SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 1)

Deer Valley Corporation

(Name of Issuer)

Common Stock, $0.001 par value per share

(Title of Class of Securities)

244196101

(CUSIP Number)

Shad Stastney

Vicis Capital LLC

445 Park Avenue, Suite 1901

New York, NY 10022

(212) 909-4600

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

August 27, 2009

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

CUSIP No.244196101
1.	Names of Reporting Persons.
	Vicis Capital LLC
	45-0538105
2.	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a) [  ]
	(b) [  ]
3.	SEC Use Only
4.	Source of Funds (See Instructions)
	OO — funds of its advisory client
5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  [  ]
6.	Citizenship or Place of Organization
	Delaware

	7.	Sole Voting Power
NUMBER OF		13,406,749
SHARES	8.	Shared Voting Power
BENEFICIALLY
OWNED BY		0
EACH	9.	Sole Dispositive Power
REPORTING
PERSON WITH		13,406,749
	10.	Shared Dispositive Power
		0

11.	Aggregate Amount Beneficially Owned by Each Reporting Person
	13,406,749
12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [  ]
13.	Percent of Class Represented by Amount in Row (11)
	77.3%
14.	Type of Reporting Person (See Instructions)
	IA

Item 1.    Security and Issuer

The securities to which this Schedule 13D (the “Schedule”) relates are shares of common stock, par value $0.001 per share (the “Common Stock”), of Deer Valley Corporation (the “Issuer”).  The address of the Issuer’s principal executive offices is 3111 West Dr. Martin Luther King Blvd., Suite 100, Tampa, FL 33607.

Item 2.    Identity and Background

(a) The name of the reporting person is Vicis Capital LLC (“Vicis”).  All 13,406,749 shares reported on this Schedule are held directly by Vicis Capital Master Fund (the “Fund”), for which Vicis acts as investment advisor.   Vicis may be deemed to beneficially own such 13,406,749 shares within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended, by virtue of the voting and dispositive power over such shares granted by the Fund to Vicis.

(b) The address of Vicis is 445 Park Avenue, Suite 1901, New York, NY 10022.

(c) Vicis is an investment adviser registered under the Investment Advisers Act of 1940, as amended, that provides investment advisory services to the Fund.

(d) Vicis has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) during the last five years.

(e) Vicis has not, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) Vicis Capital LLC is a limited liability company organized under the laws of the state of Delaware.

Pursuant to General Instruction C of Schedule 13D, the following information is being provided with respect to each member of Vicis (the “Insiders”):

Members of Vicis Capital LLC

Name	Occupation
Shad Stastney	Member and Chief Operating Officer
John Succo	Member and Chief Investment Officer
Sky Lucas	Member and Head of Global Convertible Arbitrage

The business address of each of the Insiders is 445 Park Avenue, Suite 1901, New York, NY 10022. To Vicis’s knowledge, each of the Insiders is a United States citizen, and none of the Insiders has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), nor has any Insider been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3.    Source and Amount of Funds or Other Consideration

The Fund previously acquired (i) 6,840,082 shares of Common Stock; (i) 492,500 shares of the Issuer’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”); (ii) 22,463 shares of the Issuer’s Series C Convertible Preferred Stock (the “Series C Preferred Stock”); and (iii) 1,000,000 shares of the Issuer’s Series E Convertible Preferred Stock (the “Series E Preferred Stock”).

On July 7, 2009, the Fund submitted a notice of conversion to the Issuer seeking to convert 492,500 shares of Series A Preferred Stock having a stated value of $10 per share into the Issuer’s Common Stock at a conversion price of $0.75 per share, for the acquisition of 6,566,667 shares of Common Stock.  In order to be able to effect such conversion in full, on August 27, 2009, the Issuer amended its Certificate of Designations, Preferences and Rights of Series A Preferred Stock (the “Series A Certificate of Designations”) to remove certain conversion caps that had prevented the Fund from converting an amount of such Series A Preferred Stock that upon such conversion would result in the Fund beneficially owning greater than 4.99% of the outstanding Common Stock. The Issuer finalized the conversion of the Fund’s Series A Preferred Stock in conjunction with the entry by the Fund into the Option Agreement (as defined below), resulting in the acquisition by the Fund of an additional 6,566,667 shares of Common Stock.  The amendment to the Series A Certificate of Designations gave the Fund the right to acquire the shares of Common Stock underlying the shares of the Series A Preferred Stock immediately.

On January 6, 2011, Vicis Capital Master Fund entered into a Securities Option and Right of First Refusal Agreement (the “Option Agreement) with Charles Masters (the “Optionee”).  Pursuant to the Option Agreement, the Fund granted the Optionee an option, exercisable immediately, to purchase from the Fund all, but not less than all, of the following: (i) 13,406,749 shares of the Issuer’s Common Stock ; (ii) 22,463 shares of the Issuer’s Series C Preferred Stock; and (iii) 1,000,000 shares of the Issuer’s Series E Preferred Stock (the “Option”).  In consideration for the grant of the Option, the Optionee paid the Fund a purchase price of $100.  The Option expires on March 31, 2012.  Upon the Optionee’s exercise of the Option, the Optionee shall pay the Fund a purchase price of $12,000,000, and the Optionee will receive all of the securities underlying the Option.  The Fund is also subject to certain covenants as described more fully in the Option Agreement attached as Exhibit A.

The terms of each of the Certificates of Designation (collectively, the “Certificates of Designation”) designating the Series C Preferred Stock and the Series E Preferred Stock contain conversion caps that prevent the Fund from exercising or converting, as the case may be, an amount of such Series C Preferred Stock or Series E Preferred Stock to the extent that upon such exercise or conversion the Fund would beneficially own greater than 4.99% of the outstanding Common Stock.  The Certificates of Designation, however, allow the Fund to waive each of these conversion caps upon 61 days’ prior notice and thereby obtain the ability to exercise such Series C Preferred Stock and Series E Preferred Stock without the limitation imposed by the applicable conversion cap. The Fund has not provided such notice with respect to the Series C Preferred Stock or the Series E Preferred Stock and therefore the Fund is not deemed to beneficially own any of the shares of Common Stock underlying the Series C Preferred Stock or the Series E Preferred Stock.

As a result of the foregoing transactions, when the 6,566,667 shares of Common Stock acquired as a result of the conversion of the Series A Preferred Stock are aggregated with the 6,840,082 shares of Common Stock previously acquired by the Fund, Vicis is deemed to own 13,406,749 shares of Common Stock.

Item 4.    Purpose of Transaction.

Vicis, on behalf of the Fund, acquired the Common Stock for investment purposes in the ordinary course of its business pursuant to specified investment objectives of the Fund.

On November 22, 2010, Mr. Shad Stastney was appointed to the Issuer's board of directors.  Mr. Stastney is the Chief Operating Officer and Head of Research for Vicis Capital LLC, a company he jointly founded in 2004.Mr. Stastney also jointly founded Victus Capital Management LLC in 2001. From 1998 through 2001, Mr. Stastney worked with the corporate equity derivatives origination group of Credit Suisse First Boston, eventually becoming a Director and Head of the Hedging and Monetization Group, a joint venture between derivatives and equity capital markets. In 1997, he joined Credit Suisse First Boston’s then-combined convertible/equity derivative origination desk. From 1994 to 1997, he was an associate at the law firm of Cravath, Swaine and Moore in New York, in their tax and corporate groups, focusing on derivatives. He graduated from the University of North Dakota in 1990 with a B.A. in Political Theory and History, and from the Yale Law School in 1994 with a J.D. degree focusing on corporate and tax law. Mr. Stastney is currently a director of several public companies.

Vicis and representatives of Vicis and the Fund have had discussions with senior management of the Issuer and may in the future have such discussions concerning ways in which the Issuer could maximize shareholder value.

Except as set forth in this Item 4, Vicis has no present plan or proposal that relates to or would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D, but will continue to review this position based upon further developments.

As permitted by law, Vicis and/or the Fund may purchase shares of Common Stock or other securities convertible, exchangeable or exercisable into Common Stock or dispose of any or all of such securities from time to time in the open market, in privately negotiated transactions, or otherwise, depending upon future evaluation of the Issuer and upon other developments, including general economic and stock market conditions.

 Item 5.   Interest in Securities of the Issuer

(a)

All 13,406,749 shares reported on this Schedule are held directly by Vicis Capital Master Fund, for which Vicis Capital LLC acts as investment advisor.  Vicis Capital LLC may be deemed to beneficially own such 13,406,749 shares within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended, by virtue of the voting and dispositive power over such shares granted by Vicis Capital Master Fund to Vicis Capital LLC.  The voting and dispositive power granted to Vicis Capital LLC by Vicis Capital Master Fund may be revoked at any time.  Vicis Capital LLC disclaims beneficial ownership of any shares reported on this Schedule.

The foregoing 13,406,749 shares of Common Stock represent approximately 77.3% of the Issuer’s outstanding Common Stock (based upon 17,334,585 shares of Common Stock outstanding at November 4, 2010, as reported by the Issuer in its Quarterly Report on Form 10-Q filed with the SEC on November 5, 2010 for the period ended September 30, 2010, and 13,406,749 shares of Common Stock deemed to be beneficially owned by Vicis).

(b) For information on voting and dispositive power with respect to the above-listed shares, see Items 7-10 of the Cover Pages.

(c)	Except as disclosed in Item 3 of this Schedule, Vicis has not effected any transaction in the Common Stock in the past 60 days.
(d)	Not applicable.
(e)	Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to  Securities of the Issuer

The information set forth in Items 3 and 4 is hereby incorporated by reference in this Item 6.

Item 7.   Material to Be Filed as Exhibits

Exhibit No.	Description
Exhibit A	Securities Option and Right of First Refusal Agreement, executed January 6, 2011, between Vicis Capital Master Fund and Charles G. Masters.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

VICIS CAPITAL LLC

January 10, 2011

Date

By:	/s/ Andrew Comito
	Name: Andrew Comito
	Title: Compliance Officer*

* Executed pursuant to the authorization of the members of Vicis Capital LLC attached as Attachment A to the Schedule 13D/A previously filed with the SEC by Vicis Capital LLC with respect to the Amacore Group, Inc. on October 1, 2009.

EX-99.1

EXHIBIT A

SECURITIES OPTION AND RIGHT OF FIRST REFUSAL AGREEMENT

This SECURITIES OPTION AND RIGHT OF FIRST REFUSAL AGREEMENT(the “Agreement”), dated January 5, 2011 (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 CHARLES G. MASTERS, an individual maintaining a mailing address at 3400 82nd Way North, St. Petersburg, Florida 33710 (the “Optionee”).

BACKGROUND INFORMATION

Vicis owns common stock and preferred stock issued by Deer Valley Corporation, a Florida corporation (the “Company”).  The Optionee wishes to obtain an option and limited right of first refusal to acquire such securities.  Vicis is willing to grant the Optionee such option and limited right of first refusal, but only upon the terms and conditions set forth therein. Accordingly, 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 “Securities” as used in this Agreement shall mean all of the securities set forth on Exhibit “A”to this Agreement, together with, in each case, all securities issued in substitution of or exchange for, or on account of, any such Securities, 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 from Vicis all (but not a portion of) the Securities of the Company.  The Option to acquire the Securities shall become immediately exercisable upon the execution of this Agreement.

3.           Option Purchase Price.  The purchase price for this Option (the “Option Purchase Price”) shall be one hundred dollars ($100), and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.  The Option Purchase Price is payable, in cash, upon execution and deliver of this Agreement.

4.           Securities Purchase Price.  Upon exercise of the Option, the purchase price for the Securities (the “Securities Purchase Price”) shall be twelve million dollars ($12,000,000) cash.

5.           Term; Termination.  The term of the Option shall be for a period that commences on the Effective Date and expires on March 31, 2012, 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 Internal Revenue Code of 1986, as amended.

6.           Exercise Procedure; Closing.  The Optionee may exercise the Option by delivering written notice to Vicis, at any time prior to the Termination Date, 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 thirty (30) days after the date that the Exercise Notice is given to Vicis (the “Closing”), which, it being understood that such date for Closing may be after the Termination Date.  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 thirtieth (30th) day after the date that the Exercise Notice is given to Vicis.  At the Closing, (a) Vicis and the Optionee shall execute a purchase agreement (the “Purchase Agreement”) in the form attached hereto as Exhibit “B”, (b) Vicis shall deliver to Optionee the certificates or instruments evidencing the Securities 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 Securities Purchase Price.  Following such delivery, the parties shall thereupon take such action within their respective reasonable powers to cause the Company to register such issuance and ownership in its transfer records.

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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.  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, except as may be required pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

(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 Securities.  Vicis has good and marketable title to the Securities 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 Securities to the Optionee without obtaining the consent or approval of any other person or governmental authority.

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

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(a)           Authorization.  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.

(d)           Sophistication.  Optionee is a sophisticated investor and is experienced in matters relating to the valuation and the purchase and sale of securities, and, by reason of Optionee’s knowledge and experience in financial and business matters and access to the existing information about the Company, is capable of evaluating and has evaluated the merits of the transactions contemplated hereby.

9.           Covenants of Vicis.  Vicis covenants as follows:

(a)           Sale In Excess of $12,000,000.

(i)           If, prior to the Termination Date, Vicis sells, in a bona-fide arms length transaction, all of the Securities for a purchase price per security that exceeds Twelve Million Dollars ($12,000,000), then [A] Vicis hereby agrees to pay to the Optionee, at the closing of such sale, an amount equal to Eighty Percent (80%) of the difference between (1) the purchase price of such securities, and (2) Twelve Million Dollars ($12,000,000), and [B] upon receipt of such payment, this Agreement, inclusive of the Option set forth in Section 2 above and the Right of First Refusal set forth in Section 9(b) below, shall be deemed terminated.  If the purchase price is payable partially in cash and partially in securities, a promissory note or other deferred purchase price, then the Optionee’s participation payment under this Section 9(a) shall be pro-rated accordingly.  By way of example, if Vicis decides to sell all of the Securities for a cash purchase price of $13,000,000, then Vicis shall pay the Optionee $800,000, payable in cash at the closing. By way of further example, if Vicis decides to sell all of the Securities for a purchase price of $13,000,000, payable at the closing by (i) $7,000,000 in cash, (ii) the issuance of securities valued at $5,000,000, and (iii) the issuance of a note for $1,000,000, then Vicis shall pay the Optionee $800,0000, payable at the closing (i) $430,769.23 in cash, (ii) the transfer of the securities issued at the closing having a value of $307,692.30, and (iii) an assignment of the principal of the promissory note equal to  $61,538.47.

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(b)           Sale for $12,000,000 or Less; Right of First Refusal. If Vicis intends to sell, prior to the Termination Date, in a bona-fide arms length transaction, all of the Securities for a purchase price equal to or less than Twelve Million Dollars ($12,000,000), then Vicis shall follow the procedures set forth in this Section 9(b) below before effecting such sale.

(i)           Right of First Refusal. Vicis shall submit a written offer to sell the Securities (the “Offer”) to Optionee, which document shall contain the terms of the Offer, including the purchase price, the terms for payment of the purchase price, and the proposed closing date.

(ii)           Acceptance of Offer by Offeree. Optionee may, within thirty (30) calendar days after having been furnished the Offer, accept the Offer by giving written notice to Vicis.

(iii)           Permitted Sale. If Optionee does not exercise his Right of First Refusal within the thirty (30) calendar days following the Offer, then Vicis shall have the right to sell the Securities on the same terms and conditions set forth in the Offer (a “Permitted Sale”), free and clear of Optionee’s rights under this Agreement (including this Right of First Refusal and the Option set forth in Section 2 above); provided, however, if Vicis does not sell all of the Securities within ninety (90) calendar days after having furnished the Offer to the Optionee, on the same terms and conditions set forth in the Offer, thenVicis shall not thereafter sell the Securities, without first again offering such securities to the Optionee in the manner provided in this Section 9(b). Upon a Permitted Sale pursuant to this Section 9(b), this Agreement shall be deemed terminated, subject to Section 9(b)(iv) below.

(iv)           Mixed Consideration.  If the purchase price is payable partially in cash and partially by delivery of a promissory note, then Optionee shall have the right to pay the purchase price on the same terms and conditions. If the purchase price is payable partially in cash and partially in securities, then the Optionee may exercise the right of first refusal by paying a cash payment equal to the fair value of the securities and cash payment set forth in the Offer.

(c)           Without the written consent of Optionee, which Optionee may grant or withhold at Optionee's sole discretion, Vicis shall not effect any sale of some, but not all, of the Securities during the two-year period following the closing of the Purchase Agreement governing the purchase of such Securities.  For the avoidance of doubt, Vicis shall be deemed to have sold Securities in the event that Vics sells any security of the Company of the same class as any of the Securities during such two-year period.  By way of example, any sale of shares of Common Stock by Vicis shall be deemed a sale of the shares of the Common Stock included among the Securities, regardless of whether such shares of Common Stock were actually acquired in conjunction with an acquisition of the Securities or otherwise.

10.           Covenants of Optionee.  Optionee covenants as follows:

(a)           If Optionee has acquired the Securities for Twelve Million Dollars ($12,000,000) pursuant to the Option set forth in Section 2 (but not pursuant to the Right of First Refusal set forth in Section 9(b) above), and if during the two-year period following the closing of the Purchase Agreement governing the purchase of such Securities, Optionee sells all of the Securities for a purchase price per security that exceeds Twelve Million Dollars ($12,000,000), then Optionee hereby agrees to pay to Vicis, at the closing of such sale, an amount equal to Twenty Percent (20%) of the difference between [A] the purchase price of such securities, and [B] Twelve Million Dollars ($12,000,000).  If the purchase price is payable partially in cash and partially in securities, a promissory note or other deferred purchase price, then Vicis’s participation payment under this Section 10(a) shall be pro-rated accordingly.  By way of example, if Optionee decides to sell all of the Securities for a cash purchase price of $13,000,000, then Optionee shall pay Vicis $200,000, payable in cash at the closing. By way of further example, if Optionee decides to sell all of the Securities for a purchase price of $13,000,000, payable at the closing by (i) $7,000,000 in cash, (ii) the issuance of securities valued at $5,000,000, and (iii) the issuance of a note for $1,000,000, then Optionee shall pay Vicis $200,0000, payable at the closing (i) $107,692.31 in cash, (ii) the transfer of the securities issued at the closing having a value of $76,923.08, and (iii) an assignment of the principal of the promissory note equal to  $15,384.61.

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(b)           Without the written consent of Vicis, which Vicis may grant or withhold at Vicis's sole discretion, Optionee shall not effect any sale of some, but not all, of the Securities during the two-year period following the closing of the Purchase Agreement governing the purchase of such Securities.  For the avoidance of doubt, Optionee shall be deemed to have sold Securities in the event that Optionee sells any security of the Company of the same class as any of the Securities during such two-year period.  By way of example, any sale of shares of Common Stock by Optionee shall be deemed a sale of the shares of the Common Stock included among the Securities, regardless of whether such shares of Common Stock were actually acquired in conjunction with an acquisition of the Securities or otherwise.

11.           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 Securities pursuant to the terms and conditions set forth herein.

12.           Investment Purpose.  This Agreement is executed on the express condition that the purchase of the Securities shall be made for investment purposes only and not with a view to their resale or further distribution unless (a) such Securities, 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 Securities 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.

13.           Non-Public Information.  Optionee acknowledges that Vicis may be in possession of material non-public information about the Company and that Optionee wishes to proceed with the transaction notwithstanding such possibility.  Optionee acknowledges that he has requested that Vicis not share any such material non-public information with Optionee.  Optionee acknowledges that he has reached his own investment decision with respect to the transactions contemplated herebyand waives any claims he may have against Vicis for nondisclosure of any material nonpublic information.

14.           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.  Each party hereby covenants and agrees with the other party that at any time and from time to time it will promptly execute and deliver to such other party such further assurances, instruments and documents and take such further action as such other party 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 not be assigned by any party without the prior written consent of the other party. This Agreement shall be binding upon the parties hereto and the successors and assigns of each party hereto.  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.

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

OPTIONEE:

/s/ Charles G. Masters

Charles G. Masters

VICIS:

VICIS CAPITAL MASTER FUND

By: Vicis Capital, LLC

By: /s/ Keith Hughes

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SCHEDULE A

to the Securities Option and Right of First Refusal Agreement

by and among

Vicis Capital Master Fund and Charles G. Masters

Purchaser	Seller	Issuer	Type of Security	Security No.	No. of Securities
Charles G. Masters	Vicis Capital Master Fund	Deer Valley Corporation	Series C Convertible Preferred Stock		22,463 shares convertible into 2,246,300 shares of common
Charles G. Masters	Vicis Capital Master Fund	Deer Valley Corporation	Series E Convertible Preferred Stock		1,000,000 shares convertible into 1,000,000 shares of common
Charles G. Masters	Vicis Capital Master Fund	Deer Valley Corporation	Common Stock		13,406,749 shares of common

Schedule A, Page 1