
	 	$	 	  	  			
		 		 	  
	  
	 	  			
				
	(G)	 	 Net Amount of 540 Day Eligible Accounts Receivable (E) Less (F)
	 				  	$	 	  
		 		 				  	  
	  
	 
				
	(H)	 	 50% of (G)
	 				  	$	 	  
		 		 				  	  
	  
	 
				
	(I)	 	 CURRENT BORROWING BASE:
	 				  	$	 	  
		 		 				  	  
	  
	 
		 	 (D) Plus (H)
	 				  			
				
	(J)	 	 The aggregate unpaid principal owed to Bank is:
	 				  	$	 	  
		 		 				  	  
	  
	 
		 	 Not to not exceed maximum loan limit or (I) above
	 				  			
				
	(K)	 	 Availability (I) Less (J),
	 				  	$	 	  
		 		 				  	  
	  
	 
		 	 Not to exceed the maximum loan limit of $5,000,000.00
	 				  			


  
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 The undersigned hereby certifies, represents, and warrants to FIFTH THIRD BANK (the “Bank”) as
follows: 
 1. All the representations and warranties contained in the 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 Loan and Security Agreement or any other related document. 
 3. The description of Eligible Accounts
Receivable and the values assigned thereto are true and correct in all material respects (see attached accounts receivable aging). We are legal owners 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 Borrowing Base. 

This shall also certify that, for the month ending
                    , 20    , the Borrower was in compliance with the following covenants contained in the Loan and
Security Agreement between Bank and Borrower dated October 14, 2009, as amended. 
  

							
	  	 	 COVENANT
	  	ACTUAL	  	COMPLIANCE
				
	 1.      
	 	Minimum Fixed Charge Coverage Ratio of not less than 1.20 to 1.00	  		  	
		 		  	  
	  	  


 “Minimum Fixed Charge Coverage Ratio” is defined as Borrowers EBITDA plus rent and operating
lease payments, less cash taxes paid, distributions, dividends and capital expenditures (other than Capital Expenditures financed with the proceeds of purchase money Indebtedness or Capital Leases to the extent permitted hereunder) and other
extraordinary income for the twelve month period then ending, to: (b) the consolidated sum of: (i) Borrowers interest expense; and (ii) all principal payments with respect to Indebtedness, including capital leases and subordinated
debt, that were paid or were due and payable by Borrowers during the period, plus rent and operating lease expense incurred in the same such period. 

  
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	 2.      
	 	Maintain a Debt to Tangible Net Worth Ratio of Not More than 3.00 to 1.00	  		  	
		 		  	  
	  	  


 “Debt to Tangible Net Worth Ratio” is defined as (1) (A) Total Liabilities of
Borrower, minus (B) Subordinated Debt, divided by (2) (A) Net Worth, plus (B) Subordinated Debt, plus (C) Intangibles, minus (D) Related Party Receivables. 

 

							
	 3.      
	 	Maintained minimum, unencumbered Liquidity of $2,500,000.	  		  	
		 		  	  
	  	  


  

									
	By:	 	  
	 		 	By:	 	  

					
	Its:	 	  
	 		 	Its:	 	  

					
	Date:	 	                            ,
20    	 		 	Date:	 	                            ,
20    


  
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