Exhibit 10.3

COMMON STOCK OPTION AGREEMENT

This COMMON STOCK OPTION AGREEMENT (the “Agreement”), dated March 30, 2012 (the
“Effective Date”), is by and between VICIS CAPITAL MASTER FUND, a sub-trust of
Vicis Capital Series Master Trust, a unit trust organized and existing under the
laws of the Cayman Islands (“Vicis”), with a mailing address care of Vicis
Capital, LLC, 445 Park Avenue, Suite 1901, New York, New York 10022, and DEER
VALLEY CORPORATION, a Florida corporation maintaining a mailing address at 3111
West Dr. MLK Blvd, Suite 100, Tampa, Florida 33607 (the “Optionee”).

BACKGROUND INFORMATION

On even date herewith, Vicis and the Optionee have entered into that certain
Securities Redemption and Purchase Agreement (the “Redemption Agreement”). This
Common Stock Option Agreement is being issued pursuant to the Redemption
Agreement. Accordingly, the parties, in consideration of the covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

OPERATIVE PROVISIONS

1. Definition of Securities. The term “Option Shares” as used in this Agreement
shall mean 12,310,359 shares of Deer Valley Corporation’s common stock owned by
Vicis, together with, in each case, all securities issued in substitution of or
exchange for, or on account of, any such common stock, including, but not
limited to, securities issued upon a conversion, stock dividend, stock split,
reverse stock split, recapitalization, reclassification, merger, consolidation,
combination of shares, spinoff or otherwise.

2. Grant and Vesting of Option. Vicis hereby grants to the Optionee an option
(the “Option”) to purchase the Option Shares from Vicis. The Option to acquire
the Option Shares shall become immediately exercisable upon the execution of
this Agreement. The Option may be exercised in whole, but not in part.

3. Option Purchase Price. The purchase price for this Option is one hundred
dollars ($100), and other good and valuable consideration, including
consideration paid pursuant to the Redemption Agreement, the receipt and
sufficiency of which are hereby acknowledged.

4. Purchase Price Upon Exercise of Option. Upon exercise of the Option, the
purchase price payable for the Option Shares (the “Purchase Price”) shall be as
follows:

[a] If the Option is exercised on or before June 1, 2012, the aggregate exercise
price for all the Option Shares will be $5,300,000;

[b] If the Option is exercised after June 1, 2012, but on or before August 1,
2012, the aggregate exercise price for all the Option Shares will be $6,300,000;

[c] If the Option is exercised after August 1, 2012, but on or before
December 1, 2012, the aggregate exercise price for all the Option Shares will be
$6,800,000; or

[d] If the Option is exercised after December 1, 2012, but on or before June 1,
2013, the aggregate exercise price for all the Option Shares will be $7,300,000.

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5. Exercise Procedure; Closing; Payment of Purchase Price. The Optionee may
exercise the Option by delivering written notice to Vicis, at any time prior to
the Termination Date (as defined below), of the Optionee’s intent to exercise
the Option (the “Exercise Notice”). The closing of the sale and purchase of the
Securities shall take place at a time and date mutually agreeable to Vicis and
the Optionee, which shall be no later than twenty (20) days after the date that
the Exercise Notice is given to Vicis (the “Closing”), which, it being
understood that there shall be no price adjustment or Termination Date (as
defined below) during such twenty (20) day period. The Exercise Price is
payable, in cash, in full, at the Closing. The Closing shall occur at the
offices of legal counsel for Vicis, or at such other location (which may include
the waiver of any physical closing and the exchange of executed documentation by
facsimile or electronic transmission or otherwise), as may be agreed to by Vicis
and the Optionee. If the parties do not mutually agree to a time and date for
the Closing, the Closing shall occur at 10:00 a.m., Eastern Prevailing Time, on
the twentieth (20th) day after the date that the Exercise Notice is given to
Vicis. At the Closing, (a) Vicis and the Optionee shall execute a redemption or
purchase agreement in substantially similar form to the Redemption Agreement,
provided, however, such redemption or purchase agreement shall provide for the
purchase of the Option Shares at the Purchase Price under the terms of this
Option, (b) Vicis shall deliver to Optionee the certificates or instruments
evidencing the Option Shares in negotiable form or accompanied by an executed
stock power or instrument of transfer in a form acceptable to Optionee, and
(c) Optionee shall deliver to Vicis payment of the Purchase Price.

6. Term; Termination. The term of the Option shall be for a period that
commences on the Effective Date and expires at 11:59 p.m., Eastern Prevailing
Time, on June 1, 2013, unless sooner terminated by mutual written agreement of
Vicis and the Optionee (the “Termination Date”). The Option is not intended to
be an “incentive stock option” within the meaning of Section 422 of the Code.

7. Representations and Warranties of Vicis. In order to induce the Optionee to
enter into this Agreement and to consummate the transactions contemplated
hereby, Vicis represents and warrants to Optionee that:

(a) Authorization. Seller has duly executed and delivered this Agreement. When
executed and delivered by Vicis, this Agreement will constitute the valid and
binding obligation of Vicis, enforceable in accordance with its terms except as
the enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting the rights of
creditors and subject to general equity principles.

(b) Consent. No consent, approval or authorization of or registration,
qualification, designation, declaration or filing with any governmental
authority or private person or entity on the part of Vicis is required in
connection with the execution and delivery of this Agreement or the consummation
of any other transaction contemplated hereby.

(c) No Contractual Violation. Neither the execution, delivery nor performance of
this Agreement by Vicis, including the consummation by Vicis of the transactions
contemplated hereby, will constitute a violation of or a default under, or
conflict with, any term or provision of any contract, commitment, indenture or
other agreement, or of any other private restriction of any kind, to which Vicis
is a party or by which it is otherwise bound.

(d) Title to Option Shares. Vicis has good and marketable title to the Option
Shares free and clear of all liens, claims, encumbrances and restrictions, legal
or equitable, of every kind, except for certain restrictions on transfer imposed
by federal and state securities laws. Vicis has full and unrestricted legal
right, power and authority to sell, assign and transfer such Option Shares to
the Optionee without obtaining the consent or approval of any other person or
governmental authority.

 

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8. Representations and Warranties of the Optionee. The Optionee represents and
warrants to Vicis that:

(a) Authorization. Seller has duly executed and delivered this Agreement. When
executed and delivered by the Optionee, this Agreement will constitute the valid
and binding obligation of the Optionee, enforceable in accordance with its
terms, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws generally
affecting the rights of creditors and subject to general equity principles.

(b) Consent. No consent, approval or authorization of or registration,
qualification, designation, declaration or filing with any governmental
authority or private person or entity on the part of the Optionee is required in
connection with the execution and delivery of this Agreement or the consummation
of any other transaction contemplated hereby, except as shall have been duly
taken or effected prior to the Closing.

(c) No Contractual Violation. Neither the execution, delivery nor performance of
this Agreement by the Optionee, including the consummation by the Optionee of
the transactions contemplated hereby, will constitute a violation of or a
default under, or conflict with, any term or provision of any contract,
commitment, indenture or other agreement, or of any other private restriction of
any kind, to which the Optionee is a party or by which it is otherwise bound.

9. Covenants of Vicis. Vicis covenants that, as long as this Option remains
outstanding, Vicis shall not sell, convey, transfer, exchange or otherwise
dispose of any of the Option Shares or any interest therein, or create, incur,
or permit to exist any pledge, mortgage, lien, charge, encumbrance or any
security interest whatsoever with respect to any of the Option Shares or the
products and proceeds thereof, unless all of the Option Shares are sold,
conveyed, transferred, exchanged or otherwised disposed of in a single
transaction, and such transferee or pledgee has agreed in writing to be bound by
this Option. Upon request of Optionee and subject to this Agreement, place a
legend on the back of the certificates for the Securities referencing this
Option, such legend being in form and substance reasonably acceptable to
Optionee.

10. No Rights as a Shareholder. Nothing in this Agreement shall convey upon the
Optionee any rights of a shareholder of the Company prior to the exercise of the
Option and the transfer of the Option Shares pursuant to the terms and
conditions set forth herein.

11. Investment Purpose. This Agreement is executed on the express condition that
the purchase of the Option Shares shall be made for investment purposes only and
not with a view to their resale or further distribution unless (a) such Option
Shares, at the time of their issuance and delivery, are registered under the
Securities Act of 1933, as amended (the “Act”), or (b) after the date of such
issuance the resale of such Option Shares is determined by counsel for the
Company to be exempt from the registration requirements of the Act and of any
other applicable law, regulation or ruling.

12. Assignability. Each of the provisions and agreements herein contained shall
be binding upon and enure to the benefit of the respective parties hereto, as
well as their successors and transferees, as applicable, but no statement
contained herein is intended to confer upon any person or entity, other than the
parties hereto and their successors in interest and permitted assignees, any
rights or remedies under or by reason of this Agreement. The Optionee may assign
this Agreement at any time prior to the Termination Date upon prior written
notice to Vicis

 

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13. Miscellaneous Provisions. All notices required to be given pursuant to this
Agreement shall be in writing and shall be hand delivered or sent via overnight
delivery services to the applicable address set forth in the preamble of this
Agreement, or to such other address as any such party may have designated by
like notice forwarded to the other party hereto. This Agreement, and any other
document referenced herein, constitute the entire understanding of the parties
hereto with respect to the subject matter hereof, and no amendment, modification
or alteration of the terms hereof shall be binding unless the same be in
writing, dated subsequent to the date hereof and duly approved and executed by
each of the parties hereto. Vicis hereby covenants and agrees with Optionee that
at any time and from time to time it will promptly execute and deliver to
Optionee such further assurances, instruments and documents and take such
further action as Optionee may reasonably request in order to carry out the full
intent and purpose of this Agreement. This Agreement, and the application or
interpretation thereof, shall be governed exclusively by its terms and by the
laws of the State of New York. Venue for all purposes shall be deemed to lie
within New York, New York. The parties agree that, irrespective of any wording
that might be construed to be in conflict with this paragraph, this Agreement is
one for performance in New York. The parties to this Agreement agree that they
waive any objection, constitutional, statutory or otherwise, to a New York
court’s taking jurisdiction of any dispute between them. By entering into this
Agreement, the parties, and each of them understand that they might be called
upon to answer a claim asserted in a New York court. If a legal action is
initiated by any party to this Agreement against another, arising out of or
relating to the alleged performance or non-performance of any right or
obligation established hereunder, or any dispute concerning the same, any and
all fees, costs and expenses reasonably incurred by each successful party or its
legal counsel in investigating, preparing for, prosecuting, defending against,
or providing evidence, producing documents or taking any other action in respect
of, such action shall be the joint and several obligation of and shall be paid
or reimbursed by the unsuccessful party or parties. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL
BY JURY IN ANY SUCH LEGAL PROCEEDING. All representations and warranties
contained in this Agreement shall survive the closing and the consummation of
the transactions contemplated hereby. This Agreement may be executed in any one
or more counterparts, all of which shall be considered one and the same
agreement. The headings in this Agreement are inserted for convenience only and
shall not constitute a part of this Agreement.

IN WITNESS WHEREOF, this Agreement has been executed as of the date first above
written.

 

VICIS: VICIS CAPITAL MASTER FUND By:   Vicis Capital, LLC By:  

        s/ Shad Stastney

  Shadron L. Stastney, Manager OPTIONEE: DEER VALLEY CORPORATION By:  

        s/ Charlie Masters

  Charles G. Masters, President & Chief Executive Officer

 

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