| 1.1 | The      Employee is hereby engaged for a three-year period commencing August 6,      2007 (the "Initial Term"), and the Employee hereby accepts the employment      as President and Chief Executive Officer. The Initial Term shall be      automatically renewed for up to two successive consecutive one (1) year      periods (each, a "Renewal Term" and the Initial Term and Renewal Term are      collectively referred to as the "consulting period") thereafter unless      either party sends notice to the other party, not more than 270 days and      not less than 90 days before the end of the then-existing consulting      period, of such party's desire to terminate the Agreement at the end of      the then-existing term, in which case this Agreement will terminate at the      end of the then-existing term. Employment services will be provided at the      Company address or at such other places as may be directed by the Company.      The Employee agrees that time is to be scheduled by the Company and to      devote reasonable productive time, ability and attention to the business      of the Company during the term of this Agreement, subject to the direction      and supervision of the Company. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.1 | As      compensation for services rendered under this Agreement, the Employee      shall be entitled to receive a base salary of Two Hundred and Fifty      Thousand and NO/100 DOLLARS ($250,000.00) per annum payable twice monthly      less all Federal, State and required payroll withholdings. The salary may      be increased annually at the discretion of the Board of Directors. The      Employee is also entitled to annual bonuses as determined by the Board of      Directors and offshore bonuses as dictated by Company policy. The Employee      shall provide such reasonable business hours as the Company shall dictate,      but at least forty hours per week. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 2.2 | Employee      shall be eligible to participate in any and all benefits as are available      from time to time to key executive officers, directors and employees (and      their families) of the Company, including all health, medical, dental, and      life insurance benefits. The Company shall pay 100 % of all premiums with      respect to such plans for Employee. Employee will be entitled to four      weeks paid vacation. Employee will also be entitled to $1,000 per month as      an expense allowance to pay for the cost of a vehicle, insurance,      gasoline, maintenance, repairs and other unanticipated    costs. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1 | If      the Employee willfully breaches or habitually neglects the duties which he      is required to perform under the terms of the Agreement, the Company may      at its option terminate this Agreement by giving written notice of      termination to the Employee. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.2 | Willfully      breaches is defined as misappropriation of Company' s assets, being      intoxicated or under the influence of drugs or alcohol while on the job,      being convicted of a felony, or not willingly coming to    work. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.1 | Employee      agrees that this covenant is a separate contract in and of itself. In the      event that any of the prior clauses of this contract should fail, this      separate contract shall be binding upon the parties. Employee covenants      and agrees that during his consultancy with Company and upon termination      of their engagement, whether by termination of this Agreement, by wrongful      discharge, or otherwise, Employee shall not directly or indirectly, within      Texas, enter into or engage generally in direct competition with the      Company's business, as a Employee in any business providing identical      services as Company or own a business which provides identical services as      Company either individually or as a Employee, officer, director,      independent contractor, or shareholder or otherwise, during the term of      this Agreement or for three (3) months after termination. This covenant on      the part of Employee shall be construed as an agreement independent of any      other provision of this Agreement; and the existence of any claim or cause      of action of Employee against Company, whether predicated on this      Agreement or otherwise, shall not constitute a defense to the enforcement      by Company of this section. Company shall be entitled to such extra      remedies as injunctions, stays or restraining orders to enforce its rights      hereunder. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.2 | The      Employee will not solicit or divert or attempt to solicit or divert, any      business, patronage, or clients of the Company from the Company to himself      or a competitor or rival of Company for three (3) months from the date of      Employee's withdrawal or termination from the  Company. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 4.3 | During      the term of this Agreement, the Employee will not communicate or divulge      to or for the benefit of any competitor or rival of the Company, any of      the trade secrets or processes of the Company including      client list or pricing information, and used by the Company.      Notwithstanding the foregoing, upon termination of this Agreement and the      Non-Compete period, Employee shall not be prohibited from contacting any      prospective client or determine appropriate pricing for any products      and/or services on behalf of any newCompany. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.4 | The      Employee states that he has read this Agreement in full and understands      the terms and language in Article IV. The Employee has had outside counsel      of his choosing      review the Covenant of Noncompete and counsel has explained all terms and conditions      to him. The Employee swears that he is not under any duress or coercion to      enter this Covenant of Noncompete, but is doing it of his own free will in      order to gain the experience, specialized training and especially the extra      compensation offered by Company. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.5 | Confidentiality      of this business is very      important as the nature of the business is securing the customers      confidence. Therefore, Employee may not directly or indirectly make known      to any person, firm or corporation the names, addresses or any information      pertaining to or regarding any customer of the Company during or after      termination of employment through the end of the Non-Compete      period. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.1 | Any      notices to be given hereunder by either party to the other may be effected      either by personal delivery in writing or by mail, registered or      certified, postage prepaid with return receipt requested. Mailed notices      shall be addressed to the parties at the address appearing in the      introductory paragraph of this Agreement, but each party may change her      address by written notice in accordance with the paragraph. Notices      delivered personally shall be deemed communicated as of actual receipt;      mailed notices shall be deemed communicated as of three (3) days after      mailing. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.2 | This      Agreement supersedes any and all other agreements, either oral or written,      between the parties hereto with respect to the employment of the Employee      by the Company and contains all of the covenants and agreements between      the parties with respect to such employment in any manner whatsoever. Any      changes or amendments must be in writing, signed by all the parties, or      they are null and void. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 5.3 | This Agreement shall be governed      by and construed in accordance with the laws of the State of Texas and      enforceable in Houston,Texas. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.4 | Where      context and circumstances require, the gender of all words used in this      contract shall include the masculine, feminine and  neuter. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | COMPANY:DEEPDOWN,      INC.By:  /s/ Robert E. Chamberlain,      Jr.                       Name:           Robert E. Chamberlain, Jr.Title:             Chairman & CAOEMPLOYEE:RONALD      E. SMITH/s/      Ronald E.      Smith                            Name:          Ronald E.      SmithTitle:          President & CEO |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----