| 1.1 | The      Consultant is hereby engaged for a period commencing on August 6, 2007 and      ending May 31, 2010 (the "Initial Term"), and the Consultant hereby      accepts the engagement by providing the services of Eugene L. Butler      ("Butler") as Chief Financial 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. Consulting services will be provided at      the Company address or at such other places as may be directed by the      Company. The Consultant 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 theCompany. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.1 | As      compensation for services rendered under this Agreement, the Consultant      shall be entitled to receive a base consulting fee of One Hundred Eighty      Thousand and NO/100 DOLLARS ($180,000.00) per annum payable twice monthly      plus an amount equal to Federal and State payroll withholdings customarily      withheld for an employee earning this compensation, including but not      limited to FICA and Medicare. The consulting fee may be increased annually      at the discretion of the Board of Directors. The Consultant is also      entitled to annual bonuses as determined by the Board of Directors. The      Consultant shall provide such reasonable business hours as the Company      shall dictate, but at least forty hours per  week. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 2.2 | Butler      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 Butler. Butler may, at his option, elect to be      reimbursed for medical insurance premiums incurred for medical insurance      not provided through the Company. Butler will be entitled to four weeks      paid vacation. Butler 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. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.3 | The      Employment Agreement dated May 31, 2007 is hereby terminated and replaced      by this Consulting Agreement. Notwithstanding the foregoing, the 3,000,000      options granted pursuant to the Employment Agreement remain as validly      existing options. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1 | If      the Consultant 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 Consultant. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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 | Consultant 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. Consultant 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, Consultant shall not directly or      indirectly, within      Texas, enter into or engage generally in direct competition with the      Company's business,      as a Consultant in any business providing identical services as Company or      own a business which      provides identical services as Company either individually or as a      Consultant, 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 Consultant      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 Consultant 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 Consultant 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 Consultant's withdrawal or termination from the  Company. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.3 | During the term of this Agreement,      the Consultant 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, Consultant 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 Consultant states that he has      read this Agreement in full      and understands the      terms and language in Article IV. The      Consultant has had outside counsel of his choosing review the Covenant of Noncompete and counsel has      explained all terms and conditions to him. The Consultant 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 byCompany. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.5 | Confidentiality of this business      is very important as the nature of the business is securing the customers confidence.      Therefore, Consultant 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      Consultant 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 andvoid. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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: DEEP      DOWN, INC.  By:  /s/      Ronald E.      Smith                          Name:          Ronald E. SmithTitle:            President & CEO CONSULTANT: EUGENE      L. BUTLER & ASSOCIATES /s/      Eugene L.      Butler                                              Name:          Eugene L. ButlerTitle:            President |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----